May 31, 2017

Construction remains one of the most attractive and promising sectors in Lebanon

Despite facing political and economic pressures due to the spillovers of the ongoing Syrian crisis, the construction and real estate industries in Lebanon remain the most attractive and promising sectors of the country’s resilient economy. Recorded real estate sales transactions, including residential and commercial projects have increased in 2016 and the first months of 2017.

Actually, the construction sector in Lebanon remains one of the most attractive sectors for local, Arab and foreign investors.

Last February, during a fund-raising meeting held in Brussels for countries hosting Syrian refugees, Lebanon announced that the country seeks up to $12 billion in infrastructure investment. The Council of Development and Reconstruction is working on a master plan for the needs of Lebanon and we will send this report to the international community, World Bank and other international banks to obtain long-term loans.

On the other hand, the Lebanese parliament has ratified four financing agreements worth $303 million, to conduct infrastructure projects in different areas. The four financing agreements have been offered by the Islamic Development Bank (IDB).

This adds to the $3.4 billion worth of public works that will start or continue in 2018, according to the CDR Progress Report. The sector that received most funding with contracts underway is ‘basic services’, whereby $2 billion worth of projects are being executed or started in 2017. Basic services include solid waste, wastewater, and potable water.

Yet, the region’s potential developments and reconstruction could open doors to many profitable opportunities in the construction, infrastructure and real estate industries in Lebanon and the neighboring Levant countries.

Finally, we should bear in mind that Lebanon imports around 80% of its construction equipment and building materials, and many countries in the region and Africa where Lebanese communities exist, buy their construction material supplies from Lebanese dealers.

Lebanon Public Works – Major Projects

The Council for Development and Reconstruction (CDR) is actually supervising $3.4 billion worth of public works that will start or continue in 2017 and 2018.

Works will be on the construction of Bisri Dam and potable water networks in Zahleh, Akkar, and Jabal Amel. The water station at Dbayeh will also be expanded. The CDR will see the construction of a treatment plant and waste water networks in Kesrouan, Al Ghadir, Sarafand, and Jeita.

The second largest funded sector is infrastructure, with $780 million worth of projects under implementation. The sector is mainly made up of transport. Among the major projects under preparation are the East Tripoli Highway, parts of the Arab Highway (between Jamhour and Baaleshmay), the Metn Expressway (Ain Alak-Bteghrine), the outer Beirut ring road (Hadath-Dekouane), and smaller roads such as Syr road, Cedars, Jounieh-Harissa.

$392 million in funds will be used in the productive sectors. These include works on the Canal 800 in Litani, since the CDR has awarded the contract to Kharafi-Veziroglu-Guris joint venture.
$271 million worth of projects are currently under execution or in the preparation stage within the socioeconomic sector, which is the least funded sector. It includes land planning and environment, education, health, and social and economic development.

The construction of the Faculty of Health at the Lebanese University in the North and at the Fanar campus forms part of this sector.

Air and maritime transport saw positive improvements last years. No major works are being prepared so far to extend the Port of Beirut or the Rafic Hariri International Airport. Mohammad El Hout, Chairman of MEA, said: “The most important step now is to expand the airport because it has gone over capacity. El Hout also called for the establishment of a Public Authority Civil Aviation. -The authority’s work is an urgent and inescapable need.” he said. MEA plans to restore other infrastructure and expand its fleet. The plans for a ‘national public transport projects have recently received the support of The World Bank.

1)    Tripoli economic zone reclamation
The reclamation of Tripoli Special Economic Zone (TSEZ) is expected to be completed by the first quarter. A tender tor infrastructure works will be launched soon after, according to Hassan Dinnawi, advisor to TSEZ Board. The board chaired by Raya el Hassan, is seeking between S25 and $30 million to launch the tender for infrastructure. The Government has allocated an initial part of the funds. Last October, the CDR awarded the reclamation tender to Al jihad far Commerce & Contracting. The 18-month long works included the reclamation of 550,000 square meters of north of sea, north of the Port of Tripoli.

