Israel Electric Company to fire 2,000 workers

IEC chairman also promises to cut the benefit of free electricity for employees as a part of a future reform.

December 27, 2012 00:47
2 minute read.
electricity line old

electricity line old370. (photo credit: Marc Israel Sellem)


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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.

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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

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