In a special report released Wednesday, State Comptroller Micha Lindenstrauss urged the Israel Lands Administration (ILA) not to extend the contract it signed with private builders to construct a resort on Palmahim beach, near Rishon Lezion.
Although the builders have already erected the walls around the projected resort, construction of the facility itself has not yet begun.
"In the tender for the marketing of the land, [the ILA] gave no expression to considerations of the public good, and did not take into account factors that would guarantee that the best proposal would be chosen which would make possible the development of the area for the good of the entire public and the protection of the public interest," wrote Lindenstrauss.
The state comptroller conducted the investigation in response to a request by the Knesset Interior and Environment Committee, after environmental organizations and others protested against the plans to build the resort on 70 dunams of land on the 2-kilometer-long Palmahim beach.
The resort is to include 350 guest rooms.
All in all, the state comptroller found that "there were serious flaws in both the transaction to market the land on the part of the ILA and in the various stages of the planning procedures which designated the land for a resort."
The following are some of the problems that Lindenstrauss discovered:
â€¢ The 1969 Land Law stipulates that the beach is a "specially designated area" and that any business transaction involving such land must be approved by the government or the relevant cabinet minister.
The ILA did not ask for permission from the government and Lindenstrauss wrote that it should discuss with the attorney-general whether or not it should have.
â€¢ In 2000, the district planning commission approved a plan covering more than 400 dunams of the Palmahim beach, including 70 dunams for the resort. In 2004, the National Planning Commission approved a new plan for tourism and recreation along Israel's entire beachfront, introducing new restrictions on development and construction.
The public tender to develop Palmahim beach was issued in a hurry in 2003, so that it would not be affected by the new plan.
â€¢ The government assessor told the ILA that it was not a good time to build the resort for economic reasons. The ILA ignored the opinion and asked for one from a private assessor, who assessed the value of the land at NIS 15.75 million.
Nevertheless, in the tender, the ILA set the minimum leasing cost at less than half the sum - i.e. NIS 7.166 million. The tender's winner offered NIS 8 million.
â€¢ The ILA did not see to it that the tender was widely publicized. For example, it did not specify that the land for the resort was located on the beach. Only two bids were entered for the project.
â€¢ The ILA did not involve the Tourism Ministry in the tender.
â€¢ The ILA and the building contractor signed a three-year contract, under which the resort was supposed to be built by 2007. When the contractor failed to live up to its obligation, the ILA extended the contract without applying any sanctions. It was entitled to cancel the deal.
â€¢ It was only in April 2007 that the contractor submitted a detailed outline plan for the development of the resort. In September 2007, the district planning committee approved the plan but rejected the contractor's request to build some of the buildings less than 100 meters from the water.
â€¢ Despite the district committee's guidelines, the contractors built walls for the resort as close as 30 meters from the water. It also failed to take measures to develop the national park and preserve the natural and scenic qualities of the rest of the area, which it was obliged to do in accordance with the tender.
In the wake of the problems that Lindenstrauss discovered, he wrote that "as the state comptroller's investigation was being completed, the agreement on the development of Palmahim beach expired without the transaction between the ILA and the contractor having been implemented.
"In the state comptroller's opinion, it would be proper for the ILA - given the findings of the report - to reconsider the land deal and, in deciding whether or not to extend the contract, that he take into account the public interest in preserving a beach that is open and accessible to the entire public and to limit as much as possible the damage to the beach front and to determine whether extending the contract will serve the public in accordance with the above."
Environment Minister Gilad Erdan said he would ask the ILA chairman to cancel the agreement with the contractors.
"This is a very grave report which proves that the authorities have yet to absorb the fact that the beaches are a public resource and that we must allow open and egalitarian access for all," he said.
MK Ophir Pines (Labor) said this was one of the most serious reports that had ever been issued regarding real estate matters.
"The government bureaucracy has revealed itself for all to see as a system that operates deceitfully, to serve the interests of the real estate tycoons and to hurt the public using cunning and ignoring the law."
The Society for the Protection of Nature in Israel (SPNI) on Wednesday welcomed the findings and recommendations of the state comptroller, saying "he has placed the protection of the beaches and the right of the public to open and natural beaches at the top of his list of priorities, and has not passively accepted the current situation which is leading to their destructive development, and which only benefits business entrepreneurs."
The SPNI called on the attorney-general to investigate whether there might be reason to take action against any of those involved in leasing the land.