Wuhu Hong Kong and China Water Company Limited

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In September 2005 Hong Kong and China Gas Co. Ltd. (Towngas) was awarded a 30-year concession contract by the Anhui Provincial Government for the provision of water and sewerage services to the Wuhu administrative Zone following a competitive bid process. Wuhu was the second largest city in Anhui Province with a population of 2.25 million. In 2004 the city consumed 85 million cubic meters of water and consumption in 2005 was expected to exceed 86 million cubic meters. Wuhu Hong Kong and China Water Co. Ltd. was established as the project company in which Towngas held 75% stake and was responsible for the company’s overall management. The Wuhu city government retained 25% of the joint venture company. Towngas had promised not to dispose of its stake for five years. The project involved a total investment of US$84.6 million (RMB 700 million), which included the US$27.2 million (RMB 225 million) purchase price for the stake made by Towngas and US$57.4 million (RMB 225) for facilities investment. Wuhu Hong Kong and China Water Company Limited had a registered capital of US$36.1 million (RMB 300 million).