SAO PAULO, Brazil, Aug. 1 /EMWNews/ -- Companhia de

Saneamento Basico do Estado de Sao Paulo - Sabesp (NYSE: SBS; Bovespa:

SBSP3), one of the largest water and sewage service provider in the world

based on the number of customers, hereby inform the Shareholders that on

July 31, 2008, the Board of Executive Officers, having heard the Fiscal

Council, proposed and the Board of Directors resolved on the payment of

dividends in the form of interest on own capital related to the period from

January to June 2008, to the Shareholders registered as such on August 12,

2008.



    The dividends as interest on own capital, totaling R$200.496.228,24

corresponding to R$0.88 per common share will be paid no later than 60 days

after the 2009 Annual Shareholders' Meeting.



    Income tax shall be withheld from payment of dividends as interest on

own capital, pursuant to the laws in force, except for the immune or exempt

shareholders proving such condition until September 10, 2008, and

corresponding documents shall be sent to the Company's headquarters.



    Referring to the entities of Supplementary Private Pension, Insurance

Companies and Fapi, such proof shall occur by means of Declaration, a model

of which is available at the Investors Area, in the item Information to

Shareholders on the website http://www.sabesp.com.br.



    The aforementioned interest on own capital will be computed in the

calculation of the mandatory minimum dividends, as provided for in the

caput of Article 29 of the Company's Bylaws.



    The shares now are traded ex-interest from August 13, 2008.



    Further information may be obtained at any of Banco Itau S.A.'s

branches, which are specialized in assisting shareholders, during banking

hours.



    The full version of the release is available at the Company's website.



    Sabesp also informs that on July 11, 2008 announced to the market that

the Company's Form 20-F, regarding the year ended on December 31st, 2007,

was filed with the SEC, and is available for download at the Company's IR

website. Shareholders may receive a hard copy of the Company's Form 20-F,

free of charge, by requesting a copy within a reasonable period of time to

Sabesp's Investor Relations.