Israeli Government Formalizes Infrastructure Companies' Roles After Two Decades
After more than 20 years of negotiations, the Israeli government has officially approved an agreement regulating the work of the country's three main transportation infrastructure companies: Netivei Israel, Netivei Ayalon, and Hotsa Israel. The agreement, ratified by the Economic-Social Cabinet led by Finance Minister Bezalel Smotrich on Wednesday night, replaces previous temporary arrangements that caused disputes over authority, budget delays, and uncertainty.
The deal, spearheaded by Netivei Israel on behalf of all three companies, clearly defines responsibilities, project management authorities, budget frameworks, and dispute resolution mechanisms. This framework aims to prevent conflicts and enable continuous progress on transportation projects with long-term planning. The agreement sets the companies' operational scope for the next five years and allows them to undertake new projects under the agreed terms.
To finance the plan, the Ministry of Transportation will allocate 8.356 billion shekels from its 2026 development budget, including 8 billion for development payments and 356 million for ongoing expenses. Additional funding from 2027 to 2031 will total 50 billion shekels for development payments and 407 million for operating costs, distributed according to project progress.
The absence of a formal agreement previously led to conflicts, such as coordination difficulties between Netivei Israel and Netivei Ayalon during the construction of Highway 531, which connects Sharon cities to Highway 6. The new agreement also lays the groundwork for potentially dismantling Hotsa Israel by clearly defining its jurisdiction and enabling orderly transfer of responsibilities.
In September 2025, the State Comptroller criticized the Ministry of Transportation for failing to renew its framework agreement with Netivei Israel, forcing a partial budget approval to avoid harming infrastructure projects. The ministry responded that it was close to finalizing the comprehensive agreement, which has now been approved after a decade of preparation and two decades of discussion.
