Minister of Finance Yuval Steinitz has come under attack from all sides following the agreement reached last night between the state and Israel Chemicals of the Israel Corporation group, which is controlled by the Ofer family. After hours of tense discussions and last ditch efforts on the part of the negotiations teams from ICL and the Ministry of Finance to improve their positions, Israel Corp. chairman Amir Elstein notified Steinitz that he would accept the outline agreement offered him a week ago
.Under the plan, ICL will fund 90% of the cost of salt harvesting in the Dead Sea, for the purpose of rehabilitating the sea, and from 2012 will double the royalty rate it pays to the state on potash mining .
Now, the understandings reached between the parties must be approved. Steinitz will bring the outline agreement to the government, probably as early as its next meeting, on Sunday .This afternoon, the ICL board met to discuss the agreement and approve it .At the end of the approvals process , the parties will sign an agreement that will form the basis for the beginning of the salt harvesting work.
"Distortion of years fixed "
Israel Corporation's decision to accept Steinitz's formula prevented the establishment of a "Sheshinski Committee 2", which the finance minister intended to appoint if he received a negative answer. Steinitz recently obtained agreement in principle from Professor Eytan Sheshinski to head such a committee .
Commenting on the agreement, Steinitz said today, "The same applies to the Dead Sea as to the Mediterranean. We have completed by agreement a move to raise the state's share of potash resources to the normal level in the Western world, as we did through the Sheshinski Committee for oil and gas resources. We thereby corrected a distortion that had continued for years, and we have gained billions of shekels dollars for the public good."
The Dead Sea hotels and the Tamar Regional Council welcomed the agreement, and called on the parties to start carrying out the work of harvesting the salt in pool 5 (the industrial pool used by Dead Sea Works, on the shores of which are the Ein Bokek hotels). Following the agreement , the hoteliers intend to review the status of the petition they filed in the High Court of Justice to require the state to solve the problem of the water level in the pool, which threatens to inundate the hotels. .If work starts on the ground, they will withdraw the petition .
"The agreement is not the last word"
Environmental organization Adam Teva V'Din, the Israel Union for Environmental Defense (IUED) strongly criticized the agreement and claimed that the negotiations that led up to it were not conducted with appropriate transparency. "The Minister of Finance changed his skin, and in the dark, without a public committee and without informing the public. He abandoned the Dead Sea .The Treasury is trying to mark a public victory, while sadly this is a poor agreement : 10% is the level of royalties prescribed by law , which in any case Dead Sea Works is obliged to pay " said IUED executive director Amit Bracha.
Minister of Environmental Protection Gilad Erdan announced this morning that the agreement reached last night was not the last word, and that he would work to raise the royalties in accordance with the expansion of the industrial activity of ICL in the Dead Sea. .This was for fear that expanding operations would cause great damage in the northern basin of the sea , due to increased water pumping .
Despite the last night's understandings, this morning, the Knesset Finance Committee discussed the bill sponsored by Moshe Mutz Matalon on Dead Sea restoration, to introduce it for a vote on first reading .During the hearing , tourism minister Stas Misezhnikov attacked Steinitz, saying, "The minister and his ministry spat in the faces of the citizens of Israel once more, when they decided to prevent the restoration and development of the Dead Sea. That means no more jobs will be created at the Dead Sea in the restaurant business and commerce, no new hotel rooms will be opened, and the tourism and hotel offering will continue to be limited. .The public will have to continue paying high prices for the right to vacation in Israel. .The Minister of Finance did not show leadership as called for in his position, and was dragged after the position of his officials, , whose path in life is known, to trample underfoot the public interest, to give preference to the wealthy over the public, and to serve them "
Published by Globes [online], Israel business news - www.globes-online.com - on December 28, 2011
© Copyright of Globes Publisher Itonut (1983) Ltd. 2011.