Wujiang Hong Kong and China Water Company Limited

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In June 2005, Hong Kong and China Gas Co. Ltd. (Towngas) was awarded a 30-year concession contract by the state-owned Wujiang Water Investment Co. Ltd. to operate and manage the water utility in Wujiang Administrative Zone in Jiangsu Province, China. The city, with a population of just over a million was near Shanghai and Suzhou and had many investors from Taiwan. Wujiang's demand for water had been growing at about 20% a year since 2001, mostly because of rapid growth in local industry and manufacturing. Water was being supplied at 830,000 cubic meters per day and water consumption was forecast to reach 115 million m3 for 2005. Wujiang Hong Kong and China Water Co. Ltd. was established as the project company in which Towngas held an 80% stake and was responsible for the company’s overall management. Wujiang Water Investment Co. Ltd. retained 25% of the joint venture company. The joint venture involved a total investment of RMB 970 million (US$117 million) of which Towngas paid RMB 776 million (US$93.8 million) for the stake in the project company.