It has been called Israel’s potential Suez Canal. A planned rail freight link could provide an alternative to the famed Egyptian waterway.

A convoy of container ships pass southbound along the Suez Canal towards Suez, Egypt, on Saturday, April 6, 2013.- Photo: Bloomberg

The project would connect the 300-plus kilometers between Eilat on the Red Sea and Ashdod Port on the Mediterranean. And it could be the chance for China to gain a foothold in the region.

Prime Minister Benjamin Netanyahu, who regularly calls his country the “innovation nation,” hopes the cabinet’s recent decision to fast-track the so-called Red-Med project will augment that reputation. The link, estimated to cost upwards of $2 billion, is expected take five years to complete, with construction starting in the next 12 months.

Netanyahu said late last month he was excited about the project.

“It’s the first time we’d be able to assist the countries in Europe and Asia to make sure they always have an open connection between Europe and Asia and between Asia and Europe,” Netanyahu said, mentioning the interest in China and Europe. “And there is interest for us.”

According to Oded Eran, a retired Israeli diplomat now at Tel Aviv University’s Institute for National Security Studies, Netanyahu’s interest in the link is less about economic benefits and more about developing a strategic alliance with China and improving access between the regions.

The Inter-Disciplinary Journal of Asian and Middle Eastern Studies has said the project highlights the ‘”dizzying pace” at which China and Israel are forging economic and diplomatic ties.

According to a U.S. Navy War College strategy professor, James R. Holmes, closure of the canal under the Brotherhood remains a possibility.

“That any such action will take place is doubtful … but never say never,” Holmes wrote for The Diplomat in August. “Suppose, perchance, that the Suez were closed or disabled for some significant interval. The economic and military effects would reverberate throughout Asia and the Atlantic world.”

Holmes says closure of the Suez would be the perfect way to discredit the army’s capacity to maintain order.

According to the Centre for Strategic and International Studies, China is now Africa’s number-one trading partner, with trade worth $120 billion. Meanwhile, the European Union is China’s number-one trading partner, so easy access to the continent is very important.

The Suez Canal has long been a point of contention and, according to the Center for International Maritime Security, the situation is unlikely to improve anytime soon.

The center blames Egypt’s political uncertainty since the downfall of President Hosni Mubarak in February 2011 and the ousting of his successor, Mohammed Morsi, a year after he was elected in June 2012. Morsi was linked to the Muslim Brotherhood.

Really avoiding the canal

The center says the political instability has left the Sinai Peninsula a “lawless zone for jihadists and Bedouin militias,” mentioning a rocket-propelled-grenade attack last August on a Chinese-owned container ship.

Lloyd’s insurance market has even recommended that ships take the 6,000-mile route around South Africa instead. In September, it welcomed a new maritime hub at Port Sudan to provide an alternative should Egyptian unrest force the Suez to close.

Meanwhile, Eran of the INSS says it has become common for countries to demand an alternative freight route.

“Those who use the canal may find the alternative of train and using the Red Sea cheaper. You see there’s demurrage on the Suez – congestion charges. We pay for waiting in line,” Eran told Haaretz. Still, he said the rail link is not a way to compete with Egypt.

“We want the Egyptian economy to strengthen,” he said. “It’s simply a way of facilitating transport between the industrial centres of the north to the south.

The Centre for International Maritime Security has warned of increased attacks on the canal, but Eran is less worried.

“There’s not so much of an issue with Suez, despite political changes and instability in Egypt,” he said. “There has been no impact on those using the canal, no terror activity, and those using the canal have not been intimidated in any way.”

Still, the rail project has hit some bumps.

In October, Environmental Protection Minister Amir Peretz appealed against it, saying it was impossible to approve the route when the Knesset didn’t know the final destination. Peretz was backed by a key member of the opposition, MK Dov Khenin.

Peretz wrote a letter to ministers outlining research from the Shasha Centre for Strategic Studies and the Society for the Protection of Nature in Israel, which claimed that the rail line would lead to “unprecedented environmental damage” in the Negev and Arava. “A train that passes through the Negev at more than 200 kilometers per hour will not contribute anything to its residents.”

According to the letter, “The development of such an extensive and expensive project will involve shifting serious resources and will constitute an insufferable economic burden on society in Israel.”

But that appeal was rejected last month. And the project has the backing of the Israel Export and International Cooperation Institute. The institute supports Israeli exporters through international partnerships and trade relations.

“It’s a great idea and of course the institute is happy,” an institute spokeswoman said, adding that it was too early to predict export volumes. “It will improve infrastructure, and any improvement is great news.”

But Eran, who was Israel’s ambassador to Jordan from 1997 to 2000, says an opportunity has been missed. He wants the link to include Jordan.

“It doesn’t exploit fully the benefits of relations with Jordan, especially in relation to transport,” he said. “There’s a semi-used port in Aqabar in Jordan – we could have used that infrastructure. It would have been economically and politically correct to work together on this.”

Eran says including Jordan would make the link much more appealing to importers and exporters. Netanyahu, meanwhile, has said he wants to make the most of the link – it could also serve as a two-hour passenger rail between Tel Aviv and Eilat.

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