Legality of Kfar Chabad Tender to Be Investigated

The Antitrust Commission and the Justice Ministry examined on Monday the legality of 171 tenders offered for the purchase of properties in Kfar Chabad, a community in situated near the Ben Gurion Airport, to which only one bid was submitted for each tender.

In the vast majority of the 171 tenders that the Israel Lands Administration (ILA) published two months ago, the bid was close to the minimum price required by the ILA - ranging from NIS 177,000 to NIS 208,000. The prices offered were lower in comparison with similar properties in the area.

The tender was limited only to Chabad movement members, who had obtained the authorization of the community. Furthermore, all the bids were won without any objection.

The Antitrust Commission and the Justice Ministry are examining a possible coordination among village residents to assure the tender results. They are also checking the possibility that private individuals who united to create a cartel violated the Antitrust Law, or if police should launch a probe to investgate the handing of the tenders.

Other properties, on which four-story buildings are to be built, were also included in the tenders. All of their bids were made by groups of families which offered bids only several hundred shekels above the opening bid.

The Chairman of Kfar Chabad council, Yami Lifshitz, denied allegations that the purchase of properties was coordinated.

In the Knesset's Finance Committee meeting on Monday, the ILA's legal advisor, Rachel Zakai Noiman, admitted that in view of the high demand for property in the area, the tender should have been put at 91 percent of the property's estimated value, and not at the minimum rate of 71 percent.

MK Eti Livni (Shinui) demanded an examination of the tenders' legality and said she feared they entire process was not in accord with the principles of free trade and competition. She said that the properties' real value should have been determined as the minimum bid.

According to ILA chief, Ya'acov Efrati, the standards for the Kfar Chabad tender were identical to other tenders conducted in towns and communities such as Bnei Zion and Basra, where the minimum bid was set at 51 percent of the land's value.

Efrati said the sum of the minimum bid was his to decide, and that since he was unable to assess the competition factor surrounding each bid, he implemented identical rules in all communities.

The Finance Ministry representative suggested to set directing criteria for the ILA?s administration of the fixing of minimum entering bids.