Israel Government Defies Unions with Private Seaport Tenders


(Reuters) – Israel issued a tender on Wednesday for two privately-run seaports to operate alongside state-owned terminals, a move to stir competition that puts the government on a collision course with powerful labour unions.

Unions at the country’s two largest ports have threatened action to prevent the emergence of competing private ports where they would have less influence over management.

For years the government had been unwilling to risk a confrontation that could paralyse vital sea routes. With Israel surrounded by unfriendly neighbours, 99 percent of its exports and imports are transported by ship.

Prime Minister Benjamin Netanyahu, who was reelected in January with a mandate for sweeping economic reforms, said no strike would prevent the tenders going ahead. The additional competition, he said, would lower prices of nearly all goods in Israel and make the country’s exports more attractive.

“No longer will 2,000 people be able to strangle the economy, paralyse the country,” Netanyahu said at a news conference. “The age of monopolies at Israel’s seaports is over and it will never return.”

Manufacturing, trade and shipping companies have long complained about poor service and lengthy waiting times in the state-operated ports of Ashdod and Haifa.

The two new Mediterranean terminals, at a cost of about $1 billion each, will be operated by foreign firms and will have enough capacity to host the world’s largest cargo ships, something not possible today. They will also create hundreds, if not thousands, of new jobs, said Finance Minister Yair Lapid.

There was no immediate reaction from the port unions, who as effective gatekeepers to international commerce are likely to be severely weakened and may have to make concessions on working hours and pay or face lay-offs among their members.

The unions, as well as leaders from the 800,000 member umbrella Histadrut federation, have said they would never allow competing, private ports.

Transport Minister Yisrael Katz, who oversees the ports and earlier this year pushed through an “open skies” deal that liberalised aviation between Israel and Europe, told Reuters a number of foreign firms had taken an interest in the tender.

“There are big companies that already in preliminary talks with us have expressed much interest in operating the ports,” Katz said, without giving names. “There are American, Chinese, German companies that are interested in turning Israel into a hub.”

Writing by Ari Rabinovitch and Tova Cohen; editing by Tom Pfeiffer

Haifa Port Company responded to the decision to build two new Israeli terminals:

Haifa Port Company is ready for any competition with new productivity records.

The records in June were: a total average of 29.4 container moves per crane hour for all the terminals, and over 32 containers per crane hour in the most advanced terminal in Israel, the Carmel Terminal.

Comparing to an average of 23.7 per hour achieved on 2011, this is a big step forward (+24%), and we are very proud in the huge gap between Haifa’s productivity and the other container ports in Israel.

This productivity allowed Haifa Port to take back the lead in domestic containers after 5 years that Ashdod was the leader: In 2013 the market share is 52% in Haifa and 48% in Ashdod. For domestic and transshipment it is 61% Haifa and 39% Ashdod (according to the Israeli Ministry of Transportation).

The port new target is 32 containers per hour for all the terminals, which should be achieved in the next 12 months, using the advanced and powerful Navis SPARCS N4 TOS system.

Mendi Zaltzman, Haifa Port Company CEO said today: “No one can claim for a lack of productivity in Haifa Port. We do our best to give outstanding service, and we succeed in all the challenged milestones we marked for ourselves. Our achievements were noticed by all the major shipping lines, and we are happy to give transshipment services both for the Golden Gate Service of MSC and for all the Mediterranean transshipment of ZIM. We still have room for more lines. We are ready for any competition.”







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