Mekorot National Water Company subsidiary Mekorot Initiative and Development Ltd. did not report business relations between itself and Minrav Holdings Ltd. (TASE: MNRV), during the tender process for the Ashdod desalination plan. Minrav subsidiary Minrav Engineering Ltd. and its Spanish partner SADYT won the tender with a bid of NIS 1.65 billion.
Minrav and SADYT beat the other finalist in the tender, a consortium led by Shikun u'Binui Holdings Ltd. (TASE: SKBN) and Azrieli Group unit Global Environmental Solutions Ltd. (GES), which offered NIS 1.85 billion.
The tender terms include an extraordinarily tight timetable of 24 months to complete construction of the facility from the start of work. Mekorot Initiative will fine the contractor for each day of delay.
Mekorot Initiative and Minrav have been partners since 2008 in the Nebi Musa sewage treatment plant near Jerusalem. Minrav has a 24-year franchise to operate the facility. Mekorot Initiative is also a subcontractor in Minrav's sewage treatment plants in Beersheva and Ben Gurion Airport. Industry sources say that, at least in the case of the Nebi Musa plant, the companies have a longstanding business relationship, not merely one-time contract work.
Mekorot Initiative said in response that the company's tenders committee "frequently published details about all the bidders in the Ashdod project, as well as all the details about the parties directly or indirectly involved in the Ashdod project from the beginning. Naturally, Mekorot Initiative has many business relations. There is no legal basis of any kind requiring the disclosure of business relations that are not related to the Ashdod desalination plant."
Mekorot said, "Regrettably, special interests are trying to harm in any way possible the construction of the facility by the national water company. Nonetheless, Mekorot Initiative and the winning consortium are committed to building the facility and supplying desalinated water under an unprecedented timetable."
In a related matter, sources report that Mekorot Initiative has withdrawn its petition against the Ministry of Finance concerning the price of the desalinated water that it will supply. In the petition, the company said that the price of NIS 2.36 per cubic meter was unrealistic. The parties today reached a settlement in court, under which Mekorot Initiative will withdraw the petition and ask the Attorney General to deal with the dispute, until an agreement is signed.
Published by Globes [online], Israel business news - www.globes-online.com - on January 19, 2010
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