The announcement of Antitrust Authority director general Prof. David Gilo's resignation aroused a storm of responses today, as is usually the case with such dramatic developments. Those leading the struggle against the natural gas companies shouted their outrage, the developers were delighted, the government ministers were embarrassed, and there was wall-to-wall relief among the professional echelons dealing with the gas sector.
The big bottleneck blocking progress in the energy sector is now likely to be released. Development of the Leviathan reservoir, sale of the Karish and Tanin reservoirs, construction of power stations, and conversion of industrial enterprises to the use of natural gas - all these have been waiting for a decision. The structure devised by the state and opposed by Gilo is designed to enable Israel's gas industry to continue its forward sweep.
Gilo's main struggle was not against the gas developers; it was against his government colleagues. His decision to resign came after it was made clear to him last week that he would not receive the backing of other government agencies in the expected hearing at the Restrictive Trade Practices Tribunal concerning his classification of the 2007 Leviathan deal as an agreement in restraint of trade.
Fear of humiliation in court led Gilo to resign. Exactly the same fear caused his dramatic decision last December to rescind the compromise plan agreed with the gas developers concerning the agreement in restraint of trade at Leviathan. At that time, nine months after he signed the compromise agreement, Gilo realized that he could not lie to the court by telling it that he had signed a good agreement that would promote competition in the gas sector.
He reached the same conclusion this time about the new compromise agreement formulated by the state. It is the obvious conclusion - that the solution is not free competition, but a different regime of supervision and regulation - that Gilo still refuses to accept. Gilo was an unusual figure on the government regulation stage: introverted, quiet, and not a politician. His decision to rescind the compromise agreement caught his colleagues completely by surprise.
"He sat in the discussions and didn't open his mouth. We didn't know there was a problem," the blockage removal team steered by Prime Minister's Office director general Harel Locker said about him. His colleagues asserted that he took only competition into consideration, without looking at the general picture. The huge damage to the gas sector that classification of an agreement in restraint of trade at Leviathan would cause includes years of delay in development of the reservoir, delaying billions in state revenues, jeopardizing strategic export deals with Egypt and Jordan, and many other things.
Gilo claimed it was not his job to look at the general picture - that was what the government was elected for. Even senior Antitrust Authority officials, however, did not conceal their different opinion, and did not hesitate to disagree with the director general behind closed doors. Gilo was left alone in his self-righteousness within the government, even though he won popularity outside it. After refusing to pull Prime Minister Benjamin Netanyahu's chestnuts out of the fire for him, he discovered the welcoming arms of the opposition and the social organizations, which saw him as the sole righteous man in Sodom, and now regard him as a holy martyr who chose to sacrifice himself on the altar of the tycoons' interests - if we could only believe it. As for us, we still think being smart is better than being righteous.
Published by Globes [online], Israel business news - www.globes-online.com - on May 25, 2015
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