European hostility could jeopardize Metro

The foreign infrastructure companies are not expected to rush back to Israel with the end of the war, and they will probably not participate in tenders here. The government and NTA – Metropolitan Mass Transit System Ltd. are prepared for this, and plan to adapt the tenders for the construction of the Metro underground railway in the Greater Tel Aviv area accordingly.

Tens of billions of shekels will be spent on infrastructure in Israel in the coming years, and the outstanding project is the massive Metro. But although Israeli companies have acquired experience in constructing railways and light rail systems, it is mainly foreign companies with appropriate experience in mass transit systems that work on these kinds of projects in Israel.

The companies mainly come from Europe and China. European companies are having to defend their activity in Israel against allegations by their governments of human rights abuses. Meanwhile, although many Chinese companies are keen to operate in Israel, it is not clear at present whether it will be possible to depend on them. Policy concerning these companies, which are mostly state owned, needs to be set at government level, taking into account diplomatic and security considerations, and not by tenders committees. At present, tenders committees that decide the fate of billions of shekels out of the state budget don’t know whether or not they can approve a tender win by a Chinese company.

Wave of infrastructure projects

The Metro project is the largest infrastructure project ever undertaken in Israel, and it will be carried out at the same time as many other transport projects, among them light rail projects in Jerusalem, the north of the country, and the center, and track laying by Israel Railways. The Metro consists of three underground railway lines passing through 24 local authorities in Gush Dan. It is budgeted at almost NIS 200 billion. It is scheduled to become operational only towards the end of the next decade, but for that to happen the tenders process needs to begin soon.

Next month, NTA – Metropolitan Mass Transit System, the company responsible for constructing the Metro, is due to publish the conditions for the pre-screening stage of the project, in which the companies and consortia qualified to participate in the tenders will be selected.

Flexible tender

Because of the sensitive geopolitical situation and the cool attitude of the European companies, it appears that the tender will be structured as a flexible tender that will reopen a year after the initial date for submitting bids, on the assumption that the recoil from Israel will not end immediately with the end of the war and the return of the hostages.

Canadian engineering consultants WSP leaving Israel

In this way, NTA will be able to keep to the schedule and publish the tenders at the end of 2026, and the first companies that enter the pre-screening will be given an incentive in the form of the ability to compete for the first stages of construction, while on the other hand it will be possible to bring in additional companies in accordance with political and security developments, on the optimistic assumption that the situation will improve and stabilize.

Complications for Jerusalem light rail

Meanwhile, the government will have to adapt the Jerusalem light rail tenders to deal with the complicated situation there. “Globes” recently reported that Canadian engineering consultant WSP had decided to close its Israel branch and make do with a representative only, as part of a “restructuring.” In recent years, WSP has become a target of pro-Palestinian organizations that describe it as “entrenching apartheid”, and the accusations against the company became more severe as the war went on. 105 organizations have petitioned the UN High Commissioner for Human Rights to add WSP’s name to the list of companies operating in “illegal Israeli settlements,” because of its involvement in the construction of the light rail lines in Jerusalem, and almost all the European companies operating in Israel have been subjected to pressure, sometimes from unions and investors.

In Spain, for example, engineering and infrastructure development consultants COMSA withdrew from the Blue Line light rail project in Jerusalem, following political pressure. Spanish companies SEMI, which is responsible for electrifying Israel Railways, and CAF, which is building the light rail lines in Jerusalem and Tel Aviv with Shapir Engineering, have remained in Israel, but it has not been easy for them to do so. In Belgium, CAF’s win in a huge tender to supply rolling stock worth more than €3 billion has been made clearly conditional on it meeting “the requirements of international law and human rights” in relation to its activities in Israel.

A review by planner Omar Raz points to a broad pattern. A UN report on “those who benefit from Israel’s illegal actions under international law” cited CAF. French company Alstom could, according to foreign media reports, lose a tender for the Barcelona Metro because of its activities here. Germany’s Siemens, France’s Aegis and companies from Italy and Austria have also come under fire for operating in Israel.

Although most of the companies decided to stay in Israel during the war, it is doubtful whether they can afford to compete in the new tenders. “The government will have to rely mainly on Israeli companies in the tenders in Jerusalem, because in Europe the narrative will not change any time soon, with the pictures that will be broadcast from the Gaza Strip after the end of the war,” a market source told “Globes.”

Hostility

The hostility comes from various directions. In Europe, transportation is a highly unionized sector, and many unions are calling for companies to avoid working in Israel. The pressures also come from anti-Israel governments and metropolitan authorities, and, even if the managements of companies want to stay in Israel, their boards of directors which decide whether or not to participate in tenders, may choose not to enter into further confrontations beyond those in which the companies are already involved because of their activity here.

The optimism about the Israeli economy therefore needs to be tempered by the realization that the infrastructure sector is heavily reliant on foreign companies that are not expected to be thronging to Israel in the near future.

Published by Globes, Israel business news – en.globes.co.il – on October 15, 2025.

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