Israeli Minister Up in Arms as Labor Court Orders Port Tenders Delayed

Union officials are concerned about the tenders designed to stoke competition in the sector.

The National Labor Court ordered the government late Monday night to pause tenders for building two new private ports and to launch negotiations with the unions over the process, which is designed to increase competition in the sector. Transportation Minister Israel Katz responded aggressively Tuesday to the court ruling, while ministries declined to halt their work process, arguing that they were still learning the ruling.

The court ordered the tender process frozen until September 1.

The ruling late Monday came two weeks after the Histadrut labor federation declared a work dispute at Israels two state-run ports in Haifa and Ashdod - a response to the tender process. That declaration provided a two-week period before the dockworkers could legally strike.

The court Monday also ordered the Histadrut and the Ashdod and Haifa port workers union not to call a strike or take other work action before September.

We regret the labor courts decision, the Finance Ministry said in a statement. The state maintains its right to establish new ports for strengthening competition, lowering the cost of living and developing the economy. The state will appeal the ruling to the Supreme Court, the ministry added.

Katz said the ruling wouldnt change anything.

We respect the labor court, which delayed by a month the creation of new ports, but we wont change our outlook and well petition against the decision, stated Katz Tuesday via his Facebook page. If we need to, well push through legislation.

Katz took an aggressive tone addressing the port unions. If [port union heads] Alon Hassan and Meir Turjeman want to see the new ports up close, they better buy binoculars, since theyre not getting near them any other way, he said. We wont build new ports so that Hassan and Turjeman can take control of them. We wont bribe them with billions to agree, as was done in the past, without receiving anything in return.

This time therell be a real reform – the government needs to govern, he said.

The case was originally brought before the court by the Federation of Israeli Chambers of Commerce, which petitioned to prevent the port workers from striking.

"We are not opposed to the principle of reform and the development of new privately operated ports," Histadrut chief Ofer Eini said when declaring the work dispute two weeks ago. "But we expected the government to agree with us not to infringe on the salary conditions or job security of veteran port workers, as well as to ensure the rights of workers employed at the new ports."

So far, eight foreign companies have contacted Israeli authorities to receive documents for the initial selection process for the tenders, which cover equipping the new ports and concessions to operate them for 25 years.

Bidders must prove their financial stability and experience in operating ports. The deadline for bid proposals has been set for October, when the state will determine if there is enough cargo traffic and interest to justify opening private ports in Ashdod and Haifa simultaneously.

Some foreign port operators have reportedly sent representatives to Israel to consider the deal. These include the China Ocean Shipping (Group) Company, which operates the Greek port of Piraeus, and APM Terminals, part of Denmarks A.P. Moller–Maersk Group, which operates the port facilities at Port Said in Egypt and Aqaba in Jordan.

It also includes Singapores PSA International, U.S. company Ports America and the Swiss Mediterranean Shipping Company, which operates ports at Istanbul and Valencia, Spain. Representatives of these companies were said to have met with the Haifa municipality's director general Shmuel Gantz, but the municipality has declined to comment.

Gantz heads the municipalitys special team hoping to make Haifa the location for Israel's first privately run port if the government decides not to build two new ports simultaneously. In the meantime, the state-owned Israel Ports Development & Assets Company has published two tenders for building the sea infrastructure for the two planned ports. Seven foreign and local companies have passed the early selection round and will submit proposals.

Shipping containers in Ashdod Port.Credit: Ilan Assayag

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