Deal Reached to Sell Off Egged Routes

Egged buses parked in Yerushalayim. (Sebi Berens/Flash90)

After extensive negotiations, the Egged Bus Cooperative, the Finance Ministry and the Transport Ministry have come to an agreement that would essentially end Egged’s near-monopoly on inter-city travel. According to the deal, most of the lines operated by Egged will be put up for tender, with any bus company that cares to participate in the tender to be provided with the opportunity to bid on the routes.

According to the deal, Egged will gradually put all its routes up for bidding, with the process to be completed by 2030. Besides inter-city routes, many urban routes will be put up for auction as well – starting with Yerushalayim, where some 50 percent of the routes will be offered for tender in the coming months. Some 80 routes, carrying 60 million travelers a year, will be put up for bidding.

In 2019 routes between Yerushalyim, Ashdod, Ashkelon and Rechovot will be offered, to be followed by dozens of local routes in Haifa, Rishon LeTzion and other cities by 2020.

The deal comes in the wake of huge debts Egged has run up in recent years that the government has bailed out the company for. As part of the deal, the company has committed to increasing its efficiency. Many of the workers currently under contract will retire in the coming years, and a special budget will be allocated in the next year and a half to enable many of them to retire early. In order to further enhance efficiency, the company will turn from a cooperative to a corporation next year.

Transportation Minister Yisrael Katz said that “with the approval of the deal, Egged will turn into a competitive modern organization, for the benefit of all Israelis and the workers of Egged.” The changes will, he added, enable the company to enhance its offerings and service, and implement new technologies, such as hydrogen and electric-powered buses, and other modern improvements.