Red-Dead Feasibility Grapples with Funding Problems as

C O N F I D E N T I A L AMMAN 003011 SIPDIS STATE FOR NEA/ELA, NEA/RA, AND OES STATE PASS TO USAID E.O. 12958: DECL: 11/09/2018 TAGS: SENV EAID PGOV JO SUBJECT: Red-Dead Feasibility Grapples with Funding Problems as Private Sector Proposal Gains Traction Ref: A. Amman 1882 ¶B. Amman 409 ¶C. Amman 228 Classified by: DCM Lawrence Mandel for reasons 1.4 (b) and (d) ¶1. (C) The World Bank led Red-Dead Feasibility Study (RDS), grappling with a $3.5 million funding shortfall at its May 2008 launch, continues to wrestle with money-problems. Ministry of Water and Irrigation (MWI) Assistant Secretary General (and Red-Dead Project Manager) Fayez Bataineh told ESTH Officer on October 28 that four Israeli specialized institutions contracted for technical sub-studies related to environmental issues have submitted proposals for $2 million when only $400,000 has been budgeted by the World Bank. The Italian government announced a $2 million contribution to the RDS in October 2008, however, according to Bataineh, Italian government procurement rules require the proposals to be placed for open international bidding. Bataineh noted that the funding issues would be discussed at the November 23 Technical Steering Committee meeting in Aqaba and expected that the RDS would likely be delayed. Bataineh reported the World Bank is in discussions with Korea and Sweden about additional RDS funding support, and chuckled when suggesting a "nudge" from the U.S. would help them make a positive decision. Montgomery Watson Harza Proposal Gains Traction -------------- -- ¶2. (C) Montgomery Watson Harza (MWH),a U.S.-based global vendor of water management and engineering services, has been promoting in the region over the last year its own proposal for a Red Sea-Dead Sea canal (ref A). Jordan's Water Minister Raed Abu Saud previously told Post that Jordan would need to speed up implementation of the Red-Dead project once the RDS was completed as he planned to engage MWH to start a Jordan-specific implementation of the project (Ref A). Bataineh subsequently confirmed that the MWI initiated a $3.2 million project feasibility study with MWH on October 1, based on a Jordan-only approach. The study is expected to be completed by February 2009 and, according to Bataineh, takes a broader perspective than the RDS by addressing the development of economic zones along the canal and associated financing issues. MWI is providing 80% of the study costs from its own budget with the rest being borne by MWH. Visit Amman's Classified Website at http://www.state.sgov.gov/p/nea/amman Beecroft