www.libyaherald.com

ISSUE 2 APRIL 2013 BUSINESS EYE

Focus on CONSTRUCTION Interviews with Ministers Economy - Electricity - Social Affairs

Finance & Energy FDI Libya - Focus IT & e-Libya PRICE: 5 LYD PRICE: EDITORIAL ISSUE 2 APRIL 2013

BUSINESS EYE www.libyaherald.com

From the Editor CONTENTS 02 Focus: Construction It was noticeable that as soon as the second anniversary of the 17 03 Turkish construction in Libya February Revolution was passed and fears about security proved to be widely off the mark, foreign companies and organisations 06 Paints again started making a bee-line for Libya. 08 Cement and concrete 09 South Korean construction in Libya Security is an issue, but concerns about it have been massively 10 Sustainable design exaggerated, especially in the international media, and especially in relation to Benghazi and the east of Libya. As elsewhere in the Exhibition and Conferences 11 world, there is crime but it has to be put into perspective. 13 Water 14 Power Now that the February scare is seen to have been based on misin- formation, international companies should now feel assured that 14 Interview: Minister of Electricity Libya is a safe place to come and do business. There is a great 16 Transport deal to do, now that the LD 66-billion budget has been approved 19 Interview: Social Affairs Minister by the General National Congress. 20 Economy What Libya is looking first and foremost for at this point in time 20 Interview: Minister of Economy is for work on existing contracts to be restarted. Already that is 22 Oil and Gas happening. The other need that Libya is going to pursue vora- 26 Finance ciously is know-how, not just technical skills but administrative ones in scores of disciplines. 30 IT-Telecoms 34 Fairs However, while it is government spending that it going to drive 36 Special focus: FDI Libya development in the medium term, it is the private sector that in the longer term is going to drive economic growth and prosper- ity. The Libyan revolution was about giving Libyans the freedom EDITOR: to be in charge of their own lives as well as of the country. That Michel Cousins includes being free to run their own businesses if that is what [email protected] they want. +218 (0)91 770 3242 The country is moving irrevocably from a centralised economy MANAGING EDITOR: to a free market — albeit one where,because of the oil income, Sami Zaptia the state remains in the driving seat as far as major development [email protected] projects are concerned. The government and Congress are com- +218 (0)91 212 1272 mitted to it.

BUSINESS EDITOR: It is the private sector that international companies need to Nigel Ash particularly focus on. Last year’s growth figures, estimated by the [email protected] IMF at over 100 percent, were largely a case of restarting eco- nomic activities curtailed during the revolution. More interesting CHIEF REPORTER: is its prediction that non-hydrocarbon growth will average 15 per Ashraf Abdul Wahab cent a year for the next five years. Much of that will be private [email protected] sector growth.

SOCIAL MEDIA: Nihal Zaroug [email protected]

SALES AND MARKETING: Yolanda Zaptia [email protected]

CREATIVE DIRECTOR: Imad Ali Khan [email protected] Michel Cousins Editor-in-Chief

Hay Demashque, Al-Hadba Al-Khadra, © The Libya Herald PO Box 83510, Tripoli, Libya The views expressed are not necessarily those of the Libya Herald. Fax: + 218 (0) 21 491 0464 April 2013 Business Eye 1 FOCUS CONSTRUCTION FOCUS CONSTRUCTION

GOVERNMENT READY TO SPEND the fact that it could generate a massive Government number of jobs. Last month, the General Na- tional Congress approved the Turkish contractors remain bullish 2013 LD 66-billion budget, However, rebuilding Libya is going to cost spending drives opening the door both to reac- not tens but hundreds of billions. In Novem- tivating previous contracts and ber 2011, just before he resigned as interim More than a hundred Turkish companies are doing business in Libya. Most of them are allowing new ones. The prior- prime minister, Mahmoud Jibril estimated ity is on completing the tens that rebuilding Libya was going to cost $400 members of the TCA. The total worth of their projects in Libya is $19.1 billion. construction By Nigel Ash of thousands of housing units billion (LD 500 billion). No one disputes that across the country that stand figure — and it did not take into account long – but what about unfinished, in various stages of overdue new projects needed. ibya was one of the first overseas construction. LD 3.5 billion has markets that Turkish contractors been allocated to housing pro- NEED TO CHANGE LAWS entered in the 1970s, as they went the private sector? jects, the biggest single alloca- But, as Libyan businessmen have increas- abroad to grow their businesses. Thus, though Turkish firms have now more tion in the development budget. ingly been pointing out this year, the major L By Michel Cousins than 7,000 projects in 100 countries, Haluk- challenge in getting the cranes moving again Buyukbas, secretary-general of the Turkish Oil and gas projects come next, and the economy to grow is not about money hat Libya has a mountain of pro- Contractors Association (TCA) says Libya with LD 1.99 billion, followed by electricity and government spending. It is about the jects needing to be undertaken is has a special meaning and significance for projects at LD 1.88 bil- law. Government obvious to Libyans and foreign his members. visitors alike. The country’s infra- lion. Hospital and heath spending is the mo- projects are allocated structure is appalling even by Third World tor that drives the T LD 1.01 billion as are “Deep-rooted relations based on common standards. It is not just what was damaged economy at present, communications and There is today a strong history, social and cultural affinities, eco- or destroyed during the revolution. So much but the new Libya information projects. pushbythe government to nomic cooperation and friendship,” says was left to rot during the Qaddafi decades or “get the cranes is committed to the Buyukbas, “have existed between Turkey was poor quality in the first place or never private sector. The Education projects, in- moving again”. and Libya throughout history. The govern- built. challenge is remove cluding new schools, ments and businessmen of both countries the mass of Qaddafi- universities and tech- have spared no effort to improve both politi- Even the former regime finally realised the regime regulations nology institutes, get cal and economic relations.” Tripoli skyline extent to which Libya had been left behind. LD 947 million while that were designed looted or destroyed. In addition to all this, CONSTRUCTIVE DIALOGUE But the rush to develop and catch up was also defence projects (as opposed to defence to block a free market. GOOD RELATIONS they have failed to receive the payments for “As from February 2011, Turkish contrac- a rush by Qaddafi family and friends to line equipment and training) are given LD 800 These good relations have reportedly paid the projects they had completed prior to the tors have paid huge amounts for insurance, their own pockets. million. Water and water desalination pro- The biggest issue is land registration. Until it off in intensive trade negotiations between civil unrest.” commissions for the bank guarantee letters, jects get LD 263 million. Interestingly, the is sorted out, the mega projects will remain Tripoli and Ankara. During a visit to Turkey construction site security costs and similar Most of the projects – the housing, the rail- development budget for transport projects stalled while former owners claim title. Simi- last month by Prime Minister Ali Zeidan, he Buyukbas points out that immediately after claims. In this process, they have constantly ways, roads, airports, power and water pro- is set at LD 365 million (including LD 85 larly, individuals will not be able to use prop- offered to pay any contractors returning to the fighting ended, Turkish contractors vis- jects, hospitals colleges and universities and million on the railway project) but transport erty as collateral to raise funds for projects. their stalled Libyan projects 50 percent of ited their construction sites and expressed attempted to remain in a constructive dia- so much more — however, make sense and officials say they intend to spend more this their outstanding contracts immediately their willingness to resume the projects. logue with the Libyan authorities and have there is today a strong push by the govern- year – LD 500 million. The government and Congress appear to un- and the rest thereafter. “They have also realised the maintenance and done their best to create the necessary work- ment to “get the cranes moving again”. derstand the urgency. In the 2013 budget, LD construction of some public buildings such ing conditions to resume their business in The lowest allocation – just LD 1 million – is 334 million has been set aside for legal pro- At a private dinner party in Ankara with as police stations, schools, health centres, the country. Although significant progress Minister after minister says that Libya needs for tourist infrastructure projects, which jects, specifically land registration. It is po- Turkish Prime Minister Erdogan and the and airport terminals as a donation with re- has been made, so far there is still much to be to get foreign companies to come back and says a great deal about how both the govern- tentially one of the most crucial investments Economy Minister Zafer Caglayan, Zei- spect to the good relations with the National done as far as security and political stability complete projects stalled by the revolution. ment and Congress view the sector, despite in getting the economy moving. dan reminded his hosts that Libya was still Transition Council (NTC) and strong histor- is concerned.” emerging from a war and he asked that Turk- ical ties with the Libyan people.” ish contractors to “have patience.” He said But the key issue remains when promised Tripoli building site he could not give a clear road map for the He continues: However, “although two years payments will be made. This is more impor- payments. have passed after the civil unrest, construc- tant than the inability to collect progress tion companies still have not received their payments. “The ambiguity regarding the More than a hundred Turkish companies progress payments. Similarly they have also time frame and method of compensation for are doing business in Libya. Most of them not received compensation for their dam- damages and losses is a bigger issue.” are members of the TCA. The total worth of ages and losses.” their projects in Libya is $19.1 billion. The Buyukbas says that in their 40 years of work- outstanding progress payments add another “In order to swiftly resume their construc- ing in Libya, Turkish companies have ac- $1 billion; volume of performance and ad- tion activities in the country, Turkish con- quired a wide knowledge of local conditions vance payment bonds $1.8 billion; and the es- tractors expect that the damages and losses timated total amount of losses and damages suffered within the process to be detected or and good local relationships. $1.3 billion. at least a proper method of compensation to be determined.” He remains bullish about his members’ pros- Since they were obliged to evacuate their pects in Libya. “Even though they have been nationals quickly, Turkish contractors, says This he insists is important: “Although the going through a difficult financial phase, Buyukbas, “have been suffering from sub- Libyan government gave priority to the un- Turkish companies are willing to resume stantial amounts of losses and damages. paid progress payments in their statements, unfinished projects and to continue to un- Many construction sites have been damaged, the damages and losses are also substantially dertake new opportunities in Libya in the the equipment, materials, offices and camps important for the companies.” coming period.”

