Winner selected in tender for construction of Highway 431 connecting Rishon LeZion to Modi'in

Infrastructure work on the road will begin within six months and will last three years
 
The Inter-ministerial Tenders Committee for the construction of Highway 431 from Rishon LeZion to Modi'in announced today that the Danya Cebus consortium (“Netivei Hayovel”) has been awarded the tender.
Highway 431 is planned as a lateral route to link Rishon LeZion directly with Highway 1 close to Modi'in, bypassing Ramla. 
 
The road will be a fast suburban road, 17 km in length and will have three lanes in each direction.  Construction of the road will help alleviate traffic on the main route to the Tel Aviv Metropolitan Area – Highway No. 1 – and will also provide faster, more convenient access to Highway No.1 to residents of Rishon LeZion, Ramla and other communities in the vicinity, traveling in the direction of Modi'in and Jerusalem.  Infrastructure work on the road will begin in approximately six months and the road will take three years to complete.
 
This tender is the first to be published during the tenure of Accountant General Dr. Yaron Zelekha, and his senior deputy responsible for infrastructure, Zvi Halamish, CPA.  Soon after taking office, Zelekha introduced numerous changes in the tender procedures, in an effort to streamline government tenders, which were integrated in the currently mentioned tender.
 
Among the most important changes to affect this tender were the elimination of various entry obstacles, including simplifying the structure of the tender and the payment of compensation if the tender is cancelled, and the elimination of financial obstacles including the protection of interest rates on the withdrawal dates, placing the conditions for foreign investors on an equal footing, involving the financiers at the stage of consolidating the tender, holding a convention for the investors, ordering an initial rating for the project from Maalot (rating company) in an effort to facilitate the entry of institutional investors, offering financial incentives for early financial closure, offering the full revenues for the operation of additional synergetic ventures and even an incentive to the franchise holder for opening sections of the road earlier than planned.
The introduction of these changes resulted in fierce competition between the various bidders and investors and this in turn led to a substantial reduction in the price of the project to NIS 1.5 billion, while reducing the return on the project to just 5.3%. 
 
Moreover, all the bidders attached a “term sheet” from their financiers, so that the infrastructure part of the project is expected to be rapidly secured financially through the PFI / BOT method published by the State earlier on.  This tender, is the first to involve a large number of investors, both local and foreign, in fierce competition with the two major banks.
 
Accountant General Dr. Yaron Zelekha, noted that following the Minister of Finance’s directive to curtail the work period involved in publishing tenders and in selecting franchise holders, considerable efforts were made to amend the government tender procedures regulations so that the period and costs required for preparing the tenders for highway No. 431 were substantially reduced.
 
The Inter-ministerial Tender Committee, headed by Deputy Accountant General Zvi Halamish, CPA and with the participation of Deputy Director General of Economics at the Ministry of Transport, Charlie Salomon, published the tender, accepted the offers and selected the franchise holder all within just one year, an extremely short period of time as compared with previous projects. 
 
In addition, many of the changes introduced by the Accountant General concern the elimination of financial obstacles that had previously held up projects for protracted periods.  It is hoped that as a result of these changes the financial arrangements for this tender will be completed in just six months.  Consequently, the total duration of the tender from the date of publication until the selection of the franchise holder and the closure of the financial arrangements, allowing work to commence, will be eighteen months.  It is worth mentioning that if the schedule is brought forward, the national economy will benefit by hundreds of millions of shekels.
 
The Accountant General also emphasized that the publication of this tender forms part of a new wave of infrastructure development projects planned over the last year, that includes the construction of an underwater (almost completed) and overland natural gas pipeline, publication of a tender for the construction of a fast traffic lane on the road into Tel Aviv, and reviewing the construction of additional fast lanes, finalizing the financial aspects of the Jerusalem Light Railway that is in the advanced planning stage, closing the financial details for a desalination plant at Palmachim where work is now commencing, the publication of a tender for a desalination plant in Hadera, receipt of proposals due next month for the construction of a private prison in Beer-Sheva, signing a development agreement with Israel Railways, and the preparation of a NIS 2 billion round of financing on the capital market to finance this development plan in 2005.