The preliminary tender for the green line of the Jerusalem light rail has been postponed in an attempt to reach a compromise with CityPass.
The Ministry of Transport decided on Tuesday to issue a preliminary selection tender for groups to compete for building and operating the green line from Gilo to Mount Scopus, including an extension of the red line from Mount Herzl to Hadassah Ein Kerem, and from Pisgat Zeev to Neve Yaakov. There is a NIS 260 million gap in the negotiations with CityPass on the compensation it will receive for being removed from the management of the light rail extensions.
According to sources familiar with the events, however, CityPass chairman and former minister of finance Avraham Shochat contacted the Ministry of Finance at the last minute in an effort to reach a compromise, and the tender was postponed. Shochat and Ministry of Finance officials will meet on Sunday to discuss the matter. The government has an interest in having CityPass build the red line extensions and the branch from Givat Ram to the Chords Bridge through Alstom, because it can begin work within six months and complete some of the sections relatively quickly, such as the section between Mount Herzl and Kiryat Yovel.
CityPass claims that the franchise agreement it signed with the state entitles it to NIS 400 million in compensation for excluding it from management of the extensions. The government argues that this is an interpretation of the contract, and is in any case illogical, because these extensions will be built using government money, not financing raised by the franchise holder. The dispute was created by the government's intention to remove CityPass from the operation of the red line under the buyback option existing in the contract, starting in March 2019, due to the Ministry of Transport's belief that both the red and green lines, as well as the future blue line, should be operated by a single franchise holder.
CityPass said in response, "The Ministry of Finance is systematically and deliberately misleading the Jerusalem public by making unfounded claims that CityPass was the one preventing progress in the extensions and branches of the existing line… If the negotiations are unsuccessful, the light rail extensions project will be take many more years and cost many more hundreds of millions of shekels, at the taxpayers' expense. In complete contrast to the Ministry of Finance's assertions, CityPass has continually made concessions to the state, and is willing, despite its contractual rights, to forego many millions of shekels."
Published by Globes [online], Israel Business News - www.globes-online.com - on April 6, 2017
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