By Anat Georgi

The government is relaxing conditions for bidders in private finance initiatives (PFI) in order to attract more investors.

The global recession and domestic security situation is making it hard to mobilize local investors, let alone foreign firms and banks, to invest in local projects.

In the recently issued prequalification stage in the tender for building a road between Ness Tziona and Modi'in (Road 431), valued at NIS 1.2 billion, it was stipulated that the state would repay developers much of the setup costs immediately after construction, within 3 to 4 years.

Furthermore, bidders will not be required to join with multinational firms, although such an alliance would guarantee a higher score.

PFI is a scheme often used by governments for infrastructure projects. Normally, developers finance the project and operate it for a predefined period that may be 15-30 years. In return, the developer charges the government a fixed fee throughout the period. This way the cost of the project does not weigh on the government budget at once. The revised plan reflected in the Ness Tziona project repays the developer in a much shorter interval.

Sources in the Finance and Transport Ministries told Ha'aretz the Ness Tziona tender will also include an incentive for the developer to encourage usage on the road - in addition to the expanded annual repayment the developer will get paid by the number of vehicles that will use the road.

The terms set in the tender for Road 431 will be used in other projects as well, the sources said. Also, the process of getting construction plans approved will be shortened so a case like the Carmel tunnels project does not recur. In this case a group won the tender four years ago but could not start work because the statutory approvals were late in coming.