The defense establishment, Israel Police, and Israel Prison Service will procure hybrid cars. Following a thorough three-year study on the issue, the Government Vehicle Administration published a tender for the purchase of the first 20 hybrid cars under a two-year contract with a two-year option to extend. Deliveries will be made by May. The tender will be closed in a few days.
Car industry sources believe, however, that the initial order will be increased. The tender also allows authorized government agencies, such as government companies and municipalities, to procure hybrid cars from suppliers under the same terms as the winning bid in the tender. Sources believe that orders placed by such agencies, including Israel Electric Corporation (IEC) (TASE: ELEC.B22), will be substantially larger than the order by Government Vehicle Administration.
However, it seems that the writers of the tender failed to do their homework. Although only three models of hybrid cars are currently sold in Israel - made by Toyota Motor Corporation (NYSE: TM; LSE: TYT; TSE: 7203) and Honda Motor Company (NYSE: HMC; LSE: HNDA; TSE: 7267) - the newest and cheapest model, the Honda Insight, cannot participate in the tender. The Honda Insight, which is due to arrive in Israel in April, has a wheelbase that is five centimeters shorter than the mandated minimum of 2.6 meters, which means that it does not comply with the specifications of the tender.
This is the first tender for hybrid cars since the Ministry of Finance decided in principle to suspend the procurement of leased cars and to revert to its previous policy of direct purchases.
Published by Globes [online], Israel business news - www.globes-online.com - on March 1, 2009
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