Kunming Water Supply Company

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In September of 2005, the local government of Kunming City awarded a 30-year lease contract to a consortium led by Veolia Water to manage its water utility, Kunming Water Supply Company. Kunming, also known as Spring City, was the capital of Yunan province and had 3.5 million inhabitants in 2005. The lease contract was granted through an international tender, in which more than 20 firms competed. The tender was launched in August 2004 at the Yunan Property Rights Exchange Center to attract strategic local and foreign investors in an attempt to enhance Kunming Water Supply Company’s competitiveness. The consortium, formed by Veolia Environnement of France (51%) and Hong Kong based Citic Pacific (49%) acquired a 49% stake in the Kunming Water Supply Company while the municipal authorities, through the state-owned Changzhou City Construction Group, held on to the remaining 51%. The partners paid an acquisition price of RMB 1 billion (US$124 million) for the stake. Under the contract, the consortium was to be responsible for the management and operation of the Kunming Water Supply Company, which had 1,145 employees. It was to be responsible for water production and distribution (nine plants with capacity of 1,615,000 m3 per day, and a 1,500km-long network), as well as providing customer services to as many as 2.5 million people in Kunming. The deal was expected to generate 1.6 billion euros (US$1.87 billion) in revenues of the life of the contract. Information on investment commitments were undisclosed. Veolia Water wins water supply contract in Kunming 135 words 28 November 2005 NewsTrak Daily English Copyright 2005 NewsTrak International Co. Ltd. All rights reserved. Veolia Water of France has just signed up another major water project in China. It has reached an agreement with Yunnan Kunming Tape Water Co. Ltd. to supply water to the region. This is Veolia's 17th project won through bidding in China. Veolia has successfully bid for a joint venture water project in Kunming Yunnan. Veolia will invest RMB1.05 billion to take a 49% equity stake and will provide 1.6 million cubic meter of water to Kunming on a daily basis. The contract has a term of 30 years and will serve as many as 2.5 million people in Kunming. Veolia already has water business in Beijing, Shanghai, Shenzhen, Zhuhai, Changzhou, Tianjin, Chengdu, Urumqi, Junyi and Baoji. Ta Kung Pao