The Metro project in the Gush Dan (Greater Tel Aviv) area, Israel’s largest ever infrastructure project, is nearing the capital market. "Globes" has learned that NTA-Metropolitan Mass Transit, the government company carrying out the project, is looking at the possibility of issuing a bond on the Tel Aviv Stock Exchange to bridge the timing gaps between the huge expenditure on construction of the Metro and the revenue from taxes and charges, the amounts of which are not certain and which may not be collected for years. The idea of a bond offering is supported by the Government Companies Authority but awaits the decision of incoming Ministry of Finance accountant general Michal Abadi-Boiangiu.
In 2021, the budget for the project was set by law at NIS 150 billion. With index-linkage, the amount is now nearly NIOS 180 million.
Financing gap
Half the cost of constructing the Metro will be financed out of the state budget, and other half from a congestion charge in Tel Aviv and from capturing the rise in value of the land along the Metro route. In the environs of the Metro stations and above them building rights will be considerably increased, and developers that exploit the rights will be required to pay a betterment levy to the state. This is in addition to a special tax that will be imposed on local authorities in accordance with the number of stations built in them, and some land sales.
The finance due from the state is predictable in timing and amount, but the tax revenue is harder to plan for, and gaps may arise between the need to pay contractors and the actual revenue received from taxation.
The Bank of Israel commented on these gaps as early as 2022, but explained in a report on the matter that it was difficult to estimate how large they would be. The central bank proposed that the government should bridge the gap by means of the state budget or by raising debt.
The state comptroller also raised the problem of the financing gap in a report released last week, putting it at tens of billions of shekels. The comptroller criticized the Accountant General’s Department and the Budgets Division at the Ministry of Finance for having failed to formulate a plan for bridging the gap. The matter will need to be dealt with by two officials nominated by Minister of Finance Bezalel Smotrich whose appointments have yet to be confirmed by the government: Abadi-Boiangiu as accountant general and Maharan Frozenfar as head of the Budgets Division.
Bond issues financed projects in London and New York
In an international survey of projects on this scale, NTA points out that projects elsewhere in the world have resorted to bond offerings. The construction of the Elizabeth Line in London, for example, was financed by the issue of a £3.5 billion bond against a financing levy and a similar amount against the revenue of Transport for London, the metropolitan transport authority of the UK capital. Similar measures were adopted in New York and Lima. "International experience relevant to Israel teaches that a bond issue by NTA or by the state can be considered," the survey states.
Sources inform "Globes" that staff work on the matter has been carried out at NTA over the past few months. NTA chairperson Yodfat Afek Arazi has experience of managing bond issues of government companies in the past.
The Metro seems far off, but tenders amounting to billions of shekels will be published this year. In the coming two years the project is not expected to run into any cash flow difficulties, but this is precisely the period in which NTA has to organize itself as a public company and to implement financing methods in the tenders. A government source told "Globes": "The state comptroller’s report begs the government - this is the biggest project ever carried out here, don’t treat is as though you’re building a road. It requires precise financial planning and provision of certainty to the market right now."
Published by Globes, Israel business news - en.globes.co.il - on January 5, 2026.
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