CityPass loses Jerusalem Light Rail extension tender

By
July 5, 2017 20:51

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

1 minute read.



Jerusalem light rail

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

Following contentious and protracted negotiations between the Finance Ministry and CityPass over a multi-million- shekel tender to extend the Jerusalem Light Rail’s Red Line, the ministry announced this week that CityPass’s contract will be terminated.

The Red Line’s extensions will run from Mount Herzl to Hadassah-University Medical Center in Ein Kerem, and between the Pisgat Ze’ev and Neveh Ya’acov neighborhoods.

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

The agreement also stipulated that in such a case, City- Pass would receive an estimated NIS 360 million-NIS 400m.

in compensation for lost future revenue from the extensions.

The primary dispute concerned the total compensation, which the Finance Ministry sought to reduce to NIS 40m., although CityPass demanded at least NIS 100m.

On Monday, the ministry said that whatever company was given the tender for the Green Line – an additional 19-kilometer route – would also be awarded the Red Line’s extension tender.

According to multiple sources, the decision was made due to CityPass’s compensatory demands, which the Finance and Transportation ministries believed to be unacceptably high.

CityPass claimed it was misled by the government and said it would still vie for the rights to construct the Green Line.

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