Veolia sells its shares in the Jerusalem Light Rail and completes withdrawal from the Israeli market
More than a decade after winning the tender for the construction and operation of the Jerusalem Light Rail (JLR), Veolia Environnement’s subsidiary, Transdev, has sold all of its holdings in the JLR to a group of Israeli investors.
The approval of the deal by the Israeli authorities and the completion of the ownership transfer, earlier this month, mark an end to Veolia’s operations in the Israeli market in general and to its involvement in the controversial JLR project in particular.
Israeli authorities’ approval and ownership transfer
Until August 2015, Trasndev, a Veolia Environnement subsidiary, held a minority interest (5%) in CityPass, a consortium tendered by the Israeli government to build the JLR, as well as full ownership (100%) of the train’s operator – Connex Jerusalem. The JLR was designed to connect the western part of Jerusalem with the illegal settlements surrounding the city. Operational since December 2011, the JLR crosses the Green Line and passes through the Palestinian neighborhoods of Shuafat and Beit Hanina.
On September 2nd 2014, Transdev (formerly: Veolia Transdev) signed a contract with the CityPass consortium for the sale of Connex Jerusalem and Transdev’s remaining 5% share in CityPass. The buyer, CityPass consortium, consists of three Israeli shareholders: The Ashtrom Group, IIF – Israel Infrastructure Fund and Harel Insurance.
Recent findings by Who Profits Research Center indicate that after almost a year- long negotiations between the companies, the Israeli authorities and the funding banks, the September deal was fulfilled and that the sale of Connex Jerusalem together with the 5% of CityPass shares reached completion.
On August 6th 2015, the Ashtrom Group – one of the buyers and a shareholder in CityPass, reported to the Israeli Stock Exchange that all conditions precedent in the JLR sale agreement with Transdev were fulfilled and that the agreement was completed. Ashtrom’s report also mentioned that on the same date, 1% of CityPass shares’ was passed into Ashtrom’s possession. For further information on the deal and necessary approvals, see Who Profits’ update from February 2014.
Later that month, on August 18th 2015, and according to the Israeli Companies’ Registrar, 100% of Connex Jerusalem shares’ were transferred from Transdev to an Israeli holding company jointly owned by the Ashtrom Group, IIF and Harel Insurance. According to the Registrar however, Transdev 5% share in CityPass still remained.
The Israeli financial newspaper – the Marker – has also confirmed the completion of the deal on August 2015. In an article (available in Hebrew), published on August 20th 2015, it was reported that Transdev received NIS 100 million for Connex Jerusalem. Contrary to Ashtrom’s report to the Israeli Stock Exchange and to the unaltered status of CityPass ownership in the Israeli Companies’ Registrar, The Marker reported that Trandev’s 5% share in CityPass was fully sold to IIF. Who Profits will continue to monitor the publications around the sale in order to determine which company is the current owner of Transdev’s former 5% share in CityPass.
Finally, Who Profits findings and analysis strongly suggest that the sale has been completed and that the formal ownership transfer of CityPass shares will soon show on public record.
The final step in a gradual withdrawal
The sale of the JLR is the final step in Veolia’s gradual withdrawal from the Israeli market and several illegal operations in the occupied Palestinian territory. Through its various Israeli subsidiaries, the company has engaged in multiple sectors of the local economy, including transportation, water, waste management and energy. Since the Israeli private sector, much like the Israeli government, considers the settlements as a legitimate part of Israel, Veolia’s Israeli subsidiaries operated freely beyond the Green Line. Their activities included the provision of public bus services to Israeli settlements in the West Bank, the operation of a landfill in the occupied Jordan Valley, wastewater treatment facility for settlements’ sewage, and finally the construction and operation of the controversial JLR.
In the last few years, Veolia Environnement sold its Israeli subsidiaries piecemeal. In September 2013, the company sold its local bus services subsidiary to Afikim Company and in April 2015, water, waste and energy activities in Israel were also sold to the US-based investment firm Oaktree Capital Management. At the same time, Veolia tried to distance itself from the JLR by decreasing its holdings in Veolia Transportation – the multinational’s transport services division. In 2011, Veolia Transportation was merged with Transdev UK, leaving Veolia with a 50% share in the new company. To further blur Veolia’s involvement in the JLR, the new subsidiary – Veolia Transdev, changed its name to Transdev.
Simultaneously, Veolia negotiated with the Israeli Ministry of Transportation its way out of Jerusalem. In 2010, the Ministry has effectively blocked Veolia’s attempts to sell its holdings in the light rail to the local Egged Company. It did so by demanding previous international experience form the replacing operator. Due to the controversy surrounding the light rail, it appeared that international companies were hesitant to take on Veolia’s role, additionally with an unexperienced local transportation sector, Veolia was unable to sell Connex Jerusalem and its minority share in CityPass for years. Apparently, negotiations have now ended with the removal of the Israeli government’s objection to an unexperienced buyer and the acceptance of the CityPass consortium as capable rail operator.
As of August 2015, Veolia Environnement is no longer active in the Israeli market and in the occupied Palestinian territory. Nevertheless, the company has left behind irreversible facts on the ground. The construction of the railway involved the expropriation of occupied land that was not done for the benefit of the occupied population, and hence contradicts international law and the Fourth Geneva Convention. The JLR continues to serve the Jewish settlement neighborhoods in occupied East Jerusalem and passes daily through the Palestinian neighborhoods of Beit Hanina and Shuafat, by doing so it will play a substantial role in the reinforcement of Israeli sovereignty over occupied East Jerusalem for years to come.
