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A new economic front is threatening to open up between the Prime Minister's Office and the Finance Ministry. Prime Minister Benjamin Netanyahu and his economic adviser Uri Yogev are vigorously pursuing a campaign to line the country with railroad tracks from Kiryat Shmona in the north to Eilat in the south. The project's price tag is NIS 50 billion from 2012 to 2020.

The treasury's budget division under Ram Belinkov firmly oppses the plan, seeing as a huge waste of taxpayers' money. Observers believe that won't change after Belinkov, who tendered his resignation recently, steps down.

Netanyahu sees the development of Israel's railway system as the jewel in the crown of his economic policy, and can be expected to push it through despite opposition.

Under the plan, rail lines would be laid alongside Highway 90 from Eilat to Be'er Sheva, continuing north with the Trans-Israel Highway to the Wadi Ara area, at which point the tracks are to take a northeasterly direction, picking up with Highway 90 again to Rosh Pina and Kiryat Shmona. Three branch lines are to cut across the main north-south route: one from Amiad junction to Acre, one from Haifa to the Jordanian border (Sheikh Hussein bridge) and a third from Ashkelon to Be'er Sheva.

The project is scheduled for completion in 2020. From 2012-2020 it would require an annual supplement of about NIS 5 billion to the infrastructure budget.

200 years too late

Netanyahu believes the expanded system will bring commuters from peripheral areas into the center of the country for work.

Officials in the Prime Minister's Office say trains are the best mode of public transportation for long distances, and the best way to transport cargo, with the potential for getting tractor-trailers off the roads and thus reducing pressure on the country's road network.

According to the PMO, a train from Beit She'an to Haifa would make it possible to build large factories near the former, and thus achieve what the Law for the Encouragement of Capital Investments has not: bringing entrepreneurs to the hinterland.

The budgets division, however, has a very different take. Officials there say that the vision of a railroad network enabling a rural population to stay put and still have jobs was fine for the 19th century, when it was virtually the only form of long-distance transport, but not for the 21st century. They add that the type of train, a heavy one that is difficult to stop and therefore will not make frequent stops, will not be viable for a commuter rail system.

The treasury would rather see a light rail system, which is less expensive to build and because the stopping distances are much shorter is closer in performance to a bus. Officials say the PMO is dreaming when it talks about having a heavy-duty train plowing a commuter route with stops at every small town on its route. They claim that the kind of railway that Netanyahu is talking about isn't meant to stop at communities with fewer than 50,000 inhabitants, and that forcing it to do so is counterproductive, lowering the train's average speed and making it far less efficient - and less attractive to potential users.

According to Finance Ministry officials, switching to rail transport only makes sense in places where the roads are crowded, and that means the center of the country. When the roads are empty, they say, people simply don't choose to take the train instead of driving. As evidence they point to the lack of success of the Be'er Sheva-Dimona line. They also say the idea of switching from trucks to trains for cargo transport only works for the longest of long-haul routes, the kind that simply don't exist much in Israel.

Feel-good project

Treasury officials speaking off-record said the PMO supports the train project because of the way it feels, and hasn't run the numbers to determine its economic viability.

"We've already seen how the Prime Minister's Office succeeds in cutting the defense budget," one official said, adding that the additional NIS 5 billion a year for the railroad plan will come out of the Transportation Ministry's budget for less expensive and more important public transport projects.