Anti-Trust Commissioner Dr. David Tadmor today declared NZBA, the Egged co-operative’s properties company, to be a monopoly in the sector of central bus terminals (the central bus stations); and Egged to be a monopoly in the public transport services sector. He also declared the agreements between NZBA and Egged to be restrictive arrangements.
Tadmor said that Egged should be declared a monopoly in interurban public transport everywhere in Israel.
Regarding NZBA, which is controlled by Egged and also owned by Granite Hacarmel (owner of Sonol), and Ashtrom, Tadmor determined that it will be declared a monopoly in respect of the central bus terminals in Eilat, Dimona, Beer Sheba and Jerusalem.
Egged is a sole provider of urban and interurban transport services in most parts of Israel. NZBA owns most central bus stations. Between Hevrat Mifalei Tahanot (Station Enterprises company), a subsidiary of NZBA and Egged, a long-term exclusive lease agreement was signed in July 1995, determining that Egged would be the sole lessee in the said central terminals, together with other properties, for a period of ten years, with an option for automatic renewal for additional periods of ten years each, on the initiative of Mifalei Tahanot.
The Cartels Law does not permit monopolists to contract in agreements that block or are prejudicial to competition.
"Moreover, the law requires monopolists in vital facilities, such as central bus stations, to permit egalitarian use of those facilities to the various competitors".
The series of agreements between Egged and NZBA are referred to, by Tadmor, as "a mortal blow to the entry capability of operators other than Egged into the transport terminals of Mifalei Tahanot for the duration of the agreement".
Tadmor notes that these declarations "constitute an important tier in the fight for penetrating competition into the public transport sector".
Published by Israel's Business Arena May 26, 1999