Israel is vowing to take tough measures to prevent China from using a second port facility in Haifa as a basis for surveillance, as a headache caused by a 2014 deal to modernize Israeli shipping continues to grow. Earlier this month, Israeli regulators decided to allow a Chinese state-owned firm, Shanghai International Port Group (SIPG) Bayport Terminal Co. Ltd., to expand its facility from two to four platforms.
That has led to criticism, including from Indian rival Adani Ports And Economic Zone (Adani), which operates an older port facility in Haifa. Another port, at the southern city of Ashdod, is run by the state.
Israeli Prime Minister Benjamin Netanyahu was not involved in the decision to expand the Chinese presence, according to multiple sources. But there is concern that it could complicate relations with the U.S. and India. The controversy dates back over a decade, when Israel — like many other countries, including the U.S. — sought deals with Chinese companies to expand and modernize the country’s infrastructure.
Israel had a port system that was slow, outdated, state-run, and heavily unionized, raising costs and hurting Israel’s participation in regional trade. Israel wanted to use the Chinese deal as a spur to reform in its shipping industry.Under a 2014 deal, Chinese companies would operate a new, Israeli-built container port terminal, the Haifa Bayport, and construct a railway connecting the Mediterranean coast with the port of Eilat on the Red Sea — an early version of the India-Middle East-Europe-Economic Corridor (IMEC) that President Donald Trump has embraced as the key to peace and prosperity in the region under the Abraham Accords deal. (Read More)
