Shenzhen Water Group

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In December of 2003, Veolia Water, a subsidiary of Veolia Environnement, signed a 50-year concession contract for the rehabilitation and operation of Shenzhen's water and wastewater utility, the Shenzhen Water Group, following an open international bidding. With net assets of some 6 billion yuan (US$722.89 million), Shenzhen Water Group had five water plants and four wastewater treatment plants, along with a daily water supply capacity of 1.67 million tons and a wastewater disposal capacity of 1.08 million tons. The water supply covered under the contract was to reach a population of 2.2 million in central Shenzhen. Compagnie Generale Des Eaux (CGE), a unit of Veolia Environment, along with the state-owned Beijing Capital Group, purchased a 45% stake in the Shenzhen Water Group, with CGE owning 49% of the venture. This gave Veolia an effective 22% stake in the project company and Beijing Capital an effective 23% stake. The remaining 50% was to be owned by the Shenzhen municipal government. Veolia Water, was to inject US$400 million in capital into the group. The deal was the largest property rights purchase involving foreign investment in China in 2003 as well as the largest water project purchase ever in China. Beijing Capital has an investment joint venture with Compagnie Generale Des Eaux (CGE), a unit of Veolia Environment, with CGE holding a 49 percent stake in the venture whose registered capital is US$30 million. The venture and CGE bought a combined 45 percent stake in Shenzhen Water Supply Corp in December 2003, with the venture paying 2.94 billion yuan and CGE US$44.4 million. http://www.miga.org/sitelevel2/level2.cfm?id=1074