Sale of Bus Company Tnufa Highlights Structural Failures in Public Transport

Last week, it was revealed in Globes that the bus company Tnufa is on its way to being sold to the Metropoline company. Subsequently, more than 400 drivers at the company announced a warning strike in protest of "serious defects in bus maintenance alongside uncertainty regarding the payment of employee wages."

The current saga surrounding Tnufa is nearing its end, but it is far from new: according to the Ministry of Transport's semi-annual control report, in the second half of 2025, Tnufa received the worst score of all operators (55.81). In the fines sector, Tnufa is also notable: by the end of 2025, the company had incurred fines totaling about 78 million shekels. This raises the question: how does a company with so many problems manage to enter the Israeli market and settle in it at all?

"Tnufa is a symptom of the current tender system," says Yael Shechter Sitman, head of the public transport sector at Lobby 99. "The question is how the tender mechanism allowed a situation where a bad company operates lines."

"Uncertainty in investments"

In recent years, the rules of the game have begun to change, but until recently, they explained how we reached this situation. "The moment a company wins a tender, the passengers are a captive audience for a decade," explains Shechter Sitman. She adds that until recently, the most significant component in the tender (52%) was the financial proposal. "The lower the proposal, the more chance you have of getting the highest score. This means quality indicators take up less space. If a less capable company is chosen, getting rid of it is complex, as it requires time and preparation for a new tender."

It seems the state also has a fundamental difficulty in replacing operators. "Some companies are held by investment and infrastructure funds, and they have investors to whom they must be accountable," explains Shechter Sitman. "The state knows that if it is perceived as someone who cancels contracts easily, it may make the entire industry more expensive and create uncertainty in investments."

Yitzhak Lampert, from the "Transport in Our Way" organization, adds: "If the state tells operators that even after 5 years they can be kicked out according to a contract, it will no longer be like buying government bonds. Someone will have to put their hand in their pocket to get rid of the buses and pay the debts." Furthermore, removing a player from the market reduces competition in future tenders.

"A spirit of change"

Sometimes the tender system creates an absurd reality. For example, in 2022, it was decided to replace Metropoline in the Sharon area, but in the new tender, Metropoline submitted the lowest proposal and won.

The Ministry of Transport and the National Public Transport Authority have decided to change the system so that only 35% of points consider the price proposal (instead of 52%), and 65% focus on service quality. Additionally, as part of industry regulation, the reward component based on passenger numbers will increase from 7% to 15%, with 85% of the reward based on kilometers.

Another proposal involves the size of tenders. According to Lampert, "if they had divided into smaller tenders of 30 lines, it would have been easier to get rid of companies and find intermediate solutions." On the other hand, Shechter Sitman is slightly reserved: "Although a small cluster will create more competition, it will be less economically efficient, and the operating cost per km could be more expensive."

Bottom line, the sale of Tnufa may solve a local problem for thousands of passengers, but not necessarily the broader problem. If the changes in tenders and new incentives do not succeed in changing the way operators are chosen and rewarded, Tnufa's replacement might also find itself in the exact same place.

No response was received from Tnufa company by the time of publication.