Vol 4, Issue 7 (July 2003)

Need to know

CORPORATE
Germany: RWE president Harry Roels said the company was no longer a candidate to acquire Gelsenwasser from Eon.
DEALS/TENDERS
United States: Suez subsidiary United Water pulled out of the running for a 20-year contract to run New Orleans’ water and sewerage systems, pushing the troubled privatisation plan once more into disarray.
INVESTMENT
United States: The US Department of Commerce and the Ex-Im Bank made a push to build business in Mexico’s water sector.
PRIVATE PLACEMENT/POLICY/REGULATION
United States: Brazil’s Sabesp completed an offering of US$225 million principal amount of its 12% notes due 2008 in the private placement market.

Analysis

A matter of branding
Are we overstating demand?
What is driving water now?
Project finance is a politically acceptable alternative to full privatisation. But can it last?

General

Agbar in JV with engineering group
The deal signals Agbar’s desire to diversify into areas with “maximum technological value”.
Berlinwasser linked with Sofia concession stake
Could a partnership between United Utilities and Berlinwasser International be on the cards?
Black & Veatch bids low for consultancy contract
To advise SWCC on the construction of a series of RO plants.
Brazil: public spending vote in August
Central government is in discussion with the states to formulate three-year spending plans. Government sanitation spending might have to be topped up with private funds.
Bream gives up on AWG – for now
Bream Investments’ bid for AWG came to nothing last month when it failed to meet a takeover deadline. However, this might not be the end of the matter.
Chile leads, but others fail to follow
Chilean customers are highly prized compared to their counterparts in Brazil, Argentina and Mexico.
Darco in deal to supply Indonesian water to Singapore
The group has signed a conditional sale and purchase agreement to acquire a 10% stake in the company which will negotiate water sales to Singapore on behalf of the Indonesian government.
Degrémont challenges Mekorot contract award
The company claims that its offer to build a filtration plant was artificially inflated – which meant that it lost out to a rival bid.
Essat, Essan, Emssat & Essco – what is on offer?
The companies are relatively small so a potential buyer may have to look at all four to benefit from economies of scale.
Kenyan PSP possible in longer term
A PwC study has concluded that a Dar es Salaam-style, heavily donor-backed contract could be made to work.
Limited public funds for sanitation in Brazil
Funds are available this year but accessing them is a different matter.
Malaysian water business on the boil
The water sector in the south-eastern Asian state offers a range of opportunities. Several local groups are well placed.
Manila arbitration case hots up
MWSS has been instructed not to draw on a performance bond while the case is in progress. Meanwhile, Ondeo is pushing for a swift resolution.
Mid Kent sale on hold
WestLB’s withdrawal from Bream means that the sale of Mid Kent can wait.
Network of Asian regulators planned
To involve both MWSS and the Jakarta water regulator.
New concessions spark Chilean revival
There is renewed interest in Latin America’s most stable market. Bids are being called for new concessions, a number of assets are available and the government is considering further share sales.
Nord/LB starts a Mexican wave
With an innovative local currency financing deal.
Ondeo’s Singspring stake handed to Hyflux
Ondeo has withdrawn from another Asian water deal – Singapore’s Tuas seawater desalination project – thereby making the Singspring SPV a wholly owned Hyflux subsidiary.
Panama Bay clean up proposed
The government has plans to clean up the bay and rebuild Panama City’s sewer network. Negotiations are underway for IDB loans.
PPIAF backs PSP in African water sector
PPIAF funded the Mombasa study and others elsewhere in Africa.
Saudi IWPP programme moves ahead
Events are happening quickly in the Kingdom and RFPs for one of the co-generation plants could be ready by August.
The challenge of Dresden’s wastewater privatisation
German law and an existing leasing deal complicate a proposed sell-off of the city’s wastewater activities. The transaction could take up to a year and might not even be successful.