Sources inform ''Globes'' that Danya Cebus Ltd. (TASE: DNYA) earlier this week received a NIS 285 million grant from the state for opening Road 431 between Rishon LeZion and Modi'in. The company also undertook to deposit a NIS 20 million guarantee. The parties agreed to freeze the balance of the settlement until July.
Danya Cebus and the government are continuing the arbitration on the company's claim for NIS 500 million in compensation for changes made in the planning of the road, which increased the construction costs. The arbitrator is Judge (emeritus) Eliyahu Winograd.
The grant was paid a few days before the 45-day deadline for the payment stipulated in Danya Cebus's franchise contract. The company will use the proceeds to repay part of its bank loans, mainly to Bank Hapoalim (TASE: POLI; LSE:80OA), taken to finance the building of the road.
Transport industry sources believe that, despite the dispute between the government and Danya Cebus over Road 431, the government did not want to delay payment of the grant because this could have future repercussions on banks' willingness to fund other BOT and PFI infrastructure projects.
The 23-kilometer Road 431 opened in February. Danya Cebus built the road as a PFI project, and subsidiary Netivei Hayovel Ltd. operates the road under a 25-year franchise. In addition to the set-up grant, now paid, the company will receive semi-annual operating grants and a shadow toll of NIS 0.02 per kilometer of travel on the road.
Danya Cebus' share jumped 16.1% by mid-afternoon to NIS 6.79.
Published by Globes [online], Israel business news - www.globes-online.com - on March 25, 2009
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