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Knesset panel: Gov’t must help Israel Electric Company collect Palestinian Authority debt
By SHARON UDASIN
26/02/2014
The PA’s contribution to the IEC’s total NIS 73 billion debt is only about NIS 1.369b., or 1.9% of the grand total.
 
If the Israeli government does not help the Israel Electric Corporation collect debt from the Palestinian Authority, the Knesset Finance Committee may appeal to the High Court of Justice, the committee’s chairman said on Tuesday.

“If the state does not help the IEC in collecting the debt from the Palestinian Authority, the Finance Committee will consider turning to the High Court of Justice – to obligate the state to address the problem,” said Finance Committee Chairman Nissan Slomiansky (Bayit Yehudi). “It cannot be that citizens of Israel will finance the deficits of the IEC, which stem, among other things, from the PA’s lack of debt collection.”

Overall, the PA’s contribution to the IEC’s total NIS 73 billion debt is only about NIS 1.369b., or 1.9 percent of the grand total, according to data from the IEC Although IEC executives and coalition MKs harped on the government’s failures to pressure the PA into paying the electricity debts, members of the opposition slammed these claims as convenient ways to gloss over the company’s much larger problems.

“If we were a private company, we would have stopped supplying power to the Palestinian Authority and the Gaza Strip a long time ago,” said IEC chairman Yiftah Ron-Tal, at the committee meeting. “If an ordinary citizen would not pay his electricity bill, we would disconnect him within a week, and here, despite the enormous financial debt of the company, we have to continue to provide electricity to the PA.”

Ron-Tal said that even when the PA does collect money from its residents, Palestinian officials often transfer the funds for other purposes because there is no one to enforce the PA’s obligations to the IEC.

Ron-Tal said that the company is in “the most difficult crisis of the past 60 years,” but although the crisis is ongoing “it is possible to get out of it.”

IEC workers committee chairman Miko Zarfati assured the Finance Committee members that the company is “in the advanced stages of reform,” and that the government’s Yogev Committee is now submitting its recommendations regarding plans for comprehensive IEC reform.

Reverting back to the discussion about the Palestinian debt to the IEC, MK Orit Struck (Bayit Yehudi) called upon the Finance Committee to launch an investigation into funds transferred by Israel to the PA, and to offset the PA’s debts to Israel by deducting from these.

In response, Labor MKs Michal Biran and Erel Margalit slammed the previous speakers for placing an emphasis on the PA’s financial debt to the IEC.

“It seems very convenient [for] several groups here to divert the discussion of the IEC crisis toward the Palestinian debt,” Margalit said.

Of the approximately NIS 1.369b. owed by Palestinian electricity users to the IEC, about NIS 882m. comes from the Jerusalem District Electricity Company (JDECO), an IEC spokeswoman told the The Jerusalem Post.

Of the remaining NIS 487m. owed, about NIS 195m. is for electricity provided to Gaza, she said.

JDECO administers electricity distribution in the east Jerusalem, Bethlehem, Ramallah and Jericho areas, while the PA itself is responsible for providing power to the Gaza Strip and to areas in the northern and southern West Bank. Debt incurred in these areas must be repaid directly from the PA itself, rather than through the company.

In August 2012, the IEC had threatened to perform intermittent West Bank power supply cuts due to NIS 662m. worth of unpaid debts from Palestinian electricity users – the threat never materialized.

At the time, JDECO CEO Hisham Omari largely attributed his company’s deficits to the fact that there are many refugee camps within his company’s jurisdiction, where 95 percent of residents refuse to pay their electricity bills. He said that PA government bodies receiving JDECO electricity also faltered on their payments.

According to economic agreements between Israel and the PA, any monthly income tax that Israel collects on behalf of the PA must be transferred to the authority at the end of the month, Omari had said at the time. However, before transferring that total, Israel deducts allocations for electricity, water, treatment in Israeli hospitals and other Israeli services.

As of that time period, August 2012, Omari said that the Israeli government was transferring about NIS 55m. of the deduction to the IEC for Gazan and northern and southern West Bank electricity allowances. Yet because this money came directly from the deductions, customers in these regions were not paying directly for their electricity use, Omari said.

Meanwhile, in Gaza, although the Hamas did collect electricity fees from its citizens, the government was using the money for its own purposes rather than sending it to the PA Energy Authority, he said.

The Post was unable to reach Omari on Tuesday for updated details about the Palestinian electricity debt.
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