The halting of work at nights and on Shabbat and strikes, the war, breakdowns and other delays have piled up over the past two years. As a result the completion of Israel Railways’ flagship strategic project of the past decade – the electrification of the national railway network at a cost of NIS 12 billion – is getting further and further away, while also becoming more expensive.
At the end of 2015, Spanish company SEMI was chosen to carry out the infrastructure electrification works for NIS 4 billion, and the original plan was that it would be completed by 2021. However, the project has currently been officially delayed until July 2027, and it has already been suggested that the government should announce a new completion date of 2030.
Government ministries and the public long ago loss confidence in Israel Railways after the late opening and many failures of the fast link Jerusalem-Tel Aviv line which opened 2018, years behind schedule, and which was the first electric line in Israel. Beyond environmental benefits, the project will make it possible to increase the frequency of passenger trains, shorten journey times and cut maintenance costs compared with diesel-powered equipment.
Under Israel Railways previous CEO Michael Maixner and the then Minister of Transport Bezalel Smotrich, the electrification plan was fast-tracked with 2025 set for completion. Under Minister of Transport Merav Michaeli, the plan was further speeded up and was due to be completed by the end of this year. Work did indeed move forward rapidly and in March electrification of most of the rail network had been completed – from Zikron Yaakov in the north to Ashkelon in the south.
Electrification of the tracks was undertaken mainly at nights and over weekends from Thursday night to Sunday at dawn, to minimize disruptions for passengers. However, with the formation of the current government, the Haredi parties began objecting to the works on Shabbat, even though these works previously took place under previous governments, including Netanyahu-led governments and under the then Minister of Transport Bezalel Smotrich. The pressure took its toll and work has been significantly reduced.
Also following the pressure, work on another Israel Railways project – construction of the line alongside Road 431, including erecting the bridge over Road 1, was carried out on weeknights instead of weekends. Midweek passenger service disruptions in the south caused an outcry on by local authority heads who put pressure on Minister of Transport Miri Regev, who in turn ordered the reduction of the works.
In March, Israel Railways wrote in its annual financial report, “As a result of a significant reduction in the number of employees due the Swords of Iron War, and network breakdowns that caused the suspension of construction work for about six months in 2023, the operation of electrification on all lines will be postponed until 2025.”
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At the same time, Israel Railways reported disputes with the electrification contractor on financial demands totaling NIS 480 million. Negotiations followed and recently Israel Railways notified the Tel Aviv Stock Exchange of a new agreement, the ninth in number, with the contractor, which includes less work at nights and weekends and an additional €30 million payment compensation for this. The agreement also stipulated that completion date for the project has been postponed from October 2024 to July 2027.
The contractor will receive a bonus if the work is completed by the end of 2026. Beyond the direct cost of the postponement, there is the indirect cost that would have been reflected in saving time and fuel, cutting emissions of pollutants, improving and streamlining train services, and more.
Bringing in more companies
The war has also affected the pace of the project’s progress due to the fact that SEMI flew its teams back to Spain, when the war broke out. The fact that Israel Railways had not insisted that half of the workers in the project be Israelis, as agreed between the parties, which would have reduced the damage to progress, raises questions.
Tens of millions of euros have been paid to rectify the situation. In addition, despite the many delays in the project, the Spanish contractor is also expected to receive additional work to electrify tracks on the 431 line between Modi’in and Rishon Lezion, the eastern line from Hadera to Lod and the fourth track on the Ayalon. All of these projects were anchored as an option in the original contract with SEMI.
Israel Railways said, “Israel Railways has completed about 70% of deployment of the electrical infrastructure, including the core of the railway network, between Binyamina in the north and Ashkelon in the south. Electric trains, which currently make up about 60% of the volume of train traffic, are operated on lines operating in the center of the country, Jerusalem, the coastal plain, Hasharon, and other areas. The railway is working to complete the electrification of the remaining sections, despite the many challenges, caused, among other things, by the war and its consequences.”
Published by Globes, Israel business news – en.globes.co.il – on June 27, 2024.
© Copyright of Globes Publisher Itonut (1983) Ltd., 2024.
