A privately owned company has been awarded a design, build, finance and operate (DBFO) contract over the next 20 years for China's largest wastewater treatment plant for the Yangtze River. In a move that appears to signal the increasingly open attitude of local government in China towards private sector participation in the municipal water and wastewater industry, the contract for the operation of the Shanghai Zhuyuan No 1 Sewage Treatment Factory was signed on 5th June. A local company (Shanghai-based Youlian Enterprise Development Company), together with two other private companies, will invest CNY 870 million (EUR 107 million). The project will also aim to raise Zhuyuan's daily treatment capacity to 1.7 million tonnes within the 20-year contractual period. Local sources claim that the winning tender was considerably lower than the local market cost for urban sewage treatment. "This clearly demonstrates the private investors' confidence in the long term profitability of the venture, as well as perhaps hinting at further private sector opportunities", writes the Frost & Sullivan Research Manager, Environment Group, Europe.

Source: Frost & Sullivan, 12 Jun 2002, requires free registration