Since the signing of a peace treaty with Jordan last year, the de facto lifting of the Arab boycott and the prospects of transshipment trade to Jordan and beyond, Israel has advanced an ambitious $1 billion development program to prepare its Mediterranean ports for increased trade.

The Port of Haifa, built by the British military in 1993, is likely to return to its pre-state role of facilitating the bulk of transshipment traffic eastward, since it is only 100 miles from Jordan's population centers of Amman and Zarqa, port officials say.Toward supporting transshipment to Arab destinations, infrastructure planners in Israel are considering reviving the Valley Train which, before the establishment of the state of Israel in 1948, was used to transport cargo from the Haifa eastward through what was then Transjordan.

"We have had strong interest on the part of the Jordanian private sector in shipping through Haifa and view potential in transshipping to Jordan and to Syria in the future," said Haifa Port Manager Mendl Zaltzman. Other port officials privately admit to having hosted delegations from Oman and other gulf countries that do not have diplomatic relations with Israel.

Israeli Minister of Transportation lsrael Kessar estimated that Jordanians will save $500 for each container when shipping through Israel's Mediterranean ports as opposed to Aqaba.

However, given the fact that Aqaba only handles 70,000 TEUs per year, facilitating Jordanian cargo through Israeli ports will not significantly impact operations, according to Mr. Zaltzman, who said Haifa logged 400 delay days last year, as compared with some 600 delay days in Ashdod. In 1995, the Port of Haifa is expected to handled 464,000 TEUs and the Port of Ashdod 312 TEUs.

In lobbying the government for $1 billion to be spent over seven years, Mr. Kessar warned of the competition Israeli ports will face in the future from nearby Beirut, Lebanon and Syrian ports. Officials at the Israeli Ports Authority also pointed to a clause in the 1993 agreement between Israel and the Palestinian Liberation Organization which allows for a port to be built in Gaza, less than an hour drive from Ashdod.

The Israeli Port Authority predicted that increases in total tonnage handled at Haifa will far outstrip projected increases in traffic at Ashdod through the end of the decade.

Haifa expects an increase of 44 percent in the total tonnage handled by the year 2000 (from 9.6 million metric tons predicted for 1995 to 13.8 million metric tons by the year 2000). The increase in tonnage is expected to be primarily due to an increase in container traffic which, in 1992, accounted for 37.4 percent of the total tonnage.