China Jinjiang unit signs compensation deal with local government over facility closure

CHINA Jinjiang Environment on Wednesday said that its wholly owned subsidiary, Hangzhou Yuhang Jinjiang Environment Energy, has signed a compensation agreement with the local government to receive a compensation of 289.8 million yuan (S$57.5 million), following negotiations over the closure of a waste-to-energy (WTE) facility that the subsidiary owns and operates.

The sum includes land compensation, housing compensation and fair value of equipment, among other components. As at end-August 2018, the group has already received about 145 million yuan in compensation, and the balance is expected to be paid by end-October 2018.

The registered capital and net asset value of Hangzhou Yuhang as at end-December 2017 is 113 million yuan and about 140 million yuan, respectively.

Hangzhou Yuhang, which started operations in 1998, has a daily waste treatment capacity of 700 tonnes and is the first circulating fluidised bed incineration power plant in China, the company said.

Given that the facility is located where the future Hangzhou West Corridor is to be situated and west of Hangzhou's future transport hub, its location may no longer be suitable for the operation and development of a waste incineration plant, it added.

Accordingly, the group had voluntarily ceased operations at the Hangzhou Yuhang WTE facility from August 2017 onwards, in view of ongoing negotiations between the local government and the parent firm.

China Jinjiang Environment on Wednesday also updated that its Zibo Jinjiang WTE facility had ceased incineration in early July 2018, and the group is still in negotiations with the local government regarding compensation payments.

Its Kunming Jinjiang WTE facility is currently operating normally, and the timeline for any closure or cessation of operations will be determined based on the progress of completion of the Kunming Wuhua reconstruction project.

Shares of China Jinjiang Environment closed half a Singapore cent higher at S$0.50 on the stock market.