The government is considering issuing a new tender for the construction of a new light rail line in Yerushalayim, and the extension of an existing line. The new lines would extend service south to Hadassah Ein Kerem Hospital, and north to Neveh Yaakov. Altogether, the construction will add 22 kilometers of track to the system.
The plan for the additional lines was approved about a year ago, but has not been put into effect, Haaretz reported – because of a financial dispute with Steepas and Alstom, the companies in charge of construction and operation of the Light Rail. The companies say that between 340 and 355 million euros are needed to build the projects, but the government does not want to spend more than 310 million euro. According to Alstom, the state arrived at that figure after consulting with an outside company that did not take into account some of the infrastructure work that needs to be done to build the lines.
Steepas and Alrom built the current light rail system after winning a previous tender – and they are supposed to hold the franchise until 2038. The state has the right to seek out other bidders for further work, but will have to compensate the companies if they are replaced. According to one expert quoted by Haaretz, that compensation is likely to significantly slow down construction progress. “It isn’t the compensation costs – it’s the delays in construction as the government seeks out a new candidate. Just look at the Light Rail in Tel Aviv and you get an idea of what a delay in construction can cause.”
MTS was chosen in 2006 to build that city’s light rail, but in 2010 the state changed its mind, and reissued the tender. As a result, the construction process is likely to continue through 2022, and will end up costing the country NIS 17 billion. “When you have a thirty-year-plus contract, a few million euros here or there don’t matter,” said the expert. “The state wants to show that it is in charge of the project, but it has to look at the long view. The question is not what the companies get out of this, but what the people get.”