New rail link would benefit ICL

Tel Aviv — The Israeli government is expected to approve in the coming weeks a plan to build a rail line from the Mediterranean to the Red Sea. The link is designed to create a new route for Europe-to-Asia trade that would circumvent the Suez Canal. The cost of the project is put at $1.5-$2 billion, and it is expected to take four years to complete once the government gives the go ahead. Israeli Prime Minister Benjamin Netanyahu said that the proposed line "would create a junction between continents." The link would be extremely significant to Israel Chemicals Ltd. (ICL), which is currently the largest user of the Eilat port. ICL ships potash, fertilizers, phosphate, and industrial chemicals to China, India, and other Far East markets. The company ships some 2.5 million mt of potash and other chemicals via the Eilat port. The importance of the port has continued to grow in recent years as sales to the Far East increase in importance, as ICL accounts for nearly 20 percent of the port’s revenues. At present, ICL subsidiary Mifaeli Tovala ships from its plants in southern Israel by truck to the port. Industry officials say that a rail line will be a substantial savings for ICL in shipping costs to the southern port, and could contribute substantially to its profits. The increasing importance of the Chinese and Indian markets make the rail line a high priority for the company. Israel’s Transport Ministry has expressed a preference for the 350 kilometer-long line to be handed by Chinese government contractors. Israeli Transport Minister Yitzhak Katz noted that the Chinese capabilities in the field of rail construction and transport networks are among the best in the world. Katz met with Chinese officials last September in Beijing and agreed on a joint proposal for the project. The proposed rail line would be electrified and run from Ashdod on Israel’s Mediterranean coast to Eilat. At the time, the two governments signed a memorandum of understanding for the construction of the main segment from Nahal Zin to Eilat, a distance of 180 kilometers. Nahal Zin is the location of one of the country’s largest phosphate mine.