Vol 12, Issue 10 (October 2011)

Need to know

• Membrane Epiphany

  The Abu Dhabi Water & Electricity Authority – historically one of the biggest customers for thermal desalination plants in the world – is planning to switch to membrane desalination in future.

• Israel Finance

  Delek, the Israeli investment holding group, has put its 50% share of IDE Technologies on the market.

• European Grief

  France is taking decisive action to bring its wastewater treatment up to EU standards.

• China Curse

  Chaoda Modern Agriculture, the Hong Kong-quoted water-related wonderstock, has delayed the publication of its annual report after Anonymous Analytics, an online shareholder activist group, accused it of fraud.

• M&A Mania

  The mini-M&A wave which has swept the regulated UK water sector appears to be all but over.

Analysis

• Opportunities in the malaise

  The game has changed. From now on it is going to be about delivering efficiency and cutting costs, says Christopher Gasson.

• David Lloyd Owen - A farewell to the June Return: Ofwat’s proposals are bad for data junkies.

  A farewell to the June Return: Ofwat’s proposals are bad for data junkies.

• Chart of the Month - Market share of seawater desalination technologies

  This month’s chart looks at the market share of the three main commercial seawater desalination technologies since 1991.

General

• Reaching the Summit

  Emma Welsh considers the importance of GWI’s American Water Summit.

• Nuclear plans push Abu Dhabi towards RO

  The Emirate has historically been one of the strongest supporters of thermal desalination. Changing priorities in power will mean it will be looking to reverse osmosis for its future desalination needs.

• Membrane tender troubles

  Middle East editor Tom Scotney says the move toward membranes in Abu Dhabi was inevitable – but comes with its own procurement headaches.

• The push to revitalise PSP in Madagascar

  Private sector participation in Madagascar’s water sector stalled following the presidential coup in 2009. Now, the country’s leading private water proponent, Sandandrano, wants to kick-start investment.

• Private finance rises up Spain’s water agenda

  A change of government would appear to be Spain’s best hope of resuscitating its water infrastructure programme. Richard Weyndling assesses the prospects for privately financed projects.

• Germany faces court over WFD interpretation

  In an ironic twist, one of the chief proponents of the Water Framework Directive has been hauled up over its interpretation of when to apply cost recovery.

• France faces up to new EU compliance demands

  A new investment push will see 74 French WWTPs upgraded to comply with EU directives. The role of private finance in the initiative remains undecided.

• Portugal rejigs water management

  Spending cuts ushered in by the new government will see a streamlining of the country’s water management activities. It is a double-edged sword.

• Bluewater Bio enters desal market

  The latest acquisition by the wastewater technology specialist will enable it to pursue opportunities in water reuse and desalination pre-treatment.

• Israeli water company faces uncertain future

  The sale of Granite Hacarmel could have far-reaching implications for its water division. It has been frantically buying out joint venture partners in order to boost its core offering.

• Capstone takes a gamble on Bristol returns

  The new majority owner of Bristol Water seems to have been happy to trade operational control for exposure to the regulated UK water sector. Realising a double-digit return could be tricky.

• More asset sales on the cards in Bahrain

  International Power is still dealing with the ramifications of the combination with GDF Suez that made it the largest power and water asset owner in the Middle East. Bahrain has become the focal point of its regulatory issues

• Warm welcome for IWPP bond refinancing plan

  The developers of the Shuweihat 2 project are looking to the bond markets to refinance the original commercial loan. The move could help broaden the investor base for power and water assets in the region.

• Planners give go-ahead for Beirut supply scheme

  After years of complaints and delays, a $370 million water treatment and transmission project could be set to finally go out to tender.

• CH2M Hill boosts global water capabilities

  The takeover of Halcrow will create a combined water group with annual revenues of $1.5 billion. What are the prospects for further growth?

• CAB picks up two new passengers

  The Brazilian water concessionaire is poised to take on new shareholders ahead of a possible IPO revival. Alexandre Spatuzza reports from São Paulo.

• Xylem debuts with $4.4bn market cap

  ITT’s water spin-off will start regular trading on NYSE on 1st November.

• Getting into the Swing of things

  With internal restructuring now complete, Swing Corporation wants to grow its international revenue base. A unique water services PPP in Japan could be just the springboard it needs.

• Standing on the shoulders of giants

  KEC International is looking to build a $200 million water business from a standing start within five years. Division chief Dilip Shukla spoke to GWI’s Rama Rastogi about how he intends to get there.

• Tokyo goes to work on Asian water

  A new initiative spearheaded by Tokyo Waterworks will enhance Japanese companies’ prospects of penetrating international markets. It could also pave the way for JICA’s first equity investment in a project since the 1990s.

• Metito thinks big as Germans exit China JV

  Metito is looking to turn a share in a Chinese wastewater business into a full-service outfit after buying out partner Berlinwasser. Executive director Rami Ghandour spoke exclusively to GWI.

• Latest Aussie water buyback draws flak

  The timing of the Australian government’s latest water buyback has been called into question by both irrigators and water rights brokers. Max Borchardt reports.

• Chinese water companies revel in diversity

  The potential returns on offer in the fledgling environmental remediation market are driving a new wave of diversification among large Chinese water companies. Kathy Liu assesses the reasons behind the trend.

• Japan’s infrastructure spending dilemma

  A falling revenue base and rising rehabilitation costs may force Japanese municipalities to explore more closely the idea of private sector finance.

Brief

• EUROPE WATER IN BRIEF

  * Ownership changes at three of the UK’s regulated water utilities dominated the headlines this month.

• MIDDLE EAST IN BRIEF

  * The Kuwaiti parliament is discussing a proposal to part-privatise the national water and power metering system.

• AMERICA WATER IN BRIEF

  * Chilean centre-left MP Adriana Muñoz filed a motion in early October requiring large mining companies to use desalinated water in their production processes.

• ASIA WATER IN BRIEF

  * TRILITY announced on 17 October that it had completed the acquisition of the remaining 50% stakes in the Macarthur and Yan Yean water filtration plants from Transfield Services Infrastructure Fund for A$27 million (US$27.5 million).

Opinion

• Waste not, want not

  Raising consumer water tariffs is still a no-no in the Middle East. Tom Scotney says upping wastewater charges might be an easier case to make.

• Starving Yin to feed Yang

  Charles Bodhi assesses the changing relationship between China’s power alternatives and its water needs.

GWI Water Index

• Asia disappoints as index treads water

  Asian stocks were the biggest fallers in the GWI Global Water Index this month, as export fears began to hit home. The debut of Xylem provided a bright spot, with more water pure-plays expected to float in the New Year.

Market Profile

• Better regulate than never

  The way water and wastewater treatment standards are implemented has far-reaching implications for both health and economic prosperity. A new report from GWI assesses the opportunities.