Top Ministry of Finance and Government Companies Authority officials held an emergency meeting yesterday to decide the fate of the privatization tender for the Eilat Port Company Ltd. They decided to postpone the closing of the tender by more than a month, after only one company, Israel Chemicals Ltd. (TASE: ICL), was left in the tender. This infuriated Labor Party chairwoman MK Shelly Yachimovich, who sent a sharply worded letter to the Ministry of Finance and the Government Companies Authority, calling on them to cancel the tender immediately.
Meanwhile, a report by Israel Ports Development & Assets Company Ltd. states that repairs of the damaged wharf at the Eilat Port will take at least four years, and will cost an estimated NIS 45 million. In addition, the Eilat Port's profit fell to NIS 1.7 million for the first quarter of 2012 from NIS 5.7 million for the corresponding quarter of 2011.
Last Thursday, Israel Chemicals was the only company to file the NIS 15 million guarantee that is a threshold condition of the Eilat Port tender. As "Globes" was the first to report, three other companies decided not to bid in the tender because of the NIS 100 million starting price.
In response, Yachimovich sent a sharply worded letter to the Ministry of Finance, the Government Companies Authority, and Prime Minister Benjamin Netanyahu, calling on them to cancel the tender immediately, and threatened to petition the High Court of Justice. "For the third time, we are seeing the scenario repeated, in which the State of Israel transfers Israeli public assets to private hands, as if this were another government than the one that is supposed to submit to the Knesset tomorrow a bill to reduce concentration and promote competition, which the government approved only two weeks ago," she said.
It seems that Yachimovich's pressure and other factors worked, since in view of the fact that only one company has filed the documents for submitting bids, and given the importance that the Government Companies Authority attributes to competition in the sale of state assets, the tenders committee decided to postpone the deadline for submitting bids to August 15, 2012. Until then, the Government Companies Authority will look at ways of ensuring that the principle of competition is upheld..
Papo Maritime Ltd., owned by the Nakash brothers, was the latest company to withdraw from the Eilat Port tender, following in the wake of Gold Bond Group Ltd. (TASE:GOLD), controlled by Shlomo Schmeltzer, and Gadot Chemicals Tankers and Terminals Ltd., controlled by Yosef Maiman.
A source at Israel Chemicals said yesterday, "Everyone who has come out against Israel Chemicals' win would prefer for the Eilat Port to be sold for peanuts to another party, so long as it is not Israel Chemicals, while giving up on the employees' rights and the future of the port. Israel Chemicals is the largest employer in the Negev and the country's largest exporter. The attempt to disqualify Israel Chemicals from participating in a legitimate tender reeks powerfully of populism."
Published by Globes [online], Israel business news - www.globes-online.com - on July 9, 2012
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