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Of the 85 local authorities that have constructed modern waste treatment facilities, not a single one has established an independent municipal corporation for treating the water and sewage, according to Eli Ronen, head of the National Sewage Administration at the National Infrastructures Ministry.

And this, despite the fact that, for the past three years, the state has offered a grant of 10 percent of the construction costs of such a purification facility. Estimates put the cost of constructing a modern treatment facility at NIS 20-60 million, hence the local authorities are forgoing grants of millions of shekels.

The municipal corporations are intended to separate the water and sewage departments from the remaining municipal services. They would be entrusted with collecting water and sewage dues from residents and using the money to improve the water and sewage infrastructures in the local authorities. Today, this money, which is paid directly to the local authorities, goes toward financing additional municipal operations, such as the construction of schools and synagogues. The area of water and sewage services, on the other hand, is often neglected.

According to Ronen, despite the grants promised to the local authorities, they had not acted responsibly and have been in no hurry to set up municipal corporations.

Apparently, the local authorities fear having the water and sewage dues taken out of their hands; from their point of view, such a move would mean a loss of tens of millions of shekels a month that are used to finance various municipal activities.

Nevertheless, in light of the importance of separating the sewage and water economies from the other municipal systems, the Knesset, some 12 months ago, enacted the Water and Sewage Corporations Law. The law stipulates that during the first three years following its enactment, the establishment of municipal corporations will be voluntary. Thereafter, all local authorities will be obliged to set up such a corporation.

The law also stipulates that local authorities that chose to establish corporations during the initial three-year period will be entitled to the 10 percent government grant, which will come from a specifically-allocated budget of NIS 400 million.

Ronen said that authorities that did not take advantage of the grants offered them for the purpose of setting up their water and sewage corporations would be required to do so in the future, without any incentives. He added that during the initial three-year period, the state was also offering an additional grant of 5 percent of the cost of establishing a purification facility to authorities that chose to do so in conjunction with a private entrepreneur, according to the B.O.T. (build operate transfer) method.

Ronen noted that only about 10 local authorities had set up treatment facilities by this method, according to which the private entrepreneur finances, constructs and operates the project for an extended, predetermined period, and exacts a charge from the users. At the end of the period, the facility is returned to the public body (municipality or other local authority) that requisitioned it.

Ronen said that the aim of the grant was to encourage the construction of purification facilities that would not be financed by the state budget. The B.O.T. method, he added, placed the financial burden on the private entrepreneur and freed up the state budget for other fields.

Ronen stressed the grant was intended only for financing work related to the purification facilities. Authorities who chose to set up facilities independently, he said, were not entitled to any grant whatsoever. They were eligible for 20-year loans of up to 100 percent of the cost of establishing their facilities.

Ronen added, however, that private entrepreneurs could not always be incorporated into the treatment facilities, particularly the smaller ones.