Tel Aviv metro project faces major delays and cost overruns, state comptroller warns

Preliminary estimates suggest the project cost may exceed the approved budget by up to NIS 12 billion ($3.77 billion).

By Pesach Benson, TPS

Israel’s ambitious Tel Aviv metro project, set to become the country’s largest infrastructure undertaking, faces severe organizational and financial challenges that could delay its completion and add billions to its cost, according to a scathing report released Tuesday by State Comptroller Matanyahu Englman.

“The challenges are enormous in many ways. Costs amounting to tens of billions of shekels. Thousands of heavy trucks were replaced in the heart of Gush Dan. The expenditure of millions of shekels from excavations of 300 kilometers of tunnels and many other challenges. The delays in its completion are causing damage of tens of billions of shekels to the citizens of Israel,” Englman said.

The Comptroller regularly reviews Israel’s preparedness and the effectiveness of government policies.

The 150-kilometer underground railway system, designed to serve more than three million residents across 24 municipalities in the Tel Aviv metropolitan area, carries a price tag of NIS 177 billion ($55.69 billion).

The project represents roughly one-third of all state infrastructure investment in the coming years, making it not only Israel’s largest infrastructure project but one of the most ambitious metro systems under development worldwide, according to the comptroller.

He warned that delays in completion cause damage of tens of billions of shekels to Israeli citizens, and that deficiencies in proper preparation could lead to postponement of the project’s completion, disruption to the lives of millions of citizens, and significant cost increases.

The comptroller identified what he called a critical failure at the heart of the project: the absence of a coordinating authority. The Metro Authority, established in 2021, currently operates with only five employees.

Its director, recruited three years after the search committee was formed, served for just a few months before resigning in October 2025, shortly after the audit concluded.

“How is it possible that there is no director for the Metro Authority responsible for a project whose cost, according to law as of 2025, stands at NIS 177 billion shekels including indexation?” Englman asked.

The report reveals that neither the National Transport Infrastructure Company, known as NTA, nor the Transport Ministry and Metro Authority have completed preparations to absorb up to 16,000 foreign specialists and workers required for the project.

Additionally, Israel faces a shortage of approximately 4,500 civil engineers, expected to grow to 8,000 in coming years, with no adequate recruitment programs in place comparable to those in the defense or health sectors.

Equipment shortages pose another significant obstacle. The tunnel boring machines necessary for excavation are not currently in Israel, and the country lacks equipment for ground-freezing technology untested in Israel.

Laboratory capacity for soil testing falls short of project requirements, potentially causing delays in completing ground surveys and consequently affecting construction timelines, the report said.

The audit identified three major financial risks. First, preliminary estimates suggest the project cost may exceed the approved budget by up to NIS 12 billion ($3.77 billion).

Second, dedicated revenues from betterment taxes have declined from initial projections of NIS 38-43 billion ($11.9-$13.5 billion) to NIS 25-30 billion ($7.85-$9.42 billion) due to tax rate reductions.

Third, the government will need to provide tens of billions of shekels in interim financing before dedicated revenues begin flowing, yet the Finance Ministry has not presented a bridging mechanism to the government.

Coordination with utility companies remains incomplete.

While NTA reached an agreement with the state electric company, service level agreements with telecommunications companies have not been signed, despite extended negotiations. Similar coordination gaps exist with water corporations.

The metro’s urgency stems from Tel Aviv’s deteriorating traffic situation.

The metropolitan area accounts for 44 percent of Israel’s population and 62 percent of business output, yet its transport infrastructure represents only 50 percent of GDP compared to 71 percent in developed nations.

Without the metro, traffic congestion costs are projected to reach NIS 25 billion ($7.85 billion) annually by 2040, up from NIS 10 billion ($3.14 billion) in 2018.

“The metro project is a national project and therefore requires special treatment by all relevant government ministries,” Englman emphasized, calling on the Transport Minister, Finance Minister, and responsible bodies to act immediately to correct deficiencies and streamline work on the project.