Global Water Intelligence Magazine

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Vol 17, Issue 12 (December 2016)

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In Global Water Intelligence this month


Need to know


Saudi yard sale
  • Saudi Arabia’s water ministry has outlined a radical restructuring of the country’s water sector that foresees a reinvention of the massive state bodies that have dominated one of the world’s largest water markets, and a strengthening of national regulators and water purchasers aimed at tempting...
  • The prospect of this investment is driving corporate activity. Local oligarchs such as Abdul Latif Jameel (who is backing Carlos Cosín’s Almar Water Solutions), Al Bakri (which is backing Rawafid Holding), and Al Rayes (which is backing Mowah), are looking to replicate the success of Abunayyan and Al- Muhaidib (of ACWA Holdings) in the first round of Saudi privatisation...
  • It is not just the municipal market in Saudi Arabia which is looking up. Aramco is also looking to improve...
  • After China and Saudi Arabia, the next biggest enthusiast for private capital in water is probably Vietnam. To date it has not been a greatly attractive place for foreigners to do business: sometimes contractors are...
P2 for P3
  • DC Water has launched Blue Drop as the platform to market its expertise to other utilities on a consulting basis. At this month’s American Water Summit, DC Water general manager George Hawkins convinced the audience that Blue Drop’s public-public partnerships would help public-private partnerships get off the ground...
Desal divas
  • Although desal might have missed the drought market (see analysis overleaf), a new market for the technology is definitely opening up in Africa – if someone can figure out how to finance it...
  • Desal dreamers are not ready to give up on California yet either. SolRio Organization for Climate Change Mitigation Inc. has proposed a 4 million m³/d desal project at the San Onofre nuclear power plant as an alternative to the California Water Fix and Eco Restore project to tunnel beneath the San Joaquin Delta. The cost of the project is calculated to be $...
  • The market seems to believe that the Cadiz water storage project under the Mojave desert will be the big winner from the Trump presidency. The project developer’s shares have risen by 55% since the election...
Wrong 'UNS
  • Wang Piaoyang, thought to be water’s richest man, has run into legal difficulties after the company he founded, Beijing Water Business Doctor, was named in the trial of China’s hedge fund king, Xu Xiang. Wang topped GWI’s list of entrepreneurs who have made the most money in water, with the $888 million fortune...
  • Hong Kong-listed industrial wastewater specialist CT Environmental Group saw its share fall 32% after a damaging analyst report from short seller Glaucus Research Group. Other analysts are less convinced by the accusations that the company inflated treatment volumes...
  • Veolia has launched an internal investigation after an investigative website, Mediapart, reported that two of its senior managers in France – understood to be Philippe Malterre and Jean-Philippe Franchi – had bought shares in a supplier, Olky Payment, shortly after it was awarded...
Deals on wheels
  • Speculation about who will buy GE Water is reaching fever pitch, with first-round offers due in as GWI went to press. Key questions being asked at the American Water Summit were...
  • Acea – the publicly traded water and energy utility controlled by the city of Rome has bought up the Italian water concession interests of Veolia and Severn Trent. The €24 million Veolia deal includes a 49% interest in the Acqualatina southern Lazio concession and a 19.2% interest in...
  • Severn Trent’s Italian interests were priced at just €400,000, suggesting the business was not entirely profitable. It is a significant deal, however, as it reduces...
  • Back home in the UK, Severn Trent is battling to secure Dee Valley Water, a tiny water only utility that was put on the market in October. Ancala, a pension fund-backed group spearheaded by former Thames Water CEO David Owens, has offered £...
  • There are two risks associated with buying a UK water utility at the moment. The first is the threat that interest rates will rise above the 3.74% cost of capital assumed by the economic regulator Ofwat in its ratesetting decisions. The second is...
  • Canadian infrastructure fund manager Brookfield has paired up with Suez to buy two Peruvian concessions from Odebrecht which were not included in Brookfield’s earlier acquisition of...

Project Tracker

Project Tracker

Charting the progress of over 900 Desal, Reuse and PPP water projects in the international water industry.

