State-owned rolling stock manufacturer China Railway Rolling Stock Corporation (CRRC) will make purchases worth $68m (€56m) from Israeli businesses under an offset agreement.

This purchase was included in the Israeli Government tender, which was secured by CRRC for the delivery of carriages for the light rail system in Israel.

Currently under construction in the coastal Tel Aviv-Yafo Municipality, the light rail system is expected to be completed in 2023.

After extended negotiations,  the offset agreement was signed between the CRRC and the Industrial Cooperation Authority of the Israeli Ministry of Economy and Industry.

According to the agreement, CRRC will make reciprocal purchases from 12 firms in Israel.

The $68m worth of purchases includes equipment at $21m (€17m), services and work at $13m (€10.5m), transfer of knowledge at $5m (€4m), and research and development cooperation with Israeli universities at $9m (€7.6m).

In addition, the agreement covers around $20.55m (€17m) for future investment for the acquisition of equipment, as well as research and development.

The Israeli Ministry was quoted by Xinhua as saying: “The agreement demonstrates that offset procurement not only deals with products but also is a significant tool for the development and training of manpower, as well as the transfer of knowledge, advanced working methods and research and development.

“The agreement is good news for the Israeli economy. The Israeli academy will also benefit from collaborations that will advance science and industry.”

Israeli Minister of Economy Amir Peretz said: “The CRRC’s offset procurement will help create jobs, train personnel and develop Israeli industry and academia.”