LibanPost’s Beirut sorting center. (Credit: Philippe Hage Boutros)
In less than 24 hours, CMA CGM went from withdrawing its bid to run Lebanon’s postal service to being the sole candidate in the second tender issued by the Ministry of Telecommunications to replace LibanPost.
CMA CGM has been chosen as LibanPost’s successor.
Initially, the French transport and logistics giant, led by French-Lebanese businessman Rodolphe Saade, declined to participate in the March tender. Ultimately, the company made its bid w just 15 minutes before the deadline.
CMA CGM’s press office confirmed its bid to L’Orient-Le Jour just before caretaker Telecommunications Minister Johnny Corm’s press conference officially announcing it.
According to the minister, the sole bid to replace LibanPost was submitted by Merit, the Saade family’s private holding company, and the French parcel-delivery company Colis privé France.
A senior telecommunications ministry official told L’Orient-Le Jour that the disparity between the companies submitting the bid and the company receiving the contract should not pose a problem.
In a press release, Corm’s office announced the tender’s outcome the same evening, which took place in the presence of Omar al-Barraj, a Public Procurement Authority (PPA) member.
15.5 percent of gross profits
Although it was the only one received, the bid submitted by CMA CGM was accepted due to a provision in the new public procurement code adopted in 2021.
Article 25, paragraph 4 of Law no. 244 lists the prerequisites for accepting bids under these circumstances. These include: the tender must comply with all the requirements; the proposed price must be suitable; above all, the award of the contract must be of urgent public interest.
The PPA is charged with providing an opinion concerning whether the bid is compliant to these prerequisites. The ministry must indicate its willingness to deal with the sole candidate.
It appears that these requirements were met within a few hours of the government receiving the bid.
“The tender was launched in accordance with the rules, and the LibanPost contract was automatically renewed for three years. The proposed price was 15.5 percent of the gross profits generated [which is confirmed by the Ministry]. The specifications required a minimum of 10 percent [of gross profits], while the previous company paid only five percent,” according to the unnamed senior official.
Additionally, according to the terms of the document, candidates were required to commit to retaining at least 70 percent of the existing staff, which was approximately 800 people at the time of the announcement.
CMA CGM made no comment before or after the announcement of the decision. The carrier’s bid is particularly surprising, given that the logistics firm had announced in January that it would not do so, despite having withdrawn its book of technical, administrative and legal specifications a month earlier.
Those involved in the tendering process firmly denied press reports suggesting that a “deal” had been made behind the scenes to ensure that CMA CGM would win the contract indirectly.
This was against the backdrop of revelations that briefly sparked a controversy over the management of postal services since the early 2000s.
The inclusion of Lebanese postal services into CMA CGM’s existing Lebanon portfolio appears to be in line with the carrier’s development strategy in the country, which began several years ago. CMA CGM currently operates two container port terminals in Beirut and Tripoli in North Lebanon.
It is currently unclear whether CMA CGM will retain the LibanPost brand, which is owned by the ministry and is separate from LibanPost SAL — the company that has been managing postal services since 1998.
The Build, Operate and Transfer (BOT) contract for LibanPost expired at the end of 2019. LibanPost SAL is jointly owned by the Saradar Group and the Mikati Family’s M1 Group also holds shares in the company.
In May 2022, the government of caretaker Prime Minister Najib Mikati approved the launch of a tender to reopen the public contract for postal services.
The first bidding process was initiated on Oct. 18, 2022, with a submission deadline of Jan. 24. When no bids were received, the deadline was extended to Feb. 16, but with no success. Subsequently, authorities launched a second call for tenders with no significant modifications to the first, setting a March 29 submission deadline.
This story originally ran in French in L’Orient-Le Jour, translated by Sahar Ghoussoub.