IEC checks Siemens control system allegations

IEC control room  picture: Tamar Matzapi

The IEC central district manager is among those who have warned that the system endangers human life.

The Israel Electric Corporation (IEC) (TASE: ELEC.B22) auditing unit is examining allegations by Moran Genosar. He was a company employee fired after complaining about irregularities relating to the purchase from Siemens of the command and control system in the DMS electrical system, and the malfunctions and failures discovered when it was installed and operated, which endanger lives.

The IEC is responding to a letter sent by the Movement for Quality Government to State Comptroller Yosef Shapira last week asking him to investigate Genosar's allegations. The organization's lawyers, Advocates Tomer Naor and Yotam Goldstein, are asking the State Comptroller to investigation suspicions that purchase of the system is linked to the Siemens bribery affair in the framework of its relations with IEC, beyond the bribe paid to Dan Cohen in the purchase of the turbines. The Movement for Quality Government is also asking the Comptroller to look into how Genosar was treated in his struggle to expose failures and corruption in IEC, his being fired, and the damage caused him.

Siemens won a tender to install the system in 2002 for $75 million, beating out ABB and Canadian company SNC-Lavalin. The IEC supreme tenders committee, headed by company director Adv. Rachel Don-Yichye, approved Siemens win in the tender. The Israel Securities Authority suspects that money for Don-Yichye was deposited in the Swiss bank account of her brother, Adv. Shlomo Nass, for the purpose of giving Siemens an advantage in the tender. Siemens admitted paying a $20 million bribe to parties in Israel, and other than the $4 million given to Dan Cohen, it is unclear who received the rest. Besides its ties with IEC in Israel, Siemens is involved in a baggage check project at Ben Gurion Airport and in the purchase of railway carriages for Israel Railways.

Managers and workers at IEC have also warned about the malfunctions and dangers of the DMS system, including IEC central district manager Dov Hirsch. Hirsch contacted former IEC CEO Yakov Hain, who was recently arrested in a renewed investigation by the Securities Authority into suspicions that he had received a bribe from Siemens in a secret Swiss bank account.

As revealed in "Globes," in the framework of the Securities Authority investigation, Genosar gave the investigators a recording and information indicating that Canadian company SNC-Lavalin had actually led the professional rating by IEC engineers. The recordings also show that three IEC engineers had warned during the tender that Siemens had received improper preference in the professional assessment.

A senior IEC professional source is heard on the recordings claiming that as a result of "pressure from above," Siemens had received a positive professional rating for the most important operative functions required in the tender, but which either did not exist at all, or did not function in the system offered by Siemens in the tender: electrical calculations in preparing the electrical system for extreme situations and malfunctions, a system for detecting disruptions on the network, an system for insulating a segment suffering from a disruption, and restoring electricity to customers in the network.

IEC told "Globes," IEC is taking steps to uproot and eradicate existing corruption. The company is also operating with complete transparency towards all the relevant parties in examining the matter. Moran Genosar's allegations concerning the DMS system are being examined by the IEC audit committee."

Published by Globes [online], Israel business news - - on April 8, 2015

© Copyright of Globes Publisher Itonut (1983) Ltd. 2015

IEC control room  picture: Tamar Matzapi
IEC control room picture: Tamar Matzapi
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