By Nigel Ash.
Tripoli, 21 February 2013:
Prime Minister Ali Zeidan has said that Libya is poised to hand over some $10 billion, . . .[restrict] around half the outstanding contract payments owed to Turkish contractors. Moreover the country was prepared to pay compensation for projects these firms had had to abandon at the revolution.
However the deal is conditional on Turkish firms returning to these suspended projects. As work on each resumes, Zeidan said that the contractors would receive half of what they were due, with the remainder to be paid in two 25 percent payments, dependent on progress.
The announcement came after Zeidan’s meeting in Ankara yesterday with his Turkish opposite number Recep Tayyip Erdogan. At this encounter Zeidan made the commitment to expedite the settlement process, while also holding out the opportunity for Turkish construction companies to win major new projects, as Libya rebuilds its infrastructure.
“Some Turkish firms suffered because of the war and of course we want to pay any damages. However, ” he added, according to the Anatolian Press Agency,” Libya has just gone through a period of devastating war. We are very serious on the debt subject. We know what the problem is and we are going to take it up seriously.”
At a joint press conference Erdogan confirmed that Zeidan had said his government would “solve the issues about progress payments and compensation with our ministers. We have said we wish our construction companies to go back to Libya to complete their unfinished projects. We are pleased to see the same desire from Libya.”
Zeidan described the relationship between Libya and Turkey as “privileged”. He said that his talks with Erdogan had also touched on energy cooperation between the state-owned Turkish Petroleum Company and the Libyan NOC which, he said, shared the same vision.
The Turkish economy minister, Zafer Caglayan, who had also been part of the meetings and spoke at the press conference, said that he “had faith” that the debts owed to some 100 Turkish firms for projects commissioned in the Qaddafi era, would be paid.
More than 3,000 Turkish nationals evacuated Libya in February 2011. Although companies have sent back a number of employees to assess stalled projects and assist in the calculation of likely compensation claims, there has been a general reluctance to resume any major work, until it was clear that real progress had been made on back payments. The promise of half outstanding debt being repaid upon work resumption with the rest in two later tranches, is not in fact new. It was floated by the El-Kib government to contractors from a number of countries, including Turkey. However the original offers did not cover compensation and according to some contractors, carried no guarantee that deals would not be called in and payments delayed on the grounds of alleged corruption.
Caglayan said that there was immense potential for an expansion in Libyan-Turkish trade ,which last year stood at around $2.5 billion. He believed that it could easily expand to $5 billion and double again within just a few years.
It is clear that Zeidan’s announcement of the imminent settlement of half the debt, comes at the end of a concerted campaign by the Turks to be given priority in getting their money. Caglayan had spent a crowded day in Tripoli on 17 February meeting a series of ministers, including Zeidan and also GNC president Mohamed Magarief . He then went on to meet compatriots who were attending a Libyan-Turkish business forum at the Radisson hotel.
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