Knesset Finance Committee member MK Fania Kirshenbaum (Israel Beiteinu) today asked Antitrust Authority director general Ronit Kan to declare IDE Technologies Ltd. a monopoly in desalination. "It is insufferable that a private company should control this strategic resource," she said in her letter, a copy of which "Globes" has obtained.
IDE is a joint venture held in equal shares by Delek Group Ltd. (TASE: DLEKG), controlled by Yitzhak Tshuva, and Israel Chemicals Ltd. (TASE: ICL), a subsidiary of Israel Corporation (TASE: ILCO), controlled by the Ofer family through Ofer Holdings Group.
Last month, IDE and its partner, Hong Kong-based Hutchison Water Ltd., won the BOT tender to build and operate the Soreq desalination plant, which will become Israel's largest such facility. The consortium won the tender with an offer of NIS 2.01 per cubic meter, well below expectations.
Delek Group subsidiary Delek Infrastructures Ltd. will supply the electricity needed by the Soreq plant. Delek Infrastructures is in negotiations with natural gas suppliers, including sister company Delek Energy Systems Ltd. (TASE: DEOL), a partner in the Tamar natural gas field and Yam Tethys natural gas supplier.
On this point, Kirshenbaum says, "There is no doubt that the low price in the Soreq tender was achieved thanks to IDE's control of the water market, and thanks to its possible agreements with its parties at interest, including Delek Group. IDE's reliance on its parent company in order to cut electricity and gas production costs enables it to offer low bids that its competitors cannot match."
IDE is also a 50% partner with Veolia Water SA in the VID Desalination Company Ltd. that owns the Ashkelon desalination plant, and a 50% partner with Shari Arison-controlled Shikun u'Binui Holdings Ltd. (TASE: SKBN) in the H2ID Ltd. consortium that owns the Hadera desalination plant.
IDE said in response that Kirshenbaum's accusations were "unsubstantiated and groundless." It added that the franchisees do not own the desalination plants, but the government owns them, and that the government "has the right to transfer ownership to the company."
Published by Globes [online], Israel business news - www.globes-online.com - on January 19, 2010
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