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Church and state

The growing battle over the Port of Beirut’s future

by Jeremy Arbid

Earlier this year, Executive started an investigation into an expansion project at the Port of Beirut (POB) aimed at enhancing capabilities and readying Lebanon’s primary port for future competition. The plan was to create a multi-purpose terminal — at a cost of $129 million — building a new quay to accommodate larger seafaring vessels and filling the Basin 4 to create a backyard for general cargo and container storage.

The project’s key measure of filling in Basin 4 caused a huge stir as soon as contractors commenced work. The first line of opposition was as vocal as it was obvious: truckers, fearing for their livelihoods, blocked POB access. Their union argued that filling Basin 4 would eliminate trucking jobs for general cargo — materials ranging from steel girders, baled and boxed goods to cars.

However, it quickly emerged that the truckers’ grievances were barely the tip of a much wider disagreement over Lebanon’s maritime transport. Executive contacted a wide range of stakeholders — some of whom made themselves very hard to reach. Others were initially slow to respond but very forthcoming once we discovered that the epicenter of the debate was located in a very unlikely place: Bkirki — seat of the Maronite Catholic Patriarchate.

Clerical intermediation at the hub of Lebanese Christianity led to the formation of a committee of Christian political parties focused on the economic need for a national maritime transport strategy. The Bkirki-led committee is looking beyond the plight of the truckers: they point to the port as a strategic public asset whose current expansion planning is, in the committee members’ assessment, neither institutionally sound nor properly aligned with the development needs of the nation’s economy.

“If this [plan] was part of a whole new look for 2050 and the next 35 years, and were this port to play a very important role in the rebuilding of Syria [then] okay, I would take off my hat and say let’s do it. But I read the feasibility study. It’s all bullshit,” says Fadi Abboud, industrialist, former minister of tourism and participant in the Bkirki-led committee. Ghassan Hasbani, chief economic adviser to the Lebanese Forces and also a participant in the Bkirki-led committee, says that port management is only concerned with how to maximize its revenues without taking into account what impact the expansion project may hold for the economy at large. “They [the port management] are doing what they believe is best for the port itself and the revenues of the port. They are not taking into account the impact on the economy, on society and on the social and public responsibility of the Port of Beirut, which is very important,” Hasbani says.

It is all part of a larger power struggle for control of the management of the port — with the truckers’ union seemingly a pawn towards this end. Those in opposition decry the illegal status of the port’s board of directors — they charge that it is a temporary committee. Indeed, operations were handed over from a private company in 1990 to this committee under the expectation that a law would be passed to formalize the structure of Lebanon’s ports. It never materialized. Leveraging a stay on the project, the Bkirki-led committee is demanding the government articulate a national strategy to organize the ports. As Executive goes to print, the POB expansion project remains on hold indefinitely in the face of significant opposition, and additional stakeholders are entering the fray.

A trucking sideshow

In December 2014 the truckers’ union began protesting the expansion plan, arguing it would negatively impact their livelihoods while also contesting the legality of the project. The truckers, in fear for their jobs, ran to Bkirki for support — the trucks’ owners are majority Christian, says Minister of Culture Raymond Araiji, whose Marada party participates in the Bkirki-led committee. The Church promised to look into the matter, with Bishop Boulos Sayyah enlisting Christian political parties — Free Patriotic Movement, Kataeb, Marada and the Lebanese Forces — to the cause.

The pressure worked. In January, the responsible parliamentary committee issued a statement calling for work on the expansion project to stop and asking the council of ministers to intervene. However, the commotion raised by the union has quickly spiraled into a debate over the port’s management as a strategic asset of the state, leaving the concerns of the union as a secondary issue.

Executive’s interview requests with truckers’ union leader Naim Sawaya remain unanswered, but interviews with participants of the Bkirki-led committee confirm that the truckers do fear their livelihoods are at stake. To them, any restructuring of the port’s strategy might jeopardize their employment in a similar fashion to that of the stevedores more than a decade ago. The installation of the blue and red gantry cranes at the port rendered obsolete the basic manual labor of unloading and loading cargo from ships. The port’s director, Hassan Kraytem, in an April interview told Executive that maximizing efficiency in the port’s operations was the goal. The introduction of the gantry cranes and a focus on containerization at the port has allowed gains in efficiency, Kraytem acknowledges, but has marked a shift in employment structure. “True. Work in the port has changed a lot and the number of employees has come down, by choice and by force,” he admits. A new multi-purpose terminal would allow the unloading and loading of ships carrying containers or general cargo around the clock every day of the year, he says, whereas the quays of Basin 4 now service ships for only eight hours per day.

