"The 10% hike in the electricity rate hike will not only affect electricity bills, but will also result in higher prices for consumer goods and water, which will further raise prices for goods," said Manufacturers Association president Shraga Brosh today. "This is the opposite of the policy that the government is trying to do, and should do."
Brosh proposed an alternative to the electricity rate hike: allow Israel Electric Corporation (IEC) (TASE: ELEC.B22) to use its cash reserves from overpayments by the public, which total NIS 2 billion. This money is slated for investment infrastructures, and Brosh says IEC should use it to absorb the rate hike.
Brosh says that IEC should raise capital for investing in infrastructure through a government-backed bond issue. "Since continued investment is critical for development of the electricity grid and IEC's financial position prevents it from raising capital at a reasonable price, the government should provide guarantees for the company. This would solve the problem of raising capital, while leaving electricity rates unchanged on one hand, while implementing the investment plan that is critical for development of the electricity grid on the other."
No comments:
Post a Comment