NTA Metropolitan Mass Transit System Ltd., the manager of the Tel Aviv light rail project, is preparing to republish the systems tender, splitting it into two separate tenders, "Globes" has learned. NTA had contingency plans for such an eventuality, which materialized when it turned out that two bids submitted in the tender were billions of shekels over prior estimates.
The assumption is that if the two bidders do not agree to reduce their bids substantially to bring them close to the estimates, there will be no avoiding cancellation of the tender, but NTA is confident that should that happen there will be no significant delay in the project timetable.
The tender is for planning and constructing civil infrastructure such as rails and electrical systems, and signaling systems for controlling all train movements, plus less complex systems such as ticketing, fare collection, PA, and information for passengers. The value of the tender was estimated by consultant BP at NIS 2.5 billion. NTA's internal estimate was verified by Aegis, the auditing firm supervising the project on behalf of the Accountant General in the Ministry of Finance. When the bids were submitted, however, it turned out that one consortium (comprising French companies Thales, Colas and Systra, together with Israel's Shafir Civil and Marine Engineering Ltd.) submitted a bid of just over NIS 4 billion. A second consortium (comprising French company Alstom and Israeli company Minrav Engineering and Construction of the Minrav Holdings Ltd. (TASE: MNRV) group) bid NIS 5.5 billion.
The tender began in 2012, and included a pre-qualifying stage which was passed by four consortia of which two later withdrew. The systems are a main part of the Red Line project of the light rail system in the Tel Aviv area now under construction, the cost of which is estimated at NIS 17 billion and which is due to be completed in 2021.
Sources that 'Globes" spoke to raised the possibility that the bids were a polite way of avoiding winning the tender, because the European companies do not wish to take responsibility for integrating their technological systems with the Chinese rolling stock that the light rail will operate.
The rolling stock tender was won by Chinese company CNR, which beat Spanish company CAF and France's Alstom. "Globes'" sources indicated that the cost estimate of NIS 2-2.5 billion produced by NTA and the Ministry of Finance could have been reasonable only in the event of integration between Western signaling systems with Western rolling stock, and that the combination of Western and Chinese systems makes the work substantially more costly.
In addition, there were claims that NTA should have done things the other way around, and that the first tenders to be published should have been the rail operating tender and the systems tender, because these require the involvement of experienced professionals able to produce appropriate follow-on tenders. In fact, the operating and systems tenders were published only this year, after the infrastructure and rolling stock tenders. NTA believes that the high bids it received in the systems tender represent attempts by the bidders to exploit the project's tight timetable.
The first tender that NTA seeks to publish, if the systems tender is cancelled, is for laying rail line infrastructure and electrical cabling in the above-ground sections of the Red Line, where work can begin immediately. A second tender, which can take longer without affecting the timetable, is for installing and managing the signaling systems and the other computerized systems. In neither tender will there be a pre-qualifying stage, and any consortium that meets the threshold conditions will be able to bid, which should considerably shorten the tender procedure.
NTA said in response, "We are used to attempts by interested parties to sabotage tender processes of the light rail project and to spread speculation. This is what happened when we announced the start of excavation works, and also when the winners of the tunnel digging tender were announced, as well as the winner of the rolling stock tender, and unfortunately that is what is happening now. It goes without saying that in all these instances NTA stood firmly by the timetable and the budget, and so it will be this time too. All that remains to be said is that when the winner among the bidders is decided on, we shall publish the results."
Published by Globes [online], Israel business news - www.globes-online.com - on November 24, 2016
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