The state will pay NIS 4 billion for Israel Aerospace’s Elta unit to vacate its campus in Ashdod so that 70,000 housing units can be built on the site. An agreement on the matter between the government-owned IAI and the state is nearing final signing. The potential government revenues from marketing the land is worth tens of billions of shekels.
The state has been trying to promote the relocation of the Elta plant in northeast Ashdod, for years. In 2019, an agreement in principle was signed between the parties to move the factory, but since then talks failed to produce a final agreement, until recently. The factory and its surroundings occupy 194 dunams (48.5 acres), and according to the agreement, it will be moved to another site in southern Ashdod. The new location covers 250 dunams (62.5 acres) with rights for 357,000 square meters of buildings.
To date, the area surrounding the Elta campus has not been built on due to restrictions arising from the factory’s operations. After its relocation, the state plans to build 70,000 housing units on 11,340 dunams (2,835) acres in six neighborhoods – four in Ashdod, one Bnei Darom area and one in Nir Galim. The relocation and associated costs will be financed by the state.
The agreement seen by “Globes” reveals that the cost of the relocation was estimated in June 2024 at NIS 3.37 billion. In addition, the Israel land Authority (ILA) pledged to transfer additional amounts to Elta of up to NIS 226 million for land consolidation, NIS 93.3 million for financing construction of 17,000 square meters of buildings, NIS 45.6 million for building car parks, up NIS 30 million for financing regulatory changes, and more. Thus, the cost of the relocation will amount to at least NIS 3.8 billion, before reimbursement for various taxes Elta will need to pay.
Even so this is a profitable deal for the state. If the full plan is implemented, marketing land for 70,000 housing units will bring in tens of billions of shekels, far more than the relocation cost.
The agreement between the parties also outlines a clear framework for the timetables. The complete halt of activities on the current Elta site, and the relocation to the new site in southern Ashdod will be carried out gradually and completed within six years of the date of receipt of the first building permit for the new Elta complex; Elta undertakes to submit an application for the first building permit in the third quarter of 2028, or three quarters after the detailed plan for the new complex is given effect. At the same time, the ILA undertakes not to market the land at the existing site before Elta’s plan for the new site is approved. If full permits are not issued within 10 years, the plan for the new site will be canceled.
The agreement further stipulates that the ILA will be solely responsible for the demolition of the buildings and purification of the soil and groundwater on the old site. The ILA and Elta will bear equally the costs of the evacuation and land purification, after the first NIS 5 million, which will be paid by Elta.
Published by Globes, Israel business news – en.globes.co.il – on November 20, 2025.
© Copyright of Globes Publisher Itonut (1983) Ltd., 2025.
