Seaport battle looms as Israel plans new competition

Thu May 16, 2013 11:42am EDT
 
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By Tova Cohen and Ari Rabinovitch

TEL AVIV (Reuters) - Israel is betting its economic future on high-tech exports but faces a low-tech bottleneck in state-owned seaports subject to work stoppages and slowdowns because of the enormous strength of their unions.

All that may be about to change.

The government, for years unwilling to risk a confrontation that could paralyze trade given that 99 percent of exports and imports are transported by ship, last month pledged to end the monopolies of the two main ports of Ashdod and Haifa.

By introducing private piers to compete with the two ports, service would improve and prices would drop across the board, Prime Minister Benjamin Netanyahu said.

The port unions - possibly the most powerful in the country with just 2,400 workers earning double the average public sector salary - are likely to be severely weakened and may have to make concessions or face layoffs.

At a time when the middle class is squeezed by slow economic growth and high costs, there is little sympathy for their plight among average Israelis, let alone businessmen.

"Labour unions in the ports are very strong, very belligerent, very egotistical and are using their control of a key state property against the state," said Uriel Lynn, president of the Federation of Israeli Chambers of Commerce.

The unions declined to speak with Reuters for this article and referred questions to the umbrella Histadrut labour federation.   Continued...

 
A scuba diver jumps in the water at the port of the northern city of Haifa April 23, 2013. REUTERS/Ronen Zvulun