Global Water Intelligence Magazine

Apr17 cover for web

Vol 18, Issue 4 (April 2017)

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In Global Water Intelligence this month


Need to know


Apres GE
  • There seems to be a deluge of mergers and acquisitions activity in the sector, following in the wake of Suez’s €3.2 billion acquisition of GE Water. Severn Trent is looking for buyers for its US contract ops business. Macquarie is looking to sell a 55% stake in the Aquarion Water Company. Aqualyng is understood to be negotiating a significant new deal...
  • The Severn Trent Services sale is likely to attract a lot of interest, despite the fact that the contract operations market has been sluggish (last year, revenues at the big five operators declined 1.9% overall, according to our survey on p10). STS had revenues of $188 million last year, which is a good size for a platform acquisition, and unlike...
  • Having received an approach late last year from CH2M Hill, UK-based engineering firm WS Atkins is now mulling a $3.5 billion offer from Canadian engineer SNC-Lavalin. Partly thanks to the parallel M&A activities already undertaken by the two firms, the combination would create...
Regulated utilities
  • For those interested in owning regulated water assets, Affinity Water in the UK looks set to be the next opportunity for investors. It has appointed Citigroup – which seems to have become the go-to investment bank for UK utility sales – to undertake...
  • UK water companies lost their monopoly over business customers on 1st April this year, and in the first week of the new arrangement almost 9,000 businesses switched supplier. With 20 retailers now licenced to sell to business customers, 10% of the 1.2 million strong customer base is expected to switch...
Asian travellers
  • Chinese state-owned engineering giant China Gezhouba Group (CGGC) announced that its overseas investment subsidiary had made its first investment in the international water sector, paying an estimated $147 million for Brazilian water concessionaire Sistema Produtor de Água São Lourenço...
  • Japan’s Sumitomo Corporation has also been attracted to Brazil’s water concessions market. It is rumoured to be in talks to take a 14% stake in market-leading concessionaire Odebrecht Ambiental. It is part of a larger transaction yet to be finalised, which would see...
  • Beijing Enterprises Water Group, China Everbright Water and CITIC Group – all powerful Chinese state-owned enterprises with strong existing water platforms – have joined Australian private equity firms in the race for water project developer Trility...
Tough deadline
  • Ceramic membrane specialist LiqTech International was staring down the barrel as GWI went to press. It needs to secure a $4 million investment from Chinese water engineer Hunan Yonker by 15 April, otherwise it may run out of cash. Investors on a call discussing the company’s poor 2016 financial results questioned Liq- Tech’s ability to survive without...
  • HaloSource, the point-of-use disinfection business that has been traded on London’s Alternative Investment Market since 2010, has given itself to the end of this quarter to find a new investor or go bust. The company had almost limitless ambition at its IPO, saying that its technology could save...
Desalting tales
  • After half a decade of torpor, the Saudi Arabian desalination market – the largest in the world – sprang back into life in April with two major contract awards for plants at...
  • Cape Town is preparing to fast-track its first ever desalination plant and its first potable reuse plant in an attempt to mitigate the effects of a drought which has left it with only 100 days of water in storage...
  • New standards for the quality of treated municipal sewage in India are expected to unleash a flood of new tertiary treatment and nutrient removal projects, and could be written into law next month...
  • Aguas de Antofagasta last month announced a $300 million four-year infrastructure investment programme, which includes up to $...
Coffee is for closers
  • Two of Canada’s design-build- finance-but-not-operate wastewater treatment plant projects reached financial close this month. An Acciona-led team secured a Can$525 million (US$391 million) contract for a wastewater treatment plant in Vancouver, British Columbia, while a Suez-led consortium secured a...

  • A consortium of Synagro, Maple Reinders and Bird Construction has closed a Can$50 million finance package to fund a biosolids project in Hamilton, Ontario. The project has two income streams – one from...
Digital futures
  • Water treatment specialist Solenis is aggressively expanding the equipment and digital side of its offering as it seeks to take...
  • Anyone feeling that digital solutions are getting ahead of themselves should read the feature on cyber security on p50 in the CTO section of this magazine. The absence of industry standards for security and protocols for security fixes is...

