Moshe Kahlon recuses himself from gas issue

Moshe Kahlon
Moshe Kahlon

Kahlon told Netanyahu he will not act on gas-related matters due to his relationship with Tamar owner Koby Maimon.

The reason for the Minister of Finance Moshe Kahlon's silence has at last been revealed: Kahlon notified Prime Minister Benjamin Netanyahu that he will not deal with the issue of breaking up the gas monopoly due to his close relationship with businessman and one of the owners of the Tamar field Koby Maimon.

Before the elections, Kahlon had promised to break up the gas monopoly.

Meanwhile "Globes" has petitioned the Court of Family Affairs to publish testimony last month by Kahlon in a case on behalf of Maimon.

"When I assumed the position of Minister of Finance, I notified the relevant gas-decision-making parties, including the Ministry of Finance legal advisor and David Gilo in a meeting last week, that because of my longstanding relationship [with Maimon], and in order to prevent any appearance of impropriety, I have decided to transfer the matter to the prime minister, and he will decide which minister to transfer it to. I spoke with the prime minister and the cabinet secretary," said Kahlon.

Kahlon's deafening silence on the matter raised many an eyebrow, particularly when he did not react to the resignation of antitrust commissioner David Gilo yesterday. Gilo spoke today at the Israel Institute of Energy and Environment convention and said that the gas companies tried to prevent competition, and threatened that if the monopoly were broken up, there would be no gas.

Kahlon's relationship with Koby Maimon, who owns Isramco Ltd. (Nasdaq: ISRL; TASE: ISRA.L) through Equital (Isramco owns 29% of the Tamar reservoir), has long been known. Recently, "Globes" reported also on Kahlon's testimony on behalf of Maimon in the case between him and his former partner.

Prime Minister Benjamin Netanyahu addressed the matter of the gas monopoly in the cabinet meeting today and said: "We will not repeat the mistake made by countries that sought an ideal solution for their gas, and sometimes oil, and as a result of this, both the gas and oil remained deep underwater or underground. They had an ideal solution that wasn’t realistic. In this situation, they could pat themselves on their backs for wanting the most competitive system that never came to be. Many years have passed for many countries and they have seen no sign of energy from these sources.

"We will not operate like this. We will operate based on smart considerations that weigh competition and profitability, and bring the gas up from the depths of the sea. There is a plan here that is the result of the hard work of various experts in this field. Not all agreed. Unfortunately, the antitrust commissioner did not agree, but we are moving forward. We were stuck with a cost of roughly NIS 12 billion because of a pipe that didn't pass through a banana grove near Kibbutz Dor. Is a banana grove worth NIS 20 billion? The answer is no, but we paid it."

Netanyahu was referring to the protests by area residents who oppose the establishment of a gas terminal in the heart of a densely populated area, which is liable to pose a risk to residents. The residents demanded that an offshore liquid natural gas (LNG) facility be established instead, but the gas companies prefer an onshore facility, due to price considerations.

Netanyahu added: "I won't allow any consideration, and pressure, any populist activity to prevent the flow of gas to Israel. We will extract this gas from beneath the sea, bring it to the citizens of Israel, and make life better for all of society."

Published by Globes [online], Israel business news - - on May 26, 2015

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

Moshe Kahlon
Moshe Kahlon
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