Metropolin, won a competitive process to operate the Eshkol Hasharon cluster

Generation Capital reported this morning to the stock exchange that the company it owns, Metropolin, won a competitive process to operate the Eshkol Hasharon cluster. This announcement joined the Ministry of Transportation's announcement on the subject that was published, but the one that was reported to the stock exchange also shows the financial data behind the tender. According to Metropolin, the cost of establishing the cluster is expected to be about NIS 900 million, and Metropolin's revenues from the operation are expected to be over NIS 570 million on average per year.
The company's report states that "the winning proposal in the tender reflects an expected return that exceeds the target return established in the fund's investment policy." When we asked Generation Capital from Calcalist about the meaning of this line, they answered that it was a "high double-digit return". When asked whether a high double-digit return means the possibility of giving drivers a higher payment, the company corrected that it was a "not high" double-digit return and that they would not be able to address the question of the drivers' wages, but in Metropolis they emphasized that "the company makes sure to give its drivers conditions that exceed what is customary in the industry and to the best of its knowledge , the compensation paid to its drivers is one of the highest in it." As a general rule, the public transportation companies in Israel do not reflect their level of profitability from the provision of public transportation services, and when there is a call to raise the wages of drivers in the industry, they turn the responsibility over to the Ministry of Transportation.
The Metropolitan company that won the tender, competed against 7 other companies. Egged company, which offered a higher offer than Dan's, was ranked second in the tender. The Dan company submitted an offer that was not feasible on the part of the Ministry of Transportation, and it was rejected due to incompatibility. Metropolis is fully owned by Bon Thor, and Generation Capital owns 73% of Bon Thor's shares. Metropolitan estimates that winning the tender positions them as the second largest public transport operator.
The Ministry of Transportation's announcement states that the company will continue to operate the service lines in Kfar Saba, Herzliya, Ra'anana, Hod Hasharon, Ramat Hasharon and Kochav Yair, with an addition of more than 144,000 kilometers traveled each week, in the municipal service in the Sharon cities, and the intercity between them and the Gush cities Dan and other destinations. The company will operate 7 new lines, 28 reinforced lines and 3 lines whose route will be upgraded with about 500 new buses, of which at least 191 are electric buses, which will allow for faster and quieter travel.
It was also noted that the service in the cluster is expected to increase by about 40% compared to the existing situation. It is not clear how the Ministry of Transportation intends to significantly increase the service when they are having difficulty meeting the existing service, mainly due to a severe shortage of approximately 6,000 drivers. The Ministry of Transportation replied that "the operation is still about a year away and the companies are working and will work to recruit and train drivers."