EX-10.16.9

Exhibit 10.16.9

23 January 2008

BIWATER PLC

-and-

CASCAL N.V.

-and-

T.W.A. BARKER AND OTHERS

DEED OF AGREEMENT

BIWATER RETIREMENT AND SECURITY
SCHEME

Herbert Smith LLP

THIS DEED OF AGREEMENT is made the 23 day of January 2008

BETWEEN:

(1)		BIWATER PLC whose registered office is at Biwater House, Station Approach, Dorking, Surrey RH4 1TZ (company registration number 929686) (“Biwater”)

(2)		CASCAL N.V. at Strawinskylaan 3105, 1077 ZX whose registered office is in Amsterdam, the Netherlands (“Cascal”)

(3)		TERENCE WILLIAM ALBERT BARKER of “the Willows”, 20 Holme Park, Upper Newbold, Chesterfield, Derbyshire S41 8XB NORMAN ERIC DODD of 5 Ashworth Avenue, Urmston, Manchester M41 8TH MARTIN ROBERT ANTHONY DUFFY of 4 Ashwood Park, Lower Road, Fetcham, Surrey KT22 9NT JOHN ERNEST ALFRED KERSLAKE of Ivy House, Stack Hills Road, Todmorden, Lancashire, OL14 5QW ANTHONY JOHN READ of 4 Hazlemere Drive, St Leonards, Ringwood, Hants and BARRY SHORT of 15 Rimbury Way, Christchurch, Dorset BH23 2RQ (all together the “Trustees”)

RECITALS

A.		The Trustees are the present trustees of BRASS.

B.		Biwater is the current principal employer of BRASS.

C.		Biwater and the Trustees entered into the 2006 Agreement which set out various rights and obligations in relation to the purchase by Biwater of N.V. Nuon Global Water Solutions’ 50% interest in Cascal.

D.		Biwater is contemplating an initial public offering of shares in Cascal in January 2008 which would constitute a Recapitalisation under the terms of the 2006 Agreement. The IPO would consist of Biwater selling part of its shareholding in Cascal (the “Secondary Offering”) and Cascal issuing new shares to public investors (the “Primary Offering”). Following the IPO, Biwater would become a minority shareholder in Cascal. (Schedule 1 sets out various scenarios.)

E.		It is intended that the proceeds of the secondary offering be used to meet Biwater’s commitments to BRASS under the 2006 Agreement and to pay certain transaction costs. Subject to sufficient additional funds being raised through the secondary offering, Biwater intends to use approximately $80m (c. £40m) of the proceeds to return capital to its shareholders of which approximately $40m (c. £20m) would be invested back into Biwater by way of a loan from the shareholders.

F.		It is estimated that as at 30 November 2007 the Main Section had an FRS17 deficit of approximately £29.3m and a scheme funding deficit of approximately £42.5m, and that the Water Company Section had corresponding deficits of £2.3m and £8.6m respectively. The Water Company Section currently benefits from a bank letter of credit for £4.0m covering certain future contributions.

G.		The parties to this deed have discussed the anticipated IPO. Should the IPO proceed at any time in 2008, the parties wish to give effect to this deed pursuant to their obligations

under the 2006 Agreement and also to vary some of those obligations as hereinafter specified.

NOW THIS DEED WITNESSES as follows:

INTERPRETATION

1.1

Definitions

In this deed, except where the context otherwise requires, the following words and expressions shall have the meanings set out below:

“Actuaries” means the Scheme Actuary and any actuary instructed by Biwater;

“BRASS” means the “Biwater Retirement and Security Scheme”;

“Business Day” means a day (other than a Saturday or Sunday) on which banks in the City of London are open for business;

“Escrow Account” means the account in the joint names of Biwater and the Trustees for the purposes of implementing the arrangements under this deed;

“IPO” means an initial public offering of shares in Cascal N.V. on the New York Stock Exchange;

“Main Section” means the part of the assets of BRASS known as the Main Section, and defined in the Rules as the Main Fund;

