Qingdao Waste Water Treatment Project

"Producing quality projects and creating an attractive environment" In November 2003, the Group entered into an agreement in respect of a waste water treatment project in Qingdao (including Qingdao Haibohe Waste Water Treatment Plant and Qingdao Maidao Waste Water Treatment Plant ) with Veolia Water and Qingdao Municipal Government. The total investment cost of the project is approximately US$42,808,150 and the Group indirectly owns 60% interests in the project. Commercial operation of the plants commenced on 1 January 2005. Waste water treatment service charges were charged based on the daily treatment capacity of 150,000 tonnes. In March 2005, Qingdao EB-VW Waste Water Treatment Co. Ltd. entered into the "Engineering, Procurement and Construction Contract" with a consortium led by Veolia Water Systems, under which the consortium led by Veolia Water Systems was appointed to be in charge of the construction for the extension facilities of Qingdao Maidao Waste Water Treatment Plant (the "Extension Facilities") under a turnkey contract. The Extension Facilities, being ancillary facilities for the water sports events of 2008 Olympic Games, has been constructed according to Grade 1B standard. Construction of the Extension Facilities commenced at the end of June 2005. The Extension Facilities started to receive waste water in June 2006 and commercial operation duly commenced in July 2007. Qingdao Maidao Waste Water Treatment Plant has an area of 4.54 hectares, which is 67.4% smaller than waste water treatment plants of similar scale in the PRC, achieving the utmost economy in land resources. At present, the average treatment volume of the two plants in aggregate is 190,000 tonnes per day and will gradually increase to 220,000 tonnes. Besides, in order to fully utilize the methane produced from sludge digestion, four 500-kilowatt methane-gas power generators were installed. The project is the first methane-to-energy project in Shandong Province . In June 2008, the generators commenced generation of power. At present, the generators' average daily generation output is more than 20,000 kilowatt-hour of electricity. The electricity output has been for our own use, resulting in the decrease of electricity cost.

Zibo Southern and Northern Plants Waste Water Treatment Project

"Establishing the project company as a renowned corporation in the industry and making the same a base for environmental education on waste water treatment in Zibo" In September 2005, the Group entered into agreements in respect of the Zibo Waste Water Treatment Project with Zibo Municipal Government, Zibo Finance Bureau and Zibo City Environmental Protection Bureau and Zibo City Fisheries Bureau for the acquisition of the Southern Plant and the Northern Plant in Zibo City. The investment cost is approximately RMB224,055,000. The project is operated on "TOT" basis and the term of exclusive right of operation is 25 years. The designed waste water treatment capacity of the plants is 250,000 tonnes per day. As regards the equipment upgrade for the plants, it was completed in April 2006. At present, the total daily waste water treatment volume of the plants is more than 220,000 tonnes. On 28 August 2006, Zibo Project Company and Zibo Municipal Government signed a supplemental agreement in respect of the overall upgrade of the Southern Plant and the Northern Plant. The cost for the overall upgrade is approximately RMB130,221,000.

The upgrading work has already completed and the discharge quality reached Grade 1A of the national waste water discharge standard in May 2008. Waste water treatment fee increased from RMB0.75 per tonne to RMB0.98 per tonne. Zibo Project Company is the first Chinese enterprise whose waste water quality reaches Grade 1A of the national waste water discharge standard whereas Zibo is the first Chinese city whose urban waste water quality reaches the same standard.

Zibo High-tech Industrial Development Zone Waste Water Treatment Project

"Producing an excellent project, setting an example for the industry" Zibo High-tech Industrial Development Zone Waste Water Treatment Project is the Group's first waste water treatment project constructed according to Grade 1A standard and operated on "BOT" basis. The total investment cost of the project is approximately RMB150,000,000. The term of exclusive right of operation is 25 years. The designed waste water treatment capacity of the plant is 100,000 tonnes per day. Construction of the Project commenced in October 2006 and the plant received waste water in March 2007. Commercial operation of the project commenced in September 2007 and the waste water treatment fee is RMB0.98 per tonne. In November 2008, the project was awarded a silver medal in the "State Outstanding Construction Projects 2008".

Jinan Waste Water Treatment Project

"Creating outstanding environmental protection works under excellent management" In June 2006, the Group entered into an agreement with the relevant department of Jinan Municipal Government to acquire Jinan No. 1 and No. 2 waste water treatment plants. On 31 October 2006, Jinan Project Company duly executed various agreements with the relevant departments of Jinan Municipal Government. Jinan No. 1 and No. 2 waste water treatment plants were formally handed over to the Group on 18 November 2006 and commercial operation of the project commenced thereafter. It is the second wholly-owned waste water treatment project acquired by the Group. The total investment cost of the project is approximately RMB400,000,000. The term of exclusive right of operation is 30 years. The total designed waste water treatment capacity of the plants is 420,000 tonnes per day. After the said handover of the plants, the Group invested RMB20,000,000 to upgrade the equipment and the upgrading work was completed in April 2007, two months earlier than the expected completion date. The plants are now operating at full capacity. In July 2008, Jinan Project Company and Jinan Municipal Government signed a supplemental agreement in respect of the overall upgrading of Jinan No.1 and No.2 plants and the extension of Jinan No.1 Plant for a daily waste water treatment of 80,000 tonnes. The cost for the overall upgrade and extension work is approximately RMB287,000,000. The upgrading work and the extension work were carried out at the same time. The upgrading work was completed and the plants were ready to receive waste water in December 2008. The extension of Jinan No.1 Plant is expected to receive waste water in mid 2009. Upon completion of the said upgrading work and extension work, the total designed capacity of Jinan No.1 and No.2 plants will be increased from 420,000 tonnes per day to 500,000 tonnes per day. Discharge quality will improve to the highest Grade 1A of the national waste water discharge standard. The waste water treatment fee will be increased from RMB0.75 per tonne to RMB1.012 per tonne.

