In a historic decision, the Israel Electric Corporation (IEC) (TASE: ELEC.B22) workers committee approved in principle the privatization of utility's power stations. Opponents of the decision argued that this was a trick, which was not presented to them in writing.
Members of the IEC national workers committee said that the decision was "the end of IEC."
The decision was a major achievement for Government Companies Authority director general Doron Cohen, who formulated the privatization structure, IEC CEO Amos Lasker and national workers committee chairman Miko Zarfati. Cohen said in response today that the decision was a historic breakthrough.
Lasker and Zarfati yesterday presented the IEC restructuring plan to the national workers committee. The new structure calls for splitting off seven production units, including the Ramat Hovav Power Station and the power station that will be built at Alon Tavor to a company 51% of which will be privately held, with IEC owning the minority 49% stake.
The new company will also own the controlling interest in the additional power plant planned for the Ashkelon Power Station (Project D). The government is discussing this power plant but has not yet made a decision about it.
The new company will own power stations with a total capacity of 3,000 megawatts, about a third of the production capacity that will be left with IEC.
The Ministry of Finance and the Government Companies Authority hope that this measure will create an effective private power producer that will be able to compete against IEC. "Globes" disclosed that the government promised IEC employees that they will build the nuclear power station planned to be built after 2020 (Project E).
Published by Globes [online], Israel business news - www.globes-online.com - on August 9, 2010
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