Global Water Intelligence Magazine

Sep 16 cover

Vol 17, Issue 9 (September 2016)

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In Global Water Intelligence this month


Need to know


Latam goes private
  • Brazil’s principal state bank, BNDES, announced plans on 13 September to tender private sector concessions for the retail water and wastewater operations of the state water utilities in Rio de Janeiro, Rondônia and Pará. If the proposals go ahead...
  • Peru’s new government has promised a radical shake-up of the water and wastewater sector, speeding up the implementation of infrastructure projects in order to achieve basic universal coverage by 2021. On 14 September, housing and sanitation minister Edmer Trujillo announced that 17 water and wastewater projects had been...
American deals
  • Pentair agreed to sell its troubled valves business to Emerson this month for $3.15 billion – a price that is well below the $4.9 billion Pentair paid in stock for...
  • EPCOR Water USA has agreed to buy a 53-mile bulk water pipeline in Texas for $71 million. The pipeline – which is known as 130 – has been conveying groundwater from Burleson County to wholesale municipal customers in Travis County since 2012...
  • Besides pipelines, another area which is attracting private sector interest in the US is municipal reuse for industrial customers. It is a neat business model, because it promises...
PPP Muscat-eers
  • Oman’s Public Authority for Electricity and Water is looking to expand its desal capacity as it continues to add new connections to its piped water network. PAEW chairman Mohammed Al-Mahrouqi told GWI this month that the next stage of expansion will rely on private finance...
  • Iran’s National Water and Wastewater Engineering Company has signed off on five desalination and wastewater treatment projects financed by domestic investors...
Asian markets
  • The Japan International Cooperation Agency is contributing JPY25 billion ($245 million) towards a JPY80 billion ($790 million)...
  • A Shanghai Safbon/Yongnam/ United Engineers Ltd. consortium looks to have beaten Hyflux at its own game in the tender for the Marina East desal project in Singapore. The group, whose credentials for building large desal plants are no better than Hyflux’s when it was awarded the first Tuas project in Singapore in 2005 with a record-breakingly low tariff...
Foreigners squeezed
  • Malaysian project developer Ranhill Holdings is selling 60% of its Chinese water project portfolio to SIIC Environment Holdings. Ranhill’s ambitions in China have been larger than its wallet...
  • The Ranhill deal is part of a larger market trend of foreign developers selling their Chinese project portfolios to Chinese investors. In the last couple of years, more than...
  • The main hold-outs against the repatriation trend are Veolia, Suez and Metito. Metito’s CEO restated his commitment to the market in an interview with GWI this month...
  • Saud Siddique and Daniel Yeung seem determined to take their Tigris Water investment platform work against the trend as well. This month, Tigris committed its first investment: $...
Post Brexit blues
  • Macquarie has approached its fellow shareholders to gauge their interest in increasing their stakes in Thames Water. It is a sign that the company has been unable to...
  • The Bank of England’s quantitative easing programme has provided an unexpected fillip to the UK’s private water companies. Having expanded the bond purchasing programme to include corporate bonds as well as government bonds, it is looking to spend...
  • A series of legislative changes introduced in Italy over the summer could mark the tipping point that finally sees international investors become more involved in the Italian water sector. Suez seems to believe the hype, more than doubling its stake in...
Goodbye El Niño
  • Pacific ocean temperatures are finally returning to normal after a strong El Niño event that brought drought to Southern Africa, parts of India, Venezuela and Brazil, but failed to end the drought in California. Its impact has shown up in this year’s Global Water Tariff survey, as...

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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Latest Tracker Updates

Project Tracker Database
(Subscription Requried)
PROJECT COUNTRY UPDATED STATUS TYPE
Pampanga bul... Philippines 18 Jan 18 The PPP Center... WTP
Pagla WWTP, ... Bangladesh 18 Jan 18 The World Bank... WWTP
Rayerbazar W... Bangladesh 18 Jan 18 The Asian Deve... WWTP
Minera Cande... Chile 18 Jan 18 The Candelaria... Desal
Corpus Chris... United States 18 Jan 18 On 16 January ... Desal

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

Project Tracker

Busy quarter looms for desal developers; a mixed month for North American biosolids; yet another lease in Pennsylvania turns into an asset sale; municipal ZLD in India; how to get a municipalindustrial project off the ground; all the latest project news from around the world this month.

Intelligence


GWI Water Index

China charges ahead as US utility correction continues

Defensive water portfolios nursed fresh wounds this month as US utilities continued to sell off. Chinese water stocks steamed ahead on prospects of a renewed PPP push.


Water on the markets this month:

MarketValueChangeDate
Global Water162.690.16%Value on 10 Dec
Asian Water115.94-4.53%Value on 10 Dec
EMEA Water98.61-2.36%Value on 10 Dec
Americas Water249.773.86%Value on 10 Dec

Market Profile

Latin America and Africa slash subsidies while Northern Europe rewards ratepayers

External pressures from El Niño to the IMF were behind major price hikes implemented by water utilities across the developing world this year. Do substantial tariff cuts at some of the world’s most efficient utilities show that it is not just a one-way street?

Growing public awareness of water issues creates space for tariff restructuring

North America as a region has finally caught up with Western Europe when it comes to consumer water prices. Rising awareness of water issues and a consequent boost in infrastructure investment were key factors behind this year’s tariff rises.

The big picture – the Water Tariff Survey data

As always with water, global issues result in local solutions. While many cities have seen major increases in the consumer price of water over the last year, there are a large number of major exceptions around the world.

The List

The top 20 desalination plant suppliers

The desal market is still in recovery mode, but competition remains very tight. The latest market data shows the winners and losers.


 

Christopher gasson Reading the meaning of tariffs

Christopher Gasson looks at this year’s GWI Global Water Tariff survey for an insight into market trends.


