Interview with Ido Rosolio, CEO of Mekorot Panorama Reports
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Interview with Ido Rosolio, CEO of Mekorot
Panorama Reports
PANORAMA REPORTS: How would you assess the overall water sector in the region?
MR. IDO ROSOLIO: The global water market is growing steadily due to the severe shortage of drinking
water caused by demographic growth, industrial development and global warming.
Global warming affects the whole world, including Israel. Israel is located near the desert, the climate is semi-
arid and recently there has been a sequence of drought years. The surrounding countries (i.e. Cyprus,
Lebanon, Syria, Jordan, etc.) have no water. Tap water in Cyprus flows for a day and a half per week. In
Syria, which uses Turkey’s Euphrates River, there is not enough water either. Dams like the Haditha Dam, the
Birecik Dam, and the Ataturk Dam cause the water level in the Euphrates River to dwindle. The population in
this region, including Lebanon, Syria, Jordan, Egypt and Israel has grown five to ten times since the beginning
of the 20th century, and the scarcity of water supply continues to be a problem, affecting the cost of living and
the quality of our lives.
Can you give us a brief overview of the water sector in Israel and Mekorot’s role within the industry?
Water in Israel is a natural resource, controlled and regulated by the government through the National Water
Authority. Mekorot, Israel's national water company, was founded in 1937, and is actually older than the state.
Mekorot supplies approximately 80% of Israel’s drinking water and 70% of the country’s total water
consumption. The company delivers water to the urban, industrial and agricultural sectors, as well as to the
Hashemite Kingdom of Jordan and the Palestinian Authority, under commitments made in international
agreements.
Mekorot operates approximately 3,000 facilities throughout Israel for water supply, water treatment,
infrastructure, wastewater treatment, desalination, etc.
Kindly discuss the challenges the company is currently facing, and the strategies it has formulated to
address them.
As a result of the shortage in drinking water and the increase in water consumption, Mekorot focuses on a
series of targets: create water from a variety of sources; improve water quality; protect the country’s water
security; find and apply advanced technologies to foster the company’s activity with maximum efficiency
over time and entrepreneurship.
Mekorot is a unique company at a global level. The company combines a wide range of complex activities
that are based on know-how, professionalism and experience. The main concern of the company is to develop,
produce and integrate a number of water sources and different types of water and supply the water at all times
in accordance with the needs and the sector.
The vision of the company's founders was a masterpiece in terms of engineering. They identified the areas that
need irrigation, in relation to the sources of water (i.e., the Jordan River, the Yarmuch River, Lebanon's Litani
River). The idea being to build a national water carrier that will transfer the water from the water sources in
the north of Israel to the central and southern parts of the country.
Although a child at the time, I remember very clearly how proud I was when the National Water Carrier was
built. Now, as an adult, I can appreciate the vision of the founders – to bring water from the northern part of
Israel, where water sources are more abundant, to the central and southern parts of the country.Our water supply system integrates most of the regional water plants, the National Water Carrier and the
Yarkon-Negev plant. The water supply system combines water from various sources: the Sea of Galilee,
mountain and coastal aquifers as well as drillings and desalinated sea and brackish water.
This national system enables mobility and operational flexibility. Water can be allowed to percolate into the
aquifers during years with heavy rainfall against future needs, and it can be pumped out in greater quantities
during droughts. The system also makes it possible to reverse the flow of water from south to north, or north
to south, depending on needs.
Mekorot is currently building what will be Israel’s largest water plant since the establishment of the National
Water Carrier, at a development cost of $5 billion. The current system supplies water from the Sea of Galilee
southward, to the central and southern regions. The new system absorbs water from the desalination plants
along the coast. When completed, most drinking water will come from the Mediterranean Sea in the west,
flowing at all directions, including eastward and southward.
The system is remotely controlled by eight automated control centers. One of Mekorot’s biggest challenges is
to control the water system in real-time, in the same manner as the electricity system functions.
With regard to future challenges, Mekorot has been constantly searching for new solutions in order to increase
the water supply.
Desalination plays a central role in the supply of fresh water in Israel. Mekorot has more than 30 years
experience and know-how in the development, planning and operation of another water source – desalinated
water of varying qualities. The company was a pioneer in the application of reverse osmosis technology for
the supply of water in Israel, and has an international reputation in this field. The company owns 30 brackish
and seawater desalination facilities, mostly in southern Israel, which operate with maximum efficiency
through the constant implementation and installation of new technologies, and a unique combination of
seawater and brackish water desalination.
Currently Mekorot's subsidiary – Mekorot Development and Enterprise – is planning and building in Ashdod
a 100 million cubic meter a year seawater desalination plant, which will be one of the largest in the world.
