"The technology of ten years ago, when we started the tender process in Tel Aviv, is no longer relevant," Bombardier Transportation president systems division Eran Gartner told "Globes".
Bombardier Transportation, a unit of Canada's Bombardier Inc. (TSX: BBD), one of the world's top three rolling stock manufactures, regrets not participating in tenders for Israeli light rail projects. Two of its rivals, Germany's Siemens AG (NYSE: SI; XETRA: SIE) is a partner in the Tel Aviv light rail franchisee Metro Transport Solutions (MTS), and France's Alstom SA (LSE: ALS; Euronext: ALO) is a partner in the Jerusalem light rail franchisee CityPass.
In 2001, Bombardier decided to forego the Tel Aviv light rail tender because the timing was not right for the company, which was up to its neck in a merger with Germany's ADtranz.
Despite the Israeli farce, Bombardier admits that it missed out by not participating in the Israeli tenders. Gartner, a former Israeli, who resides in the US, is particularly chagrinned. During visits to Israel, he was disappointed to find the same traffic jams, which are only getting worse. Commenting on the Tel Aviv light railway, he said "Projects like this are very complex, and there is no tender without problems. This is something that penetrates the heart of a city and fundamentally changes its face. After such a long time, Tel Aviv should already be seeing the cranes at work. It can be said that the project, in its original format, is a failure," he says.
Gartner adds, "We missed every opportunity to develop a transportation system that would meet demand. Take Tel Aviv's seafront Hayarkon Street for example. This should have been closed to private cars long ago, forcing beachgoers to leave their cars at the Reading park-and-ride terminal."
"Globes": What's a reasonable time to build an urban rail system?
Gartner: "A typical project takes ten years for planning, the tender process takes a year, another year to 18 months to secure financing, and five years construction."
The Ministry of Finance and many others say that a light rail project is too complicated for a private-public partnership model.
"There's something to that argument. Projects we're building in Africa, for example, have 90% government financing, so it can be argued that, in the end, government financing is cheaper than private financing. I believe that the solution should be the right sharing of risk between the government and the franchisee."
What's the best model in your opinion?
"In recent years, the tender process has become more sophisticated. Many places now divide the process into two stages: the technology (E&M) tender, which picks the equipment and systems' and the set-up tender, which is adapted to the equipment chosen. I think that this is the right way, because the contractors don’t want to understand railroads, and we don’t want to understand concrete. The technology chosen is critical; it's possible to go for overhead electrical wires or inductive electricity at the ground level (electricity produced from the magnetic field in the rails as the trains passes over them - A.B.), which has esthetic and safety advantages."
Published by Globes [online], Israel business news - www.globes-online.com - on July 12, 2010
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