November 21, 2006, was an unseasonably warm day. At the top of Sderot Herzl, all the who’s who of Jerusalem gathered for an important ceremony.

Even former mayor Ehud Olmert attended the laying of the cornerstone for the long-awaited light rail. A major part of the ceremony was the activation of Appitrack, a special – and very expensive – vehicle brought from Switzerland especially designed for the laying of tracks.

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The ceremony was a public relations success, and soon the photos of the event were published in the media. But two hours after the ceremony Efrat Zemer, a reporter for one of the local Hebrew newspapers, was driving by the site and noticed that the fence had disappeared, as well as the Appitrack and the workers.

The explanation she received from the workers at the site was astonishing. The whole ceremony, she was told, had been a sham. The expensive device had turned out to be unsuitable for Jerusalem soil, but nobody wanted to cancel the official ceremony. On top of that, there was a mistake regarding the exact place it was done – some 20 meters to the left of the correct spot.

“Even [humorist] Ephraim Kishon wouldn’t have dreamed up such a bizarre scenario,” comments Shmuel Elgrabli, spokesman for the Jerusalem Transportation Master Plan, designers of the light rail system.

The light rail project was the dream of the capitalist ideology: a major mass transit project for the capital that would be achieved through private funding and a minimum of state support but still designed to meet the public’s needs. What could be better? Well, nothing, except for the reality on the ground.

As a result of the numerous pitfalls of the Jerusalem light rail, one thing is certain. Tel Aviv’s light rail system – if it ever comes to fruition – will not be built according to the Jerusalem model: no build, operate, transfer (BOT) model, no private financing and, above all, no disruption to the public.

“The residents of Tel Aviv should be brought here to see what they will be spared, following the Jerusalem residents’ incredible suffering,” concludes a high-ranking official at the Master Plan.

Last week, the light rail project hit another snag: Yair Naveh, the CEO of the project for the past two years, has been appointed IDF deputy chief of General Staff.

A major-general in the reserves, Naveh had served as OC Home Front Command and later the OC Central Command. Naveh’s departure at this critical stage of the project does not sit well with the Transportation Ministry or the municipality. Both feel frustrated as, despite some disappointments regarding his ability to solve problems and advance the work, Naveh’s presence at the helm is certainly better than an organization with no leader.

“We wish Yair Naveh luck in his new position in the IDF. We are sure that CityPass, an international consortium, will not allow replacing him to impact on its fulfilling its commitments – as quickly as possible and to the necessary standard – to the state and Jerusalem residents, who have also suffered,” says Elgrabli.

So far, acccording to Elgrabli, CityPass has not officially presented a potential candidate.

Following Naveh’s decision to step down, there is good reason to assess the light rail project and see where it stands.

What really happened to the project that started off with so much fanfare in the Prime Minister’s Office and promised to bring the ancient capital into the 21st century? In fact, nothing really new: negligence, sloppiness and, apparently, a fair share of cynicism.

What follows is an attempt to outline the failures, step by step, as well as several explanations by observers, some of them provided on strict conditions of anonymity.

THE TENDER for the huge public transportation project – the first of this scope in the country – was published in October 2002, though it had already been conceived and approved a few years before under Olmert. He had also determined the route of the city’s first tramline, which would later be nicknamed the “political” path, as it connected the Arab neighborhoods of Beit Hanina and Shuafat with the city center.

The route had been chosen despite the fact that it was the least profitable of the eight lines in the system. But in the 1990s, Olmert believed in an undivided Jerusalem under Israeli sovereignty.

Four companies submitted their proposals, two of which reached the final stage – Africa-Israel and CityPass. The winner of the tender was CityPass, an ad hoc consortium of foreign and Israeli companies. It won, primarily because its offer was cheaper than Africa-Israel’s by half a billion shekels. By law, explains Elgrabli, there is an obligation to choose the least expensive offer.

The second reason was the notion that nothing could meet the needs of the project better than an international organization that had some serious experience under its belt and had built similar systems in France, Italy and Switzerland.

The ceremony marking the choice of CityPass was held on July 17, 2005, at prime minister Ariel Sharon’s office, with all the relevant participants, including French ambassador Gérard Araud sitting in the front row. Araud’s picture, released to the press, would later be used as a weapon by the Palestinians to exert pressure on the French government to stop its participation in the project, on the grounds that the light rail would go through “the occupied part of the city” and thus would be a breach of international law.

The pressure reached its peak with a special request from Palestinian Authority President Mahmoud Abbas to then French president Jacques Chirac. He responded that in France, the government had no sway in matters of private enterprise.

To this day, the Palestinian pressure has not abated.

