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The government is to compensate Derech Eretz, the concessionaire for the Trans-Israel Highway, for delays in handing over land for the toll road, even though the company completed that stretch four months ahead of schedule.

According to an agreement, the state will pay compensation estimated at NIS 100-200 million. Next week the parties are scheduled to meet to draw up the final details of the payment.

The Trans-Israel Highway Company, which manages the project on behalf of the state, committed to handing over the land that was due to be paved for the highway by May 2000. However, land disputes, including cost of compensation to landowners for expropriating their property, delayed the transfer.

The disputes centered around the value of compensation, with the landowners claiming the proposed sums did not reflect true worth or future usage of land. The Trans-Israel Highway Company rejected this, but a compromise was reached that enabled work to begin on the project.

The state believed the delays caused the concessionaire to put in extra effort to complete the road on schedule, and therefore it deserved compensation. Derech Eretz concurred, and demanded compensation of NIS 400 million. The state agreed to something less.

Even so, Derech Eretz opened the main stretch from Hadera to Gedera for traffic four months ahead of schedule, in January of this year.