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WATER IS OUR CONCERN

10
OCTOBER 2017

SPORTSWEAR
GIANTS STEP UP
TO TREATMENT
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WITH $3 BILLION VALUATION

DESALINATION
AND THE PATH
BACK TO PROFIT
NEW FIGURES MARK RENEWED ACTIVITY
FOR INTERNATIONAL DESALINATION MARKET

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 CONTENTS

OCTOBER 2017
GLOBAL WATER INTELLIGENCE
34 ASIA PACIFIC
Volume 18, Number 10 34 Oriental manoeuvres at
Darco: InfraCo team-up sees
Published by: developer pivot toward Vietnam
Media Analytics Ltd.
35 DNP’s investment DNA: Dong
Suite C, Kingsmead House
Nai Plastic lines up IFC backing
Oxpens Road
Oxford OX1 1XX 36 Korea development: K-water
United Kingdom supports SMEs abroad while
T: + 44 (0)1865 204 208 boosting smart water at home
F: + 44 (0)1865 204 209 37 Wellington loot: New Zealand
E-mail domain name:
to share the spoils with new
globalwaterintel.com alliance water contracts
38 Willy Yeo: Chinese water firms
Publisher: need to take responsibility
Christopher Gasson
cg@globalwaterintel.com
40 MARKET PROFILE
Editor-in-Chief: Data from the 30th Worldwide
Ian Elkins (E-mail: ie@)
Desalting Plant Inventory lay
COVER STORY: The Zero Discharge of Hazardous Chemicals Foundation, an out the numbers behind the
Deputy Editor:
initiative among global sportswear and apparel brands, is looking to define new desalination industry’s recovery
Tom Scotney (E-mail: ts@)
quality standards for textile effluent handling (see page 56).
Managing Editor:
Sebastian Lennox (E-mail: sl@) 4 INTELLIGENCE 21 Debra Coy: Spending smarter, 43 CTO
4 Need to Know: News, nuggets not harder, on infrastructure 43 Charlie Walker: America’s
North America Editor: and information from the world nutrient recovery industry steps
Paul Hasler (E-mail: ph@) of water this month up to the challenge
22 MIDDLE EAST/AFRICA
Technology Editor: 5 Chart of the Month: Global 22 Supply and demand: Abu 44 Market map: Scanning the
Charlie Walker (E-mail: cw@) contaminant regulations Dhabi tariff reorganisation pays disinfection business as UV
6 The List: The world’s biggest off, but desal market forges on treatment hits a purple patch
Technology Consultant:
desalination centres 24 Cutting the Muscat? Oman 50 First report: CTO’s experts go
Tom Pankratz (E-mail: tp@)
7 Christopher Gasson: Selling lines up consultants with the flow on new network
Australia Editor: PPP to utilities is like selling 25 Tariff turnaround: Saudi water sensor technologies
Neil Palmer (E-mail: npalmer@) life insurance to immortals 52 Smart water watch: i2O
price rises put on ice as network
8 GWI Water Index: Falling problems stymie reform reaches into China with GDH
Head of Marketing:
Chantal Marchesi (E-mail: cmarchesi@) bond yields boost water stocks 26 Tom Scotney: PSP will help Water link-up
drive the totex mentality 54 CTO outlook: IDE Technologies’
Head of Sales: Boris Liberman on pushing the
Abigail Smith (E-mail: asmith@) 10 AMERICAS
boundaries of desalination
10 Evoqua and out: Can AEA get 29 EUROPE
Advertising Executive: 56 End-user: Sportswear giants
what it wants from the sale of 29 Desalting the earth: Spanish
Ruth Newcombe (E-mail: rn@) team up to tackle textile
its water pure-play investment? farmers finally embrace the effluent challenges
Registered Company Number: 4412085 12 DB or not DB: No question: benefits of desalination
design-build moves into the 30 Mergers and accelerations:
ISSN No: 1471-3322. Media Analytics Ltd. 59 PROJECT TRACKER
accepts no liability or responsibility whatsoever
mainstream in US water sector Suez looks to speed up
for any loss or damage suffered by the subscriber 14 Looking for a breakthrough: industrial growth in H2 GWI’s project tracker seeks
or any other user of the information contained USA stays realistic about P3s 31 Shake-up and Evac: Finnish out the most important
in this publication. Unauthorised distribution
desalination, reuse, utility,
or reproduction of the contents of Global Water 15 We’ve only just begun: Santa firm keen to double sales under
Intelligence is strictly prohibited without prior fourth owner in five years water & wastewater treatment
Clara P3 marks a starting point
consent of the publisher. contracts around the world
17 On the march: Military water 32 The social contract: Yorkshire
© 2017 by Media Analytics Ltd. All rights outsourcing turns a corner Water eyes breakthrough bond
reserved. No part of this publication may be
32 Live long and prosper: United 66 COMPANIES INDEX
photocopied, reproduced, retransmitted, put into 18 Border party: Water offers US-
a computer system or otherwise redistributed Mexico collaboration options Utilities pushes CPI envelope An easy reference guide to all
without prior authorisation from Media Analytics
33 David Lloyd Owen: Fatbergs the companies appearing in
19 Roll out the BRL: Brazil’s new
and the silo mentality this issue
Cover picture: Shutterstock wastewater funding roadmap

OCTOBER 2017 GWI / 3

INTELLIGENCE

NEED TO KNOW
Evoqua sets IPO parameters; Global desal market set for third straight year of growth; Spanish farmers
beg for water; US P3 pipeline grows; How to do business in Vietnam; K-water’s smart water ambitions;
Cadiz pipeline gets green light; all the latest news from around the world this month.
EVOQUATIVE
l Evoqua is set to price its ini-
tial public offering on the New
York Stock Exchange later this
month at an implied equity
valuation of just over $2 billion.
The deal will offer an attractive
exit for AEA Investors, which
bought the company in 2014
for $731 million (net of cash),
and has spent $400 million on
acquisitions in the interven-
ing period. AEA’s stake will go
down from 58.5% to 43.0% as a
result of the deal, leaving a con-
siderable stock overhang which
threatens to crimp the near-
term performance of the stock.
Also achieving partial exits are
Canadian fund bcIMC, which
currently holds an 11.2% stake,
Swiss investor Pictet, which
has a 9.4% interest in the com-
pany through its private equity
fund, and the Singaporean
government, which holds 7.7%
through the Havelock subsidiary
of its Temasek sovereign wealth
fund.
l Spain’s powerful irriga-
tion lobby used to be among
the greatest hold-outs against
desalination, preferring instead
to take vast quantities of water
from the Tagus-Segura pipeline
at a quarter of the cost. Now,
with drought in Iberia having
reduced the flow of water from
the pipeline to a trickle, the
could mean that Suez’s new its third straight year of growth farmers have gone cap in hand
Water Technologies & Solutions after slumping to a long-term to the government, asking for
unit takes longer than anticipat- low in 2014 (see story p40). ever greater volumes of desali-
ed to achieve its target run rate nated water. It is a far cry from
of 5% top line growth (see story l The Middle East continues a decade ago, when the ag lobby
p30). to be a cornerstone of growth in rejected desalination as finan-
terms of desalination capacity- cially unsustainable, and while
DESAL DRIVERS building, despite higher tariffs plans for a giant 1 million m3/d
in Abu Dhabi having resulted seawater desal plant at Escom-
l The enlarged Suez group in a marked drop in water breras may sound like pie in
will almost certainly emerge demand over the past five years. the sky, serious negotiations
as the world’s leading desalina- The good news for the water are already underway for a raft
tion plant supplier when the industry is that the pace of the of capacity increases at existing
final cut of data comes in for desal build-out will not slacken sites (see story p29).
the next World Wide Desalting off, with the emirate racing to
Plant Inventory. This year’s data replace its fuel-hungry thermal l The signing of a new water-
shows that the global desalina- plants with new membrane sharing treaty between the US
tion market is on track to record -based facilities (see story p40). and Mexico brings with it the
DESAL’S NEW POWER COUPLE
Suez’s Miguel Angel Sanz was elected President of the International Desalination Association earlier this month at the
organisation’s World Congress in São Paulo. Fellow director Shannon McCarthy also agreed to become Secretary General,
replacing Pat Burke, who had served the association and its predecessors for 45 years. Sanz promised a new roadmap for
the association, involving a renewed focus on governance, improving transparency and communications, and developing
new sources of revenue.

l The EV/EBITDA multiple

looks to be somewhere in the
mid-teens, partly thanks to the
acquisitive growth path that
AEA has embarked on over the
past 18 months. The choice of
acquisition targets has raised
questions over whether the
company favoured companies
with solid EBITDA margins
over those which might have
made a better fit with the exist-
ing portfolio. The jury is still
out (see story p10).

l Suez completed its $3.4

billion takeover of GE’s water
business on 30 September, leap-
frogging Evoqua to take a spot
among the top three global sup-
pliers of industrial water solu-
tions. A soft start to the year

4 / GWI OCTOBER 2017


possibility of more desalina-
tion and reuse infrastructure in
the border region, with a bina-
tional project works group set
to explore five potential desali-
nation and reuse initiatives,
including desalination facili-
ties on the New River and the
Pacific Coast, and the reuse of
municipal effluent from treat-
ment plants located in Mexicali
and Tijuana (see story p18).
P3 PROMISES
l A series of developments
over the past month have rein-
forced a sense of cautious opti-
mism around the pipeline of
privately financed water pro-
jects in the US. This time,
however, there’s none of the
overblown enthusiasm of pre-
vious years – despite Trump’s
hyperbole, a slow, steady stream
of conceptual projects is emerg-
ing, with solid drivers and real-
istic timetables (see story p14).
l The adoption of design-
build delivery to the point that
it can no longer realistically
be described as “alternative”
should help this trend, and
a new report from the Water
Design-Build Council this
month forecasts an annual
capex spend of up to $9 bil-
lion in the US alone by 2021
on design-build projects in the
water sector. Advanced waste-
water treatment and reuse infra-
structure is expected to account
for a significant proportion of
the total, although the growth
in popularity of so-called “pro-
gressive design-build” delivery
threatens to limit the upside for
contractors (see story p12).
l The options for privately
financed treatment plants in
Vietnam, meanwhile, are lim-
ited only by the risk appetite of
project developers. If you are
prepared to take demand risk,
a simple licence is all it takes
to set up a merchant facility
and start supplying the locals.
A new JV between Darco Water
Technologies and InfraCo Asia
aims to do just that (see story
p34).
OCTOBER 2017
INTELLIGENCE
NETWORKING level of tap water consumption authorities scramble to modern-
across the country from 5% to ise the network.
l Korean small and medium 30% by 2024 (see story p36).
enterprises are reaping the ben- l The US Bureau of Land
efits of K-water’s efforts to inter- l In Saudi Arabia, mean- Management issued a letter to
nationalise its ICT-optimised while, attempts to further raise Cadiz Inc. earlier this month
approach to integrated water water tariffs have hit the buffers stating that the company needs
resources management. Korean after last year’s unpopular hike. no further authorisation to
state spending on smart water While plans to slash subsidies build its proposed water con-
also seems to be paying off at and raise prices on fuel and veyance pipeline along an exist-
home – real-time water qual- electricity have paid off in terms ing railroad right-of-way. The
ity monitoring systems in pilot of reduced usage, leaks and bill- move brings to an end a decade
areas have effected a remarkable ing mistakes took the edge off of wrangling over the route of
turnaround in the number of the progress (see story p25). A the pipeline, which will deliver
Koreans willing to drink water plan to cover water production water from an underground
straight from the tap. K-water costs through tariffs by 2020 aquifer to communities in
now wants to increase the has now been dropped as the southern California. <
CHART OF THE MONTH: WORLDWIDE CONTAMINANT LIMITS
This month’s chart comes from GWI’s Global Regulations the percentage of this intake which comes from drinking
Package, a new database and digital report covering water, water. Although mercury has the strictest limit shown here, it
wastewater and sludge treatment standards which will be is only present in small levels in water, with the main source
published on 24 October. It shows the range of concentration of contamination being food. Arsenic, which has caused
limits set for 27 of the most common chemical contaminants health problems across South Asia, and lead, which has had a
in drinking water regulations from more than 40 countries, well publicised impact in the USA, have a median limit which
with the WHO and EPA guidelines for comparison. These is identical to WHO guidelines. As this chart only includes
compounds are either naturally occurring, have been caused the most common parameters, it does not feature many
by contamination from industrial activity, or are by-products emerging contaminants or those which encompass many
of water treatment processes. There is a clear distinction individual compounds. Of special interest are haloalkanes
between more relaxed limits on naturally occurring ions such as PFCs, which have infiltrated groundwater across the
such as chloride, sodium, and sulphate, and those posing US and Australia; and TCPs, which in late 2016 were added to
a greater danger to human health. These limits are set by the EPA’s candidate list of contaminants for future regulation.
considering the acceptable intake for each contaminant, and To get hold of the data, go to https://tinyurl.com/GWI-regs.
mg/l 0.0001 0.001 0.01 0.1 1 10 100 1000
Aluminium
Antimony Range of standards
Arsenic WHO standard
Barium EPA standard
Benzene
Boron
Bromate
Cadmium
CCl4
Chloride
Chromium
Copper
Cyanide
Fluoride
Iron
Lead
Manganese
Mercury
Nickel
Nitrate
Nitrite
Selenium
Sodium
Sulphate
Toluene
THMs
Zinc Source: GWI
GWI / 5
INTELLIGENCE

THE LIST
EVENTS DIARY
All the key events coming up in the global water and
wastewater industry.
The biggest desal centres
With the new Worldwide Desalting Plant Inventory published this month, we take a look
at the largest desalination production centres in the world.

T
OCTOBER 2017
he fastest growing market in the sea- With the completion of the Shoaiba
26-28 Myanmar Water 2017. Yangon, water desalination industry is not 3 Expansion 2 project and the Shoaiba 4
Myanmar greenfield projects on some pristine independent water project, Shoaiba – locat-
30-3 Aquatech. Amsterdam, Netherlands
piece of coast. It is the expansion of capac- ed 120km south of Jeddah – will overtake
ity at existing desalination centres, where Jebel Ali (which serves Dubai) to become
the distribution infrastructure is already the largest desalination production centre
NOVEMBER 2017 in place, such as on Saudi Arabia’s Red Sea in the world, hosting close to 2.5% of global
coast. desal capacity. <
6-7 Oman Water & Wastewater
Conference. Muscat, Oman Production Capacity Facilities
centre (m3/d)
7-9 Aqua Ukraine. Kyiv, Ukraine
1 Shoaiba, KSA 2,448,745 1 (223,000m³/d MSF), 2 (454,545m³/d MSF), 2 Exp. (91,200m³/d MED),
8-10 Vietwater 2017. Saigon, Vietnam 3 IWPP (880,000m³/d MSF), 3 Exp. 1 IWP (150,000m³/d RO) 3 Exp. 2
9-10 World Aqua Congress XI. New Delhi, IWP (250,000m³/d RO), 4 (400,000m³/d RO)
India 2 Jebel Ali, UAE 2,136,620 D (159,110m³/d MSF), E (113,650m³/d MSF), G (272,760m³/d MSF),
RO (113,650m³/d RO), K (272,760m³/d MSF), L1 (318,220m³/d MSF),
12-13 Produced Water Society Middle East
L2 (250,030m³/d MSF), M (636,440m³/d MSF)
2017. Abu Dhabi, UAE
3 Jubail, KSA 2,024,528 RO (307,500m³/d RO), 1 (137,729m³/d MSF), 2 (947,890m³/d MSF),
12- International Water Conference. RO1 (90,909m³/d RO), IWPP (800,000m³/d MED), Marafiq 1&2
Orlando, FL, USA (48,000m³/d MSF)
13-16 IWA Water and Development 4 Taweelah, UAE 1,336,524 A1 IWPP (381,864m³/d MSF), A2 IWPP (227,300 m³/d MSF), B IWPP
Congress. Buenos Aires, Argentina (727,360 m³/d MSF)
22-24 Envirotech Asia 2017. Mumbai, India 5 Yanbu, KSA 1,246,304 1 (108,074m³/d MSF), 2 (144,000m³/d MSF), RO1 (128,182m³/d
RO), Exp. (68,190m³/d MED), 3 IWPP (550,000m³/d MSF), Marafiq
29-30 American Water Summit 2017. Austin,
1 (81,910m³/d MSF), Marafiq 2 (50,400m³/d RO), Marafiq Doosan
TX, USA
(55,200m³/d MED), Marafiq Hanwha (60,348m³/d MED)
6 Fujairah, UAE 1,180,960 1 IWPP (284,000m³/d MSF & 170,500m³/d RO), 1 SWRO Exp.
DECEMBER 2017 (136,000m³/d RO), 2 IWPP (454,200m³/d MED & 136,260m³/d RO)
7 Az Zour, Kuwait 1,146,095 North IWPP (486,400m³/d MED), South 1 (262,855m³/d MSF), South
12-14 World Efficiency. Paris, France
2 (130,920m³/d MSF), South 3 (130,920m³/d MSF), South RO/Hybrid
(136,000m³/d RO)
ADVANCE WARNING: APRIL 2018 8 Ras Abu Fontas, 1,068,310 A (250,030m³/d MSF), A1 (204,570m³/d MSF), A2 (163,656m³/d MSF),
Qatar A3 (163,656m³/d RO), B (150,018m³/d MSF), B2 (136,380m³/d MSF)
15-17 Global Water Summit 2018. Paris,
9 Ras Al-Khair, KSA 1,035,000 MSF (728,300m³/d), RO (306,700m³/d)
France
ft. the 2018 Global Water Awards 10 Shuweihat, UAE 909,200 S1 IWPP (454,600m³/d MSF), S2 IWPP (454,600m³/d MSF)
11 Ras Laffan, Qatar 741,160 A IWPP (181,840m³/d MSF), B IWPP (272,760m³/d MSF), C IWPP
(286,400m³/d MED)
12 Umm Al Nar, 650,078 East (102,285m³/d MSF), West (125,469m³/d MSF & 58,189m³/d MED),
Contact the GWI events team for more information on UAE B IWPP (400,776m³/d MSF & 31,822m³/d MED)
media partnerships:
13 Doha, Kuwait 621,556 SWRO (227,300m³/d RO), East (109,156m³/d MSF), West (392,400m³/d
www.globalwaterintel.com/events MSF)
PDF users can click through on the event names above
14 Barka, Oman 594,200 Barka I (193,200m³/d), Barka II (120,000m³/d), Barka IV (281,000m³/d)
15 Tuas, Singapore 590,500 SingSpring IWP (136,000m³/d RO), Tuaspring IWP (318,500m³/d RO),
Tuas 3 (136,000m³/d RO)
IN FUTURE EDITIONS... 16 Jeddah, KSA 575,175 4 (221,575m³/d MSF), RO1 (56,800m³/d RO), RO2 (56,800m³/d RO),
RO3 (240,000m³/d RO)
NOV l The Top 50 private water companies 17 Soreq, Israel 540,000 Single RO IWP
l Stantec’s global water strategy 18 Khobar, KSA 503,000 2 (223,000m³/d MSF), 3 (280,000m³/d MSF)
l Saur sets out its strategic vision
l Analysing China’s PPP strategy 19 Mactaa, Algeria 500,000 Single RO IWP
DEC l UK water companies’ half-year 20 Subiya, Kuwait 454,600 1+2 (227,300m³/d MSF), 3 (227,300m³/d MSF)
results review Italics indicate projects under construction. MSF = multi-stage flash; MED = multiple effect distillation; RO = reverse osmosis;
IWP = Independent Water Project (i.e. privately owned); IWPP = Independent Water and Power Project

6 / GWI OCTOBER 2017

 INTELLIGENCE

FROM THE PUBLISHER

Learning to sell life insurance to immortals

Christopher Gasson argues that private finance is more about risk transfer than a lender of last resort.

A
ll over the world, weakening public
finances mean that there is grow-
ing interest in private finance. This
is not necessarily a great thing for the
water sector. It makes private finance
look like an expensive choice for those
who have no choice. For the private
finance market to really grow, it needs to
show that it is a cost-effective means of
managing project risk.
As I see it, the main reason why a
utility should turn to private finance
is because it needs its suppliers to act
more like owners. The market is tight,
and winning a sale and then screwing
as much as possible out of a client is
becoming more important than win-win
partnerships. There are four particular
areas where the public sector may be tak-
ing on asymmetric risks:
1) Construction risk: Engineering and
construction companies typically aim to
make more than half their profit on the
additional work agreed after a contract
has been signed. This attitude is not
sustainable when the contractor is also
in the consortium financing the project.
Then, the incentive is to deal with prob-
lems as quickly and as cost-effectively as
possible.
2) The opex-capex trade-off: More and more
utilities are moving away from low-bid pro-
ject procurement to a greater focus on life-
cycle costs. The problem is that suppliers
don’t back their lifecycle cost projections
with their own balance sheets. It is left to
the ratepayers to count the cost years later.
3) Technology risk: Technology is playing
a bigger role in the water sector, but util-
ity customers are incredibly dependent on
their suppliers, who offer short-term war-
ranties on long-term risks.
4) Performance risk: An asset needs to be
operated right in order to deliver the most
value, and without focused leadership and
operator expertise, there is no guarantee
that optimal performance will be achieved.
The private sector may have better access to
specialists who optimise operations.
Ultimately, the question of whether pri-
vate finance delivers ratepayer value centres
around how these four different risks are
priced. It is relatively easy to see the way
these risks are priced on the private sector
side of the equation. It is reflected in the
weighted average cost of capital a private-
ly financed special purpose vehicle faces
in comparison to its public sector client.
It is very difficult to tell how these
four risks are priced when they are held
by a public authority rather than a pri-
vately financed SPV. The cost of finance
for public utilities is driven primarily
by the fact that the ratepayers will pick
up the tab at the end of the day. It is not
a function of how good the utility is at
delivering the lowest possible lifecycle
cost on a project.
Anecdotally, I hear that big public
procurements in the US water sector go
over budget by at least 30%. There is no
data available to prove this point. There
is even less data available on the extent
to which operational costs might diverge
from what would be optimal under a
build-operate-transfer (BOT) project.
Most utilities don’t believe these risks
exist at all. It means that selling private
finance to the public sector is like selling
life insurance to people who believe they
are immortal. <

WHAT IS THE CASE FOR PRIVATE FINANCE?

The main argument for privately financed asset procurement is that it ensures that risks are carried by those best able to manage them. This should reduce the
overall cost of capital procurement, but the argument only makes sense if the public sector client can identify the project risks in advance and accept that the higher
capital cost of a private developer will be more than paid for by the better risk management performance. The case below is based on a $110 million/100,000m3/d
desalination plant in the US, where debt can be issued tax-free by either the utility or the private developer with a 27-year tenor. It assumes that there will be a mean
overspend of 20% on both the capex and the opex where it is managed by a public utility, compared to the fixed price offered by the private sector special purpose
vehicle. In this example, the private developer’s additional cost of capital relating to the risks associated with offering a fixed price on the BOT contract are $39 million,
but the public utility would find itself paying $22 million more in capex (which would bring with it additional debt service costs of $9 million) and $54 million more in
opex, implying a net additional cost to the public sector of $37 million.
600
Cost of equity: assumes public utility meets 10% of EPC cost from internal funds Expected public
sector cost: $511m Private
at zero cost, but private developer expects 12% return on 20% equity portion of
(range $426m- finance
$110m capex = $37m
$596m) fixed price:
$474m
Cost of debt: assumes AA-rated public utility issues debt at 3.2% for 90% of capex
(including overspend) = $54m; BBB-rated private sector SPV issues tax-exempt 400
Lifecycle cost ($ million)

bonds to cover 80% of capex at 132bp spread over public sector debt cost = $56m
Expected variance on operating costs resulting from poor opex-capex
trade-off, technology risk, and performance risk = $54 million for publicly
financed client; zero for fixed-price BOT contract
200
Base operating costs = $271m for both public and private finance

Overspend on capex resulting from poor management of construction risk = $22

million for publicly financed client; zero for fixed-price BOT contract
Expected capex costs = $110m for both public and private finance 0
Public finance Private finance
Source: GWI

OCTOBER 2017 GWI / 7

INTELLIGENCE

GWI WATER INDEX

REGIONAL TRENDS
Falling bond yields boost index GWI Index
Global Water
Value on 10 Oct
160.94
Change
1.45%
A continued decline in the 10yr Treasury yield has enhanced the prospect of a sustained Asian Water 120.83 0.23%
rally in regulated US utility stocks. It helped the GWI Water Index to hit another new high. EMEA Water 100.25 -3.39%
Americas Water 237.54 3.95%

T
he GWI Global Water Index climbed to tions raised this month was the possibility
yet another all-time high this month, of a merger between San Jose Water and
boosted by a spectacular 67% rise in Connecticut Water. As CEO of SJW, Rich
Calgon Carbon’s share price on the back of Roth successfully fended off a $390 million 10 BEST PERFORMERS
the agreed sale of the company to Kuraray takeover approach from American Water
last month for $1.3 billion. back in 1999. Now that he is retiring, Company Monthly change (10 Sep-10 Oct)
And yet it still doesn’t seem to have speculation arose that his successor in the Calgon Carbon Corp. 67.05%
been enough for some investors, with the role, current Connecticut Water boss Eric Forterra 41.62%
deal becoming the focus of a class action Thornburg, may look to broker a deal unit- China Water Affairs Group 36.18%
lawsuit on 18 October, which seeks to ing the two companies, thus giving SJW an
Layne Christensen 16.64%
investigate “whether and by how much East Coast presence on which to build.
this proposed transaction undervalues the Should a water pure-play end up being Pentair 12.79%
Company.” removed from the investible universe of Energy Recovery Inc. 11.82%
Pipe manufacturer Forterra, mean- stocks, there is almost always another one Beijing Water Business Doctor 11.52%
while, bounced back from its own class to take its place, and Evoqua’s decision to Tetra Tech Inc. 11.03%
action lawsuit around the alleged with- move forward with an IPO this month set
Yunnan Water 10.62%
holding of key information from its IPO pulses racing over the prospect of a shiny
prospectus, although the stock is still 75% new publicly listed water company (see story Middlesex Water 10.13%
down on where it began the year. p10).
As Treasury yields in the US continue The coming month marks the return
to fall, investor-owned utilities are start- of results season, with Pentair due to
ing to gain more attention as bond proxies reveal its Q3 numbers on 24 October, and 10 WORST PERFORMERS
which offer increasingly attractive dividend Kemira and A. O. Smith reporting the fol-
yields. All the listed US IOWCs rose this lowing day. Suez will follow on 27 October, Company Monthly change (10 Sep-10 Oct)
month – some by more than 10% – and and Ecolab and Xylem both up on 31 Octo- AquaVenture Holdings -13.46%
with some sources forecasting a continued ber. Aqua America and Mueller Water are Jaks Resources Berhad -8.70%
downward bias in the 10-year T-Note yield expected to report on 1st November, with
SIIC Environment -7.14%
until the end of 2019 at least, there could American Water’s Q3 earnings call sched-
be a lot of steam left in the sector yet. uled for the following day. Veolia is set to VA Tech Wabag -6.53%
One of the more interesting sugges- bring up the rear on 7th November. < United Utilities -5.94%
Tianjin Capital Env. Protection -5.60%
Severn Trent -4.84%
HOW DID WATER STOCKS PERFORM THIS MONTH? Qatar Electricity & Water Co. -4.79%
The Americas segment of the index continued its inexorable rise this month, pushing the GWI Global Water Beijing Capital -4.48%
Index to yet another all-time high. Next month’s crop of earnings announcements will shuffle the pack. Advanced Drainage Systems, Inc. -4.31%
250
Global Water EMEA Water
Americas Water Asian Water BIG WATER
200
MSCI World ($)
Company Monthly change (10 Sep-10 Oct)
150 Pentair 12.79%
Xylem Inc. 2.95%
American Water 2.57%
100
Sabesp 1.46%
Aqua America 1.32%
50 Kurita Water Industries 0.79%
Veolia -0.85%
Suez -4.22%
0 Jun
Jun
OctFebJunOctFebJunOctFebJunOct
FebJunOctFeb
JunOctFebJunOct
FebJunOctFeb
JunOctFebJunOct Severn Trent -4.84%
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 United Utilities -5.94%
1st January 2008=100. Calculated on 10 Oct. Index has 75 stocks, weighted by market capitalisation and water exposure.