Wastewater Treatment and Effluent reuse for agriculture is another important solution.
Mekorot aims at improving the level of the reclaimed water quality, thereby broadening its applications as an
alternative water source. The company is responsible for approximately 40% of the wastewater treated in
Israel, (approximately 200 million cubic meters a year), and for the reuse of 60% of the country’s treated
wastewater for agriculture. About 360 million cubic meters of effluents are reused in Israel for agriculture –
75% of total treated raw sewage – one of the highest proportions in the world!
The Dan Region Treatment and Reclamation Plant (Shafdan) that is being operated by Mekorot, is the largest
wastewater treatment plant in Israel. It collects the effluents from the Tel Aviv area (the most densely
populated area). After the treatment Mekorot recharges the effluents to confined aquifers through infiltration
fields for tertiary treatment. Pumps reclaim 160 million cubic meters of water and supply them to the southern
part of Israel through The Third Line to the Negev for irrigation of plants and crop such as wheat, lettuce,
oranges, carrots and potatoes, without limitation! This is one of the world’s biggest wastewater treatment
systems. We have wastewater systems in the northern and central parts of Israel as well.
One of the main concerns of Mekorot is the quality of the water it supplies. We carry out several activities in
order to ensure that the quality of water meets the Ministry of Health’s national health regulations. Water
undergoes routine tests even more frequently than mandated in the regulations.
To ensure that Israel’s residents obtain even higher quality of water via the National Water Carrier,
Mekorot built the Central Filtration Plant at the Eshkol facility, at a cost of more than $100 million. It is one
of the leading plants in the world in terms of its water quality targets and the quantity of water it handles.Besides, Mekorot implements advanced and innovative water treatment technologies and monitoring
measures. One of them is fish. Special software monitors a certain type of fish that are introduced into the
water in order to determine according to their behavior whether the water is good or not.
We have a central water laboratory and five regional laboratories, which are equipped with sophisticated
devices for chemical, bacteriological and biological testing. We also perform tests at the water sources
(drilling, spring water and the Sea of Galilee), at water systems, reservoirs and entrances to settlements.
One of the important issues that the company takes care of is water security. Here too we are using
sophisticated water technologies.
Mekorot does not just care of water quality. We have always ascribed great importance to protecting the
environment. We implement various operations for that purpose, among which are replacing electrical energy
with clean electrical energy in order to reduce air pollution. We make use of environmentally friendly
technologies and materials, as well as foster the landscape and rehabilitate water sources.
With regard to environmental hazards that are liable to contaminate water sources, Mekorot takes care of their
removal in cooperation with the relevant authorities. We also conduct environmental studies and carry out
pollutant surveys in the coastal plain for all the wells that provide drinking water, as part of the company’s
pollution prevention measures
Our scope of activities include also rain enhancement. In wintertime, when the conditions are suitable, we
seed the clouds with silver iodide with the help of airplanes and ground generators in order to optimize
precipitation. Our seeding activities result in an increase on rainfall by an average of 13%. We also increase
the volume of water by catching floods.
What are your top priorities for the coming years?
First, we are changing Israel’s national water system. As I have mentioned earlier, we are shifting the primary
source of drinking water to seawater desalination plants. I believe that this is going to be the real revolution in
Israel.
At the moment we are undergoing a process of change in the water industry in Israel. Our natural resources
(the Sea of Galilee and the aquifers) are very small. Within a few years, more than 50% of the freshwater will
come from our desalination facilities. This will dramatically change all the systems. Right now, we have an
SWRO plant in Ashkelon, whose capacity is will be about 130 million meters3 per year. The SWRO plant in
Palmachim produces 45 million meters3 per year. The plant in Hadera produces about 130 million meters3 per
year. We are going to build a facility in Ashdod via our daughter company, Mekorot Development &
Enterprise.
These projects will herald a new era in the water sector. The connection of the new desalination facilities to
the water system costs about $100 million per unit.
In my opinion the second issue that we are going to deal with is the redesigning of the wastewater systems.
Usually, the wastewater systems in the world involve treating and using water on-site. However, as you can
see, most of the plantations/fields in Israel are in the northern and southern part of the country. As such, we
have to optimize the use of wastewater and take them from the densely populated central part of Israel to the
more remote, less populated areas
Regarding gray water ideas (having the water treated in-house), making freshwater from wastewater is
dangerous if you don’t do it properly. It is highly complex and has to be done professionally. I think this is
going to be the next challenge after we solve the problem of scarcity.
