The Quarterly '97
October - December
Prime Minister Rafic Hariri inaugurates a tunnel in the ring road network of the Beirut Central District(BCD) on December 19, 1997. Opened to traffic nine months ahead of schedule, the network links the western and eastern sectors of the capital and includes tunnels, underpasses and an interchange that provides quick access to Beirut International Airport.
The last quarter of 1997 also saw the delivery of the headquarters of the UN Economic and social Commission for Western Asia(ESCWA), after a record construction period of 14 months. With the completion of the first public open space at the site of the Roman Baths, and advances in the treatment of 70,000 square meters reclaimed from the former landfill, the achievements made during this period mark a major turning point for the BCD reconstruction project.
The beauty and charm of the BCD begins to unfold as renovation works are completed and the facades of historical buildings, alongside others from 1950s and 1960s, are restored to their former glory.
With work under way on some 200 buildings in the Foch-Allenby, Maarad and Riad El Solh streets, as well as in Nejmeh and Riad El Solh squares and in the residential districts of Saifi and Wadi Abou Jamil, the BCD is one of the largest restoration sites in the world. The restoration of all preserved buildings is targeted for completion during Phase One of the reconstruction project.
Renovation is carried out in accordance with strict guidelines set out in the developer's brief for each property to preserve the original style and architectural quality of the building, as well as specifications for materials and equipment aiming at providing high-quality, modern commercial and residential space.
SOLIDERE took a number of significant decisions in 1997, among them:
-Reduction of its capital from US$1.65 billion through the retirement of 17 million A shares that had reverted into Company possession after the recuperation of the corresponding properties by original BCD property right holders.
-Amendment of article 9 of the articles of Incorporation, providing international investors the right to own SOLIDERE shares, previously restricted to Lebanese and Arab nationals.
The Council of Ministers approved both amendments.
The issue of Global Depository Receipts(GDRs) in November 1996 strengthened the Company's position in the world capital markets and among international investment funds. The issue was SOLIDERE's first approach to the international capital market. Thanks to its successful launch, the Company was able to establish wide-ranging contacts with investors interested in emerging markets. The GDR issue elicited the interest of international investment funds, especially in the United States and Europe, and especially in the United Kingdom. Throughout 1997 there was considerable increase in interest, with over 50 international investment fund managers visiting SOLIDERE to personally acquaint themselves with the project.
The share rose to US$15, a three- year record high, in the latter part of October 1997 when, for the first time, international investors were allowed to trade in the shares. However, the crisis in the world stock markets had an effect on the local market.
Class A shares closed at US$12 5/8 at year end, 12.5 % above the closing price on the last day of trading of the previous year. Class B shares closed at US$13 1/4, representing an increase of 15.2% from the previous year.
Three years after their launch, the extensive infrastructure works in the traditional Beirut Central District have neared completion. Among the more tangible achievements of 1997 are the expansion of the Fouad Chehab Avenue Bridge and the construction of the tunnels that link it to the hotel district and to the Hamra area in West Beirut, as well as the underpasses and the ramps leading to the Ghalghoul interchange, now open to traffic.
The year also saw the completion of most other infrastructure works, including power, water and phone networks, as well as roads and pavements, scheduled for final completion in 1998.
Completed in 1997, the first new development in BCD serves as the headquarters of the United Nations Economic and Social Commission for Western Asia (ESCWA) as well as other UN agencies. Ongoing developments by SOLIDERE include a residential complex in the Saifi area, the Army Officers' Club, The Souks reconstruction and development project, the Beirut Trade Center, as well as office buildings that will house the Ministry of Finance, the Ministry of Interior and several agencies affiliated to the council of Ministers.
SOLIDERE is thus creating a rental market in the BCD enhanced by competitive property maintenance and management services. New development projects have also been launched by other investors.
SOLIDERE signed sale agreements during the last quarter of 1997 with the following parties:
-Hussein Dalloul and Sons ltd., for office space in Lot 157 in the Foch-Allenby area.
-Ali Assaf Engineering and Contracting ltd., for office space in Lot 157 in the Foch-Allenby area.
-The contracting company Enterprise, for office space in Lot 157 in the Foch-Allenby area.
-Dar al Handasah(Shair & Partners), for a plot of land in Minet El Hosn, facing the starco building, to be used as the company's international headquarters.
-Medco, for a plot of land on George Haddad street for the construction of a gas station
-Bank of Beirut, for a building in the Foch-Allenby area to be incorporated into an adjacent construction, owned by the bank, to serve as its new headquarters and main branch
-Dar Al Nahar Publishing, for a plot of land in the Foch-Allenby area to serve as a site for its future headquarters.
-1330 Park Avenue SAL, for a plot of land in the Minet El Hosn area to be developed into a residential, office and commercial building.
The reclamation of approximately 70,000 square meters of the landfill area, south of the park Boulevard, is providing a valuable extension to the hotel district and the Serail corridor. Preparatory works are under way for the treatment of the waste excavated from the former landfill according to the most modern technology.
These works include the conclusion of laboratory testing prior to final treatment, and installation by the Dutch company Duos Engineering B.V. of a treatment plant for the sorting of extracted waste into various categories, each reusable following individual treatment. Inert metal and other construction material will be used directly or after crushing as a backfill, while organic substance will require further treatment. Refuse and rubble from as deep as 20 meters below sea level will be extracted, sorted and treated.
The works also include the provision of all other equipment required to proceed with the treatment of remaining parts of the landfill, starting with the area north of Park Boulevard.
The marine works project entered its implementation phase in early November 1997, following successful testing of the structure design. The contractor, Bouygues (France) in joint venture with its subsidiary Bouygues offshore, has setup its offices on site. Mobilization includes the installation of a plant for the production of caissons and the construction of a 100-meter long temporary quay. Construction of the sea defense structure will begin in early 1998, starting with the western breakwater facing the St.Georges Hotel. It is scheduled for the completion at the end of 1999.
The November visit of Italian President Oscar Scalafaro, at the head of an official delegation, was one of many by international dignitaries during the year. Others who visited the BCD in 1997 include His Holiness Pope John Paul II, His Royal Highness Abdullah Ben Abdul Aziz, Crown Prince of Saudi Arabia,
Italian Prime Minister Romano Prodi, Malayzian Prime Minister Mahatir Mohammed, World Bank Group President James Wolfensohn,and His Royal Highness Salman Ben Abdul Aziz, Prince of Riyadh.
During the last quarter of the year, the BCD was also visited by Finnish Minister of Defense Tania Anneily, Tunisian Minister of Economic Development Toufic Bakkar, and Jordanian Minister of Public Works Mohammad Al Mayah. Representatives of economic, financial and cultural institutions also visited the project, including a delegation from St.Jude Hospital in the United States.
SOLIDERE participated in 1997 in a number of local and international conferences and fairs. The most important were MIPIM in the French city of Cannes, a conference on the reconstruction of Beirut organized by the Harvard University Graduate School of Design, the Global Super Projects conference organized by Euro International in Paris, the Cities
International 97 Fair in London, and the Crans Montana Forum in Switzerland. In Beirut, SOLIDERE took part in the Conference on Arab Capital Markets, the Center for Studies of Emerging Markets seminar on Alternative Means for Efficient Growth, and a conference by the International Union of Architects on the Post-war Reconstruction of War-torn Cities.
For more information Email : Solidere@Lebanon.com
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