“Maximum Payment” means the maximum amount the Trustees are entitled to receive from Biwater under clause 6(a) of the 2006 Agreement;

“Recapitalisation Date” means the first day in 2008 on which Cascal shares are traded on the New York Stock Exchange, which is anticipated to be 25 January 2008;

“Recapitalisation Date Deficit” means the amount of the deficit in the Main Section on the scheme-specific funding basis as at the Recapitalisation Date as disclosed by the Recapitalisation Date Valuations;

“Recapitalisation Date Valuation” means the valuation of BRASS carried out under Part 3 of the Pensions Act 2004 as at the Recapitalisation Date using the assumptions set out in Schedule 2;

“Rules” means the Rules, as subsequently amended, annexed to each of two editions of a Fifth Definitive Trust Deed, one called the “Main Edition” made on 24 June 2003, and the other called the “ex-WCAPS Edition” made on 1 April 2003;

“Scheme Actuary” means a Fellow of the Institute of Actuaries or a Fellow of the Faculty of Actuaries, appointed by the Trustees as the scheme actuary to BRASS. BRASS’s current Actuary is Emma Whitehouse of Punter Southall;

“Water Company Section” means the part of the assets of BRASS known as the Water Company Section, and defined in the Rules as the Water Company Sub-Fund;

“Water Section Guarantee” means the letters of credit which Cascal procures to be put in place under sub-clause 6.1 and 6.3 below;

“2006 Agreement” means the deed of agreement between Biwater and the Trustees dated 16 November 2006.

1.2

Interpretation

	(a)		In this deed the headings are for convenience only and shall not affect its construction or meaning.

	(b)		References in this deed to any statute, statutory instrument, or regulation shall mean a reference to that provision as amended from time to time, or re-enacted or re-made.

	(c)		“Subsidiary” has the meaning given to it in section 736 of the Companies Act 1985.

	(d)		Unless the context requires otherwise, words denoting the singular only shall include the plural and vice versa.

	(e)		Each of the parties to this deed intends it to be a deed and agrees to execute it and deliver it as a deed.

	(f)		The expressions “Biwater” “Cascal” and the “Trustees” shall, where the context requires, include their respective transferees, successors, assigns and (in the case of the Trustees) their successors in office.

2.		MAIN SECTION — ESCROW ACCOUNT

2.1		Within 30 days of the Recapitalisation Date, Biwater and the Trustees shall set up the Escrow Account. Monies therein can be used only for the purposes set out in clauses 3 and 4 below. For the avoidance of doubt, the assets held in the escrow account shall not be available to meet obligations of Biwater unless or until paid to Biwater in accordance with the provisions of this deed and shall not be subject to any right of offset, cross-guarantee or charge in favour of Biwater, any other group companies or its creditors. The Escrow Account shall be based on standard form Pension Protection Fund (“PPF”) documentation with a view to it qualifying as a contingent asset for the purposes of the PPF levy.

2.2		Within 35 days of the Recapitalisation Date, Biwater shall provide the Trustees with a schedule setting out the Maximum Payment calculation.

2.3		Within 42 days of the Recapitalisation Date, Biwater shall procure that the lesser of (i) £42.5m and (ii) the Maximum Payment is paid into the Escrow Account.

3.		MAIN SECTION — RECAPITALISATION DATE DEFICIT

3.1		The Trustees will instruct the Scheme Actuary to carry out the Recapitalisation Date Valuation. Matters to be determined by the parties in connection with the valuation shall be determined in accordance with Part 3 of the Pensions Act 2004 unless otherwise

agreed under this deed. The parties will use reasonable endeavours to procure that the valuation is completed within three months of the Recapitalisation Date.

3.2		If the Recapitalisation Date Deficit is equal to the aggregate of (i) the amount paid into the Escrow Account by Biwater under clause 2.3 above and (ii) the amount of any deficit reduction contributions paid into the Main Section by Biwater and/or its subsidiaries between the Recapitalisation Date and the date the finalised Recapitalisation Date Valuation is provided to Biwater, Biwater will not be required to pay any further amount into the Escrow Account and shall not be entitled to receive any payment from it.

