Israel Haifa Port & US Maritime Concerns

India’s Adani Ports Group along with a Israeli  logistics group acquired Israel’s premier Mediterranean Sea Port of Haifa .The Adani Ports conglomerate is expanding its portfolio in Israel and future plans include establishing of a trade and strategic gateway connecting the Port of Haifa and Middle Eastern region despite Israel not having diplomatic relations with the Kingdom of Saudi Arabia .The Port of Haifa was acquired by Adani Group at a cost of around $ 1.10 billion and India’s Adani Ports has 70 % stake in the acquisition.

India Intrudes into Israel Port Business

Adani Ports & Special Economic Zone Ltd  in partnership with local chemicals and logistics group Gadot last year emerged successful in acquiring the Israel government’s tender for Haifa Port a major maritime and trade hub on Israel’s coast for a staggering $1.2 billion.Adani Group has paid the full amount now and is eying the significant real estate acreage and has grandiose plans to change the silhouette of the port cities. Perhaps from a trade strategic perspective the Indian entities acquisition of Israel’s Haifa Port may establish a trans-Mediterranean maritime link for India bypassing the Suez Canal and is expected that Haifa port would reduce the shipping time from Mumbai to Europe by almost 40%.

Source/credit X Haifa /Eurasian

The Adani Group manages 13 sea terminals in India accounting for almost 24% of the maritime trade of India. Haifa Port is the first international acquisition for the Adani Group and is no mean feat. To its credit the Adani Group has also been co-producing Hermes 900 medium altitude and long endurance drones, Galil Sniper rifles, Negev light machine guns and Tavor X95 assault rifles in collaboration with Israeli companies as well as with the Israeli Innovation Authority, Israeli Weapons System and Elbit Systems. Plans are afoot to establish an artificial intelligence lab in Tel Aviv as well. It was revealed in the Hindenburg accusations that GQG Partners, an American asset management and investment company, had announced an investment of around $1.88 billion in four companies under Adani Trust, acquiring a 4.1% stake in Adani Ports amounting to $640 million.

China’s Acquiring of Stakes in Haifa Bayport Worrisome for USA

China celebrated 30 years of diplomatic relations with Israel being one of the first countries to recognise the Communist Party leadership of China however diplomatic relations emerged in the year 1992. China and DP World also bid for acquisition of Haifa Port but inexplicably withdrew. The US Coast Guard wanted to conduct an inspection of the Chinese port in Haifa in 2021 and upon Israel’s refusal the US warned that it may no longer send ships from the US 6th Fleet to Haifa and it appears that  intense US pressure convinced Israel to grant the tender for Haifa Port to India .However, cracks in US-Israel diplomatic relations became visible when Shanghai International Port Group (SGIP)  (state-owned Chinese industrial conglomerate) emerged as the successful bidder in the year 2015 for Haifa Bayport situated 1 km away from Haifa Port. The Haifa Bayport , lease of which is valid till the year 2046 , was constructed by the SGIP on a landfill peninsula and the landfill project included importing of 6 million tonnes of stone to create an 882 km long breakwater along with 13 million cubic feet of sand.  The Haifa Bayport which commenced port operations in the year 2021 has currently has 100 employees with few Chinese technicians as Israeli law does not allow Chinese nationals to work in its ports. The Haifa Bayport operates giant automatic cranes, electric trucks and 5G wireless communications with its fortified control room located nearby. It was Israel’s first new and automated port in 60 years and is Israel’s largest container cargo harbour and diverts significant volumes of traffic volumes from Haifa port.
Despite bombing and conflict in the region Haifa Bayport functions around the clock even accommodating ships that could not dock at Ashdod Port due to rocket attacks. The Chinese operated Haifa Bayport port symbolically supported the Israeli economy by donating dozens of armoured containers to Israeli Defense Forces , extending waivers on storage fees for importers and hosting soldiers from the Israeli Home Front Command.Suspicions about the port’s Chinese ownership have been put to rest as the operation of the Bay Port has brought immense benefits for the Israel maritime sector including increased competition among Israel’s ports and lowering the logistic cost of doing business. Israel has embarked upon leasing its state-owned ports and constructing of new private docks aiming at lowering port related costs , average wait times and high demurrage costs when vessels unload as nearly the entire movement of goods into and out of Israel is over sea .

The Port of Haifa is an energy hub and produces and distributes petroleum products as a significant oil refinery is located here. The Port of Haifa thus operates on competitive terms with the Haifa Bayport owned by China’s Shanghai International Port Group with its 25-year management contract. A Chinese company also operates a cargo terminal in the Ashdod Port although not as active as the terminals in Haifa.

China’s BRI and CPEC Attempted Countering through Indian Proxies

Credit/Source;Mexico Business News

The operation of critical infrastructure by an Israeli company which in turn is owned by China is not being digested by the US. The United States grants about $4 billion in military aid to Israel each year and has taken exception to the Chinese maritime container facility in Haifa Bayport. The US has voiced its concerns about Chinese espionage as the US Sixth Fleet frequently visits Israeli ports and Israel’s main submarine base housing its nuclear submarines is nearby. In a bid to counter China’s infrastructure-driven, multifaceted Belt and Road Initiative (BRI) the acquisition by Adani Group of Haifa Port in a joint bid with Israeli company Gadot appears to be tacitly or at times overtly encouraged by the US. There is a maritime adage that ” appreciate the hinterland of any port and the port throughput will ensue “. The terminal operator DP World has understood the present Chinese corporate mind set as Chinese companies are pumping funds to develop manufacturing facilities in Mexico to circumvent U.S. tariffs likely to be imposed on Chinese origin products as evidenced by Chinese companies relentless surge in containerized imports loading at Northern Mexican ports .The containers arriving in increasing numbers from China are being processed for re-export to the U.S at Mexican ports located near the U.S. border as well on the direct railway lines and high capacity highways linking Mexico with the U.S. The Chinese origin products can be similarly shipped to Gwadar Port which is a transhipment port leased to China with an exclusive economic zone in existence. Of course it goes without saying that the concerned maritime and port policy makers need to develop a complete transportation logistics chain including the port(s) to inland ports/logistics centers-transports especially towards the US border . The Central Asian countries and China are poised to utilise Pakistan’s ports for trade . There is a possibility of Pakistan emerging as an exporter of sophisticated manufactured  complex Chinese high value products . In the future the US which has a phobia of the Chinese economic juggernaut may combine with India to insidiously combat the China Pakistan Economic Corridor (CPEC) directly or through proxies especially at Pakistan’s three ports.

 

Authored by Nadir Mumtaz

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