Starting today, Israel Electric Corporation (IEC) (TASE: ELEC.B22) is cutting the supply of electricity to Jericho and the surrounding area in half because of money owed by the Palestinian Authority (PA) and the Jerusalem District Electricity Company. As of today, the debt amounts to NIS 1.7 billion. IEC is also refusing to connect new customers in the area.
IEC provides most of the electricity for the West Bank and Gaza Strip - a total of 120 megawatts. The financial crisis afflicting the PA for several years, however, has prevented it from paying salaries to 150,000 government workers, and its payments for electricity have either been late or have been completely halted.
IEC CEO Ofer Bloch sent a warning letter several days ago on the matter to acting National Security Council head Yaakov Nagel, Israel Security Agency director Yoram Cohen, Coordinator of Government Activities in the Territories General Yoav Mordechai, IDF Operations Directorate head General Nitzan Alon, and Israel Police Inspector General Roni Alsheikh, with copies to officials in the Prime Minister's Office and the Ministry of Finance. The letter explains that the debt is a heavy burden on IEC's cash flow, and that IEC is legally obligated to act according to business considerations.
Because of the debt, IEC cut power to Nablus (Shechem) and Jenin for 45 minutes in March 2015, the first time it took such measures in the West Bank. The measure, which caused a public storm and emergency discussions in Jerusalem, was opposed by the defense establishment.
Published by Globes [online], Israel business news - www.globes-online.com - on March 31, 2016
© Copyright of Globes Publisher Itonut (1983) Ltd. 2016