Politics threatens progress on eastern rail link

Netivei Israel - The National Transport Infrastructure Co. and Israel Railways are working together on the eastern railways project, which will run between Hadera and Lod alongside Road 6. The important project will be an alternative to the coastal route, which is already at full capacity and will allow an increase in freight capacity. The section being built by Netivei Israel is on open land from Hadera to the Sharon suburban loop, while Israel Railways is building the section from the Sharon loop to Lod.

Because the section being undertaken by Netivei Israel is on open land and will take less time to complete, it has been decided to open that section between Hadera and Rosh Ha'ayin in 2025, before the entire eastern railway is completed On the eve of the Passover holiday Netivei Israel chairman Yigal Amedi, who was seen alongside Minister of Transport Miri Regev at a Likud primaries event, sent a letter to Israel Railways chairman Moshe Shimoni who is trying to oust CEO Michael Maixner, despite opposition from the Government Companies Authority and Ministry of Finance. The letter contains allegations about the conduct of Israel Railways and its cooperation with Netivei Israel to bring about an early opening of the line.

According to Netivei Israel's chairman, insufficient manpower has been allocated by Israel Railways, insufficient activity has been undertaken, and not enough data has been transferred since the agreements between the companies at the end of last year. Netivei Israel also demands more manpower for work on weekends and nights, even though under the current government it has actually been decided to reduce Shabbat work. In fact the early operation of the line was initiated by Israel Railway's CEO and the plan and schedules were presented to the Bennett government together with an offer to extend the tender with the existing electrification contractor in order to speed up the operation of the line, instead of opening a tender for a new contractor that could delay its opening to 2028.

In a letter sent to government ministries, Israel Railways wrote, "The date of commercial operations of the eastern rail in its entirety is planned for the start of 2027, but since Netivei Israel is expected to finish the infrastructure works under its responsibility in August 2025, Israel Railways CEO ordered the line will operate commercially in a phased way, so that in the first phase services will be operated on the eastern rail (northern route) directly to Tel Aviv. In this way, the project will produce revenue about a year before the original starting date and will make it possible to provide direct services to Tel Aviv to towns such as Hadera, Taiba and Tira." The letter raises questions both due to its timing on the holiday eve, while also in the midst of attempts to oust Israel Railways CEO, and due to the relationship of the chairmen to the Minister of Transport Miri Regev who is working to oust Israel Railways CEO.

Last week Israel Railways chairman Moshe Shimoni, appointed by Minister of Transport Miri Regev, summoned the board to discuss appointing an external legal advisor to the board of directors to oversee the process of removing the CEO. The official reason was the issue of the carriage procurement, which was not progressing, but the next day the Ministry of Finance clarified that the procurement is actually progressing properly thanks to the CEO. Reports say that Israel Railways CEO Maixner has refused to appoint a Likud activist as the company's vice president.

Other reports add that the board has frozen dozens of appointments until after the CEO is ousted. The Government Companies Authority warned last week that ousting the CEO could cause upheaval at the company and harm the services it provides and that there was no reason for dismissing the CEO. Senior Treasury official support the CEO

Last week, senior Ministry of Finance officials in the Budget Division, the Accountant General's office and the Government Companies Authority wrote to Israel Railways chairman that operating and development agreements have recently been signed with Israel Railways worth tens of billions of shekels, which stem, "Directly from the network of trust between the company and government ministries, a network of trust that has been developed due to Israel Railways achievements in recent years under the leadership of its CEO, chairman and board of directors. These achievements include speeding up electrification, improving development criteria, improving train punctuality, promoting a salary agreement for railway workers, and solutions for reducing train congestion." They made clear that dismissing the CEO could directly harm the railway's ability to cope with national missions, such as the urgency of cutting road congestion and connecting all parts of the country to areas where there are jobs.

They wrote, ""We would like to make it clear that the board of directors must consider only the good of the company and avoid actions that could harm the railway's ability to meet the urgent challenges that the state has asked it to fulfill." The eastern railway will be built along 64 kilometers from the coastal railway in the Hadera area, alongside Road 6, to Lod. Nine stations are planned along the line, but only five of them have been approved at this stage.

Israel Railways aim is to create an artery for transporting freight on a route parallel to the coastal line. Diverting freight trains from the coastal line will allow increased capacity for transporting freight, while cutting passenger train congestion on the busiest line in the country. The new eastern line will also create an alternative to the existing service on the coastal line in the event of breakdowns or infrastructure works.

Netivei Israel's chairman said, "The chairman of the board wishes a happy and peaceful holiday to everyone in Israel. Regarding the allegations, the letter was written by the company's professionals and reflects reality." Published by Globes, Israel business news - en.globes.co.il [1] - on April 9, 2023.

References

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