Tel Aviv Light Rail Faces Delay of Two Years

An analysis of the project by the auditing firm Agis found that the government company building the line has already exceeded the NIS 15 billion budget NIS 5 billion.

The Tel Aviv light railway launch is likely to be delayed by at least two years, Finance Ministry officials estimated on Monday after a financial analysis of the projected system found serious flaws in its cost estimates.

An analysis of the project by the auditing firm Agis found that the government company building the line, NTA Metropolitan Mass Transit, has already exceeded the NIS 15 billion budget to construct the first line, known as the Red Line that will run from Petah Tikva to Bat Yam, by NIS 5 billion.

They ascribed the cost overruns to higher operating costs at NTA as well as to changes in the Red Line's parameters including enlarging planned underground stations.

As a result, a joint steering committee that includes representatives of the transport and finance ministries and Government Corporations Authority, have stepped up supervision of the Red Line and must approve every tender that is published.

The Red Line is unlikely to begin operating before 2019, treasury officials said on Monday. They are now weighing whether to restructure the entire light rail project from one financed by the state budget to one operated by a private sector licensee that raises its own capital. The private company would be entitled to state subsidies.

It would be impossible to change the financing and contracting structure of the Red Line, where construction is already under way, but Finance Ministry officials say they hope that the projected Green Line, can be developed through a private sector company.

Ofer Vaknin