The Ministry of Finance has rejected the request by Tel Aviv light rail franchisee Metro Transport Solutions (MTS) for a 60-day extension to renegotiate the terms of its contract. Deputy Accountant General Avi Dor notified MTS that it must secure financing for the project within 90 days at the current terms. Failure to do so will be grounds for cancelling the franchisee's win in the tender.
Ministry of Finance officials confirmed that there was a real chance that MTS's franchise could be cancelled. This would lead to a government takeover of the project or its cancellation.
MTS comprises Africa-Israel Investments Ltd. (TASE:AFIL; Pink Sheets:AFIVY), Egged Israel Transport Cooperative Society Ltd., Siemens AG (NYSE: SI; XETRA: SIE), China Civil Engineering Construction Corporation (CCECC), and Sociedade de Construcoes Soares da Costa SA of Portugal. Last month, the Ministries of Finance and Transport held a hearing for MTS, which claimed that it could secure the financing due to the global financial crisis.
The Tel Aviv light rail's Red Line current target date for opening is the end of 2015. Sources involved in the project said that if MTS's franchise is cancelled, this would push the opening date back by at least two more years.
Published by Globes [online], Israel business news - www.globes-online.com - on December 23, 2009
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