ISRAELI HOUSING MINISTER ISSUES TENDERS FOR NEW

C O N F I D E N T I A L SECTION 01 OF 02 TEL AVIV 004830

SIPDIS

E.O. 12958: DECL: 08/04/2015
TAGS: PREL PGOV KWBG IS SETTLEMENTS
SUBJECT: ISRAELI HOUSING MINISTER ISSUES TENDERS FOR NEW
HOUSING UNITS IN BEITAR ILLIT; LIKUD MINISTER PRESSES FOR
E-1 EXPANSION

REF: TEL AVIV 04284

Classified By: Ambassador Daniel C. Kurtzer for reasons 1.4 (b) and (d)

This cable has been cleared by Consulate General Jerusalem


1. (C) Summary: Israeli press reported today, August 4,
that the Ministry of Construction and Housing (MOCH)
published notices for two tenders for the sale of a total of
72 residential units, plus commercial space, in Beitar Illit,
a settlement southwest of Jerusalem. Housing Minister Isaac
Herzog told the Ambassador that the units meet pressing
ultra-orthodox demand, are located within the "construction
lines," and are in a "consensus settlement bloc" adjacent to
the Green Line. Peace Now reports that, with these units,
the GOI has issued tenders for a total of 235 units since the
beginning of this year. Separate press reports said that
Israeli Health Minister Danny Naveh submitted a resolution to
the Cabinet last night that the GOI approve building a new
neighborhood in E-1, between Ma'ale Adumim and Jerusalem, in
Sunday's Cabinet meeting. Israeli pundits speculate that
Naveh submitted the proposal in exchange for his vote in
favor of the resolution to evacuate the first group of
settlements from the Gaza Strip under the disengagement plan.
The Prime Minister's office has reportedly rejected Naveh's
demands. End summary.

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Houses for Sale in Beitar Illit
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2. (C) The Ministry of Construction and Housing (MOCH)
published notices for two tenders today in Ha'aretz for the
sale of a total of 72 units in the B1 area of Beitar Illit
settlement, southwest of Jerusalem. The first tender is for
the sale of 30 residential units covering 3,200 square meters
in two plots, and an additional 1,400 square meters for
commercial building. The plots can be leased for 98 years,
with an option to extend for an additional 98 years, and have
a minimum cost of USD 517,700. The tender also states that
the "expenditure for development" is in the amount of USD
1,972,366. Dr. Chaim Fialkoff, Senior Deputy Director
General for Planning and Coordination at the MOCH, told
Embassy econoff that building contractors will pay the
development expenditure -- or the infrastructure that the GOI
has put in place at the neighborhood level -- and then begin
bidding above the USD 517,700 minimum cost, with the highest
bidder winning. According to the notice for this tender,
interested bidders can pick up informational booklets
beginning today, and can submit their bids through September

14. The building contractors who win the bid will have 36
months to develop the land. Fialkoff said these would likely
be multi-unit dwellings.


3. (C) The second tender is for 42 residential units
covering 5,000 square meters also in the B1 area of Beitar
Illit at an adjacent site, as published in Ha'aretz.
Fialkoff reported that each unit would average 120 square
meters. The minimum cost is USD 871,100 and the development
expenditure is USD 2,160,238, but according to Fialkoff,
this tender differs from the first in that building
contractors bid at the lowest cost they can offer buyers on a
per-meter basis when construction is complete. He said that
in both cases, however, the builders will be in charge of
marketing and selling the units to individual buyers.


4. (C) In response to econoff's question on the lag time
between the final GOI approval of the projects and the
publication of the tenders, Fialkoff responded that he does
not know for sure. He said, however, that there is
significant demand in Beitar Illit and he guessed that not
much time has passed between the final approval and the
tender publication. He explained that while in some cases
plans can sit on shelves for years before they are developed,
Beitar Illit is not one of those cases and it is likely that
the project received the final approval "relatively
recently," in the past few months. (Note: This is contrary
to MOCH public comments that these projects were approved
"years ago." End note.) When econoff asked if there are
other plans such as these in the pipeline, Fialkoff said,
"not that I know of."


5. (C) Housing Minister Isaac Herzog told the Ambassador
that he approved the projects because Beitar Illit is near
the Green Line and within the "consensus settlement blocs"
that will be part of Israel. Herzog explained that the
demand from the Haredi community in the area far exceeds the
number of housing units he approved, and that all of the
approvals fall within the construction lines of the
settlement. Herzog stressed he is approving far fewer
settlement tenders than his predecessors.


6. (U) Peace Now, in response to the announcement, said that
with these 72 units, the GOI has published tenders for a
total of 235 units since the beginning of this year. The
other locations are:
-- Givat Ze'ev: 63 units, published on January 1, 2005.
-- Ariel: 10 units, published on March 24, 2005.

-- Elkana: 50 units, published on April 18, 2005.

-- Ma'ale Adumim: 22 units, published on June 2, 2005.

-- Elkana: 18 units, published on July 6, 2005.

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E-1 Expansion to Ma'ale Adumim Tabled
--------------


7. (U) Separately, press reported that Health Minister Danny
Naveh submitted a resolution to the Cabinet last night that
the GOI approve building a new neighborhood in E-1, between
Ma'ale Adumim and Jerusalem, in Sunday's Cabinet meeting.
The press reports say that Naveh submitted the proposal in
exchange for his vote in favor of the resolution to evacuate
the first group of settlements -- Netzarim, Kfar Darom, and
Morag (Cabinet meeting agenda reported septel). Naveh
reportedly said that the plan is meant to prevent "a
Palestinian stranglehold" around Jerusalem and is especially
necessary to strengthen Jewish settlements and security in
the West Bank while the GOI is evacuating settlers from the
Gaza Strip. The Prime Minister's Office has reportedly
rejected Naveh's demand.


8. (C) Danny Seidemann, an Israeli attorney with human
rights NGO "Ir Amin," told ConGen poloff August 4 that
Naveh's statement is badly timed and puts the GOI on a
collision course with the U.S. administration. "There is
likely to be much more international pressure against the E-1
project after Gaza disengagement, so it is in the interest of
the Israeli 'right' to put Sharon's government under
pressure," said Seidemann, opining that the future of the
two-state solution will be decided in and around Jerusalem.
According to Seidemann, Sharon sees it as politically
necessary to take inflammatory actions in Jerusalem to
compensate for evacuating settlements in Gaza. Seidemann
said that the next 48 hours are critical in the international
community's swift reaction and strong condemnation of Naveh's
statement.


9. (C) Comment: Israeli Housing Minister Isaac Herzog told
a visiting staffdel last month that the GOI intends to
eventually build 700 new housing units in Ma'ale Adumim and
Beitar Illit (ref A). If this is true, we expect to see more
tenders of this nature in the coming months, and will
continue to try to obtain a list from the MOCH of projects
that are in the planning phases. End comment.

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