Sources inform ''Globes'' that Carmel tunnels franchisee Carmelton has signed a contract with Road 6 (the Yitzhak Rabin Highway, also known as the Cross-Israel Highway) franchisee Derech Eretz Highways Ltd. to operate the tunnels after they open in 2010.
Carmelton is controlled by Ashtrom Properties Ltd. (TASE:ASPR) and Arison Holdings Ltd. subsidiary Shikun u'Binui Holdings Ltd. (Housing and Construction) (TASE: HUCN). Derech Eretz is also owned by Shikun u'Binui, together with Africa-Israel Investments Ltd. (TASE:AFIL; Pink Sheets:AFIVY), and Canadian engineering company Aecon Construction Group Inc. (TSX: ARE).
The government and Carmelton financier Israel Discount Bank (TASE: DSCT) have already approved the contract. Derech Eretz will set up the tolls system for the Carmel tunnels and operate it for 20 years. The fee for operating is estimated at NIS 20-30 million a year, and which brings the financial scope of the deal to around NIS 500-600 million.
"Globes" broke the story that Carmelton and Derech Eretz signed an memorandum of understanding in late 2007, after Derech Eretz won the pricing process against Siemens AG (NYSE: SI; XETRA: SIE) and other bidders.
In contrast to Road 6, which uses electronic toll systems, the Carmel tunnels will probably combine an electronic toll system with the option of paying at manned toll booths.
Derech Eretz was founded in 2001 to operate and maintain Road 6.
Published by Globes [online], Israel business news - www.globes-online.com - on May 13, 2009
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