|Photo by: Courtesy of IBA|
Treasury reneges on agreement with IBA
By GREER FAY CASHMAN
IBA brokered settlement with the Treasury, selling off real estate in order to guarantee a credit line and maintain solvency.
As the cash-strapped Israel Broadcasting Authority prepares to implement
long-awaited reforms – following years of negotiations, strikes and sanctions –
the Finance Ministry broke off its agreement prior to Passover.
brokered a settlement with the Treasury, selling off its real estate assets in
order to guarantee a credit line and maintain solvency.
In return, the
Finance Ministry promised to transfer a grant of NIS 90 million, a loan of NIS
240 million and approximately NIS 400 million as its share of the real estate
The IBA had previously negotiated a compromise with both the
Journalists Association and the Histadrut labor federation on layoff
As a state-owned enterprise, the IBA would not be directly
involved in the real estate transactions. The Treasury would receive its rights
and ultimately transfer a large portion of the proceeds from the sales to the
IBA barring the loan.
Last month, representatives from the Prime
Minister’s Office, the Finance Ministry and the IBA signed a memorandum of
Days before Passover, the IBA received a document from the
property division of the department of the accountant-general of the Finance
Ministry that contained new conditions contradicting the signed MOU.
officials Eran Horn and Tomer Karni objected strongly to the amended
Karni, the IBA’s deputy legal adviser, warned that if the IBA
abided by the new terms, the enterprise would leave itself open to political
The new terms would also jeopardize the IBA’s
While the IBA wants to retain one-third of its headquarters in
the old Sha’arei Zedek building on Jaffa Road, the Finance Ministry plans to
sell the property without guaranteeing plans for the IBA.
Even if the
Treasury were to relent and allow the IBA to remain in its current building, the
IBA must find another location from which to broadcast.
Since the Finance
Ministry changed the negotiation’s terms, the IBA has ratcheted up the pressure.
IBA director-general Yoni Ben-Menachem wrote a terse letter to accountant-general
Michal Abadi stating that the new terms were unacceptable and the IBA demands
that the previous agreement be upheld. The IBA has threatened to manage its real
estate transactions outside of the Finance Ministry.
Due to the negated
compromise, the benefit packages of several hundred IBA employees are in
The enterprise cannot afford to lay off staff without funding
from the Treasury.