[pullquote]“[the truckers] moved because they were the only ones who could exercise pressure”[/pullquote]

The truckers’ fear, Araiji says, is based on the assumption that the filling of the Basin 4 will kill their business — particularly general cargo activity. They depend on freight coming into the Beirut Port and believe that “if you fill [Basin 4], this cargo wouldn’t be able to discharge, and the trucks, in principle owned by Christians, will be impacted because this kind of cargo will be redirected to Tripoli. In Tripoli, trucks owned by Christians cannot enter the [port],” Araiji says. The truckers have been working within the current framework: specific companies and drivers have been servicing the Beirut Port not under formal contracts but through general arrangements, with trucking companies having a non competitive environment secure to themselves. It is “a monopoly in fact, a de facto monopoly,” Araiji says.

Kraytem told Executive in the April interview that the closure of Basin 4 and the construction of a multi-purpose terminal in its place would not negatively impact general cargo. He does acknowledge that the port’s overall growth rates will continue to focus on container traffic, adding that transshipment at the port now accounts for one third of its traffic, with the rest being local. Kraytem says the expansion will increase container traffic, and that general cargo will also be received at the planned multi purpose terminal. He says they’ll have much more work, and that truckers can transport containers as much as they drive general cargo.


Differing motives

The Lebanese Forces’ Hasbani confirms the plight of the truckers as a triggering event, but not the crux of the issue. Abboud corroborates this notion, saying, “Yes, [the truckers] moved because they were the only ones who could exercise pressure — if not for them, what could we do?” The Bkirki-led committee is backing the union but for strategic reasons only, and opinions within the committee range from mere disagreement with the truckers to railing against them as a bloated monopoly.

Araiji indicated that the truckers held a monopoly over general cargo at the port. Abboud reiterates this notion. He tells Executive that, “In their mind, [filling] Basin 4 means the beginning of not allowing conventional ships [carrying general cargo]. They are trying to fight for their rights and the monopoly they have. They [mobilized] simply because they are under the impression that maybe general cargo will move to Tripoli.”

Abboud offers a harsher judgment on the truckers. He says their monopolies at the ports hinder the country’s manufacturers. Their transit of freight between the port and factories is extremely slow, cumbersome and expensive “because it’s another fucking monopoly. You cannot buy your own truck and send it to the port. Everybody who tried failed. In principle you can, but you will never be able to get it [through],” he says.

The truckers, however, are convinced of their cause, says Araiji, who is one of four ministers participating in the Bkirki-led committee — the others being Minister of Economy Alain Hakim, Minister of Education Elias Bou Saab, and Minister of Energy and Water Arthur Nazarian. Abboud, a Free Patriotic Movement supporter and informal advisor to Bishop Sayyah revealed to Executive that “[the truckers] had their own reasons. Their own reasons have nothing to do with the economy of the country. We are with them in strategy and tactics — for the strategy we think they are right.”

Port management

The truckers astutely grasp that they would be among the first affected by a shift in port strategy.

Those in the Bkirki-led committee realized, based on the movement by the truckers, that changes at the POB were not in their economic interest. What began as a labor issue is now the cause célèbre on the political front, and the economic stakeholders to be affected tend to be on the Christian side — not in a religious dimension, but a communal one in support of industrialists in the greater Metn.

The Bkirki-led committee is questioning the legality of the port’s management as a main component of their takeover strategy, specifically challenging the port’s ability to undertake any expansion project without government approval. For its part, the port’s management justifies its plans by pointing to a previous cabinet decree as all the approval it needs. The Bkirki-led committee challenges this interpretation. They argue that since the port’s managing team is a temporary one, it cannot undertake expansions without new approval from the Council of Ministers.

