The Finance Ministry is prepared to buy water from private desalination companies at much higher prices than it is prepared to pay Mekorot.

The Finance Ministry is prepared to buy water from private desalination companies at much higher prices than it is prepared to pay Mekorot (the national water company), according to people involved in Mekorot’s desalination project in Ashdod.

The Finance Ministry was offering private companies NIS 2.75 per cubic meter of water, whereas Mekorot was compelled to commit to a price of NIS 2.36 per cubic meter of water as a condition for obtaining a permit for its facility, the sources said.

The yearlong battle between Mekorot and the Finance Ministry has delayed the 100-million-cu.-m.-a-year Ashdod desalination facility, which will be one of the largest in the world, even as Israel’s water shortage worsens in one of the worst droughts in decades.

Mekorot subsidiary Mekorot Development & Enterprise awarded the tender to build the Ashdod desalination plant to the IVM consortium, comprising Minrav Holdings and Spain’s Valoriza Agua, a division of Sacyr Vallehermoso subsidiary SADYT.

However, shortly after construction began, the inter-ministerial tenders committee ordered a halt to the work and demanded that Mekorot commit to a price of NIS 2.36 per cu. m. of water. Mekorot, which based the project on a price of NIS 2.85 per cu. m., said it could not meet this price.

The Finance Ministry said the lower price was based on the tender for the Soreq desalination plant, which was completed a few days before, and was won by a consortium of IDE Technologies and Hutchison Water, with a price of NIS 2.01 per cu. m.