Vol 7, Issue 12 (December 2006)

Need to know

• CAYMAN CONNECTION

  * Cayman-based Consolidated Water Company closed its $34.9 million secondary offering in mid-December.

• LETTER FROM LIBYA

  * Thermal desalination specialists should be watching Libya with interest. According to the latest information from GECOL (General Electricity Company of Libya) consultant Tractebel Engineering is currently examining the feasibility of a new phase of power and water plants along the Mediterranean coast.

• ON THE CONFERENCE TRAIL

  * It has been a big month for conferences. GWI has been at seven, starting with the Jeddah Power and Water Forum on 12 and 13 November, then moving on to the Saudi Privatisation Roadshow two days later in the same city.

• SUEZ – GAZ DE FRANCE

  * The Suez – Gaz de France merger is getting silly.

Analysis

• Price of water by type of water provider in developing countries - CHART

  This month’s chart comes from Meike van Ginneken’ presentation to the OECD forum on public-private partnerships in water and sanitation.

• Going to the dark side

  Christopher Gasson asks how informal operators can save the world.

• Insight – David Lloyd Owen

  It’s not only Ofwat heralding a cooler financial climate for the water plcs.

General

• $600 million investment plan approved for ailing Peruvian water utility

  As part of a modernization programme, Peruvian regulator Sunass has approved a $600 million investment plan for beleaguered state utility Sedapal. Tariff rises are only part of the solution.

• AmiWater goes home to conquer

  Amiantit’s water subsidiary suddenly finds itself ideally positioned for the Saudi water sector liberalisation. It is well placed to grow in the rest of the world as well. A deal with Gulf One Investment Bank will help it happen.

• Australia pushes urban water liberalisation

  The gradual opening up of the Australian urban water market to competition is spawning new levels of interest from the private sector.

• Berlinwasser International back on the block

  Just as it seemed the Japanese would re-energise the international ambitions of Germany’s leading water utility, the Marubeni – BWI deal seems to have cooled off. What has gone wrong?

• Carnival time in Montevideo as private sector water opportunities burst forth

  The failure of foreign water companies in Latin America has made Uruguay wary of the private sector. Now, Montevideo appears to have seen the light.

• Czechs seek deadline extension for sewerage upgrades

  After a long-running dispute over funding for sewerage projects, the Czech Parliament has been forced to beg the EC for more time.

• Discovering the power behind ACWA Power

  The skill with which Mohammed Abunayyan has mastered up in the Saudi power and water sector has awed his competitors. One gets the feeling that he has only just begun.

• DMCI-MPIC takes Maynilad

  A local consortium has taken an 83.97% stake in the Manila West Zone concession. They could have paid less.

• GE chooses Jafza for Middle East business hub

  GE Water hopes to attract $50 billion of investment from its new Dubai business centre.

• How things really work

  Alison Ireland introduces our new series of Market Access reports.

• Israel faces up to its desalination challenge

  Incoming water commissioner Uri Shani has his work cut out to meet the country’s desalination targets. There may be light at the end of the tunnel.

• Metito prepares for $400m growth spurt

  Metito weighs up the leveraged opportunities available after Gulf Capital’s private equity injection.

• Mexican mega-plants set to bloom at last

  After years of political infighting, a clutch of Mexican wastewater treatment plants may now finally be built. The funding is already in the bag.

• Mouchel Parkman buys Ewan in UK acquisition spree

  The company has bolstered its position in the UK water consultancy market – but has lost key staff in the process.

• New boss at Marafiq

  Thamer Al-Sharhan found himself refereeing one of the region’s largest IWPPs just days starting work at Jubail and Yanbu utility. No problem.

• New South Wales opens up to the private sector

  New legislation in NSW will allow for increased private sector involvement in water and wastewater. With a 1-in-1,000-year drought raging, the time is ripe.

• Paddling upstream – water needs in oil & gas

  Water treatment needs within the O&G industry are growing by more than 10% a year. Gord Cope assesses the opportunities for investment in this burgeoning sector.

• Palm Water breaks the five billion barrier

  The developer continues to notch up contracts in its home emirate of Dubai. It still has to break into the international market, however.

• Saudi Arabia outlines PPP strategy

  The Kingdom is pushing ahead with public-private partnerships in the water sector. What is on offer?

• SETE consortium wins in Jeddah

  The 30,000m³/d RO project attracted strong interest from local and international players.

• Shuqaiq tender puts WEC’s credibility beyond doubt as Ras Azzour looms

  The Water and Electricity Company sees itself as a service provider rather than a client. This mind-shift has made an important difference, as the organisation gears up for its biggest challenge to date.

• Siemens’ €25m Singapore sling

  Siemens plans to invest €25 million to turn its Singapore operation into a centre for Asian water and wastewater technologies.

• SSE to move into UK water asset management

  The company is looking to reinforce its multi-utility status by moving into water. National Networks Manager David Shillibier is bullish on the prospects for growth.

• SWCC to keep the core together

  Selling off the corporation’s main power and water plants will be painful, but with shortages reaching crisis point in Jeddah, this is not the time to break up the region’s most experienced desalination business.

• Taiwan welcomes international water expertise as scarcity bites

  Kathy Liu finds that there is much to be done if Taiwan is to optimize the management of its water resources.

• Thames completes Asian exit strategy

  Thames Water has finally sold its interest in China Water. New owner Cascal will be hoping it has not bought a lame (Peking) duck.

• UK interims reveal a mixed picture as investment programmes progress

  The rash of UK interim results announcements saw more of Thames’ profits leak away, while Yorkshire was stung by an instant ratings downgrade.

• Water developers look for special opportunities as India’s special economic zones inch forward

  India’s SEZ policy should in theory provide lucrative business opportunities for water companies. In practice, there is likely to be a long wait.

• World Bank embraces new water operators as Europeans step back

  There were more private water contracts awarded last year than at any time since 1990, despite the retreat of the European majors. The World Bank has spotted an opportunity.

Brief

• IN BRIEF – AMERICAS

  * Aqua America continues to mop up local water assets, announcing that it has acquired three systems that supply water to residents in Lehigh County, Pennsylvania.

• IN BRIEF – ASIA

  * The ADB is lending $600 million to help increase private sector participation in infrastructure development in Pakistan.

• IN BRIEF – EUROPE

  * Flowserve Corp. has announced the opening of new administrative headquarters for its Flow Solutions Europe, Middle East, and Africa operations.

• IN BRIEF – MIDDLE EAST

  * Doosan Heavy Industries hosted the Gulf desalination industry at a gala dinner for the opening of its new Dubai research and development centre in November.

Companies

• Balancing risks and rewards in China

  Suez knows how big bets on emerging markets can go wrong, and it is not taking any chances in China. Fortunately it has 30 years of history on its side.

• Suez Environment confident in the shadow of Gaz de France merger

  Suez Environment boss Jean-Louis Chaussade explains his long-term, low-risk vision to Christopher Gasson. It sounds good, but will it go down to friendly fire as the merger with GdF grinds ahead?

• Suez in Europe: growth in the South and East

  Establishing a position in a new market takes at least a generation, but with the right partnerships it can be well worth the wait.

• Suez’s US strategy: United forever

  There are no more must-win contracts in the US, but Suez’s US business is thriving on smaller-scale deals.

Market insight

• Turning losses into gains

  With multilaterals increasingly keen to provide support to tackle high UFW rates, John Kolodziejski finds that there are gains to be made from the water loss market.