Only after a final determination of the owner of Transdev’s former 5% share in CityPass, Who Profits Research Center will remove the profiles of Veolia Environnement, Transdev and Caisse des Dépôts et Consignations(CDC) from its database.
Layali al-Sayyad, 23, and Anwar Abu Rmooz, 21, told Ma’an that they were attacked by an Israeli man in his twenties while buying a ticket for the Jerusalem Light Rail near the central bus station in West Jerusalem.
The man reportedly asked the women in both Arabic and Hebrew whether he could help them, before swearing at them and punching al-Sayyad in the face, causing her to pass out.
The man then attacked Abu Rmooz and assaulted a member of the light rail security staff before Israeli police arrived at the scene and arrested him, al-Sayyad said.
Both women, who are from the al-Tur neighborhood, suffered a broken nose and bruising to their eyes and face.
An Israeli police spokesperson could not be reached for comment.
In February, a group of Jewish women attacked a Palestinian woman while she was waiting at a light rail station in Jerusalem, beating her severely.
The women asked if she was Arab before spitting on her and physically attacking her.
Weeks later, a group of Jewish youths in Tel Aviv assaulted a Palestinian cleaner after asking whether he was Arab. A co-worker of the man said it was a “lynching, plain and simple,” according to Israeli media.
- Settlers burn 300 olive trees near Nablus, Israeli army obstructs firefighters (occupiedpalestine.wordpress.com)
On his visit to Switzerland, Hamas spokesperson Mushir al-Masri unequivocally condemned the Jerusalem Light Rail project. French companies Veolia and Alstom should stop assisting the occupier and leave Jerusalem, he said.
Al-Masri headed a delegation of members of the Palestinian Legislative Council (PLC) to the Inter-Parliamentary Union in Geneva. The Electronic Intifada reported on the first official visit of Hamas members to a European country since the 2006 PLC elections. I interviewed Al-Masri on Thursday, 19 January, about his views on the Israeli Jerusalem Light Rail project.
The first line of the light rail connects West Jerusalem with the illegal settlements of Pisgat Ze’ev and French Hill in occupied Palestinian East Jerusalem. Israeli settlements in the occupied West Bank and the annexation of East Jerusalem are illegal under international law. This status has been confirmed repeatedly by numerous UN resolutions and the 2004 advisory opinion of the International Court of Justice on Israel’s wall in the occupied West Bank.
I wrote about the negative impact of the light rail on Palestinian Shuafat in my blog of 14 December. The first line of the light rail – for which two thousand square meters of land belonging to Shuafat resident Mahmoud al-Mashni have been confiscated – has three stops in Shuafat.
Jerusalem Light Rail stop in Shuafat, 30 December 2011, 11.50 am (Ibrahim Yousef)
According to Al-Masri, “This a dangerous project, well planned by the occupier to maintain, strengthen, change the image of Jerusalem. To destroy the historical monuments of Islam. The aim is to link West Jerusalem to East Jerusalem and to make sure that Jerusalem will be the eternal capital of Israel. It proves that Israel does not believe in peace.”
When I inform him that Veolia repeatedly states that the light rail is important for the Palestinians because they use it, he responds: “Any company that assists the occupier does not contribute to peace. They should leave Jerusalem. They should respect the resolutions of international organizations. Companies that support the occupation violate international law. If Palestinians use the light rail, it is not an argument. They maybe have to use it because it is a means of transport that is available. Veolia should not look for excuses for the occupation.”
Through its spokesperson Al-Masri, Hamas has joined the protests and criticism against the Jerusalem Light Rail and the two French companies involved in it: Veolia and Alstom. Palestinian non-governmental organizations, the PLO, the Arab League, international law experts, solidarity activists, churches, trade unions, city councils, socially responsible investment advisers and pension funds have called on Veolia to end their involvement in Israeli projects in the Occupied Palestinian Territories.
However, Veolia has chosen to continue its collaboration with the Israeli authorities in a project that was developed to serve the needs of the settlers in East Jerusalem. Veolia has therefore been targeted by the Boycott Divestment and Sanctions movement.
Veolia Israel’s CEO Arnon Fishbein commented on Veolia’s attempts to sell off its shares in the light rail to Egged in the Israeli magazine The Marker on 26 January. “There were pressures inside Veolia, because there are many among the group who believe the company lost a lot of contracts because of this project”, he admits. “One way or another, we will never leave a contract in the middle”, says Fishbein. (Translated from Hebrew)
It is unlikely that the deal with Egged will be approved because Israel requires the operator to be a foreign and experienced company. According to The Marker, banks are not happy to entrust the project in the inexperienced hands of Egged.
Fishbein sums up Veolia’s commitment to the Jerusalem Light Rail: “We are not running away from any contract. We made a business agreement. If it would be approved, we’ll be happy to carry on with it. If not – we won’t stop the train.”
Instead of listening to the voice of the Palestinians and respecting decisions of UN bodies, Veolia Israel’s CEO expresses clearly the company’s dedication to a project of the occupying power Israel. The global BDS Movement will therefore continue its activism against Veolia.
- Veolia dumps Israel’s waste in Jordan Valley and wins Israeli army contract (alethonews.wordpress.com)
- Veolia Takes Severe Blow As It Fails To Win 485 Million Pound Contract In West London (alethonews.wordpress.com)
- Palestinian Freedom Riders to challenge segregation by riding settler buses to Jerusalem (alethonews.wordpress.com)