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Haifa Port privatization underway

After years of negotiations and failed attempts, the privatization of the Port of Haifa is underway. This Sunday, Minister of Finance Moshe Kahlon and Minister of Transport Bezalel Smotrich will present the plan for privatization of Haifa Port Company Ltd. to the ministerial privatization committee for approval.

Under the proposal, the state will sell all its shares in Haifa Port Ltd. to a strategic investor who will undertake to invest NIS 1 billion in the company. The investor will need to meet criteria designed to ensure his financial strength. Beyond that, preference will be given to an investor “with experience in containers and maritime cargo.”

In this respect, threshold conditions will be set, requiring experience in operating container terminals of a size similar to the terminal in Ashdod. The sale process will be managed by the Government Companies Authority, part of the Ministry of Finance, but the minister of finance will appoint two representatives for the Ministry of Transport as observers of the process.

NIS 400 million of the amount that the buyer will undertake to invest will be earmarked for developing infrastructure and for port equipment. The remainder will be for other uses, such as financing worker layoff programs, subject to these uses improving the company’s financial strength.

Any amount that the buyer agrees to pay beyond NIS 1 billion will remain with the state. The port workers will receive a privatization bonus, to be paid after the sale process is complete. Workers at the Port of Haifa are the highest paid among employees in government companies and the civil service.

The plan to be submitted on Sunday includes special provisions that will apply in the event that a foreign state seeks to take part in the tender for purchase of the port. This is against the background of the assumption that the Chinese government has a special interest in buying the port, in order to create synergy with the neighboring new Haifa Bay Port, which will be operated by Shanghai International Port Group (SIPG). For example, a foreign state or a corporation controlled by a foreign state will only be allowed to buy the company with the permission of the minister of finance and the minister of transport, who will consult defense officials.
Source: Globes

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