On 22 May 2008, PNHB executed a Sale and Purchase Agreement with Global Environmental Solutions Pte Ltd (GESL), and a Shareholders’ Agreement with Environmental Holding Pte Ltd (EHPL). The execution of these agreements marked PNHB’s venture into the water and wastewater industry in the People’s Republic of China.

Under the Sale and Purchase Agreement, PNHB acquired the rights to seven water and wastewater projects in the PRC with the option for three more projects from GESL. These water and wastewater projects would be injected into Sino Water Pte Ltd, a newly incorporated company in Singapore company with 80:20 equity holdings between PNHB and EHPL. The Shareholders’ Agreement would regulate the business of Sino Water Pte Ltd.

The seven initial projects are located in Yuanshi and Luancheng Counties in Hebei Province, Lushan County and Kaifeng City in Henan Province, Yangxin County in Shandong Province, Boluo County in Guangdong Province and Wanning City in Hainandao Province. These projects include Build-Operate-Transfer (BOT), Build-Operate-Own (BOO) and Takeover-Operate-Transfer (TOT) types of concession up to 30 years with the respective local governments. When the 7 projects completed, it should have a combined production capacity of 750 million litres per day (MLD).

As at 31 December 2008, two of the seven initial projects had been successfully transferred and injected into Sino Water Pte Ltd. Sino Water Environmental Consultancy (Shanghai) Pte Ltd and it was legally incorporated as a wholly owned subsidiary of Sino Water Pte Ltd in Shanghai, PRC on 4 December 2008.

The details of the two projects which have been successfully injected into Sino Water Pte Ltd are:-

The project is located in Lushan County, Pingdingshan City of Henan Province, PRC held under Luwei (Pingdingshan) Water Co. Ltd, which is 83% owned by Sino Water Pte Ltd.

The project involves the taking over and rehabilitation of the existing Lushan Water Supply Facilities and the construction of a new 30 MLD water treatment plant. The existing underground water wells would be replaced by the new 30 MLD WTP which abstracts raw water from Zhaopingtai Reservoir and distribute the treated water to consumers in Lushan Township via 40 km of distribution pipelines to be laid under the project.

Construction works commenced in November 2008, and the plant is expected to be completed in the fourth quarter of 2009.

The project is located in Laodian Village, Binzhou City of Shandong Province, PRC held under Xinnuo (Binzhou) Water Co. Ltd, which is wholly owned by Sino Water Pte Ltd.

The project involves the construction of a 30 MLD wastewater treatment plant in two phases of 15 MLD each. It is designed to treat wastewater from the nearby Tannery Industrial Park.

To commemorate the project commencement, a groundbreaking ceremony was held on 28 September 2008 attended by the Binzhou government and party officials as well as PNHB’s and Sino Water Pte Ltd’s representatives.

Detailed design is presently on-going and the plant is expected to be completed at the end of the first quarter of 2010.

Besides the above two projects above, Sino Water Pte Ltd will be acquiring a few other projects such as Luancheng Water Supply and Yuanshi Water Supply in Hebei Province. The project companies are in the process of being transferred to Sino Water Pte Ltd. Sino Water Pte Ltd has also identified several potential projects located in the Provinces of Henan, Hebei, Guangdong, Jiangxi and Tianjin City for possible acquisitions.