Israel, China agree to build Eilat railway

Transport Minister Yisrael Katz and China's Minister of Transport Li Shenglin signed the memorandum of understanding in Beijing.

Israel and China today signed historic cooperation agreements to build the Eilat railway and future projects, including the inland canal port north of Eilat. Minister of Transport Yisrael Katz and China's Minister of Transport Li Shenglin signed the memorandum of understanding in Beijing.

Katz departed for a three-day visit to China at the head of a 12-member delegation of ministry officials and executives of government companies. The main project on the agenda is construction of a cargo rail line that will link Israel's Mediterranean ports in Ashdod and Haifa with the Eilat Port. There are also plans to extend the line to Jordan's Aqaba Port.

Prime Minister Benjamin Netanyahu has declared the Eilat railway a national priority project, because of its strategic and policy importance. Israeli sources told "Globes" that the Chinese also consider the project to be important, as it fits in with China's global strategy to strengthen critical trade routes. The 180-kilometer line will run through the Arava Valley and Nahal Zinn. Netanyahu wants to cut travel time between Tel Aviv and Eilat to two hours.

The estimated cost of the line is at least NIS 20 billion. In talks with the Chinese, they proposed financing part of the cost through the government-owned China Development Industrial Bank, and that Israel handle the project's operations.

Israel is considering awarding construction of the project to Chinese companies, because of their rapid work, and is therefore considering a government-to-government agreement to bypass the Tenders Law in awarding the franchise. A cabinet decision from February instructed Prime Minister's Office director general Harel Locker to recommend to the government ways of financing the project.

Tonight, the Israeli delegation will be guests at a special dinner given by the Chinese government. The food will be kosher lemehadrin, in part because delegation member Shaul Bitterman who represents Chinese companies in Israel is an Orthodox Jew.

Published by Globes [online], Israel business news - www.globes-online.com - on July 3, 2012

© Copyright of Globes Publisher Itonut (1983) Ltd. 2012

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