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Beyond an expected $450 million injection into the economy, the planned $525m. state grant towards Intel's expansion of its Kiryat Gat facility will help bring Israeli hi-tech invaluable expertise and international publicity, the Industry, Trade, and Labor Ministry said Sunday, ahead of Monday's Knesset Finance Committee discussion on the matter.
Intel's $5 billion project to expand the existing building and construct a second structure beside it constitutes the biggest single investment ever made in Israel by an industrial enterprise, the ministry stressed.
"The models examining the [state] investment in Intel only in terms of direct benefits for sales or exports represent a simplistic approach and miss the mark," Israel Venture Association chairman Yoram Oron told The Jerusalem Post in a recent interview.
"Intel's presence in Israel has a tremendous value in terms of technological education in this country, as well as in 'spill-overs' of technology into other sectors, and the formation of a very, very strong image for Israel as a world center when as important a player as Intel sells from here," he said. "It is very important that strong multi-nationals be here."
From the investment, some $367m. would flow directly to the economy, mostly as direct taxation, while the monetary value of relatively high Intel wages, of providing jobs to the unemployed, and of the company's contribution to Israeli industry are assumed to total roughly $85m., the ministry said, citing a study conducted by the Industrial Development Bank. The state expects to receive tax revenues totalling 23.5 percent of the project's profit.
The project will add 4,400 jobs to the facility's current 3,500 positions, including 2,400 direct employees and 2,000 workers on temporary contracts, the ministry noted, adding that the jobs to be created range from engineers, scientists, financial advisors, and skilled industrial production workers, to cleaners and cooks.
The ministry agreed to provide 15% of the $3.5b. part of the project determined to be eligible for assistance, or $525m., over the course of four years.
Members of the Knesset committee demanded explanations from Ministry Director-General Raanan Dinur on the "unusual" size of the financial assistance the government intends to provide for the project.