Three months ago, the treasury tried to slash the transportation budget. The construction of two railway lines, one from Acre to Carmiel and one through the Jezreel Valley, was to be suspended. The Transportation Ministry vehemently opposed. A compromise was reached: The ministry suspended road paving and the transfer of funds for the Tel Aviv area light rail, a project already delayed. So Israel's most important mass transit project was delayed once again.
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Three years after the project was handed over to NTA, a government-controlled company, the project is suffering from severe delays. And now the state comptroller is sniffing around to figure out what's wrong.
By the middle of the next decade, a network of light rail and express buses is supposed to operate in the Tel Aviv area. The first stage is the main central line, the Red Line: a light rail line that will run underground for 11 of its 23 kilometers. It will run from Petah Tikva through Bnei Brak, Ramat Gan, Tel Aviv, Jaffa and Bat Yam, and possibly to Rishon Letzion at a later stage.
According to the government, the project was supposed to be operational by 2016. But according to NTA, the first stretch between Allenby Road and Jaffa will only be operational by 2018.
The expected costs currently stand at NIS 14.3 billion, compared with the NIS 10.7 billion expected in 2010. NTA officials say the increased budget stems from the addition of the bus system, as well as the increase in VAT and the cost of building materials.
The idea for an underground rail system in the Tel Aviv area first surfaced in the 1930s, and serious planning began in the '70s. The Shalom Tower, completed in 1965, included an option for linking to an underground railway station. A committee established in 1983 recommended building such a railway; thus was born the Red Line concept.
Roni Milo, Tel Aviv’s mayor between 1993 and 1998, committed to building an underground railway during his election campaign. The municipality then submitted a plan, but the Finance Ministry was opposed. Although Milo laid the cornerstone for the project, the treasury preferred a surface railway, which is much cheaper to operate. With this in mind, it established NTA in 1997.
Until 2010, NTA was a small operation dealing mainly with planning, with most of its operations carried out by an external contractor. The whole project was supposed to be built by the MTS Group, a partnership consisting of Africa Israel, the Egged bus cooperative, Siemens, Chinese infrastructure company CCECC and Portuguese company Soares da Costa. MTS won the build-operate-transfer bid in 2006, but the concession was revoked in 2010 after the partnership ran into financing difficulties. The project was handed over to NTA.
“The project got its fingers badly burned and is now proceeding with caution,” says a senior official involved in the planning. “A total of NIS 300 million was spent on companies that were hired with no tenders or approvals. Later, the stables were swept clean, employees were fired, and the finance and transportation ministries contracted two monitoring companies to supervise the management. They now tell managers how to proceed, leaving them no other options.”
One source says NTA's management style “lacks guidance or policy, with only abundant chatter. Every time the project progresses a little it's halted by the monitoring companies. NTA is under immense pressure and needs a bulldozer" – a strong leader.
According to a senior transportation official, “The public is clamoring for a solution, but NTA is dysfunctional. We're frustrated, tearing out our hair. How many more years can they claim that the shafts for the mining equipment are being excavated? … NTA still doesn’t have a CEO. There are managers there who don’t speak English. In a company with 150 employees, maybe three people know anything about railways. The company issues tenders without obtaining legal advice, and it still doesn’t have anyone to manage the Red Line.”
It's tougher than in Jerusalem
An NTA official said in response that “tenders are being issued for a legal counselor and for a manager of the Red Line. The board chairman's term expired seven months ago, and the appointment of a new one isn't in our hands.”
The NTA official admits that the company needs more outside help. “NTA officials feel that if they designate authority to outside experts they'll reduce their own power, and the treasury will reduce NTA’s involvement. It’s a real bind, leading them to hire consultants only in very limited areas, so nobody has an overview of the whole project.”
The official points to Jerusalem's recently completed light rail. “Over there it was one contractor working with one municipality, with the whole project above ground. Even so, look at all the delays and mishaps. It will be much worse in the Tel Aviv area.”
Other sources at the company describe a lack of communication between NTA and the cities through which the line will pass. “We still don’t have building permits; we ask for these based on our progress," one source says. "We have no problems with most local authorities along the route, only a few. We're now negotiating for permits from Petah Tikva and hope they won’t delay our work.”
NTA has issued many tenders, including ones for purchasing railway cars, for control and monitoring systems and for excavating a new entrance. But sources close to the project say these tenders are rejected and split up into smaller segments, creating further delays.
