A protracted legal battle over the construction of Israel's Carmel Tunnels has concluded with what Judge Ariel Zimmerman of the Tel Aviv District Court described Monday as a "feeble outcome." The Chinese construction firm CCEC had sought $27 million in compensation, while Israeli construction groups Shikun & Binui and Ashtrom filed a counterclaim for $16.4 million.
After years of litigation, the final amount the Israeli companies will pay the Chinese contractor stands at approximately $70,000, a tiny fraction of the combined claims totaling over $43 million, according to legal correspondent Itamar Levin's report.
Shikun & Binui and Ashtrom formed the Carmelton consortium, which won the tender to build the Carmel Tunnels and served as the main contractor. The actual excavation work was performed by CCEC, a subsidiary of China Railway Group. The tunnels, which run through Mount Carmel in Haifa, opened approximately 15 years ago, while the lawsuits were filed in 2012.
At the heart of the dispute, the Chinese company claimed it completed the work eight and a half months ahead of schedule and was therefore entitled to a bonus of $9.6 million. Additionally, CCEC demanded $15.5 million, arguing it had achieved significant cost savings during the project.
The Israeli contractors countered that CCEC had actually delayed delivery of the tunnels by eight months and demanded $13 million in compensation for the delay.
However, a court-appointed expert, Italian engineer Enrico Pizzarotti, determined that CCEC had delivered the project early by only 24 days. Judge Zimmerman further adjusted this finding, ruling that the early completion was just 16 days. Based on this, the Chinese company was awarded approximately $97,000, plus interest and linkage adjustments, as well as $81,140, equivalent to roughly $22,000.
CCEC's claim regarding cost savings was rejected after the court found that eligibility for such payment was conditional on signing a waiver of claims, which the company had not signed. Simultaneously, the Chinese firm was ordered to pay Shikun & Binui and Ashtrom approximately $108,000, plus interest and linkage, for municipal taxes paid on its behalf.
After offsetting the amounts, the court determined that the Israeli companies would pay CCEC approximately $70,000. Judge Zimmerman declined to award legal costs, despite court fees alone totaling around $670,000.
Zimmerman concluded: "Thus ended a massive dispute with a net payment to the contractor of approximately $70,000. This could have been avoided, and this is said not only with the benefit of hindsight."
