Officials at the Shanghai Municipal Foreign Economic and Trade Commission believe such a joint venture will encourage more foreign investors to seek to co-operate with State-owned utility companies.

The Sino-French Water Development Company and the Shanghai Chemical Industry Park are the two parties to the joint venture, each with a 50 per cent shareholding.

The registered capital of the joint venture is over US$48 million. The Shanghai Chemical Industry Park gained its 50 per cent share by offering the physical assets of the original waterworks, whose capacity is 100,000 tons per day. Sino-French gained the other half of the shares by submitting capital.

The major consumers of the joint venture will be companies.

Christophe Bongars, vice-president of Sino-French Asia, said: "We plan to provide world-class industrial effluent treatment services to both State-run companies and multinational ones."

Some insiders said they think the joint venture will inject more energy into the "stifling" management of State-run waterworks.

A confident Bongars said: "We have had experience of working smoothly with Chinese partners. In fact, Sino-French Water Development Company is a partnership between the Hong Kong-based New World Group and the France-based Ondeo Industrial Solutions."

The officials at the Shanghai trade commission said two other waterworks in the city are bidding for foreign investment and around 20 foreign companies are set to enter the sector.

Statistics show the profit-cost ratio of the business is 24.48 per cent, the highest of all foreign-funded projects on the Chinese mainland.

(China Daily March 27, 2002)