ATCO launching water division
GE partnership to focus on infrastructure
Geoffrey Scotton
Calgary Herald
Wednesday, October 01, 2008
Seeking to leverage the growing focus of municipalities, industries and businesses on water, diversified industrial and utility giant ATCO Ltd. said Tuesday it is launching a new division to design, build and operate water and wastewater infrastructure.
"We've been thinking about our future and we've got a tremendous amount of related resources and expertise," ATCO president and chief executive Nancy Southern said in an interview. "We believe that this could be a very good business -- and an important business."
The new unit, ATCO Water, has already reached an agreement to partner with the water technology unit of global business behemoth General Electric Co. -- GE Water & Process Technologies -- to market processes in water purification and recycling. "We see it as a great opportunity not just in Alberta but in the North, north of 60, and internationally as well," said Southern.
Here in Alberta, the government is spending tens of billions of dollars on infrastructure, but with what has been the fastest-growing economy in North America, demand is relentless. In late April, the province unveiled a three-year infrastructure capital spending plan to provide $22.2 billion to municipalities for infrastructure building.
"It's hugely important," said Alberta Infrastructure and Transportation spokesman Jerry Bellikka on Tuesday. "There's a lot of stuff that we're building, but there's a lot more we need to build."
ATCO Water will be headed by Bob Myles, who has held senior roles in ATCO's gas, pipelines, midstream and strategic planning groups. The unit is being shaped to aim for projects linked to so-called P3 structures, or public-private partnerships, and utilize ATCO's substantial network of personnel in utilities, pipelines and related businesses throughout Alberta and around the world.
The P3 structure is increasingly popular in Alberta, particularly for infrastructure such as schools and roads.
ATCO and GE -- which has stated it is enthusiastic about the opportunities in Alberta -- have worked together on many projects in the past, including generating turbines, workforce housing and water treatment for ATCO power plants. Southern said she is hopeful ATCO Water will produce as much as $20 million in after tax earnings in as short a time frame as five years.
ATCO Water will further expand the $3-billion-a-year parent company's reach, which revolves around utilities, energy, logistics, facilities management, technology.
Like much of the existing ATCO network, the new unit will focus on Alberta but also pursue opportunities elsewhere.
"(It's) a natural extension to the range of services we currently offer our customers," said Southern. "The combined technical strength and operational excellence of ATCO Water and GE ensures customers will receive the very best in water services."
The launch of the division, to be a subsidiary of major ATCO natural gas and electricity utilities unit Canadian Utilities Ltd. through its ATCO Energy Solutions arm, was timed to match the opening Tuesday in Edmonton of the annual conference and trade show of the Alberta Urban Municipalities Association.
The announcement's timing allows ATCO to unveil its new business in the home of what has been a major competitor in natural gas and electricity and will be in water: City of Edmonton-owned Epcor Utilities Inc. The announcement speaks to the intense rivalry between the ATCO group and city-owned utilities generally.
Southern and her father, ATCO chairman Ron Southern, have long campaigned to have government-owned entities such as Epcor and City of Calgary-owned Enmax Corp. out of the utilities business, claiming they enjoy unfair advantages.
