The Bottom Line / The light at the end of the reform
No one would dispute the fact that our public transportation system is of low quality - including Egged, Dan and Israel Railways. It is also indisputable that the train should be developed as a welcome alternative to traveling on buses and other public vehicles.
No one would dispute the fact that our public transportation system is of low quality - including Egged, Dan and Israel Railways. It is also indisputable that the train should be developed as a welcome alternative to traveling on buses and other public vehicles, thus helping to solve many problems of congestion and environmental quality.
Therefore, the Finance Ministry deserves praise for managing to remove Israel Railways from the Ports and Railways Authority in the 2003 Budget Law, effectively turning it into a government company. If this measure is indeed implemented, the length of railway tracks and number of rail passengers would double by the year 2006.
To implement this ambitious reform, substantial shareholders equity must be created to raise bank loans for the large investments required. For this purpose, the treasury's Budgets Director Uri Yogev and Accountant General Nir Gilad proposed that the train's assets (valued at NIS 3-5 billion), now held by the Ports and Railways Authority, be transferred to Israel Railways.
The treasury has also promised to invest another billion shekels in the railways over the next five years (a sum equivalent to the current subsidies allocated to the railways). With this amount of capital, this revolution could be implemented within four years.
The Ports and Railways Authorities was not particularly fond of this idea. These officials would prefer that it remain under their purview as a subsidiary company. Amos Ron, the director-general of the Ports and Railways Authority, instructed the director-general of Israel Railways, Yossi Snir, not to sign the agreement with the treasury. But the prime minister then intervened and pressured Snir to carry out the government's decision, even hinting that Snir better comply if he wants to remain in his position.
When this issue reached the Knesset Economic Committee, MK Avraham Poraz (Shinui) wanted to transfer the railways' assets directly to Israel Railways to ensure the success of this plan. But Nir Gilad managed to persuade him that land rights should be settled first and, for this reason, it would be better to initially transfer the assets to the government and only later to Israel Railways.
Nonetheless, Poraz inserted a clause stipulating that if the transfer of land from the government is not completed within six months, it would be directly transfered to Israel Railways.
The employees, who fear that the change will work to their detriment, comprise one of the major obstacles in this structural reorganization. But it seems that they have nothing to worry about this time. They'll receive a special bonus, all of their rights will be maintained, and all their pension problems will finally be resolved. They should not fear layoffs, since the plan calls for doubling the scope of Israel Railways' activities. Instead of layoffs, new workers will be required.
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