Monday, November 25, 2013
France Invests in Israel
It is dispiriting that the temperature of the Obama Administration towards Israel appears to be lukewarm, if not cold. By contrast, it is heartening that the relationship between France and Israel is warm and growing stronger, not only politically but also in economic relationships. The three-day visit of French President Francois Hollande to Israel in November 2013 was largely focused on discussion with Prime Minister Benjamin Netanyahu concerning the Iranian nuclear issue. Most attention and analysis of the visit understandingly addressed this issue. But equally important, and perhaps more important in the long run, were economic contracts and developments resulting from the visit. Not surprisingly, since the president was accompanied by a large group of business leaders, important, though less publicized, economic agreements were made. President Hollande showed he was determined to have French publicly-owned companies invest in Israel. French private companies have invested in Israeli enterprises for some time. The new feature is that French state-sponsored firms will join economic associations and partnerships with those enterprises. One of the most important of these developments is the strategic cooperation agreement signed on November 17, 2013 between the National Society of French Railroads (SNCF) and Israel Railways (ISR). The SNCF is the French national, state-owned rail company, with 180,000 employees, operating the nation's national rail services, including the high-speed TYGV network. ISR is a government-based rail company employing 1900 workers concerned with carriage and passenger transport in Israel. Seventy years after the events in France during World War II, differences still exist about the actions of the SNCF in transporting 76,000 Jews in 80 convoys on the journey to the Nazi concentration and extermination camps in the Holocaust. The SNCF in recent years has officially expressed remorse over the wartime actions but argued that it was coerced into operating those convoys. Critics have argued that SNCF should still be accountable for its role in those actions and should pay reparations to the victims who were transported, along with their descendants. In reply, the SNCF claims immunity from legal action because of the U.S. Foreign Sovereign Immunities Act of 1976 that limits legal suits against a foreign sovereign nation or its agencies. As a partial solution, the SNCF reached an agreement with Yad Vashem in Jerusalem to pursue further research into this hotly controversial issue of the deportations. The agreement was signed by Guillaume Pepy, chairman of SNCF, and Boaz Zafrir, the CEO of ISR on November 17, during Hollande's visit. Since the year 2000 cooperation has existed between the two parties, and it will now be strengthened and extended in many areas. SNCF will provide experience to transform Israel Railways into a modern and service-oriented national railway operator. The agreement includes the establishment of a training program for ISR engine drivers and the development and modernization of Israeli railway stations. As a result ISR hopes to carry 70 million passengers in 2020, compared to 12 million in 2000 and 40 million in 2012. Other contracts were made on transport and energy issues. After considerable discussion, the Israeli trade union in 2012 agreed to a decision that Israel should outsourcemaintenance and services on its railroads, provided that no more than 30% of the current rolling stock be outsourced. After international bidding, a contract was given to France's Alstom SA, the large multinational company employing 85,000 people in power generation and transport concerns. Alstom will maintain the outdated carriages of the Israel Railways, in all 144 rail cars, which is 30 per cent of the total. Alstom has already served Israel in providing maintenance for the rolling stock that it supplied to the cars used in the Jerusalem light rail franchise. Alstom employees will perform the maintenance work with services initially at the rail depots in Haifa and Lod. French firms are now beginning to invest large sums in Israel in some industries such as solar energy, not only because of the sunshine in the country, but also because it can be a model for building in the desert. A major relationship is with EDF-EN Israel (Énergies Nouvelles) which is about 85% state owned, which has 2,000 employees and which is part of the French energy giant Électricité de France with 160,000 workers. Its investments include more than 250 million euros in 11 Negev solar-energy projects that will have a total production capacity of 160 megawatts, a major party of Israel's renewable energies. Two of them have already been completely built. Four other large projects will be built during the next two years. A major focus is the Zmorot Solar Park project which will be the largest solar project in Israel, and one of the largest in the world. The EDC has been working with the Israel Electric Corporation (IEC) for some time, and will now team with it to build a power station at Ashkelon concerned with natural gas and coal. Other new developments include French investment in the Israeli firm, Beit Shemesh-based Atlantium Technologies, that is focused on water disinfection. French firms are involved with Israeli companies working on cyberspace security and well as in other fields of energy. French entrepreneurs have recognized Israel as an important player in the fields of new technologies. The visit of President Hollande and his entourage to Israel has had important consequences with signs of greater cooperation between the two countries, especially in the areas of new technologies in which Israel has been prominent. France is now paying greater attention to Israel and is appreciating the mutual benefits gained from that cooperation. Perhaps President Hollande can persuade other members of the European Union to follow his example. Michael Curtis is author of Jews, Antisemitism, and the Middle East.