In his final act as Environment Minister, Avi Gabay authorized an allocation of NIS 400 million for the transfer of Israel’s ammonia storage facilities from Haifa to the Negev, the Environment Ministry announced. After conferring with Finance Minister Moshe Kachlon, Gabay received permission to earmark the funds for whichever firm wins the tender to move the storage facilities.
The Ministry said that the money would be used to guarantee loans that the private contractor will take out to build the facility. With the money, the winner of the tender will be able to get bank loans at much lower interest rates. The tender is expected to be concluded in June. It was supposed to have been completed over a year ago, but various bureaucratic snafus postponed its completion.
Most of the ammonia produced at the facility is used to manufacture chemicals, such as fertilizers – and much of that takes place in Haifa, with Haifa Chemicals serving as the main customer for the substance. There was concern among some of the potential bidders that the company might replace the ammonia with raw materials from other sources, because the costs of transporting it from the Negev back to Haifa would increase the price.
The financial guarantees secured by Gabay solve that problem, the Ministry said. “Many potential bidders felt that the tender was not going to be profitable because of various circumstances which could arise, so we have improved the tender to make it economically worthwhile,” it said in a statement.