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The Finance Ministry hired last year the services of five consultants to move forward the privatization of Israel Military Industries (IMI). Despite this, privatization didn't make any progress over the past year.

The Finance Ministry commented that "in every privatization, and particularly in one as complicated as that of IMI, the state strives to carry out the process as professionally as possible, and it relies on experts in the field to do this." Moreover, the ministry noted that "the state will hire further the services of assessors, as required by every privatization." The treasury is determined to move the privatization forward and has been working for months preparing for privatization along government lines, said the ministry, adding: "The delay in privatization stems from a lack of cooperation by the company and its workers." The official noted that without full cooperation from the company and its workers "a heavy cloud hangs over the company".

The Government Companies Authority and IMI heads recently exchanged accusations regarding responsibility for the lack of progress. At this stage Defense Minister Amir Peretz's position is unclear. On the eve of the Knesset elections, Peretz said that he opposed privatizing IMI.

Officials close to the privatization process predicted that publishing the report on IMI's cash-flow crunch, which will prevent it from repaying its NIS 250 million loan on time to the government and to pay employees' salaries, was meant to apply pressure on workers to be more flexible in talks related to privatization.

Still, the sources believe IMI will do what it has done in past years - use cash in its coffers to pay salaries and not to acquire raw materials. As a result, IMI is liable to return to a situation of falling far behind in its delivery schedule, canceling orders and losing money. The result will be that the recovery plan the company had implemented in the past year will go up in smoke, and the company's value for privatization purposes will drastically decline.

The consultants hired include a legal firm, an accounting firm, the financial consulting firm Halevi Douak, an environmental consulting firm and an engineering firm.