Minister of Interior Eli Yishai has intervened in the water war between the Union of Local Authorities in Israel and the Water Authority by exempting local authorities from the requirement to set up municipal water companies to manage their water services.
Yishai said, "In view of the heavy financial burden that is again imposed on Israel's citizens and the cry of the local authorities on this matter," he decided to use his authority under the Water and Sewerage Corporations Law (5761-2001), which allows him to exempt local authorities from the obligation to set up a municipal water corporation "if it is proven that there are special reasons for doing so". The exemption requires approval of the finance minister and the Knesset Economic Affairs Committee. Yishai's decision will restore the interior minister's authority to set water rates.
The decision came in the wake of the lengthy struggle by local authorities to abolish the municipal water corporations and return the authority to manage water services to them.
"Globes" obtained a copy of a letter that Yishai sent to Union of Local Authorities chairman Shlomo Bohbot, in which Yishai requests all local authorities that have not yet set up a water corporation to ask him for an exemption from doing so, and to cite the reasons why. Yishai wrote, "It should be noted that I do not consider this to be the final word, and will continue the struggle until general abolition of the need to set up water corporations is achieved, in order to allow local authorities the freedom of management in their decisions, and especially to stop the rise in water prices."
Yishai told "Globes" today why he decided on the measure. "The establishment of water corporations directly burdens the public, which directly leads to the rise in water prices. It is inconceivable that bureaucratic decisions will force us to stop drinking. Local government cannot make this decision, the public cannot bear this decision, and so a black flag flies over it."
Yishai sent copies of the letter to Minister of Finance Yuval Steinitz and Economic Affairs Committee chairman MK Carmel Shama (Likud). He writes, "The harsh reality created by the establishment of the water corporations is causing me sleeplessness… We're talking about a rise in prices that in some cases has reached 40%. A family that used to pay NIS 200 is now paying NIS 600."
Yishai claims that the reasons for the rise in water prices is not the temporary water shortage, but in the establishment of the water corporations and their bureaucracy. "In any event, a review is required on how prices soared so high," he says.
More than 50 municipal water corporations currently operate in Israel to manage municipal water supplies and remove sewage. The Water Authority says that the corporations are essential, because local authorities neglected water and sewage infrastructures for years.
Local authorities counter that the jump in water prices that began last year is due to the establishment of the water corporations, and that the price hikes are intended to finance the corporations' allegedly inflated bureaucracies.
The Water Authority dismisses the claim, saying that current water prices reflect the cost of water, due to years of drought and growing need for seawater desalination, which is an expensive process, and the need to develop a nationwide water distribution system.
A Water Authority official accused Yishai of grandstanding with a "populist measure based on populist assertions". He said, "It is simply not true that water prices have soared because of the establishment of the water corporations. Prices soared because there is no water; because desalinated water is more expensive than rainwater. If he had asked us properly, we'd have explained this to him."
Ministry of Finance officials added to the criticism heaped on Yishai, saying that he does not have the sole authority to make a decision on the matter. Moreover, activation of Clause 6A of the Water and Sewerage Corporations Law requires the consent of the finance minister and is subject to approval by the Knesset Economic Affairs Committee. "He simply cannot do anything with this. The finance minister has no intention of changing his position on the water corporations. His opinion on their need did not change overnight," a ministry official told "Globes".
Published by Globes [online], Israel business news - www.globes-online.com - on March 28, 2011
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