Increasing passenger and freight volumes helped to drive operating profits up to around Shekels 106m ($US 29m) or around 10% of turnover, which is higher than the target set in the operating agreement IR recently signed with the Israeli finance and transport ministries.

Passenger numbers in the first half climbed by 8% compared with the corresponding period in 2013 to reach 23.5 million, with fare revenue rising by around 10% or Shekels 31m. Daily ridership reached around 179,000, a 40% increase compared with the first half of 2009.

IR attributes ridership growth in the first half of this year to the opening of new lines, increased frequencies, and improved punctuality. Full year passenger numbers are forecast to reach 48 million.

It was a similar picture for the freight business, which saw first half revenues increase by around 14% to Shekels 86.2m. Volumes increased from 3.47 million tonnes in the first half of 2013 to 3.61 million tonnes. Punctuality increased from 45% to 85% and IR says the introduction of new locomotives and wagons has enabled it to run more trains and increase capacity. Steps have also been taken to improve track capacity utilisation and wagon turnaround times.

"These positive results express the fruition of steps taken to improve efficiency, restructure, and implant a business and service-oriented culture in the company in recent years," says IR CEO Mr Boaz Tsafrir. "The railways' performance shows that it is possible to be service-minded, punctual, and also profitable. Our aim is to put the railways on a firm profitable footing, thus reducing the budgetary load."