GAZA: POWER SUPPLY THREATENED AS CROSSINGS REMAIN

C O N F I D E N T I A L JERUSALEM 002019

SIPDIS

NEA FOR FRONT OFFICE; NEA/IPA FOR GOLDBERGER/SACHAR; NSC
FOR PASCUAL; TREASURY FOR AHERN

E.O. 12958: DECL: 11/10/2008
TAGS: ECON ETRD EAID ENRG KWBG KPAL PHUM
SUBJECT: GAZA: POWER SUPPLY THREATENED AS CROSSINGS REMAIN
CLOSED

Classified By: Consul General Jake Walles, Reasons 1.4 (b) and (d)


1. (C) Summary: The Gaza crossings with Israel have been
closed since November 4, following a resumption of violence
between the IDF and Hamas, resulting in a sharp drop in fuel
supplies. The Gaza power plant will likely shut down at 1830
hours on November 10 due to a lack of fuel, according to
plant management. 3,000 students and medical patients
reportedly traveled to and from Gaza via Rafah crossing on
November 5-7. Currency shortages continue to hamper payment
of PA salaries. End summary.

Crossings with Israel remain closed;
3,000 travelers pass through Rafah
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2. (U) Kerem Shalom crossing, Sufa crossing, and Nahal Oz
fuel transfer station have been closed since November 5.
Erez crossing has been open to 10-20 medical patients/day
since November 5, but remained closed to most NGO and
diplomatic traffic. According to press reports, a group of
European diplomats were denied entry through Erez on November

5.


3. (C) The Rafah crossing on the Gaza-Egypt border was open
to two-way pedestrian traffic (students and medical cases
only) November 5-7. Contacts in Gaza said that an estimated
3,000 travelers passed through the crossing those three days.
The Hamas "interior ministry" had registered all travelers
with Egyptian authorities prior to their passage, according
to our WHO contacts in Gaza.

Gaza power plant runs dry -
shut-down scheduled for November 10
--------------


4. (C) Gaza power plant manager Rafiq Maliha told Econoff on
November 10 that the plant will likely be forced to shut down
at 1830 local time that day due to a lack of industrial fuel.
Since the June 19 "tahdiya" between the GOI and the Hamas
government in Gaza, an average of 2.5 million liters/week of
industrial fuel has been delivered to the plant via Nahal Oz,
enabling the plant to produce 60-65 MW of electricity,
according to Maliha. He underscored that a complete
shut-down would damage the plant's turbine parts, and
subsequently re-starting the generators would require a large
amount of fuel. (Note: The plant had provided 60-65 MW over
the last few months, while Gaza imported additional
electricity via Israel (115 MW) and Egypt (17 MW). End
note.)


5. (C) UNRWA contacts told Poloff that fuel shipments via
Nahal Oz on November 3-9 met just a fraction of the fuel
demand -- 13 percent of diesel, 18 percent of gasoline, and
54 percent of cooking gas needed. The GOI has not signaled
when Nahal Oz will reopen, according to the Director of the
PA Fuel Agency on November 10.

PA salaries paid, yet NIS currency shortage continues
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6. (C) Gaza banks remain cash-strapped. Ministry of Finance
contacts confirmed that PA salaries and arrears were paid in
full on November 6, yet, because of a shortage of NIS, PA
employees in Gaza cannot withdrawal amounts equal to their
full salaries. Our Palestinian banking contacts are hoping
that the GOI will allow a currency shipment to Gaza soon.
Until more currency arrives, PA employees will have access
only to a portion of their deposited salaries.

WALLES