Israel kicked off the long awaited privatization of the nation's state-owned sea ports by seeking bids to operate the Red Sea port of Eilat.
The government plans to sell its entire holding in the port to a private company, preferably a strategic investor, which would get an initial 15 year operating concession with an option for a further 10 years.
The government's main aim in privatizing the port is to boost its container traffic, which totaled close to 70,000 20-foot equivalent units in the 1990s but has "dried up in recent years," according to the Government Companies Authority, which is handling the tender.
The additional 10 year operating concession is conditional on the successful bidder's meeting container volume targets during the first three years of operation.
Foreign and Israeli firms are expected to take part in the initial tender for the port, which is located at the northern end of the Red Sea, across from Aqaba, Jordan.
As Israel's only port on the Red Sea, Eilat offers access to the country's cargo market without crossing the Suez Canal.
With a 1,732-foot main quay and 39 feet of water depth, Eilat mainly handles imports of cars and exports of minerals and chemicals.
The GCA said it intends to complete the sale of shares during the current year using a multi-stage process.
Finance minister Yuval Steinitz said the tender was an important step toward implementing the 2005 ports reform program.
The government also plans to sell 20 percent of the Ashdod Port Company and the Haifa Port Company.
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