Lebanon: Preparing to Rebuild

U.S. participation in the reconstruction of Lebanon is beginning to gather momentum, despite continuing uncertainty about long-term prospects for contractors in the war-torn country.

The giant Bechtel Group is among a number of construction and engineering concerns which have been asked by the government of Lebanon to bid on a technical assistance agreement which would assess the priorities for reconstruction, with particular emphasis on the infrastructure. Bechtel and the others will submit their programs to the Lebanese Council for Development and Reconstruction by April 11, and final selection will be made by the Lebanese authorities on April 25. The company chosen will play a strong role in advising the Lebanese government and could eventually become the main conduit for a multi-billion dollar reconstruction program.

In the meantime, two other U.S. firms are currently in the final stages of negotiating contracts with the Lebanese to restore disrupted services in devastated Beirut. Federal Electric International, a subsidiary of ITT, is negotiating with Lebanon's Ministry of Posts and Telecommunications (PTT) to rehabilitate eight exchanges in West Beirut, where 33 percent of all telephones are currently reported to be inoperative. The project will be financed by a $7.7 million grant recently approved by the U.S. Agency for International Development (AID) for telecommunications projects in Beirut. Boston's Dresser McKee, an engineering consulting firm, is conducting negotiations on a consulting project for a drinking water and sewage sanitation scheme which would help the Lebanese, in the words of one company executive, "to buy time by patching up their waste water and drinking water pipes," which he described as "ancient." Funds for this project will also be provided by AID as part of the $111.8 million in emergency relief and rehabilitation funds allocated in the wake of the invasion of Lebanon.

Extra Grants Pending

Recently, AID proposed that an additional $150 million be allocated in the form of grants to Lebanon in fiscal 1983 and 1984, but the proposal has not yet had congressional approval. According to AID officials, the $150 million would include:

$69.2 million for a capital equipment fund to help the Lebanese obtain machinery and heavy construction equipment.
$32 million to repair and rehabilitate sewer and waste disposal systems and repair damaged drinking water pipes.
$15 million for telecommunications repair and equipment.
$10 million for health service and rehabilitation of clinics and hospitals damaged by bombing.
$10 million for the promotion of small-scale enterprises aiding in the reconstruction effort.
$2.5 million for the Council for Development and Reconstruction.
$1 million to provide health care in Lebanese schools.
Assorted funds for relief organizations, including Save the Children ($6.2 million), Catholic Relief Services ($2.6 million) and the YMCA ($1.5 million).

AID officials say that at least some of the package is to be committed by May.

Spokesmen for Morrison-Knudsen, the Ralph M. Parsons Corp., the Fluor Corp., and other engineering concerns said they remain enthusiastic about the prospects for U.S. companies in Lebanon, although a Morrison-Knudsen spokesman said his company is seeking assurances that war risk coverage would be available if it undertook reconstruction projects. He indicated his company's keen interest in a coastal road project in Beirut, but speculated that any construction effort could be hampered by the presence of foreign troops, who have created military zones along much of the Lebanese coast.