A Palestinian-American billionaire says the biggest challenge facing his $1.4 billion luxury city in the heart of Palestine nearly bankrupted the project — and it’s still not over

Palestinian-American billionaire developer Bashar al-Masri is the brains behind Rawabi, a $1.4 billion planned city of 40,000 in the West Bank, the territory home to 2.6 million Palestinians.

Around 4,000 of a planned 40,000 people currently live in the shiny new city, which is both the first planned city built by and for Palestinians in the West Bank and the largest private sector project in Palestinian history.

Though it remains to be seen whether Rawabi will become the thriving, bustling metropolis of Masri's dreams, the development is already a success. Getting a Palestinian project of that size completed in the West Bank is no easy feat.

But as Masri told Business Insider in a recent interview, the biggest challenge he faced in building Rawabi was the realities of "the occupation."

While Rawabi is located in Area A of the West Bank, the 18% of the territory under full Palestinian control, access to the city is in Area C, the 60% of it under Israeli military control. That left Rawabi at the mercy of the Israeli government for approval for infrastructure like roads and water.

First, Masri had to lobby to get permission to build an access road to bring materials to the construction site and then for a road to allow residents and visitors to go to Rawabi. It took years to get the road approved. Even now, the city only has a dinky two-lane country road that winds through vineyards.

The development has a temporary permit for the road, which must be renewed annually. If the Israeli government does not renew the permit, the road would have to be destroyed, Jack Nassar, a Rawabi spokesperson, told Business Insider.

Rawabis water became a political football

An even bigger issue was water access.

"This is a story of defying the occupation, and a story of how this project is not just about economics. It's about the situation here," Masri told Business Insider

When Israel took control of the West Bank over 50 years ago, it took control of the water supply as well. The 1993 Oslo Accords dictated all water agreements had to be approved by a Joint Water Committee established between Israel and the Palestinian Authority. But in 2010, the Palestinian Authority decided that it would no longer participate in the JWC because it did not want to approve water infrastructure to Jewish settlements in the West Bank. In return, Israel refused to approve new water infrastructure for Palestinian communities.

At the time, Masri was optimistic that Rawabi would be approved, despite the tit-for-tat difficulties. But then, the other shoe dropped.

"We had 200 meetings with Israeli authorities about the water. Everything was lovely and dandy. All of a sudden, in April 2013, we said, 'Where's the pipeline? Let's go,'" Masri said.

Through back-channels, Masri found out that Israeli officials were holding the approval for Rawabi's water to punish the Palestinian Authority for forming a unity government with Hamas,

the settler movement, a powerful bloc of Israelis who have established communities on lands within the Palestinian territories. A headline of a column in the pro-settler Arutz Sheva news organization at the time conveys the sentiment: “Qatar-Funded City to Arise in Israel; More Tunnels, Anyone?”

A Palestinian-American billionaire says the biggest challenge facing his $1.4 billion luxury city in the heart of Palestine nearly bankrupted the project — and it’s still not over

Rawabis water became a political football

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