Israel's Transit Sector Stalled by Government Transition

Israel is currently operating under a caretaker government, which faces significant legal and bureaucratic limitations, hindering its ability to advance major policy changes or approve new development budgets. This governmental paralysis is particularly impacting the transportation and national infrastructure sector, where delays translate into substantial economic damage and a decline in quality of life for millions.

Under caretaker government rules, the Minister of Transportation lacks the authority to implement significant policy shifts, approve new development funds, or sign strategic reforms unless they address life-threatening emergencies or urgent public needs. The professional staff and legal departments are bound by principles of restraint to prevent the imposition of faits accomplis on the incoming government or the misuse of state resources for political gain. Consequently, the ministry's budget is frozen, operating on a limited continuation budget that prevents long-term infrastructure contracts or allocation of resources for unforeseen crises.

Several critical reforms are now on hold. A comprehensive reform of disabled parking permits, designed to address the over fourfold increase in such permits since 2014 and alleviate severe parking shortages, has stalled. The reform aimed to shift eligibility determination to the National Insurance Institute and revoke up to 75,000 improperly issued permits, potentially recovering NIS 132 million annually. Another stalled initiative is the metropolitan authorities reform, intended to establish independent bodies for managing transportation in the Gush Dan, Jerusalem, and Haifa areas. This reform also included provisions to freeze urban parking fee increases and re-examine the controversial "parking law" that has led to dramatic price hikes in parking facilities.

Furthermore, key leadership positions in major state-owned companies remain vacant. Israel Railways has been without a permanent CEO for over a year, impacting its ability to implement efficiency measures and address service reliability issues. Ayalon Highways also needs a new chairman to restore proper board functioning. Strict guidelines for senior appointments during caretaker periods, aimed at preventing political appointments, lead to prolonged bureaucratic delays.

Long-term strategic projects are also in limbo. A plan for a new international airport to alleviate congestion at Ben Gurion Airport is stalled due to disagreements between the outgoing government's preference for a southern location and the Treasury's push for a northern site. The implementation of the Gush Dan congestion charge, intended to charge drivers for entering the Tel Aviv metropolitan area during peak hours, is also proceeding slowly amidst the political uncertainty. Existing infrastructure projects, such as railway electrification and the expansion of rapid transit lanes, are also constrained by the lack of an approved state budget and reliance on continuation budgets, limiting flexibility and the ability to address operational issues.