International trade in British water expertise
Neil Semple, Deputy Head of the Worldwide Water Unit at Trade Partners UK, discusses some of the primary factors behind the state of the UK water industry’s business activity overseas.
The water industry is an important part of the UK economy with investment in water supply and sewerage infrastructure in England and Wales since 1989 – when the water and sewerage utilities were privatised – set to reach £50 billion by 2004 and currently running at about £3 billion annually.
Since 1989, the UK water industry has enjoyed considerable success in overseas markets. The principal water trade association, British Water, estimates that their member companies and their subsidiary and associated companies have an approximate annual turnover of £7 billion, of which about 50% is international business.
At home, the UK-based water industry also has a good story to tell in terms of investment successes. Since 1989, UK-based firms in the water and sewerage sector have secured over 30% of concession and Build Own Operate (BOT) contracts worldwide that they have bid for internationally. The value of such contracts won by UK-based companies over this period totals almost £7 billion and they now serve over 60 million people outside the UK.
On top of this, UK-based service providers, such as consultants, financial institutions and law firms, continue to be world leaders in offering innovative solutions in privately financed water sector projects.
A wide variety of UK-based firms have, and continue to enjoy, overseas business success. In China, Anglian Water Group and its partner Mitsubishi, initialled a contract in April 2002 with the Beijing Municipal Government to design, build and operate a water treatment plant for 20 years, to provide safe drinking water for two million Beijing residents.
“Biwater has successfully secured contracts in the Dominican Republic valued in excess of US$188 million for the enhancement of water supplies to three cities, San Francisco de Marcoris, La Romana and San Cristobal,” said Biwater main board Director Derek Ash. “A major contributor to this success was the cities’ ability to provide 100% finance. This was achieved in collaboration with HSBC in London and New York with funding from the USA’s EXIM Bank and a syndicate of commercial banks. Trade Partners UK, through the small but highly active British Embassy in Santo Domingo, were very helpful in terms of local language translation, advice on local business culture and assistance in the identification and assessment of local partners.”
Turning to Europe, Severn Trent has a highly successful Public/Private Partnership with the Government of Flanders in Belgium, which provides wastewater treatment and collection services for around 5.8 million people through a joint venture company, Aquafin and they have also recently been awarded a 30-year contract to supply water and wastewater services in Terni in Italy.
UK-based companies in the manufacturing sector are offering leading edge technological solutions. “HR Wallingford Ltd has achieved a position as an international leader in specialist consultancy related to desalination plants, providing services to the water industry world-wide,” said Dr Colin Skipper, manager of HR Wallingford’s water and industry group.
As outlined by the success above, some UK-based water firms are experienced in working in markets where there is invariably quite formidable competition as well as daunting legislative, financial and technical challenges to overcome. UK-based firms are recognised as amongst the world leaders in putting together innovative packages that deliver best value and provide sustainable solutions.
However, value and innovation alone are not sufficient to win work in a highly competitive marketplace. In some markets, there are formidable political obstacles to overcome. In such an environment, close collaboration between business and government is crucial.
Trade Partners UK is the government organisation that provides support services for UK companies trading overseas. It offers a wide range of business support services tailored to firms’ specific needs, and brings together the work of teams in 200 British embassies overseas and government departments across Whitehall.
A key goal of the organisation is to focus its resources where they can help to increase UK business competitiveness. Trade Partners UK, along with DEFRA and British Water, has recently embarked on a detailed analysis of priority markets, producing plans for Mexico, Poland and Hungary. Strategies for China, Turkey, Brazil, Egypt and Saudi Arabia are currently being developed.
In England, Trade Partners UK services are delivered through the 45 Business Links and other partners including Regional Development Agencies and Chambers of Commerce, coordinated by nine regional International Trade Directors. The devolved administrations in Scotland, Wales and Northern Ireland have their own arrangements for local delivery of services. For more information visit the web site www.tradepartners.gov.uk
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