8 / GWI OCTOBER 2017

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the resource
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AMERICAS
WATER M&A
AEA readies revamped Evoqua
for $500m New York IPO
After four years of ownership, AEA Investors is poised to hand over a profitable water pure-
play. Has bulking up on EBITDA created strategic long-term value?
E
voqua Water Technologies’ private
equity backer AEA Investors is looking
to capitalise on appetite for pure-play
water businesses by leveraging the com-
pany’s exponential EBITDA growth, which
has been driven in part by an accelerated
acquisition strategy undertaken by CEO
Ron Keating.
On 18 October, Evoqua announced a
target range of $17 to $19 per share for its
initial public offering, implying an equity
valuation of $2.04 billion at the mid-point
of the range, and an enterprise value of just
under $3 billion. AEA will see its stake in
the business reduced from 58.5% to 43%
as a result of selling down a portion of its
stock, while the new money tranche is set
to raise $135 million in net proceeds.
Since April 2016, Evoqua has spent
over $400 million on acquisitions (see
table, facing page), expanding its portfo-
lio of municipal and industrial water and
wastewater treatment solutions, and pro-
pelling the company into new areas such
as recreational water treatment (Nep-
tune Benson) and agricultural irrigation
(Olson).
With many of these acquisitions bring-
ing in disparate product lines that do not
immediately align with the company’s
existing businesses, observers have sug-
gested that the primary motivation was
the attractiveness of their margins. The
IPO valuation looks to imply an EV/
EBITDA multiple somewhere in the mid-
teens, slightly higher than that which GE
achieved from the $3.4 billion sale of its
water business to Suez earlier this year.
EVOQUA’S EVOLUTION
The company has come a long way since Siemens sold the rump of USFilter to private equity house AEA Investors in January 2014. The revamped entity is now ready to
embark on its next phase of growth.
Jan 2014: AEA Investors buys Sep 2015: Evoqua’s EBITDA
Evoqua for $731m doubles year-on-year
Dec 2014: Ron Keating
appointed Evoqua CEO
10 / GWI
NORTH AMERICA’S #1
Despite the fact that more than half of its sales come from industrial clients, the fastest growth in recent
years has come from acquisitions in the products division. The picture is still dominated by North America.
Products (22.4%)
$1,137.2m
Total revenues
(2016)
Municipal (24.4%)
Industrial (53.1%)
“The only rationale that makes sense
for me is the EBITDA advantage, and the
fact that these companies fit within the
bigger water story,” one observer explained
to GWI. “There’s otherwise no evident syn-
ergies within existing sales and distribu-
tion channels.”
Alongside accretive acquisitions, AEA
has sought to further improve Evoqua’s
margins by eliminating inefficiencies and
introducing new senior leadership – the
company’s EBITDA has been transformed
since Ron Keating was appointed CEO in
November 2014 (see chart, facing page).
“AEA ran the classic private equity play-
book,” another observer commented to
GWI. “You lever it up as much as you can,
Apr 2016: Evoqua buys Jul 2017: Evoqua’s global
Neptune Benson for $284m HQ moved to Pittsburgh, PA
Oct 2015: Full consoli- Apr 2016-Jun 2017: $400m
dation of Nalco JV of water M&A completed
This month in the Americas:
10 Evoqua bulks up ahead of IPO
12 Design-build hits the US mainstream
14 US P3s break through to a new plane
17 A change of pace for military outsourcing
18 Breaking down walls for US-Mexico water deals
19 Brazil’s new wastewater capex roadmap
21 Debra Coy: Let’s spend smarter, not harder
ROW (14%)
$1,137.2m
Total revenues
(2016)
North America (86%)
Source: Evoqua
make the business simpler from a deci-
sion-making standpoint, put in some no-
nonsense management, retire a lot of the
expensive older people, and then pepper in
acquisitions that are accretive to the exist-
ing margins.”
Observers have nevertheless com-
mended AEA on its ability to quickly turn
around the business it bought from Sie-
mens for $731 million in 2014.
“AEA essentially salvaged the busi-
ness from Siemens, where there was no
accountability and very poor strategic and
tactical direction,” a former senior execu-
tive at USFilter, the company’s forerunner,
observed to GWI. “Keating and his folks
came in, and AEA did the heavy lifting
Aug 2017: Comprehensive
debt refinancing completed
Jul 2017: Confidential IPO
filing made with SEC
Source: Evoqua
OCTOBER 2017
 AMERICAS

early on to really restore a level of account-

ability and decision-making and a solid
[profit and loss] focus.”
He also argued that it is not always
necessary for acquisitions to marry up per-
fectly from a strategic perspective. “With
a strong management team and platform,
you can create synergies over time – it
doesn’t have to be instant,” he added.
Evoqua divides its business into three
divisions (see chart, facing page), and
although its industrial interests account
for the majority of its revenues, the recent
spate of acquisitions boosted revenues
derived from product sales in 2016 by
approximately $53.4 million, or 10%.
Nevertheless, the company’s $1.1 bil-
lion annual revenue number is still almost
evenly split between product sales and ser-
vices – $587.1 million and $550.1 million
respectively in 2016.
Its capability in combining products
and technologies with an array of service
offerings is what differentiates Evoqua
from many of its competitors in North
America, and provides the company with
a healthy backlog of recurring business.
The company offers services ranging from
the replacement of ion exchange and acti-
vated carbon media, to the servicing of
ultrafiltration membrane systems, while
it also operates a fleet of more than 600
mobile treatment systems. More advanced
offerings include its ‘Water One’ service
contracts, which utilise smart monitoring
technologies and predictive analytics.
While these service offerings enable
the company to sustain significant market
share (see chart right), Evoqua has struggled
to achieve the same trajectory with some of
its legacy products – in particular its Mem-
cor line of UF membrane systems.
In the nine months ending 30 June
2017, the revenues of the Memcor business
declined by $6.1 million versus the same
IT’S TOUGH AT THE TOP
Evoqua will be under pressure to maintain its market-leading track record after leaving AEA’s embrace – its
position as a top three player in the global UF membrane market is already at risk.
Market position
EDI
Electrochlorination
EDR/ED
Mobile water
UF process/drinking water
Activated carbon
Biological nutrient removal
period last year, which Evoqua attributes to
a transition to higher-growth end markets.
Observers suggest, however, that this high-
lights more systemic problems with the
business.
“Memcor remains one of the weak-
er businesses,” one onlooker explained
to GWI. “Their market share has been
eclipsed by other players, and it’s really
tough in the water business in general if
you aren’t number one or two from a cat-
egory standpoint, because you have to start
fighting more with price than technology.”
Starved of investment under Siemens,
Memcor lost valuable ground to its compet-
itors and was plagued with performance
issues and consequent warranty liabilities.
The business is also complicated by the
fact that the membranes are manufactured
in Australia but largely sold elsewhere –
particularly in North America – leaving it
sorely exposed to foreign exchange head-
1 2 3
Source: GWI estimates
winds and shipping costs.
“I think they lost their way under Sie-
mens, and there was very little [AEA] could
do in a short period of time,” our observer
continued. “It takes ten years to really
regain a brand that has been damaged, and
I hold Siemens accountable for that – they
made a lot of bad decisions and didn’t fix
things right away.”
Recognising the necessity to acquire
new products and services in order to
maintain its market-leading position in
North America, Evoqua has identified a
pipeline of 60 potential acquisition targets
with which to maintain its rhythm of inor-
ganic growth.
Private equity ownership has left the
company with a hefty $900 million debt
pile, a junk rating, and some fairly hefty
debt service commitments, although the
IPO proceeds will see this reduced by $100
million. <

EARNINGS RESPECT UNDERSTANDING EVOQUA’S M&A STRATEGY

Evoqua’s EBITDA has doubled every year since Since divesting its chemical feed automation business in 2015, the company has spent more than $400
Ron Keating took over as CEO. million on acquisitions. It has identified a pipeline of more than 60 additional targets for the future.
120
Company Line of business Price Completed
100 Olson Irrigation Systems Filters and irrigation components for ag $9.0m 30 Jun 2017
80 ADI Systems Anaerobic digestion/biogas treatment CAD71.4m 30 Jun 2017
$ million

Noble Water Technologies Water equipment and treatment systems $7.6m 09 May 2017
60
Env. Treatment Systems DAF unit manufacturing capability $10.7m 01 Nov 2016
40 Delta Ultraviolet Corp. North American UV-C tech manufacturer $4.8m 03 Aug 2016
20 VAF Filtration Systems Screen filtration manufacturer $3.3m 01 Jul 2016
Neptune Benson, Inc. Water filtration and disinfection products $283.7m 15 Apr 2016
0
2014 2015 2016 Magneto Special Anodes Electrochlorination for seawater electrolysis €23.6m 11 Apr 2016
Source: Evoqua Source: Evoqua

OCTOBER 2017 GWI / 11

AMERICAS
PROCUREMENT TRENDS
Design-build sheds its ‘alternative’ status as
client uptake advances to the next level
A steady rise in the proportion of US water projects procured using design-build delivery has gone hand in hand with a trend towards
increased collaboration between client and contractor. Who are the real winners in this evolving market segment?
T
he first in-depth report into the design-
build market for water and wastewater
projects in the US – published ear-
lier this month by the Water Design-Build
Council – forecasts that design-build will
account for 11% of total project spending in
the sector by 2021, up from 9% in 2016.
This equates to an annual projected
spend of $9 billion, with advanced waste-
water treatment projects set to dominate
the mix, as clients look for greater levels of
risk transfer on increasingly complex pro-
jects, whilst frequently facing ambitious
delivery timetables driven by regulatory
deadlines.
Cultural inertia, and the consequent
need to educate clients about the advan-
tages of the procurement method, remains
the single largest impediment to the more
widespread adoption of design-build deliv-
ery, although the report’s authors believe
there is significant justification for doing
away with its ‘alternative delivery’ tag.
“I think we’ve reached a tipping point,”
said Steve Gates, a senior vice president
at Brown and Caldwell who also serves as
first vice president of the WDBC. “Con-
versations ten years ago with stakeholders
would be along the lines of: ‘here’s some-
thing new to think about,’ and the question
on the other side of the table was, ‘why?’.
Now the question on the other side of the
table is, ‘how?’”
With the annual run rate of water and
wastewater projects contracted in the US
using design-build delivery now consist-
ently above 100, more and more clients are
looking to streamline the delivery of their
infrastructure by procuring services from a
single provider.
“The three things that owners are look-
ing for with design-build are cost, risk and
delivery time advantages,” explained Ken
Rubin of Rubin Mallows Worldwide, which
carried out the research on behalf of the
WDBC, together with the University of
North Carolina.
“We’ve wrung about as much environ-
mental improvement as we can out of the
system at low cost, and the next increment
of advancement is orders of magnitude
12 / GWI
DESIGN-BUILDING A BETTER FUTURE FOR WATER
Capital expenditure on design-build projects in the US water sector is projected to rise as the delivery model
gains more widespread acceptance. The percentage of total sector capex will remain limited, at around 11%.
10
8
Billions of 2016 US dollars
6
4
2
24860
10
0
2013 2014
more expensive per unit of environmental
quality achieved. Markets naturally tend
to look for more efficient solutions under
these circumstances, and that has resulted
in a greater uptake of projects delivered
though alternatives to design-bid-build.”
Gates also cited pent-up demand for
infrastructure investment as an additional
driver for choosing design-build, as public
authorities look to reduce their risk expo-
sure and play catch-up after the drop in
spending precipitated by the Great Reces-
sion. “There is a recognition by sophisti-
cated owners that the design-build method
manages project risk more effectively, and
design-build has consistently and routinely
demonstrated that delivery schedules can
be expedited,” he told GWI.
Progressive or regressive?
The data collected for the report includes
projects delivered using “progressive”
design-build procurement, which does not
Estimated range Point estimate
2015 2016 2017 2018 2019 2020 2021
Source: WDBC
guarantee a fixed price from the outset, but
relies on a more collaborative approach in
which the client is more closely involved in
the design process.
“With only a relatively small number of
owners willing to give up the responsibil-
ity for operations, progressive design-build
allows a much greater opportunity for
owner engagement in the details of design
and construction, so they end up with
something that they are comfortable own-
ing and operating,” Gates explained. “That
is an important driver for owners to move
in the direction of progressive design-build.
“It’s a method that brings out the best
in design-build, and the best aspect of
design-build is collaboration. In a fixed-
price setting, there’s more opportunity for
arguments, whereas in progressive, you’re
working together on every last detail of
the design, and there’s a much lower prob-
ability that there will be a misalignment
between the expectations of the owner
OCTOBER 2017

and what’s provided by the design-builder,”
he explained.
Upside down
While the collaborative nature of progres-
sive design-build has the potential to wring
out additional risk factors from a project,
the corollary of this is that is reduces the
upside potential for contractors.
“In a fixed-price setting, if the design-
builder manages a risk and that risk’s not
realised, the project profit can increase.
With progressive design-build, the owner
and design-builder collaborate to wring risk
out of the project and assign responsibility
to the party best able to manage each risk.
As a result, project costs are more predict-
able, but that provides less upside profit
potential to the design-builder. Generally
speaking, there’s less downside risk to the
design-builder and the owner with progres-
sive, but there can also be less upside.”
Progressive design-build can also mean
that the client may end up paying above
the odds versus a traditional fixed-price DB
contract, although Gates argues that this
need not affect levels of client satisfaction.
“Some owners worry that they might
lose cost leverage with progressive design-
build because the cost of work is negoti-
WATER P3S
Getting collaborative about P3 delivery in water
Introducing a progressive element into the delivery of P3 projects in the water sector could stimulate more deal flow by offering
clients a greater say in a project’s outcome. The concept is not popular with everyone.
T
he concept of introducing a progres-
sive element into privately financed
water projects in the US is begin-
ning to gain traction, as players look for
new ways to convince public sector offi-
cials about the benefits of the delivery
model.
Although there is no precedent of a
US water P3 being delivered using a pro-
gressive design-build model, an increas-
ingly collaborative approach on projects
in other spheres of social infrastructure,
such as the Long Beach Civic Center
and the US Merced 2020 Project, has
resulted in optimised projects with lower
budgets – and happier clients.
“I think the day of the hard-bid P3
is over, at least in water and wastewater,
and we’ve been really encouraging cities
to consider a progressive approach to P3,”
said Megan Matson, a partner at Table
Rock Capital, which financed the munic-
ipal water and wastewater concession in
OCTOBER 2017
ated, not publicly bid. Best practice for
progressive design-build requires all mate-
rial and equipment to be competitively pro-
cured from pre-qualified sources, with no
opportunity for hidden costs,” he explained.
US WATER DESIGN-BUILD PROJECT ACTIVITY (2013-2016)
Advanced wastewater treatment projects have accounted for the lion’s share of the capital outlay for design-
build projects in the last four years. Increased project complexity means this trend is likely to continue.
8.0
Total project cost ($ billion)
7.0
6.0
5.0
4.0
3.0
2.0
1.0
0.0
WW Combined Water
Public utilities
Rialto, California.
“What is really appealing to people is
having a qualifications-based selection at
the front end, and then having the team in
the room with all the technical expertise
of both the existing public sector leader-
ship and the P3 team, and then working
out, over time, the best possible technical
and financial solution, before the final go/
no-go decision is made by the council. It’s
the classic progressive design-build format,
but with the P3 overlay,” she explained.
Embedding a progressive design-build
procurement strategy into an existing
concession has already paid dividends in
Rialto, Matson argues. “We have a progres-
sive design-build within the Rialto conces-
sion, and it’s really worked,” she told us.
“The city came into the concession with a
concept for the major plant upgrade, but it
just wasn’t a solution that fit. The AECOM/
Lyles team reconfigured it to hit the same
performance outcomes, but through plant
AMERICAS
“Owners we know who have completed
progressive design-build contracts general-
ly believe the inherent collaboration among
all parties got them exactly the project they
wanted, at a fair price.” <
200
175
150
Number of projects
125
100
75
50
25
0
Other Water Other WW Combined
Investor-owned utilities
Source: WDBC
consolidation, reducing the budget from
$46 million down to well below $30 mil-
lion, and with significant annual cost
savings in the operations that dropped
straight back through to the city.”
The greater level of involvement by
city staff in a progressive process can
also lessen some of the initial trepidation
around what is frequently an unfamiliar
delivery method.
“I think the progressive model is a
great model. It allows for increased com-
munication and collaboration every step
of the way, and it also allows cities and
utilities some level of comfort, as there
are off-ramps,” said Francesca McCann,
business development director at infra-
Management Group, part of Black &
Veatch. “I think it will help move P3 for-
ward, and from the conversations we’ve
had around it, there has been greater
receptivity, because it decreases the fear a
little bit,” she told GWI. <
GWI / 13
AMERICAS
P3S IN WATER
Discussion around US water P3s reaches a
new level of maturity
More and more public authorities are embracing the possibility of delivering water infrastructure using private capital and expertise.
Despite the diversity of projects in the pipeline, the market is realistic about how this will translate into deal flow.
A
series of developments over the past
month have reinforced a sense of
cautious optimism that the pipeline
of privately financed water projects in the
US has quietly solidified into something
stronger and more diverse than at any time
during the last five years.
Encouraged by the market’s response
to a request for information about the pros-
pect of implementing P3s for a variety of
water projects, the US Bureau of Reclama-
tion stated on 2nd October that it is “high-
ly motivated and encouraged to further
explore the potential for leveraging P3.”
Just days prior to that, the City of Cor-
pus Christi in Texas issued its own RFI
seeking feedback on potential wastewater
P3s, while the Santa Clara Valley Water
District in California surprised everyone by
voting to go down the P3 route for a $600
million expansion of wastewater treatment
and reuse infrastructure (see story opposite).
These events are a far cry from the hype
of 2013, when the market succeeded in con-
vincing itself that a flood of opportunities
would materialise on the back of long-term
concession contracts signed in Rialto (CA)
and Bayonne (NJ). In reality, the pipeline
petered out after some public sector clients
received poor advice from inexperienced
advisors, while others elected to sell their
systems outright.
“The project opportunities that we’re
seeing now are stronger and broader,
with really solid drivers,” said Francesca
McCann, business development director at
Black & Veatch’s infraManagement Group.
“Three years ago, all of the discussion was
around water and wastewater, and we’re see-
ing more dialogue now around stormwa-
ter, agriculture and irrigation, and Bureau
of Reclamation projects. Utilities are more
aware of where P3s can be applicable within
the water sector, and we’re seeing a broader
variety of opportunities,” she told GWI.
There is also a growing realisation that,
even in big utilities, there is frequently
a lack of institutional capacity to push
through major capital investment pro-
grammes without significant private sector
intervention.
14 / GWI
SURVIVING THE HYPE
After a sustained period of excessive hype, the pipeline of P3s in the US water sector finally feels more solid –
and more diverse. The focus has shifted away from system-wide concessions to single-asset projects.
Project Client
Wastewater P3s City of Corpus Christi
WWTP expansion/reuse Santa Clara Valley WD
Various brownfield P3s Bureau of Reclamation
189,250m³/d SWRO plant Orange County WD
18,925m³/d Doheny plant South Coast WD
22,710m³/d brackish plant City of Antioch
Biosolids processing plant Louisville MSD
Biosolids processing plant Miami-Dade WSD
Satellite water reclam plant LA Sanitation
“Nationally, the conversation has real-
ly progressed, and there is a new level of
openness. Utilities are finally seeing a
more three-dimensional picture of P3, and
how it is not about the money, but about
the whole package,” said Megan Matson, a
partner at Table Rock Capital, a financial
backer of the Rialto concession. “Two years
ago, there was a more solid belief by coun-
cils in their own staff’s ability to execute
and their own city’s ability to execute, and I
think that is vanishing,” she told GWI.
The education piece of the equation has
long been one of the greatest challenges in
getting public administrations to embrace
the possibility of privately financed water
infrastructure.
“That’s one thing that I think the mar-
ket is probably getting better at,” comment-
ed McCann. “Full transparency for ratepay-
ers is critical very early on, since P3 really is
a shift in the intrinsic way of doing things.”
Part of the argument around transpar-
ency centres around the tunnel vision on
the part of many public authorities that a
P3 cannot represent value for money, given
that a BBB-rated project bond inevitably
costs more to service than a AA-rated tax-
exempt municipal bond.
“The implied equity that lies inside
a publicly administrated AA utility isn’t
Status
RFI responses due on 10 November 2017
P3 route selected on 10 October for $600m project
USBR “highly motivated” following market feedback
EIR certification due Oct 2017 (Huntington Beach)
DBFO under consideration; next workshop 15 Nov
EIR underway; project could be procured as a PPP
Two teams shortlisted for possible DBFO/DBOO
Tender process for 20-year DBFO contract delayed
DBFO under consideration; next steps in early 2018
Source: GWI Project Tracker
priced transparently in the market or to
ratepayers,” said Peter Luchetti, managing
partner at Table Rock Capital. “In other
words, you’re not being held accountable
for managing risk. What the P3’s telling
you is, as we think about optimising the
risk, it’s cheaper on a lifecycle basis to have
a BBB rating and perform well, than it is
to have a AA rating and not perform well.
Your credit rating is not a grade on the
quality of your infrastructure, it’s a grade
on your ability to take money out of ratepay-
ers’ pockets,” he told GWI.
The increased willingness among pub-
lic utility leaders to accept that argument
and learn more about the benefits that P3s
can bring in terms of risk transfer, asset
lifecycle optimisation, and accelerated
delivery, was nowhere more obvious than
at the inaugural P3 Water Summit held
in San Diego back in May. Of the 525 del-
egates who attended, more than 200 were
public sector representatives.
Despite the increase in awareness, how-
ever, practitioners caution that deal flow
is likely to remain light for the foreseeable
future. “We see a lot of good signs, but I’m
not sure that’s going to convert into a lot of
deal flow,” said Luchetti. McCann agrees: “I
don’t think we will have explosive growth,
but I think we’re gaining traction.” <
OCTOBER 2017
 AMERICAS

WATER FINANCE

Santa Clara’s P3 decision is just the beginning

The decision to pursue a P3 delivery method for a major reuse project in California puts an end to 18 months of market uncertainty.
The client still needs to resolve a host of other issues before it can move forward with the project.

T
his month’s historic decision by the
Santa Clara Valley Water District
to go down the P3 route for a $600
million wastewater reuse project finally
removed the uncertainty around a pro-
curement process which had drawn con-
siderable flak from the industry.
Having shortlisted separate consor-
tia for either a progressive design-build
approach or a privately financed P3,
the District then seemed to veer in the
direction of the former delivery method
before ultimately deciding that private
finance was the way to go.
“As we went along, we had certain
questions, and each progressive move
that we made, we got more comfortable
with P3,” explained District board mem-
ber Tony Estremera. “We have always
been comfortable with a diversity of
water sources, and so why not look at
additional diversity in the way we make our
investments?”
Further comfort was provided follow-
ing a consultation with San Diego County
Water Authority officials on their expe-
riences when procuring the privately
financed Carlsbad desalination plant.
“Two issues really made the differ-
ence: the exchange of risk, and the eco-
nomic help that we would get,” Estremera
told us. Going down the P3 route not only
alleviates fears over the capacity of District
staff to manage a project of this scope and
complexity, but will free up bonding capac-
ity, enabling investment in other key assets
such as storage infrastructure, and a poten-
tially downsized Delta tunnels project (the
Board voted on 17 October not to partici-
pate in the full-scale WaterFix project).
Despite the procurement route having
been chosen – and two developer teams
shortlisted – an award is still some way
off. “We’ve gone through a pretty sub-
stantive process, and we’ve asked to staff
to come back with a recommendation of
how we approach that,” said Estremera.
The project still faces a range of sig-
nificant hurdles before it can move for-
ward, among them the issue of brine
disposal from the proposed expansion of
the Silicon Valley Advanced Water Puri-
fication Center (SVAWPC), and the tax-
exempt status of existing debt raised to
fund publicly financed treatment infra-
structure if it is ultimately migrated into
the scope of the P3 contract.
Estremera intimated that a final deci-
sion on the scope of the P3 is still some
way off, but remains upbeat.
“It will allow us to handle a lot more
projects. We might actually be able to do
everything we want.” <

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WHEN: November 29-30, 2017
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What new financing will Washington offer?
Brent Fewell, Earth & Water Group
Is big best for engineers and their clients?
Tim Chinn, AECOM
Will utility consolidation start to accelerate?
Bill Teichmiller, EJ Water Coop, ARWO
Where is the reuse revolution taking
California?
Dominique Demessence, SUEZ and
Gloria Gray, West Basin Municipal District
Can we make the IoT safe for water?
Stephen Ridley, Senrio
What does Flint mean for water?
Joseph Cotruvo, Joseph Cotruvo & Associates
Where next for desal?
Andy Kingman, Poseidon Water
Do the markets still have an appetite for
water pure-plays?
Deane Dray, RBC Capital Markets
What are the lessons from Harvey and Irma?
Yvonne Forrest, City of Houston, TX
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 AMERICAS

UTILITY PRIVATISATION

US military outsourcing turns a corner as the

pace of procurement quickens
The award this month of two military water privatisation contracts in the US prefigures a strong pipeline of additional opportunities. As
public and private sector players compete for a slice of this lucrative market, how will operators look to differentiate themselves?

T
he award in the past month of water RFPs to come out – including electric the procurement of utility privatisation con-
utility privatisation contracts worth and gas – which is quite a bit to issue and tracts.
more than $1 billion by the US military administer in just one year,” Todd Duerr, Typically spanning 50 years and with
reflects a maturing of the procurement military services group president at Ameri- a lifetime contract value in the hundreds
process in this growing market segment. can Water, told GWI. of millions of dollars, military outsourc-
American Water scooped up a $490 Duerr attributes this renewed dealflow ing contracts are highly coveted, and it is
million 50-year contract to operate the to improvements in the military procure- no surprise that improvements to the pro-
water and wastewater systems at Wright- ment process, including increased staff- curement process are already resulting in
Patterson Air Force Base in Ohio, while ing levels at the Defense Logistics Agency greater levels of competition. “We’re seeing
American States Water secured a $601 mil- (DLA) and improvements to RFP templates more and more of our traditional contract
lion 50-year contract at Fort Riley (Kansas). and scheduling. “If you look at [DLA’s] operations competitors showing up at utili-
With a crop of additional contracts in award rate over the last three years versus, ty privatisation meetings,” Duerr admitted.
various stages of procurement (see table say, the prior six years, you can see a great The market is not the exclusive domain
below) – and more on the horizon – this improvement,” he observed. of large private sector companies, and there
historically slow and cumbersome market Moreover, with the Trump administra- have been increasing instances of local
could be turning an important corner. tion favouring increased levels of military municipalities with strong connections
“In 2018, we’re expecting somewhere spending, the DLA could in the future have picking up military utility outsourcing
between 12 and 15 [utility privatisation] more resources at its disposal to support contracts. In August this year, the Jackson-
ville Water Commission was contracted to
operate the water infrastructure serving
THE STEADY ADVANCE OF MILITARY PRIVATISATION the Little Rock AFB (AR) after the original
In addition to the handful of contracts awarded over the past year, there is currently a strong pipeline of
competitive tender was cancelled in 2011.
military water utility privatisation contracts under procurement in the US.
The City of Biloxi bid for the Keesler AFB
contract in Mississippi, for which an award
Contract Scope Status is expected next year, while Huntsville
JB Myer-Henderson Hall, VA Water/wastewater Responses due by 12 January 2018 Utilities is pitching for the upcoming Red-
Yuma Proving Ground, AZ Electr/W/WW Solicitation documentation expected imminently stone Arsenal contract. The Oklahoma City
Oahu Army Garrison, HI Electr/gas/W/WW Submissions due by 2nd November 2017 Water Utilities Trust, meanwhile, is bid-
ding for the water and wastewater contract
Aberdeen Proving Ground, MD Water/wastewater Statements of interest were due 13 October 2017 at Tinker AFB (see table).
Fort Buchanan, PR Electr/W/WW Proposals due by 11 December 2017 While the scale and successful track
Fort Leonard Wood, MO Water/wastewater Bids due in Oct 2016; decision possible in FY 2018* record of major players such as American
Joint Base Lewis-McChord, WA Water/wastewater Bids due in Dec 2015; decision possible in FY 2018
States and American Water does put them
at an advantage – the latter now operates 14
Keesler AFB, MS Electr/W/WW Bids due in Aug 2015; decision possible in FY 2018 military water/wastewater contracts – the
Grand Forks AFB, ND Electr/gas/W/WW Award decision believed to be imminent increased competition from other private
Joint Base San Antonio, TX Water/wastewater Bids due in Sep 2013; decision possible in FY 2018 and public sector players places a greater
onus on firms to differentiate their service
McConnell AFB, KS Electr/W/WW Bids due May 2013; decision possible in FY 2018
offerings. Duerr recognises the potential to
Tinker AFB, OK Water/wastewater Provisional award scheduled for FY 2018 bring in new offerings, suggesting that the
USAG West Point, NY W/WW/heat/pwr Bids due in Feb 2016; award possible in FY 2018 military is receptive to innovations such as
Anniston Army Depot, AL Water/wastewater Provisional award scheduled for FY 2019 digital solutions.
Despite recent improvements, however,
Redstone Arsenal, AL Electr/gas/water Provisional award scheduled for FY 2019 the procurement of military outsourcing
Rock Island Arsenal, IL Electr/gas/W/WW Provisional award scheduled for FY 2019 contracts remain complex, which will natu-
Recent awards rally favour those firms with the resources
Fort Riley, KS Electr/gas/W/WW $601m contract awarded to Am. States in Oct 2017 to undertake protracted bidding processes
that typically last several years.
Wright-Patterson AFB, OH Gas/W/WW $490m contract awarded to Am. Water in Sep 2017
“It’s still a three- to five-year procure-
Travis AFB, CA Water $209m contract awarded to Cal. Water in Sep 2016 ment, and while that may not sound great,
Eglin AFB, FL Electr/W/WW $510m contract awarded to Am. States in Jul 2016 they’re complex 50-year contracts, so it’s
best to take our time,” Duerr conceded. <
* FY2018 = Fiscal year ending 30 September 2018. Source: GWI, Defense Logistics Agency

OCTOBER 2017 GWI / 17

AMERICAS
BINATIONAL WATER PROJECTS
New collaborative water infrastructure deal
agreed on the US-Mexico border
As the US and Mexico face off on thornier political issues, the two countries have struck a deal to extend the water-sharing provisions of
the 1944 Colorado River Treaty. Ongoing collaboration will see the US invest in water infrastructure south of the border.
T
he US has agreed to invest $31.5 mil-
lion in water conservation infrastruc-
ture in Mexico under the latest amend-
ment to the Colorado River Treaty, which
also lays the groundwork for new binational
desalination and reuse projects.
Signed late last month, Minute 323
extends the water-sharing provisions of
the existing Colorado River Treaty – which
had been due to expire at the end of 2017 –
through to 2026, and introduces a handful
of new provisions, including a binational
drought contingency plan, whereby Mexico
would cut its withdrawals from the Colora-
do River in line with a Lake Mead conser-
vation plan due to be implemented by Ari-
zona, California and Nevada later this year.
Over the next decade, the US will also
spend up to $31.5 million on water conser-
vation infrastructure in Mexico, such as
canal lining and irrigation improvements.
In exchange for the water savings gener-
ated, Mexico will relinquish up to 109,100
acre-feet (135 million m3) of its Colorado
River water allocations over the duration of
the updated agreement, which could then
be used by water agencies in the US.
Minute 323 also directs a binational pro-
ject works group to explore five potential
desalination and reuse initiatives in Mexi-
co, including desalination facilities on the
New River and the Pacific Coast, and the
reuse of municipal effluent from treatment
plants located in Mexicali and Tijuana.
One binational concept which will be
actively investigated in the near term is a
desalination facility on the Sea of Cortez,
which is advocated by the Arizona-Mexico
Commission and stakeholders including
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the Central Arizona Project.
Chuck Cullom, the Central Arizona
Project’s Colorado River programme man-
ager, explained to GWI that a binational
desalination work group will undertake an
investigation of initial feasibility and site
screening for this project, with a scope of
work expected by March 2018.
The concept of a seawater desalination
project on the Sea of Cortez is not new, and
bids are due in November for a 17,280m³/d
facility to serve the cities of Empalme and
Guaymas (Sonora), while the concept has
also been explored in Puerto Peñasco.
In 2014, Sonora and Arizona agreed to
investigate binational desalination oppor-
tunities, although Cullom suggests that
a formal process coordinated through the
entities responsible for the Colorado River
Treaty – the International Boundary and
Water Commission in the US, and its Mexi-
can counterpart La Comisión Internacional
de Límites y Aguas – will be key to moving
a binational concept forward.
Elsewhere, another project with
binational interests is the 100MGD
(378,500m³/d) SWRO plant being devel-
oped by NSC Agua in Rosarito, which is
expected to reach financial close this year.
The Otay Water District in California has
signed a non-binding letter of intent to
purchase water from the project, and has
received a presidential permit to build a
$30 million pipeline from the Mexico bor-
der. However, it remains to be seen if any
of the water will ultimately reach the US.
Mark Watton, general manager of the
Otay Water District, explained to GWI
that the facility will have to completely
ON THE BORDER
Minute 323 identifies possible binational desal
and reuse projects in the Mexican states of Baja
California and Sonora.
San Diego CALIFORNIA Colorado River
Tijuana
Rosarito Mexicali ARIZONA
BAJA
CALIFORNIA
Puerto Peñasco
Pacific Ocean Sea of Cortez
SONORA
satisfy the water needs of the Tijuana-
Rosarito region before any exports to the
US can take place, and that is unlikely to
occur until the second of the project’s two
50MGD phases is completed – which could
be as late as 2024.
With Minute 323 allowing Colorado
River rights to be exchanged for infra-
structure improvements for the first time,
the market could see the development
of binational desal and reuse initiatives
which do not involve a physical transfer of
water across the border. Baja California, for
instance, has already indicated the possibil-
ity of monetising its Colorado River rights
to offset the cost of desalination in Rosarito.
In the meantime, any discussion of
binational collaboration between the US
and Mexico could be clouded by broader
shifts in the political landscape. “It will
take a concerted effort to keep this on track
and untangled from anything else that
might be happening between the two coun-
tries,” cautioned one observer. <
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OCTOBER 2017
 AMERICAS

BRAZILIAN WATER INVESTMENT

Brazil’s new roadmap for wastewater capex

A new study published this month provides a unique level of granularity on Brazil’s wastewater investment needs. A holistic approach
involving reuse from the outset will depend on a policy change at the federal level.

