“The involvement of foreign construction firms is important for the introduction of new technology and workers. That’s how we see the cooperation. I believe we can learn much from what is happening in Europe and other nations; and I think it can help modernize the Israeli industry. I hope the first foreign firm will arrive in Israel this year, that’s what we want and what we’re aiming for. The intent is to build more quickly, more affordably, and at better quality, to foster cooperation with Israeli companies that can quickly learn from the foreign firms,” said Minister of Housing and Construction Yoav Galant at a conference for foreign attachés and representatives held by his office on Monday in Tel Aviv.
The session was held to explain to foreign representatives about the call for bids issued for foreign companies to come build residential projects in Israel with up to a thousand of their own employees in tow. The plan was based on the current framework understanding with Turkish company Yilmazlar, which has been working in Israel for years as a contractor on several projects.
Representatives from a wide variety of nations were present at the forum including Poland, France, China, Italy, Finland, Romania, the US, Georgia, the Philippines, Lithuania, Brazil, Thailand, Germany, Vietnam, Taiwan, Greece, Spain, and Colombia. However, these were economic attachés and embassy staff not representatives of construction firms.
Sources inform “Globes” the Ministry of Finance and Ministry of Construction and Housing have heard of interest from European companies including from Greece, Spain, and Italy.
Galant also provided the foreign representatives with background data on the Israeli demand for construction: “Housing prices in Israel have multiplied, there’s a shortage of 100,000 apartments, and we’ll likely need another million in the next 20 years. It takes us in Israel 15 years to build a neighborhood from the ground up compared to three or five years in Europe, or less in the East. A significant part of the land in Israel is owned by the state, and there are many government ministries involved in the process and many subcontractors. We’re now trying to change this situation and allow one company to go through the process top to bottom, planning and construction, with a timeframe for building an entire residential neighborhood.”
The head of the housing cabinet at the Ministry of Finance, Avigdor Yitzhaki, said at the session: “Our central problem is workers. To import workers we need to sign bilateral agreements; so far, we signed three in Eastern Europe. We’re now signing another agreement with Ukraine and we hope to expand that to other states.
“We’re inviting the foreign firms to come and work in Israel. We hope that when all the companies register, we can do our calculations, and that by this Rosh Hashana we can start seeing foreign construction firms working in Israel, helping us build the state, and making it possible for young families to buy apartments in Israel.”
Daniela Paz Erez, one of the owners of Paz Economy and Engineering, presented an overview of the Israeli construction sector. “In Israel there are currently 2.4 million apartments and houses compared to a demand of 2.5 million. It’s a shortfall we now need to fill. Israel is currently building some 40,000 homes annually, but demand calls for 60,000 homes each year that’s the direction the government is pushing for. The government in Israel controls a substantial part of the land and its zoning. From 2007 to 2010, the planning authotities in Israel approved only 23,000 homes, in 2011 they approved 32,000; it was only in recent years these numbers increased in the past year it reached a level of 100,000 plans approved.”
Ministry of Construction and Housing Director General Eshel Armoni also spoke at the conference: “There are many opportunities in Israel; in the initial stage we are looking to bring six companies. We know the foreign firms are worried about Israeli bureaucracy. We will establish a special section to accompany these firms from the moment they arrive in Israel.
“The permission for these companies will be limited to give years with the possibility to extend for an additional three years, but we want to see results; we’re bringing companies to build. And at the same time we’re encouraging joint initiatives with Israeli firms. We postponed the deadline for applications to let more companies learn about it. We will also be reconsidering certain criteria which we were told by companies could be hard to implement. In the initial stage, we’re talking about six companies, but it could expand to more in the future. I hope that by this September we can see companies arriving in Israel.”
Published by Globes [online], Israel business news - www.globes-online.com - on May 10, 2016
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