The Man Who Would Remodel Eilat

Sharon Kedmi
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Sharon Kedmi

The vision of a train track to Eilat was David Ben-Gurion's. Israel's first prime minister believed a railway would make the Negev wilderness bloom, just like the railways transformed the late 19th-century Wild West into a populous and prosperous region. It is unlikely the Old Man thought in 1951, when he ordered construction on the Eilat railway, that it would still exist only on paper 55 years later. However, an ambitious $2.5-3 billion makeover plan for the entire Negev, seeks to change that.

Businessman Jacob Harris envisions Eilat as a center of international trade, which would make the entire southern Negev an incredible asset. "I want to fulfill Ben-Gurion's vision and then some," the 79-year-old Jewish developer says. Since the 1960s, Harris has divided his time between his home in Savyon and Pretoria, where the core of The Harris Group of Companies' business lies.

Harris has contemplated the Eilat project for 20 years. "Eilat is located at a unique geographic crossroads. An international commerce center with the status of a free-trade zone will help exploit the location between the major manufacturers in the East, mostly India and China, and the Western consumer," Harris imagines. "In the mid-'80s, I understood the huge potential but, unfortunately, until today, I have not managed to set the wheels in motion. Maybe now we will finally succeed."

Harris notes with sadness that despite Eilat's obvious advantages, it has not managed to unlock its potential. "Eilat's port has limited capacity, and there is no direct rail line from the Eilat port to the Ashdod port. The train from Ashdod port ends at a cargo terminal in Nahal Zin, and the Eilat airport is only meant for passengers."

Do you have the energy to take on such an ambitious project?

"Not only have I got the energy, I'm more raring to go on this project now than I have ever been," Harris answers enthusiastically.

In the late '80s, the state formed several committees to examine various project in the Eilat region. In 1986, then Transportation Minister Haim Corfu appointed a committee to determine the economic viability of the railway to Eilat. That committee rejected the idea as unfeasible.

In 1987, the Port Authority proposed moving the Eilat port, including creating rail access to the port and rezoning the prime beachfront real estate for tourism. Another Corfu-appointed team in August 1987 also examined the viability of a channel port on the Jordan border. In early 1988, yet another committee examined expanding the port, and also recommended the project.

Shimon Peres, then acting prime minister, foreign minister and chair of the ministerial committee on Negev development, was one of the central addressees of the correspondence Harris presents. "Peres liked the idea already back then, but somehow nothing moved," Harris says, noting, "It was even endorsed by a parliamentary committee headed by the late Yigal Alon."

Currently, three separate projects are being promoted by the Finance Ministry, the Transportation Ministry, Israel National Ports Company, Israel Railways and the Airports Authority: a train to Eilat right up to the existing port (NIS 6-7 billion), moving the airport from the center of the city to either Timna or Evrona (NIS 1 billion) and moving the port north (a few billion shekels).

According to Harris, meetings with various relevant bodies reveal that all three projects could fail separately, but under one roof they have a better chance. "Everyone is optimistic," Harris notes, "What they all need is each other, and I think there is someone to do that."

To promote the unified project, Harris founded the ambitious-sounding company "Peace Train." Harris's partner in the venture is former Bedek Aircraft CFO Shlomo Tal, now a business consultant.

According to Tal, the wasted waterfront real estate alone is financial justification for moving the seaport and airport.

This is no small investment. At $3 billion, it's 3 percent of gross domestic product. Where will the money come from?

"I'm not worried at all," Harris says. "It is obvious to me that the state cannot fuel this project out of the budget. That's where we enter the picture. I already have a consortium of investors including U.S. funds and European infrastructure companies. We can get the money, but we will need state support - money isn't everything."

And if the state wants to tender out the project?

"We'll be happy. After all, we're ready."

The first project planned is moving the port north to the Jordan border, with access via a channel. "According to the plan, the canal will be 3 kilometers long, 60 meters wide and 20 meters deep," Harris explains. The Panama Canal is 40 meters wide and 20 meters deep. "The canal will open into an 800,000 square meter basin. There will be jetties, operating systems and storage. The port will be upgraded to capacity for 2,000 containers a day."

What's the payoff?

"The first thing, is freeing 3 kilometers of the most attractively located real estate for tourism, recreation and luxury residences," says Harris. "Moving the port will also lower the cost of building the railway. The railway-port combo in northern Eilat will increase the volume of cargo that passes through the Eilat port - by reducing transit costs, saving the Suez Canal passage fees and the speed of transit inside Israel. Moving the port will also allow for the needed huge storage space, a barrier to expansion at the current location."

Harris goes on to explain that moving the port would also reduce the cost of building the railway, which would not require a complicated passage through Eilat or digging a tunnel under the city.

There is a great deal of criticism of the rail to Eilat and its lack of viability. What is different in your plan?

"We are aware of the criticism and lack of support," says Harris. "But a rail line to Eilat will reduce the cost of haulage, which will boost the volume of cargo way beyond natural expansion."

Harris notes that 800 million tons a year of cargo go through the Suez Canal. Israel Railways moves 3 million tons a year. Feasibility surveys indicate that 5 million tons a year make the rail line viable. "Just half a percent of the Suez cargo and we are economically viable. I am sure we will take far more and viability will become an irrelevant question in a very short time."

What about the airport. What's wrong with the existing plan?

"The Airport Authority is examining a plan for a passenger terminal at Timna," Harris says. "We proposed an airport that can also handle cargo, because a terminal for large cargo planes is critical for an international transportation hub."

An airport in the middle of the desert?

"Las Vegas is where exactly?" Harris asks. "Everything there also started from a few nuts who decided to develop the wilderness. I'm not talking about casinos, but casinos aren't the only way to develop wilderness. Just like moving the port, moving the airport will free downtown property that can be used for a commercial center, entertainment, hotels and tourism facilities. It will also raise the quality of life necessary for a resort."

Harris shares his vision. "Centralized shipments from factories in the east will come into the trade and distribution center and will be directed to clients in various countries. The free-trade center will include offices for representatives, manufacturers, distributors and all sorts of business service providers like insurance, banking, shipping and communications. There will be light industry. The tax-free zone should have no less status than that of Aqaba or Dubai."

Harris says the trade zone will bring cargo into Eilat whose final destination isn't Israel. "Integrating the projects will lower investment in infrastructure, including roads, water and electricity, drainage, security and more, and will help manage ancillary systems like equipment and shipping. Integrating the projects increases all their chances to succeed."