Carriages shortage hampers Israel Railways expansion

Israel Railways

With the Jerusalem - Tel Aviv fast link set to open, Israel Railways must cut other services because of a shortfall of 80 carriages.

Just three days ago, Israel Railways announced that due to the planned opening of the high-speed Tel Aviv-Jerusalem railway line on the eve of the Sukkot holiday in September, a new railway timetable would take effect on September 1 that would include shortening and elimination of direct routes starting in northern Israel. Israel Railways attributed its cuts in service to a shortage of railway carriages. Minister of Transport Yisrael Katz intervened in the matter, announcing that he would soften the blow and restore the Karmiel-Tel Aviv line.

The selection of Karmiel is no accident. This line has always been Katz's pet project, despite criticism that it was not economically worthwhile (allegations that have been proven wrong, by the way - the line serves thousands of people daily). In effect, Katz sent the people from his ministry and Israel Railways back to the drawing board to devise a new railways timetable that would include the Karmiel-Tel Aviv route, probably through cuts elsewhere. Cancellation of the line from Nahariya will still take place.

Although the crisis was partially solved, Israel Railways passengers are still left with the question of how the shortage of carriages occurred. Opening of the high-speed route to Jerusalem was officially scheduled for late 2017. Following two postponements, Israel Railways is now preparing to open it before Sukkot this year. This is therefore not a new issue arising only now. Why did Israel Railways only now realize that it lacked carriages?

Israel Railways is currently short of 80 carriages because of what appears to be power games and useless bargaining between different government agencies, according to a "Globes" probe.

In order to reinforce Israel Railways' existing lines, which are also crowded, and open the high-speed line to Jerusalem on schedule, Israel Railways has been demanding the procurement of 170 carriages for the past three years. Approval from the Ministry of Finance Accountant General, however, has been very tardy and only partial, according to senior transportation sector sources, forcing Israel Railways to cancel direct lines serving thousands of passengers.

Number of carriages grew six-fold in 20 years

The transportation sector blames the Ministry of Finance. "There is a regular conflict between Israel Railways and the Ministry of Finance when carriages are ordered according to planning by Israel Railways," a senior source in the sector says. "No one in the Ministry of Finance can argue with Israel Railways about operations; they don't have enough knowledge on the subject."

On the other hand, another government source explains that the delay in approving the order for carriages resulted from dissatisfaction among staff in the Accountant General Department with the contract signed by Israel Railways with Bombardier.

The contract was signed a decade ago and has since been extended a number of times, while being severely criticized by the State Comptroller. According to the original plan, Israel Railways was not supposed to have ordered more carriages from Bombardier and it is very doubtful whether the new agreement was supposed to have replaced the questionable agreement from 2010. At the same time, legal petitions against Siemens win in the tender delayed the beginning of its supply of carriages, thereby creating a need for another order under the questionable 2010 agreement.

A senior transportation sector source now says, "In order to meet the minister's target for launching the high-speed train to Jerusalem, carriages have to be taken from the other routes. The blanket is too short - if it is pulled over the head, the feet are exposed. It's a dilemma."

Demand submitted three years ago

Israel Railways, then headed by Boaz Tzafrir, notified the Ministry of Finance already in 2015 of its demand to procure 170 diesel passenger carriages at an average cost of €2 million per carriage. This number included 60 carriages for the high-speed line to Jerusalem and more carriages for crowded existing lines, for example the Haifa-Tel Aviv line, on which passengers are crammed into just seven carriages. Keep in mind that manufacturing the carriages takes a long time - nearly a year from the time of the order.

After over a year of discussions with the Ministry of Finance, the Accountant General approved procurement of only 60 out of the 170 carriages demanded by Israel Railways. Approval was received to procure 33 more in early 2017.

In order to make up the missing equipment, Israel Railways made another request for procurement of 80 carriages, this time by new CEO Shahar Ayalon. The response to this request, however, was also only partial - an order of 48 carriages was approved in late 2017.

Israel Railways' calculation of 170 carriages in 2015 was based on a forecast from 2014. Since then, however, demand for railway service has risen. As a result, even had this number of carriages been ordered fully and on time, it would not have met the Israel Railways' future needs.

It is believed that the most recent 48 carriages ordered will reach Israel only in March 2019 and the electrical carriages will arrive only in 2020. Israel Railways is currently unable to order carriages from any supplier other than Bombardier. As a government agency, it is required to hold a tender, which can take two years. Until the new railway carriages arrive, there will be shortage of carriages on the existing lines because of the opening of the new high-speed Jerusalem line. This will increase crowding on the existing lines, which is liable to make people use private cars instead of the railway.

Although road congestion is greater in Israel than in any other developed country, less than 10% of public transportation users travel by railway. This is no surprise - the railways are quite crowded and the situation will get worse in the coming year because of the delays in ordering the necessary equipment. Opening the high-speed line to Jerusalem will only make the existing situation worse.

Ministry of Finance: An attempt to cover up failures

The Ministry of Finance said in response, "The shortage of equipment cited by Israel Railways is due above all to the company's faulty maintenance of equipment. Israel Railways is having trouble maintaining the level of availability it promised in its agreement with the government. The number of trains operated by the company is therefore significantly less than the number needed according to the agreement with the government. This is the reason why the company has had to cut its service on passenger lines.

"The procurement requested by Israel Railways is based on an agreement from 2009 in which the State Comptroller found material defects resulting from faulty management of the tender proceeding.

"The government's representatives therefore instructed Israel Railways to issue a new tender in 2015 and the company promised in writing in 2016 that it would not ask for further procurement in the framework of the current tender.

"Despite this commitment, in order to avoid harming the passengers, government representatives approved additional procurement for the company in 2016, 2017, and 2018 amounting to a total of 140 additional carriages. At the same time, the government representatives demand that the company take steps with the supplier to obtain optimal commercial terms."

Published by Globes [online], Israel business news - www.globes-online.com - on August 2, 2018

© Copyright of Globes Publisher Itonut (1983) Ltd. 2018

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