Vol 8, Issue 3 (March 2007)

Need to know

• CHOPPY MARKETS

  * Overall, the water sector did no better than the market as a whole during the recent equity market turmoil – furthermore, there was no discernable flight to quality within the sector.

• DESAL DELIGHT

  * Doosan looks set to get what it has been longing for: a major reference in reverse osmosis desalination which it can call its own.

• FRENCH EARNINGS SEASON

  * The French majors announced their earnings figures in early March (revenue figures had already been released in February).

• MARCH AGAINST APRIL

  * Ulstermen will start paying for their water from 1st April, when Northern Ireland Water Limited is set to replace the Water Service as the water and sewerage undertaker in Northern Ireland.

• MARUBENI’S TASTE FOR CHILE

  * Having shown Berlinwasser International the cold shoulder, Marubeni is now considering expanding its activities in Latin America.

• SAVING THE WORLD

  The World Bank has restructured the part of the organisation with includes its water sector activities.

• SPANISH SENSE AND NONSENSE

  * Esteban González Pons, minister for territory and housing in the Valencia regional government, has described the 220,000m³/d desalination plant being built at Torrevieja as “a nuclear power plant of the sea”, referring to its alleged environmental impact.

• UK MERGER IMPACT

  * In early March, the UK Competition Commission published its provisional findings on the proposed merger of South East Water and Mid Kent Water.

Analysis

• Rises in water and sewerage bills at the UK WaSCs - CHART

  This month’s table charts the latest rise in bills for customers served by the ten water and sewerage companies (WaSCs) in England & Wales.

• Insight – David Lloyd Owen

  Painting the East Green.

• When needs must

  Christopher Gasson looks at the resurgence of private sector involvement in water.

General

• ADB details proposals for Chinese water finance

  The ADB is doing its bit to address the Chinese water situation. Will its proposals for wastewater discharge permit trading and utility revenue bonds catch on?

• Australia pins its ski hopes on “brown snow”

  A ski resort in Victoria is tackling climate change head on by using recycled water to make snow. Will their gamble turn into a slippery slope?

• Australia’s state capitals nearing zero hour

  Time is running out for Australia’s big cities in the fight to secure future water resources. Max Borchardt finds that education can be just as important as rain.

• Barka 2 loan financing oversubscribed

  The successful completion of the Barka 2/Al-Rusail loan financing will be followed by a partial IPO in 2010.

• Contract ops continue to expand

  The US contract ops market continued its growth trend last year. 2007 holds even greater challenges in store.

• Death knell for private water in Italy

  Despite the best intentions of the Galli Law, private investment is still sadly lacking in the Italian water sector. New legislation could turn out to be the final nail in the coffin.

• EU funding for Czechs set to bounce

  Czech municipalities desperately need funding to meet the EU sewerage provision deadline. A conflict over private water contracts is threatening the release of funds.

• From Alpha to Omega: financing closed for NI’s wastewater PPP

  The second part of the Ulster PPP package has finally limped through to financial close – albeit with fewer lenders than originally envisaged.

• Great expectations: Maynilad’s new chapter

  As Manila’s West Zone concessionaire enters a new phase of ownership, Alastair Strickland gets the low-down from all the key players in the deal.

• Israel prepares to enter municipal desal market

  The planned SWRO plant at Rishon Le-Zion has now been put out to tender. It could be the beginning of something big.

• “Liquid and tradable” – S&P’s new global water index makes its debut

  The increasing number of water indices is reflective of the rising profile of the water industry as a whole. Why launch another one?

• Managing China’s asset price inflation

  Veolia’s deal to acquire 45% of the Lanzhou water group involved a premium of 280% over the asset value – the largest ever paid in the Chinese water sector. GWI China editor Kathy Liu explains how such deals can work.

• Municipal contracts to drive growth at Darco

  Singapore’s Darco Water has had a dream start to the year in the industrial sector. This does not stop CEO KM Thye pinning his long-term growth prospects on the municipal market.

• New staff, new reports

  Alison Ireland looks ahead to GWI’s next batch of special publications.

• Our mutual friend – Scottish Water’s future under debate

  Scotland’s politicians reckon that mutual status for Scottish Water would lead to cheaper delivery of services. Privatisation is not an option, however.

• Pipers call the tune in Queensland

  As the prospect of tighter water restrictions hits home, the proposed Queensland water grid could now be threatened by disputes within the pipeline supply industry. Max Borchardt reports.

• Pushing the envelope – Manila Water’s ambitions

  Manila Water’s Perry Rivera talks about his company’s plans, both within Manila’s East Zone and beyond.

• Regulators go under the microscope

  A parliamentary select committee is to examine the role UK regulators play in promoting competition at home and abroad. Ofwat has already come in for criticism.

• RWE sets its sights beyond American Water IPO

  Tariff rises in the US failed to boost profits at RWE’s water division last year. The company is looking to wrap up the American Water IPO and move on.

• Severn Trent feels the heat in Guyana

  The company went into the country with its eyes wide open, but has come out with its tail between its legs. What went wrong?

• Shuqaiq closes in record time

  Financing power and water projects in Saudi Arabia has become slightly cheaper over the past year.

• Singapore signs up to new water initiatives

  Singapore is as keen as ever to foster international relations in the water sector. It has signed a series of MoUs to promote PPPs, conferences and research projects.

• Spain squares up to wastewater challenge

  Having risen to the challenge of large-scale desalination, Spain’s water chief Jaime Palop is now grappling with his country’s wastewater situation. He has plenty of ideas up his sleeve.

• SW Umwelttechnik’s Transylvanian triumph

  The Austrian company is unhappy with conditions at home. It is looking eastwards to help achieve its aim of boosting net income by 50% this year.

• Taking the salt from the wounds

  Adelaide has received the desalination wake-up call, and has formed a working group to assess its options. Is it a case of too little too late?

• “Thinking outside the water vessel” – World Bank Water Week 2007

  This year’s World Bank Water Week stimulated some lively debate over the role of private water operators in providing sustainable solutions. Kathy Shandling reports from Washington.

• Trio of US bills usher in $16 billion of new funding

  Investment in US water infrastructure has scampered up the political agenda with the passing of three new bills. The House votes are only the first step.

• Turkey tenders on the menu

  EU funding will help pay for a series of new WWTPs in Turkey. Will they prove mouthwatering enough for international private water companies?

Brief

• IN BRIEF – AMERICAS

  * The City of LaBelle, Florida, has chosen Applied Technology & Management, Inc. (ATM) to plan, design, permit, and manage the construction of a new 4 MGD (15,140m³/d) reverse osmosis water treatment plant, which will be expandable to a total capacity of 10 MGD (37,850m³/d).

• IN BRIEF – ASIA

  * The World Bank has approved a $147 million loan to China to help finance the Second Shandong Environment Project.

• IN BRIEF – EUROPE

  * In order to improve its debt redemption profile, Suez has bought back €1.235 billion of outstanding bonds, just short of the maximum €1.25 billion threshold it set back in mid-February.

• IN BRIEF – M&A

  * Mott MacDonald has strengthened its international development activities by acquiring Arcadis’ Dutch subsidiary Arcadis Euroconsult (AEC).

• IN BRIEF – MIDDLE EAST

  * Kahramaa (Qatar General Electricity & Water Corporation) has issued an RFP for the 2600 MW/55 MIGD (250,030m³/d) Ras Laffan C IWPP.

Market insight

• Getting up a full head of steam

  The boiler makeup water sector has been simmering along of late. It’s about to come to the boil, says Gord Cope.