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French group Veolia Environment, the world's largest water company, has reached an agreement with a Chinese counterpart in Tianjin, North China to set up a joint venture, bringing the number of joint projects it is involved in in China to 22.

The new joint venture, Tianjin Teda Veolia Water Co. Ltd., will specialise in the integration of water processing systems, urban sewage disposal, industrial wastewater treatment, desalination, sales of water treatment equipment, management of water equipment, technical services and investment.

Veolia said its Asian business currently accounts for less than 2 percent of its global business, but the ratio is expected to jump to 10 to 20 percent in the future.

The contract was signed here on May 22 by Veolia Water Group, under Veolia Environment, and Teda Investment Holding Company, the biggest state-owned enterprise in this northern Chinese port city.

Veolia holds a 49 percent stake in the joint venture and Teda the remaining 51 percent.

With total assets of 300 million yuan (over 39 million US dollars) during the initial operation period, the joint venture aims to expand rapidly and increase its total assets to 1.8 billion yuan (nearly 235 million US dollars) in the near future.

Veolia, which entered China in 1997, operates more than 20 water projects in cities such as Beijing, Shanghai, Tianjin and Shenzhen and has more than 18 million employees across the nation. Under its management, a renovated Tianjin-based water plant is providing drinking water to a population of about 1.8 million.

According to Qiu Baoxing, deputy Minister of Construction, China will invest one trillion yuan in the water market -- including waste water treatment and the renovation of urban water supply networks -- during the 11th Five-Year Plan period (2006-2010).

Investment in the construction of sewage disposal and water recycling facilities is expected to increase by more than 330 billion yuan (about 43 billion US dollars) during the period.

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