Major Developments in Israeli Smart Transportation and Infrastructure

Dear Clients and friends,

On January 22, 2017 the Israeli Government approved a National Plan for the Development of Smart Transportation. The five-year plan is in addition to the existing National Plan on Fuel Alternatives, and is aimed at implementation of innovative solutions in the Israeli transport sector, and the positioning of Israel as a global leader in a sector with the value of which is projected to reach $7 billion by 2030.

The plan is intended to capitalize on Israel’s position at the forefront of innovation in the smart transportation sphere, along with its competitive advantage in a number of related fields upon which the Smart Transport ‘revolution’ relies, such as data processing, artificial intelligence, network integration, sensory technologies, and cyber-security.

The National Plan has six key elements by which the government intends to realize its goals, bolstered by a budget of ILS 250 million (approximately $65.8 million or €61.7 million) allocated for its implementation: the allocation of land for experiments in transportation technology; fostering cooperation and collaboration between industry and academia, in conjunction with the Israel Innovation Authority; providing support to new ventures and initiatives, including pilot programs; making all government transportation databases available and accessible to developers and entrepreneurs in this field; undertaking comprehensive and high-resolution mapping of all of Israel’s roads; and altering and adapting relevant regulations and legislation, such that they will enable the conduct of experiments and R&D.

Responsibility for the plan’s implementation will be with a new steering and implementation committee, along with the Alternative Fuels Administration, whose name will be changed to the ‘Alternative Fuels and Smart Transportation Administration’.

This initiative presents an exceptional opportunity for growth in an emergent sector, especially in light of the successes of its predecessor, the government’s Fuel Choices Initiative, which has seen the number of companies active in the alternative fuels sector rise from 60 to 500 in the five years since its inception, along with an investment volume of ILS 9 billion (approximately $2.36 billion or €2.22 billion).

The approval of the National Plan for the Development of Smart Transportation is yet another initiative by the Israeli government with respect to development of transportation infrastructures, following an official draft resolution from July 2016 regarding a multi-annual investment plan for the development of public transport in metropolitan areas across Israel.

The draft resolution introduced the Israeli Government’s intentions to invest large amounts in developing highly advanced transportation infrastructures in heavily populated areas, including the following projects and programs: (1) in the Tel Aviv metropolitan area: the LRT “Green Line” (ILS 20 billion, which equals $5.26 billion or €4.93 billion) and the “Purple Line” (ILS 9 billion, which equals $2.36 billion or €2.22 billion) and preparation of a feasibility study for the Tel Aviv metro rail project; (2) in the Haifa metropolitan area: LRT lines (ILS 5.9 billion, which equals $1.55 billion or €1.45 billion), BRT lines (ILS 2.6 billion, which equals $685 million or €642 million) and a funicular (ILS 290 million, which equals $76.3 million or €71.6 million); (3) in the Jerusalem metropolitan are: the LRT “Green Line” (ILS 8.5 billion, which equals $2.23 billion or €2.1 billion) and planning of the LRT “Blue Line”; (4) development of heavy rail track between Hadera and Lod (ILS 8.1 billion, which equals $2.13 billion or €2 billion); (5) formulating a multi-annual plan for infrastructure development, to be executed and financed in cooperation with the private sector (PPP); and (6) removing regulatory barriers.

The Israeli Government’s plans increase expectations for a positive momentum in the local transport sector and for creating interesting possibilities for developers, contractors, and financiers in the coming years.

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