Israel Bans Egged from Major Public Transport Tender

Israel's Public Transport Authority has disqualified the Egged bus company from participating in a significant tender for operating service lines in the "Hashmonaim" cluster. This cluster encompasses routes in the Modi'in, Modi'in Illit, Lod, Ramla, Shoham, and surrounding areas.

The tender is substantial, involving approximately 26 million vehicle kilometers annually, with an estimated budget of NIS 500 to 650 million per year, and a total of NIS 5.5 to 7.5 billion over the concession period of 10 to 12 years.

Idan Moalem, Director of the Public Transport Authority, informed Egged CEO Gilad Riklin that the company exceeded the legal limits for competition and mileage. This disqualification stems from a 2017 government plan to foster competition in public transportation and reduce the historical dominance of Egged and Dan.

Under this plan, Egged is limited to 35 million annual vehicle kilometers in new cluster wins until 2029. Having already won the "West Jerusalem Envelope" cluster (around 15 million km), Egged has only 20 million km remaining, insufficient for the Hashmonaim tender's 26 million km requirement. Moalem noted Egged's significant market share, stating the next largest operator holds only about 12%.

This is not the first time competition limits have restricted Egged's expansion. The company has been barred from other major tenders, including those in Binyamin and Ma'ale Adumim, and regional clusters in the north and south, as part of efforts to introduce new players and increase competition. Egged's request to increase its mileage limit to 46.4 million km, citing industry growth, and its offer to sell routes if it won, were rejected. Moalem stated the 35 million km cap is absolute and requires a new government decision to change. The authority also denied Egged's request for an oral hearing, deeming its written arguments sufficient.