Energy Infrastructure Company to Pay Haifa Municipality NIS 200 Million in Road Paving Levy

Energy Infrastructure Ltd. will pay the Haifa Municipality NIS 200 million as a road paving levy, according to a settlement agreement approved by the Supreme Court. The company, formerly known as Oil and Energy Infrastructure, is state-owned and its bonds are publicly traded. The levy is to be paid in five installments ranging from NIS 25 million to NIS 57.5 million, starting in mid-October and concluding in April 2030.

Energy Infrastructure has not yet reported the agreement to the stock exchange, leaving uncertainty about whether it has already made provisions for this liability or if the sum could lead to a loss. The NIS 200 million settlement represents approximately 1% of Haifa Municipality's current annual budget of NIS 4.2 billion, plus NIS 782 million for development.

The dispute originated in June 2021 when Haifa Municipality demanded NIS 169.5 million from the company for road construction and a bridge over the Gadur stream, as well as a change in land use from agricultural to industrial. Energy Infrastructure contested the claim, arguing its property was not adjacent to the construction, the work did not constitute paving, and there was no direct road access to its land.

In February 2024, the Haifa District Court rejected the company's appeal, upholding the municipality's claims regarding road construction and land use change. Energy Infrastructure appealed to the Supreme Court, reiterating its arguments. During the Supreme Court hearing in July, justices suggested the parties negotiate the updated levy amount, which had grown to NIS 260 million including interest and linkage.

The final settlement of NIS 200 million was agreed upon, with payments scheduled through April 2030. Energy Infrastructure Ltd. is involved in various aspects of the energy sector, including fuel ports, oil storage, and a network of pipelines for petroleum products.