A recent cyberattack on Rafic Hariri International Airport in Beirut,lebanon compromised departure and arrival screens, disrupting the baggage handling system. LIMS warned that this attack will further damage Lebanon’s reputation, already tarnished by the airport’s ongoing decline due to poor management, deteriorating services, and a lack of organization. LIMS revealed that the current state of the airport is symptomatic of a more extensive concern – monopolies permeating airport-related services. This monopoly stranglehold extends across fuel supply for aircraft, duty-free operations, parking services, catering, and beyond.

The APPLE C program (Apply Public Procurement Law to End Corruption) was conceived by LIMS to tackle the issue of monopolies in public contracts and the irregularities and corruption they cause. In the case of the airport, services are witnessing a decline, prices are soaring, and the once-thriving tourism sector is experiencing a gradual stifling. Lebanon currently receives less than 2% of the tourists in the Middle East region.

Illustrating this issue, the bidding process for the duty-free area stands as a stark example, culminating in an inexplicable five-fold surge from the opening price. This development has prompted LIMS concerns about the rationale behind opening price determination, revealing a disconcerting detachment from reality. The evident amateurism in the tendering process for critical airport services not only opens the door to corruption but also inevitably inflates the overall cost of traveling to Lebanon. In a landscape where airline fares are overshadowed by excessive taxes and fees, such practices discourage tourism even more.

Another episode underscoring monopolistic rent-seeking tendencies took place in the Ministry of Telecommunications for the contract of “packet core services”—a vital element in telecommunications infrastructure facilitating data transmission. The Ministry decided to sidestep established public procurement procedures and to select a specific company in a glaring case of irregularity, raising concern about favoritism. The Ministry defended its unconventional approach by citing concerns about avoiding a monopoly, referencing Lebanon’s two mobile phone operators, MTC and Touch. Notably, the Ministry expressed apprehension that the provider of packet core services for Touch, namely Huawei, might secure the coveted Alpha contract as well.

LIMS issued a policy brief within the APPLE C program, arguing that public procurement laws explicitly prohibit the ministry from sole-source contracting. Competitive and transparent bidding processes is imperative to align with the legal standards and therefore, the Ministry should opt for an open bidding process. Rather than discarding the entire competitive framework, the Ministry could simply exclude any service provider already affiliated with a mobile phone operator, thereby ensuring compliance with the law and upholding the principles of competition. Furthermore, the duopoly of the mobile phone operators should be eliminated, and more operators should be allowed into the market, to allow a divers set of packet core service providers.

LIMS produced also produced another paper under the APPLE C, spotlighting inherent flaws within the Public Procurement Law itself. The identified loopholes serve as conduits for violations that undermine the very essence of fair and competitive procurement practices. These identified gaps include: (1) a lack of clear criteria for confidential purchases, granting ministers the latitude to designate any deal as confidential to evade scrutiny; (2) an absence of requirements for providing estimated contract values (benchmarks), enabling collusion among bidders that results in inflated prices when the government is making purchases and low income when the government is auctioning; (3) the allowance of unreasonable deadlines that discourage potential bidders, effectively creating an environment conducive to favoring crony entities; (4) the potential for mid-tender modifications, tailoring conditions to favor specific bidders and introducing elements of favoritism; and (5) the use of imprecise terminology that compromises the independence of contracting committees. These systemic issues collectively enable a circumvention of the intended purpose of the law, fostering an environment conducive to corruption and limiting competition to a single bidder. A critical amendment to the law is imperative to fortify its foundations, fostering genuine competition, and enhancing efficiency within the realm of public procurement.

• Beyond The “Airport Shutdown”… This Is What Dr. Mardini Revealed to “Al Hadath Online”, January 16, 2024: Hadath Online, Article AR    
• Exclusive: Telecommunications Reiterates “Striking Under the Belt” and Moves Towards Voluntarily Imposing the Paket Core Service, January 23, 2024: Limslb, Article AR                   
• Exclusive www.limslb.com: Gaps In “Public Procurement” Widen To Remove Deals From The Fair Competition Framework, January 18, 2024: Limslb, Article AR