EVERYTHING FLOWS

Lebanon 2018 | TRANSPORT | REVIEW

Air and port transit flows have increased in recent years, but the most pressing need for investments is in Lebanon's road infrastructure, which is struggling to handle increased volumes.

Lebanon's transport sector is central to its economic and cultural identity. Banking and tourism are two of the longtime staples of the country's service-based economy, and the health of its transport sector is a key part of the continued success of these two fields. Beirut's status as a major air and sea transit stop on the Mediterranean dates back millennia, and the current Lebanese government is in the midst of a capital investment plan that calls for USD6.9 billion of investment in the transport sector over three cycles, ensuring that the city remains a logistical center for years to come.

Lebanon's transport infrastructure is ranked 110th in the world in the Word Economic Forum's 2017 Global Competitiveness index. While port infrastructure came in at 91st, the quality of its roads was 121st in the world, and the quality of available air transport infrastructure was at 100th. Lebanon has only one operational commercial airport, Beirut Rafic Hariri International, named after the former prime minister. In the years after its opening in 1954, Beirut International served as one of the Middle East's primary air transit hubs but lost this status during the Lebanese Civil War. Since the end of the war, the airport has undergone extensive reconstruction and expansion programs that have helped it see steady growth over the past two decades. In 2017, Beirut Rafic Hariri International reported passenger volumes of 8.2 million people, an increase of 8.2% over the previous year.

As the airport's current capacity is 6 million passengers per year, expansions are underway to meet demand and facilitate a more efficient air transit experience. In November 2017, Prime Minister Saad Hariri proposed an expansion plan that would increase capacity to 20 million per year by adding a new wing, renovating the customs building, and implementing technological upgrades that would result in faster security and baggage handling systems. Cognizant of the immediate need for expansion works, March 2018 saw the Lebanese cabinet approve USD88 million in urgent expansion projects and announce that a USD500 million tender for a long-term expansion project would be launched by the end of 2019. In the short term, the immediate works are expected to increase the airport's capacity by 2 million passengers within the next year, easing the pressure on Beirut Rafic Hariri International.

The Port of Beirut's position at the intersection of three continents makes it a tremendously valuable logistical node and a core part of the Lebanese economy. After sluggish performance in recent years due to an uncertain economic environment that led to mergers between several major shipping lines, the Port Authority of Beirut (PoB) reported that in 2017 the transshipment of goods through the port rose 40% YoY and total container activity rose 14%. The port saw 407,000TEUs come through on transshipments and 1.3 million TEUs in total, an increase of 14%. Thanks to leading container shipping firms resuming service on several routes as economic conditions improved, revenues remained stable at USD240 million on the year. In 2017, PoB commissioned Lebanese engineering firm Dar Group to oversee an expansion project that would include a new container terminal, a 10,000-sqm warehouse, and five new administrative buildings. The government's long-term goal is for the port to serve as the center of a redesigned community-oriented waterfront district that recalls the days when Beirut was known as the Paris of the Middle East.

Lebanon's capital investment plan calls for USD500 million in investment in roadwork around the country. The nation's roads lag behind its air and port transport infrastructure due to years of underinvestment, hampering connections between urban and rural regions and serving as a public safety hazard. The presence of Syrian refugees has also placed renewed stress on aging infrastructure. To address the problem, Lebanon's road investment includes an assessment of 6,000km of primary, secondary, and tertiary roads to assess where repairs are most needed and then a program of rehabilitation, safety equipment upgrades, and capacity expansion to facilitate better flows. Infrastructure repairs will be aided by the World Bank, which delivered a loan of USD200 million to help fund the project.