“There is no country in the world that has no competition in the automotive sector other than Israel. I promise there will be competition as appropriate; there is not one case in which competition did not lead to reduced prices. Competition is more important than privatization; I delayed the privatization of the Ashdod port while others tried to erroneously privatize it. Competition will bring international companies. There will be export to Jordan and other states,” Minister of Transport Yisrael Katz told “Globes” deputy editor Eli Tsipori on Wednesday at the “Globes” Real Estate Summit in Tel Aviv.
The discussion began with a question to Katz about his recent confrontation with Prime Minister Benjamin Netanyahu over the entry of Uber to Israel. At the time, Katz declared the state would be forced to pay NIS 8-9 billion compensation to taxi license owners.
You led the port reform, and you always rightfully claimed compensation should not be awarded to veteran competitors and stood by your opinion why pay it here?
“The port reform was the first we launched, without paying fees to the existing port unions. Now we are building two new seaports, and the existing ports will receive the appropriate tools to compete as I promised. It works. We did it with the train, we did it with ‘open skies’. Real competition, reduced prices, but with real opportunity to Israeli companies opportunities which they utilized.
“It led to two developments. First, from north to south, and in the center, we are building infrastructure at unprecedented scale and the Israeli companies have integrated through joint ventures or independently in the construction work.
“By the way, I gave my friend the Minister of Finance a piece of advice: ‘Do the same thing in construction you lowered the price of land, you stopped the profiteering that’s good; but if it does not develop to competitions with foreign firms that will build 40,000 apartments and not 150 apartments…’ and I believe he is now following that mindset.
“The keyword is competition; the second keyword is fair competition. And if we are going to talk about the cabs again, I have two things to say: There was no deliberation. In the middle of a meeting there was a comment, and there was a response. I believe the response was more justified than the comment; I gave the response. I have not been framed as someone who does not lead reform or competition because of some person’s pressure or concern… We spoke about the railways, the ports, the airlines, the infrastructure, soon the automotive sector, and other places.
“When you consider reform and competition, you need to first assure it benefits the citizen, then you need to assure the people who will face competition have the opportunity for a fair fight, for a beneficial competition not merely to throw the local or current player out of the ring. For example, what happened with the Israel Post al Company was a failure because there was no competition. It crashed. If it was up to me I would have expanded the mail service and brought in some competition.”
What does it mean to expand the operations of Israel Post?
“The post office can operate in areas which it does not yet, and you can open anything to competition. Then you get a larger volume of operations with more competitors and players on the field. The railway now takes on 200 employees each year, not because there is pressure but because it is improving and expanding its operations; the airlines is also hiring for Israeli companies to prepare for the low-cost flights; the ports will hire new employees but the price level will decrease across the country because of competition.
“If we would actually have a discussion over the taxis, then we would need to explore what shared transportation is and what Uber is, and if there is a necessity for it which is urgent because we are adding to a public transport infrastructure which includes busses, service taxis, trains, and only then private taxis. But you hold a hearing when you need to create advanced competition which will reduce prices, improve service, and allow existing players to compete.
“My remark on the NIS 8 billion was in that larger context; if Israel decides it needs this service now and we have yet to decide then we can overcome the obstacles. You give the cab drivers the money they invested in the taxis, licenses, training, and their loss of income for a period.
“I did not come out and toss out the existing ports, I took up a fight that few dared to touch, but I did not come with the intention of throwing them to the wolves without the opportunity for a fair fight. I told them if you want to compete with the advanced ports that will be built, you will receive the tools, but you will not receive bribes, you will not receive any additional grants the same goes for the cabs.”
Tell us your solution.
“At the moment I am not sure this discussion will happen, and if it does yield any conclusions they will not throw people under the bus. I recently met with Fried Avraham (the chair of the association of cab drivers and owners) and told him: ‘You know me, you know that if I thought you were wrong I wouldn’t be afraid of anyone. I am not worried. There were much bigger threats, that people would take me out of politics. Cab drivers think about driving. They aren’t the wealthy, they work for a living. If we make a change it should be through fair competition”
You have said in the past including in a “Globes” interview that you wished to be Minister of Finance. You are the most veteran minister and still in the same role.
“Firstly, we have a good Minister of Finance, I support him and wish him well. That remark was before the election, and I believed I was likely to serve in one of the three leading roles in the government. After it was clear that because of the coalition, mostly, and other reasons that was unrealistic, and I was given the choice of portfolios, from Interior to Education and others; I said I was staying in transportation. There was an argument, there were others interested, I said it would be me. If I am to stay in an active portfolio only the Ministry of Transportation, because I have missions to complete, because if I am not there they will be harder to finish.
“The revolution in infrastructure, the reforms, that I believe, as a public servant, I am doing with the backing of the Prime Minister and the government together, but at the end of the day I am on the front. I feel that I am leaving a real mark, for generations, on the State of Israel, like they did in the US some 180 years ago, like they did in Europe after World War II.”
Published by Globes [online], Israel business news - www.globes-online.com - on March 4, 2016
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