BEIRUT: Elias Assouad gazes forlornly out the window of his second-floor office in Hazmiyeh, observing the ebb and flow of midday traffic.
He takes a sip from a cup of bitter Turkish coffee and sighs as a power cut temporarily plunges the room into darkness before the generator grumbles into motion, returning illumination.
Assouad smiles, a stoic smile, shaped by over 40 years of operating a successful business in an environment where forces beyond his control intermittently threaten the productivity of the industrial goods company which his father founded in 1961.
“The current electricity problems are not due to the incapacity of Electricite du Liban,” opines the electrical engineer and head of Tecmo. “The problem is interference by and bickering among the whole political mafia that control this country.”
Increased electricity blackouts are having a detrimental effect on local industries – causing extra expenditures due to over-reliance on generators while also stymying productivity.
The increased use of generators and the carbon monoxide produced is also exacting a toll on Beirut’s urban environment, where the amount of dangerous pollutants in the air is already double the World Health Organization’s maximum recommended level.
Assouad laments that before the Lebanese Civil War, EDL had been the most efficient electricity company in the Middle East and Africa, operating at the same level as suppliers in many European countries.
“Now?” he says almost rhetorically, gesticulating skyward with his hands and arching his eyebrows in a gesture of mock incredulity. He doesn’t need to finish his sentence; the gravity of his message is palpable in his body language. Times have changed.
In 2011, the EDL deficit, which is covered by the public Treasury, reached $1.2 billion. A simple calculation reveals that this figure constitutes a massive 3 percent of Lebanon’s annual GDP, which currently stands at around $40 billion.
In the World Economic Forum’s Global Competitiveness report for 2011-12, Lebanon ranked 141st out of 142 countries surveyed in terms of the “quality of electricity supply.” The country was just behind Angola, and only Nepal ranked lower.
“Every citizen is paying a double invoice for electricity. The first to EDL and the second to the generator supplier. The generator bill is always more,” explains Assouad. “Here in this office we pay $200 every two months to EDL, last month our generator bill came to $600. The increased reliance on generators caused by the current crisis is having a negative effect on businesses.”
Energy experts and officials remain at loggerheads over the best way to end the country’s long-running electricity crisis, with some favoring full or partial privatization of the sector while others insist the state can do the job.
According to Roudy Baroudi, a leading energy expert, no major investment has been made in the sector since 1998 primarily due to a lack of political consensus.
Ibrahim Hajj, a professor of electrical and computer engineering at the American University in Beirut, suggests that the inability of the government to provide an adequate power supply adds to a general feeling that politicians are more concerned with their own personal interests than in the welfare of the general population.
Hajj further points out that the strikes caused by the electricity crisis contribute to projecting an image of internal instability that also negatively impacts the tourism sector.
Meanwhile, the cessation of energy supplies from Egypt, Jordan and Syria over the past year has further accentuated the problem.
In the last couple of weeks, the Chouf electricity supply has plummeted from over 12 hours a day to less than six; in north Lebanon, electricity cuts exceed 12 hours a day in many areas; and in the Bekaa, rationing is exceeding 16 hours a day.
In the south of the country, problems at the Jiyyeh and Zahrani power stations coupled with the breakdown of a major electricity transformer in Sidon have seen the electricity supply cut in half in some areas.
In addition to the increased costs caused by electricity rationing and the corresponding reliance on generators, sudden power outages and “micro-cutting”– the process of switching from mains electricity to a generator – is curtailing productivity and damaging machinery and equipment.
“On a nationwide scale you are looking at hundreds and hundreds of millions of dollars wasted,” Assouad said.
Also, the amount of electricity that generators are able to deliver is limited and often insufficient for all applications to function at full capacity.
“Companies are being forced to reduce stock in order to minimize cost, avoid waste and overloading the generators,” explains Fadi Sandaqli, a plant manager with Cortas – a canning and refrigerating specialist that distributes Lebanese produce to over 20 countries worldwide.
“Production lines have to be stopped and orders have to be delayed. This not only results in financial losses but also has the potential to alienate customers,” he said.
Sandaqli, who says Cortas relies on its own generators for 20 hours a day compared to eight in previous years, points out that over-reliance on generators also damages their longevity.
This means that they will become inoperable in a shorter amount of time, causing further expense.
As summer temperatures rise, Sandaqli expects that the situation will only get worse.
“The generators are not built to cope with such high demand and their efficiency decreases with rises in temperature,” says Sandaqli, who adds that generator prices have risen by 25 percent due to the increased demand.
“At the moment the temperature is 32 Celsius. Over the next few weeks a 5 degree rise is expected. They will function even less effectively.”
Ziad Shalan, a member of the sales department at Jubaili Bros. – a leading supplier of diesel power generators in the Middle East, Africa and Asia – says that the current electricity crisis has led to a 20 percent increase in demand for industrial generators.
While the company has not raised the cost of generators, Shalan says that the delivery of the company’s products has slowed down due to the high demand.
Lebanon’s current electricity production stands at 1,500 MW. To meet the current demand, energy experts say that production should rise to at least 2,400 MW.
Even this goal may be insufficient in the next four to five years due to population growth and the construction of more housing units, factories and malls across the country.
The government has recently approved plans to lease two electricity generating boats from a Turkish company to temporarily alleviate the crisis but several experts cast doubts over the benefits of such a move.
“It is the most stupid idea. It satisfies only 10 to 15 percent of the demand,” says Assouad, noting that the two boats have the capacity to produce only 270 MW of power and the required infrastructure for them to function effectively is also lacking. “It would cost less money, take less time, and be more effective to buy two or three second-hand gas turbines and put them in existing power plants. But no one wants to listen,” he adds.
Sandaqli is equally skeptical.
“It will take two months from signing until the boats arrive. By then it will be the end of the summer and it will be too late. To be honest I don’t think they will ever come.”