An examination by the state comptroller of the government’s progress in planning and executing the Metro mass transit project in the Greater Tel Aviv area raises some worrying findings. Among them is a wide gap between current financial estimates, which have yet to be approved, and the original estimates for the huge infrastructure project. It is not certain that revenue amount that the government based itself on will materialize.
The Metro is planned to operate across 24 local authorities. It involves digging 150 kilometers of tunnels and building 109 stations. The cost is estimated at NIS 150 billion, half of which is meant to come from the state budget, while the other half is supposed to come from capturing the rise in land value along the Metro routes, that is to say from taxation of the benefits that developers and local authorities will derive from construction of the Metro and the increase in building rights in areas surrounding it, and from other sources, such as the congestion charge planned for Tel Aviv. The state comptroller’s report, however, finds a large shortfall.
NIS 150 billion was the amount stated in the 2021 Metro Law as the cost of the project. Inflation has raised this to NIS 177 billion. In addition, while the Metro Law was in the process of being legislated, the committee that discussed it lowered the tax on the increase in land value from 35% to 32%, and set a reduced rate of 20% if building rights were used by 2030. As a result, the revenue from the tax is estimated at NIS 25-30 billion, NIS 2-13 billion below the original revenue estimate.
The report further states that there is a fear that revenue from other sources will be smaller by tens of billions of shekels. The financing gaps become even more serious when seen in the light of the growth in government debt and the consequent interest costs.
Not only the budget but also the timetable has question marks over it. In November 2022, the committee steering the project approved a timetable under which the Metro would become partially operational by 2034 and would become fully commercially operational by 2037. Since then, however, apart from the war, various delays and failures have held it back.
Besides the political pressures that held up the second part of the Metro Law, from 2021 until June this year the government did not manage to set up the Metro Authority, and it worked with a skeleton staff of five, with frequent turnover. Since the period covered by the state comptroller’s audit, the authority’s director Uzi Itzhaki has resigned shortly after being appointed. The authority is meant to coordinate the work of NTA – Mass Transit System, which is carrying out the project, with other entities, but so far an agreement has been reached only with Israel Electric Corporation, and there are no similar agreements with the telecommunications companies and the water companies.
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Another cause of delay has been the need to redesign stations that were designed with just one entry and exit point, contrary to the approved plan. There have also been delays in carrying out test borings.
Israel’s infrastructure industry has a shortage of 4,500 engineers, and in order to advance the Metro 16,000 foreign professional workers will be required to operate twenty huge boring and lining machines, but the government has yet to make the necessary arrangements. The report finds that critical engineering equipment for the project is lacking.
NTA said in response: “Since the report began to be written eighteen months ago there has been considerable progress in the company’s preparation for constructing the Metro, in cooperation with the Ministry of Transport and the Ministry of Finance, government agencies, local authorities, and all entities participating in the project. NTA recently published huge tenders (NIS 65 billion) for the digging of the tunnels, which will bring to Israel the best infrastructure companies in the world, with their experience, equipment, and workers.”
Published by Globes, Israel business news – en.globes.co.il – on December 31, 2025.
© Copyright of Globes Publisher Itonut (1983) Ltd., 2025.
