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Chengdu Xingrong Environment Co., Ltd. (Xingrong Environment for short) recently won twowater affairs projects of RMB 1.355 billion

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Chengdu Xingrong Environment Co., Ltd. (Xingrong Environment for short) recently won twowater affairs projects of RMB 1.355 billion

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2019/07/12
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[Abstract]:
XingrongEnvironmentwontwoprojectsrecently,namelyJiangsuPeixianCountyWaterSupplyPublic-PrivatePartnership(PPP)Project(thepartwithadditionalinvestment)andthePhase-IFranchiseProjectofthePhase-VIIndustria
   Xingrong Environment won two projects recently, namely Jiangsu Peixian County Water Supply Public-Private Partnership (PPP) Project (the part with additional investment) and the Phase-I Franchise Project of the Phase-VI Industrial Sewage Treatment Plant in Southwest Airport Cluster Industrial Concentrated Development Zone, with a total investment of approximately RMB 1.356 billion. Details are as follows:
  
  Peixian County Water Supply PPP Project (the part with additional investment)
  
  Xingrong Environment won the bid in advance for Peixian County Water Supply PPP Project (the part with additional investment), with a total investment of about RMB 956 million, including the Peixian No.2 Surface Water Plant, the sewage treatment plant management projects in 13 designated towns, the renovation project of the pipe network in the old town (including the development zone), and the overlapping project of Peixian’s regional water supply and rural safe drinking water projects.
  
  Bid-winning quotation
  
  Basic water price of Peixian No.2 Surface Water Plant: 2.034 yuan/ton
  
  Return rate on static investment of the renovation project of Peixian’s pipe network in the old town (including Development Zone): 8.19%
  
  Operation and maintenance fee for the renovation project of Peixian’s pipe network in the old town (including Development Zone): 2.1 million yuan/year
  
  Return rate on static investment of the overlapping project of Peixian’s regional water supply and rural safe drinking water projects, the sewage treatment plant management projects in 13 designated towns and the renovation project of the pipe network: 7.91%
  
  In response to the country’s call that “lucid waters and lush mountains are invaluable assets”, Xingrong Environment is actively participating in water-related environmental protection projects in various regions. This project is a comprehensive water-related environmental protection project integrating urban and rural water supply and sewage treatment. It can further expand the company’s scale, improve its performance and increase its experience in the fields of water supply & drainage and supporting pipe networks, which is conducive to the promotion of the company’s market competitiveness and conforms to its overall development strategy. In this project, the company can use existing resources and experience to reduce management costs, improve operating efficiency and realize synergy. The formal signing and successful implementation of this project will help to increase the company’s operation revenue and improve its business performance.
  
  The Phase-I Franchise Project of the Phase-VI Industrial Sewage Treatment Plant in Southwest Airport Cluster Industrial Concentrated Development Zone
  
  Xingrong Environment (the initiator of the consortium), China 19th Metallurgical Corporation (a member unit) and Chengdu Drainage Co., Ltd. (a member unit) won the bid for the franchise project of the Phase-I project of the Phase-VI industrial sewage treatment plant in Southwest Airport Cluster Industrial Concentrated Development Zone, with a total investment of RMB 399.3161 million.
  
  Project construction content
  
  1. Sewage Treatment Plant Project
  
  With the total scale of 100,000 m3/d, the Phase-I project will be 50,000 m3/d. The engineering structures in the plant area include the grid balance tank, flocculation and water and mud distribution well, primary settling tank, hydrolysis acidification pool, multi-stage A/O biological tank with staged water intake, secondary sedimentation tank water distribution well and sludge pump house, secondary sedimentation tank, denitrification deep-bed filter and ancillary structures, blower room and power transformation and distribution room, intermediate lifting pump room, activated carbon (coke) treatment system, high-density clarification tank and sludge pump house, V-type activated alumina filter and ancillary structures, back flushing pump room and chlorine dosing room & power distribution room, disinfection tank, on-line monitoring room for water inlet and outlet, sludge concentration tank, sludge storage tank, dehydration machine room and dosing room, deodorization device, comprehensive building, dormitory canteen, reception room, auxiliary pipelines in the factory area, greening, roads, etc.
  
  2. Main Pipe Connection Project outside the factory
  
  With a scale of 100,000 m3/d, the trunk sewer in the plant area section of Jiannan Avenue is 1,200 mm in diameter and its distance from the next pipeline is 550 m.
  
  3. Tail Water Project
  
  With a scale of 200,000 m3/d, the Jinjiang sewage draining exit of the sewage treatment plant area is 1,800 mm in diameter and its distance from the next pipeline is 2,190 m.
  
  This project adopts BOT (build-operate-transfer) model, with a franchise period of 30 years, including a construction period of 1 year and an operation period of 29 years. During the franchise period, the project company is responsible for the investment & construction, operation & maintenance, transfer and other works of the project.
  
  Bid-winning price
  
  The financing interest rate rises by 20% according to the current benchmark interest rate of the People’s Bank of China (PBC) for loans over five years.
  
  The rate of return on capital rises by 50% according to the current benchmark interest rate of the PBC for loans over five years.
  
  The rate of return on operation rises by 25% according to the current benchmark interest rate of the PBC for loans over five years.
  
  The construction and installation costs are reduced by 5.3% based on the list budget review price.
  
  This project lies in the Southwest Airport Economic Development Zone, Shuangliu District, Chengdu City. Southwest Airport Economic Development Zone is a provincial key economic development zone approved by the People’s Government of Sichuan Province and verified and approved by the State Council. It has been listed as a national new energy equipment high-tech industrialization base by the Ministry of Science and Technology of the People’s Republic of China.
  
  In line with the overall development strategy of Xingrong Environment, participating in this project is an important measure for the company to further deepen the sewage treatment business within Chengdu. It also reflects the company’s advantages in resource, brand and technology in Chengdu and Southwest China. It can expand the company’s scale, improve its performance and enrich its practical experience in the field of industrial sewage treatment, help enhance its market competitiveness and influence, and exert a positive impact on its future operating performance.