It's judgment day at Israel Railways - 24 hours before the court's deadline for an agreement between management and workers, the sides are still at loggerheads over structural reforms. If the workers refuse to accept these reforms, the Transportation Ministry intends to shut down the railways entirely in order to reorganize it, minister Yisrael Katz hinted.
The workers' union, the Histadrut labor federation, the Finance Ministry and the railways management were given two weeks to sort out their differences, after employees carried out a series of strikes.
They made significant advances on several matters: All agreed in theory that certain aspects of operations would be outsourced to subsidiaries, and that employees would receive additional raises.
But the main bone of contention remains the railways' organizational structure, mainly who will perform future train car maintenance - employees or an outside company. This kept the parties from finalizing an agreement over the weekend.
Once they reach a deal, it needs to be presented to Katz.
Negotiations are expected to continue Sunday.
Among the agreements, the parties agreed that a subsidiary would handle shipping operations, and that this subsidiary would eventually be partially privatized in order to bring in a strategic partner.
The railways currently employs 300 workers in its shipping department, and while it has revenues of NIS 140 million a year, it generally books losses of NIS 20 million to NIS 30 million.
The sides also agreed a fully-owned subsidiary would handle the railways' business development and real estate, in order to generate additional profits from these assets.
In addition, the Finance Ministry offered to give employees a raise of 20% instead of 12%, in exchange for a prolonged period without labor sanctions, increased management flexibility and individual contracts for top management. In exchange, the Histadrut asked to include some subcontracted employees in the new agreement.
The bone of contention remains the government's intent to outsource maintenance, initially by signing an agreement to have manufacturer Bombardier maintain the 150 new cars it is selling the railways. It committed to continue employing all railways maintenance employees until they retire, but the union rejected this.
In addition, the government believes a deep reorganization is needed given the number of serious safety failings at the railways, coupled with the significant increase in passengers.
If the organizational culture at the railways doesn't change, "there won't be a choice but to close it for several months and reorganize it," said Israel Railways CEO Boaz Zafrir Friday.
