The delay in converting Israeli Railways to electricity will cost the state billions of shekels. Sources inform "Globes" that a joint team of the Ministry of Finance, the Ministry of Transport, and Israel Railways has recommended buying double-decker railway carriages and diesel locomotives for NIS 2.4 billion by 2025, given the delay in converting the tracks to electrified trains. The team recommends buying 51 new carriages and seven new locomotives in 2020.
The team was appointed last October in order to assess the procurement program submitted by Israel Railways. The program is designed to cope with crowding on the railways and the fact that the electrified carriages (propelled without a connection to the locomotive) ordered will be irrelevant until electric infrastructure is deployed for more tracks.
The current occupancy rate on the most crowded lines is 196%. Israel Railways predicts that occupancy on popular lines, especially the route from Nahariya to Tel Aviv, will reach 256% in 2024.
Half of the active multiple carriages are being repaired
The team considered continued use of Israel Railways' oldest mobile equipment: IC3 multiple carriages manufactured in 1991-1995 and single-decker carriages manufactured by Alstom, which Israel Railways began using in 1994. The assessment dealt with the question of whether comprehensive renovations of this equipment was worthwhile, or whether they should be scrapped. From a long-term perspective until 2060, figures were presented showing that replacing the old mobile equipment was financially worthwhile. Israel Railways' calculation assumed that following comprehensive renovation, the old carriages could be used until 2035, but new equipment purchased now could be used until 2075. It was learned that the availability of IC3 multiple carriages outsourced to Alstom for renovation was an especially low 47.5%. In other words, more than half of the multiple carriages are being repaired at any given time, compared with the 87% availability stipulated in the maintenance agreement with Alstom.
The team recommended scrapping 35 IC3 multiple carriages and 35 Alstom-manufactured carriages, and replacing them with double-decker carriages that can be used with either diesel or electric locomotives. The team's final conclusion is two stages of procurement. In the first, 51 double-decker carriages will be purchased from Bombardier immediately under existing tenders and seven locomotives under a rapid tender proceeding, with the supply time being one of the conditions in this tender. The team recommends buying 188 more carriages and 20 more locomotives by 2024.
The projected cost is NIS 1.9 billion for 239 carriages and NIS 500 million for 27 locomotives. The locomotives will be either diesel or dual-use locomotives that can operate using either diesel or electricity. In any case, the cost is enormous for technology that Israel Railways was not planning to use. The existing diesel locomotives, which Israel Railways bought early this decade, were meant for passenger use only during an intermediate period before the completion of railway electrification, and afterwards for cargo trains. Israel Railways now has to buy additional diesel locomotives.
In addition to the cost of buying new carriages and locomotives with outdated propulsion, postponement of the order for electric locomotives and multiple carriages will cost more money. The team predicts that only 18 electric locomotives out of the 62 ordered under a tender won by Bombardier will be needed by 2024. Israel Railways also ordered 46 electric multiple carriages from Siemens, but it is now believed that only 27 will be needed five years from now. Israel Railways is therefore seeking to postpone delivery, and will probably have to pay for that, too.
Electrification of the railway tracks is projected to cost NIS 12 billion, including NIS 3 billion for the electrification infrastructure itself. Spanish company Semi offered carry out the project for NIS 2 billion, but failed to do the work according to the times stipulated in the tender. Conversion of most tracks to electricity was slated for completion by 2021, but it is now believed that this will not happen before late in the next decade. The Ministry of Finance is considering terminating the agreement with Semi and continuing the project with other companies. It is now clear that the supposed saving of NIS 1 billion will cost the country billions in other places, such as the purchase of diesel locomotives years after their use was to have been ended.
Israel Railways declined to respond to the report.
Published by Globes, Israel business news - en.globes.co.il - on April 8, 2019
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