The end of the road for Suez in Lianjiang
- From: Vol 10, Issue 10 (October 2009)
- Category: General
- Region: Asia
- Related Companies: Lianjiang Water Company and Suez Environment
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The Lianjiang government has bought the 100,000m3/d Tangshan drinking water plant back from Suez Environnement for RMB45 million ($6.6 million) – just over half what the company had hoped to get for it.
The move marks the end of ten years of negotiations during which the plant lay idle, after the extra demand it had been built to meet never materialised.
On the plant’s completion in 1999, Lianjiang Water Company was obligated to buy minimum volumes ranging from 60,000m3/d to 80,000m3/d in the first four years of operation. The water tariff, meanwhile, was due to rise steadily at an annual rate of beween 8% and 12%.
Given that water demand did not increase as expected, the Lianjiang government baulked at the thought of paying Suez for water it did not need over a period of 30 years, and sought to either terminate or adjust the terms of the contract. Somewhat ironically, Lianjiang’s daily water demand has now increased to the extent that the government will have to begin operating the Tangshan plant itself.