Desalination Plant 311.
(photo credit: Courtesy)
The Finance Ministry, which has been sharply criticized for delaying the
building of Israel’s seawater desalination plants, is dragging its feet in
implementing the cabinet decision in January to expand these plants. An
investigation by Globes found that the production expansion is almost six months
behind the schedule set by the government.
Moreover, the Finance
Ministry’s efforts to achieve the lowest price for the water produced by the
plants, in order to save millions of shekels, is liable to torpedo the entire
desalination expansion program, according to the plants’ franchisees. They
recently told the ministry they could not expand the plants at the prices
dictated to them.
“The price is viable for desalinated water,” the
On January 30, the government decided that the first step
to deal with Israel’s water shortage was to expand the production of desalinated
Excluding Mekorot’s ( the national water company) Sabha plant in
Eilat, Israel has three facilities in operation along the Mediterranean coast:
at Ashkelon, Palmahim and Hadera. The aggregate production of these plants,
currently 250 million cubic meters a year, is to be increased by 100
m.cu.m. to 120 m.cu.m.
The government instructed the seawater
desalination tenders committee, headed by Deputy Accountant-General Gil Shabtai,
to close new contracts with the plants’ franchisees by June 1. But the ministry
first contacted the franchisees only in early July, a month after the deadline
for signing the contracts.
The delay apparently frightened the tenders
committee into trying to dictate to the franchisees a very tight timetable, by
demanding bids by August 15, just six weeks from the notification.
franchisees say they need three months to prepare bids.
Under the tender
committee’s model, the Finance Ministry will dictate the price for desalinated
water, while each franchisee will offer additional water at that price. The
price of water for each plant will be derived from the balance of the franchise
period, and allowing the plant’s new facilities the option of receiving the same
conditions as the original facilities, but not the opposite, because the
original contracts with the state expire earlier (each lease is for 25
The Finance Ministry’s prices were unrealistic and substantially
lower than the highest price achieved in latest competitive tender to build and
operate the Soreq desalination plan, representatives of the franchisees told
The Finance Ministry said in response: “The claim that the
Finance Ministry is delaying the desalination enterprise is groundless. The
opposite is true. Since 2000, the Finance Ministry is the party that has
promoted the desalination enterprise. Immediately following the government
decision, the tenders committee has been working in accordance with the
priorities given it.”
The Finance Ministry says the tenders committee is
undertaking several processes simultaneously, including reaching agreements with
the Palmahim and Hadera desalination plants on expanding production to most of
the day, securing financing for the Soreq plant and the contract process with
Mekorot for the Ashdod desalination plant.
production is complicated and requires thorough legal, statutory, engineering
and financial preparation, the ministry said.
“Taking this into account,
the tenders committee has acted expeditiously and meticulously to complete the
process in the shortest possible time,” it said.
The timetable is
reasonable, given that preliminary procedures were already carried out, enabling
the plants to prepare in time, the ministry said.
“This is not the first
expansion process that the government has undertaken with the desalination
plants,” it said, adding: “The prices, which were set on the basis of
engineering financial work by the tenders committee, are a proper financial
price for the desalinated water. It is superfluous to mention that franchisees’
comments received as part of the process will be discussed by the committee,
which will respond accordingly.”