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Plans washed away

Macao Water hopes to begin construction on the Seac Pai Van plant in H2, anticipates MOP65 mln profit

A reduction in the size of the Seac Pai Van water plant has caused further delays in the construction of the plant, pushing back estimates for the completion of the plant to end-2019, with construction expected to begin in the second half of this year.
The plant, originally estimated to cost around MOP1 billion (US$125 million) to MOP1.5 billion and proposed in 2014, saw its total size reduced by 10,000 square metres, according to the Executive Director of the Macao Water Supply Company Limited (Macao Water), Nacky Kuan.
“According to our original planning the land size was 27,000 metres,” said Ms. Kuan. “Now it’s reduced to 17,000 square metres.”
The Executive Director points out that the reduction has also nearly halved the overall output of the plant, which was originally estimated at 200 million litres per day (MLD) or 200,000 cubic metres of daily water supply, as well as switching from two-100MLD phases to a single phase.
“We have to reduce the capacity of the water treatment plant from 200MLD to 130MLD and combine into one phase only,” says Ms. Kuan.
The news came on the sidelines of a Spring Festival lunch held by the group.
Regarding the progress, Ms. Kuan commented that the land reduction sent the group back to the drawing board, observing “our land size was reduced a little bit and we have to change the water treatment plant layout and submit again for the detailed design.”
This follows an October submission of the land application for the use of the property, which was passed by the city planning committee before the government decided to use part of the land for a ‘recreational facilities’ project, announced in the government’s Policy Address.
According to the Address, the government aims to ‘complete the construction of the Seac Pai Van Public Housing Community Activity Centre’ this year, while the city’s cadastral information site shows the area directly next to the Seac Pai Van reservoir as reserved for ‘water supply facilities.’

Cotai City
The opening up of new infrastructure in the Cotai region, including Wynn Palace and The Parisian, has contributed to a double-digit increase in the growth rate of water demand in what Ms. Kuan calls “Cotai City”.
The 12 per cent growth rate in the region last year is expected to halve in 2017, to 6 per cent, closer to the growth rate seen for the collective areas of Taipa, Coloane and Cotai, which experienced 7 per cent growth during the year.
“This year, they already have some planning for the completion of another two large-scale infrastructures, so we expect that there will be some growth in Cotai City,” said Ms. Kuan, pointing out that “this growth will not affect the prices” of water.
The growth rate of water demand on the Macau Peninsula is around 2 per cent, according to Ms. Kuan, which she predicts will remain flat in the near future. With regard to the completion of Seac Pai Van plant, slated for 2019, the Executive Director expects “water demand at that time will go up, so that will have some impact upon water revenue.”

Pipes and profits
Overall, the group saw a 6 per cent reduction in its profits, according to the preliminary financial results divulged by Ms. Kuan, amounting to some MOP65 million.
“The major reason for that is due to water demands not meeting our original target,” explains Ms. Kuan, noting that a 2 per cent growth, as opposed to a predicted 3 per cent growth, was experienced in the year.
Also contributing to the profit reduction was a decrease in income from the “construction activity income” or the construction of pipe networks, which Ms. Kuan explains contributed to about 15 per cent of the group’s profit, among other non-water projects.
The group’s core business contributed between “80 to 85 per cent” of the profit for 2016, noted Ms. Kuan.
Plans for using recycled water have not yet been implemented by the company, although it tells Business Daily that it’s ‘ready’ to pending a proposal by the government, which has yet to materialise.
The Executive Director notes that environmental protection is “also the core value of the company, so if there is a very good environmental protection policy then we will follow it . . . [although] . . . for the time being there is no recycled water supplied to customers now.”
There are no plans to increase the water tariff “for the time being,” said Ms. Kuan, adding “we have to see the results for 2017.”