Israel Railways today signed an agreement for the maintenance of more than 130 carriages with Canadian railway car manufacturer Bombardier Inc. (TSX: BBD). The carriages were procured by Israel Railways from the Canadian manufacturer.
The outsourcing agreement was signed behind the back of Histadrut (General Federation of Labor in Israel) chairman Ofer Eini and Israel Railways workers committee head Gila Edri but with the blessing of Minister of Transport Israel Katz.
The agreement also covers dozens more carriages, engines and other equipment that will be purchased by Israel Railways in the next two years. Under the terms of the agreement, Bombardier will make preparations to integrate into Israel Railways maintenance network over the coming three months.
The agreement signed today follows 18 months of unsuccessful talks between Israel Railways management and the workers committee regarding maintenance arrangements for new carriages. The failure to reach an agreement led to last week's wildcat strike, which shut the railways down for two days.
The signing of the maintenance agreement between Israel Railways and Bombardier took the Histadrut by surprise and union leaders said that they are considering their response. The Tel Aviv District Labor Court is anyway preparing to hear the railways workers and Histadrut petition tomorrow requesting permission to strike.
Last week, Minister of Transport Israel Katz said that the agreement with Bombardier would be signed by the end of the month and that if the rail workers went on strike again he would close down the railways.
Published by Globes, Israel business news - www.globes-online.com - on February 19, 2012
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