x Abu Dhabi, UAEWednesday 26 July 2017

The heat is on in Lebanon and EDL may be in for a jolt

The state of the electricity infrastructure is Lebanon's biggest headache, writes Michael Karam.

The Lebanese call it al mawsam, the season. It is the time when Arabs of all stripes flock to Lebanon to party, while the Lebanese who can either retreat to the mountains or head for Europe. Those of us who are left sweat it out in a congested and humid Beirut and pray that the national grid can cope with the excess demands placed upon a system already at breaking point. Every day there is a three-hour power cut, during which I have to turn off my air conditioning as the underpowered generator kicks in. I also am careful not to send vital e-mails, download documents or make online transactions at precisely 9am, noon, or 3pm in case my electronic instruction is lost. Such is life in the most glamorous capital of the Middle East.

Last week, Lebanon's finance minister Raya al Hassan was quoted by the local press as saying that Lebanon would spend - and this is a conservative estimate - a staggering 10 per cent of government spending, or US$1.5 billion (Dh5.51bn), on propping up the state-owned Electricite du Liban (EDL), a company with operating costs, read salaries, of $500 million but which does an appalling job in meeting its obligations in either providing judicious distribution of limited power resources or collecting bills.

EDL is shot through with mediocrity, corruption and decay. Add a culture of electricity theft on a national scale into the mix and you have a pretty dire national malaise. What makes Ms al Hassan's prediction all the more galling is the fact that Lebanon's overall budget deficit this year is forecast at $4bn, or 10 per cent of anticipated GDP. It is a figure to which EDL will have contributed. But Lebanon has always been a country that sweeps its problems under the carpet.

Security issues aside, infrastructure is arguably Lebanon's biggest headache. The country has an abundance of water, enough, say the experts, to sell a surplus to a parched region, and yet it suffers from chronic shortages, especially in summer. Its roads, on which more than 600 people perish every year, are potholed and mangled, while the fixed-line telephone network provides internet connectivity to rival that of Kyrgyzstan. The mobile phone rates, set by the government, are the most expensive in the region, if not the world. The operators that run the networks for the ministry of telecommunications say that privatisation would see an instant drop in tariffs of between 50 and 70 per cent, but the state will not give up the cash cow.

But it is the state of the EDL that, more than any other utility, has come to epitomise Lebanon's woes. It is a situation with which I am intimately familiar, given that there has been no 24/7 electricity in the country since I returned 18 years ago. Life back in 1992 was divided into six-hour shifts. People knew when the power would be off and arrange their social lives accordingly. For those of us not hooked up to one of the throbbing neighbourhood generators, nights would be lit by candles or strip lighting hooked up to car batteries.

When my wife and I moved into our first apartment in 1994, we spent every other night at the mercy of two lorry batteries hooked up to a primitive backup system. This $600 system would churn out enough volts to power the TV and one lamp for roughly five hours before charging up again for the next outage. Yes, we had just emerged from a war, but Lebanon's public sector has never been efficient at the best of times. In the two decades since the civil conflict ended, what little efforts were made to fully rehabilitate the national grid and rid the sector of corruption have been regularly dashed by the Israeli Air Force. In the late 90s and most recently in 2006, the Israelis hit back at Hizbollah by bombing the nation's power stations.

But back to the present: on Tuesday, the Beirut-based Al Akhbar reported the energy and water minister Gebran Bassil as saying that Lebanon may buy liquefied natural gas from Qatar, Yemen or Algeria for power generation. Mr Bassil is clearly rolling up his sleeves in the same way he did at the telecoms ministry. Mr Bassil no doubt styles himself a new generation technocrat. He even has a 10-point plan to get EDL back on its feet and root out bad practices.

Last month, he announced that he issued a final payment demand on a number of ministers, MPs and political figures, giving them one month to sort out overdue electric bills worth about $8m to the state. He also warned that the justice minister would take legal action against electricity theft and corruption among EDL employees. We'll see how he gets on. But even this may be a walk in the park compared to what is arguably his real problem, one that is as hot a political potato as you will encounter in modern Lebanon. Mr Bassil belongs to Michel Aoun's Free Patriotic Movement which is allied to Hizbollah, whose constituents live in the densely populated southern suburbs of Beirut. The residents of the Dahiyeh have a reputation for not contributing to EDL's coffers and employees who have been sent to dismantle illegal cables hooked up to the state' power system have been intimidated and beaten up.

Plus ca change ? @Email:business@thenational.ae