3.3		If the Recapitalisation Date Deficit is greater than the aggregate of (i) the amount paid into the Escrow Account by Biwater under clause 2.3 above and (ii) the amount of any deficit reduction contributions paid into the Main Section by Biwater and/or its subsidiaries between the Recapitalisation Date and the date the finalised Recapitalisation Date Valuation is provided to Biwater (the “Deficit Shortfall”), then Biwater shall within 28 days of being notified of this fact in writing by the Trustees pay an amount equal to the Deficit Shortfall into the Escrow Account to the extent that the aggregate of (i), (ii) and the Deficit Shortfall does not exceed the Maximum Payment. Biwater may at its discretion elect to pay any additional amount or amounts into the Escrow Account.

3.4		If the Recapitalisation Date Deficit is less than the aggregate of (i) the amount paid into the Escrow Account by Biwater under clause 2.3 above and (ii) the amount of any deficit reduction contributions paid into the Main Section by Biwater and/or its subsidiaries between the Recapitalisation Date and the date the finalised Recapitalisation Date Valuation is provided to Biwater (the “Deficit Overpayment”), then an amount equal to the Deficit Overpayment shall be paid to Biwater from the Escrow Account within 28 days.

4.		MAIN SECTION — PAYMENTS FROM THE ESCROW ACCOUNT

4.1		Following the Recapitalisation Date, payments shall be made from the Escrow Account to the Trustees in line with Schedule 3 for the exclusive benefit of the Main Section. (Schedule 3 is based on an illustrative figure of £44m. The amounts of the actual payments made will be adjusted as necessary in respect of the later tax years set out under the Schedule to reflect the final total amount Biwater is required to pay into the Escrow Account under clause 3 as a result of the Recapitalisation Date Valuation.)

4.2		The payments due to be made to the Trustees from the Escrow Account under clause 4.1 shall with immediate effect from the Recapitalisation Date replace the deficit contributions required to be paid to the Main Section under the schedule of contributions in place at the date of this agreement, and a revised schedule of contributions shall be put in place to reflect this.

4.3		Investment returns on the funds in the Escrow Account shall accumulate in the Escrow Account and be paid to the Trustees with the final payment from the account for the exclusive benefit of the Main Section.

5.		MAIN SECTION — LIABILITY MANAGEMENT EXERCISE

		Biwater shall no longer be obliged under clause 5 of the 2006 Agreement to make available or procure to be made available within 15 months from 26 June 2006 a sum of £3m for the purpose of a liability reduction exercise.

6.		WATER SECTION GUARANTEE

6.1		Cascal will procure that BWHW puts in place a letter of credit for the amount of £8.6m with effect on and from a date no more than seven Business Days after the Recapitalisation Date and with an ultimate expiry date of 31 March 2011. The letter of credit shall be in substantially the same terms as the letter of credit for £4m in place at the date of this agreement.

6.2		At the same time that the letter of credit for £8.6m is put in place, the letter of credit for £4m in place at the date of this agreement shall be withdrawn, and Biwater shall cease to have any obligation to procure that any further letter of credit is issued under clause 2.1 of the 2006 Agreement.

6.3		Within 28 days of Cascal being provided with a copy of the finalised Recapitalisation Date Valuation, Cascal will procure that BWHW puts in place a letter of credit up to a maximum of £10m to cover the deficit contributions payable to the Water Company Section under the schedule of contributions for the Water Company Section prepared for the purposes of the Pensions Act 2004 as a result of the Recapitalisation Date Valuation. The term of that letter of credit shall be the same as the recovery period agreed in respect of the Water Company Section as a result of the Recapitalisation Date Valuation, and may be of a reducing amount and/or replaced annually to reflect the deficit payments due under any applicable Water Company Section schedule of contributions.

