Netanyahu Submits Watered-down Ports Reform

While the Finance Ministry may be determined to bring about far-reaching change in the ports industry - Minister Benjamin Netanyahu has repeatedly described the introduction of

efficiency and competition in the sector as one of his major objectives - the latest proposal seems a watered-down version of the original plans. The treasury now proposes to proceed gradually, with the first stage separating Haifa and Ashdod ports, to make them compete against each other.

Initially, according to the plan submitted for workers' discussion, the two ports' assets would be transferred to the existing Ports Authority, which would be incorporated as a holding company. The authority would remain responsible for planning and development at the two ports, and will retain their shares for 12 months.

Then in early 2005, shares of the two companies separately managing Haifa and Ashdod ports would be floated on the Tel Aviv Stock Exchange, until eventually the state is left with a 51 percent holding.

The ports workers will be entitled to buy some of the shares at a discount, and will also be entitled to financial assistance in acquiring the shares. The government also promises to preserve the terms of the collective employment agreements and to iron out remaining wage issues during the transition period.

Meanwhile, Israel Shipyards will be permitted to operate as a private port - this right has been temporarily withheld while the ports workers and government solve their dispute in the labor court - and management of the chemicals docks at Ashdod will be outsourced.

The fate of the Eilat port will be decided separately.

The Histadrut labor federation - a strong opponent of the port privatization plans - said it was studying the treasury's proposal, which it received only this week. Haim Sheib, who heads the labor federation's ports division, commented that the number of shares to be earmarked for the workers to buy had not been determined.

At the moment, he added, the union is concerned about ensuring the workers keep their jobs and rights. "Our objective is not to gain shares for the workers, or special agreements that would differ from the ones signed in other cases of privatization. It is primarily to ensure that transferring the ports to private hands will not harm the workers," Sheib said.

Director of the Ports Authority Amos Ron welcomed the latest plan, describing it as a compromise that bridged the gaps between the the port management's proposal of a year ago and the government's decision to privatize. He added that the interim period before sale of the ports will be three years instead of one, as originally proposed.

Meanwhile yesterday the Ports Authority Council's finance committee yesterday approved paying compensation of NIS 30 million to shipping companies that were forced to send their cargoes elsewhere during the ports strike three months ago. The payment will cover damages incurred by shipping some 10,000 containers during the strike period.