Minrav, Sadyt bid to buy Ashdod desalination plant

Ashdod desalination plant Photo: Albatross

The two companies built the plant, which has planning and construction defects that will cost NIS 250-300 million to repair.

A consortium of Israeli company Minrav Holdings Ltd. (TASE: MNRV) and Spanish company Sadyt is expected to announce today that it plans to acquire the Ashdod desalination facility from Mekorot Initiation, sources inform "Globes." The consortium was previously the construction contractor for the facility. Market sources said that the bid was filed last Thursday, and was the only bid filed so far. Other concerns likely to show interest in acquiring the facility are Hutchison-Water and Shikun & Binui Holdings Ltd. (TASE: SKBN), which are partners in existing desalination plants in Hadera and Sorek; the Israel Infrastructure Fund, which acquired control of the Palmachim desalination facility in 2015; and Noy Infrastructure and Energy Investment Fund.

A senior Ministry of Finance source told "Globes" today, "There is concern that Minrav and Sadyt, which are still in an arbitration proceeding against Mekorot, are trying to buy time by prolonging the arbitration in order to deter other concerns from bidding for the facility." The source believes that the consortium will pay Mekorot several hundred million shekels at the end of the arbitration proceeding. He added that the bid that Minrav and Sadyt plan to submit is probably not attractive enough, and the tender for sale of the facility is likely to be won by other private concerns.

The facility, built in 2013 by Mekorot National Water Company subsidiary Mekorot Initiation, has never operated at its full capacity of 100 million cubic meters of water a year. Since commercial operation began in early 2015, the facility has operated at 80-85% of capacity, and has frequently shut down due to construction and planning defects. As reported in "Globes" two weeks ago, the cost of the repairs needed in the facility is estimated at NIS 250-300 million, 50% more than the previous estimates presented to the Ministry of Finance.

Published by Globes [online], Israel Business News - www.globes-online.com - on August 14, 2017

© Copyright of Globes Publisher Itonut (1983) Ltd. 2017

Ashdod desalination plant Photo: Albatross
Ashdod desalination plant Photo: Albatross
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