AS Tallinna Vesi submitted a proposal to operate AS Maardu Vesi assets

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| Source: Tallinna Vesi
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On 4 August 2008 AS Tallinna Vesi submitted a proposal to AS Maardu Vesi for    
operating the infrastructure of the public water supply and sewerage system. The
contract is to be approved by Maardu City Council, which shall convene for a    
session on 5 August.                                                            

When the operating contract comes into force, AS Tallinna Vesi shall help AS    
Maardu Vesi to finance the self-financing part required within the European     
Union Assistance Project during the period 2009-2012 with approximately 20      
million kroons annually. The financing commitment of AS Tallinna Vesi is up to a
total of 80 million kroons over the period. The company shall get the investment
back through the capital component to be included in the tariff within 20 years.
On the basis of the cooperation of the companies and the subsidies of the       
European Union the problems regarding the water quality in Maardu shall be      
solved in the forthcoming years and in a longer perspective Maardu shall be     
supplied with drinking water from Ülemiste Water Treatment Plant.               

Administrating the infrastructure of AS Maardu Vesi enables AS Tallinna Vesi to 
increase its customer portfolio and to grow turnover. In addition to the        
required self-financing AS Tallinna Vesi shall provide the customers of AS      
Maardu Vesi with a modern service of operating the assets with a good-quality   
customer service.                                                               

The operating contract has been planned for the duration of 30 years; the       
parties have come to an agreement regarding the terms and conditions of the     
contract as well as regarding the securities.                                   

The contract shall enter into force as of the moment of signing. Tallinna Vesi  
shall start to operate the assets and provide full service at the latest from 1 
January 2009 after the preparation period during which the assets are taken     
over. AS Maardu Vesi shall still remain the owner of all assets.                

AS Maardu Vesi is a company in private ownership, established in 2001, the main 
activities of which include the provision of the services of water supply and   
wastewater discharge as well as the performance of sanitary works. The main     
operating area is the city of Maardu. In 2007 the turnover of AS Maardu Vesi was
more than 20 million kroons. There area about 20 000 residents living in the    
operating area of AS Maardu Vesi.                                               

AS Tallinna Vesi is the largest water utility in Estonia providing drinking     
water and wastewater disposal services to approximately one third of the people 
of Estonia. AS Tallinna Vesi shares are listed on the main list of the Tallinn  
Stock Exchange.                                                                 

Additional information:                                                         

Reigo Marosov                                                                   
Head of Communication                                                           
AS Tallinna Vesi                                                                
Ädala 10, Tallinn 10614, Estonia                                                
Phone. +372 6262 209                                                            
Fax +372 6262 300                                                               
Mob. +372 5690 5373                                                             
reigo.marosov@tvesi.ee                                                          
www.tallinnavesi.ee