Police probe Palmachim desalination plant

Palmachim desalination plant / Photo: Shlomi Yosef

The investigation concerns falsification of water quality tests.

Israel Police has opened an investigation into suspicions of false reporting by parties in Via Maris Desalination, the company that operates the Palmachim desalination facility, sources inform "Globes." The investigation, the first ever of an operator of a strategic infrastructure facility, was begun following findings sent to the police by the Adiri committee, a public committee formed to examine irregularities in water quality at desalination facilities in Israel, in August 2019, following a report on the matter in "Globes."

The "Globes" report stated that the desalinated water supplied by the Sorek desalination facility to the National Water Carrier contained systematic irregularities in chloride levels, with the level of chloride being four times the rate stated in the franchise holder's agreement with the state.

The committee, appointed by Minister of National Infrastructure, Energy, and Water Resources Dr. Yuval Steinitz, found that the irregularities at Sorek had not jeopardized public health, but that they were aimed at making the facility more profitable.

In addition to the findings about the Sorek facility, the committee revealed grave findings about the Palmachim desalination facility, owned by Israel Infrastructure Fund (IIF). The committee's report states, "For a period of eighteen months, there were deviations in the concentration of chloride in water supplied by the Palmachim facility from the level stipulated in the agreement between the state and the operator. In dozens of cases, the figures communicated by the franchise holder to the state on the concentration of chloride in the water in laboratory tests did not match the actual laboratory tests."

The committee, headed by Ministry of National Infrastructure, Energy, and Water Resources director general Ehud (Udi) Adiri submitted its recommendations to Steinitz on August 20, 2019. The committee recommended an enforcement proceeding, including NIS 46 million in fines for the Sorek facility. The committee also recommended a series of measures for improving monitoring and auditing by the state and the Israel Water Authority of the quality of desalinated water supply by the desalination facilities.

Concerning the Palmachim facility, the committee wrote, "The committee recommends sending the findings from its evaluation to criminal investigative agencies" because "The committee lacks the tools to complete the assessment and identify the parties responsible for presenting the laboratory test results reported to the state." The police have now begun an investigation into these suspicions.

In no hurry to fine or punish the companies

No fine whatsoever was imposed on the operators of the Palmachim facility, even though the false reports continued for eighteen months. Despite the systematic and unacceptable conduct at the Sorek 1 facility, the state is permitting the holders of the franchise at the facility when the incident occurred, Hutchison Water and IDE, to compete in the tender for construction of another desalination facility (Sorek 2) near the existing one. In response to a question addressed by "Globes" to parties in the Ministry of National Infrastructure, Energy, and Water Resources involved in overseeing the desalination facility, it was stated that the state lacked additional tools beyond the complaint to the police in cases in which a suspicion of this type arose. The only sanction listed in the franchise agreement is agreed compensation. In this case, however, no fine whatsoever was imposed on the Palmachim facility.

The Palmachim desalination plant was built by Via Maris, a subsidiary of the Granite Hacarmel group, controlled by the Azrieli family. Construction of the facility began in 2005, and it began operating in 2007 as a small facility with a capacity of 30 million cubic meters a year. The Water Authority later authorized the franchise holders to expand the facility at an investment totaling NIS 1 billion, and the facility's current capacity is 90 million cubic meters a year.

Desalination plants now supply most of Israel's drinking water - an estimated 600 million cubic meters of water annually.

In late 2013, Granite Hacarmel sold Via Maris to IIF for NIS 400 million. At the time of the sale, it was estimated that the facility was generating a NIS 40 million annual operating profit. IIF, whose managing partner is cofounder Yaron Kestenbaum, was founded in 2007 by the Harel group and Adv. Yehuda Raveh. In addition to Harel Pension & Provident, its partners include the teachers union savings funds and the Hebrew University provident fund.

Via Maris stated, "We are unaware of any examination taking place in the matter."

Published by Globes, Israel business news - en.globes.co.il - on February 20, 2020

© Copyright of Globes Publisher Itonut (1983) Ltd. 2020

Palmachim desalination plant / Photo: Shlomi Yosef
Palmachim desalination plant / Photo: Shlomi Yosef
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