NOTES TO
FINANCIAL STATEMENTS
December 31, 2015
92
CITIC ENVIROTECH LTD.
Annual Report
2015
8 SERVICE CONCESSION RECEIVABLES (cont’d)
Name of subsidiary
as operator
Project name Location in
PRC
Name of
grantor
Type of
service
concession
arrangement
Contracted
daily design
capacity
(tons/day)
Service
concession
period
Gaoyang
Bishuilantian Water
Co. Ltd
高阳县污水处
理厂一期与二
期工程
Gaoyang
County, Hebei
Province
河北省高阳县
人民政府
BOT
80,000/
120,000
28 years from
2010/2013
United Envirotech
Water (Mianchi) Co.
Ltd
渑池污水厂
Mianchi
County, Henan
Province
渑池县人民
政府
BOT
20,000
25 years from
2013
#
The plants, which are currently under construction, are expected to be completed and to commence operation in fiscal
year 2016.
(b) For the above arrangements, the Group has a contractual right under the concession
arrangements to receive a fixed and determinable amount of payments during the concession
period irrespective of the usage of the plants. Under the terms of the arrangements, the
Group will receive a yearly minimum amount of RMB438,959,000 (equivalent to $96,659,000)
[March 31, 2015 : RMB253,777,000 (equivalent to $56,157,000)] from the contracted parties
(grantors) in exchange for services performed by the Group.
(c)
All the waste water treatment arrangements state the rights and obligations for the grantors
and operator as follows:
(i)
The operator has an unconditional right to use the land and infrastructure within the
waste water plant. The operator also has an unconditional right to receive payment from
the local government for treatment of waste water.
(ii)
The operator has the obligation to treat the required amount of waste water and also
to ensure that the treated water fulfil the standard quality requirement of the grantor.
In addition, the operator cannot provide waste water treatment services to third parties
without seeking permission from the grantor.
(iii) The infrastructure including the plant and equipment, “know-how”, operations manual,
hand-over report, design of infrastructure and related documents, for the waste water
treatment plant will be transferred over to the grantor or any grantor appointed
agencies at the end of the concession period.
(iv) The arrangement is terminated only when the other party breaches the contract or due
to unforeseeable circumstance.
(v)
The operator has the obligation to maintain and restore the waste water plant to its
operational condition upon transferring to the grantor at the end of the concession
period.
