Vol 9, Issue 7 (July 2008)

Need to know

• IPO NEWS

  * The collapse of the Veolia share price will have a knock-on effect on the value of Suez Environnement, which is due to get a separate listing in Paris on 22 July.

• PURE CHEMISTRY

  * Another new water pure play on the way is Kemira – the Finnish water treatment chemical company which is also one of GWI’s oldest subscribers.

• SAUDI ACTION

  * Saudi Arabia’s Water and Electricity Company opened bids for the mammoth Ras Azzour power and water plant at the end of June (see story p8).

• SHORT STORY

  * It has been an eventful month since the last issue of GWI, starting with the stellar success of the Singapore International Water Week.

• THE ROAD TO TRANSPARENCY

  * Nakheel has been prevaricating over whether to invite private developers to build, finance and operate its desalination and water reuse plants, or whether to simply ask contractors to design and build them,

Analysis

• UF in pretreatment for seawater desalination: annual capacity by supplier - CHART

  This month’s chart comes from data collected by CH2M Hill on the growth of ultrafiltration as a pre-treatment method for seawater reverse osmosis.

• Down and out in Paris

  Christopher Gasson looks at the implications of the re-municipalisation of Paris’ water supply.

• Insight - David Lloyd Owen

  A Glas half full – Glas Cymru’s not-for-profit model retains its charms.

General

• Abu Dhabi STPs reach financial close

  The greenfield STPs which will serve Abu Dhabi and Al Ain have reached financial close. Abu Dhabi Commercial Bank’s USD408 million financing package remains unsyndicated.

• Anger over West Bank water supplies

  Israel has been accused of restricting water supplies in the West Bank. Are illegal connections part of the problem, or part of the solution?

• Anglian follows Severn Trent into € bond market

  Anglian Water returned to the € bond market in June with its first benchmark issue since being taken private. The deal outperformed in a difficult market.

• BWI’s new consulting joint venture bears fruit

  Having channelled all its consulting expertise into a new joint venture, Berlinwasser International is beginning to reap the benefits. It is still hunting for a financial partner.

• Canaries sing out for €300m

  A nod from Madrid is required before the Canaries can get their hands on €300m of new funding. New desal facilities and reuse initiatives await.

• Colombia kicks off USD5.2bn water upgrade plan

  The private sector is set to play a major role in boosting Colombia’s water and sanitation coverage to meet MDGs. Deputy water minister Leyla Rojas talks to GWI.

• Desalination encounters the “Cyprus problem”

  The political implications of awarding a desal plant in the Greek part of Cyprus to a company with an existing reference in Northern Cyprus are manifold. A technical loophole could mean it doesn’t come to that.

• ERI makes a splash with Nasdaq float

  Energy Recovery Inc. was one of the best received IPOs on Nasdaq so far this year. It shows the strength of the energy recovery device market. Different customers have different requirements and there is growth enough for all.

• Gambling with infrastructure in the US

  The financing of infrastructure improvements in the US needn’t be a lottery. Kathy Shandling finds that state legislatures are constantly finding new ways to reduce their yawning budget gaps.

• Gelsenwasser predicts rises after contract reversion

  It is not just Veolia and Suez who are smarting from contract reversions. Gelsenwasser wants a good price for its assets after a trio of German towns voted not to renew their water supply concessions.

• Gunpowder, treason and plot

  A new report illuminates how corruption in the water sector is threatening development and sustainability. Kathy Shandling summarises the findings.

• Gwi water index

  The GWI Water Index fell by 10.8% last month, underperforming the MSCI World Index, which was down by 8.0% over the same period.

• Help for rural US communities

  An amendment to the Safe Water Drinking Act will ensure ongoing assistance for America’s rural communities. Kathy Shandling reports.

• inge restructures and prepares for growth

  Ultrafiltration specialist inge watertechnologies AG is growing at a phenomenal rate. EVP for business development Bruno Steis explains to GWI how the new corporate structure will help maintain that growth.

• Israel’s brackish water challenge

  The Israeli authorities are planning to ramp up their brackish water desalination efforts. Aquifer recharge is at the heart of the plan.

• Italian government softens up on water reform

  A draft reform of public services legislation could give new life to the privatisation of water services in Italy. The government has already had to soften its approach.

• Nakheel weighs up its delivery options

  The region’s biggest property developer has become its most prolific investor in water and wastewater projects. Alastair Strickland talks to Abdulrahman Kalantar about how Nakheel’s delivery mechanisms are evolving.

• Ofwat’s Olympic battle

  Ofwat is concerned about competition in the UK water sector. While there is support from some quarters, many remain sceptical about the benefits.

• Private finance steals the day in California

  The decision by the city of Santa Paula in California to leave the funding of a new MBR plant to the private sector shows a bold new direction in the financing of US water infrastructure.

• Queensland’s strategic shift

  The new bulk water supply regime in Queensland has not diminished the state’s appetite for working with the private sector. Water Commissioner Elizabeth Nosworthy talks to GWI about the way forward.

• Regulators act as Aquavitae loses vital signs

  The news that Aquavitae has gone into administration is a step backwards for the regulators’ ambitions to further competition in the water sector.

• Sino-Dutch looks to earn its PIPPs

  A Dutch-Chinese consortium has come up with a new way of funding water reuse projects. It plans to sign up industrial off-takers as part of the PPP package.

• Sohar Power Company launches IPO

  Retail investors will have the opportunity to buy directly into an independent water and power project next month, when the IPO of the Sohar desalination plant goes live. The projected financials make interesting reading.

• Suez chokes on Valencia Water

  As Aguas de Valencia prepares to de-list its shares, Suez’s role as a shareholder looks increasingly marginalised. AVSA’s Eugenio Calabuig talks to GWI about the future.

• Suez’s holiday nightmare

  Cracks are appearing in the relationship between Suez and AVSA. It could mark the beginning of the end.

• Sumitomo ahead in Ras Azzour tender

  The Japanese developer seems to have offered the best price to build the world’s largest desalination plant, but second-placed ACWA Power may yet succeed, as Saudi Arabia’s Water and Electricity Company studies the bids.

• SWCC privatisation moves forward

  New consultants are to be appointed following the granting of royal consent for SWCC’s privatisation. It has been a long wait.

• The new chemicals revolution

  A wave of deals in the chemicals industry over the past month shows that companies are feeling the pinch. It seems Kemira’s shareholders have yet to be convinced of management’s restructuring plan.

• What is the real water price?

  The prices for water at Ras Azzour look high – until you consider the price of oil being charged. Then the prices look astronomical.

• When Paris sneezes, private water catches a cold

  The news that Paris will not re-tender its water distribution contracts should come as no surprise. Mario Alemi looks at how the move will affect municipal relations with the private sector.

• Yorkshire Water refinancing nears completion

  Kelda’s new owners are putting the finishing touches to the refinancing of Yorkshire Water. The debt load at the holding company level remains a concern.

Brief

• In Brief - America

  * Dow Chemical is to acquire Rohm and Haas to create the world’s leading specialty chemicals and advanced materials company.

• In Brief - Asia

  * Governments, utilities providers and water companies signed 27 agreements totalling more than SGD367 million (USD270 million) during the first Singapore International Water Week.

• In Brief - Europe

  * Following a Serious Fraud Office investigation, Severn Trent Water has been fined £2 million and ordered to pay £220,000 costs after supplying false leakage data.

• In Brief - Middle East

  * Mekorot has selected Ido Rosolio as its new CEO. He will replace Ronen Wolfman, who resigned five months ago.