(photo credit: Courtesy)
The Knesset Economic Affairs Committee on Wednesday tackled the issue of water corporations, and the debate centered around whether they are necessary to improve infrastructure, or whether they just raise the cost of water.
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Prime Minister Binyamin Netanyahu has set up a committee to reexamine the issue.
The local authorities say the corporations should be dismantled and control over water returned to them.
Up until 2001, water was controlled by the local authorities. However, “after dozens of years in which the administration of the water economy was in the hands of the local authorities, the government decided in 1999 that the system had completely collapsed and therefore a reform was in order,” Yisrael Einav, water corporations supervisor at the Water Authority, told the committee.
Einav added that the water corporations had conserved 60 million cubic meters of water a year by reducing water loss, which represented a savings of NIS 600 million.
The government reform that created the water corporations was meant to keep the revenue from water sales in a closed circle, wherein it would be used to upgrade infrastructure. Einav provided statistics showing that in 90 percent of the areas having water corporations, water loss had shrunk.
The water corporations would spend NIS 1 billion on infrastructure this
year, he said. Before the advent of the corporations, local authorities
were adding the revenue to their general budget and then using it for
the needs of the municipalities.
Einav acknowledged that the original goal of the reform was to create
just 12 water corporations nationwide. Today, there are 52. He added
that merging the water corporations and reducing their number to 20
would save NIS 150m. a year. Water corporation overhead added NIS 1.7 to
the cost of each cubic meter of water, he said.
Union of Local Authorities water consultant Moshe Avnon disputed Einav’s
figures. He said the rate of water loss hadn’t changed at all since
He said that the price for the Mekorot national water company of a cubic
meter of water was NIS 3.1, including VAT, whereas the price for
households was NIS 9.5. Avnon said that returning control to the local
authorities would shave NIS 3 off the price.
The whole process was designed to privatize the water economy, he said,
but when that wasn’t possible, what was left was a “sick law.”
However, Water Authority head Prof.
Uri Shani warned against dismantling the water corporations, and denied there was any attempt to privatize them completely.
“The significance of that would be that the citizens of Israel would
then be placed under different rules and price structures and would pay
different amounts for water. “Some processes are irreversible,” he said.
“There are no intentions to privatize the water economy, and the Water
Authority makes sure there won’t be any initiatives of that sort. That
would be a mistake and we need to make sure it doesn’t happen,” Shani
MK Ze’ev Bielski (Kadima), a former mayor of Ra’anana, said he was
preparing a bill mandating that only those local authorities that could
not handle their own water matters would be required to create a water
Committee chairman Carmel Shama- Hacohen (Likud) said the committee
would wait for the conclusions of Netanyahu’s committee before meeting
again on this topic.