Officials in the Israel Electric Corporation (IEC) met on Monday evening with representatives from the Finance Ministry to discuss the utility’s NIS 1.5 billion (almost $400 million) cash flow shortfall.
The meeting focused on finding financing alternatives and on preventing a recurrence of such a shortfall in the future, as well as understanding how such a financial disaster could have happened in the first place.
The IEC board of directors on Tuesday announced the establishment of a committee to determine the value of IEC assets, that could be sold off to help cover the gap. Additionally, the Finance Ministry has demanded that the IEC empty the trust fund that provides free electricity and early retirement to employees.
The IEC commissioned the Goren Capital Group to conduct an audit concerning the missing money. One government source was quoted in Globes as saying that the report referred to “a serious problem in the internal communications between the company’s units on critical issues, such as cash flow updates.”
The report did not make any recommendations regarding IEC executives.
Electric Corporation CEO Eli Glickman told Globes that he discovered serious deficiencies in how the company has been managed. Glickman also attributed the shortfall to an unexpected increase in electricity consumption, and failures in coal power stations which led to an increase in the cost of diesel fuel.
A Finance Ministry official was quoted in Globes saying that “IEC’s chairman should take responsibility and ensure that lessons are learned.”