In water business arena, Japan is lagging behind other countries. There are major manufacturers selling high technology products of water purification and desalination, but there are few operators of tap water or wastewater, which can answer to RFP from foreign governments so far. Readers may know huge potential lay on the operation business of long duration requested by the public. Japanese government and major private players such as trading house know this status very well. Therefore, they have made public measures as well as private strategies and some of them have commenced pilot or small-sized operation.

NEDO, Japan’s policy based R&D agency, has been conducting a water recycling pilot with the emirate of Ras al-Khaimah, UAE, using technology of Hitachi Plant Technologies and TORAY from April 2010. The purpose of this pilot is to testify the feasibility of relatively small-sized water recycling plant, which can be deployed on numerous locations in need, in a short construction time. Energy efficiency and cost reduction per production unit are also being tested.

This pilot plant produces two kinds of purified water. One is “middle level” processed water used for irrigation and gardening. The other is “high level” processed water used for industrial purpose such as concrete mixing. The operating entity, working like a JV of PPP project, of this pilot charges fee for the “high level” water provided to commercial plants. The entity collects wastewater by tank trucks, processes middle-level water using Membrane Bio Reactor and produces high-level water by Reverse Osmosis technology. PV unit near by provides electricity for the plant.

The format of the operating entity, GWSTA (Global Water Recycling and Reuse Solution Technology Research Association) is a “special purpose union” made by Hitachi Plant Technologies and TORAY. GWSTA and NEDO will continue operation for three years, and after that, considering accompanied conditions, GWSTA may become special purpose company such widely seen in international PPP projects. NEDO works as a policy based project manager all over the pilot.

For Japanese players who have assets of water technology, such a test bed has a great meaning for their future business. Not only in water business, but in almost all the field, Japanese players would not try to take chances of getting PPP opportunities abroad. Currently, key players mainly in manufacturing industry are requested to have experiences in foreign countries. While some large trading houses, namely, Mitsubishi, Mitsui, Sumitomo, Marubeni and Itochu have experienced PPP projects in power generation already. They can use that know-how in the water business. For the rest, NEDO works like a matchmaker to arrange international requirements. NEDO covers renewable energy field as well as other alternative energy.

Originally posted on Infrastructure Investment Journal authored by Daisuke Imaizumi, CEO of InfraCommons.