6.4		At the same time that the letter of credit is put in place under clause 6.3 above, the letter of credit for £8.6 m under clause 6.1 shall be withdrawn.

6.5		The Water Section Guarantee shall fall away if at any time a valuation calculated in accordance with Part 3 of the Pensions Act 2004 shows that the Water Company Section (or any replacement scheme sponsored by Cascal to which the Water Company Section’s assets and liabilities have been transferred) moves into surplus on a scheme-specific funding basis prior to the end of the recovery plan adopted as a result of the Recapitalisation Date Valuation (or as a result of any subsequent scheme-specific funding valuation).

6.6		In the event that any letter of credit under sub-clause 6.1 or 6.3 above is withdrawn or not renewed other than in accordance with the terms of this clause 6, Cascal shall pay to the Trustees for the exclusive benefit of the Water Company Section the whole amount of the nominal value of the last letter of credit, less any contributions paid by its subsidiaries to the Water Company Section under the schedule or schedules of contributions adopted after the date on which that letter of credit was put in place.

6.7		Once the Water Section Guarantee has been put in place, Biwater shall have no further obligation to make payment to the Trustees in respect of the Water Company Section under clauses 2, 3.2, 6 or 7 of the 2006 Agreement.

7.		WATER COMPANY SECTION — NEW SCHEME

		Biwater, Cascal and the Trustees may take the necessary steps after the Recapitalisation Date to effect the transfer of all the assets (including, if required by the trustees of the new scheme, the Water Section Guarantee) and liabilities of the Water Company Section to a new registered pension scheme to be sponsored by the Cascal group.

8.		SURPLUS DATE

8.1		A “Surplus Date” shall be deemed to have occurred under the 2006 Agreement and the “Recapitalisation Period” under that agreement shall be deemed to have ended in relation to the Main Section:

	(a)		if the Recapitalisation Date Deficit is less than the aggregate of (i) the amount paid into the Escrow Account by Biwater and (ii) the amount of any deficit reduction contributions paid into the Main Section by Biwater between the Recapitalisation Date and the date the finalised Recapitalisation Date Valuation is provided to Biwater; or

	(b)		as at any date on which an actuarial valuation carried out on a scheme-specific basis in accordance with Part 3 of the Pensions Act 2004 discloses that the aggregate of:

	(i)		the value of the assets in the Main Section; and

	(ii)		the value of the assets in the Escrow Account

is equivalent to a surplus in the Main Section on a scheme-specific basis.

8.2		A Surplus Date shall be deemed to have occurred under the 2006 Agreement and the “Recapitalisation Period” under that agreement shall be deemed to have ended in relation to the Water Company Section once the Water Section Guarantee has been put in place.

8.3		For the avoidance of doubt, following the IPO and the Water Section Guarantee being put in place, the funding position of the Water Company Section (or the replacement scheme sponsored by Cascal) shall not be taken into account in determining whether a Surplus Date has occurred in relation to the Main Section.

8.4		For the avoidance of doubt, a Surplus Date arising under this Clause 8 shall not affect any payment due from the Escrow Account to the Main Section under clause 4.

9.		INVESTMENT STRATEGY

		The Trustees welcome input from Biwater (and from Cascal in respect of the Water Company Section) in relation to the future investment strategy of BRASS including how best to manage the Escrow Account. So long as Biwater can demonstrate it has sufficient strength of covenant, the Trustees currently anticipate maintaining substantial holdings of return-seeking assets but always recognising the maturity of the liabilities. Until the finalised Recapitalisation Date Valuation is provided to Biwater, the Escrow Account shall be invested in cash with an AA-rated bank except as Biwater and the Trustees otherwise agree. Thereafter the Escrow Account shall be invested as the Trustees direct.

