The Israel Electric Corp (IEC) is taking a Palestinian firm to court after the firm has refused to pay $150 million in unpaid bills.
Officials at the IEC said that it had been taking part in negotiations with the firm to settle the debt. However, negotiations have collapsed and the IEC has no choice but to take legal action.
A company statement said that the IEC filed a lawsuit at the Jerusalem District Court against the Jerusalem District Electric Company (JDECO) in the amount of 531 NIS ($153 million/ 111 million Euros).
JDECO, a private company, purchases electricity from Israel and supplies it to Palestinian neighborhoods in Jerusalem as well as the Palestinian Authority. The IEC said it decided to sue after “intensive contact” with JDECO and PA officials failed to resolve the debt.
The PA also owes money to the IEC. Failing to collect money from Palestinian customers, the PA has racked up millions of shekels in debt owed to Israel.
AFP reported that the combined amount of debt owed to the IEC by JDECO and the PA is a staggering 1.5 billion NIS ($434 million/315 million Euros). Two thirds of the total debt is owed by JDECO.
Israel’s Finance Ministry has already begun taking steps to collect the debt owed by the PA. Each month, the finance ministry deducts funds from monthly taxes it collects on behalf of the PA. However, in the case of JDECO, Israel does not have the ability to deduct money.
Despite political tensions with the Palestinians, Israel has refused to cut off electricity to Palestinian areas. During the last round of peace talks, Israel and the PA had been negotiating the debt. However, with the announcement of uniting with Hamas, all negotiations have been halted.