Chart of the month

Water security ratings in Asia

This month’s chart comes from the Asian Development Bank’s Asian Water Development Outlook 2016 which was released at Stockholm World Water Week last month.


Chart of the month

Americas

Partnerships unlock resiliency in industrial operations

The reuse of municipal wastewater in industrial operations can be a clear win-win. What factors are limiting the wider uptake of these partnerships in North America?

ESG unseats CH2M from Hinesville public works contract after 32 years

Long-serving incumbents in the US contract operations market are coming under increasing pressure when it comes to renewing deals on a competitive basis. A Georgia-based firm founded by two CH2M employees is one of their most feared competitors.

EPCOR’s pipeline acquisition signals further potential for the private sector

The acquisition of a water pipeline in Texas this month is the second recent example of a third party owning and operating large-scale bulk water supply infrastructure in the US. Why does this corner of the market remain relatively untapped?

Pentair set to refocus on water following the sale of its valves unit

In ridding itself of the distraction of a business that was haemorrhaging cash as its end markets collapsed, Pentair now has the scope to refocus on its core water and technical solutions businesses. Will it be able to convince investors that the next acquisition makes sense?

Post-impeachment Brazil sets out its stall for private water concessions

Plans announced in September could see a raft of large-scale concessions come to market in the Brazilian water sector. Could this be the access point that international private water companies have been waiting for?

Peruvian shake-up fast-tracks water projects

A series of reforms ushered in by the new government in Peru are aimed at achieving basic universal coverage by 2021. The Kuczynski administration has stopped short of offering full private sector concessions.

Debra coy Who wins from smart water?

Smart water is on the cusp of mass adoption in the US, says Debra Coy. Who will be the winners and losers from the market change?

Americas water in brief

Chemical-free industrial wastewater treatment specialist Axine Water Technologies has raised $8 million of Series B funding in a round led by Asahi Kasei.


Asia pacific

JICA offers $245 million for Yangon water supply boost

Japan’s prime minister officially offered Myanmar’s Aung San Suu Kyi a $245 million loan for Yangon’s water sector as part of a $1.2 billion package this month. The loan will fund Yangon’s first river water treatment plant, but the civil works tender may disappoint EPCs.

PUB’s challenge at Marina East

Hyflux has been played at its own game on the Marina East desalination tender by an aggressive Chinese-led group. There is a hard decision ahead for PUB, writes Sebastian Lennox.

Ranhill strikes deal with SIIC to recharge its Chinese business

Malaysia’s Ranhill has agreed to divest a majority stake in its portfolio of Chinese wastewater treatment projects to Singapore-listed SIIC Environment. The deal will relieve Ranhill of the funding pressure of the BOT business, and give SIIC a leg-up in the industrial sector.

Metito adapts to the times in China as rest of Asia drags

With three new O&M contracts secured so far in 2016, and sludge and desalination projects in its sights, Metito Utilities shows no sign of stepping back from the Chinese market. India and Indonesia have yet to fully deliver on their promises, however.

Tigris Water maintains the momentum with $30m Chinese investment commitment

The Asian water investment platform has struck its first deal by offering $30 million of funding to help a small EPC company make the transition to a project developer. It is part of a bigger plan to create an ecosystem of players with complementary capabilities.

Willy yeo Good Morning Again Vietnam!

Vietnam is following China’s growth trajectory, giving latecomers to the region another shot at success, argues Willy Yeo.

Asia water in brief

Australian water rights investor Duxton Water raised A$70.4 million (US$52.9 million) at its IPO earlier this month – less than the A$99 million it had been targeting.

Europe

Questions raised over report into household competition

Industry analysts have called into question Ofwat’s methodology when compiling a new report on extending competition in the UK water sector. Is it flogging a dead horse?

Water company bonds trade up after BoE move

£9 billion of water bonds feature on the list of securities that the Bank of England may purchase under a new initiative. What effect will it have on new issue spreads?

Thames sale cools

The owner of more than a third of Thames Water’s equity has approached its co-investors after struggling to raise sufficient third-party interest.

Kemira seeks to reverse margin erosion with joined-up solutions

International investors are already responding to Kemira’s strategy of targeting profitable growth through differentiated offerings. How is the company positioning itself to reverse recent margin slippage?

Italian private water market looks for reformled renaissance

New legislation which came into force earlier this month could mark a crucial inflexion point for international participation in the Italian water sector. Consolidation and regulatory reform are at the heart of the latest developments.

David lloyd owen What goes in, comes out

A look at international pollution and water monitoring shows it is time to take sewage treatment seriously, says David Lloyd Owen.

Europe water in brief

Italmatch Chemicals announced its second recent acquisition from Solvay earlier this month, agreeing to buy the Ionquest 290 and octyl phosphonic acid product ranges, which have applications in the industrial water business.


Middle East and Africa

Oman pushes the envelope on water as reform nears

The sultanate’s Public Authority for Electricity and Water tells GWI how a reform in management ahead of an upcoming overhaul of the national system is being matched by a major drive to build out and secure new water sources.

Saudi desalters plan PPP pow-wow

Progress on private investment has been slow over the last decade. With economic pressures mounting, the authorities are trying to make things happen more quickly.

Raft of new contracts point the way for Iranian water PPP projects

Contracts signed with domestic investors show the ability to succeed with PPP at a time when authorities are tapping up international investors.

Tom scotney Making the best of things

Tariff reform is finally here – whether governments and populations in the Middle East like it or not, says Tom Scotney.

Middle East water in brief

The project team behind the massive Red Sea-Dead Sea water desalination and transfer scheme in Jordan has said it plans to announce a list of prequalified bidders in the first week of October.