THIRD RED-DEAD DONOR COMMITTEE MEETING IN THE HAGUE

UNCLAS AMMAN 000299 SENSITIVE SIPDIS STATE FOR NEA/ELA, NEA/RA, AND OES STATE PASS TO USAID E.O. 12958: N/A TAGS: SENV PGOV PREL JO SUBJECT: THIRD RED-DEAD DONOR COMMITTEE MEETING IN THE HAGUE REF: A. 09 Amman 1915 ¶B. 09 Tel Aviv 1726 ¶C. 09 State 78652 ¶D. 09 Amman 1472 ¶E. 09 Amman 1116 (U) SENSITIVE BUT UNCLASSIFIED. NOT FOR INTERNET DISTRIBUTION ¶1. (SBU) Summary. The third donor committee meeting of the Red Sea - Dead Sea Water Conveyance Study Program (RDS) convened in The Hague on January 28. The World Bank, along with the beneficiary parties, chaired the meeting attended by almost all of the donors with the exception of Japan and Greece. The RDS is studying the feasibility of rehabilitating the Dead Sea, generating hydropower, and constructing a desalination plant to provide additional potable water for the beneficiary parties (Jordan, Israel, and the Palestinian Authority). The relationship between the RDS and the Jordan Red Sea Project (JRSP) was discussed, with Jordan stating that its national project would not commence till the RDS was completed. While France stated its opposition to unilateral initiatives such as the JRSP, the Palestinian Water Authority noted Jordan's right to develop its own desalination facilities but highlighted that if any brine were to enter the Dead Sea, the project would require a regional mandate. The JRSP announcement in May 2009 and ensuing confusion about the overlap with the RDS has added six months to the RDS schedule with a current projected completion date of July 2011. There was discussion regarding the need for a potential Phase II RDS Pilot project to reach any firm conclusions on the project viability. It is likely that the RDS conclusions will not provide definitive "Yes/No" guidance, but rather a murkier range of alternatives. End Summary. Jordan Explains Relationship between JRSP and RDS -------------- -------------- ¶2. (SBU) The third donor committee meeting of the Red Sea - Dead Sea Water Conveyance Study Program (RDS) met in The Hague on January 28, to review the status of the proposed project study to rehabilitate the Dead Sea, generate hydropower, and construct a desalination plant to provide additional potable water to Jordan, Israel, and the Palestinian Authority. Jordan introduced its Jordan Red Sea Project (JRSP) by reiterating the acute water crisis it faces and noting that water conveyance and desalination from the Red Sea was the only long-term option for Jordan to meets it increasing demands and water security. Secretary General of the Jordan Valley Authority Mousa Jamaani described the JRSP as a 100 percent Jordanian project independent of the RDS. He noted that options for disposing of the brine produced from desalination were still under study and included returning it to the Red Sea, discharging it in the Dead Sea, or using evaporation ponds on Jordanian soil. The financial models for the JRSP are still in development and the project scope will be further defined once the models are completed. Jamaani admitted that a possible convergence with the RDS would be the introduction of brine to rehabilitate the Dead Sea. Acknowledging that the JRSP has no independent environmental assessment, Jamaani went on to state that the JRSP would not start till the RDS was completed. ¶3. (SBU) The French reiterated their previously stated position that there is no scope for unilateral initiatives such as the JRSP which would impact shared resources and eco-systems. Palestinian Water Authority (PWA) Chair Dr. Shaddad Attili noted that Jordan has the right to develop its own desalination and conveyance mechanism, however, any introduction of brine into the Dead Sea would require a regional mandate and PWA concurrence. (Note: Israeli Water Commissioner Uri Shani was on the phone for a significant part of the meeting and did not comment on the JRSP. End Note). JRSP Contributes to RDS Schedule Slippage -------------- ¶4. (SBU) The original two-year RDS timeline has seen repeated slippages. The JRSP announcement in May 2009 and ensuing confusion about the overlap with the RDS led the World Bank to delay the June 2009 start of two critical technical sub-studies on the impact of mixing Red Sea and Dead Sea water, as well as the impact of water extraction from the Red Sea. These sub-studies are now set to start in February 2010 and will result in a delay of the RDS completion date to July 2011. (Note: The Technical Steering Committee (TSC), consisting of World Bank Chair Dr. Vahid Alavian, Shani, Attili, and Jamaani, consciously accepted the risk that the sub-studies would submit interim reports for inclusion in the larger project reports by July 2010. Without this decision, the final RDS completion would be further delayed. End Note). The key milestones ahead of the RDS are: -- Start of Red Sea and Dead Sea Technical sub-studies: February/March 2010 -- Mid-term report of technical sub-studies: October 2010 -- Final report of technical sub-studies: July 2011 -- Final report of Study of Alternatives: December 2010 -- Preliminary draft RDS Feasibility Report: January 2011 -- Final RDS Feasibility Report: June 2011 -- Final Environment and Social Assessment Reports: June 2011 ¶5. (SBU) The lead consultants, Coyne et Bellier, which manage the feasibility study, and Environmental Resources Management (ERM), which is responsible for the Environmental and Social Assessment Study, were not present at the donors meeting. The World Bank acknowledged that "not much work had been done in the last six months" by these firms since the delayed technical sub-studies were needed to contribute information to their feasibility and environmental studies. ¶6. (U) The $1.35 million Red Sea sub-study to measure the impact of water extraction from the Gulf of Aqaba has been awarded to Italian firm Thetis and will include sub-contractors from the Marine Science Station in Aqaba, the Interuniversity Institute for Marine Sciences in Eilat, and the Israel Oceanographic and Limnological Research institute. The $1.5 million Dead Sea sub-study to examine the effects of mixing Red Sea and Dead Sea waters and the introduction of brine into the