Boston, MA -- (ReleaseWire) -- 04/29/2014 -- We forecast fairly modest growth in Israel's freight transport sector in 2014, though this will be an improvement for air and rail freight volumes, both of which have suffered declines in recent years. The major port of Ashdod also suffered an estimated fall in volume handling in 2013. Political risk from the civil war in Syria and escalating sectarian tensions in Lebanon could all weigh on the Israeli economy and its freight transport sector (though this also presents transit opportunities). However, with the eurozone set to return to growth following two years of economic contraction, Israel could see a boost in its export volumes. The country is looking towards the future, and is committed to developing its ports, though this brings with it strike risk from workers disgruntled at the planned privatisation of key facilities.
Headline Industry Data
- 2014 air freight growth is forecast at 1.4% following an estimated decline of 2.0% in 2013; we project average growth of 1.8% per annum to 2018.
- 2014 Port of Haifa tonnage throughput growth is forecast at 7.2%, and to average 5.1% per annum to 2018.
- 2014 rail freight tonnage is forecast to grow by 2.4%, and to average 2.3% to 2018.
- Total trade growth in real terms in 2014 is forecast to grow 3.3% and average 3.3% to 2018.
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Key Industry Trends
Israel Corporation To Lose Control Of Zim After Debt Settlement: A debt settlement agreement is soon to be signed between Israel Corporation and the creditors of Zim Integrated Shipping Services. The settlement would cut Zim's US$3bn debt by 50%. Israel Corporation will invest US$200mn in Zim for keeping 33% of Zim and forego debt. The remaining 66% of Zim's shares will go to its creditors. A new bond will be issued by Zim and will be superseded by current bonds.
Deadline For Private Ports Tender Postponed To February: Israel postponed the deadline for submitting technical bids for the construction of private ports at Haifa and Ashdod from January 15 to February 17, according to the Israel Ports Development & Assets Company. The deadline for the construction tender for Haifa Bay Port and South Ashdod Port was postponed at the bidders' request. Discussions Over El Al's Future: There are talks taking place with regards to the future of El Al, Israel's flag carrier. Avi Gabbay, former CEO of Bezeq Israeli Telecommunication, has approached Saban Capital Group with a view of putting together a consortium to buy the airline. It has been reported that a feasibility study is being produced.
Key Risks To Outlook
Israel's drive to develop its port sector through establishing private facilities offers the greatest risk to our outlook at present given the high likelihood that the existing ports of Haifa and Ashdod will stage strikes in protest against the move.
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