This record is a partial extract of the original cable. The full text of the original cable is not available.

C O N F I D E N T I A L SECTION 01 OF 03 TEL AVIV 006665 
 
SIPDIS 
 
NEA/IPA FOR BURNS/SATTERFIELD/DIBBLE 
 
E.O. 12958: DECL: 12/26/2014 
TAGS: KWBG ECON IS GAZA DISENGAGEMENT ISRAELI PALESTINIAN AFFAIRS
SUBJECT: WORLD BANK PROPOSALS SEEM AN UNLIKELY FIT AT KARNI 
TERMINAL 
 
Classified By: Economic Counselor Bill Weinstein for reasons 1.4 (b) an 
d (d) 
 
¶1.  (C) Summary and Comment: On December 15 Emboffs toured 
the Israeli side of Karni Terminal, the site of a proposed 
World Bank pilot program of technological and management 
fixes that include replacing the current back-to-back 
shipping system with free-circulating trailers.  Situated on 
the eastern border of the Gaza Strip between Gaza City and 
the Nachal Oz settlement, Karni is an approximately 50-acre 
fenced area centered around a covered warehouse-type loading 
dock that runs the length of the facility and is cut in half 
longitudinally by a 25-foot high concrete wall.  The wall 
ensures complete separation between Israeli and Palestinians, 
and enforces the back-to-back system of shipping.  Gazan 
exports are removed from their containers on the Palestinian 
side of the terminal, sent through the wall via one of eight 
low-capacity scanners, and loaded onto Israeli trucks for 
onward shipping.  Gazan imports of raw materials and 
humanitarian goods are passed through the wall into 
restricted-access areas on the Palestinian side.  Fruits and 
vegetables are transferred via what general manager Yoni 
Doton called "the lions' cages" -- vast warehouse-like rooms 
that operate like an airlock, in which one door is sealed 
when the second is open.  Terminal staff employs a modified 
2004 mobile scanner that can more quickly check empty 
containers leaving the Strip, and terminal management hope 
the addition of two more scanners will drastically increase 
capacity.  Both GOI and World Bank plans for further 
technological enhancements, however, must be accompanied by 
management strategies that take into account a civilian staff 
under military authority, as well as a physical 
infrastructure built more for security than economic 
efficiency.  End Summary. 
 
------------------------------------ 
Karni's Infrastructure of Separation 
------------------------------------ 
 
¶2.  (SBU) On December 15 Emboffs toured Karni Terminal, the 
Gaza Strip's primary trade gateway to Israel and the rest of 
the world.  Karni is the proposed site of a World Bank pilot 
program of technological and management fixes that center on 
replacing the back-to-back system of shipping with 
free-circulating trailers that can move between Israel and 
the Gaza Strip by switching drivers at the terminal.  Some 
GOI interlocutors have said Israel is willing to consider 
this idea in principle, but as yet the GOI has taken no 
concrete steps to actualize it.  At present, Karni's physical 
plant allows only back-to-back shipping.  The terminal is an 
approximately 50-acre fenced facility, its peripheral areas 
primarily devoted to truck parking and queuing, and its 
central focus a covered warehouse-style loading dock running 
the length of the facility and divided in half longitudinally 
by a twenty-five foot high concrete barrier.  There is no 
passage through the wall except via x-ray scanners and 
conveyor belts.  General manager Yoni Doton explained that 
when the Intifada began, the original open-air loading docks 
located at the terminal's southeastern edge were converted 
into storage sheds, and its walled section was expanded for 
exclusive use.  It now "ensures complete separation" between 
Israelis and Palestinians during cargo processing. 
 
