Vol 4, Issue 11 (November 2003)

Need to know

• COMPANY NEWS

  Ofwat, the UK water regulator, published the English and Welsh water companies’ plans for the 2005-2010 review period.

• CONSULTANCY NEWS

  Franklin + Andrews, which is part of Mott MacDonald, won a framework contract to provide cost consultancy services for Scottish Water to assist in implementing its £1.8 billion capital investment programme.

• DEALS

  Suez finally sealed the sale of Nalco to a private equity consortium on 5 November.

• PROJECTS

  The progress of deals in the Middle East has slackened with the onset of the month of Ramadan.

Analysis

• Desalination grows up

  But how fast?

• Sales is vanity

  But is return on capital employed sanity?

General

• Algeria awards Hamma RO contract

  Ionics was announced as the low bidder last month. It is seeking finance from a mix of quasi-public US agencies.

• Barra da Tijuca project resumes

  After time out for an election, the wastewater scheme is on line again.

• Brazil PPP law expected soon

  Planning minister Guido Mantegna hopes it will bring in $10 billion a year of investment.

• China’s water problems loom large

  Official sources have been highlighting the scale of the challenge for China’s water industry.

• Court blocks Stockton deal

  Thames/OMI’s $600m contract to run Stockton’s water system seemed to prove that even Californians can think sensibly about water. Now a court has reversed it.

• Real competition in France?

  The profitability of their domestic market enabled French water companies to conquer the world. Now they are returning home to discover things have changed.

• Rising interest rates play havoc with UK regulator’s calculations

  The cost of capital is the key issue in the price review process. It is becoming very difficult to predict.

• Scottish PFIs begin to stir

  Uncertainty over the next review period is a dampener on corporate activity in the English water market. But there may yet be some action in Scotland.

• Shanghai Industrial Holdings enters the market

  A red chip giant strode into the Chinese water market last month, with big plans and a joint venture with an international water company in the pipeline.

• What price the environment?

  UK water bills may become a political liability. How can they be cut?

Companies

• Philadelphia basks in the sun belt

  Philadelphia Suburban Corporation has a formula for solid growth. Larry Chertoff looks at how it delivers.

• Veolia eyes Sicily… and east Germany as well

  Was the company looking for trouble when it signed a €299 million deal for the island’s bulk water supplies? Or was it part of a larger strategy?

Market insight

• Ionics lands major desal contract

  Hamma deal pushes company to 52-week high.

• Suez and Nalco part

  The chemicals business was a drag on Suez’s third quarter. Moody’s doesn’t like it either.

• UK water sector rises with wider market gains

  Publication of companies’ plans for the next review period makes little impact.

• US third quarter results stable

  Results are in from American States, Cal Water, Calgon and Philadelphia Suburban.