Only two companies have submitted bids in the tender to build the Hadera desalination plant, which will produce 100 million cubic meters of water a year. The first company is IDE Technologies Ltd., owned by Delek Group Ltd. (TASE: DLEKG), Ofer Brothers, and Housing and Construction Holding Co. Ltd. (Shikun u'Binui) (TASE: HUCN). IDE is a partner in the consortium that built the Ashkelon desalination plant.
The second bidder is a consortium comprising Granite Hacarmel Investments Ltd. (TASE: GRNT), Ocif Investments and Development Ltd. (TASE: OCIF), Tahal Group, and Aqualia GestiónIntegral del Agua SA and Inima Servicios Europeos de Medio Ambiente SA of Spain. Granite Hacarmel is a partner in the Palmachim desalination plant.
A third consortium comprising General Electric Co. (NYSE: GE), Ionics Agar Environmental, Baran Group (TASE: BRAN; OTCBB:BRANF) and Danya Cebus Ltd. (TASE: DNYA), did not submit a bid with the tenders committee. Baran won a turnkey tender to build a desalination plant in Ashdod for Mekorot National Water Company.
The deadline for filing bids was postponed several times in recent months. The participants are competing over technology and the price of the water in the BOT (build, operate, transfer) tender for the Hadera desalination plant.
Five years ago, the government decided to overcome Israel’s water shortage by adding 450 million cubic meters of desalinated water a year. The government later scaled back the plan to 315 million cubic meters of water a year.
So far, one 100-million cubic meter facility has been built in Ashkelon, which sells desalinated water at $0.52 per cubic meter, the lowest price in the world. A 30-million cubic meter facility is under construction at Palmachim. Mekorot’s Ashdod facility will produce 45 million cubic meters of water a year.
The government cancelled a tender for a 30-million cubic meter facility at Shomera, after the winner failed to meet the tender terms. The government foreclosed the company’s guarantee.
No tender has yet been published for construction of Dan Region Sewage Reclamation Project’s (Shafdan) desalination plant in Rishon LeZion.
The bids in the Hadera desalination plant tender will reportedly be higher than in the Ashkelon plant tender, because the price of fuel and iron has risen during the interim. Fuel is a key cost in the desalination process.
Published by Globes [online], Israel business news - www.globes.co.il - on July 6, 2006
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