beirut, lebanon january 30, 2008

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Beirut, LebanonJanuary 30, 2008

Infrastructure and Privatization Inter-Ministerial Committee Progress Report # 4

PRESENTATION

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Today’s objective is to update your Excellencies on progress to-date against Commitment Documents of the respective stakeholders

Meeting Objectives

Brief on the status of issues raised in the previous IMC and on progress to-date of GR PCO planning and monitoring activities

– Following the last IMC dated August 24, 2007: 8 main issues were raised regarding the Power, Telecom and Transport Sectors, and the CDR

– To-date, 2 issues were resolved, 1 is in progress, and 5 are delayed

Highlight progress and status of implementation of short-term programs in each sector (where available):

– Monthly Progress Report against programs charted in commitment documents

– New and Emerging Issues

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Table of Contents

GR PCO Planning & Monitoring

Monthly Progress Reports

– Telecom Sector

– Power Sector

– Transport Sector

– CDR

Next Steps

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The Paris III implementation planning process is generally on track, except for the Power Sector which is delayed, and the Transport Sector, which is still at the initiative identification phase

Natural Owner

Identification of Initiatives

Prioritization of Initiatives

Program Charters

DevelopmentKPI Setting

Progress Report

Commitment Document

Immediate Next Steps

Ministry of Telecom ✓ ✓ ✓ ✓ ✓ ✓

Commitment document (no financial requirements) signed by MoT

HCP ✓ ✓ ✓ ✓ ✓ ✓ Commitment document for Telecom

and Power signed by HCP

TRA ✓ ✓ ✓ ✓ ✓ ✓ Commitment document signed by TRA

Ministry of Energy and Water / EDL

✓ ✓ ✓ ✓(Targets missing)

✓ ✓

Finalize KPIs for EDL Commitment document for Power

signed with no KPIs

Ministry of Transport

50% 50%Not

ApplicableNot

ApplicableNot

ApplicableNot

Applicable

Discuss Airport privatization roadmap and ports strategy development plan with Prime Minister/Minister of Transport and HCP SG

CDR ✓ ✓ ✓ ✓ ✓ ✓

Commitment document signed by CDR

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Table of Contents



– Telecom Sector

– Power Sector


– CDR

Next Steps

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Program Status and Budget Performance Definitions

Monthly progress reports will highlight the status of each program – defined in a commitment document – along implementation, budget, and KPI dimensions

StatusStatus ImplementationImplementation BudgetBudget KPIKPI

Completed on Time

Completed on Time

Completed on Budget

Completed on Budget

Completed on Target

Completed on Target

On Track On Track On Budget On Budget On Target On Target

Could be Delayed

Could be Delayed

Potential Over Budget

Potential Over Budget

Emerging Issues

Emerging Issues

Delayed Delayed Over Budget Over Budget Off Target Off Target

Not Started Not Started N/A N/A N/A N/A

NS

Budget Performance

Initial BudgetBudget endorsed

during an IMC

Revised Budget

Budget adjusted using a Program Change

Request Form endorsed during an

IMC

Actual SpentAmount spent until date of reporting

Remaining Budget Requirements

Estimate

Estimate of the remaining budgetary requirements for the

program

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Table of Contents



– Telecom Sector

– Power Sector


– CDR

Next Steps

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Program DashboardProgram Dashboard

Program Overall Status:

Program Title: TEL-001: Establish the Telecom Regulatory Authority

Natural Owner: Minister of Telecom/TRA

Period: January 2008 IMC: Infrastructure and Privatization

KPI Baseline Current ValueTarget

(Closest Date)Status

Transfer of Regulatory Functions from MoT to TRA

15% 75%100% (April 08)

Broadband licensing 0% 40%Process

launched (June 08)

Achievements Since Last Report

Transfer of qualified staff from MoT completed

Key Issues

New: TRA budget approved but not transferred yet Second advanced payment approved but not transferred as of

January 18th, 2008 Review and approval of Ministry of Finance for financial

procedures still pending Carried Over from Previous IMC: Need to complete the process in transferring documentation

and information from MoT to TRA– Numbering assignment database– RF planning and studies (ATDI, and other) carried out to

the benefit of MoT– Transfer of Satellite licensing information

Transfer of RF management equipment

Budget Performance*

Initial Budget $13,500,000

Revised Budget N/A

Actual Spent $2,000,000

Remaining Budget Requirements Estimate

N/A

Status N/A

Note: (*) Defined in the legend

9On Track Could be Delayed Delayed Not startedNSCompleted

Program/ Initiative/ Workstep Start Date End Date DurationWorkstep

ResponsibleDeliverable/ Milestone Status

1. Establish the Telecom Regulatory Authority 23/07/02 30/11/07 281.8 w ks

1.b Issue decrees to facilitate operations of the TRA 03/01/05 24/08/07 139.6 w ks

1.b.iv Approve and transfer TRA budget 02/07/07 13/07/07 2 w ks CoM, MoFBudget approved and transferred

1.b.vi Issue decrees for specif ic secondary legislation 02/07/07 24/08/07 8 w ks CoM Decrees issued

1.c Transfer regulatory responsibility to the TRA 05/03/07 01/10/07 31.6 w ks1.c.iii Transfer all necessary documentation from MoT to TRA (e.g., Radio Frequency, Licensing, Authorizations) 19/06/07 24/09/07 14.6 w ks

TRA Board / MoT Documentation imported

1.c.iv Transfer relevant equipment from MoT to TRA (mainly RF management equipment) 19/06/07 24/09/07 14.6 w ks

TRA Board / MoT

Tools & equipment transferred

1.c.v Migrate and appoint TRA staff 19/06/07 24/09/07 14.6 w ksTRA Board / MoT Staff migrated

1.c.vi Finalize transfer of existing functions 25/09/07 01/10/07 1.2 w ksTRA Board / MoT

Regulatory functions transferred

1.c.vii Transfer international representation for Radio Frequency and Standards to TRA 02/07/07 01/10/07 13.4 w ks

TRA Board / MoT

International representation

1.d Draft telecom policy outlining the liberalization path to be follow ed 05/06/07 30/11/07 26.8 w ks TRA

Detailed Workplan Progress -- Sep 1, 2007 - Feb 29, 2008

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Program Title: Tel-002: Corporatize and Privatize Liban Telecom

Natural Owner: Minister of Telecom




Liban Telecom Board appointment Delayed DelayedCompleted (Dec. 2007)

Percentage of employee migration from Ogero to LT

0% 0%Completed (Jul. 2008)

Percentage of asset migration from Ogero to LT

0% 0%Completed (Dec. 2008)

Percentage of customer migration from Ogero to LT


Percentage of vendor migration from Ogero to LT



MoT launched on IP TV pilot project MoT is proceeding with its national project providing broadband

services

Key Issues

New: None

Carried Over from Previous IMC: Need to appoint Liban Telecom Board of Directors or

alternative governance structure

Budget Performance*

Initial Budget N/A

Revised Budget N/A

Actual Spent N/A


N/A

Status N/A





2. Corporatize and Privatize Liban Telecom 04/01/05 15/10/09 251.4 w ks2.a Issue decrees to establish LT and appoint governance structure 04/01/05 01/07/07 131.4 w ks

2.a.ii Appoint LT Board of Directors or equivalent governance structure 01/05/07 01/07/07 9.4 w ks MoT / CoM

