United States: Quarterly Report on Water Industry Developments in Asia - April 2004

The Central Highlands Water authority in Australia will be selecting between the bids of United Utilities Australia and Earth Tech for the proposed 25-year Design-Build-Finance-Operate project to upgrade the Ballarat North and Creswick Wastewater Treatment Plants.

The project will be implemented within the Partnerships Victoria policy framework and cost approximately A$50 million (US$38.5 million). Upon completion of the upgrading, 2 billion liters a year of reclaimed wastewater from the two plants will be made available for agribusiness purposes.

Central Highland Water is responsible for the current provisions of water and wastewater service, ranging from treatment and delivery of drinking water to homes and the collection, treatment and disposal of sewerage and trade waste.

As part of the land-based effluents reuse program know as SmartCycle, this project will conform with Environmental Protection Authority License Conditions and Reclaimed Water Guidelines for the development, construction financing and operation of sustainable irrigates reuse enterprises.

Central China's Hubei province is developing water conservation projects throughout the province by attracting investment from private sources.

According to the provincial department of water resources, there are 392,000 water conservation and irrigation projects invested by private capital, with the total value of over 4 billion yuan (about 484 million US dollars).

The majority of the private investment goes to small and medium-sized projects, of which 42 percent were water source projects and water saving agriculture.

The private water conservation projects covering all water areas in Hubei.

Construction-based Gadang Bhd ("Gadang") has decided not to proceed with a proposed investment in a waste water project in Xiangcheng, China. Last November Gadang signed a memorandum of understanding with Xiangcheng County Government in China to develop, construct and operate a waste water treatment plant in Xiangcheng county and to collect fees for a concession period of 30 years.

Recently Gadang decided that after conducting a feasibility study on the treatment plant, Gadang would not proceed with this investment."

The memorandum of understanding on the proposed investment lapsed on Feb 21.

Gadang estimates that the total investment cost for the project to be 20.67 million ringget. (1 usd = 3.8 ringget).

As the Selangar Water Treatment Plant, located in Kota Tinggi, is scheduled to be completed and fully operational by end of 2004, State of Johor will no longer be dependent on Singapore's Public Utility Board ("PUB") for its supply of treated water.

The construction of the RM649 million facility which provides 160 million litres of water per day with a distribution pipeline measuring 225km, will cater to local needs for years to come.

The plant is in its final stages of completion, which include installation and connection of pipelines to and from the plant and other facilities.

By year end, all 18 PUB pipelines - which distribute treated water to Johor Baru, Kota Tinggi and Pontian - will be shut down.

Residents in the three districts have been receiving treated water through PUB pipelines and its treatment plants in Sungai Skudai, Gunung Pulai and Sungai Johor for 45 years.

Upon completion, the project will be well positioned to even cater to the water supply needs of other states, in addition to Singapore.

Between 2003 to 2005, treated water supply in Johor is expected to rise by between five and six per cent or 1,337 million litres daily.

During that period, SAJ Holdings will spend about RM730 million to boost water supply through upgrading water capacity, improved distribution and reducing loss of Non-Revenue Water.

Syarikat Bekalan Air Selangor Sdn Bhd ("Syabas") plans to issue about 2 billion ringget worth of bonds before June 2004 to finance the privatization of water supply services in Selangor state and the Federal Territories.

Syabas, which has been given approval to undertake the privatization, will be 30 percent owned by the Selangor state government and 70 percent by Puncak Niaga Holdings Bhd.

The concession agreement for the privatization is being finalized and is expected to be signed soon.

Salcon Trans Consortium, a 70:30 joint venture between Salcon Engineering Bhd and Trans MSB Sdn Bhd, has secured a 51.04 million ringget 2-year contract from the Perak Water Board, to build the New Sungai Kinta Water Treatment Plant.

The contract was awarded under the Greater Ipoh Water Supply Scheme Phase 2. The report said Salcon Engineering, a wholly-owned subsidiary of Salcon Bhd, is the lead partner in the consortium and in this project.

Ranhill Utilities Bhd is negotiating to undertake overseas construction work in India on the Tamil Nadu water supply project worth RM1.6 billion - and Turkey's Bodrum Peninsular water project worth RM660 million.

Ranhill Utilities plans to expand its expertise and services in water–related jobs across the region to increase its earnings base and undertake the entire scope of water works from development and operations to maintenance.

Through subsidiary Ranhill (India) Pvt Ltd, Ranhill is attempting to tap the lucrative Indian water and sewerage works. It has recently met with the water authorities personally to pitch its proposals. This included meetings with the Tamil Nadu Water Supply and Drainage Board as well as the Chennai Metropolitan Water Supply and Sewerage Board.

Industry insiders say that the Public Utilities Board is studying additional privatization opportunities for the three existing NEWater plants in Singapore. Dayen, Hyflux and SembCorp Utilities, the three main private water players in Singapore, have expressed interest in Singapore’s recent interest in the possibility of privatization of the three existing NEWater plants in Singapore at Bedok, Kranji and Seletar. The Bedok plant, which cost $6.5 million to build, and the one at Kranji now have a production capacity of about 15 million gallons a day. The Seletar plant, with an initial capacity of five million gallons a day, is expected to start production soon.

NEWater technology is seen as a cheaper alternative to desalination, and PUB expects demand for NEWater to reach 55 million gallons a day by 2011.

Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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