Israel said on Thursday it will sell Haifa Port, a major trade hub on its Mediterranean coast, to Adani Ports of India and local chemicals and logistics group Gadot. After a two-year tender process, Adani Ports and Gadot clinched the 4.1 billion shekel ($1.18 billion) winning bid for Haifa Port.

Adani Ports will have a 70% stake and Gadot will hold the remaining 30%, the Indian company said.

"The privatization of the port of Haifa will increase competition at the ports and lower the cost of living," said Finance Minister Avigdor Lieberman.

Adani Ports, which has said it is the largest transport utility in India, is targeting expansion and seeks to become the premier global port group. "In the short term, we look forward to developing strategic trade lanes between our ports in India and Haifa," Adani Ports chief executive Karan Adani said in a statement. He added that the company anticipated Israel in the longer term becoming a connection both for Europe and the Middle East.

"Therefore, we stand to benefit from the new possible trade lanes that will get created," Adani said.

Haifa is Israel's second largest port and serves as a major trade hub on the country's Mediterranean coast. The city is Israel's transportation and industrial centre and a key railway hub along the Mediterranean.

Israel is selling its state-owned ports and building new private docks to encourage competition and lower costs. Delays and inefficiencies have plagued the state-owned ports. Given that about 99 percent of all goods move in and out of Israel over the sea, the government decided to privatise ports to maintain economic growth.

Once upgraded by the new developers, Haifa port needs to compete with Haifa New Port Terminal, an already functional automated container port constructed by the China Shanghai International Port Group (SIPG). The greenfield port in Haifa was developed under the BOT (Built-own-Transfer) model, with construction followed by a 25-year arrangement.

The first phase of Haifa New port, constructed at the cost of 5.5 billion shekels ($1.7 billion), was officially opened in Sep 2021, becoming the first new port in the Middle Eastern country in the past 60 years.

The construction of the Haifa New Port Terminal project began in 2018. Planned to be developed in two phases, an 805.5-meter shoreline terminal with an annual container throughput of more than 1 million TEU (twenty-foot equivalent unit) was developed as part of the first phase. The second phase will involve the development of a 715.7 meters long terminal with an annual container throughput of 800,000 TEU.

The group chairman Gautam Adani took to Twitter, to say "delighted to win the tender for the privatization of the Port of Haifa in Israel with our partner Gadot. Immense strategic and historical significance for both nations!”

Adani also pointed out the significance of Haifa in India's military history.

In 1918, over 400 Indian soldiers of the princely states commanded by Indian officers charged against over 1,500 soldiers of the combined forces of the Germans, Turks and Austrians romping into the town of port Haifa, capturing Mount Carmel and freeing the spiritual leader of the Bahais.

Image source: Reuters