Tzachi David, deputy head of the budget department at the Ministry of Finance, warned at the last Israel Lands Council meeting in December about Rami’s situation. Against the background of concerns in the Ministries of Finance and Housing, the council decided to establish a subcommittee to examine economic and funding models for Rami’s activities. The annual will be able to serve its activities and liabilities.
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“On the one hand, the development of the country is the overriding goal of both Rami, the Israeli government and ours as the Ministry of Finance, and there is the desire to leverage, advance, develop,” said David. “On the other hand, we also have fiscal and budgetary responsibility to see that things do not We are reaching a crisis. ”
rummy, monopoly Which owns and manages about 90% of the state’s land, is a government authority defined as a “business enterprise”. As such, it subsists on land marketing receipts and does not rely on the state budget. In recent years, these receipts have averaged about NIS 8.5 billion annually. The problem is that at the same time, the scope of the Emir’s obligations, mainly due to the complexity of the transactions and the effort to open more tenders for land that will be worthy of construction and development.
It was only recently revealed in “Calcalist” that Rami refuses to finance the evacuation of land in Haifa Bay, for fear that the receipts will not cover the huge expenses. This is a project led by the head of the National Economic Council, Avi Simhon, and includes evacuation of land in Haifa Bay for housing projects. Incoming Remy Yankee Quint informed Simhon that Remy would not agree to fund the evacuation of the land, including the evacuation that Simhon announced of a Zen plant by 2025. Quint recently estimated that in the coming years Remi’s receipts will be NIS 7.5‑8.5 billion a year.
At the same time, in recent weeks Rami has been busy accelerating land marketing throughout the country. Among other things, the effort stems from the fact that 2020 ended in an unprecedented slump in marketing – just over 20,000 apartments – against the backdrop of the Corona epidemic and paralysis in the PA and many local authorities.
According to Quint, “The increase in marketing in the coming months is expected to provide a response to demand throughout the country and at the same time it will increase the volume of revenues in the authority’s coffers, especially in light of the abolition of land subsidies in the demand and strength areas of the housing market.”
According to David, who until recently served as director of the Tel Aviv district in Rami, “In recent years, the authority has become a monopoly that maximizes profits, or at least has been perceived as such, a monopoly that maximizes activity, with very, very large numbers of land markets. “It has a deep connection to the leverage of the land and Rami’s ability to produce the necessary infrastructure, for example through revenue and the management of strategic land clearance agreements. We are very, very much in favor, but Rami’s accumulation of liabilities today stands at more than NIS 40 billion.”
Rami’s main commitments concern the financing of infrastructure, various strategic agreements and the evacuation of IDF camps. In light of this, the Israel Land Council – the body responsible for the country’s land policy – decided at the end of December to establish a subcommittee that will now examine “the optimal use of state land – as a lever for development and growth.”
The committee is to examine economic and funding models for RMI’s activities, regarding “economic evictions, strategic agreements, examination and updating of existing arrangements in urban renewal and land designated for metro.”
David emphasized to the Israel Land Council that “the new committee will give its opinion on Rami’s accumulation of liabilities and its ability to meet them before taking on new liabilities. Rami took on a lot of commitments. Every year in the March area we are sure there is a problem, and at the end of the year somehow get along. The meaning of leverage is like in the private sector. Ilan Ben Dov took leverage, Nochi Dankner took leverage, Rami also took leverage and you Want her to take more leverage. Therefore, before proposing new proposals, we need to take care of Rami’s ability to pay the full existing obligations. “
According to Yair Pines, director general of the Ministry of Housing and the person who initiated the establishment of the committee, “the truth must be told, the accumulation of liabilities on Rami’s revenues stems first and foremost from initiatives by the Ministry of Finance. Sharp and smooth.”
Between May 2015 and May 2020, Remi was under the responsibility of the Ministry of Finance, following the decision of the then Minister of Finance, Moshe Kahlon, to take over the entire “real estate toolbox” in order to accelerate the pace of marketing.
Pines, who previously served as deputy head of the budget department at the Treasury, stressed that “there is no point in taking more leverage. The opposite is true. The goal is to see that the issues being addressed and on the table are reasonable issues, both in the context of leverage and real estate policy.”
Pines stressed that the need to control and inform the Israel Land Council of “very, very big things happening in RMI” is necessary. The main concern Pines expresses is the establishment of additional commitments on RMI for the construction of the Gush Dan metro project (“a huge huge issue” as he puts it) , Since “the Ministry of Finance sees RMI and RMI’s revenues as a very central source of funding for the metro.” The metro budget is estimated at NIS 150 to 200 billion, and it is still not clear how the state will finance the huge project.