July 1999

Palestine territories Master Report

1. The interaction between business and regulatory constraints

1.1 The regulatory background

The Palestine National Authority (PNA) under the Article 36 of the Israeli-Palestinian Interim Agreement on the West Bank and Gaza Strip (Washington D.C., September 28, 1995, also referred to as the Oslo II agreement) , is legally permitted to "build and operate separate and independent communications systems and infrastructures including telecommunication networks."

The official policy of the Palestinian National Authority is to engage the private sector in all the operational aspects of the telecommunication market in Palestine while at the same time maintain the role of policy making and regulatory monitoring within the Ministry of Post and Telecommunication.

The Telecommunication Law in effect, decreed and signed by President Arafat on the 18^th of January 1996, vests ownership of the sector in the PNA and provided the Ministry of Post and Telecommunication the right to establish, operate and manage telecommunication networks in Palestine and connect these networks internationally. In addition, it allows the Palestinian Legislative Council to grant concessions to public network operators and entrusts the Ministry to issue permits to operate private networks.

The first elected Palestinian Legislative Council (PLC) was initially conceptualized with the Declaration of Principles (DOP). The idea was further developed in the Israel-Palestinian Interim Agreement (Oslo II) in which the structure, jurisdiction, functions, size, and responsibilities of the Council were determined. In fact the Oslo II Agreement was so detailed that one cannot but deduce that this agreement constitutes the terms of reference for the Council.

The PLC, as stipulated in Oslo II, is to replace the Palestinian Authority upon it inauguration. As such, the Council is expected to act as the highest authority in the interim phase. The PLC is the body responsible for legislation and from it the majority (80% of the cabinet) of the Executive Authority is appointed.

1.2 Business constraints and entry barriers

Since the signing of the Oslo I agreement between the Palestine Liberation Organization and Israel resulting in the establishment of the Palestinian National Authority a number of parties and institutions have influenced the telecommunication sector in Palestine. The extent of the influence of each party has changed from time to time depending on the particulars of the policy or regulation matters in reference to the overall political, social and economic aspects involved. For example, while the technical details of the licensing agreement of the Palestine Telecommunication Company, PALTEL, was handled by the Ministry of Post and Telecommunication, the corporate structure of the company and the limits of its monopolistic activities was decided by the office of the President, through his economic adviser, and influential private sector players.

External to national institutions and players, the Ministry of Communication of Israel continues to play a role in the Palestinian telecommunication sector by virtue of the interim agreement governing the relationships between Israel and the Palestinian National Authority. Its role is particularly prominent with matters that involve international connectivity and spectrum management as the membership of Palestine in the International Telecommunication Union (ITU) is less than that of a sovereign state.

1.3 On-going regulatory developments concerning alternative networks

With the establishment of the Palestinian National Authority, the Ministry of Post and Telecommunication assumed the role of the regulator. While the official policy of the Palestinian Authority is to engage the private sector in all operational aspects and thus establish a regulatory framework adequate for a liberalised market it is evident that the framework does not exhibit coherence or maturity for stimulating the required activities of the private sector.

The only sizeable regulatory activity was issuing the license agreement of the Palestine Telecommunication Company, PALTEL, as a provider of telecommunication services. Neither the scope nor the monopolistic characteristics of the license have been publicised. As a result, the regulatory framework does not provide the adequate transparency for the involvement of the private sector.

2. Inventory of the major "public" utilities with a potential for use in I.S. applications

2.1 The Palestinian Energy and Environment Research Center (PEC)

The Palestinian Energy and Environment Research Center (PEC) was established in December 1993 in Jerusalem, in accordance with the decision of Yasser Arafat, President of Palestine, in order to prepare studies and proposals about the needs of the Palestinian community for energy resources, traditional and non- traditional. PEC as a national independent organization has a full authorities and responsibility in the issues of energy and related environment, and to take care of the development of renewable energy issues, as well as energy conservation.

In July 1996, The center became part of the President’s Office, and subject to the decisions made by the President himself. The Center has finished the plans and studies to provide electricity to the remote communities in Palestine, by using the Solar, Wind and Biomass energy. By this time, nine locations including schools and clinics, had been provided by using Solar energy. The success of this project has a very substantial effect on the life of those communities.

Moreover, the center has began another national project for three years, in which 200 KWp of Solar energy will be installed in Palestine, this project is considered one of the biggest in the Middle East.

