Get tough on cement, improve bus service, break port monopoly, and more
Committee finds providing more competition to bus companies Dan and Egged could lower prices for the government and consumers, and improve service.
The Trajtenberg committee called for reevaluating the government-set prices for cement monopoly Nesher, which is owned by the IDB group. Nesher produces 90% of the country's cement. The committee wants to see a new local producer enter the market, with government support. It also called for giving imported cement priority at the Ashdod port's unloading stations. Its attempts to allow a certain amount of imports at dumping prices did not go through. (Ora Coren )
The disappearance of Egyptian natural gas from the Israeli market created a market failure, ruled the Trajtenberg committee. In addition, it stated regulatory failures are likely to prevent the growth of future competition. Currently, Israel's natural gas is being supplied by one local field alone, and the partners in that field are also developing the Tamar and Leviathan fields. It cited the Tamar partners' demand to raise their prices once the Egyptians halted the gas flow as an example of this lack of competition. (Avi Bar-Eli )
Providing more competition to bus companies Dan and Egged could lower prices to the government and consumers, and improve service, the committee found. The committee called for letting more than one company run buses along popular lines, increasing the frequency of buses and improving service. It wants to see bus fares cut by at least 25%, and make bus travel more attractive. In addition, by letting companies other than Dan and Egged operate more bus lines, the government could save on the NIS 720 million subsidies it grants these two main operators every year, the committee noted. (Avi Bar-Eli )
Some 90% of the country's gasoline market is controlled by four companies, and the lack of competition is even more pronounced in specific regions of the country, noted the committee in its recommendations to add competition to the sector. The committee called for bringing the price of diesel fuel back under government price control, and adding 40 independent gas stations in the city centers. It also called for freeing private gas stations from their exclusive supply contracts with the big gas retailers, thus opening up the gas wholesale market to competition. (Avi Bar-Eli )
Israel's ports are local monopolies characterized by poor service and low output that directly cost the economy hundreds of millions of shekels a year, the Trajtenberg committee stated. This does not include the indirect costs in terms of the uncertainty they create for the economy. The committee recommended creating internal competition at the ports in Haifa and Ashdod - by introducing additional port operations alongside the current ports. This echoes recommendations issued by the government as long as four years ago. (Avi Bar-Eli )