JORDAN SLOWLY AND CAREFULLY PROCEEDING WITH PLANS

UNCLAS SECTION 01 OF 02 AMMAN 002562 SIPDIS SENSITIVE SIPDIS FOR NEA/ELA, NEA/RA, AND OES; PASS TO USAID AND OPIC E.O. 12958: N/A TAGS: EAID SENV JO SUBJECT: JORDAN SLOWLY AND CAREFULLY PROCEEDING WITH PLANS TO TAP INTO DISI AND AQABA WATER RESOURCES REF: A. 06 AMMAN 8401 ¶B. 06 AMMAN 4692 Sensitive but unclassified -- protect accordingly. Not for internet distribution. ¶1. (SBU) Summary and comment: After years of research and discussion, the GOJ is evaluating three bids to transfer water from the Disi Aquifer in southern Jordan to Amman. Officials are also contemplating an unofficial offer from an Arab country to exploit Disi and/or build a large desalination plant at cost in exchange for real estate development projects. Both approaches are viable according to Bassem Awadallah, Director of King Abdullah's office, who stressed that there would be considerable private sector involvement. Awadallah is hopeful that Disi water will reach Amman by 2011. Continued economic and population growth will increase Jordan's water needs, and desalination is a long-term solution which could also benefit neighboring countries. Awadallah admits that Jordan would eventually need to address heavy agricultural use of its limited water resources, a politically sensitive issue. Comment: Post believes that water from Disi, a fossil aquifer, should not be used for agricultural purposes. Groundwater levels in Jordan are steadily dropping and post has encouraged the GOJ to promote increased water use monitoring and regulation. End summary and comment. ¶2. (SBU) OPIC representatives Vice President for Structured Finance Robert Drumheller, Director of Structured Finance Nancy Rivera, and Maria Goravanchi visited Jordan June 10 - 12 for meetings with Jordanian officials in Aqaba and Amman on plans to develop projects for the delivery of water from the Aqaba region to Amman and other areas. Following technical discussions in Aqaba, the OPIC team met June 12 with Bassem Awadallah, Director of the King's Office, who briefed them, the Ambassador, FCS Counselor, and EconCouns on Jordan's water strategy. Awadallah identified water security as one of three key elements of Jordan's five-year plan. Energy security and infrastructure security, including roads, rail, and pipelines, are the other two elements. ¶3. (SBU) Awadallah commented that "all governments are cautious on mega-projects," but said that after ten years of no progress, the GOJ was ready to move forward on a 
Build-Own-Transfer system to deliver groundwater to Amman from the Disi Aquifer. The top three bids from the private sector are on the desk of the Prime Minister, who has also received recommendations from the Ministry of Finance and the Ministry of Water and Irrigation. He said the proposals' price per cubic meter of water was higher than desired, so the GOJ was also weighing an informal proposal from an Arab country to provide water at cost as part of a real estate development proposal. Whether the GOJ accepted one of the bids or pursued a deal with an Arab country, Awadallah was confident the project could be done and was optimistic that work on the Disi Aquifer could begin by 2009 with water delivery in 2011. He restated the GOJ commitment to private sector involvement in the winning bid, welcomed news that OPIC had offered to provide financing to some of the successful and unsuccessful bidders, and encouraged continued OPIC involvement. Awadallah was also sensitive to the need to address environmental concerns in Aqaba, and admitted that Jordan needed to address the political hot potato of water consumption by the agricultural sector. ¶4. (SBU) Despite efforts to proceed with the Disi project, with 6 per cent economic growth, 2.4 per cent population growth, and increasing industrial demands for water, Jordan's needs and the price of water would continue to rise, Awadallah explained. He said the long-term solution to Jordan's water problems was desalination, either in tandem with Disi or the Red Sea - Dead Sea Conveyance project. The latter would not only raise the water level of the Dead Sea, but could also address regional water shortages. Construction of a desalination plant could occur independent of or concurrent with the Disi project. Awadallah added that after years of fruitless discussions with the Israelis and the Palestinian Authority, Jordan was going to pursue a desalination project independent of the Red-Dead project, while still waiting for the results of a World Bank coordinated feasibility study funded by international donors, AMMAN 00002562 002 OF 002 including the U.S. Awadallah also outlined a plan "still on the drawing board" for the Wadi Araba region that would bring desalinated water up from a plant to be located on the Red Sea. He asserted increased water resources would attract economic development, provide economic opportunities to residents thereby eliminating the emergence of more Zarqawis, and serve as a money-making vehicle through the sale of water to Jordan's neighbors. ¶5. (U) OPIC did not clear this message. Visit Amman's Classified Web Site at http://www.state.sgov.gov/p/nea/amman/ Hale