U.S. Raises China Concerns Over Israel’s Sale of Largest Seaport

(Bloomberg) -- The U.S. is working to find American bidders for Israel's largest port to counter China's clout in the Middle East, adding drama to a deal that's drawn interest from regional heavyweights including the UAE and Turkey, according to people familiar with the matter.

Expressions of interest for the asset worth as much as 2 billion shekels ($586 million) are due in late October, and the U.S. -- already unnerved by China's operation of a port in the same city of Haifa -- doesn't want to miss out on another strategic facility.

American officials have raised concerns with Israelis about Chinese influence, and emphasized the importance of vetting the sale of the port in the northern city for security issues, according to a person familiar with the matter. They're also actively engaged and working to round up American companies to submit bids, according to people with knowledge of the issue who requested anonymity because the talks are private.

So far, no Chinese company has publicly voiced interest, and the Chinese Embassy in Tel Aviv didn't respond to a question about any potential Chinese candidates. A hallmark of the Trump administration's foreign policy has been to encourage allies to avoid Chinese investment in major infrastructure projects.

Israel Pushes to Sell a Port China Plans to Rival: Supply Lines

A spokeswoman for the U.S. Embassy in Israel declined to comment. A spokesman for China's Embassy in Israel said Chinese investment comes with no geopolitical agenda or security threat to Israel. Prime Minister Benjamin Netanyahu's office didn't respond to a request for comment.

U.S. companies didn't bid on a previous Haifa project won by state-run Shanghai International Port Group Co. in 2015, but this time Israeli officials are making “a special effort to try to bring an American company,” said Dan Catarivas, head of foreign trade and international relations at the Manufacturers' Association of Israel.

The U.S. Navy's Sixth Fleet sometimes docks near the port run by SIPG, and American officials are worried about security breaches.

U.S. Envoy Says Emirati Investment Safer for Israel Than Chinese

Some U.S. companies are interested in the port up for sale, according to people familiar with the matter, but it remains to be seen if that will translate into offers. And now that Israel is normalizing ties with the UAE, the Gulf nation could be a safer substitute for China, U.S. Ambassador to Israel David Friedman has said.

Dubai-based port operator DP World has already partnered with Israeli businessman Shlomi Fogel to prepare an offer for the harbor. Istanbul-based industrial conglomerate Yildirim Holding AS is also considering a bid, according to people familiar with the matter, despite Turkey's tense diplomatic ties with Israel. A representative for Yildirim declined to comment.

A spokesman for Israel's Government Companies Authority, which is leading the sale, said the agency is working with international diplomatic and economic representatives, and that any entity applying for participation in the sale will require approval from relevant Israeli authorities, including ministers, as in previous privatizations.

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