Mekorot nearing strategic cooperation with GE

Mekorot is seeking partners for the construction of the $450 million desalination plant in Ashdod.

Water industry sources inform ''Globes'' that Mekorot National Water Company is in advanced negotiations for a strategic cooperation agreement with General Electric Company (NYSE:GE) for the construction of the $450 million 100-million cubic meter desalination plant at Ashdod.

Mekorot began working on the tender in 2001, when the plant was planned to produce 45 million cubic meter of fresh water a year. At the same time, the government was formulating its own tender for the 100-million cubic meter desalination plant at Ashkelon, in which Mekorot was not a bidder. The Ashkelon plant set a new standard for the seawater desalination industry, and Mekorot wanted its own facility to be at least as big. As a result, the Mekorot tender was stymied for years, until the government gave the company the go-ahead two months ago and allowed Mekorot to build the plant in the size it wanted.

Mekorot chairman Eli Ronon declined to answer questions from “Globes” on the matter. At a press conference opening International Water Technologies and Environmental Control Exhibition and Conference - Watec 2007, he outlined the company’s projected timetable for the tender. He believes that Mekorot will conclude strategic and financing agreements by October 2008, once the plans for the facility are completed.

Mekorot plans to raise its 50% share of the investment (about $225 million) through a bond issue.

Under the original plan, Baran Group (TASE: BRAN; Pink Sheets:BRANF) was supposed to be Mekorot’s partner in the Ashdod desalination plant.

Published by Globes [online], Israel business news - - on October 30, 2007

© Copyright of Globes Publisher Itonut (1983) Ltd. 2007

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