Shenzhen has found takers for a 45 per cent stake in its water company almost 16 months after unveiling a bold plan to auction off stakes in its five best state-owned firms. France-based Veolia Environnement, a world leader in environmental services, yesterday announced that its water division would buy the stake in Shenzhen Water Group together with state-owned investment company Beijing Capital Group. Veolia Water will make a Euro100 million (HK$965 million) capital investment in and 'take charge of the management of Shenzhen Water', Veolia Environnement said. The Shenzhen municipal government retains the remaining 55 per cent. The transaction comes with a 50-year contract to produce and distribute water to Shenzhen as well as collecting and treating waste water, a deal estimated to bring in more than Euro8.5 billion, the company said. The Shenzhen Water transaction concluded the Shenzhen municipal government's plan, first unveiled in August last year, to auction stakes of 25 per cent to 70 per cent in five large state-owned companies to foreign investors. The five also included Shenzhen Energy Group, Shenzhen Gas Group, Shenzhen Public Transportation and Shenzhen Food General. While many local governments have been quietly selling off state firms, Shenzhen's move stood out for its high profile and use of open tenders. However, the experiment soon met with scandal and weak investor response. Two months after the auction's announcement, news broke that Lao Derong, then chairwoman of Shenzhen Energy, was under investigation. Lao was tried in September for bribery and embezzlement. By February this year, only one stake had been sold - Hong Kong-listed Huaneng Power International bought 25 per cent in Shenzhen Energy for 2.4 billion yuan. Hong Kong and China Gas has bought a 30 per cent stake in Shenzhen Gas, while Kowloon Motor Bus acquired 35 per cent of Shenzhen Public Transportation. The 70 per cent stake in Shenzhen Food General was sold to Ng Fung Hong, Hong Kong's largest importer of live and frozen food from the mainland.