Shapir sues Knesset for NIS 673m

The company has not been paid 12 years after building the Knesset's new wing.

Shapir Civil and Marine Engineering Ltd. yesterday filed a NIS 673 million lawsuit against the Knesset, 12 years after building the Knesset's new wing, and after a last attempt to reach a settlement with outgoing Knesset Speaker MK Reuven Rivlin failed. The matter has been suspended until a new speaker is sworn in.

Sources at Shapir told "Globes" that the filing of the lawsuit on the same day that the 19th Knesset was sworn in was not a coincidence. They said that now, following the election of a new Knesset speaker, talks could drag on for years.

In the statement of claim, Shapir says that Knesset demanded "huge amounts of additional work" which completely altered the project, and only paid for 28% of the project's original cost. The company is suing the Knesset for NIS 228 million in financing costs for the additional work, NIS 110 million for the additional work itself, NIS 110 million for damages by the Knesset's refusal to allow the company to hire construction workers from eastern Jerusalem, and NIS 160 million for finishing ahead of schedule.

Shapir won the PFI tender to build the Knesset's new wing in July 2001, and signed a contract a month later. The Knesset agreed to pay NIS 136 million for the 32,000-square meter new wing, which has offices for MKs and their aides, committee rooms, communications rooms and a computer center, and the Knesset's energy center. Work began in September 2001, but only ended in January 2009, 4.5 years behind schedule, because of 960 additional work items and changes to the original plan.

Published by Globes [online], Israel business news - www.globes-online.com - on February 6, 2013

© Copyright of Globes Publisher Itonut (1983) Ltd. 2013

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