A
new wastewater atlas published by
Brazil’s national water agency (ANA)
in September puts an estimated price MAPPING BRAZIL’S WASTEWATER INVESTMENT NEEDS
tag for achieving universal wastewater col- The volume of investment required in order to achieve universal coverage of wastewater collection and
lection and treatment at BRL149.5 billion treatment by 2035 varies by hydrological basin. Reuse will be most prevalent in the northeast of the country.
($47.2 billion), of which 32% is for treat-
ment infrastructure.
The heaviest investment per capita is Atlântico
required in the north east, where the docu- Nordeste
ment forecasts a serious need for reuse in Ocidental Atlântico
order to make up for dangerously low reser- (BRL6.5bn) Nordeste
voir levels. Implementation will neverthe- Oriental
less have to wait for the development of a Amazônica (BRL25.3bn)
comprehensive wastewater reuse policy by (BRL11.6bn)
the federal government’s cities ministry.
The document is the continuation of a Parnaíba
process launched by the first Dilma Rouss-
(BRL4.1bn)
eff administration, and involved three years
of work in collaboration with Brazil’s state Tocantins São
governments and 5,570 municipalities. Araguaia Francisco
It is designed to give a detailed picture of (BRL9.8bn) (BRL9.3bn)
the current state of sewage collection and Atlântico Leste
wastewater treatment in the country, and to (BRL11.2bn)
outline the requirements for achieving uni-
versal urban coverage by 2035. Paraguai
Investment (BRL2.4bn)
According to Sérgio Ayrimoraes, plan-
ning superintendent for water resources <BRL10bn Paraná
at ANA, the atlas is designed “to provide a (BRL34.8bn)
technical reference to assist planning and BRL10-20bn Atlântico Sudeste
decision-making by financing agents such (BRL18.6bn)
>BRL20bn
as BNDES, as well as operators, regulators Uruguai
and public authorities. The technical solu- (BRL3.6bn)
tions and the implementation strategy pre-
sented in the atlas show the need for new Atlântico Sul
institutional approaches to providing waste- (BRL12.3bn)
water services, without making any distinc- Source: ANA
tion between public or private sector opera-
tors,” he told GWI. This is the task of the consultancies Basic solutions such as sewage con-
Alexandre Lopes, director of the private chosen by BNDES to chart the role of pri- nections can be applied in over half of the
sector water and wastewater concession- vate sector companies in the future opera- municipalities, especially in more rural
aires’ association ABCON, added that while tions of ten of Brazil’s state water opera- and western areas, which have ample sur-
the atlas provides important information, tors, Lopes argues. “The consultancies will face water resources. The most complex
“other instruments are required in order to define which model is best for providing solutions are required in the dry northeast,
know how to help each municipality.” effective institutional capacity, whether where the atlas calls for extensive reuse (see
it be a sub-concession, total privatisation, map).
The consultancies public-private partnership, or whatever,” he As regards implementation, the atlas
told GWI. divides municipalities into three groups
will define which The atlas contains information on the according to their level of institutional
model is best for requirements and the existing state of plan-
ning for improving wastewater collection
capacity and their preparedness to carry out
the required investments. Investment can-
providing effective and treatment in each municipality. It also not be undertaken until any deficiencies in
provides a comparative analysis of institu- the institutional and financial capacity of
institutional capacity. tional structures, and of the complexity of operators have been made good, the docu-
Alexandre Lopes, ABCON the solutions required in each situation. ment states. <

OCTOBER 2017 GWI / 19

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COMMENT
Spending smarter, not harder
As the argument over who should fund water infrastructure rolls
on, utilities are finding alternative ways to save, says Debra Coy.
L
ike many readers, I’ve recently
returned from WEFTEC, the largest
water gathering in North America,
where 20,000+ conventioneers descend-
ed on Chicago to buy, sell, learn, and
gossip. The show was busy, the parties
were hopping, and the mood was gener-
ally buoyant, notwithstanding the woe-
ful refrain on underinvestment in infra-
structure that we continue to proclaim.
Municipalities are spending, despite
certain federal government data sug-
gesting otherwise (see Christopher Gas-
son’s 5th October Insight column on this
topic). While the current US economic
expansion, now in its eighth year, is get-
ting very long in the tooth, state and local
tax receipts are still growing. Municipal
bond issuance has rebounded, totalling
$445 billion in 2016, up from a low of
$295 billion in 2011, although the pace is
slowing somewhat in 2017.
Structural labour shortages, due to
an ageing population and reduced immi-
gration, are starting to constrain the US
economy, and anecdotal evidence sug-
gests this is also impacting the water
industry, bottlenecking project permits
and construction. However, this does not
explain the 20%-plus declines in water
and sewer construction spending over
the past two years, as reported by the US
Census Bureau.
I am beginning to wonder if the sta-
tistics, collected in the same way for dec-
ades, are measuring the wrong things.
I’d like to think municipalities are sim-
ply starting to spend smarter – more on
technologies and services that drive effi-
ciency, and less on big brick-and-mortar
construction – and this is not well cap-
tured in traditional government surveys.
I would argue that a positive outcome
of the Trump administration’s dither-
ing on infrastructure legislation is that
the water sector is coming to realise
that it has no choice but to get smarter.
It will have to solve its challenges on its
own. Water was never going to get a big
share of a trillion-dollar infrastructure
programme, and the odds of any pro-
gramme at all are looking more remote
by the day.
OCTOBER 2017
President Trump himself, always
ready with a curveball, left his infrastruc-
ture team scrambling last month when
he said in a meeting on Capitol Hill that
he no longer favoured public-private part-
nerships, undermining the core princi-
ple of his administration’s early propos-
als. As Fox News, a conservative media
outlet, said at the time, “Trump Pivot on
Infrastructure May Kick Wall Street to
the Curb.”
Of course Washington lobbying is
all about trying to avoid being kicked to
the curb. Right now, top lobbyists are
gearing up to fight over tax reform, not
infrastructure. Wall Street is already
plenty engaged in infrastructure, mainly
through municipal bond underwriting.
The broader question is not whether new
private capital will flow to infrastructure,
but whether muni bonds will keep the
tax subsidies they currently enjoy. So far,
subsidised healthcare has been fiercely
debated in Congress, but the municipal
bond subsidy remains sacrosanct.
The fact remains that a key limita-
tion to growth in US water PPPs – and
by proxy, overall growth in water invest-
ment – is the inability of private capital to
compete with subsidised capital, wheth-
er muni bonds, state revolving funds,
or the new WIFIA programme. I often
hear that “private sector profits” are what
drives up the cost of PPPs, which ignores
the inconvenient truth that taxpayers,
rather than users, bear the cost differ-
ence between market interest rates and
the government-funded rates on offer.
The debate about how well subsidies
work as incentives to efficient invest-
ment, and about who should receive
them, is a thorny one. To a certain extent,
it misses the point. Sure, we all want our
share of subsidies, but many utilities are
realising that value is driven not only by
cheap capital but by “better, faster, cheap-
er” delivery of services overall. Innova-
tions across technologies, predictive
data analytics, business processes, and
financing can all help utilities stream-
line their capital spending programmes
and reduce operating expenses. Now that
looks smart. <
AMERICAS
AMERICAS IN BRIEF
l The US Bureau of Land Manage-
ment has issued a letter to Cadiz Inc.
stating that the company needs no
further authorisation to build its pro-
posed water conveyance pipeline along
an existing railroad right-of-way. The
move brings to an end a decade of
wrangling over the project’s route.
l American Water has gained approv-
al from the Indiana Utility Regulatory
Commission to acquire the Town of
Georgetown’s water system for $6.426
million. The company is also awaiting
the green light for acquisitions of water
assets in Charlestown, IN ($13.4 mil-
lion) and Sheridan, IN ($10.75 million).
l Shares in listed Brazilian water
concessionaire Sabesp rallied briefly
on news that the regulator in its home
state of São Paulo had approved a tariff
increase of 7.9%, higher than the 4.7%
which had initially been proposed.
l Middlesex Water has filed a rate
case in New Jersey which, if granted,
would see the company’s annual rev-
enues rise by $15.3 million.
l Canadian water treatment compa-
ny ENPAR Technologies intends to raise
a further Can$5 million (US$4 mil-
lion) of equity in a private placement to
fund the Can$3 million (US$2.4 mil-
lion) acquisition of pump station man-
ufacturer Pumptronics Inc.
l Meanwhile, compatriot Aqua Terra
has filed for an IPO. The oilfield ser-
vices provider generated adjusted
EBITDA of Can$3.2 million (US$2.6
million) on revenues of Can$30.3 mil-
lion (US$25.5 million) in 2016.
l Brazilian private water company
Aegea Saneamento has issued $400
million of 7-year international bonds
carrying an interest rate of 5.75%.
l WesTech Engineering has signed
an exclusive agreement with Microvi
Biotech to promote Microvi’s biological
technologies for water and wastewater
treatment in the US and Canada.
l RevO2 Solutions has acquired
wastewater treatment specialist Abso-
lute Aeration. The acquired company
was advised by FMI Capital Advisors.
GWI / 21
MIDDLE EAST / AFRICA

WATER DEMAND AND DESAL This month in the Middle East and Africa:
22 Desal steams on as Abu Dhabi demand drops

UAE slashes water demand – 24 Oman restructuring advisory hopefuls

unveiled

but desal market forges on

25 Network problems stymie Saudi tariff rises
26 Tom Scotney: Positive signs for totex thinking
26 Middle East: News in brief
Tariff management has paid off for Abu Dhabi, with the emirate cutting water demand
forecasts significantly. As the priorities for its still-buoyant desalination market shift to
new technology and lower energy usage, is the end of thermal desal in sight?

T
he introduction of new water tariffs
in Abu Dhabi is paying off, with the
desal-reliant state readjusting its water
A PICTURE OF DESALINATION PAST AND PRESENT
demand forecast to a new low this month. The MSF desalination units at the Taweelah A1 site were originally installed in 1989. Building a new RO plant
Despite this, the emirate is still set to accel- could well be more cost-effective than continuing to take water from the thermal site.
erate its desalination capacity-building pro-
gramme in a bid to replace massive fuel-
hungry thermal plants with more efficient
membrane desalination facilities.
Peak water demand forecasts until
the year 2030 have dropped below the
1,000MIGD (4.5 million m3/d) threshold
for the first time, following a downward
readjustment in each of the last five years
(see chart below). The new low figures fol-
low the introduction of new tariff struc-
tures in the Januaries of 2015, 2016 and
2017, which marked the first rises in water
rates for more than a decade. The new

Source: Taqa
round of changes also saw the majority of
Abu Dhabi nationals – responsible for a sig-
nificant portion of water usage in the emir-
ate, despite their relatively low numbers – ADWEC acting director of planning cast recognition that we think the demand
pay for water for the first time. and studies Bruce Smith told GWI that is going to slow down and continue to see
The Abu Dhabi Water and Electric- the introduction of new tariffs had already low growth because of the ongoing tariff
ity Company (ADWEC) is responsible for made a serious impact on consumption. reform and the fact that people are feeling
demand forecasting in the emirate, as well “At a residential level, we are seeing it in their pockets.”
as acting as the single buyer of water and levels of consumption that we saw in 2013
electricity from the network of privately and 2014, even though the underlying Supply and demand
owned independent water and power pro- demand hasn’t changed over the years,” Work to manage demand was bolstered by
jects (IWPPs). he said. “We’ve built into the demand fore- the extension of the emirate’s treated sew-
age effluent distribution system – expected
to be complete by the end of the year – that
THE PAYOFF FROM DEMAND MANAGEMENT will see the consumption of 30MIGD of
Over the past five years, forecasted peak demand for water from Abu Dhabi’s desalination plants has
desalinated water and 40MIGD of ground-
dropped significantly, according to the emirate’s water planners.
water replaced by 70MIGD (318,220m3/d)
of treated wastewater that is currently dis-
6.0 posed of (see GWI January 2017, p28).
2013 forecast
Smith added that there is still scope
2014 forecast for further demand management in the
Forecast peak demand (million m3/d)

5.5
2015 forecast emirate, most notably by addressing the
water volumes used by some large private-
5.0 2016 forecast ly owned farms which are supplied by the
2017 forecast desalinated water system, but which have
4.5 not felt the impact of tariff reform.
“There are still some major account-
4.0
holders who are consuming very large
quantities,” he observed. “It’s quite pos-
sible, if these top guys suddenly started to
3.5
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 Source: ADWEC receive very significant bills, even at an

22 / GWI OCTOBER 2017


Every month we
don’t push ahead
with this, we are leaving
money on the table.
Bruce Smith, ADWEC
initial subsidised rate, that they then might
reduce their consumption accordingly.
“If you were going to put a fair value on
the water required to produce these crops,
you would probably not do it in the first
place. The Saudi change in farming policy
is a good example – when they started to
look at how much it was costing them to
produce corn, they ended up saying: ‘it’s
not worth it to do this any more’.”
The impact for desal
Despite the drop in forecast demand,
Abu Dhabi is still keen to make progress
with its desalination capacity-building
programme. Three advisory teams are
waiting for confirmation of an appoint-
ment relating to the next major privately
financed plant in the emirate, which is
expected to have a capacity in the region of
60-100MIGD (272,760-454,600m3/d).
While the choice of technology for the
new plant has not yet been finalised, it is
likely that it will be the first membrane-
only desalination facility in Abu Dhabi.
While the emirate has publicly committed
itself to membrane desalination, it has yet
to build a purely membrane-driven plant.
Its last major new desalination project was
the Mirfa water and power complex, award-
ed in 2014. While all 136,380m3/d of the
new desalination capacity included in the
project was composed of membrane desali-
nation, it also incorporated three MSF units
that were already on site. All the other
major plants in the emirate also feature
thermal desalination (see table, above right).
While the cost of membrane desalina-
tion has fallen consistently, the rising price
of fuel as subsidies are stripped away has
further pushed up the cost of supplying
and operating thermal desalination facili-
ties. While the plants in Abu Dhabi are all
partly owned by the private sector under
long-term fixed power and water purchase
agreements (PWPAs) with the state, the
PPP agreements under which they were
procured involve a guaranteed supply of
fuel, meaning that the state bears the brunt
of rising energy costs.
The use of membrane desalination,
relying solely on electrical energy rather
than a source of heat, also ties in with local
efforts to diversify and reduce the cost of
OCTOBER 2017
MIDDLE EAST / AFRICA
electricity supply through alternative ener-
gy sources (see box, below). ABU DHABI’S PLANTS
Smith said that even where the country
The emirate’s desalination portfolio is
is tied to long-term offtake contracts with
the owners of thermal desalination plants,
dominated by thermal technologies, with fixed
offtake contracts mainly due to expire over the
it makes more financial sense to stop tak-
next 15 years.
ing water from the plants and build new,
more efficient ones. Capacity Desal PWPA
ADWEC’s PWPAs with the companies Plant (m3/d) type expires
that own Abu Dhabi’s power and water
facilities are planned to expire over the next Taweelah A2 231,846 MSF Oct 2021
15 years (see table, right), meaning the state Taweelah A1 381,864 MSF/MED May 2023
would be left with the choice of whether to Shuweihat 1 459,146 MSF Jun 2025
maintain the supply from those plants after Umm al Nar 659,170 MSF Jul 2027
that point. Smith hinted, however, that the
Taweelah B 736,452 MSF Mar 2028
cost of thermal desalination could mean
that commissioning replacement capac- Fujairah F1 595,526 MSF/RO Jan 2029
ity may make sense even before the offtake Fujairah F2 600,072 MED/RO Jul 2030
contracts for existing plants expire. Shuweihat 2 459,146 MSF Aug 2031
“Part of ADWEC’s planning project is Mirfa 272,760 MSF/RO Dec 2042*
to minimise costs, and the cost of water
*Estimated Source: Various
from RO is so much less than MSF, which
forms the bulk of the capacity we have
today,” Smith said. “Gas used to be abun- and it might not be fully depreciated, it’s
dant and virtually free, but that situation no so expensive to run it on fuel compared to
longer exists. In an environment where the the cost of an RO plant that you’re better off
gas price is increasing, in the long run, the building a new one.”
cost of building a new RO plant and operat- While no formal timetable has yet been
ing it is less than the fuel cost of the exist- confirmed for building new desalination
ing MSF. It pays to build a new plant and capacity, Smith said that projects could
continue to pay capacity payments to the come to the market before the end of the
old MSF for the duration of its contract, but year. “Every month we don’t push ahead
not take the water. with this, we are leaving money on the
“Also, the IWPP model effectively table, so I’ve been arguing very hard this
means you are not paying for the new plant year that we need to get on with it,” he told
up front, you are paying for it over the life- GWI.
time of the plant, so you will see the benefit The conclusion must be that the wide-
of a lower water tariff from day one, even spread introduction of new membrane
though the tariff contains the capital cost desalination capacity could eventually spell
of the new plant. So even with the fact that the end for the use of thermal desalination
you’ve sunk your capital into an MSF plant in the emirate by 2030, or soon after. <
NEW ENERGY SOURCES JOIN THE MIX
The cost of energy from burning natural gas is estimated at around $0.07/kWh in Abu Dhabi. With the price
of alternatives tumbling, and the security and cost of gas under the spotlight, new sources are emerging.
zz Photovoltaic solar: A bid from a team capacity of the 5,600MW plant and the
led by Abu Dhabi’s Masdar quoted a lev- opportunity to generate a baseload of
elised cost for energy of just $0.018/kWh power make it a crucial part of the mix.
for a proposed new 300MW plant in
Saudi Arabia, setting a new benchmark zz Concentrated solar power: The
for the technology. Meanwhile, construc- 800MW third phase of the Moham-
tion has started at the Sweihan plant in med bin Rashid Al Maktoum solar park
the UAE, one of the world’s largest PV in Dubai attracted a low tariff bid of
facilities, where energy is due to cost $0.030/kWh in 2016.
$0.024/kWh.
zz Coal: Dubai’s 1,200MW Hassyan
zz Nuclear: While the estimated cost of clean coal plant supplies energy at a price
energy from the soon-to-be-completed of $0.042/kWh, and will offer the emir-
Barakah nuclear plant in Abu Dhabi is ate more diversity in its energy supply
expected to be $0.110/kWh, the massive mix when it is completed in 2021. <
GWI / 23
MIDDLE EAST / AFRICA

OMAN RESTRUCTURING

Consultants wait for formal Muscat shortlist

The sultanate is imminently expected to confirm a shortlist of consultants to advise it on a radical water sector restructuring programme.
The chosen team will help formulate a programme that will revolutionise water and wastewater services in the country.

O
mani state-owned utility umbrella sor to a deeper involvement of the private through the independent water and power
body Nama Holding is in the final sector in the country’s services. project programme controlled by the Oman
stages of compiling a shortlist of Until now, private investment has most- Power and Water Procurement Compa-
qualified consultants to bid for the chance ly been limited to the desalination sphere, ny. <
to work with it on the restructuring of the
sultanate’s water and wastewater sector.
Thirteen international advisory teams
submitted statements of qualification, and
are vying for the contract to recast Oman’s
water and wastewater sector (see table
below). Between four and six of these teams
are set to be invited to submit bids, and for-
mal approval of the shortlist was expected
imminently as GWI went to press.
An Omani government steering com-
mittee approved recommendations from
the Public Authority for Electricity and
Water on the restructuring of its water and
wastewater sector in June.
Under the plan, the state-owned bod-
ies responsible for water and/or wastewater
services would be replaced by three verti-
cally integrated regional service compa-
nies. The restructuring would also see the
establishment of an independent regulatory
body for the sector, and the separation of
service provision and policy setting.
These changes follow on from a similar
Combined Expertise
process in the country’s electricity sector,
and are widely expected to act as a precur-
for sludge dewatering in the Nereda® process

Benefits GEA decanter centrifuge

TURNAROUND TEAM
• Energy consumption reduced by 50 %
Thirteen teams are hoping to advise Muscat on the • High dewatering efficiency: 10 – 15 % drier cake
restructuring of Oman’s water authorities. • Efficient gear drive GEA summationdrive Simultaneous fill and draw
• Highest uptime reliability
Lead consultant Location In Out
Arcadis Netherlands Benefits Nereda process
®

Atlas International Oman • One-tank solution

Baringa UK • Cost-effective in CAPEX and OPEX
BCG USA • Plant footprint up to a factor 4 smaller Nereda®
Bin Shabib, Al Rashdi & Al Barwani UAE • Up to 50 % energy savings process

EY UK • No / minimal waste generating chemicals Air

FTI Consulting USA • Excellent effluent quality Fast settling Aeration

Grant Thornton UK
GEA-ET-01-018

For contact details: gea.com/contact

Machinery Group UAE
PwC UK
SASLO Oman
Sia Partners France
Tetra Tech USA
Source: Nama

24 / GWI OCTOBER 2017

 MIDDLE EAST / AFRICA

WATER TARIFFS

Network and billing problems put new Saudi

water price rises on ice
Problems with piping, metering and billing have put a halt to the Kingdom’s much-needed, but controversial, water tariff restructuring
plans. With further consumer price rises off the cards for now, improving network efficiency will be a priority.

S
audi Arabia has frozen its plans for
water tariff rises and is hurriedly SAUDI PUBLIC BUDGETING (2014-2022)
rolling out a programme of water The country is pinning its hopes on growth in non-oil revenues to meet its future spending commitments.
and wastewater network improvements, Income from previously subsidised energy and water supply will form a large – and growing – part of this.
after inefficiencies in the system stymied
attempts to control demand and raise more 1,200
revenue through increased water prices.
Under the national economic turn- 1,000 Expenditure
around plan devised by McKinsey and
introduced in 2016, the Kingdom plans 800
SAR billion

to eliminate utility subsidies and realise

meaningful income from the sale of fuel,
electricity and water. The introduction of
controversial new energy and water tariffs
early last year saw energy and water sales
play a non-negligible part in national budg-
eting for the first time, forming a key plank
of the economic reorganisation planned in
the light of reduced oil income (see chart,
right). Under the National Transformation
Program introduced later that year, Saudi
Arabia committed to complete cost recovery
in the electricity and water sectors by 2020.
However, a report by the Internation-
al Monetary Fund published this month
revealed that while increased utility tar-
iffs had worked to reduce consumption of
electricity and fuel, the same could not be
said for water, with high levels of leakage
and inaccuracies in metering and billing
NETWORK REGENERATION
National Water Company (NWC) employees work on the repair of a major sewer line in Jeddah in August –
part of a major overhaul of the network being carried out by Saudi authorities.
600
400
200
0
2014 2015 2016
2014-2015 figures recorded. 2016 preliminary. 2017-2022 projected
accused of undermining the reforms.
Importantly, the report stated that “the
government has committed to not increase
water prices further until the infrastruc-
ture is fixed.”
While further rises in the cost of fuel
and electricity are still in the pipeline for
2017-18, the reorganisation of water pric-
es has been put on hold, a move that will
come as a relief to some customers after
Revenue
Energy/water
Non-oil (excl. e/w)
Oil
2017 2018 2019 2020 2021 2022
Source: IMF
the uproar that followed the first water
price rises in 2016.
The National Water Company in Saudi
Arabia has started three programmes cost-
ing a combined SAR119 million ($53 mil-
lion) to identify ways to improve water
supply and distribution efficiency in the
country. The programmes will also lay out
water investment needs in more detail up
to 2050.
The kingdom also took a major step
toward the reorganisation of water sub-
sidies earlier this year, starting a plan to
make direct subsidy payments to poorer
families to cover the cost of energy and
water. In the eight months since it set up
an online portal to allow citizens to regis-
ter for utility payment support, households
representing around 12 million people – or
around half of the population – have signed
up. Around 10 million of these are expect-
ed to be covered by the payments. While
details have not yet been confirmed by the
Saudi authorities, the aim is to fully cover
the cost of price increases for the lowest-
earning 40% of the population, with more
limited support going to the next 40%, and
none for the top-earning 20%. The cost of
price rise compensation payments under
this scheme is estimated at around SAR33
billion ($8.8 billion) a year. <
Source: NWC

OCTOBER 2017 GWI / 25

MIDDLE EAST / AFRICA
MIDDLE EAST IN BRIEF
zz The European Investment Bank
(EIB) could have its remit extended to
Iran under a proposal being consid-
ered by the European Commission.
The EIB is one of the world’s largest
multilateral water lenders, and could
potentially play a part in financing
the estimated €10 billion of power and
water projects outlined by caretaker
energy minister Sattar Mahmoudi this
month.
zz Meanwhile, the Internation-
al Finance Corporation (IFC) has
announced it is planning to boost lend-
ing to MENA countries by 20% this
year, identifying the water sector as
one of its key target investment areas.
zz Japan’s New Energy and Industrial
Technology Development Organisation
has signed an agreement with Saudi
Arabia’s Saline Water Conversion Cor-
poration to develop a pilot desalina-
tion plant driven by renewable energy
sources.
zz CH2M has been taken on by the
Abu Dhabi Sewerage Services Company
to advise on the development of the
agency’s upcoming new sewage treat-
ment facilities. The first new plant to
be procured – likely under a PPP con-
tract – is expected to be in the Al Ain
region.
zz Israeli national water company
Mekorot is waiting for the result of
a hearing into negotiations over the
sale of the troubled Ashdod desali-
nation plant. At the end of Septem-
ber, Mekorot was ordered by a judge
to cease direct negotiations with the
Sadyt/Minrav team that put in an offer
to buy the plant. The judge said that a
directly negotiated sale would break
competition laws.
zz Japan’s Asahi Kasei will supply a
610,000m3/d membrane pre-treat-
ment system for the Doha Phase 1
SWRO desalination plant in Kuwait.
zz The Dubai Electricity and Water
Authority has launched Jumeirah Ener-
gy Silicon Valley Company, a Califor-
nia-based subsidiary aimed at invest-
ing in start-ups working in the fields
of renewable energy and water technol-
ogy. <
26 / GWI
COMMENT
Totex thinking’s white knight
A rising tide of PSP in all its forms will make life easier for
equipment suppliers in the Middle East, argues Tom Scotney.
A
mid all the discussion at the Brit-
ish Water International Conference
this month, one question really
stood out for all the various engineers,
equipment suppliers, contractors and
financiers present – how to make cli-
ents aware of the lifetime cost of a plant,
rather than just the up-front capital
impact. How do you sell totex in place of
capex?
Despite the impact of Brexit on the
pound, the UK water sector’s export
strategy is still one that looks to com-
pete on the basis of technical innova-
tion and equipment quality rather than
race-to-the-bottom pricing wars. And
like all markets trying to bring advanced
technology to bear, it faces the perennial
problem in the water sector that risk-
averse utilities don’t always seem inter-
ested in investing in improvement.
It’s a question that is particularly
pertinent for the Middle East, where a
combination of often opaque procure-
ment procedures, subsidies for utility
budgets, and a historical willingness to
prefer oil-boosted cheques for capital
spending over long-term financial pru-
dence means that the lowest-priced bid
is often the one chosen, regardless of the
quality of design, the lifetime cost to the
client, or even the eventual capital bill at
the end of construction. And this is the
problem for the UK, or any high-cost,
high-value economy looking to make an
impact in a regional water market.
To be clear, this isn’t asking cli-
ents to make a choice between cost and
quality, but just about recognising that
investing more in the capital side of
things can pay off in terms of reduced
operating costs over a project’s lifetime.
New technological solutions can have a
direct, demonstrable impact on the life-
cycle cost of a plant, but still struggle to
make a case because utilities are reluc-
tant to put up money in the first place.
Essentially, the issue is around mak-
ing the operator’s voice heard when it
comes to procurement. Things are rela-
tively more fluid in the industrial water
sphere, where suppliers and contrac-
tors are more likely to view their utility
commitments on a commercial basis,
and will thus have the cost of operations
more firmly fixed in their minds.
But the problem remains in the
municipal utility sector, which after all
accounts for the majority of water infra-
structure spending, and so dominates
the thinking at the majority of water
equipment businesses.
There is one issue that paints a posi-
tive picture for the totex thinkers – the
rising tide of private sector participation,
in all its forms. Whether you’re talking
about the rise of design-build procure-
ment in the US, the increasing numbers
of contracts that fold in operating ele-
ments with construction work, or the
wielding of private finance and asset
ownership, the private sector is becom-
ing more entwined in the infrastructure
game, beyond the traditional client/con-
tractor model.
In many ways, making the case for
PSP is a similar problem for the sector
to making the case for totex thinking, a
point laid out by GWI publisher Christo-
pher Gasson in this issue of the maga-
zine (see p7). The problem is firstly that
operating costs are easier to kick down
the road and worry about later, and sec-
ondly that there are external costs that
are not always considered – such as
the gap between a capex figure quoted
in tendering and the eventual bill pre-
sented – meaning that the ‘real’ cost of
a plant is not the same as that paid up
front by the client.
Both the use of private finance and
the consideration of totex rather than
capex seem to be trends that are gath-
ering steam around the world. And the
rise of private finance and private own-
ership of assets is one of the key driv-
ers of totex thinking, because operat-
ing inefficiencies make an immediate
impact on profit margins for private
infrastructure owners/operators.
It may be small comfort for the
equipment suppliers struggling to
bring their products into a conservative
market now, but the future is looking
brighter for those who can make the dif-
ference for operators. <
OCTOBER 2017
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 NEW MARKET REPORT

