Metro Transportation Solution (MTS), the consortium contractor for Israel’s Tel Aviv light rail system, has asked the government for two months to secure funding for the project.

This comes as the government is considering cancelling the $2.6bn (NIS10bn) contract with MTS for the rail project, which has been hit by funding problems.

The company has also threatened to sue the government for NIS500m if it cancels the contract.

The contract is for the first stage of the planned partly underground light rail project, involving a 23km line with 33 stations, to be built by 2014.

The MTS consortium includes Africa Israel (20% stake), German firm Siemens, Chinese firm CCECC, Portuguese firm Da Costa Soares, Dutch transport company HTM and Israel’s Egged bus cooperative.