Thursday, September 28, 2017

Israel's Desalination Disaster

When we in the Water Authority were preparing the international bidding papers for five seawater desalination plants, the state-owned water corporation Mekorot had a fit fearing that its 70 years old monopoly was about to end. Israel was moving towards a desalinated water system and Mekorot was being left out of the future. Applying its considerable political power, it  demanded to be assigned at least one desalination project.

The Otzar, the Treasury, said: All right, although you are a subsidized State-owned fossil sorry corporation, you are allowed to submit competitive bids. If you are selected, you are in. I remember the meetings at the Water Authority where the elders laughed, and said that Mekorot cannot compete and if assigned one project (following the usual cost-plus system), it will be unable to build it. Mekorot answered that its minimum price was 10% above the private sector competitors. My bosses at the Water Authority gave the Ashdod plant project to Mekorot without bidding.

Now I realize that I should have protested forcefully against a decision that would cost tens of million dollars for the Israeli taxpayer just because Mekorot had to be involved in the desalination business. I had a strong case. But I am super submissive to authority and knew that my bosses were all tightly linked (sentimentally, socially, economically) with Mekorot. They all did occasional well-paid consulting work for Mekorot, as I did.

The project is an absolute disaster. It never worked and it requires an additional 50 to 100 million dollars of repair work to start producing drinking water. The Otzar and Bank HaPoalim (that financed part of it) are trying to sell the white elephant.

There was talk about organizing an investigative commission to learn the causes of disaster, but apparently there was so much corruption, many millions of dollars misspent or unaccounted for, by people that sits in the current coalition government, that it was silenced. If I was a different kind of person, I could have protested (and be fired, as I was anyway). But I am me. 


  1. Maybe off-topic but interesting, Saudi Arabia is beginning a massive privatization push, they’re saying is gonna be bigger than 80s Britain or early 90s post-Soviet Union fire sale.

    Letting women drive is a sign where things are going from now on, the sheiks are with the Neoliberal World Order.

  2. They need money. They are trying to sell part of their holdings and sell bonds. They need to look acceptable, soon you will see them discarding their pink galabiyyas and dressed like Western businessmen.