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Will Tel Aviv light rail start operating in November?

by Index Investing News
August 28, 2022
in Financial
Reading Time: 7 mins read
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Two weeks ago the top echelon of the Ministry of Transport went on a trial run of the Tel Aviv Metropolitan area light rail Red Line, which after postponements is due to start operating at the end of November. Ministry of Transport director general Michal Frank and her senior lieutenants were joined on the trip by the board of directors from NTA – Metropolitan Mass Transit System, headed by chairperson Adv. Maya Liquornik, which oversees the project, to check on progress. As the train was traveling at 80 kilometers an hour underground, it suddenly braked, due to a fault in the signaling system, which directs the trains and distances them from each other.

A host of problems and malfunctions threaten the operation of the line on time, but NTA is convinced that it is still possible and insists that the Red Line will be fully up and running on the promised date. The project is supposed to be ready for testing by the company that will operate the line in about a month and a half, and one of the main problems now is the faulty signaling system. The advanced system that was installed and is needed to operate the light rail is designed to provide a high level of safety, so any fault causes an immediate halt, as the senior officials of the Ministry of Transport discovered for themselves. It is true that this is a run-in and testing period, so malfunctions are certainly a matter of routine, but skepticism in government ministries about operations on the planned date has sharpened after the problems were demonstrated in real time.

Israel’s biggest and most complex infrastructure project

The cost of the largest and most complex infrastructure project ever built in Israel has already reached NIS 18 billion, and its opening date has been postponed from October 2021 to November 2022 – among other things due to the change of management at NTA. The line will connect Bat Yam to Petah Tikva, through Tel Aviv, Ramat Gan and Bnei Brak. Trains that combine above ground and underground travel have never been operated in Israel. The model was chosen in Israel due to the necessity of compromise between a metro and a light rail, as well as other considerations such as less interference with car travel and greater speed underground. Additional complexities in the project stem from the decision to split the various systems into separate companies and suppliers, which created a need for integration by government company NTA between all of them, unlike the light rail system being built in Jerusalem. The delays that have taken place so far are not particularly unusual for such a huge infrastructure project, and so the government believes that NTA is doing everything to open the line on time. However, new problems are constantly being found, and few believe in the chances of a full opening, which will allow trains to stop at all stations, on the date NTA continues to insist on, although the public, investors and businesses rely on this date.




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Despite the delays NTA insists on November

NTA is convinced that the light rail can begin running in November and is trying to stick to the timetable at any price. For example, until a few months ago the main obstacle to opening on time was the completion of the stations. That’s why at some point they considered running the train on time from Bat Yam but only to the Elifelet station near Tel Aviv’s railway park and Tahana complex, where the train goes underground. Another option that was considered was opening the full line but missing out stations that were not ready. After that, other and more serious problems were discovered, such as the malfunctions in the signaling system. So it was decided to carry out an examination of systems that are critical for operation and those that are not necessary. As part of this, unofficial requests have even been made to lower the Ministry of Transport’s requirements for the opening of the line – such as operating without a ticketing system, although from an operational and contractual point of view with the operator this is not possible.

The testing phase has been problematic. In March, the auditing company harshly criticized progress in the pace of the trials. On the other hand, it was claimed that the rate at which the company was auditing the project was too gradual, examining each step separately, while NTA performs several stages of testing together, and therefore the pessimistic forecast by the auditing company was groundless. However, many delays have still been recorded in the sixth stage of the trials. This includes the examination of all the systems that make up the project together, and subject to a timetable, to ensure reliability, availability, safety and maintainability of all systems. The last and seventh stage will include trials carried out by the company chosen to operate the trains. Each such stage is divided into sub-stages and some of them have been conducted simultaneously, but as mentioned, there are still delays. Track times are restricted and due to the large number of suppliers and companies, queues are formed and timetable delays created.

Lack of drivers and an unclear operating plan

Another problem that could lead to a delay is the pace of hiring and training drivers – there are currently only about 50 drivers out of the 120 needed. It is true that the gap can be reduced even after the light rail is delivered to the operator, but the slow pace has become a pressing problem in a tight employment market. Beyond the signaling issue, many other issues remain to be resolved – from completing finishing works at the stations, through to handling the machinery that washes the trains and onto problems at the depot and maintenance facilities. Delivery to the operator should take place 45 days before the line’s opening, when it is fully ready to run and train drivers are fully trained for commercial operations.

