Privatization Off the Table for Israel Railways

Israel Railways has announced that it will not be privatized. The Finance and Transportation Ministers have agreed to establish a team to examine ways to improve efficiency and remove obstacles.

The Treasury's plan to privatize segments of the railway has been removed from the government's decision as part of the economic plan for the 2026 budget. Instead, a decision was made to establish an inter-ministerial team that will examine alternatives for improving efficiency and service in the railway.

However, the decision approved last Friday leaves the possibility open - but does not mandate its implementation.

Last Friday, when discussions on the budget were at their peak, Israel Railways published an announcement with the updated wording of the government's decision. Two paragraphs from the original draft, describing the roadmap for railway privatization, were removed from it, and the word 'privatization' or 'private franchisee' does not appear in the decision at all. Instead, the purpose of the inter-ministerial team was changed, and it was determined that it would examine alternatives for 'railway efficiency', 'including examination of methods of establishment, maintenance, and operation'. The amended decision also determined that the team would examine Israel Railways data and various cases around the world - which was not included in the original decision.

However, the updated decision imposes a cut on the railway in the form of a ban on recruiting new employees, except with the approval of the Budgets Department, until the team's recommendations are received and a decision is made on them.