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March 24, 2014 9:53 pm

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

avatar by Joshua Levitt

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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.

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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.

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  • Frank Adam

    Suez is not only for oil – which can go through the Eilat – Ashdod pipeline to Mediterranean ports or round the Cape of Good Hope to the West as cheaply – if tankers are big enough as when Suez was closed in 67-77.
    The container traffic is also important and growing especially for Chinese exports to Europe and US and the “boxes” will still be transiting when the oil peaks, if it has not done so already, and runs out mid-century.

    Quirkily the Pacific is so broad that the new enlargements of the Panama and Suez Canals balance in terms of US East coast to the far East via Suez, or China to the US West coast and potentially to the US East coast via Panama. However given the volatility of all the Arab World it suits China to “belt and braces” with an Israeli rail, “canal.” It will also suit Turks and others sending container lorries round Syria and Iraq to the Gulf ports and Indian sub-continent to drive across Northern Saudi from Eilat.

  • Jonah Lissner

    The Israel-China Alliance has many advances, including this one to move Israeli and Chinese products to and from both countries. It also builds a greater future of Israeli presence in the Red Sea through the Horn of Africa and into the Indian Ocean, making stronger Israeli Navy and future Israeli population gains as in Cyprus and the Mediterranean. African and Asia alliances are in the strong interest of Israel and so are Israeli interests for African and Asian countries.

  • Mahmoud Hamza

    I think that Egypt’s SISI has replied in kind by announcing the digging of the new Suez Canal , making it ever easier and faster and cheaper for ships to transit from the Red Sea to Mediterranean .
    The new canal must be a blow the the Israeli Rail line . Ships will now lose no time at all waiting in transit at either end of the canal or in the bitter lakes .
    So Israel may go ahead and build her proposed new rail line.

    • Serge

      Egypt is broken…the economy is in very bad shape. It would take years for the recovery to happen.So a project like that is just another “pipe dream” bravado from the current Egyptian government….

    • dc batemn

      how humorous. Egypt cannot afford a left nostril inhaler . yet another fantasy of the vivid Egyptian imagination. all you have are fava beans, sand,rocks and flies. you have natural gas and are having to buy it from Israel. you know, if Egyptians would just lose their paranoia and jew fixation and realize they are not out to get you or your fava beans, and the people who are killing your citizens are also enemies of Israel you would be far better off. china has plans to avoid your machinations and coups and instability that can’t even keep their cargo ships from being shot at , and paying through the nose to get through the canal. live with it. grow up and make nice with the people who could and would gladly help you pull your 3rd world country out of the hole its in. do you realize , each time a tank gun round is fired that is equivalent to an average Egyptian worker’s annual income? and that has not changed since the 70s. have a nice day.

      • Ola

        We Egyptians did in one year with our money, for anyone of you who didn’t believe that we could. Proud to be an Egyptian, proud of my President Al-Sissi.

        • Michael

          Ola, Kudos to Egypt and their accomplishments on the construction of the Suez canal, job well done.
          The Med-Red line, if ever built, will not replace or even compete with the Suez canal, it will augment.
          I am skeptical about Israel’s ability to built the rail line, because of the ludicrous politics and special interests in Israel. Egypt has problems, but also a smart, intelligent and lucid leader who knows how to get things done.

  • 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?

    • nguik

      On which side of border do you refer?
      On Egypt side of border, it will meet with the same political instability of Egyptian government.
      On Israel side of border, it will have to run through Hamaslandia .. uh .. Gaza Strip.

  • 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.

    • Harrybaby

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

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  • 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.