Lebanon’s State Electricity Company: A Pawn for Political Corruption

Lebanon is crippled by frequent power cuts as corruption keeps hindering the improvement of the country's energy sector. (AFP)
Lebanon is crippled by frequent power cuts as corruption keeps hindering the improvement of the country's energy sector. (AFP)
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Lebanon’s State Electricity Company: A Pawn for Political Corruption

Lebanon is crippled by frequent power cuts as corruption keeps hindering the improvement of the country's energy sector. (AFP)
Lebanon is crippled by frequent power cuts as corruption keeps hindering the improvement of the country's energy sector. (AFP)

All year long, electricity is at the heart of the Lebanese people’s concerns. It is also at the heart of the country’s staggering $80 billion public deficit with the sector costing it $36 billion a year.

This reality can be blamed on political corruption that has for years plagued the sector.

Former Energy Minister Mohammed Abdul Hamid Baydoun told Asharq Al-Awsat: “It is part of political bribery.”

Politicians always set their sights on the Energy Ministry whenever a new government is being formed, heedless of the label of corruption that will follow them.

Lebanon’s electricity crisis began during the country’s 1975-90 civil war, which destroyed many of its power plants. The people had to contend with gas lanterns to compensate for their lack of power. Now, 28 years later, not much as has changed and the country still suffers from frequent power cuts. There appears to be no light at the end of the tunnel because politicians would rather fill their own pockets than tackle years of incompetence in such a vital sector.

Experts agree that the solution lies in modernizing laws linked to Electricite du Liban (EDL), the state-owned company that runs the sector. The current laws in place are outdated and a lack of coordination between the concerned ministries has rendered work in the sector inefficient and ineffective.

Baydoun said: “The company cannot be fixed.”

“When I assumed the energy portfolio, I managed to draft the privatization law that never materialized,” he continued.

“Current EDL director Kamal Hayek has proven that he cannot limit the losses in the firm. The situation at EDL has not changed since he assumed his post in 2002,” he told Asharq Al-Awsat.

Despite this 15-year failure, nothing has been done to change it, he stressed.

Dr. Mohammed Basbous, a leading member of the Progressive Socialist Party, told Asharq Al-Awsat: “The energy sector is the greatest source of waste in the Lebanese economy.”

There are vacancies in 50 percent of EDL and only two representatives remaining in a seven-member board of directors, he stated. A law was issued in 2011 to fill these posts and, yet, seven years later, nothing has been done.

Moreover, six months were given in 2011 to the formation of a regulatory authority, which has not yet seen the light, Basbous added.

The extension of the term of current officials at EDL are therefore all illegal, he noted.

Furthermore, vacancies, he said, are being filled with unproductive employees. The absence of a regulatory authority is also limiting interaction between the energy minister and any potential cooperation partner to just these two sides, meaning talks between them are not being monitored and violations go unchecked.

Unimplemented plan

Baydoun said that when current caretaker Foreign Minister Jebral Bassil served as energy minister, “he concocted a theory that regulatory authorities infringe on the minister’s privileges.”

On the contrary, “regulatory authorities are formed to protect general sectors from political meddling, to ensure the rights of the consumer and to put in place set prices,” he continued. “Politics must not impose such prices.”

An expert at a firm specialized in modernizing the energy sector told Asharq Al-Awsat: “Technically, we have a plan, but it has not been implemented.”

Speaking on condition of anonymity, he added: “The plan calls for the formation of a regulatory authority and separating the sector’s three main divisions: power plants, networks and distribution and tax collection.”

“EDL was supposed to be restructured and its rules were supposed to be modernized. The private sector was supposed to renovate power plants and take part in the distribution and tax collection process, while the state would keep control of the grid,” he explained. “The plan, however, was hindered by corruption and political disputes.”

Lebanon’s two most important power plants are the Deir Ammar plant in the North and al-Zahrani in the South.

Baydoun said: “They were constructed to work on gas, not regular diesel fuel, before a mechanism to import gas was even put in place. They have been operating on the most expensive kind of diesel fuel since 1996. Just imagine the waste.”