WATER’S
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The outlook for monitoring, control
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DESALINATION IN SPAIN
Spain entertains desalination
capacity boost for farmers
The Spanish agricultural lobby has reluctantly embraced desalination after the Tagus-
Segura pipeline dried up earlier this year. Do the long-term economics stack up?
S
evere drought conditions in the Ibe-
rian peninsula have partially overcome
farmers’ traditional resistance to desal-
ination, and central and regional adminis-
trations are now seeking ways to respond
to demands from the powerful irrigation
lobby for additional desalination capacity.
Intensive irrigation in Spain’s south-
eastern Segura basin has relied since the
1980s on the Tagus-Segura pipeline. How-
ever, extreme water shortages in the upper
Tagus have meant that, since the end of
May this year, virtually no water has flowed
through the pipeline, a source which in a
normal year supplies 200 million m3 .
Mariano Soto, secretary of the Campo
de Cartagena irrigators community, told
GWI that, while 20% of the water used by
farmers in the region comes from desalina-
tion, “the pipeline is crucial, and it may not
return to operation at all in 2018.”
According to Lucas Jiménez, president
of the Tagus-Segura aqueduct irrigation
communities union, farmers have to pay
€0.475/m3 for desalinated water, compared
to €0.11/m3 for Tagus water.
Consumption of desalinated water for
irrigation is expected to reach 145 million
m3 this year, up from just under 50 million
m3 in 2014, according to Acuamed, the cen-
tral government’s water company for the
Mediterranean coast (see chart, above right).
Acuamed’s existing desalination plants
are already running at full capacity to sup-
ply domestic and agricultural needs, and
discussions are already underway for a
series of plant expansions (see table below).
However, such is the apparent concern
SPAIN’S DESAL AGENDA
A new wave of capacity-building is envisaged at
existing plant sites to meet agricultural demand.
Location Capacity boost
Escombreras 100,000m³/d
Torrevieja 100,000m³/d
Valdelentisco 50,000m³/d
Águilas 27,000m³/d
Source: Acuamed, Murcian regional government
OCTOBER 2017
SLAKING THE THIRST OF SPANISH FARMERS
The volumes of desalinated water supplied for irrigation in Spain have been growing exponentially. It is
driving a renewed push to build additional treatment capacity.
150
120
Million m3/year
90
60
30
0
2010 2011
* Full-year projection Source: Acuamed
among certain agro-producers in the region
about the future of the Tagus-Segura pipe-
line and the sector’s increasing water defi-
cit, that they are considering financing a
huge new SWRO plant to be built beside
the existing Escombreras facility.
According to Miguel Ángel del Amor
Saavedra, director-general for water at the
Murcian regional government, the plans
– by a group of local businessmen – “origi-
nally contemplated a macro-plant of up to
1 million m3/d with power supply to come
from a large photovoltaic array”.
The regional government considers the
project to be “unrealistic, especially given
that the permitting process could take
between six and seven years”, but recognis-
es that additional measures will have to be
taken to ensure water for agricultural irri-
gation. The sector accounts for 23% of the
region’s GDP, and provides 30% of regional
employment (as well as supplying super-
markets across Europe).
The turnaround in the way desalina-
tion is viewed in Spain’s south-east is noth-
ing short of startling. When Águilas, Val-
EUROPE
This month in Europe:
29 Desal makes a mark with Spanish farmers
30 Suez aims for industrial bounce in H2
31 Evac’s management thinks big
32 Yorkshire Water mulls debut ‘social’ bond
32 UU pushes the boundaries of index-linked
bonds
33 David Lloyd Owen: Fatbergs and silo thinking
33 Europe: News in brief
2012 2013 2014 2015 2016 2017*
delentisco, Torrevieja and other SWROs
were being built a decade ago, many farm-
ers and local politicians rejected the use of
desalinated water for irrigation as finan-
cially unsustainable. In 2012, the European
Commission issued a warning to the Span-
ish government to ensure the EU-funded
plants were used efficiently, or else risk
losing EU financing. One local politician
actually called for desalination plants to be
dismantled and sold for scrap.
According to del Amor Saavedra, “the
global vision hasn’t changed – there is a
maximum cost above which producers of
traditional crops cannot pay for desalinated
water.” On the other hand, however, “water
that doesn’t exist is the most expensive of all.”
The central government has reacted to
the immediate crisis by providing a €400
million subsidy to defray the cost of desali-
nated water, del Amor Saavedra told GWI.
Financing alternatives for the future expan-
sion of desalination capacity “is something
which we are looking at, with talk of public-
private initiatives and a national pact for
water,” he added. <
GWI / 29
EUROPE

COMPANY STRATEGY

Suez looks for accelerated industrial growth

after softer first half
Having catapulted itself into the premier league of global industrial water suppliers through the acquisition of GE Water, Suez is now
faced with the challenge of growing the top line of the combined business at a rate of 5% a year. What is its strategy?

T
he completion of Suez’s $3.4 billion
acquisition of GE Water on 30 Septem-
ber paves the way for the combined
group to create €200 million of annual rev-
enue synergies within the next five years.
“Everything is now defined, and we
are ready to start the full integration,” said
Marie-Ange Debon, deputy CEO in charge
of international activities at Suez. “We can
now develop commercial and cost syner-
gies by combining our resources to have a
stronger footprint, and we are reinforcing
our key account management structure
by merging our two organisations. For the
commercial part, GE Water was already
organised on a regional basis, with the
head of a region managing both the chemi-
cal and the engineering parts. We will con-
tinue that same type of organisation,” she
told GWI.
The injection of Suez’s €500 million-
the chemical part of our activity and the
systems part.”
On the systems side, she insists that
potential channel conflicts resulting from
the natural vertical integration brought
about by the deal will be minimal. “It’s
clear that we will preserve some frontiers,
but this part is really limited, because a big
part of our activity is about services.”
While the high degree of predictability
from service revenues will help underpin
sales going forward, a softer first half to
2017 could make it tougher to meet the 5%
annual top-line growth target set for the
new WTS division going forward.
“The beginning of the year in the US
was uncertain, but since the summer,
PRETREATMENT
we are seeing dynamic new momentum
again. Many industrial companies have
announced new investments, for instance
in the microelectronics, plastics and chemi-
cals industries,” Debon affirmed.
She was keen to point out that, despite
the group having received offers to pur-
chase various parts of the GE Water busi-
ness, it will remain intact – at least for the
time being.
“We review the portfolio every year
to see if it’s relevant either to consolidate
and to make additional acquisitions, or
to sell some businesses if we believe they
are mature, or they do not have any added
value,” she told GWI. “We will do the same
for WTS.” <

a-year industrial business into the newly COMPACT

PLANT
formed Water Technologies & Solutions
COMBIPRO ®
(WTS) division – which is 30% owned
by Canadian institution CDPQ – consoli-
dates the industrial expertise of the French
group with the powerful reach of the €2
MANUFACTURER OF WASTE WATER TREATMENT EQUIPMENT
billion-a-year GE water business.
It is not all about industrial end mar-
kets, however – embedded within the divi-
sion will be the entirety of Suez’s ozone
business, the Monsal anaerobic digestion FILTERING
technology, equity stakes in the Hamma MICROSCREEN
and Sulaibiya water treatment concessions, ROTADISC ®
and GE Water’s clutch of smaller BOO
contracts, all of which have some degree
of municipal exposure. “We will keep
Hamma as part of WTS, but WTS will ben-
PERFORATED
efit from the expertise of the rest of Suez
FILTERING
in desalination if, for instance, we need to
SCREEN
support the process in terms of optimisa- BASKET CONVEYOR
PEGASUS PRO ®
tion,” Debon confirmed. SCREEN
One of the most promising areas for BASKETPRO ®
synergistic development is on the digital
side. “The first big move we can already Office and Factory

perceive is the development of digital tech- Carretera Granollers a

Cardedeu, Km 1,5
nologies to monitor assets in a remote way GRIT 08520 Les Franqueses del Vallès

using the cloud-based InSight platform WASHING Barcelona (Spain)

Tel. 00 34 93 846 66 31
developed by GE Water, and also to develop PLANT
estruagua@estruagua.com
predictive maintenance,” said Debon. “This HIDROSAND ® www.estruagua.com

platform can be expanded and used in both

30 / GWI OCTOBER 2017


COMPANY STRATEGY
Evac set to cruise to market-beating growth
under new ownership
The Finnish water and waste company wants to double its revenue base under new owner Bridgepoint. It still lacks exposure to one of
the most hyped growth areas in the market.
F
innish water and waste management
specialist Evac Group will soon have
its fourth owner in five years, after IK
Investment agreed at the end of September
to sell the company to UK private equity
group Bridgepoint.
Since being acquired by IK in 2014,
Evac has boosted revenues from around
€60 million to €101 million last year, and
expects to post turnover of around €110
million in 2017.
“Over that period, roughly 40% has
been organic growth and 60% has been
through acquisitions,” explained CEO Tomi
Gardemeister. “When we were spun off
from Wärtsilä [in 1979], vacuum sanitation,
black water collection and vacuum toilets
were the original product lines. During the
last three to five years, the goal has been to
complete the environmental offering for
our main maritime customers by going
into fresh water generation, food waste, and
dry and wet waste. We are the only solu-
tions supplier who can integrate all of these
in one single packet,” he told GWI.
Evac’s broad-based exposure to the
marine, offshore and building industries
has enabled it to weather both the down-
turn in capex in the offshore oil industry,
as well as a long-term slump in global ship-
building activity.
“We are growing rapidly in the cruise
sector, and the strong after-market service
business also helps to balance those cycli-
calities,” said Gardemeister. Evac’s strong
position in the cruise ship industry means
that it should benefit from the current
EVAC’S EVER-CHANGING EVOLUTION
Since being spun out of Wärtsilä in 1979, the company has developed the most comprehensive water and waste management package for the marine and offshore
industries. It has worked its way through more than its fair share of owners along the way.
1985: Enters WW treatment 2012: Buys Triton Water,
market through Envirovac entering seawater RO market
1999: Buys AquaMar, entering
marine biological WWT market
OCTOBER 2017
KEEPING A CLOSE GARD
Evac CEO Tomi Gardemeister has grown revenues
and EBITDA despite a cyclical downturn in some
of the company’s key end markets.
boom in new-build activity. Close to 100
new cruise vessels are currently on order
around the world, with European ship-
builders such as Meyer Werft, STX France
and Fincantieri securing the lion’s share of
the business.
“We usually try to deliver the complete
package to the owners and operators, which
includes vacuum sanitation, black and
grey water collection, dry waste treatment,
wastewater treatment, and freshwater gen-
2014: Buys Cleansea MBBR 2015: Buys Deerberg-Sys-
technology from Headworks tems (solid/wet/food waste)
2013: Zodiac sells Evac 2014: Oaktree sells Evac to
to Oaktree Capital IK Investment Partners
EUROPE
eration,” Gardemeister explained. “We can
also add automation, which makes sure
that the whole system is running intelli-
gently and energy-efficiently – that’s a key
competitive advantage.”
One obvious gap in Evac’s portfolio is a
ballast water treatment solution, but with
compliance deadlines being pushed back,
and bankruptcies increasing (the assets of
Norwegian supplier OceanSaver were sold
last month after the company folded), Gar-
demeister admits he has not yet decided
how or whether to enter the space. “We are
thinking about it, but we haven’t made any
firm decision as yet,” he told GWI.
While Evac’s IP lies in product develop-
ment and process engineering, it outsourc-
es a large proportion of its manufacturing
and systems assembly to its industry part-
ners, through three regional value chains.
The sales model also makes significant use
of agents and distributors, although major
new-build projects are handled by the com-
pany’s in-house sales team.
Relying on outside expertise to gener-
ate above-market growth has long been
a feature of Evac’s strategy (see timeline
below), and Gardemeister sees the inorgan-
ic growth trend continuing under Bridge-
point’s ownership.
“Our total addressable market will dou-
ble in size in the coming ten years, and
non-organic growth is something we will
continue in the future,” he told GWI. “Our
long-term target is to have revenues of over
€200 million and an EBITDA margin of
20% plus.” <
2017: IK Investment sells
Evac to Bridgepoint
2016: Buys Uson Marine
(marine/offshore waste mgmt)
Source: Evac/GWI WaterData
GWI / 31
EUROPE
UK WATER FINANCE
Yorkshire Water mulling debut ‘social bond’
As monopolies, water utilities have never had to worry too much about the wider benefits their interventions have on society at large.
The sector’s first ‘social bond’ is set to challenge that notion.
Y
orkshire Water is contemplating the
issuance of the first ‘social bond’ in
the UK water sector, building on the
industry’s reputation for innovation and
diversification in the capital markets.
The bond, which is likely to take the
form of an institutionally targeted bench-
mark issue denominated in sterling, would
align with the social bond principles estab-
lished by the International Capital Markets
Association in June.
“Our assertion as an industry is that
we’re good for the environment and good
for society, and we ought to be able to
demonstrate that,” explained Liz Barber,
group director of finance and regulation at
Kelda Group, the parent company of York-
shire Water. “There’s a growing appetite
for investors to be able to say that they’ve
invested in things that are rigorously
assessed, good for the environment, and
good for society. It lends itself to an indus-
try like water,” she told GWI.
Barber is undaunted by the fact that
UK WATER FINANCE
United Utilities pushes the envelope on CPI
A new 40-year bond linked to the consumer price index is believed to be the longest ever issued in this format by a UK water utility.
With demand sporadic at best, what will it take to bring CPI-linked debt into the mainstream?
U
nited Utilities has pushed the curve
for CPI-linked debt in the UK water
sector out to 2057, whilst bringing the
total raised in the sector to £240 million.
UU’s latest pair of private placements
– carrying maturities of 31 and 40 years –
came hot on the heels of the £75 million
30-year deal done by Bazalgette Finance at
the end of August, which brought a modi-
cum of supplier diversity to a market which
is still very much in its infancy.
“We’re comfortable that we’re not pay-
ing a premium to access CPI, but at this
point it’s a very thin market on both the
supply side and the demand side,” UU
treasurer Brendan Murphy told GWI.
With only around one third of pen-
sion liabilities currently linked to CPI, and
no benchmark Gilt to price deals off, CPI-
32 / GWI
there are very few precedents of social
bonds from corporate borrowers. “We’d
like to stretch ourselves and say: ‘if we’re as
good for society as we believe we are, why
would we not seriously explore issuing a
social bond’?”
Defining and tracking projects with
positive social outcomes is a key corner-
stone of the social bond compact, and York-
shire Water believes an initiative it is work-
ing on in Hull has the potential to meet the
use-of-proceeds criteria.
“We want to work with the community,
the Environment Agency and local coun-
cils around implementing flood mitigation
in a holistic way,” Barber told us. “It would
involve opening up green spaces in Hull,
it would be affordable, it would engage the
community, and it would support the gen-
eral wellbeing and health of the citizens.
It’s about measuring your impact on soci-
ety, and that’s where we want to really chal-
lenge ourselves.”
The bond would naturally come with
linked issuance opportunities are likely to
remain limited, at least in the short term.
The UK water regulator Ofwat is due to
THE BOND MARKET THROUGH A CPI LENS
£240 million of debt has now been raised by UK water companies in the CPI-linked bond market. Despite the
need for pension funds to match their assets with CPI-linked liabilities, demand is still sporadic.
Issuer Size Coupon
United Utilities Water £33m 0.387%
United Utilities Water £32m 0.359%
Bazalgette Finance £75m 0.828%
United Utilities Water £60m 0.093%
United Utilities Water £20m 0.245%
United Utilities Water £20m 0.379%
the burden of reporting project outcomes to
a pre-defined schedule, but Barber insists
that initiatives such as this offer a route
towards restoring the sector’s reputation,
following a swathe of high-profile fines and
a resulting uptick in negative press around
the UK regulated water industry.
“We’re a privately owned company that
provides an essential public service, and
the bar of legitimacy is all the higher for it,”
she asserts. “We’re becoming more com-
fortable with the concept of measuring our
impact on society and on the environment,
and as part of this, we’ve been developing a
decision-making framework that measures
not just the cost, but the environmental and
social impact of all our asset interventions.
It’s being tested at the moment, and it will
have underlying systems that will be able to
track that impact on a systematic basis.
“The reputation of the industry is very
valuable, and the issue at hand is our will-
ingness, as an industry, to demonstrate our
benefit to society and the environment.” <
decide by January 2018 whether to change
the index for price controls in the sector
from RPI to CPI or CPI-H. <
Maturity Issued on Dealer
05 Oct 2057 05 Oct 2017 NatWest Markets
05 Oct 2048 05 Oct 2017 NatWest Markets
25 Aug 2047 25 Aug 2017 Lloyds Bank
10 Feb 2037 10 Feb 2017 NatWest Markets
09 Dec 2031 09 Dec 2016 RBC Europe
09 Dec 2036 09 Dec 2016 RBC Europe
Source: GWI
OCTOBER 2017

COMMENT
Fatbergs and the silo mentality
Joined-up thinking could mean the sewer blockages facing Thames
Water could be turned into an opportunity, says David Lloyd Owen.
I
t has been quite a month for Thames
Water’s sewer teams. A 250-metre-long,
130-tonne fatberg was found in a sewer
in Whitechapel, east London. Breaking
up fatbergs is rarely easy, and this was a
three-week job. No sooner had the clot-
ted colossus been cleared when four new
fatbergs were discovered in central Lon-
don, blocking the sewers of Savoy Street,
Lisle Street, Northumberland Avenue, and
Whitehall Place.
While much attention has been
focussed on the role wet wipes and other
unmentionables play in fatberg formation,
as their name suggests, it is the cook-
ing fat that slips down too many sinks
which really causes the problems. Lon-
doners who enjoy Chinese cuisine will
know Lisle Street well: it lies in the heart
of Soho’s foodie district. Where you have
a collection of caterers, their cooking fats,
oils and grease tends to congeal. The util-
ity and local councils are pleading with
them to put the fat aside and to treat it as
solid waste for collection.
I fear that this misses the point. These
are not wastes – they are resources. Gil-
lian Tett, in her 2015 book The Silo Effect,
shows that there are other ways of dealing
with fatbergs. New York’s municipal ser-
vices traditionally operated in isolation,
so that staff working on catering waste
and the city’s sewers worked in mutual
ignorance. Michael Bloomberg as mayor
realised that these silos needed to be
connected, and recruited a team of dedi-
cated silo-busters to do the job. Putting
all the data together – including cooking
licences – they soon found that the city’s
sewer blockages took place in the vicin-
ity of catering outlets. The city also had
a catering waste recycling business. So,
instead of threatening the caterers with
fines or prosecution, they sent the collec-
tors round, telling them how much they
would pay to collect these wastes in the
free containers they were providing. The
opportunity was seized and the pressure
on the sewers eased.
One of this decade’s themes has been
wastewater recovery. As well as extracting
water, energy and nutrients from effluent
streams, this ought to ensure that other
OCTOBER 2017
potential resources such as oils and fats
never enter the sewerage networks in the
first place. Changing habits can take a lot
longer than many appreciate. In 1990,
the British environment secretary, Chris
Patten, launched ‘This Common Inherit-
ance’, which envisioned 50% of the UK’s
recyclable municipal waste being recycled
by 2000. I feared this target missed the
point that changing consumer behaviour
can take a generation. It has taken a quar-
ter of a century for Britain to become a
society where recycling is widespread.
It may take another generation for
people to appreciate that flushing wet
wipes and so on down the loo is a rather
stupid way of bumping up water bills;
clearing fatbergs costs Thames Water over
£12 million per annum. It is a problem
across Britain. Catering waste is another
matter. It is illegal to discharge them
down the drain, and caterers are obliged
to have grease traps, but the gloop still
seems to flow. At present, companies will
collect waste oils for recycling, but this
is an ad hoc process. Every commercial
caterer is registered, and licensing data
can be overlaid onto sewerage data. Vol-
umes of scale and efficiency of collection
drive the economics of recycling waste
oils and fats. Developing a smart mapping
system for every catering outlet in every
town and city is not a great challenge.
From there, deploy an effective collection
system using standardised containers and
an appropriate financial incentive, and
a new market emerges. McDonalds, for
example, fuels 42% of its delivery fleet
with biodiesel refined from its own cook-
ing oils.
Domestic customers can, in fact, be
engaged. Yorkshire Water unveiled its
‘fat vat’ pilot project for 85 households in
Bradford in 2014. In 2011-14, they dealt
with 85 sewer blockages. Since then, there
has been just one blockage, with 1,000
litres of waste oil being collected. They
plan to expand it to 6,000 households.
Without fat, fatbergs tend to be few
and far between. By crossing boundaries,
smart sewer management outlines the
potential for innovation that the sector
needs. <
EUROPE
EUROPE IN BRIEF
l The UK Labour Party’s plans to
buy back outstanding PFI contracts if
it gets into power were met with dis-
dain by industry body CBI, which said
in a statement that the party’s “vision
of massive state intervention is the
wrong plan at the wrong time.”
l Suez’s Catalunya-based subsidiary
Agbar has announced that it intends to
shift its headquarters from Barcelona
to Madrid to protect investors from
the uncertainty caused by the Catalan
independence referendum.
l Kelda has lined up buyers for the
five UK non-regulated contracts owned
and operated by its Kelda Water Servic-
es subsidiary. The sales are expected
to go through before the end of the
company’s fiscal year. The group is
also planning to sell its non-household
retail arm, Three Sixty.
l Murphy, which took over AECOM’s
design-build business in Ireland ear-
lier this year, has secured a €25 mil-
lion DBO contract for the Staleen and
Cavan Hill water treatment works in
County Louth.
l Saur has broadened its service
offering in water by acquiring French
start-up ImaGeau, which specialises in
groundwater monitoring.
l The Georgian capital of Tbilisi
has become the second city to have
an EBRD-endorsed green action plan
approved. Among other things, the
plan includes measures to improve
water and wastewater services.
l Northumbrian Water drew over
£500 million of investor demand for
a new £300 million 10-year bond last
month, its second such deal in a year.
l Italian sludge treatment specialist
Newlisi is set to receive €10 million of
EIB funding to finance both its R&D
efforts and its plant rental programme.
The funding requires approval prior to
disbursement.
l Listed Estonian water concession-
aire AS Tallinna Vesi has refinanced a
€37.5 million loan for five years, low-
ering the interest rate from 0.95% to
0.79% in the process. <
GWI / 33
ASIA PACIFIC
VIETNAM PPP
Darco-InfraCo team pioneers
water concessions in Vietnam
A Singapore government-brokered partnership between Darco Water Technologies and
InfraCo Asia is treading virgin ground for foreign companies in Vietnam. Bearing the
demand risk is the price to pay for getting back into the asset ownership business.
S
ingaporean industrial water engineer
Darco Water Technologies is negotiat-
ing with InfraCo Asia to create a joint
venture which will hold a portfolio of four
rural water supply systems in Vietnam.
With the first project due to start construc-
tion later this quarter, Darco is poised
to become the first foreign group to run
municipal water concessions in the nation.
Allard Nooy, CEO of InfraCo Asia, a
commercially managed development fund
(see box, right), told GWI that JV nego-
tiations should be finalised within two
months. A 50:50 JV would be established in
Singapore, and would in turn “invest in a
Vietnamese joint stock company, in which
a local partner will have a 10% sharehold-
ing.” The JSC will invest approximately
S$50 million ($37 million) in four conces-
sions with a total treatment capacity of
62,000m3/d, serving half a million people.
Darco and InfraCo Asia were introduced to
one another by IE Singapore, the govern-
ment agency for promoting the overseas
development of Singaporean firms that
also helped Memiontec get its Jakarta BOT.
Foreign investment targets in the Viet-
namese water sector have to date been lim-
ited to provincial utilities and large-scale
water treatment plants in the big cities (by
Manila Water, Salcon and Acuatico). How-
ever, sources involved in projects on the
ground estimate that there are dozens,
potentially hundreds, of privately owned
water treatment plants and networks in
the smaller towns, of which the new JV’s
first project, at 15,000m3/d, will be one of
the largest. These small-scale projects are
almost all owned by local entrepreneurs
who have received investment licences
from the local People’s Committees under
the ‘direct investment’ rule, through which
local governments can avoid the need for
competitive tendering. ASX-listed De.mem
started off in this space in 2013 (at capaci-
ties up to 4,000m3/d), operating under a
model where it would control the treatment
plants under BOO contracts, and sell water
to local partners which billed the customer.
Many foreign investors and banks have
34 / GWI
been put off from investing in Vietnam-
ese infrastructure projects partly by the
scarcity of government guarantees – espe-
cially around currency convertibility – and
these are now even less likely to material-
ise, given the fact that Vietnam has almost
hit its self-imposed 65% ceiling in terms
of public debt (including guarantees) as
a percentage of GDP. However, for Darco
CEO Thye Kim Meng, guarantees or take-
PRIVATE SECTOR SUPPORT
InfraCo Asia dives into water sector
A joint venture with Darco will be InfraCo Asia’s first investment in the water and
wastewater treatment industry. It will be looking for a quick exit.
I
nfraCo Asia’s first investment in the
water sector will see the government-
owned firm pick up a 45% stake in
a portfolio of Vietnamese projects run
by Darco Water Technologies, although
some or all of that stake could be put
back up for sale within a couple of years.
InfraCo Asia is funded directly by
the British, Australian and Swiss govern-
ments through the Private Infrastructure
Development Group (PIDG), a multilater-
al organisation owned by the World Bank
and donors from seven countries. Its
remit is to provide early stage finance to
risky but commercially viable infrastruc-
ture projects across South and Southeast
Asia, and it can potentially exit as early as
financial close – although it must make
commercial returns.
“We basically put development dol-
lars at risk to de-risk projects. We aim to
be a catalyst for private sector capital –
both debt and equity – to be raised,” CEO
Allard Nooy told GWI.
“We get them to financial close, and
at that point in time we review whether
we are looking for an exit or we stay
involved,” he elaborated. It has not yet
been finalised whether Darco will have
an option to buy InfraCo’s shares or first
This month in Asia Pacific:
34 Darco boots up in Vietnamese water sector
34 InfraCo Asia enters the water space
35 DNP Water eyes IFC funding
36 K-water’s smart water ambitions
37 New Zealand embraces alliance contracting
38 Willy Yeo: Reflections on water
38 Asia Pacific: News in brief
or-pay agreements with utilities were not
a requirement for the formation of the JV.
“We think it will be less risky here if you
are collecting the tariff yourself, because
then you don’t have to worry about non-pay-
ment. Vietnam is a very organised society,
and non-revenue water from non-collection
is very low.”
Thye estimates that investment licenc-
es for all four projects will be received
right of refusal on a third-party sale.
Last month, InfraCo Asia exited two
wind farms in Pakistan with a total pro-
ject value of $260 million, after just one
year of operations, while it divested part
of its 70% shareholding in a hydropower
plant in Vietnam soon after commercial
operations started. Having financed the
hydropower plant with debt from a single
Vietnamese bank and successfully com-
pleted a refinancing deal, Nooy is con-
fident that they will be able to organise
non-recourse project finance with local
lenders for the Darco projects.
“We are potentially going to work
with a local currency guarantor to get a
longer tenor in place for the amount of
debt that we require,” Nooy told us. The
inability to hedge or mitigate currency
risk has been a problem with some of
the tens of water deals which InfraCo
has looked at in the last few years, he
observed. “If they are not commercially
viable, then there is no route to exit for
us,” he explained.
“Once news of the JV with Darco was
in the public domain, the phone didn’t
stop ringing from other water project
developers who want to do other things
with us in other countries,” said Nooy. <
OCTOBER 2017

