Israel Playing Catch-up in Expanding Its Water Infrastructure

Officials are now trying to clear the way for the cabinet to approve an emergency plan to spend up to $3.8 billion over the next seven years

This is the sort of water technology most often associated with Israel: At the IDE and Veolia Sea Water Reverse Osmosis Desalination Plant in Ashkelon.
Eitan Simanor / Alamy Stock Photo

For the average Israeli coping with flooded streets and leaking roofs this winter, there doesn’t seem to be any water crisis. Northern Israel has exceeded normal rainfall, with most places recording 150% or more average levels. Lake Kinneret – the Sea of Galilee – has risen more than 19.5 centimeters (7.7 inches) this week alone.

But the heavy rains are following five years of drought during which the Water Authority failed to invest enough to ensure that Israel has a long-term, reliable supply.

Officials are determined to make up for the lost time and investment as quickly as possible, but they face a legal obstacle: Prime Minister Benjamin Netanyahu’s caretaker government is barred by law from making critical, costly decisions, except in urgent cases.

Thus, while Israel is being drenched, officials from the finance and energy ministries and other branches of the government are trying to convince their counterparts at the Justice Ministry that Israel not only faces a water crisis but should deem it a national emergency that demands immediate attention.

>> New pipeline will bring desalinated water to Israel's only freshwater lake

If they succeed, the cabinet should be able to approve in the next few weeks an ambitious program to at least double investment in the water sector over the next seven years. Government officials estimate that this will amount to about 10 billion shekels ($2.7 billion at current exchange rates), but experts in the water industry say the cost is more likely to run to 2 billion shekels a year, for a total of 14 billion shekels ($3.8 billion).

With such a fat prize officials face another obstacle besides skeptical a Justice Ministry. They are determined that the government-owned water company Mekorot be barred from developing most of the biggest projects, even though an agreement with unions right now guarantees that two-thirds of all engineering work Mekorot needs be done by the company’s EMS Mekorot Projects subsidiary.

In the name of cost efficiency, the government wants to put the projects up to competitive bidding by Israeli and overseas companies.

Mekorot would only have a management role as a partner with the winning bidder, but Mekorot employees and the Histadrut labor federation are fighting this.

The water crisis has been years in the making. The five drought years didn’t do much to convince the Water Authority that it needed to step up investment in developing new supplies, the state comptroller said in an October report.

Also, the authority failed to stem a rise in per capita water consumption and reduced the annual target for desalination from 750 million cubic meters, which the government had set in 2013, to 600 million cubic meters through 2020.

“The Water Authority walked on the edge time after time, loosening the reins immediately after one rainy year while ignoring the long-term effects in the region of climate change,” the comptroller said. “The absence of sustainable planning and mismanagement by the authority have caused another water crisis.”

The program calls for building two new desalination plants – one in the Western Galilee and one next to the existing Soreq plant south of Tel Aviv that would be the world’s largest. Together they would add 300 million cubic meters annually to Israel’s desalination capacity of 858 million.

Other major undertakings include drilling wells at a rate of 20 annually and building a pipeline to deliver desalinated water to the Kinneret.

The latter project originally called for a pipeline to deliver no more than 100 million cubic meters of water at a construction cost of 700 million shekels. But Jordan, which is desperately short of water, may need to buy it from Israel. If so the pipeline feeding the Kinneret could triple in size and cost.

The catch is that Jordan doesn’t have the money to help pay for an enlarged pipeline. Israel has good national security reasons for ensuring the stability of the kingdom, but many officials fear that Israeli consumers could end up covering the cost.

In addition, if the Israeli-Jordanian plan to pump water from the Red Sea into the Dead Sea gets underway, Israel will be spending money on a system to distribute desalinated water from a Jordanian plant to farms in the southern Arava down south. If the Red-Dead project doesn’t begin, a desalination plant in Eilat will have to be doubled in size.

The cost of financing such a massive undertaking is expected to be borne by Mekorot, which would act as manager of the projects. The state-owned company doesn’t have the financial resources to do this, so the plan is to increase its shareholders’ equity by selling real estate and issuing bonds of up to 800 million shekels.

If the program fails to go ahead as planned, the government will have no choice but to scale down spending to 6 billion to 7 billion shekels financed by government-backed bonds or (the least attractive choice) by raising water rates up to 10%.

Except for the two desalination plants, whose developers and operators will be chosen by a bidding process, the rest of the work will come under Mekorot’s purview. Officials say this is because the other projects require an expertise that the government doesn’t have.

In any case, rather than exclude Mekorot altogether, the plan is for the state-owned company to act as a contractor for private-sector companies chosen by competitive bidding to perform the work.