Section 3: The above mentioned rates will be

subject to annual indexation against the domestic price index, exchange rate, foreign price index and the electricity tariff The indexation will be carried out on a financial year basis and will apply on the 1st July of each year. The indexation will be based upon the following formular. To (aAI + bAFIAFX+ cAK ) = T1 Whereby To = Tariff level at end of year zero. a = Proportion of tariff associated with local salaries, and locally sourced goods based on the previous years audited financial Accounts. A Change. = 1 Domestic retail price index as published by the Bureau - of Statistics and based on the underlying inflation rate. b = the proportion of the tariff associated with foreign costs, i.e. foreign inputs in the production process based on the previous years audited financial accounts. FI = Foreign retail price index based on the US Bureau of Labour Statistics. FX = US Dollar to shilling exchange rate based on the Bank of Uganda mid exchange rate as at the 30th June of each financial year. c = Proportion of tariff associated with electrical power based on % of electricity cost to total cost as a proxy. (Audited financial Accounts). K = Price of electrical power per unit. T] = Indexed Tariff at beginning of year one. Water^ 4. Effective July 2004, the NWSC will provide and Lines. maintain all water service lines to its customers. To enable the Corporation do this, all service lines shall belong to the NWSC. Accordingly, in order to defray the costs of this additional service to customers, the rates will be adjusted by an average of 10% for all customer categories except those consuming over 500 cu.m of water per month. sewerage 5. Effective July 2006, the NWSC will provide and maintain Poi'icyCl,°n sewer service lines to its customers. To enable the Corporation do this, all sewer service lines shall belong to the NWSC. Accordingly, in order to defray the costs of this additional service to customers, the rates will be adjusted by an average of 7.4% for all customer categories except those consuming over 1,500 cu.m of water per month whose tariff will be adjusted by 5%. s.i. No. 44 6. The Water (General Rates) Regulations, 2004 is of 2004. hereby amended accordingly. SCHEDULES FIRST SCHEDULE