Electricite du Liban has agreed to extend by three years the lease of two power barges owned by Turkish company Karadeniz Holding and is waiting for finances to be provided, an EDL source told The Daily Star Sunday. The extension was approved by the now-caretaker Cabinet in its final session last month and was recently OK’d by EDL’s board of directors.
It includes a provision stipulating that Karadeniz will also provide 200 megawatts of electricity “for free” for three months via an additional power barge, the source confirmed.
EDL was now waiting for the finances for this contract to be provided by “the relevant agency,” which in this case is likely the Finance Ministry.
Caretaker Finance Minister Ali Hasan Khalil told The Daily Star he could not immediately comment on whether he had received the dossier, or whether the deal might be held up.
Caretaker Energy Minister Cesar Abi Khalil had previously disputed whether the Finance Ministry’s approval was needed on the contract, on the basis that Cabinet’s May 21 agreement on the issue superseded the ministry’s authority.
The new contract reportedly includes a negotiated drop in the per-kilowatt hour price on the 370 MW the barges provide, from 5.85 cents per kilowatt hour to 5.60 cents per kilowatt hour in the first year, before being set at 4.95 cents per kilowatt hour for the next two.
The EDL source also clarified the additional barge would, in line with Cabinet’s decision, “clearly be free for three months,” rather than for the “first” three months.
Controversy erupted earlier this month when a statement issued by Cabinet’s Secretariat-General implied the latter, which critics worried could open the door for Lebanese taxpayers to begin footing the bill for this additional electricity after the first three months.
Some ministers, most prominently caretaker Health Minister Ghassan Hasbani, have demanded that this issue be clarified by reference to the minutes of that final whirlwind Cabinet session, in which many electricity-related plans were endorsed.
A source at the Tenders Department of the Central Inspection Bureau raised other issues related to the deal, telling The Daily Star Sunday that bringing in an additional barge was “clearly corrupt” from the outset and that, once it arrived, it would likely be here to stay.
“You don’t need to be very educated to understand – they are doing what they couldn’t achieve through the Tenders Department three times in a row,” the source said, in reference to a thrice-invalidated tender process for emergency electricity that many have argued showed favoritism toward Karadeniz.
Karadeniz was the only company to meet the stringent requirements to qualify for bidding each of the three times the process was completed. Any bidding process including only a single company is invalid, and the process was therefore canceled each time.
The Tenders Department source said that once the third barge arrives, there would be endless ways through which its short, “free” three-month stay could be extended.
Arguments could be made, for instance, that the barge was plugging a vital hole in the electricity sector, or that it could even produce additional required energy. “It’s like the saying, ‘He who tastes will come back for more,’” the source said.
The source also decried the additional power barge as a “bribe on the national level” by Karadeniz, describing the barge as a massive gift to politicians to secure a contract extension, which violates “every single standard.”
The caretaker energy minister could not be reached for comment before this article went to print.
Karadeniz previously told The Daily Star that if and when the contract was signed, the additional power barge could arrive in Lebanon within less than month – welcome news for Lebanese already suffering increased power outages as the summer season begins.
The extra 200 MW of electricity would help cope with the increased summer energy demand, effectively providing an additional two hours of electricity per day, Abi Khalil has said previously.
An EDL official recently told The Daily Star current public electricity production hovers around 1,700 MW, while national demand is over 3,300 MW in the summer months.