Subscribe to Print Edition | Thu., December 11, 2008 Kislev 14, 5769 | | Israel Time: 02:34 (EST+7)   Back to Homepage web haaretz.com Haaretz Toolbar Diplomacy Defense Jewish World Opinion National Print Edition Car Rental Books Haaretz Magazine Business Real Estate GA 2008 Travel Week's End Anglo File

Foreign banks imperil TA rail project By Avi Bar-Eli Funding for the Tel Aviv light rail project is in jeopardy after the banks slated to finance the project advised the tender winner, the MTS group, that they cannot meet their obligations. The Royal Bank of Scotland, and KfW and Bayern banks of Germany, were to have lent ?1.4 billion through a consortium. The widening financial crisis is believed to be a major culprit in the banks' decision to withdraw from the project. Another culprit is the banks' experience with the rail project in Jerusalem. Representatives of the banks and of MTS are discussing a new idea: a "club deal" that would include additional banks and not have any single leading bank. It would also transfer the financing risk to the tender winner. Advertisement However, given the credit crisis jolting world markets, the process can be expected to hit a wall. It will likely be difficult to enlist new banks at this late stage. The deadline to reach a financing arrangement was recently postponed, for the second time in four months, to January 28, 2009, after representativess of the government, MTS and financing bank failed to reach a final agreement by the end of September. Last month it turned out that global reinsurers had refused to provide an Advance Loss of Profit insurance policy for the project. The policy, which would provide financing banks with a safety net against lower than expected profits, followed the collapse of AIG, which served as the project's professional insurer. Nationalization of the Royal Bank of Scotland added to the difficulties. The banks also want the tender agreement be renegotiated to ensure that work permits are issued in a timely manner. They demand moer assurances, too, after observing the difficulties imposed by municipal authorities in the light rail project in Jerusalem. Bookmark to del.icio.us   Back in the Mideast Carter may meet with Hezbollah officials during his visit in Lebanon. Bush's final days Olmert has a thing or two to learn from Bush about an exit strategy.

Read & React Feiglin's missing manifesto: Israel should quit UN, cut off water to Palestinians Responses: 264 Yossi Sarid / Feiglin and his cronies are fascists by any definition Responses: 144 Bush's final days: What W can teach Olmert about exit strategy Responses: 25 Reuven Pedatzur: Why can't the IDF handle a few dozen Gaza terrorists? Responses: 35 More Headlines 23:40 Obama wants to 'reboot' America's image in the Muslim world 01:13 Tzipi Livni slams Likud list as 'been there, done that' 00:36 Report: Israeli envoy to U.K. accuses church service of being anti-Semitic 19:16 UN General Assembly chief tries to block Israeli envoy's address 21:01 Anti-Terror Bureau warns Israelis not to travel to Goa 15:57 Nobel Peace Prize winner urges Obama to focus on Middle East 01:19 Barak: Israel will act in Gaza when time and place are right 01:17 Feiglin: Israel should pay Palestinians to quit West Bank 16:56 Barak approves transfer of NIS 100 million to Gaza banks 21:21 Comedian Gil Kopatch to lead Green Leaf party in Knesset elections 20:49 Probe reveals voting irregularities during '07 elections for Labor chairman 14:05 Hezbollah leaders refuse to meet with Carter in Lebanon 17:05 Survey: Most Israelis think state must crack down on sex industry 01:11 Court indicts settler caught shooting Palestinians in Hebron 16:15 Ultra-Orthodox pressure leads finance committee to approve budget changes Previous Editions Select Day 10 dec 09 dec 08 dec 07 dec 05 dec 04 dec 03 dec 02 dec 01 dec 30 nov 28 nov 27 nov

Special Offers Advertisement Summer in Israel Israeli style - Tzofim Chetz V'Keshet 2009 Living in Israel Studying in English Click & Meet our students from all around the world Fattal Hotel Chain Perfectly located hotels on best resorts of Israel. Car rental in Israel Shlomo Sixt Receive $15.00 from our low rates. Eldan Rent a Car Israel's leading car rental company offers you a 20% discount on all online reservations Jewish Singles Personal Ads Find the love of your life on JDate.com Hebrew Summer courses From $39.95 Junkyard Junk a car - get free towing nationwide and a tax-deductible receipt

Home | TV | Print Edition | Diplomacy | Opinion | Arts & Leisure | Sports | Jewish World | Underground | Site rules |

Real Estate in Israel | Travel to Israel with Haaretz | Hotels Israel | Restaurants Israel | Tourist attractions Israel | Shops Israel

birthright Israel | Search engine marketing

Haaretz.com, the online edition of Haaretz Newspaper in Israel, offers real-time breaking news, opinions and analysis from Israel and the Middle East. Haaretz.com provides extensive and in-depth coverage of Israel, the Jewish World and the Middle East, including defense, diplomacy, the Arab-Israeli conflict, the peace process, Israeli politics, Jerusalem affairs, international relations, Iran, Iraq, Syria, Lebanon, the Palestinian Authority, the West Bank and the Gaza Strip, the Israeli business world and Jewish life in Israel and the Diaspora.

© Copyright  Haaretz. All rights reserved