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The state controller's harsh criticisms of the government's inability to achieve its desalination goals have repercussions on policy makers. After eight years of delay, the construction of Sorek B, Israel's sixth desalination plant, which is expected to be the largest in the world, has begun to progress rapidly.
Four months after the government approval of a strategic plan to address the prolonged drought in Israel, the ministerial procurement committee, representing the Ministry of Finance, the Ministry of National Infrastructures, the Energy and Water Resources and the Israeli Water Authority, published today the tender documents. for the Sorek B desalination plant. The committee is led by Itsik Marmelstein, Project Manager for Energy and Water Units and Public-Private Partnerships (PPP) in the General Accounting Department. from the Ministry of Finance.
The PPP concession holder will be responsible for the planning, financing, construction, operation and maintenance of the desalination plant for 25 years. The plant will produce 200 million cubic meters of water per year, bringing the total desalinated water production capacity of Israel to 785 million cubic meters per year, or 85 percent annual consumption of households and municipalities in Israel.
Earlier this month, seven local and international consortia submitted their applications to the prequalification phase of the bidding process. The committee will announce in November which consortia have met the required conditions and will be invited to bid on their offers.
The consortia that submitted their nominations were Hutchison, the Israeli companies IDE Technologies and GES, the Chinese company PMEC, the French company SUEZ, a partnership of the Spanish company Acciona with the Israeli company Allied Investments and a partnership between the Spanish company Aqualia and the Israeli company WPI.
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IDE, controlled by Yitzhak Tshuva and Alpha Partners, had to sell its stakes in the Sorek A desalination plant to participate in the new tender. However, there is no guarantee that the IDE will outweigh the other six consortiums in the pre-selection phase.
In offers of this type, a winner is usually selected and then asks a bank to provide funding for the project. For the first time in a call for desalination offers in Israel, the state can select two bidders for the final phase, in which they will have to choose a lending bank and complete with it the project funding procedure. With the lending bank, bidders will then be allowed to submit improved bids, from which the state will select the winning bid (Best Final Offer Procedure (BAFO)). This procedure will increase certainty as to the execution of the project and provide the state with a better offer.
The tender documents also give the developer the opportunity to build a private power plant with a capacity of 140 megawatts for the operation of the facility. A letter of intent from the European Investment Bank (EIB) to finance the project to the tune of 200 million euros is also attached to the documents.
If drought persists next year, disturbances in household water supply are likely to occur.
Water desalination plants in Israel currently supply 585 million cubic meters of desalinated water annually, or 70% of the total water supplied to households and communities. According to a Cabinet Resolution of June 2008, there should already be six desalination plants. The state controller's report indicates that the Water Authority has not taken the necessary steps to achieve the desalination target set by the government in 2008; instead, it actually changed the government's desalination target volume without approval of this measure. As a result, a sixth desalination plant has not been built, water quotas for agriculture have been reduced and persistent drought is likely to disrupt household water supply.
Sorek B is expected to be operational only in eight years, which means that if the drought continues next year for the sixth year in a row, disruptions in water supply are likely.
Posted by Globes, Economic News in Israel – www.globes.co.il – October 29, 2018
© Copyright Globes Publisher Itonut (1983) Ltd. 2018
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