Vol 8, Issue 6 (June 2007)

Need to know

FUND FUN
* Australia’s drought may have been broken by severe flooding north of Sydney, but the money is still flooding into the water sector (see story p28).
MEGACITY ONE
* Dubai’s insatiable growth rate seems to be driving demand for power and water far beyond what the Emirate can reasonably be expected to meet on its own.
OWNERSHIP STRATEGIES
* Modern Water amazed the sceptics by raising £30 million in an initial public offering on the Alternative Investment Market of the London Stock Exchange in June.
THIS MONTH’S WINNERS
* After a long fallow period, GE Water seems to be moving into action.
WET TUESDAY
* It started as Wet Wednesday, but now it is Wet Tuesday.

Analysis

Changing the world
The water sector is like the Soviet Union in the 1980s, argues Christopher Gasson. We urgently need a rational water economy.
Credit Suisse’s water top 10 2007 - CHART
Credit Suisse published an extensive research note on the water sector this month, which systematically works through the impact of water scarcity on each segment of the water industry.
Insight – David Lloyd Owen
The water sector recycled – courtesy of private equity.

General

Abu Dhabi WWTPs have the EUCH factor
Biwater and EUCH are preferred bidders on a pair of much-needed WWTPs to serve Abu Dhabi and Al Ain. A deep tunnel sewerage system could be next.
Aqualyng starts to punch above its weight
Norwegian desalter Aqualyng has taken on new money and new leadership to facilitate its move into project development. There has been a dramatic shift in the scale of its ambitions. Alastair Strickland reports from Dubai.
Brazilian majors reveal three-year investment plans
Brazil’s big two water companies announced three-year investment plans at the end of May. Their ambitious growth targets will provide opportunities for private partners.
BWI backtracks on sale of majority stake
The sale of Berlinwasser International seems to be more distant than ever. The company’s consultancy business could provide a new strategic direction.
Congressional activity spurs new federal funding
A new bill should pave the way for more infrastructure investment in the US. There is still a huge shortfall, as Kathy Shandling finds out.
Exploiting the herd
Alison Ireland gets lyrical about marketing and the new IDA Yearbook.
Fast-tracking Queensland’s recycled water
Extra funding and an accelerated timetable smack of desperation on the part of the Queensland Government. At least the opinion polls are stacked in its favour.
France prepares for deluge of rainwater BOTs
A new financing model is set to change the way French rainwater treatment plants are funded. Suez and SG are at the forefront of the action.
Groans over Gateway water strategy
The ambitious Thames Gateway regeneration project still lacks a coherent water management plan, according to a new report from the National Audit Office.
Has Veolia Water overstepped the mark in China?
GWI China editor Kathy Liu suggests that the French company may be making some powerful enemies as it continues its drive to be the leading player in the country\'s water market.
Hessen takes its place on the monopoly board
Eight German water companies are in trouble over alleged over-charging. There is a long legal battle ahead.
Israel reneges on desal capacity
Israel has given itself added breathing space within its ever-changing desal programme. The country’s potential water needs make scary reading.
Kathmandu contract draws its final breath
Severn Trent has walked away from negotiations for the Kathmandu management contract. After two decades of political infighting, a long-term solution to water supply in Nepal’s central valley is still nowhere in sight.
Metamorphosis of Queensland
Queensland has simplified its bulk water delivery model. Local councils are concerned over the loss of their revenue-generating assets.
Mitsui to take Shuaiba North
Mitsui looks set to take Shuaiba North, earning Fisia yet another MSF win.
Modern Water raises £30m
The company has pushed through an oversubscribed share placing less than six months after being formed. It still has to establish a revenue base.
Namibia steps closer to desal at Swakopmund
Canadian mining company Forsys has secured a 137,000m3/d abstraction permit for a desalination facility to supply its Valencia uranium deposit. It could be just what the nascent Namibian desal industry needs.
New wave of water funds list on the ASX
Australia is catching on to the idea of water funds. There is a distinct lack of domestic companies to invest in.
OPIC seeks fund managers
A new series of OPIC-backed funds could mobilise up to $800 million of investment for Africa. All OPIC needs to do is find willing fund managers.
Palm Water loses some of its digits
Palm Water has slimmed down its management team. Is there more to the restructuring than meets the eye?
Remondis Aqua in Pole position
The German company has broadened its presence in Eastern Europe.
Southern, but without the comfort
The parties bidding for Southern Water will have to deal with gearing of 95% and a potential purchase price exceeding 140% of the company’s RAV.
Spanish reuse, Granada style
A new Spanish MBR system could find widespread use in its home market.
SSE breaks new ground in UK water market
Scottish and Southern Energy is poised to revolutionise the way Ofwat deals with inset appointments. Conquering Scotland remains more of a challenge.
Still waters run deep in Australia
The Australian National Water Commission’s latest coup is a ground-breaking report on urban water utilities. Its responsibilities go far deeper than that, as GWI’s Australia Editor Max Borchardt finds out.
UK results fuel M&A speculation
Profit growth at the listed UK WASCs has re-ignited take-over rumours within the sector. There are, however, other assets to chase.
UK White Paper lacks green credentials
Proposals to fast-track major UK infrastructure projects could leave environmental concerns unaddressed.
UK White Paper lacks green credentials
Proposals to fast-track major UK infrastructure projects could leave environmental concerns unaddressed.
Veolia subsidiary challenges E.ON in Salzgitter
The fight for control of a local water company in Germany has moved up a gear.
Veolia’s big bid for Haikou Water
The French company has agreed to pay a gobsmacking price for the utility serving the capital of Hainan Island.

Brief

IN BRIEF – ASIA
* In late May, Veolia signed its 22nd wateragreement in China with TEDA (Tianjin Economic Development Area) Investment Holding Co., Ltd. to set up a joint venture, whereby Veolia will own 49% and TEDA 51%.
IN BRIEF – EUROPE
* Earth Tech Ireland has been awarded two contracts in Ireland: a €16.5 million contract with Dublin City Council to refurbish Ireland’s largest drinking water facility in Kildare will increase the plant’s capacity from 265,000m3/d to 333,000m3/d, while a €21.3 million DBO project with the Laois County Council will see Earth Tech design and build upgrades to the Portlaoise Main Drainage Scheme.
IN BRIEF – MIDDLE EAST
* GECOL is set to launch the tender process for the first in a series of power and water plants in Libya at the end of June, when it issues a request for proposals for the Tobruk plant.
IN BRIEF – UK
* The Consumer Council for Water put a dampener on UK water companies’ results by reporting that complaints have reached their highest level since 1994, up 10% in 2006-7.