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Israel Drops Plans to Buy Arab-owned East Jerusalem Firm

April 22, 1981
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— The government apparently has backed away from its plans to purchase the Arab-owned East Jerusalem Electric Co., a controversial move that had aroused considerable opposition in Israel as well as in the Arab community. This was indicated today following a meeting here between Energy Minister Yitzhak Modai and Anwar Nusseibeh, chairman of the utility.

Both men refused to comment on their discussion but sources close to Nusseibeh said it was “good.” It is believed that Modai has concluded that the disadvantages of taking over the Arab firm would out-weigh the advantages. Israeli opponents of the projected purchase, including Jerusalem Mayor Teddy Kollek, had long argued that such a move would be unwise politically and appear provocative.

The deciding factor may have been the Supreme Court’s ruling earlier this year affirming the government’s right to purchase the electric company’s facilities in East Jerusalem but not its franchise on the West Bank. The utility’s generators are in East Jerusalem but the bulk of its customers are on the West Bank, including Jewish settlers. The latter had been urging the government to take over the company on grounds that it provided poor service.

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