Israel planning $4 billion privatization effort
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Israel planning $4 billion privatization effort

Netanyahu, Lapid say move will reduce debt, corruption; expert doubts duo can pull it off against powerful unions

Finance Minister Yair Lapid with Prime Minister Benjamin Netanyahu. (Photo credit: Flash90)
Finance Minister Yair Lapid with Prime Minister Benjamin Netanyahu. (Photo credit: Flash90)

Israel plans to fully or partly privatize a number of state-owned companies in a move aimed at boosting efficiency, reducing the national debt and fighting corruption.

The decision, approved by the ministerial socioeconomic cabinet, was expected to add NIS 15 billion ($4.07 billion) to state coffers over the next three years, the Finance Ministry said Sunday.

Minority stocks will be issued for firms “in which the state has an interest in retaining long-term governmental control” such as Israel’s electricity corporation, aviation, trains, water, mail and natural gas industries, a ministry statement read.

It will also sell companies in which it has “no long-term interest”, such as the ports at Ashdod and Haifa, a modified and declassified military industry (with the state retaining the right to determine the ownership), the Dead Sea Works and others.

Prime Minister Benjamin Netanyahu said in a statement the “reform” will “increase the state’s income and enable greater transparency in government companies”.

Finance Minister Yair Lapid called the move “an additional measure to end the politicization of companies and reduce corruption in them”.

Netanyahu had previously overseen a series of privatizations when he was himself finance minister some 10 years ago.

But the companies sold off then were “easy” compared to what was currently on the privatization list, one economics expert said.

“I can’t see these things going ahead,” said Michael Beenstock of the Hebrew University’s economics department, noting that powerful unions at Ashdod port and in the electricity company have prevented any reform or change for decades.

While Lapid and Netanyahu may be successful in privatizing some smaller estate enterprises, the electricity corp and Ashdod port are “not going to take this lying down”.

“To break these things you have to put the country into misery for a long time,” Beenstock said, and Netanyahu and Lapid are “not going to do it.”

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