The Ministry of Finance will reject the final offer of Tel Aviv light rail's Red Line franchisee Metro Transport Solutions (MTS), believe sources from both parties. Both parties will officially approached the arbitrator to decide whether there is breach of the franchise agreement between MTS and the ministry, and if so, which party is at fault.
The parties believe that the Ministry of Finance will, within days, foreclose on MTS's NIS 147 million bank guarantee.
Last Thursday, MTS submitted its final offer for a new franchise agreement, during a meeting between Accountant General Shuki Oren and consortium executives headed by Africa-Israel Investments CEO Izzy Cohen. MTS's offer accepted most of the items listed in the Ministry of Finance's "final offer" submitted to the consortium on August 10.
However, sources inform ''Globes'' that MTS decided that it would not announce that it accepts the Ministry of Finance's offers on the grounds that it does not recognize the ministry's announcement to cancel the franchise, which was appended to the final offer. MTS also did not attach documents declaring that the banking syndicate financing the project was bound by its offer.
A government official involved in the project told "Globes", "Bottom line, they did not put the money on the table, and they are basically in the same place where they were two years ago.
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 September 5, 2010
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