The site of the Ashelim solar energy plants is strewn with unexploded ordnance, the Ministry of Defense told the companies bidding in the international tender to build and operate the power plants. The statement of commitment to bidders stipulates that they will be responsible for clearing the area of any ordnance found in it.
The Ministry of Defense is also demanding that the bidders consent to allowing the IDF "to continue firing over the power stations", and to forego in advance any claims for compensation for any damage resulting thereof.
Sources affiliated with the tender expressed concern that these conditions may result in the remaining foreign bidders, mostly large infrastructure firms, to withdraw. The foreign companies in the tender include Germany's Siemens AG (NYSE: SI; XETRA: SIE) through Siemens Concentrated Solar Power Ltd. (formerly Solel Solar Systems), Spain's Abengoa Bioenergy SA (IBEX:ABG), and France's Alstom SA (Alstom SA (LSE: ALS; Euronext: ALO) in partnership with Israeli firms.
The BOT tender is for the planning and construction of two thermosolar power plants at Ashelim, and their operation and maintenance for 25 years. The two plants will be among the largest of their kind in the world.
The tender has been delayed because of demands by the defense establishment, which operates a landing field near Ashelim, and uses part of the area for training. Two years ago, the defense establishment reached a deal with then-Minister of National Infrastructures Benjamin Ben-Eliezer that the IDF would vacate the training ground, but the agreements on the matter between the ministries of defense and finance were only finalized last month.
The Ministry of Defense sent the statement of commitment to the Ashelim tender bidders as part of the agreement with the Ministry of Finance. It states, "There is a possibility that explosives and unexploded ordnance of all kinds may be found in the area of the tender… The IDF will carry out training exercises, including live fire exercises, in the military areas adjacent to the power stations, and that firing over the area of the power stations and use the unused area of the power stations, everything pursuant to IDF training guidelines."
The bidders were also asked to adhere to strict height restrictions to allow Israel Air Force planes to fly low over the power stations, finance the paving of an military road as an alternative to the present road that cross the area of the facility, and to deposit NIS 2 million in guarantees in favor of the defense establishment. The bidders must also undertake to clear the area in the event that their activity "materially affects activity of the defense establishment." A company that does not comply with the defense establishment's demands will face a fine of NIS 100,000 per day.
Published by Globes [online], Israel business news - www.globes-online.com - on July 19, 2010
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