Israel’s Fattest Paychecks Go to Port Workers, at NIS 38,000 / Month

Haifa dockworkers were earning nearly 50% more than the already steep average of about NIS 26,000 a month at all government-owned companies.

Which government company paid its workers the most last year? The ports, with wage costs averaging NIS 38,000 in Haifa Port, an increase of 12% from the year before, the Government Companies Authority stated in its annual report, released Monday.

In other words, Haifa dockworkers earned nearly 50% more than the already steep NIS 26,000 average monthly wage cost at all government-owned companies.

The nationwide average salary is only about half the average wage at state-owned companies.

The data on the outsized pay at Israel’s ports come as the government gets ready to battle with unions over plans to introduce more competition and efficiency by creating a private port alongside the state-owned facilities. Officials are weighing options such as bringing in troops to operate the ports if workers strike.

Listed close behind on the pay charts are Israel Electric Corporation and Israel Ports Development & Assets Company, where monthly compensation costs averaged NIS 34,000 per employee. For the latter the figure dropped 9% from the previous year due to older employees’ retiring.

Average pay costs at the Electric Corp., however, shot up by 18%, and the payroll grew by nearly NIS 1 billion, from NIS 4.37 billion in 2011 to NIS 5.31 billion last year. The company also increased its workforce by 3% to an all-time high of 13,077.

This year was the second time the report has been issued on a consolidated basis after eliminating inter-company transactions and balances in order to reflect the performance of the sector as a whole, as well as its part in the domestic economy compared with the private business sector.

Despite its being released to the public, the report is regarded as a draft since for years it hasn’t been established who should actually sign off on it. In addition, some of the reported figures are subject to change when international financial reporting standards take effect.

Haifa Port revenues up

The reason behind the steep pay hike at Haifa Port was an increase in revenues to NIS 735.4 million in 2012 from NIS 690.4 million in 2011, although operating profits actually declined due to higher operating costs net profit was higher thanks to financial income and a lower income tax liability.

The average salary costs at Ashdod Port actually dropped 6% to NIS 37,000 a month, but overall payroll expense was larger than in 2011 thanks to NIS 62 million in bonuses paid on profits earned from 2008 to 2010. The state collected NIS 330 million in dividends on the port’s profits in those years. Revenues of the company operating the port climbed 9% in 2012 while net earnings reached NIS 192.1 million as opposed to NIS 18.8 million in 2011.

At IEC the increase in payroll comes despite management’s announcement in May 2008 that it was embarking on a streamlining program that would include early retirement for 1,500 to 2,000 employees. Since then, however, IEC’s workforce has actually grown by 8%, or a net new 900 jobs. Meanwhile the company is asking the government to finance a reform costing billions of shekels to fund early retirement for 1,500 workers.

Although IEC recorded a 12% increase in revenues to NIS 27.8 billion last year, it ended with a loss of NIS 679 million.

All told, revenues at government corporations amounted to NIS 67.3 billion last year, about NIS 4 billion more than in 2011, with exports accounting for NIS 14.3 billion. IEC had the biggest revenues, followed by two defense companies − Israel Aerospace Industries, with NIS 12.9 billion, and Rafael Advanced Defense Systems, with NIS 6.8 billion. Next were the National Roads Company of Israel ‏(NIS 5.7 billion‏) and the water company Mekorot ‏(NIS 4.4 billion‏).

But state-owned enterprises suffered a net loss of NIS 95 million, largely because of IEC.

Israel Military Industries was another big loser for the government, registering a NIS 247 million loss on NIS 1.86 billion in sales, following a NIS 293 million loss in 2011 on sales of NIS 1.73 billion.

The company has now extended its deficit to NIS 2.12 billion, equivalent to 82.3% of the value of its assets, and owes the government NIS 2.17 billion. IMI’s sales to the Defense Ministry grew to NIS 850 million last year from NIS 825 million in 2011.

The Finance Ministry has decided to renew its efforts to privatize the company after previous attempts failed, as did plans for merging the ailing company with Rafael.

The report summarized the financial standing and operating results of 98 government companies and non-profit organizations employing a total of around 60,000 people. The companies mostly deal with national infrastructure, including electricity, gas and other fuels, transportation networks including highways and rail, ports, and defense industries.

Albatross Aerial Photography