2005 - 2006 - Pinsent Masons Water Yearbook 2012

Identified private sector projects, 1993-2005
Million people served
Year Number of Water Sewerage Net Total
Contracts Contracts Contracts
1993 1 1.40 0.00 1.40
1994 3 2.47 0.00 2.47
1995 1 0.40 0.00 0.40
1996 7 8.14 0.00 8.14
1997 2 3.90 0.00 3.90
1998 6 8.04 0.00 8.04
1999 3 0.85 0.15 0.85
2000 10 10.90 2.50 13.40
2001 9 5.30 5.00 10.30
2002 11 7.82 6.65 14.07
2003 9 3.77 5.06 6.28
2004 20 11.15 3.73 14.88
2005 22 6.73 12.29 16.39
Total 104 70.87 35.03 100.52
Involving the private sector
12
PART 1: 2005-2006 OVERVIEW
Due to funding flows from Hong Kong, South East Asia and internal sources, China is less
reliant on foreign currency denominated debt that in many cases. The real motivation for using
the private sector is the mobilisation of capacity for developing new treatment works,
management abilities and the application of new techniques and processes. Thus the currency
exchange risk element is relatively small for international companies in relation to their overall
exposure. This is often due to their using joint ventures, which in turn divide up the capital costs.
Political change can work both ways. For example, in 2002, the State Council issued a note
requiring all fixed return water contracts held by foreign entities to be restructured, RWE /
Thames Water and Berlinwasser subsequently sold stakes in two concessions back to the state.
This stricture does not affect Chinese companies, which in some cases have publicly
announced guaranteed rates of returns in the region of 12% for BOT projects. In contrast,
municipalities are also able to change regulations with alacrity if these are an obstacle to a
contract going ahead. This is a benefit of having joint ventures with municipalities.
Wastewater treatment is seeing the most activity
Since the first private sector sewage treatment project award in 1999, this sector has increased
at an appreciably higher rate than that for drinking water. Indeed, in two of the last three years,
project awards have been greater for wastewater than for drinking water.
As well as the companies listed below, GE and Siemens have both stated that they seek to
develop billion dollar/euro enterprises in China, combining the sale of goods with the provision
of services, especially to the industrial outsourcing sectors.
Companies currently active in China
Country / Company
China & Hong Kong
People served Operations
Anhui Guozhen 255,000 Local
Beijing Capital 5,800,000 National
Beijing Sound 5,000,000 National
Cathay International Water 4,000,000 Hong Kong
China Everbright International 3,900,000 Hong Kong
China Evergreen 530,000 Local
Citic Pacific 600,000 Joint Venture
Pinsent Masons Water Yearbook 2005-2006