Israel Electric Behaves Exactly Like a Monopoly Should

Until Netanyahu and Kahlon get down to implementing reforms – in other words, until the Messiah comes – we will continue to suffer from blackouts and crises.

Nehemia Shtrasler
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A palm tree, brought down by heavy winds, blocks a road during a storm in Netanya, north of Tel Aviv, October 25, 2015.Credit: AFP
Nehemia Shtrasler

The truth is I wasn’t really surprised. It was expected. It was unavoidable. This is exactly how a monopoly behaves when it faces absolutely no competition. It becomes corrupted from top to bottom, from bribery affairs to deep disrespect for its customers.

This is exactly how a monopoly behaves when the chairman of its union, Miki Tzarfati, is the real CEO, while the person who bears the title, Ofer Bloch, only serves as his flunky. This is exactly how a monopoly operates when Prime Minister Benjamin Netanyahu and Finance Minister Moshe Kahlon are so afraid of it, they flee from reporters seeking their response. They are scared that the union might get mad at them and turn off the switch, or even worse: Take revenge on them at the ballot box.

This is exactly how a monopoly works when it keeps 2,500 superfluous workers on for years, paying them billions of shekels a year at the taxpayers’ expense. This is exactly how a monopoly acts when it has betrayed its purpose: Instead of supplying the public reliably with electricity, it supplies itself with endless enhancements in employees’ salaries and pensions.

State Comptroller Joseph Shapira discovered this week that in recent years there was a shocking rise in the number of “senior” employees at the IEC, such that today there are 300 employees whose average salary is 49,000 shekels ($12,620) a month! The average monthly salary for all 13,000 IEC employees climbed to 24,500 shekels – not including free electricity.

The World Bank has already determined that the wages at the electric corporation are 25 percent higher than what is accepted around the world, so the unfortunate Israeli public pays an “electricity tax,” which goes directly into the pockets of the workers every time someone connects an appliance to the electricity grid.

As a result of this failed management, the IEC loses hundreds of millions of shekels a year, and it does not have the money to prepare properly for the winter winds, rain and snow. By comparison, it has 23 million shekels a year to invest in ridiculous ads on television to “improve its image.” And we pay for that, too.

I was not surprised either when we found out that despite the clear recommendation of the committee established after the scandal of the power outages in December 2013, the IEC continues neglecting to trim the trees that threaten its power lines. After all, salary conditions and pensions are more important, and who has time to deal with trees?

The climax came when the union ignored management, which ordered employees on Sunday to start working in emergency mode. The union, in defiance, ordered employees to work in “slowdown strike” mode, and they did so, working slowly, not showing up for the shifts they were assigned, ending work at 5 P.M., refusing to transfer teams and equipment from the southern district to the Sharon region, and even objecting to bringing in private contractors to work. Tzarfati is the one who decides, not Bloch, and what do they care that hundreds of thousands of people were sitting in the dark? What is important to them was they get a raise, seniority pay, automatic promotions and bonuses unconnected to any productivity – a unique invention of the IEC.

True, Netanyahu and Kahlon have taken a vow of silence, but where are the excellent Knesset members Shelly Yacimovich and Zahava Galon, and Social Affairs Minister Haim Katz? Imagine what they would have been shouting if private businessmen had owned the electric corporation and supplied the public with such a level of blackouts.

The solution to the IEC dilemma is to return to the well-founded reform of 1996, which determined that the company should be split into three firms: Electricity generation, transmission, and distribution. The power stations would be sold to private owners who would compete with each other. The fact is that private power plants produce more reliable and cheaper electricity than the IEC does now.

But until Netanyahu and Kahlon get down to implementing that reform – in other words, until the Messiah comes – we will continue to suffer from blackouts and crises, and Tzarfati will continue to run the company, for the glory of the State of Israel and the Third World.