2 Business Eye April 2013 April 2013 Business Eye 3 FOCUS CONSTRUCTION FOCUS CONSTRUCTION

SEBHA CHAMBER OF COMMERCE SIGNS Bureaucracy threatens AGREEMENT WITH IZMIR CHAMBER The Sebha Chamber of Commerce signed an agreement with Izmir Chamber of Commerce. The agreement was concluded during the Izmir Furniture and Carpets show held from 27 February to 3 March in the Libya’s rebuilding Turkish city of Izmir. The agreement, signed by Sebha Chamber’s Chairman Mohamed Wanis and by the head of operations on the Turkish side, is to provide for the Inexplicable bureaucratic delays are mutual exchange of market information and to expand commercial visits jeopardising the completion of works aimed at increasing trade between the two nations. for which Libya has already paid.

By Nigel Ash

Hotel building site in Tripoli

t is not simply questions over out- in containers in the port at Benghazi.” has begun the ground works. However there standing payment and compen- are now moves to build the stadium else- sation that are holding back the “So everyone is waiting. But some of these where. Notes Hazneci: “The fact that Libya return of foreign contractors to materials are delicate. It is getting hot- is anxious about the Africa Cup 2017, it is Iprojects they abandoned at the start of ter and hotter in Benghazi. It is going to crucial to resume work at Tripoli Stadium - the revolution. Inexplicable bureaucratic be 50 degrees in those containers and which is a state-of-the-art structure, ASAP” delays are jeopardising the completion of some of the goods are going to be damaged works for which Libya has already paid. permanently. For example, the luggage CONFIDENT LIBYA WILL PAY system has these plastic palettes. They are Hazneci points out that Renaissance A case in point is Labraq’s new airport, going to be bent by the heat. I don’t know recommitted to its government projects almost finished but still needing a vast what is going to happen if this occurs, who in Libya without insisting first on agreed array of goods and equipment, includ- is going to pay for it, the customs penal- compensation, unlike some European ing its state-of-the-art baggage handling ties, the container charges to the shipping contractors who said they would not move systems. These have been sitting for companies. There are lots of unknowns.” until they were recompensed for losses suf- months in containers on the docks at Benghazi, awaiting release and collection. fered as a result of the revolution. Renais- SOME PROJECTS RESUMED sance has projects valued at $1 billion. The hold-up is nothing to do with the port Yet Hazneci and Renaissance are highly authorities, who are anxious to free up the optimistic about their work in Libya. The “At Renaissance, in principle, we have not valuable storage space, nor indeed customs. firm was he says,the first to return to Libya. made compensation a reason not to come Sources close to the docks say that the delay It now has 500 workers back in the country, back,” says Hazneci. “We did not make it a has everything to do with the Ministry of as against a peak of 3,000 before the revolu- condition. We came back and we are confi- Transport’s Transportation Projects Board tion. Besides Labraq airport, it is contracted dent that Libya will pay us eventually. We (TPB). Because the goods are shipped to to build new terminals at Tobruk, Murtuba, had the financial strength to be able to re- the name of TPB, they are the only people Ghat and Kufra. Work, he says, has resumed turn and start again and we know we will be who can authorise their release and nobody on all but Kufra, where the government compensated. Libya and Turkey have very seems to know why this is not happening. has been unable to supply the requested close ties. We understand they have been security, and flying in all the construc- through a lot. We are thankful for the jobs For Hakan Hazneci, Senior Vice President, tion material is too expensive an option. they awarded to us and are at their service.” Business Development at Renaissance Construction, having the material stuck Renaissance has also half-finished Trip- However he notes sadly that one result in Benghazi port is frustrating: “We are oli University’s new engineering facility. of so many stalled construction projects at an advanced stage with Labraq airport, Hazneci says that since the government has is that Libya is a mass of idle cranes, on which is a project we were paid for several said it will give priority to the completion which only the warning lights are still months ago. But we cannot finish because of healthcare and education projects, he is working. Two such Renaissance projects materials and equipment, everything from hopeful his firm will receive clearance to re- are the renovation of Tripoli’s Al Kabir paint, marble and wood to the luggage sume the work. Less clear is the future of the Hotel and the Bab Trablus mall, offices handling and security systems, are stuck Tripoli stadium project, where Renaissance and five-star hotel on the Airport Road.

4 Business Eye April 2013 April 2013 Business Eye 5 FOCUS CONSTRUCTION FOCUS CONSTRUCTION

Painting a bright LIBYA TO IMPORT PREFABRICATED HOUSING The Housing and Infrastructure Board be set aside for the ministry. This would was destroyed or badly damaged during business picture: (HIB) has issued a tender for 2,300 pre- have given it over LD 13 billion. In the the revolution. A 50-hectare site was set fabricated housing units. It is the first event, it received less than a third, LD 4 aside to locate them. call for such units to date although at billion, of which LD 3.3 billion is allo- Jotun Libya the end of last year, the Deputy Prime cated for housing and utilities projects. Minister, Abdussalam Al-Qadi, told the This includes, however, standard hous- By Tom Westcott General National Congress that the Min- ing as well as the wide-scale renovation istry of Housing and Utilities planned of homes damaged during the revolution Jotun is the leading paint company in Libya, home decor, has been to erect a total of 6,500 prefabricated and the cleaning of public spaces, water selling around eight million litres of paint lucrative. Jotun Libya units throughout the country as a tem- and sewage infrastructure. per year to Libyan businesses and homes. is now the industry porary solution to the persistent housing leader in a country problem. The tender, which closes on 21 April, A Norwegian company founded in 1926, Jo- where the paint sec- New Jotun factory in Zawia 2013, says the units are for 11 different tun first came to Libya in 1962. Oil had been tor is worth in excess It is not clear if this will be the first in a sites across the country but does not say than one source in case they can’t supply discovered here three years earlier and, rec- of LD 100 million per year. It sells to three succession of tenders for prefabricated where or mention specifications. enough,” Abdulaziz explains. ognising the country’s market potential, Jo- main markets: household paints (which units or if the government has had to cut tun established its first foreign factory in make up 75 percent of its sales), protective the number it was planning to install this One major destination for such units will Libya, later setting up the Libyan Norwegian exterior coatings for the oil and gas industry, Jotun Paints year. Last month, the Assistant Deputy be Sirte. A year ago, the local council ap- Industrial Company (LINOCO). Qaddafi and marine coatings for ships and offshore Minister Housing and Utilities said that proved the construction of 2,500 units in decided to take over the factory in the early installations. that 20 percent of the 2013 Budget would the town where a large number of homes Prefabricated building 1980s and substituted cheaper, substandard materials. Rather than be associated with poor quality paints, Jotun pulled out of the country. In 2010 Jotun Libya started