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Canoas WWTP Colombia 21 Sep 18 Proposals for ... Reuse
Lake Station... United States 20 Sep 18 The Indiana Ut... Utility
Sun Country ... United States 20 Sep 18 The bid submis... Utility
East Brandyw... United States 20 Sep 18 Sealed bids ar... Utility
Montebello s... United States 20 Sep 18 AB 2339 was en... Utility

What's making the news in global water projects this month

Project tracker

South Africa’s changing desal landscape; Sierra Leone eyes seawater desal; Tunisian PPP pipeline builds; Saudi Arabia details mega-projects; Miami backtracks on PPPs; North American biosolids bonanza; Indian states vie for desal supremacy; all the latest project news from around the world.

Intelligence


GWI Water Index

Global water index flatlines

A strong rebound from investor-owned utilities failed to lift our water index into positive territory this month. CT Environmental, meanwhile, suffered at the hands of short sellers.


Water on the markets this month:

GWI IndexValueChangeDate
Global Water154.911.95%10 Aug
Asian Water98.010.41%10 Aug
EMEA Water91.372.17%10 Aug
Americas Water253.642.56%10 Aug

The List

Which are the biggest utilities in the world?

There are around 300,000 water utilities around the world, but the vast majority serve small towns. Which are the big players?


 

Christopher gasson Fixing desal’s future

Droughts are becoming more frequent and severe. Christopher Gasson asks why this has not benefited the desalination industry.


Chart of the month

Digital water savings for utilities

Chart of the month

 

Water Leaders

Leading water’s fightback against climate change in Southern California

While the state-wide drought in California eased last year, the picture in the south is as tough as ever. With wildfires raging and utilities under pressure, Metropolitan Water District boss Jeff Kightlinger tells GWI’s Samantha Yates how the region plans to build its way out of drought.

Being the best in the world is not our job

Singapore PUB’s chief executive Peter Ng has another goal in mind: being the best for Singapore. It means pursuing impossible performance targets, pushing the boundaries of technology, and still worrying about how to win the trust of customers.

 

 

 

Chief Technology Officer

User Perspectives

Puma takes the lead with supply chain sustainability strategy

The ubiquitous German sportswear brand is at the forefront of the changes being brought about in the textiles industry. GWI probes its relationship with a vast supply chain and its plans to coordinate a major evolution in water and wastewater treatment techniques.

Smart Water Watch

Innovyze touts asset management as the next big thing

The hydraulic modelling specialist is taking on the biggest trends in the digital water industry. What opportunities does it see away from its traditional areas of expertise?

CTO Outlook

A dual approach to innovating in water

Hitachi’s water business unit is trying to make a splash in desalination and the digital sector. GWI talks to its technology advisor Koichi Tsuzuki about the company’s two-pronged strategy of innovative treatment techniques and harnessing the Internet of Things.

See the latest technology updates on the Chief Technology Officer Homepage...

Americas

Aqua America eyes regulated acquisitions outside of water

With the majority of its non-regulated business on the block, Aqua America’s regulated acquisition strategy could encompass opportunities outside of the water sector.

Investor-owned utilities benefit as fair value legislation incentivises system sales

The adoption of fair market value legislation in a growing number of US states bodes well for investor-owned utilities looking to acquire distressed municipal water and wastewater systems.

U.S. Water’s growth strategy on track despite disrupted acquisition rhythm

The acquisition of Water & Energy Systems Technology last month prefigures the revival of U.S. Water’s long-standing inorganic growth strategy, which has slowed markedly since power utility Allete took the helm in February 2015.

Woodard & Curran boosts national footprint with California acquisition

The Maine-based firm has emerged as the successful buyer after environmental engineer RMC Water was put up for sale earlier this year. The deal gives it a permanent platform from which to expand in the Western US.

BNDES’ push to boost PSP in Brazilian water encounters early resistance

The federal lender has already met with pushback to its plans to introduce retail water concessions into key Brazilian states. It is pressing ahead with consultancy tenders to determine the extent of the roll-out.

Veolia restores muni contract ops rhythm with new deals

After a fallow period and several headline contract losses, the company has now taken three contracts off its rivals in as many months. Can it sustain the momentum?

