Public Transport Operators Sue Ministry Over NIS 34 Million in Deductions

Fifteen public transportation companies have filed a lawsuit against Israel's Ministry of Transport in the Jerusalem District Court, demanding the return of approximately NIS 31.1 million that was deducted from their payments, plus NIS 3.6 million in interest. The deductions were made due to alleged service failures or unmet targets, a standard mechanism the ministry uses to ensure operators adhere to their contracts.

The companies, including Electra Afikim, Metropolin, and Nativ Express, are contesting the ministry's application of its "agreed damages" mechanism for monitoring service quality. They claim the ministry changed how it applied penalties during their contracts, deducting funds for violations not originally agreed upon.

One point of contention involves discrepancies between the operators' system reports and passenger complaints or inspection findings. The companies argue the ministry is using a "failure to follow inspector's instructions" clause, which carries a NIS 10,000 penalty per incident, for issues where specific violations, like failing to stop at a designated station, have much lower penalties, up to NIS 1,000.

A second dispute concerns "route incidents," such as accidents or protests, which are beyond the operators' control. The companies state that since 2024, the ministry has stopped recognizing these events as valid reasons for certain electronic control findings, potentially leading to penalties for delays caused by circumstances outside their influence.

The operators argue that the current public transport operating model, where the state commissions services and collects passenger revenue while setting performance standards and penalties, is flawed. They claim significant deductions are made for deviations from service levels that stem from fundamental industry problems not their responsibility. The lawsuit seeks a court ruling that the deductions were unlawful, the return of funds, and the removal of attributed violations, or alternatively, a reduction in the penalty amounts.

The Ministry of Transport stated it would present its response within the legal proceedings.