within three to six months, and explained
that each would serve households and fac-
tories, according to tariffs pre-set by provin-
cial governments, with an in-built adjust-
ment mechanism for inflation. Each target
district does not currently received piped
water service from the local utility, and is
dependent on increasingly depleted – and
degraded – groundwater reservoirs.
While industrial tariffs are higher
than domestic, Thye notes that industrial
growth is “less predictable” and that some
industries “are reluctant to set up factories”
as a result of public fervour against pollut-
ing industrialists (fish deaths caused by
cyanide and phenol discharged by a For-
mosa steel plant resulted in mass protests
and a $500 million bill last year). Thye’s
economic calculations are therefore mainly
based on residential population growth.
Bulk water from BOTs in similar situ-
ations sells for around $0.25-$0.35/m3,
according to GWI’s sources, with tariffs
rising to around $1.00/m3 where saline
intrusion is a problem and RO systems are
needed. Darco expects to be using low-pres-
sure membranes for surface water treat-
ment. With InfraCo’s help (see box, facing
page) Thye hopes to secure local financing
to mitigate foreign currency risk, and he
observed that, even though “the cost of bor-
rowing in dong is very high, at 8-9%”, the
projects remain “commercially viable” at
the tariffs set by the government.
This deal will see Darco return to the
asset ownership business it exited in 2013
when it sold a portfolio of Chinese water
assets to Salcon to repay debts following a
fraud scandal at a Taiwanese subsidiary
(the plants were promptly sold on to
BEWG). “Since the Taiwan problem, we
have not done any investment because
it took time to resolve the issue and the
banks have not lent us much money yet,”
Thye explained to GWI. However, this has
resulted in a situation where Darco’s debt-
to-equity ratio is around 10-15%. “There
is plenty of room for more funds,” Thye
told GWI. “We have already done a private
placement for $3 million, and it’s our inten-
tion to raise more funds at a company level
through [another] private placement.”
An additional placement is necessary
to build liquidity in the stock, according to
Thye. “Right now there is not much trade
in Darco because most investors are wait-
ing for our story to develop.”
That story has come a long way in
the last few years. Revenue nearly tripled
between 2013 and 2016, reaching S$60
million ($44 million) last year, largely as a
result of a merger with Chinese EPC con-
tractor Wuhan Kaidi, which became Dar-
OCTOBER 2017
We think it will be
less risky here if you
are collecting the tariff
yourself, because then
you don’t have to worry
about non-payment
Thye Kim Meng, CEO, Darco
co’s largest shareholder in 2015. “Wuhan
Kaidi is strong in the zero discharge area
for power generation, because they have a
licence with Vacom for their vaporisation
technology,” Thye explained. He acknowl-
edged, however, that “the power industry in
China is quite saturated.” Darco’s core rev-
enue, meanwhile, comes from the electron-
ics market in Malaysia, where “there are
not many new projects coming up or new
PRIVATISATION
IFC eyes Vietnam water player DNP
Dong Nai Plastic Company, which has built up a portfolio of five water projects and
utilities in Vietnam, has piqued the IFC’s interest. An equity injection is on the cards.
D
NP Water, a subsidiary of Hanoi-
listed Dong Nai Plastic Company, is
negotiating a convertible loan with
the International Finance Corporation
(IFC) to support its expansion plans in
the water treatment sector.
Le Tuan, investment director at DNP
Water, declined to disclose the value of
the loan, but confirmed to GWI that a
minority equity injection is also possible.
The IFC is expected to approve its invest-
ment on 30 November 2017. Accord-
ing to Le, DNP Water intends to expand
the capacity of its water treatment plant
portfolio from 140,000m3/d today to
240,000m3/d next year, and to 1 million
m3/d within five years.
Currently DNP Water owns stakes
in two operating water treatment plants
(Binh Hiep & Dong Tam), and two which
are under construction (Nhi Thanh &
Bac Giang). It also owns 40% of the
water and wastewater utility serving the
province of Long An, just south of Ho
Chi Minh City, having bought 26% of
the utility from Manila Water-backed
developer SII in 2016.
Le told GWI that he plans to use the
proceeds “to acquire state-owned water
companies being privatised”, as well as to
ASIA PACIFIC
technologies to drive sudden growth. The
industrial market is still very competitive,
[but] we do not see it as a long-term profit
driver,” he told GWI.
“Based on the immediate needs and
opportunities, I think we will focus on
Vietnam with any money that we raise
now,” Thye continued, adding that the
country “has a very organised governance
– their policies are very clear, and they also
have an urgent need to develop their coun-
try quickly. There is a lot of demand and a
lot of interest in investing in Vietnam, but
their infrastructure cannot catch up.”
In the future, a return to BOTs in
China, leveraging Wuhan Kaidi’s engineer-
ing expertise and sales network. may be
on the cards. “When we have raised more
interest and we have more funds, then we
can also take part in some of the projects in
China. Not in the coastal cities, but more in
the second- or third-tier cities,” Thye con-
cluded. <
build and buy water treatment plants.
Acknowledging that local govern-
ments find it a lot easier to do direct
investments than PPPs under Decree
15, Le explained that his projects are not
“BOO or BOT, but freehold”, meaning
that the developer receives an invest-
ment licence from the local people’s
committee, and is then free to sell the
water either to the utility or directly to
end-users. Two of DNP Water’s projects
include a distribution network element,
and only one of the four benefits from
a take-or-pay contract. “In a lot of cases
take-or-pay is not applicable, so the devel-
oper has to take on that risk,” said Le,
stressing that the viability of these pro-
jects hinges on the demand for water.
Currently fewer than 20% of Viet-
nam’s water utilities have taken on pri-
vate capital, but the government plans for
all utilities to be ‘equitised’ by 2020.
In Decree 57 of December 2016, the
government pledged to reduce its stake
in more than 20 water and wastewater
utilities to less than 50% by 2020. The
list included Vietnam’s largest water
utility SAWACO, although Le affirmed
that it is “far away and a little too big for
us.” <
GWI / 35
ASIA PACIFIC
KOREA INC.
K-water launches Korean SMEs abroad while
scaling up its smart water strategy at home
With the Asia Water Council’s initiatives abroad gathering pace, K-water has set up a platform for channelling Korean SMEs to overseas
opportunities. Efforts to tackle consumer mistrust of tap water mean that there is a lot of SME smart water know-how to be unlocked.
P
rogress on a clutch of projects organ-
ised by the Asia Water Council (AWC)
show that K-water’s plan to interna-
tionalise its ICT-optimised approach to
integrated water resources management
is creating opportunities for Korean small
and medium enterprises (SMEs). To sus-
tain enthusiasm for smart water manage-
ment, however, it needs to find an afford-
able way to scale up its pilot successes at
home across its Korean operations.
At last month’s inaugural Asia Interna-
tional Water Week (AIWW) in Gyeongju,
Korea, the AWC – an organisation funded
and mostly staffed by K-water – detailed the
progress of its first water projects (see table,
below right). The results show that the AWC
can be an effective platform for the Korean
government to structure projects which
benefit Korean SMEs abroad. While the
AWC is now asking for more participation
from non-Korean member companies in
its water projects, and requesting financial
contributions from other states including
China and Indonesia, it is likely that Kore-
an firms will continue to dominate the con-
tracts, given their experience with smart
water technologies and the presence of tan-
gible state support for global expansion.
At AIWW, the AWC pledged to cooper-
ate with the K-water Water Industry Plat-
form Centre (KWIP), an entity launched
in June 2017 with the objective of creating
12,000 new jobs for Korean SMEs from
2017-2021, and creating KRW600 billion
($530 million) worth of overseas business.
SMEs make up 70% of Korean water
companies, and the government is under-
stood to have made a special effort to pro-
tect their interests in the realm of smart
water management in recent years by
blocking the entry of the large business
conglomerates (chaebols) into the market.
For example, the government is under-
stood to have limited the expansion of LS
Electronics into the market for ICT-based
water management systems. This is part
of a wider government strategy to limit
the power of the chaebols, and nurture a
stronger SME economy.
K-water’s role in this government initia-
36 / GWI
tive is increasingly evident. Dr Haksoo Lee, drinking water consumption in the devel-
who has now been president of K-water for oped world, a direct legacy of a number of
a year, told GWI that through the KWIP, contamination issues in major cities in the
K-water will “get applications from SMEs 1980s and 1990s. Estimates of the per-
with good technologies, select a few of centage of the population that drinks tap
them for smart water management, and water without boiling it first range from
create partnerships to open a pathway for 1.5% to 5% – as opposed to 56% in the US
them to the industry.” K-water is seeking and 33% in Japan (according to K-water).
to prove and standardise new technolo- Increasing this figure has been a key pub-
gies in the smart water space by providing lic policy priority for years, but despite the
test-bedding facilities for SMEs at its dams fact that K-water pointedly monitors 300
and water and wastewater treatment plants. parameters (far above the 86 mandated by
“Upon realising the importance of software regulation), and has introduced advanced
systems, K-water established a software water treatment including ozonation at 12
development centre at the end of 2014,” of its WTPs, there has been little obvious
said Lee. “Jointly working with SMEs in improvement in public trust.
developing software systems after setting Now, however, K-water points to a trans-
the common technology framework [means formative example at its flagship reference
that] SMEs can yield the shared benefits for smart water management in Korea,
with K-water when expanding business in the city of Paju. In 2014, the company
overseas.” launched a smart water management
According to Lee, one of the core driv- system including real-time water quality
ers for the adoption of digital technologies monitoring (RTM), when direct drinking
in Korea is “to encourage the people to water consumption was just 1%. In 2016
drink more tap water – to establish trust.” that figure had reached 36.3%, prompting
Korea has one of the lowest levels of direct K-water to expand its service to the whole
ADDRESSING ASIA’S WATER NEEDS
Two years after start-up, the Asia Water Council has built up an eclectic mix of projects in the region. South
Korea has bankrolled the organisation and the project work, but it wants other nations to start contributing.
Project Scope Status
Update national water To suggest a new water plan to 2030 to Completed; funded by K-water
policy of Mongolia reflect SDGs & Paris climate agreement
Smart Water Management, $58m, 5yrs: GIS system, DMAs, pipe Pre-FS finished by K-water, WARECO,
Denpasar, Indonesia replacement, SCADA, smart flow, pressure Hankuk Engineers, & SMEC. FS starts
& quality sensors = NRW halved to 20% 2018 with Korean state funding
Cloud computing-based $1m, 3yrs: develop a custom risk FS/pilot underway by Locus Solution,
water risk management in management and smart IWRM system K-water, R&A Solutions & Indonesian
Jabodetabek, Indonesia govt. Korean state-funded
Integrated flood & drought $4.8m: develop a water security Funding sought
management in 4Ps river framework for 143,000 people; install
basins, Cambodia flood/drought monitoring infrastructure
Ceramic filter-based WTP, Developing ceramic filter-based water Ongoing, backed by Korea Institute
Cambodia treatment for high-turbidity surface water of Ceramic Engineering & Technology
Basin-scale smart water grid Korean ‘Smart Water Grid’ system using Preparation stage
to tackle drought, Vietnam satellite data and ICT to tackle drought
Source: Asia Water Council
OCTOBER 2017

406,000-strong population. Sensors (sup-
plied by SME Suntech Engineering) moni-
tor five parameters at ten-minute intervals
at 19 positions across the reservoir and
distribution system, whereupon real-time
data is pushed out online, on 17 electronic
billboards and directly to customers’ tele-
phones via an app. In addition to RTM, the
Paju initiatives include ICT-optimised chlo-
rine dosing, automated water pipe drain-
age, smart metering and water pipe inspec-
tion, and diagnosis in consumers’ homes.
The Paju project is partly a conse-
quence of the $28 million that the govern-
ment has poured into smart water technol-
ogy through the five-year Smart Water Grid
Research Group project, which started in
2012. The SWGRG developed the biodi-
rectional communication systems used in
Paju, and has driven the government con-
viction that exporting smart water technol-
ogy will be a major job and value creator.
K-water now has an ambitious aim to
increase the level of drinking water con-
sumption across the country from 5% to
30% by 2024. Despite the “positive feed-
back from everywhere” on smart water
management, Lee explained he has to “pri-
oritise areas and expand slowly” because
the “big problem is the expense”. The next
city to receive the service will be Sejong
City, a purpose-built government adminis-
trative city with 240,000 residents. It may
roll out similar smart water concepts in
purpose-built cities Songsan GS (150,000
people) and Busan EDC (75,000 people).
While historically responsible for
wholesale bulk water sales to local govern-
ments, K-water has built up a sizeable water
concessions business in recent years, tak-
ing over treatment plants, networks and
billing from 23 of the country’s 162 govern-
ments. Lee claims this has resulted in “a
more customer-driven culture”, which he
is fostering by trying to reform the “Korean
traditional company culture [that] is very
hierarchical” and build a “flexible” organi-
sation so “creative ideas can come up from
other people.” <
GLOBAL WATER MARKET
Meeting the world’s water and
wastewater needs until 2020.
globalwaterintel.com/gwm-2017
OCTOBER 2017
PROCUREMENT
New Zealand alliance activity picks
up pace
Two councils are embracing alliances as a way of streamlining water, wastewater and
stormwater services. Splitting plant and network management is a new approach.
W
ellington Water, the utility serving
more than 400,000 people in the
southern part of New Zealand’s
North Island, has invited private compa-
nies to register their interest in a NZ$200
million (US$143 million) ten-year alliance
framework covering network assets.
The move builds on the precedent set
by Horowhenua District Council earlier
this year by bringing together the opera-
tion and maintenance of drinking water,
stormwater and wastewater network assets
(“Three Waters”) under a collaborative alli-
ance model, enabling the utility to consoli-
date budgets which are currently controlled
by five separate councils, whilst streamlin-
ing customer services.
“The intention is to strongly consider
non-financial performance in selecting the
successful alliance partner,” a Wellington
Water spokesperson told GWI. “The ability
to form positive working relationships with
Wellington Water and its five constituent
councils will be key.”
The alliance will replace the current
Three Rivers O&M contract with Citycare
which is due to expire in 2019, but unlike
the Horowhenua alliance, the scope will
not include the O&M of water or waste-
water treatment plants. Under a separate
arrangement, the O&M of the four waste-
water treatment plants serving Wellington
Water’s franchise area will be bundled into
a new ten-year performance-based con-
tract, for which registrations of interest are
expected to be invited in June 2018, with
ASIA PACIFIC
an RFP to follow in May 2019.
At present, the Moa Point and Western
wastewater treatment plants serving Wel-
lington City are operated by Veolia under a
contract which is due to expire in February
2020. The Seaview WWTP, which serves
the Hutt and Upper Hutt areas, is operated
by Hutt Valley Water Services (Suez) under
a contract which is due to expire in June
2020. The operation of the Porirua WWTP,
The intention
is to strongly
consider non-financial
performance in selecting
the successful alliance
partner
Wellington Water
which is currently managed in-house by
Wellington Water, is also expected to be
folded into the scope of the new contract.
Any company seeking to position itself
for the aggregated plant O&M contract will
undoubtedly be better positioned to realise
appreciable synergies if it is already operat-
ing the associated network.
The provisional tender timetable for the
new alliance contract stipulates that com-
panies must register their interest by 17
November, with at least two companies to
be shortlisted by mid-December, ahead of
an RFP in May 2018. <
PUBLISHED:
31ST MARCH
2016
GWI / 37
ASIA PACIFIC
ASIA PACIFIC IN BRIEF
zz Chinese state-owned giant Shen-
hua Group has awarded the engineer-
ing and procurement contracts for
coal-to-chemical and mining waste-
water treatment at its Ningdong Ener-
gy Base in Ningxia Province. Beijing
Water Business Doctor has won the
pre-treatment contract, worth RMB193
million ($29 million), while Poten
Environment won the RMB325 million
($49 million) ZLD portion.
zz The city of Shenzhen’s investment
arm has agreed to acquire Shanghai-
listed engineer Beijing GeoEnviron
Engineering (BGE) via a reverse take-
over. Shenzhen Investment will inject
undisclosed environmental assets into
BGE, which is focussed on solid waste
but also works on industrial wastewa-
ter treatment (it is piloting Dais’ Nano-
Clear membrane evaporators in the
petrochemical and power industries).
zz Hong Kong-listed water project
developer Kunming Dianchi Water has
announced that it will buy Hongyu
Water for RMB127 million ($19 mil-
lion) and Sichuan DBO E.P. for RMB80
million ($12 million).
zz Malaysian consultant HSS Engi-
neers is paying MYR270 million ($64
million) to buy SMHB Engineering and
stake a powerful claim to Malaysia’s
water market.
zz Indian valve and screen maker
Jash Engineering realised a post-money
valuation of $21.7 million at its IPO,
which provided an exit for private
equity backer Pragati India Fund. 30%
of Jash’s INR1.6 billion ($24 million)
2017 revenue came from exports.
zz Meanwhile, infrastructure group
H.G. Infra has filed for a dual listing
on the NSE and BSE. It hopes to raise
INR5 billion ($77 million) from new
and existing shareholders. The com-
pany has built and operates two water
supply schemes in Rajasthan.
zz MIT spinout Sourcewater, Inc.,
which runs an online marketplace for
water solutions to serve US uncon-
ventional energy players, announced
last month that it had received fund-
ing from Japanese trading house
Marubeni. <
38 / GWI
COMMENT
Reflections on water
Chinese water companies have a responsibility to drive the
industry forward, argues Willy Yeo.
I
have had a number of encourag-
ing e-mails over the past few weeks
from readers who follow this column.
Besides expressing their appreciation
of what I had shared of late, be it about
specific company developments in Asia,
or a 30,000-feet view of how the Chi-
nese government is following up its soft
loan diplomacy with hard-hitting pen-
alties, some readers and contacts were
kind enough to tell me that the analyses
helped deepen their understanding of
the shifting dynamics in Asia. While
thanking them for their kind words, I
could not but reflect on almost a decade
of writing, which in its own way also
shows the drivers behind this industry
and how it has evolved since I started
penning this column.
What started out as a sexy industry
in the early 2000s, when water scarcity
was the challenge of the millennium,
when Asia was the biggest growth story,
and when Asian water scarcity became
the hottest bandwagon to jump onto
because the ethics and economics were
all aligned, quickly became a bit of a
pipe dream. Most outsiders only saw the
obvious drivers, of urbanisation driving
more water infrastructure investments,
and more people in Asia getting access
to clean water. But this never quite took
off, because both drivers were invariably
overridden by the politics of tendering
and pricing. Rife with challenges rang-
ing from corruption to mispricing, most
of the hype turned out to be just that,
aside from a few very well governed cities
and city-states in the continent. It is trag-
ic, but also a natural extension of centu-
ries-old ways of life (corruption) and the
rise of nationalism and localised democ-
racy (water mispricing). Ironically, it has
often been businesses in Asia producing
or treating their own water that get what
they need; left to their own devices, Asian
municipal and central governments have
turned in a sobering report card.
I have written at length about India
and Southeast Asia. But what has con-
stantly captured my imagination is
China, and indeed it has often been
my reflections on China that garnered
the most responses. But just as I have
bemoaned how the playing field has
been shifted by Beijing in favour of
local players, and how of late even other
countries are facing their own pressures
from China, my prognosis for margins
and growth rates remains dim, largely
because of the drivers described earlier.
Ethics was never lost on Beijing.
Leaders knew and genuinely believed
that clean and reliable sources of water
were paramount to the country’s pros-
perity, and they did good work in that
regard. But a free market was never to be
expected from the Chinese Communist
Party. With water identified as a strategic
resource, foreign technologies had to be
learnt and replicated ad nauseam at the
expense of fair competition, and eventu-
ally booted out. To their credit, Chinese
water prices are managed well enough to
avoid the large-scale problems still com-
mon in India and most of Southeast Asia.
The challenge, I think, is more about
how, in a market that emerged out of the
most vicious of price wars and technol-
ogy replication, China can still have any-
thing to offer to the wider world. Perhaps
this question is a non-starter, because it
was never the intention of Beijing to do
so. But for its leading home companies
to rest on their laurels would be a shame:
much profit that would have been due
to previously leading foreign companies
was not channelled to them, and in like
fashion, not channelled to more prod-
uct and technology development, lead-
ing to cantankerous bouts of M&A in
the wider market. Rather, it was spread
thinly across the existing base of Chi-
nese companies, and one could argue
that there is an onus on them to reach
real breakthroughs in this space. If all
they do is piggyback on Beijing’s soft
loans to expand, and with their easy mar-
gins diverge into industries with tenuous
links to their core business, it would be a
travesty for us all. If the retort is that this
is a free market and winners are at liber-
ty to choose how they spend their lucre,
that would be a bitter irony, as this very
lucre came right out of the favouritism of
a communist regime. <
OCTOBER 2017
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MARKET PROFILE

DESALINATION

Desal recovery continues, but risks remain

Appetite for new desalination capacity is growing, but progress is frustratingly slow in some areas. What are the market dynamics?

N
ew data from the 30th Worldwide
Desalting Plant Inventory released by
KEY NUMBERS FROM THE 30TH INVENTORY
GWI DesalData this month suggest
that the market is set to show a third con- GWI DesalData collects information on all new desalination plants contracted each year, as it continues to
secutive year of growth in 2017, after reach- build on the IDA Worldwide Desalting Plant Inventory first published in 1965 as a biennial register of global
ing a low point in 2014 (see chart below). desalination capacity. The publication became annual in 2005 after it was acquired by GWI.
Comparing data from the new 30th Category 30th Inventory 29th Inventory % change
Inventory with the 29th Inventory reveals Total contracted capacity 99.8 million m3/d 95.7 million m3/d 4.2%
that seawater desalination saw only mar-
ginal growth, even as the traditional hot- Total installed capacity 92.5 million m3/d 90.2 million m3/d 2.6%
spots for desal around the Gulf remained Total new contracted capacity 4.1 million m3/d 3.9 million m3/d 5.2%
steady year-on-year. With enduring water Total contracted seawater capacity 59.0 million m3/d 56.6 million m3/d 4.4%
scarcity problems, this area is likely to Total contracted brackish capacity 22.1 million m3/d 21.3 million m3/d 3.9%
retain the largest share of contracted seawa-
Total new contracted seawater capacity 2.5 million m3/d 2.5 million m3/d 0.6%
ter capacity for the foreseeable future. The
past year has also seen significant awards Total new contracted brackish capacity 1.0 million m3/d 0.8 million m3/d 16.6%
in China, Singapore, and Morocco. Total new privately financed capacity 0.6 million m3/d 1.3 million m3/d -51.9%
Brackish water desalination is showing Source: GWI DesalData
signs of stronger growth, with contracted
capacity for the first half of 2017 up by 29% plying a petrochemical complex in Nige- the extent to which broader water sector
year-on-year. The typical brackish plant ria, illustrating a trend where the needs of reforms in the Middle East serve to man-
serves either a small utility or an industrial industry often drive demand in developing age demand for water in the region, and
concern, and so capacity growth is lower, markets. the speed at which new Asian markets
but less variable. Much of this growth has The expectation is that in the year develop. It is expected that the market
come from China, where a slew of medi- ending 31 December 2017, newly con- for seawater desalination in the US will
um-sized industrial plants in the latter tracted capacity will top 4.4 million m3/d, remain painfully slow, although the brack-
half of 2016 pushed contracted capacity but DesalData’s analysts have expressed ish water desalination market will expand
to double that of the United States. One of doubt about whether the market will be more rapidly, largely as a result of the evolu-
the most interesting projects over the past able to maintain that strength in 2018. A tion of high-recovery and brine concentra-
year was the 110,040m³/d BWRO plant sup- key determinant of future growth will be tion technologies which help address the

INCREMENTAL CONTRACTED AND ONLINE DESALINATION CAPACITY (1980-2017)

The desalination market looks set to show its third straight year of growth in 2017, after reaching a low point in 2014. Asia and the Middle East are the strongest areas.

7
Contracted – 1st half 2017 H2 estimate
6
Contracted – 2nd half
Capacity (million m³/d)

5 Contracted – full year

4 Online

0
1980 1985 1990 1995 2000 2005 2010 2015
Source: GWI DesalData

40 / GWI OCTOBER 2017


problem of inland brine disposal.
Awards for plants treating other feed-
water streams, such as wastewater and sur-
face water, were significantly lower in 2016
than in previous years. This is partly due
to the absence of large projects: 2015 saw
the expansion of the Sulaibiya reuse plant
in Kuwait and two awards for the NEWa-
ter programme in Singapore. The first
half of 2017 looks more promising, with
contracted capacity up by 76%, although
most of this increase can be attributed to a
150,000m³/d water treatment plant in the
Baysh Dam valley in Saudi Arabia. In the
short to medium term there will likely be
more demand for desalination technologies
treating wastewater, as countries including
the US, India, and Taiwan encourage the
wider adoption of reuse.
There are several projects in the 30th
inventory which feature a blend of feedwa-
ter types. The 136,380m3/d plant at Mari-
na East in Singapore is designed to take
seawater from the Singapore Strait and
less saline water from behind the Marina
Barrage. More interestingly, Hitachi was
awarded a contract for a 6,250m3/d dem-
onstration plant in Durban, South Africa,
which will blend seawater with secondary
treated municipal wastewater to reduce the
energy consumption of the RO process.
The regional picture
The past year has seen a significant
increase in contracted capacity in Saudi
Arabia, after several years in which the
only activity was for small-scale plants.
The focus of activity is on the kingdom’s
Red Sea coast, and includes its largest ever
SWRO project at Shoaiba 4 (400,000m³/d)
and three smaller plants awarded to Hyflux
ANNUAL CONTRACTED DESALINATION CAPACITY BY FEEDWATER TYPE
Seawater has bounced back, but brackish water saw the strongest start to 2017. Other feedwater types were weaker in the most recent plant inventory.
6
5 Brackish water or
Capacity (million m³/d)
4
2
1 2017 capacity, brackish water*:
0 0.4 million m³/d
1990
* Values through June 2017 Source: GWI DesalData
OCTOBER 2017
(which had been one of the bidders on
Shoaiba 4). Another 250,000m³/d plant
at Shoaiba 3 is awaiting financial close,
which could be reached by the end of the
year. On the other side of the Gulf in Iran,
the 200,000m³/d first phase of the SAKO
power and desalination complex was con-
tracted. Two more phases are expected to
be awarded over the next few years.
In Egypt, plans to make outlying
regions independent of the Nile as a water
source continued with the award of two
150,000m³/d seawater plants at El Alamein
and Port Said. These plants were awarded
through a body associated with the coun-
try’s armed forces, who stepped in after
efforts by the civilian government to
award the contracts using a PPP model got
bogged down.
Meanwhile, Oman continues to provide
a steady stream of projects for private sector
investment. The end of 2016 saw the award
of the 250,000m³/d Sohar 3 IWP, and there
are hints that another 120,000m³/d IWP at
Salalah 3 could be contracted by the end of
2017.
In the Asia Pacific region, contracted
capacity in H1 2017 is double what it was
at the same time last year, with industrial
projects dominating the reference list. The
only significant utility project in the region
is the 136,380m³/d plant at Marina East in
Singapore. In China, which is by far the
largest market in the region, the landscape
is dominated by small and medium pro-
jects for industrial clients. The only two
projects of any size are serving the petro-
chemical industry on Zhoushan Island
in Zhejiang: a 150,000m³/d SWRO plant
awarded to HWTT and a 105,000m³/d
MED plant awarded to Shanghai Elec-
1995 2000 2005 2010
MARKET PROFILE
tric. In Taiwan, the Formosa Petrochemi-
cal Corporation awarded a 105,000m³/d
SWRO plant to IDE to secure process water
for its naphtha cracker plant. This project
shows the private sector moving a step
ahead of the government’s plans for the
island, which envisions 1.3 million m³/d
of municipal wastewater to be reused for
industrial clients by 2031. The first of six
pilot plants was awarded in 2017 to a con-
sortium of CTCI and Hsin Dar Environ-
ment under a BOT contract.
In the Americas, the market has
remained sluggish due to the absence of
large projects. There has not been a project
greater than 50,000m³/d since 2015, or a
project greater than 100,000m³/d since
2013. Although the data for the full year
in 2016 showed a substantial decrease in
contracted capacity, the outlook for 2017
is rosier, with 142,000m³/d more capacity
than at this time last year. In Latin Amer-
ica, the market is still struggling with the
delay of projects associated with the min-
ing industry in Chile, with an average plant
size of just 750m³/d. The latter half of 2017
may have better prospects, with the poten-
tial financial close of the projects at Rosar-
ito and San Quintín in northern Mexico,
and the award of a 38,880m3/d plant for
municipal utility Aguas Chañar in Chile.
In the USA, the most reliable source of
projects has been brackish water treatment
plants for industrial users and small utili-
ties. However, this year saw two interest-
ing seawater projects for industrial users:
a 34,000m³/d SWRO plant that the Mossi
Ghisolfi group is building for itself at its
PTA/PET plant in Texas, and a new low-
salinity EOR project in the Gulf of Mexico.
The only significant reuse project using
Seawater
inland water
Other
2017 capacity, seawater*:
1.5 million m³/d
0.4 million m³/d
2017 capacity, other*:
2015
GWI / 41
MARKET PROFILE

desalination technology awarded in the

last year was for the 19,682m3/d Westside THE DESALINATION LEADERBOARD
RWTF in San Francisco.
The chart below shows the total capacity contracted to each major plant supplier since 2006. Some of the
In the rest of the world, some of the
big players – notably Suez, Acciona, Fisia and Cadagua – went hungry last year. In next year’s inventory, GE
most interesting projects were found in
Water’s business combination with Suez will almost certainly make it the biggest desalter in the world.
sub-Saharan Africa. 2017 saw Wabag win
two projects treating seawater and wastewa-
ter at the Dangote petrochemical and fer- Veolia
tiliser complex in Nigeria, while Tedagua GE
won the contract for an EU-funded project
Doosan
to supply a 22,500m3/d plant serving Dji-
bouti city. Cape Town’s drought could well Suez
mean that South Africa proves to be a new IDE
source of growth going into 2018.
The resurgence in awards for extra- Valoriza
large utility plants has also meant a burst Hyflux
of activity for projects with private sector Acciona Since 2006
involvement, meaning that 2016 saw the
highest percentage of projects using private Tedagua 30th Inventory
finance or operations since 2009. Many of Abengoa
these projects were in countries like Qatar,
Fisia
Oman, and the UAE, where there is a well-
developed structure for private finance. Metito
The first half of 2017 has been less promis- Wetico
ing for private finance, with only one large
Biwater
project at Marina East in Singapore. How-
ever, the 250,000m³/d expansion of Shoai- Cadagua
ba 3 in Saudi Arabia reached financial close Aqualia
this month, and there are several more pro-
jects which may yet reach financial close HWTT
before the end of the year, including the VA Tech Wabag
Rosarito and San Quintín projects in Mex- Aquatech
ico and the Salalah 3 project in Oman.
H2O Innovation
zz Full details of the 30th Worldwide Desalt- 0 1 2 3 4 5 6 7
ing Plant Inventory are available to DesalData
subscribers. The next DesalData market fore- Capacity (million m³/d) Source: GWI DesalData
cast webinar will take place in November. <

ANNUAL CONTRACTED DESALINATION CAPACITY INVOLVING PRIVATE OPERATORS

Private finance bounced back strongly in 2016, but the first half of 2017 was weak for privately financed desalination projects. The second half looks more promising,
and in the longer term, the return of Saudi Arabia to the private finance market will provide a significant boost.

