Funding disputes drain Lebanon’s supply of the elixir of life
Every year the rain passes over in Lebanon, endowing it with a resource that much of the Middle East can only dream of. But even as those rains fall and the country’s roads turn to rivers, many Lebanese still look up at the sky and ask why their water tanks are empty and their faucets are spitting out nothing but air.
The reason is that since the end of the civil war little has been done to improve water reuse, although a lot of words have been spent. Only one large dam has been built in the Chabrouh area, 40 km outside the capital, holding a maximum of 15 million cubic meters (MCM). The only other major infrastructure project, the Qaraoun artificial lake, carries a maximum of 300 MCM of water and was built in 1959. Combined, their total storage capacity is less than 6 percent of renewable water resources, compared to 56 percent in Tunisia and 117 percent in Syria.
Thus it is little wonder that the water balance, or the relationship between total supply and demand, is estimated at a deficit of around 420 MCM average per year, with Greater Beirut alone facing a daily shortage that ranges between 145,000 and 275,000 cubic meters.
In 2010 the Ministry of Energy and Water issued its National Water Sector Strategy, which gave an unprecedented look at the state of the country’s water sector. The strategy replaced an older document that explored the idea of building dams between 2000 and 2010. Of course, little of that ever happened.
“To me at least we have a kind of plan for once,” says Nadim Farajallah, professor of hydrology and water resources at the American University of Beirut. “At least we know what we have and how much it’s costing us; what we need to do is move forward.”
This time around the strategy is to build a series of dams, artificial lakes and other infrastructure elements to alleviate the entire water sector from shortages. In total it will cost the country around $7.9 billion (LL11.85 trillion) in capital expenditure and another $2 billion (LL 3 trillion) in operational expenditure by 2020 to rectify the situation, not just in water supply, but also in wastewater and irrigation. And that’s if Lebanon’s notorious geological formations allow for the dams to be built at cost.
That will also require several initiatives on the financial, regulatory and legal fronts, of which none were started in 2011. To begin with the water establishments (WEs), the public sector administrations dealing with water in each region, will have to be staffed and restructured so they can exercise their prerogatives according to Law 221, which lays out how the sector should be organized. In theory the WEs should be financially and administratively independent, but they are far from it. They are also grossly understaffed, as is the Ministry of Energy and Water and the general directorates within it that are concerned with water management.
Regarding financing, the money for all the infrastructure looks like it will have to come from sources other than the national treasury. The Ministry of Finance has a proposed budget of only $46 million for dams and $4 million for consulting services in the 2012 budget proposal, and this is yet to be hacked away at by cabinet and Parliament. “Concerning the remaining allocations for dams, the Ministry of Finance finds it necessary to resort to donor countries and funds, given their willingness to extend soft loans at much lower interest rates than what it would cost if the projects were funded through budget allocations,” the proposed budget reads.
Conflicting messages
The minister in charge seems to disagree. “It appears that again and again the value of deposits in Lebanon are large and Lebanon secures larger funding than is required… hence all that remains is the decision to invest,” said Gebran Bassil, Lebanon’s minister of energy and water at a press conference in October. He also stated that investment should be “translated fully” in the upcoming budget (if it breaks the mold and passes) and was “awaiting discussions.” Previously, a similar debate over funding Lebanon’s decrepit energy sector almost brought down the cabinet. In the time it takes for the government to haggle over the budget — something that began to happen in November — there is no telling where the debate may take the sector or the country.
The problems with international loans are that they require long and extensive feasibility plans and environmental impact assessments, which take time. In March, Minister Bassil’s advisor Randa Nimer told Executive that the only project which was ready and had received approval was the Greater Beirut Water Supply Project (GBWSP), also known as the Awali project. It aims to provide constant water supply to Baabda, Aley, parts of the Metn/Mount Lebanon region, as well as to an estimated 350,000 low-income residents in Beirut’s southern suburbs. The total cost would come to approximately $370 million, of which the World Bank would put up $200 million in loans, the Beirut and Mount Lebanon Water Establishment some $140 million and the Lebanese government the rest. It will take 50 MCM of water from the Qaraoun reservoir in the Western Bekaa, fed by the Litani River. The water will then be rerouted to the Awali River, treated and then conveyed to Greater Beirut, where, according to the Ministry of Energy and Water, a new network is currently being built that will distribute it to consumers whose homes are to be fitted with new meters.
The project has come under fire for reasons that range from polluted water in the Qaraoun (which was recently found to contain cancerous trace metals) to reportedly less expensive alternatives, which the ministry says will have to be built anyway. Nevertheless, Lebanon’s cabinet has signed off on a number of projects including the GBWSP and the completion of two major projects for irrigation out of the Qaraoun (Canal 800 and Canal 900).
Furthermore, Minister Bassil highlighted at the press conference that the proposed Bisri dam project between the Shouf and Saida is also an “inseparable and integrated” part of the GBWSP and that moving ahead with the larger project without first building the dam would be “an investment that is useless, resulting in paying a lot of money for a little bit of water.”
However, an official World Bank response to a complaint put in by around 50 residents against the project stated: “The Bisri Dam is not a component of the GBWSP nor is it relevant to, or necessary for, the achievement of the objectives of the GBWSP.” This obviously puts the whole issue in question and thus the only project due to start relieving Beirut of its water woes may just run dry before the tap is even turned on.
First published in Executive Magazine’s December 2011 issue
Sami Halabi 