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
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PROJECT COUNTRY UPDATED STATUS TYPE
Gandharbpur ... Bangladesh 14 Dec 17 GWI understand... WTP
Jaffna Penin... Sri Lanka 14 Dec 17 Five bids are ... Desal
Weliwita bul... Sri Lanka 14 Dec 17 The client is ... WTP
Far North Al... New Zealand 14 Dec 17 The current wa... Utility
Gilbert O&M ... United States 14 Dec 17 GWI understand... Utility

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

Project tracker

Canadian P3s are all the rage; Cape Town turns to desal and reuse; Cyprus eyes desal BOOT; India extends desal tenders; US contract ops growth remains elusive; BNDES encounters pushback on concession plans; Fiji looks to private water; all the latest project news from around the world.

Intelligence


GWI Water Index

Chinese whispers boost index

The massive infrastructure build-out anticipated for a new economic zone south of Beijing had an unusually uplifting effect on the shares of a select few local water companies.


Water on the markets this month:

MarketValueChangeDate
Global Water162.430.93%Value on 10 Nov
Asian Water121.450.52%Value on 10 Nov
EMEA Water101.000.75%Value on 10 Nov
Americas Water240.481.24%Value on 10 Nov

Market Profile

Water reuse steps out from desalination’s shadow in a tale of two sources

With demand for unconventional water resources accelerating, a new research report from GWI looks at the dynamics of the desalination and water reuse markets up to 2022.

The List

The desal power list 2017

This month’s list looks at who is holding power in desal. The big off-takers and regulators feature highly, followed by the big business leaders, but those at the forefront of new technologies also make the cut.


 

Christopher gasson Money’s nice, but I’d rather Innovyze

Christopher Gasson explains why EQT’s $270 million acquisition of the watershed management software company is so significant.


Chart of the month

Trends in desalination prices

This month’s chart comes from our newly published Desalination and Water Reuse report.


Chart of the month april 2017

 

Water Leaders

Introducing the Leading Utilities of the World

Last month the Global Water Leaders’ Group launched a new initiative to highlight the achievements of the top performing utilities in the world. It has ambitions to change the way the water industry works.

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

Market Map: Going boldly forward to meet the energy neutral proposition

Smart Water Watch

Bentley Systems expands its modelling software expertise for more joined-up approach to digital water

User Perspectives

Fostering the waste-to-value economy within industry

The resource recycling methods of an industrial ecosystem in a Danish town has brought numerous economic and environmental benefits. Where are the opportunities going forward?

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

Americas

Operators diversify to offset sluggish contract ops growth

The top five private water operators in North America are increasingly battling over a pool of existing contracts. Differentiation will be the key to future success.

Solenis establishes new digital blueprint for industrial water growth

The former Ashland water treatment business has restored profitability and boosted its automation and control offering since being bought out by private equity in 2014. Artificial intelligence and predictive analytics are next on the agenda.

Trio of deals reinforces Canadian P3 model

A clutch of wastewater and biosolids projects reached financial close this month, restoring faith in the concept of the PPP procurement model for water infrastructure in Canada. What are the dynamics at play?

Grasping the economics of the Hamilton biosolids P3

An aggressive operating budget and the monetisation of dry solids were not the only factors behind the winning bid.

Vancouver reaches financial close on state-of-the-art wastewater P3

The complexities of a new secondary wastewater treatment plant in Metro Vancouver required private sector intervention at every level of the planning process. The municipality will only have a year to get up to speed before taking over operational responsibility.

ADASA’s capex plan boost focuses on desal

Revised population growth numbers have convinced the concessionaire to increase its desalination spend. Wastewater is a poor second.

Stantec capitalises on smart water revolution with Innovyze sale

Stantec has sold its highly profitable stand-alone software business Innovyze less than a year after acquiring the firm through its purchase of MWH Global. Is shedding its in-house smart water platform a smart move?

Leumi launches US water business

The bank is looking to leverage its Israeli connections to kick-start its lending activities in the US water sector. It is not yet ready to take on project finance risk.

Hatch secures US municipal toehold with Chester Engineers acquisition

The deal will see the Canadian engineering firm return to the US municipal water sector after the dissolution of the Hatch Mott MacDonald joint venture stripped it of its muni interests south of the border.

Wesstrickland Piling on the source

Wes Strickland examines a new legal decision that could place more pressure on groundwater resources in the western US.

Americas water in brief

Days after California’s Sierra snowpack ended the season at a near-record 163% of normal, Governor Brown ended the drought state of emergency in most areas of the state. He cautioned, however, that “Conservation must remain a way of life.”


