Although 70 percent of the earth’s surface is covered by water, little of it is fresh – 97 percent of the planet’s water reserves are saline, and desalination is an extremely expensive procedure. Of the remaining 3 percent, which is fresh and of economic value, 79 percent is in the form of icebergs, 20 percent is underground and only 1 percent is on the surface. Just 10 percent of the world’s water is destined for domestic use, 8 percent for industry and 82 percent for agriculture – thus conservation efforts should mainly center on irrigation systems. In Greece, 85 percent of available water is used for farming. About 30 percent of the water provided by the Athens Water and Sewage Company (EYDAP) is lost through leakage from broken pipes. Work in progress or in the planning stage should reduce this percentage by half by 2008. One of the biggest water consumers in the country, the Public Power Corporation (PPC) is also guilty of wasting water, which it uses to generate electrical power. Unfortunately, no real steps have been taken to restrict waste. Another way to save water is to re-use urban waste water that has been treated – something which is practiced in Israel, and Florida in the USA. Irrigation systems firm Eurodrip, along with the National Foundation for Agricultural Research (ETHIAGE) used waste water from Thessaloniki for sugar beet in fields owned by the Greek Sugar Industry (EBZ). Water economics Shares in the Greek water company EYDAP and its Thessaloniki counterpart EYATH are listed on the Athens Stock Exchange. Their shares are traded at a 20-percent discount according to the EV/EBITDA ratio (enterprise value to earnings before taxes, depreciation and amortization) in relation to other European peer firms. But according to their price-to-earnings ratio, they are traded at a 20-percent premium, mainly due to EYDAP’s fall in profits after state subsidies were stopped. According to Dimitris Skalaios, analysis director of BETA AXE, the water utilities sector is defensive and therefore is interesting as an investment during a bear market as well as for the satisfactory dividends they provide. He added, however, that these companies do not present wide margins for growth, as they are restricted geographically to the area of their monopoly. The first nine months of this year, EYDAP’s profits decreased by 36.7 percent after it lost state subsidies for 1999-2002, to the value of 44 million euros annually. It returned a profit of 47.6 million euros, down from 75.2 million in the same period of the previous year. Its turnover rose by 8.6 percent to 217.1 million euros, compared to 200 million for the same period the previous year. EYATH presents a different picture regarding profits, with January-September pretax profits reaching 18,221 million euros, up from 12,234 million the previous year. EYATH management attributes the increase to the new pricing policy. Income was 41,465 million euros, compared to 30,449 million the previous year. Cause for war Several disputes between neighboring countries are over available water sources. According to an accord between Israel and Jordan, the latter country draws 50 million cubic meters of water annually from a river in Israel, but it is not clear who is to pay for and transport it, which has led to bloody incidents. Egypt has threatened Ethiopia with war if it implements a plan to divert more water from the Nile, on which Egypt depends for 97 percent of its water. Similar problems plague Syria, Iraq and Turkey, which has one of the largest irrigation projects in the world, including its dams and canals. Twenty-five years from now, the number of countries with water supply problems will have increased from 29 to 48. Of these, 40 will be in Africa and the Middle East. Compared to other countries, Greece has reserves of water. The volume of rainwater amounts to 115 billion cubic meters. However, half of this volume is lost through evaporation, and another 35 billion cubic meters end up in the sea. This means that dams and reservoirs need to be built. Eighty percent of Greece’s water reserves are in its rivers. Four of these (the Evros, Nestos, Strymon and Axios) originate in neighboring countries, carrying a total of 12 billion cubic meters over the Greek borders. Meanwhile, much of the water used in irrigation is ground water, which represents 10-15 percent of total reserves.