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Israeli public-private partnerships multiply in Israel




Since the early 2000s, twenty projects have already been carried out as public-private partnerships (PPP) in Israel, in which the government has invested more than 33 billion shekels (€6.6 billion).



The new Training City will see the light of day in the Negev thanks to the PPP (Photo: DR)
The new Training City will see the light of day in the Negev thanks to the PPP (Photo: DR)
ISRAEL. Relocate the military bases of the Centre to the Negev desert, creating a new city called "Training City". This is a complex project valued at 19 billion shekels (€4 billion), launched as a public-private partnership (PPP) in April 2011. 

These large financing operations are booming in Israel, and can be found in several sectors: transport, with several conventional and high-speed rail projects; water (desalinisation plants and waste water treatment plants); construction; energy; and the environment.   "The vacated sites of the military bases of the Centre will be sold as land for construction in order to finance part of the project. In addition, the Ministry of Defence and Tsahal have chosen a private company, the group CEO, to plan the construction and logistical and material needs of the city", explained the spokesman for the Ministry of Finance at a press conference held on 29 April 2011.
 
"The vacated sites of the military bases of the Centre will be sold as land for construction in order to finance part of the project. In addition, the Ministry of Defence and Tsahal have chosen a private company, the group CEO , to plan the construction and logistical and material needs of the city", explained the spokesman for the Ministry of Finance at a press conference held on 29 April 2011. 
 

Produce water at all costs

The government plans to desalinate 505 million m³ of seawater under a PPP between now and 2014.  

In 2010, the Hadera desalinisation plant began to contribute to Israeli potable water reserves and produce 127 million m³ of potable water. This plant, which is located north of Tel Aviv, cost the government €340 million.

The EIB (European Investment Bank) invested €70 million in the Hadera plant, followed by French bank Calyon Corporate   and investment bank Banco Espirito Santo (BES).

At Palmahim, the government called on the group GES to start up another desalination plant, "Via Maris". Avner Hermoni is the director of this highly computerised plant, which has just 20 employees. "The government invested $200M in the construction of the plant. In fact, the business is half privately-owned ", he explains.  "The Israeli state has also promised to buy the 30 million cubic metres of water produced each year for the next 25 years. The water is sold at 3 Israeli shekels (€0.56) per cubic metre; it is rather more expensive than the water pumped out of natural Israeli reserves. Only in 25 years will the plant become property of the State." 
 

Foreign partners for rail projects

The Jerusalem tramway, which will be inaugurated in May 2011, was financed by the State, private Israeli companies and foreign companies. It was built by the municipality of Jerusalem and French firm Alstom Transport  .

The total cost of building the first line of the Jerusalem tramway is estimated at 3.8 billion shekels, or €760 million. It was built by private capital under a BOT (Build-Operate-Transfer) contract.

When the sale is ratified by the Israeli public treasury, the Jerusalem City Pass tramway will be owned by six shareholders: Israeli firms Ashtrom   (27.5%), Harel (20%), Acro Group  (17.5%) and Israel Infrastructure Fund   (10%) and French firms Alstom Transport   (20%) and Véolia  (5%). Once it has been in operation for 30 years, it will become property of the State.

Two major rail projects are on the verge of being launched between now and the end of 2011 as PPP: a metro system in Tel Aviv and a high-speed train service between Jerusalem and Tel Aviv.  
 
 
 
   

 

Hélène Lesman, JÉRUSALEM


Hélène Lesman, JERUSALEM


Tuesday, May 24th 2011



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