10.		PENSIONS REGULATOR

		Biwater considers the position of the Main Section and Water Company Section creditors to be significantly improved as a result of the IPO, and the related payments to BRASS and the Water Section Guarantee are expected to see both sections being fully funded, or close to being fully funded on a scheme-specific funding basis. Biwater will keep the Pensions Regulator informed, to the extent necessary, of the putting in place of the Water Section Guarantee and the consequent termination of its obligations under clause 2 of the 2006 Agreement.

11.		RETURN OF CAPITAL TO SHAREHOLDERS

11.1		Biwater’s obligation to make the Maximum Payment has priority over the return of capital of approximately $80m it intends to make to shareholders to the extent that insufficient assets are raised from the Secondary Offering for both the Maximum Payment and the return of capital to be satisfied in full.

11.2		Subject to Biwater making the intended return of capital to its shareholders of approximately $80m, Biwater shall put in place an enforceable agreement giving it the right to call on a loan of approximately $40m from the shareholders on reasonable commercial terms or shall take steps to retain the $40m within the Biwater group.

11.3		Biwater does not intend to seek clearance from the Pensions Regulator for the proposed return of capital as it does not consider it to be materially detrimental to the Main Section or Water Company Section creditors.

12.		DEFAULT INTEREST

		If any sum (or part thereof) due for payment by Biwater to the Trustees under this deed is not paid, then on the date falling five Business Days after the due date for payment under this deed, interest shall accrue on that sum (or part thereof) on a daily basis at the rate of 2% above the base rate for the time being of Barclays Bank plc from the fifth Business Day after the sum falls due for payment until the date of actual payment and, pending payment, interest accrued on any such amount on the last days of March, June, September and December in each year shall be added to the outstanding overdue amount for the purposes of calculating further interest provided that if the failure to pay on the due date is a result of an administrative error or omission which is rectified in accordance with clause 17 below, default interest shall not accrue on the overdue sum (or part thereof) pursuant to this clause 12.

13.		AMENDMENTS TO THIS DEED

		The parties hereto may, by written agreement, alter the provisions of this deed.

14.		THIRD PARTY RIGHTS

		Without affecting any rights of the parties to this deed, no other person shall be entitled to any rights under the Contracts (Rights of Third Parties) Act 1999 as a result of this agreement.

15.		WAIVER

		No failure or delay by the Trustees, Biwater or Cascal in exercising any right or remedy shall operate as a waiver thereof nor shall any single or partial exercise or waiver of any other right or remedy preclude its further exercise or the exercise of any other right or remedy.

16.		NOTICES

		Every notice, request, demand or other communication to be delivered under or pursuant to the provisions of this deed shall be in writing and:

16.1		in the case of such communications to the Trustees shall be delivered personally or by first class registered mail to the addresses of each individual trustee at the relevant time;

16.2		in the case of such communications to Biwater shall be delivered personally or by first class registered mail to “The Chief Executive” at the registered office at the relevant time of Biwater;

16.3		in the case of such communications to Cascal shall be delivered personally or by first class registered mail to “The Chief Executive” at the registered office at the relevant time of Cascal.

17.		RECTIFICATION

		Each party to this deed shall, as soon as practicable, notify in writing all other parties if it becomes aware of a breach of any obligation under this deed. Where that breach arises or has arisen as a result of a genuine administrative error (including, but not limited to, administrative omissions and oversights) in relation to actions undertaken in good faith by any of the parties the relevant party or parties shall take such steps to rectify the administrative error as are practicable in the circumstances. Provided that such administrative error is rectified within five Business Days of a party in default receiving written notification of the relevant breach (such receipt to be in accordance with clause 16) or becoming aware of it if the default is on its own part, the other parties to this deed shall be deemed to have waived irrevocably any rights and remedies they may have in respect of such breach under this deed or any connected or related document.

18.		CO-OPERATION

		The parties to this deed shall co-operate with each other and assist each other in implementing this deed and the matters envisaged by this deed.

19.		COUNTERPART DEEDS

		This deed may be executed in any number of counterparts, each of which when so executed and delivered shall be an original, but all the counterparts together shall constitute one and the same instrument.

