Israeli Treasury Warns Halting Transportation Reform Will Cost 40 Billion Shekels Annually

Following coalition chairman Ofir Katz's concession to pressure from ultra-Orthodox parties, senior officials from the Ministry of Transportation and the Treasury have issued a stark warning about the consequences of shelving the Metropolitan Authorities Law. The law, which was set for discussion in the Knesset on Tuesday just before the July 17 election recess, was removed from the agenda due to ultra-Orthodox demands to prioritize legislation they support.

Moshe Ben Zaken, Director General of the Ministry of Transportation, and Ali Bing, Deputy Budget Supervisor at the Treasury, cautioned that abandoning the reform would perpetuate traffic congestion losses estimated at 40 billion shekels annually. They emphasized that road congestion costs are expected to increase year by year without improvements. The law aimed to decentralize transportation management by transferring significant authority from the Ministry of Transportation to metropolitan authorities in the Tel Aviv, Jerusalem, and Haifa areas, enabling them to independently plan public transit, bike lanes, and coordinate travel times while respecting Sabbath and holiday status quo.

This reform is considered the most significant public transportation change in decades and had already passed second and sixth readings in the Knesset's Economics Committee after extensive discussions and broad agreement between central and local governments. If delayed due to political considerations, implementation could be postponed by at least a year. The officials highlighted that similar metropolitan authority models in Europe, such as London, have doubled passenger growth rates and reduced bus wait times by 60%.

Meanwhile, as part of coalition agreements, the Knesset approved a law exempting ultra-Orthodox draft dodgers from arrest, a key demand from the ultra-Orthodox parties. This move came amid instructions from Rabbi Lando to ultra-Orthodox MKs not to trust Prime Minister Benjamin Netanyahu "until the last moment." The Basic Law on Torah Study passed in a softened version despite sharp criticism from reservists and opposition. In exchange for dropping a daycare subsidy law this session, the ultra-Orthodox secured the kosher law and agreed to support the bill splitting the Attorney General's role, which is expected to pass further readings. They also voted in favor of establishing a political inquiry committee into the October 7 massacre.