In fact, one of the constituents of CityPass, Veolia (the French operator of the light rail), was taken to court in France by a pro-Palestinian organization that claimed that Veolia was collaborating with the army in occupied territory. Veolia has since tried to pull out of the project by attempting to sell its share to the Egged and Dan bus companies, but Israel has refused to allow it, warning that such a step would cause an immediate dismantling of CityPass. As a result, Veolia has lost quite a few projects in Arab countries.

The roadwork for the light rail began in January 2006, but it was not long before there were signs indicating that something was wrong – for example, the lack of workers along the path of the tracks.

“Whenever we asked for the reasons behind such a low pace of work,” recalls a high-ranking official in the municipality’s Engineering Department, “the answer from CityPass was that they hadn’t obtained the necessary permits from the municipality. Technically this was true, but the fact is that the plans they submitted were far from acceptable for such a high-profile project.

Considering that at the time CityPass’s CEO was Kuki Edri – until just a few months before the CEO of the Moriah auxiliary, who built all the infrastructure before digging the tracks and a man highly reputed for his professional abilities – the sloppy plans submitted were hard to understand, let alone accept, and the feeling was that the problem lay elsewhere.”

A quick glance at the plans – shown to this journalist under strict conditions of confidentiality – revealed that there was no clear indication of the exact route of the tramway lines. And in some other plans checked by the municipal engineer’s staff, the route was not delineated in the right place on the maps.

According to Elgrabli, CityPass has been making complaints about lack of permits from municipality since the beginning of the project, but “unfortunately, even on stretches and at times where permits were issued, CityPass didn’t carry out the work at the pace and quality desired,” says Elgrabli, who nevertheless points out that the Master Plan is not flawless. “As a government that employed private companies we expected much more. From the outset we warned of a lack of engineers and workers on the route, about the quality of the plans and and requests for permits, etc... In addition, we are constantly troubled by arbitration on mutual lawsuits and the litigiousness of an engineering project, and that is a shame.”

The first official news that something was really problematic was released on July 5, 2007, by The Marker, followed by a decision to renegotiate the franchise agreement, which was concluded on May 26, 2008. It stated that an agreement had been reached between the state and Citypass.

The deadline was postponed by 19 months, and the state agreed to pay compensation (the first in a series) to CityPass.

Another important decision was to appoint two arbitrators – one to represent each party (attorney Dov Weissglas for CityPass and Judge Boaz Okkon for the state). Justice Meir Shamgar was appointed arbitrator in cases where the two could not agree. Engineer Avi Adwin was named technical consultant for the arbitrators.

The new deadline for the completion of the project was set for January 15, 2009.

Nothing happened on that day, and once again it was The Marker that revealed, 10 days later, that major disagreements among the parties within CityPass were jeopardizing the continuation of the project.

Following a few press conferences with the arbitrators, a new completion date was published: September 8, 2010.

Deputy Mayor Naomi Tsur said to this journalist, “It is also my birthday. This time it will work out. I’m sure it will be ready.”

In this particular case, perhaps the reason for the failure to get the railway ready lay somewhere else. At CityPass, apparently no one uses a Jewish calendar. Otherwise, they would have known that September 8 was on the eve of Rosh Hashana! Needless to say, yet again the light rail was not ready to roll.

The latest deadline set is April 7, 2011, but Elgrabli – and many others – admit there is no way it will work out this time, either.

Among other reasons, this date is not realistic because, as it was discovered a few days ago, there is still no electrical system on the Calatrava Bridge for the light rail, so it cannot reach that part of the route unless it is dragged there. IT DIDN’T take long for the people at the Master Plan to understand that money was the main issue behind the problems. CityPass’s “low” offer turned out to be insufficient to finance the project. In fact, the Transportation Ministry and Master Plan discovered that even after it took CityPass two years to gather the sum they needed from the banks, they were still short some NIS 500 million – “exactly the sum that made their offer so much more attractive than Africa-Israel’s and won them the tender,” a high-ranking official at the Master Plan points out (Africa-Israel’s offer was NIS 2.7 billion, while CityPass’s was NIS 2.2.b.).

High-ranking officials at the Transportation Ministry and at the municipality suspect that this accounts for the repeated delays and perhaps the large number of lawsuits filed by CityPass against the state, many of which have garnered the organization considerable sums (close to NIS 200 million, according to sources at the municipality and Master Plan).

“They began to ask for money to continue the work, just as any ordinary contractor would do, and we thought that something was wrong here. After all, the BOT is precisely about not being in such a situation,” says a highranking official at Kikar Safra.

To enable work to continue, someone at the Transportation Ministry suggested using some of the terms of the contract – such as to bring forward some of the steps. As it happened, at that time the railcars had just been completed in France.

Alstom, the French builder of the cars, insisted that they be taken from the warehouse in La Rochelle. But there were no tracks ready in Jerusalem or even a warehouse in which to keep the cars in the interim.