The company was brought back into Libya work on a factory in Zawia, by Abdulmenem Abdulaziz who worked in designed to make 15 million the oil and gas sector and noticed the dete- rioration of equipment in desert conditions. litres of paint per year. He recognised the need for good-quality pro- Partners in rebuilding Libya ! tective coatings and started importing Jotun Jotun Libya is now the industry paints. When Libya’s difficult market condi- Part of its success seems to have been its tions were eased, Abdulaziz established a devotion to a single product. “We have al- leader in a country where the business, Al Mumtaz, working as the sole ways just focused on paint and developing paint sector is worth in excess distributing agent in the country. this, which means we have kept ahead of our of LD 100 million per year. competitors,” Abdulaziz says. “But we don’t MULTICOLOUR INTERIOR DESIGN see ourselves as a company that sells paint; we see ourselves as more as selling an inte- In 2000 Jotun Libya opened its first “multi- rior design concept, putting our multicolour colour centre,” selling not only colourful centres on the high street rather than in in- To address this, in 2010 Jotun Libya started domestic paints but also the concept of inte- dustrial areas.” work on a factory in Zawia, designed to make rior design. “At the time, you could only buy 15 million litres of paint per year. Interrupted Joint Libyan Cement Manufactoring Company white or cream interior paint from hardware Jotun Libya Staff by the revolution, the project is still on hold, shops,” explains Abdulaziz: “White for the waiting for the return of the Italian contrac- www.jlcc.ly Libyan Cement Company Joint Libyan Building Materials ceilings and cream for the walls. We had an tors. “We are being patient,” Abdulaziz says, www.lcc.ly www.jlbm.ly original concept, but we needed to create a “but it will be a lot easier for us when we can demand for colours and patterns.” manufacture our own products.” Libyas successfull Joint Venture Today, customers can go to any Jotun out- Once work restarts, he estimates that the within the Construction Business! let in Libya and leave with one of 64,000 new factory will be producing paint within shades, mixed on demand by computerised 12 months. It is also expected to bring jobs to machines. Country-wide there are 80 mul- the area, employing 150 people, 95 percent of ticolour centres, exclusively selling Jotun whom, including senior staff, will be Libyan. [email protected] paint. “Effectively, we have an ambassador in every town,” Abdulaziz says and, in a country OVERCOMING SUPPLY CHAIN CHALLENGES There is also a strong commitment to the with limited communications and transport With a high demand in the country at pre- factory being environmentally responsible. infrastructure, he explains: “Our network is sent because, as Abdulaziz says, “everybody “100 percent of the waste from the factory our infrastructure.” needs paint for rebuilding,” Jotun’s biggest will be recycled,” Abdulaziz says. “This is an +218 91 873 3000 +218 21 478 2282 2300 problem is the supply chain. Paint supplies investment of millions but we are pleased Creating its own market for interior design, are being ordered from factories around the to be implementing Scandinavian require- based around a wide choice of colours for world. “Our supply has to come from more ments and we won’t be economising at all.”

6 Business Eye April 2013 April 2013 Business Eye 7 FOCUS CONSTRUCTION FOCUS CONSTRUCTION

In TV interviews, members of the Workers’ Asamer – concrete Solidarity Group demanded the reinstate- ment of sacked workers, the firing of Qaddafi- South Korea’s era managers, a pay rise, the introduction of commitment to Libya medical insurance, improved plant safety and the expulsion of all foreign executives. By Nigel Ash active agenda in Libya LCC management responded saying that no workers had been sacked. When the strik- By Brigitte Scheffer ers alleged corruption at the joint venture, ESDF head, Dr Mahmoud Baadi met them South Korea is becoming one of the most to participate in the rebuilding of Libya. and offered to open up the company’s books active foreign missions in Libya as it an- He has also invited Korean companies for an independent audit. The industrial ac- nounces one initiative after another. to bid for developing oil ports in Libya. 19 South Korean tion fizzled out after a few weeks. construction companies RESUMING WORK BUILDING AIRPORTS INVESTING IN PRODUCTION In February, Hyundai Engineering South Korean construction companies have 25 projects worth a Asamer acquired its majority stake in the and Construction agreed to resume are also engaged in the construction of total of $10.6 billion in holding company that controls LCC and work on projects in Libya after receiv- airport terminals. Nemo Partners has JLBM in 2009 by paying LD200 million to ing assurances on compensation and been put in charge of building a new pas- Libya. ESDF. The deal gave it management control. security from the government. senger terminal at Benghazi airport. The Asamer then began an extensive upgrading project is expected to take 12-18 months of the plants to boost production and cut en- The Counsellor at the South Korean to complete, and will alleviate demands on comes in the midst of contractual dif- vironmental pollution by 95 percent. So far, embassy in Tripoli Kyung-han Kim, said Benghazi’s small airport with its inad- ficulties on other projects at the airport he had “asked the Libyan government equate and poorly serviced facilities. described as “extremely complicated”. to expedite the process of re-evaluating all existing contracts and to resolve the In spite of its huge cost, this new terminal at These new passenger terminals at Libyan operations are now compensation, non-payment, bond call and Benghazi is being billed as temporary, mean- Benghazi and Misrata airports will escalation fees for resuming the projects.” ing that it could be superseded should the cost an estimated LD 60 million. on par with similar plants it larger pre-existing runs elsewhere in the world. All together 19 South Korean construc- terminal expansion Asamer cement factory in Benghazi tion companies have 25 projects worth a project be resumed. total of $10.6 billion in Libya. These were “The Libyan side hen the hundreds of stalled back to Libya to restart work in January 2012. said the Austrian company in a statement halted by the 2011 revolution. Companies need these new construction projects to the Libya Herald, it has invested in ex- have since been cautious about resuming passenger terminals throughout the country final- BACK TO WORK cess of €100 million to improve production their operations in an uncertain situation. and want to make ly restart, there is going to be Unfortunately for LCC, not all its employees processes and increase efficiency, as well as headway as soon as a massive demand for cement and concrete. W were impressed by the support Asamer had addressing pollution with the use of filters Nonetheless, South Korean Ambassa- possible”, explained Two Libyan joint ventures with the Austrian given to Libya during and after the revolu- and increasing health and safety provisions. dor Lee Jong-kook has said his country’s Kyung-han Kim. company Asamer will play an important role. tion. Last May, 68 strikers, calling them- Asamer maintains that in terms of both pol- companies will return to Libya, espe- “That’s why they are selves the Workers’ Solidarity Group, partial- lution and health and safety, the Libyan op- cially those involved in construction. He proceeding with The Libyan Cement Company (LCC) has fac- ly blockaded the Benghazi plant. Employees erations are now on par with similar plants it expressed, too, Korea’s desire to take these temporary tories in Benghazi, Hawari and Al-Fataiah, in Derna refused to join in the industrial ac- runs elsewhere in the world. Asamer is pre- part in the other industrial projects. terminals now.” near Derna. With more than 2,500 workers, tion and the majority of staff in Benghazi also Asamer and its 49.6 percent Libyan partners, sent in eleven other countries. continued to work. They mounted angry For his part, the Minister of Oil, Abdulbari A new passenger the Economic and Social Development Fund counter-demonstrations against the strikers, Al-Arusi, wants South Korean companies terminal at Mis- (ESDF) together with LCC employees, have Asamer is clearly proud that it paid its work- some of whom were allegedly armed. How- in the oil sector to finish their projects. rata airport is also These lawyers are one of the largest corporate workforces in ers for all of 2011, despite the shutdown of its He encouraged them to speed up their being described eastern Libya. In another joint venture with operations. “With this act the company ex- specialists: return so they can have a better chance as temporary, and ESDF, the Joint Libyan Building Materials pressed their support directly to the workers - Emerging markets “Despite all the challenges and and their families and,” it says, “in a broader Company (JLBM), Asamer also runs the Ta- Korean contractor’s building site in Tripoli - International trade joura concrete operation in Tripoli. problems of a country in the sense, to the community of Benghazi and the process of stabilization, Asamer new government.” - Infrastructure - Natural resources At the start of the revolution, Asamer sent is still trying to maintain the two humanitarian aid convoys with 30 tons production and delivery of “Despite all the challenges and problems - Transportation of food and medical supplies to Benghazi. cement to the Libyan market, of a country in the process of stabiliza- Almost exactly a year ago, it sent a third con- which is important tion, Asamer is still trying to maintain the voy with medical aid and Austrian doctors, for the reconstruction production and delivery of cement to the Now in who helped out in hospitals in Benghazi and of the country.” Libyan market, which is important for the Gharyan. reconstruction of the country.” It concludes: Libya. “Being one of the most experienced foreign Asamer also paid its employees for the whole investors in Libya, Asamer maintains posi- www.clydeco.com time that work was suspended during the ever, because of security concerns, the 33 tive expectations for the country, its future revolution. It was also one of the first non-oil expatriate employees at the plant were told stabilisation and development. We expect to companies to send its expatriate employees to stay away. As a result the business idled. have a strong role in its reconstruction cycle.”

