Spanish contractor suspended from railway electrification project in Israel

The Israeli railway company (Rakevet Israel) has notified the Spanish company SEMI that within 14 days it will terminate all relations with it and exclude it from all railway electrification projects, including those currently under active implementation.

Rakevet Israel stated that the decision to suspend was made due to systematic violations of the agreement by SEMI, which it did not eliminate, despite numerous warnings.

At the same time, the confiscation of security deposits amounting to tens of millions of shekels was announced.

Recall that in March 2026, Rakevet Israel announced the seizure of the electrification sections of line 431 and part of the Eastern Railway from SEMI due to delays and failure to fulfill obligations.

In response, SEMI filed a lawsuit in the Tel Aviv District Court demanding that the project be returned to it and an injunction be imposed on the execution of the decision. SEMI argued that Rakevet Israel was violating the law and was responsible for delays due to unprofessional management, lack of communication, employee strikes, executive departures and the failure to fill the CEO position, as well as the coronavirus pandemic and military operations carried out in Israel over the past decade.

Earlier this week, the court rejected SEMI’s petition. Judge Tamar Snunit-Porer said the company should have known there was a provision in the contract that denied it the right to seek legal relief.

The court also paid attention to the testimony of the project manager from SEMI, given after his dismissal (he was removed from his position for false reporting about a failure in the electrification system).

The Israel Railways electrification project, costing around NIS 12 billion, has been plagued by years of delays. It was originally planned to be completed in 2021, but the official completion date has been postponed to March 2027. To date, about 75% of the network has been electrified.