Citipass, the company that has operated Jerusalem’s single-line light rail system for the past eight years, announced last week it was withdrawing from the race to run the capital’s expanded two-line system going forward.
Citipass notified the Finance Ministry it was withdrawing from the tender over what it called “unreasonable and disproportionate” demands made of the operator in the new tender’s conditions.
The capital’s 14-kilometer Red Line, which runs from Pisgat Ze’ev in the north to Mount Herzl in the city’s west, was Israel’s first above-ground municipal rail when it opened in 2011. When new extensions will be finished, it will run in the southwest all the way to Hadassah Ein Kerem hospital, and in the north to Neve Yaakov.
The new tender includes construction of 19 kilometers of new track for a second line, the Green Line, which will ultimately stretch 27 kilometers from the Hebrew University campus on Mount Scopus in the city’s north to the capital’s southernmost Gilo neighborhood.
Citipass has long been a lightning rod of criticism from passengers, drawing thousands of complaints over a dearth of ticket terminals, aggressive ticket inspectors and unfair fines. Jerusalem’s largest local paper, Kol Hair, counted 80,000 fines handed out by the company to passengers over a five-year period.
Israeli officials have said the initial tender that set Citipass’s operating conditions incentivized the company’s aggressive ticketing — and lessons were learned in the new tender.
Citipass is also a subject of a massive NIS 250 million ($69 million) class action lawsuit alleging that its inspectors were not trained or legally authorized to hand out the fines.
Before issuing the new tender, the Finance Ministry activated its “buy-back” option in the contract with Citipass, in a bid to ensure that both the green and red lines in the capital will be run by a single operator following the new tender. The winner of the tender will be required to take over operation of the Red Line from Citipass within six months of the announcement of their win.
Citipass said its withdrawal is unrelated to past complaints, but was due to the risks placed on the future operator of the light rail system by the new tender conditions. It pointed to a long string of security incidents, including Palestinian terror attacks and rock-throwing, as well as riots and protests in ultra-Orthodox areas, that damaged and delayed trains. The company’s contract with the state did not adequately protect it from losses incurred during such events, it told Israeli business journals in recent days.
The new tender for an operator that would run both the red and green lines contained even fewer protections, it told Kol Hair in a statement.
“In recent weeks, the tender committee [in the Finance Ministry] publicized a new and unreasonable version of the tender agreement for the Green Line in Jerusalem,” the company said.
“As an organization that has accumulated a great deal of experience managing such a project, we appealed to the committee about the high and disproportionate risks it placed on the operator.” These included responsibility, the company said, “for issues that are not under the operator’s control.”
Citipass did not detail the risks in its statement, but said the state’s alleged refusal to take more responsibility in the project “left us no choice but to decline to participate in the tender.”
Three groups are believed to be planning to compete in the tender following Citipass’s withdrawal, each composed of multiple companies providing expertise in infrastructure, rail vehicle construction and maintenance, and public transportation management. Competitors hail from Israel, Spain and China, with investment firms from additional countries backing the competing coalitions. Firms from Germany, Russia, Greece and Austria are also considering bids, but have not finalized the decision, according to Hebrew media reports.