Jinan Licheng Waste Water Treatment Project

In August 2008, the Group and Jinan Municipal Public Utilities Authority entered into agreements in respect of Jinan No. 3 Waste Water Treatment Project on BOT basis. The designed waste water treatment capacity of the project is 100,000 tonnes per day. The investment cost of the project is approximately RMB138,000,000. The project will be constructed and operated according to national Grade 1A discharge standard. The waste water treatment fee will be RMB0.81 per tonne. Construction work of the project commenced in September 2008 and has been progressing satisfactorily. It is expected the plant will be ready to receive waste water by the end of March 2009.

Zibo Zhoucun Waste Water Treatment Project

"Establishing excellent projects and setting example of brilliant works" In July 2007, the Group entered into a cooperative framework agreement with Zibo Zhoucun Municipal Government. In October 2007, the Group entered into the formal agreements in respect of the waste water treatment plant at Zhoucun with Zibo Zhoucun Municipal Government. The project is the second waste water treatment project invested, constructed and operated on "BOT" basis by the Group. The designed waste water treatment capacity of the project is 80,000 tonnes per day. The total investment cost of the project is approximately RMB120,000,000. For Phase I of the project, the waste water treatment capacity will be 40,000 tonnes per day and the investment cost is approximately RMB70,000,000. The project will be constructed and operated according to national Grade 1A discharge standard. The waste water treatment fee will be RMB0.95 per tonne. Construction work of the project commenced in August 2008. The plant was ready to receive waste water at the end of 2008 and the test running duly carried out in January 2009.

Binzhou Boxing Waste Water Treatment Project

"Producing quality projects and creating outstanding works" In November 2007, the Group entered into various agreements with Boxing Municipal Government for the acquisition of Boxing waste water treatment plant on "TOT" basis. The total waste water treatment capacity of the project is 60,000 tonnes per day. The acquisition cost of Phase I with waste water treatment capacity of 30,000 tonnes and the investment cost for upgrading work will be RMB40,000,000. Upon completion of the upgrading work, the project will be operated according to national Grade1B discharge standard. Boxing Project Company took over the plant in April 2008 and commercial operation of the project commenced thereafter. At the same time, Boxing Project Company and Boxing Municipal Government entered into a supplemental agreement in respect of Phase II of the project with waste water treatment capacity of 30,000 tonnes. The upgrading work of Phase I and the construction of Phase II commenced in August 2008 and the plants were ready to receive waste water in December 2008 and January 2009 respectively.

Jiangyin Waste Water Treatment Project

"Establishing the country's first waste water treatment pioneer project aiming at achieving "integration of plants and sewage piping network in one system in rural areas"" Jiangyin Waste Water Treatment Project is the Group's first waste water treatment project in Jiangsu Province. In November 2007, the Group entered into the "Joint Venture Agreement" with Jiangyin City Xin Guo Lian Investment and Development Company Limited. Pursuant to which both parties will establish a project company in Jiangyin City and will invest RMB624,000,000 to acquire Binjiang waste water treatment plant, Chengxi waste water treatment plant, Shizhuang waste water treatment plant and Chengshi waste water treatment plant situated in Jiangyin City on "TOT + BOT" basis. The Group owns 70% interests in the project company. The designed waste water treatment capacity of the plants is 190,000 tonnes per day. The term of exclusive right of operation is 30 years. The Plants were formally handed over to the Group on 18 January 2008 and commercial operation of the project has commenced. Upgrading work of the project commenced to comply with Grade 1A discharge standard and the estimated construction cost is RMB201,000,000. In March 2008, the Group and Jiangyin Municipal Government entered into the "Asset Transfer Agreement in respect of All Sewage Piping Network in the Urban Area of Jiangyin City". The purchase price was RMB267,000,000. The waste water treatment fee was adjusted from RMB2.1 per tonne to RMB2.52 per tonne. The Group intends to integrate the waste water treatment plants and sewage piping network in Jiangyin in phases in the next 2 to 3 years. The plan is to ultimately integrate the plants and sewage piping network of the urban and rural areas into one seamless system, which will make the Jiangyin Waste Water Treatment Project the first integrated urban and rural waste water treatment model project in the PRC.