Foreign bidders mull withdrawing from Metro tender

• Published date: 24 May 2023
• Publication title: Globes (Rishon LeZion, Israel)

At the same time, market conditions and the rise in interest rates do not help companies considering participating in the huge tender. Fifteen years ago the tender for building the Tel Aviv light rail Red line, which was won by a consortium led by Africa-Israel, ultimately failed because the financial crisis of 2008 made it difficult for the tender winners to obtain financing

The Metro tender, worth an estimated NIS 10 billion, attracted bids from seven consortia, each comprising foreign and Israeli companies, some of them bidding for a tender in Israel for the first time. At the end of the process, three consortia will be chosen, with each one of them planning and overseeing works and the construction tenders and management of the contractors, for each of the three planned Metro lines.

More problems on the way

The tender for the Metro project has arouses great interest among many foreign companies. The overall project is worth an estimated NIS 150 billion, making it the most expensive and complicated project ever undertaken in Israel. In recent years, government ministries have worked hard to make the tender accessible to as many companies as possible, in order to increase competition and attract leading companies from around the world.

Despite the great interest and advantages of the tender, it also has risks. The statutory planning of the lines has not been completed, the work intended for the winning companies is not yet closed and there is a lot of flexibility. The Metro Law has also still to be fully approved by the Knesset, despite the coalition's plans to pass it by the end of the previous Knesset session.

Added to the inherent risks are new risks, which are severe. The business environment is changing due to the judicial overhaul...