Ports Privatization Policy Fails to Charter New Waters

Half a year after the government's decision to reform the ports, in an attempt to end long-standing restrictive work practices and improve efficiency, nothing has been achieved beyond the transport minister's announcement that he will soon appoint someone to look into the matter.

In October 2001, an agreement was reached between Finance Minister Silvan Shalom, Transport Minister Ephraim Sneh and chairman of the Histadrut labor federation MK Amir Peretz that decreed the new ports - Carmel (in Haifa) and Jubilee (Ashdod) - would be run as competing subsidiaries of the Ports Authority. This agreement ended both a strike at the ports, and plans, outlined by an earlier government decision, to privatize at least the Jubilee port.

The government had decided in 1999 that the Jubilee Port would be built according to the BOT (build-operate-transfer) method, whereby the port (essentially new wharfs by the existing port) would be operated by a private concern and paid a commission by the Ports Authority for a period of up to 20 years. The private contractor would be responsible for constructing the second stage of the port (the first would be carried out by the authority) as well as operating the port, in the attempt to introduce competitive work practices into the ports of Israel.

However, the port workers, who have enjoyed some of the highest wages and easiest work conditions in the public sector, took umbrage and launched sanctions. The dispute ended with the agreement that effectively buried the privatization hopes.