Foreign firms hesitate returning to post-Qaddafi Libya

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Thousands of industrial projects signed by the regime of Muammar Qaddafi are still languishing in Libya, except those in the key oil sector, as foreign majors hesitate to return to the north African country.

Fifteen months after the ouster of the former dictator, reconstruction has been slow to take off, primarily because of insecurity, as authorities struggle to control armed groups formed during the war that toppled Qaddafi and killed him in October 2011.

A lack of well organized and effective police and army has further compounded the sense of insecurity.

“The question is of security for our companies,” Helene Conway-Mouret, French minister for nationals abroad, said in Tripoli last week.

In other cases, however, companies are demanding compensation for damages suffered during the uprising, with properties having been looted or bombed during the conflict.

And still other projects are on hold because the authorities are investigating whether bribes were paid to secure lucrative contracts.

The lacklustre industrial situation is particularly evident in the housing, telecommunications, health, education and transport sectors.

China Railway Construction Ltd, for example, left behind three sites in Libya, including the laying of Tripoli-Sirte railway line worth $4 billion (3 billion euros).

Also languishing is the expansion of Tripoli’s airport by French companies Vinci and Aeroports de Paris, as well as dozens of housing and shopping complexes involving Brazilian, Spanish, Tunisian and Turkish firms.

Since last January, Libya’s planning ministry has been reviewing more than 11,000 contracts worth a total of $110 billion.

Deputy Planning Minister Ali Ahmed Saleh said the contractual terms of about 220 mega projects, each worth at least $80 million and valuing a total of more than $55 billion, were being revised.

Saleh accused companies of being involved in corruption and paying bribes to win contracts worth billions of dollars.

Serge Badran, a consultant based in Libya, rejected allegations that French companies were engaged in corruption, saying “French enterprises, aware of French law, were careful at the time they signed contracts.”

Meanwhile, he said the “return of foreign companies depends on negotiations with the authorities over compensation for damage suffered during the conflict.”

He added that negotiations would also focus on “bringing prices into line with the market.”

Oil majors, however, have been quick to resume operating in Libya.

Libya, the fourth-largest oil producer in Africa, has already reached its pre-conflict output of 1.6 million barrels per day.

Production picked up on the back of the rapid return of such foreign energy firm as Total of France, Eni of Italy, Repsol of Spain, Witershall of Germany and Occidental Petroleum of the United States.