Nesher Said to Be Selling Cement to Palestinians at Nearly Half-price

Cement monopoly says that by selling excess cement on the Palestinian market, it was keeping prices in Israel low.

The Nesher cement monopoly sold cement to Palestinian buyers for 40% less than it charged within Israel, according to Channel 10's investigative show "Hamakor." The story is scheduled to air on Tuesday night.

Nesher controls 90% of the local cement market.

The television program's investigators found that in December 2007 and July 2008, Nesher sold cement to Palestinians at a 40% discount, contravening its claims that it gives Palestinians a discount of no more than 20%.

Nesher stated in response that by selling excess cement on the Palestinian market, it was keeping prices in Israel low. The Palestinian buyer saves Nesher money on sales, transport and credit risk, it said.

The Industry and Trade Ministry regulates cement prices, but its formula does not factor in prices within the Palestinian Authority.

The Trajtenberg Committee, charged with drafting a plan for economic and social reform, urged that the formula for cement prices be changed. It left Nesher with too much profit and blocked potential competition from imports, said the panel, which had been headed by economic adviser Manuel Trajtenberg.

The Trajtenberg team also accused the Industry and Trade Ministry of blocking cheap cement imports in order to protect Nesher.

The TV show also reported on the practice at Nesher of employing former high-ranking officials including ex-Prime Minister Ehud Olmert and ex-Israel Defense Forces Chief of Staff Amnon Lipkin-Shahak, to help it get a foot into the Palestinian cement market.

Olmert assisted Nesher when he was industry minister in 2003, protecting it from having to compete against the French company Lafarge. Before his intervention, Nesher had controlled 70% of the local market; afterward, it had 90%, the TV probe notes.

Nesher said it played no role in blocking imports.