Four consortia last week submitted their candidacy to take part in the NIS 1 billion NTA Metropolitan Mass Transit System Ltd. Carlebach railway station tender. The groups are Shikun & Binui Holdings Ltd. (TASE: SKBN) and Shikun u'Binui Solel Boneh Infrastructures Ltd. with the Chinese Railway Tunnel Group (CRTG); Shafir Civil and Marine Engineering with Italian company Ghella Impresa Pizzarotti; Danya Cebus Ltd. (TASE: DNYA) with China Civil Engineering Construction Corporation (CCECC); and Minrav Holdings Ltd. (TASE: MNRV) with China Harbour Engineering Company (CHEC).
The underground station is designed to be one of the largest in the Tel Aviv light rail project. It will have three levels: one for the Red Line, one for the future Green Line, and one for ticketing. The Red Line level will stretch from Bat Yam to Petah Tikva by way of central Tel Aviv, Menachem Begin Rd., Ramat Gan, and Bnei Brak. The Green Line will stretch from western Rishon Lezion to Ramat Hahayal and north Tel Aviv by way of central Holon, Holon Junction, and Ibn Gvirol St. in Tel Aviv.
The winning group, whose selection will be announced this year, will begin work on the project in the second half of the year. While the work is in progress, the main junction will closed for five years, and an underpass from Yitzhak Sadeh St. to Lincoln and Carlebach Sts. will be built in its place. The Ministry of Finance accountant general will decide in the coming weeks whether to exempt the PB company from a tender for management of the project, or to obligate NTA to publish a new tender. A legal opinion commissioned by NTA from the Arik Shalev & Co. law firm, however, indicates that canceling the agreement with PB as the project administrator and issuing a new tender will lengthen the time before the project is begun by 18 months.
The document also states that according to an economic opinion commissioned by NTA from BDO, had NTA retained management of the project and not contracted with an external company to manage it, the cost would have been NIS 200 million more. It is further stated that according to an opinion by the Capita company, the proper fee for a company to manage the project is 5% of the total project budget. The proper fee for PB should therefore be NIS 670 million, not counting VAT.
"This fee is greater than the fee paid for project management in Israel, but considering the fact that PB will employ dozens of foreign professionals in management of the project at great cost, this fee is reasonable, according to the expert who advised NTA in the matter," the opinion stated.
Published by Globes [online], Israel business news - www.globes-online.com - on February 22, 2015
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