Final week, it appeared just like the Jerusalem gentle rail Blue Line undertaking had screeched to halt, after the Ministry of Finance accountant basic canceled an settlement by the profitable consortium of Dan and Danya Cebus (TASE: DNYA) to acquire carriages from Chinese language firm CRRC. This adopted US strain to keep away from dealings with the Chinese language state-owned firm.
The consortium turned to the Chinese language after Polish firm PESA withdrew from the undertaking final yr, due the growing danger of doing enterprise with Israel and the downgrade of its credit standing. In order to not delay the undertaking, funding for the civil engineering work has been accredited within the meantime, and it has been determined that inside six months procurement of carriages will probably be organized by means of a brand new tender.
The consortium selected the Chinese language provider after receiving a costlier bid from Korea’s Hyundai Corp. (a subsidiary of Hyundai Engineering and Building). Following talks, Israeli authorities officers had been additionally underneath the impression that Hyundai was not desperate to embark on operations in Israel as a result of warfare.
In direction of the shut of the tender course of, strain from components within the US authorities had begun to extend, together with the dearth of decision-making by the Shin Wager and the Nationwide Safety Company on the difficulty of Chinese language involvement in infrastructure. When CRRC competed with Egged and Shikun & Binui for development of the Tel Aviv gentle rail development Inexperienced and Purple Strains, the bid failed not due to Chinese language involvement, however as a result of it didn’t meet financial viability checks. The tender committee believed that it was a sloppy bid, which had no feasibility and would later value the state big further sums to finish the undertaking.
Rehearsal for the wrestle to construct the Metro
The excuse the state discovered for quashing the bid allowed it to keep away from declaring an official coverage on Chinese language participation in infrastructure initiatives as a consequence of US opposition. However whereas Chinese language firms are basically blocked from constructing Israeli initiatives, business sources believed that they may nonetheless compete as suppliers to development firms.
Final yr following assertions towards Chinese language tender involvement by Minister of Transport Miri Regev throughout a go to to India, the Ministry of Finance responded sharply on the time, stating that “there isn’t a coverage resolution that disqualifies sure nations.” However final week the identical ministry was compelled to rule in any other case. Now one of many options that’s rising is to switch the manufacturing of the carriages to a CRRC manufacturing facility within the US. However this battle over the procurement of the carriages is only a rehearsal for the fights over development of the large Metro undertaking.
Analyzing entry into infrastructure initiatives in Israel
RELATED ARTICLES
The consultant of the Chinese language firms once they entered Israel’s infrastructure sector was Shaul Bitterman. He now threatens to finish their actions in Israel. Bitterman now represents different firms from India and Korea, together with Hyundai. Regardless of the impression that authorities officers in Israel had about Hyundai’s intentions, the Korean firm despatched a sequence of letters earlier than the choice was made to approve the acquisition of the carriages, expressing assist for the Israeli undertaking and want to take part in it, although its bid was greater.
In keeping with business estimates, Bitterman introduced Hyundai’s bid to the eye of the US, stressing that if there’s another, why do enterprise with China? The US administration exerted its weight on the difficulty and compelled Israeli authorities officers to postpone the choice. Even when the Chinese language finally provide the automobiles to Jerusalem by means of US manufacturing facility, Hyundai Engineering intends to enter infrastructure initiatives in Israel and compete within the tenders that will probably be revealed subsequent yr for the Metro excavations.
Delegations to India and South Korea
Delegations of Israeli authorities officers have traveled to India and South Korea prior to now two years to persuade these firms to come back to Israel. Hyundai’s market cap is $32 billion, and it’s concerned in dozens of infrastructure initiatives around the globe – its entry into Israel can be competitors for European rivals.
Nonetheless, in accordance with authorities sources, the market phase examination of firms working and all for Israel in preparation for the announcement of the Metro tenders nonetheless reveals a extreme scarcity of engineering personnel. To dig 300 kilometers of subway tunnels underneath 24 municipalities within the Tel Aviv metropolitan area, it’s essential to function 22 TBM machines that dig underground and line the tunnels with concrete. On the similar time, there’s a single-digit variety of firms working in Israel that compete within the infrastructure market, and they’re additionally busy with different initiatives, though in any case, information of worldwide firms is required.
Some are involved that Israeli authorities coverage in direction of the Chinese language is meant to fulfill US technique, not Israeli technique, for the reason that nation can have problem discovering different personnel within the fields of civil engineering, even when firms from India and South Korea come to Israel.
Revealed by Globes, Israel enterprise information – en.globes.co.il – on April 22, 2025.
© Copyright of Globes Writer Itonut (1983) Ltd., 2025.
