94 cos buy Red-Dead Sea pipeline tender papers

Dead Sea picture: Tamar Mitzpi

Regional Cooperation Ministry:US will pay $100 million of the total $400 million cost.

At an international conference yesterday in Aqaba, the Israel Ministry of Regional Cooperation presented the timetable for the Red-Dead Sea project to potential donors, headed by the US government and the World Bank. The project is designed to save the Dead Sea, in which the water level is falling every year, and arrange the division of water between Israel and Jordan.

Last December, Israel and Jordan published a tender for the Red-Dead Sea project calling on Israeli and international companies to take part in a preliminary selection process. Two year before that, in December 2013, the two countries signed a letter of intent at the World Bank headquarters in Washington.

The Ministry of Regional Cooperation yesterday revealed that 94 of the world's largest companies had acquired the tender papers, indicating strong global interest in the project.

"The project is an extremely significant cooperative Israeli-Jordanian civilian project that will improve the lives of the peoples in the region, and the donor countries will therefore make donations to this important project," Deputy Minister of Regional Cooperation Ayoob Kara (Likud) stated.

The Ministry of Regional Cooperation also said that the US had decided to help finance the project with a $100 million grant. Under the current format agreed by the parties, a four-pipeline conduit will be laid connecting the Red Sea to the Dead Sea. The conduit will be entirely in Jordanian territory, and some of the water transported through it will be supplied to a desalinization facility in Aqaba. Israel will buy water from this facility for Eilat and the Arava region, and will undertake to supply water from Lake Kinneret (the Sea of Galilee) to northern Jordan. The main cost of the project is an estimated $400 million for building the long conduit.

Israel hopes that others besides the US will make donations for the project. Government sources said that several countries, including France and Japan, have already expressed interest in helping to fund the conduit.

Maya Eldar, who is in charge of the administration for the project and for devising the international format for the conduit, yesterday said, "Another stage in the historic Red-Dead Sea project has been completed." She expressed satisfaction at the presence of ambassadors and delegations at the conference, asserting that this attendance "demonstrates the world's great interest in this unique project and its importance. Together with all the international partners, we will continue this strategic mission."

Alternative plan: Mediterranean Sea water

Concurrently with the Red-Dead Sea project, an alternative to it is under consideration an underground conduit instead of pipelines. As reported in "Globes" last March, for several months Israel Electric Corporation (IEC) (TASE: ELEC.B22), Mekorot National Water Company, and a group of private developers have been considering digging a 100-km underground conduit to transport water from the Mediterranean to the Dead Sea and the construction of a underground hydroelectric power station for producing electricity using the difference in height between the Mediterranean and Dead Seas. The plan is being examined by an inter-ministerial team coordinated by Prime Minister's Office director general Eli Groner. If the alternative plan is adopted, however, Jordan is liable to regard it as a violation of its agreement with Israel.

EcoPeace Middle East (formerly Friends of the Earth Middle East) Israel director Adv. Gidon Bromberg, who also represents Jordanian and Palestinian activists, says, "Without the consent of Jordan and the Palestinian Authority, investors and international companies will oppose the project, and won't invest a dollar here. Under international law governing the joint Mediterranean basin, the consent of all parties is required."

Published by Globes [online], Israel business news - www.globes-online.com - on May 10, 2016

© Copyright of Globes Publisher Itonut (1983) Ltd. 2016

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Dead Sea picture: Tamar Mitzpi
Dead Sea picture: Tamar Mitzpi
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