Sources inform “Globes” that Ministry of Finance Accountant General Dr. Yaron Zalika has decided not to allow VID Desalination Company to expand production at the Ashkelon desalination facility from 100 million cubic meters a year to 120 million.
Zalika's position contradicts the Ministry of National Infrastructures', which supports the expansion, in view of the delays in other desalination projects that were already supposed to be underway.
The Ministries of Finance and National Infrastructures have sharply disagreed over the past year on the publication of more desalination tenders. While the Ministry of National Infrastructures has urged the publication of more tender, the Ministry of Finance has sought a delay, due to concerns of an oversupply of desalinated water. The Ashkelon desalination facility is the only one of all the planned projects actually under construction, and is due to open in a few months.
The VID consortium comprises IDE Technologies, owned by Delek Group (TASE:DLEKG) and Ofer Brothers; Veolia Water, the water division of Veolia Environnement (formerly Vivendi Environnement) (NYSE:VE; Euronext:VIE), and Elran Infrastructures, owned by the Dankner group.
VID won an international tender to desalinate 50 million cubic meters of water a year. The Ministry of Finance later approved VID's request to double the amount. However, this time the ministry has refused a new request to for another 20% increase in the amount of water to be desalinated a year.
The Ministry of Finance stated in response, "In accordance with the policy of Ministry of Finance Accountant General Dr. Yaron Zalika, which emphasizes the carrying out of signed contracts as written, Zalika does not intend to allow VID to increase desalinated water production by 20%."
Published by Globes [online] - www.globes.co.il - on July 27, 2004