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GAZA CITY, Gaza Strip — The Israeli government and the Palestinian Authority have reached an agreement under which the PA will begin paying its massive debt to Israel Electric Corp. (IEC), which in turn will forgive part of the debt. The agreement also will allow for competitive internet service in the West Bank.
Hussein al-Sheikh, the chairman of the Palestinian General Authority for Civil Affairs, said in a Sept. 14 press release that the deal will affect the organization of the energy and communication sectors in Palestine. Wataniya Mobile will begin operating in the Gaza Strip, 3G wireless internet access will be activated in both the West Bank and Gaza Strip by the end of 2016, and the Palestinian government will assume management of the electricity sector.
The agreement also allows the Palestinian government to take back full control of the power lines scattered across the West Bank, and calls for temporarily lowering the electricity tariff by 1.5% until a final tariff agreement is reached.
Palestinian company Jerusalem District Electricity Co. purchases electricity from IEC, and distributes it in and around Jerusalem. The PA distributes electricity to the rest of the West Bank areas and some of the Gaza Strip.
In late March, the IEC reduced the supply of electricity to the West Bank due to the PA electricity debt. There were subsequent power outages in many cities of the West Bank, most notably Jenin and Nablus. The IEC threatened to do the same in West Bank cities until the PA debt was settled.
According to the IEC agreement, the PA will pay immediately about 570 million Israeli shekels (roughly $151 million) in one payment. About 500 million shekels ($133 million) will be waived. The rest (about 1 billion shekels) will be paid over 48 months. Mohammed Makadmeh, the general manager of media and international organizations in the General Authority for Civil Affairs, told Al-Monitor that the agreement was signed in the presence of representatives of the Israeli ministries of Finance and Defense and the Palestinian ministries of Civil Affairs and Finance.
However, Makadmeh pointed out, "These understandings have no guarantee and Israel can disavow them based on the 'logic' of power and defiance of international and humanitarian law.”
He added, “If and when we pay the full electricity bill, then Israel would stop deducting money from the taxes imposed on goods destined for the PA territories to settle the electricity debt."
Israel also agreed to activate 3G service in the West Bank and the Gaza Strip, with no strings attached, according to Makadmeh, and to allow Wataniya Mobile to operate in Gaza based on a previous agreement.
Wataniya Mobile Palestine is owned in part by the Palestinian Investment Fund. It launched its services in November 2009 in the West Bank, but has been unable to operate in the Gaza Strip because Israel said it failed to get permission from the proper authorities and to get the required frequencies. Although the company imported all the necessary equipment in 2013 for the operation of its network in Gaza and paid the Israeli custom fees, it has yet to get Israeli approval to introduce the equipment into Gaza. The equipment is currently in the company's warehouses in the West Bank.
Samir Abu Mudallalah, an economics professor at Al-Azhar University, told Al-Monitor about what he views as problems with the overall agreement.
“The electricity agreement does not offer anything new to the PA and it will only lead to deepening the economic dependence on Israel and tying up the Palestinian economy. As this agreement increases Israel’s control over the Palestinian economy, it seems inconsistent with the previous decisions announced by Abu Mazen [President Mahmoud Abbas] in his speech before the United Nations on Sept. 27, 2015, which calls for economic disengagement from Israel and reconsidering the economic relations with Israel, as stipulated by the Paris Convention.”
He added, “There are no Israeli guarantees that the agreement will be applied, and it will not be long before Israel disavows it, as it has a political, economic and security agenda that cannot be affected — especially if the agreement proves to be contrary to its interests."
Mudallalah did note the importance of allowing Wataniya Mobile to operate in Gaza, which would break Jawwal's current monopoly, and of activating 3G service in the territories, which currently have only a 2G network.
He also stressed “the need for an agreement with the Hamas government in Gaza in this regard and the need for the two sides to seek to relieve the Palestinian citizen.”
Jawwal has been the only company operating in the Gaza Strip since 1997, and it is making huge profits because it has no competition. In the West Bank, Jawwal competes with Wataniya Mobile.
Haitham al-Shawa, the director general of Gaza operations for Wataniya Mobile, who was appointed to monitor the company’s work in the event of Israeli approval, told Al-Monitor, “We have been notified by the Palestinian side about Israel’s agreement to allow the entry of the necessary equipment in order for Wataniya Mobile to start operating in Gaza as per the above agreement. We are waiting for more details in this regard, especially about new understandings with Israel regarding the 3G service. Israel had suggested in 2014 having the 3G service in the West Bank and the Gaza Strip running through an Israeli intermediary, which the PA rejected for affecting its sovereignty.”
The Ministry of Communications and Information Technology in Gaza ratified in February 2013 the granting of a license to Wataniya Mobile to operate in Gaza, and the company again was ready to import $15 million worth of equipment, but Israel refused to allow its entry for political and security reasons, which delayed it from operating in Gaza until today.
Al-Monitor tried to obtain a statement from the Ministry of Communications and Information Technology in Gaza about this agreement, but the ministry said it is not a party to these understandings and did not receive any details about them. The ministry added that it does not “mind the Wataniya company working in the Gaza Strip so long as it has obtained the required license and paid the required sum to the [Hamas] government, because this serves the public interest and leads to honest competition in the field of telecommunication.”
As with previous agreements, and in the absence of sufficient guarantees, this agreement awaits implementation in the hopes that it will not be delayed by any Israeli political and security measures.
