CGE Zunyi Water Treatment Company

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In April of 2004, a consortium of Citic Pacific of Hong Kong and Compagnie Generale des Eaux (CGE) of France (a subsidiary of Veolia Environement), was awarded a 35-year concession contract to handle the operation of two water treatment plants in Zunyi, Guizhou province by the Zunyi Municipal People’s Government. The Zunyi facilities included the Nanjiao and Beijiao plants, each with a capacity of 100,000 cubic metres per day. The consortium was to operate and maintain the plants, as well as treat raw water and sell the treated water to the city's state-owned Zunyi Water Supply and Sewage Treatment Company who were to, in turn, sell it to the roughly 600,000 citizens in the city. Under the concession, two joint ventures were set up: CGE (Zunyi) Water Treatment Company and CGE (Zunyi) Water Treatment Operation Company. Under the scheme, CGE (Zunyi) Water Treatment Operation Company was to be charged with running the facilities and was to be paid fees by CGE (Zunyi) Water Treatment Company. The ultimately state-owned Citic held 25% of the first joint venture and 75% of the latter. The total cost of the project was estimated at about 200 million yuan (US$24 million) of which Citic was to contribute 60 million yuan and Veolia the remainder. Included in this figure was the 152 million yuan paid by the JVs for the concession. The partners said that their contributions to the registered capital of the JVs were to be funded internally. Further expansion of the water supply operation was planned. None None