Ministers: Dead Sea Works Should Cover Salt Cleanup

The cost of the cleanup is estimated at between NIS 3.8 billion (says the company) and NIS 5 billion (says the government).

Dead Sea Works should cover 90% of the cost of clearing out the salt from its evaporation pools, which are threatening to flood hotels at the Dead Sea's southern end, the Ministerial Committee for Legislation ruled yesterday.

The cost of the cleanup is estimated at between NIS 3.8 billion (says the company ) and NIS 5 billion (says the government ). The Israel Chemicals subsidiary has argued that its agreements with the government place it under no obligation to bear the cost, and wants the government to pay for a significant portion. Israel Chemicals is controlled by the Ofer family's Israel Corporation, one of the country's largest business groups.

The Dead Sea - Gil Cohen-Magen
The Dead Sea, Nov. 10, 2011.Gil Cohen-Magen

Yesterday, the ministers approved two bills drafted by MK Moshe Matalon (Yisrael Beiteinu ). The bills are intended to save the Dead Sea hotels and to help develop the region.

The first bill says that the companies will have to pay 90% of the cost of dredging the pools and hauling off the salt. The Finance Ministry will cover the remaining 10% or NIS 150 million, whichever sum is larger, says the bill. Given that the expenses are expected to far exceed NIS 1.5 billion, 10% is the more likely figure.

The second bill calls for launching a fund to develop and preserve the Dead Sea and its surroundings. The money will come from increasing the royalties the state charges Dead Sea Works for exploiting the country's natural resources. The Finance Ministry also will contribute NIS 150 million by 2016, the bill states.

Both proposals have the support of Tourism Minister Stas Misezhnikov and Environmental Protection Minister Gilad Erdan.

Israel Chemical's negotiations with the government over the cleanup have not yet borne fruit, even though TheMarker reported last week that the sides were nearing an agreement. The company has offered to bear up to NIS 3 billion of the cost.

Israel Chemicals and the government are also negotiating over the latter's claim that Dead Sea Works owes it royalty money, as well as over the government's intention to raise royalties starting in 2011.

Prime Minister Benjamin Netanyahu has stated that if the sides cannot come to an agreement, the government will impose its will on the company through legislation.

Dead Sea Works stated in response that it was conducting serious negotiations with the Finance Ministry over these matters.