Five days after the government cancelled Shafir Civil and Marine Engineering Ltd's franchise to build lateral road 531, the company and the government reached a settlement on the terms of the cancellation on Sunday. Shafir will forego its right to build and maintain the road between Kfar Saba and Herzliya, and the Ministry of Finance will return the company's NIS 33 million bank guarantee within three days. Shafir won the Road 531 tender in 2008.
Cancellation of Shafir's franchise will probably cause a prolonged delay in the NIS 2.25 billion project.
The Ministry of Finance will now have to decide whether to transfer the franchise to the runner-up in the tender, Africa-Israel Investments Ltd. (TASE:AFIL; Pink Sheets:AFIVY) contracting subsidiary Danya Cebus Ltd. (TASE: DNYA), or to publish a new tender.
As part of the settlement, the Ministry of Finance will let Shafir sell the planning of the project that it has conducted to date to its replacement.
This was the first time that the government has cancelled a public-private partnership (PPP) for a transportation project.
Published by Globes [online], Israel business news - www.globes-online.com - on February 16, 2010
© Copyright of Globes Publisher Itonut (1983) Ltd. 2010