Merging water corps would save NIS 500m

Water
Water

Water Authority: Reducing the number of water corporations from 55 to 13 would save NIS 496 million a year.

Reducing the number of water corporations in Israel from 55 to 13 would save Israeli taxpayers NIS 496 million, according to an official position paper by the Israel Water Authority written in 2013 and revealed on a Channel 10 television program. The Water Authority is the body that supervises the water corporations that were privatized in the preceding decade.

The position paper also revealed the annual salary cost of officeholders in each "normative" water corporation, as the Water Authority referred to it. These salaries, which are comparable to those at large private sector companies, including a company car for both senior and junior executives, gasoline expenses, leasing expenses, maintenance, etc., are at the expense of Israeli water consumers.

The cost of a water corporation CEO's salary is NIS 618,000 a year, including NIS 33,000 in monthly salary, a company car, NIS 3,000 in gasoline expenses, NIS 3,000 in leasing expenses, maintenance, etc. A simple calculation shows that the 55 water corporation CEOs alone cost an aggregate NIS 34 million annually. Adding the salary costs of the managers and officeholders in the other water corporations puts the total cost in the hundreds of millions of shekels - all at the taxpayers' expense.

In contrast, a clerk in a water corporation earns NIS 5,500 a month. None of his expenses are reimbursed, and the annual cost of his salary is NIS 89,000. The salary cost for the other managers in the water corporations is NIS 454,000 a year or less.

The office maintenance costs of each corporation total NIS 858,000 annually, and maintenance for its warehouses and facilities, including municipal property tax, totals NIS 1.15 million a year. The cost of maintaining a corporation's main branch is NIS 766,000 a year, and a secondary branch costs NIS 162,000 to maintain. The telephone answering service for consumers costs NIS 412,000 annually.

The position paper also states that NIS 750,000 in management and operating expenses was recognized for the corporations in 2011. The corporations actually spent NIS 1.05 billion on these items, 40% more than the recognized norm.

In response to the report, the Water Authority stated, "Water and sewage prices in Israel are among the world's lowest. In infrastructure development, the neglect of this aspect in the past under the local authority should not be compared with the welcome turnaround that has occurred in this aspect over the past decade. Let it be said that the Water Authority has always favored a limited number of water corporations (10-13)… The salaries of the workers and officeholders are set in accordance with the instructions by the Ministry of Finance Wage and Labor Agreements Department director. The local authority owns the shares in the water and sewage corporation, and is entitled to appoint directors on its behalf, in accordance with the law and with the approval of the government appointments committee."

Minister of National Infrastructure, Energy, and Water Resource Yuval Steinitz said, "The editors of the television program at no time asked for our response, except for waiting next to the minister's house. That did not keep the program from determining the minister's policy, the measures that he will take, and his response, accompanied by constant slander. After a number of joint discussions by MKs Itzik Shmuli, Cohen, Yoav Kisch, and Yuval Steinitz, a new good bill was agreed for substantially reducing the number of water corporations and streamlining the Israeli water sector. Any allegation to the contrary is wrong and misleading."

Three years ago, the television program began a campaign to reduce the number of water corporations in Israel. Two weeks ago, a bill to reduce the number of water corporations to 11 passed its preliminary reading in the Knesset.

Published by Globes [online], Israel Business News - www.globes-online.com - on January 19, 2017

© Copyright of Globes Publisher Itonut (1983) Ltd. 2017

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