Miami-Dade backtracks on P3 project pipeline

Hopes that a series of large-scale treatment assets in South Florida would be procured as DBFOs are now more distant than ever, with only one project put forward as a P3.


Asia pacific

Vietnam’s largest water utility prepares for IPO

SAWACO is gearing up to sell between 35% and 49% of its equity on the Ho Chi Minh City Stock Exchange in 2017 or 2018. The utility’s complicated internal structure means that valuing it will not be easy. GWI takes a look behind the numbers.

Vietnam pushes privatisation agenda

The privatisation process of Vietnam’s water utilities is in full swing. Water players may have a second bite at the apple when short-term local investors pull out.

World Bank tees up $400m support package for $1.7bn Vietnam water supply project

The Vietnamese Ministry of Construction has rebooted an old plan for large-scale water treatment plants on the Hau and Tien rivers. With the prime minister and the World Bank on board, they may come to fruition, but not in the timeline the MoC wants.

CT Environmental fights back against short seller allegations

Following an attack from a short seller, CT Environmental Group’s stock has lost 32% of its value, despite a robust defence and a share buyback campaign. The timely publication of annual results, coupled with movement on deals with the CDB and IFC, would help.

Australian technology firms secure foothold in Chinese water market

2016 has seen a flurry of partnerships between water technology companies based in Australia and Chinese SOEs looking for a unique selling point in the battle to clean up China’s environmental pollution. How sustainable is the growth dynamic?

Willy yeo Don’t hold your breath

Rumours are rife over the delay to the Marina East desalination contract award in Singapore. Willy Yeo investigates.

Europe

UK water companies face up to post-Brexit pension pain

A dramatic increase in pension fund deficits in the wake of this summer’s Brexit vote could put pressure on returns in the sector. Which companies are worst affected?

UK water retailers jockey for position as giant public sector contract looms

The prospect of a single, nationwide contract covering all public sector water users in England has got non-household water retailers salivating ahead of the market opening next April.

United Utilities issues first CPI-linked water bonds

An impending change to the underlying index used to calculate the sector’s regulated asset value has raised the stakes for borrowers. There is still no liquid CPI debt market.

David lloyd owen Getting a raw deal for customers

Further water competition in the UK risks raising a hornets’ nest of issues over pricing raw water supplies, says David Lloyd Owen.


Middle East and Africa

Doosan mulls project equity to retain Saudi desal top spot

The Korean firm secured a position as the leading contractor in the world’s largest desalination market, with a string of competitively bid projects. A change of strategy may be needed now the Kingdom is switching its focus to PPP.

Tom scotney A time for smooth operators

Generating a profit from Saudi Arabia’s PPP bonanza will largely come down to operating excellence, says Tom Scotney.

Saudis lay out PPP-driven water sector overhaul

The running of almost every part of one of the world’s largest water markets is being reconsidered, as the Kingdom attempts to marry its twin ambitions of massive investment and sectoral sustainability. A number of key questions have yet to be answered.

Marafiq shows off PPP credentials

The industrial city utility says its work with the private sector can be an example for similar municipal cooperation. It wants to take an active hand in new PPP projects.

Renewed national offtaker WEC signs on team to advise on first new IWPs

Saudi Arabia’s rejuvenated purchaser of privately produced water has taken its first steps back into the market.

Saudi PPP commitment leads to privately financed project bonanza

The Kingdom’s decision to turn to the private sector to prop up its capital budget will see its first impact in the project market, with tenders switched to privately financed procurement models. The scale of investment needed means the opportunities are immense.

The bottom-up approach to PPP

Private groundwater supplier Mowah has welcomed the inclusion of brackish groundwater treatment and supply projects in the Kingdom’s privatisation plans.

Lower oil prices pay dividends for industrial water work at Saudi Aramco – and AES

With oil prices still weak despite a recent production cut agreement, investment in efficiency is the name of the game for the oil industry. For domestic market leader AES Arabia, the next few years are looking positive for oil and gas water work in the Kingdom.

Qualified bidders emerge for Red Sea-Dead Sea desal mega-project

Five teams have been given the go-ahead to bid on one of water’s largest – and most complex – projects.