Palestinian Authority already owes Israel’s electric company a whopping NIS2 billion.

By:  Batya Jerenberg – worldisraelnews.com

Israel will start withholding tens of millions of shekels per month from money it is obligated to transfer to the Palestinian Authority (PA), in order to service a debt to the electric company that has grown to two billion shekels ($527 million) over the last three decades, Israel Hayom reported Tuesday.

Finance Minister Bezalel Smotrich (Religious Zionist Party) instructed his staff three months ago to find a way to start collecting the money, the report said.

While the PA has occasionally made payments towards its decades-old electric bill, the accumulated sum was too much for the right-wing minister to ignore.

The whopping debt also endangers the financial health of the Israel Electric Corporation (IEC), the country’s sole integrated electric utility, according to a report written by the State Comptroller two years ago.

Under a law passed as a result of the Oslo Accords, the finance minister can deduct money the PA owes to such companies as utilities from the tax funds the government collects from Palestinian employees working in Israel, which Israel then transfers to the Palestinian Authority each month.

The plan to implement the law was complicated by several details of the Israel-PA electricity distribution arrangement, however, as such an offset could only be implemented from corporations under the PA’s direct control, and there was a middleman company that actually bought the electricity from the IEC.

Legal minds at the finance ministry worked on the issue, and found links proving that the core of control of the East Jerusalem Electric Company could be traced back to the PA. This included the fact that seven out of 18 directors on its board are members on behalf of Palestinian municipal authorities.

Smotrich has now signed off on the first monthly deduction, which will be transferred straight to the IEC. The amount is expected to range between NIS20-30 million each month.

This will only pay for the Palestinians’ current electricity usage, the report pointed out, with the 2 billion shekel hole that was already dug being something that will require attention at the highest political levels, probably necessitating outside aid.

Whether the political echelons will be willing to take it on, considering that it has become such a problem due to past governments ignoring the issue, remains to be seen.

Back in September 14, 2016, World Israel News reported that Israel and the Palestinian Authority (PA) signed an agreement that will settle the Palestinians’ multi-billion Shekel debt to Israel’s Electrical Company (IEC), settling a decade-long dispute on the matter.

Israel’s Minister of Finance Moshe Kahlon signed for Israel, and the agreement was reached through the office of the Coordination of Government Activities in the Territories (COGAT), the IDF unit responsible for implementing government policy in Judea and Samaria and vis-à-vis the Gaza Strip. The Palestinian Minister for Civil Affairs Hussein A-Sheikh signed for the PA.

The agreement stipulates that the PA will pay an initial NIS 500 million of the two billion Shekel ($530 million) debt, and in return will receive control over the power lines running through the PA.

Another billion Shekels will be paid by the PA in installments spanning an extended period of time, but the remaining 500 million shekels will be permanently erased from the PA’s debt.

The IEC provides around 88 percent of total electricity consumption to the PA.

“The agreement will also assist in reforming and developing the PA’s electric and energy sector,” COGAT stated.

(WorldIsraelNews.com)