No-one is looking after our assets

Stella Korin-Lieber

The Government Companies Authority has failed in its task and should be abolished.

1. The Government Companies Authority has had its day, and the time has come to close it. To break it up. There have been no privatizations for ages, and if such plans do materialize, such as the idea that appears in the economic plan to float 20% of Rafael Advanced Defense Systems Ltd. and Israel Aerospace Industries, the move will be led by the Minister/Ministry of Finance and the minister/ministry responsible for the company. There is no need for the go-betweens of the Authority.

2. There is no supervision of the state-owned companies. Perhaps there never was effective supervision. If there were, if the owners' representative, the Government Companies Authority, had its finger on the pulse, then Israel Electric Corporation would not have reached virtually bankruptcy, a debt of 75 billion, while, at the beginning of 2012, the Authority approved handsome salary rises for the chairman and the CEO and those around them, and they themselves allow the thousands of the monopoly's workers this and that benefit, some well-known, some less well-known. If there were supervision, then a company that makes a NIS 680 million loss in 2012 would not also award salary rises averaging 18.2% to its employees. If there were supervision, the seaports, with the highest wages in the public sector, would not have become a symbol of cynical, bullying exploitation of state assets. This is not new; it's a tradition that heads of the Government Companies Authority have never done anything to stop. On the contrary, they have even abetted it.

3. Had the Authority carried out its task faithfully, the salaries of the 58,850 government company workers would not have continued to grow while the private sector licks the wounds of the global and local economic crisis and cuts its employees' salaries. In 2010, the salary cost of the 58,850 people employed in the state-owned companies was NIS 16.2 billion. In 2011, it was 16.9 billion, and in 2012, NIS 18.5 billion, representing a rise of 10%. So who needs this Authority? Just so that the surrender to the strong workers committees should have its own organization?

4. In order to exploit better the huge assets, worth hundreds of billions, embodied in the government companies, the owners, through their representatives in the government, need to take notice of what is going on there. The Government Companies Authority doesn't do that. The time has therefore come for the new Minister of Finance Yair Lapid to adopt the recommendation to abolish the Government Companies Authority, and, in the first place, not to appoint to it a CEO to replace the acting CEO who has been there for months. Supervision of the government companies and statutory corporations should be transferred to the Accountant General in the Ministry of Finance. Secondly, the Government Companies Law of 1975 should be amended to define every government company as a public company in every respect, and not just on account of the huge number of shareholders in it, and thus make it subject to all the rules of transparency and reporting requirements of the Securities Law and the Israel Securities Authority.

Published by Globes [online], Israel business news - - on May 20, 2013

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

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