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)
TT

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 The current laws in place are outdated and a lack of coordination between the concerned ministries has rendered work in the sector inefficient and ineffective.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.



Lebanon's Public Schools Reopen amid War and Displacement

Children playing in a shelter center for displaced people in the town of Marwaniyah in South Lebanon (AP)
Children playing in a shelter center for displaced people in the town of Marwaniyah in South Lebanon (AP)
TT

Lebanon's Public Schools Reopen amid War and Displacement

Children playing in a shelter center for displaced people in the town of Marwaniyah in South Lebanon (AP)
Children playing in a shelter center for displaced people in the town of Marwaniyah in South Lebanon (AP)

In the quiet seaside town of Amchit, 45 minutes north of Beirut, public schools are finally in session again, alongside tens of thousands of internally displaced people who have made some of them a makeshift shelter.

As Israeli strikes on Lebanon escalated in September, hundreds of schools in Lebanon were either destroyed or closed due to damage or security concerns, according to the United Nations Office for the Coordination of Humanitarian Affairs (OCHA).

Of around 1,250 public schools in Lebanon, 505 schools have also been turned into temporary shelters for some of the 840,000 people internally displaced by the conflict, according to the Lebanese education ministry.

Last month, the ministry started a phased reopening, allowing 175,000 students - 38,000 of whom are displaced - to return to a learning environment that is still far from normal, Reuters reported.

At Amchit Secondary Public School, which now has 300 enrolled students and expects more as displaced families keep arriving, the once-familiar spaces have transformed to accommodate new realities.

Two-and-a-half months ago, the school was chosen as a shelter, school director Antoine Abdallah Zakhia said.

Today, laundry hangs from classroom windows, cars fill the playground that was once a bustling area, and hallways that used to echo with laughter now serve as resting areas for families seeking refuge.

Fadia Yahfoufi, a displaced woman living temporarily at the school, expressed gratitude mixed with longing.

"Of course, we wish to go back to our homes. No one feels comfortable except at home," she said.

Zeina Shukr, another displaced mother, voiced her concerns for her children's education.

"This year has been unfair. Some children are studying while others aren't. Either everyone studies, or the school year should be postponed," she said.

- EDUCATION WON'T STOP

OCHA said the phased plan to resume classes will enrol 175,000 students, including 38,000 displaced children, across 350 public schools not used as shelters.

"The educational process is one of the aspects of resistance to the aggression Lebanon is facing," Education Minister Abbas Halabi told Reuters

Halabi said the decision to resume the academic year was difficult as many displaced students and teachers were not psychologically prepared to return to school.

In an adjacent building at Amchit Secondary Public School, teachers and students are adjusting to a compressed three-day week, with seven class periods each day to maximize learning time.

Nour Kozhaya, a 16-year-old Amchit resident, remains optimistic. "Lebanon is at war, but education won't stop. We will continue to pursue our dreams," she said.

Teachers are adapting to the challenging conditions.

"Everyone is mentally exhausted ... after all this war is on all of us," Patrick Sakr, a 38-year-old physics teacher, said.

For Ahmad Ali Hajj Hassan, a displaced 17-year-old from the Bekaa region, the three-day school week presents a challenge, but not a deterrent.

"These are the conditions. We can study despite them," he said.