LT governance structure appointed

2.b Setup Program Management Office (PMO) 02/07/07 07/09/07 10 w ks

2.b.i Appoint PMO director, task force leaders and teams 02/07/07 27/07/07 4 w ks MoT/ LT Board PMO Staff appointed

2.b.ii Develop and approve w ork program 30/07/07 07/09/07 6 w ks LT Board/ HCP Work program approved

2.c Create LT organizational structure 02/07/07 15/11/07 20 w ks

2.c.i Develop LT Organizational Chart 02/07/07 24/08/07 8 w ks LT BoardOrganizational Chart created

2.c.ii Appoint CEO and Level 1 Management Team 27/08/07 15/11/07 12 w ks LT BoardCEO and Level 1 appointed

2.d Set up provisional opening balance and prepare asset transfer 10/09/07 20/03/08 28 w ks2.d.i Perform full asset survey and valuation as per a pre-approved RFP 10/09/07 24/01/08 20 w ks

LT Board/ PMO/ HCP Asset survey performed

2.d.ii Develop Accounting policies 10/09/07 01/11/07 8 w ks LT Board / PMOAccounting policies developed

2.e Capitalize LT by transferring budget 04/01/05 27/07/07 135.4 w ks

2.e.i Issue decree 4/1/05 4/1/05 1 day CoM Decree 13944 issued2.e.ii Open bank account, define signature attorney, contract execution pow er 02/07/07 27/07/07 4 w ks LT Board / MoF

Execution pow er contracted

2.j Create LT brand and establish w eb presence 10/09/07 15/10/09 110 w ks2.j.i Launch Procurement process and Prepare TOR for TA Consultant to develop a new brand for LT 10/09/07 18/10/07 6 w ks PMO RFP sent

2.j.vi Design LT w ebsite 10/09/07 18/10/07 6 w ks PMO Website designed


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Program Title: TEL-003: Privatize mobile telecom Natural Owner: Secretary General of HCP and TRA Chairman




Regulations Issued by the TRA 4 512

(June 2008)

Mobile licensing process completion 0% 85%100%

(May 08)


Review and finalizing of the 4 regulation issued for consultation (Interconnection, SMP, Consumer Affairs, and Quality of Service and Key Performance Indicators)

Issue Type approval regulation for consultation

Finalize request for application

Finalize information memorandum

Launch of the mobile licensing process

Opening of the online data room along the auction website

Finalize the mobile draft license

Finalize all related document (due diligence reports)

Finalize draft transaction document (SPA)

Key Issues

New: None

Carried Over from Previous IMC: None

Budget Performance*

Initial Budget $ 13,500,000

Revised Budget N/A

Actual Spent $ 2,000,000


N/A

Status N/A


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On Track Could be Delayed Delayed Not startedNSCompleted



1. Privatize mobile telecom 13/12/05 14/01/08 111 wks

1.a Draft and issue regulations (e.g., Interconnection, Competition,

Consumer Guidelines, Universal Services, National Roaming) 02/04/07 28/12/07 40 wks

1.a.i Draft mobile telecom regulations 02/04/07 30/11/07 35.8 wks TRA Regulations drafted

1.a.ii Publish draft regulations on TRA website for review 08/06/07 03/12/07 26.2 wks TRA

Draft regulations

reviewed

1.a.iii Update draft regulations based on review 19/06/07 14/12/07 26.8 wks TRA Draft regulations updated

1.a.iv Issue telecom regulations 03/07/07 28/12/07 26.2 wks TRA Regulations issued

1.b Perform valuation of licenses 13/12/05 31/08/07 91.4 wks

1.b.iv Negotiate and sign contract with investment bank 14/07/06 06/07/07 52.6 wks HCP Contract signed

1.b.v Perform valuation of licenses 09/07/07 31/08/07 8 wks

HCP supported

by TRA

Valuation report

completed

1.c Perform financial due diligence 13/12/06 12/09/07 40.6 wks

1.c.iv Negotiate and sign contract with consultant 23/04/07 13/07/07 12.6 wks HCP Contract signed

1.c.v Conduct statutory audit of MIC accounts (2005-2006) 02/04/07 31/07/07 18 wks HCP

2005-2006 audit

conducted

1.c.vi Reconstruct cash flows (2004-2006) 01/08/07 29/08/07 4.2 wks

HCP/ MoT

(OSB)

2004-2006 cash flows

reconstructed

1.c.vii Conduct vendor due dilligence 01/08/07 12/09/07 6.2 wks

HCP/ MoT

(OSB) Vendor report submitted

1.d Perform technical due diligence 06/12/06 25/09/07 43.4 wks

1.d.iv Negotiate and sign contract with consultant 27/02/07 27/07/07 23 wks HCP Contract signed

1.d.v Present key findings from technical review and site visits

and status of KPI analysis 01/08/07 21/08/07 3 wks HCP Key findings presented

1.d.v Draft technical section for Information Memorandum 01/08/07 04/09/07 5 wks HCP

IM technical section

drafted

1.d.vi Undertake KPI analysis 01/08/07 04/09/07 5 wks HCP KPIs determined

1.d.vii Verify networks' asset register 01/08/07 25/09/07 8 wks HCP Asset register verified

1.d.viii Forecast CapEx over 12 month 01/08/07 25/09/07 8 wks HCP CapEx forecasted

1.d.ix Perform network asset replacement valuation 01/08/07 25/09/07 8 wks HCP Valuation performed


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1.e Perform legal due diligence 01/12/06 07/09/07 41.6 wks

1.e.iv Review compiled contracts 26/03/07 07/09/07 25 wks HCP Contracts reviewed

1.f Define and finalize the legal basis for the transfer of ownership of mobile assets 14/05/07 07/08/07 13 wks

1.f.ii Submit to Minister of Telecom for review 23/06/07 03/07/07 2 wksMinister of Telecom Documents revised

1.f.iii Get legal advise from MoJ 04/07/07 31/07/07 4 wksMinister of Telecom Legal advise received

1.f.iv Submit to Council of Ministers for approval 01/08/07 07/08/07 1 wk TRA; HCP; CoM Documents approved

1.g Finalize auction rules and procedures 02/07/07 07/09/07 10 wks

1.g.i Draft auction guidelines 02/07/07 03/08/07 5 wks TRA; HCP Auction guidelines drafted

1.g.ii Draft rules and procedures related to assets lease/ sale 06/08/07 17/08/07 2 wks HCPAssets rules and procedures drafted

1.g.iii Draft rules and procedures related to license sale 06/08/07 17/08/07 2 wks TRALicense rules and procedures drafted

1.g.iv Approve auction rules and procedures 20/08/07 24/08/07 1 wk CoMAuction rules and procedures approved

1.g.v Merge document and finalize it 27/08/07 07/09/07 2 wks TRA; HCP Auction document finalized

1.h Publish Request for Applications (RFA), including pre-qualification/ qualification criteria, and review EoIs 31/08/07 02/11/07 9.6 wks

1.h.i Adopt pre-qualification / qualification criteria 31/08/07 13/09/07 2 wks TRA; HCP Criteria adopted

1.h.ii Publish RFA and receive technical bids 14/09/07 14/10/07 4.6 wks TRA; HCPTechnical proposals received

1.i Draft and distribute Information Memorandum (IM), and provide dataroom access and site visits 01/08/07 11/12/07 19.4 wks

