Compromise reached on Jerusalem light rail extension

Jerusalem light rail

CityPass will soon begin building the Red Line extension with Alstom after reaching understandings with the Ministry of Finance.

The Israeli government and Jerusalem light rail operator CityPass seem to have reached an understanding on the extension of the Red Line from Mount Herzl to Hadassah Ein Kerem Hospital in southwest Jerusalem and between Pisgat Zeev and Neve Yaakov in northeastern Jerusalem.

Under the terms of the understanding, CityPass will build the extensions with Alstom. CityPass will earn 30% of the profits of the extensions above the safety net for the period before the government buys the line. In addition, CityPass will receive NIS 40 million during construction in accordance with milestone payments that will be set. If the government takes up its buyback option, CityPass will receive an extra NIS 40 million payment.

CityPass chairman Avraham (Beiga) Shochat said, "We welcome the understanding reached this morning, first and foremost for the benefit of the people of Jerusalem, who have been crying out for a long time for the light railway to the hospitals, universities and more remote suburbs like neve Yaakov. CityPass is ready to start work very soon on extending the light rail after much of the infrastructure has been prepared."

Public Transport Consumers Association 15 Minutes executive director Gil Yaakov said, "Continuing the contract with CityPass is surrender by Ministry of finance officials to blackmail of CityPass's shareholders. Minister of Finance Moshe Kahlon has abandoned the public purse and Mayor Barkat has abandoned the passengers. We demand halting this bootlicking of powerful shareholders and ousting CityPass for the sake of public transport passengers in Jerusalem."

The understanding between the government and CityPass was reached this morning at a meeting between CityPass CEO Yaron Ravid, Shochat and other shareholders and state officials including Accountant General Rony Hizkiyahu and Minister of Finance Budget Director Amir Levy. It was also agreed that intensive talks will be held over the next two months to finalize the agreements.

At the same time, the government will publish next week the preliminary selection procedure documents for a franchise on the green line between Gilo and French Hill. The franchisee will operate the line for 15 years with an option to also operate the Red Line, which the government can buy-back from CityPass after March 2019.

Published by Globes [online], Israel business news - www.globes-online.com - on April 9, 2017

© Copyright of Globes Publisher Itonut (1983) Ltd. 2017

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Jerusalem light rail
Jerusalem light rail
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