Accusing the US of meddling, China is suing Israeli government for rewarding construction of Tel Aviv light rail to Israeli, European firms instead

A number of Chinese state-owned companies are suing the Israeli government after losing a bid for a contract to build two new light rail lines in Tel Aviv, the Jerusalem Post reported Sunday. 

The companies claim that the decision of the NTA Metropolitan Mass Transit System Ltd., the Israeli firm responsible for planning and constructing the Tel Aviv light rail on behalf of the Israeli government, was based on illegal U.S. pressure. 

The contract, which was awarded back in January, was instead given to the French firm Alstom and Israeli companies Dan and Electra for the Green Line. The contract for the Purple Line was awarded to the Israeli firm Shafir and Spanish company CAF. The decision to go with Israeli and European companies instead of the Chinese ones was made due to pressure from the Biden administration, according to a senior unnamed Israeli source. 

Washington has been warning Israel for years that Chinese investments in the country, especially in critical infrastructure projects, pose a security risk. One of the Biden administration’s main concerns for the Tel Aviv project, according to Al-Monitor, was that the construction of one of the light rails would, “include excavations and maintenance for electrical cables, which run in close proximity to the Israel Defense Forces headquarters in central Tel Aviv, and other defense facilities in the Tel Aviv Metropolitan area. Given this proximity, it would apparently be easy to plant sensitive listening, tracking and recording devices along the line.”

Chinese state-owned companies have already built the new Haifa port and dug tunnels in the north of Israel. China Railway Construction Company (CRCC), which is already working on the Tel Aviv Light Rail’s Red Line with its subsidiaries and one of the Chinese companies that is suing the Israeli government, had submitted a proposal that was 1 billion Israeli shekels ($313,000) lower than the transit system’s own estimates for the cost of the project. The practice is known as dumping and is frequently used by Chinese state-owned companies in order for them to win tenders in competition with private companies. The CRCC reportedly has a long history of dumping and is also suspected of “numerous cases of bribery, forgery, dereliction of safety concerns and failures to meet timetables in projects around the world.” In 2019, the World Bank debarred CRCC for nine months for “misconduct” during work on a highway construction project in Georgia.  

Crucially, the CRCC is sanctioned by the United States because of its close ties with the Chinese military. 

“China Railway Construction Corporation (CRCC) is one of the biggest construction companies in China. Founded in 1948 as the railway arm of the People’s Liberation Army, CRCC was moved under the Ministry of Railways in 1982 and ultimately listed on the Shanghai and Hong Kong Stock Exchanges in February 2008,” according to SupChina, a New York-based, China-focused website.  

CRCC has played a central role in China’s Belt and Road Initiative, the Chinese Communist Party's top foreign policy priority to gain international influence in the form of a gigantic global infrastructure project of Chinese built roads, railways, tunnels, dams, airports, ports, energy pipelines, power plants and telecommunications networks across the world.