8 Business Eye April 2013 April 2013 Business Eye 9 FOCUS CONSTRUCTION FOCUS CONSTRUCTION

Improving workplace SELECTION OF EXHIBITIONS productivity through & CONFERENCES IN LIBYA 12th Arab Structural International Building sustainable design Engineering Conference - Materials exhibition for Tripoli Misrata in September The 12th Arab Structural Engineering Con- ference and exhibition is being organised The existing structure had been by the Civil Engineering Department of the Misrata was one of the places most dam- Faculty of Engineering in the Dat Al-Imad aged in the vicious fighting during the revo- diagnosed as a “sick building,” complex -Tripoli, 16-18 December 2013. lution. It is therefore perhaps surprising that the city has not hosted any sort of rebuild- meaning that the working conditions Office of Sustainable Design This event is a continuation of the suc- ing event; until now that is. The Build Expo were unhealthy and inefficient. cessful series of Arab Structural Engineer- Libya will be opening its doors at Misrata ing Conferences held every two years in International Fairground between 9 and 12 several Arab countries since 1985. Saudi of September this year. By Sarah Elmusrati Arabia hosted the last event in 2009 and Libya, which was due to host the event in Turkel Fair Organisers, which is staging this 2011, is hosting it in December 2013. International Building Materials exhibition, n September 2012 the Office of Sustain- on productivity, particularly in Libya. Other Italianate buildings that needs to be given a point out that since the revolution most such able Design (OSD) was commissioned factors, such as management structures, new lease of life. Elsewhere there are more The conference in Tripoli will bring to- events have tended to focus on Tripoli. How- by the Libyan Civil Status Authority work incentives, individual job satisfaction, modern buildings that are as drab and soul- gether internationally recognised special- ever, combining Misrata’s own population, to redesign its IT building in Janzour also have to be considered. Also, sustainable less on the outside as the inside. Then there ists, researchers and engineers from Arab which is in excess of 281,000, with those of neighbouring towns – Khoms, Ajdabia. Zliten to improve efficiency. It was the first -pro office buildings are not on the wish-list of are apartment buildings used as offices. They countries to share their expertise on recent I and Sirte – gives the Build Expo show a research and technical developments in ject of its kind in Tripoli. The existing struc- Libyan public officials and business owners. are almost all inefficient in terms of running catchment area approaching three quarters ture had been diagnosed as a “sick building,” Cheap subsidised utilities, notably electrici- costs, workspace layout and design. They Architecture + Engineering + Building Science + Project Management the fields of Structural Engineering. In particular expertise will be shared in the of a million people and many thousands of meaning that the working conditions were need to be changed. ty, make the savings of operating green build- areas of construction design, materials, businesses. Turkel says that the Misrata fair unhealthy and inefficient. Mould, mildew, ings less significant. The economic benefits is to be given the full support of the Libya www.osd.ly +218 92 229 1242 [email protected] techniques, technology,management and cigarette smoke and poor ventilation led to of improving employee productivity through Design strategies that enrich user experienc- Businessmen’s Council. Abu Al Qasim Ash-shatabi St. Hay Alandalus . Tripoli . Libya environmental impact. www.asec12.ly/en toxic indoor air quality. Tinted window glass good design are often neglected, though this es should be considered as investments that Email: [email protected] www.buildexpolibya.com blocked out 50 percent of the sunlight, so ar- is an area where a big return on investment enhance an organisation's overall success, tificial light was used during the day. About can be made. Moreover, with electricity and can be implemented in new or renovated 70 percent of the building plan was ineffi- generation operating significantly below de- office buildings in all sectors. ciently used or wasted. mand in summer when air conditioners are Infrastructure Libya 2013 Sarah Elmusrati is Co-Founder, of Office of EXHIBITIONS & CONFERENCES IN LIBYA (APRIL – JULY 2013) on full blast, it is in the country’s interests to Infrastructure Libya 2013, the 5th event The goal was to redesign the building with reduce consumption. Sustainable Design www.osd.ly in this series, is set for 22-25 April 2013 Date Title Location Contact minimal changes and waste of material. at the Tripoli International Fairground, or-

Through simple alterations, the designers Over the lifecycle of a typical office building, Before. Original building exterior ganised under the patronage of Libya’s 2-12 April 41st Tripoli International Fair 2013 Tripoli International Fair General Board of Fairs were able to maximise daylight in offices construction costs amount to only 1-2 per- Ministry of Planning. The event which is 22-25 April Oil & Gas Libya 2013 Tripoli International Fair www.oilandgaslibya.com whilst reducing total heat gain from the sun cent of the total cost. Rent and operational an international showcase for infrastruc- by 15 percent, thus re- ture planning, and civil engineering, will 22-25 April Infrastructure Libya 2013 Tripoli International Fair www.infrastructurelibya.com costs consume 6-10 showcase technology and expertise from ducing air conditioning percent, while the around the world, of major relevance to 22-25 April Mobtex Furniture Show Tripoli International Fair www.mobtextripoli.com use in summer. Lost bulk of the total costs, Libya’s infrastructure rebuilding priorities. Infrastructure & Construc- space was re-allocated 80-90 percent,goes www.infrastructurelibya.com 29-30 April Istanbul, Turkey www.libyaconstruction2013.com/ The sustainability tion Libya Summit to flexible worksta- to employee salaries factors that contribute tions, increasing the and benefits. It is be- Infrastructure & 6-9 May Agro Libya Food & Fishing 2013 Tripoli International Fair www.eagro-libya.com building occupancy to employee productivity lieved that productiv- 6-9 May Libya ITEX- Technology Tripoli International Fair www.elibyaitex.com/en by 40 percent. A new are indoor air quality, ity can be increased Construction Libya Summit outdoor area for work International Electri- natural lighting, up to 20 percent 2013 19-23 May Tripoli Sport City www.emex.ly breaks and handicap cal and Mechanical Show thermal comfort, and through efficient Following the success of the first Sum- accessibility was cre- workspaces, which mit, held in November 2012, the Infra- 19-23 May Libya Build 2013 Tripoli Sport City www.libyabuild.com ated to boost staff mo- links to nature. would be up to nine structure & Construction Libya Summit After. Artist image of new design 23-24 May New Libya Oil & Gas Forum Istanbul, Turkey www.libyaoilgas.com rale and encourage times more than sav- 2013, is taking place on 29-30 April 2013 community-building. ings made elsewhere in Istanbul. As in 2012, participants are 29-30 May FDI Libya Conference London, UK www.fdilibya.com in the organisation. expected to include representatives from Libyan Ministries, housing authorities, 2-5 June MEED Libya Projects 2013 Conference Corinthia Hotel, Tripoli www.MEEDLibyaProjects.com Upon completion of the The sustainability factors that contribute to transportation infrastructure operators, as project in May 2013, OSD plans to carry out a employee productivity are indoor air quality, 3-6 June Machinery & Food Pack Show Tripoli International Fair www.tripolifoodpack.com Post Occupancy Evaluation (POE) to deter- well as Libyan and international construc- natural lighting, thermal comfort, and links tion firms and their service providers. The 16-19 June Libya Food Expo Tripoli International Fair www.libyafoodexpo.ly mine the outcome of design with regards to to nature. event will cover key areas such as utilities, www.alkhalanexpo.com/ productivity. power, water, housing, social infrastruc- 1-4 July Libya Sport Show Tripoli International Fair Libyansportshow Central Tripoli and Benghazi have a re- ture, transportation, airports, railway, and It is hard to quantify the impacts of design markable heritage of stunning art deco and roads. www.libyaconstruction2013.com

