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Who is involved?

The large water companies Veolia and Suez are not significantly active in Asia. Although the companies have interests in the Middle East and Australia, neither has been able to yet move into the Far East with a headline project although both see this region as a growth area.

Degremont

Jean-Marc Langard, head of marketing, Asia, at Suez-owned Degremont says; "There could be the possibility of Degremont moving into Taiwan, but at the moment there are no significant projects for us in Asia. The most water stressed areas of Asia are the north of China and the south of India, and these are not rich areas."

The main sticking point in moving into these areas is the price of the output water, says Langard. "The Chinese government wants desalinated water to have a price of $0.5 m 3 . Currently, surface water has a price of around $1-2 m 3 . We can't see desalinated water having that price unless the government provides some subsidies. The membranes on the plants that we'd use are not available in China, so key components of the plants would have to be imported. This makes the plant the same price as in the rest if the world." This combined with the problematic energy consumption of desalination plants, and the overall cost to build far exceeds what could be recouped with a water price of $0.5 m 3 .

Langard says surface water will always be cheaper than desalinated water. "If you don't have surface water, then you go for desalination," he says. "The price of surface water treatment has not increased substantially in recent times." Langard thinks one of the problems with water shortages is bad water management. He says around 70 per cent of water goes to agriculture, 20 -25 per cent to industry and 5-10 per cent to the population. Better water management is important for avoiding problems that arise from this.

Despite the company's hesitation over the Asian market, Degremont has an office in Beijing and around 170 contracts in China for waste water processing in industry.

Black & Veatch

Earlier this year, US-based Black & Veatch opened a Global Design Centre for water in Singapore, and established a Centre for Excellence in Desalination. In December 2006, the company had announced its intentions to establish its already-existing Singapore office as a "key node" for its global water infrastructure business. As well as opening the door to contracts for the company, Black & Veatch has committed to investing in training its Singaporean staff.

Dan McCarthy, president and chief executive of Black & Veatch's global water business said at the opening: "The Global Design Centre operates as a key part of our integrated global workforce. [we] are also seeing increasing use of desalination as a treatment process throughout the world. However, desalination is still constrained by high energy consumption and membrane lifespan. The Centre for Excellence in Desalination will focus on optimising the performance of plants and enhancing membrane life."

Black & Veatch was involved on the design side for the one of the largest desalination plants in Asia, operated by Hyflux, in Singapore. Brought onstream in 2005, the $127 million SingSpring reverse osmosis plant in Tuas is capable of producing 30 million gallons a day, meeting 10 per cent of Singapore's daily water needs at a potential selling price of $0.49 m3 .

Singapore is also experimenting with membrane distillation technology - a hybrid technique in which seawater is boiled and the vapour is passed through microfiltration membranes before condensation. This technology supposedly uses three times less energy than reverse osmosis, and cut could the salt content in seawater a thousandfold. Singapore hopes to build a large demonstration plant later this year.

Hyflux

Singapore-based Hyflux is a major investor in a multi-million dollar membrane and materials technology research and development centre in Singapore. The centre was officially launched in November 2004, and is the largest membrane and materials technology centre in Asia outside Japan. The facility focuses on research applications aimed at spearheading the development of cutting edge technologies in water and environmental engineering solutions. The research includes the development of hollow fibre membranes and modules, including flat sheet membranes; the development of various types of novel membranes with different configurations; and new applications for membranes used in environmentally friendly solutions by industries.

As well as the SingSpring desalination plant in its home country, Hyflux has contracts to build desalination facilities in Tianjin and Ningxia in China, and also in Dubai.

The SingSpring desalination plant in Singapore came to be built because of diplomatic rows over Singapore's dependence on neighbouring Malaysia for fresh water piped into the country. Singapore objected to the hike in price Malaysia put on the water, triggering the development of the plant to ensure a degree of sustainability. However, commentators in the region have suggested the most recent output of the desal plant at a mere 10 per cent of capacity due to political agreements reached in the price of surface water coming from Malaysia. So desalinated water once again suffers because of its uncompetitive price.

On the fringes of Asia, Degremont's reverse osmosis desalination plant in Perth, Australia, is claimed as the largest in the southern hemisphere. Coming onstream in April 2007, the plant is 45 gigalitres a year and provides 1.5 million people with water. It supplies 130 million litre of water a day. Degremont has the contract for 25 years. The scope of works consists of seawater intake, pre-treatment, reverse osmosis desalination, drinking water and pumping station in Kwinana, south of Perth.

Is desalination just too expensive?

Expensive water prices and large energy consumption makes desalination a daunting prospect for companies operating in Asia. As Jean-Marc Langard from Degremont points out, the plants could be as expensive to build, or more so, than anywhere in the world and the cost surface water will nearly always be cheaper. It's clear unless regional governments provide subsidies, large scale desal plants for local populations simply may not happen in great numbers in areas where they are needed most. However, as industry grows in China and India, desalination projects for process industries may be viable as environmental regulations get slowly more stringent in these countries. China's own research estimated that their industry lost $24.7 billion in output value annually from 2001 to 2005 due to water shortages. This guarantees it a certain amount of political goodwill, but whether that goodwill could be translates into funds for projects and subsidies, remains to be seen.

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