The Israel Electric Corporation (IEC) is in fiscal crisis and only major reforms can salvage it, according to Minister of Energy and Water Resources Silvan Shalom.
At a joint press conference with Histadrut chairman Ofer Eini and Israel Electric Corporation (IEC) reform steering committee chairman Ori Yogev, Shalom revealed that the “IEC is close to insolvency.”
“This is a big day for Israel and the energy market,” said Shalom. “When I took the job, I was horrified. I saw that IEC might not be able to supply electricity this summer, a 70 billion shekel debt, and that it was effectively insolvent. If this were a private company, the board of directors and management would have to draw conclusions. It would be in receivership. Where was the oversight? Management? Performance? Policy? We’re in an SOS situation. We must prevent the collapse of IEC.”
Shalom said that the envisaged overhaul would necessitate layoffs and the termination of IEC’s signature perk: free electricity for employees.
“The reform will result in a reduction in the number of employees in order to streamline, and damage to benefits, such as the free electricity, which has become a symbol of abuse, something which should not happen and has passed from this world. At the end of the process, the Israeli consumer will pay less for electricity, and the entire economy will benefit.”
Reflecting a dispute over the Public Utilities Authority’s role in refoming the IEC, Shalom expressed his opposition to its intervention in negotiations with the employees.
“The Electricity Authority has an important role, which is to supervise areas for which it is responsible, but it should carry out policy, not be inside, because then we would have to enter into talks with both IEC’s management and its employees, and there would be unceasing conflict during the committee’s discussions,” he said.
Shalom’s aides predicted that IEC reforms would be ready to roll by the end of the year.