Thai Tap Water (TTW) Water Production and Distribution Concession

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On September 21, 2000, Thai Tap Water Supply Public Company Limited (TTW), entered into the Water Purchase and Sale Agreement with the Thailand's Provincial Waterworks Authority (PWA) to produce and distribute tap water for a period of 30 years or until July 20, 2034 on the BOO basis. The area serviced by the TTW under the concession agreement included communities living in Nakhon Pathom and Samut Sakhon provinces west of Bankok. To operate the newly built infrastructure, the TTW had to obtain a concession from the Ministry of Natural Resources and Environment. The latter granted such concession on March 11, 2005 for a period of 25 years. Under the concession agreement with the PWA, the TTW would undertake construction of the tap water production and distribution systems with the maximum production capacity of 320,000 cubic meters/day. TTW was to maintain the ownership of the tap water production and distribution systems. The Water Purchase and Sale Agreement also specified the minimum order quantity (MOQ) to be purchased by the PWA from the TTW throughout the 30-year period . On 15 September 2006, PTW signed another WPSA with the PWA to increase the tap water supply by an additional volume of 70,000 cubic meters per day under the build, operate, and own contract.The WPSAs guarantee a minimum volume to be purchased by the PWA with the pricing formula linked to the Consumer Price Index (CPI). The estimated cost of the expansion was US$39 million (BT 1,300 million) and was partilly financed in 2008 with debt emssion. TTW was a joint venture between Mitsui & Co., Ltd. (Mitsui) and Ch.Karnchang Public Company Limited (CHK), a construction company established and registered in Thailand. Mitsui held a 26% share in TTW and CHK held a 35% share. The project company launched an IPO in 2008 where it raised US$130 million (THB4.20 billion). As of January 2010, main shareholders of TTW are CH.Karnchang Plc.(35.31%), Mitsui Water Holdings (Thailand) Ltd. (25.88%), Bangkok Expressway Plc. (9.24%), HSBC (SINGAPORE) NOMINEE PTE LTD. (4.56%), and Thai NVDR Co.,LTD. (3.39%)