Vol 10, Issue 4 (April 2009)

Need to know

• PRIVATE WATER COMEBACK

  * Our annual survey of the US contract operations market shows 8% growth in revenues from the sector during the year (to $1.53 billion).

• RIGHTS

  * Rising demand seems to be a major issue in South Africa. The Supreme Court ruled this month that 25 litres per person per day was no longer enough to cover the basic human right to water as enshrined in the constitution

• STOP STOP GO

  *The biggest financing in the water sector – the $5.4 billion Ras Azzour independent water and power project in Saudi Arabia – is not looking too pretty (see story p28).

• THE BIG DRY

  * Australia’s Murray-Darling Basin has seen inf lows shrink to a 117-year low, despite the reversal of the La Niña effect which was identified as the cause of its long drought.

Analysis

• Booty for the brand pirates

  Christopher Gasson analyses why municipal utilities need to work more closely with business users of water.

• Desalination versus water reuse in the MENA region-CHART

  We selected this month’s chart in reply to our reader survey on page 15.

• Insight - David Lloyd Owen

  With water and money in short supply, the AMP5 run-in will be fascinating.

General

• Australia’s five billion dollar question

  GWI’s Max Borchardt meets the leaders of a new industry group aiming to develop a A$5 billion export industry for Australian water companies.

• Banking on water infrastructure

  Kathy Shandling explores the role of a proposed new federal lending authority for the US. It has already attracted interest from elected officials.

• Bath or shower?

  Emma Welsh puts her thinking cap on and decides that the GWI/IDA conference is even better than a hot bath.

• Beijing steps up its commitment to 100% water reuse by 2013

  Beijing’s water authorities have announced a $5 billion investment package as part of a drive towards full water reuse. GWI’s Kathy Liu investigates.

• Bluewater Bio poised to enter Saudi market

  A new joint venture agreement will boost Bluewater Bio’s penetration into the Saudi wastewater sector. A recent equity infusion will facilitate access to project finance.

• Cost fears dominate UK final business plans

  In their final business plans for 2010-2015, the English and Welsh water companies have requested higher tariff rises, despite cutting back on capex. It reflects widespread fears over rising costs.

• DEWA completes loan refinancing

  The pressure on DEWA’s ratings has eased after the authority successfully refinanced a $2.2 billion loan. Reduced capex commitments will also help.

• DEWA weighs up its options

  A 10% rise in water consumption in Dubai last year is likely to be reversed in 2009. This summer’s demand forecast will provide further direction.

• EA strategy report blurs regulatory lines

  The Environment Agency’s new strategy document has a clear message for Ofwat. It advocates broad-brush changes to the way the industry is structured in England and Wales.

• EBRD eyes equity stake in aqualia subsidiary

  The EBRD is looking to invest in a new vehicle which will further aqualia’s expansion into Eastern Europe. It follows a similar deal with Veolia.

• Gelsenwasser looks to acquisitions for growth

  Germany’s largest water company struggled to boost its water sales in 2008. Falling domestic consumption means that future growth is likely to come from acquisitions.

• Hyder secures advisory contract for Saudi cities

  The unbundling of Saudi Arabia’s municipal water infrastructure is poised to move on to the next round of cities.

• Hyflux secures financing for Mactaa

  The financing is now in place for the world’s largest membrane desalination plant. The Algerian government has broken with tradition to take a majority stake in the project company.

• Israel’s point-of-use solution to the water crisis

  The authorities in Tel Aviv have stepped up demand management measures in an attempt to bridge the supply gap.

• Jumeirah Golf Estates wastewater deal in turmoil

  The project once hailed as the gold standard for sustainable development in the Gulf has become the latest victim of the slowdown in Dubai’s property market.

• Leased is most in Milwaukee

  The Cream City is looking to maximise the value of its water assets by leasing them to the private sector. The scale of the deal is unprecedented.

• More free water for Johannesburg’s indigents

  Residents of Johannesburg have successfully challenged the city’s water policy. The ruling could have national implications in terms of South Africa’s ‘right to water’.

• NYC officials vote on Croton

  The decision to outsource the operation of New York’s $3 billion Croton water filtration plant marks an important step forward for the industry

• Oman tweaks 7yr water demand forecast

  Oman’s PWP has released its new seven-year demand outlook for power and water. The projected targets hinge on the stalled IWPP at Duqm.

• Quoted water stocks reverse declines

  The GWI Water Index surged forward in the run-up to Easter, but failed to keep up with the major indices. Problems in California took the shine off the spring rally.

• Safeguarding Europe’s water

  The European Environment Agency is advocating tariff reform and water reuse as key tools to mitigate the effects of climate change. Executive director Jacqueline McGlade spoke to GWI.

• Saudis consider strategy switch at Ras Azzour

  The banking commitments secured by the preferred consortium on the Ras Azzour IWPP have now expired. The client is looking closely at radical steps to ensure timely delivery.

• South Africa looks to desalination

  A new policy document points to potential projects for all South Africa’s major coastal cities.

• Spanish water privatisations gain popularity

  Inspired by Madrid, a number of Spanish municipalities are looking to part-privatise their water systems. Public opposition is already rampant.

• Suez Environnement’s bond bonanza

  First-time borrower Suez Environnement drew nearly €9 billion of orders for its two-part bond issue. It will lessen the company’s reliance on its parent as a source of funding.

• The dark side of inflation-linked debt

  Concerns over falling inflation have led to new equity injections at three privately owned UK water companies. It is the downside of having so much index-linked debt.

• Three Ts for the fourth forum in Istanbul

  An alphabet soup of solutions for water was debated at the World Water Forum. Not much was achieved, but private water enjoyed some quiet advances. Christopher Gasson reports.

• US outsourcing activity picks up

  An up-tick in contract ops revenues in 2008 reversed the declines of the previous year. Restructuring efforts should enable the larger firms to make the most of a burgeoning pipeline of opportunities.

• Your views on the future of water

  When we asked you to vote on the Global Water Awards, we also asked for your views on what the future holds

Brief

• In Brief - America

  * Peter S. Silva will take over from Ben Grumbles as assistant administrator for water programmes at the US EPA.

• In Brief - Asia

  * GE and the National University of Singapore have signed an agreement to establish a S$150 million (US$100 nillion) water technology centre on the NUS campus. The NUS-GE Singapore Water Technology Center will develop new solutions for low-energy seawater desalination, water reclamation and water reuse.

• In Brief - Europe

  * With shares in Christ Water Technology still languishing below €1.00, both Pictet and Invesco have reduced their stakes to below 5%. Meanwhile, Christ’s subsidiary Aqua Engineering has been awarded a €60 million water treatment contract in South Africa.

• In Brief - Middle East

  * The Gulf’s leading power and water developers, speaking at MEED’s Arabian Power and Water Summit 2009, offered their thoughts on how shifting EPC prices might affect the market.

Market insight

• Using everything but the oink

  Regulation is re-defining the way industry manages its entire water cycle. Gord Cope explores the diverse opportunities for extracting value from wastewater streams.