State Comptroller Micha Lindenstrauss has criticized the Eilat water corporation for charging the city's hotels too little for their water, reports www.mynet.co.il. In a report released last week on how local authorities were functioning in setting up the government-mandated water corporations, Lindenstrauss said that since the creation of the Eilat water corporation three years ago, it had charged the hotels a water rate that was "recognizably" too low, with the result that it had suffered continued and growing financial losses. According to the report, hotels use 37 percent of all the water used in Eilat. In line with government moves to transfer water management from local authorities to independent water corporations in recent years, the Ein Netifim water corporation was set up in Eilat in January 2006. In his report, Lindenstrauss said that since its inception, the corporation had charged the hotels a water rate that was too low and was less than the cost of supplying the water. "This caused an operational loss from the supply of water to the hotels, and this (loss) grew as their need for water grew," Lindenstrauss said. The report said that even before the corporation was set up, municipal and national officials had begun discussing raising water rates for hotels, but nothing was done about this. In May 2007, the Knesset Finances Committee ordered that new rates be fixed for all water corporations within three months, but it was only in October 2008 that the new rates were to take effect. The report said that even with the new higher rates, the Ein Netifim corporation was expected to record a deficit of NIS 1.6 million from supplying water to Eilat's hotels in 2008. The comptroller's office added that even though the corporation was not suffering from an operating loss in recent months, its existing earnings did not allow it to invest in water and sewerage infrastructure, which was one of the aims of setting up the water corporations in the first place.