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BEIRUT: The Cabinet Monday sent a strong signal to the international community about its resolve to enact reforms by unanimously endorsing a new electricity plan aiming to reform the dilapidated sector, boost power supply and reduce subsidies to the state-run Electricite du Liban, estimated at $2 billion annually. The announcement was made by Prime Minister Saad Hariri following a special Cabinet meeting chaired by President Michel Aoun and devoted to the electricity plan.
The Cabinet unanimously approved the electricity plan with all its provisions amid a very positive atmosphere. ... This plan will satisfy the Lebanese people because it will ensure for them 24-hour electricity and also reduce the budget deficit, Hariri told reporters after the meeting at Baabda Palace.
He said the plans approval would send a positive message to all international institutions, including ratings agencies, that Lebanon is taking real steps for reforms.
Hariri said the Cabinet decided that the Central Inspection Bureaus Tenders Department and a technical committee from the Energy Ministry would handle the tenders for implementation - a major bone of contention among political parties that had hindered an agreement on the blueprint that was presented to the government by Energy Minister Nada Boustani last month.
One sticking point still to be resolved is the formation of the National Electricity Regulatory Authority established years ago to organize and control the sector.
We are working to form the regulatory authority, Hariri said.
The electricity plan had been agreed upon by a ministerial committee headed by Hariri after four rounds of discussions last week. The committee at the time failed to agree upon who would carry out the tenders to implement the blueprint.
Hariri underlined the need for the quick implementation of the plan, warning that the states finances could not endure a further delay. The electricity bidding should take place as soon as possible. Anyone who is negligent in this issue will pay the price.The state finances cannot [endure] a postponement of work with this plan even for one day, Hariri said.
We tell the Lebanese that we have endorsed this plan positively. This is an achievement for all political parties, he said, praising Boustani for the great efforts she made in the past weeks.
Hariri added that the Cabinet agreed to renew Law 288, dated 2014, which empowers the Cabinet to grant temporary permits and licenses to produce electricity upon the proposal of the energy and finance ministers.
Hariri also assured the Lebanese that the electricity plan would not be doomed like previous plans.
With the presence of President Michel Aoun, myself and amid Cabinet unanimity, this plan will be implemented, he said.
Since the end of the 1975-90 Civil War, the Lebanese have been suffering from severe power rationing, especially in the summer.
Several electricity plans adopted by previous governments failed to resolve the long-running power problem.
Speaking to local TV stations shortly after the Cabinet session, a jubilant Boustani, who belongs to the Free Patriotic Movement founded by Aoun, said she was happy that the blueprint had finally been approved.
What matters now is the implementation of the plan, she said.
The Lebanese Forces ministers, who had in the past rejected previous FPM electricity plans, expressed satisfaction that the blueprint had passed.
We dont want to enter into the game of profits and losses. We are satisfied with the approval of the plan and we want it to be implemented as soon as possible, Labor Minister Camille Abousleiman, one of four LF ministers, said after the meeting.
The LF, along with Hezbollah, the Amal Movement, the Progressive Socialist Party and the Marada Movement wanted the tenders to be conducted by the Tenders Department. The FPM and the Future Movement were reported to be supporting the ministerial committee to handle the bidding.
LF leader Samir Geagea praised the passing of the plan as a victory for the Cabinet combined. Speaking at a news conference after chairing the weekly meeting of the LFs parliamentary Strong Republic bloc, Geagea said: Had it not been for the combined efforts of several parties, we would not have reached what we reached today.
Foreign Minister Gebran Bassil, the FPM leader, also lauded the blueprint. What matters is the implementation of [the plan] without obstruction in order carry out promises of 24-hour electricity and a zero deficit, Bassil tweeted.
Speaking to reporters at Baabda Palace, Hariri also said that intensive efforts were underway to endorse the 2019 draft state budget.
He said difficult measures would have to be taken in the budget in order to boost the weak economy.
He added that he was working with Finance Minister Ali Hasan Khalil and political parties to unify the position on the budget issue and adopt the same path we took in the electricity plan.
Fixing the electricity sector and endorsing the 2019 budget are among important measures the government has pledged to take as part of key financial and economic reforms recommended at last years CEDRE conference to bolster the countrys ailing economy, which is burdened by $85 billion in national debt, an endemic budget deficit and slow growth.
The reforms are deemed crucial to unlocking over $11 billion in grants and soft loans pledged by international donors at the Paris conference.
Khalil has submitted a revised draft budget to Hariri that includes reductions in all ministries spending as a means to slash the deficit.
The electricity project still needs to be ratified by Parliament.
The plans approach is two-pronged. In the short term, its goals include reducing electricity cuts from 34 to 11 percent, increasing the electricity tariff and tying it to the price of oil so that EDL doesnt end up falling into deficit once again if oil prices surge.
It also lays out a plan to secure an additional 1,450 megawatts of temporary power by 2020 so that total output will reach 3,500 MW. This translates to just enough electricity to secure 24/7 supply at peak demand.
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