The reparations were paid directly to the headquarters of the Israeli purchase delegation in
Cologne, which received the money from the German government in annual installments. The delegation then bought goods and shipped them to Israel, receiving its orders from a
Tel Aviv-based company that had been set up to decide what to purchase and for whom. A great part of the reparations money went into purchasing equipment and raw materials for companies that were owned by the government, the
Jewish Agency, and the
Histadrut labor union. Notably, much of that money went into purchasing equipment for about 1,300 industrial plants; two-thirds of this money was given to 36 factories, most of them owned by the Histadrut. At the same time, hundreds of other plants, mostly privately owned ones, received minimal assistance with reparations money. From 1953 to 1963, the reparations money funded around one-third of investment in Israel's electrical system, helping it to triple its capacity, and nearly half the total investment in
Israel Railways, which obtained German-made rolling stock, tracks, and signaling equipment with reparations money. The reparations were also used to purchase German-made machinery for developing the water supply, oil drilling, mining equipment for use in extracting copper from the
Timna Valley mines, and heavy equipment for agriculture and construction such as combines, tractors, and trucks. About 30% of the reparations money went into buying fuel, while 17% was used to purchase ships for the Israeli merchant fleet; some fifty ships including two passenger liners were purchased, and by 1961, these vessels constituted two-thirds of the Israeli merchant marine. Funds from the reparations were also used for
port development; the
Port of Haifa was able to obtain new cranes, including a
floating crane that was named
Bar Kokhba. The
Bank of Israel credited the reparations for about 15% of Israel's
GNP growth and the creation of 45,000 jobs during the 12-year period they had been in effect, though the BoI report also noted that the funds received were not crucial in that Israel would have secured the funds in any case from other sources.
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