Vol 7, Issue 6 (June 2006)

Need to know

• FINE WEATHER

  * There has been a flurry of interest in the UK water market. The publicly quoted water companies came in with a strong set of full-year results (see story p8).

• LONG WAITS

  * Veolia Water North America had an active month in May, signing three deals including the first design-build-operate wastewater project in New York state.

• MORE TO LIFE THAN DESAL

  * It is not just desalination deals that are making the headlines in the Middle East this month.

• SAD NEWS

  * David M Schanzer, vice president for research at Janney Montgomery Scott, died suddenly of a heart attack on 7 June.

• WITH FRIENDS LIKE THESE

  * The Suez-Gaz de France merger has taken a bizarre twist with GE Energy Financial Services (EFS) president and CEO Alex Urquhart telling Reuters that it might be interested in Suez’s water assets.

Analysis

• CHART OF THE MONTH

  The recent commodities bull market has significant implications for desalination, particularly thermal technologies that employ large quantities of metal.

• Famine brings feast

  Christopher Gasson sees opportunities in the south-east's water scarcity.

• Insight - David Lloyd Owen

  Government needs to use its joined-up thinking on its water policy.

General

• AfDB’s water facility moves into action

  The African Development Bank’s African Water Facility is gaining momentum. But where is it going?

• Barka puts the emphasis on water

  Oman does not need a high base load of power from the Barka 2 IWPP. But it does need water. It is a challenge.

• Breaking into Sydney’s sewers

  Peter Trute investigates the South African company that is forcing its way into the city’s wastewater sector. It might be a model for other entrepreneurial companies looking for opportunities in water reuse.

• EIB invests in Israeli pipeline study

  The European Investment Bank gives US$15 million to look at the feasibility of a water pipeline running from south-east Turkey to Israel.

• Energy prices start to take their toll on costs

  Rising energy bills are starting to eat into the UK water sector’s profits.

• Five-year plan prioritises safe drinking water

  Government investment in China’s water sector peaked in 2001, and will continue to fall, but making water safe to drink is now a priority.

• Germany opposes tendering plan

  The German water industry is still holding out against compulsory tenders.

• Inima’s €3 billion global ambition

  OHL’s water subsidiary was the first of the Spanish water groups to go international. Director general Antonio García-Zarandieta thinks the business can quadruple in size over the next five years. Richard Weyndling reports.

• Is water a defence against falling markets?

  Bears and bulls both need water, which makes for a good stock in hard times, but how did the water sector perform in last month’s market downturn? It depends on what you are buying.

• IWPPs are getting creative. Where will it lead?

  Christopher Gasson fits the Barka tender into a broader pattern of change in the power desal market.

• Options drying up for Australia

  Doing nothing to develop new water sources could be a very expensive choice, according to a new report from Australia’s Commonwealth Scientific and Industrial Research Organisation.

• Pictet backs UK equities – with a hedge

  The leading specialist water fund has an interesting strategy for the UK.

• PPP alive and well in Peru

  Public-private partnerships may be in trouble elsewhere in Latin America, but in Peru, which has one of the strongest economies in the region, they are progressing well.

• Pure play is the way in water

  Are the English water companies getting too focused?

• Rising rates meet scant resistance in the US

  Municipalities across the country have been running out of alternatives to rate hikes. Fortunately, the public seems to understand.

• Seeking the legacy of the Forum

  Did the event in Mexico City do any more than spell out the challenges facing Mexico’s water sector?

• Suez squeezed out of Fujairah

  In a rebid for the Fujairah IWPP, the two teams dropped their offers by a total of $1 1 million. ADWEA will do better in the long run, however.

• UK water companies’ cash appeal

  Despite a £30 billion investment bill, the quoted UK water companies think that their shareholders need money more than they do. Andrew Cavenagh reports on this year’s results season.

• Zhejiang faces scarcity crisis

  The province south of Shanghai is going to have to invest in desalination to meet rising demand.

Brief

• NEWS IN BRIEF – AMERICAS

  * Suez\'s subsidiary, Aguas de Illimani, is expected to discover this month if the Bolivian government is to give it the boot, following a long-running disagreement over tariffs.

• NEWS IN BRIEF – ASIA

  * Under Shenzhen Water Development’s 11th five-year plan, RMB38.96 billion ($4.86 billion) is to be invested in water and wastewater projects, with RMB10.51 billion ($1.31 billion) spent on the development of water resources and RMB17.91 billion ($2.24 billion) on drainage and water treatment.

• NEWS IN BRIEF – EUROPE

  * A new company in charge of water services for the city of Genoa, Mediterranea delle Acque, was formally set up in early June, following the merger of Genova Acque, Acqua Italia and Acquedotto De Ferrari Galliera (see GWI August 2005).

• NEWS IN BRIEF – MIDDLE EAST

  * Bids for Kuwait’s Shuaiba North power and desalination plant are due on 7 August following an extension to the deadline.

Market insight

• Modelling the future

  Software to model water systems and manage assets is not only saving money and time; it is making water utilities safer. Gordon Cope investigates one of the fastest growing sectors of the water industry.