Xian South Water Works

Cancelled

Failure

In January of 1997, Berlinwasser Holdings AG of Germany was awarded a 20-year BOT contract to develop the water supply network in Xian, China. The project committed to provide 500,000 cubic meters of water per day to 3 million in the city, which corresponded to about 85% of the average daily consumption. To implement the contract, Xian South Water Works Limited was created as the project company which was owned 35% by Berlinwasser with the remaining 65% split between the state-owned Xian Waterworks Company and Grown Smark Ltd, a Hong Kong based investment company. The initial cost of the project was DM 55 million (US$30 million) with financing from Dresdner Bank. The plant entered into operation in November of 2001. In December 2003 Berlinwasser sold its equity interest in Xian South Waterworks Co. Ltd. to the majority shareholder, Xian Waterworks Company. A Chinese governmental decree dated September 11, 2002, declared projects with a guaranteed return for foreign investors to be no longer permissible. This decision canceled the legal base for Berlinwasser's commitment. The repurchase price was US$11.2 million. None None

Water and sewerage

China

High

World Bank Group

Project

Water Supply and Storage, Government, Commercial, Waste Processing and Treatment