One of the first shock waves of the European financial crisis is now hitting Israel: French infrastructure group Veolia Environment is expected to announce within a few days that it is ending its Israeli operations in the transportation and contracting sectors.
The move is part of an overall restructuring and efficiency plan the international company announced this week, in which it will sell off some 5 billion euros in assets within two years.
Veolia Israel has agreed to sell the contracting business of its Dalkia Israel subsidiary to Electra for an estimated NIS 40-60 million. Veolia is also negotiating to sell its transportation holdings here, which includes the Connex bus company that operates public bus routes in Modi'in, Lod, Tiberias and Ashdod; as well as the Jerusalem light rail line.
The Veolia group had revenues of 34.8 billion euros in 2010 and 320,000 employees in 105 countries. Now the company wants to leave 40 of those nations. Veolia made a 579 million euro profit in 2010.
The businesses Veolia Israel wants to shed bring in annual revenues of about NIS 500 million, and employ some 750 workers. Most Dalkia employees are expected to keep their jobs after the sale, but the fate of Veolia Transportation workers is still unclear.
Veolia Israel will be keeping its local environmental and water businesses, which employ another 1,250 and have about NIS 1 billion in annual revenues. Veolia is even expected to expand these interests as they are quite profitable. Veolia Israel owns 5% of CityPass, the Jerusalem light rail franchisee, but owns 80% of the company that operates the light rail project. It has tried to sell its holdings in the light rail project to Egged for NIS 46 million, but the state has held up the sale.
Pro-Palestinian organizations in France and Scandinavia have attacked the company over the past two years for its involvement in the Jerusalem project, which also serves part of East Jerusalem.
Want to enjoy 'Zen' reading - with no ads and just the article? Subscribe todaySubscribe now