Overcoming the vehement objections of the Antitrust Authority, Prime Minister Ariel Sharon on Wednesday decided to allow the Israel Electric Corporation to build a pipeline leading natural gas from offshore fields to the shoreline.
The proposal to allow the IEC to take the tender was brought by the National Infrastructures Ministry, and won the support of the Finance Ministry.
The value of the project to the IEC could be around $350 million.
The project's ultimate goal is to convert power stations running on crude oil, to natural gas, which is cheaper and less harmful to the environment.
The conversion is expected to save about $60 million a year in the first years, and at a later stage, about $100 million a year.
However, the Antitrust Commissioner, Dror Strum, claimed during the discussion with the prime minister, that granting the project to the IEC contravened the law.
The Mekorot water company, which was allowed to establish a water desalination plant on condition that it not serve as the plant's operator, is doing everything it can to avoid publishing at tender for an operator, Strum added.
The government would do better to give the pipeline project to the Africa Israel-Paz group, without a tender, than give it to the IEC, Strum said.
The Africa Israel-Paz group had bid to run the pipeline project, but the tender was canceled.
The IEC will finance the project through bond issues and loans from Israeli and foreign banks. Also, the Infrastructure ministry will set up a government assets company that will buy some of the infrastructure to be built from the IEC, and operate the infrastructure until an operator can be chosen through a tender process, as required by law.
An interministerial team consisting of officials from the Infrastructure, Finance and Justice ministries will closely accompany the project and supervise its costs.
Upon learning of the plans, Sharon said there was no need for further debate and implementation should start immediately, despite Strums objection that the IEC is a monopoly over natural gas consumption, and should therefore be prevented from servinf as a monopoly over its transport.
While Strum cannot prevent the IEC from receiving the project, he can act to have the infrastructure transferred to private hands after its construction.