Haifa Port Company has announced further details of the government’s plans for its privatisation.
In a statement Haifa Port Company said: “Israel’s Government Companies Authority (GCA) has announced that it is proceeding with the privatisation and sale of 100% of the shares of the Haifa Port Company (HPC). The process kicked off with the announcement on July 21 of the sale and publication of the sale process on GCA’s website. The privatization is next major milestone of the national port reform program that began in 2004 with the breakup of the Israel Ports Authority and gradual transformation of the Israeli port sector into the landlord model”.
The Israeli government actually announced back in January 2020 that it had made a decision and given the final approval for HPC to be privatised. As well as the current economic climate, its value will be impacted by the new terminal at Haifa Bay, which will be operated by SIPG for 25 years from 2021. This terminal will have 8 STS cranes and 22 dual cantilever RMGs, delivering a capacity of 1.86M TEU. All the equipment will be automated, according to the supplier ZPMC.
Against this backdrop, HPC is focusing on its recent financial performance, and the potential of its much larger facility. “The Company reported 2019 operating profit (EBIDTA NIS 122m) of NIS 88m on NIS 746m of revenue. During 2019, the HPC handled 1.4m TEU and a total of 15.7m tons of cargo (containerised, breakbulk and bulk). HPC boasts 5,000m of quay length with water depth alongside of up to 16.2m. It has deployed state of the art technology at its facilities, including a modern, paperless gate and advanced operating systems. The company holds an operational license through 2054 and usage rights to over 166 Ha of land. Some of the port company’s underutilised land is slated for waterfront recreational and commercial development,” HPC stated.
HPC also said the government is promising to reinvest part of the proceeds from the sale in the port . “Pursuant to the sales terms, the first one billion NIS of proceeds from the sale will be reinvested in the company, with proceeds beyond that sum going to the State. Additional investment funds are also available to cover certain company development costs from other sources. Further details are available on the Government Companies Authority website,” said HPC.
Haifa’s very high labour cost and long history of difficult labour relations is a negative factor as it goes to the market. The timing of the sale is also a challenge, as a number of international terminal operators are looking to cut back on their investments at the present time.