The name “Mekorot” is familiar to every child in Israel in the context for which it was founded, as specified in the original memorandum of the National Water Company: But the changes brought about by time, 84 years after it was founded, changed the face of society and expanded its areas of practice.
Mordechai Mordechai (67), the retiring chairman of the Mekorot board of directors, observes at the end of seven and a half years in a position satisfied with what is happening: The company, which was issued on the Stock Exchange in 2019, last week completed the sale NIS 909 million, thus completing a historic move: All the major desalination facilities in Israel were transferred to private hands.
That week it was announced that the state intends to complete the transfer of the assets of the national carrier (the national water project plant, MAPAR – KASU) to Mekorot, as part of a government decision made in February 2019, in light of the need to significantly increase investment in the water economy.
Shortly before, in June this year, in light of expectations based on its estimates that the water control market may grow rapidly in the coming years, the company announced the establishment of the start-up “Watersight”, which will operate in water quality monitoring – starting with home monitoring and water systems And ending with the monitoring of entire countries’ water systems.
To this end, she joined Newsight Imaging, which operates from Ness Ziona and specializes in the development of sensors for various industries, including automotive and medical. In the background, in the name of Mekorot, which has won several grants from the Innovation Authority, are registered a number of patents in Europe and the United States.
Privatization of desalination
Mekorot’s financial statements for the second quarter of 2021 also pleased him, with a jump in net profit in the first half to NIS 142 million, an increase of about 53% compared to net profit in the corresponding period last year. According to the reports, water consumption in agriculture increased by about 17%, water sales to Jordan and the Palestinian Authority increased by about 25% and there was a 54% increase in quarterly profit – to NIS 63 million.
“I retire with a feeling of great satisfaction from the work,” says Mordechai. “Everything has to come to an end. This job too. Why should I miss it? The people. There are quality and dedicated people here, professional and very responsible. At every opportunity that could have been conveyed to them, I made sure to do so.”
Mordechai divides his tenure as chairman of the board into two main parts. We belatedly received a lame fixture, and I went into the girder thickness to handle two axes: one in front of the operating contractor, who was a partnership of Minerva and Spanish SEDYT, to get him out of the project amid disagreements, late delivery of the fixture and non-compliance. Indeed, in the end, I led to a compromise with the contractor and removed him from the project.
“The price of the facility was NIS 1 billion, which came from external financing, mainly from Bank Hapoalim, and NIS 400 million from Mekorot, in a joint investment. This was not an easy task.
“This amounted to a total write-off of about NIS 430 million, which was completed back in 2017. In practice, we received NIS 909 million for an asset that was listed in the books at zero value. “The shoulder under the stretcher and gave his part. The end of the process was last week. A very sweet lollipop for the end of the role.”
The second part, that is, the last four and a half years, is the process of modernization that has led in society. “Mekorot has changed from an old government company to a modern company, after barely touching this company for decades. Today the company is somewhere else. For the past four years, Eli Cohen has taken on the role of energetic CEO, and together we have led the change in the company.
“Part of the reform included streamlining and reducing the number of employees. Naturally, the workers’ committee did not like it, but realized that he was dealing with a serious and responsible management that wanted the company and wanted to make it stronger. The committee cooperated. 170 employees and not absorb others in their place.This is a real deletion of standards.The process has not yet been completed, and is still in progress.
“On the other hand, we almost doubled our development budgets: from 800 million to 1.5 billion shekels a year, because the government trusted the company, and we did that without additional staff. We invested in information systems and developed the cyber issue. Thinking is more business. We promote. Our properties in order to serve the issue of solar electricity by renting space to developers.
“This is how we earn both green and non-polluting electricity and income. Mekorot is the largest energy consumer in the State of Israel. 5% of the total annual electricity consumption is ours, and it costs us almost a billion shekels a year. Therefore, one of our big tasks is to reduce energy consumption.
“At the same time, the company is preparing to enter the communications market by placing fiber optics in the national water pipeline, with a relatively fast and inexpensive ability to connect cities and seats to a world of fast data traffic.”
And on the international level?
“Israel has a global reputation when it comes to water. Our innovation unit continues to look for start-up companies that can serve the local water sector, with access to new markets overseas, as befits a modern business company that adapts itself to today’s reality. As a strategy, we do not do work. “We bring our relative advantage in consulting and planning master plans for water, a sophisticated command and control system and reducing water depreciation. We are already doing actual work with Bahrain, consulting and planning, and are in very advanced stages of understandings and agreements with Dubai.”
Do not stand still
Total water consumption per year in Israel ranges from 2 to 2.2 billion cubic meters, of which about 600 million cubic meters is desalination water, another 1.2 billion cubic meters agriculture and the rest is industry and other uses. The five desalination facilities active in Ashkelon, Palmachim, Soreq, Hadera and now also in Ashdod will be joined in the coming years by facilities in the center and north. With and without droughts, Israel has enough water.
“Currently, water consumption by households is 80% of desalination facilities, and with the new facility in Ashdod, the figure will increase to 90%,” says Mordechai. “There is no shortage of water. The whole business becomes an economic business of how to desalinate the water cheaply and how to transport cheaply to the house.”
Regarding tariffs, there is still no real line for consumers: “Although we are not in short supply, there is a regulator that determines the water tariff, it is the Water Authority, based on three factors: the payment for desalination facilities, the water transportation costs of springs, and of course, corporate tariffs.” , Says Mordechai.
In his previous positions, Mordechai served as Director General of the Ministry of Construction and Housing, Director General of the Ministry of Communications, Chairman and Director of the Public Services Authority – Water and Sewage, Director General of the Ministry of the Interior, briefly as Director General of the Ministry of Welfare. Treasurer of the Jerusalem Municipality for budgets. “The common denominator for all my roles is the need to know how to manage. You have to invest, take the issue you are responsible for seriously, exercise common sense, identify the problems and harness everyone who works around you to find solutions to problems.
“Although I came from government ministries, I knew that Mekorot, like any government company, is committed to doing business. I quickly adapted and made business decisions on the board. My three most important decisions were selling the desalination plant in Ashdod I personally led, the manpower efficiency program and choosing a good CEO. . When you choose a good CEO, there are those who carry out the policies you believe in. Eli Cohen has been the CEO of the company for the past four years. A man of his stature and above. “Everything I mentioned, which brought the company to another place, is its execution.”
Message to next or next after you?
“Do not keep quiet about the yeast. Society is in good shape. To stand still means to retreat. One has to think about how to promote and develop more and more.”
Source: Maariv.co.il – כלכלה בארץ by www.maariv.co.il.
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