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 a motive 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 imagine that enterprise entities within the Gulf are will present curiosity in a future tender given the port’s strategic location.
The change following the struggle
In 2012, the federal government determined to denationalise Eilat port, and a yr 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 a further 10 years. The concession was bought at a particularly low worth 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 applied, with the port specializing in unloading vehicles – essentially the most worthwhile discipline within the transport trade.
Till the struggle 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 means of the port. In response to knowledge revealed in Knesset Financial Committee’s discussions, the port homeowners took a dividend of NIS 162 million within the 4 years previous the struggle.
The struggle and the Houthi assaults on the Pink Sea have led to an nearly halt of ships calling at Eilat port, to the purpose that it has nearly utterly shut down. Thus, in 2023, the port’s income amounted to NIS 212 million whereas in 2024, with the commerce route by means of the Pink 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 struggle, as a part of the marketing strategy for the whole economic 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 cost of NIS 3 million in consumer charges, which the port has not but paid to the state for the reason that outbreak of the struggle.
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 report income its homeowners have recorded since they bought it. Additionally, in accordance with authorities sources, the port didn’t make the anticipated investments. In the meantime, the port additionally clashed with the Histadrut, which represents its workers, they usually approached authorities ministries final April with a request to not grant the homeowners the choice to increase the contract.
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The Histadrut then claimed that the situations vital for the port’s suitability had ceased to exist by failing to fulfill 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 transport rules. 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 cost of taxes totaling NIS 10 million. The risk was met with displeasure by the regulators.
In any case, by the tip of the yr, the Minister of Transport and the Minister of Finance are imagined to resolve whether or not to increase the franchise and embrace 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 in an effort to function it beneath totally different possession inside two years from in the present day.
“Potential for a land bridge”
Sources within the automotive trade imagine will probably be a very long time earlier than the maritime site visitors of ships devoted to transporting autos (RO-RO) within the Pink Sea resumes, because of the ongoing Houthi risk, to which no navy answer has been discovered. Presently, most autos arriving in Israel from East Asia make a protracted detour by way of the Cape of Good Hope in Africa and from there to European ports.
As well as, most worldwide transport 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 spanking new autos from East Asia to reach in Israel by practically two weeks and will increase the price of transport by hundreds of {dollars} per automobile in contrast with the direct path to Eilat by way of the Pink Sea. Nevertheless, this course of has created a thriving “enterprise” for Israeli ports, particularly Haifa Port and Haifa Bay Port, which previously yr have considerably elevated the amount of unloading and storing autos.
Lately, a number of importers reported that they’ve heard estimates from Eilat Port in regards to the resumption of transport autos to Eilat by way of the Pink Sea. Nevertheless, such estimates have been heard previously and haven’t materialized because of continuation of the struggle. Expectations for the return of car transport ships to the Suez Canal additionally haven’t occurred.
Nevertheless, sources within the automotive trade estimate that worldwide elements, together with main enterprise entities from the Gulf nations, are anticipated to point out lively curiosity in taking part sooner or later tender for working the port, because of its strategic location and the anticipated adjustments 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 by way of land rail from Eilat to the Mediterranean ports, continues to be a strategic objective, which may 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.
