A few weeks after the struggle between government company NTA Metropolitan Mass Transit System Ltd. and the Ministry of Finance over the structure of the Greater Tel Aviv light rail tenders ended in a compromise, it turns out that NTA wants to avoid the signals tender scheduled for publication no later than May 15. As an alternative, NTA has allocated NIS 300 million, including a 10% commission to Chinese company CNR, the winner of the rolling stock tender, to bring a signals company to do the work for NIS 270 million.
Following the message from NTA, CNR contacted French company Thales, but the two companies have yet to reach agreement. As far as is known, the signals element in the combined tender was to have been for NIS 250 million, but the bids made reflected prices in the NIS 300-400 million range. NTA is now willing to add NIS 20 million for this element in order to settle the matter as soon as possible.
NTA today said that as of now there was no change, and the tender would be published on May 15. Last night, however, NTA said, "No decision has yet been made about the process for buying a signals system." NTA is again emphasizing that its goal is to meet the timetables for launching the light rail in October 2021 within a NIS 16.1 billion budget.
The struggle between NTA and the Ministry of Finance was settled on the eve of the Passover holiday, following intervention by Minister of Transport Yisrael Katz, after almost four months of dispute between the parties. NTA believes that the tender for the main systems (signals, electrification, tracks, communications, security, control and engineering infrastructure) should be split into four separate tenders, and responsibility for integration should be given to the PB consultant company supervising the project. The settlement gave NTA the option of issuing a separate signals tender, but the other systems will be assigned in a combined tender to be issued no later than August.
According to former Ministry of Finance senior deputy legal advisor Advocate Eldar Duchan, who currently heads the Project-Finance, Energy & Infrastructure department at the Eitan, Mehulal, & Sadot law firm, infrastructure tenders usually include a clause for changes and extensions - a clause that can be formulated either broadly or narrowly. Another possibility is obtaining authorization from the tenders committee for an exemption from a tender on the grounds of a single supplier, "but that is stretching it." As of now, no such decision has been taken.
"Had they asked me to allow the Chinese to bring the signals contractor because it is the cheapest and the best for the country," Duchan says, "I would first check the changes and extensions clause, although even if it is formulated broadly, it is no trivial matter to ask a contractor who was awarded one kind of work to carry out a different kind of work." A check by "Globes" shows that the wording of the clause in the tender was broad, but Duchan adds that even in this case, "It is right to bring the decision to the tenders committee."
Published by Globes [online], Israel Business News - www.globes-online.com - on May 4, 2017
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