Meet the water champions

Approximately 18% of the worldÆs population lacks access to safe drinking water, but in Asia almost 70% of people donÆt have access to clean water, explained Bernd Schanzenbacher, head of Credit Suisse's environmental business group, as he spoke at a Green Wave panel on water at the bank's annual equity conference yesterday.

ôBut let me not scare you, because there is hope,ö said Schanzenbacher, as he pointed to his fellow panellists, dubbed the ôwater championsö, who included: Remi Paul of Veolia Water; Antonino Aquino of Manila Water; Sam Ong of Hyflux; and KE Seetharaman of the Asian Development Bank.

The three companies represented on the panel run ground-breaking water businesses, while the ADB is helping to fund programs. The executives pointed out that there is no one-size-fits-all solution for water problems. Instead, each regional problem has to be solved by an individual project.

Consider Manila Water. Ten years ago only 58% of the three million population in Manila had water available for 16 hours a day. Now, thanks to its public-private partnership in the Metropolitan Waterworks and Sewerage System, 99% of the 5.3 million people in Manila have water 24 hours a day.

To achieve this success, Aquino, who is president of the company, said Manila Water subscribed to straightforward prescriptions: ôWe made sure that our social and environmental objectives were aligned with our business goals.ö

Hyflux is another water champion. With a S$600 million ($435 million) invested in a diversified pipeline across China, it has a plan that ensures long-term, regular and predictable cash flow through its pumping stations, water treatment plants and water recycling/wastewater treatment plants. The company's Group Deputy CEO Ong also announced during the panel discussion that the company has been awarded the opportunity to build the worldÆs largest desalinisation plant in Algeria (which is the third largest desalinisation market in the world). The firm not only builds, but also operates the water recycling and desalinisation plants.

Ong offered valuable guidance to investors on how to choose companies in which to invest. He said that you need to pick companies that go to places where the government officials and communities are ready to work hand-in-hand to develop viable programs. ôIf the framework is not there, it is difficult to move ahead,ö said Ong. ôSo itÆs important that you go to where the legal framework and the allocations of risk and return are in place.ö

Paul from Veolia Water agreed. Veolia has a 50-year management contract to build the Shanghai Pudong Project which will operate and maintain full water services in the district of Pudong, including water production, distribution and customer service. The company also has 25 integrated project joint ventures in China and eight contracts to directly supply water to 20 million people in this country. The contracts are 20 to 30 years long. This amounts to, as Paul said: ôThe first significant public-private partnership for water services in Chinaö.

Given these corporate accomplishments, Seetharaman, who runs water and urban development at the ADB, hopes to see 1,000 such leaders in Asia in the future. ôPeople do not necessarily put money into good projects,ö said Seetharaman. ôThey put money into good people who run good projects.ö

Water at a glance
* Freshwater accounts for just 2.5% of global water resources
* Only 0.4% of that freshwater is surface or atmospheric water
* 69.6% is in glaciers
* 30% is groundwater
* The agricultural sector uses 70% of global freshwater
* While Asia has 60% of the worldÆs population, only 36% of the worldÆs freshwater resources are in the region
* Global water demand is forecast to grow by 29% by 2025 but global supply is forecast to grow by just 22%