Dead Sea has been awarded to Israeli firm Tahal, which will also draw on several other Israeli sub-contractors. The contracts for these are expected to be signed shortly with the sub-studies to be completed by July 2011. As noted in para 5, the TSC has agreed that interim "best estimate" results from these sub-studies will be fed into the final Feasibility and Environmental Reports to allow the RDS to be completed by July 2011. Panel of Experts and Study of Alternatives -------------- ¶7. (SBU) World Bank requirements and the RDS terms of reference mandate the appointment of an independent Panel of Experts to study the environmental impacts of a large project such as the RDS and advise the TSC. In addition, the three beneficiary parties have each nominated an expert to lead a study of alternatives to the RDS. Both these groups have been established and participated in a field trip to the region in October 2009. Several follow-on meetings and trips are scheduled with the final study of alternatives report due by December 2010. RDS - Plan B? -------------- ¶8. (SBU) There was discussion at the donors' meeting about the potential for the final RDS reports to not paint a conclusive picture, but rather present a range of alternatives. The two sub-studies are also focused on mathematical modeling which some suggested would require further practical validation. Israel suggested that any RDS results should be followed up by a Phase II or a pilot implementation that would test the introduction of brine into the Dead Sea. The French supported this with potential additional French funding, while requesting that a pilot program be reversible if introducing brine into the Dead Sea indicated a negative outcome. Although there is no scope or budget for what a pilot program might look like, one World Bank representative noted that a $100 million trial to validate a potential $8-10 billion project could be prudent. At one stage, the discussion appeared to re-open the RDS scope and further extend the schedule. The World Bank noted that the RDS consultants could develop a preliminary pilot scope and cost estimates in two-three months within the current RDS terms of reference. Several donors, however, stated the importance of defining a clear "end point" for the RDS based on the current terms of reference, noting that additional schedule slippages would further detract from what is often perceived as an excessively delayed feasibility study. The TSC eventually agreed that the RDS, as currently defined, would target completion by July 2011, and a pilot implementation, if needed, would be a subsequent phase and require additional funding. Additional Donor Concerns -------------- ¶9. (SBU) The energy balance (for water transmission, hydropower generation, and desalination) is a key component of the RDS analysis. It depends on a variety of factors such as the conveyance mechanism (tunnel, pipeline, or canal),location of the intake location in the Gulf of Aqaba, the location and altitude of desalination and hydropower facilities, as well as the location of brine discharge site. France suggested that the RDS include sustainability considerations and include an analysis of integrating concentrated solar energy plants into the energy mix. The World Bank agreed to examine this possibility but noted that the current terms of reference include an RDS energy analysis and cost estimation, but not an analysis of how any energy deficit should be sourced. The initial estimates have identified an energy deficit in the 300-650 MW range for an RDS implementation. ¶10. (SBU) Comment: The RDS completion is subject to additional slippage, potentially even into 2012. Although the World Bank procurement cycle will be completed once the contracts for the sub-studies are signed, the next 18 months include a significant number of intertwined reports that have to be coordinated and finalized. Furthermore, the discussion on a possible validation pilot program, could make the RDS completion murky, leading to questions about the validity of the mathematical models and underlying assumptions in the feasibility study. This will make it increasingly difficult for Jordan to hold to its recently stated position of awaiting the RDS completion prior to starting the JRSP. The Jordanian stance of using the RDS environmental study for the JRSP design will also be further complicated in that the RDS scope does not include any study for releasing the brine back into the Gulf of Aqaba, one possible JRSP option. End Comment. Participant List -------------- ¶11. (U) The Netherlands co-chaired the meeting with the RDS TSC. Donor participation was almost identical to the last meeting in Athens (ref E). Almost all donors (U.S., France, Italy, Korea, Netherlands, and Sweden) with the exception of Japan and Greece attended: Government of Netherlands (Host) Mr. Henne Schuwer, Director of Middle East and North Africa Division, Ministry of Foreign Affairs Ms. Ester Van Someren, Ministry of Foreign Affairs France Mr. Jean-Michel Linois-Linkovskis, Ministry of Ecology, Energy, and Sustainable Development Ms. Lise Breuil, Agence Francaise de Developpement Italy Mr. Filippo Scammacca, Ministry of Foreign Affairs Mr. Guido Benevento, Ministry of Foreign Affairs Korea Ambassador Shin Bong-kil, Embassy of Republic of Korea, Amman Sweden Ms. Annika Johansson, Embassy of Sweden, Amman U.S. Mr. Manu Bhalla, ESTH Hub Officer, Embassy of United States, Amman Israel Mr. Uri Shani, Israel Chair to Technical Steering Committee Mr. Avi Goh, Ministry of Foreign Affairs, Jerusalem Jordan Mr. Mousa Jamaani, Secretary General, Ministry of Water and Irrigation/Jordan Valley Authority Palestinian Authority Dr. Shaddad Attili, Palestinian Authority Chair to the Technical Steering Committee The World Bank Dr. Vahid Alavian, World Bank Chair to the Technical Steering Committee Dr. Stephen Lintner, Technical Steering Committee RDS Study Management Unit Dr. Alexander McPhail, Head of Study Management Unit, World Bank Mr. Gershon Vilan, Israel ¶12. (SBU) The World Bank anticipates the next RDS Donor Committee meeting taking place in July/August 2010. Italy offered to host the next meeting in Rome. BEECROFT