THE flight path into Lebanon’s international airport passes over the rocky outcrop of Ras Beirut and the teeming southern suburbs to a main runway fringed by new buildings that have proliferated in an unplanned sprawl. The visitor is bussed into a small terminal building, where immigration staff sit in shabby booths beneath portraits of the President of Syria and his son Basel, who was killed in a car crash in January.
The sense of dilapidation is reinforced on the long drive through the city suburbs. The clogged roads are bordered by monuments to the war’s destruction, such as the sports stadium, destroyed on 4 June 1982 by Israeli jets in one of the first acts of Operation Peace for Galilee. Evidence of the reconstruction programme – which the Council for Development & Reconstruction (CDR) says already involves some 380 contracts representing over $625 million in work – is not immediately apparent.
However, five years from now, the initial impressions afforded the visitor to Lebanon will be very different. The aircraft will land on a brand new runway jutting out into the sea, the road link to the city centre will include a causeway by-passing much of the southern suburbs, and on the site of the old stadium will be a new sports city, which is due to host the 1996 Arab Games.
The tender invitation for the airport expansion contract attracted 16 compliant bids – plus an alternative from France’s Dumez GTM proposing a cheaper project by dispensing with the seaward-pointing runway. The response was particularly gratifying for the CDR because the project did not have any special financing. The contract is to be signed soon with a joint venture of Hochtief of Germany and the Athens-based Consolidated Contractors International Company (CCC) for about $490 million.
The main source of financing will be fees charged from passengers and freight operators for using the airport. A bridge-financing package will be put in place to meet cash flow requirements during the construction phase. By the time the work is complete in 1998, the airport will have capacity to handle 6 million passengers a year.
The cash flow concerns of the contractor have also been taken into account for the sports city contract. This will be signed in the next few weeks with the UK’s Trafalgar House for roughly $116 million. CDR secretary- general Nouhad Baroudi said at the end of June that a total $31 million had been provided for the project by Arab governments, which had pledged to finance the scheme as part of the Arab Games. He said work will go ahead as the funds become available. Beirut contractors say such is the prestige of the project that private donations may be forthcoming at the later stages of construction if all the Arab government money fails to materialise.
The airport and the sports city are two of the higher-profile projects being carried out. However, the CDR is also well ahead with more mundane projects. Work is going on in 11 sectors, including electricity, telecommunications, waste disposal, roads, education and health.
Foreign contractors are working on repairs to the power generation and distribution system and on a scheme to provide Lebanon with 1 million working telephone lines by mid-1997. Bids were submitted at the end of June for the construction of two new power stations, near Tripoli and Sidon, and the government has also awarded franchises for a mobile telephones system.
The financing for all these projects has been meticulously planned. By June 1994, the CDR had managed to secure a total $1,800 million in foreign financing, including $325 million in grants.
A meeting of international donors is to be held at the end of November to discuss ways of securing the extra $1,200 million the government estimates it needs in foreign financing up to the end of 1995. After that date the main source of financing for the reconstruction programme will be the surplus on the current budget. Most of this will come from the revenues of power and telecommunications utilities. Baroudi says foreign debt will peak at no more than $4,000 million in 1997/98. That will be equivalent to just 34 per cent of gross domestic product, a modest level of indebtedness by regional standards.
For companies taking part in the programme, the tender system has been refreshingly open. The CDR is working closely with two tiers of international consultants. At the top is the project management unit comprising KPMG Peat Marwick of the UK and Netherlands Engineering Consultants (Nedeco). This unit reports directly to the CDR presidency, filtering reports and recommendations from a number of sector implementation units. The aim is to create a mechanism whereby contracts are awarded on a scientific basis. Government officials point out that such transparency is vital because of the harsh scrutiny to which the reconstruction programme is subjected by opponents of Prime Minister Rafiq Hariri.
Major construction projects at the early phase of tendering include a $500 million scheme to rebuild and electrify the coastal railway, and an estimated $600 million toll road from Beirut to the Syrian border. About 10 international companies have prequalified for both schemes. For the road project, the prospective bidders include France’s Dumez GTM which has also made a proposal to build a power station at Beddawi, near Tripoli, on a build-operate-transfer basis.
International companies have also shown enthusiasm for the project to regenerate the Beirut central district for property company Solidere. The initial infrastructure contracts have been restricted to local firms, but most of the 13 bidders have linked up with foreign partners. These include Bouygues of France, which is also bidding for the toll road scheme, Walter Bau and Dyckerhoff & Widmann, both of Germany, South Korea’s Kuk Dong Engineering & Construction Company, Alfred McAlpine of the UK, Belgium’s Six Construct and Italy’s Rizzani di Eccer.
The work is expected to be complex and will involve careful liaison with individual property owners and archaeological organisations seeking to discover traces of Beirut’s ancient past in the district’s ruins. However, the Solidere project envisages work going ahead well into the second decade of the next century. In the years ahead, the scheme is likely to throw up exciting opportunities for major new office and residential construction.
Lebanon’s reconstruction is still at an early stage and is hedged around with doubts about political stability. However, Beirut airport, even in its present sorry state, is greeting ever increasing hordes of foreign company executives seeking fresh opportunities.