Mekorot wins battle to build Ashdod desalination plant

The Finance Ministry accepted Mekorot's final offer of NIS 2.40 per cubic meter of fresh water produced.

Mekorot National Water Company has won its battle against the Ministry of Finance to build the Ashdod desalination plant. After refusing to accept the ministry's demand to lower the price of water from the plant to NIS 2.36 per cubic meter, the ministry today accepted Mekorot's final offer of NIS 2.40 per cubic meter of fresh water produced.

The difference of NIS 0.04 per cubic meter could amount to tens of millions of shekels over Mekorot's 25-year operating license for the plant. Two weeks ago, the cabinet rejected the Ministry of Finance's request to revoke Mekorot's franchise to build the 100 million cubic meter a year Ashdod desalination plant, and ordered the ministry to settle its dispute with Mekorot.

The Ministry of Finance's announcement came two days after the court dismissed an appeal filed by the BGS consortium against the IVM consortium, which won Mekorot's tender to build the Ashdod desalination plant in November 2009. IVM comprises Minrav Holdings Ltd. (TASE: MNRV) unit Minrav Engineering Ltd., and Spain's SADYT. BGS comprises Shikun u'Binui Holdings Ltd. (TASE: SKBN), Azrieli Group Ltd. (TASE: AZRG) unit Global Environmental Services Ltd. (GES), Baran Group (TASE: BRAN; Pink Sheets:BRANF) and Shafir Civil and Marine Engineering Ltd.

Mekorot chairman Alex Wiznitzer said in response, "Mekorot welcomes the Ministry of Finance's decision and will do everything it can to build the facility on time, despite the difficulties, and to supply 100 million cubic meters of water a year beginning in 2013."

Published by Globes [online], Israel business news - - on February 22, 2011

© Copyright of Globes Publisher Itonut (1983) Ltd. 2011

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