AFX - Asia | February 14, 2002
Suez Lyonnaise des Eaux is in contact with Enron Corp's Chapter 11 administrators over the acquisition of Enron holdings in South Korea, Spain and Mexico, Suez chairman and chief executive Gerard Mestrallet said. In Mexico a water project is being handled by Suez unit Ondeo at Cancun. In South Korea and Spain energy projects are being handled by Tractebel, Mestrallet said, noting that Belgium's Tractebel has been a 100 pct Suez unit for two days since the buyout of residual shares it did not own.
Suez/Tractebel had completed a deal to buy Enron's Monterrey 250 megawatt co-generation plant near Mexico's border with Texas just before Enron went into Chapeter 11, he said.
He noted that it is harder to negotiate now Enron is in administration, than previously with its managers.
On the Argentina financial crisis situation, Mestrallet said Suez has water assets in Buenos Aires, Cordoba and Santa Fe.
Suez had already provisioned 100 mln eur in the 2000 accounts and has added another 35 mln eur in provisions in the 2001 books, he noted.
He repeated Suez' position that it is willing to sell its stake in Fortis, as part of planned disposals of non-core assets. "If Fortis decides to take part in the next step in the consolidation of the European financial sector, of course it would be better to take part in that as it would create value," he said.
Mestrallet was speaking to journalists after meeting European Commission president Romano Prodi to explain Suez' international "Water Truce" initiative.
He has been seeking political support for the initiative from governments and international institutions like the EU, World Bank and regional investment or development banks.
Suez and a group of independent international water advisors believe that access to healthy water is a right for all the world's citizens including those in slums and the poorest areas.
To provide them with water, Mestrallet is promoting public-private partnerships, under which the infrastructure remains public but Suez, or other specialists, provide water services, at a cost.
He cited examples of Suez' success in slum areas round the world of providing tapped water to previously waterless areas at lower prices than those of itinerant water sellers, as well as other cases where stopping leaks had enabled a healthy water supply at unchanged prices.
Faced with a choice of continuing to buy water from itinerants, or installing tapped systems at lower prices, over 99 pct of local collectivities - blocks of slums, streets or neighbourhoods - prefer Suez to install metered collective water supplies.
"There have been no cases of them not paying. In fact they pay better than the richest quarters of Paris," said Mestrallet.
Suez water division Ondeo currently has 115 mln customers worldwide generating sales of 6.2 bln eur.
With only 5 pct of the world's water provided to customers through private companies and 95 pct provided by public services, the scope for increasing the business is huge, he said.
Suez, which is the number one private provider worldwide, believes it is possible to double that rate to 10 pct within 5-10 years, if the principle of public-private partnerships is generalised, he said.
The involvement of the private sector in provision of water services will be politically easier to accept if it is clear that the public sector is keeping control, Mestrallet said.AFX - Asia:
