Capital Investment Programme Report L17023-0100D-RPT-PM-01 REV 7 Capital Investment Programme INTRODUCTION Since the start of the Syrian crisis, economic growth in Lebanon has slowed down sharply and the number of people living in Lebanon has increased sharply, with an estimated 1.5 million displaced Syrians entering Lebanon during 2011-2017. Despite the major reconstruction of Lebanon’s infrastructure that took place subsequent to the end of the 15-year conflict in 1990, with low levels of public investments after 2000, due in part to fiscal and debt limitations and delays in project implementation, Lebanon’s infrastructure still had significant gaps in various infrastructure sectors when the Syrian crisis evolved. The Syrian crisis placed increased pressure on Lebanon’s infrastructure, leading to deterioration of existing infrastructure, in particular in transport, and a widening of the gaps, in particular in the electricity sector. A sharp expansion of investments in Lebanon’s infrastructure is key to and a recovery of economic growth in the medium term, with increased private sector productivity, and the creation of employment opportunities in the short term. The short-term priority is the completion of projects for which for which external financing has already been secured. These are not part of the Capital Investment Programme (CIP). The CIP is a key pillar of the Government’s vision for stabilization and development against the background of the Syrian crisis and the effects this has had on Lebanon. It comprises new projects for infrastructure investment that will eliminate the gaps that exists between the demand and need for infrastructure services, in all sectors, and the supply, and reduce the cost to the economy of the lack of adequate infrastructure. The CIP is limited to projects in the physical infrastructure sectors for which funding from external lenders and donors or private investors are sought. The adoption of the Public Private Partnership Law in 2017 provides the legal framework for private sector investments in infrastructure. The projects in the CIP were selected in compliance with the sectors’ strategies, aimed at bridging the gaps and meeting the sustainable development goals, particularly ensuring decent work and economic growth, reducing inequality, ensuring clean water and sanitation, affordable and clean energy, building resilient infrastructure and promoting sustainable industrialization and innovation, making cities inclusive, safe, resilient, and sustainable. Projects were prioritized based on their readiness for implementation and their expected positive impacts to provide adequate basic services to households, enable sustainable urban development, and improve social security, stability and wellbeing. In the sector reports, scores of 1 to 3 are indicated with respect to readiness for implementation (availability of tender documents, environmental impact assessment and feasibility studies, or the time required to finalize them), and with respect to impact, scores of 1 to 3 are indicated to the degree to which existing investments are capitalized upon, socio- economic impacts and mitigation of the impacts of the Syrian crisis. The combined scores indicate the priority score, with 6 being the highest. The priority score is the main determinant for whether the projects form part of the first, second and third phases of the CIP. Concurrently with the prioritization as per the above, the indications of needs and demands received from the various regions, municipalities and villages were assessed and incorporated in the CIP where justified. These exclude projects that could be funded outside the framework of the CIP. The CIP will be adjusted as necessary in the course of its implementation to reflect evolving priorities and the outcomes of detailed appraisals and financial viability analysis, and environmental and social impact assessments. L17023-0100D-RPT-PM-01 REV 7 Page i of ii Capital Investment Programme TABLE OF CONTENTS 1 Context and Framework ................................................................................................................ 1 Project Rationale ........................................................................................................................... 1 Project Context and Objectives ..................................................................................................... 1 Methodology ................................................................................................................................. 2 Transport ........................................................................................................................................ 4 Introduction and Methodology ....................................................................................................... 4 Objectives ................................................................................................................................. 4 Context ..................................................................................................................................... 4 Methodology ............................................................................................................................. 5 Background and Current Conditions ............................................................................................. 5 The Role of Infrastructure ......................................................................................................... 5 Transport Infrastructure and the Lebanese Economy ............................................................... 6 Capital Investment in Transport Infrastructure .......................................................................... 8 Transport Infrastructure and Sustainable Development Goals ................................................. 9 Quality & Competitiveness of Transport Infrastructure ............................................................. 9 Roads ..................................................................................................................................... 10 Railways ................................................................................................................................. 11 Airports ................................................................................................................................... 11 Ports ....................................................................................................................................... 11 Transport and Trade Flows ................................................................................................ 12 Impact of the Syrian Crisis on the Transport Sector .................................................................... 12 Existing Program and Strategies ................................................................................................. 13 Land Use Master Plan 2009 ................................................................................................... 13 2006-2009 Development Programme ..................................................................................... 14 Comprehensive Sector Policy and Strategy for the Lebanese Land Transport Sector ........... 14 Summary of Proposals ........................................................................................................... 14 Development Vision .................................................................................................................... 16 Justification for New Capital Investment Programme .................................................................. 16 Capacity and Impact on Economic Activity ............................................................................. 17 Sustainable Development and Access to services for vulnerable groups ............................... 17 Facilitating Trade and Movement of Goods in and out of Lebanon ........................................ 18 Reintroducing Public Transport to Lebanon ........................................................................... 19 Generation of Employment ..................................................................................................... 19 Strategic Capital Investment Programme ................................................................................... 19 CIP Update: Municipalities and Governorates Requirements ..................................................... 23 Methodology ........................................................................................................................... 23 Analysis and Results .............................................................................................................. 25 Road Rehabilitation and Improvement Projects...................................................................... 25 L17023-0100D-RPT-PM-01 REV 7 Page i of v Capital Investment Programme New Links/Roads .................................................................................................................... 27 Maritime and Airports ............................................................................................................. 28 Public Transport Projects ....................................................................................................... 28 Parking Projects ..................................................................................................................... 29 Summary and Way Forward ..................................................................................................