The Bank of Israel has spoken out against the way that the government plans financing the Greater Tel Aviv Metro underground railway project, which will cost an estimated NIS 150 billion. The Bank of Israel wrote that the uncertainty about the income and when it will be received will only delay implementation of the project.
The Bank of Israel wrote, "The Law, which sets that financing will be divided equally between designated income and the overall state budget is problematic, and might cause difficulties and delays in implementing the project and harm the quality of the Metro that will operate."
The difficulty described by the Bank of Israel stems from the source of the designated funds, which are from new sources, like the congestion charge, the, which itself has already been delayed.
The Bank of Israel explains that a more reasonable scenario would be for the financing to be based over many years, mainly on transfers from the state budget, which would be returned at a future date through the designated funds.
The Bank of Israel argues that the lack of adequate available funding will result in implementation taking longer through the postponement of signing on contracts or a reduction in the scope of the project at the expense of work that will be carried out after the Metro begins operating.
The Bank of Israel concludes that it would be preferable if legislation is completed that stipulates that the government will finance all the required expenditure to advance the project each year to the amount required that makes up any designated funds shortfall. When the Metro begin operating, the Bank of Israel writes, budget expenditure will end but designated income will continue to be received over many years, so that it can pay its part of the project, and there may even remain a surplus.
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