ILA issues revised tender for Eilat golf course

• Author: Yuval Nisani
• Published date: 29 September 2022
• Publication title: Globes (Rishon LeZion, Israel)

In July 2018, the Israel Land Authority (ILA) published a tender for a golf course and hotel north of Eilat. But the tender was dropped shortly afterwards with no bidders. Now the ILA has published a new version of the tender, hoping that changers to the terms will persuade businesspeople to make bids

560 hotel rooms and 150 acre golf course

The tender includes leasing rights and the construction of a 560-room hotel, a 600 dunams (150 acres) golf course and housing for employees. The entire tourism complex will cover 850 dunams (212.5 acres) near the planned northern neighborhood for which marketing of land was recently begun.

According to the ILA, the tender winner will sign a six-year development contract for construction of the entire enterprise (hotel and golf course), although the development expenses have yet to be published, although the amount is likely to be similar to the terms of the previous tender - NIS 15.7 million.

Changes in the permit period and usage fees

In the second stage, the tender winner will sign a 49-year lease (including the development period) with an option to extend the lease for a further 49 years. As part of this, the golf course and hotel will be separated into two agreements - a separation that was not part of the 2018 tender. The hotel will be leased for the entire period while the golf course lease will be renewed every seven years, not every 10 years as in the previous tender.

In addition, the usage fees for the golf course will not be set ahead of time, as was the case in the 2018 tender, when the fees were NIS 8.7 million, but will be derived from the bidder's offer. In other words, the bidder will offer a price for operating and maintaining the project and accordingly the ILA will set the usage fees from the bid for every seven years stage. The relative value percentage will be included in the terms, which have not yet been published in full.

The ILA also emphasizes that the usage fees at the start of every seven year period will be linked to the cost of living index (CPI), "In order to create certainty for the bidders, without the need for a new assessment at the start of every period."

The ILA explains, "Due to the fact that the previous version of the golf course tender did not have any winners, the outline has been somewhat changed for the current tender being published. In the current tender outline, the ILA has sought to create economic certainty for bidders in the tender and strengthen them. Therefore, it was...