Carmel Tunnels Dispute Ends With Minimal Payment to Chinese Firm
A protracted legal battle over the construction of Israel's Carmel Tunnels has concluded with a surprisingly small sum awarded to the Chinese contractor. The Tel Aviv District Court, presided over by Judge Ariel Zimmerman, ruled on the mutual claims between China Civil Engineering Construction Corporation (CCEC) and Israeli firms Shikun & Binui and Ashtrom.
CCEC had initially sued for 100 million shekels, while Shikun & Binui and Ashtrom filed a counterclaim for 61.2 million shekels. The dispute stemmed from the construction of the Carmel Tunnels, which were completed about 15 years ago, with the lawsuits filed in 2012. CCEC, part of China Railway, was the actual excavation contractor for the project, which was led by the Israeli consortium Carmeltown.
The core of CCEC's claim was that it finished the work eight and a half months ahead of schedule, entitling it to a bonus of 36 million shekels, plus an additional 58 million shekels for cost savings during the project. However, an expert appointed by the court, Italian engineer Enrico Pizzarotti, determined CCEC was only 24 days ahead. Judge Zimmerman adjusted this, ruling the actual advance was 16 days.
Consequently, CCEC was awarded approximately 363,000 shekels plus interest and linkage for the early completion, and an additional $81,140 (about 240,000 shekels). CCEC's claim for cost savings was dismissed because it had not signed a required waiver of claims. In parallel, CCEC was ordered to pay Shikun & Binui and Ashtrom about 404,000 shekels plus interest and linkage for property taxes paid on its behalf.
After offsetting the amounts, the Israeli companies are to pay CCEC a net sum of roughly 250,000 shekels. Judge Zimmerman noted that the court fees alone amounted to approximately 2.5 million shekels and refrained from awarding additional costs, stating that the entire massive dispute concluded with a net payment of about 250,000 shekels, and that significant costs could have been avoided.
