Israeli officials have terminated a franchise agreement awarded in 2006 to an international engineering-construction consortium to build a $2-billion, 23-kilometer light-rail network in metropolitan Tel Aviv because the owner and its contractors cannot agree on financial terms. The gap between the government’s cost figure and that of the building team’s, comprising firms from Israel, China and Portugal, is said to be around $100 million. Israel also is set to seize $35 million in financial guarantees the consortium had provided. The team already has spent $65 million on the project, and the state has spent close to $250 million on related
The market is generally healthy and steadily growing, and margins are up for large specialty contractors. Further, advances in design tools and owner demand for collaboration are giving subcontractors a seat at the table early on in projects.