The Jerusalem Mass Transit System light railway project will be completed in January 2009, three years behind schedule. Alstom (Euronext: ALO; LSE:ALS), part of the City Pass consortium, said today that it expected to complete construction and begin operating the railway on January 15, 2009.
Under the original timetable set by the state, the railway was due to be completed this year. City Pass signed a franchise contract in November 2002, and was due to secure financing by August 2003. The consortium needed almost three years to secure the financing.
An Alstom executive said several factors were behind the delay in securing financing. One factor was the banks’ extreme caution towards Israel’s first light rail project. Negotiations took place during the intifada, which resulted in stricter conditions for the project. He added that the state’s timetable for securing financing was also unrealistic.
Alstom said that, under its contractual obligations, is due to complete work on the railway three years after securing financing. The company said it would meet its obligations, and complete the railway on schedule, unless changes were made in the project.
City Pass will complete work on the first route from Pisgat Zeev in northern Jerusalem through the city center to Herzl Boulevard. in Beit Hakerem in the western part of the city by 2009. However, it will not include the planned extensions to the Neve Yaakov neighborhood in the north or to the Hebrew University campus.
Published by Globes [online], Israel business news - www.globes.co.il - on June 27, 2006
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