egged bus 311.
(photo credit: Courtesy)
The Ministries of Finance and Transport released a joint statement on Wednesday
announcing they had reached an agreement with Egged Bus Company to transfer 17
percent of its operations to competition by other bus operators.
lengthy negotiations, the ministries came to an agreement with Egged regarding
the advancement of competition on public transportation over the next decade.
The agreement, scheduled to be signed on Sunday in Jerusalem, will determine the
method by which 17% of the company’s operations will be released for open
competition by other operators over the next five years.
According to the
statement, the competition will allow the continued development of the public
transportation industry, while establishing the status of the new public
transport operators and ensuring improvement in the level of services provided
The agreement determines that all future mass transit systems,
including Bus Rapid Transit systems, will be promoted competitively and that
both local and international companies will be able to take part.
agreement creates the groundwork for Egged’s continued transformation from being
a cooperative to becoming a company and will help improve its ability to
function in a competitive market, where quality of customer service is given
considerable weight,” read the statement.
As part of the agreement,
Egged’s activities will be divided into clusters, which will be continuously
reviewed to test the level of service given to the public. Failure to meet the
required standards of accuracy and reliability by Egged may lead to high fines
and the transfer of other portions of its operations to
Moreover, the agreement ensures that public transportation
services will not be negatively effected by Egged’s other activities by creating
a separation between its public transport operations and its private travel
Finance Minister Yuval Steinitz, said that “improving the
competitiveness and service standards of public transportation services...is a
social objective of great importance, which will improve the standard of living
of all sectors of the population, improve efficiency and service availability
and will also lower prices.”
Transport and Road Safety Minister Israel
Katz noted that since the start of the reform in public transportation, more
than 2,000 new employees had been hired and 10 new public transport operators
had been introduced, currently operating about 30% of Israel’s public
Katz added that so far the public transportation
reform had resulted in average reductions of about 25% in public transportation
fares. He said that over the last four years, the number of passengers using
public transportation had increased by 25% from 490 million passengers in 2004
to more than 650 million passengers by the end of 2009.
arrangement is fair and allows Egged to focus on its core activities, developing
services and long-term planning,” according to Egged Chairman Gideon
As part of the agreement, 15% of Egged’s routes will be offered
up to competition and it was agreed that 3% of them will be operated by
subsidiary company, Egged Taavura.
“The fact that the agreement will
allow the organization to enjoy the fruits of its investments is an
incentive for continuous efficiency improvement,” said Mizrachi.
takes upon itself, as part of the agreement, to meet the required
objectives with full faith that the organization can meet
According to Transportation Ministry figures, buses are the most
popular form of public transportation in Israel. With 760 million bus
2009, buses make up 86% of all public transportation rides, followed by
taxis (Sherut), with 70 million rides and Israel Railroads with 36
Egged currently controls 46% of all bus activities, down from 70%