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Israel’s Ashdod Desalination Plant will be repaired and privatized

  • Israel’s Ashdod Desalination Plant will be repaired and privatized
    Ashdod (cc/Wikipedia)
Global Omnium
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The Israeli government, banks and the Mekorot Water Authority, Israel’s national water company, have reached an agreement to repair and sell the Ashdod Desalination Plant, reported Jewish Press. After complex negotiations that lasted more than two years, the plant’s shares held by Mekorot will be sold in a public tender.

The plant was built after Mekorot argued that the state should have a desalination plant, given that one company, Yitzhak Tshuva's IDE, controlled most of the desalination plants in Israel, according to Globes, Israel business news source. However, the construction of the plant was not completed due to engineering and other issues. As a result, although the plant has a potential capacity to supply 100 million m3 of desalinated water per year, which amounts to 12 per cent of the domestic consumption in Israel, it struggles to deliver on that amount, leading to financial losses.

A four year plan that contemplates overhauling and privatizing the plant is expected to end the $20 million annual losses. The repairs will be carried out by the buyer and financed by Mekorot and the IVM consortium that built the plant (Minray Holdings Ltd. and Spanish company Sadyt), published Globes.

After the repairs, with some added profit sources ─ such as a natural gas-fueled power plant or solar power systems in the premises ─, and in the hands of a private buyer not subject to the same regulatory restrictions as Mekorot, the plant is expected to be profitable and yield revenues to the Tax Authority.

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