Anglian steps up foreign moves

Anglian Water is confident it can generate 10 per cent of its pre-tax profit from overseas by 2005, as it speeds up growth away from its regulated core water and sewerage business, writes Edward Orlebar.

The company has been slower off the mark than some of its peers to expand abroad. However, over the last 12 months it has beefed up its international business team and is currently bidding on around 12 projects from Australia to Panama, according to Chris Mellor, Anglian's newly appointed managing director.

The planned increase comes as municipalities and governments, in particular those in developing economies, consider privatising the management of their water and sewerage infrastructure in the face of rising costs.

"If the international businesses are not earning 10 per cent of group pre-tax profit by then (2005) then we'd be asking, is it worth it," Mr Mellor said. "I think that level is perfectly possible."

The World Bank estimates $600bn (pounds 364bn) to $800bn needs to be spent in the next decade to upgrade existing systems and provide basic water to the world's population, 1.7 billion of whom lack sanitation and 1 billion of whom have no running water.

"The market is there and there aren't many competitors," Mr Mellor said.

On 3 December Anglian submitted a bid to build and operate a water treatment works at Laguna Alta outside Panama City. If it is successful it will be well placed to bid for other contracts should the Panamanian government decide to privatise existing assets.

Mr Mellor said the company is considering strategic alliances with one or more large non-UK infrastructure companies, which possess project finance skills and have contacts in a range of countries. "If we are going to make a step change we may get there quicker if we link ourselves to major strategic partner or partners."

He said it would be several months before Anglian might be in a position to make an announcement. "All we are doing is talking to people with that objective," he said. He declined to specify with which companies Anglian has talked.

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