Vol 3, Issue 3 (March 2002)
Analysis
- A word from the Editor
We start this month with some good news from Nigeria. After several false starts, Lagos state appears ready to put out the tender documents for two concession contracts. The concessions will be for the Lagos East and Lagos West areas.
General
- Avignon negotiates improved price
THE SOUTHERN FRENCH CITY OF AVIGNON has succeeded in negotiating a 13% reduction in its water tariff following a political controversy dating back over 15 years.
- Baltic states prepare for EU accession
Accession to the European Union is forcing the Baltic states of Latvia, Lithuania and Estonia to bring their environmental regulations into line with those of the EU. European funding and grants – which allowed substantial investment in the water sector throughout the 1990s – could conceivably finance most of the requirements. However, such investments are not likely to be sustainable without accompanying reform of the water sector.
- Bidding groups await Lagos tender
A concession to produce and distribute drinking water in the Nigerian state of Lagos looks likely to be put out to tender soon.
- Foreign involvement grows in Algeria
A number of new projects are transforming the Algerian water sector. Project financing of the Arzew independent water and power project (IWPP) is nearing agreement, the Sidi Bel Abbes drinking water supply project is close to completion, and financing is now in place for the country’s largest project – the Taksebt drinking water scheme.
- French rapped over marine pollution
THE FRENCH ENVIRONMENT INSTITUTE has charged the country’s authorities with failing to honour its commitments under the 1992 Ospar convention for the protection of the northeast Atlantic marine environment.
- Hard going for water projects in post-currency crisis Asia
Private sector participation in Asian water supply and sewerage projects has slowed dramatically since 1997/98. Regulatory and tariff uncertainties are holding up deals, water utilities remain subject to political interference, and the downturn in the Asian project finance market has meant that non-recourse lenders are reluctant to provide funding for projects. However, the growing availability of local currency financing in Asia is allowing projects to close in spite of the difficult market conditions.
- Israel’s desalination plans
In an attempt to bridge the gap between the growing demand for water and the inability of its existing resources to meet this need, Israel is turning to the sea. Despite warnings voiced by experts over the past two decades that the water shortage is both real and imminent, the government did nothing until the middle of 2001, by which time Israel was experiencing its most severe shortage since its inception in 1948.
- New ultrafiltration plant
ONDEO DEGRÉMONT has booked a €38 million contract to modernise the WTP operated by the Greater Angers local authority at Ile-au-Bourg in the Loire region of France.
- São Francisco transfer gets $800 million boost from Spain
Spain’s Ministry of Foreign Trade formally signed a US$800 million credit for Brazil’s São Francisco river transfer project last month.
- Suez to help with Volga river project
CHAIRMAN AND CEO OF SUEZ GÉRARD MESTRALLET, and Mikhail Gorbachev, president of Green Cross International (GCI) have signed a partnership agreement under which Suez will contribute its technical and financial support to a Volga river basin project carried out by GCI and UNESCO.
- Tallinn financing still to close
FINANCING FOR THE TALLINN WATER PRIVATISATION has still to be finalised according to the EBRD. The deal could not be closed as hoped by the end of February as there were still some outstanding administrative issues that needed to be resolved with the shareholders.
- The Nigerian water sector
Nigeria has a population of 120 million which is expected to double by 2020. The West African country has abundant water resources with surface and underground water reserves estimated at 267 billion m<sup>3</sup> and 57 billion m<sup>3</sup> respectively.
- Two desal plants for Cataluna
THE SPANISH PROVINCE OF CATALUNA is to construct two new desalination plants to process saline water for drinking purposes.
- US Filter to build MF plant in California
US FILTER HAS BEEN AWARDED A CONTRACT to provide a microfiltration plant for the Orange County Water District (OCWD) and the Orange County Sanitation District (OCSD) in Fountain Valley, California.
- West African contracts for Ondeo Degrémont
ONDEO DEGRÉMONT, the French engineering and contracting subsidiary of the Suez group, has secured two contracts worth a total of €36 million to construct WTPs serving the capitals of Sénégal and Burkina Faso in West Africa.
Companies
- German water sector still offers investment opportunities
Moves towards liberalising the German water sector are still at the talking-shop stage. In late January, federal minister of economics Werner Müller outlined the five points of his modernisation strategy but acknowledged that the plan “can only succeed if those involved at federal, state and municipal level, as well as the water associations and industry organisations are prepared to co-operate”.
- Suez hit by Argentine crisis
PROFITS AT SUEZ – VE’s main rival – also took a hit last year. The group made a provision of €629 million to take in charges from restructuring Ondeo Nalco and the energy company, Electrabel, and to cover foreign exchange losses in Argentina and Brazil.
- VE writes off €2.6 billion
The weakening of the US economy has obliged Vivendi Environnement (VE) to increase support for its water treatment and management subsidiary US Filter.
Performer of the month
- US earnings take centre stage
US earnings reports for 2001 took centre stage last month as weary investors watched for signs of economic recovery. The Dow Industrial Average hit 10,000 for the first time since the middle of January and all economic indicators are pointing to improved economic conditions.
