Is It Time for Tel Aviv to Give Up on Its Subway Dreams?

They tried a private consortium, then nationalized the project, yet 22 years later nothing has happened. Time for a rethink?

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An overground intercity train station in Tel Aviv, November 25, 2014.
An overground intercity train station in Tel Aviv, November 25, 2014.Credit: Eyal Toueg

The campaigns for the Tel Aviv municipal election in 1993 were unusually rambunctious, and for the most part focused on one key question: Should Tel Aviv have a light rail or a subway?

Roni Milo supported a subway, Avigdor Kahalani thought a light rail would be better. Unwittingly perhaps, they were continuing a grand tradition of uselessly fantasizing about a train in the first Hebrew city: Theodor Herzl had imagined it before Tel Aviv even existed and Nathan Alterman wrote about building a train system in the 1930s.

Anyway, Milo won the poll and 22 years later – thar she blows! A subway!

Just kidding. 22 years later, nada. No subway, tram or train, not in Tel Aviv.

Not only doesn’t Tel Aviv have a train system: What it does have is a long list of sins of omission, commission, corruption and billions of shekels down the drain. A lot of people made a handsome living over these 22 years from the plans to build a light rail system in Tel Aviv.

Instead of supplying this crucial service to the people of greater Tel Aviv, the “train project” became a source of jobs for political hacks, sewn-up tenders for friends and photo-ops for politicians who purport to be advancing the project – not that they have a clue how.

See the picture of Prime Minister Benjamin Netanyahu with Mayor Milo under the sign “Ceremony marking the start of test drilling for the subway”, taken in 1996.

The list of things that have gone wrong with the project is so long that we cannot summarize and say, “This is why Tel Aviv has no train.” One could blame the contractors who won the tender but couldn’t fulfill their part. One can point the finger of blame at the government, which failed to promote the project even after giving up on the contractors and nationalizing it. One can lash at the local authorities that sabotaged it (for reasons of NIMBY), or the political hacks who saw it as a temporary sweetheart job en route to some other temporary sweetheart job.

But the truth is, the project of building a train system in Tel Aviv is just too big for Israel’s boots.

Yes, Israel managed to build a train system in Jerusalem – but that was one city, one municipality, a concentrated set of issues and problems to overcome. To name just one crucial difference, the greater Tel Aviv train system would have involved eight lines passing through multiple cities and municipalities, each of which has its own opinions and issues.

Even the fact that the Transportation Ministry was under a single effective minister, Yisrael Katz, for six years (after years of the ministry getting a new minister each year), couldn’t break the logjam.

Enter the state

Four years ago the state voided the contract won by MTS, a group including the Israeli company Africa Israel, the German giant Siemens, the Israeli bus company Egged, the Chinese company CCECC, the Portuguese company Suares de Costa and the Dutch company HTM. For one thing they weren’t meeting the terms of the tender, and for another they kept making more and more demands.

Nationalizing the paralyzed project seemed to make sense. In any case, some 7 billion shekels of the projected 10-billion-shekel cost (roughly $250 million) would be borne by the state; and to advance a project of such magnitude would require a central authority that could overcome obstacles (such as reluctant local authorities bent on sabotaging the project).

Big mistake. The government gave the project to NTA, a government company founded in 1997 that had zero experience in projects, let alone monsters like this.

NTA had every “government company” disease in the book, led by cronyism – manning key jobs with inexperienced political associates devoid of any skill needed to lead a project like this.

Today the state and MTS are still duking it out in court and the chosen alternative is looking even worse than its predecessor: NTA remains a government company with no productive ability, that undertook a project about a thousand times too big for it; it’s riddled with political appointments, nepotism and corruption.

No train system is going to be born of that mess – all we wound up with is years of delays and the promise that the cost is going to run not at 10 billion shekels but at 16 billion. And counting.

Held up in traffic

The cost of the delays is hard to quantify. In 2011 the Finance Ministry estimated the cost of delay at 3.5 billion shekels, according to the claim the state filed against MTS. Most of that is based on loss of time in greater Tel Aviv traffic jams. Four years later, the damage has doubled, if not more.

Recalling that the difference between the state and MTS amounted to tens of millions of dollars, was it worth the trouble of voiding the contract – to go nowhere at all and wind up with such heavy costs? But conversely, can it be said that MTS would have done the job if the state had relented and given the contractors what they wanted? Hard to say, but one has to think about it before deciding how to advance this moribund project, after all.

Recent events at NTA do not augur well. The company has basically admitted that it has no idea how to run a light rail system. Without asking anybody, it hired a consultancy called PB and gave it the job of managing the construction of the Red Line, the first of the eight lines. It held no tender but agreed to pay PB the sum of 800 million shekels.

Meanwhile, Alex Wiznitzer, chairman of NTA for the last year and a half, quit over the police investigation into corruption in the Yisrael Beiteinu party; now certain affairs of NTA itself are coming under scrutiny.

Last week officials from the Finance Ministry, Transportation Ministry and Government Companies Authority met to discuss what to do next.

One possibility is to replace all NTA’s chieftains and hope for the best. For a leader, one would need a man like the late Moshe Levy, a former chief of staff who managed the establishment of Highway 6 (Israel’s only toll road) quietly, modestly and honestly. Another possibility is to give the project back to private enterprise; that would certainly hold it up even more, because it takes time to write and publish a tender, hold the contest, pick the winners and enter into contracts. Thing is, leaving it in government hands has accomplished nothing; NTA turned out to be a flop, doing well mainly at being corrupt. Surely the private sector would be better.

Knotty conundrums, those. Possibly the answer Katz cobbles together will be a patchwork: leaving some of the engineering and infrastructure works (the financially most risky part of the project) in government hands, with NTA; and outsourcing the rest to the private sector, including laying the trail tracks, building the stations and operating the Red Line.

We can only hope this combination of public and private sector actually shows us their advantages. Until now all we’ve seen are their disadvantages and meanwhile, Tel Aviv grows more congested, more polluted, parking and housing just cost more by the day and it isn’t going to get any better. Certainly as long as the train line remains a pipe dream.

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