10 Business Eye April 2013 April 2013 Business Eye 11 Focus CONSTRUCTION WATER Can British firms help Libya Build moves on By Hadi Fornaji with Libya’s water needs? ibya’s largest trade show, Libya was already 90 percent sold out. This year are all priorities. By Thom Westcott Build, is getting bigger. So much so 636 exhibitors are expected, much the same that this year it has decided that it is as last year. For the first time ever, there will be official too big for the Tripoli International participation from Belgium and Spain. LFairground it has used in the past. “It’s a big challenge to move from a venue that is well known,” said Mafoud. But mak- “I wanted to do everything excellently,” ex- So this year’s show, the ninth International ing the move from the Tripoli International plained Mahfoud Building & Construction Exhibition, from Fairground (TIF) — and he predicts 19th to 23rd May, is being held at the Sports was more or less an that will be the City stadium grounds, on the west side of the obvious and neces- case. “It will be a capital. sary choice. The The show will transform Sports better business facilities there have City’s parking area, an area of environment. All It is not so much a case of lots of extra com- declined, parking over 30,000 square metres, into will be in one hall. panies wanting to showcase products and is not easy and the the largest ever exhibition centre Everything under services. It is more about demands for extra streets around are one roof. There space. “International companies want a big- congested. In com- in Libya. It sends “a clear and will be no small ger space,” explains Maged Mahfoud, Man- parison, the new lo- unequivocal message” that the pavilions. And it aging Director of ATEX, the organiser of cation is accessible country is ready will have the best Libya Build. “So we’ve increased the area by from east and west, to do business. air conditioning, 15 percent.” via the motorway. not so at the TIF buildings.” Some exhibitors, he said, had doubled their Neptunus Tent Fountain near Al-Kabir Hotel space. The indoor Italian display area, the structures of Hol- biggest national showing, has at 1,300 square land has been awarded the contract to set Pan Libya for Ex- desalination projects in the country.” wastewater treatment, regulation, pro- metres, nearly double its previous area. up over 20,000 square metres of specialised hibitions and Events, the recent joint ven- Thompson says that British Water un- ject delivery and operational efficiency.” tent structures for exhibitors coming from ture between ATEX and Casapinta Design British Water, the trade derstands “Around 100 sewage pump- The show will transform Sports City’s park- Austria, Malta, China, the Czech Republic, Group of Malta will oversee the project man- association for the UK’s water ing stations will be refurbished this year Administrative areas, including risk and agement of the venue, while providing all ing area, an area of over 30,000 square me- Egypt, France, Italy, Korea, Malaysia, Tur- and ten new treatment plants will be asset management and legal and con- exhibition services for setting up of stands at industry, is leading its first trade tres, into the largest ever exhibition centre in key, Tunisia and, of course, Libya. They will built.” She explained that Libya’s waste tractual negotiations are further areas be exhibiting the latest projects, services and this international event. Libya. It sends “a clear and unequivocal mes- visit to Libya, 20 to 23 April. services, which are limited at present, where, she says, British companies could sage” that the country is ready to do business, equipment vital for rebuilding Libya, where also need to be expanded and extended bring expertise. They could also offer say the organisers. That is seen in the simple the construction of new airports, roads, Further details on Libya Build Exhibition can to other parts of the country, offering “This is a fact-finding visit, so British Water specialist training for those working in the fact that two months before the opening, it housing units, hospitals, schools and hotels be obtained from www.libyabuild.com further opportunities for collaboration. and the majority of delegates will use the water and wastewater sectors in Libya. visit to learn about the most pressing needs “The UK water industry has more than in Libya,” says British Water’s interna- 150 years' experience in managing water The visit, supported by UK Trade and ATEX HAS AMBITIOUS PLANS TO DEVELOP ITS OWN EXHIBITION AND CONFERENCE CENTRE. tional director Lila Thompson. “Our aim supplies and providing wastewater treat- Investment (UKTI), will enable delegates to is to help UK supply chain companies ment,” says Thompson. “Skills have been learn about Libya's plans, and offer guidance “It makes sense,” said Managing Director Maged Mahfoud. “The Tripoli International Fairground has reached the end of its life.” He pointed out that the site identify projects and potential business shared and developed with countries on how they can partner up with Libyan is hemmed in by the city and that not only can it not expand, it has lost a third of its space – the outdoor industrial area. A court handed it over to a family partners for future water, wastewater and across the world in areas such as water and ministries, organisations and businesses. who claimed that it had been taken from them. ATEX has drawn up plans to build a new, state-of-the-art centre which will be used for its own events and will be hired out to others. It is inviting businessmen “with vision” to invest in the project, which will be built on a site as yet undecided. Details of the project and the new holding company are to be announced during the Libya Build exhibition.

Waha Oil Company has awarded a contract to demonstrated when installing an emergency wa- Zulal Water Zulal Water Technology (ZWT) for three turnkey ter plant for us recently at Waha site.” reverse osmosis water plants for the company’s awarded contract Gialo, Waha and Essider oil camps. The total ca- The multi-million dinar project is to be completed pacity of the three plants, to replace Waha’s ex- during the fourth quarter of the year, according to for 3 water plants isting GE-Ionics EDR plants, exceeds 4,000 cubic ZWT. metres a day. by Waha Oil Iftikhar-ul-Haq, Managing Director of ZWT, com- “Our existing GE-Ionics EDR plants are in poor mented: “This contract award reflects ZWT’s condition and in urgent need of replacement,” strong reputation and execution track record said the Engineering Manager of Waha Oil. “We within the Libyan market. We very much look selected ZWT based on the strength of their tech- forward to working with Waha Oil again and are nical proposal and their ability to install high qual- confident of completing the project on time and to By Michel Cousins ity water plants in a short time frame, which they the client’s satisfaction.”

12 Business Eye April 2013 April 2013 Business Eye 13 POWER POWER Libya Herald Interview with the Minister of Electricity, Mobile power turbines By Tom Westcott Ali Mohamed Muhairiq By Ashraf Abdul-Wahab Libya’s fast-track solution for its expected electricity deficit of 500-600 Minister of Electricity, Ali Mohamed Muhairiq MW this summer is to deploy mobile power generators. ith a limited budget for 2013, the Electricity Ministry is APR Energy, a US-headquartered company specialising in temporary focusing its attention on ad- power solutions, is to supply 250 MW of mobile power to the country. The dressing the country’s energy highly-portable, wheel-mounted units each comprise two modular cus- Wdeficit, to ensure that there will be enough tomised trailers, specially designed for swift mobilisation and installation. power to see Libya through its peak-use summer season. With turbine engines similar to those that power large commercial air- craft, each unit can produce 25 MW of power with high-power density, The Ministry’s budget for 2013 is $1.89 bil- and with a modest carbon footprint. They are increasingly being chosen lion - less than half of the $4.8 billion it re- as a temporary power solution, especially in countries across Africa and quested - which will not meet the needs of South America. the electricity sector, Muhairiq says. With this constraint, major new projects are not Libya’s mobile turbines will be diesel-powered but are fuel-flexible and an option in this financial year. Instead, can also be altered to run on natural gas. The turbines, which can be in- much of the budget is being directed towards stalled in just three days, will start generating power in July. the construction of a new power plant in Sirte and acquiring mobile power turbines to ensure that the recent power cuts experi- enced by much of the country will be a thing of the past.

DEALING WITH THE POWER DEFICIT Co-organised by: Under the patronage of: “The power deficit is expected to be 500-600 MW with total demand in the summer, which “One of my major aims in this Ministry is to shift is peak time, reaching 6,700 MW,” says Mu- the focus from conventional power stations hairiq. “However, with the land-based mo- that use gas and light-fuel to renewables,” bile units we are purchasing, we will have General National Ministry of Libyan Businessmen GECOL Congress Communications and Council close to 500 MW so we do not think that Informatics there will be further shortages of electricity.” of course, have reservoirs in every station,” ready have some in the 2013 budget.” There Libya 5 Reasons to attend MEED Libya Projects, 2013: Libya has awarded US-based APR Energy explains Muhairiq, “but these are limited are now 40 MW solar power plants in Hun Gain insight on the latest projects being issued by the NOC, a contract to supply the country with 250 and, if the supply is cut off, we can only run and Sebha and a 60 MW wind farm near 1GECOL, HIB, ODAC, LISCO and Civil Aviation Authority MW of portable power generation. This is the station for a few days.” Derna. Another wind turbine project is being Projects Review first-hand information on the status of pre-revolution 2contracts, the proposed 66 Billion Dinar budget and how your thought to be one of the largest interim pow- planned. organisation can be involved er projects ever signed with a public utility. The power plant being built in Sirte will 2013 Benefit from a specially designed programme streamed into the These diesel-fuelled mobile power turbines, boost the country’s electricity generation. “We are shifting towards renewable energy 3most relevant sectors - infrastructure, energy, utilities and industry Learn about the on-ground practical realities of doing business which can be transported via road freight, Muhairiq says that construction work, led and maybe the budget of 2014 will see even in Libya Building a sustainaBle future for liBya– 4 will be employed from July to give regional by the Turkish firm Gama Industrial Plants, bigger projects for solar and wind power,” Interact with 300 key individuals involved in re-building Libya An essential guide to the developments and projects across 5and create key relationships coverage wherever it is most needed. is going well. The revolution set the project says Muhairiq. “We did not get what we critical infrastructure, energy, utilities and industry sectors back a year but, with the contractors now wanted this year and that has limited our “There will be no black-outs or disconnec- back at work, the Ministry expects the first plans but hopefully next year’s budget is go- June 3 – 5, 2013 KeynOTe Juma Attiga Awad Ibrahim tions, unless we have an unforeseen mainte- 350 MW unit to enter into the grid in April or ing to be better.” Corinthia Hotel, Tripoli, Libya addresses Vice President Elbarasi nance problem, such as a short circuit in one May 2014. When completed, the plant’s total By General National Deputy Prime of the transmission lines,” says Muhairiq. power output will be 14000 MW. Congress Minister Key speaKers include: Libya

