Lebanese construction companies are tipped to pick up the bulk of contracts that will come from the massive reconstruction process across the country.
Business delegations from all over the world have descended on Lebanon since a ceasefire was called on the 34-day bombardment by Israel in August.
A team of American companies visited the country in September – backed by a US $230 million (LBP347.5 billion) finance package from their government – while others have come mainly from Europe.
“We have received many delegations over the last few months from different countries, but I think eventually most of the work will go to Lebanese construction companies,” said Wajih Bizri, president, Lebanese International Chamber of Commerce.
“Lebanese companies will stand a much better chance because they know the market better, along with the demographics and how things are done.”
Although the labour force has gradually returned since the end of the war and projects that were already underway are progressing, reconstruction efforts have been hampered by political instability, and even more so since the assassination last month of Pierre Gemayel, a leading Maronite Christian politician.
The Centre for Economic Research in Beirut estimates that the cost of repair and reconstruction will exceed $7 billion.
Around 30,000 homes, 95 bridges, 900 businesses, 25 fuel stations and 31 utility plants were destroyed during the war, according to the latest figures by the Higher Relief Council.
“Ongoing projects are progressing, if slower than usual,” said Bizri.
“And the big project operators, especially those working in the southern area of Lebanon, where most buildings were destroyed, are now studying masterplans and discussing with the government about what needs to be done.
But if we have political stability, then work will move much faster.”
Bizri added that the current political crisis is also having an impact on real estate investment from overseas, and particularly from the GCC.
Before the war broke out, a large part of the ‘property buying’ was done by Gulf nationals.
“We have seen a much lower demand from Arabic clients, who are normally the major clients, especially in prime areas like downtown Beirut.”
UAE property development firms have ploughed an estimated $2 billion into Lebanon so far, and despite the slowdown, those currently operating in the country remain confident that the market will eventually stabilise and continue to attract investors.
Abu Dhabi Investment House (ADIH) recently submitted final plans for its $600 million Beirut Gate project.
“At the moment we don’t share any great pessimism,” said Michael Lawrence, director of real estate, ADIH.
“Lebanon is traditionally a good market for Gulf investors and is one they’re very comfortable with.”For all the latest construction news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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