Promising prospects for Israeli PPP market

Progress in some areas offers promise for the future of Israel's PPP industry, but some areas continue to lag

Jerusalem Blue Line: hoping for a winner

This summer saw progress on two of Israel’s largest transport and water PPP projects, while activities slowed in parts of its road and light rail pipeline.

In July, Tel Aviv's Purple Line PPP reached financial close, following the success of its new 27km Green Line, which is being delivered under a PPP contract signed in 2019. 

The 29km Purple Line will connect the eastern parts of the Tel Aviv metropolitan area to the city centre across 45 stations. Both lines are part of a major government plan to deliver eight new light rail and tram systems within five years.

However, slower progress is being made on the 31km Jerusalem Blue Line. The Israeli government said in August last year that four teams had submitted bids for the Blue Line but a winner is yet to be revealed despite the announcement being due by November 2022. The latest update from an official at the agency in charge of the project suggests a winner could be announced in “the coming weeks”, which would represent an important breakthrough in the progress of this scheme.

There has also been similarly slow progress on the Highway 5 PPP project: the government released a request for pre-qualification (RFQ) for that scheme in August 2022 and responses were due by 15 December 2022 - but the names of any bidders have yet to be announced.

Under the Highway 5 plans, private partners will deliver express lanes along 25km of the highway, featuring three major interchange upgrades.

Liquid boost

Within the water sector, however, there has been a greater sense of pace. Israel’s Western Galilee desalination PPP has received key financial backing from the European Investment Bank, paving the way for its financial close.

In November last year, Israel’s IDE Technologies was selected as preferred bidder for the project.

Under the plans, the firm will design, build, finance and operate a new 100 million cubic metres per year desalination facility.

The first desalination plant in Israel’s north, the project is set to provide 85% of the country's potable water from desalination needs.

To be named Birkat Miriam, the new plant will join Israel’s other large scale desalination plants in operation - Ashkelon, Ashdod, Palmachim, Hadera and Sorek 1 - while IDE is also in the process of building the Sorek 2 plant.

The Israel government website currently lists 17 live PPP projects at tender or financial closing stages, across water, environment, energy, transport and development. The country has been particularly focused on its transport sector since 2022.

Several government departments have been charged with promoting PPP projects in Israel, including the Infrastructure and Projects Division, the Governmental Building Administration, NTA Metropolitan Mass Transit System, and the Cross Israel Highway, as the country looks to boost its national infrastructure and PPP investment pipeline.

If the government can get those transport projects, in particular, through to financial close, there will be a growing belief that the country can deliver on its plans.