1.i.i Draft IM 01/08/07 14/09/07 6.6 wks HCP; TRA IM drafted

1.i.ii Adopt IM 17/09/07 28/09/07 2 wks HCP; TRA IM adopted

1.i.iv Compile data room's documents 26/09/07 19/10/07 4 wks HCP; MoT Documents compiled

1.j Review transaction documents based on bidders’ comments, and distribute revised documents 10/09/07 03/12/07 12.6 wks

1.j.i Draft transaction documents 10/09/07 28/09/07 3 wks HCP; TRATransaction documents drafted

1.j.ii Provide comments on transaction documents 30/09/07 11/10/07 2 wks HCP; TRATransaction documents revised


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Sector / Natural Owner Issues Register

Issue ID

Issue Level

Issue Description Raised by DateAssigned

toActions Needed Deadline Status

TEL-001 H

Need to speed-up the process in transferring documentation, information, and employees (e.g., Radio Frequency, Licensing Authorizations, Studies) from MoT to TRA

TRA Chairman

05/07/2007

MoT/ TRA

MoT/ TRA

Minister of Telecom

MoT/ TRA

MoT/ TRA

MoT to transfer frequency data to TRA

MoT and TRA to develop a detailed schedule for the transfer of documentation, information, and employees

Minister of Telecom to approve schedule

MoT and OGERO to transfer selected staff to TRA, after issuing an internal memorandum

Transfer to be completed by October 1st,

2007 (Expected completion date April 30, 2008)

17/07/2007

27/07/2007

03/08/2007

20/08/2007

01/10/2007

Completed

Completed

Completed

Completed

Delayed

TEL-002 HNeed to appoint Liban Telecom Board of Directors or alternative governance structure

Minister of Telecom / HCP SG / BAH

15/05/2007Minister of Telecom

MoT to assign PMO Members, who will report to the Steering Committee

Appoint Liban Telecom Board

18/05/2007

30/06/2007

Delayed

Delayed

TEL-003 HNeed to finalize the decision on whether to sell or lease the mobile assets when issuing new licenses

TRA Chairman / HCP SG / BAH

15/05/2007

Dept. of Legal & Legislation Matters(MoJ)

HCP SG

Minister of Telecom to transfer the file to the Department of Legal and Legislation Matters (DoLLM) at the Ministry of Justice

DoLLM to decide if the assets can be sold under the current Privatization Law

HCP/TRA to proceed and accelerate development of tender documents in coordination with Citigroup/JP Morgan

16/07/2007

31/07/2007

On-going

Completed

Completed(Assets can

be sold)

Completed

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Table of Contents



– Telecom Sector

– Power Sector


– CDR

Next Steps

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Program Title: POW-001: Strengthen Sector Policy-Making Capacity

Natural Owner: Minister of Energy and Water




National Control Center implementation

In Progress In ProgressCompleted (Oct. 2008)

Master Plan for generation and transmission development

On Track On TrackCompleted (Jul. 2008)


Recommendations for the Generation segment will be submitted on 17 February 2008

Recommendations for the Transmission segment will be submitted on 17 April 2008

Integrated report will be submitted on 17 July 2008 Public Expenditure Review Completed

Key Issues

New: New variation order for NCC (New financing required)


Budget Performance*

Initial Budget N/A

Revised Budget N/A

Actual Spent N/A


N/A

Status N/A





1. Strengthen sector policy-making capacity 03/07/06 30/06/09 159.2 w ks1.b Appoint qualif ied advisors at the Ministry of Energy and Water to support on strategic planning and evaluation of electricity policy reforms 01/01/07 30/08/07 36 w ks

1.b.vi Undertake negotiations w ith selected applicants 12/06/07 19/07/07 6 w ks CDR and MoEW Negotiations undertaken

1.b.vii Aw ard contract 20/07/07 23/08/07 5 w ks CDR Contract aw arded

1.b.viii Undertake formal signature 24/08/07 30/08/07 1 w k CDR Contract signed

1.c Complete Sector Expenditure Review w ith World Bank support 01/03/07 28/12/07 45 w ks PER report f inalized1.d Establish a National Control Center to properly dispatch EDL’s generation and transmission system 03/07/06 13/10/08 121.8 w ks

1.d.vii Define the HW/SW configuration and prepare Purchase Request and Procurement 11/12/06 23/07/07 33.6 w ks EDL

HS/SW configuration defined

1.d.viii Collect data and produce FAT database & displays 15/12/06 27/09/07 42.4 w ks EDLFAT database and displays produced

1.d.ix Conduct end-to-end tests 13/11/07 23/4/2008 23.8 w ks EDLEnd-to-end tests conducted

1.d.x Install and integrate the system, and get FAT submittal and approval 05/03/07 24/10/07 35 w ks EDL

FAT installed and approved

1.d.xi Ship HW/SW 26/10/2007 16/01/2008 12 w ks EDL HW/SW shipped

1.d.xii Backup and f inetune the w hole system 17/01/2008 05/10/08 38.4 wks EDL System fine-tuned1.e Hire consultants to develop a Master Plan for the Pow er Sector 03/07/07 26/06/08 52.8 w ks

1.e.i Hire EDF to undertake Master Plan 03/07/07 03/07/07 0 w ks EDF hired

1.e.ii Develop Pow er Sector Master Plan 03/09/07 26/06/08 44 w ksPow er Sector Master Plan developed


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1.f Assess the feasibility of increasing hydro-electrical production

08/01/08 30/6/2008 25.8 w ks MoEW/CDR Issue report



NS

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Program Title: POW-002: Improve EDL Operational Efficiency

Natural Owner: Minister of Energy and Water




Non-Technical losses N/A N/A N/A N/A

Bill collection rate N/A N/A N/A N/A

Average number of electricity hours per day (Country-wide)

N/A N/A N/A N/A

Percent distortion in electricity distribution between regions

N/A N/A N/A N/A


Viability report for Zouk Power Plant submitted

Tender was issued for Zouk and Jieh to perform feasibility study

Audit of 2002 accounts issued in draft form

Key Issues

New: EDL to provide KPI’s Finalize Audit for 2002 account Signature of Natural Gas agreement with Egypt Proceed with Audit of financial statements from 2003 to 2006

Carried Over from Previous IMC:

Need to formalize KEPCO contract

EDL to follow up with consultants on the preparation of a technical report on the viability of Jiyyeh power plant

Advisors hired for MoEW, EDL and HCP have submitted their first deliverables – Decon contacted Azorom – Advisors should coordinate with IFC

Budget Performance*

Initial Budget N/A

Revised Budget N/A

Actual Spent N/A


N/A

Status N/A


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2. Improve EDL operational eff iciency 01/02/06 31/12/09 207.2 w ks2.a Appoint consultancy team at EDL to perform operational, f inancial, accounting, legal and contract management activities, including coordinating and assisting the HCP and its advisory team in the corporatization and privatization of EDL 01/01/07 30/08/07 36 w ks

2.a.vi Undertake negotiations w ith selected applicants 12/06/07 19/07/07 6 w ks CDR and MoEW Negotiations undertaken

2.a.vii Aw ard contract 20/07/07 23/08/07 5 w ks CDR Contract aw arded

2.a.viii Undertake formal signature 24/08/07 30/08/07 1 w k CDR Contract signed

2.b Formalize KEPCO contract 01/02/06 07/09/07 85 w ks

2.b.ii Settle conflict over the contract w ith KEPCO 01/03/06 31/08/07 80 w ksMoEW/EDL, MoF and BDL Conflict settled

