Dis­sect­ing a waste em­pire

How Le­banese gov­ern­ments cre­ated a trash mo­nop­oly

Executive Magazine - - Economics & Policy - By Matt Nash

While ev­ery­one in Le­banon — from taxi driv­ers to elected of­fi­cials — “knows” the coun­try’s largest waste man­ager is as dirty as the trash it col­lects, when pressed for proof, they have lit­tle to of­fer. In­deed, even ques­tion­ing the “fact” that Suk­leen — and, by ex­ten­sion, par­ent com­pany Averda — is cor­rupt will likely get you dis­missed as a knownoth­ing. Break­ing the near ab­so­lute si­lence the com­pany has main­tained since it be­gan op­er­a­tions in Le­banon in the early 1990s, Averda Chief Ex­ec­u­tive Of­fi­cer Malek Sukkar opens up to Ex­ec­u­tive in a two-hour in­ter­view af­ter fa­cil­i­tat­ing tours of the com­pany’s op­er­a­tions in Abu Dhabi and Le­banon. Ques­tions about the pri­vate, fam­ily-founded com­pany re­main — most no­tably con­cern­ing their yearly prof­its — but months of in­ves­ti­ga­tion sug­gest there is more govern­ment neg­li­gence than cor­po­rate wrong­do­ing to the Averda story.

Maysarah Sukkar moved his en­gi­neer­ing com­pany, founded in 1968, to Saudi Ara­bia af­ter the out­break of civil war in Le­banon. The work Sukkar se­cured in the king­dom in­cluded the op­er­a­tion and main­te­nance of two slaugh­ter­house waste in­cin­er­a­tors in Mecca. “We had a lot of ex­per­tise in that spe­cific tech­nol­ogy of in­cin­er­a­tion,” Maysarah’s son Malek Sukkar says, re­call­ing the com­pany’s en­try into the Le­banese mar­ket. That ex­pe­ri­ence led the com­pany to bid for a con­tract in post-war Le­banon to fin­ish build­ing and test-op­er­ate a trash in­cin­er­a­tor then-lo­cated in Am­rousiyeh. Ac­cord­ing to doc­u­men­ta­tion pro­vided by Averda, Sukkar En­gi­neer­ing beat France’s INOR (a com­pany whose name has since changed to Inova) in a com­pet­i­tive bid to com­plete the pro­ject which INOR had taken on in the late 1980s. The con­tract’s value, Averda says, was $1.752 mil­lion. This was the prover­bial foot in the door for Sukkar En­gi­neer­ing, which by 1994

THERE IS MORE GOVERN­MENT NEG­LI­GENCE THAN COR­PO­RATE WRONG­DO­ING TO THE

AVERDA STORY

1996, and the Min­istry of En­vi­ron­ment — un­der then–Min­is­ter Akram Che­hayeb — banned waste in­cin­er­a­tion in 1997. The end of in­cin­er­a­tion, how­ever, did not mean a halt to pub­licly fi­nanced work for Averda in Le­banon. Suk­leen had been col­lect­ing waste in the cap­i­tal and its sub­urbs since 1994, and the clo­sure of the in­cin­er­a­tors brought Averda more busi­ness.

Le­banon’s in­fra­struc­ture in the 1990s was in sham­bles. In 1993, the World Bank loaned the coun­try $175 mil­lion for what was sup­posed to be three years of “emer­gency re­con­struc­tion and re­ha­bil­i­ta­tion” work. One of the loan’s many tar­gets was de­vel­op­ing waste man­age­ment sys­tems across the coun­try. The solid waste com­po­nent of the loan was later ex­cised from the main pro­ject to be­come a pro­ject of

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