Public Transport Operators Sue Ministry for $8.3 Million in Deductions

Approximately 15 public transport companies have filed a lawsuit against Israel's Ministry of Transport in the Jerusalem District Court, demanding the return of NIS 31.1 million (approximately $8.3 million) that was deducted from their payments. An additional NIS 3.6 million in interest is also being sought.

The deductions were reportedly made due to service failures or unmet targets, a common practice by the ministry to ensure operators adhere to their contracts and provide adequate service. Among the plaintiffs are prominent companies like Electra Afikim, Metropoline, Nativ Express, Superbus, Kavim, and Tnuufa.

The core of the dispute lies in how the Ministry of Transport applies its "agreed compensation" mechanism for monitoring public transport service levels. The operators claim that the ministry altered its application of the penalty system, beginning to deduct funds for violations not originally agreed upon in their contracts. These include discrepancies between the operators' technological system reports and passenger complaints or inspection findings, and incidents beyond the operators' control, such as accidents or protests.

Operators argue that the ministry is misusing a clause for "failure to follow the inspector's instructions," which carries a NIS 10,000 penalty per incident, even when specific violations like failing to stop at a designated station have much lower agreed penalties, up to NIS 1,000. Furthermore, since 2024, the ministry allegedly stopped recognizing uncontrollable events as valid reasons for certain electronic control findings, potentially leading to penalties for delays caused by circumstances outside the operators' purview.

This lawsuit follows a previous legal dispute in 2021 concerning the penalty mechanism, which was settled. However, the companies preserved their claims regarding the issues now raised in the current lawsuit. They are asking the court to rule that the deductions were unlawful, order the return of funds, and cancel the alleged violations, or alternatively, reduce the compensation amounts. The Ministry of Transport stated it would present its response within the legal proceedings.