Monday, December 19, 2011

China To Build Railway From Eilat To Tel Aviv, Allowing Israel To Challenge Suez Canal

Israel is in the midst of making a deal with China to build a railway from Eilat to Tel Aviv.

Once completed, the train will be able to travel to make that trip from Eilat to Tel Aviv in 2 1/2 hours. Sounds simple enough--but the hoped-for benefits are threefold:

1. The train will help tourism. By making Eilat more accessible, Eilat will also be able to market itself as a tourist base for visiting the rest of Israel.

2. But there's more to the railway plan than just tourism:

It is part of a broader government scheme to develop the stretch of the Negev that leads from central Israel to Eilat. The Ministry for the Development of the Negev and Galilee announced last Thursday that it aims to double the current population of the Negev to 1.2 million by 2025. The government hopes that the train, serving stations along the route to Eilat, will make Negev communities more attractive.
3. Even more ambitious is how the railway may help Israel challenge the Suez Canal as a trade route:
part of the rail plan involves promoting it as a rival trade route to the Suez Canal, which will avoid the canal's high fees. Israel wants shippers to dock in Eilat, load goods onto the train, and then ship them out one of the country's Mediterranean ports. "Anybody who looks at the map can see that in the medium to long term this will be an efficient way to transport freight," said Mr Solomon [Deputy Director-General of Israel's Ministry of Transportation].
One expert who doubts the feasibility of Israel becoming a popular trade route is Hebrew University's Alfred Tovias, who who is quoted as saying that Israel is perceived as too unstable to be used as a trade route, not too mention the cost and the hassle associated with loading and unloading.

As far as the issue of stability is concerned--that has not stopped investment by foreign tech companies in Israel. If a good investment opportunity presents itself--or a way to avoid the high cost of shipping through the Canal--it's hard to imagine that countries are going to ignore it.

But first China has to build that railway from Eilat to Tel Aviv..

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