Two out of the four groups bidding for the Jerusalem light train tender withdrew after the Canadian partners in both groups received threats from Palestinians regarding the intent to build part of the railway system in East Jerusalem and the Palestinian Authority (PA). The entire project is now in doubt.
Delek-Dankner Investments (the Ariel group), and Housing & Construction – Property and Building (the Adanim group) withdrew from the tender after their Canadian partners pulled out.
Following their withdrawal, there are two bidders left: Africa Israel and the Polar– Ashtrom group. There are fears, however, that the foreign partners in these two groups may also pull out. It is impossible to carry out the $500 million light train project without the know-how and experience of foreign investors. Nearly all the Israeli partners are real estate companies.
The first group to withdraw was Ariel, made up of Delek (20%), Dankner Investments (20%), Baran Engineering (20%), Canadian company SNC (20%), a private infrastructure company specializing in railway tracks construction, German company SSB, and Spanish train manufacturer CAF.
The second group to withdraw, Adanim, was made up of Housing & Construction, Property and Building, FIBI Investment House, Canadian train manufacturer Bombardier, and Etgal, who all had a 20% stake each.
Palestinian bodies apparently affiliated with the PA approached the foreign investors in all four groups and told them that the light train was supposed to pass through East Jerusalem, including the Jaffa Gate area, which is defined as “occupied territory”.
The train yard is due to be built on a 30-dunam (7.5-acre) plot north of the French Hill. The plot is in PA territory. The Palestinians said that construction of the railway and the train yard in those areas constituted a breach of international law, and that they would take legal and other measures on the issue.
The Canadian companies’ legal advisors looked into the matter and found that there was prima facie evidence that the Palestinian allegations were justified. They consequently recommended that the companies not bid in the tender. The Israeli partners decided they could not bid following the withdrawal of the partners, who were supposed to provide professional know-how.
As far as is known, the legal advisors of the German and French companies that are members of the other two groups are carrying out similar examinations.
The project is supposed to facilitate the movement of traffic in Jerusalem and enhance the development of new residential and commercial districts. The Jerusalem municipality considers the project one of the capital’s most important development plans in the coming years.
Published by Israel's Business Arena on 21 January, 2002