Minister of National Infrastructures, Energy, and Water Resources Silvan Shalom today told a forum of senior local authorities officials that he would take steps to reduce the number of water corporations in Israel in order to facilitate lower water prices. "There is no doubt that the water corporations have grown beyond all proportion," he said, adding, "Eliminating the corporations or their powers should be considered. There can't be a need for 55 municipal corporations that formerly operated under the auspices of the municipal authority, and did it with a third of the manpower they have today."
Shalom continued, "The ordinary person is helpless against the corporations. When I was Israel Electric Corporation (IEC) (TASE: ELEC.B22) chairman, I established its 103 call service, and we'll do the same now for water."
Shalom also said that his ministry was formulating a plan for lowering the price of water for consumers, and noted that if responsibility for water is returned to the local authorities, prices will fall, albeit by a small amount, saying, "One of the things under consideration in this area is the establishment of one large water corporation - a nationwide water company that will manage all the corporations." He added that the committee for streamlining the water sector, the founding of which he had advanced in order to cut water rates for the public, would issue its recommendations soon. "The main reasons for the high price of water are the cost of desalination and the fact that the government decided that the state budget would no longer subsidize the water industry," he explained.
Shalom also commented on the cost of living, saying that a significant cut in electricity rates was expected at the beginning of 2015, after water rates were lowered by 5% over the past year. "Lowering the rates is expected to lead to additional price cuts in other parts of the economy, whether you're talking about children's snacks, cottage cheese, or any other item whose production requires inputs of electricity and water. When these items are cheaper, the rest will be, too," Shalom said.
Published by Globes [online], Israel business news - www.globes-online.com - on October 21, 2014
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