Everybody knows it: Lebanon’s internal software has to be updated as soon as possible and starting the reform of its electricity sector should be the top priority. Lebanon’s state Treasury has so far has accumulated a whopping $40 billion plus in losses in the electricity sector, as a result of political bickering among rival factions; the country is facing a severe electricity crisis as it attempts to mitigate issues in its decades-old chronic power problem.
“The electricity sector has cost the state Treasury more than $40 billion and the main reason for this is political spitefulness,” said Lebanese President Michel Aoun during a meeting with the newly appointed Maronite League Council at the Baabda Palace. “Although we had previously achieved an electricity plan that had been agreed upon, it was obstructed. Today, we are trying to bring the nation back to economic options and stay away from spitefulness because development has nothing to do with [political] parties.”
Aoun’s comments come in the wake of a ministerial committee agreeing to a new electricity plan that was submitted by Lebanon’s Energy Minister Nada Boustani, to the Cabinet in March 2018. The plan, aimed at mitigating Lebanon’s electricity crisis, is likely to be taken up and be approved at a special Cabinet session. Incidentally, the committee has yet to agree on who will actually carry out the tenders to implement the plan.
$2 billion annual loss
The blueprint aims to significantly overhaul the country’s dilapidated electricity sector, reduce state subsidies, and improve the power supply scenario in the country. This will positively impact the country’s cash-strapped Electricité du Liban, which currently posts a $2 billion annual loss.
Although politicians and Members of Parliaments from the Free Patriotic Movement and from the Lebanese Forces have repeatedly had vigorous exchanges over assigning responsibility over the long-broken electricity crisis, other political parties and the LF have rejected previous FPM plans to lease more power barges to improve the country’s electricity supply, arguing that this is too expensive a solution; instead they have called for the construction of power plants which they deem as the only viable long term solution to the long-running severe rationing of electricity.
Although the electricity plan was among the topics discussed during last Friday’s meeting at Baabda Palace, Lebanon’s National News Agency reported that during the meeting the topics discussed were “current political developments, as well as the work of the government and the challenges facing it and the steps that needs to be taken in this delicate stage in Lebanon’s history”. Despite the “positive” atmosphere present in the four days of discussions, the ministerial committee, which is tasked with examining the electricity plan, continued to remain divided over who would manage the tenders for companies to implement the plan.
“Prime Minister Hariri and committee members are making efforts to resolve the rift over a mechanism to conduct the bidding,” said a political source familiar with the talks revolving around the electricity crisis. “The electricity plan will be approved during Monday’s Cabinet session once agreement is reached on the bidding mechanism. There is no intention on the part of anyone to derail the plan. All the parties want to see the electricity plan implemented”. He went on to add, the Cabinet has essentially three options to manage the tenders: 1) The Energy Ministry, 2) the Tenders Department, 3) the ministerial committee which represents Lebanon’s main political parties.
As and when the plan to mitigate the electricity crisis is approved by the Cabinet, it will need to be endorsed by Parliament.
Fixing electricity: Lebanese people are waiting for the past 25 years
The Cabinet session is going to be key since it includes various the political parties who are divided over who should manage the tenders. While the Future Movement and the FPM support the ministerial committee to handle the tenders, Hezbollah, the Amal Movement, the LF and the Progressive Socialist Party want the bidding to be conducted by the Tenders Department, said the Central News Agency.
“We support going to the Tenders Department. This is an irreversible principled position and we will go with until the end,” said former LF MP Fadi Karam in reference to bringing about a solution of the electricity crisis.
According to Deputy Prime Minister and Health Minister Ghassan Hasbani, who is also a Committee member, the Committee has amended provisions related to tapering down the budget deficit, increasing production levels and rolling out the plan’s short- and long-term stages.
“The Cabinet is the authority in charge of approving the electricity plan … and the goal is to implement it, and this is the responsibility of the Energy Ministry and Cabinet,” said Hasbani.
For the government, fixing the electricity crisis and getting the electricity sector back on its feet is important since it endorses it in its 2019 draft state budget document. It is among the significant measures the Lebanese government has pledged to undertake as part of its key financial and economic reforms.
These reforms are vital and are the key to unlocking the $11 billion in grants and soft loans that have been pledged by international donors at the Paris CEDRE conference which was held on April 6, 2018. Clock is ticking.