US embassy cable - 04ANKARA149

C O N F I D E N T I A L ANKARA 000149 
 
SIPDIS 
 
 
E.O. 12958: DECL: 01/08/2014 
TAGS: ECIN, ETRD, IS, PREL, SENV, TU 
SUBJECT: TURKEY PLEASED WITH ISRAELI CABINET APPROVAL OF 
TURKISH WATER IMPORTS 
 
 
REF: TEL AVIV 127 
 
 
Classified by Economic Counselor Scot Marciel for reasons 1.5 
(b) and (d). 
 
 
1.  (C) Turkey is pleased with the decision (reftel) of the 
Israeli Cabinet to approve the broad outlines of the sale of 
fresh water from Turkey to Israel.  MFA's Transboundary 
Waters Chief, Mithat Rende, said that Israeli working level 
officials had been in Ankara recently to agree on the text of 
the framework agreement, and Turkey is ready to sign. 
Details on who will sign and when have not been decided, 
however.  Rende said the signing of the agreement will be a 
big step but confirmed that the framework agreement is little 
more than a statement of intention.  The important -- and 
difficult -- details have not been addressed and will take 
considerable time and effort to resolve.  Nevertheless, he 
expected the water deliveries to commence in 2006. 
 
 
2.  (C) Turkey has about 5 billion cubic meters of fresh 
river water that flows unused each year into the 
Mediterranean.  The deal with Israel to deliver 50 million 
cubic meters per year for 20 years is just a drop in the 
bucket.  The water will come from the Manavgat river in the 
middle of Turkey's Mediterranean coast.  (Rende emphasized 
that some Arab countries have accused Turkey of wanting to 
sell transboundary water, i.e. from the Euphrates River, to 
Israel.  The Manavgat is wholly within Turkish territory.) 
Turkey built a water treatment plant and loading facility on 
the Manavgat in 1997, and now intends to privatize the 
facility.  Rende said the facility, which cost $147 million, 
would require some upgrades, bringing the total cost near 
$200 million.  In addition, transport of the water will 
require a private company to build and operate three 
specially-built tankers, with the capacity to transport 
250,000 tons of water each.  He estimated the cost of the 
tankers at between $180 and $200 million. 
 
 
3.  (C) The Israel deal is part of a long-standing Turkish 
dream to develop a "Peace Pipeline" delivering water to the 
parched countries in the Middle East (from the Gulf States to 
North Africa).  Turkey hopes that the deal with Israel will 
encourage other water-starved countries in the region to 
follow suit.  Rende noted that the framework agreement will 
allow Israel to sell the Turkish water to its neighbors. 
Rende said that Israeli Public Works Minister had suggested 
that the deal with Turkey could evolve into a regional 
concept. 
 
 
4.  (C) In a related effort, Rende said that Turkey will 
proceed with a plan to build a $500 million submerged 
pipeline to deliver fresh water to Northern Cyprus, with the 
option of extending the line to include Greek Cyprus. 
 
 
5.  (C) Rende would not speculate on what price Israel would 
pay for the water.  He noted that the Turkish water will be 
more expensive than desalinated water, saying that Sharon's 
decision was political.  He said the GOT had not decided what 
"royalty" price Turkey would ask for the water.  The more 
difficult issues involve the private companies operating the 
water treatment and loading facilities in Turkey and the 
transport operator.  Without including other operating costs, 
if the companies wanted a reasonable 15% return on their 
total upfront cost of about $400 million, they would need to 
bring in annual revenues from the water sales of about $64 
million, which translates to a cost of $1.28 per cubic meter. 
 With the Turkish 'royalty" and operating costs included, the 
water could easily be triple the price of desalinated water 
in Israel. 
 
 
Baghdad minimize considered. 
DEUTSCH