Calcalist, Amitay Gazit, 26.05.2020
After the Corona crisis, there is now another threat to the stability of the construction industry: the PA's struggle with the annexation plan. The border crossing between Israel and the PA is expected to reopen on Sunday, two months after the closure imposed by the Corona epidemic, and construction, agriculture and industrial workers will be able to return to their jobs. However, last week, PA Chairman Mahmoud Abbas stated that, because of the annexation intentions, he would cease security and civilian coordination with Israel. Against this background, the construction industry estimates that the number of workers entering Israel will be very low, if at all.
If this assessment comes to fruition, it would be a blow to the industry where activity was dramatically reduced following the Corona crisis. At the outbreak of the epidemic, 63,000 Palestinians worked in the construction industry in Israel. By May, their numbers had dropped to 17,000. Today, the number of employees is zero, partly because many returned to their homes on the weekend of Eid al-Fitr. Most of them work in skeleton and construction, and it is estimated that in the past two months, only about 30% of construction sites have been fully worked.
“Increase foreign quota”
A work permit procedure is being carried out in front of the Palestinian Ministry of Civil Affairs. The permit is valid for a period of three months to two years. This Sunday, work permit holders will be able to cross the border, but the problem will arise when the permits expire. A security system official told Calcalist that the system will know how to find a solution to the issue of permits. However, even if a solution is found, without coordination between the PA and the security forces, difficulties in opening the crossings are expected, even for those with work permits. In addition, even if the border crossings are opened, there is concern that many of the workers will be heard calling for Abbas not to enter Israel.
Contractors are now asking the government to increase the quota of foreign workers in the industry. Raul Sarogo, president of the Israel Builders' Association: "The industry cannot continue to be a hostage in Abu Mazen's hands. The Corona era has shown that in the hands of the Palestinian Authority there is an element that has a decisive impact on the Israeli economy. The state, meanwhile, must bring at least another 30,000 foreign workers here. "
Drop in redemptions
Continuing such a dramatic shortage of workers can be devastating for the industry. Companies that fail to finish projects on time may be sued, be caught in lengthy legal proceedings, or worse, from the perspective - they will have to pay millions of shekels of compensation. This scenario threatens residential construction companies and companies that build public buildings and infrastructure for the government.
The Justice Department has set up a team, headed by Deputy Attorney General Erez Kaminitz, to look into how to handle the situation and whether to recognize Corona as an unexpected superior force that warrants delay. This week the team is expected to submit its recommendation to the Minister of Justice.
Another problem affecting the industry is the drop in sales volume. On May 13, the CBS reported that 37% of businesses in the construction industry reported a fall of more than 50% in revenue in May, compared with a 25% decline in all businesses in the economy. The construction industry leads the share of companies reporting a 50% or higher decline in revenue The retail trade sector where 33% reported this.
Despite the difficulties, the state has not yet created an aid mechanism for construction companies. Only 22% of applications from state-owned construction loan companies were accepted, compared with 70% in all sectors of the economy.