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