Six months after a compromise agreement was signed between Jerusalem Light Rail franchisee CityPass, the Israeli government and the Jerusalem Municipality that allowed work to continue, the project now faces further delays.
CityPass CEO Yair Naveh said that September 2010 is no longer a realistic date for completing the project, which is already nearly two years behind schedule.
He attributed the additional delay of several months to the failure of the Jerusalem Municipality to provide the necessary permits.
Naveh said, "In my estimation however hard we try we won't make it on time. My forecast is an additional delay of two more months and perhaps even more."
Relations between CityPass, the Jerusalem Municipality and the government are again strained after newly elected Jerusalem Mayor Nir Barkat has yet to approve work on a number of junctions in the center of the city. As a result the government is withholding a NIS 150 million grant to CityPass, which is meant to compensate the franchisee for the delays so far.
Naveh vehemently attacked the behavior of the Ministries of Finance and Transport. He said, "It is no secret that the new mayor does not like the project, and he doesn't hide the fact even today but in light of the reality he understands that the project must move forward. The main threat to the project is from the government that is not handling the financing. If funds are not passed onto the franchisee there is a clear danger that the project will take longer."
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 February 24, 2009
© Copyright of Globes Publisher Itonut (1983) Ltd. 2009