TEL AVIV – The U.S. Navy said it may pull its longstanding operations in Haifa port once a Chinese firm takes over in 2021, prompting Israel’s national security cabinet to revisit the deal with Shanghai, according to an Israeli news report.
Israel’s Transportation Ministry struck an agreement in 2015 with Shanghai International Port Group (SIPG) — a company in which the Chinese government has a majority stake — a deal that is now coming under interagency review, the Jerusalem Post reported. According to the terms of the deal, SIPG would control the port for 25 years. The Shanghai company has a $2 billion stake in the project, including plans to convert the bay terminal into the largest harbor in Israel.
Haifa, which is Israel’s largest port city, routinely hosts joint U.S.-Israeli naval drills and visits from American vessels.
When asked whether Chinese control might affect operations, the Post cited a representative of the U.S. Sixth Fleet as saying the navy’s partnership with Israel for now remains “steadfast.”
“Our U.S. Navy ships frequently visit Haifa, Israel, for both U.S.-Israel bilateral military activity and port calls,” Commander Kyle Raines said.
“For now, there are no changes to our operations in Israel,” the commander continued. “I can’t speculate on what might or might not occur in 2021.”
However, the Post also cited three sources familiar with the matter as saying that U.S. defense officials harbored concerns that they shared privately with their Israeli counterparts, prompting the Israeli government to open “a review of the agreement at a high level,” the paper said, adding that a senior IDF official confirmed that a review was under way.
One of the sources expressed concern that sensitive infrastructure matters did not undergo full scrutiny by Israel’s full national security cabinet prior to the deal’s approval.
“You don’t want a decision that was made ostensibly for business reasons to have an impact on Israel’s relationship with the American navy,” the source said.
Assaf Orion, a retired Israeli brigadier-general and expert on Israel-China relations now based at the Washington Institute for Near East Policy, said there was little Israel could do at this stage, three years after the deal was struck.
“Historically, it’s interesting to see [that] the whole awakening is now when the contract was signed in 2015 – it begs the question what the hype is all about. It’s probably more conducive now because of the US-China tensions over trade, national security and the like,” said Orion. “There is always a question of encouraging investment versus managing risk.”
“The bottom line here is that Israel will make a fatal mistake by doing either or both of the following: disregarding China’s potential to advance Israel’s economy, and doing it with our eyes shut,” Orion continued. “We must keep our eyes open, fully aware of the risk management requirements and its possible impact on the US-Israel relationship.”
The former chief of U.S. naval operations, admiral Gary Roughead (ret), warned that a Chinese-run port could force the navy to dock its warships elsewhere.
“The Chinese port operators will be able to monitor closely U.S. ship movements, be aware of maintenance activity and could have access to equipment moving to and from repair sites and interact freely with our crews over protracted periods,” Roughead said at a conference last month at the University of Haifa.
“Significantly, the information systems and new infrastructure integral to the ports and the likelihood of information and electronic surveillance systems jeopardize US information and cybersecurity,” he added.
A Chinese seaport also raises concerns for Israel which has a navy base close by housing a fleet of submarines that, according to foreign reports, are capable of carrying and launching nuclear missiles.
The report noted that if the Sixth Fleet altered its Haifa operations, it would not be the first time it did so. Port falls were drastically reduced in the wake of the USS Cole bombing in Yemen in 2000, and again during the Second Intifada in the ensuing years, but as the report notes, neither event was within Israeli government control.
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