The 180 kilometer railway will link Eilat with Israel's ports of Ashdod and Haifa
Israel and China signed on 3 July a historic co-operation agreements, to build the Eilat railway line and other future projects, including the inland canal port north of Eilat.
Minister of Transport Israel Katz and China's Minister of Transport Li signed the memorandum of understanding in Beijing.
The main project is the construction of a freight rail line, that will link Israel's two Mediterranean ports in Ashdod and Haifa with the Eilat Port.
The 180-kilometer line will run through the Arava Valley and Nahal Zin. The estimated cost of the line is at least NIS 20 billion.
The Chinese proposed the financing of part of the cost through the Chinese government-owned China Development Industrial Bank, and that Israel handle the project's operations.
Israel is considering awarding construction of the project to Chinese companies, because of their rapid work, and is therefore considering a government-to-government agreement to bypass the Tenders Law in awarding the franchise.
The inland canal port north of Eilat is an idea of the Government of Israel which examine the feasibility of establishing a canal port at north east of Eilat bay. The Government signaled its support for the plan, following offers from Chinese companies to build the port. The idea is to offer an Israeli rail landbridge alternative to the Suez Canal. The existing port at Eilat has poor inland connectivity and the local topography makes the cost of building a rail link prohibitively expensive.