The Government Companies Authority, headed by Roi Kahlon, intends to present a series of reforms for government-owned companies to the new government once it is formed. The centerpiece of the plan is the closure, consolidation, and liquidation of dozens of government companies and corporations. This move is expected to save the state treasury billions of shekels.
Through the Government Companies Authority, the state currently holds interests in 115 companies an non-profit organizations. There are 68 government-owned companies, 15 mixed companies (partially state-owned), 25 subsidiaries, three companies owned jointly by the state and local authorities, and four non-profit organizations. Each of these government-owned entities is subject to the oversight of the minister responsible for the Government Companies Authority (currently David Amsalem) as well as the relevant portfolio minister.
The minister of energy, for example, oversees 27 companies, the minister of transport oversees 12, and the minister of defense oversees ten. The new plan aims to reduce the total number of such companies to 20-30, in line with the policy set by the political leadership.
According to the Authority, the state should retain ownership only of natural monopolies, such as INGL (Israel Natural Gas Lines), which manages the national gas transmission network; Israel Electric Corporation; and Mekorot (the national water company). The state will also continue to hold entities that serve as the operational arms of government ministries, such as transport-related companies and the Government Tourism Corporation, and organizations dedicated to advancing social objectives, such as Amidar, which manages public housing, and the Israel Association of Community Centers in education.
Privatization of financial entities
The consolidation process will be carried out through several channels. One such channel is the privatization of financial entities, most notably Bank Yahav, the last remaining bank under state ownership. The Authority estimates that this privatization could generate revenue of one billion shekels.
Additionally, the state currently holds eleven kranot hishtalmut (advanced training funds, in effect tax-free saving schemes). Privatizing these would enable the state to divest from assets under management totaling some NIS 60 billion. According to the Authority, this move will eliminate the risk and exposure to the state treasury that arises when fund members rely on the government’s deep pockets in a financial crisis. These privatizations are expected to raise about NIS 1 billion.
Another financial service earmarked for privatization is the Kanat Insurance Fund for Natural Risks in Agriculture, which is jointly owned by the state and agricultural organizations. An audit report on the company, reported by "Globes", found conflicts of interest. In this case, the Authority proposes full government ownership, to be followed by the privatization of specific parts of the.
Nadav Tzuk, senior deputy to the director of the Government Companies Authority, who is overseeing the plan, says, "This serves as an example of a situation in which, if there is a potential conflict of interest, it will inevitably occur. The agricultural organizations are both the owners of the fund and its policyholders. This makes no sense; there is clearly a conflict of interest when the same party determines the premium amount and pays it, and likewise determines the compensation amount and pays it out."
Another component is the four youth villages currently held by the state. The Authority believes that transferring these to private third-sector entities would facilitate faster decision-making and would bring in organizations possessing relevant experience and professional expertise, thereby improving the current, substandard level of management. The Authority has already initiated a pilot program for this component at the Sde Boker youth village, with the submission of proposals scheduled for the end of this month.
Company mergers
Another element of the plan is mergers between government companies, which could yield NIS 50 million annually for the state treasury. The Authority proposes merging the companies Arim and Dira LeHaskir (Apartment for Rent) to create a unified development and construction arm for residential housing. Currently, Arim is responsible for infrastructure and land development, while Dira LeHaskir handles the identification of sites, and project planning and marketing.
A merger is also proposed between the Government Tourism Corporation and the Development Company for Acre and Nazareth, and between Ashra - The Foreign Trade Risks Insurance Corporation and Inbal Insurance Company. Inbal is an operational arm for the Ministry of Finance, while Ashra provides insurance against commercial and political risks for exporters.
As previously reported by "Globes", the Authority intends to merge Cross-Israel (Hotzeh Yisrael), Ayalon Highways (Netivei Ayalon) and Netivei Israel National Transport Infrastructure Company. Two companies operating in Jerusalem, the East Jerusalem Development Company and the Company for the Reconstruction and Development of the Jewish Quarter, will also be merged. Another proposed consolidation involves municipal housing companies Halamish, Shikmona, and Heled, which are to be merged into nationwide housing company Amidar.
Inactive companies
The final part of the plan concerns the liquidation of 30 inactive companies that still hold funds or "trapped" building rights. For instance, MATIMOP, which was eventually superseded by the Israel Innovation Authority, holds a balance of NIS 4 million that could be transferred to the Authority’s operations. About NIS 500 million remain trapped within inactive government-owned entities under the Ministry of Agriculture. Another entity that previously operated was the Wine Institute, which holds land that could be sold.
This ambitious plan faces numerous obstacles, particularly political ones. Historically, many ministers have opposed the closure or consolidation of entities that offer opportunities for appointments to management positions and boards of directors. Moreover, some ministers have leveraged the large number of entities under their purview to shift projects between them, effectively "punishing" any entity that failed to comply with the minister’s directives. The current plan also omits several other initiatives previously proposed by government professionals, initiatives that were ultimately shelved because of opposition from politicians and public controversy, such as a reform to open Israel Railways lines to the private sector, the privatization of the Port of Ashdod, and the privatization of operations at Ben Gurion Airport.
The debate centers on the pros and cons of privatizing these services. Proponents argue that it would lead to improved service and generate revenue for the state, while opponents fear a deterioration in public service and higher long-term costs.
Another significant concern relates to the privatization of not-for-profit services such as welfare services, including youth villages, where privatization could worsen the situation. Tzuk, however, believes it would actually lead to an improvement. "We are responsible for four youth villages that are directly held by the state, in contrast to 40 others managed by the third sector. In the state-run facilities, there are no donations, often no management or board of directors, and frequently a lack of proper oversight and control. We are dealing with matters of life and education; in some cases, over the years, we have even been forced to appoint a special administrator and take immediate corrective action."
Tzuk points to another weakness: "Our portfolio includes a state-affiliated non-profit, the National Center for the Development of Holy Sites, which, among other things, manages infrastructure at Meron and 120 other holy sites, and is responsible for organizing religious celebrations. Following the commission of inquiry [into the fatal crowd-crush incident at Meron in 2021], the CEO resigned, and no replacement has been appointed, but the organization continues to hold these celebrations. Our position is that the Ministry of Religious Services should absorb these operations. This would ensure that every shekel is subject to oversight by the ministry’s comptroller and a legal advisor who reports to the attorney general, rather than leaving it in the hands of an entity that currently lacks both management and a board of directors."
Published by Globes, Israel business news - en.globes.co.il - on November 11, 2026.
© Copyright of Globes Publisher Itonut (1983) Ltd., 2026.