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«Managing Blue Gold New Perspectives on Water Security in the Levantine Middle East Mari Luomi (editor) Managing Blue Gold New Perspectives on Water ...»

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Thus, the Ministry of State for the Transfer and Development of Technology resolved in 2000 to form a Scientific National Desalination Commission to evaluate the country’s needs for water desalination, identify the most appropriate technology, and suggest an integrated programme enabling Syria to optimize its investments in brackish and seawater desalination. At the present time, Syria’s desalination capacity is negligible, but there are intentions to construct seawater and/or brackish water desalination plants in Eastern Syria. 299 However, differences in opinion among policymakers make the plans very uncertain.

Syria still has significant scope for reducing its water usage prior to desalination. There is potential for this particularly in the agricultural sector, where irrigation losses have been estimated at over 50%. Furthermore, the Damascus water network leaks up to 60% of the water it carries. An expansion of wastewater reclamation for secondary use is also a planned and necessary measure. 300 According to a study by Japan’s International Cooperation Agency, Syria will have to spend billions of dollars to prevent a severe water crisis in Damascus. This includes, for example, replacing leaking water pipeline systems and a water transportation project from the Euphrates to Damascus.

At present, due to massive investment needs in the infrastructure sector, among others, Syria is increasingly willing to open up the economy and facilitate the realization of PPPs. The country is currently in the process of drafting PPP legislation and reviewing legislation covering contracts in the country. It has established a 298 Elie Elhadj, ‘The Household Water Crisis in Syria’s Greater Damascus Region’. SOAS Water Research Group Occasional Paper 47. (SOAS and King’s College, University of London, 2004).

299 ESCWA, Role of Desalination; S. Wardeh et al., Desalination for Syria. (School of Civil Engineering, the University of Nottingham, 2009).

300 GTZ, ‘Institutional Support’.

118 FIIA REPORT 25/2010 PPP unit under the direct supervision of the deputy prime minister as well as separate ministerial PPP agencies to oversee projects in the targeted areas of transportation, electricity, housing, agriculture, health and education.301 PPPs in the infrastructure sector are, however, still in their infancy. The first positive experience with PPP in the water sector was undertaken with the GTZ and consisted of a small wetland wastewater treatment plant at Jdidet Yabous. The lack of progress in regulatory reform, the absence of a PPP track record, and difficulties in cost recovery in water utilities decelerate private sector participation in water investments. It is likely to be a long, drawn-out process until such time as the water sector in Syria is ready for significant private sector participation.302 Lebanon: weak management hindering investments In Lebanon, the water sector is seriously underdeveloped. There is a great need for private or international funding, but political instability, weak management and poor transparency seriously hinder private investments. Despite relatively extensive water resources, the lack of water management measures has led to limited water supply in several areas during the dry season. In addition, it is estimated that water demand will increase by more than 80% by 2025, mainly due to the growth of Lebanon’s population, expected to reach 7.6 million the same year.303 Although the water shortage problem is readily acknowledged in Lebanon, the value of water and its significance for the national economy and the well-being of citizens is not yet generally recognized. The inadequate municipal water supply capacity and insensitivity to potential future problems has led to the uncontrolled 301 Oxford Business Group, ‘Syria focuses on PPP for growth’, Emerging Voice Blog (2009).


Accessed on 14 September 2010.

302 J. Deane ‘Private sector participation in desalination in the Mediterranean Middle East (MME) - past, present and future’, Desalination 152:1-3 (10 February 2003), pp. 57-66.

303 IRINnews, ‘LEBANON; Climate Change and politics threaten the water wars in Bekaa’ (1 February 2009), http://www.irinnews.org/Report.aspx?ReportId=82682. Accessed on 17 September 2010.

FIIA REPORT 25/2010 119 digging and overuse of private wells, which in turn is leading to a decline in the groundwater table.

To meet the demand, small companies providing additional water have emerged, some of which produce bottled water in smaller desalination plants. Nevertheless, most of Lebanon’s desalination capacity is used in the production of cooling water for two power plants. No new desalination plants are planned, although unofficially it is estimated that a plant for producing drinking water for Beirut will be indispensable within 10-15 years. A report by the World Bank 304 argues that, in the case of Lebanon, due to the limited economic resources of the public sector, improving the efficiency of the water sector is more viable than constructing desalination capacity. The following measures should therefore be prioritized, according to the Bank: loss reduction through network rehabilitation and the installation of meters; the expansion of water storage facilities; and the expansion of water facilities to produce 24-hour service.

In accordance with the recommendations of the World Bank, the Lebanese government is planning to construct dams and hill lakes for water storage. So far, two dams have been constructed, but there are also plans to build up to 28 surface and subsurface dams over the next 10 years, aiming to capture up to 900 Mm 3 of fresh water. The estimated costs are 2.5-3 billion USD. Because of their location, the dams would mainly produce water for irrigation. According to local sources, the environmental aspects have come under discussion, but the most significant potential constraint is the lack of funding. 305 Increasing the wastewater treatment capacity in line with the water supply is also an important feature of a functioning water management system. Lebanon has just one big and a few smaller wastewater treatment plants in operation.306 For example, wastewater from Beirut is discharged untreated into the sea. Some plants have been constructed, but there is no capacity to operate them.

Private and international funding are prerequisites for the development and implementation of the planned water projects, and the government has set the promotion of PPP as one of its strategic 304 World Bank, Lebanon, Water Sector.

