Vol 3, Issue 11 (November 2002)

Analysis

• The genius of leverage

  It says something about the naivety of the UK regulator that in response to the trend towards highly leveraged water companies in England and Wales, he commissioned a study – published last month – on the extent to which he should take capital costs into account in price regulation (see report, p.14).

• What will the Saudis do next?

  So water could be decoupled from the Saudi Gas Initiative (see p.8). It is difficult to know whether this should be a reason for hope or despair. Valued at $25 billion, the gas venture was billed as one of the largest private sector projects in the Middle East.

General

• Biwater edges towards Dawasa deal

  The UK’s Biwater is playing a waiting game in Dar es Salaam but has ruffled a few feathers in Francophile Africa.

• Leak reduction offers a chance to shine

  Reducing leakage and consumption is a cost-effective alternative to desalination, and private water companies may be able to help in the Kingdom’s big cities.

• New water support plans from German ministry

  Funds are to be made available to support projects in Syria, Jordan, Kazakhstan and Azerbaijan.

• Oxera report on leverage and capital structure

  By leveraging up, water companies have turned the tables on the regulator.

• Prosecutions to commence in Nelspruit

  Biwater is owed R17 million in unpaid bills and has hired a law firm to take debtors to court.

• Saudis shift closer to IWPP route

  The IWPP model is emerging as the most likely way of developing power and water projects at Shoaiba, Ras Al-Zour and Jubail.

• SIAAP chooses Ondeo... and Vivendi

  Both of the big two French companies have won contracts in their own backyard.

• South Africa’s leaking pipes

  Leakage rates in South Africa are as high as 30% and that simply isn’t good enough.

• Taweelah RO project to be rebid

  ADWEA is unhappy with the proposals it received in October and has called for new offers.

• The PT and privatisation

  State water companies are not for sale – with the exception of Embasa.

• The tariff problem

  Tariffs simply must rise but there are social issues to consider.

• Umgeni moves out of the red

  Thanks to a cost-pruning programme.

• Vivendi takes over in Rabat

  By acquiring Redal’s utility services concession.

• Vivendi waits

  Vivendi is still tied up in the process of acquiring the UK’s Southern Water.

• Water and sanitation high up Lula’s agenda

  The new left-wing government in Brazil has identified basic sanitation as a priority for investment. But projects are to be publicly run and funded.

Performer of the month

• Shares surge after New York rally

  Share prices were up in October on the back of a modest market recovery.