Posted on September 25, 2023
TRADITIONALLY, GOODS flowing between India and Europe have relied heavily on routes passing through the Suez Canal. After the acquisition of Haifa Port, Israel’s second largest port, by a consortium led by India’s Adani Group, it is being transformed into a world-class facility that can be an alternative route, besides challenging China’s growing footprint in the region.
Ron Malka, Israel’s former envoy to India, took charge as the executive chairman of the Haifa Port Company this year. He says the goal is to develop Haifa Port as a true gateway connecting the east to west. With India and Israel leveraging its strategic location to boost trade linkages between Israel, neighbouring Arab states and other countries, Malka says expanding the scope of the Abraham Accords to include Saudi Arabia would present new opportunities and open up new horizons. He also says that there is a long-term vision to establish railway connections between Haifa and west Asia through the UAE. Edited excerpts:
Q / How do you see the strategic purchase of Haifa Port by India?
A / Haifa Port is widely regarded as the leading port in Israel across various aspects, including innovation, growth potential, and the range of activities it offers. Our vision is to transform Haifa into a world-class port and position it as a key player in the Mediterranean. Our goal is to develop it as a true gateway connecting the east to Europe and the United States, and vice versa.
While the decision to invest in Haifa Port was a strategic business decision, it was supported by strong bilateral ties between India and Israel. By leveraging our expertise and resources, we aim to enhance Haifa Port’s capabilities, infrastructure, and operational efficiency, enabling it to compete on a global scale. Through this endeavour, we strive to contribute to the economic growth and development of both countries while establishing Haifa Port as a premier maritime hub in the region.
Q / What role can it play in improving regional economic relations?
A / Traditionally, goods flowing between India and Europe have relied heavily on routes passing through the Suez Canal. Haifa port can potentially serve as an alternative gateway, providing more options and reducing dependence on single routes. Improved infrastructure can attract more businesses, stimulate economic growth, and create job opportunities, thereby boosting the local economy.
Adani’s expertise in port management and operations can contribute to the transfer of advanced technologies and best practices to Haifa port. This knowledge sharing can enhance the overall efficiency, productivity, and competitiveness of the port, benefiting the regional economy as a whole. The acquisition can contribute to the broader regional integration of economies and facilitate smoother trade flows between Israel and other countries in the region. It can encourage joint ventures, investments, and the exchange of goods and services, leading to increased bilateral trade and economic cooperation.
Q / The next step is improved regional connectivity, infrastructure and trade in west Asia. What are the short-term and long-term goals?
A / In the short term, we are looking at strong partnerships in the shipping industry; we expect a substantial increase in cargo movement through Haifa Port. Through collaborative efforts of India and Israel, we aim to strengthen ties with neighbouring countries, fostering improved regional connectivity and trade. We aim to create a more modern and advanced facility capable of handling larger volumes of cargo.
In the long term, our vision is to establish railway connections between Haifa and west Asia through the United Arab Emirates. This ambitious project aims to enhance regional connectivity, facilitating seamless transportation of goods and fostering economic integration. The international involvement of governments, from the US to India to the UAE, and the engagement of organisations like the World Bank demonstrates the seriousness and potential of these projects.
Q / How different is reviving old ports from building new private port terminals with China?
A / This is an excellent question, and indeed, these are two distinct tasks. We have entered a working port with its inherent advantages and disadvantages. On one hand, we cannot construct it entirely according to our preferences. However, on the other hand, we can immediately begin working to enhance and address any deficiencies we identify. It can be compared with taking an iconic existing building and renovating it with new ideas, rather than starting from scratch.
Additionally, we have the invaluable knowledge and expertise of the Haifa Port workers, which, when combined with the knowledge of Adani and Gadot, create a synergy that sets us apart from the Chinese or the new port in Ashdod.
Q / Which freight links are on the cards in next few years from Haifa to Arab states?
A / Shortly after the declaration of the Abraham Accords, signifying the normalisation of relations, the first ship carrying goods from the UAE arrived at Haifa Port. The MSC Paris marked the beginning of a flourishing trade relationship; ships from the UAE now make weekly calls at Haifa. And this trade trend is only growing stronger. Our business connections with Palestinian and Jordanian importers and exporters have been fruitful, as they regularly utilise Haifa Port.
However, it is clear that we have only begun to scratch the surface of the potential in this area. Haifa is, and will continue to be, the ideal gateway for trade with countries located east of us. Expanding the scope of the Abraham Accords to include Saudi Arabia would present new opportunities and open up new horizons for us. We hope to establish connections with countries to the north of Israel. By doing so, we can proudly claim that Israel truly serves as a bridge between the east and the west. The intertwining of geopolitics and global trade has been a significant aspect for centuries and we are positioned to capitalise on this convergence.
Q / How is port privatisation helping the supply chain?
A / In the past, the Mediterranean ports in Israel were dominated by two government-owned port operators, resulting in limited competition. However, the landscape has shifted, and we now have five different operators, with four of them being private entities. This includes international players like Adani and TiL (Terminal Investment Limited, owned by Mediterranean Shipping Company). This will drive more aggressive competition and lead to improved services.
As the saying goes, time is money and better service translates to enhanced efficiency and cost-effectiveness. By embracing these changes and promoting healthy competition, we are confident that the Israeli port sector will continue to evolve, ultimately benefiting businesses and consumers alike while reducing costs and enhancing efficiency in the supply chain.
Q / What are the projects to transform the area around Haifa Port to maximise benefits?
A / Haifa Port was constructed by British mandate exactly 90 years ago as a strategic hub to receive oil transported through pipelines from western Iraq. Acting as a loading point for bunker ships, it facilitated the distribution of oil across the Mediterranean. However, the port’s location adjacent to the city created a physical barrier, blocking the waterfront from the public. Now, we are embarking on a plan to reclaim this waterfront for commercial and leisure activities.
Plans are underway to establish the city’s first modern international cruise terminal, catering to the growing number of cruise ships choosing Haifa as their home port. These state-of-the-art facilities will undoubtedly enhance Haifa’s appeal as a premier tourist and business destination.
Q / What is the future of port cities like Haifa?
A / The transformation of Haifa mirrors similar endeavours in port cities worldwide. The renovation of warehouses and the construction of public spaces, such as opera houses in Copenhagen and Oslo, hotels and museums in Cape Town, and bustling cafes and shops in Istanbul’s Galata district, have successfully revitalised these regions.
Nevertheless, rejuvenating Haifa’s waterfront poses its own challenges. The railway divides the city from the piers, necessitating significant infrastructure improvements. However, we are optimistic about the forthcoming transformation of Haifa’s skyline.