Vol 11, Issue 1 (January 2010)

Need to know

• STOCK MOVES

  * Water under-performed the markets during 2009, according to our annual stocks survey (see pages 8-13).

• PRIVATE FINANCE

  * There has been speculation that two of the giants of the Middle East power and water market, GdF Suez and International Power, will merge.

• SPANISH ABROAD

  * The world’s biggest wastewater treatment plant contract has been awarded in Mexico.

• THE GULF OF SINGAPORE

  * Moya, the Saudi-Bahraini specialist water investment vehicle set up last year by Gulf One Investment Bank and the Bushnak Group, has made its first acquisition outside the Gulf region.

• WATER CRISES

  * Jordan attracted more than 40 expressions of interest from engineers looking to be “master developer” of the Jordan Red Sea Project, which will desalinate water from the Red Sea and transport it inland.

Analysis

• The deranged lunatic

  Christopher Gasson argues that change is required before long-term growth in the water sector can be achieved.

• David Lloyd Owen - Out of bondage

  sub-sovereign water funding makes a belated return.

• Chart of the Month - Aggregate gap between water supply and demand by 2030

  This month’s chart comes from the IFC/ McKinsey report, Charting Our Water Future.

General

• A higher resolution

  Emma Welsh is excited about our new Global Water Market report – this time in print.

• Water stocks didn’t bounce in 2009

  Having outperformed the market between 2004 and 2008, water stocks under-performed during 2009. Careful stock-picking enabled some investors to stay ahead of the market.

• Swings and roundabouts in European water

  Picking the right stocks was the key to successful investment in European water last year. The de-listing of Agbar and Christ in 2010 will reduce the investible universe.

• US water utilities underperform in 2009

  Quoted US water utility stocks put on a somewhat lacklustre show last year, after 2008’s stellar outperformance. Analysts are predicting great things for 2010.

• Industrial uptick boosts equipment stocks

  A combination of internal and external factors meant that nearly all the North American water equipment stocks in the GWI index grew in value in 2009. What are the prospects for 2010?

• Regulatory reform divides Brazilian water stocks

  The relative outperformance of Copasa versus Sabesp on the Brazilian stock market last year was partly down to greater clarity over tariff reform in Minas Gerais state. The tables were turned in early January 2010, however.

• Asian stocks: the dragon rises again

  The resurgence in Asian listed water stocks last year was supported by renewed access to capital. The new environment could encourage more companies to recycle capital by spinning out business trusts.

• A model deal for a model city

  aqualia and Orascom have convinced local banks to back Egypt’s first wastewater PPP at New Cairo. It is an important breakthrough.

• Italy’s leakage embarrassment

  New water loss figures from Italy illustrate how little investment has been made in the last 10 years. The south is guiltier than the north.

• DEWA’s defining moment of clarity

  The Gulf’s most conservative procurement agency is seeking a blueprint for a radical overhaul of its power and water procurement strategy.

• Private partners to take centre stage in JRSP

  Jordan’s ambitious water supply project will be relying on a wider economic development programme to meet its multi-billion dollar price tag.

• Saudi water management plans move ahead

  The National Water Company is making progress in water reuse, CEO Loay Al-Musallam tells GWI.

• Istithmar re-opens old wounds in Singapore

  Istithmar has initiated legal action against Hyflux over the exercising of warrants on Hyflux stock. Could this be the final parting shot as the Dubai investor liquidates its investment to pay creditors?

• Ashdod price battle hots up

  The battle between Mekorot and the Israeli finance ministry has reached epic proportions. The outcome could affect Israel’s entire desal programme.

• Hutch finds the winning formula at Soreq

  IDE and Hutchison Water have been chosen to develop Israel’s largest ever desalination plant. The low off-take price is not all it seems.

• UGSI sales jump ahead of stock listing

  Underground Solutions' CEO Andy Seidel has been quietly building market share with his fusible PVC pipe applications. Now he plans to take the company public.

• Robots join the sewer bandwagon

  RedZone Robotics is capitalizing on the shambolic state of US sewer infrastructure. It has attracted the attention of venture capitalists.

• Water follows the shale trail

  The market for wastewater treatment solutions to serve shale gas wells could be worth $100 billion over the next 50 years. Emily Pickrell investigates.

• The king of wastewater treatment plants

  Billed as the largest wastewater treatment plant in the world, Mexico’s new Atotonilco facility will have a profound impact on the local economy in more ways than one. Mark Walsh reports.

• A new future for Aussie water

  The first stage of a new water trading framework will be implemented in April. The debate over further legislation is causing friction.

• China to double environmental spending

  China’s next five-year plan is likely to call for more than $450 billion in investment to protect the environment. Wastewater treatment companies will be hoping to reap the benefits.

• Chennai’s desal expansion set to continue

  The award of India’s latest municipal desalination project to Wabag and IDE points the way to increasing international collaboration in the sector, argues Rama Rastogi. The city is already looking for more capacity.

• Saudi fund breathes new life into Dayen

  A capital injection from Moya Holding will allow the ailing Singapore EPC contractor to fast-track its growth strategy. It is a precursor to a possible IPO of its new majority owner.

• A winning team worth its salt

  The win at Nemmeli looks set to transform the fortunes of VA Tech Wabag and IDE Technologies in India.

Brief

• EUROPE WATER NEWS IN BRIEF

  * On 12 January, the majority of Agbar’s shareholders approve the delisting of the company later this quarter, in anticipation of Suez Environnement increasing its stake in Agbar to 75%.

• MIDDLE EAST WATER NEWS IN BRIEF

  * Epure International has formally signed its first contract in Saudi Arabia.

• AMERICAS WATER NEWS IN BRIEF

  * The City of Evansville, Indiana, has voted to end private sector participation in the management of its water and wastewater facilities with effect from March 2010.

• ASIA WATER NEWS IN BRIEF

  * Spain has signed an inter-governmental MOU to provide €65 million of funding for three water treatment projects in Vietnam, for which Spanish companies will be allowed to tender.

Companies

• aqualia’s major league ambitions

  aqualia’s international aspirations have seen it grow from a zero revenue base to €200 million within four years. Vice president Miguel Jurado spoke to GWI about the company’s future expansion plans.

Opinion

• The rise of the Chinese shadow

  Charles Bodhi returns to the real world after the New Year's party is over.