The legal challenge stretches deeper. The Bkirki-led committee is raising questions over the port’s legitimacy to spend the tariffs it collects. “It’s neither a public company nor a private company, nor a department within the government, with no clear reporting lines to anyone except a dotted line to the minister. It has its own bank account at Banque du Liban. It does not fall under the jurisdiction of the audit council, so it does not get audited by the government at all,” Hasbani challenges.

Abboud adds that, since before his time as minister of tourism, he has been stonewalled on the tax issue. He says the role of the Church throughout all of this has provided a useful platform to push the issue. “We went to Bkirki because there is no president,” Abboud tells Executive. “To be totally honest with you, [this was] the only way I could think of to turn this around, because I have been defeated for the last 15 years, before I was even a minister in the Cabinet. Usually Bkirki, when we ask for their interference, say they will not interfere in such a way — they will simply call the president: ‘Please Mr. President, put this whole issue in a Cabinet meeting.’”

But Abboud is adamant that the tariffs the port collects are illegal taxes. “You cannot collect taxes from the people and not pay them to the budget — this money goes to private banks, and [Kraytem] spends the money as he wishes. This is what has been happening for the last 25 years, which is absolutely incredible. I sent [a letter] to the Shura Council asking them how a temporary committee can collect taxes from the people and not pay it to the budget? This question is now more than three years old and has never been answered.”

National strategy needed

The Bkirki-led committee is pushing further. They want to integrate Lebanon’s ports into a national strategy, and their objection to this specific expansion project — as one not in the public interest — has, in their opinion, highlighted such a need. They also say the project does not consider the impact to the nation’s economy but only serves the port’s desire to increase its revenue. Predictably Kraytem, the port’s manager, disagrees. He says that Lebanon would be losing economically and strategically, and that it would negatively impact Lebanese consumers if the expansion project were not implemented.

[pullquote]“We asked if there is a national plan for the ports. There was none”[/pullquote]

Where exactly the port lays in economic importance to the nation is not up for debate, but how it intersects with other sectors of the economy, they say, must be prioritized. “We asked if there is a national plan for the ports. There was none. We asked if there is a national strategy for maritime transport. There was none. We asked for the position of the government. There was none,” Hasbani tells Executive. The Bkirki-led committee is of the opinion that Lebanon’s ports, since they are public assets vital to the nation’s economy, should be incorporated into a national strategy integrating maritime transport with land infrastructure. “This is what we’re demanding,” Hasbani continues, “first of all a strategy; second an independent regulator; third a clear structure of how the ports will be managed — public-private partnership, privatization, nationalization — we have to have a decision by the government and it has to be a full national discussion, not just one minister or one group.”

If and when the government might commence this debate is still unclear — its silence on the whole issue is deafening. The ministry responsible for the port has been publicly absent from the discussion, seemingly content to allow the port’s future to be debated outside the framework of the state. Executive’s interview requests to the Minister of Public Works Ghazi Zaiter, as well as separate requests to its director general for land and maritime transport, Abdul-Hafiz Kayssi, remain unanswered. Abboud also says that Prime Minister Tammam Salam has so far declined to put the expansion issue on the agenda of the Council of Ministers. He tells Executive that, “I spent two and a half hours with him [in March]: ‘You are the head of this Cabinet, you are the prime minister, how can you say you don’t want to look at this file?’”

Executive has also learned that an additional stakeholder has requested the project be put on hold — the Lebanese Army. The army is reportedly anticipating delivery of several new frigates, and the port’s First Basin is said to be too shallow to moor those warships. Filling Basin 4, the Army is concerned, might also limit the access of UN and foreign military ships — possibly jeopardizing international treaties.

Clearly, the Port of Beirut is a strategic asset — it is Lebanon’s maritime transport hub, the point of entry for a great majority of Lebanon’s consumables and raw materials, as well as the site of export for most of the goods produced here, with major implications for the nation’s economy. A national strategy organizing Lebanon’s ports is needed, the Bkirki-led committee correctly points out, to address infrastructure challenges that are limiting shipping efficiency, as well as to determine the roles of Lebanon’s ports and how they will be managed.

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Jeremy Arbid

Jeremy is Executive's former economics and policy editor.

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