search
Front > News

IEC mulls rate hike to cover Palestinian's NIS 730m debt

28 Mar, 2013 20:33
שלח תגובה במיילAmiram Barkat

The chances that IEC will collect the debt fell after the Prime Minister Benjamin Netanyahu released tax money to the Palestinian Authority.

Israel Electric Corporation (IEC) (TASE: ELEC.B22) is considering raising electricity rates to Israeli consumers to cover the debts of Palestinians, after Prime Minister Benjamin Netanyahu decided to release tax money owed to the Palestinian Authority, which Israel had withheld, in part to pay its debt to the IEC.

Israel currently supplies all electricity needs to the West Bank. Palestinian customers receive the electricity through the Palestinian Authority and the Jerusalem District Electricity Company Ltd., each of which operate in different cities in the territories. The two entities' aggregate debt to IEC currently totals NIS 730 million. Each month, IEC sends a warning letter about the debt, and it is in talks with the Palestinian Authority and the Jerusalem District Electricity Company, but no agreement has been reached on payment.

In late 2012, former Minister of Finance Yuval Steinitz halted the transfer of tax revenues collected by Israel on behalf of the Palestinian Authority in response to the UN General Assembly's recognition of the State of Palestine. The withheld funds were due, in part, to pay the Palestinians' debt to IEC. However, following US President Barack Obama's visit to Israel last week, Netanyahu decided to release the withheld funds as a goodwill gesture to the Palestinian Authority. Under a decision by the political security cabinet, Minister of Finance Yair Lapid will order the Ministry of Finance to transfer the funds to the Palestinian Authority immediately.

Electricity industry sources told "Globes" that the decision greatly reduces the chances that IEC will collect the Palestinians' debt. If there is no alternative, the utility will have to record the debt in its books as lost debt and ask the Public Utilities Authority (Electricity) to recognize it as an expense to be covered by electricity tariffs.

A rough calculation estimates that a 3% electricity rate hike for one year is needed to cover the current debt in full, but this is not a long-term solution to the non-payment of the Palestinian Authority's debts.

Published by Globes [online], Israel business news - www.globes-online.com - on March 28, 2013

© Copyright of Globes Publisher Itonut (1983) Ltd. 2013

David Amsalem credit Noam Moskowitz, Knesset Spokesperson's Office Rafael to pay state NIS 444m dividend

The minister in charge of the Government Companies Authority, David Amsalem, has approved the payment by the defense company.

Barak MX air defense system credit: IAI IAI profit jumps 55%

Israel Aerospace Industries posted a net profit of $493 million for 2024, and ended the year with an all-time high orders backlog of $25 billion.

A TSG system in tactical use credit: PR TSG signs cooperation agreement with US defense co

The agreement includes the integration of TSG's advanced technologies into sensor-based defense systems, which will be integrated into the operational systems of US defense units.

Bria CEO Yair Adato credit: Kseniia Poliak Israeli visual generative AI co Bria raises $40m

Bria’s Visual Generative AI platform empowers businesses to create predictable, controllable, and on-brand content that aligns with their visual language.

Amnon Shashua and Aviram Ziv credit: Eyal Izhar OrCam stymied by investor dispute with Shashua

Demands by institutional investors are blocking the visual and hearing impairment device developer's recovery plan.

Work on the Green Line credit: Bar Lavi Egged wins tender to operate TA light rail Purple, Green Lines

NTA awarded the tender to Egged, which already operates the Red Line, despite government ministry opposition to one operator for the entire network.

Gabi Seroussi illustration: Gil Gibli Board chooses Seroussi as IAI chair as Erdan freezes candidacy

Israel Aerospace Industries board chose Gabi Seroussi as chair even though he did not to go through the preliminary process of the Government Companies Authority appointments review committee.

Bavli Park penthouse credit: Eyal Tagar Tel Aviv Park Bavli penthouse sells for NIS 43m

A 44th floor penthouse in one of the two towers in businessman Yitzhak Tshuva's Park Bavli project has been bought by an Israeli businessperson.

El Al aircraft credit: Yoav Yaari El Al pilots receive nearly NIS 250,000 bonus each

Thanks to the agreements signed with the unions in 2018, El Al's employees as well as senior management share in last year's success.

Pentera CEO Amitai Ratzon credit: Eyal Izhar Israeli security validation co Pentera raises $60m

Pentera's platform enables security teams to analyze complete attack paths, identify root causes, and prioritize remediation for effective risk reduction.

Tel Aviv credit: Shutterstock Supply of unsold new homes hits record

Israel's real estate market is sliding into recession with 78,000 unsold new apartments in January, the Central Bureau of Statistics reports.

D&B chairman Doron Cohen and Meitar partner Dan Geva Meitar reclaims title of Israel's biggest law firm

Meitar has first place with 537 lawyers, followed by Herzog Fox Neeman with 512 lawyers, according to the latest Dun's 100 rankings.

First International Bank of Israel CEO Eli Cohen credit: Eyal Toueg First Int'l posts top return on equity

First International Bank of Israel's return on equity in 2024 was 19%, the highest among Israel's banks.

Dina Ben Tal Ganancia credit: Guy Kushi & Yariv Fein El Al almost quintuples profit

The airline posted a net profit of $545 million for 2024, 4.7 times the profit in 2023, and an all-time high.

Gev Hadari credit: Nati Hortig Sompo Israel appoints Gev Hadari as cybersecurity head

Hadari's expertise spans penetration testing, including Red Team operations, web applications, mobile applications, OT/IOT products, and both external and internal assessments.

Attack drones credit: Shutterstock IDF issues tender for 5,000 Israeli-made attack drones

Critics of the tender say the number being procured is insufficient and thewre are security concerns about Chinese components.

Twitter Facebook Linkedin RSS Newsletters גלובס Israel Business Conference 2018