Figure 9. Transportation System, 1988

Beginning in 1948, the government invested large sums to develop a first-class transportation infrastructure. The main projects undertaken were the construction of the Qishon element of the harbor at Haifa and the Ashdod port, the building of railroads between Haifa and Tel Aviv and from Tel Aviv south to Beersheba, Dimona, and Zin, and the construction of several major roads in the center of the country as well as many new roads in peripheral regions (see fig. 9).

Rapid economic growth and the removal of the limitation on importing private cars and buses created a growing demand for transportation services in the early 1960s. This demand was met by increased public transportation services and by private transportation expenditures. In 1984 the subsidy on public transport equaled US$13 million. In 1985 Israel's 13,410 kilometers of roads were used by 776,000 vehicles, of which about 624,000 were private cars, about 115,000 were trucks and other commercial vehicles, and about 5,500 were buses. In 1988 there were two main public carriers--Egged, with about 4,000 buses operating throughout the country, and Dan, with approximately 1,500 buses. Both of these carriers were cooperatives that charged subsidized tariffs determined by agreement with the government.

Israel also had a government-run railroad system. In 1986 there were 528 kilometers of state-owned railroad linking Jerusalem, Tel Aviv, Haifa, and Beersheba. The government had a long-term plan to extend the Beersheba line along the Dead Sea and south to Elat and to develop a rapid rail line from Petah Tiqwa to Tel Aviv. Total railroad passenger traffic was 2,814,000 in 1985, and total freight carried (primarily phosphates, grains, coal, and potash) was 6,086,000 tons. Given the government status of the rail system, however, it could not compete with other transportation modes. Between 1965 and 1985, railroad use declined because of cutbacks in rail services. In 1986 travel by truck or car was faster than by rail on all lines except the Haifa-Tel Aviv line, where it was identical.

As a result of Israel's geopolitical situation, almost 99 percent of its trade was transported by ship. Thus, in the first twenty years of statehood, the government made a special effort to build a commercial fleet. In 1985 about 9,205 tons of freight were unloaded at Israeli ports: 55 percent at Haifa, 39.3 percent at Ashdod, and 5.7 percent at Elat. During the same year, 7,088 tons were loaded: 22 percent in Haifa, 68.7 percent at Ashdod, and 9.3 percent at Elat. In the 1970s, two additional, specialized ports were opened: an oil terminal at Ashqelon and a coal terminal at Hadera. These open-sea, offshore ports were operated by special port administrations independent of the Israel Ports Authority.

The merchant fleet was 3,050,000 deadweight tons in 1984. The main shipping companies were (in order of importance) Zim, El Yam, Dizengoff, and Maritime49 ime Fruit Carriers. During the late 1960s, two structural and technological changes took place in the shipping industry. First, improved cargo-handling technologies and containerization led to the use of more specialized ships. Second, ships increased in size, especially bulk carriers and tankers. Despite these changes--and the importance placed on sea transportation--Zim (owned by the government, the Histadrut, and the Israel Corporation) and El Yam continued to sell unprofitable old ships in the hope of becoming profitable.

In 1988 Israel had one international airport at Lod, but special charter flights also used smaller airports such as Qalandiyah, near Jerusalem, and Elat. El Al, the government-owned national carrier, flew a total of 36.3 million kilometers in 1984, carrying 1,450,000 passengers on 9,646 international flights. In 1985 approximately 455,000 passengers arrived in Israel on charter flights. Inland air services were provided by Arkia Israeli Airlines, which operated flights to major cities.

Like other developing countries, Israel has constantly battled the excess demand for telecommunications services. The telecommunications industry is characterized by its high capital intensity--it requires a full cable network system. In 1988 Israel was still lagging in the development of a telecommunications system adequate to meet the needs of its clients. While the industry was expanding, it continued to represent a major weakness of the economy.

Israel has long been plagued by delays in building new telephone exchanges and laying cables to meet the growing needs of the citizenry, businesses, and the new age of computer communication. Israel had about 1.9 million telephones in FY 1986. More than 250,000 citizens, however, remained on waiting lists to receive telephones that year. Some Israelis had been waiting seven or more years for telephones. Around 99 percent of the telephones in Israel were connected to the international direct dialing system.

Three ground satellite stations in 1988 facilitated satellite connections between Israel and the rest of the world. Overseas connections also were possible through underwater cables. In April 1988, Israel announced plans for a five-year telecommunications development program, costing approximately US$2 billion. The plan included an underground cable from Israel to Europe and the installation of various satellite and cable television facilities. In addition, a multicapacity transatlantic cable was being planned in 1988 to provide 600 channels for communication with the North American continent. Furthermore, in May 1988 the cornerstone was laid for a US$170 million Voice of America transmission relay station in the Nahal HaArava north of Elat.

Data as of December 1988