By Amiram Cohen

The natural gas pipeline tender has collapsed. Only the doctor on the scene - the Tenders Committee - is still hanging around, waiting to sign the death certificate.

Once British Gas decided against joining the consortium Paz built to build the pipeline, the project was doomed. It doesn't matter what the Tenders Committee says: a fundamental condition of the tender was that the Israelis bring on board an international company with know-how and proven experience in gas infrastructure construction. With British Gas gone and no alternatives in sight, the process is dead.

For years Israel has tried to build a natural gas industry. Many mistakes and foolishness have been committed, by everyone involved, culminating in the collapse in confusion of the pipeline tender.

But it would be unfair to lay all the blame on the initiators of the convoluted natural gas law, the Natural Gas Administration, and the various ministries that handled the matter.

The primary problem was created by the drastic change in Israel's environment in the last couple of years. It has become all but impossible to find any multinational energy company whose board will approve an equity position in Israeli infrastructure projects.

International money tends to avoid countries where city centers are blown up by suicide bombers and tanks are firing on curfew violators.

For Israeli natural gas to reach consumers, and for the economy to save $50-$70 million a year, net of the public cost saved on improved air quality, a new way must be found.

The right way, maybe the only way, to save the pipeline project is to declare the tender process void, and to amend the natural gas law, allowing the state to build the pipeline another way.

One option is to have local consortia capable of building the pipeline do so, assisted by foreign companies with the knowhow. The process would have to be exempted from a tender, which under the circumstances would surely be approved by the inter-ministerial exemption committee.

Meanwhile, the Tenders Committee is still talking with the Paz group. There is nothing wrong with that, and the Paz group is certainly worthy. But it must be clear that these negotiations are not part of a tender process. In addition, other Israeli groups must be asked to submit proposals, if only to bar the inevitable rounds in court by Israeli companies whose international partners withdrew.

One example is the Engel group, which had established a relationship with the Slovakian gas company SPP. Engel could argue there is no reason the Tenders Committee or the National Infrastructure Ministry shouldn't negotiate with it as well as with Paz.

The alternative is for the pipeline project to stay buried as the lawsuits fly, lawsuits to which the Justice Ministry warns it has no answer.