The Bottom Line / A Separate Reality in the Ports

The passenger terminal in Ashdod port on a late Thursday morning in mid-August: Dozens of noisy families are crowding around counters, clinging to suitcases and bags, waiting in line for the security check and check-in on their way to the 'cruise of their dreams.'

The passenger terminal in Ashdod port on a late Thursday morning in mid-August: Dozens of noisy families are crowding around counters, clinging to suitcases and bags, waiting in line for the security check and check-in on their way to the "cruise of their dreams" on one of the luxurious liners docked and ready at a pier in the harbor.

Next to the busy terminal is a duty-free store, next to that is a little stand with cold drinks, and just a few meters farther on at the entryway to the enormous ship, dancing girls in gold dresses are welcoming the passengers.

But if you look behind all the goings-on, the place is actually quite miserable. The terminal, built at a cost of NIS 10 million, is no more than a huge hanger reminiscent of some god-forsaken airport in Africa. The duty-free store is really only a warehouse stuffed with a disorganized mess of goods, mostly cigarettes. The ship is very old and likely to be taken out of service soon. The cold drinks are cheap strawberry Kool-Aid look-alikes, and even the dancing girls are worn out and spend most of their time staring vacantly at the passing families.

Outside the boisterous terminal, all is silent. Dozens of huge cranes in the old port and the new, modern Eitan Port, which was built with a NIS 3 billion investment, stand lifeless. There is not a living soul on the wharves. No one is loading or unloading.

"This is rather weak period," explains Shuki Sagis, CEO of the Ashdod Port Company during his tour for a very small group of reporters. "Nowadays, the port is highly efficient and we finish unloading quickly. If you had been here yesterday you would have seen a lot of traffic," he explained.

Why is Thursday different from Wednesday?

"Thursday is already close to Saturday. On Saturday the port is closed."


"In Ashdod we keep our traditions."

All the employees?

"This is a municipal decision. It is impossible to change it."

And what if a ship arrives on Thursday or Friday morning?

"We begin unloading and stop when the Sabbath begins.

And who pays for the delay?

"The ship's owner."

And the employees, where are they now?

"At home."

They get money for today?

"Yes, but only the basic [salary]."

So the port reforms have not changed anything?

"That's not exact. We are much more efficient and are becoming still more efficient."

Major reforms in Israel's sea ports began in February 2005, after a very difficult birth. The goal was to make the ports more efficient, create full competition between the Ashdod and Haifa ports, and improve the service to shipping customers. The reforms were also supposed to lower prices and wipe out the nepotism rampant in the ports, the inflated salaries and numerous strikes. Some 98% of goods to and from Israel pass through the ports, and competition and increased efficiency - as well as a planned revolutionary pricing scheme - were expected to eventually reduce the prices of most imported goods.

The state invested enormous resources to enable the reforms' implementation. The biggest investment was in the Eitan Port, the first computerized container port in Israel, which opened in 2005. The ambitious project was one of the largest infrastructure projects in the country's history.

Work on the Carmel Port has also started, and the project to expand Haifa Port at a price of about NIS 1 billion is scheduled to be completed next year.

Both new ports were paid for by the state. Even though they were planned to be constructed and financed by the private sector - in return for the right to operate the ports - ultimately the workers' objections to the transfer of control over the port into private hands pushed the privatization date back until 2020. In addition, the workers won raises, huge bonuses and protection from losing their jobs - all in order to allow the reforms to proceed.

The old Ports Authority was dismantled and in its place four new companies were established: one each for the three ports, Ashdod, Haifa and Eilat; and a fourth company that is a holding company for port assets. A board of directors and CEO was appointed for each firm, and they set off full of promise.

Three-and-a-half years later, it seems that very little has changed, if at all. The competition between Haifa and Ashdod ports is marginal, importers complain about convoluted bureaucracy and high costs, and the number of strikes and work disputes may be somewhat lower, but they still exist. The salaries of the longest-serving workers still star on the treasury's annual wages report, and the ports are still paralyzed for a few hours every time a workers' family has a Bar Mitzva or wedding.

The reforms' lack of success stood out particularly in the past year, as rising fuel costs pushed the price of air freight sky-high and made shipping by sea more attractive. With advanced equipment and efficient employees, Israel's' ports could be a paragon of competition and efficiency - and that would have been their finest hour. Instead they have not changed: Workers go home early to rest for the Sabbath, and the only place in the port with life left in it is an old boat offering a fake experience of pleasure cruises at a rock-bottom price.