COSTLY crude oil and the low value of the Cyprus pound are hiking the price for desalinated water from the Dhekelia plant, but the state insists things will “even out” in the end.
Because desalination is so energy-hungry, the agreement the government has with the Israeli company running the island’s only functioning plant allows for the price for the salt-free water generated to fluctuate in keeping with the ups and downs of oil prices. Also, the government pays the operating company, which has a contract to run the Dhekelia plant for a decade, in foreign currency.
The price the state pays for the desalted water is therefore pinned to the fluctuations in crude oil prices and the Cyprus pound’s performance against other currencies.
This mechanism has reportedly pushed the price of fresh water from Dhekelia up from the base rate of 54 cents a tonne to 70 cents a tonne. The Dhekelia plant produces some 40,000 cubic metres of water every day.
But Senior Water Development Department Engineer Nicos Tsiourtis insisted yesterday that the formula setting the price of Dhekelia desalinated water was not all bad news for taxpayers.
“The system is to the advantage of both the company and the tax payer,” Tsiourtis said yesterday. “The taxpayer pays when the price goes up but benefits when there is a price decrease,” he added.
Tsiourtis admitted that the cost had gone up recently but added that dropping crude prices would soon make amends for that, with the cost diving below the 54 cents a tonne base rate. He said he did not know what the exact price of Dhekelia water was at the moment.
After going through the roof earlier this year, the price of crude is now coming down to more `normal’ levels. The Cyprus pound, recently pegged to the Euro, is still weak against most foreign currencies.
The Water Development Department official said he could not comment on reports that the Electricity Authority (EAC), which has submitted an offer to build another desalination plant at Moni, was offering to produce fresh water far more cheaply than Dhekelia. “The offer has not yet been examined and I cannot comment on costs at this stage,” Tsiourtis said.
The government sees desalination as the answer to the nation’s chronic water shortages and more units for Paralimni and Larnaca are in the pipeline.
The Cyprus Mail is the only English-language daily newspaper published in Cyprus. It was established in 1945 and today, with its popular and widely-read website, the Cyprus Mail is among the most trusted news sites in Cyprus. The newspaper is not affiliated with any political parties and has always striven to maintain its independence. Over the past 70-plus years, the Cyprus Mail, with a small dedicated team, has covered momentous events in Cyprus’ modern history, chronicling the last gasps of British colonial rule, Cyprus’ truncated independence, the coup and Turkish invasion, and the decades of negotiations to stitch the divided island back together, plus a myriad of scandals, murders, and human interests stories that capture the island and its -people. Observers describe it as politically conservative.
