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The winner of the tender to build Tel Aviv's light rail system will receive a government grant of some NIS 5.8 billion, Finance and Transportation Ministry officials said yesterday.

Ben Zion Salman, director-general of the Transportation Ministry, said the two ministries have agreed on an allocation in this ballpark, though the exact figure will be determined by the tender. The NIS 5.8 billion figure, he said, is based on the estimated cost of building the system's first line and on the size of the grant received by City Pass, which won the tender to build Jerusalem's light rail system. City Pass received a grant of NIS 1.4 billion, covering some 70 percent of the project's estimated cost of NIS 1.9 billion.

According to Finance and Transportation Ministry officials, Tel Aviv's first light rail line (known as the "Red Line") is expected to cost some NIS 10 billion, but the cost could run as high as NIS 12 billion if problems arise during construction. That is double the NIS 5 billion that ministry officials predicted when they first started planning the project. The increased costs are due mainly to repeated changes that have been made in the line's route. A few months ago, for instance, the National Planning Board approved an underground line to Bnei Brak, which will increase the project's cost by some NIS 800 million.

The Tel Aviv light rail system will be the country's largest infrastructure project over the next several years. It will be built under the BOT (build-operate-transfer) system, meaning private investors will finance the project and operate it for a predetermined number of years, during which they will reap all the profits. At the end of this period - 32 years, in this case - the project will be handed over to the government.

Nevertheless, the government has decided to give the operators a grant, as well, in order to spur the project forward. It will also give them a "safety net" - a pledge that, should the number of passengers per year fall below a predetermined level, the government will compensate the investors for 75 percent of the difference.

The "Red Line" is slated to be 22 kilometers long, of which 9.3 kilometers (between the Geha and Menashiya junctions) will be underground. The line will pass through five cities - Tel Aviv, Bat Yam, Bnei Brak, Ramat Gan and Petah Tikva - and include 31 stops, of which 10 will be underground. The trains are slated to run every 1.5 to 3 minutes.

The tender for the Red Line was issued last November, and the four consortia that have expressed interest in the project are slated to submit their bids by August. The winner is due to be chosen in February.

The four consortia are the Metro group, which includes Africa Israel, the Egged bus cooperative, Germany's Siemens, Canada's Aecon, and Holland's HTM Transportation Solutions; Adanim, which includes Properties and Building, the Dan bus cooperative, and France's RATP; the Ashtrom group, which includes Ashtrom, Housing and Construction (Shikun U'Binui), Polar Investments, and France's Connex; and a group consisting of Shafir Engineering, Aviv, Granit Hacarmel, Bateman Engineering and Korea's Daewoo International.