China Harbour Engineering Company (CHEC) has been chosen to build a new port in Ashdod, Israel.
Israeli Prime Minister Benjamin Netanyahu said during the signing ceremony that the new facility will serve as an important link in a new east-west trade route.
Construction works on a 1,000m pier and 2.8m of breakwater at a site some 1km north from the current Ashdod Port are expected to start by the end of 2014, and are projected to last for seven years. The project value is estimated at USD 930 million.
Through the new Ashdod Port Israel is trying to provide a safe alternative for east-west trade. Shipments will move from China to be offloaded in Eliat, where the cargo will be transferred onto trains and transported to Ashdod. Cargo will then be reloaded to ships bound for Europe.
Prime Minister Benjamin Netanyahu said on the occasion: “There is a very major change here for the citizens of Israel. First of all we are developing the Ashdod port. We are talking about something with vision for the future. We are joining Ashdod with the arteries of global trade, and the link from Eilat, which will be carried out via rail, also the link to the Suez Canal and the trade that emerges from it, this will be a great engine for growth not only in Ashdod but for the State of Israel.
“This has very major implications. As we open Ashdod to global trade we also increase employment in Israel. We also create further competition which lowers prices.
“When there is more competition, prices go down and jobs are added. This is good for the Israeli economy and for Israeli citizens, as well as for Israel’s place on the global trade map.”
Meanwhile China has given four shipping lines including China Cosco 1.8 billion yuan ($293.3 million) in subsidies to encourage them to retire and upgrade their vessels, the four companies said.
In December, China announced it would hand out subsidies to shipping lines to replace old models with new and greener ones and to generate orders for its shipbuilders, which have been hit by an order slowdown in a global shipping slump.
China Cosco said on Tuesday it had received 1.3 billion yuan through its controlling shareholder, state-owned China Ocean Shipping Group, to compensate it for scrapping and upgrading old vessels.
Sister company Cosco Shipping said it had received 182.9 million yuan for ship upgrades.
On Monday, China Shipping Development Co. said China’s finance ministry had given it 215 million yuan in subsidies for scrapping 15 ships. China Shipping Container Lines said it had received a subsidy of 40 million yuan.
The companies said they expected the subsidies to have a positive impact on their full-year results.
Despite a pledge to reduce support for industries with overcapacity, the government has suggested it is reluctant to allow large ones such as shipbuilding to wither. It is currently seeking outside support for heavily indebted private shipbuilder China Rongsheng.