Search
Search

Trash crisis

Garbage collection companies caught in the middle as bank threatens to seize assets

Garbage collection companies caught in the middle as bank threatens to seize assets

Piles of garbage spilled into the streets of Beirut during the 2015 crisis. (AFP/Joseph Eid)

Editor’s note: One of the sources quoted in this article has replied to it; you can find their response below. L’Orient Today believes in the right to response, enshrined in Lebanese law. We also stand by the article as published.

BEIRUT — A waste management company has accused a leading Lebanese bank of threatening to seize its assets if it does not repay its loans, potentially forcing it to stop trash pickup in Beirut.

CityBlu, which collects garbage in the southern suburbs of Beirut, Baabda, Aley and Chouf, said that Bank of Beirut had made the threat in an effort to recoup $20 million in outstanding loans it had made to the company.

“The bank is telling us, ‘Go get me dollars or we might seize your guarantees,’” said Milad Mouawad, the chief executive of CityBlu.

Bank of Beirut is one of the country’s largest financial institutions, and its chair, Salim Sfeir, is also the leader of the banking lobby. L’Orient Today approached Bank of Beirut regarding the allegations, but the bank refused to comment, citing banking secrecy laws.

Ramco, another waste management company that covers Beirut, as well as parts of Metn and Kesrouan, said it was facing a startlingly similar situation.

Ramco’s director, Walid Bou Saab, would not confirm which bank the company owed dollars to, but said this bank was threatening to repossess equipment if its $10 million outstanding loan is not repaid.

“There are properties and lands as collateral, from when we initially took out the loan, but now our trucks are also included,” he told L’Orient Today.

Ramco released a statement Sunday saying it would stop trash collection this week if the government did not begin paying it in local dollars rather than lira.

Both companies’ contracts are in dollars, as are their loans. However, the treasury has been paying them in lira since November 2019.

“We have been taking losses for over 10 months now, but we can’t take it anymore,” Bou Saad said.

The companies — and those who depend on their services — appear to be caught in the middle of the larger fight between banks and the government over who will bear the losses from the catastrophic collapse of Lebanon’s financial model.

But a solution may be in the works. CityBlu had ceased collection Thursday, but resumed Monday following a meeting with caretaker Finance Minister Ghazi Wazni, two local MPs and the head of the Southern Suburbs Municipalities Union, Mohammad Dergham.

Mouawad could not give full details of the agreement reached during the meeting, saying it first needed the approval of Central Bank Gov. Riad Salameh, but said the issue with the banks should be resolved within a week.

However, if this promise does not materialize, he said, the company will have no choice but to suspend its activities once again.

Both companies have previously met with Salameh, who they said had assured them he was willing to ensure they were paid in US dollars, but that this required the approval of the Finance Ministry.

“Meanwhile, we are sitting in the middle, paying the cost,” Bou Saad said.

Beirut Gov. Marwan Abboud said he understood Ramco’s complaints, but could not get behind the company resorting to threats.

“We don’t have dollars either, and it’s unacceptable to allow Beirut to drown in trash,” he said.

Five years ago, in the summer of 2015, flowing piles of garbage filled the streets of the capital when a landfill closed after it reached capacity and waste management company Sukleen stopped clearing up.

Tens of thousands of people poured into the streets in a series of protests throughout the summer.

Earlier this year, Ramco’s operations were thrown into controversy when employees, mostly migrant workers from India and Bangladesh, took an unprecedented decision to go on strike in protest at being paid in lira, despite having contracts in dollars.

Riot police were called in, and several protesting employees were injured.

The company continues to reimburse its employees, now mostly Lebanese, in lira. However, they are now even struggling to pay these salaries after banks introduced tighter limits on lira withdrawals.

These new limits have also restricted both companies’ ability to purchase fuel, which they now have to pay for in cash. This move was taken by gas stations following a requirement by the central bank that importers provide cash lira to obtain the US dollars at the official exchange rate they need to buy fuel from abroad.

Ramco, for example, requires around LL90 million worth of fuel per week to run its vehicles, but can only withdraw LL5 million in cash, Bou Saad said.

“We are paying the price, because of the government’s mistakes,” he continued. “At this point, we would be happy if the government just decided they wanted to take [waste management] back.”

Now, CityBlu and Ramco are awaiting the decision of the BDL governor to see whether they will be able to settle their bank loans and continue operations.

Whether Beirut sees a return to garbage piled on the street appears to have little to do with the trash collectors themselves.


*   *   *

Response from Milad Mouawad, the chair and general manager of CityBlu, to the above article:

CityBlu cares to correct and clarify the information that the Article contained:

1. Bank of Beirut never threatened CityBlu to seize its assets;

2. CityBlu refutes what was erroneously stated in the Article that Bank of Beirut threatened to recoup the outstanding loans of CityBlu if it does not repay its loans.

3. The context of the statement of Mr. Milad Mouawad stated in the Article “The Bank is telling us ‘Go get me dollars or we might seize your guarantees’” was misinterpreted; In fact, CityBlu fears that banks may seize its assets if it does not pay its outstanding loans in the currency of the said loans – i.e. the US dollars; and

4. Bank of Beirut continued, despite the financial crisis, to extend facilities to CityBlu that allowed the latter to continue the execution of its works of waste management and it had stopped extending such facilities only lately.

Editor’s note: One of the sources quoted in this article has replied to it; you can find their response below. L’Orient Today believes in the right to response, enshrined in Lebanese law. We also stand by the article as published.BEIRUT — A waste management company has accused a leading Lebanese bank of threatening to seize its assets if it does not repay its loans, potentially forcing it...