Haifa Port Privatization

Background:

In January 2020, the ministerial committee for privatization approved the Haifa Port’s privatization. This move, part of the 2004 Ports Law, aimed to transform Israel’s port monopoly. Haifa Port handled about 50% of Israel’s container traffic and 70% of general cargo, was a key focus of this privatization strategy. The goal was to dismantle the inefficient state-controlled port system with its inefficient labor practices and high operational costs.

The Case

BLK has been appointed as the financial and strategic consultant for the Adani-Gadot group, with the responsibility of creating an extensive financial model that incorporates detailed demand and cost projections for the Haifa Port.

Work Process

BLK Consulting conducted a thorough market analysis of the Israeli ports sector, focusing on current and future demand for containers, general cargo, bulk materials, vehicles, and passengers. Subsequently, a detailed financial model was created to project revenues, costs, depreciation on fixed assets, capital expenditures, and financing planning. The model included various growth scenarios, including the potential for expanding port facilities.

Close collaboration with the Adani-Gadot consortium provided strategic advice and ensured the financial model aligned with their long-term objectives. The model also aided in assessing potential risks, growth opportunities, and investment needs. Throughout the project, cooperation with stakeholders ensured the analysis supported both the consortium’s bidding strategy and the broader goals of the privatization process.

In 2022, the Adani-Gadot consortium successfully won the tender, becoming the new owners of Haifa Port.