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HS Prometheus in Haifa port.(Photo by: ANNA AHRONHEIM)
Israel works to defuse US concerns over Chinese control of Haifa Port
By MICHAEL WILNER
12/20/2018
Israeli officials confirmed that the government was reviewing how to ensure that Chinese construction and management of the port does not adversely impact ties with the US.
WASHINGTON – The Israeli government is working to defuse any problems that may arise from a planned Chinese takeover of Haifa Port in 2021, an arrangement that has led the US Navy to reconsider its future port calls and exercises in Israel, senior officials told The Jerusalem Post on Tuesday.

The officials were responding to an exclusive report in the Post on Sunday, according to which the US Navy may change its long-standing operations in Haifa once Shanghai International Port Group (SIPG) – a company in which the Chinese government has a majority stake – takes over the civilian port there in 2021.

“The State of Israel is dealing with all aspects connected to the establishment and management of infrastructure by foreign companies in Israel,” Intelligence and Transportation Minister Israel Katz, who pioneered the project and is also a member of the security cabinet, told the Post.

Israeli officials confirmed that the government was reviewing how to ensure that Chinese construction and management of the port does not adversely impact ties with the US. The Americans are said to be concerned that China will use the port to improve its standing in the Middle East and potentially gather intelligence on US interests.

Commander Kyle Raines from the US Sixth Fleet told the Post last week that there were currently no changes to operations in Israel. But “I can’t speculate on what might or might not occur in 2021,” he added, when asked whether China’s coming presence might affect fleet operations in the Mediterranean city.

News of an interagency review in Israel comes amid a spike in tensions between Washington and Beijing, and growing discomfort within Israel over China’s creeping control over its critical infrastructure.

The Israeli security cabinet recently convened to discuss friction with the Trump administration over the port and agreed to set up a mechanism to prevent possible problems with the Americans. It remains unclear if that mechanism will be accepted by Washington.

The White House declined requests for comment on this report. But senior administration officials tell the Post that National Security Council personnel have registered their displeasure with their Israeli counterparts over the SIPG agreement, sealed in 2015.

Meanwhile, Israel’s cabinet is divided on how to proceed, and does not seem prepared to rattle relations with Beijing by scuttling the SIPG deal. One official said that Defense Ministry and Foreign Ministry officials remain upset that the agreement was completed without first undergoing a thorough, whole-of-government review.

Israel understands American sensitivities regarding China’s presence, another official explained on condition of anonymity, but at the same time faces a challenge finding international companies with expertise in building and managing ports.

SIPG operates the largest port in the world in Shanghai and was the sole bidder for the Haifa project. It plans on growing the bay terminal into Israel’s largest harbor over the life of its 25-year contract with the government.
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