The Objectives of PEC

Since its establishment, PEC intends to draw the energy sector policy, and its effect on environment in Palestine, and to ensure the assessment of the energy sources taking into consideration the availability of these resources, and the environmental effects, also to increase the international cooperation in the field of energy and its related environment effects. The aims of PEC could be set up as follows:

• Contributing in putting and issuing plans, in order to execute them at the local and international levels, to help the Palestinian Authority to take decisions relative to the energy sector and environment sector, as a general policy, which helps the development of energy and environment sectors.
• Issuing of renewable energy projects, and its effect on water and environment, and putting plans and expectations in order to implement these projects in the energy conservation issues.
• Providing the PNA with all of the information and data that are required for formulating the general policies of the energy sector, with technical consultancy about these projects when necessary.
• Contribution in following the plans that aims to implement the energy policies, especially those projects that have an international donation, in addition to the effective contribution in putting the technical studies and introducing the experts for the regional projects such as the regional interlinking projects, gas pipe lines and petrol... etc.
• Assisting in putting the priorities of the policy of distribution and consumption of energy.
• Introducing new approaches in regard to the international cooperation, especially in putting plans for regional interlinking of electricity and gas, and promotion of new and clean technologies.
• Developing tools for decision - making concerning the development of energy and environment policies, and to define the priorities of this policy.
• Elaborating the legal framework which will apply both to supply and demand.
• Planning and coordinating the energy programs, with a direct responsibility for the implementation of energy efficiency and renewable energy development programmes.
• Elaborating the standards and certificates for the manufacturing of energy instruments, equipment, and materials such as heating devices, solar water heaters, electrical devices, etc.
• Coordinating and ensuring the follow up of the implementing of the projects that related to the energy policy, in particular those financed by cooperation and international loans, as well as large regional projects.

International cooperation agreements

Several agreements are being signed with different governmental and non-governmental agencies in the world. These agreements mainly cover renewable and energy conservation. Protocol of cooperation with the following institutions:

• ADEME France
• CODEV France
• ICE France
• OME France
• ENEA Italy
• ENEL Italy
• IDEA Spain
• ICAEN Spain
• FhG-ISE Germany
• Baden Wurtemberg Germany
• CRES Greece
• CEEETA Portugal
• University of BOCHM Germany
• University of Florida USA
• RSS Jordan
• ANER Tunisia

The Center’s Activities

The center provides consultancy and support to the PNA in implementing the plans and projects in the distribution and consumption of energy sector, in order to satisfy the above mentioned objectives, and also to ensure the implementation of the energy policy, when executing the local projects, and also to enlarge the international cooperation. There are many projects and studies underway:

A. Projects:

• The center, in coordination with all the Palestinian Ministries and national institutions, is executing many projects in Palestine, among them are:
• Electrification of Isolated Communities by Solar Energy.
• Electrification of Isolated Clinics and Medical centers by Solar Energy;
• Baden Wurttemberg Project;
• Eldorado Project;
• UNIDO Project ( The Application of Renewable Energy in Palestine ).
• Electrification of Remote Villages Project.
• Energy Conservation & Demand Side Management at Taiba and Sika Villages.
• The Training and Awareness Unit project.
• Energy Research Station Project.
• Energy Balance project.
• Mediterranean Energy Information Network.
• Regional Action Plan on Energy and Urban Environment- under SYNERGY
• programme.

B. Studies and Researches

• Supply and demand for Petroleum in Palestine.
• Evaluation of Oil Shale in Palestine.
• Evaluation of the Rock Wool in Palestine.
• Evaluation of Renewable Energy Sources in Palestine.
• Electrical Regional Interlinking Study
• Natural Gas Study.
• Environmental Pollution Due to Transportation Sector.
• Strategy for the Promotion of European Technologies in Palestine- under THERMIE programme.
• Information Dissemination to Palestinian Industry of EC Member States’ Clean and Energy Efficient Technologies- under THERMIE programme.
• Renewable Energy Assessment for Palestine.
• Prefeasibility Study for the Integration of Renewable Energies for Electricity Production in the Southern Mediterranean Countries (INTERSUDMED).
• Feasibility Study for the Power System in Nablus and the North of West Bank.
• Furthermore, there are many studies concerning environmental issues, pollution and recycling of waste water. These studies are being conducted in cooperation with the municipalities of Gaza, Rafah, Jenin, Jericho, Tulkarem and Qalqilia.

2.2 Cable TV

Until now there is no cable TV in Palestine. It is not yet clear if the three cable TV companies in Israel (Aruzei Zahav, Matab and Tevel) provide any services in the areas of the Palestine National Authority (PNA).

2.3 Type of services offered by the operators on the networks

The areas of Palestinian Authority lack alternative networks, like gas, water, cable, electricity (only electricity purchased form Israel from a mixture of distribution networks), railways, motorways, waterways, oil pipelines.

This is why, there is not any kind of agreements, regulations or draft proposals concerning alternative networks in this country.