Ireland

DAA contract to build Beirut airport terminal with consortium involving Saudi prince cancelled by Lebanon

Decision came after significant criticism in recent days that the controversial contract had been granted without a public tendering process

Rafic Hariri International Airport in Beirut. Photograph: Hassan Ammar/AP

Hannah McCarthy
Sat Apr 1 2023 - 05:00

A plan to award a contract to run a second terminal at Beirut Airport in the Lebanon by a consortium involving a Saudi prince and DAA International has been cancelled by the Lebanese government.

The decision came following significant criticism in Lebanon in recent days that the controversial contract had been granted without any public tendering process and was illegal under Lebanese law.

Under a memorandum of understanding signed just 10 days ago, the second terminal at Rafic Hariri International Airport would have been constructed by Lebanese Air Transport (Charter) Co (LAT), partly owned by Saudi prince Turki bin Muqrin Al Saud.

In turn, DAA International, a subsidiary of the State-owned company responsible for operating Cork and Dublin airports, had signed a memorandum of understanding with LAT to act as a technical adviser.

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DAA on its own website said it would offer help with design and operations during the terminal’s construction and later manage “all elements of operations, commercial, aviation business development and facilities maintenance contract management”.

The caretaker Lebanese minister for public works and transportation, Ali Hamieh, cancelled the contract following criticism by opposition parties and civil society groups that it had granted without a public tender and was illegal under Lebanese law.

Mr Hamieh had announced the plans at a press conference on March 20th in Beirut alongside caretaker Lebanese prime minister Nijab Mikati, Minister for State at the Department of Justice James Browne, Irish Ambassador Nuala O’Brien and DAA International’s chief executive, Nick Cole.

On Thursday, however, Mr Hamieh said the Lebanese government would not proceed “despite the importance” of the second terminal due to “legal controversy” and “the difference in points of view” over the decision to award it.

The new terminal was expected to have opened in 2027, servicing low-cost airlines and charter flights, provided 2,500 jobs and handling 3.5 million passengers annually. Since 2013, Beirut Airport’s existing terminal has regularly exceeded its six million passenger limit.

DAA International manages several airports in Europe and the Middle East. After taking part in competitive tendering processes, the company secured contracts to manage two airports in Saudi Arabia last year.

The DAA group’s retailing arm, Aer Rianta International, has separately and successful operated the duty-free section for Beirut Airport in partnership with Lebanese businessman Mohamad Zeidan since 1996.

In July 2021, the Lebanese parliament, which has been in turmoil for a number of years, passed a law requiring public procurement processes to be fair, transparent and competitive.

Jean Elliye, director of Lebanon’s public procurement regulatory authority, told L’Orient Today this week that the authority had not reviewed the deal and declined to comment on the legality of awarding contracts without a public tender.

Mark Daou, an MP for the secular opposition party Taqaddom, said necessary feasibility studies had not been undertaken, nor was a proper tender conducted. All contracts should be properly audited, he said.

“I’m glad that the intervention of the parliament and the raising of public opinion has been effective in stopping this deal and ensuring that proper procedures are followed,” he continued.

Earlier this week, Mr Browne told his local newspaper, the Wexford People, about his St Patrick’s Day visit to Lebanon, where he praised the Lebanese people but highlighted that the country is facing “serious economic and political turmoil.

“The economy is collapsing there. They are lovely people and it’s a beautiful city, but you can see major challenges everywhere you go there. This potential investment is the best thing we can do to help,” he said.

Lebanon has been without a new cabinet since last May and has been unable to appoint a new president since last November. The caretaker government lacks authority to carry out reforms required to qualify for an international bailout.

Regional expert Kim Ghattas said the handling of the contract was “the worst possible way of doing business in Lebanon, especially when a second airport terminal seems an unlikely economic priority”.

If Ireland wants to help Lebanon as Mr Browne said, “the best way is to demand accountability and transparency from the Lebanese leadership, after they sank the country’s economy,” Ms Ghattas said.

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