Tel Aviv light rail franchise Metro Transport Solutions has rejected the Ministry of Finance's final offer for building the project. The announcement came at the end of the 12-day period the ministry gave the consortium after cancelling its franchise.
The Ministry of Finance and MTS will continue discussions in arbitration proceedings. The ministry is due to foreclose on MTS's bank guarantees 30 days from the cancellation notice, i.e. in two weeks.
The cancellation of MTS's franchise agreement, signed in 2006, will probably greatly delay construction of Tel Aviv's light railway line. The construction cost of the first line, the Red Line, is €2 billion, for which MTS was due to receive a set-up grant of NIS 7.15 billion from the government. The 22-kilometer Red Line will run from Petah Tikva through Ramat Gan to Tel Aviv, Jaffa, and Bat Yam.
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 August 19, 2010
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