3.5

3.0

2.5
Capacity (million m³/d)

2.0

1.5

1.0
DBO
0.5 IWPP
BOT / BOO
0.0
2001 2003 2005 2007 2009 2011 2013 2015 2017
Source: GWI DesalData

42 / GWI OCTOBER 2017


FROM THE CHIEF TECHNOLOGY OFFICER
How to meet America’s nutrient challenge
The picture for nutrient recovery from wastewater treatment plants in the US is looking rosier. The
industry is grasping the urgency for better nutrient removal as a first step, writes Charlie Walker.
F
or anyone who stuck around on the
final day of WEFTEC in Chicago
this year, they could have joined the
thoroughly entertaining session entitled
‘Making Lemonade from Lemons: Nutri-
ent Management, Resource Recovery
and the Utility of the Future’. There was
standing room only as leaders from two
of the most forward-thinking US utilities,
Clean Water Services, based out of Hills-
boro, Oregon, and the Metropolitan Water
Reclamation District of Greater Chicago,
tried to outdo each other with colour-
ful presentations and bragging rights on
their nutrient recovery facilities (it is first
in North America versus largest in the
world). Both have deployed systems recov-
ering phosphorus in the form of struvite
from their waste streams, which can be
sold as fertiliser.
During the session, general manager
of CWS Bill Gaffi enthused that there
was a business case for implementation
of these projects, but it is far from always
being a slam dunk. The adoption of tech-
nologies for nutrient recovery is borne out
of the need to meet increasingly stringent
nutrient effluent limits, as well as remov-
ing the issue of returning sludge filtrates
with high phosphate loads back into
the main wastewater treatment process.
These are important considerations that
make the economics work for such a pro-
ject. More can be done to accelerate their
uptake, and enable us to head further
towards the utility of the future.
The US EPA currently regulates three
different waste streams: wastewater efflu-
ent, biosolids and solid waste from the
screens at the head of a WWTP. The prob-
lem is that it is not clear how it wants to
OCTOBER 2017
class struvite – the prevailing form that
phosphorus is recovered in – and so it is
currently bundled into the EPA Part 503
Biosolids rule. The main concern among
people such as the National Association
of Clean Water Agencies is that the value
of struvite as a fertiliser product is dimin-
ished, potentially discouraging future pro-
jects. The success of these projects can be
jeopardised if the final product is not suf-
ficiently valued. Bodies such as NACWA
would like to see it taken out of regulation
by the Clean Water Act completely, per-
haps introducing another instrument, but
dialogue is ongoing.
Despite these ongoing uncertain-
ties, the session for me encapsulated an
increasing optimism in the world of nutri-
ent recovery that I felt overall from the
event, coming into sharper focus than
previous years. The more pressing matter
however, is simply better removal of these
nutrients, as the discharge regulations in
many regions of the United States become
much stricter for levels of nitrogen and
phosphorus. In some areas it might take
time for the regulations to be put in place,
but utilities are seeing the need to adopt
new and improved technology in antici-
pation of revised limits. The busyness of
particular booths during the WEFTEC
exhibition reflected this.
Many times I walked past the very
modest booth of Clearas Water Recovery,
which has an enhanced biological nutri-
ent removal system using microbiology
and accelerated photosynthesis, and on
each occasion there were huge crowds
spilling over into the exhibition aisles.
This is all the more remarkable given that
Clearas has only had demonstration pro-
This month in Chief Technology Officer:
43 Charlie Walker: US’s wastewater tech future
44 Market map: LEDs challenge UV status quo
50 First report: Making sense of sensors
52 Smart water watch: i2O moves into China
54 CTO outlook: IDE’s Boris Liberman
56 End-user perspectives: Piloting new textile
wastewater guidelines in China
jects thus far. Whether the hype is excel-
lent marketing or the real deal, we will
soon find out. The company is currently
in the process of commissioning its first
full-scale system.
There were plenty of visitors to the
Aqua-Aerobic Systems booth too, though
there were numerous idle sales rep-
resentatives as the crowds flocked to
one particular man: Brian Bates. He is
responsible for introducing the heralded
Nereda aerobic granular sludge process
– developed by Royal HaskoningDHV
– into the North American market fol-
lowing a partnership signed between the
two firms at last year’s event. The technol-
ogy is one of the most disruptive in recent
years, and RHDHV has commissioned 13
installations over the last four years alone
across the globe, with another nine under
construction and 14 under design. It is a
technology that ageing WWTPs in the US
might need, given its footprint advantages
and superior performance on meeting
stringent nutrient limits. Expect several
Nereda project wins in North America in
the next 12 months.
How the US will meet its wastewater
challenges going forward is something
we will be exploring further at the Ameri-
can Water Summit in Austin, Texas on
November 29 & 30. We have a panel of
Chief Technology Officers from across
the water value chain discussing the tech-
nology needs of the American water sec-
tor – the topic of nutrient removal and
recovery will undoubtedly arise. We also
have a dedicated roundtable to determine
what the next big thing in treatment tech-
nology will be. Do join us.
www.americanwatersummit.com <
GWI / 43
CHIEF TECHNOLOGY OFFICER
MARKET MAP
Getting onto the right wavelength with UV
water disinfection
Ultraviolet disinfection continues to go from strength to strength as it proves itself as a reliable technology for both drinking water and
wastewater. How will the rise of LEDs change the look of the market?
U
ltraviolet (UV) disinfection has forged
ahead as a well-accepted water and
wastewater treatment technology,
offering a chemical-free, low maintenance
option that is very effective against chlo-
rine-resistant pathogens such as crypto-
sporidium and giardia. Due to these advan-
tages, the technology continues to take
market share from chlorine, especially in
the wastewater arena, and is benefiting
from the excitement over the increasing
number of potable reuse projects. Con-
ventional mercury lamp technology is
approaching peak efficiency, with room for
system improvements continuing to shrink
but the emergence of alternatives is threat-
ening to shake up the market.
Several suppliers of systems containing
UV light emitting diodes (LEDs) are enter-
ing the market as a mercury-free alterna-
tive to mercury lamp systems providers.
They are initially targeting low flow point
of use (POU) or point of entry (POE) appli-
cations, but they are expected to penetrate
municipal and industrial applications
in future, potentially sooner than many
might think. It is bringing new thinking to
the market in terms of reactor design and
increases the applications for UV technolo-
gy. One exciting example is the potential to
place UV LEDs for a water recycling system
on the International Space Station.
Technology landscape
The UV disinfection market divides into
open channel versus closed vessel sys-
tems, with vendors often carrying both
kinds depending on the application. Open
channel systems dominate for wastewater
treatment, while closed vessels are more
suited to drinking water (to decrease risks
of external contamination) and wastewater
reuse.
Another differentiator is low pressure
versus medium pressure mercury-based
lamp technology. This dynamic gener-
ally involves having less powerful but more
energy efficient lamps in greater numbers
versus a fewer number of more powerful
but less energy efficient lamps. In the ger-
micidal UVC region (see diagram, right), low
44 / GWI
pressure lamps are monochromatic and strategy manager for treatment at Xylem,
emit solely at 254 nm, whereas medium whose main UV brand is Wedeco. “Such
pressure lamps are polychromatic and emit lamps have bridged the gap with medium
throughout the entire spectrum. However, pressure lamps while their power con-
medium pressure lamps are also inher- sumption remains three to four times less.”
ently much less efficient than low pressure To demonstrate the point, Trojan now car-
lamps, by a factor of about three to four ries a 1kW lamp, compared to 200-300W
times. What has happened over the years lamps a few years ago. This is more power-
is an attempt to find some kind of mid- ful than ETS’ (now part of Evoqua) medi-
dle ground between the output of the low um pressure 800W lamp.
power lamps and number required. The development of more powerful, low
“Over the years, powerful low pres- pressure lamps - or low pressure, high out-
sure lamps (greater than 500W) have been put lamps – is opening up a market for UV
developed,” said Bertrand Dussert, global in mid-size to larger treatment plants.
SPECTRUM IS PURPLE
The UV spectrum is divided up into ranges of wavelengths, with UVC having the germicidal effect. Its
effectiveness against crypto puts it a head above chlorine, which also struggles on giardia and legionella.
The electromagnetic spectrum
UV radiation is emitted in the wavelength range from 100 to 380 nanometer (nm)
X-Ray Ultraviolet Visible light Infrared
V-UV UV-C UV-B UV-A
100 200 280 315 380 780 nm
For disinfection UVC radiation in the
range from 240 nm to 280 nm is used.
Advanced oxidation processes are
realised with radiation down into VUV
range (below 200 nm)
Multiple barrier protection
Chlorine Ultraviolet (UV)
effectiveness effectiveness
Hepatitis A Streptococcus
Rotavirus Giardia
Adenovirus Crypto
Legionella
E. coli
Poliovirus
Combined range of effectiveness
Source: Heraeus; Trojan
OCTOBER 2017

“The barrier there was maintenance –
operators do not want to change hundreds
or thousands of lamps,” explained Wayne
Lem, marketing manager at TrojanUV.
“More powerful lamps drove the adoption
of UV. Only one of the top ten wastewater
treatment plants in the United States uses
UV, and that’s Chicago. They switched to
UV because of the 1000W lamp available
in our UV Signa product, which cut down
the number of lamps by a quarter or more.”
Another key technology trend has been
the reorientation of lamps in open channel
systems away from a horizontal configura-
tion because of the maintenance benefits
that can be achieved. An operator is able
to remove a lamp or quartz sleeve (which
houses the lamps) without needing to
remove UV modules or banks.
“This is not possible with horizontal
lamps systems because both ends of the
lamp are submerged in water,” said Lem.
“Water level control, which is critical in a
UV system, is also easier to manage with
an inclined system as excessive water over
the ‘top lamp’ in a horizontal system is
avoided.”
Xylem inserts lamps at a 45 degree
incline, TrojanUV goes further with a 65
degree incline, while Suez has gone com-
pletely vertical with its Aquaray product.
Stacking up versus other disinfection
UV can bring the benefit of being a physi-
cal disinfection technology, eliminating
the need for storing hazardous chemicals
such as chlorine. Chlorination is the main
competitor for UV, but particularly for cer-
tain applications. For example, in wastewa-
ter, the two directly compete, but in drink-
ing water applications they are complemen-
tary, mainly in North America, due to the
need for chlorine residuals in the water
distribution system. UV can help lower the
amount of chlorine necessary for additional
disinfection or residual disinfection, but is
still needed in some quantity for the water
network to prevent the regrowth of any bac-
teria. Some see the ability for UV to take a
leading role.
“For municipal drinking water appli-
cations, you can use UV for your primary
disinfection, to lower the amount of chlo-
rine necessary. Alternatively, you can use
chloramines for the distribution system;
these are less powerful than chlorine, but
their use is adequate for the distribution
system,” commented Dussert. Using UV
would drastically reduce the risk of disin-
fection by-products (DBPs), carcinogenic
and mutagenic compounds formed when
chlorine reacts with chemicals in the water.
In Europe meanwhile, the emphasis on a
OCTOBER 2017
PRIDE OF PLACE IN THE TREATMENT TRAIN
Where UV typically sits in a treatment train depends on the source of incoming water. Following
microfiltration and reverse osmosis, UV is part of a triple barrier process for indirect or direct potable reuse.
Drinking water
Filtration
Activated carbon
(optional)
UV disinfection
Treated water reservoir
Only one of the top ten wastewater treatment
plants in the United States uses UV, and that’s
Chicago. They switched to UV because of the
1000W lamp available in our UV Signa product,
which cut down the number of lamps by a quarter
or more.
Wayne Lem, TrojanUV
chlorine residual is much less, meaning
UV disinfection can be considered a stan-
dalone treatment type.
On the wastewater side, UV vies with
chlorine, often resulting in a simple com-
petition on cost. This is usually very site
specific, however chlorine has a distinct
disadvantage because it leaves a residual
that can impact aquatic species. When
treating for discharge, a utility needs to
dechlorinate, adding to the cost and mak-
ing UV the more cost-effective solution in a
majority of cases.
Another predominant disinfection (and
oxidation) technology is ozonation, which
can be used to treat drinking water but, like
chlorine, can create undesirable DBPs, and
is generally regarded as more expensive
than UV. It is beginning to find a niche in
the treatment of micropollutants in waste-
water (see Market Map, GWI August 2017),
and is also used in the food & beverage sec-
tor.
Making UV an AOP
The use of UV as part of an advanced oxi-
CHIEF TECHNOLOGY OFFICER
Wastewater Wastewater reuse
Secondary
MF-RO
clarifier
Media filter
(optional)
UV disinfection UV disinfection
Discharge Reuse
Source: GWI
dation process (AOP) is gaining momen-
tum, particularly for the water reuse mar-
ket or for removal of micropollutants. UV
regularly needs to be accompanied by an
oxidation process to remove trace harm-
ful contaminants in addition to bacteria
and viruses. Its traditional pairing has
been hydrogen peroxide, which is dosed
upstream of a UV system and absorbs
the UV light to create powerful oxidants
known as radicals, which react with recal-
citrant contaminants in the water, breaking
them down.
Exploration of combining UV and
ozone, and UV and chlorine is also ongo-
ing, but there is room for further optimisa-
tion with the chemicals used.
“A key limitation of commercially avail-
able AOPs is the use of chemicals that do
not absorb a lot of UV light emitted by the
lamps,” said Dussert. “The goal is to better
match the absorption spectrum of a chemi-
cal with the emission spectrum of a UV
lamp in order to maximise the formation of
the radicals responsible for the oxidation of
refractory chemicals.”
GWI / 45
CHIEF TECHNOLOGY OFFICER

UV inactivates extremely effectively. Suppli-

FRAGMENTED MARKET ers got very excited by the introduction of
the Long Term 2 Enhanced Surface Water
The mercury lamp conventional UV system market is extremely fragmented. A few leaders have emerged, Treatment Rule, or LT2, in response to out-
with the rest being regional or more industry-specific players. Evoqua’s position has been strengthened by breaks of cryptosporidiosis, notably in Mil-
recent acquisitions such as Neptune Benson. waukee, which put in place more stringent
LEADER LEADER requirements for surface drinking water
to protect against cryptosporidium. It then
turned out that lower levels than expected
MUNICIPAL INDUSTRIAL/COMMERCIAL
of crypto was detected, meaning the antici-
pated market take-off never occurred.
TrojanUV Wedeco Aquafine Wedeco However, in the UK there has been
greater growth in the drinking water mar-
Evoqua Suez Hanovia ket on the back of a cryptosporidiosis out-
break in the north west of England in 2015
LIT UV Berson Evoqua atg UV involving United Utilities.
“This scared every company in the UK
Enaqua Aquionics
Calgon Carbon Suez into making sure they are protected against
atg UV crypto,” said Hennessey. atg UV claims it
supplied 52% of UK drinking water sites
Heraeus Noblelight Enaqua LIT UV UV Pure in 2016, including three of the largest five
Abiotec UV sites.
ProMinent Atlantium Glasco UV Advanced UV ProMinent UV has found strong application in
Van Remmen UV disinfecting water for the food & beverage
UV Pure Calgon Carbon BWT industry. Its major selling point is the fact
Neotech Aqua that it does not change the organoleptic
Onyx Environmental Neotech Aqua
Bio-UV Glasco UV Funatech properties such as texture and taste of the
Enviolet water, vitally important because the water
Ultraaqua Aquisense* Ultraaqua
SITA De Nora often goes into the final product. Some
ESCO Sentry Ultraviolet
Aqua Azul see making enhanced use of UV systems
Aqua Azul Heraeus Noblelight
Neotech UV Pentair in this sector. “In food & beverage they are
Best UV Conwin Culligan looking much more at photocatalytic uses
Onyx Environmental Sinatech
Crystal IS* for UV beyond just standard disinfection. If
Conwin Neotech UV American Ultraviolet you make the doses higher, or run the sys-
Ningbo Shengyuan tem to produce different wavelengths, you
Bluescop Van Remmen UV Biopuremax can do things like dechlorination, ozone
PILOT PHASE

destruction and TOC [total organic carbon]

Typhon Treatment* Nikkiso/Metawater*
CHALLENGER
*UVC LED players
atg UV, a strong player in the industrial
markets and UK municipal sector, is using
titanium dioxide, a chemical-free fixed cat-
alyst which is not consumed by the process.
With the solution being chemical-free, it
precludes the need to remove any residual
catalyst – radicals produced have a short life
and would not damage downstream pro-
cesses (which may include membranes).
“This technology is very suitable for
industrial applications as well as drink-
ing water and ultrapure water,” said Paul
Hennessey of atg UV, recognising that tita-
nium dioxide is not efficient enough to be
deployed in wastewater.
The key applications
Many see the application of UV in waste-
CHALLENGER
Source: GWI
water as the greatest opportunity going
forward. There is pull in North America,
particularly as reuse grows in states like
California, Texas and Florida, but also the
drive towards more effective wastewater
treatment in Asian regions, notably China
and India, is bringing compelling busi-
ness opportunities for UV system provid-
ers. Trojan has already been very active in
China since 2005, but UV will face com-
petition from chlorine, especially in India
where a lot of education around UV tech-
nology validation is required.
The development of UV projects in the
drinking water market has been slow in
North America. This is mainly because the
uptake of UV was dependent on the threat
of cryptosporidium in water sources, which
reduction,” Hennessey noted.
The technology is one of the two pri-
mary options for treatment of ballast water
too (see Market Map, GWI February 2017).
Despite another recent delay in the dead-
line for compliance with the Ballast Water
Management Convention, suppliers remain
upbeat, adopting a longer-term outlook
with plentiful opportunities.
How can mercury lamps develop further?
With the advancements in lamp power up
to 1kW, many see little room for further
improvement in mercury lamp technol-
ogy. Companies are focusing on improve-
ments for reactor hydraulics instead, which
is how they can really differentiate them-
selves. Reactor design became very impor-
tant after the progression of computational
fluid dynamics (CFD), which could model
the systems, meaning analysis of how the
water flowed through the system became
much easier.
“The reactors had the same power and
the same shape, but the difference between
a good reactor and a bad reactor could be

46 / GWI OCTOBER 2017


up to 30%, which can be a big deal when
you’re treating water for human consump-
tion,” commented Hennessey.
In a bid to get ahead of the competi-
tion in a crowded marketplace, the pace of
new reactor design is important. Trojan is
making use of transformative technologies
from outside of the sector. “We’re deploy-
ing rapid prototyping by using 3D print-
ers so that we can quickly get a feel of how
ergonomic the products are to make it
easier for the user. This halves our develop-
ment time by 50%,” Lem told GWI.
One aspect of the reactor design for
conventional technology that could be
improved is enhancing the amount of light
that is reflected within the system, accord-
ing to Professor Karl Linden at the Univer-
sity of Colorado, comparing it to the emerg-
ing UV LED technology.
“The outputs of LEDs are so low that
every photon is valuable – you don’t want
to waste it on an adsorbing feature that is
not a microorganism. LED reactors tend to
be fully reflective inside and so recycle a lot
of photons, but that is not the case in mer-
cury lamps. I think there are opportunities
for improvements [in conventional systems]
– the materials they use for reflectants and
optimisation of the lamp spacing,” he said.
LEDs shaking things up
The development of UV (including UVC)
KEY DEVELOPMENTS
Some of the technology trends being observed in the mercury lamp system space have taken many years
to occur. Development of UVC LED power output is keeping pace with Haitz’s Law – commercial LEDs are
expected to exceed 100mW by next year, but prototypes being tested in the lab are three times as powerful.
Mercury lamps
Lamp power (low pressure): 200W
Low pressure & medium pressure lamps:
Lamp life: 8-10,000 hours
Horizontal configuration in open channel:
LEDs
2013
Power: 10mW
Haitz’s Law: For every decade of development, LED Optical Power increases 20x and cost/lumen falls by 10x
OCTOBER 2017
LED reactors tend to be fully reflective inside
and so recycle a lot of photons, but that is
not the case in mercury lamps. I think there are
opportunities for improvements in conventional
systems – the materials they use for reflectants and
optimisation of the lamp spacing.
Karl Linden, University of Colorado
LED systems, mercury-free and immune to
scaling issues that blight the quartz sleeves
of conventional mercury lamps, has come
a long way in a short space of time. This
should not be a surprise given the rapid
advancements commonly associated with
the semiconductor industry. How it will
shake up the market will become clearer
in the next two to three years. Oliver Lawal,
president of the International Ultraviolet
Association and CEO at Aquisense, one of
the leading UVC LED suppliers told GWI
that he believes the technology is both dis-
ruptive and constructive.
“A lot of people feel LEDs are a threat to
traditional mercury vapour lamps. Although
I think they are, Aquisense has a different
vision. We think there are a lot of applica-
tions that cannot be solved with mercury
lamps. Strategically, we think we can make
more money by not replacing mercury
Over 10 years
1,000W
Low pressure high output
18,000 hours
Inclined/vertical in open channel
2017 2018
70mW 100mW+ Lab testing: 280mW
Source: GWI
CHIEF TECHNOLOGY OFFICER
lamps – we can make more money by doing
something different,” he said.
The major issue facing LEDs currently
is their power output: it is still in the order
of milliwatts rather than watts, so signifi-
cant progress needs to be made. However,
the speed of UV LED power enhancements
continues at a rapid pace (see figure, below).
“If you follow Haitz’s law, we are about
two years away from having LEDs more
efficient than mercury lamps. If you look at
research, we’re already more efficient than
mercury lamps,” said Lawal.
The leaders in the mercury lamp mar-
ket all have LEDs on their radars (indeed,
Xylem is part of the Advanced UV for Life
consortium in Germany, which is push-
ing the technological development of UV-
LEDs), but it will potentially take a different
mindset for them to become successful at
applying them.
“What a lot of UV manufacturers
are saying is that LEDs are not ready,”
explained Mitch Hansen at Aquisense.
“But what they are not understanding is
that they are trying to apply an LED to the
traditional UV lamp system, which is an
incorrect way of thinking. They need to
start thinking about how to design a sys-
tem around the LED light, not how the LED
light will fit into their current system.”
Some incumbents in the market sug-
gest that the LED technology itself is the
problem, particularly for application in
larger flow systems. “We have an idea for
a system, we’re just waiting for someone to
create an LED that is usable,” commented
atg’s Hennessey.
While some convergence to reactor
design has occurred among mercury lamps
systems, designing reactors around LEDs
offers lot more flexibility. Aquisense credits
an outside influence for its early successes..
The CTO Jennifer Pagan has come from an
electronics background, approaching the
matter from a different direction to water
engineers. Because LEDs emit light in a
different way and their power output is cur-
rently much weaker than mercury lamps,
the reactor must be designed in a way to
most effectively distribute the light with-
GWI / 47
CHIEF TECHNOLOGY OFFICER
in the reactor and ensure a narrow dose
distribution.
Exploring the world of wavelengths
One important capability emerging with
the advent of UV LEDs is the ability to tai-
lor UV wavelength applications to optimise
treatment. This enables the more specific
targeting of problem contaminants.
“We’re finding out that each strain of
bacteria, whether it be E.coli or legionella,
has a different sensitivity to different UV
wavelengths,” said Mitch Hansen at UV
LED system maker Aquisense. “What we
can do now with LEDs is that we can cus-
tomise the disinfection based on the type
of bacteria that a client is having a problem
with.”
As low pressure mercury lamps only
operate at wavelengths of 185 or 254nm,
while medium pressures have a polychro-
matic range but not immediately effective
at a particular wavelength, LEDs can fill
the gap.
“What UVC LEDs are allowing us to
do is shift to the real optimum wavelength
for germicidal efficacy, which the peak of
in almost all bacteria adsorption is around
265 nm,” James Peterson, product manag-
er at Crystal IS, told GWI.
Investigations into the mechanisms
of inactivation of polychromatic UV light
is also going on at the Linden Research
Group at the University of Colorado.
“We found that polychromatic UV
systems like medium pressure mercury
lamps are more effective for virus inactiva-
tion than traditional low pressure lamps,”
Linden told GWI. “We can make it three
to four times more efficient because we’ve
pulled apart all of the wavelengths that are
important to the disinfection process.
“Wavelengths that are low output like
220-230 nanometres are very important
and then [wavelengths of ]around 254 [nm]
and 260 [nm] is very important. We’ve
been trying to tailor a wavelength specific
system using both excimer sources at 222
[nm], which is effective against inactivat-
ing proteins and viruses, combined with a
wavelength in the 260 [nm] region.”
An excimer lamp is a source of poly-
chromatic ultraviolet light, produced by the
formation of excited dimers (hence exci-
We think there are a lot of applications
that cannot be solved with mercury lamps.
Strategically, we think we can make more money by
not replacing mercury lamps — we can make more
money by doing something different.
Oliver Lawal, Aquisense
48 / GWI
LED PLAYERS AND THEIR TARGET MARKETS
Aquisense and Crystal IS have had the most early success with their UV LEDs, with numerous players now
in tow. Crystal IS has a rare position of being a manufacturer as well as a supplier.
MUNICIPAL POINT OF USE/COMMERCIAL
Typhon Aquisense Crystal IS
Treatment
Rayvio SETI
Nikkiso/
Metawater Acuva Qingdao Jason
Watersprint AB HCEN
mers) that break apart and results in a UV
photon. They are also mercury free, but
currently have a significantly shorter life-
time than mercury lamps as well as being
less energy efficient.
Compared to LEDs meanwhile, excimer
lamps are much more powerful and effi-
cient, however do not offer the flexibility
in reactor geometry that UV LEDs afford.
Many leading mercury lamp system manu-
facturers are exploring the use of excimer
lamps in tandem with development of LED
system.
Some go low flow...
Two different target markets are being pur-
sued by UV LED water treatment suppliers:
decentralised, low flow applications, and
the municipal sector. Both strategies focus
on drinking water because UV-transmit-
tance is much higher in this application.
Many suppliers are pursuing low flow
(e.g. less than 50 gallons per minute) appli-
cations, partly due to LEDs’ currently low
power outputs (commercial wattages are
currently around 30mW, although UVC
LEDs with 300mW output are being tested
in laboratories), but also because the devel-
opments of decentralised, point-of-use type
markets in regions such as China and India.
Crystal IS, part of Japanese giant Asahi
Kasei since 2012, is one such company tar-
geting these areas. James Peterson, told
GWI that the company is pursuing a long-
LED MANUFACTURERS
Crystal IS Nikkiso
LG Innotek Dowa
UV Photonics Osram
Nitride Semiconductors
Source: GWI
term strategy associated with the decen-
tralisation of treatment because LEDs are
allowing more devices to be deployed in a
more dynamic way. “We see that the best
way to provide real microbial protection to
end-users in water is through these decen-
tralised systems,” he added.
Crystal IS develops aluminium nitride
substrates as opposed to sapphire-based
LEDs, the advantage of which Peterson
happily points out: “We are one of the few
groups on the market right now providing
aluminium nitride. Any other LED pro-
ducer is now using sapphire based LEDs.
This makes a very large difference because
aluminium nitride has a wider band gap,
which allows LED chips to reach better
power and better lifetimes.” He believes
that this is a key differentiator for Crystal
IS from the competition. “Crystal IS was
started and founded with the idea of UVC
LEDs primarily, and we’ve driven that pure-
ly in the direction of pursuing the germi-
cidal effects around it.”
Aquisense is also targeting low flow
applications, excited by how LEDs can min-
iaturise UV technology. For example, sys-
tems could be integrated into taps, bypass-
ing under the sink treatment, and bringing
UV disinfection even closer to the point
from where water is drawn.
“The trends are both replacement and
creation. We’re gambling on creation as a
better short-term play, but replacement will
happen,” Lawal told GWI.
…others aim higher flow
Other companies have homed in on the
municipal space as they saw the market-
place for supplying UVC LED systems to
the point-of-use space becoming increas-
ingly crowded. The founders of UK-head-
quartered Typhon Treatment Systems rec-
ognised this saturation and headed in a
OCTOBER 2017

