At the beginning of January, water rates are due to fall for the first time since the water corporations were set up. Rates will be cut by 2%. Since responsibility for the water supply was removed from the local authorities and transferred to the water corporations that were set up in 2009, water rates have shot up by tens of percentage points. The Water Authority has repeatedly said that the rise was not a consequence of the establishment of the 54 water corporations, and that "the price of water reflects its cost". The Water Authority has announced that the number of water corporations will be reduced to 13 regional corporations, which, we are promised, will mean a reduction in rates.
The picture is not necessarily so rosy, however. Union of Local Authorities chairman Shlomo Bohbot has written to Water Authority director general Alex Kushnir, Minister of Energy and Water Silvan Shalom and Minister of Finance Yair Lapid, saying that the reform bringing about the establishment of regional water corporations stemmed from "considerations divorced from reality and from market conditions". Bohbot further claims that the streamlining process will lead to the collapse of the existing corporations, and that the 2% reduction in water rates was actually designed to finance the operation of redundant water desalination plants.
Bohbot's letter is based on an opinion from Prof Yaron Zelekha, dean of the Faculty of Business Administration at Ono Academic College and a former Accountant General, who acted as professional consultant to the Union of Local Authorities on the matter. Zelekha delivered a 40-page opinion to the Water Authority, recommending that the decision should be delayed until all affected parties have conferred for two weeks, after which conclusions should be drawn.
Published by Globes [online], Israel business news - www.globes-online.com - on December 1, 2013
© Copyright of Globes Publisher Itonut (1983) Ltd. 2013