"The State lost a great deal of money in the land tender for Ashdod’s holiday village, when the Finance Ministry refused to allot the area to the Movenpik chain without a tender. We also lost the chain having an equity here, not only managing hotels, but also its investment". This was told "Globes" today by Ministry of Tourism director-general Shabtai Shai.
He said the Ministry of Tourism was in favor of the Movenpik chain entering, and having equity in, and managing the holiday village on the Riviera beach south of Ashdod. They also approved the allocation of the land to the Minrav-Movenpick partnership, without a tender.
Shai said the step was approved by the Israel Lands Administration and Prime Minister Benjamin Netanyahu, but due to the Ministry of Finance’s bureaucracy, the company was not able to take up its allocation, and the Movenpik chain will only operate, not invest, in Israel.
Under the tender that closed this week, Minrav was the only bidder for the lot, offering NIS 6.19 million, while the joint offer with Movenpik was NIS 7.2 million.
The lot assigned for the vacation village on the beach south of Ashdod comprises an area of 13 acres (53 dunams), and was the subject of prolonged negotiations between the Ministries of Tourism, Finance and Israel Lands Authority, and the group made up of Minrav and the Swiss Movenpik chain.
Movenpik’s representative in Israel, Yossi Fisher, said in response that he blames the Ministry of Finance. "The Ministry of Finance was the party blocking the Ashdod project, and they drive promoters from Israel. Until the Prime Minister, or people from his office, get involved in neutralizing the way the Ministry of Finance runs matters, large companies will not be attracted to make large equity investments in Israel. This was a test case, following which other foreign companies will get cold feet as regards investing in Israel".
Published by Israel's Business Arena April 12, 1998