A LibanPost office near Beirut’s Justice Palace. (Credit: Philippe Hage Boutros)
Almost a year after the launch of the first in three successive calls for tenders aimed at helping the Telecommunications Ministry find a successor to LibanPost, the situation remains at a standstill.
The contract was awarded in July to Merit Invest, the Lebanese holding company of the Saade family, owner-operators of the French transport and logistics giant CMA CGM, along with their subsidiary, Colis Privé. The bid included provisions of “technical assistance” from the French Post Office.
Not only is the contract still unsigned, but its future has become uncertain following last week’s release of a report by the Court of Audit criticizing the ministry for the manner in which it awarded the contract. The court’s primary mission is to scrutinize the use of public funds.
Responding to a request from cabinet, caretaker Telecommunications Minister Johnny Corm solicited the court’s opinion in August. The court’s ruling is partly based on a report compiled by the Public Procurement Authority, published on July 31, more than two weeks after the results of the tender were announced.
The PPA’s post-award evaluation adheres to the standard procedure set by the Public Procurement Code, which has been in effect since 2021.
Cabinet retains the authority to potentially disregard the Audit Court’s opinion and proceed with contract approval. CMA CGM declined to comment on the matter.
The Court of Audit’s evaluations
In a 25-page decision dated Aug. 14, signed by the Audit Court president Mohammad Badran, the court levied significant criticisms against the ministry. These evaluations include:
· Initiating the call for tender without conducting a comprehensive “clear study of the postal services market.”
· Allocating too short a deadline for bid submissions.
· Approving the contract for the sole bidder.
· Adopting specifications tailored to suit the particular characteristics of Merit Invest and Colis Privé’s proposal.
Furthermore, the court’s decision included a table that, based on its calculations, illustrates that the terms of the tender awarded to Merit Invest and Colis Privé would result in a revenue loss of $5 million over a nine-year period for the state. This contrasts with the conditions of the previous procurement, which was also won by the Saadé family’s holding company. It’s important to note that the Telecoms Ministry swiftly canceled the previous procurement after the results were announced due to a technical issue, although the PPA report did not address this particular detail.
The telecoms minister told L'Orient-Le Jour that he has asked the Audit Court to reevaluate its assessment of the procurement procedure. He has provided the court with new information in an effort to address the criticisms raised.
He expressed confidence that if the results of the tender were not validated, it would result in a squandering of public funds, and hoped “the court would provide a prompt response.”
Corm said his request was motivated by the fact that the longer the Lebanese state delays awarding this contract, the smaller its expected share of revenue will be, and the longer it will take for the selected operator to restore profitability to the service.
Corm also said his request to review the case was justified by certain “confusions” in the court’s opinion, though he provided no further details.
Ghana Post Company, which also took part in the call for tenders, lodged an initial appeal with cabinet, to contest the deadline for submitting bids.
The appeal, however, was rejected during the summer.
Further complications
The LibanPost company has managed the country’s postal services since 1998, and its contract has been renewed multiple times.
Since Lebanon lapsed into crisis in late 2019, however, the state has been extending its last contract with the company — owned by the Saradar group and the M1 holding, which belongs to caretaker Prime Minister Najib Mikati’s family — on a month-to-month basis.
It wasn’t until May 2022 that the government finally granted approval to commence a new tendering process for the postal services contract.
· The first call for tender was issued on Oct. 18, 2022, but no bids were received by the end of the deadline, which had been extended to Feb. 16.
· A second call for tender was issued in February, 2023. CMA CGM was the only bid to meet the deadline and was declared the winner at the end of March. The award was canceled in April, after the PPA issued an unfavorable opinion.
· A third award bid was launched at the beginning of June, with specifications revised to take account of the PPA’s observations and adapted to logistics companies.
It’s worth noting that the Ghana Post Company consistently withdrew its specifications in each tender process, and LibanPost (which is distinct from the ministry-owned brand of the same name) has no plans to reapply.
For a significant period, LibanPost’s pricing structure was based on the previous official exchange rate of LL1507.5 to the dollar. This year, however, the rates have been calculated at the parallel market rate, except for postal prices, which have remained unchanged.
This story first ran in French in L’Orient-Le Jour, translated by Sahar Ghoussoub.