Lianyungang Wastewater Concession

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In June 2005, Bio-Treat Water announced that it had secured a 25-year concession contract to undertake modification works to an existing 100,000 tons per day capacity wastewater treatment plant in Lianyungang city, Jiangsu Province. The project was the first phase of a three phase project initiated by the Lianyungang government and Bio-Treat Water had secured the right of first refusal for the other two phases. Concurrently, Bio-Treat was also awarded a contract to build and operate a new wastewater treatment plant in Lianyungang city. Bio-Treat Water was a joint venture between Perfect Grace Investments Ltd., a wholly owned Hong Kong based subsidiary of Bio-Treat Technology Ltd., itself a private Chinese company based out of Dongguan city in Guangdong Province (95%), and Oriental Fortune International Ltd., a Hong Kong incorporated investment company (5%). The total cost of the project was estimated at RMB 140 million (US$16.9 million) and was funded substantially through bank borrowings secured in June 2005. The project was expected to be completed in the first quarter of 2006.