The Ministerial Committee on Privatization approved on Tuesday the privatization of the Port of Haifa, officially concluding a two-year process to set this strategic move in motion.
The privatization will “put a private strategic investor in the port” as part of the overall seaport reform of Israel, the committee said.
Israel has yet to find a buyer for the port, although the Chinese have reportedly expressed interest in the issue.
The state will request for at least NIS 2 billion from an investor who will prepare the port for the competition that will commence in another two years’ time when the state-owned Chinese SIPG opens another port in the Haifa area.
Finance Minister Moshe Kahlon, who headed the committee, stated that “this is a significant move for the Israeli economy that will strengthen the port of Haifa and the competition between the ports.”
“This move is a necessary move that the government has been advancing for several years,” he added.
Eshel Armoni, Chairman of the Board of Directors of the Port of Haifa, declared that “this is a historic moment that comes after two years of intensive work and as part of a long-term strategic process, the purpose of which is to bring Haifa Port to prosper in a competitive environment.”
The committee also approved a significant move towards the privatization of the Israel Postal Service by removing a barrier that prevented the entry of a private investor into the market.
Yaakov Kwint, Director of the Companies Authority, said that “this move will significantly contribute to strengthening and improving the service of the Israeli postal company.”
Analyst Tom Kregenbild believes that are “not enough words to describe how important” the privatization of the Haifa port is.
Workers’ unions had previously taken advantage of their ability to threaten the port’s shutdown to receive higher wages, but now the only way a private company can make money from the port is by operating and transporting goods from the world to Israel, he explained.
“The incentive system will change completely,” he noted.
The move to privatize the port was enabled only after a prolonged battle with the unions and only after an expensive settlement was signed with them.
However, Kregenbild warned of “the dangers and fears” entailed with foreign countries investing in the port and the implications this may have on Israel’s geopolitical relations.
For instance, the US-Chinese trade war may affect Chinese ownership of the port, he said.