French environment service giant SUEZ has recently signed a 30-year concession right to manage and operate a wastewater treatment plant with Chongqing in Southwest China, another move that reaffirms the company's commitment to being a major player in the country's environment sector.

The 50-50 joint venture created in April 2006, between the Chongqing Water Company and the SUEZ subsidiary, Sino-French Water Development, will manage, operate and maintain a 300,000-cubic-metre-per-day wastewater treatment plant in Tangjiatuo. The concession right runs for 30 years and concerns sewage services for the Jiangbei and Yubei districts in the northern section of Chongqing. This joint venture will also cover customer services and draw upon advanced sludge treatment technologies.

Total investment for this project will come to 60 million euros (US$72.9 million).

Sewage treatment represents a major environmental challenge for China and for Chongqing, with a population of 32 million, situated in the upstream of the Three Gorges dam on the Yangtze River.

Suez's commitment

SUEZ will provide expertise to optimize the management of sanitation services and strengthen environmental protection, and the plant will benefit from the managerial and technological expertise of SUEZ in wastewater treatment services, said Gerard Mestrallet, SUEZ chairman and chief executive officer.

Since 2002, through its subsidiary, Sino-French Water Development, SUEZ has provided drinking water management services to 1 million residents in Chongqing. With this concession, SUEZ thus becomes the first foreign operator to supply a Chinese urban area with both water and wastewater treatment services.

This new contract comes a few weeks after SUEZ was designated a preferred bidder in conjunction with a 30-year concession contract totalling over 1 billion euros (US$1.2 billion) for Changshu, a city in East China's Jiangsu Province.

Earlier in February, the firm announced its intention to establish its regional headquarters in Shanghai, in a bid to further enlarge its presence in the country.

Given recent growth indications, the group may double in size over the next 2 years, investing accordingly. By 2005, the Group's investment in water amounted to 237 million euros (US$287.9 million), accounting for almost two thirds of its total investment in China.

In addition to water treatment, it also conducts waste management in the country.

The company has designed, built and will operate through Swire SITA, a 60,000-ton-per-year hazardous waste incineration plant for processing waste generated by industries operating at the Shanghai Chemical Industry Park. It will be a pioneering plant for China both in terms of size and technology.

China has become increasingly appealing to domestic and international water service companies, since the government realized that a shortage of fresh water poses a threat to the nation's economic health. The government has said the country is preparing to spend heavily on the sector.

It is reported that China plans to spend about US$125 billion over the next five years to improve water supply and wastewater treatment. More than US$43 billion has been earmarked for sewage treatment plants in urban areas.

For SUEZ, China accounts for about 5 per cent of its environment business line, with the revenue increasing 20 per cent last year to approximately 600 million euros (US$728.9 million).

SUEZ has been active in China for over 30 years through Sino-French Water Development, Swire SITA Waste Services and Degremont, and its 7,800 employees. It has so far designed and built over 160 water treatment plants in the country.

Today, close to 20 per cent of China's urban population, which is about 250 million people, drink water produced by water treatment facilities designed and built by Degremont, SUEZ's water treatment plant specialist.

Group portfolio

Sino-French Water Development, established in 1985, a 50-50 joint venture between SUEZ and the New World Group of Hong Kong, produces or manages water in over 15 Chinese mainland cities, such as Chongqing, Qingdao, Sanya, Tanggu and Shanghai, and provides distribution services to 12 million people. Since the mid 1980s, SUEZ has also provided drinking water production and distribution services in Macao.

Swire SITA Waste Services, established in 1989, a 50-50 joint venture between SUEZ and Swire Group of Hong Kong, provides waste services in Hong Kong and Macao and also operates two landfills, WENT and NENT, in Hong Kong which are among the largest and most modern in the world.

SUEZ, an international industrial Group, designs sustainable and innovative solutions for the management of public utility services as a partner of public authorities, businesses and individuals.

The Group aims to meet essential needs in electricity, natural gas, energy services, and has extensive expertise in all dimensions of water and waste management, allowing SUEZ to build and maintain long-term partnerships that meet the specific needs of each customer and respect the environment. SUEZ is listed on the Brussels, Luxembourg, Paris, New York and Zurich stock exchanges. SUEZ employs over 157,650 people worldwide and generated 41.5 billion euros in revenues last year.

(China Daily 10/25/2006 page19)