2005 - 2006 - Pinsent Masons Water Yearbook 2012

PART 1: 2005-2006 OVERVIEW
privatisation. The average contract size has eased since 2000, reflecting a trend towards
smaller, more localised contracts and fewer of the major privatisations such as Buenos Aries,
Manila and Jakarta.
Distribution of contract awards – by region
Water 1985-99 1990-94 1995-99 2000-04
Europe 39.86 1.57 17.35 24.77
Americas 0.00 20.73 50.19 22.64
Asia 1.49 9.56 53.70 48.66
ME & Africa 7.25 1.28 14.81 13.62
Total 48.60 33.14 136.05 109.69
Wastewater 1985-99 1990-94 1995-99 2000-04
Europe 55.03 3.54 18.41 23.27
Americas 0.00 9.73 34.09 12.11
Asia 0.00 0.30 3.48 30.98
ME & Africa 1.50 0.00 1.96 5.69
Total 56.53 13.57 57.94 72.05
Europe’s figures are marked by two especial trends; the privatisation of the water and sewage
companies of England & Wales in 1989 and gradual impact of the Galli Law in Italy from 1999.
While contract activity has decreased materially in the Americas since 2000, it has remained at
least steady in Asia due to the expansion of the market in China and the emergence of the
market in India and has materially increased in Africa and the Middle East.
Distribution of contract awards – by awardee
Water 1985-99 1990-94 1995-99 2000-04
Local – Developed 39.86 0.00 4.08 16.29
Local – Developing 0.60 4.88 26.20 26.04
Expatriate Chinese 0.00 0.00 8.99 5.35
Multinational 8.14 28.56 96.14 62.22
Total 48.60 33.14 136.05 109.69
Wastewater 1985-99 1990-94 1995-99 2000-04
Local – Developed 55.03 1.66 4.56 12.97
Local – Developing 0.00 0.30 17.20 18.96
Expatriate Chinese 0.00 0.00 0.00 2.63
Multinational 1.50 11.61 36.28 37.48
Total 56.53 13.57 57.94 72.05
It appears that a shift away from contracts being awarded to multinational companies to local
and expatriate companies is taking place. This shift is even more dramatic when you consider
reflects at Brazil’s SABESP (partly privatised in 1996) served 24 million people. While these
changes are in part due to the problems encountered by multinational companies since the mid
1990s, especially regarding political and foreign exchange risk, it also demonstrates that local
capacity building is starting to have an effect.
This is not necessarily a good thing as while local or expatriate funding obviates exchange rate
risk, it plays a limited role in mobilising new sources of funding needed to attain the Millennium
Development Goals as expatriate funding has only been identified being used in China to date.
In China, legislation was passed in 2002 outlawing fixed returns on investment for water or
wastewater projects by held and operated by international entities. As a result Berlinwasser and
RWE Thames sold back their holdings in two projects back to state held entities. This legislation
does not apply to projects funded and operated by domestic companies and companies such as
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Pinsent Masons Water Yearbook 2005-2006