PSE Circular for Brokers No. 2060-99

August 19, 1999 PSE CIRCULAR FOR BROKERS NO. 2060-99 August 18, 1999 Philippine Stock Exchange Tektite Tower, Ortigas Center Pasig City Attention: Ms . Grace B . De Guia Assistant Manager, Disclosure Department Ms . Raquel R . Angeles Assistant, Disclosure Department Mesdames : In reference to the article that came out in the August 18, 1999 issue of the Philippine Daily Inquirer entitled "2 firms blamed for gas leak lacked permits", Benpres Holdings Corporation would like to make the following clarifications regarding the criminal charges against Maynilad Water Services, Inc. 1) The June 11, 1999 incident in Muntinlupa City subject matter of an article that came out in the August 18, 1999 issue of the Philippine Daily Inquirer, was occasioned by soil testing operations conducted by Geotechnics Philippines, Inc. in behalf of DCCD Engineering Corporation which was in turn contracted by Montgomery Watson New Zealand Ltd., and Safege Consulting Engineers, a French Company. The latter two are independent contractors and consultants of Maynilad Water Services Inc. in connection with Maynilad's expansion projects in the southern part of Metro Manila. 2) While conducting soil testing operations, the drilling rig of Geotechnics accidentally punctured the gasoline pipeline of First Philippine Industrial Corporation, thereby causing a big amount of gasoline to leak and spread into the Pasong Diablo Creek. For still unknown reasons, the gasoline caught fire and destroyed several business establishments and residential houses, resulting also in the death of one person. LLphil 3) Geotechnics was hired by DCCD, in turn. DCCD Montgomery and Safege have at all times been represented by a Program Manager. They have introduced themselves as associated firms and have a common office at the MWSS compound in Balara. As such, Maynilad cannot be held legally liable for the acts of these entities or of their employees. 4) Notwithstanding the foregoing, Maynilad has closely coordinated with FPIC, Montgomery Watson Safege, DCCD and Geotechnics in order to address the concerns of the City Government of Muntinlupa and the losses of the fire victims. The insurance companies of these companies have also expressed their support to the settlement of the claims of the fire victims. To this date, the claims of more than 50% of the fire victims have already been settled although the bigger claims remain to be negotiated. In any event, Maynilad Water is fully covered by a US$10 Million Public and Products Liability Insurance. 5) The companies involved have fully cooperated with the City Government of Muntinlupa and are presently addressing the concerns of the local government in the public hearings being conducted for the purpose. As of this date, no criminal, civil or administrative case has ever been filed against any of the parties in connection with the fire. Should you have further questions or clarifications, please do not hesitate to give us a call. For your information and guidance Warm Regards, (SGD.) CATHERINE LOPEZ Corporate Information Officer