Terminology
Chlorination: adding chlorine in gas or
liquid form to water for purposes of dis-
infection. Chlorine gas forms hypochlo-
rous acid on reaction with water. This
weak acid can damage bacterial cell
walls, affect the uptake of oxygen by
cells, and reduce the reproduction rate of
DNA.
Closed vessel system: disinfection takes
place in an end-feed closed pipe where
the UV chambers sit. Generally has a
smaller footprint than open channel sys-
tems and reduces operators’ exposure
to the UV radiation. It is more suitable
for drinking or process water and water
reuse applications.
Log inactivation: the decrease in the con-
centration of infectious microbes after
exposure. Comparing the dose and
log inactivation produces a curve that
describes the effect of UV exposure on a
particular microbe.
Low pressure (LP) mercury lamp: operates
near vacuum pressure and emits light at
a wavelength of 185nm or 254nm. UVC
efficiency, emitting at 254nm, is normal-
ly between 30-40%.
Medium pressure (MP) mercury lamp:
emits light with a higher intensity than
an LP lamp in a broad spectrum between
200 and 300nm. However, UVC effi-
ciency is less than a LP lamp, normally
between 10-15% for emitting at 254nm.
Minamata Convention: a global treaty
Our computer modelling, lab testing and now
pilot scale testing of our technology versus the
legacy technology indicates that we will be on par
with operational efficiency [of mercury lamps] next
year.
Peter McNulty, Typhon Treatment
different direction.
“We saw lots of companies going after
small-scale as that sandbox filled up quick-
ly. We decided to see if we could build a
big reactor for municipal, the non-obvious
application,” explained CEO Peter McNulty.
“We started with a clean slate. Configura-
OCTOBER 2017
aimed at tackling the adverse effects of
mercury through bans on new mercury
mines, phasing out existing mines and
reducing the mercury content of a wide
range of products.
Open channel system: banks of UV lamps
submerged into a stream, either in hori-
zontal configuration or, much more com-
mon today, positioned in an inclined
array. More suitable for wastewater appli-
cations.
Ozonation: ozone (O3) reacts with water
in a series of reactions to produce a high-
ly reactive hydroxyl free radical, which
break down bacterial cell walls and
remove soluble oxygen compounds from
water.
Quartz sleeve: UV lamps are normally
housed in a quartz sleeve, which will
require cleaning every so often to remove
scale and other foulants.
UVC light: also known as germicidal
UV, UVC radiation, which comprises
wavelengths between 200-280nm, is
very effective at inactivating bacteria and
viruses, preventing microbes from repro-
ducing by altering the chemical bonds
within DNA.
UV transmittance (UVT): the percentage
of light that passes through a material.
When designing a disinfection system,
the transmittance should be constant
at all points in the feedwater. UVT is
defined at a wavelength of 254nm.
tion of the reactor is based on carefully con-
ceived optics to enable the use of individu-
ally weak UV sources which are collectively
very powerful.”
Typhon is currently piloting a full-scale
unit (250m3/hr) at a water treatment plant
owned by United Utilities (UU) since July
CHIEF TECHNOLOGY OFFICER
2017, and has a feasibility study going on
with Anglian Water. Many in the indus-
try think UVC LEDs are many years away
from being suitable for the municipal sec-
tor, but Typhon sees things differently.
“Our computer modelling, lab testing
and now pilot scale testing of our technol-
ogy versus the legacy technology indicates
that we will be on par with operational
efficiency [of mercury lamps] next year,”
enthused McNulty. It has sold another
prototype to UU which will run at 250m3/
hr - this will be an advanced oxidation pro-
cess coupled with chlorine. Typhon expects
market entry in 2018, and will initially
focus on drinking water.
UVC LED systems are unlikely to be
able to compete with conventional tech-
nologies on capital cost in the short-term,
so markets such as the UK, where utilities
take a total expenditure (totex) approach to
investment, are attractive for Typhon.
The company needs competition to
help bring down the costs of LEDs; if other
parties are buying LEDs in large volumes,
price points will become more competitive
with mercury lamps. Fortunately, it has one
in the shape of Japanese systems integra-
tor Metawater. Working with Nikkiso Co.,
Metawater claims it has developed a system
capable of treating 2,000m3/d of water with
a lamp life of approximately 45,000 hours
(standard output is 30mW), which is three
times the performance of conventional mer-
cury lamps. The introduction of the prod-
uct comes as the company estimates about
1,800 water treatment facilities in Japan are
contemplating installing UV disinfection to
counter cryptosporidium.
One driver behind why many expect
UV LEDs to gain market share is the reg-
ulatory pressure on mercury, which can
have adverse effects on public health and
the environment when released into the
atmosphere or soil. The Minamata Conven-
tion on Mercury, initiated by the United
Nations Environmental Programme and
ratified in August 2017, has led countries
to pledge to the phase-out of existing mer-
cury mines and phasing down of mercury
use in a number of products. However, the
matter of mercury in UV lamps for water
treatment is currently exempt from the reg-
ulation, and suppliers will not dwell on any
bans coming into force.
“We’re trying to save our custom-
ers money, and UV LEDs will save them
money. [Mercury-free] is not a selling
advantage for us,” McNulty told GWI. Crys-
tal IS’ Peterson suggested that it will be a
growing factor in where UV technology
comes from, but a major impact would be a
“longer process”. <
GWI / 49
CHIEF TECHNOLOGY OFFICER

FIRST REPORT

Making better sense of water networks

Determining the flows and pressures in water networks can be a labour-intensive exercise, coupled with the inability to regularly form a
complete picture of conditions. GWI takes a look at two new sensor products, one for properties and one for municipal applications.

WISP SUITE
SENSCO
Sensco, based in Austin, Texas, is a developer of a flow measurement and leak detec-
tion system for application in residential and commercial properties, and smart irri- Digital water
gation of farms, vineyards, and golf courses. It is a full stack IoT developer providing category:
an end-to-end solution which covers sensor hardware, connectivity and device manage-
ment, cloud-hosting, data processing and analytics, and user interfaces. The sensors Potential
are attached externally and non-invasively to the piping in customers’ homes. Leaks are applications:
detected when the sensors pick up vibrations and acoustic signals and relay these data
points to Sensco’s cloud servers via an RF-gateway located at every customer site.
Data is pre-processed and encrypted by its control and transmission hardware and soft- Potential
ware to minimise the payload before being sent to Sensco cloud servers over cellular 3G industries:
or LTE networks. The datasets are analysed by machine learning algorithms that are
able to localise leaks precisely. Users will receive an alert through a mobile app if leaks
are detected, advising them to fix the problem. The Sensco platform will also be able to
provide users with their water consumption statistics. Users will be charged a monthly USP: Non-intrusive, acute, and easy-to-install
or annual subscription fee for the service. The WISP Platform is built of four building sensors; full stack application from sensor to
blocks: WISP-SE (Sensor & Electronics); WISP-CT (Control & Transmission); WISP-CL connectivity to data-analytics and user interface.
(Cloud data & Analytics); and WISP-UI (User Dashboard &Interface).
Sensco, founded in 2015, is looking for partners with wide distribution channels to sell Funding stage: Pre-seed. Looking to raise more
its sensor system to individual households. These may include companies like Nest, capital to fund its business development activities.
the maker of smart home devices, or home security companies such as ADT. In addi-
tion, it is also considering selling the system to insurance companies since much of
their claims on home insurance are triggered by water-related damages. By encourag- Stage of development: Piloting phase.
ing clients to install flow and leak monitoring systems, insurance companies can offer Patenting process underway for several aspects
discounts on premiums to their customers of its integrated solution: self-calibrating sensors,
analytics, sensor design, data pre-processing and
To access this market segment Sensco will forge partnerships with building manage- error correction algorithms.
ment firms and water management consultants. Sensco will also consider white-label-
ling its solutions and striking revenue sharing deals with certain channel partners. A CEO: Thomas Dickey
R&D partnership has been struck with water consulting firm Banyan Water to develop Website: www.senscosolutions.com
solutions to monitor indoor water consumption.
Beyond urban areas, Sensco will also aim at selling to operators of vineyards, farms, Star rating:
and golf courses as its system is suitable for smart irrigation systems. It also intends
to approach manufacturers of white goods such as washing machines, to have their
sensors incorporated in the products. The company boasts of a highly adaptable sensor
design that can be further developed into a device for water quality monitoring.

THE EXPERTS
Prof. Zoran Kapelan Joseph Zuback Tom Pankratz
Professor of Water Systems President and founder of A Houston-based
Engineering at University Global Water Advisors, Inc., independent consultant and
of Exeter, with over 27 years (www.globalwateradvisors.com), the editor of GWI’s weekly
of research and consulting specialising in advanced water Water Desalination Report
experience in the water sector. and wastewater treatment. (www.desalination.com).

For full biographies of our experts, visit: http://tinyurl.com/cto-experts

50 / GWI OCTOBER 2017

 CHIEF TECHNOLOGY OFFICER

PIPERS
INGU SOLUTIONS
Calgary-based Ingu Solutions, founded in 2014, has developed floating golf ball-sized
smart sensors called Pipers which contain pressure, temperature and acoustic sensors Digital water
as well as a triaxial accelerometer, gyroscope and magnetometer in one device. The category:
devices have already found application oil & gas sector to detect leaks and defects in
pipelines, but the company is also focusing on applications in the water sector.
As the sensors float in the water they ‘listen’ for leaks, measure deposits and other Potential
diameter changes, and determine the flow dynamics in either a pipe or a mixing tank. applications:
The information is stored in an on-board processor with memory – enabling measure-
ments for 3 hours (expected to increase to 60 hours by the end of 2017) – and then
the data is analysed on proprietary software. The data can be returned to the customer
Potential
within as little as 72 hours.
industries:
Because the sensors are floating in a stream, they can reach previously inaccessible
areas in a pipeline and provide measurements for its whole length without any network USP: Combines numerous instruments in one
downtime. Many existing methods for measuring pipeline flow and integrity are based small device to be able to monitor flow, pressure,
on larger devices where the flow needs to be stopped. temperature and asset condition within a pipeline
As part of Ingu’s efforts to transfer the applicability of Pipers to the water industry, it or mixing tank.
has been developing a partnership with Dutch technology and process consultancy
Brightwork in order to introduce the devices to the water sector. Pilots are currently Funding stage: Seed. Currently trying to raise
being undertaken with utilities in Europe for testing in water and wastewater net- $500,000.
works, as well as mixing tanks. The devices could measure the amount of sedimenta-
tion in a sewer, or potential for clogging in mixing tanks. Ingu will also look to use the
Pipers to determine the effect of hurricanes on surface water. It has tested Pipers at Stage of development: Demonstration phase. Four
the University of Miami’s Air-Sea Interaction Salt Water Tank as a tool to study wave patent applications.
dynamics and storm surges in hurricane conditions.
CEO: John van Pol
Ingu approaches the market with a business model whereby the Pipers devices are
Website: www.ingu.co
offered for free, and customers are solely charged for the provided information on a
fixed-price, annual subscription model. It has applications for patents related to hard-
ware, software, methodology of the data analysis and application areas. Star rating:
In August 2017 the company was named to Chevron Technology Ventures’ Catalyst
Program, which accelerates the development of early-stage firms working on technol-
ogy for the oil & gas sector, as well as water technology and advanced materials. Future
developments that Ingu is working on include monitoring for corrosion in pipelines.
Ingu was spun out of INCAS3, a Dutch research institute focused on the development
and practical application of sensor systems.

ICON KEY
Digital categories: Applications: Industries:
Star rating system:
Sensors Water network Commercial Other
Unrated

Wastewater
Data analysis Municipal Interesting
network

Water treatment Oil & Gas Worth a detour

Wastewater Worth a journey

Microelectronics
treatment

OCTOBER 2017 GWI / 51

CHIEF TECHNOLOGY OFFICER

SMART WATER WATCH

i2O builds bridge into China with GDH Water

UK-based i2O has struck a partnership with Guangdong’s GDH Water to help market its smart solutions to the hungry Chinese market. It
is the latest stage in the company’s recent rapid development.

P
ressure monitoring and network
management solutions provider, i2O
is making inroads into the lucrative
Chinese market for smart water solutions
with a new partnership formed with GDH
Water, a subsidiary of listed state-owned
enterprise Guangdong Investment.
The strategic move signals a more
aggressive expansion into Asia-Pacific for
the British-based company whose exposure
hitherto has been limited to a few South-
east Asian countries, Hong Kong, and a
single customer in China (GDH Water has
been a client of i2O since 2010).
The alliance comes at a time when the
Chinese water utility market is undergo-
ing structural changes in ownership and
management. Under pressure to improve
quality and service standards but lack-
ing in experience and capital to modern-
ise operations, Chinese municipalities
are selling stakes in their utility systems
to third parties, for example state-owned
investment firms such as GDH Water or
private companies such as China Water
Affairs Group. In many cases, joint ven-
tures are formed with the municipality
keeping a minority stake whilst holding
the partner accountable for certain perfor-
mance standards.
“What GDH is trying to do is to make
a sort of templated approach to running
water companies to make that as efficient
as possible,” Joel Hagan, CEO of i2O said.
The deal comes after a period of signifi-
cant expansion for the company (see figure,
below), which has also involved the estab-
lishment in January 2017 of a global techni-
cal team with employees in the UK, Malay-
sia, Spain and Colombia to provide local
support across the world.
The initial agreement with GDH Water,
signed in May 2017, is for a two-year period
where i2O will supply its pressure logging
devices and data management and analyt-
ics software exclusively to GDH who will in
turn promote the products in China. GDH
will also build a cloud platform to adapt
i2O’s solutions to China.
“The reason we need a cloud platform
is because i2O’s servers are based in the
UK which makes access difficult due to the
Great Firewall of China,” Huang Jinghui,
engineer at GDH told GWI.
During the two-year period, i2O and
I think it’s well
understood that if
you want to tackle the
China market then you
need a local partner.
Joel Hagan, CEO, i2O
GDH will negotiate to form a joint venture
company which will continue to market
i2O solutions in China.
If all goes to plan, Hagan estimates
that the partnership will afford i2O access
to a market of about £24 million ($32 mil-
lion) for its logger systems when account-
ing only for the 28 water and wastewater
companies directly controlled by GDH
across four Chinese provinces. Success in
the wider Chinese market, which i2O esti-
mates at £870 million ($1.1 million), will
depend on the competitiveness of the joint
venture, although being locally registered
would allow it to bid for Chinese water
projects which are typically closed off to
foreign companies.
“I think it’s well understood that if you
want to tackle the China market then you
need a local partner. It’s relatively difficult
on your own to do that and so having a local
partner, particularly one that already owns
a large number of water companies, seems
ideal,” Hagan enthused. “They are very for-
ward thinking and very open. I was very
impressed by the work that they’ve already
done and they are hugely ambitious.”
“We started using i2O’s product in
2010. Since then we have also tried dozens
of different brands, but we chose i2O in the
end because we liked the user experience
of its solution,” Huang said.
A competitive edge
Where i2O’s solutions might stand out in
China is with its oNet and iNet products.
oNet is a system for automated monitor-
ing and control of pressure reducing valves
(PRVs). oNet allows operators to remotely
control and automatically actuate the opera-
tion of valves to increase or decrease pres-
sure according to programme set points. In
its most advanced form oNet can be run by
algorithms which make calculations based
on data and automate the operation of valves
completely in the absence of engineers.
iNet’s main function is to visualise
the data collected by loggers and to set
thresholds to trigger alarms for action. An
advanced version of iNet gives users the
ability to measure the performance of PRVs
in their networks.
At the lower end of the market, i2O’s
pressure loggers are also sold with its

FULL STEAM AHEAD

After its founding in 2005, i2O took several years developing and piloting its technology. After it secured £8 million from key investors in November 2014, the
company has significantly accelerated its progress, culminating in numerous contract wins in the last 18 months for its suite of oNet, dNet and iNet products.

Jan 2008: First system Nov 2014: secures £8m H1 2016: launches oNet and H2 2016: launches iNet with Aug 2017: ships 15,000th
installed at Severn Trent funding for expansion dNet products UK utility SWW as first client smart data logger

Mar 2010: lands major contract Feb 2015: wins major June 2016: doubles May 2017: signs two-year
in Selangor, Malaysia contract with Anglian manufacturing capacity agreement with GDH Water
Source: i2O

52 / GWI OCTOBER 2017

 CHIEF TECHNOLOGY OFFICER

dNet product, a simple data acquisition

program which measures pressure and flow GDH’S KEY WATER SUPPLY SUBSIDIARIES
on water networks. The dNet interface lets
users set up the loggers and configure them GDH Water is best known as the main bulk water supplier to Hong Kong, through subsidiary Guangdong
on values such as frequency of dial-up, the Yue Gang Water. However, in recent years it has aggressively grown its share of the water supply market
resolution of data to return, and location. by buying stakes in water utilities. It also has a substantial portfolio of municipal wastewater BOT contracts.
“For i2O’s dNet product, there are more
than hundreds of Chinese players in the Company Water supply Company Water supply
market, ranging from low price to high capacity (m³/d) capacity (m³/d)
price,” Huang explained. “But for i2O’s Guangdong Yue Gang Water 6,600,000 Yizheng Gangyi Water Supply 150,000
oNet and iNet products, currently no one Jianghe Gangwu Water 520,000 Gaoyou Gangyou Water 145,000
in China can develop that. Many Chinese (Changzhou) Supply
companies, especially valve manufacturers,
Guangzhou Nansha GDH Water 400,000 Baoying Yuehai Water 130,000
are trying to develop the technology.”
The partnership comes at an opportune Wuzhou Yuehai Jianghe Water 355,000 Hainan Danzhou Tap Water 100,000
time for GDH as demand for both basic Dongguan Qingxi Guangdong 290,000 Zhaoqing HZ GDH Water 90,000
and advanced smart water applications is Water
very high, according to Huang. Meizhou Guangdong Water 210,000 Suixi Guangdong Water 50,000
For the past three years, i2O’s revenues Source: GDH Water
have been split equally between Europe
(including the UK) and the Middle East, Its expansion strategy has mostly been solutions it currently does not have any ser-
Asia, and Latin America. With i2O’s expan- led by a mix of hard selling and strategic vice that helps with the design of the net-
sion across all markets—it is expecting to partnerships. Hagan says i2O is also aim- work.
make its debut in the USA with a pilot pro- ing to expand its portfolio of products and “We don’t have a design professional
ject targeted for the year-end, and it is try- services through acquisitions. services capability, and we don’t do any
ing to capture more business in the Middle “I see the next stage of growth as bring- of the interesting things that can be done
East—Hagan expects the balance to shift ing together a more complete solution set about assessing the relative merits of dif-
although he stopped short of making a pre- for water utilities,” he said, adding that ferent infrastructure investment projects,”
diction of how. while i2O provides network management he hinted. <

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CHIEF TECHNOLOGY OFFICER
CTO OUTLOOK
Taking membrane desal to the next level
Dr Boris Liberman has had a hand in several key innovations for membrane operation in desalination plants. GWI discovers where he
expects the technology to go next.
BORIS LIBERMAN
Chief Technology Officer, Membrane Technologies,
IDE Technologies
Dr Boris Liberman completed his BA and
MSc degrees at the Rostov University of
Civil Engineering, and received his doc-
toral degree from the Institute for Scientific
Research in Water Supply in Moscow. He
has worked at IDE since 1993. At the time he
joined, IDE was exclusively focused on ther-
mal desalination, and he introduced mem-
brane desalination technology.
54 / GWI
What market drivers have been most impor-
tant in shaping the direction of your tech-
nology strategy?
Twenty years ago, the question was who
can make desalination. Ten years ago, the
question was who can desalinate at low
cost. Nowadays, the question is who can
make environmentally-friendly desalina-
tion. This is the strongest market driver at
this time.
What are the key technology areas you are
looking at in your R&D activity and why?
We are developing different types of
“green” technologies: SWRO desalination
without chemicals, desalination of tertiary
wastewater with low chemical addition, and
keeping membranes continuously clean
without CIPs [Clean In Place] by fast and
frequent switching from reverse osmosis
to forward osmosis without stopping the
desalination process. The main goal is to
replace chemicals with physical methods.
This switch will impact seawater desalina-
tion at first, and then wastewater desalina-
tion in the future, due to the higher vari-
ability of wastewaters.
At this time, we have a 3-4% R&D rev-
enue expenditure. Increasing the R&D
expenditure percentage is an unavoidable
process. Knowledge is like a hill of snow in
the summer months – if you don’t build it
up fast and effectively nonstop, you’ll find
yourself in a puddle on the hot asphalt.
What gaps do you see in IDE’s water technol-
ogy portfolio that could be strengthened?
Develop philosophically new approaches
to existing technologies. For example, the
desalination community sees the market
heading towards mega-sized projects, and
the horizontal configuration of 16-inch RO
membranes – the industry standard – may
not be suitable anymore because of the big
footprint and excessive piping. This was a
problem when we came to design Soreq,
the world’s largest RO membrane plant. We
understood that if we took the same pres-
sure vessels and applied them in a vertical
configuration, the picture changes dramat-
ically – the area required is reduced by four
times. IDE is also continuing to expand
into new industrial sectors and developing
new applications for wastewater desalina-
tion in the municipal sector.
Would you strengthen these through in-
house R&D or through acquisition?
I don’t have a positive experience with
knowledge acquisition. I believe in in-
house R&D, where the whole company
is involved in the R&D process. Any com-
pany’s workload has a waveform pattern,
with ups and downs, and IDE is no excep-
tion. The slope periods are filled with R&D
activity. We have a small R&D group that
prepares R&D plans for the engineering
departments to work on when there is a
slowdown in project activity.
SWITCHING IT UP
The vertical membrane configuration in IDE’s Soreq
plant.
How is the theme of digital water impacting
how desalination plants are operated?
We invest a lot of effort in optimization
software for mega-sized RO desalination
plants. IDE’s well-known pressure-centre
design could not have been achieved with-
out seven layers of mathematical models,
taking into account the plant’s hydraulic,
chemical, capital and operational aspects.
We start any project by studying satellite
photos up to twenty years back, to assess
water quality, including turbidity, chloro-
phyll. We can draw data from these photos
from seeing how the waters change every
year.
Where are you looking for new ideas for
innovation outside of IDE (i.e. partnerships
with universities, in other industrial sectors
etc.)?
The main source of new ideas are cli-
OCTOBER 2017

LARGEST IN THE WORLD
Soreq remains the largest reverse osmosis desalination plant in the world since its 2013 commissioning. IDE is expanding its expertise for future desal mega projects.
ents. We thoroughly study all the client’s
requirements and wishes. For example, for
clients who require brackish water desali-
nation, the current RO process is not ideal
because the concentrated brine cannot be
disposed of easily if there is no easy access
to the sea. To address this, we developed
a new technology to help minimise the
amount of brine discharge. We learn how
society evolves. The corridors of conferenc-
es are filled with great ideas.
Which of the breakthroughs in membrane
technology that you’ve worked on do you
feel was the most important, and why?
The current RO technology, which has
been around for about half a century, is
based on a time-invariant cross-flow filter-
ing, stable flow, and stable concentration.
This stability causes scaling and fouling.
The new way, on which we are working
now is the Pulse-Flow operation, which
is based on changing concentrations and
velocities in RO membranes. This new
technology takes advantage of the slow
kinetics of crystal formation versus a short
stay in extremely high concentrations.
Pulse-Flow may significantly increase
recovery without scaling and fouling, and
diminishes the brine discharge amount.
We are running several pilots for this new
OCTOBER 2017
CHIEF TECHNOLOGY OFFICER
technology with commercial scale mem- sector in the next ten years? What is ripe for
branes in the semiconductor industry, at disruption?
Hadera desalination plant in Israel, and we We have to learn and understand more
are also making arrangements to install it about water clusters and related to it, water
in Texas. memory. Some people think water clusters
are a source of information about the con-
Where do you think the low-hanging fruit dition of water in the past. These features
for future innovation in membrane technol- may affect wastewater treatment for direct
ogies lies? potable reuse. Deciphering, formation and
Replacing the chemical addition with phys- erasing water memory is a big unknown
ical processes, and benefiting from deeper that requires a great deal of research.
knowledge of the kinetics of scale forma-
tion, that increase the recovery of the RO Can you give an example of a technology
train operation, and diminish power con- you have worked on which has showed ini-
sumption. tial promise but then struggled in commer-
cialisation phase? What lessons did you take
Can thermal desalination continue to be a away from this?
valuable desal technology? What improve- I worked very hard on pressure retarded
ments (if any) does it need to make it more osmosis, developed several patented tech-
cost-effective? nologies, but in the commercialisation
Thermal desalination is and will be a valu- phase we did not succeed, because the cur-
able tool in different technological areas rent membranes are not ripe enough to
especially where waste heat is available. make this technology cost-effective. The
Another benefit is that osmotic pressure efficiency of the process is not high enough
is not a limiting factor for thermal desali- because the membranes have their own
nation. These two aspects guarantee that parasitic backpressure. I hope that, when
thermal desalination will have a respect- graphene and nanoparticle membranes
able market niche. become available, the parasitic pressure
drop will be diminished, and this technolo-
What do you think will be the game chang- gy will be brought back to be commercially
ing technologies in other areas of the water successful. <
GWI / 55
CHIEF TECHNOLOGY OFFICER
END-USER PERSPECTIVES
ZDHC Programme takes first steps towards
cleaning up textile effluent in China
The Zero Discharge of Hazardous Chemicals programme has completed its first year of trialling its wastewater guidelines for the textile
industry in China. The country is only the first step in a longer game.
A
band of progressive textile millers
and materials processers in China are
one year into a three-step programme
to comply with a stringent set of voluntary
wastewater treatment standards. They form
part of a wider initiative to set up common
environmental standards for the interna-
tional footwear and apparel sector, current-
ly promoted by more than 20 global brands.
In Shanghai on 10 October, the Zero
Discharge of Hazardous Chemicals
(ZDHC) Foundation and the Chinese
National Textile and Apparel Council
(CNTAC) held their fifth annual gathering.
The conference was the first held under the
label of ‘an implementation experience’,
where ZDHC presented the tools that it
had developed to assist the textile industry
in rising to the challenge of stripping out
more than 200 chemicals from the produc-
tion process and strengthening their efflu-
ent discharge standards.
The Amsterdam-based ZDHC Founda-
tion grew out of an initiative by six sports-
wear and fashion brands – H&M, Adidas,
Nike, C&A, Puma and Li-Ning – who
came together in 2011 to develop a road-
map towards eliminating the discharge
of hazardous chemicals used in the textile
production process. The Foundation now
fronts a programme that includes coop-
eration from 23 signatory brands, 33 value
chain affiliates and 14 associates. Five more
organisations joined the Foundation on 18
October as value chain affiliates, taking the
number of contributors to over 70.
The first meat to the programme came
in 2014 when a Manufacturing Restricted
Substances List (MRSL) was published,
which outlined numerous chemical sub-
stances to be subjected to a ban on inten-
tional use in “facilities that process materi-
als used in the production of apparel and
footwear.” It establishes acceptable con-
centration limits of substances involved in
chemical formulations.
“Having set this list, looking at input
controls, as a backbone of the programme,
the next part of the programme was to look
at output controls. Wastewater was always
on the highest priority list,” explained
56 / GWI
GOING GREEN
Frank Michel is at the head of a green initiative
whose membership is flourishing.
Frank Michel, executive director of the
ZDHC Foundation.
In November 2016, the ZDHC released
a set of wastewater guidelines to act as a
harmonised group of wastewater param-
eter limits and test methods as a counter
to the numerous guidelines published by
different brands, which often varied consid-
erably and created confusion for the manu-
facturers further down the supply chain.
One set of reporting limits for levels of
MRSL chemicals found in the wastewater
has been established (see small table, oppo-
site), and these are expected to be fully met
by suppliers by 1st January 2020. Mean-
while, three distinct steps have been speci-
fied for the more conventional parameters
(see large table, opposite). The development
of the guidelines was assisted by personnel
from engineering firms Carollo Engineers
and MWH Global, as well as institutions
such as the IFC.
“China for us is the implementation
pilot,” said Michel. “We used the wastewa-
ter guidelines in the drafted version [from
July 2016] to pilot with several [textile] mills
in China, and we have guiding toolsets that
are helping them with implementation.”
One of the lessons learned by the
ZDHC during the six month piloting
period was that manufacturers responded
better to receiving a list of chemicals that
they could use in their process, rather than
those they could not.
“We reacted to this by releasing our
chemical module of the ZDHC gateway.
This is like the Amazon of all chemical
products in the textile industry, and shows
the level of conformance to ZDHC guide-
lines for each chemical,” said Michel.
A similar concept is being imagined
for the wastewater guidelines. The issue
of finding laboratories that are recognised
by the ZDHC to test compliance with the
wastewater guidelines is in the process
of being solved: ZDHC has now accepted
about 70 laboratories from around the
globe to its programme, and the ongoing
demand to get these credentials is “huge”,
according to Michel. The issue of easily ver-
ifying that a wastewater report was under-
taken by an accepted laboratory has since
come to the fore. ZDHC decided to try to
cut out some of the legwork required to
ensure a report was compiled by a ZDHC-
accredited laboratory by creating a large
online repository displaying values from
wastewater reports in an easily accessible
digital format.
“All the data that is in there can be veri-
fied immediately, not only by potential cus-
tomers but also existing customers of the
manufacturing facility,” said Michel.
During the Shanghai conference the
ZDHC received indications of how brands
were adopting the wastewater guidelines
into their sourcing policy, as well as feed-
back from pilot textile mills regarding their
wastewater implementation efforts.
“What struck me at the event was the
ambition from the mills to adopt the pro-
gramme,” recalled Michel. “One head of
a factory told me that by implementing
ZDHC guidelines they are actually ahead
of legislation, but they also go beyond
multiple customer requirements – saving
money by only having to maintain a set of
chemicals that are meeting the MRSL.”
China was a logical choice for ZDHC
OCTOBER 2017
 CHIEF TECHNOLOGY OFFICER

Going forward, Michel has identified know how to use it.”

some key areas for development within the Michel also told GWI that discus-
SUBSTANCE ABUSE ZDHC programme, notably around the sions had been opened with a UK univer-
The reporting limits for hazardous chemicals concept of better outreach to production sity about developing real-time sensors for
could prove a challenge for some manufacturers. facilities and the provision of training. detecting hazardous chemicals contained in
“We’ve learnt that there is a huge the MRSL. ZDHC is already working with
demand in educating the facilities in the the University of Stuttgart on defining the
Substance group Reporting operation of wastewater treatment plants,” advisory limits in sludge produced during
limit (μg/L) Michel explained. “Those are the findings the wastewater treatment process, which
Alkylphenols 5 we need to accommodate with collaboration are expected to be “reliable and ambitious.”
Chlorobenzenes/ 0.2 partners that are capable of scaling up and Updated wastewater guidelines including
Chlorotoluenes developing education. Many of the facilities the new sludge values are slated to be pub-
Chlorophenols 0.5 might have good hardware but they don’t lished by the end of January 2018. <
Dyes – (Forming Restricted 0.1
Amines)
Dyes – Carcinogenic 500 HOW LOW CAN YOU GO?
Dyes – Disperse 50 Meeting the foundational and progressive limits will be a bigger challenge for some more than others.
Flame Retardants 5 Attaining the aspirational limits however, will require a big step-up in wastewater management techniques.
Glycols 50
Parameter (mg/L) Foundational1 Progressive Aspirational
Halogenated Solvents 1
Organotin Compounds 0.01 TSS 50 15 5
PFOS/PFOA 0.01 COD 150 80 40
Fluorotelomer alcohols 1 Total-N 20 10 1
Ortho-phthalates 10 pH 6-9
Polycyclic Aromatic 1 BOD 30 15 5
Hydrocarbons Ammonium-N 10 1 0.5
Volatile Organic Compounds 1 Total-P 3 0.5 0.1
Source: ZDHC Oil & Grease 10 2 0.5
Phenol 0.5 0.01 0.001
to choose its pilot textile mills, given that Coliform (bacteria/100 ml) 400 100 25
it is the largest producer of clothing in the Colour [m-1] (436nm; 525; 7; 5; 3 5; 3; 2 2; 1; 1
world, with textile and clothing exports 620nm)
totalling nearly $275 billion in 2015, accord- Anions
ing to the World Bank. This figure is over
Cyanide 0.2 0.1 0.05
six times higher than that of its closest
rival India. However, ZDHC has its eyes on Sulphide 0.5 0.05 0.01
expanding its influence across the world, Sulphite
with South America one of the important Metals
markets in its sights, particularly for find- Antimony 0.1 0.05 0.01
ing laboratories able to test for the chemi-
Chromium (total) 0.2 0.1 0.05
cals outlined in the wastewater guidelines.
India will also be a focus in 2018. Cobalt 0.05 0.02 0.01
“China is the biggest market for proof Copper 1 0.5 0.25
of concept. If we can scale there, we can Nickel 0.2 0.1 0.05
scale everywhere,” Michel told GWI. Silver 0.1 0.05 0.005
ZDHC is boosted by support from the Chi-
Zinc 5 1 0.5
nese Ministry of Environmental Protection,
which “endorses” the programme. “We Arsenic 0.05 0.01 0.005
have good connections to the government Cadmium 0.1 0.05 0.01
and that helps a lot to scale the implemen- Chromium (VI) 0.05 0.005 0.001
tation,” he added. Lead 0.1 0.05 0.01
Michel hopes the event will go from
Mercury 0.01 0.005 0.001
strength to strength. Although it was the
fifth conference jointly held by ZDHC and Source: ZDHC
CNTAC, it was the first to be held separate-
ly from CNTAC’s annual corporate social 1
Foundational limits are already expected to be met by suppliers. Progressive limits apply to any facility starting production
responsibility conference. Attendance was after 1 January 2018, and any currently operating facility with a new treatment system that will be operational after that date.
reportedly about 550 people, but Michel’s Aspirational limits should be met by 1 January 2020. Testing for both conventional parameters and the MRSL parameters is
feelings are that “the conference is good for required twice a year, with no less than three months separating testing and reporting results.
1,000 to 1,500 people.”

