Veolia Water, one of the world's leading water service and sewage treatment companies, expects to maintain its growth in the country and sign another four contracts in China this year, a senior company official said recently.

"Veolia Water's business in China may grow 20 percent annually for 15 years and will account for 10 percent of our global business by 2020," said Antoine Frerot, Veolia Water's chief executive officer.

Frerot said such a target will be achieved on three conditions - China maintains its current economic growth for 10 years; more than 15 million people migrate from rural areas to cities annually; and the Chinese Government maintains its firm stance on improving drinking water standards.

Since the nation opened the water distribution sector to foreign investors in 2002, the French company has signed three to four contracts, on either drinking water supply or waste water treatment, every year in China.

The CEO made the remarks at the opening of Shanghai Pudong Veolia Water Center last Friday.

The center is a new arm of Veolia Water's 50-50 joint venture with Pudong Tap Water Co in Shanghai.

It combines water quality control, water flow management and a 24-hour customer service call center.

The center, with technical and personnel support from Veolia Water, has set a good example in Shanghai for improving the city's overall water standards, said Shen Yiyun, deputy director of the Shanghai Municipal Water Affairs Bureau.

"The new center is the product of the Sino-French partnership and is one of Veolia Water's biggest achievements in China," Frerot said.

The French company spent 266 million euros (US$345.8 million) on a 50 percent stake in Pudong Tap Water Co in 2002 and set up Shanghai Pudong Veolia Water Corp Ltd, in which Veolia Water has operating rights for 50 years.

The firm supplies drinking water to Pudong, a rapidly growing district of Shanghai, and is the nation's first Sino-foreign joint venture entrusted with the fully integrated services of water production, distribution, customer billing and water usage fee collection.

"We hope the cooperation in Shanghai will serve as a good example of Veolia Water's commitments to China's water industry and will best demonstrate our advantage in handling complicated integrated water services," Frerot said.

Frerot said he hopes this partnership will make more local governments in China trust Veolia Water and cooperate with it in the near future.

The French water company plans to flow into more inland regions in China, Frerot added.

"Veolia Water does not just look at geographic conditions when choosing the location of a project," he said.

"The most ideal location is where the local government has set a clear target of improving water standards and knows what to expect from Veolia Water's advanced technologies and management. And there must be a clear line between the two sides' responsibilities."

Veolia Water has invested 500 million euros (US$650 million) in the Chinese water market and has signed 13 water service and sewage treatment contracts in the country since 1997, Frerot said.

The projects cover coastal areas, such as Qingdao in east China's Shandong Province and Tianjin Municipality in north China, as well as inland cities, including Baoji in northwest China's Shaanxi Province and Zunyi in southwest China's Guizhou Province.

Currently Veolia Water's largest market is Europe. Sales from Asia account for less than 2 percent of the French company's annual revenues.

(China Daily January 31, 2005)