Israel’s Finance Ministry received only one bid – from Papo Maritime, owned by the Nakash family – in its tender for the port at Eilat. The Ministry said that it would study the bid and determine whether it is in the best interest of the Israeli economy and the future development of the country’s southern port.
Papo Maritime was the only one of the three qualifying bidders that actually took part in the final stage of the process. Goldbond Group and Gadot Tankers and Terminals decided not to participate, arguing that the minimum price of $25 million demanded by the government was too high. The Finance Ministry’s tenders committee is expected to decide whether to award the control of the port to Papo Maritime by the end of the year.
The tender was twice postponed. The first time followed after Israel Chemicals Ltd. (ICL) was the sole bidder in the process. The company decided to drop out after strong public criticism over the dominant position that Israel Corp., which owns a majority stake in ICL, holds in the Israeli economy.
Meanwhile, in a related development, ICL and the Eilat Port Company have signed an agreement that grants the company priority for its ships during 216 days of the year, or 18 days per month. Under the terms of an agreement signed in March, ICL was granted 190 days of priority. The country’s attorney general intervened, however, saying that the process was not legal and that a tender had to be issued for leasing the chemical dock. ICL was the sole participant, and in the negotiations demanded priority on 264 days a year. The Eilat Port rejected the demand, and the two sides agreed to 216 days.
Under the terms of the agreement, the two sides agreed that payments by ICL to Eilat Port would be on a progressive rate: $1 per ton for the first 2.5 million metric tons, $1.90 for handling of an additional 500,000 tons, and $2 per ton for each additional amount above 3 million tons a year. The amounts are over and above a flat rate of $2.15 on each ton.
ICL opposed the privatization of the port in the past, fearing that it would have an adverse impact on its operations out of Eilat.