Mubarak: Egypt forced Israel to pay triple for gas

By GLOBES / AMIRAM BARKAT
07/17/2011 15:21

Former Egyptian president reportedly told investigators that Israel pays more for Egyptian natural gas than any other country.

Former Egyptian president Hosni Mubarak claimed that Israel was forced to pay prices three-times above market value, Egyptian daily Youm7 reported over the weekend. "We stopped exporting for sometime until we pushed them to raise the price from $1 to $3 and to allow us to review the price every three years," Mubarak told investigator Mustafa Suleiman who questioned him over the natural gas treaty with Israel. "They agreed with great difficulty to both conditions."

Youm7 published the transcript of the interrogation on Friday. Mubarak was questioned at the Sharm e-Sheikh hospital. He was questioned again in late April and on May 10 about the gas contract.

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The main charge in the Egyptian government's case against Mubarak is that the price of gas set in a contract with Israel was below the market price. Prosecutors claim that the deal cost Egypt $715 million.

Israel says that this figure is based on a New York Times article, which the paper later corrected. Yosef Maiman's Merhav Group, a shareholder in Egypt's East Mediterranean Gas Company (EMG), which handles exports to Israel, said that Israel paid Egypt more than all its other export markets.

Mubarak denied any responsibility for setting the price of the natural gas in the contracts. He also denied any role in the appointment of his associate, Hussain Salem as chairman of EMG. Mubarak said that Salem "is a businessman like many others. I met him in the US when I was vice president and I enlisted him and others to help develop [the] Sinai. He's just a business acquaintance like other businessmen I deal with." He added that EMG "substantially contributed to the Egyptian intelligence service."

Mubarak added, "The deal dates from the time of [former prime minister] Yitzhak Rabin, I can't recall the exact date. He told me in a meeting that there was a clause in the peace treaty which allowed Israel to purchase petrol from Egypt by entering a public sale alongside other buyers and indeed petrol was exported to them for some time.

"When we were in need of gas I asked him whether we could exchange the export of petrol to the export of gas through public sales too. Then Dr. Atef Ebeed became prime minister. I instructed him to enter negotiations with the Israelis regarding the export of gas and eventually the gas line was built."

Ebeed was a representative of Egyptian Intelligence, which is the body responsible for Egypt's relations with Israel.