--------------------------------------------- -- 
Current Capacity and GOI Projected Improvements 
--------------------------------------------- -- 
 
¶3.  (C)  Karni now handles shipments into and out of the Gaza 
Strip in four versions of back-to-back: 
 
Gazan exports move as paletted cargo through one of eight 
x-ray scanners set into the wall that separates the Israeli 
and Palestinian sides of the terminal. 
Israeli exports of bulk items, raw materials, aggregates, and 
some livestock pass through the wall via chutes and conveyor 
belts into restricted-access areas on the Palestinian side, 
where cleared lift operators then transport the cargo to 
Palestinian trucks for onward shipping. 
Fresh produce for import and export is off- and on-loaded in 
airlock-style rooms built into the wall where only one door 
is opened at a time, maintaining the wall's "security seal." 
A mobile scanner located in a separate walled area checks 
groups of empty containers and pallets leaving the Gaza 
Strip. 
 
GOI sources and terminal management state that Karni's total 
capacity for import and export using all four methods is 
approximately 450 truckloads per day since the implementation 
of stricter inspection measures following the March 2004 
bombing at Ashdod port, with an overall average since 2000 of 
approximately 500-550 truckloads per day.  (Note: COGAT 
figures are based on the number of 20-foot cargo bed trucks 
the terminal processes daily, rather than on .  End note.) 
With a proposed increase in hours of operation as well as the 
hoped-for addition of two new mobile scanners that will 
reportedly be used to check an additional 800-1,000 
containers per day, both empty and full, COGAT says terminal 
capacity will skyrocket to over 1,500 truckloads per day. 
 
----------------------- 
The World Bank Proposal 
----------------------- 
 
¶4.  (C) The World Bank questions these estimates, however, 
asserting that better technology and additional working hours 
will not result in significant capacity increases if 
back-to-back, with its time-consuming and damaging element of 
completely dismantling and repacking shipments, remains in 
place.  They advocate instead a free circulating trailer 
system in which cargo is checked by a high-powered scanner 
without being removed from its container or pallet, and 
trucks are able to cross back and forth between Israel and 
Gaza by exchanging only drivers at the terminal. 
Drive-through saw-toothed loading docks, which the World Bank 
asserts will take up less space and facilitate quicker entry 
and exit for trucks, and an expanded terminal parking 
lot/truck queuing area will also be necessary in order to 
further address delays, the bank says. 
 
---------------------- 
Karni Operations Today 
---------------------- 
 
¶5.  (C) Terminal management says it remains committed to 
planned technological improvements that fit within the 
framework of Karni's existing system, and is doubtful that 
security can be assured under proposals that go beyond it, in 
particular the replacement of back-to-back with 
free-circulating trailers.  General Manager Doton told 
Emboffs he does not expect the GOI to significantly change 
Karni's four primary methods of cargo transfer: 
 
The Import Shed -- Gazan exports enter Israel via eight x-ray 
machines that  run through the wall.  Doton noted these 
scanners are nearly ten years old and can only process goods 
stacked to a maximum height of one meter.  This requires 
staff on both sides to dismantle most shipments, handling 
individual packages of fragile items like ceramic tiles, 
eggs, and bottles, a process which Doton conceded often 
results in product damage.  Doton said the scanners' hourly 
rate varies with types of shipments -- during a 15-minute 
visit inside the import shed Emboffs did not witness any 
shipments coming through the scanners. 
 
"Direct Transfer" and "Direct Pouring" -- Imports into the 
Gaza Strip, including wood, plastics, textiles, aggregates, 
oil, grains and flour, present much less of a security risk 
than Gazan exports, and are sent through the wall via chutes 
or conveyor belts into restricted-areas on the Palestinian 
side for reloading.  This is the sole means of entry into 
Gaza both for raw materials crucial to Gazan factory owners, 
and for humanitarian supplies distributed by relief 
organizations like UNRWA, OCHA, and ICRC.  Lt. Col. Itzhak 
Gurvitch, head of COGAT's Economic branch, noted what he 
called an additional drawback to the system -- too few chutes 
and belts means that every truckload of raw materials passing 
through the terminal takes the place of a truckload of 
humanitarian goods, and vice versa.  He said that terminal 
management must try to balance this "opportunity cost" based 
on a daily stocktaking of economic and humanitarian concerns 
within Gaza.  (Note: Gazan businessmen point out one of the 
negative effects of low capacity on Palestinian-side terminal 
operations as well -- businessmen must pay baksheesh to 
terminal management to ensure their cargo is not moved to the 
end of a register whose order is consistently disrupted by 
influential requests for precedence.  End note.) 
 
