Israel Electric Corporation (IEC) (TASE: ELEC.B22) chairman of the board of directors Gen. (res.) Yiftah Ron-Tal promised the Energy and Business Conference in Tel Aviv that IEC's streamlining plan would get underway next year even without reform, and the free electricity benefit for employees would be eliminated.
"We'll begin the streamlining plan in 2015, even if there is no reform," Ron-Tal said. "Otherwise, we'll have a tough year. The revolution is already going full steam. The private power stations have gone into operation, the gas is already here, and therefore anyone who thinks that this sector can be kept without an arrangement either doesn't know what he's talking about, or is making a serious mistake."
Ron-Tal said he was determined to push the reform, although "It doesn't appear to be near." He said that one of the things that had to be done to move the reform forward was "to make the workers organization give up its unjustified demands."
He also asserted that IEC could not continue to exist with its current debt of over NIS 70 billion: "We're talking about 8% less income than last year."
IEC reform has reached an impasse, following the lack of agreement between the workers committee and the state. The reform included a structural change, a cost-cutting program (such as voluntary retirement of 2,500 employees and reducing the number of districts), financial streamlining, and managerial flexibility.
"What we can do even without reform, we'll do - the workers organization is harming service to people, and we won't let that happen," Ron-Tal stated. "Even without an arrangement with the workers, we'll lead the reform. Incidentally, even the IEC workers organization has come to the conclusion that reform is essential. This is a very responsible organization, but it stands on the workers' rights, and here there is no agreement. The entire investment will pay for itself to the last cent, and the demands are legitimate, but too high, and that's why reform is stuck."
As if it were an afterthought, Ron-Tal added, "Oh yeah, and there won't be any free electricity, either."
Published by Globes [online], Israel business news - www.globes-online.com - on November 4, 2014
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