The antitrust commissioner, Ronit Kan, is strongly opposed to restructuring the national water company Mekorot. She is warning against the possible future damage to competition in the water industry.
Kan sent a harshly worded letter to Finance Ministry Director General Yarom Ariav, saying that "long-term goals of increased competition should be considered seriously and not sacrificed for short-term gains."
The treasury has rejected Kan's claims and says the changes in Mekorot's structure will actually help competition. The changes will be brought for cabinet approval today.
The proposal will keep Mekorot as a vertical holding company and subsidiaries, instead of sister companies in competition. This means that the government water monopoly will still own 99 percent of the subsidiary meant to compete with private firms in the development of water resources and projects.
Mekorot is now scheduled to be privatized gradually between 2010 and 2014.
Ofer brothers and Leumi
Kan will not allow Sami and Idan Ofer to buy control of Bank Leumi, even if they sell their holdings in Bank Mizrahi-Tefahot. She will only approve the deal if they sell off all their holdings in the Israel Corporation, TheMarker has learned.
The antitrust commissioner's demands stem from her policy not to let the owner of a holding company purchase a bank. In principle, the authority feels that control of a bank will give the holding company owners a large amount of information about their competitors and may harm the granting of credit to these competitors.
For example, if Nochi Dankner wants to buy Bank Leumi, Kan will make the purchase conditional on the sale of all of his holdings in IDB, and not only of certain companies in the group.
Yitzhak Tshuva and Lev Leviev would also face such restrictions, should they wish to purchase Leumi.
Airlines and code-sharing
In another move, Kan will not allow code-sharing agreements - cooperation agreements - between airlines that include price agreements or regulating demand in a way that harms consumers.
This policy appears to have been formulated in recent meetings held on the matter. However, Kan will allow coordination of flights between airlines to save both costs and resources.
Last year the commissioner decided, for the first time in Israeli aviation history and in spite of airline and Transportation Ministry opposition, to examine the agreements between airlines flying to and from Israel.
Those agreements that do not harm consumers will be allowed, but all deals will require examination and approval from now on.
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