The Knesset Finance Committee today approved NIS 150 million in compensation to be paid to the Jerusalem light railway franchisee CityPass for delays in the project. Budget Director Ram Belnikov asked the committee to approve the outlay last month.
A joint presentation by the Ministries of Finance and Transport and the Jerusalem municipality stated that cost of the delays totaled NIS 287 million, of which NIS 120 million would be transferred to CityPass. CityPass will bear the rest of the cost overrun. An additional NIS 30 million was approved to cover the cost of additional work on the project ordered by Ministry of Transport and the Jerusalem municipality.
The first line of the Jerusalem light railway is now 18 months behind schedule. The government is partly responsible, such as delays in land expropriations, ordering changes in the project, late responses from the Jerusalem city engineer, archeologists, and conflicting instructions from the Ministry of Transport.
The total cost of the Jerusalem light railway is NIS 3.3 billion, two-thirds of which CityPass will cover, and one-third which will be covered by the public sector. The Jerusalem municipality is responsible for 13% of the public sector's financing, for a total of NIS 144 million.
Published by Globes [online], Israel business news - www.globes-online.com - on May 27, 2008
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