Pizhou City Water Supply Project

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In September of 2005, a consortium led by Dayen Environmental Ltd. of Singapore was awarded a 25 year BOT contract by the Pizhou local government for a potable water treatment plant. The project was to be undertaken in two phases. In its first phase, the plant capacity was planned to be 0.59 cubic meters per second with the possibility to be expanded up to 1.16 cubic meters per second. The term of the contract was undisclosed. Pizhou Penyao Water Supply Co. (Pizhou Penyao) was created as the project company and had a registered capital US$1.8 million. Pizhou Penayo was a 100% owned subsidiary of Pizhou Water Holdings Pte. Ltd. (“Pizhou Water”), a joint venture company formed by Dayen Environmental Ltd (50%), Asia Environment Holdings Ltd. of Singapore (25%), and Lionguard Investments Limited, a unit of Hong Kong firm Richfull Development (25%). The total project cost was estimated at US$9.9 million (RMB 82 million) with phase one costing US$5.2 million (RMB 43 million). Pizhou Pengyao had received a letter of intent from Construction Bank of China to provide up to US$3.0 million (RMB 25 million) for the project from China Construction Bank. The balance of US$2.2 million (RMB 18 million) was funded through the equity contributions from the joint venture partners of Nantong Water. Asia Environment’s capital commitment for Phase I was US$ 0.54 million (RMB 4.5 million). Under the BOT contract, Asia Environment’s subsidiary, Jiangsu Penyao Environmental Engineering Contract Co., Ltd., was appointed as the main contractor to provide turnkey services to the project. These turnkey services involved design, production, procurement, construction, engineering, installation, commissioning and after-sale services. Phase I was to be completed within 10 months from the start of construction in late 2005. http://www.listedcompany.com/ir/asiaenv/newsroom/newsroom.cgi?action=view_news&id=56