305 Ibid.

306 Kamar, Lebanon Water Sector Overview.

120 FIIA REPORT 25/2010 targets.307 The main focus is currently on the telecommunications and electricity sectors. However, according to Ziad Hayek, Secretary General of the Higher Council for Privatization, PPP will play a central role in other fields, including the water sector as well.308 Private participation is also expected to improve the weak performance and inadequate staffing of the four Regional Water Establishments. 309 In spite of the political will, there are only a few cases of private sector participation (PSP). From the perspective of financing organizations, Lebanon’s weak institutional and legal framework, problems in the management of public financing, and lack of written action plans are serious obstacles complicating project funding decisions. The poor transparency and accountability of public institutions at all levels also thwart the economic health of the municipal waterworks. Furthermore, applied fixed water tariffs for domestic and agricultural use make cost recovery challenging.

The above-mentioned problems are evident in the case of Tripoli:

the Tripoli Water Authority and the French company Ondéo-Liban signed a four-year management contract in 2002. The project was financed by the French Development Agency AFD and included tasks such as the operation, maintenance and organization of the billing system, and the collection of water tariffs. The contract ended in 2007 without a continuation. According to the operator, the main reason was the uncertain institutional environment, which, among other things, did not allow the operator to increase bill collection to the cost-recovery level.310 An original feature in Lebanon, which could be better exploited, is the existence of small-scale water providers. Private water supply accounts for 75% of the total market revenues, and small-scale private operators are already active in wastewater collection.311 While off-network private solutions currently prevail, small-scale network private operators could be a viable solution in areas where the cost of a network connection is prohibitive. Thus, in the short-term, 307 Ibid.

308 Marcopolis, ‘Lebanese Privatization’ (7 June 2010), http://www.marcopolis.net/lebanonprivatization.htm. Accessed on 15 August 2010.

309 Kamar, Lebanon Water Sector Overview.

310 World Bank, Lebanon, Water Sector.

311 Ibid.

FIIA REPORT 25/2010 121 partnerships with small-scale domestic private operators could also support the water authorities in the operation and management of parts of the water supply network.

Although the Lebanese government has expressed its willingness to increase private sector participation in the water sector, the institutional uncertainty and poor accountability hinder the economic health of waterworks. This does not encourage international private companies to enter into PPP contracts. Moreover, the procedures for creating the partnerships lack clarity. Tangible improvements in the current management and legal framework are required in order to attract private funding. Meanwhile, cooperation with small-scale domestic private operators could be a partial solution in some areas.

Israel: the high-tech model student Israel recognized the need for water management as early as 1959 when a comprehensive water law was passed. The law made water resources public property and regulated their exploitation and allocation, as well as pollution prevention and water conservation.

Despite investments and relative success in water management, Israel, too, has faced water crises. Currently, about half of the water the country consumes is taken from its neighbours: the Palestinian territories and the Golan Heights. It is possible that as water supplies dwindle, tension between Israel and its neighbours, and between Arab states, will intensify.

Israel is technologically the most advanced state in the region and has an ambitious emergency programme to address the country’s growing water shortage. It has invested heavily in desalination, and already has over 30 desalination plants. Three of these are huge, with a capacity of over 1000 m3/d, and operate through seawater reverse osmosis. While in 2010 Israel will produce a total of 0.77 Mm3/d of desalinated water, it has set a target of 2.1-2.7 Mm3/day by 2020. In 2012, nearly 80% of household demand should be met by desalinated water.312 In addition to desalination, Israel is adopting other management measures, such as fixed water quotas, water-efficient practices and the upgrading of wastewater treatment capacities in order to increase the recycling of wastewater. Water is charged by consumption and

312 S. Latteman et al., ‘Global Desalination Situation’.

122 FIIA REPORT 25/2010 prices have risen dramatically in recent years, mostly to pay for the investments.313 Israel has recognized that state funds alone will not suffice in supporting the necessary infrastructure investments. The government is currently promoting infrastructure projects using private sector participation like BOT. Numerous PSP projects are ongoing and the government has established the Division of Public Private Partnership Projects, a government company, to coordinate these activities.314 Private funding was also exploited in the latest huge desalination projects, which were built on a BOT and BOO basis. 315 Israel is also aiming to reap some benefits from the consequences of

its water scarcity, namely the technical expertise it has accumulated:

in 2006, the government launched NEWTech, a national programme promoting the country’s water technology sector, and allocated substantial resources towards strengthening the foundation of its water technology cluster. The NEWTech programme includes actions ranging from training to deepening cooperation with multinational bodies. It also aims to connect companies and projects with different funding sources.

Israel has set its sights on dominating the global advanced water technology sector by 2011 and, as a result, it expects to export 2.5 billion USD in water technologies during the same year. Indeed, water technologies have become one of the country’s key export sectors. Thus, besides having an interesting market outlook for the water sector, the country is becoming a leading player in the global water industry.

Conclusion The four countries of the Levant examined in this chapter are faced with extremely challenging water resource conditions. They are confronted by challenges stemming from increasing water 313 Ibid.

314 Shay Sohlberg, ‘PPP/PFI Projects in Israel’ Tel Aviv Metropolitan Mass Transit System (2004). Accessed on 23 September 2010.

315 Y.Dreizin. et al., ‘Integrating large scale seawater desalination plants within Israel’s water supply system’, Desalination 220:1-3(2008), pp. 132-149.

FIIA REPORT 25/2010 123 demand, young and growing populations, recurring conflicts, high investment needs and, with the exception of Israel, weak policies, lack of management and low technical capacity. In Israel and Jordan, the two countries with the most serious water deficit, the value of water has already been recognized and this has been reflected in the development of more comprehensive legal and institutional frameworks for water management than in the case of Syria, and especially Lebanon. Israel has even realized that the huge challenge can be turned into an opportunity and is aiming to benefit from the consequences of water scarcity through technology exports.

Compared to Israel, Jordan has made slow progress in the introduction of new technological solutions. One reason for this is its deficient capability to finance and acquire financing for investments.

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