Construction work started this week (Tuesday) with a ground-breaking ceremony on one of the two new Mediterranean ports planned by the Israeli government as part of its reform of the country’s ports. Earlier this month (October), the government also announced that it is to privatise the country’s two existing state-owned ports in Ashdod and Haifa in 2015 and 2016 respectively.
Both actions are in defiance of threats by the country’s powerful labour unions to prevent the development of competing private ports and the privatisation of the existing facilities. According to reports from Reuters, the move has prompted strike action at the present Haifa port, where workers complained that the new ports would hurt their jobs.
It was in July last year (2013) that CM first revealed that Israel’s government was looking to break the monopoly of the two state-owned ports, through which nearly all the country’s exports and imports pass. The move, it says, will bring down the cost of goods across the board.
Pan Mediterranean, a subsidiary of the Chinese national ports company China Harbour Engineering Company (CHEC), is building the ISL3.3bn (US$876m) port in Ashdod, which is due to be completed in 2020. The port’s operator has not been chosen and the contract for Haifa has yet to be awarded.
The unions have asked the government to reach a deal with them about any moves in the port sector. Speaking at the ceremony on Tuesday, Prime Minister Benjamin Netanyahu answered: “You have rights, but eight million Israeli citizens also have rights; the right to have competitive, modern, efficient port services”.
To be built on reclaimed land, each new facility will be designed with two quays totalling 1600 m in length, with a 1-1.4m teu capacity; the maximum waterside depth of 17.3 m will enable them to handle ULCC 18,000+ teu vessels. The contract for Haifa is still under offer.
Both ports will be developed under a build, operate, and transfer (BOT) process as part of a 25-year concession. The eventual operator will be expected to complete the terminal development and then equip, operate and maintain the facility for the duration of a contractual period.
China is Israel’s largest trading partner in Asia and the Israeli government has said that it will target a doubling of exports to China to US$5bn annually within the next five years.