Electricity price hike is down to Egypt

Amiram Barkat

Egypt is balatantly breaching agreements with Israel on gas supply, and Israel"s government seems helpless.

Electricity prices could rise 20%, Public Utility Authority Electricity chairman Amnon Shapira warned in a letter to the minister of finance and the minister of national infrastructures last week. For some reason, the authority pointed an accusing finger at Minister of the Environment Gilad Erdan, who will not allow the Israel Electric Corporation (IEC) to pollute the atmosphere by using cheap fuel, thereby contributing indirectly to the rise in the price of electricity.

Erdan did not take this lying down, and attacked the conduct of the Electricity Authority. Shapira is meanwhile having a great time with the media, and has revealed that he has not yet decided whether he will introduce a temporary rise in the price of electricity immediately, or whether he will wait a while. The problem, Shapira explains, is that IEC, his old enemy, has still not got the message, and so we might perhaps be hit by a small rise now, in order to teach the IEC workers a lesson. Shapira forgets to mention just one thing, which is that he has one and half legs out of his job, and in fact should have left it this week, only the search committee that is supposed to find his replacement has been slow to do so. Is it reasonable to leave such an important decision in the hands of an embittered official on the brink of leaving?

As for the real reason for the rise in electricity prices, Shapira prefers to conceal it. It takes a search with a magnifying glass to find it, hidden among the paragraphs of his letter, where Shapira discloses a little secret: the Egyptians are supplying us with only 20-30% of the quantity of gas that they are obliged to supply under the agreements with IEC and their private customers.

A month ago, we were told that the Egyptians had resumed the supply of gas to Israel, but the fact that since then the flow of gas has been a trickle, with the clear aim of pressuring Israel to accept a hike in the price paid by IEC, has been kept from us. Why?

When the crisis with Egypt began, six months ago, government spokespersons spoke in a different tom altogether. "There's nothing to worry about," the ministry of finance assured us. "The Egyptians won't dare pay games with us: firstly, because any breach of the gas agreement will be considered a breach of the peace agreement, and will lead to immediate intervention by the US; secondly, because Egypt desperately needs foreign exchange, and Israel is already paying the highest price for the gas; thirdly, because all the declarations about cutting off the supply of gas to Israel are for internal political purposes only."

Six months on, it turns out that these convincing arguments only make an impression in Israel. The Egyptians are treating the peace agreement with contempt. They are brazenly, and not for the first time, breaching a signed agreement with IEC, and have no compunction about twisting the Israeli government's arm to make it sign on a dramatic rise in the price of the gas.

All this drama is taking place behind the scenes, without the Israeli public knowing, or being informed. No-one tells is what Israel means to do about the matter, if anything. For example, is Israel prepared to sue Egypt for the heavy damage caused to its economy, as it would in the event that an Israeli supplier behaved in the same way? Don't bank on it. This is a matter of force majeure, they explain in government circles.

In Netanyahu's government, there are quite a few who carry the flag of Israel's national honor on high. But now, when that honor is being trodden underfoot, they prefer to look the other way. Particularly ironic is the silence of Minister of Finance Yuval Steinitz, the man who built his career on unbridled attacks against the Egyptian regime of Hosni Mubarak. In his time as chairman of the Knesset Foreign Affairs and Defense Committee, Steinitz would cry and warn from every available platform every time it seemed to him that Egypt was breaching the peace agreement with Israel. So it was, for example, when Israel agreed to Egypt stationing police along the Philadelphia corridor on the Egypt-Gaza Strip border. Even when it caused severe embarrassment to then Prime Minister Ariel Sharon, Steinitz was undeterred, because of course he acted in the interests of the country, with no thought of political or personal interest. We only ask, what has changed now? Have the authorities in Egypt become friendlier since Mubarak went? Is the current breach of the peace agreement less blatant and less destructive than previous ones? Or is the only reason for Steinitz's silence connected to the fact that his political patron currently occupies the prime ministerial seat?

Published by Globes [online], Israel business news - www.globes-online.com - on July 3, 2011

© Copyright of Globes Publisher Itonut (1983) Ltd. 2011

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