Israel Postal Authority fights privatization in Court

The Postal Authority yesterday asked the High Court of Justice to overturn a Communications Ministry plan to privatize international mail services.

The privatization is slated to begin this Sunday.

The petition argued that the decision, which was approved by the communications minister, is illegal for two reasons: It contradicts a cabinet decision from July 30, 2002, and the minister failed to consult with the Postal Authority as required by law.

The petition also argued that since the Postal Authority’s rates are controlled by the government, and since the government has refused the authority’s repeated requests to be turned into a corporation, it will be unable to compete on equal terms with the commercial companies that are expected to enter the market.

As a result, it said, the Postal Authority is liable to lose the most lucrative branch of the mail business but will still be stuck with local mail delivery services – whose rates have been steadily declining in real terms to the point where they are now among the lowest in the world and do not cover the costs involved. This is liable to impede the authority’s ability to provide local mail services, the petition said.

The petition also claimed that the only country in the world that has thus far opened postal services to competition is Sweden – and even Sweden first turned its state-owned postal authority into a corporation and abolished price controls on postage. This development, the petition said, caused postage rates to surge 72 percent within five years and forced many local post offices to close.

As a result, it added, it is now cheaper to send a letter from Jerusalem to Stockholm than from one Stockholm address to another.