Published July 28, 2009

Goldis unit wins China water treatment deal

25-year concession involves treating waste water at an industrial park

By PAULINE NG
IN KUALA LUMPUR

	Email this article
	Print article
	Feedback

GOLDIS Water, a wholly owned Singapore-incorporated company of Malaysian private equity firm Goldis, has won a build-operate-transfer (BOT) concession to treat waste water at an industrial park in Zoucheng City in Shandong.

The 25-year concession, won through an open tender, is Goldis' third, having clinched two other similar concessions in Jiangsu and Shandong, both operated by another subsidiary, Crest Spring (Shanghai) Co Ltd.

Goldis Water plans to operate the concession through a newly established vehicle called Zoucheng Xincheng Waste Water Co Ltd which would invest 26.8 million yuan (S$5.64 million) to finance and maintain the sewerage treatment plant which can treat 20,000 cubic metres per day in the initial phase, rising to a total capacity of 80,000 cubic metres, Zoucheng director Justin Lee said at a signing ceremony between the company and the Zou Cheng Industrial Park Management committee yesterday in Kuala Lumpur.

A province-level park, the Zou Cheng Industrial Park has 400-odd tenants and because it is located in an area rich in coal resources, it has attracted new investments especially from the energy sector, said the town's deputy mayor, Kang Jian Guo.

According to him, the city, with a population of more than one million, is contemplating the construction of another three such plants.

Goldis chief financial officer and Zoucheng Xincheng director Leong Koh Chi said the concession fees 'vary depending on the volume of water treated'.

The other two plants are similar in size and currently operating at 20,000 cubic metres capacity, and would take three to four years to reach full capacity, he added, noting the Zoucheng win was against three or four other bidders.

He said the existing concessions 'contribute positive cash flow to Goldis but would take a while before they contribute to the bottom line'.

Under a planned corporate restructuring, Zoucheng Xincheng - which has a paid-up capital of 7.5 million yuan - would be the vehicle used for future BOT water concessions.

Given that the Chinese market is relatively underdeveloped and new in water and wastewater treatment, the company believes the business potential in China is huge.

Rapid economic development and industrialisation over the last two decades have resulted in increasingly polluted water resources.

Mainboard-listed Goldis is an associate of property developer IGB Corporation.

It assumed the listing status of Tan & Tan Developments in 2002 under a corporate restructuring exercise and has interests in property investment and development as well as health care and information technology.