Vol 2, Issue 2 (February 2001)

Analysis

• A word from the Editor…

  Welcome to February’s issue of GWI. Now that the new year is in full swing, a number of PPP deals have closed or are about to close.

General

• Aguas Argentinas renegotiates in Buenos Aires

  AGUAS ARGENTINAS – the SLdE/Agbar majority owned concessionaire – has renegotiated its 30-year water and sewerage concession in Buenos Aires.

• China to pursue new Yangtze diversion plan

  CHINA has launched another long-anticipated water diversion project to reroute water from the Yangtze river to farmland in the north of the country. The State Council is expected to approve the $17 billion first phase of the scheme later this year.

• EBRD: a growing appetite for non-sovereign loans

  The European Bank for Reconstruction and Development (EBRD) co-financed nine water and waste transactions in2000 worth a total of €211 million. As well as concession financing, the bank arranged a number of municipal loans without recourse to sovereign guarantees.

• Hesse utilities prepare for liberalisation

  UTILITY COMPANIES Riedwerke of Gross-Gerau, Südhesssische Gas und Wasser of Darmstadt and Mainova of Frankfurt have joined forces to create a new company, Hessen Wasser as a first step towards the partial merger of the three partners.

• Import plan garners little support from desal lobby

  AN ISRAELI DELEGATION was in Ankara again last month to finalise a deal to import up to 50Mm³/year of water from the Manavgat river. However, as talks went on in Turkey, the discussion at home centred on the need to begin construction of the Ashdod desalination plant (see GWI, Vol.2, Issue 1, p.10).

• Lagos seeks private partner

  NIGERIA’S Lagos state government has invited expressions of interest for contracts to upgrade and modernise its water system.

• Prague goes to Vivendi/AWG consortium

  VIVENDI ENVIRONNEMENT (VE) has won the concession to manage the city of Prague’s water supply and sewerage systems in a consortium with AWG. The Czech government will receive €174 million for a 66% stake in the Prague water utility, Prazské vodovody a kanalizace (PVK).

• Sumitomo to build $2 billion Saudi desal plant

  SUMITOMO CORPORATION of Japan has been given the go-ahead to build a 720,000m³/day combined cycle desalination plant in Saudi Arabia’s Gulf coast industrial city of Jubail. The plant will have a power capacity of 700MW.

Brief

• August start date for São Francisco transfer project

  BRAZILIAN MINISTER for national integration Fernando Bezerra has said that work on the Rio São Francisco transfer project will begin in August.

• Brasilia: Caesb investment plans

  DETAILS HAVE EMERGED on how the Brasilia Federal District water company, Caesb will use its US$130 million IADB loan.

• Degrémont to build New Delhi water plant

  DEGRÉMONT has booked a €50 million contract to design, build and operate a 635,000 m³/day WTP at Sonia Vihar in New Delhi.

• Eon increases share in Gelsenwasser

  EON HAS STRENGTHENED its presence in the German water market by acquiring a further 28.08% of Gelsenwasser shares from RWE

• Mott MacDonald moves into US water sector

  MOTT MACDONALD’S US associate company, Hatch Mott MacDonald, has acquired the Killam Group from Thermo Electron Corporation.

• Petrobras to pay for Guanabara Bay clean up

  BRAZIL’S STATE OIL COMPANY PETROBRAS is to invest R$192 million (US$97 million) in pollution prevention, monitoring and emergency control measures at its Duque de Caxias refinery on Guanabara Bay, Rio de Janeiro.

• Pôrto Alegre seeks Ponta da Serraria loan

  THE CITY COUNCIL of Pôrto Alegre has been in talks with Japan’s Bank of International Cooperation (JBIC) over a US$78 million loan towards the US$130 million Ponta da Serraria WwTP.

• Prequalifiers listed for Fujairah desalination scheme

  THIRTEEN GROUPS have been prequalified for a $550 million contract to build a power and desalination complex in the Gulf state of Fujairah.

• VE outperforms analysts’ expectations

  VIVENDI ENVIRONNEMENT (VE) has reported a 25.7% increase in year 2000 sales to €26.4 billion – considerably higher than analysts’ forecasts.

• Wilsonville O&M award for US Filter

  THE CITY OF WILSONVILLE in Oregon and the Tualatin Valley Water District have awarded US Filter Operating Services a five-year contract, with a five-year renewal option, to operate and maintain a new 15MGD WTP. Contract value is $5.5 million.

Market insight

• UK water: a debt or equity future?

  The UK water industry’s regulatory formula has come in for some tough criticism since the 1999 price review. Analysts, the media and water executives themselves have claimed that the sector is now squeezed so hard that it is difficult to see why the markets should want to continue funding it with equity. As a consequence, the debt markets are seen as the natural financiers of UK water plc.

Performer of the month

• Glas news buoys sector

  UK water regulator Ofwat finally ruled on Glas Cymru’s proposal for Welsh Water (Dwr Cymru) at the end of January. Director general Philip Fletcher announced his decision not to block the proposed sale of the Hyder subsidiary to Glas Cymru, a not-for-profit consortium of Welsh businesses and community groups which has sought to retain local control over the debt-laden water company.