IEC faces major shortfall

TEL AVIV, Israel, May 28 (UPI) -- Israel Electric Corp. will postpone investments.

The firm will, for the first time, be forced to delay new investments because of its financial situation. IEC Chief Executive Officer Amos Lasker has ordered the 2008-2009 development plans for the company's distribution, transportation and transformer network to be scaled back by $91 million from an originally planned $243 million, the Globes newspaper reported.

The IEC reportedly faces a cash shortfall because of a $274 million loss caused by delays in switching to natural gas at the Gezer and Hagit power stations. The switch is now scheduled to take place in July, but until then, the company has to use more expensive diesel to power its stations.

Minister of the Interior Meir Sheetrit opposes the construction of another coal-fired power station in Israel. He said that Israel should build solar power stations to save fuel and reduce air pollution.

Despite the cost, Sheetrit said that a natural gas-fired or diesel power station would be a better solution than a coal-fired plant.