Jerusalem's repeatedly-delayed light rail system is facing new delays, and may be postponed even further due to financial problems, the Israeli head of the international conglomerate that is carrying out construction of the project said Tuesday. The remarks, which took government officials by surprise, heralded the latest in a series of delays and derailments that the controversial transportation project has faced. Yair Naveh, the director-general of the City Pass conglomerate, said workers would not meet a September 2010 deadline set last year for the inauguration of the project after previous target dates were pushed back. Naveh said that he now hopes the light rail will begin running "by the end of 2010," but added that further delays were possible due to economic difficulties and delays in the transfer of NIS 100 million from the Finance Ministry. "If the money is not transferred, there is a clear danger that the project will be lengthened further," Naveh told reporters, during a tour of the rail depot near the city's French Hill intersection. He said that the company was facing losses in the "hundreds of millions of shekels" on the project. "There is no engineering risk to the project," he said, in an indirect reference to the faults in the construction which have been found in the past, "but the project is in financial danger." Naveh also cited antiquities buried beneath a major city thoroughfare as a cause of potential further delays. The City Pass press event, which included a minute-long ride in the light rail at the depot and a tour of the light rail station at Ammunition Hill, was expected to be a PR event for the project after all the bad press City Pass was getting following the repeated delays. Instead, it quickly erupted into a verbal altercation between Naveh and a state official present at the event. "The company will receive the remainder of the state's payment when it finishes the work it has committed to doing," said Nadav Meroz, deputy director of the Jerusalem Transportation Masterplan, which works jointly with the Transportation Ministry and the Jerusalem Municipality. "We will not tolerate any further delays." Meroz noted that the state had already transferred â‚¬130 million (NIS 700 million) to the company to date, and challenged Naveh on the issue. "This is the only project in the world which is being carried out against the will of the city and the mayor," Naveh countered. Jerusalem Mayor Nir Barkat has long been an opponent of the project but his predecessor, Uri Lupolianski, was an avid proponent of the plan during his five-and-a-half years in office. Barkat said Tuesday that he was not surprised by what he termed the company's evasion of responsibility. "When he took office, the mayor demanded that the conglomerate present a detailed timetable, which they have not done to date, in a serious violation of the agreements," Barkat spokesman Evyatar Elad said in a written response. "The mayor is not willing to see the suffering of the city's residents extended, and is determined to act to safeguard the public's interests, while ensuring that the public coffer is not exploited." Barkat has previously said he would examine the project's feasibility and would consider cheaper, more effective alternatives to the light rail system, including the use of environment-friendly buses. The NIS 4.2 billion project, which is being jointly funded by the state and the Jerusalem Municipality, is the first of its kind in Israel. The long-awaited light rail, which was originally slated to be running by now, stalled almost as soon as work began due to a lack of manpower and first-time construction problems, which included incorrect tracking installed on the line on a main thoroughfare near the Mount Herzl military cemetery. It has since been ripped out and redone. The pace of the work has greatly increased since Barkat took office in December, a government official said. In a recent report, State Comptroller Micha Lindenstrauss found that the government incorrectly estimated the public sector's investment in the project, which has soared from NIS 500 million in 2000 to NIS 1.3 billion as of the end of 2007. When it finally gets off the ground, the revolutionary transportation project is meant to ease traffic congestion, and improve access to and reduce smog in the city center. But in the meantime, it has created a traffic nightmare for motorists, and turned many parts of the capital into one big dusty - and inaccessible - construction site. It has also hit hard at merchants downtown, particularly on Jaffa Road, which has been ripped apart by the infrastructure work, and turned into a virtual no-go dust zone for many city residents, who are shopping at city malls instead. The inaugural line, the nearly 14-kilometer "Red Line," will run from the northern Jerusalem neighborhood of Pisgat Ze'ev to Mount Herzl via the city center, with 23 stops along the way. Last year, the Jerusalem Municipality finally acknowledged severe disruptions and blamed City Pass. The damning admissions, outlined in a city letter to the Finance Ministry, cited a lack of an updated stage-by-stage working plan, limited working hours, and insufficient manpower and construction equipment. For its part, the City Pass conglomerate placed the blame right back on the municipality, saying that the city had delayed issuing building permits for many months.