Egged Faces Possible Ban From Major Public Transport Tender Over Monopoly Limits

The Public Transport Authority in Israel's Ministry of Transport is considering barring Egged from bidding in the tender for operating the Hashmonaim public transport cluster, which includes the cities of Modiin, Modi'in Illit, Ramla, and Lod. The authority found that Egged's share in the public transport sector exceeds the activity cap set by the Competition Authority, which declared Egged a monopoly. In a hearing letter, the tender committee informed Egged Holdings that it may restrict the company's participation in the tender valued at hundreds of millions of shekels, involving around 400 buses. The potential restriction stems from the size of the Hashmonaim cluster, expected to operate about 26 million vehicle kilometers annually, which would push Egged beyond the 35 million kilometers annual cap established by the Competition Authority. Egged had already won a tender in June 2023 for the West Jerusalem Envelope cluster, covering over 15 million kilometers per year, leaving only about 20 million kilometers available under the cap. Even without the Hashmonaim tender, Egged's current market share exceeds the 25% threshold set by the state, standing at 27% as of June 2026 and projected to be 25.8% by June 2029. These restrictions are part of a reform aimed at dismantling Egged's historical dominance in the bus market. In the late 1990s, Egged and Dan controlled about 95% of public transport, and in May 1999, Egged was declared a monopoly by the Antitrust Commissioner. Following government decisions to open the sector to competition, agreements were signed with Egged in 2000 and 2010, with the current framework established in the 2018 Competition Plan to reduce Egged's market share by tendering routes and limiting its winning capacity. According to the plan, Egged may participate through affiliated companies but is limited to 35 million kilometers annually and a general cap of about 25% market share. The Public Transport Authority claims delays in implementing the Competition Plan have worsened the issue, allowing Egged to maintain a high market share longer due to postponed tenders. Egged responded that it received the tender committee's letter, is reviewing it, and believes it has strong arguments to justify its participation, which it will present to relevant authorities.