Vol 9, Issue 9 (September 2008)

Need to know

• BULLS AND BEARS

  * Other companies feeling bullish about the water industry include Israel’s Miya, and RVK of Russia.

• SALES PITCH

  * Desal and water reuse are not the only ways that people are dealing with the growing challenge of water scarcity.

• WALL STREET WOES

  * The question this month is not so much what has happened in the water industry, as what will happen?

Analysis

• A new virtual reality

  Christopher Gasson questions the usefulness of the virtual water concept.

• Membrane bioreactors – market share 2007 - CHART

  This month’s chart comes from Frost & Sullivan’s “snapshot” report on the membrane bioreactor (MBR) market published over the summer (see www. frost.com for details).

• Insight - David Lloyd Owen

  China remains the sector’s growth engine for those looking to the long term.

• Summary of key data from the 2008 GWI/OECD Global Water Tariff Survey (Part 1)

  Costs in USD per cubic metre of water

• Summary of key data from the 2008 GWI/OECD Global Water Tariff Survey (Part 2)

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• Summary of key data from the 2008 GWI/OECD Global Water Tariff Survey (Part 3)

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• World water prices rise by 6.7%

  Cities around the world continue to favour cheap water at the expense of investment and conservation. The approaching water crisis is forcing a radical rethink, according to the GWI/OECD 2008 Global Water Tariff Survey.

General

• Big A, little s spells trouble for Izmir

  The Turkish city of Izmir has reduced water tariffs to almost nothing after low dam levels forced it to re-open wells contaminated with arsenic. A new 35km pipeline could alleviate the problem.

• California reinstates Drought Bank for 2009

  After a 25-year gap, California has re-introduced the concept of a drought bank. Over 740 million m3 of water could change hands next year, as Kathy Shandling finds out.

• Challenger sizes up Aguas Nuevas S.A.

  After failing to offload its Chilean water interests last year, the Solari family is again in negotiations to sell the Aguas Nuevas business. Leticia Lozano reports.

• EIB’s water sector lending moves East

  The EIB has re-aligned its policy of lending to the water sector in the light of current EU policy and the needs of the new member states. It continues to have a luke-warm response to desalination.

• Franco-Italian JV awaits EU go-ahead

  Acea and Suez Environnement are re-aligning their municipal water activities in Italy. The move should preclude further fines from the anti-trust authority.

• GAP enters a brand new era

  The Turkish authorities have breathed new life into a relic project from the 1970s. The private sector will be expected to play a key role.

• GdF brings water back on board

  The structure of Germany’s municipal utilities means that GdF Suez is taking on water and wastewater activities as it pursues its energy ambitions.

• GdF Suez and GIC ink Ad Dur contract

  A consortium of GdF Suez Energy International and GIC has been chosen to develop Bahrain’s third IWPP. It is the first of four phases to be procured at the Ad Dur site.

• GWI Water Index

  The GWI Water Index fell by 9.9% last month, lagging the MSCI World Index, which was down by 6.9% over the same period.

• How far is the MDB up the creek?

  The Murray-Darling Basin is running on dangerously low reserves, reports Max Borchardt. Water theft is not helping the issue.

• Lima looks for USD2.8 billion investment boost

  Peru’s capital city needs private sector investment to expand water and wastewater coverage. GWI talks to Sedapal’s development manager about the challenges ahead.

• Mequon utility purchase invites criticism

  The City of Mequon in Wisconsin will raise debt to purchase a local water system for USD14.8 million. The public referendum offered little in the way of alternative outcomes.

• Mitsui outlines its Mexican ambitions

  The Japanese giant is hoping for big results after buying Earth Tech’s Mexican assets. It doesn’t want to rush things.

• Moving on from Carlsbad

  The path of the Carlsbad desalination plant has been a tortuous one. What are the implications for the future of SWRO projects in the US?

• Murray-Darling receives AUD400m lifeline

  The Australian government is focusing its water rights buyback programme on the Murray-Darling Basin. It has committed an extra AUD400 million to the initiative.

• Paz eyes industrial desal plant at Ashdod

  An Israeli fuel company is planning to construct a 274,000m3/d plant at Ashdod, complete with captive power plant. It will have to keep Mekorot on side if it is to use the existing state-owned distribution network.

• Profiting from water loss

  Miya claims to be the first global water loss specialist, offering know-how and technology under one roof. CEO Booky Oren shared his vision with us.

• Putting a value on Chinese industry’s \"right to pollute\"

  A new incentive scheme enabling industrial companies to trade pollutant discharge rights could create demand for bespoke wastewater treatment systems. A defined set of guidelines is a prerequisite, argues Kathy Liu.

• Report card foreshadows record spending

  Urban water utilities in Australia spent over AUD2 billion on infrastructure last year – more than twice the previous annual figure. Water conservation programmes, meanwhile, have become victims of their own success.

• Sacyr looks to exit the water business

  Spanish construction heavyweight SyV could be forced to sell its services division, which houses its water-related activities. It is the group’s fastest-growing business arm.

• Spain fast-tracks EIA process

  New legislation to speed up the environmental impact assessment process in Spain could benefit vital water projects. Not everyone is convinced.

• Spain plans to triple wastewater reuse

  Water reuse in Spain is set to receive a boost under a new national initiative. Lower energy consumption makes it an attractive alternative to increasing desalination capacity.

• Sumitomo wins tender to buy into Shuweihat IWPP

  TAQA has sold 20% of Abu Dhabi’s Shuweihat 1 IWPP to Sumitomo. Did the Japanese firm overpay?

• The dark side of Ki-Moon

  The UN Secretary-General has come down hard on member states’ failure to keep up with the Millennium Development Goals.

• The sun’s still shining

  Emma Welsh reflects on her holiday resolutions, and celebrates the joy of working for GWI.

• TUSIAD backs the private sector in Turkey

  A new report assesses the state of private sector participation in the Turkish water sector. The future looks bright.

• Water Standard prepares to set sail

  Water Standard’s purchase of an ocean-going vessel goes a long way towards sealing the future of large-scale shipmounted desalination. All it needs now is an offtaker.

• WTD seals contract for Iran’s largest ever desal plant

  Italian firm WTD has chalked up its largest desalination reference to date – a 120,000m3/d SWRO plant in Iran.

Brief

• In Brief - America

  * Arizona state officials are reviewing the concept of importing filtered seawater from the proposed Puerto Peñasco desalination plant 60 miles south of the US border in Mexico.

• In Brief - Asia

  * Bio-Treat announced its full-year results for the period ended 30 June 2008 on 29 August, revealing that revenues slumped by 11.6% to RMB1.4 billion (USD204 million), while net profits were down by 62%, at RMB125 million (USD18 million).

• In Brief - Europe

  * The ongoing consolidation in the specialty chemicals sector continued on 15 September, as BASF moved to buy Ciba for an enterprise value of CHF6.1 billion (€3.8 billion).

• In Brief - Middle East

  * Modern Water announced on 15 September that it had signed an agreement with the Ministry of Water and Electricity to develop a new desalination proving plant in Oman.

Companies

• Rosvodokanal reaps rich rewards in Russia

  From humble beginnings, Rosvodokanal has emerged to become the leading Russian private water operator. CEO Alexander Malakh talks to GWI about his strategies for success.