Amid U.S. Pressure, Chinese Firm Loses Tender for Israeli Plant in Sensitive Location

Yoram Gabison
Yoram Gabison
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Nachal Soreq vicinity, where the plant is planned, near Palmachim air base and and Soreq Nuclear Research Center
Nachal Soreq vicinity, where the plant is planned, near Palmachim air base and and Soreq Nuclear Research CenterCredit: Google Earth
Yoram Gabison
Yoram Gabison

Ten days after a visit to Israel by U.S. State Secretary Mike Pompeo, who warned against a Chinese firm winning infrastructure contracts in Israel, a government panel announced that an Israeli group has won the bidding process for a major desalination plant. 

The government panel chose IDE over Hutchison Water, whose main investor is Hong Kong's CK Hutchison Holdings.

The plant, dubbed Soreq B, will be built next to the desalination plant already in operation, and near the Palmachim air base and close to the Soreq Nuclear Research Center.

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The new facility will be the biggest of its kind in the world. Early estimates say it will be able to produce 200 million cubic meters of water annually and increase Israel's desalination capacity by 35 percent.

The announcement was made by a joint committee of the Water Authority the Finance Ministry and the Energy Ministry. IDE’s price of 1.45 shekels (41 cents) for a cubic meter of water (about 264 gallons) was unprecedentedly low, and is about 65 agorot less than the lowest price per cubic meter that Israel pays today, the committee said.

The low price will save the country about 3.3 billion shekels over the lifetime of the plant.

A desalination plant near Soreq.Credit: Ofer Vaknin

During Pompeo's visit to Israel, he warned that Chinese investments in infrastructure could pose a security risk. The Chinese Embassy in Israel responded that they trust that Israel will "defeat the coronavirus but also the 'political virus,' and choose the course of action that best serves its interests."

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Under President Donald Trump, the United States has put pressure on Israel, along with many of its allies, to limit Chinese investment in the country as part of his trade war with the nation. 

In October 2019, Israel's security cabinet decided to establish a mechanism to monitor Chinese investments, following pressure from the United States.

Pompeo and Gantz meet at the U.S. Embassy in Jerusalem, May 13, 2020.Credit: Matty Stern / U.S. Embassy

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