Economy

Public Works Minister: Revenue from Certain Facilities Will Cover Budget Deficit

Public Works Minister: Revenue from Certain Facilities Will Cover Budget Deficit

Ali Hamieh, the Minister of Public Works and Transport in the caretaker government, held a press conference in his ministry office discussing four key reform laws passed by the Parliament that pertain to the ports and the airport sector. He stated that these laws would provide hundreds of millions of dollars to the treasury without impacting citizens' wallets while bolstering the sovereign decision-making capacity of the Lebanese state.

He announced the results of two public tenders for the operation, management, and investment of restaurants and cafeterias in the passenger terminal at the airport, as well as the investment of seven counters for renting tourist cars, alongside other intended tenders, including duty-free sales, in accordance with public procurement law.

Hamieh began by stating that "Lebanon is suffering from a severe financial and economic crisis," and emphasized that since he assumed ministerial duties, they have focused on two main pillars: the first being how to provide financial revenues to the public treasury without affecting citizens, as they believe Lebanon's recovery lies in activating and revitalizing its public facilities, allowing the state to make and strengthen its sovereign decisions.

He continued, "The second pillar concerns organizing work to demonstrate how the ministry can enhance the public treasury's revenues and identify the procedural field steps to serve this goal."

Hamieh pointed out that "the four laws approved by the Parliament include an amendment to Schedule No. 9 concerning ports and the airport." He noted that since 2019, when the dollar's exchange rate began to fluctuate, companies renting land in the airport had been paying fees based on an exchange rate of 1,500 L.L. He mentioned that all amounts will now be converted to their equivalent in dollars, generating more than 160 million dollars for the treasury due to this amendment.

Regarding Schedule No. 9 for the ports and marinas, Hamieh highlighted that major shipping companies charge their fees in dollars while paying the Lebanese state in Lebanese lira at the official rate (1,500). He directed all parties concerned with the ports not to raise any fees but insisted that the share due to the Lebanese state must be paid in dollars, just as the companies collect their fees. He noted that previously the revenues from Schedule No. 9 were around four billion L.L., which would now exceed 60 billion L.L. in addition to other port fees.

Additionally, concerning the second law related to the VIP lounge at the airport, Hamieh explained that the entry fee was previously set at 500,000 L.L. and will now be modified to one hundred dollars per hour, increasing to 200 dollars for additional hours. This fee will apply only to those wishing to enter the VIP lounge, meaning that the revenues generated will benefit the treasury in fresh dollars.

The third law involves a fee for passenger departures, noting that this fee was not new but existed on various travel tickets, paid in dollars, while the state’s share was paid in Lebanese lira at the 1,500 L.L. rate. He stressed that following this new amendment, companies must pay the state's share in dollars as they collect it. The expected revenue from this change is approximately 140 million dollars, and he pointed out that these amendments should have occurred sooner, stating that Lebanon lost hundreds of millions in 2020 and 2021 due to the lack of amendments. He indicated that, considering the revenues from the amendments made with the approval of these laws, the amount could reach around 350 million dollars at the very least.

The fourth law concerns the amendment of Article 35 of the 2019 budget law, which previously prohibited public administrations from litigating in dollars, putting the public treasury at a disadvantage as private sector investors only pay in Lebanese lira while collecting in dollars. According to the law, there should be reciprocal treatment.

Hamieh added that a simple calculation shows that the 350 million dollars equates to around 9,000 billion L.L. at the current exchange rate, approximately matching the current budget deficit of 10,000 billion L.L.

He affirmed that this indeed indicates, rather than being just an assertion, that Lebanon is not poor or incapable. The discussion revolves around the revenues from some of the public facilities under the Ministry of Public Works and Transport, which cover the entire budget deficit and ensure salaries for the public sector in all its institutions. He emphasized that they do not intend to stop here, but will work to secure new revenues from other facilities and assets of the ministry without affecting citizens’ wallets.

Regarding the tenders at Rafic Hariri International Airport, Hamieh mentioned that previously they received 150 billion L.L. from the duty-free shop, while the opening bid now stands at 850 billion L.L., with the "pack" priced at 3.5 fresh dollars. He noted that the treasury would gain around 1,200 L.L. from this tender alone and highlighted that from today, all bids will be conducted in accordance with the public procurement law.

Hamieh announced an initiative to provide new services in the ministry's facilities, including a fast-track service for passenger arrivals and departures, which will be offered for investment under the new public procurement law guidelines.

He concluded by stating their approach to the grain silos at the Port of Beirut and the potential collapse of its northern side, based on reports from technical experts, and reassured that the relevant ministries are fully prepared.

Our readers are reading too