Lebanon's postwar reconstruction far from complete

BINT JBEIL, Lebanon, July 9 (Reuters) Most of the old town of Bint Jbeil still lies in dusty ruins a year after war erupted in Lebanon between Israel and Shi'ite Hezbollah guerrillas.

But among the silent streets of shattered houses in what was once a densely packed neighbourhood, 60-year-old Ihsan Bazzi has used his retirement nest egg to rebuild his family home.

''The engineers told me they wanted to demolish the house, but I refused. I inherited it from my father who built it stone on stone,'' he explained over bitter coffee and sweet cherries.

Qatar, which has promised to rebuild Bint Jbeil and three other southern towns hardest hit in the 34-day war, paid Bazzi nearly a quarter of the 32,000 dollars he has spent on repairs.

He has received nothing yet from the Lebanese government or Hezbollah. ''I didn't wait for anyone to help me. I see the humiliation of the people pushing and shoving to get money -- and you see the (party) supporters getting paid first.'' Both Hezbollah and government officials involved in rival reconstruction efforts agree that Bint Jbeil is a special case.

Conflicting damage assessments, disputes over whether the historic town centre should be preserved or replaced with apartment blocks, and the absence of many property owners who live in Beirut or abroad have helped to delay the Qataris.

Locals are grateful to the Gulf emirate anyway, contrasting its deeds with decades of government neglect of the south.

''As far as (Prime Minister Fouad) Siniora is concerned, anything south of Sidon isn't part of Lebanon,'' complained the pro-Hezbollah head of Bint Jbeil municipality, Ali Bazzi.

Siniora said in May the government had spent 318 million dollars on rebuilding after the war that began on July 12 when Hezbollah captured two Israeli soldiers. The Shi'ite group backed by Syria and Iran says it has paid out more than 300 million dollars.

COSTS OF WAR The conflict cost the lives of 1,200 people, mostly civilians, in Lebanon, and 158 Israelis, mostly soldiers.

Israeli bombing devastated parts of the south and Beirut's Shi'ite suburbs, along with bridges, airports and other targets elsewhere. Hezbollah rockets caused damage in northern Israel.

Politics has poisoned reconstruction efforts as Siniora's government uses Western backing and Arab funds to compete with Hezbollah's parallel institutions oiled by Iranian money.

The government won 7.6 billion dollars in aid pledges from foreign donors in January, but has received only 1.3 billion dollars, mainly from Gulf Arab states. Western aid was tied to reforms that have withered amid a deadlock with the Hezbollah-led opposition.

Nevertheless, Brigadier-General Yehyia Raad, head of the government's Higher Relief Council, said nearly 90 percent of war damage to Lebanon's infrastructure has been fixed and almost 80 percent of compensation has been paid in the south, but only 40 percent in Beirut's southern suburbs, a Hezbollah bastion.

''We have paid whether the recipients are from Hezbollah or not,'' he said, adding that there was no coordination with the group. ''We don't know what they pay and what work they do.'' The United States, which views Siniora as a key Arab ally, complicated Hezbollah's task by adding its reconstruction arm, known as Jihad al-Bina, to its terrorism watch list.

A new Hezbollah unit, known as Waed (Promise), plans to launch reconstruction this month in a bomb-flattened Beirut suburb once home to Hezbollah's formidable ''security compound''.

Hezbollah official Bilal Naim said Waed would spend 100 million dollars on the project -- if the government paid its promised share of 250 million dollars in compensation to owners and tenants.

CASH HANDOUTS ''We expect this operation to take about one and a half years,'' Naim told Reuters, outlining plans for wider streets, public gardens and underground parking in every block of flats.

He said Hezbollah, which paid displaced families 12,000 dollars each for rent and furniture last year, would soon give them another 4,000 dollars to help pay rent until their homes were rebuilt.

Hezbollah's dramatic cash handouts, which began soon after the war ended, underlined its energy and determination to win hearts and minds -- as well as its access to Iranian coffers.

The government also had access to politically motivated Gulf money with no strings attached, said Khalil Gebara, co-director of the Lebanese Transparency Association, linking its slower response to institutional flaws in a corrupt political setup.

Sprawling government agencies overlap with ministries and municipalities and are often sources of corruption, he said, citing the Council for the South, a body long in the hands of Parliament Speaker Nabih Berri's Shi'ite Amal faction.

The government uses the council as the main channel to distribute reconstruction funds in the south.

''The problem with Lebanon is that money has been politicised,'' Gebara lamented.

REUTERS SKB DS1245