Reforming the ports

It is the duty of a government to serve the people who installed it in office and break up corrosive monopolies.

Haifa port 521 (photo credit: LIAT COLLINS)
Haifa port 521
(photo credit: LIAT COLLINS)
The highest earners among employees of government- owned corporations are to be found at our seaports. Their wages even well outstrip the legendary incomes at the Israel Electric Corporation. This is not just our envious say-say.
According to official figures released last week, in 2012 each of the nearly 2,400 employees in the Haifa and Ashdod ports cost the taxpayer an average of NIS 450,000 annually. Their IEC counterparts average “only” NIS 406,000 each (18.2 percent higher than in 2011 – quite scandalous considering that the IEC is deeply in the red).
The average monthly pay at Haifa exceeds NIS 38,000, just several hundred shekels more than at Ashdod.
Most Israelis dare not dream of such salaries. This is more than a ministry director-general makes.
Moreover, not everyone can be so fortunate as to land a job at one of our two Mediterranean ports (Eilat, on the Red Sea, has been privatized). Connections are prerequisite. Nepotism and cronyism rule the roost.
The ports have long been considered monopolies and government after government has valiantly but vainly tried to bust them. In 1951, Israel’s first prime minister, David Ben-Gurion, went so far as to call in the army to operate Haifa Port. He also removed striking port workers from the scene by drafting them for reserve duty. In the end, it was all quasi-resolved in a negotiated compromise and the underlying anomaly continued.
More recently, daring attempts by the Rabin and Sharon administrations to overhaul the ports were dashed dismally. In 2005, it was decided to introduce competition by privatizing some of the wharfs in both Haifa and Ashdod. The employees received hefty compensation for the piecemeal privatization. They took the money but the privatized alternatives were never instituted. Yet again, the powerful unions prevailed.
Since Israel is a virtual island, such shenanigans affect the pockets of each citizen. With no overland traffic from neighboring countries, all surface transports of both imports and exports pass through our seaports. This puts extortionist clout in the unions’ hands, and their unabashed greed raises the prices of most commodities and consumer goods. Without viable substitutes, it also renders our exports less competitive.
The current budget deficit and the pain inflicted on ordinary households makes the excesses at Haifa and Ashdod all the more egregious and intolerable.
The government did announce that it would seek to develop a third port on the Mediterranean, but that is hardly an immediate remedy. Economy and Trade Minister Naftali Bennett has gone back to resurrecting the private wharfs notion at existing ports, which is certainly a worthwhile undertaking – providing this government does not flinch, as its predecessors did.
Bennett vowed not to recoil from confrontation. For the first time since Ben-Gurion, he has raised the possibility of enlisting the military to break up a monopoly- boosting strike.
He has even named his plan “1981” – his homage to US president Ronald Reagan, who 32 years ago fired 11,000 striking air-traffic controllers, imposed a lifetime ban on rehiring them and manned airport towers with military flight controllers.
Bennett and Prime Minister Binyamin Netanyahu, who appears to back him (though without mentioning the military last resort option), have certainly evoked imposing role models. They have presented the case for reforming the ports quite compellingly. But the test is not talking the talk. The test is walking the walk and here it is imperative not to fail yet again, because each failure further emboldens the monopolist unions.
This is a decisive showdown. It is now or never. If in the end this government too cringes cravenly, then no future government will dare take on the high-earners who hold the public to ransom.
Monopoly power is foremost abusive power. It is the duty of a government to serve the people who installed it in office and break up corrosive monopolies that stymie competition and gum up the workings of the economy. It is high time to remind the Haifa and Ashdod employees that the ports do not belong to them but to all of us.