World Bank and Dead Red Sea Project

Where is the Red Sea-Dead Sea Water Conveyance Program going?

BIC, 28 August 2009

After meeting with World Bank President, Robert Zoellick, Israel’s Deputy Prime Minister of Regional Development, Silvan Shalom, stated that the World Bank had agreed to fund the Red-Sea-Dead Sea Water Conveyance Program that involves Jordan, Palestine and Israel. However, Bank officials say that they have made no promises and that the project is still in the feasibility study phase.

BIC’s MENA program set up a meeting with Stephen Lintner, the World Bank's senior professional and advisor on issues concerning the environmental and social safeguard policies to discuss this commitment. In the meeting, Lintner discussed the proposed program and its relation to other similar projects in the region. There were therefore four parts to the meeting: addressing the rumor that the Bank had agreed to fund this project; secondly, some details about the Red Sea-Dead Sea Water Conveyance Program; thirdly, the Jordan-Red Sea Water Project; and fourthly, the Disi Amman Pipeline.

On the rumor that the World Bank had agreed to fund the Red Sea-Dead Sea Water Conveyance Program (the name of which is very important so as not to get confused with other projects!), Lintner said that financing the project was never promised in the meeting held between Israel’s Deputy Prime Minister, Silvan Shalom and World Bank president Robert Zoellick. He added that the Bank’s president does not have the authority to make such promises and that any decision has to go through the entire Executive Board of Directors. What was discussed in that meeting was the Feasibility Study for the Red Sea-Dead Sea Water Conveyance Program, and not the funding of the program itself. This is in clear contrast to what Shalom stated in the Israeli media.

The World Bank's role

In 2008, the World Bank launched the Feasibility Study Program based on a Terms of Reference (TOR) provided by all three governments involved. The Feasibility Study includes examining all technical, economic, financial, and environmental factors, and in fact the Bank is also overseeing the environmental assessment for the proposed project though the actual studies are being conducted by private companies. Aside from the feasibility study and environmental assessment, there are two technical studies that Lintner mentioned, one of which is to test how the Red Sea and the Dead Sea waters mix (which Israel is doing a pilot project for); and the second is to do tests to assess the environmental impacts of transferring so much water, which will be conducted at the head of the Gulf of Aqaba. Although still in the feasibility study phase, Lintner denied that the project would pose any competition to the Suez Canal, as many Egyptians feared it would, since the conveyance will not be a suitable body for boats to travel on. In fact, the project is not a canal which is a common misunderstanding; rather its structure has not yet been fully determined, but will likely involve tunneling.

The studies are slated to be completed in early 2011. According Lintner, the Bank has still not determined how much financial (or other) involvement it will have in the project’s future, but Lintner stated that by 2011, the three governments involved in the project will have decided what the Bank’s role will be if any, but that it is the governments’ decision to make. At this point the Bank’s only involvement is in the feasibility and the environmental impacts studies, which the governments of France, Greece, Italy, South Korea, Japan, Netherlands, Sweden and USA have jointly put in the allocated $16.2 million for.

Regarding the Study of Alternatives, at the time of this meeting with Lintner in early July, BIC learnt that the TOR should have been ready by late July or early August and and that it would include an assessment of different scenarios and comparative analyses. The Bank was apparently waiting for details from the Jordanian government about the Jordan-Red Sea Project (see below) so they could include this information in the TOR.

This is political

When it came to politics, Lintner was cautious; he emphasized that this conveyance program is in no way linked to the peace negotiations between Palestine and Israel. He simply said that with all three governments engaging in the same project, this can lead to peaceful cooperation, but that it has nothing to do with the peace negotiations or the two-state solution.

One of the factors that some argue makes a two-state solution potentially unviable, however, is the distribution of water resources in the region. In a two-state solution scenario, the Palestinian population in the West Bank would likely not have control over key water resources, and as it stands now, there is a major discrepancy between the water resources available to Palestinians relative to Israelis: according to an April 2009 World Bank report titled Assessment of restrictions on Palestinian water sector development, “Palestinians have access to one fifth of the resources of the Mountain Aquifer…while Israel abstracts the balance.” Moreover, “water withdrawals per capita for Palestinians in the West Bank are about one quarter of those available to Israelis, and have declined over the last decade.” Given the facts mentioned by the World Bank’s own report, it is unrealistic that any project dealing with water in the region, wouldn’t have any implications on the two-state negotiations.

Jordan-Red Sea Water Project:

Lintner also discussed the Jordan-Red Sea Project which he says the Bank has no role in, and is 100% led by the private sector. The only government that is involved in that project is the Jordanian one, whereas the Red Sea-Dead Sea program is a tri-lateral project. The Jordanian project has three phases; the first two phases will be a desalination plants in Aqaba and will be completed in 2014 and 2018 respectively. The third phase will be setting up real estate for thermo-cooling plants. In contrast, the Red-Dead Sea Water Conveyance Program will be used for hydroelectric power, a desalination plant near the Dead Sea and the transfer of water resources from the Red Sea to the shrinking Dead Sea.

Disi Amman Pipeline:

The Red-Dead Sea project is also different from the Disi Amman Pipeline. The World Bank offered to fund this pipeline but they didn’t close the deal and according to Lintner, the IFC was also unable to close a deal with the Jordanians and that the contract ended up going to a commercial private company. However, interestingly, the IFC – as of the time this update was published - lists Disi Amman as one of their projects with an estimated investment of $875 million, although the status of the project is “pending approval”, though the Board date was set for late 2008. This could be a result of poor website management on the part of IFC, or perhaps there we have yet to hear the full story? Moreover, while BIC staff were under the impression that the Bank had wanted to trigger the Indigenous People’s Policy for the Environmental and Social Assessment and that that was why the project had been dismissed, Lintner stated that this was completely untrue, and that the Bank did in fact trigger the Indigenous People’s safeguard policy, and there were no problems. The deal simply fell through.

Regardless of who the investors are though, construction for this project has already begun and involves the transfer of 200 million cubic meters of high quality water to Amman for municipal use only. Lintner maintains that this is a very important project and that it has shown no negative environmental impacts. When asked about how all these water projects relate to one another, Lintner said that parties from all three projects and countries would be meeting to discuss the projects. He also said that all Feasibility, Environment and Social Impact Studies for the Red Sea-Dead Sea Water Conveyance Program would take into account these other projects that may be happening simultaneously. Only time will tell how this project will move forward and what the Bank’s role will be in it.