Developers Shun High-Cost Land Tender in Ma'ale Adumim

A significant land tender for 183 housing units in the "Tzipor Midbar" neighborhood of Ma'ale Adumim failed this week as no developers submitted bids. The Israel Land Authority (ILA) is currently without a permanent director, having not replaced Yinki Kuint who left in December for the private sector. This comes as the ILA plans to increase the proportion of discounted housing land sales to nearly half of all sales, according to Sigal Gabai, Director of the Business Division.

The failed tender in Tzipor Midbar is attributed to exorbitant development costs totaling approximately 100 million shekels, combined with an estimated land value of 99 million shekels. The minimum bid price was set at 12.2 million shekels, leading to a potential total cost exceeding 112 million shekels before VAT. This resulted in a land cost per unit of over 600,000 shekels, significantly higher than the typical 300,000-400,000 shekels in peripheral areas, deterring contractors amid rising commodity prices and high interest rates.

Meanwhile, a separate tender for 1,234 housing units in the strategically sensitive E1 area of Ma'ale Adumim, located in Area C of the West Bank, is proceeding with a bid deadline of October 19. This area is crucial for territorial continuity between Jerusalem and Ma'ale Adumim and faces opposition from various organizations. The Attorney General, Gali Baharav-Miara, had previously advised delaying construction in E1 until after the elections, citing political sensitivities, but reversed this stance after the Ma'ale Adumim municipality petitioned the High Court. The ILA has been instructed to reopen the tender for contractor bids but not to announce a winner until after the elections.

Member of Knesset Tali Gottlieb had argued that the Attorney General's initial objection to construction in E1 was based on an outdated plan and that there should be no impediment to building. The political struggle over E1 is seen as part of a broader conflict between the current coalition and the opposition. Despite the political maneuvering, the E1 construction is distinct from the Tzipor Midbar tender. Some companies are reportedly considering waiting to submit bids for the E1 tender until after the elections, fearing potential delays in result announcements or construction.

Separately, the ILA is actively seeking a permanent director to replace Yinki Kuint, who departed for the private sector in December. The decline in the marketing of land for saturated construction has led to the ILA's stated intention to increase discounted housing land sales.