The Defense Ministry and Israel Defense Forces have begun the battle for the 2005 state budget. The defense establishment is demanding a NIS 1.5 billion boost while the Finance Ministry hopes to slash a similar sum. However, the battle has made it clear that Defense Ministry director-general Amos Yaron has no budget problems, so to speak. He wants to expand his empire.
The ministry published a tender in July 1998 for organizing vacation packages for career military and civilian ministry employees worth some NIS 70 million annually. The tender was won by Shekem, and the contract ended two weeks ago. Rather than issue another tender, continuing the proper policy of outsourcing, Yaron decided that his own staff are the biggest experts available on tourism.
He announced the establishment of a new unit in the ministry that will organize vacation services and make the many complex deals involved with hotels.
To justify the puzzling move, Yaron ordered an in-house "examination." The examiners knew which way the wind blew, and reached the conclusion that the ministry would save NIS 2 million, 2.8 percent of the budget, if it established a vacation unit. Read it and weep, a completely implausible conclusion.
It is pretty easy to find out the cost of an external company that wins the tender, but very difficult to evaluate the cost to the Defense Ministry. The unit is supposed to report to deputy director Victor Bargil, previously the union chief. But who knows how many people it will employ in practice, how many "arrangements" it will involve, how many political appointees, how many unnecessary managers, and what hidden costs will befall the ministry.
Everyone also knows that wages and employment terms in the Defense Ministry are substantially higher than at private tourism companies. What incentive will a salaried, tenured employee have to get a better deal from a hotel? Has anyone thought of the perquisites that could make their way to unit employees, for them to test the quality of services through a weekend of pampering at a five-star hotel?
The price of hotel rooms is extremely volatile. It hinges on occupancy rates, canceled charters pressuring prices down, the global tourism sector and Jewish tourism, and the latest trends in domestic tourism.
Will employees of the Defense Ministry be more abreast of all these developments than experts at private companies whose business is tourism?
But if Yaron's ministry officials are better at organizing vacations, maybe they're better at hostelry too? Why doesn't Yaron (with Bargil) establish a unit that would just build a few hotels, resort villages and a restaurant chain for defense establishment workers to enjoy on their vacations? After all, they know how to do it A-L-L better.
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