Israel’s New Budget: A Vehicle for Sustainable Transportation or a Highway to Commuting Hell?

With massive budget approvals come massive overhauls and massive potential for innovative change   

After three long years, the Israeli government has finally approved a budget. While the Knesset must still take its initial vote to approve the 14-month budget for it to be put into effect, after an unprecedented political stalemate and four elections, the country’s elected officials across the political spectrum hail the move as a milestone and welcome the thought of funds being funneled to ministries and industries in need.

According to Prime Minister Naftali Bennet, “Israel is returning to work,” and the 2021-2022 spending plan “reflects concern for all citizens of Israel and does not serve any narrow sectoral interest.” That said, with a budget of NIS 35 billion for 2021, NIS 38 billion for 2022, and NIS 7.5 billion to be invested over the next five years approved for massively overhauling the country’s transportation and infrastructure, particularly in the Tel Aviv metropolitan area (Gush Dan), not everyone is thrilled at the prospect of “returning to work” in Israel’s business epicenter. T

What will the newly-approved transportation budget fund and how will it affect those living and commuting to work in Israel’s center? Here is a rundown of what you can expect.

An expansion of the light rail in the greater Tel Aviv area

Government officials have long applauded the light rail project as an integral part of Israel’s transportation system, particularly in the Tel Aviv metropolitan area. To help cut traffic without cutting out road space, the new budget will help expand the existing (under construction) light rail, with the creation of three new subway lines – Israel’s metro. The metro will span 145 km long and cross 24 municipalities, connecting Tel Aviv with cities outside its pulsing core: Givat Shmuel in the west, Ra’anana in the north, and Holon in the south. The total cost of what is poised to become Israel’s largest infrastructure project of all time is expected to reach – if not exceed – NIS 150 billion. 

Excavations for the metro portion of the light rail project are scheduled to begin in 2025, but the newly approved budget is already factoring in its budgeting needs, by canceling state subsidies for public transportation, worth an estimated NIS 250 million. To some, this move seems economical, as the funds were originally meant to incentivize travelers to pay for and use multi-ride tickets, which the Finance Ministry claims is no longer relevant. But to others, mainly those traveling regularly to Tel Aviv and other municipalities from Israel’s periphery, the move has rendered public transportation less affordable and, therefore, far less attractive over traveling by private vehicles, rideshares, and, yes, hitchhiking. 

Imposed congestion fees for drivers entering Tel Aviv during peak hours

The new budget further compounds the commuter’s conundrum by making it less affordable to travel into the greater Tel Aviv area during rush hour (in Israel, most of the day), by imposing congestion fees on drivers who choose to enter via private car. This “congestion tax,” expected to be put into effect in 2024, has been embraced and promoted by MK Merav Michaeli, who views it as a quick-to-implement solution to the perpetual traffic jam in Tel Aviv, as well as a pipeline for funding to be funneled towards future transportation projects.

Israel is not the first country to consider implementing a “congestion tax.” Singapore’s Area Licensing Scheme (ALS) was first introduced in 1975 and saw cars with fewer than three people charged $1 for crossing into the country’s central business district during peak morning hours, with steep fines imposed upon violators. This model is similarly used in Stockholm as well. In London, cameras interact with in-car transponders to tax rush-hour travelers, and the US is famous for its many tolls, meant to help pay for the roads’ upkeep.

That said, while the idea behind the initiative seems sustainable from environmental and (government-centered) economic points of view, the question begs to ask: will the “congestion tax” actually reduce traffic congestion in the heart of the Startup Nation, or will it simply reduce the amount of liquid cash left in citizens’ pockets?

Installation of green energy & EV infrastructure

Among the infrastructure investments included in the new budget are approximately NIS 3.5 billion in funding for the installation of green energy and electric vehicle infrastructure. Over the next five years, the Transportation Ministry is expected to construct 30 bus terminals with 2,500 electric charging stations, and of the 3,500 buses expected to be purchased, 2,500 will be electric. Here, even more money and training hours will be required to train drivers and other employees to utilize the new infrastructure and equipment, and roughly NIS 1 billion will be spent on integrating road safety measures, such as adaptive technologies designed for smart cities to ensure their adoption only benefit’s public safety, and doesn’t hinder. 

While taking measures to reduce Israel’s carbon footprint is welcome, one has to wonder if Israelis are ready and willing to go electric, especially when considering the colossal failure of electric car company Better Place, which only managed to sell 900 cars nationwide, before closing shop.

Bottom line

Israelis across the political spectrum are grateful that the country finally has an approved budget. Nevertheless, the Transportation Ministry’s plans for public and private transport, particularly in the Tel Aviv Metropolitan area, are garnering a mixed response at best. Will the new budget serve as a vehicle for sustainable transportation, or will it pave the way for a highway to commuting purgatory? While only time will tell for sure, at Highroad, we believe that integrating smart city infrastructure can help make the daily commute smarter, safer, and more seamless, regardless of the method of transportation selected, and its associated costs. 

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