Negotiations between the state and CityPass, the concessionaire for the Jerusalem Light Rail, on construction of extensions of the Red Line in Jerusalem and a branch line from the Bridge of Strings to Givat Ram, have broken down. Negotiations have been taking place over the past ten weeks, following understandings reached with the intervention of Minister of Transport Yisrael Katz before the Passover holiday.
On Sunday this week, the Ministry of Finance notified CityPass that it rejected the company's proposal for extending negotiations until the beginning of July, and would stand by its commitment to end talks today, June 15.
Under the pre-Passover agreement, CityPass agreed to waive potential compensation of NIS 260-300 million that it claimed would be due to it if the state were to exercise its option to buy the Red Line concession from it from March 2019. NIS 80 million compensation was agreed instead.
A further compromise was reached on the division of revenue between the state and CityPass, beyond the safety net that the state gives the company, for revenue from journeys on the new stretches of the line between Mount Scopus and Hadassah Hospital (6 km) and between Pisgat Ze'ev and Neve Ya'akov (2.7 km). Whereas the original agreement was for a division of 58% to the state and 42% to CityPass, a 30%/70% division was agreed.
CityPass sources said, "Ministry of Finance officials misled us for a long period and for two months of negotiations created an illusion when they had a single aim: to prevent the signing of an agreement in any way possible. The Jerusalem public will pay the price of this conduct in that extension of the lines and completion of the project will be delayed for several years and will become more expensive by hundreds of millions of shekels."
Published by Globes [online], Israel business news - www.globes-online.com - on June 15, 2017
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