The Israel Electric Corporation’s chairman promised on Wednesday to slash the
benefit of free electricity for its employees, as well as lay off 2,000 of its
permanent workers in a future comprehensive reform of the
company.
Stressing the importance of entirely overhauling the IEC – which
has a debt of over NIS 70 billion – as soon as possible, chairman Yiftah Ron-Tal
discussed the provisions of a prospective reform at a Knesset Economic Affairs
committee meeting, headed by MK Carmel Shama-Hacohen.
Crucial to the
reform, according to Ron-Tal, would be flattening the organizational pyramid of
the company, reducing the number of permanent workers by 2,000 and eliminating
the employee benefit of receiving free electricity.
“There is no choice
but to complete the reform in the beginning of 2013, in order to return the
electric company to financial strength,” he said.
Emphasizing just how
important finalizing a reform would be, Ron-Tal added: “If we would assemble for two weeks of discussions, we could close the reform before
the election.”
Aaron Goldman, deputy director of the Government Companies
Authority, said that in the past year and a half there have many ongoing
discussions with the employees and management of the IEC, most with individuals
involved with the company’s financial management system.
What has
occurred in the electricity sector during the past year, however, is a crisis of
cash flow, and only when the situation improves will it be possible to return to
finishing reform discussions, Goldman explained.
Implementing the reform
would cost about NIS 6 billion, an amount that would be repaid within a period
of five to eight years, Ron-Tal explained. Through the reform, by the year 2020
the IEC would only be responsible for 60 percent of the country’s electricity
production, with private producers generating approximately 3,000 megawatts –
from sites such as the coal-fired Project D plant in Ashkelon, the Alon Tavor
combined cycle natural gas facility and a Ramat Hovav site.
Energy and
Water Minister Uzi Landau has repeatedly stressed the importance of encouraging
the development of the private power sector, noting that this will also be a
significant boost toward achieving Israel’s goal of having a 20% power reserve
supply by 2020. The first of the private power plants to open will be the
140-megawatt OPC combined cycle power station in Rotem, which will be followed
by 840 megawatts from Dorad near Ashkelon and then an additional 880 megawatts
from Dalia Power Energies at Tzafit, he told The Jerusalem Post in an interview
earlier this month.
At the meeting on Wednesday, members of the Economic
Affairs Committee decided to approve an electricity sector decree which
postpones for an additional year – until January 1, 2014 – the expiration dates
for the production and distribution licenses of the IEC.
Last year,
Shama-Hacohen’s committee had refused to enact an automatic extension process
for IEC licenses, but later amended the law to stipulate that the government
could, in fact, continue to order one-year extensions until the end of
2013.
After the end of 2013, the government will no longer be able to
simply extend IEC licenses by decree, but will instead need to go through the
passage of three legislative readings to accomplish this, according to the
committee.
“Maybe we are requesting an extension for the licenses if not
for the last time, then for the next-to-last time,” Ron-Tal said