European hostility could jeopardize Metro

Foreign infrastructure companies are not expected to return to Israel at the end of the war, and may not participate in tenders here. The Government and NTA – Metropolitan Mass Transit System Ltd. They are prepared for this, and plan to adapt tenders for subway construction 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 standout project is the massive metro. But although Israeli companies have gained experience in building railways and light rail systems, only foreign companies with appropriate experience in mass transit systems are working on this type of project in Israel.

The companies mainly come from Europe and China. European companies must defend their activities in Israel against their governments’ allegations of human rights violations. Meanwhile, although many Chinese companies are keen to operate in Israel, it is not clear at the moment whether they can be relied upon. Policy regarding these companies, which are mostly state-owned, should be set at the governmental level, taking into account diplomatic and security considerations, and not by tender committees. At present, the tender committees that decide the fate of billions of shekels from the state budget do not know whether they can approve a Chinese company to win the tender or not.

A wave of infrastructure projects

The metro project is the largest infrastructure project ever implemented in Israel, and will be implemented in conjunction with several other transportation projects, including light rail projects in Jerusalem, the north of the country, and the center, and the construction of railways by the Israel Railways Company. The metro consists of three underground railway lines that pass through 24 local authorities in Gush Dan. Its budget is about 200 billion shekels. It is only scheduled to become operational at the end of the next decade, but for that to happen, the tender process must begin soon.

Next month, NTA – the Metropolitan Mass Transit Systems Company, the company responsible for constructing the metro, is scheduled to publish the conditions for the pre-screening phase of the project, in which companies and unions eligible to participate in tenders will be selected.

Flexible tender

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

In this way, the National Tourism Authority will be able to adhere to the schedule and publish tenders at the end of 2026, and the first companies to enter the pre-screening will be given an incentive in the form of the ability to compete for the first stages of construction, while in return it will be possible to bring in additional companies according to political and security developments, on the optimistic assumption that the situation improves and stabilizes.

Complications of the Jerusalem Light Rail

At the same time, the government will have to adapt Jerusalem’s light rail tenders to deal with the complex situation there. “Globes” recently reported that the Canadian engineering consulting firm WSP decided to close its branch in Israel and limit itself to a representative only, as part of the “restructuring.” In recent years, WSP has become a target of pro-Palestinian organizations that describe it as “entrenching apartheid,” and accusations against the company have become more severe as the war has continued. 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”, due to its involvement in the construction of light rail lines in Jerusalem, and almost all European companies operating in Israel have come under pressure, sometimes from unions and investors.

In Spain, for example, engineering and infrastructure development consultancy COMSA withdrew from the Blue Line light rail project in Jerusalem, after political pressure. The Spanish companies SEMI, which is responsible for the electrification of Israel’s railways, and CAF, which is building the light rail lines in Jerusalem and Tel Aviv with Shapir Engineering, remained in Israel, but it was not easy for them to do so. In Belgium, the Confederation of African Football (CAF)’s victory in a massive tender to supply railway equipment worth more than €3 billion became explicitly conditional on meeting “international law and human rights requirements” 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 actions that are illegal under international law” was quoted by the Confederation of African Football. French company Alstom, according to foreign media reports, could lose a tender for Barcelona Metro due to its activities here. The German companies Siemens, the French Aegis, and companies from Italy and Austria were also subjected to severe criticism because of their work in Israel.

Although most companies decided to remain in Israel during the war, it is questionable whether they will be able to compete in new tenders. A market source told Globes, “The government will have to rely mainly on Israeli companies for tenders in Jerusalem, because the rhetoric in Europe will not change anytime soon, with images that will be broadcast from the Gaza Strip after the war ends.”

Hostility

Hostility comes from different directions. In Europe, the transport sector is a highly unionized sector, and many unions are calling on companies to avoid operating in Israel. Pressures also come from anti-Israel governments and urban authorities, and even if company managements want to remain in Israel, their boards of directors, which decide whether to participate in tenders or not, may choose not to engage in further confrontations outside those in which companies are already involved because of their activity here.

Therefore, optimism about the Israeli economy needs to be tempered by the realization that the infrastructure sector is highly dependent on foreign companies that are not expected to flock to Israel in the near future.

Published by Globes, Israel Business News – en.globes.co.il – on October 15, 2025.

© Copyright Globes Publisher Itonut (1983) Ltd., 2025.