Israeli officials have cleared United Arab Emirates port operator DP World to move forward in the privatization of Israel’s largest port but have kept Turkey’s Yildirim Holding AS under further scrutiny.
DP World got security clearance to move forward in the bidding process for the port in the northern city of Haifa, according to two people familiar with the matter. Local representatives for Yildirim lodged a complaint about unfair treatment in the process, according to a letter it sent to Israeli officials seen by Bloomberg.
The Government Companies Authority, which is running the privatization, said Israel is making necessary regulatory checks as part of confirming investors’ participation in the Haifa Port privatization and that the sale is expected to be completed in a few months. Representatives for Yildirim, DP World and the Israeli Defense Ministry declined to comment.
DP World’s progress is an important indicator for Israel’s new normalization agreement with the UAE, which was announced last summer. It marks a key nod of approval from Israel when it comes to Emirati involvement in strategic assets. Israel hopes to sell the facility for as much as 2 billion shekels ($612 million).
But while Israel draws closer to Gulf Arab nations, relations with former close ally Turkey have been sour for years over Israel’s policy toward the Palestinians. Turkey, which recalled its ambassador to Israel two years ago, is currently seeking to repair its ties with traditional allies but said barriers remain to improving relations.
Economic ties have been resilient throughout the estrangement, but the port sale suggests they may be getting more complicated. In a Jan. 11 letter sent to Israeli ministers overseeing the privatization process, local representatives for Yildirim said “the requirement…is very puzzling in our eyes.”
They noted Yildirim has previously been cleared by security services in Europe and the U.S.
Yildirim entered the process in a consortium with Israeli industry veteran Eli Tilles, U.S.-based GraeStone Logistics LLC and cruise port operator Global Port Holding Plc.
“This examination is even more ppuzzling since a partially governmental Dubai company is participating after the ink dried on the normalization agreement,” the letter added.
The sale has been shadowed by geopolitical jousting beyond the Middle East, with the Trump administration pressing Israel to be wary of Chinese influence, as a second, Chinese-run port rises nearby. Officials sought American firms to participate in the contest, which has also drawn expressions of interest from more than a dozen parties, including companies in India and Belgium.
No Chinese firms joined the bidding.
The port is focused largely on container shipping, and its new owners will have the opportunity to improve operations, according to Drewry Shipping Consultants. “Productivity is in line with industry average but a new concessionaire will be able to invest in the asset to improve its processes and equipment,” they said by email.
Officials from DP World and its local partner Israel Shipyards Industries Ltd. got access to in-depth data this week as they prepare to bid, according to Shlomi Fogel, who co-owns Israel Shipyards. Fogel said the venture is currently an equal partnership with DP.
