A word from the Editor

Water industry news is mixed this month and certainly not all good for private sector operators and banks.

Our short report on the west zone Manila concession illustrates the problem of financing in foreign exchange, in this case US dollars. Unfortunately, local currency debt and equity from domestic savers is not always available.

Staying in Asia, the race for the Beijing No. 10 project appears to be nearing completion. However, it has taken nearly 11 months to evaluate bidders’ qualifications. China has no legal framework for BOTs, only a guidance framework passed in 1995. This could make financing for Beijing No. 10 difficult to arrange.

Without wishing to single out China, this is one of the biggest problems facing the international water industry. There is a huge need for new infrastructure and a number of private sector operators with the experience to build it. Yet development and implementation processes are slow compared with transactions in other sectors.

Private operators would welcome moves to speed up bidding and implementation processes and, ultimately, reduce their bidding costs. As Nigel Hendley notes in this month’s Investor’s View, the provision of inaccurate data in a recent bidding exercise delayed the process by over a year and led to extra costs for the bidders.

Welcome to Clay Landry who takes over as Financial and Regulatory Affairs Editor this month, replacing David Sundel. We would like to wish David all the best and thank him for his efforts over the past year.

Peter Allison, Editor