Israel rejects Chinese firm’s bid to construct Sorek 2 desalination plant amid US pressure

Friedman, Hendel discuss warnings against Beijing’s involvement in 5G technology

Israel has selected local company IDE Technologies, rather than a Chinese firm, to construct the world’s largest desalination plant, the government announced Tuesday. The decision avoids another undesirable showdown with the Trump administration over Chinese participation in major infrastructure projects.

Three groups bid to build Sorek 2, a private-public partnership (PPP) that will be the world’s largest reverse-osmosis seawater desalination plant when completed in 2023. Among them was Israeli Hutchison Company, an affiliate of Hong Kong-based Hutchison Company.

The US has asked its allies, including Israel, in recent weeks to sever ties with China – Israel’s third-largest trading partner – in areas with security risks, a US official with knowledge of talks on the matter said last week.

In the same vein, US Ambassador to Israel David Friedman chose Communications Minister Yoaz Hendel as the first minister in the new government with whom he held a meeting, along with Knesset Foreign Affairs and Defense Committee chairman Zvi Hauser, the other member of the Derech Eretz faction.

Sources in Derech Eretz confirmed that the matter of 5G and Chinese technological investments in Israel came up in the meeting. Friedman invited Hendel to Washington to meet with government officials in his field and deepen cooperation between the countries on communication technologies.

The US has argued that Chinese companies will use their involvement in building 5G networks for espionage or possibly sabotage of communications infrastructure. Earlier this year, US Attorney-General William Barr said Chinese dominance in this sphere would be a “monumental danger” because of its use for spying, adding that

To listen to Energy Minister Yuval Steinitz tell the tale, that one of the major competitors for the project was Hutchison Water – which happened to be an affiliate of the Chinese Hutchison Company based in Hong Kong – was not a major consideration.

The IDE bid was simply much better, said Steinitz, who up until Sunday was also in charge of Israel’s water infrastructure.

“This is a cheaper price – by dozens of percentage points – for water than anything we have been offered until today,” he told KAN Bet. The IDE bid is for the desalinated water to be sold for NIS 1.45 per cubic meter, which Steinitz said is “dozens of percentage points” lower than the cost of water today, and “significantly” cheaper than the price from the other bids.

And while that may all be true, the reports that one of the reasons US Secretary of State Mike Pompeo flew here earlier this month to talk to Prime Minister Benjamin Netanyahu was concern about Chinese investments in Israel in general, and in this project in particular, leaves the distinct impression that there may have been other considerations involved in giving the project to IDE Technologies.

And those considerations are simple. The coronavirus has helped heat up the fierce global competition between the US and China, with the two superpowers now on a collision course. Washington, in this confrontation, is looking for all its allies to make it clear with whom they stand.

And Israel is not just another American ally, it is one whom Washington expects – because of all it has done for Israel over the years – to fall into line with its policy and be its most faithful friend and loyal supporter.

In America’s eyes, China needs to be seen around the world not as just a big trading partner, but also as a national security threat. And what is telling is that this negative view of China is not just a Republican position, but a Democratic one as well.

Which has placed Israel in an uncomfortable bind. Because since Netanyahu pushed an Asia-pivot trade policy soon after coming into office in 2009 – desirous of reducing Israel’s economic dependence on an EU that over the years has flirted every so often with the idea of sanctions of one kind or another against Jerusalem – Israel’s trade with China has taken off.

In 2012, at a time when Netanyahu requested his government ministers to restrict travel abroad because of budgetary constraints,