Foreign Companies Wary of Operating Jerusalem's Light Rail Because It Traverses '67 Border

The most problematic parts of the proposed Green Line – a project that could cost as much as $1.4 billion – are said to be the ones that reach Mount Scopus and Gilo

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Waiting for the light rail in Jerusalem. The tram platform is crowded to the nth degree. It's not going to get better unless Israel radically changes social policies, argues BGU professor Alon Tal.
Passengers board the Jerusalem light rail.Credit: Emil Salman

An international tender to build and operate Jerusalem’s second light rail line is failing to draw bids from overseas companies, which are fearful of arousing political opposition back at home because the proposed line runs into parts of the city seized by Israel in the 1967 war.

Israeli government officials say they have been told that the most problematic parts of the proposed Green Line – a project that could cost as much as 5 billion shekels ($1.4 billion) and stretch along 22 kilometers – are the ones that reach Mount Scopus and Gilo.

Mount Scopus, the site of the main Hebrew University campus, was controlled by Israel before the Six-Day War as an isolated outpost. But Israel subsequently annexed land between it and West Jerusalem. Gilo, a neighborhood in the city’s south, was annexed along with other areas of East Jerusalem shortly after the war.

Concerned that the tender may be delayed, government officials have taken a two-pronged strategy to coaxing overseas companies to join groups bidding for the project.

One is to remind potential bidders of a 2013 decision by the Versailles Court of Appeals that rejected a suit by Palestinian groups against three French companies involved in construction and operation of Jerusalem first line, the Red Line. The court ruled that the Geneva Convention sections concerning occupations do not cover the issue of providing public transportation, which benefits the city’s Israeli and Palestinian populations.

A map of Jerusalem's light rail and second planned line, which overseas companies fear will arouse political opposition because the line runs into parts of the city seized by Israel in 1967.Credit: Infographic by Haaretz

The Red Line, which began operations six years ago and originally included French companies Veolia Transport, Alstom and Alstom Transport as partners, has been targeted by the global BDS (boycott, sanctions and divestment) movement because it runs through East and West Jerusalem. Veolia sold off its stake in the Red Line two years ago but Alstrom continues to provide maintenance services for the cars it built for the line.

The government’s second strategy has been to adjust the terms of the tender to exempt the key companies belonging to the groups bidding for the Green Line from holding an equity stake in the line. Instead, they will be able to serve as subcontractors, i.e., they don’t have to sign an agreement with the Israeli government but with the prime contractor.

Under the terms of the pre-qualification documents issued by Israel three weeks ago, each group submitting a bid must include an experienced operator of electric trams as well as an engineering, procurement and construction contractor and a maintenance company, all led by a company that will lead the group.

The problem is that no Israeli company can act as leader or operator because the tender requires that the those companies have an industry track record.

The groups that seem likely to bid include Israel’s Shapir Engineering, together with the Spanish rail equipment maker CAF. Alstrom is teaming up with Israel’s Electra, but not as the lead company in the group. Meanwhile CityPass, which operates the Red Line, is in talks together with Israel’s Ashtrom and the Israel Infrastructure Fund, to enlist Canada’s Bombardier to provide cars and equipment.

Others interested are Germany’s Siemens and Skoda of the Czech Republic and the Japanese-Italian Hitachi Rail Italy. However, none of them are interested in being the lead company.

European companies are the most sensitive to the political implications of participating in the Green Line tender, so Israel has sought to interest Chinese companies in it.

To date, the government in Beijing hasn’t signaled its stance one way or the other, but officials are concerned that despite warming bilateral relations, Chinese officials have traditionally taken a hard line in the occupied territories.

A plan to bring Chinese construction workers to Israel to work on residential building projects and help alleviate Israel’s housing shortage was delayed by Beijing’s insistence that the workers couldn’t be employed in West Bank settlements. Israel refused and eventually the two sides compromised by agreeing to a list of authorized communities they could work in that happened not to include settlements.

The contract for the Green Line will also include extending the exiting Red Line by 14 kilometers to, among other places, the Neveh Yaakov neighborhood, also in East Jerusalem.

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