20.		GOVERNING LAW

		This agreement shall be governed by and construed in all respects in accordance with the laws of England and Wales.

IN WITNESS of which Biwater, the Trustees and David George Sayers of Biwater House, Station Approach, Dorking, Surrey RH4 1TZ in exercise of a power of attorney of Cascal N.V. dated 31 October 2007 have duly executed and delivered this document as a deed on the date first above written.

EXECUTED as a DEED on

behalf of BIWATER PLC by

Director /s/

Secretary /s/ M.R.A. Duffy

EXECUTED as a DEED on

behalf of the above-named CASCAL N.V. by /s/

its attorney named above in the presence of:

Elizabeth Fawcett

Witness name

/s/ Elizabeth Fawcett

Witness signature

Exchange House

Primrose Street

London

EC2A 2HS

Witness address

SIGNED and DELIVERED as a deed by

TERENCE WILLIAM ALBERT BARKER /s/ T. Barker

in the presence of

Andrew Rowlinson

Witness name

/s/ Andrew Rowlinson

Witness signature

12 Gosfosth Crescent

Dronfield

Derbyshire

518 1PT

Witness address

Motor Trader

Occupation of witness

SIGNED and DELIVERED as a deed by

NORMAN ERIC DODD /s/ Norman Eric Dodd

in the presence of

Kathryn Alison Stansfield

Witness name

/s/ K. Alison Stansfield

Witness signature

The Boat House

Stack Hills Road

Todmorden Lanes

OL14 5QW

Witness address

Dispensing Optician

Occupation of witness

SIGNED and DELIVERED as a deed by

MARTIN ROBERT ANTHONY DUFFY /s/ M.R. A. Duffy

in the presence of

Elizabeth Fawcett

Witness name

/s/ Elizabeth Fawcett

Witness signature

Exchange House

Primrose Street

London EC 2A 2MS

Witness address

Solicitor

Occupation of witness

SIGNED and DELIVERED as a deed by

JOHN ERNEST ALFRED KERSLAKE /s/ John Ernest Alfred Kerslake

in the presence of

Kathryn Alison Stansfield

Witness name

/s/ Kathryn Alison Stansfield

Witness signature

The Boat House

Stack Hills Road

Todmorden Lanes

OL 14 5QW

Witness address

Dispensing Optician

Occupation of witness

SIGNED and DELIVERED as a deed by

ANTHONY JOHN READ /s/ Anthony John Read

in the presence of

Sarah Davis

Witness name

/s/ Sarah Davis

Witness signature

57 Bronte Avenue

Christchurch

Dorset

HB 23 2NB

Witness address

Occupation of witness

Secretary

SIGNED and DELIVERED as a deed by

BARRY SHORT /s/ B. Short

in the presence of

Mrs. M. Jones

Witness name

/s/ M. Jones

Witness signature

9 Rimbury Way

Christchurch

BH 23 2KG

Witness address

Occupation of witness

Schedule 1

IPO proceeds scenarios

Fl Proceeds Disclosures


			No G/shoe		G/shoe		No G/shoe		G/shoe		No G/shoe		G/shoe		No G/shoe		G/shoe		No G/shoe		G/shoe		No G/shoe		G/shoe
Price				20.00		20.00		19.00		19.00		18.00		18.00		17.00		17.00		16.00		16.00		15.00		15.00

No of shares sold:
Cascal				7,706,213		7,706,213		7,706,213		7,706,213		7,706,213		7,706,213		7,706,213		7,706,213		7,706,213		7,706,213		7,706,213		7,706,213
Biwater				8,999,101		11,504,898		8,999,101		11,504,898		8,999,101		11,504,898		8,999,101		11,504,898		8,999,101		11,504,898		8,999,101		11,504,898

Totals				16,705,314		19,211,111		16,705,314		19,211,111		16,705,314		19,211,111		16,705,314		19,211,111		16,705,314		19,211,111		16,705,314		19,211,111

