Shanghai Industrial Holdings has won a stake in a major mainland water services project in Xiamen, Fujian province. The move is the latest stage of the red chip's plan to invest 10 billion yuan in the country's water supply and treatment industry. The company said yesterday that its 50 per cent-held unit General Water China would pay 461 million yuan to gain a 45 per cent stake in a joint venture to supply fresh water and a 55 per cent stake in a joint venture to treat waste water. General Water China, which is 50 per cent held by state-owned China Energy Conservation Investment Corp, will partner state-owned Xiamen Water Services Group in both ventures. The project involves five water-supply plants and seven sewage-treatment plants with a combined daily handling capacity of 1.56 million tonnes. General Water China was set up in November last year. The latest deal brings the company's total investment in the mainland water sector to 1.43 billion yuan, involving plants with total daily handling capacity of 2.72 million tonnes. It has previously invested in Fujian, Zhejiang, Anhui and Hunan provinces, and Chongqing city. Shanghai Industrial chairman Cai Laixing first unveiled in October last year the company's ambitions to plough 10 billion yuan into the sector in three years. In August this year he said there were plans to list the water business separately in the future. Prospects in the mainland's water market - estimated to be worth US$120 billion - are promising in light of the deregulation of gas and water utilities to allow non-private and foreign participation. China aims to treat 45 per cent of urban waste water and recycle 60 per cent of industrial waste water by the end of next year.