“Nevertheless, we proceeded to release a progress payment – the step required to release the money for the cars – and the railcars were sent over, with all the necessary PR fanfare. A warehouse was hastily prepared near Pisgat Ze’ev, and CityPass obtained the money,” recalls a source at the Transportation Ministry .

The roadwork in the city center, along Jaffa Road, is another example of what infuriated the people at Master Plan. According to the original plans, the work was to be done in stages in order to cause as little disruption as possible to traffic and commerce in the city. But CityPass decided to handle things differently. Two years ago, the company’s workers took over the main artery of IT DIDN’T take long for the people at the Master Plan to understand that money was the main issue behind the problems. CityPass’s “low” offer turned out to be insufficient to finance the project. In fact, the Transportation Ministry and Master Plan discovered that even after it took CityPass two years to gather the sum they needed from the banks, they were still short some NIS 500 million – “exactly the sum that made their offer so much more attractive than Africa-Israel’s and won them the tender,” a high-ranking official at the Master Plan points out (Africa-Israel’s offer was NIS 2.7 billion, while CityPass’s was NIS 2.2.b.).

High-ranking officials at the Transportation Ministry and at the municipality suspect that this accounts for the repeated delays and perhaps the large number of lawsuits filed by CityPass against the state, many of which have garnered the organization considerable sums (close to NIS 200 million, according to sources at the municipality and Master Plan).

“They began to ask for money to continue the work, just as any ordinary contractor would do, and we thought that something was wrong here. After all, the BOT is precisely about not being in such a situation,” says a highranking official at Kikar Safra.

To enable work to continue, someone at the Transportation Ministry suggested using some of the terms of the contract – such as to bring forward some of the steps. As it happened, at that time the railcars had just been completed in France.

Alstom, the French builder of the cars, insisted that they be taken from the warehouse in La Rochelle. But there were no tracks ready in Jerusalem or even a warehouse in which to keep the cars in the interim.

“Nevertheless, we proceeded to release a progress payment – the step required to release the money for the cars – and the railcars were sent over, with all the necessary PR fanfare. A warehouse was hastily prepared near Pisgat Ze’ev, and CityPass obtained the money,” recalls a source at the Transportation Ministry .

The roadwork in the city center, along Jaffa Road, is another example of what infuriated the people at Master Plan. According to the original plans, the work was to be done in stages in order to cause as little disruption as possible to traffic and commerce in the city. But CityPass decided to handle things differently. Two years ago, the company’s workers took over the main artery ofIT DIDN’T take long for the people at the Master Plan to understand that money was the main issue behind the problems. CityPass’s “low” offer turned out to be insufficient to finance the project. In fact, the Transportation Ministry and Master Plan discovered that even after it took CityPass two years to gather the sum they needed from the banks, they were still short some NIS 500 million – “exactly the sum that made their offer so much more attractive than Africa-Israel’s and won them the tender,” a high-ranking official at the Master Plan points out (Africa-Israel’s offer was NIS 2.7 billion, while CityPass’s was NIS 2.2.b.).

High-ranking officials at the Transportation Ministry and at the municipality suspect that this accounts for the repeated delays and perhaps the large number of lawsuits filed by CityPass against the state, many of which have garnered the organization considerable sums (close to NIS 200 million, according to sources at the municipality and Master Plan).

“They began to ask for money to continue the work, just as any ordinary contractor would do, and we thought that something was wrong here. After all, the BOT is precisely about not being in such a situation,” says a highranking official at Kikar Safra.

To enable work to continue, someone at the Transportation Ministry suggested using some of the terms of the contract – such as to bring forward some of the steps. As it happened, at that time the railcars had just been completed in France.

Alstom, the French builder of the cars, insisted that they be taken from the warehouse in La Rochelle. But there were no tracks ready in Jerusalem or even a warehouse in which to keep the cars in the interim.

“Nevertheless, we proceeded to release a progress payment – the step required to release the money for the cars – and the railcars were sent over, with all the necessary PR fanfare. A warehouse was hastily prepared near Pisgat Ze’ev, and CityPass obtained the money,” recalls a source at the Transportation Ministry .

The roadwork in the city center, along Jaffa Road, is another example of what infuriated the people at Master Plan. According to the original plans, the work was to be done in stages in order to cause as little disruption as possible to traffic and commerce in the city. But CityPass decided to handle things differently. Two years ago, the company’s workers took over the main artery of the city one morning and began to dig, much to the despair of the downtown merchants.

“The merchants were convinced that the municipality was responsible, since CityPass claimed that it had all the necessary permits,” explains a source at Kikar Safra.

