Harel Insurance Investments and Financial Services Ltd. (TASE: HARL) is expanding its activity in infrastructures. Sources inform ''Globes'' that the company will likely provide Carmel tunnels franchisee Carmelton with a NIS 120 million loan.
Carmelton is owned in equal shares by Housing and Construction Holding Co. Ltd. (Shikun u'Binui) (TASE: HUCN) and Ashtrom Properties Ltd. (TASE:ASPR). The companies finalized the loan details in the past few weeks and sent them to the Ministries of Finance and Transport for approval.
Harel's loan will apply for the construction period of the tunnels, and is an alternative to the owners' own equity. This will enable the company to obtain a higher yield from the project. Israel Discount Bank (TASE: DSCT) has already provided Carmelton with NIS 850 million in loans.
Work on the NIS 1.25 billion Carmel tunnels project began in the first quarter of 2006. The tunnels run from the northern end of the Coastal Highway (Road 2) at the southern entrance of Haifa, under Mount Carmel, to the Check Post. The 6.5-kilometer road includes two 4.7-kilometer tunnels.
Carmelton has a 32-year franchise to operate the tunnels under the BOT (build, operate, transfer) project. Users of the tunnels will pay a NIS 5 toll during the first year.
Harel has financed a number of infrastructure projects in recent years, including desalination plants and construction of the northern section of Road 6, the Cross-Israel Highway.
Published by Globes [online], Israel business news - www.globes-online.com - on December 29, 2008
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