“Ironically enough, efforts are underway to import liquid gas when Lebanon is lying on a natural gas field,” he remarked bitterly. The import of gas requires the establishment of dedicated ports.

“Why are we even building ports? Syria, Iraq and Iran all lie on gas fields. Pipes to import them already exist, while we are paying billions of dollars to import liquid gas?” he asked incredulously.

That is not all.

Basbous said: “The main flaw in the energy sector is the massive amounts of waste. Technical waste in companies usually lies at around 10 to 15 percent in Lebanon. Non-technical waste, including illegal connections and tampering with electricity meters, has led to the waste of 40 percent of generated power.”

During the April CEDRE donor conference, the director General Electric declared that his company was ready to build within six months power plants that can meet all of Lebanon’s energy needs, at a surplus even, and operate them at costs less than what the country was paying. His proposal fell on deaf ears, said Basbous.

As for EDL’s financial deficit, it can be blamed on several reasons, such as government decisions to exempt some regions from the power bill for security and social reasons. Other regions have been exempted for political reasons, while influential powers do not pay their power bill.

Moreover, electrical meters are not added to new consumers, meaning they will use more power without even paying for it. An aging power grid also compounds the problem. Current consumers are also using less power and relying on their own generators.

More waste

Between 2012 and 2013, waste exceeded 51 percent, said Basbous. This figure dropped to 35 percent when private companies took over tax collection. However, they became complacent when they realized that no one was supervising them and they were not being held accountable for their work.

The CEDRE conference demanded that Lebanon reduce its deficit by 5 percent in five years, meaning 1 percent each year, he added. Some have proposed that energy taxes be increased to tackle the deficit, which is the laziest solution because it requires the least effort to implement.

Raising taxes will not put an end to the waste because some people are not even paying their bills or stealing electricity from the grid. So whether taxes are raised or not, only paying consumers will be affected, he explained.

“Such an unjust decision will only increase non-technical waste,” he told Asharq Al-Awsat.

Furthermore, Baydoun criticized power-generating ships that were brought in in 2010 when Bassil was energy minister.

“Such a method is only used during times of wars or major crises. They are short-term solutions, not ones that last eight years and counting,” he said.

A third ship is reportedly coming to Lebanon. It was said that it will offer 200 megawatts for free for three months, while Lebanon will cover fuel costs, ship maintenance and employee salaries.



'We Will Die from Hunger': Gazans Decry Israel's UNRWA Ban

 Itimad Al-Qanou, a displaced Palestinian mother from Jabalia, eats with her children inside a tent, amid Israel-Gaza conflict, in Deir Al-Balah, central Gaza Strip, November 9, 2024. REUTERS/Ramadan Abed
Itimad Al-Qanou, a displaced Palestinian mother from Jabalia, eats with her children inside a tent, amid Israel-Gaza conflict, in Deir Al-Balah, central Gaza Strip, November 9, 2024. REUTERS/Ramadan Abed
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'We Will Die from Hunger': Gazans Decry Israel's UNRWA Ban

 Itimad Al-Qanou, a displaced Palestinian mother from Jabalia, eats with her children inside a tent, amid Israel-Gaza conflict, in Deir Al-Balah, central Gaza Strip, November 9, 2024. REUTERS/Ramadan Abed
Itimad Al-Qanou, a displaced Palestinian mother from Jabalia, eats with her children inside a tent, amid Israel-Gaza conflict, in Deir Al-Balah, central Gaza Strip, November 9, 2024. REUTERS/Ramadan Abed

After surviving more than a year of war in Gaza, Aisha Khaled is now afraid of dying of hunger if vital aid is cut off next year by a new Israeli law banning the UN Palestinian relief agency from operating in its territory.

The law, which has been widely criticised internationally, is due to come into effect in late January and could deny Khaled and thousands of others their main source of aid at a time when everything around them is being destroyed.

"For me and for a million refugees, if the aid stops, we will end. We will die from hunger not from war," the 31-year-old volunteer teacher told the Thomson Reuters Foundation by phone.

"If the school closes, where do we go? All the aspects of our lives are dependent on the agency: flour, food, water ...(medical) treatment, hospitals," Khaled said from an UNRWA school in Nuseirat in central Gaza.

