Betar Illit contractor faces NIS 10 million loss

Contractor faces NIS 10m

By RON FRIEDMAN,
December 17, 2009 23:48
4 minute read.

The Civil Administration of Judea and Samaria halted Haim Zaken's 67-unit project in the Betar Illit settlement late last month, but it has yet to create a compensation committee to deal with his potential NIS 10 million loss. Zaken is just one of 20 contractors in the Jerusalem area alone who stand to lose millions as a result of the 10-month moratorium on new settlement construction, said Shmuel Levy, who heads the Association of Building and Infrastructure Contractors of the Jerusalem area. He said that as many as 1,000 units in his area have been frozen. MK Ze'ev Elkin (Likud), who is compiling a cost estimate for the Knesset Foreign Affairs and Defense Committee, has estimated that the losses could run as high as NIS 1 billion. "We have no one to talk to. We have no one to address with our complaints," said Zaken, who was told to stop work on his project on the first day the moratorium went into effect late last month. Inspectors came to his site and handed out a stop work order even though the project had all the required permits, he said. "I hadn't poured the foundations, so they would not let me complete the work," said Zaken, a Jerusalem-based contractor who employs 70 Israeli and Palestinian workers. He has already sunk NIS 10m. into the project. He immediately turned to the civil administration to contest the order, but had to wait a week for a hearing because the appeals committee had yet to be set up. The administration, he said, agreed that he could proceed with work on 24 of the units, but not on the remaining 43. It's a move, said Zaken, that jeopardizes the whole project. His attorney, his daughter Hadar, said that the appeal committee gave them a number at the Defense Ministry to address the issue of compensation. Hadar said she called in vain a number of times only to discover that there is no committee. On Thursday, when The Jerusalem Post called that same number, it was told that the committee had not yet been set up, but that it was taking down names and phone numbers of those who would like to apply for compensation. On Wednesday, the state also told the High Court of Justice that the committee was not yet functional. The Defense Ministry told the Post that the committee would soon be operational, although it did not yet have a date. Zaken listened on Wednesday to initial media reports on the cases that appeared before the High Court, in which petitioners questioned the legality of the 10-month moratorium. He hopes that the court will order the state to make changes to the moratorium. Levy said that he also had his eye on the court cases, so that the Association of Building and Infrastructure Contractors could properly assess its next step. He had also written letters to the prime minister, the defense minister and the Ministry of Construction and Housing, asking that orders be amended to allow all those with permits to carry on construction. The association is weighing whether it needs to file its own lawsuit, said Levy. "The freeze orders were determined by someone who obviously has no clue about construction," he said. The government's decision that construction could only continue on buildings with foundations was arbitrary and made no financial sense, he said. Levy explained that a contractor is heavily invested in a project well before the foundation is laid. By that point, he has taken out loans from the bank, and he has agreements with workers and buyers, all of whom will demand payment or refunds despite the freeze. Contractors have to purchase the land from the Israel Lands Administration, pay for development and engineering work as well as permitting and licensing fees, said Levy. "And only then can they start the physical construction of the building," he said. "In this situation people are likely to go bankrupt," said Levy. "Not all the contractors have other projects going on concurrently. Today, to invest in a project means millions of shekels. Someone who is already invested in one spot may not have the cash flow to start any new projects before completion." Levy said the contractors had suspected that a freeze could be in the works, but they imagined that it applied only to the issuance of new permits, and not for projects that were already underway. "It makes no sense," he said. Since Prime Minister Binyamin Netanyahu took office in March, he had refused to issue new building permits. Levy said he had worried only that this policy would continue. "Even those people who completed the foundations and can proceed to build the rest of the building are in a jam, because there is a freeze on all the infrastructure development works. Nobody will come live in a house that doesn't have running water or sidewalks leading to the house," he said. Zaken added that permission to build only a fraction of a project is a way of stopping the whole thing, because many aspects of a project have to be implemented at the same time. There were some small things he could do on the 24 units, but ultimately the project was financed and designed as a unit, he said. Zaken said he stood to lose money as he waited, and that if the freeze was not eventually lifted he would lose the whole project. "It's as if they expect me to construct a building in the sky," he said.


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