Friday, Jan 19, 2007
BEIRUT (Zawya Dow Jones)--A consortium led by French-based consulting firm Europtima will re-launch in March a ski resort project in the northern Lebanese mountain town of Ehden at an initial investment of $60 million, a partner in the firm said.
"The project was first launched in 2001 and the idea for it was born in 1973 but the problem with Lebanon is that public projects don't happen overnight," Ghassan Tayoun, a partner in Europtima, told Zawya Dow Jones in an interview.
Europtima will design, build, and operate the resort in collaboration with the local municipality under a long-term lease contract on land owned by the local church.
The developers expect permits for the project to be issued through the Investment Development Authority in Lebanon before summer.
Europtima, a company founded by Ghassan's brother, Gaby, is specialized in consulting and management of real estate projects in healthcare and hospitality sectors and has been present in Lebanon since 2001.
"This time we will launch the project in two phases, the first of which will be launched in spring 2009 at a cost of $50 to 60 million," Tayoun said.
About 20% of the phase 1 investment will be provided by Optimum Holding s.a.l., a Lebanese shell company owned by Gaby Tayoun. Optimum Holding is also the majority shareholder in Europtima.
Other stakeholders in the resort project will be Lebanese and regional investors. They will contribute 50 to 60% of financing and the remainder will be secured through debt finance, Ghassan Tayoun said.
Ehden, an ancient town known for its snowy caps and many churches, lies 120 km north of Beirut at a 1500 meters altitude. A nearby nature reserve, Horsh Ehden, is the location of one of Lebanon's few remaining cedar forests.
Environmental organizations and members of the Ehden community had voiced concerns that land adjacent to the nature reserve would be used for the ski resort project when the project was under discussion a few years ago.
Tayoun said the project's first phase will mainly consist of a mixed-use development in Ehden town with very limited construction in the mountains. He added that cars will not be allowed in the resort to reduce environmental impact.
Sports and resort tourism is touted as one of the best potential growth sectors in the Lebanese economy, with numerous development projects. The country has six operating ski resorts, the best known of which is the Faraya-Mzaar resort which attracts tourists from European and Arab countries.
Full development of the resort on its leased land of 20 square kilometers will raise the project cost, including real estate development in the town itself to around $200 million, Tayoun said, up from $74 million that were estimated in 2001.
He attributed the higher cost estimate to higher steel prices, inflation, and changes in the euro-dollar exchange rates which affect the costs of many goods in Lebanon due to the dollar peg of the Lebanese pound.
"The date for the second phase has not been set yet, because we are waiting to see what the appetite for tourism investment and the trend in the country will be," Tayoun said.
He was referring to a weak tourism season this winter and political disputes that led many investors to take a wait-and-see approach on projects in Lebanon.
The country's ski season, which begins around Christmas, was off to a slippery start in 2006 as tourists have stayed away in the aftermath of the Israeli summer war with Hezbollah and the more recent political tensions between the Lebanese government and the opposition coalition led by Hezbollah.
Tayoun said he does not expect the resort to have more than a 6-8% return on investment rate in the first year, but added that he is cautiously optimistic that tourist and investment activity will eventually regain momentum.
"The country is not in a much worse situation today than it was [during the war] five months ago but we have to admit that we [investors] are navigating alone in a hazy environment," Tayoun said.
-By Ayat Basma, Zawya Dow Jones; +961-1-985 757;ayatb@zawya.com
Copyright (c) 2006 ABQ Zawya Ltd.
(END) Dow Jones Newswires
19-01-07 1313GMT
