Development


Lebanon’s Normandy Bay, the area transformed into a household waste dump in the civil war years, is in the process of shaping up under Solidere’s development plan. Today, the company is at work converting the dump into a 22-hectare island, linked to the mainland by a short causeway. Some of the main issues confronting Solidere are explored below.

Solving the Waste Problem

A new technique has been adopted to deal with the waste build-up, in which organic products are extracted and separated into solid material, to be subjected to a mixture of chemicals. The reclamation process then begins with use of mountainous rock or former building materials. The amount of materials required to complete the project is estimated at five million cubic meters.

Maritime Protection

Three lines of defense are to be established for the protection of the newly established areas. The first is a 100-meter-wide underwater platform designed to break the waves at a depth of seven meters. The second consists of a wall of 81 concrete blocks at a width of 22 meters each. The last line of defense will serve as a walking area built with three concrete layers from the Port of Beirut to the hotel area.
Two ports of tourism will also be set up on either end of the walkway, with the west side serving as an extension of the St. Georges Bay, which was cleared out last year and is now a new harbor with an anchorage capacity of 600 boats.
 

Realizing Reclamation

The reclaimed land area will encompass roughly 645,000 sq. m. - 65% of which belongs to the Lebanese government, including roads and gardens - with the remaining 35% belonging to Solidere. The 35% (225,0000 sq. m.) covers the government’s bill for reclamation and infrastructure works. In addition, Solidere receives 79,0000 sq. m. instead of $129 million for the value of executed works in Beirut’s Central District.

Financial Cost

The overall cost of maritime protection and reclamation work is estimated at around $475 million - $235 million spent on maritime protection and $240 million on reclamation and infrastructure. In line with these high costs, the established areas can be estimated at a value of $1.3 billion. Finally, it is worth noting that the process of land reclamation, though it has created a new area subject to development, has also sparked real estate conflicts regarding rightful ownership of the western port near the Saint Georges Hotel. This issue was finally resolved in Solidere’s favor.

Background


In 1983, the Council of Ministers approved a proposal for a land reclamation project suggested by the Minister of Public Works and Transportation. The bid for the development of the Northern Metn coastline, which was allocated to the National Contracting Company, took five years to complete, but the project was plagued with legal and financial disputes.

Stakeholder Involvement

Building on a framework established by the National Contracting Company, the land resulting from the sea appropriation totaled 1,003,000 sq. m. and was distributed as follows:
• 330,000 sq. m. to the contractor (33%)
• 443,000 sq. m. to the Lebanese government (44%)
• 230,000 sq. m. to the government for roads and gardens (23%)

Legal Disputes

The concession for the reclamation project was granted on the basis of a governmental decree. However, such a decree is insufficient under Clause No. 98 of the Lebanese Constitution, rendering the development project, as it stands, illegal.

Land distribution was also deemed unfair to the government. Given that the land for the roads and gardens was deducted from the 67% government-allocated portion, rather than from the overall reclaimed area, the contracting company consequently gained an additional 76,000 sq. m. of land valued at a minimum of $100 million.

Discrepancies related to land registration fees also arose, as the Ministry of Justice reported only a partial receipt of its fees. According to the Ministry, only a partition fee was paid with the contractor’s share of registration fees still outstanding. However, the Director General of the Real Estate Central Office in Metn objected to a partition fee, declaring that only a flat fee of 6% should be applied for registration purposes instead.

Upon review of the case, the Court of Audit recommended: “Registration is subject to a registration fee. When partition occurs, a partition fee equivalent to 6.05% of the total amount is to be paid.” Three months later however, the Council of Ministers contradicted the Court of Audit’s decision, re-imposing its verdict not requiring registration fees on the part of the contractor. This judgment deprived the government of at least $20 million.

Lost Revenue


Despite the economic significance of the La Marina project in helping to develop and rehabilitate the construction and tourism sectors, a total of $120 million in desperately needed government revenues was lost.