The Israel Water Authority and the Ministry of Finance are investigating a suspicion that operators of the Sorek desalination plant systematically violated their franchise agreement with the state for years. It is suspected that drinking water supplied to Mekorot National Water Company contained several times the proportion of salts (chlorides) permitted under the franchise agreement. The operators of the facility are suspected of increasing its operating revenue by tens of millions of shekels in this way.
The level of chlorides was substantially less than the maximum permitted level under the standard, and does not arouse concern for public health, but a senior government source told "Globes" that the government "takes the event with the utmost seriousness."
The source added that the government would employ all available legal means to clarify the reason for the irregularity, including asking the State Attorney's Office to consider beginning a criminal investigation.
The Sorek desalination facility is one of the largest in the world of its type. It is capable of producing 150 million cubic meters of desalinated water a year, equivalent to the annual consumption of 1.5 million people.
A joint consortium of IDE Technologies, owned by Delek Group, and Hutchison Water holds the franchise to build and operate the facility. The Ministry of National Infrastructure, Energy, and Water Resources signed a franchise agreement in 2010 for operating the plant with the Sorek Desalination (SDL). The facility began operating in late 2013. In October 2018, IDE sold its share of SDL to Dan Capital in the framework of an arrangement with the Israel Competition Authority designed to enable IDE to compete for building the Sorek 2 desalination facility. In the tender for construction of Sorek 2, which will be of the same size as the tender for Sorek 1, IDE, Hutchison Water, and a Spanish company in cooperation with Allied Capital are all competing separately.
The 2010 franchise agreement stipulated that the level of chlorides in the water must not exceed 20 milligrams per liter, much lower than the international standard of 250 milligrams per liter. The proportion of chlorides stipulated for older desalination facilities is higher, as are the proportions of chlorides in the water supplied from other water sources, such as drilling.
A water test was begun last month, following complaints by residents of Holon that their drinking water was yellow. An initial finding showed that a change had occurred in the source of the drinking water supplied to Holon residents, who had begun to consume desalinated water from facilities at Palmachim and Sorek.
A suspicious pattern and clear deviations
A test of the chloride concentrations in the desalinated water at the entry point to the National Water Carrier revealed that the water supplied by the Sorek facility deviated in the level of salts during most of the day, except at 9:00 AM, when a laboratory sample was taken by representatives of the supervisory authorities.
The suspicious pattern and deviant proportions of chlorides in the water were found in the records of Mekorot starting in 2015, fairly close to the date on which commercial operation of the facility began.
In late March, Mekorot delivered its findings to the Water Authority, managed by director general Giora Shaham. The Water Authority began water testing immediately. Since the findings were given to the Water Authority, there have been no deviations in the proportion of chlorides.
The deviant proportions of chlorides found in the desalinated water according to Mekorot's records amounted to about 100 milligrams per liter, which does not constitute a health hazard. The international standard for chlorides in water is 250 milligrams per liter. Nevertheless, water sector sources said that failure to lower the level of chlorides to the contract stipulation (20 milligrams per liter) enabled the desalination facility operators to save up to tens of millions of shekels costs for energy needed for this purpose during the period of the deviations.
Water Authority: Examining the findings
The Ministry of Finance and the Water Authority said, "The state is examining the allegedly deviant findings concerning the required chloride values under the agreement signed by the state with the Sorek desalination facility. Let it be clear that no water supplied from the facility failed to meet the drinking water standards. These findings are allegedly higher than the requirements in the agreement, but are lower than the requirements in the health standards for drinking water."
IDE said in response, "From the time the facility was built and operated by IDE and Hutchison Water until IDE sold its stake in the facility two months ago, there was no complaint about the quality of the water that the facility supplied to the state. We have no information about the allegations, if any, after the sale of our holdings, and we assume that insofar as there are such complaints, they were directed to the company operating the Sorek facility, which is owned by Hutchison Water and Dan Capital."
The CEO of SDL declined to respond. No response was received from Hutchison Water or Dan Capital as of web posting.
Published by Globes, Israel business news - en.globes.co.il - on April 29, 2019
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