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Port of Beirut slashes tariffs to handle humanitarian aid to Iraq (Daily Star)

Port of Beirut slashes tariffs to handle humanitarian aid to Iraq - authority offers huge discounts to World food program

Competition among ports will peak as war-torn nation upgrades services

The Port of Beirut expects to start handling humanitarian goods destined for Iraq this month, after maritime officials negotiated reduced tariffs for the UN’s World Food Program.

The port announced the tariff cuts on Monday, allaying fears that Lebanese ports may miss out on the UN agency’s $1.3 billion to $1.85 billion relief operation. The port has offered WFP 50 percent discounts on various port fees and scrapped others altogether to attract traffic that is heading predominantly to Jordanian and Turkish ports.

But maritime officials are uncertain if they will get more business after the WFP ends its six-month aid operation in Iraq, especially if the Syrian border with Iraq, Lebanon’s only direct corridor to Iraq, remains closed for non-humanitarian freight.“We expect the first vessel to dock in Beirut on May 27,” said Fouad Bawarchi, vice-president of Gezairi Transport-Lebanon, which is shipping 8,000 tons of humanitarian cargo for a UN agency working in Iraq.

Some maritime officials say that the tariff cuts will have helped Lebanon win these contracts, and scuttled recent rumors that Lebanese ports could be shunned.“There is no pressure being exerted on WFP or any other UN agency to shun Lebanon,” said Bawarchi. “The borders with Syria are open for humanitarian goods, but are closed for commercial traffic.”

The WFP, the main UN agency distributing aid in Iraq, so far has opened five corridors to Iraq, through Syria, Jordan, Kuwait, Turkey and Iran. Lebanon’s Gulf Agency, a WFP agent in Lebanon, has also won a contract to ferry around 25,000 tons of humanitarian aid to Iraq.

Commercial traffic has yet to enter Iraq via Syria as the UN is still revising the status of contracts signed under the oil-for-food program, which catered to the needs of 60 percent of Iraqis during the era of Saddam Hussein.“The situation in Iraq is still unclear,” said Hassan Jaroudi, vice-president of the Association of Lebanese Maritime Transport. “We do not know the shape of the future Iraqi government and how big a role the private sector could play,” he said.

Others fear that the future Iraqi government may not be as favorable to Lebanese firms as the Saddam leadership, and argue that even if they do get preferential treatment, the steep transit tariffs levied by Syria will keep them out of the Iraqi market.“Lebanon may have good services and a strategic geographical position, but it does not have a common border with Iraq,” said Yacoub Qaisi, manager of maritime firm General Transport Services. “Everything we do is linked to Syria.”

Bawarchi is not too optimistic either about future commercial business in Iraq.“If we do not solve the problem of transport costs beyond our border, we will always get petty traffic,” he said. Syria imposes numerous taxes on transit goods crossing the common border with Lebanon, upping the costs for Lebanese export-import firms.

Unless Syria slashes the tariffs, Lebanon’s transit trade with Iraq could be even less than during the Saddam era as other ports start to cater to Iraqi needs.“Turkey, Jordan, and Kuwait will benefit because they have political priority,” said Jaroudi. “We might have to pay for our political stance during the war.” Lebanon, in line with Syria, strongly opposed the US-led war on Iraq, and some Lebanese also criticized key Arab states such as Kuwait, which acted as a base for US sorties into Iraq.

Other neighboring ports have already started to get traffic initially intended for Lebanon.“A few Lebanese contracts on the oil-for-food program’s priority list have been moved to the Jordanian port of Aqaba,” said Bawarchi.

Some Lebanese maritime firms lost business to Aqaba during the Saddam regime, when a handful of Arab ports were competing for business in Iraq.“Over a year ago, we won a contract to import 100 French cars to Iraq,” said Qaisi. “When I brought the first ten into Syria, I paid $6,000 in transit taxes. When I brought the next ten and paid a similar amount, the French dealer called off the contract and shipped the remaining cars through Aqaba.”

Competition among ports is going to peak as Iraq upgrades its own transport services.“More cargo will also be going to Umm Qasr,” added Bawarchi. The port of Umm Qasr, Iraq’s only deep-water facility, was unable to handle all goods under the sanctions regime, but is set to take a bigger role once it is refurbished and UN sanctions are lifted.

Another potential problem for Lebanese and Arab ports is the Israeli port of Haifa .“I am sure the Iraqi people would refuse (to deal with it),” said Bawarchi. But an Arab peace accord with Israel could turn this proposal into a fact, particularly as the port of Haifa has already started to attract international maritime firms away from Arab ports through its competitive services.“That’s why it is more important than ever before to cooperate with Syria to fend off the possibility of losing any future traffic to Haifa, Turkey or Jordan,” said Jaroudi.

Beirut 19-05-2003
Dania Saadi
The Daily Star



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