Vol 7, Issue 10 (October 2006)

Need to know

• BREAKING UP

  * Infrastructure fund interest in the water sector also plays a bit part in the other big story this month: the Suez/Gaz de France merger.

• EXPANSIONS

  * Bidders received news at the beginning of October of the Algerian Energy Company’s decision to increase the capacity of the Cap Blanc desalination project to 500,000m³/d.

• MOVERS AND SHAKERS

  * Kuwait’s minister of energy Sheikh Ali Al-Jarah suspended five undersecretaries for three months in response to the country\'s blackouts and water shortages.

• NOT SO SLOW

  UK water regulator Ofwat complained last month that gross capital investment by the industry amounted to only £3.4 billion in the period 2005-2006, against expectations of £4.3 billion.

• SALES

  * One of the UK water companies that has been stripping back its portfolio to focus on its water interest is Severn Trent.

• WALL OF MONEY

  * Macquarie has won the battle for Thames Water with a bid of £8 billion ($14.9 billion).

Analysis

• CHART OF THE MONTH

  This month’s chart shows the gains enjoyed by the quoted UK water companies since the current price review came into effect on 1 April 2005.

• Insight – David Lloyd Owen

  When the money is hot, water boils.

• Water’s grey area

  Gentle corruption is pervasive in our industry. It is unacceptable, says Christopher Gasson.

General

• A giant prepares for growth

  GE has huge ambitions for its water business. What is holding it back?

• ACWA powers ahead in Saudi IWPPs

  Consortia supported by ACWA Power Projects look set to sign contracts for the Marafiq power and water plant at Jubail and the Water and Electricity Company’s project at Shuqaiq. What is the secret of its success?

• AWG bid pushes water yields to new lows

  The £2.25 billion agreed offer for AWG has left industry analysts scratching their heads as to how its sums add up.

• Burgeoning investment heralds new Mexican wave

  Increasing private sector involvement will benefit Mexico’s under-funded water infrastructure. However, the lack of a regulator remains a cause for concern. Leticia Lozano reports.

• Czech sewerage projects on hold as EC funding dispute rages

  The 2010 deadline for Czech sewerage upgrades may not be met if the EC continues to withhold vital funds. The knock-on effect could mean higher water prices for Czech consumers.

• Dow spells out its UF strategy

  General manager Ian Barbour spells out Dow’s strategy in the UF membrane market. He thinks it is going to be bigger than reverse osmosis.

• Drought highlights double dilemma for Australia

  The big squeeze is on for Australia’s water utilities in more ways than one, writes Peter Trute.

• Fujairah financing approaches close

  SG and Barclays Capital are on the verge of closing the financing for SembCorp’s acquisition of the IWPP. The path has been far from smooth, however.

• GE targets RO membrane market

  The company says it could 10 cents off the price of water if it can put pretreatment and reverse osmosis together.

• “Green GDP” assessments harrass Chinese governors

  A new report set to track local officials’ environmental footprint has governors up in arms, reports Kathy Liu.

• IDE takes Hadera with rock-bottom price

  A weak dollar, international financing and technological advances prove the winning combination for IDE.

• Indonesia opens up to local bonds

  USAID is negotiating a bond guarantee scheme that could become the model for funding local water infrastructure.

• Jebel Ali M station scaled back

  DEWA cuts power and water to 264, 80m³/d and 1,200MW on reissue.

• Murcia’s desalination challenge

  The regional government is at odds with the central government.

• New faces at the front

  Alison Ireland pays tribute to our departing editor, and looks forward to our expanded editorial team.

• Palm Water makes waves in Dubai

  Palm Water’s project pipeline in the pink after brace of major wastewater deals.

• Remondis Aqua inches forward despite restrictions

  Frustrated by a fragmented domestic market, the German company is spreading its wings in Europe.

• South East Water test for Ofwat

  In order to secure Thames, Macquarie has to sell South East Water to two Australian funds. The trouble is that they already own neighbouring Mid Kent Water. What will the regulator say?

• Spain’s massive expansion of reuse

  The environment minister wants to see water recycling increase six-fold. Not everyone agrees.

• SWCC selects privatisation strategy

  The board has recommended a series of brownfield IWPPs. It has some ambitious financial targets to meet.

• Thames continues Asian exit plan

  Buyout firms seek to reassure regulator as PAM Jaya sale goes ahead.

• Turning their back on the oceans

  Ecological Management Foundation chairman Allerd Stikker argues that the institutions and NGOs concerned with the world’s water challenges should take desalination more seriously.

• Veolia’s Shanghai ambitions

  As Veolia prepares to transfer management control of Pudong to its Chinese partner, long-term strategy may be starting to pay off for the French company. By Olivia Jensen and Frédéric Blanc-Brude.

• Wave of infrastructure funds gathers force

  The battles for Anglian and Thames illustrate the weight of money looking for water investments. Will it reshape the industry?

• Will ultrafiltration market go horizontal or vertical?

  Dow is betting that it won’t need to build plants to sell UF membranes. GE and Siemens are not so sure.

• World’s first wastewater auction gets going

  Prescott Valley hopes to raise $50 million from selling the groundwater credits associated with returning 9,205^m3/d of treated wastewater to the aquifer. How many millions are being flushed away by other towns in the south-west?

Brief

• IN BRIEF – AMERICAS

  * Wastewater treatment and water purification company Layne Christensen has continued its acquisition spree with the purchase of 100% of American Water\'s Underground Infrastructure Group (UIG).

• IN BRIEF – ASIA

  * Amid ongoing preparations for the 2008 Olympics, foreign capital continues to flow into the Chinese water sector, as Montpelier Asset Management announced that it had twice increased its shareholding in China Water Affairs Group to 8.01%.

• IN BRIEF – EUROPE

  * Suez subsidiary Lyonnaise des Eaux has signed a 25-year public service concession contract for sanitation with the Community of Municipal Authorities in the region of Briançon (Hautes Alpes, France).

Market insight

• Desal’s double digit future

  The desalination market has been growing at a breakneck pace. How long can it go on like this? GWI’s latest forecast from our Desalination Markets 2007 report has the answers.