Vol 7, Issue 1 (January 2006)

Need to know

• BIG DEALS

  * GWI went to press as we were still waiting for confirmation of the financial close of the $2.5 billion Shoaiba IWPP project in Saudi Arabia.

• BULL MARKET

  * 2005 was a great year for water stocks, with the big European water stocks leading the way (see Market Review on pp8-12).

• HOW TO WIN IN WATER

  * We know that football mania is taking off in Germany this year, but Gelsenwasser seems to be taking it a bit too seriously.

• NEW FACES ON THE BLOCK

  * RWE's water subsidiaries have been making some interesting appointments despite being up for sale.

• PRIVATE BATTLES

  * Santa Fe shareholders led by Suez and Agbar have voted to hand over control of Aguas Provinciales de Santa Fe to the Argentine government after failing to reach an agreement on transferring ownership to private investors.

Analysis

• CHART OF THE MONTH

  Over the past two years, the balance of private sector investment in China has shifted towards wastewater projects, which now account for 55% of the water PSP contracts signed.

• Insight - David Lloyd Owen

  Things are looking up for March's fourth World Water Forum.

• Riding the equity boom

  Christopher Gasson looks at how the capital markets are ignoring the anti-privatisation rhetoric of some politicians.

General

• Aqualia\'s €1.5 billion Italian job

  It is the FCC subsidiary’s first major international contract since its divorce from Veolia. There are more to come.

• Big is beautiful for Ashkelon

  IDE and Veolia have something to celebrate with the opening of the second phase of their desalination plant.

• Busy first half for Gulf bankers

  Finance will be in strong demand in the first half of 2006 as several IWPPs look to close. Fortunately banks are easier to find than EPC contractors.

• B&V\'s global vision

  Black & Veatch wants to double in size over the next five years, and it is looking to EPC contracting to reach that goal. CEO Dan McCarthy and MD for Europe Bruce Ainsworth explain the strategy.

• Deutsche pays £189 million for Sutton

  The price for the small water-only company is 30% more than the regulated asset value. It is a sellers’ market.

• Equipment stocks lose their shine

  Utilities performed well in the US but last year's star performer didn't live up to expectations.

• European giants set the pace

  The big three European utilities – RWE, Suez and Veolia – storm ahead with a little help from their other interests.

• How to save £20m

  GWI marketing manager Alison Ireland explains how to keep out of copyright trouble.

• Impregilo secures future for Fisia

  The Italian construction giant sold a 49% interest in the thermal desalination specialist to raise money in 2002. Now it is being bought back as Impregilo tightens up its portfolio.

• Italy struggles to make progress

  The annual report on the Italian water sector shows that there is a growing gap between the investment required and the money available.

• Marubeni acquires BWI

  The Japanese corporation buys an 80% stake in the German water utility.

• Pick and mix: Asian water stocks in 2005

  China's privatisation drive in water and wastewater has been a boon to regional water stocks.

• Sacyr wins Tenerife concession

  The Spanish group pays €60 million for a deal worth €30 million a year.

• Veolia builds on Ashkelon success

  With the largest reverse osmosis desalination plant in the world now in the operating phase, Veolia Water director Patrice Fonlladosa is looking around the world for new challenges.

• Water's stellar performance in 2005

  It has been another fantastic year for publicly quoted water companies, but can it be sustained?

Brief

• ASIA IN BRIEF

  * In a bid to develop desalination infrastructure, the City of Qingdao is offering preferential rates on municipal services, including electricity supply, to encourage enterprises to source their water from desalination.

• EUROPE IN BRIEF

  * The city of Magdeburg has signed a wastewater concession passing wastewater services and assets to the partly-privatised city utility Städtische Werke Magdeburg (SWM) for €140 million.

• MIDDLE EAST IN BRIEF

  * The final cost of water at Shoaiba is reported to be 213.79 halalas/m³ ($0.57/m³), comprised of a capacity charge of 193.65 halalas/m³ ($0.516/m³), a fixed O&M charge of 12.25 halalas/m³ ($0.032/m³), and a variable O&M charge of 7.889 halalas/m³ ($0.021/m³).

Market insight

• What was great last year?

  Over 50 companies and projects have been selected for the shortlist for this year's Global Water Awards.