Why Should China Want to Help Israel Build a Train to Eilat?

The Israeli government should think twice before recruiting China to build an economically and environmentally ill-advised railway to Eilat.

Last month, the plan to construct a railway line to Eilat was approved. It is expected to be at least a partial substitute for the Suez Canal and will serve as a means of transferring cargo from the Red Sea to the Mediterranean Sea and other destinations in Israel.

The new track will be 173 kilometers long and will include 63 bridges, with a total length of 4.5 kilometers, and five tunnels, with a total length of around ten kilometers. According to the plans, the passenger train will reduce the length of the trip from the center of the country to Eilat to two hours.

Since the construction cost is estimated to be 30 billion, the government is looking for organizations to participate in the financing or take on the project. One of the partners being considered is the Chinese government, or an organization working on its behalf.

However, economists say the project is far from profitable. The Port of Eilat does not have a shipping-container terminal, there is no room to build such a terminal within a reasonable distance of the port and there is no proper equipment for the loading and unloading of cargo.

The haulage time of each container will be at least four times longer than via the Suez Canal. According to research conducted by economist Ezra Sadan, a former director general of Israel's Finance Ministry, the transportation of cargo (especially containers) by train will be several times more expensive than via the Suez Canal. The economic feasibility of transporting passengers on the train is also questionable, since the government recently approved the establishment of a new airport north of Eilat that will compete with the railway line.

The environmental organizations that examined the project, such as the Israel Nature and Parks Authority and the Society for the Protection of Nature in Israel, argue that the train will cause catastrophic environmental damage to the Negev and Arava deserts and harm the Gulf of Eilat. The track will divide the animals living on each side on it, and the lighting along the route will disrupt their lives. The construction of dozens of bridges and many kilometers of embankments will disrupt the flow of flood waters, leading to the extinction of acacias and other trees found in the Arava streams. The construction of construction workers' residences will damage the environmental fabric of large areas extending far from the tracks. In addition, the construction of a new port or the expansion of the existing one will completely change the character of the north Gulf of Eilat and will adversely affect tourism based on the area's unique landscapes.  

In light of all this, it is astounding that the Israeli government is promoting the project. Some think it is doing so in hope that the Chinese government or Chinese companies will finance and even implement it. The idea that the Chinese government would construct the railway line is not far-fetched: In the past decade, China has spent a huge amount on infrastructure projects and purchasing access to natural resources worldwide, particularly in Africa and Australia. Between 2005 and 2011, the Chinese government invested $400 billion in natural resources in other countries.

Economist Dambisa Moyo analyzes the dimensions of China's investment in worldwide resources in her book "Winner Take All: China's Race for Resources and What It Means for the World." In her opinion, China is the only country in the world that has drawn conclusions from the approaching resources crisis, which will damage the economies of all countries. This crisis stems from two factors: a population increase – humans now number around seven billion and this number is expected to grow by another 1.2 billion by 2030 – and the rising standard of living, especially in China and India, which together comprise one-third of the world's population. Over the past two decades China has had the fastest-growing economy in the world, and in another decade it will be world's biggest economy.

In 1950, around 13 percent of China's population lived in its cities. By 2011, this figure had reached 40 percent, and by 2025, the urbanization rate will have reached 64 percent. China's consumption of natural resources will grow in accordingly, and this cannot only come from Chinese territory. Processing areas in China are rapidly decreasing due to urbanization, pollution and desertification. It imports most of its energy, as well as iron and copper resources. As a result, China has adopted a policy of investment, trade and aid to other countries. In this way, it purchases goodwill, followed by access to natural resources.

It builds ports, schools, hospitals, roads, trains, oil pipelines and water-transport routes in countries like Ukraine, Argentina, Pakistan, Sri Lanka and Burma. In 2008, China signed a contract to operate two platforms and a container terminal in the Port of Piraeus in Greece, and is acquiring agricultural land, especially in Africa. Several years ago, it tried to buy 10 million dunams in the Philippines, but the government there blocked the transaction. China invests a fortune in iron mines in Australia, copper deposits in Peru and oil fields in Sudan.

China's immense fortune enables it to gain this level of control (in 2012, China had reserves of around three trillion dollars in foreign currency). A large portion of these reserves is held in dollars, the value of which is eroded by the United States government. Investing this fortune in resources and influence is a shrewd move. The purchases are directed by the Communist Party, which provides financial aid, lines of credit and tax benefits for private, public and state-owned Chinese companies. In return for their investment, the Chinese pay prices for the resources that are lower than the world market prices. In many cases, the development of mines is made without taking environmental factors into consideration – as is customary in China itself – and the country also prefers to hire Chinese workers, without ensuring that labor laws are enforced.

So what would China gain from the railway line to Eilat? It depends on the terms stipulated by the Israeli government. If the organization that constructed the line also operated it – as in the case of the Trans-Israel Highway – China would be able to demand guarantees that its operation would be profitable for it by ensuring a subsidy or that it has access to natural resources, such as potash from the Dead Sea. Controlling the train's route is likely to buy its operator political influence and to serve as a means of pressure to attain additional goals.

Foreign investment may contribute to economic advancement, but when such an investment is made in a project that is clearly not profitable, it is worth examining closely. When the source of investment is a non-democratic country, there must be cautious examination of its motives and considerations, with full public transparency before the relationship is established. There are reasons to assume that the cost of such a "gift" to Israel will damage other areas, such as its environment and the welfare of its workers.  

Professor Yom-Tov, from the Department of Zoology at Tel Aviv University, is an environmental protection researcher.

AP