The ambush was precisely planned. On Wednesday, the ministerial committee responsible for the Tel Aviv light rail project was supposed to decide to cancel the concession to the Tel Aviv Metropolitan Mass Transit System (MTS) Consortium.
The consortium comprises Africa-Israel Investments Ltd. (TASE:AFIL), 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.
MTS won the tender four years ago, yet the first bulldozer is still not on the horizon, and implementation of the failed project was meant to return to the government. Over recent weeks, the Ministry of Finance has been organizing a coalition on the ministerial committee that will give it a majority to make a decision on the fate of the NIS 12 billion project. To the world, the Ministry of Finance was saying that all options are open.
Then something surprising happened. The announcement that the Ministry of Finance was intending cancelling the concession agreement leaked to the media before it was supposed to. The forces that found themselves exposed before reaching their target were suddenly caught in the crossfire.
MTS understood that the die was cast. Before publication of the proposed cancellation, the consortium's managers had made final attempts to convince Ministry of Finance officials against the step. Having failed to persuade them they removed their gloves.
MTS chairman Izzy Cohen and senior executives from Siemens, backed by Tel Aviv mayor Ron Huldai turned in alarm to Prime Minister Benjamin Netanyahu demanding to stop the Ministry of Finance.
Minister of Transport Israel Katz threw his weight into the fray and summoned an emergency session of the ministerial committee to prevent a final decision being reached. Above and beyond grudges and egos, Katz and Netanyahu have at least one good reason to derail the Ministry of Finance's attempt to cancel the concession.
If the Tel Aviv light rail project goes onto the government's budget, it will be instead of their ambitious transport plans to connect the periphery with the center of the country.
So perhaps we are talking about a conspiracy by the Ministry of Finance, which has fought against Netanyahu and Katz's transport plans.
All sides in this tale are convinced of one thing. The leak came from the direction of Minister of Finance Yuval Steinitz. He exposed the plans being implemented by his own cohorts and subjected them to an artillery barrage. But what in the battlefield would be considered a betrayal, in the political arena is a sophisticated maneuver.
Steinitz - assuming he was the source of the leak - proved that he maintains his loyalty to the man who appointed him and is not a captive of the Ministry of Finance's senior officials.
Published by Globes [online], Israel business news - www.globes-online.com - on May 13, 2010
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