IEC Executive: NIS 1.4 Billion Missing? A Glitch

Everything is the state's fault for not letting the IEC charge enough for power, claims Israel Movshovitz.

Executives at the Israel Electric Corporation seem rather unperturbed about the fact they somehow wound up with a cash-flow shortage of NIS 1.4 billion, a tidy sum by any criteria, in the last months of 2012. It's all the government's fault, or the public's, or both, it would seem

"This monopoly called the Israel Electric Corporation isn’t the problem – it's the solution. What do you mean 'IEC crisis,' or 'improper management'? Its NIS 70 billion debt wasn't created yesterday or the day before that, and the little mistake of this NIS 1.4 billion – and those who don't understand that it's a little mistake can get an explanation later – wasn't created yesterday either," said acting vice president of client care and manager of the marketing department at the IEC, Israel Movshovitz, at the Electricity 2012 Convention of the Society of Electrical and Electronics Engineers in Israel (SEEEI).

To put things into proportion, the IEC owes NIS 70 billion; Israel's national budget is around NIS 350 billion; and its GDP in 2011 amounted to around NIS 950 billion.

How could the company build up such gargantuan debt? It's the government's fault: it sets the rates the company may charge the public (and businesses) for power, and those rates are too low to sustain the company's costs, Movshovitz argued.

He also complained about negative public opinion towards the IEC: "It's about time that in this state of cognitive dissonance between the brain and emotions, the brain will win," he said. "It's illogical that they think that cutting salaries will be what saves the IEC. Wages make up 10-15 percent of company expenditure. Even if we work without wages for 30 years, it won't clear the debt."

With regards to complaints over the difficulties the IEC is piling upon private competitors in the electricity industry, he said: "Are there any IEC workers here who love monopolies? No one! We want to be open to everyone. That is why we were established by the state. We'll lose some of our market share? So what? But someone needs to ensure that there is a balanced provision of essential services in the market. We need to be given the correct electricity rate; that will be as low as possible on the one hand, but will enable us to provide service to every customer on the other."