The Tel Aviv light rail is running late — about six years late, and 3 billion shekels over budget, reports Globes.
Previously set to begin rolling in 2017, it won’t be ready before 2023, according to the project’s Dutch auditor, Aegis, in an internal report prepared for the Ministry of Finance.
The Tel Aviv light rail project was originally a BOT (build-operate-transfer) project until the franchisee, Metro Transport Solutions (MTS), a consortium led by Africa-Israel Investments, was nationalized in December 2010, after it failed to secure financing. The government handed the project over to NTA, a government company that had been responsible for work done on the light rail’s infrastructure.
Minister of Transport Yisrael Katz pushed through the nationalization of the project, over the objections raised by then-Prime Minister’s Office director general Eyal Gabay, who argued that it would provide no solution.
The decision to nationalize the Tel Aviv light rail states, “The project will be fully operational no later than 2017,” and set a budget of NIS 10.7 billion. A few weeks ago, NTA estimated the project’s budget at NIS 14 billion, saying that the cost overrun was due to the rise in the Consumer Price Index (CPI). However, Globes noted, a simple calculation shows that the CPI would account for only NIS 600 million of the project’s added cost, leaving an unexplained overrun of NIS 3.3 billion.
The Ministry of Finance said blandly in response, “In line with the government decision, NTA is authorized to build the Tel Aviv light rail project. The company is therefore moving forward on the planning of the Red Line, and recently submitted the planning concept in which NTA will carry out the detailed planning. This concept was reviewed by an auditor on behalf of the Ministry of Finance and the Ministry of Transport, which recommended it. The communications procedures are not the responsibility of NTA by law.”