The Water Law regulates water issues when it comes to determining a comprehensive spatial policy and is the most comprehensive legal arrangement regarding the water economy. The law stipulates that all water sources in Israel are public property, controlled by the state, and are intended to meet the needs of its residents and develop the country.[1]
The water supply chain involves several actors and factors. The production segment includes the national water company Mekorot, seawater desalination facilities and local water utilities engaged in water extraction. Water distribution is mainly the responsibility of local water utilities. In general, water suppliers (corporations and others) also collect sewage from consumers and transfer it to sewage treatment facilities, which are operated by local municipalities or water utilities. All water-related activities are regulated by the Israel Water Authority.
Israel Water Authority
In January 2007, the Israel Water Authority was established to transfer water-related management and regulatory powers from many entities to a single government body that is tasked with managing, regulating and supervising the water sector professionally and efficiently. Specifically, the Israel Water Authority is responsible for:
- regulating the water sector, its management, operation and development
- preserving and restoring natural water sources
- developing new water sources and setting prices for the various sectors
- setting benchmarks for the services that water corporations must provide
- establishing rules for calculating the cost of the services that water corporations must provide as well as rules regarding payments and rates.
Mekorot
Mekorot supplies most of the water consumed in Israel. It is fully owned by the government, and its activities are overseen by the Israel Water Authority. It serves as an essential service provider and has a monopoly on water transmission and supply. Mekorot’s main activity is producing water or purchasing it and sending it through central pipelines to water consumption centres. In addition, the company operates in the fields of effluent recovery, brackish water supply and desalination. Mekorot provides approximately 80% of Israel’s drinking water and meets 70% of the total annual water demand. Additionally, the company owns 34 desalination plants, which provide approximately 40 MCM/yr of treated brackish water. Mekorot also treats approximately 35% of Israel’s wastewater.
National Water Carrier
The National Water Carrier (NWC) is Mekorot’s largest water project, in which most water plants in Israel are integrated. The NWC is used to regulate the water supply and allows efficient utilization of water sources and their transfer from the rainy north to the water-scarce centre and south. The NWC runs 130 km from the Sea of Galilee in the north to Mitzpe Ramon in the south. It became operational in 1964 and caused many diplomatic tensions with Syria and Jordan due to water diversion.
The Israel Water Authority recently completed construction of the New National Water Carrier (NNWC), which carries water in the opposite direction, specifically desalinated water from the plants located in the centre of the country to the Sea of Galilee. The NNWC has two main objectives: to stabilize the water level in the Sea of Galilee following successive drought years, and secure additional supply to the Sea of Galilee Basin and neighbouring Jordan.
Role of the private sector
Private companies contribute to Israel’s water supply in two ways: by producing and supplying water in the areas that Mekorot does not cover, and by constructing and operating desalination plants. There is no private ownership of water resources in Israel.
Financing the water sector
As previously mentioned, desalination plants in Israel are financed by private companies. The construction and operation of the plants under public-private partnership contracts are financed by the private company that owns the plant. The government buys water from the plant and makes bimonthly payments that include fixed and variable payments depending on the plant’s performance. The fixed price is an unconditional payment to the desalination company based on the output of the plant that is agreed upon in the contract. This ensures a return on capital investment regardless of the actual water consumed. The variable price is the payment for each cubic metre of desalinated water delivered to the state. This allows for the variable costs of production.
Desalinated water bought from the private sector is merged into the national water system. All water utilities that supply potable water to consumers charge consumers according to the quantity used at the national tariffs set by the Israel Water Authority. The tariff scale includes a low tariff for consumption of less than 3.5 m3 of water consumed per month per person and a higher tariff for consumption above the aforementioned limit.[2]
[1] Avger, I., 2018. The water sector in Israel.
[2] Water Utility, n.d. Water tariff in Israel.