Salcon Water (HK) Ltd, a subsidiary of the Malaysia-based Salcon Bhd, signed an agreement with Linyi Municipality Water Supply Company, based in China's Shandong province, to establish a joint-venture firm to supply potable water, install and maintain water facilities and upgrade a water treatment plant.
Salcon Water will own 60% of the company, and the Chinese firm the balance. The joint-venture company will supply water to the Lan Shan, Luo Zhuang and He Dong areas, the High Tech Development Zone and the Economic Development Zone in Linyi Municipality for 30 years.
Salcon also entered into a partnership agreement with the People's Government of Linyi Municipality to jointly develop a 300 million-litres-per-day water supply project costing about US$ 79 million. Details of the project will be finalised and implemented after a technical and financial due diligence study is undertaken, and a definitive agreement signed.
Linyi is the largest (at 17,000 km2) and most populous (10 million people) municipality in Shandong province. The city has a population of more than one million, and currently less than half the population have access to clean water.
Salcon Chief Executive Officer Datuk Lim See Teok said: "Our immediate task is to upgrade the existing water treatment plant to meet the urgent needs of the people and industries in the city." In addition, Salcon has entered into an agreement with the management committee of the Qingdao Economic and Technical Development Zone, also in Shandong province, on a water development project.
The agreement provides for the setting up of a joint-venture company between Salcon Water and the General Water and Wastewater Company of the Development Zone, with Salcon being the majority stakeholder. Qingdao is a major trading port and industrial centre.