2)    Bisri dam to begin construction
The construction of Bisri Dam on the Awali River is slated to commence in September at the latest. The funds needed to continue the expropriation of land for the construction of a water treatment facility in Wardanieh have been collected. The facility will treat around 500 thousand cubic meters of water that will later be pumped to Beirut and the suburbs. The CDR is in charge of supervising the project and has appointed Dar al Handasah Nazih Taleb and Partners and Moroccan firm Novec to conduct the technical study, and Dar al Handasah Shair and Partners for the environmental study. The dam’s future beneficiaries have also increased to include the region of lklim al Kharroub. Nazih Taleb is preparing the terms of reference for the construction of artesian wells, pumps, reservoirs, and networks that connect the area to the dam. Construction of the dam is expected to end in 2023.

3)    Three electrical substations
Construction work by local Contracting company Matelec on three power substations in Bahsas, Tripoli. Mdawar near Ashrafieh, and the southern suburbs are expected to be delivered this year. The substation in the southern suburbs will be delivered in April, in May in Mdawar, and August in Bahsas. The consultant on the project is DEP Partners. The contract was put out to tender in 2014 and awarded to Matelec at a value of S108 million. This project is part of the plan that Parliament approved in 2011 to produce more power and establish a transport network. Another substation on Dbayeh marina will be put out to tender this year. At the end of 2017, the four substations will have a transmission capacity of 1,200 megawatts.

4)    Improved drinking water in Zahleh
A project to increase and enhance the quality of drinking water supply in Zahleh and its surroundings will be completed this year. The project consists of developing a 4.7 km-long main transmission pipe from the Berdawni Spring to water treatment reservoirs in Zahleh City. Five artesian wells are being excavated and six water reservoirs constructed. Around 20,000 households will benefit from the project. Distribution networks are also being restored and replaced. The $20 million works are financed by the Kuwait Fund for Arab Economic Development (KFAED).

5)    Kesrouan road restoration
Works on the approved expansion of the North Highway linking Dbayeh to Tabarja is expected to commence this year. The Council of Ministers allocated $35 million for the expropriation of property last year. The CDR will prepare the prequalification file for eligible contractors and the supervision of works. The sections of the highway to be widened include Nahr el-Kalb, the Casino du Liban exit, the upper Jounieh crossway, Maameitein-Tabarja, the Sarba-Jounieh side road, and Zouk Mikael. Roads will also be widened in Haret Sakhr, between Ghadir and Sarba, Jounieh and Sarba, and Sahel Alma. A traffic junction will also be developed in Kaslik. All will be modified and widened and the areas where there are only two lanes will be increased to three, along with a service road separated by concrete barriers that will be constructed on each side of the highway. In parallel, the building and restoration of roads in Mayrouba and Haret Sakhr is nearing completion. The first project links Mayrouba to Nahr El Dahab and Jouret Termos. It connects Ke-ouan to Ftouh and from there to Jbeil. The cost is $28 million. The second project is the restoration and completion of a road linking Haret Sakhr to Daraoun and Achkout. The road between Bkerki, Harissa, and Achkout, which was first expanded in 1997, only reached Bkerki. The additional restoration works cost $8 million.

6)    Jal el Dib bridges on the way
Two new bridges in Jai el Dib will replace the demolished one from a few years ago. The project is already underway. The $48 million cost will be fully funded by the State. The Council of Ministers issued a decision last October to start the works at the soonest. The first bridge will be constructed near the Bo Concept store in Antelias and will serve Beirut bound traffic from Jal el Dib. The second bridge will serve Jounieh commuters heading to Jal el Dib and Antelias. It will be located near the Mazda showroom on the coastal side of the highway. Expropriation of land was made in parallel to the studies conducted by the CDR, which is overseeing the project’s implementation.

7) Oil & Gas
Another key promising area is related to the potential oil and gas activities off the Lebanese shore. According to experts, setting the infrastructure and the environment and safety frameworks will require 30 different services. The country and region’s construction sector will benefit from the opportunities that will arise from the potentials of this prospective national wealth.

Source:

http://www.ifpinfo.com

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