"We depend on them after God," she said.

UNRWA employs 13,000 people in Gaza, running the enclave's schools, healthcare clinics and other social services, as well as distributing aid.

Now, UNRWA-run buildings, including schools, are home to thousands forced to flee their homes after Israeli airstrikes reduced towns across the strip to wastelands of rubble.

UNRWA shelters have been frequently bombed during the year-long war, and at least 220 UNRWA staff have been killed, Reuters reported.

If the Israeli law as passed last month does come into effect, the consequences would be "catastrophic," said Inas Hamdan, UNRWA's Gaza communications officer.

"There are two million people in Gaza who rely on UNRWA for survival, including food assistance and primary healthcare," she said.

The law banning UNRWA applies to the Israeli-occupied West Bank, Gaza and Arab East Jerusalem, areas Israel captured in 1967 during the Six-Day War.

Israeli lawmakers who drafted the ban cited what they described as the involvement of a handful of UNRWA's thousands of staffers in the attack on southern Israel last year that triggered the war and said some staff were members of Hamas and other armed groups.

FRAGILE LIFELINE

The war in Gaza erupted on Oct. 7, 2023, after Hamas attack. Israel's military campaign has levelled much of Gaza and killed around 43,500 Palestinians, Gaza health officials say. Up to 10,000 people are believed to be dead and uncounted under the rubble, according to Gaza's Civil Emergency Service.

Most of the strip's 2.3 million people have been forced to leave their homes because of the fighting and destruction.

The ban ends Israel's decades-long agreement with UNRWA that covered the protection, movement and diplomatic immunity of the agency in Israel, the West Bank and the Gaza Strip.

For many Palestinians, UNRWA aid is their only lifeline, and it is a fragile one.

Last week, a committee of global food security experts warned there was a strong likelihood of imminent famine in northern Gaza, where Israel renewed an offensive last month.

Israel rejected the famine warning, saying it was based on "partial, biased data".

COGAT, the Israeli military agency that deals with Palestinian civilian affairs, said last week that it was continuing to "facilitate the implementation of humanitarian efforts" in Gaza.

But UN data shows the amount of aid entering Gaza has plummeted to its lowest level in a year and the United Nations has accused Israel of hindering and blocking attempts to deliver aid, particularly to the north.

"The daily average of humanitarian trucks the Israeli authorities allowed into Gaza last month is 30 trucks a day," Hamdan said, adding that the figure represents 6% of the supplies that were allowed into Gaza before this war began.

"More aid must be sent to Gaza, and UNRWA work should be facilitated to manage this aid entering Gaza," she said.

'BACKBONE' OF AID SYSTEM

Many other aid organizations rely on UNRWA to help them deliver aid and UN officials say the agency is the backbone of the humanitarian response in Gaza.

"From our perspective, and I am sure from many of the other humanitarian actors, it's an impossible task (to replace UNRWA)," said Oxfam GB's humanitarian lead Magnus Corfixen in a phone interview with the Thomson Reuters Foundation.

"The priority is to ensure that they will remain ... because they are essential for us," he said.

UNRWA supports other agencies with logistics, helping them source the fuel they need to move staff and power desalination plants, he said.

"Without them, we will struggle with access to warehouses, having access to fuel, having access to trucks, being able to move around, being able to coordinate," Corfixen said, describing UNRWA as "essential".

UNRWA schools also offer rare respite for traumatised children who have lost everything.

Twelve-year-old Lamar Younis Abu Zraid fled her home in Maghazi in central Gaza at the beginning of the war last year.

The UNRWA school she used to attend as a student has become a shelter, and she herself has been living in another school-turned-shelter in Nuseirat for a year.

Despite the upheaval, in the UNRWA shelter she can enjoy some of the things she liked doing before war broke out.

She can see friends, attend classes, do arts and crafts and join singing sessions. Other activities are painfully new but necessary, like mental health support sessions to cope with what is happening.

She too is aware of the fragility of the lifeline she has been given. Now she has to share one copybook with a friend because supplies have run out.

"Before they used to give us books and pens, now they are not available," she said.