				$000		$000		$000		$000		$000		$000		$000		$000		$000		$000		$000		$000
Gross Proceeds				334,106		384,222		317,401		365,011		300,696		345,800		283,990		326,589		267,285		307,378		250,580		288,167

Underwriters fees				23,387		26,896		22,218		25,551		21,049		24,206		19,879		22,861		18,710		21,516		17,541		20,172

Proceeds after U/writing fees				310,719		357,327		295,183		339,460		279,647		321,594		264,111		303,728		248,575		285,861		233,039		267,995

Total Expenses:				-12,000		-12,000		-12,000		-12,000		-12,000		-12,000		-12,000		-12,000		-12,000		-12,000		-12,000		-12,000

Total Net Proceeds				298,719		345,327		283,183		327,460		267,647		309,594		252,111		291,728		236,575		273,861		221,039		255,995

	Variances			31,072		35,733		15,536		17,866						-15,536		-17,866		-31,072		-35,733		-46,608		-53,599
Biwater proceeds:
Pension Payment				109,939		114,425		102,171		114,425		94,403		114,425		86,636		106,444		78,868		97,511		71,100		88,578
Biwater Dividend				57,444		99,566		56,843		88,867		56,241		78,167		55,640		75,449		55,039		73,682		54,438		71,916

				167,383		213,991		159,014		203,292		150,645		192,592		142,276		181,892		133,907		171,193		125,537		160,493
Biwater share of expenses				-6,464		-7,186		-6,464		-7,186		-6,464		-7,186		-6,464		-7,186		-6,464		-7,186		-6,464		-7,186

Net Biwater proceeds				160,919		206,805		152,550		196,105		144,181		185,406		135,811		174,706		127,442		164,006		119,073		153,307

	Variances			16,738		21,399		8,369		10,700						-8,369		-10,700		-16,738		-21,399		-25,107		-32,099
Cascal proceeds:
Repayment of loan		A		78,204		78,204		78,204		78,204		78,204		78,204		78,204		78,204		78,204		78,204		78.204		78,204


Money for new investment				65,132		65,132		57,965		57,965		50,798		50,798		43,631		43,631		36,464		36,464		29,298		29,298
Less: Expenses				-12,000		-12,000		-12,000		-12,000		-12,000		-12,000		-12,000		-12,000		-12,000		-12,000		-12,000		-12,000

		B		53,132		53,132		45,965		45,965		38,798		38,798		31,631		31,631		24,464		24,464		17,298		17,298
Add: Expenses already paid				9,700		9,700		9,700		9,700		9,700		9,700		9,700		9,700		9,700		9,700		9,700		9,700

				62,832		62,832		55,665		55,665		48,498		48,498		41,331		41,331		34,164		34,164		26,998		26,998
Add: Recoverable from Biwater		C		6,464		7,186		6,464		7,186		6,464		7,186		6,464		7,186		6,464		7,186		6,464		7,186

Cash available				69,296		70,018		62,129		62,851		54,962		55,684		47,796		48,518		40,629		41,351		33,462		34,184
	Variances
				14,334		14,334		7,167		7,167						-7,167		-7,167		-14,334		-14,334		-21,500		-21,500
Cascal Net Proceeds		A+B+C=		137,800		138,522		130,633		131,355		123,466		124,188		116,300		117,022		109,133		109,855		101,966		102,688

	Variances			14,334		14,334		7,167		7,167						-7,167		-7,167		-14,334		-14,334		-21,500		-21,500
Residual Value of Biwater Holding				257,005		206,889		244,155		196,544		231,304		186,200		218,454		175,856		205,604		165,511		192,754		155,167

Schedule 2

A valuation under Part 3 of the Pensions Act 2004 will be undertaken for BRASS as at the Recapitalisation Date using the principal assumptions detailed in this Schedule.

