The Dalian government agreed to pay wastewater treatment fees to the Dongtai Xia Jiahe Water treatment plant, with a recognized commencement backdated to June 21, 2008.

The first stage of construction of the plant has been completed and is operating consistent with design parameters, discharging Class A water and a capacity of approximately 30,000 tons per day.

The entire construction of the Xia Jiahe plant is planned to occur in three stages. Phase two is expected to be completed in two or three years and will bring treatment capacity to 60,000 tons per day. Dongtai Water continues to evaluate the necessary expansion of its capacity for Phase Three. Dongtai Water also intends to continue its research and development in relation to the reuse of reclaimed water.

Dalian Dongtai Industrial Waste Treatment Company is 90% owned by China Industrial Waste Management, Inc., and is engaged in the collection, treatment, disposal and recycling of industrial wastes principally in Dalian and surrounding areas in Liaoning Province. The company provides waste disposal solutions to its more than 400 customers from facilities located in the Economic and Technology Development Zone, Dalian.

Dalian Dongtai treats, disposes of and recycles a variety of industrial wastes through incineration, burial and/or water treatment, and recycles, processes and resells waste products for use as raw materials in the production of chemical and metallurgy products. In addition, Dalian Dongtai provides environmental protection services, technology consultation, pollution treatment services, and waste management design processing services.