INTERVIEW WITH DAVID LEDGER, EXECUTIVE DIRECTOR OF HYDROTECH INTERNATIONAL LIMITED (HTI)

“London Underground Engineering Approves MPS Technology”

http://www.brr.com.au/event/48886

FRIDAY, AUGUST 1, 2008, 3:30 PM.

            BRR    Good morning and welcome to Boardroom Radio. Today, we are speaking with Mr. David Ledger, Director of Hydrotech International Limited. Thanks for

10                    joining us today, David.

            HTI       Thanks, Eddie.

            BRR    David, you released your quarterly report today. What can you let our listeners know about what has been happening at Hydrotech over the last

15                    quarter?

            HTI       It has been an interesting quarter for the group, and whilst there has been some frustration along the way particularly in the on-and-off negotiations we continue to have with London Underground, we finally got some acceptance and a sign-off formally by London Underground, and it has not been an easy

20                    issue. Whilst we had a successful installation at (inaudible) (0:00:38) in place for some time, the issue was that this was a Metronet-managed asset. Metronet went to administration in the last quarter of 2007 and have subsequently now come out of administration and we are looking forward to proceeding more successfully on further installations. Whilst the technology

25                    works, we have had to deal with some of the inner workings of a very bureaucratic organisation that, whilst it needs to run the underground network, it tends to be quite a difficult place in which to conduct business, which is great from a barrier to entry point of view for any competitors that might want to get in there but some frustrations have been there for us as a

30                    company. So the significance of the sign-off means that we can install across the network for tube stations and tunnels the MPS technology in both Metronet- and Tube Lines-managed assets. At the moment, what has happened is that they have now introduced seven opportunities for us to go in and survey. We are conducting those surveys presently. Again, not a simple

35                    exercise. We are doing it and hopefully that will lead to some commercial business for us.

                        Further in the quarter, we had a very successful outcome with Guangzhou Metro Corporation in China to put a pilot trial into one of their stations. They

40                    have and managed a series of underground railway stations and networks, but the significance of this one is that in the past we have installed MPS technology to remediate assets that have been damaged by water ingress. This is an example of we will be making installations on new structures. So as they roll out the build of these new stations, we will be putting the technology

45                    in place. So it is an exciting exercise for us. It is a commercial exercise for us. I guess for all shareholders, the importance of what we are really trying to do at the moment is make sure that we get this business in a very commercial state of winning commercial contracts and business.

                        So some good major headway has been made in both the United Kingdom and China.

            BRR    Obviously a strong quarter there for Hydrotech. We also see that you have

5                      participated and presented in a technology conference in Hong Kong. What has come out of this for Hydrotech?

            HTI       I think the more that we present at conferences, the more that we get broader understanding of what our technology does across water-damaged infrastructure assets, and I think that one of the biggest impediments to the

10                    successful rollout and commercialisation of the business is not the fact that the technology is in question for it working. It has been more about getting acceptance from a very staid construction and engineering community that tends not to change from old habits, and I think that one of the purposes of presenting, we did one earlier in February of this year up in Asia, doing this

15                    one to continue to talk to the engineering and construction (inaudible) (0:03:39). We get the message out about what it is that we are doing and it is an awareness game as much as anything else. So that is an important aspect of what we do and obviously it is not frustrating but we would like people to be more accepting of it. We tend to get a lot of pilot work which we hope is going

20                    to continue to lead to commercialisation, but it is a frustrating process on the way through. But these conferences are important because it is about changing mindset and getting people to understand what is available out there to deal with issues along water ingress matters.

25        BRR    Thank you very much for the insights there to Hydrotech and the review of the quarter. I am sure our listeners will appreciate it, David.

            HTI       Thanks, Eddie, and hopefully we can in the coming quarter report on some progress being made at the commercial level and really the important thing is to start seeing a positive revenue line for the business, so we look forward to

30                    being able to be in a position to do that.

            BRR    We look forward to hearing from you soon, David.

            HTI       Thanks, Eddie.

35        BRR    That was David Ledger, Director of Hydrotech International Limited. If you have any questions about this broadcast or any other broadcast, please feel free to contact us on brr@brr.com.au. I am Eddie (inaudible) (0:04:52) and thank you for listening to Boardroom Radio.

INTERVIEW CONCLUDED

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