Israel’s Finance Ministry announced on Tuesday that a consortium led by the Adani Group of India has successfully finalised the acquisition of the northern Israeli port of Haifa for 4 billion shekels ($1.15 billion).
An underperforming industry that has been hampered for years by labour strikes has undergone a nearly two-decade overhaul that culminated with the sale of one of Israel’s major seaports after a five-year process.
To decrease expenses and lower the above-average wait times for ships to unload, the nation has begun selling its state-owned ports and constructing new private terminals. Port renovations are required to preserve economic growth as around 99% of all goods are imported and exported from Israel by water.
Israel announced in July that it would sell the port in Haifa, a crucial crossroads for trade throughout the Mediterranean, to the successful bidders Adani Ports and regional chemicals and logistics business Gadot.
A new port in Haifa across the harbour was inaugurated by China’s Shanghai International Port Group (SIPG) last year and with the addition of SIPG and the Adani-led consortium, Israel’s reputation as a regional trading hub should improve.
According to Adani Ports and Special Economic Zone, the purchase of Haifa Port with a local Israeli partner will expand trade routes with the company’s Indian ports and, in the long run, might improve connectivity between Europe and the Middle East, according to Reuters on Thursday.
The biggest port developer and operator in India, Adani Ports, claimed that with the purchase, it will “expand its footprint into the European port industry, which includes the lucrative Mediterranean region.”
Israel’s second-largest port, Haifa, will be privatised by Adani Ports and Special Economic Zone Limited (APSEZ), which was awarded the contract last Thursday in partnership with the Gadot Group.
“This is a much higher price than the government (of Israel) had first anticipated and has a price-to-earnings ratio of 18 (roughly calculated, based on the average of the past three years). It is as if Adani is saying: Step aside, this is a strategic purchase, and for us, the price is less important”, the report stated.