As promised, the Tel Aviv municipality will shortly be issuing an international tender for the establishment, operation and maintenance of a bicycle rental system, similar to that operating in other major cities in Europe.

TheMarker has learned that the tender calls for placement of roughly 1,500 to 2,000 bicycles in about 100 parking stations throughout the city. The bicycles would be available for use by subscribers or chance customers for short or extended periods.

Payment will be made by credit card, to make sure that people returning the bikes beyond the deadline actually pay the fine.

The franchise will be operated for a period of five years, with an option for five more. The winner of the tender will have to undertake to install a payment and control system in three languages, and to establish at least one manned call center for public access.

The tender winner will also be responsible for routine maintenance of the bicycles and operation, which constitutes the bulk of the project investment.

The cost of a yearly subscription will likely be NIS 120, with the use of a bicycle for the first half-hour free for subscribers, and somewhere in the range of five to ten shekels an hour for every additional hour.

Chance customers will pay a one-time fee of NIS 10, and NIS 5 to NIS 10 per hour, according to the plan taking shape.

Every citizen in Israel who visits the city - not just Tel Aviv residents - will be entitled to use the bicycles. The parking stations will be located at a distance of about 500 meters from one another. The franchisee will be responsible for monitoring and regulation of the bicycles between stations, to avoid shortages of bicycles or parking spaces

The tender will include an auction for the grant that the franchisee will receive from the municipality. The annual cost of establishing and operating such a system is estimated at about NIS 10 million to NIS 15 million. The Tel Aviv municipality has decided not to undertake a B.O.T. (build, operate, transfer) tender - where the winner establishes and operates the system in exchange for royalties from public fees - in order to maintain control over flexible pricing of the service. Revenues from the rental service will therefore go to municipal coffers.

International companies experienced in the area are expected to compete for the tender, but these may well cooperate with local businesses. The municipality is also hoping for an amendment to the helmets law in the near future, which will require the use of helmets only when using sports bicycles off urban roads.

To date the municipality has paved 74 kilometers out of the 100 total kilometers of bike paths planned in the city by 2009, when the city will celebrate its 100th anniversary. A survey conducted by the municipality in 2004 showed that 5% of the city's residents go to work on bicycles, arriving within 16 minutes.

The intention is to imitate similar successful systems currently operating, mainly in western Europe. In Paris, for instance, 20,000 bicycles are offered for rent, after more than 150,000 residents subscribed to the service in the first four months of its operation. The system in Barcelona, Spain reportedly has more than 60,000 subscribers.