A few weeks after the tendering committee of Israel Railways (IR) selected the Canadian firm Bombardier as preferred bidder for a contract to supply 62 electric locomotives as part of a project to electrify 420km of the national network.
The Israeli Ministry of the Economy's International Investments and Industrial Cooperation Authority (ICA) chief executive Ziva Eger ordered Israel Railways not to proceed with the agreement.
The International Investments and Industrial Cooperation Authority is an Israeli Government entity, operating within the Ministry of Economy. ICA initiates, coordinates and monitors industrial and commercial cooperation activities following Government, Government-owned companies, public institutes and other State entities procurement.
The 160 km/h Traxx locomotives supplied by Bombardier will have a nominal output of 6MW and the first units are scheduled for delivery in 2017. The Shekels 1bn (US$260m) order includes an option for 32 additional units.
The Ministry of the Economy said that the validity of the agreement between the Canadian corporation and Israel Railways, a Government company, was contingent on €40 million in reciprocal procurement by Bombardier in Israel: half through a local subcontractor, and half through the procurement of products and services originating in Israel.
The Ministry of the Economy stated today that an examination of the reciprocal procurement plan submitted by Bombardier to the International Investments and Industrial Cooperation Authority had shown that it was impossible to carry out. Given the results of the examination, Eger ordered Israel Railways to end the agreement with Bombardier until the Canadian company submits a revised and practical plan that complies with the regulations.
Eger made it clear to Israel Railways that in the absence of a revised procurement plan, continuation of its agreement with Bombardier would not be approved.