Investment in physical infrastructure - transportation, water, energy, construction, and developmentwill total NIS 21.5 billion in the 2005 budget, 13% more than in 2004, according to an estimate by Kobi Haber, head of the Finance Ministry budget division.
The infrastructure investments are intended to create a more modern and efficient economy and to remove barriers from realizing potential economic growth. Haber added that infrastructure investment had a major impact on long-term growth.
The state budget will contribute NIS 8.4 billion. The total includes NIS 5.5 billion in developing roads, railway lines, and mass transit infrastructure, and NIS 600 million in water and sewage infrastructure. Haber added that the Government is looking for extra-budgetary sources to invest NIS 13.1 billion in 2005. The state is turning more to the private sector in major physical infrastructure projects, as is the trend elsewhere in the developed world.
Sources at the Finance Ministry estimate that transferring infrastructure projects to the private sector will increase funding sources for infrastructure and increase the efficiency of building and operating infrastructure projects.
