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In March 2003, shortly after taking over his new position, Transportation Minister Avigdor Lieberman appointed his old buddy, Moshe Leon, as director of the board of Israel Railways. Leon - a senior partner in the accounting firm Leon, Ulitsky and Partners, who served as director-general of the Prime Minister's Office under Benjamin Netanyahu - was entrusted with promoting the idea of separating the railways from the Ports Authority and turning it into an independent government company.

And indeed, four months later - in July 2003 - the railways became a company on the basis of an amendment to the ports authority law. At a news conference marking the event, Leon, Lieberman and Netanyahu proposed an unprecedented development plan in terms of investment in local infrastructure, and the plan was approved despite widespread budget cuts.

The plan calls for investing NIS 20 billion in developing the railway network by 2008. The government is expected to pay NIS 13.5 billion of this sum, while the rest will be raised by the railways from outside budgetary sources, with the backing of the government. In addition, the government is supposed to give the railways NIS 4 billion toward covering the gap between ongoing expenditures and income - which amounts to an ambitious investment of NIS 24 billion.

A short while after the railways became a company, the board headed by Leon decided to dismiss the director, Yossi Snir, who had been appointed by the previous minister, Ephraim Sneh, and appoint a new director who would steer the firm through the development plan. The post was recently given to Yaakov Raz, the previous head of police's traffic division.

There were differing opinions over the reason for Snir's dismissal. Some said the motives were political, while others said the decision was purely professional. At any rate, the dismissal revealed the extent of Leon's involvement in, and power over, the railways.

The development plan has raised several eyebrows among those involved in the public transportation sector. They say it includes many lines that are unnecessary - such as the Acre-Karmiel or Yeroham-Ofakim-Sderot lines - and which will prove to be economically unfeasible. They add that many of the development plans are in their initial stages and will not be ready for approval, or operation, as the plan calls for, within the next few years.

Leon is unfazed by the criticism and is convinced that if the government ministries, such as the treasury and the Interior Ministry, cooperate, it will be possible to put the plan into action and turn the train into a central form of transportation. He said recently that he believes the ministries are prepared to assist in the development of the lines according to the plan.

The railways' development plan for 2004 bears witness to Leon's declarations. The budget, which amounts to NIS 3.6 billion, will for the first time be larger than that allocated for the development of the country's roads and highways.