Singapore firms sing China’s praises

Darco may have had trouble getting money out of China but Dayen hasn’t, and other Singapore and Malaysian firms are queuing up for more of China’s water sector.

Singapore-based Dayen Environmental (Dayen) has reported that its Chinese joint venture, Shenfei Dayen Environmental (Shenfei Dayen), has collected RMB10 million (.2 million) initial payments for the construction of the Diao Bing Shan City wastewater treatment plant and its related sewers.

The plant is located in Diao Bing Shan City, Liaoning Province, China, and has treatment capacity of 30,000 m3/day. Shenfei Dayen was awarded the RMB70 million (.46 million) contract by Diao Bing Shan City in the fourth quarter of last year and the project is expected to be completed this year.

Of the contract total, RMB40 million will be financed by state loan and RMB30 million (.62 million) by Shenfei Dayen, the company said. The total contract value will be paid to Shenfei Dayen progressively.

During the 23-year operational term, the local government of Diao Bing Shan City has agreed to pay Shenfei Dayen a fee based on the volume of wastewater treated. Dayen managing director Kor Hock Lai said the contribution from the Diao Bing Shan City project marked a milestone for Dayen. When we launched our initial public offering in 2000, Dayen was only a local environmental engineering specialist. Today, we have delivered what we promised investors during our IPO – that is, to spread our wings beyond local shores”.

Dayen said that when its wastewater treatment plants in Diao Bing Shan City and Jufuyuan Nationality Industrial Area, Beijing, are commissioned in the fourth quarter of 2004, the company would generate recurrent income that would help it expand from its main earnings base – Singapore.

Three other peninsula companies have also made announcements relating to their Chinese ambitions during the past month. Malaysia’s Brite-Tech Berhad (BTB) and Singapore’s Eco Water Limited (ECOWL) said they have agreed to go into a joint venture and bid for water treatment projects in Xinyi City, China.

The move follows BTB’s entering into a memorandum of understanding last September with the government of Xinyi City in Guangdong Province to carry out feasibility studies on investing in water treatment projects in the city.

In a separate announcement, Malaysian water firm Salcon Bhd said it has bid for more than 12 water treatment and sewerage projects locally and abroad, worth about US0 million, and is confident that at least up to 30% of the contracts would be likely to be secured.

Last July, Salcon concluded a deal for 50-year concession for drinking water supply in Shandong, China, and has signed four more preliminary contracts with other countries and cities for similar jobs.

“Two of the memorandum of understanding signed are for water privatisation arrangements which we hope to finalise within three months”, chief executive Lim See Teok said at the company’s annual general meeting. In addition to China, the firm is also involved in water and seweragerelated projects in Vietnam, Thailand and India.