ISRAEL'S WATER POLICY OPTIONS DEBATED

UNCLAS SECTION 01 OF 02 TEL AVIV 000918



SIPDIS



SIPDIS

SENSITIVE



DEPT FOR NEA/REA and OES/ENV

USDA FOR FAS/OCBD/DRDAD

AMMAN FOR ESTH - BHALLA



E.O. 12958: N/A

TAGS: SENV, EAGR, IS, PA, JO

SUBJ: ISRAEL'S WATER POLICY OPTIONS DEBATED



Ref: (A) Tel Aviv 242 (B) Tel Aviv 678



1. (SBU) SUMMARY. Israel is debating options on dealing with its

critical water shortage. Until new and greater supply comes

on-stream from desalination plants in 2009, the choice is

essentially how to share the pain. Agriculture, the biggest user by

sector, is unlikely to shoulder the bulk of the hardship. Consumer

and commercial users will see fees rise and public use of water will

be sharply curtailed. Israel's current 350 million cubic meter

(mcm) shortfall would largely have been filled had GOI plans in 2001

to build more desalination capacity been acted upon.

Finger-pointing on who dropped the ball continues, while Water

Authority management claims it has the situation in hand. End

Summary.



Few Pleasant Options

--------------



2. (SBU) Israeli government and society are debating measures to

address the country's critical water shortage that post outlined

previously (reftels). The Israeli Water Authority (IWA) expects

Lake Kinneret to reach its lowest level ever next year, while both

mountain and coastal aquifers will drop beneath red-line levels over

the next two years, resulting in increased - and likely irreversible

- salinity. Reports from the Palestinian Water Authority claim this

is already occurring in Gaza, and an IWA water quality expert

confirmed last week that only 40 percent of Israel's coastal aquifer

now yields good quality water.



3. (SBU) On April 13 the Director General of the IWA, Uri Shani,

presented an emergency water program to GOI cabinet ministers. It

consisted essentially of persuading the public to economize on water

use, raising water prices to all users, and rationing water for some

private uses. Supply will be cut altogether for public venues such

as boulevard medians and municipal parks, which IWA estimates use

140 mcm annually. Overall supervision will be tightened and a close

watch kept on consumption. A maximum use ceiling will be set for

agriculture, and financial resources will be spent to expand the

facilities for treating sewage water into ";greywater" useable for

agriculture. The cost of the whole program would be about NIS 1.5

billion (US$ 425 million).



4. (SBU) Some of the measures debated in the Cabinet evoked protests

from ministers who believe their sectors are being

disproportionately harmed. Agriculture Minister Shalom Simchon

defended his sector's large share in water consumption (60 percent).

Although agriculture is the largest single user of water

distributed in Israel, the use of treated wastewater accounts for a

large share of this. Israeli agriculture uses over 1.2 billion cm

of water annually, but in the past two decades has moved from using

mostly fresh water to using a majority of treated wastewater; in

2007 farmers used 615 mcm of greywater versus 565 mcm of freshwater.

Shani's plans allocate 454 mcm of freshwater to agriculture in 2008

- only 40 percent of the fresh water agriculture drew 20 years ago.

While Israeli agriculture uses about the same total amount of water

as thirty years ago, it is twelve times more productive with it.

Simchon suggested industry and other fast-growing water users are

more to blame than agriculture for Israel's water deficit.



Present Realities

--------------

5. (SBU) Opponents of high allocation to agriculture note that

agriculture now accounts for only 2 percent of Israel's GDP, and

thus does not merit such a large share of this precious resource.

The majority of Israel's US$44 billion in export earnings are

technology driven today, and some believe keeping high-tech workers

productive is a wiser investment than exporting melons. Minister

Simchon and others say the answer is to increase supply, not just

suppress demand, and propose that each Mediterranean coastal town be

obliged to build desalination plants within its municipal boundaries

to supply water to residents of the town. He believes

municipalities can supply water cheaper than the national water

company Mekorot by attracting Build-Operate-Transfer (BOT)

facilities erected by private investors who sell the desalinated

water for a fixed period of years to pay off their investment before

ownership of the desalination facility is transferred to the city.

Water supply beyond what the city needs would be sold to Mekorot at

fixed rates for distribution elsewhere in Israel.



6. (SBU) The IWA office charged with demand management told ESTOff

privately it is fine-tuning the action program, which will include

sharply higher fees for all users, cut-backs on allocations of water

by sector, and several outright bans on use. Fees per cubic meter

of water supplied to private consumers will rise by over 16 percent,

water to industrial and commercial users by over 10 percent, and

agriculture by only 2 to 3 percent. When asked why agriculture,



TEL AVIV 00000918 002 OF 002





which already enjoys preferentially lower cm rates, receives such

favored treatment, IWA officials responded there are political as

well as economic purposes to land development. While "making the

desert bloom" is part of the cultural ethos of Israel, working the

land is also statement of ownership and possession.



In Regional Perspective

--------------

7. (SBU) Despite its many problems, Israel's water situation looks

better than that of its neighbors, whose needs will also impact on

Israeli water availability. Israel transfered almost 40 mcm of water

to PA areas in 2007. Palestinians on average consume about one

quarter the amount of water Israelis do, and water sources within

Palestinian areas are generally less reliable, leading to greater

demand to import water from Israel. Although Israeli and PA Water

Authorities have discussed sharing desalinated water resources, the

political vulnerability of this does not make it an attractive

option to either side, either from reliability of supply or

reliability of payment perspectives. Estimates of inefficiency and

leakage in the PWA distribution system range up to 45 percent. The

IWA confirms that Israel will transfer 35 mcm to Jordan in 2008, in

accordance with Israel's commitment under the terms of the 1994

peace treaty with Jordan. Amman faces greater hardship than Israel,

according to reports, having received only 57 percent of the average

annual rainfall this past winter. Amman itself needs 100 mcm for

the year, but expects to have only 70 mcm available.



8. (SBU) Comment: Measures taken by Israeli authorities to address

the current water situation, even though domestically targeted, are

unlikely to avoid impacting Israel's water policy toward the

Palestinian Authority. The GOI may face increasing domestic pressure

to curb exports, while being pressed by the PA and donors to share

its growing desalination capacity.



JONES