Vol 8, Issue 11 (November 2007)
Need to know
- AT LAST
* Seven years after starting work on its proposal for a desalination plant at Carlsbad, Poseidon Resources cleared the biggest obstacle in the way of getting the project built: the California Coastal Commission.
- CHOPPY MARKETS
* RWE took fright from the choppy conditions in the US market and pulled its proposed initial public offering of American Water.
- CONFERENCE TIME
* There have been three major conferences since the last issue of GWI: the IDA Congress in Maspalomas, Watec in Tel Aviv and the Saudi Water & Power Forum in Jeddah (see Analysis opposite).
- REUSE REVOLUTION
* In his speech at Watec, Frérot came out strongly in favour of reuse as the most appropriate solution to water scarcity, arguing that it is the only resource which is available exactly where additional water supplies are needed most.
- SUEZ RE-SHUFFLES ITS DEBT
* Suez continues to actively manage its liability portfolio following a bond buyback earlier this year, and is looking to further optimise its debt structure ahead of the merger with GdF.
- What are they scared of? The performance of American Water’s comparators 1st August - 14th November 2007 - CHART
RWE boss Jürgen Großmann said he was pulling the American Water IPO because the performance of the basket of water stocks with which the company would be compared indicates that RWE would get 15% to 20% less for the company than he wants.
- Insight – David Lloyd Owen
Privatisation’s steelier side: Tata Steel’s progress in India.
- Privatisation by stealth
Christopher Gasson sees an opportunity in the stretched labour market.
- $3.5bn water crisis plan approved for Mexico City
A new five-year plan aims to tackle Mexico City’s water sustainability crisis head on. It will have to make do without funding from the private sector.
- Agbar enters Chinese water market
The Spanish company has finally gained a toehold in the Chinese water sector. It is unclear to what extent it will be competing against majority shareholder Suez.
- Agbar moves to break local Spanish monopolies
Agbar has teamed up with a Spanish property developer to try to extend its domestic footprint. The move could result in further defensive consolidation in the Spanish water sector.
- Arcapita successfully exits UK water sector
The Bahrain-based investor could hardly have wished for a better return on the investment it made in South Staffs just three years ago. Will new owner Alinda enjoy similar fortunes?
- Arizona water rights auction tops $20/m<sup>3</sup>
A water reuse project in Prescott Valley has netted the municipality $67 million from the sale of the related water rights. It is an important new model for water resourcing.
- Asset management – the key to self-sustaining utilities
Kathy Shandling finds that asset management programmes can provide valuable data towards achieving full cost recovery for US municipal systems.
- Australia’s water goes to the polls
GWI’s Australia editor Max Borchardt assesses the relevance of the water ticket for the outcome of the impending elections.
- Birmingham sale moves forward
The break-up of Birmingham Utilities is set to go ahead before the end of the year. It has been something of a unique case.
- Chinese city goes on tap
A small city in China’s Hunan province has made history by providing residents with tap water they can actually drink. Kathy Liu investigates.
- Courts rule in Sanepar control case
The ceding of strategic control in Sanepar to a Veolia-led consortium in 1998 has finally been declared illegal. It could spark a re-shuffle of the Dominó consortium.
- E.ON and Hamburg Wasser breathe new life into north German JV
The companies have bundled together their activities in Schleswig-Holstein.
- Global Water Awards
Alison Ireland invites nominations for next year’s awards.
- Hessen cartel authority clamps down
Proposed price cuts could wipe millions off E.ON’s revenue base.
- IDE eyes $800m London listing
The Israeli desalter is looking for a jaw-dropping market capitalisation when it goes public next month. CEO Avshalom Felber explains where the company is coming from.
- Indian PPP focus shifts to Bhilwara
The Chittorgarh-Bhilwara industrial corridor is looking to the private sector to develop a sustainable water supply and effluent treatment system. The New Tirupur project will be a tough act to follow.
- It’s Ofwat, Jim, but not as we know it
The Conservative Party wants to re-assign Ofwat’s responsibilities, criticising the regulator’s “short-termism” and “lack of innovation”. With one recent opinion poll putting the Tories 8 points ahead of Labour, it should give Philip Fletcher some food for thought.