2.b.iii Sign contract w ith KEPCO 03/09/07 07/09/07 1 w k MoEW/EDL Contract signed2.c Aw ard contracts for the supervision of the KEPCO O&M activities for Beddaw i and Zahrani plants 03/09/07 08/04/08 32 w ks

2.c.i Develop TOR for the supervision of the KEPCO O&M activities 03/09/07 12/02/08 24 w ks MoEW/EDL

TOR for the supervision of KEPCO

2.d Decide on the viability of the Zouk and Jiyyeh plants, and rehabilitate viable existing pow er plants 01/06/06 18/12/07 82.6 w ks

2.d.ii Develop short-list of interested companies 01/01/07 18/12/07 52 w ks MoEW/EDLShort-list of interested companies

2.d.iii Open discussions w ith KEPCO on undertaking the study for free 02/07/07 01/08/07 4.6 w ks

MoEW/EDL and HCP

2.d.iv Undertake survey on the viability of Zouk and Jiyyeh pow er plants 03/09/07 07/09/07 1 w k MoEW/EDL

Survey on the viability of Zouk conducted

2.d.v Draft and submit report on viability of Zouk and Jiyyeh pow er plants 10/09/07 21/09/07 2 w ks MoEW/EDL

Report on the viability of Zouk submitted

2.e Complete the expansion and rehabilitation of the 220KV transmission netw ork 09/01/07 30/06/08 79.4 w ks2.f Complete the auditing of EDL financial statements from 2002 to 2006 01/02/07 02/03/09 111.2 w ks

2.f.vi Prepare preliminary Audit Reports 2003 02/07/07 28/09/07 65 days MoEW/EDL2003 audit report prepared

2.j Improve procurement process of fuel and gas oil, to ensure better quality and reduce high premiums 01/08/07 19/12/08 74 w ks

2.j.i Organize stakholders' meeting to identify potential issues 08/01/07 22/10/07 12 w ks MoEW Stakholders' meeting2.m Complete the infrastructure needed for the Ksara station (including 400 KV netw ork) to allow Lebanon’s integration into the regional electrical netw ork know n as the “Seventh Joint” 01/01/07 31/03/08 66.4 w ks



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2.l Commit the supply of Natural Gas to the Beddawi plant 23/4/2007 23/7/2009 119.6 w ks

2.l.i Sign Natural Gas supply agreement with Egypt 23/4/2007 23/4/2007 0.2 w ks MoEWNatural gas contract signed with Egypt



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Program Title: POW-003: Corporatize and Privatize EDL Natural Owner: Secretary General of the HCP

Period: Jan 2008 IMC: Infrastructure and Privatization



Asset registry 0% 10%Completed (Dec. 2008)

Legal due diligence Not Started Not StartedCompleted (Apr. 2008)

New EDL launch plans Not Started 50%Completed (Mar. 2008)

EDL Corporatization 5% 20%Completed

(March. 2009)Establishment of additional production capacity through IPPs


Collection Management and Metering 15% 55%Completed (Jun. 2008)


EDL restructuring kick off was end of September 2007

Sector strategy presented to the PM and IMC committee in January 2008 and approved

Key Issues

New: Need for law 462 amendment regarding certain issues

Budget Performance*

Initial Budget N/A

Revised Budget N/A

Actual Spent N/A


N/A

Status N/A





3. Corporatize and Privatize EDL 02/09/02 31/12/10 438 w ks3.a Retain consultants to assist the HCP w ith the corporatization and restructuring of EDL 01/01/07 30/08/07 36 w ks

3.a.vi Undertake negotiations w ith selected applicants 12/06/07 19/07/07 6 w ks CDR and MoEW Negotiations undertaken

3.a.vii Aw ard contract 20/07/07 23/08/07 5 w ks CDR Contract aw arded

3.a.viii Undertake formal signature 24/08/07 30/08/07 1 w k CDR Contract signed3.b Establish the Electricity Regulatory Authority and define its f inancial and organizational structures 02/09/02 24/03/08 292.4 w ks

3.b.iii Undertake interview s w ith candidates 15/05/07 27/09/07 20 w ks MoEWInterview s w ith candidates

3.b.iv Appoint ERA Board 28/09/07 03/10/07 1 w kCoM, Minister of Energy and ERA Board appointed

3.b.v Issue decrees to define ERA organizational and f inancial structure, and compensation/ benefits 01/08/07 19/11/07 16 w ks CoM Decrees Issued

3.c Launch and aw ard tender for the installation and operation of remote meters 02/10/06 11/04/08 82 w ks

3.c.v Develop and update CMM w ebsite for FAQ and source of all documentation 03/04/07 17/10/07 29.2 w ks MoEW, HCP CMM w ebsite developed3.c.vii Develop, issue and receive prequalif ication documents to interested bidders 03/04/07 07/07/07 14.4 w ks MoEW, HCP

Pre-qualif ication documents received

3.c.viii Present interested bidders list to PM and Minister of EW 09/07/07 30/07/07 3.2 w ks MoEW, HCPInterested bidders list presented

3.c.ix Develop and issue the tender document to prequalif ied bidders, and launch open data room 09/04/07 16/08/07 19.2 w ks MoEW, HCP Tender documents issued

3.c.x Manage bidding process 17/08/07 29/09/07 6.2 w ks MoEW, HCPBidding documents submitted

3.d Launch and aw ard tender for service contracts for distribution 02/10/06 24/01/08 70.6 w ks3.d.v Develop and update CMM w ebsite for FAQ and source of all documentation 03/04/07 17/10/07 29.2 w ks MoEW, HCP CMM w ebsite developed3.d.vii Develop, issue and receive prequalif ication documents to interested bidders 03/04/07 07/07/07 14.4 w ks MoEW, HCP

Pre-qualif ication documents received

3.d.viii Present interested bidders list to PM and Minister of EW 09/07/07 30/07/07 3.2 w ks MoEW, HCPInterested bidders list presented

3.d.ix Develop and issue the tender document to prequalif ied bidders, and launch open data room 09/04/07 16/08/07 19.2 w ks MoEW, HCP Tender documents issued

3.d.x Manage bidding process 17/08/07 29/09/07 6.2 w ks MoEW, HCPBidding documents submitted

3.e Develop additional generation capacity through IPP: Install additional capacity in Deir Ammar w ith private sector participation 13/04/07 12/12/08 89 w ks

3.e.ii Retain specialized consultants to provide technical and accounting advisory services 04/07/07 08/10/07 14 w ks HCP Contracts signed


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3.f Undertake asset registration and valuation of EDL’s assets 1/10/07 2/3/09 75.4 w ks

3.f.i Develop and issue RFP 1/10/07 15/11/07 6.8 w ks HCP RFP developed and issued

3.f.ii Manage Bidding Process 16/11/07 16/12/07 4.4 w ks HCP Proposals received

3.f.iii Evaluate proposals and Select w inner 17/12/07 17/1/08 4.8 w ks HCP Advisor selected

3.f.iv Negotiate and sign contract 18/1/08 1/3/08 6.4 w ks HCP Contract signed

3.f.v Undertake asset registration and asset valuation 3/3/08 02/03/09 53 w ks HCP Report submitted


