Sources inform "Globes" that the state is prepared to make changes to the concession agreement with the MTS consortium, the concessionaire for the red line of the Tel Aviv light rail project, in order to allow completion of the financial closing of the project. Meanwhile, German Transport Minister Peter Ramsauer announced during a tour of the light rail route that his government supported attempts to find a solution to the problems of financing the project, whose total cost is estimated at €1.7 billion, or NIS 10 billion. KfW Bankengruppe, which leads the consortium of foreign banks advising the concessionaire, is owned by the German government. "Globes" has also learned that MTS recently extended the validity of the bank guarantees it deposited until May 18.
In late December, the inter-ministerial committee accompanying the project told MTS that it had to complete the financial closing within 90 days, in accordance with the conditions set forth in the concession agreement, and rejected the list of objections filed by the consortium. Following that announcement, MTS hired the services of CPA Yitzhak Soari to represent it in contacts with the state. Sources involved in the negotiations told "Globes" that the state had agreed in principle to modify the concession agreement of May 28, 2007, and that significant progress had been achieved in talks.
MTS comprises, in equal shares, Africa-Israel Investments Ltd. (TASE:AFIL; Pink Sheets:AFIVY), Egged Israel Transport Cooperative Society Ltd., Siemens AG (NYSE: SI; XETRA: SIE), China Civil Engineering Construction Corporation (CCECC), and Sociedade de Construcoes Soares da Costa SA of Portugal.
Published by Globes [online], Israel business news - www.globes-online.com - on March 10, 2010
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