The Ministry of Finance has frozen all the tenders for the Tel Aviv light rail project, for fear that public money will be wasted. This follows an exchange of allegations between the Ministry of Finance and the Ministry of Transport over NTA Metropolitan Mass Transit System Ltd., which is responsible for running the project.
The Ministry of Finance has announced that NTA's development budgets are frozen until approval is obtained from the exceptions committee at the ministry headed by Accountant General Michal Abadi-Boiangiu, who is responsible for implementation of the provisional state budget (one twelfth per month of the 2014 budget) until a new government is formed and a budget for 2015 is passed. The committee's approval awaits the results of the examination of the agreement with engineering firm PB, details of which were revealed by "Globes".
Three months ago, "Globes" reported that NTA was about to sign an NIS 800 million agreement with PB under an exemption from tender requirements, for PB to manage the light rail Red Line project. Abadi-Boiangiu, however, delayed approval of the agreement until an examination of whether an exemption from holding a tender was justified in this case.
Sources at the Ministry of Transport today accused Ministry of Finance officials of exploiting the election period, and said that "Minister of Transport Yisrael Katz will not allow Finance Ministry officials to stop this important project."
The Red Line project is one of Israel's most significant and most expensive current infrastructure projects. It consists of a network of lines, partly underground, expected eventually to transport about 200,000 passengers daily. So far, more than NIS 2 billion has been invested in preliminary works and in digging piers and portals. Since 2011, when the government decided to fund the project, its estimated cost has risen by some NIS 5 billion, and currently stands at NIS 16.1 billion.
The Ministry of Finance Budgets Division has been trying to promote a new approach to the project whereby NTA will carry out the underground civil engineering work, while the remainder of the project, chiefly the tenders for the supply of rolling stock, ancillary systems, and operation and maintenance, will be put out for a single tender and carried out by a private franchisee under the PPP method.
This proposal was made in June, and was rejected at the time by NTA CEO Yehuda Bar-On on the grounds that the Ministry of Finance had already authorized the rolling stock tender, and that even if the new approach was theoretically better, changing the concept at this stage of the project was liable to cause long delays. The Red Line was supposed to have completed in 2013, when MTS won the BOT tender in 2006. That tender was subsequently cancelled. The current projected completion date is 2022.
Published by Globes [online], Israel business news - www.globes-online.com - on February 2, 2015
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