United Water Contract Extended for Indianapolis Partnership

HARRINGTON PARK, NJ, October 22, 1997 -- United Water Resources (NYSE:UWR) today announced that its affiliate, United Water Services, has received an extension and expansion of its contract through the White River Environmental Partnership (WREP), to manage the wastewater treatment facilities and sewage collection system for the City of Indianapolis. The new contract with Indianapolis will make the nation's biggest and most successful public-private partnership even larger, saving local taxpayers an additional $189 million.

"From both a financial and environmental standpoint, this partnership is a model for other communities throughout the nation," stated Donald Correll, chairman & CEO of United Water Resources. "Through improved management of wastewater systems, a city such as Indianapolis can direct additional dollars to other worthwhile projects without increasing the budget or forcing higher sewer rates."

"This is exactly the type of results-oriented service our affiliate, United Water Services, is providing to cities and municipalities throughout the U.S., Canada and Mexico. Through United Water's joint-venture with Suez Lyonnaise des Eaux, United Water Services brings international expertise to bear on solving water and wastewater issues for communities," added Correll. "We are proud of the success this has brought to our Indianapolis partnership."

The city has saved more than $46 million since contracting in 1994 with the WREP to manage the Southport and Belmont Advanced Wastewater Treatment facilities and the collection system. The WREP is a joint venture between United Water and Indianapolis Water Company. According to Indianapolis Mayor Stephen Goldsmith, those savings have yielded big benefits for taxpayers in the form of a massive investment in sewer repair projects and the lowest sewer user rates in central Indiana. Despite inflation, Indianapolis residents pay no more for sewer usage today than they did in 1985 and city homeowners pay less per month than residents of any surrounding city.

"Six years ago, Indianapolis' sewer system was on the verge of collapse," stated Mayor Goldsmith. "The savings from our contract have allowed us to invest more than $90 million in rebuilding that system - without raising sewer user fees."

Goldsmith noted that over the next several years, the city will need to continue to invest heavily in its wastewater collection and treatment systems and will need to address several combined sewer overflow issues. But while other cities have funded similar investments through tax hikes and user fee increases, Indianapolis will be able to fund these projects using savings generated through its new, ten-year contract extension with the United Water partnership.
Under the new contract, the WREP will provide savings to the city of $189 million over the next ten years while preserving the city's solid environmental record. Mayor Goldsmith noted that he intends to use these savings to continue to hold the line on rate increases, to make capital improvements to the wastewater collection system and treatment plants, and to fund a $55 million project to reduce combined sewer overflows.

Over the past five years, the city has put more than 70 governmental services up for competitive bid. Through its new wastewater contract, Indianapolis will realize $400 million in savings, which Goldsmith said the city has invested in Building Better Neighborhoods - the largest infrastructure improvement project in city history - and more police officers.
"The water leaving the plant is as clean as ever, employee wages are up and grievances are down, and taxpayers enjoy strong sewers and low rates," added Goldsmith. "Because of competition, we are getting more out of every tax dollar, cutting costs and improving quality to produce more value for our customers - the taxpayers of Indianapolis."

United Water Resources, based in Harrington Park, NJ, is a holding company whose subsidiaries are engaged in water-related businesses and real estate. As the nation's second largest investor-owned water services company, United Water provides water and wastewater services to about 5 million people in 19 states. United Water is pursuing a growth strategy through public-private partnerships and contract services agreements with municipalities, strategic alliances, acquisitions and expansions of its existing service area. The largest subsidiaries include United Water New Jersey, United Waterworks, and United Water New York. The company employs approximately 1,300 people nationwide.

Suez Lyonnaise des Eaux, headquartered in France, has four core business sectors - energy, water and wastewater, waste management and communications. The group is the international leader in water management and the world leader in water treatment techniques, is present in nearly 120 countries and provides water and wastewater services to over 70 million people. Suez Lyonnaise des Eaux has a market capitalization of $17 billion which reflects the merger in June, 1997 between two leading companies, Lyonnaise des Eaux and Compagnie de Suez (the former absorbed the later). The combined total annual revenue of the new company is $40 billion, Lyonnaise American Holding has a 28% interest in United Water's common stock.