Israel, Jordan, and the Palestinian Authority will today sign with the World Bank an agreement to finance the construction of the Red Sea-Dead Sea Conduit. Minister of National Infrastructures Silvan Shalom will represent Israel, alongside his Jordanian and Palestinian counterparts. Shalom's aides said that the signing was a "historic event" and that Shalom had been working on the agreement with the Jordanians and Palestinians since 2009.
This is the first step toward the realization of the ambitious Red Sea-Dead Sea Conduit, which Israel has been promoting for 40 years. In the first stage, a 180-kilometer pipeline will be laid along the Jordanian side of the Arava. The pipeline will carry 100 million cubic meters of brine a year from a desalination plant that will be built north of Aqaba to the Dead Sea. The water entering the Dead Sea will slow the fall in its water level, currently at 1.2 meters year, by 10%.
The project's developers hope that this limited amount of water will allow a controlled study of the effect of mixing Red Sea seawater with the hyper saline water of the Dead Sea, on the basis of an opinion that states that it is possible to inject up to 400 million cubic meters of seawater without causing irreversible damage to the Dead Sea.
The Red Sea-Dead Sea Conduit will cost an estimated $200-400 million, which will be financed by the World Bank with bridge loans that will be repaid by donor countries and philanthropists.
The Aqaba desalination plant will be built under a BOT (build, operate, transfer) contract by private sector companies, which will be chosen by tender. The tender's prequalification stage will be opened in a few days, and construction is scheduled to begin in twelve months and take four years.
The Aqaba desalination plant will produce fresh water for residents of Aqaba, Eilat, the Arava, and the Palestinian Authority. Under the agreement, Jordan will receive 30 million cubic meters of fresh water a year, Israel will receive 30 million cubic meters, and the Palestinians will have an option on the remaining 30 million cubic meters. If the Palestinians do not exercise the option, Israel can procure up to 50 million cubic meters of fresh water. To save Jordan the high cost of transporting water from the Arava to its population centers around Amman, Israel will supply water to Jordan from the Kinneret in exchange for Jordanian water from the Aqaba desalination plant.
The brine by-product, which is usually returned to the sea, will go to the Dead Sea.
Sources inform ''Globes'' that two French conglomerates, Veolia Environnement SA (Euronext: VIE; NYSE: VE) and GDF Suez SA (Euronext: GSZ) want to build the hydroelectric plant along the conduit's route. The plant will exploit the 400 meter drop from sea level to the Dead Sea. The two companies, represented in Israel by Adv. Moshe Shachal, have approached Shalom, saying that it was possible to build along the conduit's route two 300-megawatt power stations, which could sell electricity to hotels in Eilat and Aqaba. The companies estimate the cost of the project at €1 billion. The cost of hydroelectric power is very cheap. A source close to the project told "Globes" that the power stations would be built in the conduit's later stages.
Published by Globes [online], Israel business news - www.globes-online.com - on December 9, 2013
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