26


Issue ID

Issue Level



POW-001 H Need to formalize KEPCO contract EDL 05/07/2007 EDL

Stakeholders to agree on a solution to provide credit line to KEPCO

EDL to revise submitted offer of KEPCO

24/07/2007 Delayed

POW-002 H

Lack of consensus on approach regarding CRA issue (1.2 million meters vs. 16,800 pilot meters)

BAH 05/07/2007

Minister of Energy and Water / EDL / HCP

Agree on clear assignment of roles and responsibilities pertaining to the CRA contract, including the number of meters to be installed in both the short and long terms

24/07/2007 Completed16,800 by MoEW and

1.2M by HCP (incl.

funding) with support from

MoEW

POW-003 MA technical report on the viability of Zouk and Jiyyeh plants should be developed

IMC 05/07/2007 EDL

EDL to follow up with consultants on the preparation of a technical report on the viability of Zouk

EDL to follow up with consultants on the preparation of a technical report on the viability of Jiyyeh

31/07/2007

31/07/2007

Completed

Delayed

POW-004 MNo stakeholder assigned to undertake EDL asset registry

EDL 05/07/2007 HCP

HCP is working on retrieving consultant to undertake EDL asset registration

01/10/2007 Delayed

POW-005 M

Need to shift focus of auditors to EDL’s 2005-2006 accounts (or have them work in parallel on 2002-2004 and 2005-2006 accounts)

HCP 05/07/2007

EDL/MoF

EDL

Need to quickly secure funding for Grant Thornton

Audit of 2002 in final form Audit for 2003 onwards not started

31/07/2007

20/08/2007

Completed

Delayed

27


Issue ID

Issue Level



POW-006 HMoEW could consider the LNG option as an alternative to Natural Gas

Minister of Energy and Water and CDR President

05/07/2007HCP and CDR

HCP and CDR to request from their consultants to include the assessment of the supply of LNG to the Beddawi plant within their scope of work

20/08/2007 Completed

POW-007 H

Advisors hired for MoEW, EDL and HCP might have different orientations, which could create conflicts or inconsistencies among their recommendations

Minister of Finance

05/07/2007

Minister of Energy and Water / EDL / HCP

Current Infrastructure & Privatization IMC Sub-Committee (PM, MoEW, EDL, HCP, MoF) to steer the work of all advisors: The scope of work of EDL advisors should be channeled toward preparing for the set form corporatization, once sector strategy is agreed

Reinforce the Sub-Committee with some Technical Assistance

31/08/2007 Completed

28

Table of Contents



– Telecom Sector

– Power Sector


– CDR

Next Steps

29

Airport privatization roadmap and ports privatization approach were developed by the GR PCO consultant, and need to be discussed with the Minister of Transport and HCP Secretary General

Transport Sector Progress

Following the request of the Prime Minister and the Minister of Transport during the IMC

meeting on 5/7/2007, the GR PCO consultant developed the following:

– Air Transport: Detailed roadmap for the privatization of the Beirut Rafic Hariri International Airport (BRHIA)

– Maritime Transport: Approach to privatizing the different ports, including quick-wins

These proposals need to be discussed and finalized with the Prime Minister, the

Minister of Transport and HCP Secretary General

30

Table of Contents

Air Transport

Maritime Transport

31

Planned Institutional Structure of Civil Aviation in Lebanon

Government Responsible

Agency

Ministry of Public Works and Transport

(MPWT)

Ministry of Public Works and Transport

(MPWT)

Planning and Regulation

Civil Aviation Authority (CAA)Civil Aviation

Authority (CAA)

Operations

Beirut Rafic Hariri International

Airport Corporation

(BRHIAC)

Beirut Rafic Hariri International

Airport Corporation

(BRHIAC)

The aviation sector liberalization Law 481 calls for the set up of an Aviation Authority and an Airport Company, and clearly defines the roles and responsibilities of each

Propose CAA Board appointment or termination for the Council of Ministers

Set compensation and rules for Board Directors

Provide guidelines and approve overall aviation policy

Propose CAA Board appointment or termination for the Council of Ministers

Set compensation and rules for Board Directors

Provide guidelines and approve overall aviation policy

Propose aviation policy and key initiatives

Develop and enforce safety and economic regulations for airports, airlines and air traffic control

Propose development project for existing and new airports

Negotiate international agreements and ensure close cooperation with ICAO and other international and regional organizations

Propose aviation policy and key initiatives

Develop and enforce safety and economic regulations for airports, airlines and air traffic control

Propose development project for existing and new airports

Negotiate international agreements and ensure close cooperation with ICAO and other international and regional organizations

Plan and manage airport operations in coordination with government agencies

Plan and decide on subcontracting service providers for airport activities, and ensure supervision and coordination of all providers

Provide air navigation, communication, and metrological observation services

Plan and manage airport operations in coordination with government agencies

Plan and decide on subcontracting service providers for airport activities, and ensure supervision and coordination of all providers

Provide air navigation, communication, and metrological observation services

Key RolesEntity

Source: Law 481, Other Regulations

32

The CAA is the safety and economic regulator, while BRHIAC is the company that is fully responsible for running the Beirut Airport

Allocation of Selected Key Aviation Responsibilities

Source: Law 481, Other regulations

Minister of TransportMinister of Transport CAACAA BRHIACBRHIAC

Aviation PolicyAviation Policy Set guidelines, approve policies,

and submit for CoM (where needed) Set guidelines, approve policies,

and submit for CoM (where needed) Develop draft policy and laws in

consultation with stakeholders Develop draft policy and laws in

consultation with stakeholders Contribute / Propose own plans Contribute / Propose own plans

Safety StandardsSafety Standards Develop and Enforce safety

standards and rules for airport, airline, and ATC

Develop and Enforce safety standards and rules for airport, airline, and ATC

Fully comply with all safety standards

Fully comply with all safety standards

Accident / Incident Investigation

Accident / Incident Investigation

Accident Investigation office under Minister leads investigations

Accident Investigation office under Minister leads investigations

Contribute to accident and incident investigation

Contribute to accident and incident investigation

Contribute / participate Contribute / participate

Licensing Personnel, Equipment and FlightsLicensing Personnel,

Equipment and Flights

License personnel, aircrafts and airline flights in line with safety and bilaterals

License personnel, aircrafts and airline flights in line with safety and bilaterals

Ensure personnel, aircraft and flights admitted are licensed

Ensure personnel, aircraft and flights admitted are licensed

Bilateral AgreementsBilateral Agreements Review and process for approval as

per Lebanese law

Review and process for approval as per Lebanese law

Conduct negotiations and implement provisions

Conduct negotiations and implement provisions

Provide input Provide input

Airport / Airline TariffAirport / Airline Tariff Approve aviation tariff and/or refer

to CoM as per aviation laws

Approve aviation tariff and/or refer to CoM as per aviation laws

Set fees for services by CAA Review and approve aviation tariff Set fees for services by CAA Review and approve aviation tariff

Collect airport fees and fares Collect airport fees and fares

Airport developments / investments

Airport developments / investments

Review plans for compliance with safety and economic regulations

Review plans for compliance with safety and economic regulations

Plan and submit studies for airport development and investment initiatives

Plan and submit studies for airport development and investment initiatives

Outsourcing Contracts and Tenders

Outsourcing Contracts and Tenders

Review compliance with regulations and safety guidelines

Review compliance with regulations and safety guidelines

Develop tender and approve winners in compliance with laws

Develop tender and approve winners in compliance with laws

Operations Management, Outsourcing SupervisionOperations Management, Outsourcing Supervision