Another big project derives from the rapid population growth in Jerusalem. We are setting up an additional
system of pipelines to Jerusalem, which will increase the amount of water supplied to the city and its vicinity.In order to protect the environment, the new system will include a 50-kilometer [31-mile] tunnel in the
mountains (at a cost of about $600 million).
The main challenge that we are facing at present is two-pronged. The first is the physical infrastructure. The
second is the energy cost. The energy cost of water in Israel used to be 6%. After the installation of the
desalination plants and the related system, it is going to amount to around 9% to 10%.
Can you elaborate on the restructuring of Mekorot?
Mekorot currently became a group of companies. The parent company, Mekorot Water Company, is
involved in supplying water, effluent reuse, desalination and other water related activities.
Two companies operate as its subsidiaries: EMS Mekorot Projects, which is a major force in Israel in the
field of water. Its expertise covers every aspect of water works – from planning, designing, manufacturing,
installation, testing, borehole drilling and pumping equipment, to supply, water and sewage treatment and
desalination. A very special activity being implemented by EMS is rain enhancement. The company enhances
rainfall by an average of 13% in northern Israel.
The second subsidiary is Mekorot Development and Enterprise, which offers solutions for water-related
projects, consulting services, design, feasibility studies, project management, construction, operation and
maintenance of treatment facilities in Israel and abroad. It initiates and carries out activities and projects in
Latin America, the United States, Europe, and Africa. Some of these activities are through competitive public
tenders against leading international water companies.
How important are partnerships and internationalization within your business model?
Most of the projects I have mentioned earlier have been done in partnership with others. Right now we have
small partnerships in the U.S. In Israel we have partnerships in the area of wastewater. Mekorot Development
& Enterprise although very young, is already involved in activities in Trinidad, Argentina, Uganda, California,
etc.
Mekorot places great importance on becoming a competitive and profitable business concern that also takes an
international perspective.
For that reason we established WaTech™ – Mekorot's center for entrepreneurship and partnerships – that
provides a platform for partnerships between Mekorot and start-ups, entrepreneurs, academicians and
established companies.
Technology transfer is very important to companies all over the world, including Mekorot. We are handling
our expansion very carefully in order to meet successfully all challenges, both at home and abroad.
U.S. President Obama is dedicating about $15 billion to the water sector. What areas of cooperation do
you see for Israel and the U.S. in the water sector?
We hope for fruitful cooperation with the U.S. for the mutual benefit of all parties. Mekorot can assist in areas
such as water quality treatment, wastewater treatment and effluent re-use, desalination etc.
How do you intend to approach the American market?
It is too early to say, but I think we will do it through partnerships. That is the general strategy that we are
using for our operations all over the world. For example, our activity in Cyprus is a joint venture.
Generally, there have been some criticisms about the efficiency of government-run companies. What
can you tell us about the management style in Mekorot?
Mekorot is the only company in Israel to be credited with the AAA rating by Standard and Poor’s Maalot for
over six years in a row. The company's annual income is approximately $1.1 billion, its equity isapproximately $1.4 billion (including the corporation currently being established) and its annual balance sheet
is approximately $3.18 billion.
I was the CEO of a refinery. Private people who came to check the efficiency of the operation told me that
even though it was a government-owned company, all the employees were essential: they could not fire
anyone. It all depends on the management.
Mekorot does not control the pricing of water. The complexity of managing a government-owned company
that offers such a crucial service, within the given regulations and conditions, is vastly different from a
company whose only concern is the bottom line. Nonetheless, Mekorot is business-oriented, despite being a
utility company.
The largest amount of investment per $1 of income is in the water industry. It is twice as much as in the
electricity industry, and thrice as much as in the gas and telecoms. Indeed, the water sector is a highly capital-
intensive industry. The reason you don’t see it is because the infrastructure is mostly buried in the ground.
The strength of Mekorot derives from its manpower – 2,200 devoted employees, who are committed to
supply water all over the country at all times – day and night, war and piece. Mekorot is planning to increase
the investment in its employees, in order to improve their technical and managerial capabilities.
As the CEO, where would you like to take Mekorot in the future?
At the moment we are in a transition period, from natural water to industrial water (which is a big step). We
are also planning to become a more technologically driven company. The second target is to increase and
optimize the reuse of water. Further advancements in the systems, as well as the proper treatment and use of
wastewater can reduce the pressure on freshwater sources. Desalination plants and lower energy consumption
are very important as well.
What message would you like to convey to the readers of the Wall Street Journal?
Mekorot is at the zenith of changing the Israeli water economy, based on the company's know-how and
expertise, garnered during 70 years. We would be more than happy to share our know-how with other
countries for a better world.You can also read
