GWI Newsletter -- Israeli Government to Blame for Water Crisis (Part 3)

Israel would rather be known for its technical innovations, but recently, it has been getting in the news for all the wrong reasons.  International relations aside, the state now lacks 15.2bil m3 of water in its reservoirs due to over extraction of water. This is more than five times Israel's annual water demand! A government-appointed committee puts the blame squarely on several government agencies:

• Water Authority -- lacked public transparency, failed to coordinate with other government agencies, did not warn of the crisis in time, took no action to prevent overproduction, and did not adequately explain the consequences of a delay in implementing desalination on the necessary scale
• Finance Ministry -- delayed the desalination plan asking that conservation and water reuse be done first, but provided insufficient resources to do so

Cliched as it maybe, every cloud has its silver lining, and companies can now look forward to the rolling out of a large number of projects, ranging from large desalination plants and major network expansions, to groundwater protection measures.

Bank-rolling these projects, though, may be more of a challenge. Tariff hikes of just over 40% have already been scheduled for this year, but it is estimated that tariff rates will have to rise by at least 60% to cover the full cost of these projects. The Finance Ministry is, obviously, facing difficulties in raising tariffs any further, and are likely to have to allocate funds from the state budget. Honestly, can they afford not to?

Main source:
Report Reveals Israel's Crisis of Confidence

GWI Newsletter -- Spotlight on Libya (Part 2)

Libya is not afraid of big projects. Just take a look at its massive US$11bil 4,000km Great Manmade River (GMMR) project to supply groundwater from the South to the Northern agricultural areas. In spite of this, Libya is still anticipated to face a shortfall of 2mil m3/day of water, which will worsen to 11mil m3/day by 2025. Moreover, there are signs that the water sources feeding the GMMR are being drawn down too quickly.

Initially wary of desalination, an extensive network of desalination plants has now be planned for the next 10 years. And specifically, they are only interested in reverse osmosis technology, which the highest echelons of the Libyan government are convinced is the best method, despite alternative technologies proposed by potential developers. Many international desalination developers have been knocking at Libya's doors, including Singapore's Hyflux, who inked a Memorandum of Agreement (something similar to pre-qualifying for a tender) at SIWW 2009 for two desalination plants in Libya.

But as with any country's forays into new areas, Libya has its share of difficulties. In this case, it is the procurement model. Even after two years, the General Desalination Company is still undecided on its procurement strategy.  International companies are hopeful for a privately-financed Build-Operate-Transfer model, but a recent EPC tender for a desalination plant suggests that international companies may be better off sourcing good local contractors as partners in the short term.

Main Sources:
Libya Weighs Up its Water Supply Options
A New Look for Desal in Tobruk
Libya's $11 Billion Water Lifeline
Hyflux in JV to Develop 2 Seawater Desalination Plants in Libya