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Palestinian Authority: Israel Violating Oslo Deal on Water Prices


This past summer, Palestinian water authority officials were hoping that the water crisis would ease up in the Hebron area and the Gaza Strip, after an agreement was reached over the purchase of additional water from Israel.

However, their hopes were dashed when it emerged that Israel is simultaneously seeking to raise prices, not just for the additional amount, but for all the water it sells to the Palestinians, deviating from the price update formula determined in the Oslo Accord. According to the Palestinians, the Israelis are trying to exploit their weak situation and the growing public bitterness over the water shortage.

When the Interim Agreement was signed between Israel and the PLO in 1995, the Palestinians never imagined that they would still be buying water from Israel 17 years later. However, today, not only must they buy water – because some of their existing wells have dried up and their new drillings are not yielding as much water as anticipated – but a unilateral water price increase will further burden their budget, already in crisis.

The Palestinians feel this is a unilateral breach of the agreement's water clause, while Israel refuses to change other terms, such as drilling locations. Drilling wells in the western aquifer would significantly improve the Palestinian water economy and reduce dependence on Israel.

The Palestinians claim the price Israel is asking – 3.74 shekels per cubic meter of water in the West Bank, and 3.55 shekels per cubic meter in Gaza (not including VAT ), instead of 2.64 shekels and 2.38 shekels respectively – is patently unreasonable.

Moreover, the price was not determined according to the same criteria used to set prices for water companies in Israel. If Israel does indeed charge the new rates unilaterally (for the approximately 57 million cubic meters it currently sells the Palestinians each year ), this would amount to an additional annual expense of some 60 million shekels for the Palestinian Authority. The Palestinian Authority is also concerned that Israel will move ahead with the threat it voiced at hearings of the joint water commission, to seek retroactive payment of the difference between the high rate and that paid from 2004 to date – a sum of around half a billion shekels.

Water Authority spokesman Uri Schor told Haaretz in response that "according to the signed agreement between the Palestinian Authority and the State of Israel, the price of water for the Palestinians must be for the full real cost" and that water prices have increased considerably for Israeli residents as well. He said the retroactive payment will be discussed by the two parties. "Even when the water prices for the Palestinian Authority are revised, they will still be lower than the water rates for Israeli communities and companies in Israel and in Judea and Samaria," Schor said. "The average price for Israeli companies is 3.80 shekels per cubic meter. For example, the water price for Ariel is 3.645 shekels, for Kiryat Arba, 3.80; Kafr Qassem, 3.98; for Jerusalem, 4.01, for Netanya, 3.86 shekels per cubic meter."

However, Palestinian Authority water officials say the base price stipulated in the Oslo Accord was set already then as the full real cost price. The new high price that Israel is threatening to impose on them includes a subsidy for the Israeli agricultural sector (around one shekel per cubic meter ), which every Israeli pays. The Palestinians are wondering why they must subsidize Israeli farmers.

The Palestinians also note that there are two different rates for Israeli water companies: one is low, for basic consumption of up to 3.5 cubic meters per person per month, and the other is for amounts above that. On the other hand, Israel sets only one price for the Palestinians. For example, the basic rate for the company that supplies water to the settlements of Ariel and Karnei Shomron is 1.556 shekels per cubic meters and the higher rate is 5.734 shekels. The company in Givatayim buys water for rates of 1.408 shekels and 5.678 shekels per cubic meter. The Palestinian Water Authority is convinced that after a calculation of basic Palestinian water consumption they would not have to pay more than the basic rate.

This past July, the sides agreed to a temporary new rate – 3.44 shekels per cubic meter – for an additional five million cubic meters of water annually for Gaza – a supplement which was already provided for in the Oslo Accord but was not actualized due to disagreements and neglect on the part of the Palestinian Authority. The supplement, small as it may be, is significant for Gaza, where around 90 percent of the water is not potable before being purified, a fact which increases the cost considerably.

According to Israeli officials, the price set for the water supplement is lower than the actual cost – 3.74 shekels – but the Palestinians say it is too high, but because of the extreme humanitarian necessity, they were forced to agree to it. Israel argues that the real cost is the one charged for desalinated water (the Oslo Accord states that the supplement for Gaza will in the future come from desalinated water ), but the Palestinians claim that the supplemental quantity is actually desalinated water diluted with cheaper water from the National Water Carrier, and should therefore cost far less. The parties agreed to conclude negotiations over the final price within a year.

Over the last two years, there have also been negotiations over an additional 5,000 cubic meters per day for the Hebron and Bethlehem area, solely for the summer months, due to the severe water shortage there. During the negotiations, Israel lowered the temporary rate from 3.80 shekels per cubic meter to 3.55 shekels. It took an additional meeting, between Palestinian prime minister Salam Fayad and the coordinator of government activities in the territories, Maj. Gen. Eitan Dangot, to lower it to NIS 3.50. Palestinian water officials say that on July 18, on the verge of the agreement's signing, they were stunned to find out that Israel had reneged on the preliminary agreement and asked that the new temporary rates for Gaza and Hebron be applied immediately to all the water it sells to the Palestinians.

Afterward, Israel conditioned this supply of water on Palestinian Authority consent to a new rate within a few months. The Palestinians refused and the head of the Palestinian Water Authority, Dr. Shaddad Attili, described this as "Israeli extortion that is attempting to impose a new situation while exploiting the severe water crisis."

Uri Schor vehemently rejects this argument. In his response to Haaretz, he said the Israeli Water Authority made a technical effort to enable the addition of "substantial quantities of water to Hebron and Bethlehem" requested by the Palestinians. He said "the joint water committee met on July 18 and the protocol was agreed to for the additional water supplement, its temporary price and the need to determine the set price and the overall cost by the end of October 2012. The accusation (of extortion ) is completely unfounded. The Palestinian Authority's refusal to update the water prices is resulting in residents of the State of Israel paying for and subsidizing the water transferred to the Palestinian Authority. Despite the agreement (which was with the consent of both sides ), the Palestinians declined to sign the protocol and are conditioning their signature on a meeting to discuss and finalize 15 other complex matters which it was agreed in advance would be discussed separately."

The "substantial" additional quantity of water for Hebron and Bethlehem is around 600,000 cubic meters for a period of some four months. Palestinian Water Authority officials say this is a minuscule amount, especially when compared to the increased allocation of 25 million cubic meters of potable water for Israeli farmers for 2013. The basic rate Israeli farmers pay is also much lower: 1.823 shekels per cubic meter, 2.082 shekels, and 2.606 shekels (not including VAT ).

The Palestinians confirm that they are conditioning talks over the new rate on resolution of issues they had raised in the joint water committee. One of them is deducting funds they say Israel owes them for exaggerated calculations of water quantities in Jerusalem, and Israeli use of treated water from Palestinian communities. Palestinian water officials say the experience of the past 17 years indicates that if they agree to discuss just one issue, at Israel's convenience, discussion of the other, vital interests of the Palestinians will drag on and be postponed indefinitely.

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