GWS 2018

Twelve things I learned at the Global Water Summit

From GWI publisher, Christopher Gasson

There is little gloom in water
Water professionals generally like to wallow in the miseries of low tariffs, under-investment, risk aversion and decaying infrastructure. This sense of desolation is somewhat superficial because beneath it all, we know that water is the only thing that mankind will still need in 5,000 years’ time. This year’s Global Water Summit was uncharacteristically upbeat. I don’t think I heard any earnest lectures on how important it is for us to stress the value of water (which is a roundabout way of saying that there isn’t much growth in the industry). People seem to be getting it now. The industry might actually be doing quite well at the moment.

The big worry is political insecurity
Our keynote speaker, Economist editor Zanny Minton Beddoes, warned that the current benign economic climate might not last long, and we should think of ourselves as being in the same position as the world was in 1900, with some difficult geo-political times ahead. Our audience loved it. According to our delegate voting system, 53% said it made them feel that the world was becoming a better place (a similar poll before she spoke suggested that only 27% felt that way when they read the Economist). Later in the event, delegates were polled on what they thought was the biggest risk in the industry. Political instability came out ahead of an emerging market debt crisis, rising interest rates, and a possible oil price collapse.

Blending is trending
The World Bank hosted a workshop on blended finance at the Global Water Summit. My main worry before the event was that blending (using small amounts of concessionary finance to mobilise larger amounts of commercial finance) was rather more attractive to cash-strapped development finance institutions than it was to their clients, who just wanted cheap money. It seems, however, that the idea gained real traction at the event, and although there are still some details to be hammered out, it looks like the concept is going to fly.

People think India is about to happen
A poll in the final session of the conference suggested that the country that most delegates felt would grow fastest over the next year was India. Brazil was bottom of the list. China came second, but as I reported in the magazine last week, there were no Chinese private water companies at the Global Water Summit. This is apparently because of a sharp rise in the cost of capital in China, and a policy vacuum in the wake of the recent political changes in the country.

The VIP nations are becoming very interesting places
In the round table discussions, Vietnam, Indonesia and the Philippines all drew interest due to the level of investment they seem to be attracting. Argentina also looks like it is steaming ahead, thanks to 400% tariff rises. There were big delegations from Nigeria and Kenya, but my impression was that they were getting serious about raising money rather than actually spending it at this stage.

The textile industry is this year’s big discovery
We’ve got used to thinking of food & beverage, oil & gas, mining, chemicals and power as being the big industrial water markets. That is largely because textiles were made in countries which didn’t care too much for the way industries treated their wastewater. A session focusing on water for the textile industry explained how this is changing. Consumer concerns are pushing manufacturers to comply with global standards such as those set by the Zero Discharge of Harmful Chemicals programme and the Clean Cotton Initiative. Meeting the needs of textile manufacturers in Asia is potentially a huge business.

The oil and gas industry needs to be liberated from its procurement departments
The people on the operations side who handle produced water want to push the boundaries of the available technologies, but when their needs are handed over to the procurement departments, conservatism and cost-cutting reign.

The other side of customer engagement is empathy
Australia’s water companies have been reinventing the meaning of utility services since the Millennium Drought. As they pushed through dramatic tariff rises and managed demand increases, they led the way in customer engagement. We brought the various Australian water leaders together for a lunch on Tuesday, and it was interesting to see how this higher public profile is changing their organisations. They are more concerned with being “good” in the ethical sense as well as the professional sense now that their customers are following them.

Saudi privatisation is terrifyingly ambitious
Saudi Arabia is the biggest opportunity for private water in 20 years. It is also the most complex and difficult. The government officials speaking on the subject at our pre-conference workshop impressed everyone with their professionalism and sense of purpose. Getting it right is not just their problem, however. If it goes wrong, it is also a big problem for the private sector. It will be another 20 years before anyone thinks of privatisation again.

Desal research and development is going in different directions
Our Desal R&D Olympics session showed that the big desal companies seem focused on operational improvements, while the start-ups competing for the Tech Idol prize seem to be taking a more sideways approach to the business. The Tech Idol winner was CosmosID, which uses gene sequencing to characterise microbes. Its main applications are in public health, but its technology opens up new possibilities is the management of membrane fouling – the biggest unsolved problem for seawater desalters.

Evoqua isn’t going to buy Lanxess, but Suez might sell a minority stake in United Water
In the final session I put various executives on the spot on various corporate issues. Snehal Desai from Water Company of the Year Evoqua played down the company’s interest in Lanxess reasonably credibly. Suez’s Bertrand Camus masterfully dodged my probing about the possible sale of a minority in the company he used to run, the former United Water in the US. Ion exchange and membranes specialist Lanxess will probably go to private equity: the consensus is that it is more of a chemical company than a water technology company.

We were lucky it wasn’t a four-day conference
The Marriott Rive Gauche where the conference was held was stormed by striking protesters this afternoon. They smashed windows and sprayed graffiti on the walls of the hotel. Staff barricaded the doors, and our conference organiser Amy McFie was trapped inside.

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