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Cablegate: Lebanon: Reconstruction Continues to Repair 2006

VZCZCXRO4730
RR RUEHBC RUEHDE RUEHKUK RUEHROV
DE RUEHLB #0472/01 0980406
ZNR UUUUU ZZH
R 070406Z APR 08
FM AMEMBASSY BEIRUT
TO RUEHC/SECSTATE WASHDC 1438
INFO RUEHEE/ARAB LEAGUE COLLECTIVE
RHEHNSC/NSC WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RUCPDOC/USDOC WASHDC

UNCLAS SECTION 01 OF 03 BEIRUT 000472

SIPDIS

SENSITIVE

SIPDIS

STATE FOR NEA/ELA
STATE PASS USTR
TREASURY FOR MNUGENT AND SBLEIWEISS
USDOC FOR 4520/ITA/MAC/ONE
NSC FOR ABRAMS/SINGH/YERGER/DEMOPULOS
DEPT PASS TO USAID/ME/MEA/MCCLOUD

E.O. 12958: N/A
TAGS: ECON EAID EFIN PREL PGOV PARM MNUC LE
SUBJECT: LEBANON: RECONSTRUCTION CONTINUES TO REPAIR 2006
HIZBALLAH-ISRAEL WAR DAMAGE

SUMMARY
-------

1. (U) The GOL and some Arab donors continue to pay beneficiaries
compensation to rebuild houses destroyed or damaged in the July 2006
war, but the GOL needs additional funds to complete the process.
The opposition has continuously attacked the GOL regarding
disbursement of compensation, and even pro-government political
forces and anecdotal evidence point to cases of fraud. In an effort
to show transparency, PM Siniora's office established a website and
the High Relief Council has referred fraud cases to the courts. End
summary.

GOL ENTITIES HANDLING POST-JULY 2006
RECONSTRUCTION EFFORTS
-------------

2. (U) The High Relief Council (HRC), affiliated with the PM's
office, handled the rehabilitation of property damage and
compensation payments for death and injuries after the July 2006 war
between Hizballah and Israel. The HRC also is handling assistance
for the reconstruction of housing units (damaged or destroyed), but
offers no compensation for damages incurred by businesses,
industries, or the agriculture sector. HRC's consultants, Khatib &
Alami Engineering, audit and assess damage to housing units and send
the files back to the PM's office. The HRC issues checks but does
not give them directly to Lebanese citizens who are beneficiaries,
instead funneling them through two politically-connected entities:

-- The Council for the South (managed by Speaker Berri's Amal
movement) to pay housing assistance to people in the south; and

-- The Fund for the Displaced (which caters to Druze leader MP
Jumblatt's constituents) to pay housing assistance to people in all
other regions affected by the 2006 war, including Dahiya (Beirut'
largely Shia southern suburbs).

DISBURSEMENTOF HOUSING ASSISTANCE CONTINUES
--------------

3. (SBU) Housing assistance is paid in two installments. The HRC is
using cash donated mostly by Arab donors and GOL funds to pay for
Phase I & II assistance for housing reconstruction. The HRC still
has some funds from Arab donors, PM's Recovery & Reconstruction
office Analyst Ghassan Tannous told us on April 3. The GOL is
paying a total of $40,000 in housing assistance for the
reconstruction of each demolished house, regardless of the size of
the house.

4. (SBU) The Council for the South has paid nearly 90 percent of
Phase I housing assistance and will continue to pay out the
remaining 10 percent, as well as start payments on Phase II,
expected to start this month, Tannous said. Tannous further
explained a Review Committee will check homes of people who received
a first installment to make sure that it was spent on housing
reconstruction so that they are entitled to receive the second
installment.

5. (SBU) The Fund for the Displaced is still paying Phase I housing
compensation and will start paying Phase II, Tannous said. The Fund
has asked concerned citizens to come to the Fund's offices in
Sanayeh (Beirut) and fill out a specific form for Phase II payment.
Similarly, a review Committee will check that the first installment
was used for housing reconstruction.

