Tel Aviv light rail franchise Metro Transport Solutions (MTS) has officially responded to the government's cancellation of its franchise. The franchisee said in a statement, "To the regret of MTS the State of Israel is continuing to act as if it does not recognize the existence of a financial crisis in Israel and the world contradicting reality, reports and opinions."
MTS claims that the strong shockwaves felt by the world's financial markets have frozen their obligation to close financing to support the project, and thus it issued a letter at the end of last week for official distribution to obligate the government to rapidly conduct negotiations at the most senior level by the end of next week. The letter, in effect, paves the way for arbitration, which will at least involve forfeiture of NIS 120 million guarantees from the Ministry of Finance next month.
MTS said, "The gap between the current position of the State and MTS Group is not large. With its revised offer, the Group and its partners took upon themselves a heavy burden in terms of costs and commitments, which were welcomed by local and foreign supporters."
MTS Group comprises Africa-Israel Investments Ltd. (TASE:AFIL), Siemens, Egged Israel Transport Cooperative Society Ltd., China's CCECC, and Portugal's Suarez Da Costa.
A senior source in the Ministry of Finance told "Globes" that MTS' statement was false. The source said that the Ministry of Finance has given in and come towards MTS in complete contradiction of what is said in the statement.
Published by Globes, Israel business news - www.globes-online.com - on August 24, 2010
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