Government launches international water trade strategy

The government unveiled a strategy to help UK water companies gain access to the vast international market for sanitation and infrastructure projects this week. The global market for water products and services is now worth in excess of US$300 billion per year, and UK companies currently generate £3 billion worth of business every year.

The strategy was commissioned by UK Trade and Investment's (UKTI) Water Sector Advisory Group (WSAG) on behalf of the industry and was produced by the UK water industry and the government.

It outlines a number of areas where business can gain contracts and highlights ways to obtain aid money from the World Bank in order to finance water and sanitation infrastructure projects abroad.

The strategy document says that the UK's "unique public-private sector approach is highly attractive to international customers", particularly at a time when many companies are re-appraising their approach to international markets. Parallel to this reappraisal, the document says: "There is a growing recognition in many countries of the enabling role that governments need to play in establishing sustainable legal and regulatory frameworks for their water industries, whatever their local pattern of ownership and management."

This sentiment was echoed at the launch by environment minister Elliot Morley. "The key to a sustainable water system is a strong legislative framework," he said.

Mr Morley said Defra, a key partner in developing the strategy along with the DTI, was already involved in advising governments on establishing the right legal framework in which private companies could operate, adding that the UK model of water services is "something of which we're very proud."

"However, this model cannot be transplanted wholesale around the world. Each country needs to develop its own model and own framework to meet its own needs," he said. "We still face problems in this country, so a constant system of review and adjustment is needed in all policy areas."

Bill Alexander CEO of RWE Thames Water International said: "The effectiveness of regulation differs widely across markets. We need regulation in place or we cannot trade."

The trade strategy outlines the criteria that countries must pass in order to be considered for UK input. These include industry interest, population size, economic status, and a favourable political and economic climate. This climate is determined by such things as a willingness to improve water services, a willingness to involve the private sector, and most crucially, the willingness and ability to pay.

Given these criteria, various core markets for action were unveiled. Eight countries - China, Hungary, Mexico, Poland, Saudi Arabia, South Africa, Turkey and Romania - were identified for high priority action. Four countries - Chile, Egypt, USA and Belgium - were identified for priority action, and four countries - Iraq, Iran, Russia and Brazil - were identified for development.

Florence Kosmala, from UKTI's International Trade Adviser, said: "The markets where we've identified high growth are ones that are really at the beginning of their environmental infrastructure development." She gave the example of Poland where 700 wastewater plants will be needed over the next decade.

Mike O'Brien, Minister for Trade, Investment and Foreign Affairs said: "The UK water industry has 30 years experience in developing sustainable water and wastewater services. It is well placed to export its skills, experience and knowledge around the world and has done so effectively for many years. This strategy displays a joined-up government approach and provides a strong platform for greater success."

However, the strategy was not universally well received. Claire Joy of the World Development Movement, said it was an outrage that industry should be deciding policy rather than government. "Water provision is a development priority not a trade priority. We should be concentrating on those who really need these services, not simply putting aid money for the poor into private company hands."

By David Hopkins



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