Shanghai International Port Group (SIPG), operator of China’s largest port, has won Israel Ports Company’s tender to operate the new port being developed in Haifa Bay for 25 years, reflecting growing commercial ties between Israel and China.
Transportation Minister Israel Katz termed the decision a “historic day” for Israel. “The Chinese group that won the tender will bring competition to the sector. It’s winning is an expression of confidence in the State of Israel by a superpower, which has decided to invest billions of shekels in Israel and turn it into an international cargo center for all the world,” he said, as reported by World Maritime News.
Haifa Port is Israel’s largest and leading port. The port, operated by the Israel Government’s Haifa Port Company, is located in a natural, protected bay and includes many facilities that allow for the shipping and transportation of all types of cargo as well as docking facilities for large passenger liners.
SIPG will pay a license fee for all cargo moving through the Haifa port as well as annual usage fees for the facility amounting to 65 shekels a square meter, all of which should generate tens of millions of shekels of income annually for the state, according to Haaretz. The new port facility is being built by Shapir Engineering and Ashtrom, two Israeli companies, at a cost of 4 billion shekels ($1 billion). SPGI is expected to invest another 1 billion shekels in equipment and upgrading infrastructure before operation can begin, according to sources. The Haifa port – and a second one in Ashdod – are intended to compete with two adjacent harbors owned by the government. The private ports project is aimed at injecting competition into the sector where powerful unions have imposed rules that make operations costly and inefficient, raising prices for imported products, as reported by Haaretz.
Shanghai International Port (Group) Co., Ltd. (SIPG) is majority-owned by the Shanghai SASAC with state-owned China Merchants Group as its second largest shareholder. SIPG is the largest joint-stock port operator in China by equity throughput. SIPG was listed in the Shanghai Stock Exchange on October 26th, 2006 (600018.SH). By the end of 2014, the market cap of SIPG is RMB145bn, an increase of 82% compared to RMB79.6bn on the first day of listing. SIPG is currently a constituent stock of the SSE 50 Index. As of 31 Dec, 2014, its market value has exceeded RMB140bn. In the year of 2014, SIPG has been graded A+ and A1 by international credit rating top notches — S&P and Moody’s respectively.
SIPG operates all the public container and bulk terminals in port of Shanghai, specializing in container and bulk/breakbulk cargo handling, port logistics and port services with extended business covering pilotage, towing, tallying, feeder service, warehousing, freight forwarding, container truck drayage and international cruise business. In the past few years, the group has expanded its business into the emerging market, such as real estate business and port finance. Up till now, SIPG, through a series of complex regulations of institution and asset integration, has committed itself to four principal industrial segments, namely port handling, port service, port logistics and port commerce, featuring diversified businesses with real estate business, finance and international cruise industry.
As China’s main gateway port to the global market, SIPG, an easy access to the vast hinterland, serves 281 container shipping routes covering major ports globally and accommodates over 2700 monthly calls, which makes it the port with the highest density of container routes, the most frequent shifts and the most extensive coverage in the mainland of China. The world’s top 20 shipping companies have deployed their shipping service routes in port of Shanghai; over 80 overseas shipping lines now have offices in Shanghai. SIPG has recorded the container throughput of 35.285mTEU, ranking No.1 for the fifth consecutive year in terms of container volume in the year of 2014.