Israeli Firm Vying With Chinese for Highly Sensitive Plant Hit by Cyberattack

Hong Kong-based Hutchison Water hopes to build largest of its kind desalinization plant near an airbase and the Soreq Nuclear Research Center

Yaniv Kubovich
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File photo: Prime Minister Benjamin Netanyahu and Chinese Vice President Wang Qishan at a conference in Tel Aviv in 2018.
File photo: Prime Minister Benjamin Netanyahu and Chinese Vice President Wang Qishan at a conference in Tel Aviv in 2018.Credit: Ofer Vaknin
Yaniv Kubovich

An Israeli infrastructure company bidding against a Chinese firm to build a desalinization plant was the target of a recent cyberattack, though it is not yet clear what information the attackers sought and how well they succeeded, defense sources told Haaretz.

In May, Nir Ben-Moshe, the head of Malmab, the Defense Ministry’s security department, told Israel’s tenders committee he strongly opposed the bid by the Hong Kong-based company, Hutchison Water.

Haaretz Weekly

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The investigation into the cyberattack was launched after the National Cyber Directorate received information indicating that the targets were company officials planning the project, including engineers and other experts, the sources said.

Hutchison has reached the final stage of the bidding despite American pressure to halt infrastructure deals with China and despite the warning by Malmab.

The desalination plant, Soreq B, is to be built near an existing plant near the Palmahim air base on the coast between Tel Aviv and Ashdod. The new plant will also be near the Soreq Nuclear Research Center and be the largest of its kind in the world.

According to early estimates, the new plant will be able to produce 200 million cubic meters of water annually. The cost of its construction is expected at 5.2 billion shekels ($1.5 billion).

Construction is due to take three years, with the winning company authorized to operate the facility until 2049.

An initial review showed that the attackers operated from a country in Western Europe, the sources said. The authorities do not have any information tying Hutchison to the attack, but the incident has raised concerns among defense officials about dangerous scenarios they have warned about.

The National Cyber Directorate focused first on identifying whether a government or company was behind the attack, the sources said. A cyberattack orchestrated by a foreign government could have far-reaching consequences given the importance and location of the plant.

The National Cyber Directorate said: “We do not provide information about the existence or nonexistence of an investigation into cyberattacks.” On Tuesday, however, following the report, the agency said what had been "attributed to the Cyber Directorate is not correct."

Existing desalination plant near the Palmahim air base on the coast between Tel Aviv and Ashdod, Israel, 2016.

A defense official added that in the past, the defense establishment did not take a firm stance regarding certain projects that Chinese companies took part in, and not much thought was given to the ramifications.

He said that today it is understood that wrong decisions have been made and that the issue of Chinese involvement at key sites has not been addressed seriously enough.

This is not the first time that defense officials and others have criticized the government’s policy regarding Chinese companies at sensitive sites. Concerns were raised when a Chinese company won the bidding to build ports at Haifa and Ashdod, to build the Tel Aviv Light Rail – the work runs under General Staff headquarters and the Defense Ministry – and to dig the Carmel Tunnels.

In May, Haaretz’s Amos Harel reported on defense officials’ opposition to Hutchison’s participation in the bidding for the desalinization plant. At the time, the National Infrastructure, Energy and Water Ministry said that “a response to Malmab’s inquiry was sent by the Energy Ministry and the Finance Ministry two months ago. The letter explained that Hutchison Water [Israel Ltd.] is an Israeli company indirectly owned by a company from Hong Kong.”

The ministry added that the company was already doing desalination work at the very similar and nearby Soreq A plant already in operation. “Therefore, the ministries do not see how the Hutchison group’s participation in the new tender is any different from the group’s current activity in Israel,” the Energy Ministry said.