Vol 9, Issue 2 (February 2008)

Need to know

• MONOLINE FALL-OUT

  * Over the past month, it has been the turn of the monoline insurers to feel the pressure from the credit crunch. This has led to some interesting fall-out in the water sector.

• PADDLING EAST

  * Oman’s recently established Public Authority for Electricity and Water, headed up by Chairman Mohammed Al Mahrouqi, will shortly issue a request for proposals for economic, legal and technical advisors to assist the Public Authority in the design of an operation and maintenance management services contract for the water sector in the Sultanate. More details are expected soon.

• PEPSI VERSUS COKE

  * Veolia announced a bullish set of sales figures for 2007 on 5th February, and promised more to come, with the explanation that demand for water and waste services is growing, despite the economic slowdown.

• RAISING MONEY

  * Not everyone is having a hard time raising money.

Analysis

• Insight - David Lloyd Owen

  One year to the fifth World Water Forum, and the clock’s ticking fast.

• New supply vs. less demand

  Christopher Gasson looks at solutions to water scarcity.

• Water sector greenhouse gas emissions 2005/06 - CHART

  The water industry currently accounts for less than 1% of total UK greenhouse gas emissions, though this is set to rise.

General

• Adjusting to the reality

  The EBRD continued to push the boundaries in 2007, signing a number of important transactions in the water sector. Where can it go from here?

• ADWEA doubles WWTP expansion plans

  Abu Dhabi is aggressively pursuing the expansion of its wastewater treatment capacity. It wants to avoid the mistakes which have cost Dubai dear.

• AECOM snaps up Earth Tech and Boyle

  After 12 years under the Tyco banner, Earth Tech has finally been sold to AECOM. It is AECOM’s most significant water buy since the Maunsell/Metcalf & Eddy deal in 2000.

• Australian communities to reap the benefits of coal seam water

  The vast untapped water reserves in Australia’s coal mines are set to provide a lifeline for parched local communities. It is good news for water treatment specialists.

• Befesa presses for desal carbon credits

  The Spanish company is redesigning its Chennai desalination plant to cut its energy consumption by 0.64kWh/m³. It is registering the initiative with the United Nations to earn 14,000 carbon credits.

• Blue-Green takes Israeli BWRO

  Housing & Construction subsidiary Blue-Green has signed a new brackish water deal in Israel. It will have to share the profits with a kibbutz.

• Building America’s future through infrastructure

  Democrat or Republican – America’s incoming president will not be allowed to ignore the US infrastructure crisis. This is the message being put across by a new non-partisan coalition, as Kathy Shandling finds out.

• BWI seeks long-term financial partner

  After an unsuccessful hunt for a strategic investor, Berlinwasser International is now on the lookout for a financial partner to help achieve its growth strategy. GWI talks to CEO Dieter Ernst.

• Cascal IPO gets lukewarm reception

  The flotation of Cascal in New York marked an inauspicious start to 2008’s water IPO calendar. Parent Biwater did little to inspire investor confidence in the offering.

• Celebrating the best of the best

  The complete list of companies and projects which have been shortlisted for this year’s Global Water Awards.

• Financial crisis eats away at municipal budgets

  Spending on US municipal water projects could be severly impacted by wider financial woes, argues Kathy Shandling. Can local mayors rely on a federal bail-out?

• “Future Water” for England

  Defra has finally set out its vision for the future of water resources in England. It has set some ambitious targets for the water industry.

• GE and Hutchison eye water partnership

  The corporate giants are said to be discussing the mutual benefits of an international water link-up.

• Going gaga for Veolia

  Alison Ireland introduces a baby called Veolia, and reminds you to vote for the 2008 Global Water Awards.

• Gordon takes the helm at Siemens

  Chuck Gordon has replaced Roger Radke as CEO of Siemens Water Technologies. He took time out to speak to GWI about his plans for the business.

• Historic water rights ruling cripples Georgia

  A US federal court has overturned a 2003 water resourcing agreement. It is a major blow for Atlanta’s water supply plans, as Kathy Shandling finds out.

• Israel looks to fast-track desal expansion

  Israel’s Water Authority has been told to speed up plans to expand its existing desal plants. The incumbent operators are understandably rubbing their hands.

• Maynilad settles its debts ahead of IPO

  Manila’s West Zone concessionaire is starting 2008 with a clean slate. Its new lean-mean image has involved cutting 33% of the workforce.

• New lifeline for delayed Nepalese water project

  The removal of a key loan covenant by the Asian Development Bank could prove vital for the future of the Melamchi water supply project.

• Pakistan desalination plant moves forward

  The planned desal plant at Port Qasim is now back on track with a fresh developer team. It has been a long wait.

• Peru concessions put on ice

  Local authorities in Peru are stalling the progress of key water concessions worth more than $400 million. Only two deals remain on track.

• Rishon cancels BOO tender

  The local water company in the Israeli municipality is evaluating its options after the sole bid for its new desal plant was far higher than expected.

• Saudi wastewater privatisation moves forward

  Two wastewater packages will be offered to developers in Riyadh. Each contains brownfield and greenfeld assets.

• Seeking an “Al Gore for water”

  Participants at this year’s World Economic Forum seemed particularly keen to discuss water scarcity. The need to recognise the true value of water also scored highly on the agenda.

• Stella-Meta gets a new lease of life

  ITT has sold its military desal division after years of stagnant growth. New owner Rolwey has big plans to turn the business around.

• Suez and la Caixa get set for Agbar-itrage

  As of mid-January, less than 10% of Agbar’s shares remained in public hands. Its major shareholders can now pick their moment to re-float 20% of the share capital.

• Thai Tap Water IPO suffers further setback

  The plan to float 25% of the Thai water concessionaire has stalled again. There seem to be plenty of excuses.

• Thames shareholders pay up to increase leverage

  Thames Water has paid off its bondholders to permit it to increase leverage. The extra debt it can raise should come in handy to pay shareholders.

• Turning China’s water through 90º

  The Yangtze River is China’s natural water transfer scheme – from west to east. Kathy Liu asks whether it can survive the man-made water diversion project from south to north.

• UK water companies go abroad for funding

  The ongoing credit crisis has curbed UK water companies’ access to the debt market on which they rely so heavily. It is now a case of diversify or die.

• United breezes to $130m Jersey City win

  Despite a shrewd tender process, the renewal of the Jersey City drinking water contract ended up attracting just one bid. United Water has bounced back from the crisis days of 2004.

• Veolia and FCC find trouble in Tibitoc

  A cash-conscious water authority in Colombia has threatened to rescind a 20-year BOT contract in Bogotá. The consortium is unhappy with the compensation package on offer.

• White elephants on parade

  The long-term economic viability of Spain’s desalination boom is being called into question. Unless a deal can be struck with irrigators, its critics may be proved right.

• Wrapped around my finger

  The monoline crisis has created trading anomalies amongst outstanding UK water bonds. It has provided a clear buying opportunity for investors.

Brief

• IN BRIEF – AMERICAS

  * CH2M Hill has been shuffling some of its senior staff.

• IN BRIEF – ASIA

  * Cascal subsidiary China Water has signed a 30-year concession contract with the Government of Yancheng.

• IN BRIEF – EUROPE

  * Ofwat has granted Independent Water Networks Limited (IWNL) its second inset appointment to enable it to provide water and sewerage services to a new development in Corby, Northamptonshire.

• IN BRIEF – MIDDLE EAST

  * ADWEA subsidiary TRANSCO has awarded Lindenberg a $157 million water transmission contract in Abu Dhabi.