Sources inform ''Globes'' that Minister of Finance Yuval Steinitz has instructed Accountant General Shuki Oren and Budget Director Ram Belnikov to present him with a status report on the situation of the Tel Aviv light rail tender and a progress report on the negotiations with franchisee Metro Transportation Solutions (MTS) as soon as possible, in view of the delays in securing financing for the project.
Steinitz and Minister of Transport Israel Katz will reportedly have to make decisions about the future of the Tel Aviv light railway project over the coming weeks. Sources add that there is an internal dispute at the Ministry of Finance about further handling of the tender. The Tel Aviv light railway is the largest infrastructure project in Israel, with an estimated cost of NIS 10-11 billion.
Although the Accountant General's Office is determined to pursue the current tender in cooperation with the private sector, the Budget Department wants to review alternatives to the tender process because of the problems with MTS and concern about cost overruns. The deadline for securing financing for the project passed in mid-April with no agreement between the parties.
Due to the global crisis, MTS, run by CEO Yohanan Orr, has not yet signed the necessary financing agreement, despite three postponements since May 2008.
MTS is a consortium comprising Africa-Israel Investments Ltd. (TASE:AFIL; Pink Sheets:AFIVY), Egged Israel Transport Cooperative Society Ltd. and Siemens AG (NYSE: SI; XETRA: SIE), China Civil Engineering Construction Corporation (CCECC), and Sociedade de Construcoes Soares da Costa SA of Portugal.
Published by Globes [online], Israel business news - www.globes-online.com - on April 27, 2009
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