Water rates paid by consumers have soared and the Water Authority insists that they reflect costs, but the Central Bureau of Statistics reports investment in developing water infrastructures was 41% less in 2010 than in the two preceding years.
Central Bureau of Statistics figures obtained by the Manufacturers Association of Israel show that NIS 2.5 billion was spent annually on water infrastructures in 2008 and 2009. This investment included construction of desalination plants, but only NIS 1.4 billion was invested in 2010.
"One of the main reasons for establishing the municipal water companies was to boost investment in water infrastructures, after years of neglect. But the Central Bureau of Statistics figures prove that it didn’t happen," Manufacturers Association economics division manager Oren Harambam told "Globes". "In the past few years, we've seen the price of water for the industrial and household sectors soar, even as investment in infrastructures inexplicably fell."
The Water Authority, which supervises the 54 municipal water companies, has constantly insisted that there is no relationship between the price of water and the establishment of the water companies, and that the water companies are rebuilding obsolete infrastructures in any case. Most of the water companies like to claim that they are completed to finance the rebuilding of infrastructures neglected for years by the municipalities.
The Water Authority told "Globes" today that the figures in the Central Bureau of Statistics report reflect how the desalination ventures were set up, and that the 2008-09 figures include the Soreq and Hadera desalination plants. A source at the Water Authority said that the recording would be reviewed.
The Water Authority claims that, in 2010, investment by the water companies increased 30% to NIS 850-900 million. The water companies are now submitting their operational reports for 2010. A partial review of these reports by the Water Authority found that 15 water companies made surplus profit on their income from collections. It estimates these surplus profits at NIS 100 million. The Water Authority defines surplus profit as the difference between the price of water sold to the water companies by Mekorot National Water Company and the variable costs of providing water and sewage services for municipal residents.
The Water Authority says that the reports do not indicate that the price of water, which is uniform nationwide, is too high, because all the other water companies reported losses.
"If, on the basis of these figures, we cut the price of water paid by the public, all the water companies will lose money next year," a senior Water Authority official told "Globes".
The Water Authority is considering what to do in response to the surplus profits, and will submit proposals to an upcoming meeting of the Water Council. Proposals include refunding the profits to the public through deductions on future water bills, allowing municipalities whose water companies are profitable to reap dividends from them, or transferring the profits to loss-making water companies through cross subsidies.
"The idea of such a subsidy is infuriating, but it's on the agenda," said a Water Authority official. "Why should a resident of Netanya, whose municipal water company efficiently collects money from him finance a water company in the Triangle where there is no good payment discipline."
Union of Local Authorities chairman Shlomo Bohbot said in response, "The situation only proves what we've been saying for a long time: the price of water is insane, wrong, and unjustified. The government could cut the price of water by at least 30%."
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