Trans-Israel Highway Daily Traffic Volume Hits 73,000

Some 73,000 vehicles used the Trans-Israel Highway on an average weekday last month, which puts Derech Eretz, the concessionaire that runs the country's only toll road, very close to meeting its target of 75,000 vehicles a day.

Should the company meet this target, set in an agreement between Derech Eretz and the government back in 2003, the state will not have to compensate the concession holder, as part of the safety net clause.

According to the agreement, if Derech Eretz fails to reach the target traffic volume, the state will compensate it to the tune of 80 percent of the discrepancy in toll revenues. However, given the current traffic usage, Derech Eretz could very well beat the target, and then the opposing clause falls into play. In this scenario, the concessionaire has to pay the state royalties of 56 percent of the extra revenues above the tolls collected from the target number of users.

According to Africa Israel's report released this week, its subsidiary Derech Eretz made net profits of NIS 24.5 million in the second quarter. Over the period of its concession - which lasts until 2030 - Derech Eretz could expect to make profits totaling some NIS 6 billion. The estimated cost of paving and operating the highway is estimated also at NIS 6 billion over the entire period.

The Trans-Israel Highway company, which manages the entire project on behalf of the state, Tuesday said the usage of the toll road (officially Highway 6) had exceeded expectations. A spokesman said they had forecast that traffic volumes would drop in July and August because of the summer vacation, but to their surprise, the opposite had happened. "Without doing the calculations over the year, we cannot say whether the state will end up paying compensation or receiving royalties," he added.

The first section of the Trans-Israel Highway opened to traffic in August 2002, but the first toll was only charged from December of that year. From January 2004, the whole central section from Hadera in the north to Gedera in the south was open to traffic.

The company had also noted from experience that traffic increased significantly on national holidays, such as the Pesach week in spring, which was a traditional time for family outings particularly to the north.

Tuesday's report showed that some 500,000 vehicles passed along the highway during the Pesach holiday, an average of 62,500 a day, some 10 percent higher than the average daily volume of 55,000-60,000 during April. The company noted that the increase was actually far higher, but the lower volumes on Saturdays brought down the daily average.