October - December 2000
Addressing Issues With the State - Part Two

The Council of Ministers resolved this quarter a number of outstanding issues with SOLIDERE, some of which were described in the July - September 2000 quarterly, and recommended further action necessary to reach proper conclusions on other issues.
Decree 4441 dated December 14, 2000 extended for another six months the special powers given to the High Council of Urbanism for the interpretation of some master plan provisions.
On November 23, the Council took the following resolutions, based on a report prepared by the Council for Development and Reconstruction, upon the Prime Minister's request
Council of Ministers' resolutions

Public domain reconstitution, master plan amendment, 1/500 maps

The Council of Ministers entrusted to the Ministers of Public Works and Transport, and of Internal Affairs and Municipalities, the task of instructing the Directorate General of Urbanism to prepare 1/500 maps of the BCD, indicating SOLIDERE's private properties and the public domain; and thereafter submitting the subject again to the Council of Ministers.

Beirut Marina

The Council of Ministers approved the CDR recommendation:
  • to take the necessary measures for implementing the contents of the Directorate General of Transport's letter No 5018 dated October 6, 1999, in respect of vacating maritime sector 5 of the St George hotel area master plan from its occupants; this will allow SOLIDERE to proceed with the works it is in charge of implementing, as per the agreement signed with the Company for the marina operation;
  • to ask the Directorate General of Transport to prepare the issuing of a decree ratifying Council of Ministers' resolution 83 dated November 15, 1995 with regard to: considering maritime sector 5 an integral part of the [Beirut] western marina to be operated as a whole; and cancelling all previous decrees that had granted the Société des Grands Hôtels d'Orient and Mr. Michel Nader the right to occupy any maritime public domain in the St George area.

Amendment of the reclaimed land master plan and detailed plan (Formula One project)

The Council of Ministers entrusted to CDR the tasks of conducting the necessary studies and ensuring the issuing of a decree amending the master plan of the reclaimed land, to meet the technical specifications required for implementing the Formula One project; with no ensuing increase in the total land area allocated to SOLIDERE's private ownership, as per its agreement with CDR, ratified in decree 5665/94; or in the water sheet area of the eastern marina, should the latter's location be modified.

Completion of infrastructure works in the Cananean Tell area

The Council of Ministers:

  • approved the construction of two bridges, extending the roads leading from Martyrs' Square to the Port road above the ancient Cananean Tell area, in order to preserve the archeological site; entrusted CDR with preparing a study for the two bridges and ensuring the issuing of an amendment to the master plan to take account of that change;
  • entrusted CDR with: assessing the relative construction costs of the two bridges, and of the original course of the Cadmos road, which SOLIDERE was in charge of building; effecting a clearing between the two amounts; and settling any balance due after the clearing to either of the two parties.

Martyrs' Square underground car park awarded BOT contract

The Council of Ministers entrusted the Minister of Justice with preparing a report about the issue raised regarding the legality of awarding the project on a BOT basis (to Al Khorafi & Sons, in 1997); and presenting it to the Council of Ministers, to settle the difference of opinion prevailing between the Public Audit Fund, which deems it necessary to draft a law to the effect, and CDR, which advocates implementing the agreement with the contractor.

Additional road near Phoenecia underpass (BCD western access)

The Council of Ministers approved the construction of the road, the entrusted CDR with the following tasks: conducting the necessary study; entrusting SOLIDERE with implementation and taking delivery of the road after completion, with such works to be deemed as a complement to BCD infrastructure; and ensuring the issuing of a decree amending the St George hotel area master plan to take account of the new road.

Providing transformers and secondary lines to the BCD

Adopting CDR's suggestion, the Council of Ministers prevailed on Electricité du Liban to take the necessary steps to install transformers and secondary lines in the BCD. EDL is to recoup related costs directly from the users connecting their properties to the public network.

Still outstanding

Property agreement

Several developments had been undertaken by SOLIDERE, within the framework of an agreement concluded with the State in 1997. They represented 70,000 sq m of floor space, to be pre-leased as administrative buildings for seven years, with an option to buy at an agreed price.

The Company engaged in substantial works, adapting building designs to the end-users' needs. On April 6, 1999, it was notified of the Council of Ministers' decision to cancel the agreement.

SOLIDERE decided to proceed with the developments near the Serail, initially destined for a number of agencies affiliated to the Prime Minister's office, on the basis of new land use, design and identified end-users' specifications.

However, the Company had to stop construction works on the buildings dedicated to the Ministries of Finance and of Internal Affairs. In the latter case, an underground structure was executed, to provide a support system for the deep excavation and to protect the surrounding roads.

The above stoppage or disruption of works gave rise to several contractors' claims. The Company is seeking compensation for damages and losses incurred as a result of the cancellation of the above agreement with the State. This includes the refunding of US$25 million paid to the State, in exchange for various lots as part of a property swap falling within the agreement. The dispute is the object of arbitration.

Infrastructure delivery

The various parts of infrastructure implemented by SOLIDERE are delivered upon completion to the State, represented by CDR. The Company has raised with the latter the issue of its delay in receiving infrastructure.

Besides rendering site logistics services (cleaning, safety, security, traffic management), SOLIDERE operates and maintains at its own expense the completed infrastructure, utilities and reconstituted public domain, until their final handover to concerned public authorities. This includes maintaining the irrigation station and network. The Company has raised with the public authorities the issue of the costs incurred in this respect, for which it intends to seek compensation.

The ongoing delay in the infrastructure handover process in resulting in additional operation and maintenance costs to the Company. CDR's delay in receiving the sewage pumping station, delivered by SOLIDERE as part of the water disposal system, also has adverse environmental consequences.

Car parks

Two underground car parks, falling under state or municipal property, were tendered out by CDR as BOT projects. With the awarded contract for the Martyrs' Square car park remaining unexecuted since 1997, SOLIDERE had filed a claim for the major delays this is causing in the sector development. The  contract for the Serail hill  park has not been awarded yet.


Proposals by SOLIDERE for land parcellation were unduly stopped by the Directorate General of Antiquities. The Company has claimed a US$17 million compensation for increased infrastructure costs due to delays also attributed to the DGA. These costs are bound to increase as long as issues remain unresolved.