Rubinstein: Delay deals with railways, postal authorities

Elyakim Rubinstein: Land valuations were incomplete or shoddily done.

Outgoing Attorney General Elyakim Rubinstein has instructed Ministry of Finance Accountant General Dr. Yaron Zalika to delay signing agreements with the Israel Railways Authority and Israel Postal Authority. The agreements would convert the two authorities to government companies as a first step towards privatization. Rubinstein instructed Zalika to wait until the state had complted its valuations of lands belonging to the two authorities.

This coming Monday, the state was due to sign an agreement with Israel Railways. Part of the agreement awarded Israel Railways 80,000 dunam (20,000 acres) of land. The state obligated itself to transfer NIS 24 billion in development funds over a seven-year period, to be financed, in part, by the sale of properties under the jurisdiction of the railways authority.

Rubinstein's letter, sent only days before his resignation, shows that the surveying and valuation process of properties belonging to both the railway and postal authorities was either not finished, or had been executed shoddily and only in part.

The most serious problem relates to land controlled by the railway authority, at the Arlozorov train station in Tel Aviv, where properties are among Israel's most expensive.

Recently, it came to light that the main piece of property at the train station, measuring 70-80 dunam (17.5-20 acres), was expropriated from the original private owners many decades ago for the railway's use.

A High Court of Justice ruling several years ago determined that the property's designation had changed, and that it no longer served the purpose for which it was expropriated. This reinforced the claim made by the original owners, to the point that the court felt it necessary to return it to them.

This fact was not taken into account in the agreement with Israel Railways, and undermines all the calculations on which Israel Railway's future development is based.

Rubinstein's letter shows that an agreement in principle between the state and the Israel Postal Authority, according to which some properties would revert to state ownership while others would remain with the newly formed postal company for the purpose of postal service operations, did not take into account many properties given to the Postal Authority over the years.

According to Rubinstein's letter, the Postal Authority has remitted only 15 properties, using indeterminate criteria, and without having surveyed the properties and related assets.

There was no response to this report from the Ministry of Finance as of web-posting.

Published by Globes [online] - www.globes.co.il - on 15 January 2004

Twitter Facebook Linkedin RSS Newsletters גלובס Israel Business Conference 2018