Asia pacific

Chinese state-owned groups lead Trility buyout contest

Three Chinese state-owned enterprises have joined a clutch of Australian private equity firms in the race to buy water treatment plant operator Trility. The need to secure approval from BOT clients – and rising protectionism in politics – could make for a long negotiation.

CGGC inaugurates global water portfolio with Brazilian concession buy

CGGC is looking for more brownfield and greenfield concession opportunities as it seeks to leverage its experience and financial strength to transform itself from an EPC giant into an international project developer.

Aqualyng weighs up options as Earth Water merger falls through

The merger between Indian EPC contractor Earth Water Group and Norway’s Aqualyng looks to be off the cards. With an eye to an initial public offering in 2018 or 2019, Aqualyng is understood to be carrying out due diligence on an alternative merger option.

Tertiary treatment tech upgrades boom as new standards loom in India

The Indian government is in the final stage of consultation on new standards for the quality of treated sewage, which it is widely believed will necessitate the upgrade of all existing wastewater treatment plants to tertiary treatment levels. Not all experts agree.

China water in brief

Two provincial Chinese water companies tried the same strategy this month, taking on Beijing Enterprises Water Group as a cornerstone investors and launching IPOs on the Hong Kong stock exchange. It did not seem to work.

Chongqing to offload 20% stake in Derun Environment

Suez and New World Services’ long-term partner is looking to divest a $600 million stake in its water and waste platform, which it plans to grow across China and beyond.

Willy yeo Tricks of the trade

Willy Yeo finds a ray of hope for Asian water companies in the third and final instalment of his analysis of Trump’s effect on the sector.

Asia Pacific water in brief

A draft of a Ganga Act, which would legislate on crimes against the river, was handed to the Indian Minister of Water Resources, River Development and Ganga Rejuvenation on 12 April.

Europe

Report highlights Andalucía’s sewage woes

Tight municipal budgets and rising non-compliance levels at wastewater treatment plants in southern Spain have created a vicious circle of under-investment. With central government spending set to fall, is there a greater role for the private sector?

Spain targets corruption in the water sector

Parliamentarians have called for an independent audit of the procurement bodies embroiled in the corruption scandal that has rocked the Spanish water sector. Allegations of a hidden public sector deficit could have wider implications for Spain’s relationship with the EU.

10% of English non-household customers expected to switch supplier by next April

The initial flurry of customers who changed their retail water supplier under new UK competition rules is expected to be sustained over the next year. With 20 retailers now holding licences, how soon before the shake-out begins?

UK water market’s affinity with ROFO clauses withers

Right-of-first-refusal clauses could be limiting interest in UK regulated water assets. The sale of Affinity Water is likely to be different.

David lloyd owen A catchment considered

David Lloyd Owen considers the hard numbers behind soft resources – and how authorities are starting to factor them in.

Europe water in brief

Two infrastructure support businesses once owned by regulated UK water utilities have been sold this month.


Middle East and Africa

Desal market explodes back into life in resurgent Kingdom

After years of waiting, April saw the first major moves for years in Saudi Arabia’s desalination market, with two huge projects awarded within 24 hours of each other. The Red Sea port of Shoaiba marks the epicentre of activity as the market continues to unfold.

ADWEA takes stock of Taqa options

Abu Dhabi’s water utility has had to step in to prop up the company that owns its desalination plants. With more expansions needed soon, what is the future for Taqa?

New tax-raising law takes toll on Omani water project market

Muscat has leaned on foreign companies to shore up national budgets. Uncertainty over the impact is affecting water projects.

First desalination plant in Jordan sparks off hopes for new water options

The commissioning of the first seawater desal facility in Jordan has created a wave of new interest in the concept. The success of further installations could rest on a relaxing in attitudes from the government.

Tom scotney The risks and rewards of IWPPs

Mixing asset management and project development can be a tricky business, says Tom Scotney.

Middle East water in brief

Mosbah Helali has been appointed chief executive of Tunisian bulk water producer and national water utility Sonede, following the dismissal of Mohamed Dahech last month. Helali was previously director of central planning at the utility.

Cape Town finally embraces desal and reuse

After years of focusing on transfers and storage schemes, drought has finally forced the city of Cape Town to take action on securing alternative water supplies. How do desalination and reuse factor into the city’s long-term plans?