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Tuesday, January 31, 2012

"Med-Red" rail link proposed

From Reuters:
Israel said on Sunday it plans to build a railway line linking its Red Sea and Mediterranean ports that could handle potential overflow from the Suez Canal on the freight route between Asia and Europe.

Prime Minister Benjamin Netanyahu told his cabinet the idea of ships dropping off goods in one port to be picked up by a second ship at the other, had stirred "great interest" from major exporters India and China.

The project has yet to receive final approval or secure funding. Israel has not issued any cargo volume projections for the proposed electrified railway that would run 350 km (220 miles) from Eilat, on the Red Sea, to Ashdod, on the Mediterranean some 30 km south of Tel Aviv.

"Laying this line thus has strategic importance, both national and international," Netanyahu said in public remarks at the opening of a cabinet discussion on the project.

Israeli officials rebuffed any suggestion the railway plan came in response to political turmoil in Egypt and the rise of Islamist parties, though Israel has quietly been preparing for the possible erosion of its landmark peace accord with the neighbouring Arab power.

One official told Reuters the railway was a safeguard against the Suez proving incapable of handling surging maritime trade. The canal handled 8 percent of global seaborne traffic in 2009, Egyptian authorities say.

"There is going to be a lot of pressure on the Suez, and the idea here is to find an insurance should the canal not be able to deal with the volume," the official said.

Asked if the Israeli project might bite into Egyptian revenues from tariffs to sail the Suez, the official said: "We do not in any way intend to do anything of the sort."
And the idea that Western-hating fanatics might be in sole control of on of the most important waterways in the world might have a wee bit to do with the calculation.
Oded Eran, a retired Israeli diplomat who is now senior research fellow at Tel Aviv University's Institute for National Security Studies, said global traders were increasingly looking at overland transport alternatives to sea routes.

"Going through Suez costs a lot of money in demurrage," he said, describing the time-consuming process of ships obtaining permission to enter the canal and transiting.

Israeli media projected the train line would cost around $2 billion to build. Its Transport Ministry said it was seeking a Chinese company to build it and estimated it would take up to five years to complete.

Israeli officials linked the project to wider efforts to vitalise Israel's southern desert regions, including a pipeline between Eilat and Ashdod which is envisaged will pump natural gas from Mediterranean platforms for export through the Red Sea.
Interestingly, Reuters completely ignored what Bibi said was the primary reason for the rail line - as a passenger line that would whisk tourists from Tel Aviv to Eilat in two hours.

(h/t Ian)