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Cablegate: Embassy Tel Aviv

VZCZCXRO4658
PP RUEHROV
DE RUEHTV #0918/01 1131402
ZNR UUUUU ZZH
P 221402Z APR 08
FM AMEMBASSY TEL AVIV
TO RUEHC/SECSTATE WASHDC PRIORITY 6417
INFO RUEHXK/ARAB ISRAELI COLLECTIVE
RUEHJM/AMCONSUL JERUSALEM 9575
RUEHRC/USDA FAS WASHDC

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

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