Domestic and foreign investors are channeling more funds to the local water supply as water prices continue to rise.
In August, Thailand’s WHA Utilities and Power PLC announced its acquisition of a 34% stake in Duong River Surface Water JSC in Hanoi for some 2,800 billion baht (US$92.7 million).
The first phase of the Duong River Surface Water plant project, which requires an investment of VND5 trillion and has the capacity to produce 300,000 cubic meters of water per day, has been in operation for two months.
Besides the investment in this water plant, the Thai firm also spent 31.9 million baht buying 47.31% of the shares in Cua Lo Water Plant in Nghe An.
In the province, WHA Utilities and Power PLC’s parent company developed the WHA industrial zone 1 with an investment of some VND22 trillion, equivalent to nearly US$1 billion. The industrial zone covers some 3,200 hectares of land.
Prior to that, the Philippines’ Manila Water Company, Inc., a subsidiary of Ayala Corporation, penetrated the Vietnamese water supply market in 2011.
In addition to foreign firms, domestic enterprises’ investments have boosted the local water supply market.
Specifically, Saigon Water Infrastructure Corporation owns eight subsidiaries and an affiliated company in the water supply sector. Meanwhile, Refrigeration Electrical Engineering Corporation has eight affiliated companies in the sector, including a 35.95% stake in Vinaconex Water Supply JSC.
Dong Nai Plastic JSC has also invested in 14 companies in the sector.
Under the Government’s Decision 1232, released in 2017, the State intends to divest from 57 water supply companies nationwide in the 2017-2019 period, including 24 companies with State ownership below 50%, opening up multiple opportunities for investors.
Despite these companies’ poor business performances and high investment in water supply infrastructure, the sector remains attractive as water is an essential item. In addition, the water selling prices are on the rise.
In HCMC, the retail water prices will increase by 5%-7% every year in the 2019-2022 period. Late last month, the Hanoi government also drew up a plan to raise the retail water prices.
(Source:SGT)