One of the problems faced by the Ministry is “Looking to 2014 and beyond, we will prob- Ousama Syala Ali Hussein Al- Sharif Saddek Omar Elkaber Mahmoud Bashir Ajaj, a lack of electricity reserves so, at present, it ably have an excess of electricity,” Muhairiq APOLOGY: Minister of Minister of Housing Governor Chairman. Telecommunication and Utilities Central Bank of Libya Housing and is just trying to meet the country’s current says. In the last issue, we interviewed the Ministry of Ministry of Housing Infrastucture Board energy demands. Deputy Minister of Electricity, Mohamed Telecommunication and Utilities Ministry of Housing SHIFT TOWARDS RENEWABLE ENERGY Al-Hadi Khlat. This, however, was inad- vertently presented as an interview with Dr. Khairy Agha Ahmed Shawki Dr. Khalil El-Arroudi Capt. Nasereddin Muhairiq points out that the fuel needed to Renewable energy is another priority for the Chairman Head of Crude and Chairman Shaebelain run the country’s power stations is under the Ministry. “One of my major aims in this Min- the Minister of Electricity, Ali Mohammed Renewable Energy Petrochemicals Sales GECOL Director General control of the Ministry of Oil and Gas and Muhairiq, We apologise to both. Authority (REAoL), National Oil Civil Aviation Early bird offer: istry is to shift the focus from conventional Libya Corporation Authority Book before the oil companies, and that problems with power stations that use gas and light-fuel to March 31st and save fuel supplies are beyond its control. “We do, renewables,” says Muhairiq, “and we do al- How to register W: www.MeedlibyaProjects.com t: +971 (0)4 390 0699 e: [email protected] USD $$$!

14 Business Eye April 2013 April 2013 Business Eye 15 Transport Transport Transport projects resume British By Michel Cousins companies

Transport projects planned to get underway target Libyan this year are worth LD 8.4 billion: LD 4.38 billion for roads, LD 3.46 billion for airports airport sector and LD 0.57 billion for ports. Reparing Nageza bridge By Sami Zaptia ven before the GNC passed the 2013 So far there are only three genuinely new worth LD 45 million, has also been awarded budget in March, transport pro- projects. All are deemed urgent, in particular to Con.I.Cos and involves the complete re- jects were being authorised, but few the Nageza bridge on the Garabulli-Khoms paving of the airport. ibya could become a ma- the skills developed over many were new. “Works are now restart- road. Work on the LD 2.7-million contract, jor North African air hub, years. About 60 percent of the ing again,” says Bashir Dow Boragta, Man- E was given to the Italian company Con.I.Cos, Two new projects are the passenger terminal according to the leader of airports’ revenue in the UK is ager of Transport Projects. “Companies are started on 18 January and is expected to be for Benghazi’s Benina Airport to replace the a British team of airport earned from the non-airline ac- coming back to Libya.” Artist impression of new Tripoli International Airport complete by October. present ramshackle buildings, and the air- Lexperts that visited the country in tivities. This is one of the highest port building at Misrata. Worth LD 36 mil- March. in the world. Therefore we feel we Transport projects planned to get underway PORTS have many specialist skills in the this year are worth LD 8.4 billion: LD 4.38 lion and LD 24 million respectively, work on Maintenance is the main focus, too, of work Peter Budd, Chairman of the areas of financing, design, master billion for roads, LD 3.46 billion for airports them by Korea’s Nemo Partners is due to last resuming at various ports: Tripoli (the LD UKTI Airports Advisory Council planning, construction, equip- and LD 0.57 billion for ports. Yet the money a year. Deputy Prime Minister Awad Barasi 280 million breakwater contractor: Archi- told the Libya Herald: “Libya has ment supply, operations and legal. to be spent this year is almost minuscule in laid the foundation stone of the Benina ter- rodon, Greece), Sirte (J&P, Cyprus), Khoms, the potential to be a huge North The top 60 airports in the world comparison – LD 500 million. “It’s not a lot,” minal in December. Derna and at Tobruk (the harbour’s perim- African hub operation. You have a are supplied by UK expertise”. admits Salim Gazzah, the Follow-Up and In- eter security walls). At Benghazi, the second southern hub in South Africa. As formation Manager at the ministry. But he PROBLEMS AND PROSPECTS phase of the harbour project involves work air traffic into Africa is growing, Budd points out that all Libya’s points out that it is only half the funds allo- Cash is not the only issue for the stalled pro- there will be a need for a north Af- airports need development. cated to the ministry in the budget. on the breakwaters, quay paving and storage buildings. Turkey’s STFA had originally been jects. There are investigations into questions rican hub as well. Egypt, Tunisia “There is a lot to do if Libya de- and Algeria are all trying to put cides to go for tourism by exploit- Like most other ministries, it had wanted due to complete the works in July 2011. of cost and whether there was any corrup- tion at some of the large this in place. But in my opinion, ing its many assets such as its his- more but that is all it was given. So the minis- Tripoli is more well placed, if they tory, culture and beaches. If Libya A major “new” pre-existing projects, try is now effectively rationing the money to can secure first mover advantage.” develops its airports, these assets try and get as much started as possible. project is the such as the new terminal construction Cash is not the only issue could generate significant passen- building at Tripoli Inter- Budd, whose organisation ger numbers, which would in turn ROADS of a new quay for the stalled projects. national Airport and the These lawyers are at Zuara - new advises the British Government generate revenue and create jobs.” Road projects that have been given the green new airport at Benghazi. on matters relating to airport specialists: in the sense There are investigations light are largely maintenance work. These The investigations, pre- trade policy, headed the British Budd and his group met both the that the pro- - Emerging markets are the Idiri-Brak, Brak-Sebha (with a four- into questions of cost and viously in the hands of Airports Group, a ten-company Libyan Civil Aviation Author- ject, worth LD - International trade lane highway at the entry to Brak), Taraghin- a body called the Com- Airport Sector Mission to Libya ity and the Airports Authority, 62 million, was corruption at some of the Murzuk, Qatrun-Tajari and Ghadames- when discussion included the - Infrastructure awarded to mittee of 20, have been Aziziya roads. large pre-existing projects “Libya and the UK have had long- prospects of Tripoli establish- - Natural resources Italian com- taken over by the Plan- term relationships over many ing itself as the northern hub, to - Transportation pany Piacen- ning Ministry. The last is in two sections. Work on the Gh- years in this sector,” says Budd, complement South Africa’s role tini but never begun. It gets underway this adames-Nalut stretch, which was started by “Many Libyans have trained in the in the south of the continent. month. Boragta says the long-term aim is to But problems of cash shortages and investi- the Croatian construction company Viadukt UK. We want to refresh that rela- transform Zuara from a small commercial gations have not stopped the Ministry look- Now in in mid-2009 and then stopped, has resumed. tionship and support the Libyan However he cautions: “Creat- The Nalut-Aziziya stretch, undertaken by lo- harbour to one of Libya’s major ports. ing beyond simply getting stalled projects Civil Aviation Authority in its ing that hub in Tripoli is not cal company Saraya, involves the construc- restarted. Boragta reports that a brand new development plans and projects.” just about airport develop- Libya. tion of two more lanes to create a highway. AIRPORTS study is looking into the coordinated devel- ment. Libya also needs a con- www.clydeco.com There is also maintenance work on the main Airports where projects have been reiniti- opment of ports along the entire coastline. He continues: “The UK was vergent airline strategy, as coastal highway from the Tunisian border at ated are Labraq, Tobruk, Ghat and Martuba But that will probably require funding the the first to privatise its airports demonstrated in Dubai with Ras Jedir to Garabulli. (which serves Derna). The Ghat project, size of the entire 2013 national budget. industry and therefore we have the UAE carrier Emirates.”

