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Lebanonwire, March 31, 2004

The Daily Star

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Cellular sector bidding provokes mixed response
Some consider grand theft unveiled


By Majdoline Hatoum , Leila Hatoum and Elie Hourani
Daily Star staff

Monday's bidding process for the mobile sector prompted self-congratulatory reactions from the presidency on Tuesday along with criticism from various politicians and the public, who considered that the process had unveiled a scheme involving grand theft.

Politicians called for the judiciary to intervene and pinpoint the blame on those who squandered public resources, while some people interviewed on the streets of Beirut even demanded the death penalty for those who they said had committed this grand theft.

"It is the responsibility of the judicial authority to move and try those responsible for such squandering," said former Beirut MP Najah Wakim, who used to be outspoken in Parliament about excessive spending and corruption in government. "Alas, all cries are met with a  deaf ear," he added.

The mobile sector, which has been operated by both LibanCell and Cellis for $15 million a month, witnessed a tender that took place on Monday, where a German company offered a price that was about 30 percent lower than current rates.

The tender results were announced in the presence of the American, German, Italian, Norwegian and Egyptian ambassadors to Beirut and European Union, Kuwaiti and French delegates.

An informed source close to the presidential palace said Tuesday that President Emile Lahoud was successful in handling the cellular sector tender with integrity and transparency.  The source said Lahoud was guided, in his handling of the cellular sector, by three criteria: Preserving public funds, concluding the cellular sector privatization with transparency and maintaining the continuity of the privatized cellular sector so it will not be affected by any new developments. This would safeguard the interests of the public, the source said.

The same source said the figures provided by the Telecommunications Ministry showed that the two companies were making, before June 2002, an annual profit of about $600 million. Now, such profits will be increased by new cellular lines, which will increase the state's profit as well.

The source said that, in less than two weeks, more than 25,000 new cellular lines were sold to the public.

"What happened shows the theft that was going on, and those who are responsible have been stealing from the people since 1992," Wakim said.

Former Minister Mohsen Dalloul's office manager, Jamal Chehadeh, said that "the companies had an investment contract, which was later abrogated by the government."

Dalloul, who is Prime Minister Rafik Hariri's son-in-law, is said to own shares in LibanCell.

As for the high price that was paid to Cellis and LibanCell, Chehadeh said that "in this matter we have to refer to Telecommunications Minister Jean-Louis Qordahi. He was the one who extended the deal with the two companies for almost a year and a half. Besides, it was a consensus deal between the government and the two companies."

The source said that, with the new lines, the state would be making around $800 million per year. However, by the end of the year, this yearly profit will approach $1 billion.

Prime Minister Rafik Hariri's advisor, Amal Modallali, said that Hariri has no comments regarding the matter at the time

being. Likewise, Public Works and Transport Minister Najib Mikati's personal assistant said that "Mikati will provide comments for any subject except the cellular issue."

Mikati owns shares in Cellis, while Hariri is indirectly affiliated with LibanCell through his son-in-law.

Nabatieh MP Mohammed Raad said that "both Cellis and LibanCell were getting paid $15 million per month to operate the cellular nets." According to Raad, "governmental assessments for the operation is about $3 million per month, which leaves a $12 million difference that poses the question."

Saying that he was not really into the details of the issue, Raad said that he needed some time, but he was not available for further comments later on.

The Free Patriotic Movement's (FPM) head of press office, Elias Zoghbi, saw the entire matter as fraught with corruption and delusion.

"Regarding the cellular issue, the FPM considers it a kind of fraud and deception," Zoghbi said. "They talk about the 30 percent that they are going to save, I think that there is 300 percent squandering."

"They say that this will save up to $40 million. I say who holds the accounts? What makes you so sure that there isn't $200 million saved? Or more!" Zoghbi exclaimed. "It is all a political bluff to cover up the atrocities that are committed," he said. With the current national debt reaching over $32 billion, "if the cellular sector had been properly invested, we would have covered some of the debt," Zoghbi added.

"The cellular issue was a project that the companies and related authority figures benefited from since the days of President Elias Hrawi until current President Emile Lahoud," Zoghbi said.

He added that people should express their displeasure in the upcoming elections.

Zoghbi affirmed that "the FPM will not clear anybody  from 1995 till now."

Beirut MP Nabil de Freij, who is a member of the Hariri parliamentary bloc, questioned why Qordahi paid each

company $7.5 million per month? And why is there a 30 percent difference?

"Personally as an MP and as a person who is following the cellular issue, I say that I was thrilled to see the cellular file has finally come to an end," de Freij said. He was upset because of Qordahi's way of handling the file politically instead of "handling it as a telecommunications minister," de Freij said. "What makes me sad is that this file, which is 100 percent economic, turned into a completely political matter," he added.

De Freij posed another important issue regarding the old tender. "Why did the old tender fail and the new one work out fine?" de Freij asked. "The three companies (Kuwaiti, German and French), which quit the old tender due to some disputes with Qordahi, are the same ones that participated in the new one."

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