The periphery pays the penalty

Netanyahu's transport plans have been derailed.

After he promised to eliminate the periphery by linking Eilat and Kiryat Shmona to the center of the country through a network of highways and railway lines, Prime Minister Benjamin Netanyahu has come back down to earth. The grandiose promises have been replaced by more mundane plans.

This has been another small victory for those who claim that Netanyahu began his current term of office without an economic agenda and without plans for major, revolutionary changes. Netanyahu is investing his efforts in stopping Iran's nuclear program so he does not have the time to devote to the economy.

The reformer and bulldozer that we had in 2004 when he was minister of finance is no longer the same Bibi. He now has to worry about much more than balancing the budget and growth. He is the prime minister and must concern himself with security matters too. He doesn't want to argue and must maintain industrial quiet in order to keep his coalition strong. The bigger economic picture will have to wait until the ayatollahs are toppled in Teheran.

The North before the South

A quick glance at the projects that have been approved shows a clear preference for the needs of the north over the south. All the roads that will be upgraded, and the two railways lines that are getting the go ahead are in the north. The Cross-Israel Highway (Road 6) will be extended north but not south. The south has lost the railway line to Eilat. While NIS 15 billion will be allocated to new projects in the north only NIS 1.5 billion will be allocated to the part of the plan entitled "highways and railway lines in the south."

The Ministry of Finance celebrates

The Ministry of Finance is breathing a sigh of relief. Investing NIS 27 billion in transport infrastructure over the next eight years means that the Ministry of Finance can save over NIS 3 billion annually.

Within this context Netanyahu's reduced plan is a victory for Minister of Finance Yuval Steinitz over the prime minister's economic advisor Ori Yogev who opposed the cuts.

Another winner is Israel National Roads Co. Ltd.chairman Micah Goldman. The former Labor MK fought for the implementation of laying the railway lines to Afula and Carmiel, which will be built by his company, and which will now have an opportunity to prove its ability to construct railway lines as well as roads.

Published by Globes [online], Israel business news - - on February 22, 2010

© Copyright of Globes Publisher Itonut (1983) Ltd. 2010

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