Major Privatization Deals Await New Government

While Binyamin Netanyahu and Benny Gantz and their emissaries wrangle over a unity government, multi-billion dollar privatization deals are being held up, Globes reported on Monday.

Privatization of Israel Aerospace Industries (IAI), Haifa Port, and the sale of the Environmental Services Company, all of which have already received official approval, cannot proceed until a new government is formed.

The state stands to reap billions of shekels in revenue once the deals go through.

While the money can’t be used to shrink the government budget deficit directly, it can be used to help the state pay its debts, thereby indirectly decreasing the budget deficit, Globes explained.

Offering IAI shares on the Tel Aviv Stock Exchange was given the green light by Israeli Prime Minister Binyamin Netanyahu‏‏ in December 2018, offering 25 percent of the shares in the company to the general public at 4 billion shekels. That may be raised to 30 or 40 percent. The offering could be held within three months of the formation of a new government, according to government sources.

Government Companies Authority manager Yaakov Kvint met with IAI workers chairperson Yair Katz, who made a proposal that the state sell a 51 percent controlling interest in IAI in the offering, making it a public company.

Katz argued that IAI’s current status as a state-owned entity hampers its development and exposes it to burdensome state regulation. These restrictions prevent IAI from hiring the best personnel because of opposition by the Ministry of Finance budget director.

“The goal is separation from the Government Companies Authority. If an offering is held, IAI’s workers should at least derive some benefit from it,” he said.