Sources inform ''Globes'' that the Ministry of Finance yesterday notified Metropolitan Tel Aviv light railway franchisee Metropolitan Mass Transit System (MTS) that it has rejected MTS's proposals to amend the franchise agreement for the construction of the Red Line. This means that the franchise agreement, signed in 2006, is about to be cancelled.
Officials from the ministries of finance and transport convened at Prime Minister's Office director general Eyal Gabbai's office last night to discuss alternatives for building the light railway line. One option under consideration is to finance the project from the state budget, instead of the current public-private partnership (PPP) project. Prime Minister Benjamin Netanyahu was originally due to attend the meeting.
On Friday, MTS submitted an improved offer, which included two changes in two key areass: the long-term financing of the project, and a compensation mechanism in the event that the franchise agreement was terminated.
MTS is a consortium comprising Africa-Israel Investments Ltd. (TASE:AFIL), Egged Israel Transport Cooperative Society Ltd. and Siemens AG (NYSE: SI; XETRA: SIE), China Civil Engineering Construction Corporation (CCECC), and Sociedade de Construcoes Soares da Costa SA of Portugal.
Published by Globes [online], Israel business news - www.globes-online.com - on June 7, 2010
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