CityPass, Finance Ministry reach deal over light rail tenders

Plans on track to extend Red Line to Ein Kerem, Green Line to Neve Yaakov.

By
April 9, 2017 20:28
2 minute read.
Jerusalem light rail

Jerusalem light rail. (photo credit: MARC ISRAEL SELLEM/THE JERUSALEM POST)

CityPass and the Finance Ministry reached agreement on Sunday following acrimonious negotiations over compensation for a possible state buyback, extension of the light rail’s Red Line, and tenders for the Green Line extension.

The extensions are to run from Mount Herzl to Hadassah University Medical Center in Jerusalem’s Ein Kerem, and between Pisgat Ze’ev and Neve Yaakov.

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The new section to Neve Yaakov will have four stops along its 2.7-kilometer route, while the extension to Hadassah Ein Kerem will be 6 km. long.

Upon completion, the light rail will have 22 km. of track.

Under the agreement, the state has an option to buy the project back from CityPass in March of 2019 – 17 years before the end of the franchise period.

The agreement also stipulates, however, that in such a case, CityPass will receive an estimated NIS 360-400 million in compensation for lost future revenue from the extensions.

The main dispute concerned the total compensation, which the Finance Ministry sought to reduce to NIS 40m.

In response to the ministry’s offer, CityPass sent the government a letter stating its willingness to accept 25% of the projected revenue from the Red Line extension, amounting to NIS 270-300m. in compensation.

The preliminary tender for the Green Line was postponed on Thursday as a result of the stalemate, in an attempt to reach a compromise with City- Pass over payment.

In a strongly-worded statement, CityPass blamed the government for the impasse.

“The Ministry of Finance is systematically and deliberately misleading the Jerusalem public by making unfounded claims that CityPass was the one preventing progress in the extensions and branches of the existing line,” CityPass said.

“If the negotiations are unsuccessful, the light rail extensions project will take many more years and cost many more hundreds of millions of shekels, at the taxpayers’ expense. In complete contrast to the Ministry of Finance’s assertions, CityPass has continually made concessions to the state, and is willing, despite its contractual rights, to forego many millions of shekels.”

On Sunday, the Finance Ministry announced an agreement between the two parties regarding future compensation if the government buys CityPass, as well as the conditions for construction and operation of the extensions.

Both parties agreed on a twomonth time frame for reaching a final, detailed agreement. No final figures were offered by the Finance Ministry.

Globes contributed to this report.


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