China firm to build new Ashdod ‘union buster’ port
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China firm to build new Ashdod ‘union buster’ port

New seaport would turn Israel into a major east-west trade route; powerful port unions had better stay out of the way, say officials

Officials applaud the new port deal (Photo credit: GPO)
Officials applaud the new port deal (Photo credit: GPO)

A Beijing-based contracting firm, China Harbor, has been chosen to build a new port in Ashdod — a facility Israel expects to be an important link in a new east-west trade route, Prime Minister Benjamin Netanyahu said at the gala signing of the deal Tuesday, but setting up a potentially ugly confrontation with local labor unions.

The new South Port will cost Israel NIS 3.3 billion ($930 million) – and it will be worth every shekel, said Netanyahu, because it will improve the lives of Israelis, providing new job opportunities, more access to trade, and lower prices on a wide range of goods by injecting an element of competition in Israel’s current shipping infrastructure.

The new port will be built about a kilometer north of the current Ashdod Port. It will consist of a 1,000-meter pier and 2,800-meter breakwater. The pier will have facilities for loading and offloading ships, warehouses and storage areas, office space, and more. Construction is set to begin at the end of the year and will take about seven years to complete, officials said. The government is also planning to build a new port in Haifa, and the decision on a contractor will be made in about a month, the officials said in a statement.

The new Ashdod port is part of the government’s effort to offer Israel as a safe alternative for east-west trade. China Harbor, via its Mediterranean Engineering PMEC, is also a candidate to build the cross-Negev railway, which will begin in Eilat and/or neighboring Aqaba in Jordan and terminate in Ashdod – at the new port. According to the government’s vision, laid out by Netanyahu in a speech last year, goods will be transported by ship from China and offloaded in Eilat/Aqaba, side-by-side ports at the northern end of the Red Sea, then transported by train to Ashdod and reloaded onto ships bound for Europe. The new route will offer shippers a safe and price-competitive alternative to the current Suez Canal route, Netanyahu said in the speech.

“This project will significantly change the lives of Israelis,” Netanyahu said at the signing ceremony. “Ashdod underwent some difficult experiences” during the summer, a reference to the city becoming a prime target for Hamas rocket attacks, “and now we are turning it into a center of world trade, via the rail route to Eilat.” The project, added Netanyahu, will “create jobs and lower prices for Israelis.”

To lower those transport prices, however, Israel is going to have to keep costs at the new port down – and that will require taking on the powerful unions that currently control Israel’s sea transportation infrastructure. The new port, officials said, is the government’s response to what they called the excesses of the port workers’ unions. The new port will be administered by private contractors who will not be beholden to the current labor leadership.

In recent years, workers at the port have gone on strike numerous times – once, apparently, in order to enable workers attend the Bar Mitzvah ceremony of the son of Ashdod Port workers committee chairman Alon Hassan – and some of the strikes have gone on for months. Hassan, who is under investigation on various corruption charges (he was jailed, held under house arrest, and barred as union head for several months this year), is demanding that the government guarantee it will require contractors to hire union labor only. He did not attend the signing ceremony – and that was just fine by Transportation Minister Yisrael Katz. “A year ago I promised a reform that will lead to greater competition and lower prices by opening up sea transportation to competition, and now, a year later, we are signing the contract to build a new port that will do just that,” he said.

“I also promised,” added Katz, “that the chairman of the port workers’ committee would not be here. As you see, both promises have been fulfilled. We will do our best to ensure that the old ports can remain competitive, but under no circumstances will we pay off workers for ‘permission’ to build a new port. We have a right to build this project, and we will not allow anyone to be ‘in charge’ of what we can and cannot do. A monopoly, including one run by a union, is a monopoly.”

Picking up on that theme was Shlomo Briman, chairman of the Israel Ports Corporation. “Our vision is turning into a reality today, as we jump-start a historic project that will have a profound impact on Israel’s economic development,” he said. “The new port will satisfy many of the needs of Israel’s modern economy, including enabling the huge ships plying the seas today to dock in Ashdod – as well as encouraging competition that will benefit importers, exporters, the shipping industry, and all Israelis.”

For China, the project is an opportunity to enhance its business ties with Israel, Ambassador Gao Yanping said at the event. “This project will effectively open up the Israeli market to China. I am sure that the cooperation between our two countries on this and other projects will lead to other investments that will generate development and jobs for citizens of both countries.”

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