Knesset Asked to Ratify Concession on Oil Pipeline to Investors
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Knesset Asked to Ratify Concession on Oil Pipeline to Investors

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Finance Minister Levi Eshkol asked Israel’s Parliament today to ratify an agreement giving a 49-year concession on a 16-inch oil pipeline from Eilat, on the Gulf of Akaba, to Israel’s refineries in Haifa, on the Mediterranean, to an international syndicate headed by Baron Edmund de Rothschild of Paris.

Mr. Eshkol and Baron de Rothschild signed a preliminary agreement this week-end, subject to ratification by the Knesset. The syndicate will invest more than $20,000,000 in the operation. Mr. Eshkol told the chamber that the new pipeline would enable the Haifa refineries to work at full capacity and would be a major contribution toward the further development of the Negev, the southern desert. He urged early ratification of the de Rothschild concession.

The Finance Minister disclosed that the concessionaires were organized in two companies, Tricontinental Pipeline, Ltd., with offices in Canada, and Israeli Pipeline, Ltd., which is registered locally. For their investment of $20,000,000 the concessionaires will obtain the existing 16-inch line from Beersheba northwards to Haifa and the new line being built from Eilat to Beersheba.

The concessionaires will have exclusivity on oil imports into Israel, both at Eilat and along the Mediterranean. They will be guaranteed an eight percent return on their investment for 15 years during which the Israel Government is obligated to transport 1,500,000 tons of oil annually for domestic requirements.

The Government will hold in abeyance for 15 years $4,000,000 in payments to the concessionaires. The concessionaires will pay $19,000,000 before the end of 1960 and another one million in 1961.

Mr. Eshkol named as members of the concessionaire group the Palestine Economic Corporation, the American Palestine Corporation (AMPAL), the Miami group of private investors, Sam Rothberg, former top leader of the Israel bond organization, the Bank Leumi L’Israel, the Israel Discount Bank, the Swiss-Israel Bank, PAZ-the Isaac Wolf son oil interests-which took over Shell’s holdings in Israel, and Delek, Ltd., the National Fuel Company.

At the present time, the Haifa refineries are working at only one fourth of their capacity because of the lack of crude oil supplies. Prior to 1948, the Haifa refineries received their crude oil via a pipeline from the Iraqi fields.

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