Israel spends hundreds of millions on Gaza infrastructure, private contractors rake in fortunes

IDF claims can dismantle and remove all structures in Gaza within 48 hours if cease-fire and hostage release deal reached; however, once government’s wartime spending stops, economists warn country could face significant economic challenges

Yuval Sade, Calcalist|
Near Kibbutz Be’eri, a new border crossing, dubbed Terminal 3 after the main terminal at Ben-Gurion International Airport, has recently been opened. Land has been cleared for a makeshift parking area where hundreds of buses, trucks and private vehicles are parked alongside military ones.
This is currently the main thoroughfare into the Gaza Strip and the Netzarim Corridor. Efforts by the IDF to rename it the Be’eri Corridor have so far failed.
3 View gallery
IDF structures in the Netzarim Corridor in Gaza
IDF structures in the Netzarim Corridor in Gaza
IDF structures in the Netzarim Corridor in Gaza
(Photo: Yuval Sade)
The Netzarim Corridor is a swath of land running east to west across the Gaza Strip, from the Israeli border to the sea. It spans about seven kilometers (4.3 miles) in length, with an additional three kilometers (1.8 miles) of cleared land on either side, creating a nearly sterile rectangle of over 40 square kilometers (15.5 square miles) in central Gaza. To the north lies Gaza City; to the south are the Nuseirat and Bureij refugee camps.
Two roads cross the Netzarim Corridor from north to south, intended to allow residents in northern Gaza to move en masse to the south. The military anticipated this would occur once the offensive on Jabaliya—the third since the war began—got underway.
However, only 300 Gazans used the roads, while the estimated hundreds of thousands in northern areas remained in Gaza City, avoiding the corridor altogether. This left the IDF’s interrogation areas and facial recognition technology largely idle.
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IDF structures in the Netzarim Corridor in Gaza
IDF structures in the Netzarim Corridor in Gaza
IDF structures in the Netzarim Corridor in Gaza
(Photo: Yuval Sade)
If the government indeed intended to facilitate a transfer of Palestinians from northern Gaza to the south, as Finance Minister Bezalel Smotrich claimed during a National Religious Party Knesset faction meeting, that effort appears to have failed.
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The IDF maintains that all infrastructure constructed in the area can be dismantled and returned to Israel within 48 hours, including buildings and antennas. These facilities were built to provide reasonable accommodations for troops operating in Gaza and to support the ongoing offensive. If a cease-fire and hostage release deal are reached, the military plans to remove the infrastructure.
The IDF also asserts that it can defend the border without remaining on the ground in Netzarim or the Philadelphi Corridor further south. This stance contrasts with the government’s more ambiguous approach. The military claims that a kilometer-wide buffer zone along the border would suffice to prevent Gazans from reaching the border fence. Observation posts on elevated dirt mounds would ensure adequate surveillance into Gaza.
IDF roadworks at Netzarim 
(Video: Yoav Zitun)
This position is a direct response to accusations that Israel intends to maintain an occupying presence in Gaza and establish settlements there. Failing to withdraw from these areas, the IDF argues, would bolster claims that Israel is committing ethnic cleansing in the enclave.
According to information obtained by Calcalist, the IDF’s construction efforts in Netzarim have already cost hundreds of millions of shekels, with the actual figure likely higher.
Beyond Netzarim, the IDF has paved new roads and established infrastructure in the Philadelphi Corridor and along the border. Additional logistical efforts are underway between Jabaliya and Gaza City. In all areas under IDF control, drilling is being carried out with civilian equipment to locate underground tunnels.
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Civilian drilling equipment searches for tunnels in Gaza
Civilian drilling equipment searches for tunnels in Gaza
Civilian drilling equipment searches for tunnels in Gaza
(Photo: Yoav Zitun)
Visitors to Gaza will observe an abundance of civilian machinery—trucks, engineering vehicles and roadworks equipment—conscripted into military service or rented from private contractors.
On my way out of Gaza at Terminal 3, I spoke with a reservist who suggested that, even if the IDF withdraws, the financial investment in Gaza has economic benefits by creating activity, citing the economic theories of John Maynard Keynes. While that view is debatable, my tour of Gaza revealed the significant economic activity generated by the war for Israel’s economy—whether through contractors, reservists or logistical supplies.
If the war were to end, this economic activity would stop abruptly, along with the financial benefits provided to reservists. Only then would the local market face the reality of operating without government intervention, potentially leaving the economy in serious trouble. The reservist remarked that there is often an economic boom after a war. I hope he is right, and that we avoid the economic stagnation that followed the 1973 Yom Kippur War.
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