Mekorot, gov't near desalination water price compromise

Water Commissioner Uri Shani: If Mekorot's tender fails, we won't meet the national desalination targets.

Mekorot National Water Company and the government appear near a compromise on the price of water from the planned Ashdod desalination plant, which will produce 100 million cubic meters a year.

Mekorot is now offering desalinated water at NIS 2.55 per cubic meter, down from its original offer of NIS 2.86 per cubic meter, while the inter-ministerial desalination committee is offering to pay NIS 2.36 per cubic meter. The committee today responded favorably to Mekorot's new offer.

At today's cabinet meeting, the government decided to send Mekorot's new proposal to the inter-ministerial desalination committee for review. The committee is due to respond within two weeks.

Water Authority director general Uri Shani told the cabinet, "This is an excellent compromise offer. The difference in price between Mekorot's offer and the tender committee's offer is NIS 20 million a year. If Mekorot's tender fails, there will be a delay of at least 12-18 months until a new tender is published, and we won't meet the national desalination targets."

Prime Minister Benjamin Netanyahu told the cabinet, "In recent years, the Israeli water economy has become caught in a deep crisis. There is a gap of millions of cubic meters that we will need per annum and this gap will be filled by the installations that we are planning. The Soreq desalination facility will supply 150 million cubic meters annually, 25% of the water that the Israel lacks per annum."

Netanyahu added, "This is an infrastructure project of the highest national importance. Solving the water problem is an integral part of creating the state of Israel's infrastructure base for the 21st century."

The cabinet approved doubling the capacity of the Soreq desalination plant to 300 million cubic meters a year. The first 150-million facility is due to come on line in 2013. In December 2009, the SDL Group comprising Hutchison Water Ltd. and IDE Technologies Ltd. won the Soreq desalination tender.

Another water project is to connect, for the first time, IDF bases to an advanced wastewater treatment network.

Published by Globes [online], Israel business news - - on June 20, 2010

© Copyright of Globes Publisher Itonut (1983) Ltd. 2010

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