Transportation Minister (Likud) Yisrael Katz

Israel to Privatize New Seaport, Unions Prepare for Battle

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May 20, 2013

reuters logoJERUSALEM, May 19 (Reuters) – Prime Minister Benjamin Netanyahu said on Sunday Israel would issue a tender to build a privately run seaport in the coming months, a move that would break up the monopoly controlling the country’s main trade artery.

Nearly all of Israel’s exports and imports are transported by ship, and the government has declared war on the powerful workers unions at the state-run ports of Ashdod and Haifa, blaming their iron grip and propensity to strike for poor service and high prices of goods.

“In the coming months there will be a tender for an additional, new port for Israel,” Netanyahu said at the start of a weekly cabinet meeting. “This plan will have very big consequences on the cost of living.”

Transportation Minister (Likud) Yisrael Katz
Israeli Transportation Minister (Likud) Yisrael Katz, image courtesy David Fainshtein/wikipedia

For years the government has been trying to privatise or open privately run piers to compete with the two major Mediterranean ports of Ashdod and Haifa, but it has been unwilling to risk a confrontation with the port unions.

The unions, who would likely be weakened or face layoffs by the move, have threatened to strike and bring the ports to a standstill to prevent any competition.

Netanyahu, however, was reelected in January with a mandate to make sweeping economic changes to stimulate the economy and the planned port reform has broad support.

“Efficiency, or lack of efficiency, at the ports is something every citizen feels in his pocket,” Netanyahu said.

Transport Minister Yisrael Katz, who oversees the ports, told Army Radio the government is preparing a contingency plan that includes bringing in foreign firms to operate the ports in the event of a strike and drafting a law to prevent a port strike.

In February, the state sold the rights to manage and operate the small Red Sea port of Eilat. (Reporting by Ari Rabinovitch; Editing by Tova Cohen)

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