Water cartel masterminds get jail for inflating prices

The scheme, hatched in a secret meeting in 2004, led to a reported 20% spike in water prices during the years 2004 to 2009.

By YONAH JEREMY BOB
Updated: JANUARY 3, 2018 01:26
Shower head with running water (photo credit: INGIMAGE)
Shower head with running water
(photo credit: INGIMAGE)
A group of businesspersons who formed a water cartel to inflate prices by a form of indirect price fixing got a range of prison sentences from the Jerusalem District Court on Tuesday.
The scheme, hatched in a secret meeting in 2004, led to a reported 20% spike in water prices during the years 2004 to 2009.
Allegedly, around NIS 19 million was collected from consumers above what would have been charged absent the complex scheme which did not directly fix prices as much as it fixed who would be awarded certain public contracts – indirectly guaranteeing inflated prices.
Those involved in the scheme coordinated municipal offerings for purchases, fixes and water meter issues related to water consumption.
A flagship case for the country’s antitrust authority, 13 individuals and five separate entities were indicted in the case in 2011 including some of the CEOs and companies lawyers.
Jail sentences for the leaders of the cartel ranged from 45 days to four-and-a-half months in prison.
In addition, the multiple companies involved in the scheme were fined between NIS 35,000 to 750,000 each for their part in the scam.
Aram Water Services CEO Avi Ben Dror was sentenced to four-and-a-half months in prison and another 45 days of community service along with a NIS 125,000 fine.
Former Varad Water Meters director Ya’acov Tzvigbaum was sentenced to six months of community service and fined NIS 175,000.
Reliable Water Meters company CEO Roi Feigin got three months in prison and was fined NIS 35,000.