Israel-China Alliance Moves Forward With $2 Billion ‘Red-Med’ Freight Rail Link Alternative to Suez Canal

March 24, 2014 9:53 pm 5 comments

An Israel Railways train at the Haifa Merkaz Hashmona Station. Photo: Golf Bravo via Wikimedia Commons.

The growing economic alliance between Israel and China is moving forward with a $2 billion, 300 kilometer freight rail link connecting Eilat, on the Red Sea, with Ashdod Port, on the Mediterranean, Germany’s Deutsche Welle news magazine reported on Monday.

The project, nicknamed the ‘Red-Med,’ was greenlit by Israel Prime Minister Benjamin Netanyahu’s cabinet, and construction, which is expected to take five years, will begin within the year.

About the link, Netanyahu said, “It’s the first time we’d be able to assist the countries in Europe and Asia to make sure they always have an open connection between Europe and Asia and between Asia and Europe.” For Netanyahu, the rail link also has a civilian use, doubling as a line for a two-hour passenger ride between Tel Aviv and Eilat, DW said.

Ilan Maor, a former Israeli consul to Shanghai and CEO of consultancy firm Sheng-BDO, told DW that without foreign help and investment from China, the project would likely remain on the drawing board for years.

“I think the investment or involvement of the Chinese companies and government in Israel, just like any other country whether European or American, is a good thing,” Maor told DW. “If this project is good and it makes sense commercially, then if you have a foreign company which enables you to do it, that’s a good thing. I don’t think the Israeli government or any of the Israeli companies have the capability to take such a project and develop it by itself.”

“I think China is looking more and more into the international market and doing business outside China. That goes for Africa, for Asia, for Israel and the Middle East. And I think any foreign involvement in the Middle East is coming from the positive aspect. Not somebody who is going to build military camps and sell weapons but a foreign body or company who is investing in the Middle East producing new projects,” Maor said.

“It shows the Chinese government, Chinese companies believe that Israel holds a significant potential for business cooperation and that they believe the trade relation with Israel is not only between China and Israel but between Israel and other countries – it’s going to develop,” Maor said.

The rail link will both increase access to goods for Africa, where China is the continent’s biggest partner, with trade worth $120 billion, while also providing an alternative shipping route to the Suez Canal, controlled by Egypt.

In a report cited by DW, the Center for International Maritime Security pointed to Egypt’s political uncertainty following the downfall of Egyptian leader Hosni Mubarak in February 2011 and the ousting of his successor, Muslim Brotherhood leader Mohammed Morsi, a year after he was elected in June 2012. The center said that political instability has left the Sinai Peninsula a “lawless zone for jihadists and Bedouin militias,” highlighting a rocket-propelled-grenade attack last August on a Chinese-owned container ship.

Lloyd’s insurance market has even recommended that ships take the 6,000-mile route around South Africa instead. In September, it welcomed a new maritime hub at Port Sudan to provide an alternative should Egyptian unrest force the Suez to close, DW said.

“Those who use the canal may find the alternative of train and using the Red Sea cheaper. You see there’s demurrage on the Suez – congestion charges. We pay for waiting in line,” Oded Eran, a retired Israeli diplomat now at Tel Aviv University’s Institute for National Security Studies, told DW.

Rather than compete with Egypt, Eran said the Red-Med link would just facilitate more trade. “We want the Egyptian economy to strengthen,” he said. “It’s simply a way of facilitating transport between the industrial centers of the north to the south.”

But Eran, who was Israel’s ambassador to Jordan from 1997 to 2000, said the plan missed the opportunity to include Jordan, which would have also helped encourage Arabs to use the infrastructure.

“There’s a semi-used port in Aqabar in Jordan – we could have used that infrastructure. It would have been economically and politically correct to work together on this,” Eran told DW.

5 Comments

  • conrad mikhelson

    Why dont they just dig another channel through the desert. This channel will be parallel to the Suez one, boost competition and make Izrael and oil companies happy?

  • Raymond in DC

    As a layman, the idea of unloading, mounting on rail, traveling the rail distance, then reloading on ship seems inefficient and costly. But if the Chinese are supporting the project with their own money, they must know more than me.

    A more obvious project, which makes sense even to me, would involve transporting Arab oil through Israel, avoiding both the Straits of Hormuz and the Suez Canal. I see two routes: The first would follow the path of the old British oil line that went from Iraq through Transjordan to Haifa. The second would run from the Arab countries of the Persian Gulf to Jordan’s Aqaba. From there, oil would feed into an existing pipe running from Eilat to Ashdod. It was built to carry oil from Iran back in the days of the Shah.

    • Maybe in a perfect world this would work. In today’s Arab world this is just a passing daydream!

  • Hi there this is kind of of off topic but I was wanting to know if blogs use WYSIWYG editors or if
    you have to manually code with HTML. I’m starting a blog soon but have no coding skills so I wanted to get guidance from someone with experience.
    Any help would be enormously appreciated!

  • Joseph Kelly

    When Chinese do business with Israel it is profitable for both parties, which it should be.

    When the EU and the USA do business with Israel, they secretly fund post Zionists and Israel’s mortal enemies. Could this be because they are influenced by lucrative petro dollar contracts coming their way, making them confused with morality?

    This is why Europe now and soon the USA will lose their hegemony to Asia in particular and China more specifically.

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