Light Rail Construction Devastates Businesses, Owners Fear Collapse
Translated & summarized from Israel Hayom by baba
Business owners in Israel are suffering significant financial losses due to extensive light rail construction, with some facing potential closure. Owners report drastic drops in revenue, blocked access for customers, and a lack of compensation from authorities. While the Ministry of Transport acknowledges the difficulties and points to a NIS 500 million assistance fund, businesses argue it is insufficient and that they receive no direct compensation. The construction, expected to last until 2032 in some areas, is creating prolonged uncertainty and damaging local economies.
The story in 5 lines · by baba
- Light rail construction is causing severe financial hardship and potential closures for Israeli businesses.
- Business owners report significant revenue drops, lack of customer access, and no direct compensation from the government.
- Construction projects, like the Tel Aviv light rail, are expected to continue for years, exacerbating business struggles.
- Authorities acknowledge the issues and point to a NIS 500 million assistance fund, but businesses deem it inadequate.
- Consultants highlight prolonged uncertainty as the main challenge for business owners needing to cover immediate expenses.
Business owners across Israel are reporting severe financial damage and uncertainty due to ongoing light rail construction projects. Avi Avital, owner of the nine-branch "HaMalbiya" chain, stated that his flagship Tel Aviv branch, open for 12 years, has lost money monthly since construction began in late 2022. He is considering closing the branch, which has seen a 60% drop in revenue, despite the owner's willingness to negotiate rent and a sentimental attachment to the location. Avital also noted that other branches in Rishon LeZion, Rehovot, Kfar Saba, and Givatayim are facing or will face similar disruptions.
Natanel Yitzhakov, owner of "Mix Market" in Holon, opened his delicatessen six months before construction started, only to see access blocked by fences, deterring customers, especially families with strollers and the elderly. He reported zero cash flow in bad months and having to subsidize the business from his own pocket during summer. Yitzhakov estimates construction will continue until 2032, far beyond the projected 2030 end date.
In Lod, Meir Cohen, owner of a wholesale mini-market, noted that even after construction finished in his area in 2024, changes to the road layout have eliminated parking and reduced traffic lanes, significantly impacting business. He observed that 70% of shops on the main street are now closed, with landlords only willing to rent if tenants pay property taxes. Cohen expressed skepticism that the light rail will increase visitors, predicting it might instead drive shoppers to other cities.
Business strategy consultant Eran Buchris highlighted that the primary issue for business owners is prolonged uncertainty, not just lost income. While transportation projects may benefit cities long-term, business owners need to cover immediate expenses like salaries and rent. Buchris added that beyond noise and dust, there's a risk of long-term damage to customer habits and business reputation.
The Ministry of Transport stated that the Metro in Gush Dan is a complex national project and that they are working with relevant authorities and Tel Aviv-Yafo Municipality to minimize impacts. They referenced a NIS 500 million assistance fund approved by the government and Knesset under the Metro Law. NTA (Netivei Ayalon) added that while they invest in supporting residents and businesses, their budget doesn't include direct compensation, directing businesses to Tel Aviv-Yafo's independent assistance fund. The municipality confirmed a joint fund with the Ministry of Finance established in 2018 for assistance, not compensation, and has provided aid to 54 businesses totaling NIS 10.7 million across different light rail lines.