All this and more. The operating plan is also still unclear. Although it is promised that there will eventually be a train every 3.5 minutes during rush hours, the running-in period that will last for months and possibly even years will involve slower journeys and possibly not all stations will be opened on time. But there is still no information about any of this, since the trials have not been completed and travel time from terminal to terminal is still unclear. The Ministry of Transport and NTA have declined to comment on the operating plan for the inaugural day and the pace of hiring drivers.

Construction works on the Red Line finally got underway in August 2015 after years of promises and postponements, with the demolition of the Maariv Bridge in Tel Aviv. In 2019, NTA was thrown into turmoil following a struggle between the company’s chairman at the time Ram Belinkov (today director general of the Ministry of Finance, one of the company’s regulators) and the previous CEO Yehuda Bar-On. The latter resigned in protest at the interference, according to him, in the management’s powers and the violation of corporate governance. As well as Bar-On, five deputy directors also resigned. The company, which due to ego struggles was left without senior management, was left to oversee the project with a team that had little relevant experience. Months after the appointment of the company’s current CEO Haim Glick, in October 2019, the company announced a 13-month delay in the opening of the line, from October 2021 to November 2022. Belinkov continued to serve as chairman.

In any case, while the prestige and credibility of NTA’s management depends on meeting the postponed target date it set for the opening of the Red Line, government ministries are even more concerned about the Green and Purple lines of the light rail. NTA is also responsible for the Metro underground system plan, which is still in its formative stages and also needs a boost. The management attention that is directed almost exclusively to the opening of the Red Line on schedule leaves significant delays and problematic management of the early phases in the works on the other lines.

This phase includes land expropriation, infrastructure clearance, excavations and the construction of the underground station areas as well as other works until companies enter the franchises for the second phase, operation and maintenance. These companies have already notified the Tel Aviv Stock Exchange that the Purple Line will not be operating until 2027 instead of in 2026. The Purple Line will connect Tel Aviv, Givatayim, Ramat Gan, Givat Shmuel, Or Yehuda and Yehud- Monoson. They have also reported that the Green Line has been delayed until 2028 from 2027. The Green Line will run from Herzliya through Tel Aviv and Holon to Rishon Lezion. Here, too, the official dates are themselves dates that have already been postponed.

Pressure on contractors with no shocks wanted before elections

So the question has to be asked as to why NTA is insisting on operating the Red Line on schedule, if there is a major doubt that it can meet the deadline? Would it not be better to provide the public, which has been waiting years for the light rail and could wait another few months, with more accurate information? Would it not be better to delay the launch for a new months, if progress is at the expense of the other lines?

The main consideration motivating NTA and government ministries is to exert pressure on the contractors so that the commitment to the launch date can be kept. A postponement would lead to a series of financial demands and the reallocation of resources amid competition in the infrastructure projects sector and by the international companies implementing the projects.

After all there are elections on November 1 and announcing the delay of the project due to open on November 25 would not please the political echelon of the government.

In the midst of the running-in stage

NTA said, “The Red Line is in the midst of running-in and trials, which include conducting thousands of complex tests, in preparation for its planned commercial launch. As expected, as with any full running-in of a new rail system, updates and adjustments are required in the various systems in Dankal (the light rail system), according to the strictest standards, and without compromising safety. Upon completion of the process, NTA will provide passengers with a reliable, comfortable and safe train service of the highest standards. The Green and Purple Lines are undergoing intensive work in the Infra 1 stage before being transferred to the PPP franchisees.”

The Ministry of Transport said, “The Red Line is in the running-in stage. State representatives and the Ministries of Transport and Finance are supporting NTA in the construction and operation process and assisting them to complete it, without any compromise on matters of safety and operational service.”

Published by Globes, Israel business news – en.globes.co.il – on August 25, 2022.

© Copyright of Globes Publisher Itonut (1983) Ltd., 2022.




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