Lebanon to Sign Agreement with World Bank’s IFC to Privatize Airline
Lebanon will sign an agreement Tuesday with a World Bank division providing a 20-year loan to assist the privatization of struggling Middle East Airlines (MEA), Finance Minister Georges Corm said.
Corm, quoted Thursday in the Lebanese press, said the loan from the International Finance Corporation would provide 40 to 60 million dollars to compensate 4,500 employees of the state-run airline.
The Lebanese government plans to privatize MEA and a number of other public companies and services, including its water, telephone and electricity firms, to make up a public debt of 22 billion dollars, 137 percent of the country's gross domestic product.
Lebanon's central bank, which for the past four years has held more than 99 percent of MEA's shares, has long called for the privatization of the airline, which has lost 364 million dollars since 1996 despite efforts to cut down on expenses.
MEA signed a cooperation agreement last year with Air France and has since closed down several routes, but political differences have stopped it from going through with restructuring.
MEA, founded in 1944, has come under state control at various times, including after the 1996 collapse of Intra Bank, its main shareholder, and after Air France and Kuwaiti and Qatari investors left in 1996 in light of continuing losses from the country's civil war and political job placing.
Lebanon's parliament passed a law last month giving it wide control over all privatization operations - BEIRUT (AFP)
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