Transport ministry project NIS 2b over budget, says Treasury

Ministry says that an efficiency plan, which has already been approved by the director-general, is currently being implemented.

By
September 30, 2014 20:12
1 minute read.
Train

Israel train. (photo credit: MARC ISRAEL SELLEM/THE JERUSALEM POST)

Delays in Transportation Ministry projects will add up to NIS 2 billion, according to Finance Ministry accountant-general Michal Abadi-Bouiangui.

In a recent letter to the ministry first reported in Calcalist, Abadi-Bouiangui said that delays in a slew of projects under the control of Israel National Roads Company – the stateowned company responsible for carrying out large transport projects – were “extremely worrying” and had grave budgetary implications.

Be the first to know - Join our Facebook page.


“Most of the projects being carried out by Netivei Israel [Israel National Roads Company] are in some sort of crisis – overspending or suspected overspending on the alloted budget, contractor suits, payment demands, not hitting milestones and expected delays in timetables,” she said, basing the assessment on a July report on the company.

Project 531 to connect Route 6 with Kfar Shmaryahu, for example, was running a year behind schedule, and contractors were demanding an extra billion shekels – a third of the overall budget.

Amid disputes with contractors, work on Route 2 is 10 months behind, causing traffic jams in the Tel-Aviv/Hasharon region. Construction on Route 31 is NIS 200 million over budget and eight months behind.

Similar citations were made for Route 7 (18-month delay and NIS 30m. over budget), the Acre-Karmiel rail line (7- to 10-month delay and NIS 100m.

over budget), and the valley rail line between Haifa and Beit She’an (a year’s delay and NIS 230m. over budget).



In response, the Transportation Ministry said that Israel National Roads Company is conducting dozens of major transportation projects, worth more than NIS 40b.

“This is an unprecedented number of transportation projects, including the construction of new roads, interchanges, bridges, tunnels and railways, at amounts that have not been invested in the State of Israel since its inception,” the ministry said.

Regarding investments and projects of such a great magnitude, the Transportation Ministry stressed that “there may be unforeseen budgetary irregularities resulting from schedule delays and the increase in the extent of activities of the company over the years.”

Most of the irregularities described by the accountant- general, however, refer to demands of contractors that have proven incorrect, according to the ministry.

Regarding Route 531, for example, the contractor’s NIS 1b. claim was not proven, and Israel National Roads Company did not fulfill their demands, the ministry said.


Related Content

The Teva Pharmaceutical Industries
April 30, 2015
Teva doubles down on Mylan, despite rejection

By GLOBES, NIV ELIS