Gov’t’s China policy to be tested by Tel Aviv Light Rail tender

Most of the groups competing for the multibillion-dollar deal include Chinese companies.

Tel Aviv light rail train car (photo credit: WIKIMEDIA COMMONS/YNHOCKEY)
Tel Aviv light rail train car
(photo credit: WIKIMEDIA COMMONS/YNHOCKEY)

The winner of the Tel Aviv Light Rail tender, one of the largest and most complex in Israel’s history, was originally scheduled to be announced in June, but a source with knowledge of the matter said NTA Metropolitan Mass Transit System, the government-funded company responsible for designing and constructing the light rail, is likely to make its decision known in the coming weeks.

Most of the groups competing for the multibillion-dollar deal include Chinese companies.

Earlier this week, a top Israeli diplomatic official said that Israel would update the US government about any major deals with China, especially in the areas of infrastructure and technology, and would reconsider them at Washington’s request.

The policy comes amid US warnings that Chinese investments could cause security breaches.

The security cabinet and Defense, Public Security and Foreign ministries have been engaged in discussions about how Israel should act as tensions between Washington and Beijing are on the rise.

 A man stands near a fluttering Chinese national flag on a cruise boat on the Yalu River separating North Korea and China, in Dandong, Liaoning province, China April 20, 2021. (credit: REUTERS/TINGSHU WANG) A man stands near a fluttering Chinese national flag on a cruise boat on the Yalu River separating North Korea and China, in Dandong, Liaoning province, China April 20, 2021. (credit: REUTERS/TINGSHU WANG)

Repeatedly rejecting Chinese firms could lead to a major crisis with Beijing and see China, Israel’s third-largest trading partner, cut economic relations. However, if a group including Chinese companies wins the tender, the news could strain relations with the Biden administration.

Israel is on the American side if it has to choose a side, and won’t fight with Washington over China, the senior diplomatic official said Monday, but it would prefer to stay under the radar so it does not lose business and investments from China.

One of the groups competing for the light rail deal includes the China Railway Construction Company. One of its subsidiaries, the China Civil Engineering Construction Corp., dug the Gilon Tunnel in the North in 2014 at a cost of about $200 million, worked as a subcontractor on the Carmel Tunnel project for about $150m. in 2010, and for the last couple of years, it has been working on the Tel Aviv Light Rail’s Red Line to the tune of $500m.

US President Joe Biden issued an executive order in June banning these companies from receiving any US investment, due to suspected ties to the Chinese defense industry.