Review compliance with regulations and license personnel and equipment

Review compliance with regulations and license personnel and equipment

Plan and manage operations and supervise all service providers

Plan and manage operations and supervise all service providers

Airport Planning and Budgeting

Airport Planning and Budgeting

Review and submit budget for government approval

Review and submit budget for government approval

Develop and propose airport plans and budgets

Develop and propose airport plans and budgets

33

The GoL postponed the creation of the CAA and BRHIAC despite the enactment of the aviation Law and the CAA decree since 2002 and 2003

Civil Aviation Institutional Structure – Status of Implementation

Current StatusCurrent Status

In August 2003, the CoM issued decrees defining and creating the organization of the CAA, as well as incorporating the BIAC

Since then, studies have been prepared for detailed organization and manpower of the new institutional set up

However, the GoL has delayed implementation of the decrees, without providing a revised timeline

To-date, the CAA Board is not appointed and no progress have been made in setting up BRHIAC

In August 2003, the CoM issued decrees defining and creating the organization of the CAA, as well as incorporating the BIAC

Since then, studies have been prepared for detailed organization and manpower of the new institutional set up

However, the GoL has delayed implementation of the decrees, without providing a revised timeline

To-date, the CAA Board is not appointed and no progress have been made in setting up BRHIAC

Current Organization of the Directorate General of Civil Aviation

Source: Directorate General of Civil Aviation

Director GeneralDirector General

Research and Studies

Research and Studies AirportsAirportsAir TransportAir TransportAviation

SafetyAviation SafetyMeteorologyMeteorology

Airport Studies Directorate

Airport Studies Directorate

Beirut Airport Presidency

Beirut Airport Presidency

Technical Affairs

Technical Affairs

Air Navigation Directorate

Air Navigation Directorate

Equipment Maintenance Directorate

Equipment Maintenance Directorate

Air Communication

Directorate

Air Communication

Directorate

Technical Installation Directorate

Technical Installation Directorate

34

The new CAA organization is planned to have two core functions focused on safety and economic regulations

Proposed Civil Aviation Authority Organization Structure(1)

(1) Proposed as part of a study on the organization, job descriptions and manpower plans of the new CAA and BRHIAC

Source: Directorate General of Civil Aviation

CAA Board of DirectorsCAA Board of Directors

Environment & Meteorology Directorate

Environment & Meteorology Directorate

Lebanese Civil Aviation Training

Center

Lebanese Civil Aviation Training

Center

Air Transport Directorate

Air Transport Directorate

Civil Aviation Safety Directorate

Civil Aviation Safety Directorate

Administrative Directorate

Administrative Directorate

Secretariat of the Authority

Secretariat of the Authority

Flight OperationsFlight Operations

AirworthinessAirworthiness

LicensesLicenses

AerodromeAerodrome

Air TrafficAir Traffic

Int’l Agreements & Authorizations

Int’l Agreements & Authorizations

Economic Studies & Financial RevenuesEconomic Studies & Financial Revenues

MeteorologyMeteorology

Environment & ClimateEnvironment & Climate

Promotion & DevelopmentPromotion & Development

Human Resources & Technology TransferHuman Resources & Technology Transfer

Legal AffairsLegal Affairs

Financial AffairsFinancial Affairs

Personal Affairs & Supplies

Personal Affairs & Supplies

Information TechnologyInformation Technology

Public RelationsPublic Relations

Performance & Quality Control

Performance & Quality Control

Safety and Economic Regulatory Functions

35

Most of the Beirut Airport activities are currently managed by MEA subsidiaries or private companies

Beirut Rafic Hariri International Airport – Privatized Activities

Note: (*) MEA is organized as a private company under the commerce code, but is 96% held by the GoL and is under the financial responsibility of BDL

Infrastructure provision & site management


Asset / Facility ManagementAsset / Facility Management

Free ZoneFree Zone

Asset / Facility Operation and Maintenance

Asset / Facility Operation and Maintenance

Airport parkingAirport parking

RetailingRetailing

CateringCatering

FuelingFueling

CargoCargo

Ground HandlingGround Handling

Aircraft MaintenanceAircraft Maintenance

Aircraft CateringAircraft Catering

GovernmentGovernment MEA* Subsidiary

MEA* Subsidiary

Privatized through

Concession

Privatized through

ConcessionCommentsComments

Managed by Directorate General of Civil Aviation (DGCA) Managed by Directorate General of Civil Aviation (DGCA)



Operated and maintained by Middle East Airports Services (MEAS)

Operated and maintained by Middle East Airports Services (MEAS)

15-year BOT concession won by Al-Khorafi of Kuwait 15-year BOT concession won by Al-Khorafi of Kuwait

15-year concession won by Phoenicia-Aer Rianta Company 15-year concession won by Phoenicia-Aer Rianta Company

15-year concession awarded to Abella 15-year concession awarded to Abella

15-year concession won by a consortium of 5 local companies 15-year concession won by a consortium of 5 local companies

Cargo handled by Middle East Airlines Ground Handling (MEAG)

Cargo handled by Middle East Airlines Ground Handling (MEAG)

Ground handling by MEAG, LAT, ASAS, EAS, Flying Carpet, and Beirut Wing

Ground handling by MEAG, LAT, ASAS, EAS, Flying Carpet, and Beirut Wing

Aircraft maintenance by Mideast Aircraft Services Company (MASCO), and TMA

Aircraft maintenance by Mideast Aircraft Services Company (MASCO), and TMA

Aircraft catering by Lebanese Beirut Airport Catering Company (LBACC)

Aircraft catering by Lebanese Beirut Airport Catering Company (LBACC)

36

However, four key requirements need to be addressed upfront to enable the privatization

Appoint the Board of Directors

Fully develop the organization and build all requisite safety and economic regulations capabilities



CAA Set UpCAA Set Up

Potential investors need to be reassured about the existence of an independent regulator, as such, they need to know who the regulator will be

Potential investors need to be reassured about the existence of an independent regulator, as such, they need to know who the regulator will be

Confirm the form of the privatization option and define the process timeline – consider extending Lease term to more than 50 years

Determine a transaction timing with favorable growth prospects and political situation

Confirm the form of the privatization option and define the process timeline – consider extending Lease term to more than 50 years

Determine a transaction timing with favorable growth prospects and political situation

TimingTiming The ability to attract investors and the value of

privatization proceeds is heavily dependent on traffic growth prospects and political stability

The ability to attract investors and the value of privatization proceeds is heavily dependent on traffic growth prospects and political stability

Ensure each government agency understands and accepts its mandate post-privatization

Ensure coordination and conflict resolution mechanisms between government agencies

Ensure each government agency understands and accepts its mandate post-privatization

Ensure coordination and conflict resolution mechanisms between government agencies

Government Agencies

Coordination

Government Agencies

Coordination

Unsupportive and uncoordinated work of government security and control agencies directly impacts negatively on airport operations and commercial services

Unsupportive and uncoordinated work of government security and control agencies directly impacts negatively on airport operations and commercial services