The Lion's Cage" -- Fresh produce is transferred via a series 
of vast rooms approximately 25 feet high, 25 feet wide, and 
100 feet deep, with bay doors that open to both the Israeli 
and Palestinian sides of the terminal.  These doors are only 
opened one at a time during loading and unloading, Doton 
said, "like a lion's cage."  Israeli staff monitors the rooms 
via closed circuit television when the doors are open to the 
Palestinian side.  Doton pointed out five feet of wire 
netting that closes the gaps between the ceiling and the side 
walls in each room, explaining that in 2003 a Palestinian 
gunman entered one room while Palestinian staff were working, 
climbed the wall, and opened fire through the gap on two 
Israeli staff working in an adjacent room, killing one and 
injuring the second. 
 
The Mobile Scanner -- Doton showed Emboffs the terminal's 
newest technological addition, a 2004-model mobile container 
scanner that PA Minister of Finance Salaam Fayyad purchased 
from China and that Israeli terminal management modified and 
installed in August 2004.  "The solution to the problem of 
security is this kind of technology", said Doton.  With the 
scanner, terminal staff is able to check groups of five 
trucks hauling 20-foot containers or pallets leaving Gaza in 
less than ten minutes, with another eight to ten minutes for 
analysis of the x-rays from the scan.  Running without 
interruptions the scanner could ideally process approximately 
130 truckloads a day, a number that would drastically cut 
waiting time for containers at Karni and address the problem 
of high demurrage costs that Gazan businesses and relief 
organizations currently pay the shipping companies to whom 
the containers belong.  (Note: Relief organizations state 
that the GOI originally assured them and Gazan businessmen 
that the scanner had a capacity of 400-500 containers per 
day.  They add that the scanner processes approximately 100 
containers sporadically, with that number being much lower on 
many days.  Terminal and COGAT personnel cite frequent 
IDF-instituted closures of the terminal, as well as 
difficulties training new personnel on the scanner, as 
reasons the scanner's reported inconsistent output.  End 
note.) 
 
-------------------------------------------- 
Karni's Management Quandary: 
Civilian Staff in a Militarized Environment 
-------------------------------------------- 
 
¶6.  (SBU) Doton is optimistic about the potential for more 
and better scanner technology to bring Karni up to full 
capacity.  Technology is only one component of the terminal's 
functioning, however, and an uncertain security situation as 
well as a complex management structure also hinder 
improvements.  The semi-private Israel Airports Authority 
(IAA) handles the terminal's daily operations, working on a 
for-profit basis and therefore ostensibly committed to 
efficient cargo processing.  Yet an order from the IDF or 
Shin Bet can shut down operations on a moment's notice, even 
in the middle of the day, making it difficult for the IAA to 
maintain consistency.  (Note: IAA investment in Karni is NIS 
30 million while revenues are closer to NIS 20 million.  The 
GOI finances any operating deficits. End note.) 
 
¶7.  (SBU) During the tour, the sounds of gunfire called 
Emboffs' attention to an IDF tunnel-searching operation in 
nearby Nachal Oz settlement.  Doton noted that since all but 
seven to ten of Karni's employees are temporary workers, and 
the vast majority are young people drawn from isolated and 
lower-income "development towns", many of them simply do not 
show up to work when the security situation is bad.  "These 
kids make less than four thousand shekels a month.  Their 
families won't let them risk their lives for that kind of 
money." 
 
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