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Last week, the Carmelton group, which won the tender for the Carmel Tunnels project in Haifa, submitted a demand for NIS 100 million in compensation from the Carmel Tunnels Authority (which includes representatives of the Finance and Transportation ministries) because of the construction delays.

The group, which was awarded the tender in 1998, claims that in addition to delays in the granting of statutory permits for the project, the project has been held back due to incorrect data provided by the state regarding the type of rock along the tunnels' route and the need for a more expensive drilling process.

Sources at the Transportation Industry confirmed that in principle, a certain amount of compensation was due to the group, but that Carmelton was demanding way too much. Whether or not this is the case, last week's State Comptroller's Report confirms the group's claims.

According to the report, the state made every mistake possible with regard to the granting of the necessary permits, taking too long and acting negligently. The report noted that there were a number of lessons that could be learned from the mistakes in the handling of the project. Ministry sources told Ha'aretz that most of these lessons had already applied to other infrastructure projects.

The state comptroller's harsh criticism allows the Carmel Tunnels Project to serve as an example of how a national project should not be promoted. A combination of cumbersome bureaucracy and inflexibility on the part of the authorities delayed an important and necessary project for which the funding was already available.

There is not doubt that the bureaucratic process is important. Residents who feel that the project will harm them must be given the opportunity to voice their objections. Landowners along the route must also be allowed to conduct fair negotiations for the expropriation of their property. Environmental concerns are also important. Even so, the comptroller's report claims that these matters were not handled efficiently and led to unnecessary delays in the execution of the project.

Lengthy tender procedures

One of the problems raised by the comptroller's report concerns the duration of the tender procedures. It often takes years to obtain permits for and complete building infrastructure projects such as roads and railways, and the process involves cumbersome bureaucracy. Bodies such as the Public Works Department (PWB) and Israel Railways accuse the planning institutions of working too slowly; the planning institutions toss the ball back and accuse the projects' initiators of submitting faulty plans. Both sides agree, however, that the main cause of delays is a lack of cash.

The Carmel Tunnels Project began in 1992, with the drawing up of an international tender for the construction and operation of the tunnels under the BOT (build, operate, transfer) system, whereby the winner of the tender would build the tunnels, operate them for 35 years, and then transfer them, free of charge, to the state. The tender for candidacy applications was issued in January 1994; and in January 1997, five consortia were chosen to bid for the project itself. The tender was issued in January 1998; in September that year, a winner was chosen to undertake the project; and in March 1999, a contract was signed.

Sources at the Transportation Ministry claim that most of the mistakes stemmed from a lack of knowledge and a lack of experience, since the Carmel Tunnels Project is the first major infrastructure project to be handled by a private developer.

Incomplete expropriations

Delays in infrastructure projects are, to a large extent, caused by objections on the part of landowners who do not wish to relinquish their property to the state, despite the laws that give the state expropriation rights.

The treasury and Yefe Nof, the government company charged with planning and supervising the tunnels project, wanted to complete the approval process for the master plans and to expropriate the land along the tunnel road route before the publication of the tender, primarily to shorten the bureaucratic process and facilitate efficient engineering and feasibility checks.

In December 1994, when the government announced its intentions to expropriate land along the project's route, many landowners in the area voiced their objections to the supervisor of expropriations at the Israel Lands Administration (ILA). Most of the objections concerned the resulting devaluation of apartments in the area, as well as the noise and air pollution from the construction and operation of the project.

The expropriation process dragged on until after March 1999, when the contract was signed with Carmelton. By the end of 2001, two families living along the project's route had yet to move out of their homes, while many appeals filed by apartment owners who lived above the project's route were still being considered by the High Court of Justice.

Transportation Ministry sources noted that in the future, in light of the delays caused by settling compensation for expropriated land, no project contracts would be signed until the completion of the expropriation process.

Statutory permits

Obtaining statutory permits for infrastructure projects is, of course, a complicated process. Huge projects have an effect on their surroundings and particularly on the people who live along the routes. According to the comptroller's report, Carmelton was responsible for obtaining approval for its detailed plans and securing a building permit. The approval and permit were to have been obtained by November 1999 and January 2000 respectively.

The comptroller noted, however, that between 1993 and 1998, Yefe Nof had managed to obtain approval for the master plan only, leaving Carmelton with only 9 months to complete the work on the details.

Unsuitable land

In 1992, drilling work was done along the proposed route of the Carmel Tunnels Project to ascertain the suitability of the rock. According to the comptroller's report, however, the drilling work had not constituted a detailed geological study. Such a study was conducted by Carmelton in 1999, revealing that in many places, the rock is much harder than determined in the 1992 study.

The 1999 study also found that the area surrounding the planned western opening of the tunnel is not rock, but soft, sandy soil, which cannot be drilled like regular rock. These findings necessitated changes in the planning and digging of the tunnels. Furthermore, archaeological findings were made at the planned western opening and the Antiquities Authority conducted digs there from 1993 until 1999.

When Carmelton's geological survey found the site to be unsuitable for the tunnel, a new site was chosen, 40 meters to the east. It, too, was in an area designated as an antiquities site, and a new archaeological dig was undertaken to ensure that no important artifacts would be damaged by the tunnel. The digging took 18 months to complete.

Sources at the Transportation Ministry said that even though all the permits had now been granted, Carmelton would probably not begin working on the project until after it reached a compensation agreement with the treasury.