Eilat Port Seeks Maritime Lifeline: Costly Plan to Lease Cargo Ships After Two Years of Activity Halted by Yemeni Blockade

NYN | Reports and Analyses 

Ongoing Paralysis Drives Unconventional Solutions

Hebrew-language reports revealed on Tuesday that the operator of Eilat Port is considering a new and costly plan to restore part of the port’s activity, which has been halted for about two years due to the naval blockade imposed by Sana’a forces on Israeli shipping in solidarity with Palestinians in Gaza.

According to Israeli media outlets, including Calcalist and Maariv, the Nakash brothers, who manage the port through the company “Pipo,” plan to purchase or lease two specialized car-carrier ships. These vessels would operate as an independent shipping arm, transporting cars directly from the Far East to Eilat Port.

Ships to Transport Thousands of Cars

Reports indicate that the port management is currently negotiating with several shipping companies, in collaboration with car importers, to lease or purchase two vessels capable of carrying up to 5,000 cars each.

Estimates suggest that leasing a single ship would cost between $35,000 and $50,000 per day, while the voyage from the Far East to Eilat takes between 35 and 50 days, significantly increasing financial burdens amid no guarantees for a full resumption of port activity.

Insurance and Risk Challenges

The reports noted that port operators are in discussions with insurance companies to secure coverage for navigating amid existing risks, an additional factor that raises the cost and complexity of implementing the plan.

Port Management: A National Crisis

Port authorities stated that Eilat’s closure is not merely a shareholder issue but a “national crisis” affecting all Israeli citizens. Diverting car shipments to Ashdod and Haifa requires extensive storage space, delays the unloading of other essential goods, and increases the final cost for consumers.

The management added that concentrating imports through a single Mediterranean front weakens resilience against crises, emphasizing that the port is a lifeline for the city of Eilat and that its closure directly harms hundreds of families and the regional economy as a whole.

Sensitive Timing and Concession File

This step comes at a sensitive time, coinciding with the anticipated decision by Israel’s Finance and Transportation Ministries at the end of the month regarding the renewal of the port operating concession for the current company.

The workers’ union has demanded that the concession not be renewed, accusing the company of failing to meet operational conditions. However, Hebrew reports indicate that searching for new operators would be futile while the port remains inactive.

Requests for Compensation and Concession Extension

Calcalist recently revealed that the operating company requested the Israeli government to postpone the concession renewal decision for three months, in addition to extending the operating concession for another three years as compensation for losses incurred during two years of inactivity caused by the naval blockade.

Failure of Previous Alternative Plans

The plan to lease or purchase ships reflects the failure of a strategy recently approved by the Knesset, which involved bringing ships from the Mediterranean via the Suez Canal to unload cars at Eilat at an additional cost of up to $1.2 million per ship, to be shared among the government, the port, and importers.

Hebrew reports explained that, after discussions in the Knesset’s Finance Committee, no clear funding source was identified for that plan.

International Efforts Yield No Results

The reports also revealed that port management reached out to the United States and regional countries to secure the lifting of the naval blockade on the port. However, these efforts have so far produced no tangible results, leaving Eilat Port’s future uncertain amid the ongoing crisis.