Description Rationale

Beirut Rafic Hariri International Airport Privatization – Key Requirements


Fully develop the organization

Transition all airport operating responsibilities and staff from DGCA to BRHIAC as per Law


Fully develop the organization

Transition all airport operating responsibilities and staff from DGCA to BRHIAC as per Law

BRHIAC Set UpBRHIAC Set Up Potential investors need to be reassured about

the split between the regulator and the operator of the airport

Potential investors need to be reassured about the split between the regulator and the operator of the airport

37

List of Programs and Initiatives

Sector Programs and Initiatives Stakeholders Preliminary Timeline Implem. Comments

1.Set up Institutional Structure

1a.Set-up the CAA and appoint the Board of Directors MPWT, CoM Q3 2007

1b.Develop CAA organization and capabilities (Safety and economic regulations)

CAA Board Q4 2007

1c.Set-up BRHIAC and appoint Board of Directors MPWT, CoM Q3 2007

1c.Develop BRHIAC organization and transition responsibilities fro DGCA

BRHIAC Board Q4 2007

1d.Plan and implement the transition of responsibilities, assets and staff from DGCA to BRHIAC

BRHIAC Board Q4 2007

1e.Develop necessary laws and regulations for Free Zone / “Airport City”

CAA, MPWT, CoM Q4 2007 – Q2 2008

2.Develop Privatization Scheme and Process

2a.Confirm goals of privatization and establish priorities of key stakeholders

HCP Q3 2007

2b.Evaluate privatization options against priorities, airport investment market and financial impact

HCP, BRHIAC, CAA Q4 2007

2c.Select and approve preferred option CoM, HCP, MPWT, BRHIAC Q1 2008

2d.Draft Terms of Reference HCP, BRHIAC Q1 2008

2e.Detail full transaction process and timeline HCP Q1 2008

2f.Develop and secure official approval on coordination mechanism of government agencies at the airport

CAA, BRHIAC Q1 2008 – Q2 2008

Natural Owner S: Short term M: Medium Term L: Long TermIMPLEMENTATION:XXX

As such, the privatization roadmap starts with the establishment of the institutional structure before developing the privatization scheme

PRELIMINARY

PRELIMINARY

38



3. Implement the Privatization Process

3a. Identify potential local and international operators HCP, BRHIAC Q2 2008

3b.Short-list target operators against fit with privatization scheme and political sensitivities

MPWT, HCP, BRHIAC Q2 2008

3c.Finalize Terms of Reference and Tender documentation

HCP Q3 2008

3c.Decide on timing of the launch of process based on growth and political prospects

MPWT, HCP, BRHIAC Anytime after Q2 2008

3d.Conduct roadshow to short-listed operators and formalize Expressions of Interest through consultative issue of tender documents

HCP, BRHIAC Q4 2008

3e.Draft and issue final tender documents and schedule Q&A sessions

HCP, BRHIAC Q4 2008

3f.Receive and evaluate bids against criteria HCP Q4 2008

3g.Select preferred bidder and ensure selection is certified through the right legal process

HCP, BRHIAC, MPWT, CoM Q1 2009

3h.Notify bidders of outcome HCP Q1 2009

4.Transition to Private Operator

4a.Sign contract and launch mobilization HCP, BRHIAC, CAA Q2 2009

4b.Plan and execute transition to new operators BRHIAC Q2 2009 – Q3 2009


The privatization can then be launched at the right timing, targeting selected operators and followed by a carefully planned transition

PRELIMINARY

PRELIMINARY

39

Table of Contents

Air Transport

Maritime Transport

40

Beirut and Tripoli Ports are currently operated and managed by the GoL, except for the Container Terminal activities of the Port of Beirut (PoB) which are outsourced through a concession agreement

Ports Components Privatization in Lebanon

Note: (*) Mediterranean Shipping Company (MSC)

Beirut Port

Beirut Port

Tripoli Port

Tripoli Port

GovernmentGovernmentPrivatized through

Concession

Privatized through

ConcessionCommentsComments



Managed by Gestion et Exploitation du Port de Beyrouth (GEPB)


Asset / Facility Management




Asset / Facility Operations and Maintenance


Operated and maintained by Gestion et Exploitation du Port de Beyrouth (GEPB)

Operated and maintained by Gestion et Exploitation du Port de Beyrouth (GEPB)

General Cargo OperationsGeneral Cargo Operations Managed and operated by Gestion et Exploitation du Port de

Beyrouth (GEPB)

Managed and operated by Gestion et Exploitation du Port de Beyrouth (GEPB)

Container Terminal Operation

Container Terminal Operation

POB subcontracted container terminal operation to Beirut Container Terminal Consortium (BCTC) in February 2005

POB signed a partnership contract with MSC* CMA-CGM also established a hub at POB

POB subcontracted container terminal operation to Beirut Container Terminal Consortium (BCTC) in February 2005

POB signed a partnership contract with MSC* CMA-CGM also established a hub at POB







All Cargo and Container Operations

All Cargo and Container Operations

41

Three key requirements need to be addressed upfront to enable the privatization of Beirut and Tripoli Ports

Establish a Maritime Transport Authority

Appoint Board of Directors of MTA


Establish a Maritime Transport Authority

Appoint Board of Directors of MTA


Maritime Transport Authority (MTA) Set

Up

Maritime Transport Authority (MTA) Set

Up

Potential investors need to be reassured about the existence of an independent regulator

Potential investors need to be reassured about the existence of an independent regulator

Develop a Maritime Transport Sector Vision for Lebanon

Develop a 5-year Maritime Transport Strategy

Clarify the appropriate organization and roles of port administrations, regulatory institutions, and the private sector

Develop a Maritime Transport Sector Vision for Lebanon

Develop a 5-year Maritime Transport Strategy

Clarify the appropriate organization and roles of port administrations, regulatory institutions, and the private sector

Maritime Sector Strategy

Maritime Sector Strategy

GoL needs to have a clear vision and strategy allowing it to have a clear maritime structure and privatization path

GoL needs to have a clear vision and strategy allowing it to have a clear maritime structure and privatization path

Description Rationale

Beirut and Tripoli Ports Privatization – Key Requirements

Develop a Privatization Law for the Maritime Sector

Specify the potential privatization options, and define the transition of responsibilities and staff phases

Develop a Privatization Law for the Maritime Sector

Specify the potential privatization options, and define the transition of responsibilities and staff phases

Maritime Sector Privatization LawMaritime Sector

Privatization Law

A law (similar to Civil Aviation Law 481) needs to be drafted for the Maritime Sector in order to enable port privatization

A law (similar to Civil Aviation Law 481) needs to be drafted for the Maritime Sector in order to enable port privatization

42

Maritime Sector Privatization Roadmap

Determine Socio-Economic Implications by Region

Determine Socio-Economic Implications by Region

Determine Implications and Critical Improvements for

Infrastructure Model

Determine Implications and Critical Improvements for

Infrastructure Model

Develop Port and Port-related Business Strategies

Develop Port and Port-related Business Strategies

Develop Maritime Sector Privatization Law

Develop Maritime Sector Privatization Law

Develop Maritime Sector Strategy

Develop Maritime Sector Strategy

Assess Market Demand and Economics

Assess Market Demand and Economics

Define Liberalization and Commercialization Options and

Timelines

Define Liberalization and Commercialization Options and

Timelines

Develop Regulatory Structure, Methodologies, and Phased

Regulations

Develop Regulatory Structure, Methodologies, and Phased

Regulations

Restructure and Corporatize Functional Areas (when applicable)