16 Business Eye April 2013 April 2013 Business Eye 17 ECONOMY ECONOMY The Knowledge Sharing Programme Can Libya learn from Korea’s experience Libya plans to of going from conflict to development? invest in women By Sami Zaptia

tion Ministry to the Industry Ministry help- Libya Herald Interview: Social Affairs Minister ing to improve work ethics and attitudes. By Michel Cousins

STRATEGIC SUPPORT TO SMEs To help encourage entrepreneurs, South Ko- Social Affairs Minister Kamla Al-Mazini rea launched its “Step-wise economic con- “I’m working, I’m racing, to help people on one could be misled struction strategy”in the early 1960s, which limited income – but we’ve a limited time.” into believing that the lasted for nearly two decades. The first step much vaunted decen- Social Affairs Minister Kamla Al-Mazini tralisation of govern- “From a hopeless was for South Korea to establish a market economy, to help mobilise capital and estab- speaks calmly about people’s expectations ment was already in country to a modern lish large corporations. Next it gave strategic but is well aware that people want instant place. The area - most industrial state” is support to small and medium-sized enter- answers to Libya’s social and economic of which was not there 20 years ago - is how Professor Chun, prises (SMEs), followed by a national drive problems and that she had no magic wand. largely unplanned and to develop a skilled workforce. A rural mod- President of the certainly unlovely, a ernisation programme was also launched to “It’s very sad. The situation is still a mess,” Korean Institute for place you would least rebalance the growth gap between urban and she says. “Solving the problems of 42 years expect to find any Development Strategy regional areas. is not easy and cannot be done quickly.” described Korea’s ministry, let alone one that in Europe would history. In supporting SMEs, the government set LARGE NUMBERS ARE IN NEED be a leading govern- criteria to define them and indicate the sup- She points to those her department is there ment department. port they would receive. It then ensured that for. “We are dealing with large numbers Professor Chun, President of the Korean Institute for Development Strategy there was linkage in the market between of divorced women, widows, orphans Mazini has a radical “I believe these families must SMEs and large corporations. SMEs were as well as families of prisoners, the war- idea for helping those support themselves financially also offered financial support in the form of he Korean Institute for Develop- It was no surprise that the strong enforce- wounded and those injured in other ways, on low incomes. Her preferential rates and credit guarantees. and not rely on the government.” ment Strategy organised a workshop ment of the rule of law ranked high as a stra- and large families on low incomes. There plan is to help people at the Corinthia Hotel in Tripoli on tegic objective. But this had to go hand in are those unable to work because of ill- help themselves. T11 March as part of its 2012 Knowledge Shar- hand with meeting basic everyday human LIBYA AT A CROSSROADS ness, the old and the very large number ing Programme with Libya. needs, including creating jobs and build- Libya is starting with a blank sheet of paper, of people who had to leave their homes.” “I believe these families tives in different towns and cities, based ing an industrial base. In South Korea’s so it has an opportunity to design its future. must support themselves financially and on the skills and interests of the women “From a hopeless country to a modern indus- case, this involved strengthening the police It is at a crossroads: either - national pros- All these have put intense pressure on social not rely on the government.” Dependence themselves. “Those who want to sew will trial state” is how Professor Chun, President forces, building an efficient and transparent perity or the trap of fragility. Chun added services since the revolution, but social on the state, which the Qaddafi regime be able to work in clothes manufacturing,” of the Korean Institute for Development bureaucratic system, encouraging foreign that historically few countries had a smooth welfare does not appear to be high on the fostered, has to end. “Oil will end one day. Mazini explains. Others may want to be part Strategy described Korea’s history of coloni- capital, and having a mid-term economic de- transition out of a fragile state, witness Ko- list of the government’s priorities in Libya Citizens must help themselves in future.” of a catering cooperative or manufacturing alism, division into two states, outside mili- velopment plan. rea’s civil war and partition. at the moment. That is symbolised power- cosmetics or carpets and traditional goods. tary occupation, civil war and military coups, fully by her exceptionally modest office in a Mazini is speaking the economic language before democracy and development turned It is not hard to find some parallels between Libya must deal with the challenge of con- small nondescript building (apart from its of Mrs Thatcher and Angela Merkel. Like WOMEN COOPERATIVES South Korea into a leading industrial and the Korean and Libyan experiences, in the flicting interest groups. Chun advised that two ugly neo-classical porticos) in Tripoli’s them and other members of the govern- “They must have training before they start technological nation. challenges they have faced and overcome. it needs to stay on track with sustained de- Asseba District, south of Suq Al-Juma, so ment, she is also in favour of reducing their projects,” she insists, stressing that velopment, public security which instil pub- far from the centre of central Tripoli that subsidies and allowing salaries it is key to building the new Libya. “We POOR SKILLS AND LOW MORALE South Korea transformed its economy from lic trust in the system. This has to be done Handicrafts made by Libyan women for sale. to be determined by the market. have to re-educate people. We will face exporting fish, plywood and fabrics in the Korea’s situation was similar to Libya’s today while struggling with weak economic insti- difficulties.” Everyone, she said, wanted 1950s to producing steel, automobiles, semi- in that the workforce was frustrated, lacked tutions inherited from the former regime EMPOWERING WOMEN to work in an office. That has to change. conductors, white goods, electronics etc. confidence, and suffered from a skills defi- and a simple economic structure based on To achieve this, she is concentrat- today. It went from a balance of payments cit due to the lack of technically demanding hydrocarbons. ing on economically empowering Apart from training women, the ministry deficit to a balance of payments surplus and job opportunities and low morale. To help women because, she says, they “will support them with equipment”. The ini- a member of the G-20 in 60 years, Chun improve technical skills, the state built im- SEARCH FOR VISION are the ones who so often have tial aim is to create between ten and twenty reported. proved facilities, the curricula were upgrad- But Libya must also search for its vision and the responsibility of making cooperatives, each with as many as a hun- ed, faculty were recruited from Japan and strategy. It must assess where it can be com- sure the family is fed, clothed dred women, “before the end of the year”. This was achieved through various means some schools were moved from the Educa- petitive and where it can create a niche for and healthy. “We are consider- including setting strategic objectives for itself in the world market. And Libyans must ing training women, especially There will be funding too. How much is state-building and economic development. be prepared to sacrifice short-term wants, if those in big families, so they can another matter. It would certainly run into Without first deciding on a vision and a Libya is starting with a blank necessary, to achieve a better long-term fu- help their husbands financially.” “tens of millions of dinars.” The financial strategic long-term plan – the short-term sheet of paper, so it has an ture. This is the challenge. A challenge that details are still being worked out, the and medium-term plans would have been is easier said than done in Libya’s present Once they are trained, the aim minister explained. “But we will re-activate meaningless. opportunity to design its future. circumstances. is to create women’s coopera- women” in the economy, she insisted.

