Israel to Press Ahead With $580 Million Sale of Northern Port
Israel to Press Ahead With $580 Million Sale of Northern Port
(Bloomberg) --
Israel is moving forward with plans to auction off the nation’s largest seaport with the aim of fetching as much as 2 billion shekels ($583 million), part of a wave of state-owned asset sales meant to improve services and bring in new revenues to fund an expanding deficit.
A government committee is expected to approve the framework for the long-delayed privatization of Haifa Port on Monday, according to Roi Kahlon, deputy director for the Government Companies Authority. Israel will offer a discount to strategic investors to draw them into the bidding process that will start in October, he said.
Israel could cut 200 million shekels off the price if bidders include a strategic partner with expertise in managing aspects of seaports, like containers, Kahlon said.
Selling state assets, as part of a broader privatization push, is intended to help cover the surge in government spending needed to tackle the economic crisis brought on by the coronavirus pandemic. With the budget deficit expected to nearly quadruple to 14% of output this year, Israel is looking to sell a roughly 250 million shekels stake in the postal service, Government Companies Authority head Yaakov Kvint said Tuesday. The Finance Ministry is also considering plans to sell about $1 billion of shares in Israel Aerospace Industries Ltd. in a public listing, Bloomberg reported last month.
The first billion shekels of the winning bid for the port will be invested in infrastructure upgrades, such as a new deep-water platform, Kahlon said. The rest would flow into state coffers.
In the meantime, Haifa Port is seeking to nearly halve its workforce to about 550. The aim is to be more competitive with the new state-of-the-art port being built nearby, which will be operated by Shanghai International Port Group Co., Kahlon said.
Despite repeated warnings from American officials to stay clear of Chinese involvement in major infrastructure projects, nationality will not be a barrier to any bid, Kahlon said. The Trump administration had taken issue with the SIPG-run port in Haifa because it’s close to a dock used frequently by U.S. navy ships, leading to concerns that China could use its position to access sensitive intelligence shared between Israel and the U.S.
Every offer will have to go through a comprehensive vetting process as with the sale of any nationally strategic asset, Kahlon said.
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