Vol 8, Issue 7 (July 2007)

Need to know

• BONDING

  * There has been a flurry of activity on the bond markets.

• GREEN ABOUT THE GILLS

  * Continued rainfall is easing the drought situation in Australia, but the desalination projects continue to pile up.

• SHARING

  * Investor interest in the water sector continues to grow.

• UNWANTED

  * After more than a year of trying, Kelda finally has finally found a buyer for Aquarion Operating Services.

Analysis

• Bottling up trouble

  The bottled water industry is enjoying a golden age of growth. Christopher Gasson asks whether it detracts from utility investment.

• The global bottled water market by volume - CHART

  This month’s chart shows the volume market share of the four major bottled water brand owners: Nestlé (with Perrier, Vittel, Poland Spring, San Pellegrino and others), Danone (with Evian, Volvic, Aqua and others), Coca-Cola (with Dasani, Bonaqa, Spring and others), and PepsiCo (with Aquafina and Propel).

• Insight – David Lloyd Owen

  Water and climate change – time to cut out the hot air.

• Letter to the Editor

  Veolia takes issue with our China Editor’s views on its strategy for pursuing municipal contracts in China.

General

• 6,000 to attend Singapore Water Week

  The inaugural Singapore International Water Week is set to attract 6,000 delegates. The new Lee Kuan Yew Water Prize will only attract one winner.

• 666 and rising – UK reservoir plans in the spotlight

  Security of supply in the face of climate change has forced the issue of new reservoirs up the agenda. They will have to be much more than just water storage facilities.

• ADWEA solicits developers for Shuweihat 2

  The Abu Dhabi Water and Electricity Authority has initiated the selection process for its new S2 IWPP. It has yet to confirm the winner of the Fujairah 2 project.

• Agbar expands into North Africa

  Agbar has been awarded the Oran management contract in Algeria, beating Saur into second place. It wasn\'t all bad news for the French company, as it picked up a nearby DBO.

• AIDIS prepares for 2008 forum

  The governability of Latin American water and sanitation services will be a key factor in meeting the region’s MDGs. Kathy Shandling looks ahead to a pivotal forum in Chile.

• …and sweetly flows the Seine

  The new nitrification facility at Achères is a model of how sustainable development can become reality. It has also succeeded in uniting Suez and Veolia on home turf.

• Changing the guard at the IADB

  An internal re-shuffle at the IADB could lead to increased local funding for water and sanitation projects in Latin America. Kathy Shandling reports.

• Double or quits – Sydney’s desal approach

  As rain boosts Sydney’s water storage levels, the city’s new desal plant has been doubled in size. The project has still come in under budget, writes Max Borchardt.

• El Salvador’s water utility looks for a saviour

  Plans to open up the water sector to private investment have been met with street riots.

• Gelsenwasser enters French territory

  In an historically unprecented move, Gelsenwasser has signed a partnership agreement with a local French company. What’s in it for them?

• German communal VAT privilege under renewed attack

  The debate rages on over whether private wastewater companies in Germany should enjoy the same tax privileges as municipally owned companies. A resolution could be a long way off.

• Hagihon IPO to kick-start Israeli privatisation

  The planned flotation of 20% of Jerusalem’s municipal water company is a shrewd move. It will provide cheap funds to help finance a new wastewater BOT.

• If you can’t beat them, join them

  China’s membrane market is set to grow in the face of new drinking water quality standards. How much business will go to local manufacturers?

• Israel earmarks desalinated water for domestic use

  A significant proportion of Israel’s desalinated water could be diverted away from agriculture to meet the needs of domestic customers. Implementation could still be a long way off.

• Kelda completes US exit strategy – almost

  United Water has more than doubled its contract ops footprint in the US with the acquisition of AOS. Kelda still has to rid itself of the worst performing contract.

• Kemble under pressure over Thames securitisation

  The secured debt package to refinance the Thames Water acquisition may cost the Kemble consortium more than it had bargained for. Andrew Cavenagh reports.

• Making sense of the world’s largest water conference

  Kathy Shandling attempts to distil the highlights from a week at the AWWA conference in Toronto.

