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People’s Republic of China Water Action: Engaging Private Sector Partners for Wastewater Management

People’s Republic of China Water Action: Engaging Private Sector Partners for Wastewater Management

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Published by: adbwaterforall on Oct 25, 2012
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Country water actions are stories that showcase water reforms undertaken by individuals,communities, organizations, and governments in Asia-Pacific countries and elsewhere.
Country Water ActionsPeople’s Republic of China: Engaging Private Sector Partners for WastewaterManagement
August 2011
Water Resources Officer, ADB A wastewater management revolution is rising in thePeople’s Republic of China as the government engages withBerlinwasser International and other private sector partners.
The People’sRepublic of China(PRC) hasembraced privatesectorparticipation(PSP) as anapproach torelieve publicfinance burden,particularly inmanaging theentire country’s wastewater. Currently, wastewatertreatment infrastructures have proved inadequate, withsome facilities unable to not run at full capacity due to lackof capital.PRC has been battling water pollution since the 1970s.
Residential and industrial waste discharges, mostlyuntreated, have contributed to the deterioration of manyrivers, lakes, and reservoirs throughout the country. Withmany of its cities dumping their urban wastes in rivers andlakes, the PRC has produced as much organic waterpollution as the United States, Japan, and India combined.
In 2004, the amount of discharged wastewater totaled48.24 billion tons, composed of 22.11 billion tons dischargedindustrial effluent and 26.13 billion tons domestic sewage.
Fresh groundwater resources have also been affected.Estimates show that urban wastewater treatment processingwill reach 120.13 cubic meters per day,
which will requireincreased investments in wastewater treatment plants.Addressing water pollution problems is one of the prioritiesin the PRC Government’s 11th five-year plan (2006-2010)
and will be an on-going priority in the 12th five-year plan.But with budget limitations, the government has engagedprivate sector partners to provide wastewater treatmentservices and facilities throughout the country.Berlinwasser International, Germany’s leading internationalwater and wastewater operations and managementprovider, saw the business opportunities offered by thePRC’s wastewater management sector. Since 1998,Berlinwasser has been a partner of the PRC Government inwater supply and wastewater management. It has built adrinking water supply plant in Xi’an and wastewatertreatment plants in Hefei and Nanchang. 
In 1993, the Hefei Development and Planning Commission(HDPC) constructed a wastewater treatment plant financedpartly through an ADB loan. Since its operations in 2002however, the plant has been operating at a loss. Unable tobear the additional financial burden, the Hefei governmentdecided to sell the operating rights to investors through apublic tender, which was won by the consortium of BWI andEast China Engineering and Technology Co. Ltd.The consortium formed a special purpose company, theHefei Wangxiaoying Sewage Treatment Co., Ltd. (HWC), tooperate the wastewater treatment plant through aconcession transfer-operate-transfer (TOT) agreement of 23years. The agreement requires the plant to be initiallytransferred to the consortium to operate for 23 years andreturned to the City of Hefei at the end of the concessionperiod at no cost.Right now, HWC is operating with a capacity of 310,000cubic meters per day and treating wastewater produced byone million people. The plant, a nitrogen activated sludgeplant with simultaneous biological phosphorus eliminationand mechanical sludge treatment, has contributed to anoticeable improvement in the quality of surface waters inand around Hefei. Extensive training is also being providedby the consortium to the operating personnel on operations,maintenance of the treatment plant.
In 2003, theconsortium madeup of BWI andBeijing UrbanConstructionGroup signed abuild-operate-transfer (BOT)agreement withthe municipalsupply companyand wastewatertreatment company of the city of Nanchang to construct andoperate a wastewater treatment plant. The joint venturecompany Nanchang Qingshanhu Project Ltd. carried out theplanning and construction of the treatment plant in 18months under the supervision of BWI. 

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