BEIRUT SOUTHERN SUBURBS: AN EXCEPTION
-----------------

6. (SBU) The PM's office has decided to regularize all non-compliant
buildings in the Beirut southern suburbs (the area knows as Dahiya)
and pay their owners compensation. However, unlike the rest of
Lebanon, where the housing assistance has to be spent on housing
reconstruction, beneficiaries of housing assistance in Dahiya "are
free to do with the money what they want; they can rebuild or sell
their share in the building," Tannous told us. It is worth noting
that Hizballah has launched its "Waed" (promise) project for the
reconstruction of Beirut southern suburbs residences. The project
covers 1.2 million square meters; it was launched in May 2007 and is
expected to be completed in 18-24 months.


BEIRUT 00000472 002 OF 003


ARAB DONORS CONTRIBUTIONS
-----------

7. (U) A number of mostly Arab countries and funds have adopted
selected villages in the south and pledged to rebuild them. Except
for Qatar and Syria, these countries are giving their contribution
to the HRC to be spent in the selected villages. These countries
are: Saudi Arabia (219 villages), Oman (29 villages), Kuwait (25
villages), Iraq (4 villages), Bahrain (1 village) and Indonesia (2
villages), Tannous said. He told us the HRC is paying housing
compensation of $40,000 to beneficiaries and stressed that the PM's
office submits to these donor countries quarterly progress reports.
He refuted press reports that housing reconstruction was slow,
blaming accusations on political interests, although he admitted
that it might be slow in some areas. He also noted that the last
report sent to Oman showed that beneficiaries have re-built their
houses (which were villas) as they were before the July war.

8. (SBU) Qatar is paying $40,000 in housing assistance directly to
people in four villages (Bint Jbeil, Khyam, Aita Chaab, & Ainata).
Qatar has set up a Qatar reconstruction office in Beirut, and this
office is contracting and paying directly for the reconstruction of
schools, hospitals, and government offices in the selected villages.
It also paid for the reconstruction of all places of worship in the
south. Tannous said Qatar is not reporting to the GOL or the PM's
office what it has completed or amounts spent, but the PM's office
learned recently that Qatar spent about $101 million on housing
compensation up to January 2008. Qatar is also paying compensation
to merchants in Bint Jbeil, according to press reports quoting
Qatar's Beirut office. Tannous told us he has been unable to touch
base with the Qatar reconstruction office. (Note: We also tried
several times, but could never get hold of POC there. End note.)

9. (U) Syria is rebuilding damaged houses in two villages (Qoleila &
Qana), Tannous told us.

IRAN'S CONTRIBUTION
-------------

10. (U) Iran has rebuilt some of the demolished bridges in south
Lebanon and one in the Biqa and continues rebuilding other bridges
in the south. It has also rebuilt some roads. Iran is saying
publicly that it is spending on several other sectors, such as
educational and religious buildings, medical centers, power sector
related projects - but no housing, however this needs to be verified
by the GOL, a source at the PM's reconstruction office told us.


OPPOSTION ATTACKS GOL ON HOUSING COMPENSATION ISSUES
----------------

11. (U) The opposition has continuously attacked the GOL on the
housing compensation issue. Accusations include statements that the
GOL is slow in disbursing housing compensation donated by Arab
countries, or the GOL will not pay the second portion of housing
assistance because of lack of funds, or that the GOL is diverting
donors' contributions to other sectors. This has lead PM Siniora to
say publicly that the GOL respects the wishes of donors on
where/what their contribution should be spent. Siniora said the
PM's website, www.rebuildlebanon.gov.lb, has details about each
recipient and the amount of compensation he/she received.

LOYALISTS CRITICAL OF FRAUD AND BUREAUCRACY
--------------

12. (SBU) There is talk about fraud, and compensation payments (for
housing and for disability) to people who do not qualify. Druze
leader and PSP head MP Walid Jumblatt charged recently that there
were 1,000 people in north Lebanon registered as having sustained
damages, while effectively only 20 people did. We also heard that
some Sunnis in Beirut received housing assistance although their
houses were not damaged in the July war. The HRC is following up on
fraud cases, whether about medical or housing compensation, and
brought some cases to court, the press reported. There are also
bureaucratic hurdles, as beneficiaries need to submit documentation
proving ownership. Many houses in the south were built without
legal permits during the Israeli occupation, and some houses in
Beirut southern suburbs were built on land owned by the government
or private individuals.


BEIRUT 00000472 003 OF 003


SISON

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