Lebanon’s municipal fund runs over $2 billion deficit as waste expenses multiply

      Published on Thursday, 11 October , 2018      639 Views     
Lebanon’s municipal fund runs over $2 billion deficit as waste expenses multiply

Expensive local fixes to Lebanon’s lingering waste crisis have caused a staggering $2 billion deficit in the country’s common municipal fund, sources with firsthand knowledge tell The National.

The Independent Municipal Fund is a form of central government support for local municipalities made up the revenue from taxes and fees, such as levies on telecommunications and electricity.

It is collected, held and distributed by the Finance Ministry based on size of local population and contribution to the pool. Reports estimate the total fund is worth billions a year, although the government offers no official annual total.

These disbursements are intended for providing local services, running local administration and local development projects.

The United Nations Development Program estimated in 2016 that some 70 per cent of Lebanese municipalities rely on the common fund for 90 per cent of their income.

While the fund has had problems for years – including how money is allocated as well as the regularity with which the government disburses cash – Lebanon is also experiencing a waste crisis. In 2015, the central government finally closed the Naameh landfill site south of Beirut after years of delays. Until then, it had been the only dump site for trash generated by the capital and the Mount Lebanon region – where over half the country’s population of between 4.5 million people reside.

Without announcing a plan, the closure sparked a massive waste crisis that has subsequently led to other localised crises across the country and the government to unofficially devolved rubbish collection and handling to local areas.

But nearly two thirds of municipalities have fewer than 4,000 residents and therefore handling waste load requires financial and technical capacities beyond their limited means.

An official at the Finance Ministry tells The National that the current deficit is a consequence of the fact that the Cabinet raided the Independent Municipal Fund to foot the bill for local waste management contracts signed by municipalities and central government entities with no other means to pay.

Due to the small size of many of Lebanon’s villages, the waste sector has been unable to develop economies of scale and waste collection is often expensive in comparison to other countries in the region.

The government has been taking a percentage of the annual allocation to municipalities from the Independent Municipal Fund to cover the cost of their rubbish collection and disposal contracts.

These are set at less than 30 per cent for individual councils and at 50 per cent for municipal unions – a collection of councils that have banded together to share resources.

Category World | 2018/10/11 latest update at 7:30 AM
Source : The National | Photocredit : Google
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