China seeks to establish new trade routes in the region
By Dubi Ben-Gedalyahu, GLOBES
“Independence” is a very popular concept in Israel, however, the concept is a very flexible one. In reality, Israel’s strategic geopolitical position has made it the political and economic playground of foreign powers throughout history, leaving very limited room for the judgment of the “local” residents. The establishment of the State of Israel in 1948 did not change the big picture much.Until last decade, for example, the dominant force that molded Israel’s financial-political “independence” was the United States. US interests still carry significant weight in Israel’s economic and political conduct, but over the past five years, the beginnings of what may be termed the “Chinese chapter” in the history of the Israeli economy have become apparent.
We’re not just talking about high-profile business mergers and acquisitions, like the buying control of Makhteshim-Agan or Tnuva. The Chinese are entering Israel today via the roads, tunnels, ports, and train tracks that are under construction, and in the coming years the Chinese will build and manage transport projects totaling tens of billions of shekels.
As usual with us, in order to put together and understand the big picture from the scattered puzzle pieces, we must take three steps: examine the narrow picture, place it in the context of the bigger picture, and, of course, apply the “iron rule”: follow the money.
The narrow picture: conquering by land and by sea
Even the “narrow” picture is very impressive. In the past five years, the Chinese have become one of the strongest powers in Israel’s transport and infrastructure sector. All this has transpired while maintaining a low business profile, practically undercover, considering the scale.
Following is a partial list: On land, the “great adventure” began with the Carmel tunnels project, which was built by a Chinese government contractor for a total of billions of shekels starting in 2007. The adventure continues with the excavation of the tunnels on the Akko-Karmiel train line, at a cost of NIS 700 million, which is being carried out through a partnership between Danya-Cebus and a government-controlled Chinese construction company.
At sea, a Chinese company recently won a tender to build the future Ashdod port at a cost of NIS 3.6 billion. In parallel, another Chinese company won a license to operate the new deep-sea port, to be built in Haifa.
There are currently two Chinese manufacturing giants competing in the railway market, together and separately, for two projects worth billions. The first is to supply electric locomotives to Israel Railways under the Ministry of Transport’s electrification project – between 62 and 78 locomotives are needed, at an average cost of €3.5 million per locomotive. The second is to supply 90-120 cars for the “Red Line” light rail in the Tel Aviv metro area, at an estimated cost of NIS 2 billion.
And all this is just a prelude to the flagship future Eilat train construction project, at a cost of NIS 20-50 billion. This project is still being enthusiastically advanced in the halls …read more