OCTOBER 2017 GWI / 57

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PROJECT TRACKER
US water P3s – without the hype; New Zealand’s new model alliance; Cape Town gets pragmatic on
desalination pipeline; Japanese concessions gain steam; India’s hybrid breeding programme; New
plants for old in Abu Dhabi; all the latest project news from around the world.
MISSING: EUPHORIA
l A trio of developments in
the US this month helped to
restore faith in the theory that
privately financed P3s are not a
dying breed in the water sector
– despite hints that the Trump
administration is backing
away from providing explicit
federal support for such pro-
jects. A request for information
sent out by the City of Corpus
Christi (TX) relating to poten-
tial wastewater P3s was wel-
comed by a market starved of
new opportunities, while the
WHAT’S HOT THIS MONTH?
Ten water and wastewater projects to watch in GWI’s project tracker this month.
No. Name
1 Tseung Kwan O
2 Rabigh phase 3
3 Cape Town SWRO
4 Canoas WWTP
5 Pure Water San Diego Program, CA
6 Porto Alegre PPP
7 Miyagi concession
8 Wellington Water O&M alliance
9 Wadi Dayqah IWP
10 Corpus Christi wastewater P3s
OCTOBER 2017
decision by the Santa Clara Val-
ley Water District to go down
the P3 route for a major $600
million wastewater treatment
and reuse upgrade provided
further corroboration that
water agencies are embrac-
ing the concept in a meaning-
ful way. The icing on the cake
was the US Bureau of Recla-
mation’s gushy statement on
2nd October saying that it was
“highly motivated and encour-
aged to further explore the
potential for leveraging P3 to
the benefit of taxpayers and
Reclamation stakeholders”.
Description
New 135,000m³/d SWRO
600,000m³/d privately financed
SWRO plant
350,000m³/d of SWRO capacity
New 1,209,600m³/d WWTP
Multiple reuse upgrades
Wastewater concession
Water and wastewater full-service
concession
Water and wastewater alliance
contract
Surface water treatment plant
One or more wastewater P3s
PROJECT TRACKER
infrastructure, as well as tra-
ditional water and wastewater
treatment plants – it also feels
much more solid, without any
of the overblown hype that
accompanied previous waves of
P3 euphoria (see story p14).
KEEWEE PEETHREES
The revelation came after the
Bureau had digested the feed- l Authorities in New Zea-
back it received in response to land are also reinventing the
its own RFI, sent out earlier way they interact with the pri-
this summer, seeking feedback vate sector in terms of water
on the applicability of a range service provision. In the wake
of P3 structures to a variety of of last month’s tender for a
upcoming projects. privately financed wastewater
treatment upgrade at Rotorua
l If there is one thing that Lakes, attention turned this
the latest developments under- month to the capital city, where
score, it is that the pipeline Wellington Water is propos-
of prospective water P3s in ing to transition its operations
the US has not only become and maintenance contracts for
much broader – encompass- water, wastewater and storm-
ing stormwater management, water networks to a new ten-
biosolids, and conveyance year performance-based
Update
The client is in the process of obtaining approval to initiate a two-month pre-
qualification process at some point between the end of October 2017 and
mid-November 2017.
WEC has issued a request for qualifications from developer teams. The
deadline for submissions is 30 October 2017.
On 13 October 2017, the DBO tender for SWRO desalination plants at Hout
Bay and Dido Valley was reissued, with a new contract period of 125 weeks.
Proposals are due by 27 October 2017.
The financing package for the project received a further boost in early October
2017, when CAR (Corporación Autónoma Regional de Cundinamarca)
announced COP1.5 trillion ($508 million) of funding for the initiative. The
tender process is expected to get underway in January 2018.
Proposals are due on 24 October 2017 for the contract to provide as-needed
construction management services relating to the conveyance element of the
project. Meanwhile, a consultant has been selected for the contract to provide
construction management services for the treatment element of the project.
The public consultation period runs until 25 October 2017. The dedicated
project website can be found here: www.parceriacorsan.com.br
The feasibility study and due diligence process began earlier in 2017, and
the bidding process is planned to run from 2018 to 2019, in time for the
20-year concession to begin in 2020.
Interested parties are required to register their interest in the alliance
contract by 17 November 2017. A shortlist of at least two companies will then
be assembled by 11 December 2017, with an RFP to follow in May 2018.
OPWP has issued a request for proposals from potential financial advisors for
the project. The deadline for submissions falls on 30 October 2017.
A request for information has been released, and RFI responses are due in by
10 November 2017.
GWI / 59
PROJECT TRACKER
alliance. In April, Horow-
henua District became the
first in New Zealand to move
over to a “Three Waters” alli-
ance, covering drinking water,
wastewater and stormwater
assets. Although the Welling-
ton alliance will exclude the
operation of treatment plants,
the current outsourced O&M
contracts with Citycare, Veolia
and Suez are expected to be
bundled into a separate 10-year
O&M contract from 2020.
CAPE CRUSADERS
l It seems that the acceler-
ated desalination procurement
programme undertaken by
the city of Cape Town in South
Africa has already encoun-
tered trouble, as the tender for
small-scale plants in Hout Bay
and Dido Bay was reissued this
month, offering contractors a
longer timeframe in which to
deliver the infrastructure. The
fact that the city was so quick
to learn from its mistakes is
not only indicative of the seri-
THE GWI PROJECT TRACKER – OCTOBER 2017
All the project updates generated in the last month in the key markets tracked by Global Water Intelligence.
Type Country
Brazil
Chile
Chile
Chile
Chile
Hong Kong
India
India
Iran
Mexico
Mexico
Mexico
Oman
Peru
60 / GWI
ousness of local drought condi-
tions, but shows a commend-
ably flexible approach to get-
ting things done. Meanwhile,
there was no let-up in terms
of procurement activity for the
remainder of the city’s desali-
nation programme, with ten-
ders being released this month
for a new plant at Harmony
Park, and for a land-based
facility at a location to be pro-
posed by the winning contrac-
tor.
SUN RISES ON JAPAN
l Japan could yet be the
next happy hunting-ground
for international private water
companies looking to broaden
their horizons in the context
of the developed world. Follow-
ing a market sounding process
in August, the government
of Miyagi Prefecture (popula-
tion 2.3 million) released fur-
ther details on the scope of
a planned 20-year water and
wastewater concession, con-
firming that the bidding pro-
DESALINATION PROJECTS
Project name
Fortaleza SWRO
Aguas Chañar SWRO
Dominga RO
Minera Spence SWRO
Tocopilla (Aguas de Antofagasta)
Tseung Kwan O
Chennai Nemmeli II
Thane City I
PEISEZ desalination and power plant
Empalme & Guayamas desal plant
Rosarito (NSC Agua)
San Quintin, Baja California
Duqm SEZ
Shougang Marcona desal plant
cess is likely to run from 2018
to 2019.
l The eponymous capital city
of Oita Prefecture, meanwhile,
has hired a consultant to help
it investigate the feasibility of
a wastewater concession which
would serve 500,000 people.
BREEDING HYBRIDS
l The Indian government
has unveiled a further suite
of hybrid annuity projects
designed to help clean up the
River Ganga. With the scheme
gathering pace and consultants
already in place on a number
of projects, the key question
of how to package new and
existing wastewater assets into
bankable bundles will go a
long way towards determining
the overall success of the pro-
gramme.
NEW PLANTS FOR OLD
l The news that Abu Dhabi
has slashed its water demand
Build
Description
86,400m³/d desal plant
38,880m³/d SWRO
42,840m³/d RO plant
69,120m³/d SWRO, expandable to
138,240m³/d
17,280m³/d SWRO plant
New 135,000m³/d SWRO
New 150,000m³/d SWRO
200,000m³/d SWRO plant
750,000m³/d of desalination capacity
17,280m³/d seawater desal plant
378,500m³/d SWRO
21,600m³/d desal plant
330MW & 38,641m³/d power and water
plant
Desal plant to serve iron ore mine
forecast to a new low would
ordinarily have marked a black
day for desalination plant sup-
pliers. Instead, the opportu-
nity to replace ageing, energy-
intensive thermal desal plants
nearing the end of their useful
lives with more efficient mem-
brane facilities has got develop-
ers salivating. Three advisory
teams are waiting for confirma-
tion of an appointment relat-
ing to the next major plant in
the emirate, which is expected
to have a capacity in the region
of 60-100MIGD (272,760-
454,600m3/d). While the choice
of technology has not yet been
confirmed, it is likely that it
will be Abu Dhabi’s first mem-
brane-only desalination facility
(see story p22).
l Watch out for our in-depth
analysis of the Chinese water
PPP market next month. In
the meantime, for all the lat-
est updates from around the
world, visit the Project Track-
er section of our website:
http://tinyurl.com/gwi-tracker. <
Operate Finance
Status
Two EoIs received
Contract awarded
EIS rejection appeal in preparation
Contract awarded
Engineering design tender underway
RFQ expected in October or November
2017
DBO bids under evaluation
Bids due in November 2017
SoQs due in October 2017
Bids due in November 2017
Financial close awaited
Financial close awaited
Award due in Q1 2018
Conceptual stage
OCTOBER 2017
 PROJECT TRACKER

Type Country Project name Description Status

Qatar Facility E IWPP Independent water and power project SoQs due in October 2017
Saudi Arabia Rabigh phase 3 600,000m³/d privately financed SWRO plant SoQs due in October 2017
Saudi Arabia Ras Al-Khair privatisation Sale of 1,025,000m³/d & 2,400MW water Advisors appointed
and power facility
Singapore Jurong Island desalination New desalination plant Contract awarded
South Africa Cape Town SWRO 350,000m³/d of SWRO capacity Bids due in October 2017
UAE New Abu Dhabi IWP New 60-100MIGD SWRO plant Consultancy bids submitted
United States Bonsall Basin Desalter, CA 13,626m³/d groundwater desalter Conceptual stage
United States Doheny Desalination Project, CA 56,775m³/d SWRO plant Draft EIR due in November 2017
United States Huntington Beach SWRO, CA 189,250m³/d SWRO In permitting phase
United States Polk County BWRO plants, FL Two BWRO facilities Feasibility stage
United States Scottsdale RO, AZ 11,355m³/d RO plant Tender likely in spring 2018

REUSE PROJECTS
Argentina Salta Waste-to-Energy PPP Biogas generation Feasibility study underway
Australia Beenyup Groundwater Replenishment, 38,356m³/d RO plant expansion Contract awarded
Phase 2
Bahrain Tubli WWTP Expand WWTP to 400,000m³/d Three financial bids opened
Colombia Canoas WWTP New 1,209,600m³/d wastewater treatment Funding package negotiated
plant

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OCTOBER 2017 GWI / 61

PROJECT TRACKER

Type Country Project name Description Status

India Greater Visakhapatnam reuse 70,000m³/d of WWTP infrastructure Bids due in October 2017
India Kota effluent treatment plant 14,000m³/d effluent treatment plant Consultancy bids under evaluation
India Mathura-Vrindavan STPs 100,000m³/d of sewage treatment capacity Tender possible in 2018
Spain Valle de Güímar WWTP, Tenerife 7,000m³/d WWTP with tertiary treatment Contract awarded
United States Diablo Satellite WRF, CA Water reclamation plant Bidding process set to be relaunched
United States LA Advanced Water Purification Facility, CA 132,475m³/d MF/RO plant Pilot testing underway
United States Miami-Dade reuse, FL Multiple WWTP upgrades Land acquisition in progress
United States Morro Bay WWTP, CA New 4,542m³/d wastewater treatment plant Site selection finalised
United States Pure Water Project Las Virgenes-Triunfo, CA 22,710m³/d advanced water treatment plant Procurement decision awaited for demo
United States Pure Water San Diego Program, CA Multiple reuse upgrades Tenders underway
United States Silicon Valley AWPC expansion, CA 90,840m³/d MF/RO/UV expansion P3 route preferred

UTILITY PROJECTS
Brazil Porto Alegre PPP Wastewater concession Conceptual stage
Canada Bancroft O&M, ON O&M of water and wastewater assets Preferred bidder identified
Canada North Shore conveyance project, BC Sewage conveyance infrastructure Bids due in February 2018
Colombia Santa Marta concession Aqueduct plus WWTP Tender likely in February 2018
India New Delhi 24X7 water supply 24x7 water supply Bids due in October 2017
India Visakhapatnam 24x7 water supply NRW reduction and 24x7 water supply Bids due in October 2017
Japan Miyagi concession Water and wastewater full-service concession Conceptual stage
Japan Oita wastewater concession Wastewater utility concession Pre-feasibility study underway
New Zealand Wellington Water O&M alliance Water and wastewater alliance contract EoIs due in November 2017
Peru Municipal management contracts (ex-Lima) Municipal water management contracts Tenders expected in Q4 2017
United States Agua SUD O&M, TX O&M of water and wastewater assets Contract negotiations underway
United States Ashland O&M, PA O&M of water treatment plant Two bids under evaluation
United States Borough of Colwyn sale, PA Sale of wastewater collection system Bids due in November 2017
United States Brookings O&M, OR O&M of water and wastewater assets RFP likely in Q4 2017
United States Bureau of Reclamation P3s Multi-state P3s Positive feedback received
United States Chester system sale, PA Potential sale of water assets Deal voted down
United States Fisher privatisation, IL Sale of water and wastewater systems Final approval awaited
United States Fort Buchanan O&M, PR O&M of water & wastewater systems Bids due in December 2017
United States Fort Riley O&M, KS O&M of electric, gas, water and wastewater Contract awarded
infrastructure
United States Fulshear O&M renewal (2017), TX O&M of water & wastewater systems SoQs due in October 2017
United States Garden City O&M ,GA O&M of water and wastewater assets Bids due in November 2017
United States Gresham O&M, OR O&M of energy-neutral wastewater treatment Bids due in November 2017
plant
United States JB Myer-Henderson Hall privatisation O&M of water & wastewater systems Bide due in January 2018
United States Mahoning system sale, PA Sale of water and wastewater assets Two bids under evaluation
United States Medfield O&M, MA O&M of wastewater treatment plant Bids due in October 2017
United States New Hartford system sale, CT Sale of water and/or sewer systems RFP approved
United States RUSA O&M, OR O&M of wastewater treatment plant Extension negotiated with incumbent
United States Sandy O&M, OR O&M of water and wastewater assets Contract awarded
United States Sheridan system sale, IN Sale of water and wastewater systems IURC approval awaited

62 / GWI OCTOBER 2017

 PROJECT TRACKER

Type Country Project name Description Status

United States Vernon Township O&M, NJ O&M of sanitary sewer system Bids due in December 2017
United States Wright-Patterson AFB Utility Privatisation Privatisation of water and waste services Contract awarded
United States Yanceyville O&M, NC O&M of water and wastewater assets Contract negotiations underway
United States Yuma Proving Ground privatisation, AZ Military privatisation Solicitation awaited

WATER TREATMENT PLANTS

India Mumbai WTP O&M O&M of 900,000m³/d water treatment plant Bids due in November 2017
India Nuapada water supply project Five water supply schemes Bids due in October 2017
Indonesia Karian-Serpong water conveyance 518,400m³/d WTP + pipelines Feasibility study underway
Japan Kobe Uegahara WTP Water treatment plant renovation Consultancy tender underway
Oman Wadi Dayqah IWP Surface water treatment plant Technical and financial advisory bids due
in October 2017
Panama La Arenosa WTP 227,100m³/d WTP Bids due in November 2017
United States Chaparral WTP pre-treatment, AZ 68,130m³/d DAF pre-treatment system DAF chosen over ceramic membranes
United States Goodyear WTP, AZ New water treatment plant SoQs due in November 2017
United States Mountain Home AFB, ID 22,710m³/d water treatment plant Four SoQs under evaluation

WASTEWATER TREATMENT PLANTS

China Liuyang WWTPs BOT/TOT of 102,600m³/d of WWTP capacity Contract awarded

Helping you
navigate the
water business

STRATEGY COMMERCIALIZATION MERGERS & ACQUISITIONS PPP ADVISORY DIGITAL

OCTOBER 2017 GWI / 63

PROJECT TRACKER

Type Country Project name Description Status

China Wuzhou third WWTP 25,000m³/d wastewater treatment plant Contract awarded
India Ahmedabad STP O&M O&M of 180,000m³/d STP Bids due in October 2017
India Ahmedabad STP, New Pirana 155,000m³/d municipal wastewater treat- Bids due in October 2017
ment plant
India Anand STP 53,000m³/d across three sewage treatment Final award approval pending
plants
India Andhra Pradesh STP packages (1) 70,000m³/d of sewage treatment capacity Bids due in October 2017
India Andhra Pradesh STP packages (2) 42,000m³/d of sewage treatment capacity Bids due in October 2017
India Bally STP 40,000m³/d sewage treatment plant Conceptual stage
India Bhagalpur STP 65,000m³/d sewage treatment plant Conceptual stage
India Bharatpur STP 8,000m³/d sewage treatment plant Bids due in October 2017
India Bhubaneswar District IV STP 8,000m³/d sewage treatment plant Bids due in October 2017
India Bihar STPs 27,000m³/d of sewage treatment capacity Bids due in November 2017
India Farrukabad STPs 33,000m³/d of STP capacity Conceptual stage
India Haridwar District STPs Two new STPs and two tertiary upgrades of Financial close awaited
existing plants
India Jabalpur STPs 101,000m³/d of sewage treatment capacity Bid evaluation underway
India Kadapa STP 20,000m³/d sewage treatment plant Bids due in October 2017
India Kadechur CETP 5,000m³/d industrial CETP Consultancy bids due in Nov 2017
India Kakinada Smart City Water and wastewater infrastructure Bids due in October 2017
India Kanpur STP 12,500m³/d sewage treatment plant Bids due in October 2017
India Lakkad Ghat, Rishikesh STP 26,000m³/d STP Bids due in October 2017
India Lucknow STP O&M O&M of 345,000m³/d STP Bids due in October 2017
India Multiple STPs, Gujarat 128,250m³/d of STP capacity Final award approval pending
India Multiple STPs, Indore 67,000m³/d of sewage treatment capacity Four bids under evaluation
India Nashik STP 32,000m³/d STP Bids due in October 2017
India Pahari, Patna City STP 60,000m³/d STP Bids due in November 2017
India Ponneri STP 6,520m³/d sewage treatment plant Bids due in October 2017
India Porbandar STPs Two sewage treatment plants Bokhira contract re-tendered
India River Ganga drain bioremediation River clean-up operation Demo contracts awarded
India Tehri Gharwal district STPs 12,500m³/d of sewage treatment capacity Bids due in October 2017
India Tumakuru Smart City STP 5,000m³/d sewage treatment plant Bids due in October 2017
Japan Osaka Ebie WWTP Expansion of 176,000m³/d wastewater treat- Contract awarded
ment plant
Kuwait Umm Al-Hayman WWTP 500,000m³/d WWTP Two bids submitted
Mongolia Darkhan WWTP 24,000m³/d WWTP Low bidder revealed
Mongolia Ulaanbaatar central WWTP Upgrade / replacement of centralised waste- Now unlikely as a PPP
water treatment plant
New Zealand Wellington Water WWTP O&M O&M of wastewater treatment assets Conceptual stage
Panama Burunga, Panamá Oeste 86,400m³/d WWTP Winner named
Peru Barranca WWTP, Lima Wastewater treatment plant Conceptual stage
Peru Cañete WWTP, Lima Wastewater treatment plant Conceptual stage
Peru Chiclayo WWTP, Lambayeque Wastewater treatment plant Conceptual stage
Peru Chimbote WWTP New WWTP and network Conceptual stage
Peru Chincha WWTP, Ica Wastewater treatment plant Conceptual stage

64 / GWI OCTOBER 2017

 PROJECT TRACKER

Type Country Project name Description Status

Peru Cusco WWTP, Cusco Wastewater treatment plant Conceptual stage
Peru Huánuco WWTP New wastewater treatment plant and net- Conceptual stage
work
Peru Moyobamba WWTP Wastewater improvements Conceptual stage
Peru Sullana WWTP New wastewater treatment plant and net- Conceptual stage
work
Peru Tacna WWTP New wastewater treatment plant and net- Conceptual stage
work
Spain Almenara WWTP O&M O&M of 1,700m³/d wastewater treatment Contract awarded
plant
Spain Aspe, Alicante O&M of tertiary wastewater treatment plant Bids due in November 2017
Spain Benicarló WWTP, Castellón O&M of 12,000m³/d wastewater treatment Twelve bids submitted
plant
Spain Guadarrama Basin WWTPs O&M of 13 wastewater treatment plants Bids due in November 2017
Spain La China WWTP O&M renewal O&M of 285,000m³/d wastewater treatment Bids due in November 2017
plant
Spain Sagunto-Canet d'en Berenguer O&M O&M of tertiary wastewater treatment plant Bids due in November 2017
Spain Sistema Rio Segura 1 O&M O&M of three wastewater treatment plant Award awaited
Sri Lanka Wellawatte WWTP 50,000m³/d wastewater treatment plant Bids due in November 2017
United States Corpus Christi wastewater P3s One or more wastewater P3s RFI responses due in November 2017

NEW MARKET REPORT

DESALINATION &
WATER REUSE
Scarcity solutions for cities and industry

Demand for desalination and reuse is set to grow by up to 10% in

2017, as municipalities and industries are diversifying their water
supply options due to issues such as water scarcity to meet their
unique water challenges. This is driving a resurgence in activity from
San Diego to Singapore, and the sector is turning to alternative water
treatment solutions and conservation strategies such as reuse.

Desalination & Water Reuse is the only report on this expanding

but fragmented market showing the specific regional hotspots,
trends, market size forecasts and in-depth analysis of the emerging
technologies and their place in the market. In addition, the report
will define and compare desalination and reuse, their differing
applications and why utilities and industries would choose to invest
in these options so you can understand where there is the greatest
demand for your expertise.

The report will cover the most relevant applications of the market
including: direct potable reuse, indirect potable reuse, non-potable
use, industrial, groundwater recharge, surface water enhancement
and recreational applications. Find out more and order your copy at:
globalwaterintel.com/desal-reuse

KEY FEATURES:
Price: £2,795 / $4,345
» Global and regional market forecasts
» 22 country profiles
Hard copy report and PDF
» Industrial water trends by region
» Plant and project opportunities
» Technology trends by application

OCTOBER 2017 GWI / 65

COMPANIES IN THIS ISSUE

A Forterra 8 Poten Environment Group 38

A. O. Smith 8 FTI Consulting 24 Pumptronics 21
Absolute Aeration 21 G PwC 24
Acciona Agua 59 GE Water 4, 10, 30, 59 Q
ADI Systems, Inc. 10 GHD 59 QEWC 8
Advanced Drainage Systems 8 Grant Thornton 24 R
AEA Investors 4, 10 Guangdong Investment Ltd. 52 RevO2 Solutions 21
AECOM 13, 33, 59 H Royal HaskoningDHV 43
Aegea Saneamento 21 H.G. Infra 38 S
Agbar 33 Hitachi Zosen 10 SABESP 8, 21
American States Water 17 HSS Engineers 38 Sadyt 26
American Water 8, 17, 21 I Sai Gon Water Supply 35
Aqua America 8 i2O Water 52 Salcon 34
Aqua Terra 21 IDE Technologies 54 San Jose Water Company 8
AquaVenture Holdings 8 ImaGeau 33 SASLO 24
Aquisense 44 InfraCo Asia 4, 34 Saur 33
Arcadis 24 J Sensco 50
Asahi Kasei 10, 26 JAKS Resources Bhd 8 Severn Trent 8
Astom Corporation 10 Jash Engineering 38 Shenhua Group 38
B K Sia Partners 24
Beijing Capital 8 K-Water 4 SIIC Environment Holdings 8
Beijing Geoenviron 38 Kelda Holdings 32, 33 SMHB Sdn Bhd 38
Beijing Water Business Doctor 8, 38 Kemira 8 Sourcewater 38
Black & Veatch 13, 14 Kunming Dianchi Water 38 Stantec Inc. 59
Brown and Caldwell 12 Kuraray 8 Suez 4, 8, 10, 30, 33, 36, 37, 59
C Kurita Water Industries 8 T
Cabot Corporation 10 L Table Rock Capital 13, 14
Cadiz, Inc. 4, 21 Layne Christensen 8 Tallinna Vesi 33
California Water Service 17 M Tetra Tech 8, 24
Calgon Carbon Corporation 8, 10 Magneto Special Anodes 10 Thames Water 33
CH2M 26 Marubeni Corporation 38 Three Sixty 33
China Water Affairs Group 8 Metawater 44 Tianjin Capital 8
Connecticut Water Service 8 Microvi Biotech 21 Trojan UV 44
D Middlesex Water Company 8, 21 Typhon Treatment Systems 44
Dais Analytic 38 Minrav Holdings 26 U
Darco Water 4, 34 Mueller Water Products 8 United Utilities 8, 32
Delta Ultraviolet Corporation 10 Murphy 33 V
DNP Water 35 N VA Tech Wabag 8
Dow Chemical 10 Nalco 10 VAF Filtration Systems 10
E Neptune Benson 10 Veolia 8, 10, 36, 37, 59
Ecolab 8 Newlisi 33 W
Energy Recovery Inc. 8 Noble Water Technologies 10 WesTech Engineering, Inc. 21
ENPAR Technologies 21 Northumbrian Water Group 33 WM Lyles 13
Environmental Treatment 10 NSC Agua 18 X
Evac Group 31 O Xylem 8, 44
Evoqua 4, 8, 10, 44 Olson 10 Y
F P Yorkshire Water 32, 33
FMI Capital Advisors 21 Pentair 8 Yunnan Water Investment 8

66 / GWI OCTOBER 2017

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