Israel Railways, Roads Co. to pay for beating deadlines

Sources inform ''Globes'' that Israel Railways has begun offering bonuses, amounting to millions of shekels, to contractors who complete project ahead of schedule. Israel National Roads Company Ltd. plans to follow suit. The new policy replaces the failed policy of imposing fines on contractors who miss deadlines.

Contractors bidding in Israel Railways� tenders for building overpasses to replace level crossings discovered a clause stipulating additional payments amounting to millions of shekels if they completed the projects ahead of schedule. The bonuses amounted to 5-10% of the project�s cost. An example is the tender for an overpass for the level crossing in Beit Shemesh, in which a NIS 350,000 bonus has been offered in the NIS 80 million project. The highest bonus is NIS 5.25 million, not including VAT.

Published by Globes [online], Israel business news - www.globes.co.il - on June 3, 2007