The Israeli authorities is getting ready to publish a brand new tender for the operation of the Eilat Port. The Ministries of Finance and Transport are concluding that there isn’t a cause to increase the concession granted to the Eilat Port Firm, owned by the Nakash brothers, who acquired it in 2013, for a interval that’s set to finish in about two years.
Sources within the automotive trade imagine that enterprise entities within the Gulf are will present curiosity in a future tender given the port’s strategic location.
The change following the battle
In 2012, the federal government determined to denationalise Eilat port, and a 12 months later, operation was transferred to the Eilat Port Firm, headed by the Nakash brothers, who purchased the working concession for 15 years with an choice for an extra 10 years. The concession was bought at a particularly low worth of NIS 120 million, when bearing in mind the big dividends generated since then.
The state’s plan was for the port to additionally deal with containers, however this was by no means carried out, with the port specializing in unloading vehicles – essentially the most worthwhile discipline within the delivery trade.
Till the battle started, 50% of vehicles imported to Israel have been unloaded there. As well as, an EAPC pipeline for conveying crude oil in addition to exports of fertilizers and minerals additionally go by way of the port. Based on knowledge revealed in Knesset Financial Committee’s discussions, the port homeowners took a dividend of NIS 162 million within the 4 years previous the battle.
The battle and the Houthi assaults on the Crimson Sea have led to an nearly halt of ships calling at Eilat port, to the purpose that it has nearly utterly shut down. Thus, in 2023, the port’s income amounted to NIS 212 million whereas in 2024, with the commerce route by way of the Crimson Sea closed, it stood at solely NIS 42 million, a lower of 80%.
In the meantime, the port has been supplied with help for the reason that begin of the battle, as a part of the marketing strategy for your entire financial system and help to companies in cities depending on tourism. It additionally acquired a deferral of funds from the state and a state assure for the mortgage. As well as, final June, the federal government voted on a selected define for help to Eilat Port, in order that the port was given as much as NIS 15 million compensation, conditional on the cost of NIS 3 million in person charges, which the port has not but paid to the state for the reason that outbreak of the battle.
A brand new tender for the port?
The Ministry of Finance and the Ministry of Transportation have been suspicious about Eilat Port’s request for compensation, in view of the document earnings its homeowners have recorded since they bought it. Additionally, in accordance with authorities sources, the port didn’t make the anticipated investments. In the meantime, the port additionally clashed with the Histadrut, which represents its workers, and so they approached authorities ministries final April with a request to not grant the homeowners the choice to increase the contract.
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The Histadrut then claimed that the situations obligatory for the port’s suitability had ceased to exist by failing to satisfy minimal manpower requirements and neglecting the port’s infrastructure, and that among the port’s cranes have been unusable, whereas there are deficiencies in compliance with environmental requirements and delivery rules. The port sharply attacked the Histadrut in a letter of response and denied the claims.
This month, the port threatened to shut its doorways after its accounts have been seized following the Eilat Municipality’s demand for cost of taxes totaling NIS 10 million. The menace was met with displeasure by the regulators.
In any case, by the tip of the 12 months, the Minister of Transport and the Minister of Finance are speculated to resolve whether or not to increase the franchise and embody the choice interval in it. The ministers haven’t but formally determined and signed the paperwork, however “Globes” has discovered that the Ministry of Transport is already engaged on getting ready a brand new tender for working the port to be able to function it underneath completely different possession inside two years from at this time.
“Potential for a land bridge”
Sources within the automotive trade imagine it is going to be a very long time earlier than the maritime visitors of ships devoted to transporting automobiles (RO-RO) within the Crimson Sea resumes, as a result of ongoing Houthi menace, to which no army answer has been discovered. At present, most automobiles arriving in Israel from East Asia make a protracted detour by way of the Cape of Good Hope in Africa and from there to European ports.
As well as, most worldwide delivery corporations for transporting automobiles keep away from crusing on to Israel, so most automobiles are transported European ports to the 2 ports in Haifa Bay and Ashdod.
This course of extends the time it takes for brand spanking new automobiles from East Asia to reach in Israel by almost two weeks and will increase the price of delivery by hundreds of {dollars} per automobile in contrast with the direct path to Eilat by way of the Crimson Sea. Nonetheless, this course of has created a thriving “enterprise” for Israeli ports, particularly Haifa Port and Haifa Bay Port, which up to now 12 months have considerably elevated the quantity of unloading and storing automobiles.
Not too long ago, a number of importers reported that they’ve heard estimates from Eilat Port in regards to the resumption of delivery automobiles to Eilat by way of the Crimson Sea. Nonetheless, such estimates have been heard up to now and haven’t materialized attributable to continuation of the battle. Expectations for the return of auto transport ships to the Suez Canal additionally haven’t occurred.
Nonetheless, sources within the automotive trade estimate that worldwide elements, together with main enterprise entities from the Gulf nations, are anticipated to point out energetic curiosity in collaborating sooner or later tender for working the port, attributable to its strategic location and the anticipated modifications within the steadiness of energy within the Center East. Based on sources, “the potential for a future land bridge, which might bypass the Suez Canal by way of land rail from Eilat to the Mediterranean ports, continues to be a strategic objective, which might considerably enhance the significance of the southern port sooner or later.”
No response has been forthcoming from Eilat Port.
Printed by Globes, Israel enterprise information – en.globes.co.il – on July 27, 2025.
© Copyright of Globes Writer Itonut (1983) Ltd., 2025.
