Economics Committee postpones opening Israel postal market to Jan 2006

The Knesset Economics Committee have approved a new bill postponing the opening of the postal market to competition to January 31, 2006, instead of July 2005. The price of domestic letters will rise 11percent from NIS 1.30 to NIS 1.50, and the price of domestic bulk mail will rise 9percent on the same date.

The Knesset plenum will hold the second and third readings on the amendments to the Postal Authority Law (1986) before recessing in two weeks.The Economics Committee approved the amendments to the postal law retroactively. The postal law was passed as part of the 2004 Budget Arrangements Law. The committee voted on the only outstanding clause, which regulates Postal Bank activities under the government postal company, which will replace the Israel Postal Authority.

The amendments were inserted in accordance with an MOU signed between the Ministry of Finance, Postal Authority, and a representatives of the Postal Authority union. Economics Committee chairman MK Shalom Simhon (Labor) mediated the agreement.

Regarding the Postal Bank, the bill stipulates that the Postal Bank Law (5711-1951) will be annulled on the date the government postal company begins operations and the Postal Bank will transfer its financial services to the postal company, in accordance with a permit by the Governor of the Bank of Israel. However, regulation and supervision of these services will be in accordance with a government decision that has not yet been taken.