Tensions continue between the Ministry of Finance and the Ministry of Tourism over the decision taken two week ago to impose the responsibility for rehabilitating the Dead Sea on Israel Chemicals Ltd. (TASE: ICL) unit Dead Sea Works, which will bear most of the costs, estimated at NIS 7 billion. Minister of Tourism Stas Misezhnikov, who was behind the decision, together with Ministry of Environmental Protection Gilad Erdan, today asked Minister of Finance Yuval Steinitz to order senior Ministry of Finance officials to stop attacking the decision.
"Order the officials in your ministry to focus on finding a solution for financing implementation of the proposed plan, ahead of preparing a proposal to the cabinet and desist press briefings against elected officials and the structure of the decision," wrote Misezhnikov.
Misezhnikov and Erdan presented the plan for rehabilitating the southern basin of the Dead Sea and to prevent the flooding of the hotels at Ein Bokek. The plan includes dredging the salt deposits accumulated on the floor of the southern basin - deposits for which Dead Sea Works' industrial production is responsible. The two ministers proposed that Israel Chemicals should finance the expensive dredging, and that part of the company's royalties to the state from quarrying operations should be raised to 10% and deposited in a special fund for financing the development of tourism in the Dead Sea area. The two ministers intend to submit the plan to the cabinet for approval in two weeks.
The Ministry of Finance objects to the plan, and top officials criticized it shortly after it was announced. The officials claim that Misezhnikov and Erdan were dragged after radicals, and that they did not take into account the disaster that an unsupervised plan is liable to cause the tourism and quarrying industries at the Dead Sea. Ministry of Finance officials are also negotiating with Israel Chemicals on a compromise for financing the dredging of salt in the Dead Sea's southern basin.
In his letter to Steinitz, Misezhnikov added, "The Ministry of Finance was supposed to have been ready a long time ago - at least several years - for our declaration, both in terms of sharing the financing for rehabilitating the area and for establishing a designated budget for its development. My declaration cannot therefore be considered as a surprise for anyone at the Ministry of Finance, and definitely not as harmful to the Israeli economy, as some ministry officials and spokesmen are attempting to portray it."
Published by Globes [online], Israel business news - www.globes-online.com - on June 5, 2011
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