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Blue Gold promises to monetize water wealth

President Michel Sleiman, who sponsored the Blue Gold initiative, greets participants at the launch event held at Phoenicia hotel in Beirut. (The Daily Star / Hasan Shaaban)

BEIRUT: Despite an annual rainfall average of 8 billion cubic meters, Lebanon posted a deficit of 73 million cubic meters in water supply in 2011, according to the latest available official statistics.

Yet, the country could reverse the trend and generate more than $600 million from a water surplus by 2020 if a comprehensive national strategy to reform the sector is implemented, according to the Blue Gold initiative launched Tuesday.

The Blue Gold project is a five-year plan for the management of the water sector in Lebanon, initiated by the Civic Influence Hub – a lobbying group of leading business people – with the support of more than 40 water experts.

“In addition to ensuring the daily needs of the citizens from the water, the Blue Gold project aims to introduce the concept of converting our surplus of water from a consumption need to a national economic wealth,” said expert Fahd Saccal, a member of the CIH steering committee.

However, the failure to take immediate action is forecast to result in a deficit of 876 million cubic meters in water supply by 2020 as domestic and agricultural demand is estimated to increase by 5 percent and 3 percent annually, the study showed.

Due to inefficient management, Lebanon makes use of only 17 percent of its available water, said Saccal, who outlined the strategic aspects of the Blue Gold project before hundreds of participants attending the launch event at the Phoenicia Hotel in Beirut.

Out of 2.7 billion cubic meters of available water through eight aquifers and 17 perennial rivers fed by more than 2,000 springs, Lebanon makes use of only 1.4 billion cubic meters, with agriculture being the primary driver at 55 percent of the total demand, the study showed.

The rest of the water is lost in storage, due to Lebanon’s soil that drains water from dams; in distribution, due to depleted pipes or a lack of connection to storage facilities; and misuse, due to archaic irrigation methods and lack of water consumption discipline.

The Blue Gold project outlines work on all three fronts to exceed demand with a surplus of 500 million cubic meters through its 2015-20 first phase, estimated at a total cost of $5 billion. The plan includes reforestation, new water recycling plants, repairing the distribution system, drilling public wells and constructing 11 new dams.

The surplus water would generate more than $600 million if used in exports and bottling industries, while the rehabilitation of water distribution networks would save $310 million in technical losses, the study forecast.

The socio-economic impact of the Blue Gold initiative extends to households, providing water on a 24-hour basis while decreasing the average annual water bill by 40 percent from the current $700 per person to $380, according to Wafaa Saab, another member of the CIH steering committee.

Households in Beirut are the most dependent on private water suppliers for both drinking and domestic use since a large number of neighborhoods in the capital only receive three hours of water per day during dry seasons.

Saab added that the project would also cut the bill of tourism enterprises by 30 percent, decreasing the hotels’ average yearly water bills from $50,000 to $35,000, according to the study.

On a national level, Saab said the project would save around $800 million in health expenditures caused by water pollution, which represents 2 percent of GDP, and would boost the productivity of the agricultural sector by 20 percent.

“Blue Gold will create in the first phase more than 3,000 permanent jobs and 40,0000 seasonal jobs and encourage people to stay in their communities,” Saab said.

The Blue Gold national water plan is to be funded by international institutions and public-private partnerships to ease the burden on the indebted state Treasury and generate profits for the government from public-private partnership projects, according to CIH.

The private sector would be able to earn an annual profit of12 percent from service-provider contracts, according to the proposal that allows Lebanese citizens to invest in the water sector through crowd funding and receive a minimum annual return of 12 percent after taxes.

“Leveraging the concept of PPP in all sectors that tackle daily needs of citizens should be distanced from political tendencies and monopoly and should be influenced by science, qualification and efficiency, with the concept of involving citizens,” CIH CEO Ziad Sayegh said.

While the Blue Gold project looks promising, according to experts, the road ahead for its implementation remains a long one that requires first the drafting and ratification of a law to regulate the water sector in Lebanon.

“With these obstacles in mind, we are determined not to fail, but our bet is to convince the decision-makers to give priority to the national wealth,” CIH board member Elie Gebrayel said.

“We are in the stage of completing the draft law establishing the National Council for Water, which we propose as a new model of partnership between the public and private sectors on one hand, and Lebanese citizens on the other hand,” Gebrayel added.

The two other phases of the Blue Gold will be implemented over a medium- and long-term interval extending from 2020 to 2030 and beyond.

 
A version of this article appeared in the print edition of The Daily Star on December 11, 2013, on page 5.

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