Even electricity is highly charged topic on West Bank

In the heated political environment of the Israeli-occupied West Bank, few issues are exempt from controversy. Take the case of Jerusalem District Electric Company, or JDEC, the Palestinian company supplying electrical power to 100,000 mostly Arab residents in and around East Jerusalem.

For 60 years JDEC, the largest Palestinian enterprise on the West Bank, has operated with relative autonomy under back-to-back concessions granted by Britain and Jordan.

Since 1967, when Israel seized control of the West Bank, the company has served as a symbol for many Palestinians of the kind of independent enterprise needed to make viable the dream of eventual Palestinian autonomy or statehood.

But a combination of factors, including alleged poor Palestinian management, Israeli operating restrictions, and apparent Jordanian indifference, have brought the East Jerusalem-based company to the brink of financial ruin.

With its current concession due to expire at the end of this year, JDEC's days as an independent Arab concern now seem numbered.

Israeli officials, who insist the question of what to do with JDEC is essentially economic, say the company can continue selling its electricity to its Arab customers, but only if it does so under direct Israeli control.

Palestinians, many of whom acknowledge that this arrangement may be the best deal attainable given the company's financial plight, worry that JDEC's demise will increase the West Bank's dependence on Israel while tightening Israel's political control over East Jerusalem. East Jerusalem, which is part of the West Bank, was annexed by Israel in 1967.

``To concede Israel's authority to terminate the concession is seen by Arabs as conceding Israel's annexation of East Jerusalem and bringing it under Israeli law,'' says an Arab official of a private West Bank relief agency.

``The symbolism is very important,'' adds Daoud Kuttab, a prominent West Bank journalist. ``JDEC is the last Palestinian stronghold. It's like a big castle that's fallen. It makes the defeat of smaller castles much easier.''

Under the terms of a compromise package ratified last week by the Israeli parliament, JDEC will be allowed to operate for 12 more years under a special permit.

The deal also removes from JDEC's customer base Jewish settlements, Israeli military installations, and Jewish neighborhoods in East Jerusalem now served by the company.

If JDEC officials fail to agree to the plan, warns an Israeli Energy Ministry source, rights to sell electricity in East Jerusalem will be given to another - presumably Israeli - company.

Even its staunchest defenders concede that many of JDEC's financial wounds have been self-inflicted. Inflated salaries and overstaffing have contributed to its huge operating deficit.

But JDEC acting chairman, Hanna Nasser, says the debt cannot be liquidated by austerity measures alone.

Company officials point out that in 1967 Israel barred JDEC from installing five modern generators needed to replace outmoded equipment and keep up with growing demand.

When permission was finally given in 1985, Israel then refused to allow the company to bring the new equipment on line, citing increased air pollution that supposedly would result.

As a result, JDEC has been forced to buy more electricity from the state-owned Israel Electric Corporation (IEC) at what JDEC insists, and IEC denies, have been inflated prices.

Israel also has set JDEC's profit margins too low to cover operating costs, JDEC spokesmen say.

Last year Jordan promised to help defray the company's $11 million - now $27 million - debt to IEC, but only if JDEC's concession were extended by Israel.

``Israel says you have to pay first to keep the concession. Jordan says you have to get the concession first, then we'll pay. We're caught between both governments,'' says Mr. Nasser, who is also deputy mayor of Bethlehem.

Jordan's reluctance to bail out the JDEC is widely attributed, in part, to the company's strong union which is dominated by supporters of the Palestine Liberation Organization. Jordan's has been vying with the PLO to gain West Bank Palestinian loyalties.

Only two or three years ago, a Western diplomat says, a move to change JDEC's status would have ``caused an explosion'' on the West Bank.

But its worsening financial condition has produced a kind of resignation, tinged with deep disappointment, in the Palestinian community.