LONDON The political upheaval and pending elections in Israel could delay approval of government grants towards Intel’s proposed $4.2 billion wafer fab in Kiryat Gat.
The Investment Promotions Center approved the grant of $525 million last week for what would be the largest industrial investment ever made in Israel.
However, the Finance Committee must first approve the six-year grant, under a prior agreement with the Ministries of Finance and Industry, Trade and Labor that the grant would not be part of the Investment Center’s already reduced regular budget.
According to a report in Globes online, the chairman of this committee Wednesday (Nov. 23) postponed a discussion on the grant. Committee members want to summon Ministry of Industry, Trade and Labor director general Raanan Dinur to explain the details of the project. He is expected to attend the Finance Committee’s meeting next week.
Earlier this month, it was believed the government had approved the grant towards the project ( see November 14 story ). Some preliminary work has already started at the site.
Sources close to the Investment Center are reported to have told the news service that under the current political instability , the Finance Committee would postpone approval of the Intel grant.
The country’s Manufacturers Association has called for the elections to be held as soon as possible so that the new administration can quickly review and pass the budget.
The Association is concerned that if the 2006 budget is not approved, hundreds of millions of shekels for investment in industry and R&D grants could be delayed.