Israel is procrastinating on announcing the winners for the Tel Aviv Metropolitan light rail Green and Purple Line tenders, currently Israel's biggest transport infrastructure project. The tender, issued by the government owned company NTA Metropolitan Mass Transit System, which is responsible for building the project, has generated major international interest, and was closed in September 2020. The final date for announcing the winners of the tenders was meant to be the end of May.
Yet the date has passed and three weeks ago NTA chairman Ram Belinkov, who has since been appointed director general of the Ministry of Finance, spoke about the end of June for announcing the tender winners. This week he explained that former Minister of Transport Miri Regev had given up on talking to the families living on the route of the Purple Line and that evictions could be enforced.
It is basically an inter-ministerial dispute about 15 families living in the Tel Aviv neighborhood that is holding things up. The Ministry of Transport had been delaying the evictions, which were due to be enforced in the summer of 2020. According to deputy attorney general (civil law) Erez Kaminitz, only when the evictions have taken place can the final cost of the project be properly calculated, and only then, to avoid future complications, can the bid winners be announced.
But outgoing Minister of Transport director general Ofer Malka disagrees. He says that strenuous efforts are being made to reach agreement with the 'special evictions committee' and that the matter should not delay announcing the tender winners. Rumor has it that the issue was given special treatment because some of the families had connections with the former ruling Likud party, although Regev's entourage insisted that there was no political connection on the matter.
Once the tender winners are announced there is a window of one year in which NTA has to inform them of the final route of the lines after more checks and the transfer of infrastructures. After that, for every day of delay, the government must pay compensation.
The Green and Purple Lines will be financed, built and maintained as a Public Private Partnership (PPP). The overall cost is estimated at NIS 31 billion with the tender winners paying half of this. Five groups have bid for the tenders: Spanish company CAF and Shapir Engineering and Industry Ltd. (TASE: SPEN); CRCC, CRRC, Shikun and Binui Holdings Ltd. (TASE: SKBN) and Egged Israel Transport Cooperative Society Ltd.; Alstom, Electra Ltd. (TASE: ELTR) and Dan; China Harbor (CHEC), Minrav Holdings Ltd. (TASE: MNRV) and Allied; CREC, the Noy Fund, and The Phoenix Holdings Ltd. (TASE: PHOE1;PHOE5) and Bombardier. All five groups have bid for the tenders for both lines but can only win the bid for one line.
The Green Line will extend over 39 kilometers from Holon in the south via central Tel Aviv, Tel Aviv University, to Kiryat Atidim and Herzliya Pituah. There will be 62 stations with four of them underground. The line is scheduled to be completed in 2027. The Purple Line will extend over 29 kilometers from Yehud and Kiryat Ono and Bar-Ilan University and Sheba Medical Center in Tel Hashomer to central Tel Aviv and the Carmel Market. There will be 43 stations. Construction of the Purple Line is scheduled for completion in late 2026. From past experience with the Red Line, which will begin operations in November 2022, after years of delays, the Green and Purple lines completion dates are likely to be revised.
The Ministry of Finance said, "As of today, the Ministry of Transport has not set a date for vacating the last lots in Kfar Shalem, which is required for moving ahead on the aforementioned section. As any addityional delay on the date of the evacuation might violate the contractual commitments of the state to the concessionaire of the PPP tender for the Purple Line. The Ministry of Finance has announced that the tender announcement be suspended until the full evacuation of the section of the line. As there is no possibility of completing the Purple Line project in its current form, without vacating the aforementioned section, we think that the Ministry of Transport will make a decision soon."
NTA said, "NTA is working towards advertising the results of the PPP tender as soon as possible."
Published by Globes, Israel business news - en.globes.co.il - on July 6, 2021
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