The water reform will come into effect at New Year's 2010, and the reason for the 25% hike in water rates on Friday is not the drought, but desalination.
In the past two years, the Israeli water economy has come to stop relying on the Kinneret and more on the new seawater desalination plants. This revolution includes the construction of a new water transport network, which will carry water from the Mediterranean in the west inland to the east and south, instead of the National Water Carrier, which carried water from the Kinneret in the north to the center and south of the country.
While the drought tax was more of a measure to boost the Ministry of Finance's revenues, the pending rate hikes will finance the investment in desalination.
On New Year's, water rates will go up 25%. A second 14% rate hike will come into effect in July and a third hike, of 2%, will come into effect in January 2011, for a total hike of 41%.
Currently, household water rates are set by use. A family of four that consumes up to 16 cubic meters of water a month pays the lowest rate of NIS 3.53 per cubic meter, plus VAT. The next 14 cubic meters of water a month costs NIS 4.86 per cubic meter, and additional consumption is charged NIS 6.69 per cubic meter. There is also a sewage rate of NIS 2.26 per cubic meter.
The new rates structure will have just two rates. The lower rate will apply to 2.5 cubic meters of water per person per month, or 20 cubic meters of water a month for a family of four. In addition, the water and sewage rates will not be listed separately.
Industrial, hotel, and agricultural users will also pay more for water. The Water Authority says rate for industry will rise 2.75-fold from NIS 2.90 per cubic meters to NIS 8, and the rate for hotels will nearly double from NIS 4.23 per cubic meters to NIS 8. The increase will come into effect over four years.
The water rate for farmers is based on an agreement signed in 2006, under which the rate will rise over seven years from NIS 1.50 per cubic meter to NIS 2.20-2.50.
Published by Globes [online], Israel business news - www.globes-online.com - on December 29, 2009
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