That was true, except that the municipality’s Engineering Department and Master Plan determined that there would be no digging along Jaffa Road all at the same time. But their plan was disregarded, and the damage caused to the downtown merchants is still acute, since the merchants’ committee has filed a number of lawsuits (about NIS 5 million still in progress) against the municipality for their financial losses.

As for the state, the transportation minister sent an official letter to the arbitrators, saying that “CityPass is acting outrageously” and requesting that they “force CityPass to resume the work and get it done on schedule and restore normal life back to the residents of Jerusalem. There is no question that the company is capable of completing the work on schedule. They do not use the many working days they have at their disposal, and in so doing they have made life in Jerusalem unbearable.”

CityPass responded by rejecting the accusations, calling them “absurd” and adding that it was just “a clear judicial but baseless attempt to retaliate against the lawsuit filed by the company for the delays caused by the state.”

In August 2008, Naveh was appointed CEO of CityPass. “At first, there was a sigh of relief by all concerned,” recalls Elgrabli. But that feeling did not last long. One of Naveh’s first steps was to hire an engineer who is an expert at assisting in lawsuits – and at the Master Plan, the smiles quickly froze.

The “battle of the lawsuits,” as it has been nicknamed by an official at Kikar Safra, has reached high levels: While CityPass has filed suits that total some NIS 700m., the state, through the Transportation Ministry and the Master Plan, has filed lawsuits for about the same amount, though the state has already paid NIS 50m. for damages caused to the organization (in delays for issuing permits) and some NIS 150m. in additional claims for causing delays.

“They win because their attorneys are the best in the country, while ours are not equipped for such a battle,” admits an official at the Master Plan.

BUT PERHAPS the strangest issue is the story of the traffic lights.

Every country works with a local independent electronic system for traffic lights. In Israel, the system was developed by the Technion. It is called the “Inbar system” and is considered one of the smartest of its kind.

The first problem was almost a diplomatic issue.

CityPass announced that the French parties of the consortium could not work with the Inbar system (“It doesn’t speak French” was, according to a staff member at the Master Plan, the explanation given). Master Plan suggested that CityPass prepare a plan of its own, disregarding the Inbar requirements, and that after that, “a solution would be found somehow.”

CityPass required total priority for the railcars at traffic lights along its route. Master Plan was ready to grant it, except at a few major intersections (10 to 20 of the 100 traffic lights along the route), where, according to Elgrabli, it could cause major traffic problems.

“For some reason,” says Elgrabli, “CityPass is insisting on demanding total priority at all traffic lights, in all situations and at all times of day and night, contrary to what is accepted worldwide.”

He adds that the rail cars would only have to wait 10 to 35 seconds at these intersections.

“CityPass is even threatening/implying that a decision that does not allow full priority to the light rail at all traffic lights could lead to a massive lawsuit against the state,” Elgrabli says.

CityPass refused to accept these considerations, claiming that if a tram has to stop at traffic lights, then there is no need for such a system at all. Master Plan suggested a test according to rush hours that would allow flexibility in the priorities. CityPass refused. As a result, there were more delays until the light rail obtained full priority except for French Hill.

There were a few more problems along the way. For example, on the test runs earlier this year, it was discovered that the paving stones alongside the tracks could not withstand the weight of the cars, so the paving stones had to be replaced. The trees supplied by the municipality to be planted along the route were poisoned because CityPass used highly toxic soil. And thus far, nobody knows how the Bridge of Strings will react to the weight of the railway cars when they are filled with passengers as no tests have yet been carried out.

At the moment, things are slowly getting back to normal in the city center, but at the municipality and at Master Plan, there is a high level of frustration due to the many failures associated with the project.

“Perhaps it was indeed too large a scope for us after all,” admitted H., a high-ranking official at Kikar Safra who was there right from the beginning.


The project:

■ Jerusalem is the largest city in the country (750,000 residents) and has the highest use of public transportation (52% compared to 32% in Tel Aviv with less than 400,000 residents).
■ CityPass, which won the tender for the light rail, is a consortium composed of Alstom (France), Ashtrom (Israel), Polar Investments, Harel Investments (Israel) and Veolia (France).
■ The total investment in the light rail project is NIS 3.5 billion, which is divided as follows:
■ NIS 1.3b. from the state for expropriations, infrastructure, bridges, administrative staff and
parking areas.
■ NIS 2.2b. comes from the private sector for financing, planning, construction and building and purchase of the railway cars.
■ The agreement between the state and the private company lasts for 30 years (three years of construction and 27 of operation).
■ The first railway line is 13.8 kilometers long. There are 23 stations, two bridges, a tunnel, a
depot (at the Ma’aleh Adumim junction) and 46 rail cars. Passengers will enjoy a smart tickets system and four parking areas along the route.

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