China Woos Foreign Investors to Boost Sewage Treatment

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As China aims to double its sewage disposal capacity over the next five years, the demand for additional treatment facilities is expected to skyrocket. The Chinese government is extending an invitation to foreign investors to make up for the huge financial shortfall in the country's sewage treatment market.

Zhang Yue, deputy director of the Urban Construction Department of China's Ministry of Construction, expects the potential commercial opportunity to top 300 billion RMB (US $37 billion). Replacing worn-out pipelines that are more than 50 years-old will reach 40 billion RMB ($4.8 billion) alone, according to Xinhua News Agency.

Urban sewage is a leading contributor to water pollution in China, but the country runs starkly short of treatment facilities. By the end of 2004, only 708 plants were in place across the country, with a large portion of these not functioning properly. As of late June 2005, 297 cities still had not built adequate sewage treatment facilities.

Every day, an estimated 3.7 billion tons of sewage is discharged in China. With a current treatment rate of just 45.6 percent, more than half of that sewage runs freely into rivers or lakes, seriously degrading water systems. China has only one treatment facility for every 1.5 million urban and suburban dwellers, compared to one for every 10,000 people in the United States.

To achieve the ambitious target of raising the sewage treatment rate to over 60 percent in all urban areas by 2010, China will need to embark on an all-out construction effort. Some 10,000 new treatment plants will be needed just to achieve a treatment rate of 50 percent at the current rate of discharge.

Much of the funding will need to come from non-state sources, and China is eyeing foreign investors that can bring cutting-edge technologies and innovations. The majority of funds for existing sewage treatment projects came from the World Bank, Asian Development Bank, or concessionary financing arrangements with foreign governments.