Defense Ministry demands halt to Eilat port privatization

The ministry claims the tender contravenes agreements made with it.

The Ministry of Defence is demanding that the privatization of the Port of Eilat should be stopped, "Globes" has learned. The process of privatization of the port was officially opened last week, when the Government Companies Authority invited parties interested in buying the port company to come forward.

Following the publication of the advertisement, the Ministry of Defense legal counsel wrote to the Government Companies Authority demanding that the tender process should be stopped because it was contrary to agreements with the ministry. According to the military, the agreement on privatization did not cover the possibility that the tender would include an option clause to extend the concession period by ten years.

The Defense Ministry's opposition seems strange, given that the current privatization plan does not include moving the nearby naval base into the civilian port area. Companies Authority officials said this was probably a misunderstanding that would not delay the tender process.

The issue of evacuation of the naval base from the Gulf of Eilat has been discussed for years, without resolution. The Ministry of Finance, the Municipality of Eilat, and the Israel Ports Company supported the transfer of the naval base to the northern area of the civilian port in order to free up precious beach areas for tourism development.

The defense establishment however opposes any change in the status of the base.

Published by Globes [online], Israel business news - www.globes-online.com - on April 10, 2011

© Copyright of Globes Publisher Itonut (1983) Ltd. 2011

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