“First there was only a tunneling tender …. The early tender for the train system was reissued after relaxing some of the conditions,” says an official involved with the project. Worse, “the tender for the cars is separate from the signaling tender, even though some of the signaling systems are on the trains. No company would let a third party drill signaling systems onto its cars. It’s vital to choose an operating company at this stage. Otherwise they'll make changes only after the equipment is purchased.”
NTA officials say "shadow" companies have been hired – "an Italian company and an Austrian company that operate light rail systems," one official says. They were chosen by PB, a consulting firm used by NTA. These shadow operators examine the tenders and make comments. We will issue a tender for operating the whole light rail system early next year.”
Another issue is the number of overseas trips taken by NTA officials. Michael Ratzon, NTA's former chairman, visited several European countries. Itzhak Zuchman, the current chairman, traveled to China, and delegations have looked at light rail systems across the world. Meanwhile, company engineers plan a trip to Europe to look at trains that Ratzon has already seen.
The cabinet is frustrated by the slow progress. “Some say the project will only be finished in 2025 at a cost of NIS 25 billion," a government source says. "We think there's a low probability it will be finished in 2020. There's a big gap between what the company says and what's happening on the ground. They promise to keep to the timetable and stay within budget, but this isn't happening. This is a company with poor management. Monitoring companies can't replace professional expertise. NTA is like a novice contractor trying to build a skyscraper.”
The government source admits that government bureaucracy is delaying the project. “They don’t know how to navigate the system," he says. "These are organizational defects.” The government says the second Green Line, designed to link Herzliya with Rishon Letzion via Tel Aviv and Bat Yam, is on hold “until NTA proves itself worthy.”
Beware the state comptroller
Still, the Transportation Ministry continues to grant NTA other projects such as the reform of Tel Aviv's bus lines and the express bus system in the Sharon region. This is happening even though ministry officials admit that NTA is a problem. A reorganization of NTA is being planned. According to the plan, NTA will stop hiring new people and many tasks like issuing tenders will be outsourced.
Not only the finance and transportation ministries are perturbed; the state comptroller is looking into NTA's operations. A report is due in a few months.
For its part, NTA produced a status report on the Red Line, dealing in part with tenders and infrastructure work a cost of NIS 1.5 billion. NTA says it has started planning the operation of the Red Line, including a risk management system. It also says it has made progress developing the express bus system in Netanya and the Sharon region.
Regarding delays, NTA says the completion date of 2017 proposed in December 2010 when NTA took over was unrealistic. Meanwhile, an NTA official notes that "if there were legislation that would regulate our work and procedures vis-a-vis local authorities, things would go much smoother in managing this complex project.
“Unfortunately, local authorities and infrastructure companies view this project as an opportunity to improve infrastructure within their domains, rather than as a means to advance a dire public transportation need. NTA is doing its best to protect public funds and find the middle ground between the needs of the light rail system and the needs of other agencies involved.
“In addition, there are difficulties over which we have no control such as infrastructure maps from the 1970s. These are outdated and inaccurate and … this causes delays and waste. The approaching municipal elections are also a problem because local authorities don’t want the mess of road excavations and are not allowing the traffic changes that are required before work can begin.”
The Transportation Ministry says “NTA is vigorously trying to advance the Red Line project, and infrastructure work is currently under way. The updated timetable is under scrutiny and has not yet been approved by the steering committee.”
In any case, delays in the launch of the light rail system will hurt the Tel Aviv economy. An inter-departmental team has projected a collapse in the road network system during the morning commute.
According to the committee’s findings, by 2030 drivers will be spending an extra hour a day on the roads, with an annual waste of NIS 850 million due to traffic jams. This will lead to a NIS 25 billion loss to annual GDP, compared with NIS 20 billion today.
This means extra congestion, wasted work hours and pollution – and of course extra parking spots will be needed. This will hurt many businesses; for example, those at a big shopping center like the Ayalon Mall. Efforts to reduce housing prices will also be stung because young people will be reluctant to move away from the center of the country if transportation to the center is a problem.
Delays in the Red Line are impeding the development of mass transit in the whole center of the country. The Green Line linking Rishon Letzion to Ramat Hasharon through Tel Aviv is on hold pending an evaluation of NTA’s performance. Other lines such as the Purple Line linking Yehud to Tel Aviv via Ramat Gan are in limbo, as are lines serving Ramle, Lod, Rehovot and Nes Tziona.