The Bottom Line / Fuad in a China Shop

National Infrastructures Minister Benjamin "Fuad" Ben-Eliezer said this week, "We need to wait until at least 2012 to examine splitting up the Israel Electric Corporation."

1. National Infrastructures Minister Benjamin "Fuad" Ben-Eliezer said this week, "We need to wait until at least 2012 to examine splitting up the Israel Electric Corporation." He added that he supports breaking up IEC into three segments: generation, transmission and distribution. However, this support is nothing but lip service, for there is no reform and no point in dismantling without introducing competition to power generation and distribution.

The whole idea is for the Ashkelon power plant, for example, to compete with the Hadera plant as well as new private plants. The reform is based on the assumption that more power companies will compete on price and quality. They would be able to sell electricity to a variety of distribution companies, who would also compete among themselves. Only then would we achieve efficiency, reductions in electricity prices and improved customer service.

Fuad opposes this vital process. He is fighting against IEC chair Shlomo Rothman, who is trying to choose a professional CEO for the company. Ben-Eliezer wants his own CEO, who will dance to his tune. Ben-Eliezer is not only protecting IEC workers, but he is also looking out for workers at the Oil Refineries. And as for the Mekorot water utility, Fuad is dragging his feet over breaking that company into three components: a holding company, a development division and a national waterway section. He is doing this by supporting demands to appoint one chairman for all three companies.

Fuad is competing with Amir Peretz for the votes of the major workers' committees in the upcoming Labor Party leadership election. Despite the corruption that has permeated the party's recent membership drive, he opposes delaying the primary. The Israeli economy won't be able to support further damage if populism continues to reign.

2. An expensive holiday. We reported here a year ago on the affair of vacations in the Israel Defense Forces and the Ministry of Defense. We told how director general Amos Yaron had considered establishing a new unit next to the Ministry of Defense, to maintain direct contact with 120 hotels across the country, based on the erroneous notion that the ministry was better and more efficient than all the private companies operating in the industry.

We conducted a follow-up and discovered that if you are stubborn enough, like Ephraim Kramer, Eshet Tours CEO, you can change bad decisions, even when it comes to a large, strong and rich organization like Defense. Kramer says that Defense cannot suddenly turn into a tourism expert. It is a dynamic and complex industry where prices often fluctuate because of hotel occupancy, timing of charter flights, the state of domestic tourism and many other factors. For this, you need a widespread information network, competitive organization and many years of experience - things that just don't exist at the Defense Ministry.

Eshet Tours took Defense head on and even filed a petition in the courts. At the end of a drawn out and expensive process, the ministry was forced to abandon the idea of setting up the unit and issued a tender. Eshet Tours lost the tender to Shekem by less than a percentage point.

The point is that the people of Israel benefited, for at the end of the day, we the tax payers finance the Defense Ministry budget. Every shekel saved there is saved from our pocket.