Qingdao III

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In October of 2004, Sino-French Holdings was awarded a contract to build and operate an 180,000 cubic meters per day capacity water treatment plant in Qingdao city, Shandong province. Sino-French had originally won a 25-year concession contract for two existing drinking water treatment plants with a total capacity of 440,000 cubic meters per day in August of 2002. The contract for the additional capacity was sparate from the original contract. To implement the initial contract, Qindao Sino French Hairun Water Supply Company Ltd was created as the project company in 2002 in which Sino-French took a 50% stake, with the state-owned local water supply company, Qingdao Tap Water Corp. Ltd., retaining the other half. Sino-French, in turn, was a 50-50 joint venture between Suez water subsidiary Ondeo and New World Infrastructure of Hong Kong. Suez subsidiary Degremont was to construct the new water treatment plant. The municipal authorities agreed to purchase the water produced by the plant under guaranteed conditions in terms of prices and minimum volumes. This third plant was scheduled to enter operations at the beginning of 2006. Investment information was not disclosed. None None