Aryeh Ben-Shamoeli, CEO of the international consulting company “Mashik”, which is behind the planning of the unique tender for the sale of the port, and CPA Lior Agai, CEO of Mashik Technologies, an expert in the application of game theory and behavioral economics in tender procedures and contracts, tell about the behind the scenes of the huge tender which enriched the state coffers by one billion shekels more than the original valuations: “The reason for this is that the tender for the privatization of the Haifa port was carried out in two stages in a procedure designed to prevent a situation of price coordination and a situation in which the successful bidder decides to withdraw due to a significant gap with the bidder after him,” explains Ben-Shamuli. “The first stage included the opening of the envelopes as part of the standard price offer. The second stage was carried out in the procedure of an “English tender” – this stage took place during an entire day, and all the groups that submitted an offer except the lowest went to it. From that moment, the participants began a process of dynamic online negotiations, in which a representative from each group participated in a kind of auction. The initial price was the highest offer submitted in the first stage, and in each round the contestants were offered to raise the price by an additional 50 million shekels. The winner of the tender is this who agreed to stay in as many auction rounds as possible, and was the highest bidder.
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A key reason for the success of the tender beyond expectations, Ben-Shmueli explains, is the use of a tendering method that allows obtaining optimal results for the seller. “The Companies Authority has chosen the system of Mishik Technologies to carry out the tender procedure with dynamic pricing, in a special model developed in accordance with specific requirements. In a tender operating in the “rising Japanese tender” method, the system raises the price automatically by pre-defined amounts and times, when the updated price that appears in the system is the price at which The port will be sold. With this chosen method, the bidders were required to confirm the price again in each round, with the winner being the last one remaining in the online bidding. The bidding in the elaborate tendering process was led by the Companies Authority, the Accountant General and the Director General of Finance, with the state representatives remaining at each stage with the option of stopping the The sale procedure if the offer is too low, or negotiate with the bidder who made the highest offer to receive an improved offer,” he emphasizes.