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French Version

Energy minister to present five-year plan (Daily Star)

Sehnawi says project will require at least $1 billion

Energy Minister Maurice Sehnawi said he and the World Bank will present a five-year plan to eliminate losses at the ailing
state-owned utility Electricite du Liban (EDL).

Sehnawi said the five-year plan would involve an investment of $1 billion or more, financed by the World Bank and other financial institutions through soft loans.

The minister declined to provide details of the cost-cutting measures, but insisted they would lead to savings of hundreds of millions of dollars each year at EDL, which lost around $400 million last year.

Sehnawi, who took office three months ago, said: "People expect me to solve the problems of the energy sector in a short period. This is not possible. But I can take quick measures to ease the difficulties in the coming few months."

Sehnawi and his team traveled to Washington last month to discuss the plan with the World Bank.

The International Monetary Fund and many rating agencies have been urging the Lebanese government to restructure EDL, warning that Lebanon's energy sector is draining resources from other areas of the economy.

Successive governments have spent over $1.6 billion since 1994 to rehabilitate the old power plants and build new ones.

But the country's antiquated oil-powered stations continue to suffer from frequent power cuts, and government-ordered rationing of energy, plunging large parts of the country in darkness.

The bulk of EDL's losses is related to the high cost of fuel oil, which has soared during the last 12 months.

Commenting on the increasing number of power cuts, the minister said: "I understand people being angry about the steep electricity rationing. But the ministry is not responsible for these problems that existed long time ago."

He added that two to three ships are expected to load the fuel oil in Lebanese ports in two days and this will reduce the power cuts.

"One of the problems we are facing is that the power plants require a specific type of fuel oil and that's why we have to test the contents before loading it," he said.

Sehnawi said the recent spate of bad weather had also prevented some of ships from unloading fuel oil.

Sehnawi conceded one of the problems facing Lebanon's energy sector was its dependence on old and obsolete power stations such as the Zouk plant which supplies 40 percent of Lebanon's electricity.

Industry observers insist the maintenance requirements of the Zouk plant make it a candidate for replacement in any new energy plan.

Sehnawi said: "I am frankly worried that one day Zouk will stop functioning and the reason for that is it's simply too old."

He said archaic laws at EDL have prevented management from carrying out its duties.

Sehnawi said EDL, which currently employs around 2,500 staff, needs 3,000 full time employees. He went on to say that part of the company's workforce was "regrettably quite old," at an average age of 55.

But he confirmed that the government will not allow EDL or any other public department to hire new staff due to financial reasons.

He said: "The civil service department promised to send us 200 trained employees but so far we only got 55."

Sehnawi said that Syria will supply Lebanon 400 kilowatts of electricity in one month which should ease the problem.

He added that the liquefied natural gas from Syria will also be received through a pipeline in June of this year.

"We have solved the problems of land appropriations and contractors to speed up the installation of the Syrian gas pipeline which will supply gas to Badawi plant in the north," Sehnawi added.

He said that if his plan is approved, the government can save up to $120 million in Badawi plant alone.

But the minister said Lebanon needs to find other sources of gas because Syria has a limited amount of gas.

Beirut 14-02-2005
Osama Habib
The Daily Star

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