Israel's Finance Ministry announced on Tuesday (10 January) that a consortium led by India's Adani Group has completed the acquisition of northern Israel's Haifa Port for 4 billion shekels ($1.15 billion).

In July this year, a proposed joint venture between India's Adani Ports and Special Economic Zone (APSEZ) and Israel's Gadot Chemicals Tankers and Terminals Ltd won the bid for Haifa Port privatisation.

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.

A nearly two-decade overhaul of a struggling industry beset for years by labour strikes has culminated in the sale of one of Israel's major seaports after a five-year process, reports Reuters.

As per the terms set by the Israeli government, the joint venture (JV) will acquire a 100 per cent stake in Haifa Port Company. While the majority stake in the port, 70 per cent, will be held by APSEZ, Gadot will own the remaining 30 per cent.

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 per cent of all goods move in and out of Israel over the sea, the government decided to privatise ports to maintain economic growth.

Haifa Upgradation Plan

A new port in Haifa, across the bay, was opened by China's Shanghai International Port Group (SIPG) last year.

Once upgraded by the new developers, Haifa port needs to compete with Haifa New Port Terminal, an already functional automated container port constructed by SIPG. The greenfield port in Haifa was developed under the BOT (build-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 September 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-metre 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 metres long terminal with an annual container throughput of 800,000 TEU.

Another new port on the Mediterranean coast of Israel is due to open in Ashdod by the end of the year, to be operated by Swiss-based Terminal Investment Limited.