Israel Railways electrification delayed by war and politics

Over the past two years, work stoppages at night and on Saturdays, strikes, war, breakdowns and other delays have accumulated. As a result, the completion of the Israel Railways’ flagship strategic project of the past decade – the NIS 12 billion electrification of the national railway network – has become increasingly distant, and increasingly expensive.

At the end of 2015, the Spanish company SEMI was selected to carry out the NIS 4 billion infrastructure electrification works, and the original plan was to complete them by 2021. However, the project has now been officially postponed until July 2027, and it has already been suggested that the government announce a new completion date of 2030.

Government ministries and the public have long lost confidence in Israel Railways following the late opening and several failures of the Jerusalem-Tel Aviv high-speed line that opened in 2018, years behind schedule, and which was Israel’s first electric line. Beyond the environmental benefits, the project will enable increased passenger train frequency, shorten journey times and lower maintenance costs compared to diesel-powered equipment.

Under former Israel Railways CEO Michael Maixner and then Transport Minister Bezalel Smotrich, the electrification plan was accelerated with 2025 set for completion. Under Transport Minister Merav Michaeli, the plan was accelerated and was scheduled to be completed by the end of this year. Work has already progressed rapidly, and in March the electrification of most of the railway network was completed – from Zakron Yaakov in the north to Ashkelon in the south.

The tracks were electrified mainly at night and during weekends from Thursday night to Sunday dawn to reduce passenger disruption. However, with the formation of the current government The Haredi The parties began to object to the actions being carried out on Saturday, even though these actions took place during the era of previous governments, including the governments led by Netanyahu and during the era of then Transport Minister Bezalel Smotrich. The pressure on work has greatly affected.

Another Israel Railways project – construction of the line along Route 431, including the construction of the bridge over Route 1, was also carried out on weeknights instead of weekends, following pressure. The midweek passenger service disruptions in the south sparked protests by local authority heads who put pressure on Transport Minister Miri Regev, who in turn ordered the work to be curtailed.

In March, Israel Railways wrote in its annual financial report, “As a result of the significant reduction in personnel due to the iron swords of war, and the network disruption that caused construction work to be suspended for approximately six months in 2023, electrification on all lines will be postponed until Year 2025.”

Meanwhile, Israel Railways announced disagreements with the electrification contractor over financial demands amounting to NIS 480 million. Negotiations followed and Israel Railways recently notified the Tel Aviv Stock Exchange of a new agreement, the ninth in number, with the contractor, which includes reducing work at night and weekends and paying an additional compensation of 30 million euros for this purpose. The agreement also stipulated that the project completion date be postponed from October 2024 to July 2027.

The contractor will receive a bonus if the work is completed by the end of 2026. In addition to the direct cost of postponement, there is the indirect cost that could have been reflected in saving time and fuel, reducing pollutant emissions, and improving and simplifying the train. Services, and more.

Bring more companies

The war also affected the progress of the project due to the fact that SEMI sent its teams back to Spain when the war broke out. The fact that Israel Railways did not insist that half of the workers on the project be Israeli, as had been agreed upon by the parties, which would have minimized the damage to progress, raises questions.

Tens of millions of euros have been paid to correct the situation. In addition, despite numerous delays in the project, the Spanish contractor is also expected to obtain additional track electrification works on Line 431 between Modiin and Rishon Lezion, the eastern line from Hadera to Lod and the fourth track on Ayalon. All of these projects were established as an option in the original contract with SEMI.

“Israel Railways has completed approximately 70% of the deployment of the electrical infrastructure, including the core of the railway network, between Binyamina in the north and Ashkelon in the south,” the Israel Railways said. “Electric trains, which currently constitute approximately 60% of the total railway network’s volume of train traffic, operate on lines operating in the center of the country, Jerusalem, the coastal plain, the Sharon and other areas, and 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.”

This article was published in Globes, Israel’s business news – en.globes.co.il – on June 27, 2024.

© Copyright Globes Publisher Itonut (1983) Ltd., 2024.