No Smoking Gun in the Megrahi Release, But Big Projects in Libya Await British Companies

Gordon Brown and Kenny MacAskill

Despite arguments that the release of Al Megrahi was not motivated by economic gains, it is hard to believe that UK companies may not fully benefit from it, even if there is no paper trail on a deal between the UK and Libya. Ask British executive working in Libya and you will find an interesting consensus. British businesses have themselves made public statements that the release has removed “the last remaining obstacle to the Libyan market opening up to British firms,” according to a British construction industry publication (Building).

Quoting an industry source, the publication adds, "although growing numbers of UK firms are working in Libya, the source said there had been “some reticence” on both sides while he was imprisoned: “The situation caused embarrassment. Once the hubbub dies down this should make doing deals with the Libyans easier.”  What's not to rejoice? In addition to the British construction firms that are currently active in Libya, which include Atkins, Aecom, Buro Happold, Davis Langdon, Hill International, LCE Architects, Ramboll, Skanska and WSP, the Libyans are actively courting other UK companies. With spending on infrastructure projects expected to reach $50 billion over the next 3 years, the Libyans have been encouraging British construction firms to bid for projects and make offers. A number of British companies have been reportedly recommended to the Libyans by the South East Centre Built Environment (SECBE) helped by the UK Trade and Investment, as reported by media sources. 

Considering the opportunity in Libya and the slow recovery in Europe, it is easy to imagine why UK executives are looking for ways to expand into North Africa, and if this means unlocking Magrahi’s Scottish jail, then so be it. In the construction sector, Libya has a program to build 150,000 housing units to deal with a population growth of 3.5%. The Europeans have been watching Asian firms encroaching seriously into that space, with already 50,000 houses being built by Chinese, Malaysian and other Asian firms.  More recently South Korea’s Sungwon Corp won a near $1 billion contract to build some 5,000 residential units in Tobrouk.  Amco, a subsidiary of Hyundai Motor Co, also was granted a more than $400 million contract to build 2,000 public housing units in the city of Al-Qubbah. Also, United Fiber of Singapore recently entered Libya with a more than $1.2 billion construction project in partnership with TSG Asia, a unit of the American real estate development and trading company The Sandy Group to build low-income housing units, often referred to in North Africa as social housing. 

At about the same time, the Hyflux Group of Singapore and the General Desalination Company were awarded a deal to build seawater desalination plants in Tripoli and Benghazi capable of producing a combined 900 000 m3 of water. These kinds of lost deals do not go unnoticed to competitors, in particular the British, who often see themselves as key players in the return of Libya to the global scene, and as the dollar figures begin to add up to several billion dollars.

In a report on the state of the infrastructure sector in Libya, SECBE noted that transportation infrastructure is extremely weak and in need for substantial overhaul. It added that the paved road network (83,200 km) is insufficient to support the country development needs. In the tourism sector, the same report noted that there are only 194 hotels in Libya, most of which are located in the two largest cities, Tripoli and Benghazi. That sector has now some $7 billion of government money to invest in the coming five years. With Al Megrahi delivered to Libya, Tripoli will now have to deliver on its promises to boost British business in the North Africa country. Even if there is no deal signed on paper, the last obstacle has been removed.

By Arezki Daoud

The North Africa Journal