Weren't they doing that anyway? Israel Electric threatens to cut off electricity to Palestinians over $435 million dispute

Published May 7th, 2014 - 02:55 GMT
IEC said in response, "IEC is using every means at its disposal to collect the debt from the Palestinian Authority."
IEC said in response, "IEC is using every means at its disposal to collect the debt from the Palestinian Authority."

Israel Electric Corporation ) is again threatening to cut off electricity to the Palestinians and to petition the High Court of Justice against the state, after the failure of talks to reach a settlement on the payment of debts of Palestinian customers. Sources inform ''Globes'' that, last week, IEC chairman Yiftach Ron-Tal warned in a letter to Prime Minister Benjamin Netanyahu, "We have no choice but to take legal action against the state, against the Palestinian Authority, and Jerusalem District Electricity Company Ltd. At the same time, we intend to restrict the supply of electricity."

Ron-Tal has previously threatened to cut off power to the Palestinians, including at a Knesset Finance Committee discussion. In that discussion, Finance Committee chairman MK Nissan Slomiansky (Habayit Hayehudi) called for civil disobedience by Israeli electricity consumers, saying they should stop paying their electricity bills until the Palestinians' debt was settled. Legal experts say that cutting the Palestinians' power would cause Israel legal problems, because it could be considered a war crime.

In the past few months, Israel and the Palestinian Authority have held talks to settle the debt, but the talks, managed by National Security Council chairman Yossi Cohen, broke down following the Palestinian Authority-Hamas reconciliation, and the Israeli government's decision to halt peace talks with the Palestinian Authority. Although the government has decided on a series of economic sanctions against the Palestinian Authority, including halting the transfer of tax receipts, it has not yet allowed IEC to use this money to offset the debts of Palestinian consumers.

IEC is the sole electricity provider in Judea and Samaria, and it is the main supplier in the Gaza Strip. The debt, which grows by NIS 80 million a month, now totals NIS 1.5 billion, of which NIS 566 million is owed by the Palestinian Authority and NIS 966 million is owed by Jerusalem District Electricity Company.

Classifying the Palestinians' debt as bad or doubtful could have serious repercussions for IEC's credit rating, and the worsening of its equity-to-balance sheet ratio could be cause for an immediate recall of part of its debt. However, IEC's auditor, Brightman Almagor, does not see any real risk at this time that the debt will not be paid, even though IEC admits that it has no way to collect it.

IEC said in response, "IEC is using every means at its disposal to collect the debt from the Palestinian Authority."


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