Photo Credit: Isaac Harari/Flash90
The Sorek 1 desalination plant, November 22, 2018.

Hutchison Whampoa, an investment holding company based in Hong Kong, a Fortune Global 500 company and one of the largest companies listed on the Hong Kong Stock Exchange, did not win the tender for the construction of a huge water desalination plant in Palmachim, north of the Gaza Strip, Ynet reported Tuesday.

The Sorek 1 desalination plant, November 22, 2018. / Isaac Harari/Flash90

The Chinese were rejected two weeks after Secretary of State Mike Pompeo expressed to Prime Minister Benjamin Netanyahu the US’ concerns about Chinese involvement in the bid to establish the world’s largest water desalination plant. The US fears Chinese investments around the world, which create a dependency on China’s corporations – to the detriment of US foreign policy.

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But by avoiding a crisis in its relationship with the US, the Israeli decision may have invited a similar crisis with the Chinese government.

US Secretary of Energy Ernest Moniz, accompanied by Israeli Minister of National Infrastructure, Energy and Water Resources Yuval Steinitz, visited Israel’s desalination plant in Sorek, April 4, 2016. / Matty Stern/U.S. Embassy Tel Aviv

In their conversation two weeks ago, Netanyahu told Pompeo that the issue was under discussion by the Foreign Investment Committee at the Finance Ministry. The decision on the winning bidder is expected to be announced Tuesday. The Sorek 2 Desalination facility will process 200 million cubic meters of water per year, and will be the largest of its kind in the world, increasing Israel’s desalination capacity by 35%.

The new desalination plant will be added to five facilities already in operation in Israel.

The seawater desalination bids committee, which will announces the winner, is jointly run by the Finance and Energy ministries, the Water Authority, and Inbal, an insurance company belonging to the Finance Ministry which will likely insure the project.

Prime Minister Benjamin Netanyahu and US Secretary of State Mike Pompeo, March 20, 2019. / Hadas Parush/Flash90

When Secretary Pompeo was in Israel two weeks ago, it was in the midst of discussions regarding applying Israeli sovereignty in parts of Judea and Samaria. But, according to Ynet, the main purpose of the visit was to warn Netanyahu that he must reduce China’s involvement in Israeli infrastructure tenders. State Department officials traveling with Pompeo told reporters: “We have not flown half the world to talk about annexation.”

An American official said after the visit that “the Secretary of State has no problem with trade and relations with China, but the coronavirus has clarified the dangers of contacts with non-transparent states conducting unfair trade, which leverage their trade relations to their advantage over their partners. We saw such a trap in Djibouti (on the Horn of Africa – DI), for example, where China received a 99-year lease on port. This causes significant economic problems.”

One State Department top officials accompanying Pompeo said, according to Ynet: “We have been allies of Israel for a long time. Our strategic relations with Israel are getting closer every day – be it in the economy, the military, intelligence exchanges and so on. Our relationship is mature enough to talk about difficult issues, and the message gets through.”

Yes, it does.

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