Algae crisis reveals: State payments to private desalination plants jumped by about 50%

The Water Authority has decided to "incentivize" private companies to operate desalination plants despite algae pollution, raising the price per cubic meter of desalinated water by tens of percent. The water company "Mekorot" receives desalinated water from these plants and pays the private companies that operate them. All six major desalination plants are privately owned, following Mekorot's sale of the Ashdod plant operations several years ago. Consequently, the entire water desalination system is in private hands.

The only desalination plant not affected by the algae is Hadera, while the Sorek B (IDE) and Palmachim (BlueGen and Migdal) plants continue to operate despite the pollution. This operation exposes the facilities to premature wear and significant damage, including to their membranes. The Water Authority decided to raise the price to 4 shekels per cubic meter. For context, prices typically range from 1.5 to 2.7 shekels per cubic meter depending on the facility.

The current water crisis offers a glimpse into the future: what will happen during the next major disaster with a water economy that is entirely privatized? The Water Authority acted on its own initiative to raise the price, acknowledging the risks taken by private companies. However, it raises the question of what would happen if the economic risk were too great—would private companies have stepped up then?

Only three months ago, the government approved the planning of large desalination plants by private entities to streamline national processes. This comes at a time when the state has struggled to promote projects that could have helped the water sector overcome such challenges.

The "Adam Teva V'Din" organization criticized the management of the water economy, specifically regarding investments in drilling and alternative water sources:

"The current event illustrates the cost of a lack of sufficient redundancy. When the state is required to return desalination plants to operation under emergency conditions, it is forced to pay about 4 shekels per cubic meter instead of 2.7 shekels under normal conditions, while also committing to indemnify operators for damage to membranes and filtration systems, which could reach millions of shekels. Investment in drilling should be evaluated as an 'insurance premium': investing in resilience and backup sources can reduce economic damage during a crisis and the need to pay an expensive 'emergency premium' in retrospect to ensure continued water supply."

IDE stated that they did not demand a price increase:

"All decisions, including operating instructions and tariffs, were determined unilaterally by the Water Authority without prior discussion with us. IDE has mobilized with all its might for the sake of the state and the citizens of Israel. The company operates around the clock at maximum capacity, demonstrating national responsibility, professionalism, and absolute commitment to ensuring water security and functional continuity of the economy during this difficult time."

BlueGen refused to comment. No response has been received from the Water Authority.