• Marafiq closes jumbo IWPP financing

  The world’s largest power and water financing has reached financial close, with a groundbreaking package totaling over $3.4 billion. With Jubail now out of the way, Marafiq is already looking ahead to the next IWPP at Yanbu.

• Metito restructures to boost growth

  The Gulf-based player has followed the example of a number of other water technology companies by splitting out its project development business.

• Mexico City looks to the private sector

  The sprawling capital has realised it cannot continue to fund water projects by increasing its debt load. Its $5 billion PPP plan has attracted 300 offers.

• OTPP to pay $550m for Chilean utilities

  Having beaten Marubeni in the race for control of Essbío and ANSM, the Canadian pension fund will still have to rely on local management to operate the infrastructure.

• Report to help firms capitalise on investment lag

  A new report will help suppliers make the most of the uneven investment profile inherent in the UK AMP cycle. Energy efficient solutions are the order of the day.

• São Francisco river transfer moves forward

  Following protracted local protests, the Brazilian army has been drafted in to kick-start an ambitious water transfer project. One hopes the private firms responsible for the technical work will not need military protection.

• Scottish Water seeks funding security

  The recent election results in Scotland could threaten Scottish Water’s funding lifeline. Current CEO Jon Hargreaves won’t have to worry for long.

• Scramble for water boosts funds

  There has been a tenfold increase in the assets under management by specialist water funds since September 2005. With general infrastructure funds growing apace, is the market being driven by investor demand?

• “Selling the brains” – AnoxKaldnes joins forces with Veolia Water S&T

  Swedish water treatment company AnoxKaldnes expects to close a takeover deal with Veolia in August. It will need to boost profitability if management is to retain independence within the group.

• SEWA looks to Hamriyah for expansion

  The Sharjah water authority has big plans for the proposed desal plant at Hamriyah. It involves a blend of RO and thermal technologies.

• Shrewd Victorians play hard to get

  Despite opposing the Government on the Murray-Darling Basin, Victoria has already sweet-talked its way into A$6.5 billion of federal funding. How much more can it squeeze out of an administration desperate to be re-elected?

• Siegburg regains control of municipal sewage works

  Rather than tender for the ongoing operation of its local sewage works, the German town of Siegburg is reclaiming day-to-day responsibility from RWE.

• Spain seeks private funding for wastewater infrastructure needs

  Spain is looking to construction companies to finance wastewater infrastructure after the European tap runs dry. A tried and tested model from Aragón could provide the solution.

• Thai Tap Water buys PTW ahead of IPO

  Thai Tap Water’s acquisition of Pathum Thani Water will pave the way for a share listing later this year.

• The art of value creation in water

  Innovation or scale? Christoph Lueneburger, leader of the Water Investment Practice at 3Stone Advisors LLC, offers his views on creating value in the global water industry.

• US mayors press for private funds

  Local government water and sewer revenues are struggling to keep pace with expenditure, a new report shows.

• Vietnamese infrastructure investment gains currency

  It appears that the global flood of money being poured into infrastructure funds has reached Vietnam. With the country needing $140 billion of investment by 2020, the time could hardly be better.

• Zagreb infrastructure bond finds buyers in tricky market

  The Croatian capital’s strategic holding met with robust demand for its first international bond issue. It had to do without the support of the EBRD.

Brief

• IN BRIEF – AMERICAS

  * Argentina’s southern province Chubut plans to spend $500 million over the next three years to overhaul its water and sanitation infrastructure, according to provincial governor Mario Das Neves.

• IN BRIEF – ASIA

  * Malaysian company Salcon has won a 30-year concession to design, construct, operate and maintain a 100,000m³/d non-potable water treatment plant to serve the Nanfang District in Linyi City in China’s Shandong Province.

• IN BRIEF – EUROPE

  * The spate of full-year results announcements from the listed UK water groups were followed by those of the major privately-held companies.

• IN BRIEF – MIDDLE EAST

  * Tawze’a, a 50/50 joint venture between Amiantit and CISCO, has been awarded three water management contracts for BOT projects worth approximately SAR3 billion ($800 million) over 30 years.