Palestinian Authority defaults electricity bills for years


The Palestinian Authority owes the Israel Electric Corporation 400 million shekels ($128 million) in unpaid electric bills for Palestinian residents, Minister in the Finance Ministry Hamad Amar (Yisrael Beytenu) said late Monday [Nov. 1] in response to a query by MK Orit Strock (Religious Zionist Party). Writes Hugh Fitzgerald

Israel supplies most of the electricity used by the Palestinians in the West Bank and Gaza. For several years, the PA has not paid its mounting debt to the Israel Electric Corporation (IEC), which now amounts to a total of 400 million shekels. Israel has uncomplainingly carried that mounting debt — until now.

A report on how Israel plans to exercise its right to payment is here: “‘Israel will not write off Palestinians’ electricity debt,’” by Ariel Kahana, Israel Hayom, November 2, 2021:

The Palestinian Authority owes the Israel Electric Corporation 400 million shekels ($128 million) in unpaid electric bills for Palestinian residents,Minister in the Finance Ministry Hamad Amar (Yisrael Beytenu) said late Monday [Nov. 1] in response to a query by MK Orit Strock (Religious Zionist Party).

Amar said that Israel would not forgive the debt and added that he had instructed the Israel Tax Authority to “coordinate a framework with the PA that would allow the debt to be removed gradually from the tax money Israel transfers [to the Palestinians].”

The IEC produces most of the electricity consumed by the Arab residents of Judea, Samaria, and the Gaza Strip. According to agreements between Israel and the PA, the PA is supposed to pay for its residents’ electricity consumption.

Over the years, the Palestinians have amassed a massive debt for their electricity consumption, but the PA claims that it is unable to collect the money owed by residents who do not pay what they owe.

The PA has agreed to pay Israel for the electricity consumed by individual Palestinians. It then is supposed to collect from those individuals the amounts paid for them by the PA. But Palestinians are not reimbursing the PA, which claims it has no way to make them do so. It’s a curious claim, considering how much power the PA otherwise exercises over the Palestinians it rules over. Are we to believe that neither threats nor soft cajoling will work, and the PA remains helpless to exact electricity bill payments from those it controls?

Israel has made a few attempts at plans to collect the PA’s electricity debt. In 2017, a deal was reached that would allow Israel to deduct payments for the PA’s outstanding electric debt from the tax money it collects on behalf of the PA….

This deal, however, was never put into effect. Israel did not follow through and keep as payments on the PA’s debt for electricity part of the money it had collected as taxes for the PA and that ordinarily would be transferred by Israel to the PA. The Israeli calculation at the time was that the PA was in such dire straits that it was in danger of losing control in the West Bank to Hamas, and that however bad the PA was, for Israel it was still preferable to Hamas. The IEC continued to supply electricity to the PA, and the PA continued to run up an ever-greater debt to the IEC.

The Israeli government in 2019 came up with a plan to rescue the PA, that would allow it to settle its electricity bill. Israel agreed to provide the PA with a “special loan” of $155 million, earmarked for paying down its outstanding electric bill; the electricity would then keep being supplied by the IEC without any interruption of service. The “special loan” would then be repaid by the PA to the government of Israel at a later date, taken from the tax money Israel collects for the PA and normally transfers to it.

Israel is not going to write off the debts of the PA to the IEC, no matter what an Arab MK belonging to the far-left Meretz party may suggest. A loan is not a gift. Israeli leaders know that their loan of $155 million will be sufficient to allow the PA to pay in full its outstanding electricity bill, and that there is enough tax money being collected for the PA by Israel to pay back, over a short time, that loan. Of course, it is in Israel’s interest to keep the PA in power. The Israelis know how unpopular Mahmoud Abbas is; more than 80% of Palestinians have expressed their dissatisfaction with his rule, and especially with the colossal corruption he, his family, and his cronies, have engaged in; Abbas and his sons Tarek and Yasser have amassed a $400 million fortune. And Abbas is a despot, now in the sixteenth year of his four-year term as President, a man who first holds out the possibility of elections and then cancels them when he realizes he would lose, crushes his opponents, and even allows his goons to murder them, as happened this summer to the leading dissident and enemy of Abbas, Nizar Banat. But on the other hand, Abbas does allow continued security cooperation with Israel: Hamas is as much a threat to him as it is to Israel, and Israelis believe it is in their interest to help shore up his position, given the alternative — Hamas — to his rule..

Recently, Israel announced it would grant legal residency to 4,000 Palestinians living in the West Bank and Gaza, allowing them to get official IDs, as a gesture to the Palestinian Authority. This is one of a series of gestures announced after the meeting this August between Israeli Defense Minister Benny Gantz and Palestinian President Mahmoud Abbas, aimed at strengthening the PA. Other gestures include authorizing an additional 15,000 permits for Palestinian laborers to work in Israel and its settlements. And in late October, Israel gave the go-ahead for 1,303 new dwellings to be built by the Palestinians in Area C, where Israel exercises complete control, of the West Bank. Finally, there is that ”special loan” of $155 million from the Israeli government, which will allow the PA to pay down its mounting electric bill. The lights will not be turned off in the Palestinian territories. And the payment plan is simple: from the taxes that Israel collects for the PA, it will now withhold, from transfer to the PA, the amounts needed to pay down both that “special loan,” and the new debts that will need to be paid for electricity provided by the Israelis.

Once again the Israelis will have come to the rescue of the Palestinian Authority. But Jerusalem should not expect any gratitude from Mahmoud Abbas or any appreciation from the Bidenites in Washington, for its attempts to shore up the PA. The Israelis will continue to prop up Abbas for as long as they can, for bad as he is, he is better than Hamas. And the lights will not be going out in Ramallah, or Jenin, or Gaza City.


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