The Battle of the Billions: The New Move by Denya Cebus Against the CBS
The CBS updated the construction input index immediately following the petition filed by the real estate giant at the beginning of 2025, but the weights have not been updated since, and the parties are heading to a Supreme Court hearing at the end of the year. Denya intends to present new evidence and expert opinions, which could cause another jump in the index. What will this do to apartment buyers and why is it so important to the company?
In February 2025, Denya Cebus filed a petition against the CBS (Central Bureau of Statistics). The main claim: a demand to immediately update the construction input index. A few days later, the CBS decided to update the index weights, which pushed it upward. Now it turns out that ahead of a Supreme Court hearing in November, the construction company plans to present new evidence indicating that the CBS calculation is flawed.
Why is this actually important to Denya? First, Denya is one of the largest contracting companies in the country. It carries out large-scale projects worth billions of shekels. Their agreements with developers are usually linked to the index. When the prices of goods and labor rise and the CBS does not update the index, it means the developer pays them less money and the company "absorbs" the price increase.
Suppose that in a certain project in Tel Aviv, Denya Cebus signed a lump-sum contract with the developer, under which it is supposed to receive one billion shekels for the work. A lump-sum contract is a contract where the amounts are set in advance, but in most cases, it is linked to the index to prevent a situation where the prices of goods, workers, iron, and more rise, and the contracting company absorbs the increases and loses money. What happens in this situation? The company spends hundreds of thousands of shekels out of its own pocket, compared to a minor increase in the index, and thus its income is eroded and it earns less. The Contractors Association supported Denya Cebus and said that "a low construction input index can collapse contracting companies."
Prices of goods are rising - and contracting companies are losing money (Itzik Yitzhaki)
If the index did not change in a certain month, but prices did rise, Denya spends more money out of pocket to pay workers and for goods, while the developer does not add money to it. The result is an erosion of profit. This could be seen in the Denya Cebus reports published yesterday: revenues remained the same, but net profit was eroded due to a significant increase in the prices of goods.
Some developers testify that the prices of goods, workers, and building materials have become 30%-40% more expensive, while the index rises by only a few percent. These are losses that can reach tens and even hundreds of millions for large contracting companies. This is the reason Denya sued the CBS to update the index.
A source at Denya said yesterday that ahead of the hearing, which will be held on November 16, the company will demand not only to update the CBS weights regarding the construction price index (and also to change the calculation method), but also the commercial and office price index and the paving and bridging price index - additional works that the company performs. The company intends to present expert opinions from economists to support this.
It must be remembered that the rise in the index also has an impact on apartment buyers. Many contracts are linked to the construction input index, and when the index rises, apartment buyers will pay more for their apartments.
