Vol 10, Issue 9 (September 2009)

Need to know

• WATER REUSE MARKET BULLISH

  GE Water has downgraded desalination in favour of a big push in water reuse.

• IPO SPECULATION

  Austrian-Indian EPC contractor Wabag is being scrubbed up for an initial public offering, probably on the Bombay Stock Exchange.

• NUCLEAR DESAL FOR ABU DHABI

  Abu Dhabi is taking a new tack in its power and water strategy.

• STOCK MOVES

  GWI is just completing its annual sweep of desalination references for Desal-Data and the IDA Desalination Yearbook.

• ITALIAN PPP REVIVAL

  Italy could finally be opening the doors to more public-private partnerships in its water sector, after a new decree was issued in early September effectively outlawing "in-house"awards to former municipally- owned companies.

• SICILIAN INTRIGUE AT VEOLIA

  There are rumours in the French press that Veolia Environnement boss Henri Proglio is to be appointed capo di capi at EdF.

Analysis

• Opportunity & danger in the Chinese water market

  Christopher Gasson has been in China – with mixed feelings.

• David Lloyd Owen examines bathing water quality on British beaches. Investment is needed to meet new EU standards.

  Once more onto the beach. Is there an end to Britain's bathing water issues?

• Capital costs of Australian desalination plants are rising - CHART

  This month’s chart shows the rising capital costs involved in building large-scale desalination plants in Australia.

General

• Has GE finally found its way in water?

  Christopher Gasson assesses the evolution of GE’s water sector strategy.

• Chinese stocks impede index performance

  A 10% slump in the Shanghai Composite Index over the past month fed through into the GWI Global Water Index. The three big listed Chinese water stocks were the worst performers this month.

• De-politicising the infrastructure debate

  A new survey has found that politics, bureaucracy and corruption are some of the greatest impediments to the effective delivery of infrastructure by the public sector. Kathy Shandling digests the results.

• Still holding out for the private sector

  The spread of private sector participation in South Africa’s water sector is hampered by restrictive procurement processes. Anthony Still, former head of Johannesburg Water, outlines why the time is ripe for reform.

• Plugging Mexico’s leaky pipes

  Mexico City is launching four new concessions to improve water efficiency. It is an important new direction for the private sector. Mark Walsh reports.

• Suez Environnement plays its cards right

  A positive set of first-half numbers from Suez Environnement cheered analysts and shareholders alike. The company’s ability to protect its EBITDA margins marked it out from the pack.

• Italy threatens to turn its back on “public” water

  New legislation in Italy could give a significant boost to PPPs in the water sector. It may also involve municipalities reviewing their ownership of listed companies.

• Veolia narrows UK bidder list

  Four bidders are left in the race to buy a 49% stake in Veolia’s UK water portfolio. The price will depend on what mood Ofwat is in come November.

• STS broadens its Spanish footprint

  Severn Trent Services wants to increase its presence in Europe. The purchase of Spanish company Apliclor will open up new opportunities for growth.

• Wabag CEO bullish on growth

  Integration efforts have not hampered growth at VA Tech Wabag. Managing director Rajiv Mittal is bullish ahead of a possible IPO later this year.

• Aussie water capex set to shift to reuse

  A new report shows that the potential for water reuse in Australia is still vastly under-exploited. It could sustain the next big rush of spending in the sector.

• Taking the water out of the land

  The race to acquire Cubbie Station’s water entitlements is almost over. GWI’s Australia editor Max Borchardt wonders whether it was worth all the hype.

• Sibling rivalry: a tale of Chinese children

  Kathy Liu reflects on how state-backed, private and foreign companies have grown up in the Chinese water market.

• Beijing Drainage takes the lead on reuse

  The Olympic Games turned Beijing into a showcase for water reuse. Now Beijing Drainage Group is looking to push the technology out across the whole city.

• Explaining China’s wastewater boom

  China may build another 4,000 wastewater treatment plants as explosive growth continues.

• EIB looks to step up desal lending activity

  The multilateral is considering co-financing two large-scale desal BOTs in Israel. Its support of the Israeli desal programme should be a lesson to other Mediterranean countries.

• Too few cats, too many mice

  Charles Bodhi – GWI’s eyes and ears in Asia – considers the enigma of Chinese tariffs, and questions the value of intellectual property.

• IDE revenues jump on increased market penetration

  The Israeli desalter had an impressive 2008, more than doubling its revenues. What are its prospects in 2009?

• Calder suffers the vagaries of the ERD market

  From a leading position in 2005, the Swiss energy recovery device supplier has had llmited success so far in 2009.

• UAE’s nuclear future points to greater SWRO

  The country at the forefront of the drive to establish a civilian nuclear industry in the Gulf is formulating a strategy for nuclear-powered desalination.

• Banks hold out for 11th-hour adjustment at S2

  The deadline for refinancing the bridge facility to fund the Shuweihat 2 IWPP is fast approaching. Two of the original banks have pulled out of the deal.

• DEWA goes back to the drawing board at Hassyan

  A fresh consultancy team is on the cards for the Hassyan 1 power and desalination project. The move has alarmed some observers in Dubai.

• Six sign up for Abu Dhabi WWTP loan

  Even smaller project loans in the Gulf are struggling to find sponsorship. Only six banks have joined a new term facility for two Abu Dhabi WWTPs.

• Healthy response to Kuwaiti advisory

  A strong showing from some of the foremost consultants in the Gulf power and water market is a sign of the potential of Kuwait’s IWPP plans.

• Saur set to reap Mecca’s low-hanging fruit

  The French firm continues to capitalise on early-phase technical assistance opportunities in the Saudi water sector.

Brief

• AMERICAS WATER NEWS IN BRIEF

  Brazilian oil company Petrobras has awarded a Veolia Water Solutions & Technologies/Enfil joint venture the contract to supply and construct a water treatment and reuse station at a refinery in Pernambuco State.

• EUROPE WATER NEWS IN BRIEF

  Iride has been confirmed as the water and wastewater operator for the next 25 years in the province of Genoa, following a decision by the local ATO.

• ASIA WATER NEWS IN BRIEF

  Sinomem Technology has agreed to sell up to 50 million new ordinary shares via placement agent CIMB-GK Securities, at an issue price of S$0.62 (US$0.44) per share.

• MIDDLE EAST WATER NEWS IN BRIEF

  CH2M Hill is preparing to launch a joint venture with Saudi Arabia’s Olayan Group in January 2010.

Companies

• GE Water prioritises water reuse over desalination

  The economics for reuse beat desalination, according to GE Water’s scarcity solutions leader, Earl Jones. The US giant wants to make the most of the market.

• Veolia Water’s Saudi Arabian odyssey

  The Middle East remains the main engine of growth at Veolia Water AMI. Saudi Arabia’s industrial water market could be a key element of continuing growth.

• Turning craftsmanship into mastership

  Four years of hard work have put Veolia Water AMI in pole position for upcoming operations contracts in India. The challenge for CEO Patrice Fonlladosa will be to convert goodwill into profit.

Market insight

• No let up in pressure on water tariffs

  The global financial crisis might have provided a good reason for water utilities to hold back on water and wastewater charges. This year’s survey shows continued above inflation rises.