Danya Cebus (TASE: DNYA) has won a NIS 1.4 billion PFI (private finance initiative) contract to build Road No. 431. Danya Cebus outbid a consortium of Shafir Civil and Marine Engineering, New Kopel (TASE: NKPL), and Gandir Investments; a consortium of A. Arenson, Ramet Ltd., and Roichman Bros. Shomron Infrastructures Ltd.; and a consortium of Ashtrom Engineering and Construction and Solel Boneh Building and Infrastructure (TASE: SOLB).
The Inter-ministerial tenders committee, chaired by Ministry of Finance deputy accountant general Zvi Halamish, chose Danya Cebus last night. The main item the bidders were competing over was the semi-annual payment from the state for the 25-year franchise period. Danya Cebus reportedly bid NIS 58 million for the six-month grant that it is asking the state to pay for building, operating, and maintaining the road. The bid was NIS 25 million less than the state's estimate of NIS 75 million.
Road No. 431, a lateral road, will run 20 kilometers from Rishon LeZion, past Ramle to Modi'in and the Yitzhak Rabin Highway (Road No. 6), also known as the “Cross Israel Highway”. This is Israel's first PFI tender, in which the winner will subsequently operate the road for 25 years. The state will pay the winner a semiannual fee.
The Ministry of Finance appended to the tender a provisional AA- rating for the project, which will enable financial institutions to participate in financing it. The state will also back foreign currency loans, which will enable the contractor to raise money from foreign banks more cheaply.
Published by Globes [online], Israel business news - www.globes.co.il - on April 14, 2005