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Israeli electric company may write off 1.3 billion shekels PA debt

The Israel Electric Corporation (IEC) is considering the possibility of writing off the debt owed by the Palestinian Authority (PA), which has reached 1.2 billion shekels ($375 million) as of last month, Yedioth Ahronoth's business appendix reported.

The publication added that the IEC is considering the possibility of rating this debt as either doubtful debt or as bad debt, in which case it is incumbent on the company to declare it as an expense item in its budget, thus reducing its capital.

The newspaper also stated that the company may be forced to resort to using this measure after failing to find a way to collect these debts. The Israeli Electricity Authority refuses to add these debts to Israeli consumers' bills.

Ynet noted that the PA's debts to the power company are expected to reach 1.4 billion shekels ($399 million) with the release of the company's annual report next month. This is equivalent to 12 per cent of the company's total income during the third quarter of 2013 because these debts increase by 70 million shekels ($20 million) a month.

In 2013, the debt reached 372 million shekels ($106 million) after the Israeli Ministry of Finance took a part of the amount owed by the PA from customs' revenue. The debt then increased to reach 964 million shekels ($275 million) in the third quarter of 2013 and is now approaching 1.4 million shekels.

IsraelMiddle EastNews
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