Knesset Unit Looking into Two Firms That Will Deliver Sinal Oil to Israel

The Knesset’s Economic Committee summoned Energy Minister Yitzhak Modai today to explain why two companies owned by close personal friends of Premier Menachem Begin were selected to serve as middlemen in the delivery of Sinai oil to Israel until the normalization of relations between Israel and Egypt allows the two countries to deal directly. Eyebrows were raised when it was reported that the companies would receive fees and commissions amounting to about $l million for services they will perform only during the months of January and February, 1980.

Modai hotly denied this at a press conference he called here today. He said the two contractors would receive only $20,000, and that the rest of the amount represented expenses that Israel would have had to assume anyway if it transported the oil itself. He insisted that there was no preferential treatment and that the two firms were, in fact, doing Israel a favor that other companies approached by the government had refused to do.

One of the companies is owned by the Israeli millionaire Shaul Eisenberg, 58, who runs a worldwide commercial empire from Israel and has been associated with successive governments since the late Pinhas Sapir was Finance Minister. The other company belongs to Nissim Goon, a well known philanthropist and president of the World Sephardi Federation. Both are long-time associates of Begin. A third firm involved in the deal is Beitish owned and has been operating in the Sinoiorea for some time.

Gad Yaacobi, a Labor MK who is chairman of the Economic Committee, said he wanted to know how the companies were selected and who made the decision. Modai said it was the Egyptians who determined which companies would be chosen. He said that at the outset of negotiations over Sinai oil, the Egyptians submitted a list of five corporations out of which Israel was to choose four. The Eisenberg and Gaon companies were among the four chosen. Subsequently, the number was reduced to three companies at Egypt’s request.

Modai explained that under the agreement with Egypt, the movement of Sinai oil to Israel would be handled in three stages. During the first stage, until the end of this year, the British firm would act as middleman. In the second stage, be ginning in January, the Eisenberg and Gaon companies would join At the end of February when the normalization of relations takes effect under the terms of the Israeli-Egyptian peace treaty Israel’s three national oil companies will take over and the oil will be transported in tankers flying the Israeli flag.

Israel will buy about 150,000 tons of crude oil a month from Egypt. It will be transported to Eilat and from there by pipeline to the refineries in the north.