The Israeli authorities is making ready to publish a brand new tender for the operation of the Eilat Port. The Ministries of Finance and Transport are concluding that there isn’t any cause to increase the concession granted to the Eilat Port Firm, owned by the Nakash brothers, who acquired it in 2013, for a interval that’s set to finish in about two years.
Sources within the automotive trade consider that enterprise entities within the Gulf are will present curiosity in a future tender given the port’s strategic location.
The change following the conflict
In 2012, the federal government determined to denationalise Eilat port, and a 12 months later, operation was transferred to the Eilat Port Firm, headed by the Nakash brothers, who purchased the working concession for 15 years with an choice for an extra 10 years. The concession was bought at a particularly low value of NIS 120 million, when taking into consideration the large dividends generated since then.
The state’s plan was for the port to additionally deal with containers, however this was by no means carried out, with the port specializing in unloading vehicles – essentially the most worthwhile discipline within the delivery trade.
Till the conflict started, 50% of vehicles imported to Israel had been unloaded there. As well as, an EAPC pipeline for conveying crude oil in addition to exports of fertilizers and minerals additionally go by way of the port. In response to information revealed in Knesset Financial Committee’s discussions, the port house owners took a dividend of NIS 162 million within the 4 years previous the conflict.
The conflict and the Houthi assaults on the Purple Sea have led to an virtually halt of ships calling at Eilat port, to the purpose that it has virtually utterly shut down. Thus, in 2023, the port’s income amounted to NIS 212 million whereas in 2024, with the commerce route by way of the Purple Sea closed, it stood at solely NIS 42 million, a lower of 80%.
In the meantime, the port has been supplied with help for the reason that begin of the conflict, as a part of the marketing strategy for all the financial system and help to companies in cities depending on tourism. It additionally acquired a deferral of funds from the state and a state assure for the mortgage. As well as, final June, the federal government voted on a selected define for help to Eilat Port, in order that the port was given as much as NIS 15 million compensation, conditional on the fee of NIS 3 million in consumer charges, which the port has not but paid to the state for the reason that outbreak of the conflict.
A brand new tender for the port?
The Ministry of Finance and the Ministry of Transportation have been suspicious about Eilat Port’s request for compensation, in view of the file income its house owners have recorded since they bought it. Additionally, in response to authorities sources, the port didn’t make the anticipated investments. In the meantime, the port additionally clashed with the Histadrut, which represents its staff, and so they approached authorities ministries final April with a request to not grant the house owners the choice to increase the contract.
RELATED ARTICLES
Debt ridden Eilat Port to shut Sunday
The Histadrut then claimed that the circumstances crucial for the port’s suitability had ceased to exist by failing to satisfy minimal manpower requirements and neglecting the port’s infrastructure, and that a few of the port’s cranes had been unusable, whereas there are deficiencies in compliance with environmental requirements and delivery laws. The port sharply attacked the Histadrut in a letter of response and denied the claims.
This month, the port threatened to shut its doorways after its accounts had been seized following the Eilat Municipality’s demand for fee of taxes totaling NIS 10 million. The menace was met with displeasure by the regulators.
In any case, by the top of the 12 months, the Minister of Transport and the Minister of Finance are alleged to resolve whether or not to increase the franchise and embody the choice interval in it. The ministers haven’t but formally determined and signed the paperwork, however “Globes” has realized that the Ministry of Transport is already engaged on making ready a brand new tender for working the port as a way to function it below totally different possession inside two years from right now.
“Potential for a land bridge”
Sources within the automotive trade consider will probably be a very long time earlier than the maritime site visitors of ships devoted to transporting autos (RO-RO) within the Purple Sea resumes, as a result of ongoing Houthi menace, to which no army resolution has been discovered. At present, most autos arriving in Israel from East Asia make an extended detour through the Cape of Good Hope in Africa and from there to European ports.
As well as, most worldwide delivery corporations for transporting autos keep away from crusing on to Israel, so most autos are transported European ports to the 2 ports in Haifa Bay and Ashdod.
This course of extends the time it takes for brand new autos from East Asia to reach in Israel by almost two weeks and will increase the price of delivery by hundreds of {dollars} per automobile in contrast with the direct path to Eilat through the Purple Sea. Nevertheless, this course of has created a thriving “enterprise” for Israeli ports, particularly Haifa Port and Haifa Bay Port, which prior to now 12 months have considerably elevated the amount of unloading and storing autos.
Not too long ago, a number of importers reported that they’ve heard estimates from Eilat Port in regards to the resumption of delivery autos to Eilat through the Purple Sea. Nevertheless, such estimates have been heard prior to now and haven’t materialized attributable to continuation of the conflict. Expectations for the return of auto transport ships to the Suez Canal additionally haven’t occurred.
Nevertheless, sources within the automotive trade estimate that worldwide components, together with main enterprise entities from the Gulf international locations, are anticipated to point out energetic curiosity in collaborating sooner or later tender for working the port, attributable to its strategic location and the anticipated modifications within the steadiness of energy within the Center East. In response to sources, “the potential for a future land bridge, which might bypass the Suez Canal through land rail from Eilat to the Mediterranean ports, continues to be a strategic purpose, which might considerably enhance the significance of the southern port sooner or later.”
No response has been forthcoming from Eilat Port.
Revealed by Globes, Israel enterprise information – en.globes.co.il – on July 27, 2025.
© Copyright of Globes Writer Itonut (1983) Ltd., 2025.
