Idan Ofer Is Sole Remaining Bidder for Eilat Port

Government Companies Authority expected to defer the deadline for filing of final bids on the port operation.

Idan Ofer's Israel Chemicals Limited is the only remaining bidder for the international tender to take over the running of the port of Eilat, TheMarker has learned.

The Government Companies Authority is scheduled to hold an urgent meeting on Sunday to consider recent developments. It is expected to defer the deadline for filing of final bids on the port operation, which is currently set for this Tuesday.

ICL was the only firm to post the required guarantees on the tender after the Gold Bond group of Shlomo Shmeltzer and Shlomi Fogel; Yossi Maiman's Gadot; and the Nakash brothers' Papo Maritime all informed the Companies Authority they were dropping out of the bidding process.

Industry sources have attributed the reasons for the withdrawal of other bidders to late notice on the part of the Companies Authority; a minimum bidding price of NIS 100 million; and to changes made to the text of the tender offer terms, which they say came at the last minute.

Among the additional conditions was that the new private operator of the port be responsible for repair of a damaged dock at the port, which could cost NIS 45 million.

It should be noted, however, that even ICL's prospects as successful bidder for the Eilat port franchise are not certain, for regulatory reasons. The committee handling the tender process noted that the tender conditions give the committee the right to consider factors involving the prevention of the concentration of economic power in their choice of a successful bidder.

ICL was instructed by the Companies Authority to approach the Antitrust Commission for a "pre-ruling" in light of ICL's interest in a chemical terminal in the vicinity of the Eilat port and as a result of Ofer's interest in Zim shipping lines. ICL refused to do so, however, and submitted the bid for the port franchise without getting the pre-ruling.

This is the third time the Ofer family has found itself the sole bidder involving the privatization of a government asset. It also happened at both Zim and Oil Refineries, the company better known by its Hebrew acronym, Bazan. In both those cases, the Ofer family's Israel Corporation was the successful bidder after the competition withdrew.

For her part, Labor Party leader Shelly Yacimovich said she would seek to have the tender process for the Eilat port halted, "after what happened more than once [in the past] ... all the contenders withdrew and the only one remaining is Idan Ofer." She said that if ICL is the successful bidder, she intends to petition the High Court of Justice on the issue.

Yacimovich said the privatization process for Zim, Bazan, ICL and other firms has left one family with undue control of the economy. The Labor Party leader called on the government to exercise the provision in the bidding terms that allows for consideration of how the deal would affect concentration of economic power and also called for a reconsideration of the privatization process.

The Eilat port.
Olivier Fitoussi