IEC chairman welcomes Chinese power station bid

Yiftah Ron-Tal, IEC chairman, photo: IEC PR

China Harbor's involvement in the consortium bidding for Ramat Hovav will be another test of Israeli policy, following US pressure to distance itself from China.

Israel Electric Corporation (IEC) (TASE: ELEC.B22) chairman Yiftah Ron-Tal sees no reason why a Chinese company shouldn't buy a power station from the IEC. His comments come a week after US Secretary of State Mike Pompeo visited Israel to hammer home the message that the US administration is not happy about Chinese involvement in Israeli infrastructures. He reportedly gave as an example the Sorek 2 tender for the world's largest seawater desalination plant, and yesterday it was announced that Hong Kong based Hutchison Water had not won the tender.

After these developments, the giant tender, worth an estimated NIS 3.2 billion, published by IEC to sell the Ramat Hovav power station will be the next major test of Israeli policy towards China.

One of the bidders in the tender is China Harbor, which last year together with its Israeli partners Rapac Communication and Infrastructure Ltd. (TASE: RPAC) and Mivtach-Shamir Food Industries Ltd. (TASE:SHAM) won a similar IEC tender (about half the size) for the Alon Tavor power station. China Harbor and its partners bid a record NIS 1.87 billion, double its book value.

The China Harbor consortium is pitted against four other groups in the Ramat Hovav tender.

Ron-Tal said, "Of the consortia that have bid, there is no consortium is under Chinese control. There is one consortium, which was the consortium that won Alon Tavor, which is 33% Chinese and they cannot control the consortium and have no veto power. It meets all the regulations of the Ministry of Defense and we see no problem. Despite the coronavirus crisis, we have not postponed the tender and I believe that the offers filed will be very aggressive."

The high price that the IEC received for Alon Tavor allowed Israeli consumers to pay NIS 900 million less for their electricity - the difference between the book price of the power station and the price the Chinese-Israeli consortium paid. Ron-Tal hopes that this precedent will be repeated with IEC receiving much more for the Ramat Hovav power station than the book price.

Published by Globes, Israel business news - en.globes.co.il - on May 27, 2020

© Copyright of Globes Publisher Itonut (1983) Ltd. 2020

Yiftah Ron-Tal, IEC chairman, photo: IEC PR
Yiftah Ron-Tal, IEC chairman, photo: IEC PR
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