- Making private water work again
The International Finance Corporation has been promoting private water since 1993. GWI spoke to Usha Rao-Monari to find what the future holds for the World Bank’s private sector promotion agency.
- Namibian desal gathers pace
Namibian desal plants are like buses: you wait for ages, and then two come along at once. Southern Africa’s driest nation has long pondered desal. Now rising demand from a new crop of uranium mines is fuelling demand.
- New Saudi investment fund bets on public failure
A new Saudi-based fund is looking to take advantage of the gap between public supply and industrial demand.
- Palm Water awards Golf Estates mega-bioreactor
Degrémont & Besix take first prize in the race to build the world’s largest membrane bioreactor.
- Saxony gears up for WFD compliance
Hundreds of thousands of small sewage plants in eastern Germany will have to be modernised. Help is at hand.
- Scottish Water under fire over slow investment
In its latest report, WICS expresses concerns over the slow progress and spiralling costs associated with Scottish Water’s investment programme. Delivering new objectives more cheaply is unlikely to make up the difference.
- Solari shelves Aguas Nuevas sale
It looks like the Japanese have come off worst again in the battle for Chilean water exposure. The owners of Aguas Nuevas have elected to expand into other markets instead.
- Spanish government faces irrigation allegation
Water saved through new irrigation technology is being wasted on golf courses, according to Spanish wildlife groups. The government could face EU funding cuts if it does not tighten up its act.
- Spanish water use drops after tariff hikes
A new report from Spain suggests that rising prices were responsible for curbing water consumption in 2005. The fight against unaccounted-for water proved more tricky.
- Tbilisi Water sold in $85m deal
The privatisation of Tbilisi Water raises more questions than answers. The lack of an operator in the winning consortium is perhaps the most puzzling.
- The new law of the land
The merger of Brownstein and Hatch & Parent is designed to create the first truly national US water law firm. Ian Elkins assesses the challenges ahead.
- Turbine design holds the key to Ras Azzour
Supplying the turbines for the Saudi mega-plant is a design challenge which could leave the off-taker with a tough choice: either accept a single bidder or delay the project.
- Turkey-Israel water transfer still in the pipeline
At best, the concept of pumping fresh water from Turkey to Israel sounds like a pipe dream. The reality will depend on how the costs stack up against desalination.
- US drought prompts drastic action
Kathy Shandling finds that nowhere in the US is totally immune to the effects of the ongoing drought.
- Veolia awaits prize as Saudi privatisation moves on
Expect a number of key announcements on the Riyadh management contract, the National Water Company and the wastewater projects over the next few weeks.
- Veolia doubles Ashkelon exposure
IDE now has an equal partner in the Ashkelon desalination plant, after Elran sold its 25% interest to Veolia. The French company will be hoping to take advantage of further capacity extension at the site.
- Watering the seeds
Israel wants to be the Silicon Valley for water technology. At last month’s Watec event, it showed what it can do. Investors were taking interest.
- WRDA bill makes it past Bush veto
With the WRDA bill now law, the next step is to secure funding for the projects it authorizes. Private sector contractors should benefit from the extra work.
- IN BRIEF – AMERICAS
* United Water has successfully renewed the Indianapolis wastewater contract, one of the most lucrative PPPs in the United States.
- IN BRIEF – ASIA
* Hyflux has won a further trio of water treatment projects in China, worth around RMB291 million (US$39.2 million).
- IN BRIEF – EUROPE
* Ofwat plans to fine Southern Water £20.3 million after the company deliberately misreported information, leading to customers receiving higher than necessary bills.
- IN BRIEF – MIDDLE EAST
* Following the assignation of an A1 rating by Moody’s, Dubai Electricity & Water Authority (DEWA) has been on an international road show to market its inaugural dollar-denominated sukuk bond.
- The pace of change quickens
In the new edition of the Pinsent Masons Water Yearbook, David Lloyd Owen finds that there are still hurdles for international private water operators, despite a jump in the number of contracts awarded.