Israeli Bus Drivers' Strike Averted After Government Offers Aid

The strike by Egged was averted after the two sides commit to reaching new agreement on state aid within next 30 days.

Eliyahu Hershkovitz

A strike by Egged bus drivers, due to start Monday, was averted after the Finance Ministry agreed over the weekend to release 150 million shekels ($39.4 million) on an interim basis to allow the bus cooperative to meet its current expenses.

In return, Egged agreed it would cut 190 jobs from its bloated headquarters staff of 900. The three sides, which also included the Histadrut labor federation, set a 30-day deadline for intensive negotiations aimed at reaching a new subsidiary framework for the cooperative.

Egged threatened to strike, which would have shut down more than a third of Israel’s public transit, after efforts to reach a new agreement subsidizing the bus cooperative stalled. The previous agreement expired at the end of 2015.

The 150 million shekels represents subsidies the bus cooperative would have been entitled to under the old agreement so far this year, minus 100 million shekels the treasury is deducting for efficiency measures the cooperative is supposed to be taking.

Treasury officials said the money is, in effect, an advanced payment against aid in a future agreement.

Treasury officials have dug their heels in about negotiating a new agreement, saying Egged didn’t honor its part of the previous agreement (dating back to 2000), which called for it to take efficiency steps and open franchises to operate all its routes to competitive bidding, in exchange for subsidies that reached as much as 11 billion shekels over 18 years.

Egged has proposed to continue operating the most profitable routes without competition, and to receive subsidies of 400 million to 500 million shekels annually over the next 18 years. Part of the aid would fund buyouts for cooperative members, including severance pay and a bridge pension to tide employees over until their regular pension kicked in.

The government has insisted on four conditions, including a demand that Egged cut costs annually by 2%, and that it recruit private investors who would buy up to 51% of the cooperative. It also wanted Egged to open up 40% of its route to competitive bidding, but it seems the finance and transportation ministries have backtracked from their demand on opening all bus routes to competition – something Egged refused to compromise on.