A consortium comprising Kerry Utilities Ltd (KUL), a 50% subsidiary of the Malaysian PPB Group Bhd held through Chemquest Sdn Bhd, won the bid for a 20-year concession for a sewage treatment plant in Beijing, China.
The Lugouqiao Sewage Treatment Plant (phase 1) project in Fengtai District, Beijing, is PPB Group's first water engineering project in China. PPB Executive Chairman Ong Ie Cheong said in a statement the successful bid would give the group the strategic advantage to bid for 10 other sewage projects in Beijing estimated to be worth US$ 526 million.
The consortium is forming a business association with the Beijing Municipal Urban Water Discharge (Group) Co Ltd (BWDG) to jointly fund the construction of the sewage treatment plant, which has a capacity of 100,000 m3 per day.
The construction cost of the plant is US$ 53 million. The consortium will raise US$ 22 million and BWDG will fund the balance with a loan from the World Bank.
Upon completion of the plant, the business association will assume the operation and maintenance of the plant for a concession period of 20 years, starting in July 2004. The concession is expected to generate revenue in excess of US$ 132 million for the entire period.
Ong said PPB intended to develop utilities and environmental engineering into the group's next core business so that it could tap China's policy to promote the commercialisation of the sector. He said PPB was actively exploring numerous utilities and environment engineering opportunities in other major cities of China, including Shanghai and the Pearl River Delta in Guangdo.
