Israeli Construction Firm Wins Czech Highway Tender

The Israeli construction company Housing & Construction (Shikun u'Binui) has been chosen for the contract to build a freeway connecting the Czech Republic with Poland, Reuters and Bloomberg reported. The contract is to be signed by June 12.

Apparently, the company itself has received no official news from the Czech government, with which negotiations have been held for the last year and a half on this matter. According to Building & Construction's VP Amit Segev, the Czechs were indeed meant to make their decision on Wednesday - when the item was reported by the agencies - but no Czech official has made contact with the company to inform it of the outcome.

The Czech Republic has promised to complete an 80-km stretch through the town of Ostrava, in the northeast part of the country, to the Polish border by 2009. On Wednesday, the Czech CTK news agency quoted Czech Transport Minister Jaromir Schling as saying the government will hire Housing & Construction to finance, build and operate the freeway as a toll road until 2032, when the Czech state will take it back. Revenues over this period are expected to reach $4 billion. Housing & Construction is currently in advanced negotiations with large European banks regarding financing for the project, Segev said.

Housing & Construction has already built residential neighborhoods in the Czech Republic. In the process, the company learned about the important road project, and hooked up with British and Austrian partners to submit a bid. One of the factors that makes the Israeli firm eligible for such projects is its experience on the Trans-Israel Highway.

Housing & Construction has recently won $90 million worth of projects in South America and has also been awarded a contract to build a free trade zone in Croatia.

This news sent the company's stock up 6 percent yesterday on a large volume of NIS 12 million, putting it at a market capitalization of NIS 1.27 billion.

Solel Boneh, the subsidiary that is to build the project, jumped 4.3 percent. Housing & Construction's operating profit in the last five quarters ranged between NIS 50 and NIS 80 million on a turnover of NIS 1 billion.

With yesterday's market capitalization, Housing & Construction took 27th place on the Tel Aviv Stock Exchange.