Finance Minister Levi Eshkol, on behalf of Israel, signed an agreement this week-end with Baron Edmund de Rothschild, head of a group of foreign investors, for a 49-year concession on a 16-inch pipeline between Elath, at the Gulf of Akaba, and the oil refineries at Haifa, on the Mediterranean Sea.
The agreement, signed in Premier David Ben Gurion’s office here, with the Premier an interested spectator, must be ratified by the Knesset, Israel’s Parliament, which will have to vote a law authorizing the concession grant. The de Rothschild syndicate will invest some $20,000,000 in the project. In exchange, the Government will hand over the pipeline to it on July 1, 1960. At that time, the line is expected to have a carrying capacity of 1,700,000 tons of oil a year.
The 16-inch pipeline has already been laid from Haifa to Beersheba and work is now proceeding on the Beersheba-Elath section, now served by an eight-inch line. With the construction of additional pumping equipment along the line, it is expected that the capacity will be increased to 5,000,000 tons a year.
Under the terms of the concession, the Israel Government guarantees the investing group an eight percent return on their investment. Baron de Rothschild, who arrived here by air to sign the agreement, left by air for Paris immediately after the formalities were completed.
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