A concession agreement to design, build and operate the first light rail line in Tel Aviv was signed on May 28. The MTS consortium led by Africa-Israel Investments Ltd was told in December 2006 that its tender had been accepted, but the signing had to wait until the Finance Committee of the Knesset had approved the government's commitment to a 70% set-up grant of 7bn shekels.

Other partners in the MTS consortium are Egged Israel Transport Co-operative Society, Siemens, China Civil Engineering Construction Corp and Sociedad de Construcoes Soares da Costa of Portugal. They now have six years to design and build the Red Line, which is due to open in the first quarter of 2013.

Work started immediately on diversion of utilities in the centre of Tel Aviv to prepare for the boring of twin single-track running tunnels there are also platform tunnels to be bored at nine stations on this section. A tenth station will be cut-and-cover, and the remaining stations above ground.

The Red Line is being hailed as the most complex and expensive infrastructure project in Israel's history, with a total cost of US$2·9bn, of which the government is providing US$2·1bn. Driving of the tunnels is expected to start in May 2008, and surface works in 2010. At the end of the concession period, MTS is required to hand the line over to the government in good condition.