Israel’s Minister of Transport Israel Katz and China\’s Minister of Transport Li signed the memorandum of understanding in Beijing.
The main project is the construction of a freight rail line that will link Israel\’s two Mediterranean ports in Ashdod and Haifa with Eilat Port.
The 180 km line will run through the Arava Valley and Nahal Zin. The estimated cost of the line is at least ILS 20bn (US$4.9bn).
The Chinese proposed the financing of part of the cost through the Chinese government-owned China Development Industrial Bank, and that Israel handle the project\’s operations.
Israel is considering awarding construction of the project to Chinese companies, because of their rapid work, and is therefore considering a government-to-government agreement to bypass the Tenders Law in awarding the franchise.
The inland canal port north of Eilat is an idea of the Government of Israel which examined the feasibility of establishing a canal port at north east of Eilat bay. The Government signalled its support for the plan, following offers from Chinese companies to build the port. The idea is to offer an Israeli rail landbridge alternative to the Suez Canal. The existing port at Eilat has poor inland connectivity and the local topography makes the cost of building a rail link prohibitively expensive.