The author is an economist, holds a degree in economics and business administration from Bar-Ilan University
The State Comptroller’s report published on March 9 regarding the heads of state plane carried a large number of headlines that amounted to the fact that the “Wing of Zion” plane, the name of the official plane, is twice as expensive as the situation where heads of state rent flights in civil companies. Gadir Yair Lapid stated that the plane should be sold immediately and that its operation would be much more expensive than any other option. is that so?
First, it should be clarified that the State Comptroller has performed his role and examined the total costs of the project from beginning to end and compared to the existing situation. This is what is expected of him in order to draw conclusions for future projects and regarding the conduct of the parties responsible for the “Wing of Zion” project.
The auditor found serious deficiencies, delays, and significant budgetary inflation compared to the initial estimates the project had. These data might have canceled the project in advance, had it been known before they started working on it, but we are in the present. Today, the “Wing of Zion” aircraft is ready and ready to fly and is just waiting to be used and we need to treat the situation as it is and not as it could have been.
What does this mean and how does it change the State Comptroller’s determination?
The average flight cost of heads of state to various destinations in the world is estimated according to the State Comptroller at about NIS 2.5 million per flight. On the other hand, the cost of “Kanaf Zion” is estimated at NIS 5.2 million per flight. But here lies an important issue that needs to be addressed and that is the capital invested in the project.
Submerged capital is the money that has already come out of our pocket, money that has come out of our pocket will not come back and therefore there is nothing to treat it compared to the alternative. It’s like a man saying to a friend, “Do you know how much money I’ve already spent on this car?” The friend’s answer to this question should be “the car continues to be too expensive even now so what you spent does not matter and you need to replace it”.
This means that although the money invested in the “Wing of Zion” aircraft is important to examine the project from the State Comptroller’s point of view, for the heads of state today the only thing that matters is the current cost of operating it.
The auditor calculated that the cost of flying on the “Wing of Zion” aircraft, taking into account the operating costs alone, would cost NIS 2.7 million. The difference is due to the fact that although the cost of the entire project amounted to NIS 590 million, the operating cost is estimated at less than NIS 200 million for the period examined.
During the purchase of the plane and its adaptation to the needs of the heads of state, a lot of money was apparently wasted, and there could have been a situation where the “Wing of Zion” was cheaper from any angle we looked at it. But we are here and now, and the situation today is that operating a “Wing of Zion” plane will only cost about 10% more than renting a plane from a civilian company.
If so, why spend 10% more? The State Comptroller also notes the benefits of the “Wing of Zion” aircraft:
“There is a significant improvement in the heads of state aircraft compared to the current situation at the level of security, including aspects of the protection of the aircraft and the security of the information on it, the communication, control, conditions on the aircraft and the service provided and its availability.”
To these advantages can be added the representativeness in the fact that the heads of state arrive with the official plane for official flights and in the end there seems to be no substantial reason not to use the “Wing of Zion” already on the upcoming flight.
In order to obtain the proportion, the excess cost of the “Wing of Zion” aircraft compared to renting an aircraft from a civilian company amounts to a cost of about NIS 3 million per year, and compared to the benefits, this cost is completely negligible. The sale of the plane may be possible, but it is a unique plane and few, if any, want to buy it, it is not possible to know how much money they will receive in its purchase and it does not change the comparison of the operating cost of “Wing of Zion” to the existing situation.