Treasury: Rapid Rail Link to Jerusalem Too Costly

The plan for a rapid rail line to Jerusalem is economically unfeasible, because Finance Ministry calculations show that the project will cost NIS 5.5 billion, and not the NIS 4 billion quoted by Israel Railways, treasury officials say.

Transportation Minister Shaul Mofaz has unequivocally declared that the fast train line will be built as planned; a number of tenders have already been issued; and about NIS 1 billion has already been spent on planning, publishing the tenders and preliminary work. Nevertheless, the treasury intends to conduct another cost-benefit review in light of the revised cost estimate.

Treasury officials say that postponing construction of the rail line would free up funds that could be used to improve other transportation infrastructure that would facilitate access to the capital.

The rail line, which is scheduled for completion in 2011, includes three bridges and three tunnels, the longest of which will be about 11 kilometers.

Some industry observers expect the project's real price tag to reach NIS 6 billion or NIS 7 billion. Most of the difference is the result of revised cost estimates for digging the tunnels.

The rapid rail line is the cornerstone of Israel Railways' development plan. The Finance and Transportation Ministries recently agreed to expand the plan's budget by NIS 6 billion, to NIS 26 billion, and also to extend the construction timetable by three years, until 2011. The extension of what was originally a five-year plan was due to several factors, including NIS 4 billion in cost overruns on other projects.