Restructure and Corporatize Functional Areas (when applicable)

Commercialize Administrative, Human Resources and Internal

Services

Commercialize Administrative, Human Resources and Internal

Services

Commercialize Service ProvisionCommercialize Service Provision

Develop & Strengthen Regulator Capability

Develop & Strengthen Regulator Capability

StrategyComponents

OperationalRestructuring

I.5

I.1

I.2

I.3

I.4

II.1

2008 20111/9/2007 2009 2010

PreliminaryTargets:

Sector LiberalizationSector Liberalization Ports PrivatizationPorts PrivatizationSector PolicySector Policy

Develop Port of Beirut by Increasing the Holding

Capacity of the Container Terminal*

Develop Port of Beirut by Increasing the Holding

Capacity of the Container Terminal*

Complete Development Work of the Port of Tripoli*

Complete Development Work of the Port of Tripoli*

Source: (*) Lebanon Maritime Transport Policy , May 2006

PRELIMINARY

PRELIMINARY

Develop Privatization Plan for Commercial Maritime Assets

Develop Privatization Plan for Commercial Maritime Assets

II.3

II.2 II.4

43



1.Set up Institutional Structure

1a.Develop Maritime Sector Strategy (Policy) MPWT Q4 2007

1b.Develop Maritime Sector Privatization Law HCP, MPWT, CoM, Parliament

Q4 2007

1c.Establish the Maritime Transport Authority (MTA) and appoint its Board of Directors*

MPWT, CoM Q1 2008

1d.Develop MTA organization and capabilities* MRA Board Q2 2008

1e.Transfer regulatory responsibilities to the MRA* MPWT, MTA Q2 2008 – Q3 2008

1c.Setup Port Company, and appoint its Board of Directors*

MPWT, CoM Q4 2008

1c.Develop Port Company organization and plan transition of responsibilities from GEPB*

PBC Board Q1 2009

1d.Plan and implement the transition of responsibilities, assets and staff to Port Company*

PBC Board Q1 2009

2.Develop Privatization Scheme and Process

2a.Confirm goals of privatization and establish priorities of key stakeholders*

HCP Q3 2008

2b.Evaluate privatization options against priorities, airport investment market and financial impact*

HCP, MTA Q4 2008

2c.Select and approve preferred option* HCP, CoM, MPWT Q1 2009

2d.Draft TORs, and design full transaction process and timeline in details*

HCP Q1 2009

2e.Develop and secure official approval on coordination mechanism of government agencies at the ports*

MTA Q1 2009 – Q2 2009


As such, the privatization roadmap starts with the development of a sector strategy and establishment of the institutional structure, before developing the privatization scheme

Note: (*) In light of Sector Strategy and Privatization Law outcome

PRELIMINARY

PRELIMINARY

44


Issue ID

Issue Level



TRA-001 HStrategy relating to privatization of other public entities (e.g., airport, ports) still under development

Minister of Transport / Minister of Finance

15/05/2007

GR PCO

Minister of Transport/ HCP SG

Develop transport sector privatization roadmap, within scope of current legislation

Align transport sector stakeholders on privatization roadmap

31/07/2007

10/08/2007

Completed

Delayed

45

Table of Contents



– Telecom Sector

– Power Sector


– CDR

Next Steps

46



Program Title: CDR-001: Restructure CDR’s capacity to undertake investments

Natural Owner: President of CDR




Percentage of vacant key positions filled

0% 70%100%

(29/02/2008)


Job Vacancies List Prepared Consultants on contract basis hired (from foreign grants) New Procurement Law endorsed by CoM

Key Issues

New: None


Budget Performance*

Initial Budget $ 2,000,000

Revised Budget N/A

Actual Spent N/A


N/A

Status N/A


47



1. Restructure CDR’s capacity to undertake reconstruction & development investments 15/07/07 31/07/08 55.8 w ks

1.a Strengthen the capacity of CDR’s procurement, f inancial and project management, planning, and legal functions 15/07/07 31/12/2007 25.2 w ks

1.a.i Prepare f irst list of job vacancies and profiles 15/07/07 15/08/07 4.8 w ks CDR, OMSARJob vacancies list prepared

1.a.ii Announce the available job vacancies 03/09/07 01/10/07 4.6 w ks CDR, OMSAR Job vacancies published

1.a.iii Evaluate the applicants' CVs 02/10/07 02/11/07 4.8 w ks CDR, OMSAR CVs evaluated

1.a.iv Interview , select, and recruit applicants 03/11/07 31/12/07 8.4 w ks CDR, OMSAR Staff Recruited1.a.v Hire individual consultants on contract-basis (from foreign grants) 01/10/07 31/12/2007 CDR Consultants hired

1.b Streamline related internal procedures from bidding and terms of reference preparations to contracts management and 15/09/07 31/07/08 46.4 w ks

1.b.i Draft Law s on new procurement procedures 15/09/07 15/10/07 4.6 w ks CDRNew procurement law s drafted

1.b.ii Endorse law s by the Council of Ministers 01/11/07 31/12/2007 8.8 w ks CoMNew procurement law s endorsed bt CoM

1.b.iii Enact Law s by Parliament 01/01/08 31/07/2008 30.6 w ks ParliamentNew procurement law s enacted by Parliament


NS

NS


48



Program Title: CDR-002: Develop Public Investment Plan for 2009-2012

Natural Owner: President of CDR





Public Investment Plan submitted to Council of Ministers

Key Issues

New: None


Budget Performance*

Initial Budget N/A

Revised Budget N/A

Actual Spent N/A


N/A

Status N/A


49



2. Develop Public Investment Plan for 2009-2012 05/07/07 05/09/07 9.4 w ks

2.a Develop a Public Investment Plan (PIP) for 2009-2012 05/07/07 05/09/07 9.4 w ks CDR PIP developed



50


Issue ID

Issue Level



CDR-001 HCDR needs to develop a Public Investment Plan aligned with Paris III requirements

CDR 05/07/2007

CDR President, Minister of Finance, and Office of PCM

A Task Force including the CDR, MoF and the Office of PCM to be created in order to oversee the development of the Public Investment Plan

CDR and Ministry of Finance to coordinate the preparation of a preliminary Public Investment Plan to be ready for the next IMC

CDR and Ministry of Finance to coordinate the development of a draft Public Investment Plan for 2009-2012

23/07/2007

20/08/2007

09/09/2007

Completed

Completed

Completed

51

Table of Contents



– Telecom Sector

– Power Sector


– CDR

Next Steps

52

Next StepsActions Required

Telecom Sector:

– Appoint Liban Telecom Board in order to proceed with the corporatization process

– Transfer relevant documentation and information from the Ministry of Telecom to TRA

– Transfer TRA budget

– Review and approval of MoF for financial procedures

Power Sector:

– Secure financing for the variation order of the NCC

– Finalize 2002 audits and proceed with audit of 2003 to 2006

– Formalize KEPCO contract

– Follow up with consultants on the preparation of a technical report on the viability of Jiyyeh

– Sign the Natural Gas agreement with Egypt

Transport Sector:

– Align key stakeholders on a roadmap for implementing priority programs

– Develop Commitment Document

CDR:

– Proceed with the recruitment of the key positions