Officials from the Tel Aviv light rail consortium, Metro Transportation Solutions (MTS) yesterday met Deputy Accountant General Ami Landau yesterday in a last-minute effort to reach a commercial agreement on the financing terms of the franchise. Representatives from the foreign banks that are due to provide the bulk of the project's financing also participated in the meeting. This issue was supposed to be settled in November.
Sources inform ''Globes'' that substantial progress was made in recent talks between MTS and the Ministry of Finance on a number of issues, including responsibility for the issuing of building permits. They agreed to set up a joint team comprising MTS, the state, and the relevant local authorities. A source close to the talks said, "This is a breakthrough, but disagreements remain. We hope to finalize the outstanding commercial issues in the coming days."
The issue of financing for the Tel Aviv light railway was hit by the global financial crisis as the foreign banks financing the project delayed their responses and sought changes in the franchise agreement. The banks include Royal Bank of Scotland plc (LSE; NYSE: RBS) and Germany's KfW Bank Group, and Bayern LB notified the Ministry of Finance that they wanted to bring in more banks into the project in order to spread the risk.
MTS is a consortium comprising Africa-Israel Investments Ltd. (TASE:AFIL; Pink Sheets:AFIVY), Egged Israel Transport Cooperative Society Ltd., and Siemens AG (NYSE: SI; XETRA: SIE).
Published by Globes [online], Israel business news - www.globes-online.com - on December 18, 2008
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