Carasso Real Estate today announced that it had signed a cooperation agreement with a Chinese company for carrying out a construction project in Israel. The state has been taking action to bring foreign companies to Israel for a long time under a previous cabinet decision. The decision led to a call to international construction companies. Six companies were eventually selected: five Chinese companies and one Portuguese company.
The Chinese company that signed the agreement is Beijing Construction Engineering Group (BCEG), which was one of the companies selected by the Ministry of Construction and Housing and the Ministry of Finance. BCEG was authorized to operate in Israel with 1,000 employees, administration employees, and management.
The agreement signed by BCEG and Carasso Real Estate refers to the first stage of a new development project in Kiryat Ono. The project will include 742 new housing units in six 30-storey residential high-rises in the Ariel Sharon neighborhood in the town. The NIS 130 million first stage of the project includes 129 housing units and a 20,000-square meter underground parking lot. The agreement includes an option for later construction in the project.
A representative of the Chinese company explained today that the contract was its first with an Israeli company. He added that only after the contract is signed would they be able to obtain the appropriate authorizations for working in Israel from the Ministry of the Interior. BCEG expects to obtain the permits in the coming months, and construction is scheduled to begin in January 2018.
Carasso Real Estate CEO Dan Parness stated, "The company's construction is scheduled to take 30 months, compared with 36 months in the current market. The Chinese company's bid was competitive for the Israeli market. I assume that because it is the company's first agreement in Israel, it includes a margin of safety for the Chinese company, but I think that the timetable will be shorter than for an ordinary project of this scale built in Israel."
In the first stage, the Chinese company is planning to bring 100 workers to Israel to work on the Carasso Real Estate project. BCEG VP Chang Yongchun said, "We are proud to be signing the contract, and hope that it will be the beginning of a long-term partnership. The company was chosen by the Ministry of Construction and Housing and the Ministry of Finance a year ago. After analyzing the Israeli market over the past year, we are ready to start our activity in Israel. We are ready to bring our vast experience and construction technology to Israel."
Some people in the Israeli real estate sector are wary of the foreign companies. Union of Building and Wood Workers chairman Itzhak Moyal said today, "This is a sad day for the construction sector and the related industries, a sad day for the country, and difficult day for workers in the construction sector. I appealed to the prime minister, the minister of labor, welfare, and social services, and the minister of construction and housing in an attempt to prevent the entry of foreign companies into Israel. It will cause layoffs and the collapse of several Israeli construction companies. The company does not employ workers, and has no responsibility towards contractors and workers in Israel. The Chinese workers will replace the Israeli workers."
Published by Globes [online], Israel Business News - www.globes-online.com - on November 13, 2017
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