Adani Group acquires stake in Israel’s state-owned Haifa Port
18 Jul 2022
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An alliance led by ports-to-power conglomerate Adani Group has won the tender for the privatisation of the state-owned Haifa Port in Israel.
India's ports-to-power conglomerate Adani Group won the tender for the privatisation of the state-owned Haifa Port in Israel.
A consortium of Adani Ports and Special Economic Zone Ltd (APSEZ), India's largest private multi-port operator and Israel's Gadot Chemicals Tankers and Terminals Ltd has won the bid to acquire state-run Israeli port of Haifa.
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.
The privatised airport will compete with Haifa New Port Terminal, an already functional automated container port constructed by the China Shanghai International Port Group (SIPG).
The Adani-Gadot consortium is reported to have quoted 4.1 billion shekels ($1.18 billion) for a 100 per cent stake in Haifa Port Company.
As per the terms set by the Israeli government, the majority stake in the port, of 70 per cent, will be held by APSEZ, whereas, Gadot will own the remaining 30 per cent.
The government of Israel had said a condition that the winning bidder should invest a minimum of 1 billion shekels ($285.78 million) in Haifa Port Company's capital. Any payment in excess of the amount of 1 billion shekels will be paid to the Israeli government for the acquisition of 10 per cent of the company's shares held by the state.
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 per cent 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 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-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.
Another new port on the Mediterranean coast of Israel is due to open in Ashdod by the end of the year, to be operated Swiss-based Terminal Investment Limited.
Group chairman Gautam Adani calls the deal "immensely strategic."
Adani took to Twitter, to say "delighted to win the tender for the privatisation 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.
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