Nanchang Water

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In September of 2004, Asia Environment Holdings (AE) of Singapore was awarded a 20-year contract to construct and operate the 200,000 cubic meters per day capacity Honggutan water treatment plant in Nanchang city, Jiangxi province. In the second phase of the project, the plant was to be extended to a capacity of 400,000 cubic meters per day. To implement the contract, a joint-venture project company was created between AE and the Nanchang Municipality with AE holding 25% and the state partner holding the remainder. The total project cost was estimated at US$21.69 million. The project experienced a six-month delay related to problems obtaining land-use rights from the provincial government. The issue was resolved and construction began in March of 2005. However, in September of 2005, SIIC Investment Shanghai Co Ltd (SIIC) purchased a 49% stake in the Nanchang project for RMB 28.5 million (US$3.5 million). Asia Environment's interest in the project was diluted to 12.78% from 25% as a result of the transaction. SIIC was a wholly owned subsidiary of the state-owned Shanghai Industrial Investment Holdings Co Ltd (SIIH).