Main Section Assumptions


		Example Basis on
		30/11/2007
Assumption	Derivation of assumption	(financials only)

Rate of investment return (pre-retirement)	Average yield on over 15 year AA corporate bond indices (Barclays Capital and iBoxx indices)	5.90% pa

Rate of investment return (post-retirement)	Average yield on over 15 year AA corporate bond indices (Barclays Capital and iBoxx indices)	5.90% pa

Rate of inflation (RPI)	The geometric difference between yields on over 15 year fixed interest Gilts and index-linked gilts (2.5% inflation)	3.47% pa

Pensionable Salary increases	RPI plus 1.25% p.a.	4.72% pa

Pension increases:
- Pre 1988 GMP	3.00% pa	3.00% pa
- Post 1988 GMP	3.00% pa	3.00% pa
- Pre 1997 excess over GMP	0.00% pa	0.00% pa
- Post 1997 Pension	Inflation with min 3%, max 5% (using Black Scholes methodology and 1% volatility)	3.66% pa

Revaluation of deferred benefits in excess of GMP	Fixed at 5.00% pa	5.00% pa

Current and future pensioners’ mortality	PCA00 table (Year of birth with medium cohort projection subject to a 1% floor)	n/a

All other assumptions will be the same as for the previous formal actuarial valuation carried out as at 31 March 2005.

Water Company Section Assumptions


		Example Basis on
		30/11/2007
Assumption	Derivation of assumption	(financials only)

Rate of investment return (pre-retirement)	Average yield on over 15 year AA corporate bond indices (Barclays Capital and iBoxx indices)	5.90% pa

Rate of investment return (post-retirement)	Average yield on over 15 year AA corporate bond indices (Barclays Capital and iBoxx indices)	5.90% pa

Rate of inflation (RPI)	The geometric difference between yields on over 15 year fixed interest Gilts and index-linked gilts (2.5% inflation)	3.47% pa

Pensionable Salary increases	RPI plus 1.5% p.a.	4.97% pa

Pension increases:
BRASS Section:
- Pre 1988 GMP	3.00% pa	3.00% pa
- Post 1988 GMP	3.00% pa	3.00% pa
- Pre 1997 excess over GMP	0.00% pa	0.00% pa
- Post 1997 Pension	Inflation with min 3%, max 5% (using Black Scholes methodology and 1% volatility)	3.66% pa

- Post June 2005 Pension	Inflation with max 2.5% (using Black Scholes methodology and 1% volatility)	2.40% pa

EX-WCAPS Section:
- Pre 1988 GMP	0.00% pa	0.00% pa
- Post 1988 GMP	Inflation with min 0%, max 3% (using Black Scholes methodology and 1% volatility)	2.78% pa

- Pre 1997 XS/Post 1997 Pension	Inflation with min 0%, max 5% (using Black Scholes methodology and 1% volatility)	3.44% pa

- Post June 2005 Pension	Inflation with max 2.5% (using Black Scholes methodology and 1% volatility)	2.40% pa

Revaluation of deferred benefits in excess of GMP:

BRASS Section	Fixed at 5.00% pa	5.00% pa
EX-WCAPS Section	Inflation	3.47% pa

Current and future pensioners’ mortality	PCA00 table (Year of birth with medium cohort projection subject to a 1% floor)	n/a

All other assumptions will be the same as for the previous formal actuarial valuation carried out as at 31 March 2005 with the exception that an ill-health allowance will be included in the future contribution rate (as previously agreed between the Trustees and the Company).

Schedule 3

Escrow Schedule

Illustration based on £44.0m in the Escrow Account and escrow payments to Trustees commencing April 2008


Tax year	Current schedule of	Amount released from BRASS
	contributions	Escrow
2006/07	£5.3m	—
2007/08	£5.3m	—
2008/09	—	£11.1m
2009/10	—	£23.4m
2010/11	—	£9.5m (plus accrued interest returns)

In respect of the tax years 2008/09, 2009/10 and 2010/11 payments shall be made on 1 April 2008, 1 April 2009 and 1 April 2010 respectively.