18 Business Eye April 2013 April 2013 Business Eye 19 ECONOMY ECONOMY

“We welcome large foreign companies. prices.” They have the capital and the techni- LIBYA’S 2013 BUDGET cal experience.” There is a possibility Libya’s low salaries are a major is- of even having wholly-owned foreign sue. The average is around LD 800 TOTALS LD 66.86 BILLION manufacturing and trading compa- a month (US$615). They have to in- nies in Libya, he says. “But we are not crease. Abofanas says: “We’re working 5,400,000,000 Salaries encouraging small foreign companies on studies to increase them.” 8.1% to set up in Libya. We want to give a MARKETING THE SUN – AND LOCATION Operational chance to local companies.” 10,607,850,000 20,783,302,000 expenditure 15.9% 31.1% The other economic advantages Libya Development & CURRENCY CONTROLS TO Reconstruction can exploit are sun and location. Projects STAY – FOR THE MOMENT “Tourism is an important area”, Abofa- Subsidies & Price Stabilization Fund nas says, pointing to Libya’s wealth 19,300,000,000 Abofanas insists there will be no im- The General Reserve 28.9% of Roman and Greek remains. But he including the Child mediate change to currency controls, a 10,770,362,000 Benefit knows many potential tourists just 16.1% major gripe with the business commu- nity “For the time being, we need cur- want a short stay to relax and are not rency controls.” For the private sector interested in the past. “We also have By Sami Zaptia abolition of currency controls has be- the beaches, we have the desert. We come a major test of the government’s have asked the tourism minister to Libya’s 2013 budget was approved on 21 March understanding of what a free economy plan for projects for local and inter- 2013. Libya Herald has learnt that the GNC has put in means. Businessmen point out that, national investment.” It will be ready place nine conditions attached to the Budget: These quite apart from the fact that Libya has “very soon” and will constitute a “very include that the government activates the new Na- plentiful supplies of foreign exchange large investment plan”. tional ID Number and Local Government Act, and pays thanks to oil, far more money would child benefit. flow into Libya without controls than The country is also looking to harness would flow out. the heat of Libya’s sun to produce en- In addition, the GNC has requested that the gov- ergy, the minister says. “In the future ernment present the final accounts for the previous we will have to use solar power.” budget by 31 December 2013 and that at the end of each month the Central Bank of Libya provide each Ministry of Economy Mustafa Abofanas BENGHAZI: ECONOMIC CAPITAL? of the Ministries of Planning and Finance, the Audit Abofanas insists Bureau and the GNC with accounts that show the ac- Libya Herald Interview: Minister of Economy “Libya is a very big country,” he says, money supply will “Benghazi has the qualifications to be tivity of the general budget. The transfer of allocated not be limited. “We a very important economic city.” If it money from one section to another can only occur Government looks to the private became the economic capital it would after prior approval from the GNC. have to spend large not mean that it took control of all amounts of money. the economic sectors in Libya. “We Observers are waiting to see if the Zeidan govern- sector as motor of economic growth: are trying to devolve different sec- ment is capable of spending most of the 2013 budget We’re not and how effective this spending will be in activating tors to many places. But he points the economy and positively affecting the security sit- By Michel Cousins in a normal to what is planed for the city, in par- LD 1 billion to be invested uation. Moreover, the section in the budget allocated situation.” ticular a Benghazi Free Zone and a for development and reconstruction projects is only Benghazi Exhibition and Fair Cen- LD 19.3 billion or 28 percent, which suggests that if tre.” I’m going to Benghazi shortly. the government has agreed to pay some of the debts e are working to rebuild the ing for products where we have a competitive tion when, despite the siege, food and other Whether these will satisfy Benghazi’s of foreign contractors it will be done piecemeal and Libyan economy and find advantage in exports, such as olive oil and products remained in plentiful supply with- demands for greater economic com- over a number of years sources of income other than fishing,” he said. out any price hikes. mitment, which include returning the oil and gas,” declares the Min- NO PRICE CONTROLS NOC to the city, remains to be seen. Wistry of Economy Mustafa Abofanas. But to Libya once had a flourishing olive oil indus- He agrees financial support for the private As to rising prices and fears continued do that, he says, the government is looking to try, with hundreds of thousands of olive trees, sector is only part of what is needed. Free- large-scale mass grants will fuel infla- the private sector for help. To make it happen, mostly planted during the Italian colonial ing business from the mass of red tape and tion, Abofanas insists money supply it is planning to invest around LD 1 billion. period. Although of high quality, the indus- Qaddafi-era bureaucracy is just as important. will not be limited. “We have to spend try was left to die during the Qaddafi years. “A legal committee has been set up to look large amounts of money. We’re not in APPOINTMENTS “We are studying support for private projects Likewise, the citrus industry. Before oil’s into simplifying procedures,” he explains. a normal situation.” Besides, he does as a priority,” he explains. “We are starting discovery, oranges were Libya’s biggest ex- not believe inflation is an issue. “This Dr. Abdulkarim Mgeg, Director of the Energy a new fund to support and finance SMEs port. Again, the business was left to rot, like As to complaints about the damaging effects year government salaries will be LD Investment and Strategy Projects Department at (small and medium enterprises); this is very so many of the oranges. Now it is largely in- for investment created by the rule that for- 21 billion, compared to LD 8 billion the Privatization and Investment Board (PIB) has important for the Libyan economy,” he told dividuals selling their oranges by the side of eign companies can only own up to 49 per- in 2010 (an increase of 163 percent). been appointed a Deputy Minister of Economy. the Libya Herald. the road. cent of a joint venture, the committee had Prices have not increased by the same looked at corporate law in 20 countries and percentage.” GETTING RID OF RED TAPE Dr. Mgeg was featured in an interview on Funding will not go to just any proposal: “We promised changes to company law will be renewable energy in the February 2013 will support projects that help the Libyan Abofanas knows about business. He chaired made. But if there were inflation – and he edition of the Libya Herald Business Eye. Newly appointed Deputy Minister, Abdulkarim Mgeg reading economy.” Those that the ministry believes Misrata’s Chamber of Commerce from 2007 agrees property and meat prices are the February edition of Libya Herald’s Business Eye. should be supported will be in sectors such to 2010, it was largely responsible for its re- The joint venture percentages “could be rising – the government would not as agri-industries and fisheries. “We’re look- markable economic story during the revolu- changed,” he says. Size could be a factor. intervene to stop it. “We will not set

20 Business Eye April 2013 April 2013 Business Eye 21 Oil & Gas Oil & Gas

ibya’s Oil Minister Abdul He felt that Libya needed the Total risks millions Libyan bari Al-Arusi announced increased production to finance that he expects Libya’s its post-revolution reconstruc- By Michel Cousins current oil production to tion and development drive. in oil exploration oil production Lrise from the current 1.4 million barrels per day (mbd) to 1.7 mbd PETROCHEMICALS by the end of this year. fter a two-year break because of Total’s contract includes an option for two second well, Avignon points out, is in a zone expected to reach 1.7 Moreover, the minister re- the revolution, Libyan offshore further wells. Whether these go ahead will that has never been explored. peated the government’s desire Earlier this month Libya’s exploration starts again in April depend on the results from the first two. to diversify its income, retain National Oil Corporation with the arrival some 85 kilo- COMMERCIAL FIND more added-value locally, reduce million by end 2013 (NOC) had revealed that oil metres north of Zuara of a floating rig from AL-JURF imports and create jobs by A It is not just a question of finding gas or exports reached 485 mil- increasing Libya’s oil refin- Croatia. It will be drilling just east of the Lib- The Al-Jurf well code named BD1 is just 20 oil. “We need to find enough to justify the By Sami Zaptia lion barrels in 2012. ing capacity and developing yan-Tunisian offshore territorial line in the kilometres northwest of the new site. Oper- investment.” the petrochemical sector. Pelagian Basin, an area known to be rich in ated by Mabruk Oil, an NOC-Total-Winter- NEW EPSA? gas and oil reserves, and looking specifically shall joint venture, it is already producing At the moment, no one can know what the Arusi also confirmed his earlier To this end, he reconfirmed that for gas. 41,000 barrels of oil a day. figures will be, he says. “We don’t know what announcement that Libya would a new petrochemical company we’re going to discover. We don’t know the be inviting foreign companies would be established in Beng- FRENCH DESIGN The cost of the exploration for the two new amount. We don’t even know whether we’re to bid for the right to explore hazi to build a new refinery in wells is put at around $120-130 million. Fur- going to discover anything at all.” The French-designed rig, named Zagreb 1, in Libya for oil or gas. How- Sebha, to modernise the Zawia, ther tests could cost another $15 million. was due to leave Trogir on the Adriatic on 7 ever, Arusi thought that this Sarir and Tobruk refineries, and PROBABILITY OF SUCCESS April and arrive at the concession, A1-16/3, was now more likely going to to construct a new $45-billion The drilling – to 12,000 feet in the first well on 20 April It is being brought in by French But Total and its minority partner in the con- be at the end of the current industrial zone at Ras Lanuf. and 17,000 in the second – “will not be easy,” oil and gas giant Total. cession exploration, Germany’s Wintershall, year, as opposed to summer, says Avignon. “The geology is quite complex.” would not be spending on this project with- as he had earlier predicted. Total already has the distinction of being It is “a risky operation” in terms of its poten- out good reason to believe that gas is going to the first foreign oil company to resume op- tial success, he notes. be found. There is “a probability of success,” INCREASED OPEC QUOTA erations in Libya after the revolution – in De- Avignon says. The calculations have been Oil exports With regards to Libya’s increase cember 2011. Its aim now is to start explora- The area around the first concession has al- made and gas is expected. However, “if we in production, the Oil Minis- tory drilling at the first of two new offshore ready been explored for both oil and gas and find nothing, then we’ve lost $125 million.” reached 485 ter further added that Libya sites as early as the end of April. finds have been made. On the other hand, the would formally request that Failure, though, is not expected. OPEC officially increases its million barrels FOUR WELLS production quota to 1.7 mbd. The drilling at A1-16/3 is planned to last 130 NOC Chairman Dr. Nouri Berouin & Oil Minister Abdulbari Al-Arusi in 2012 days. “If there is a discovery, the rig could stay another month for production tests,” Total already has the says Bernard Avignon, head of Total’s Libyan distinction of being the branch, Total E&P Libye. It will then move to first foreign oil company to the second well A1-16/1, 30 kilometres north- LIBYA OIL & GAS TRADE AND east of Zuara for an estimated 146 days. Again, resume operations in Libya if there is a discovery it could remain in place after the revolution – in INVESTMENT EVENTS 2013 for another month for tests. December 2011. Exclusive distributor in Libya for:

Oil & Gas Libya 2013 Parker Hannifin Following the success of Oil & Gas Libya 2012, the 5th event in Instrumentation and this series, Oil & Gas Libya 2013, is scheduled for 22/25 April 2013 at the Tripoli International Fairground, with the support of Domnick Hunter NOC Libya and the Libyan Ministry of Oil & Gas. www.oilandgaslibya.com filtration products

New Libya Oil & Gas Forum 2013

The Second New Libya Oil and Gas Forum is being organised on the 23rd-24th May 2013, in Istanbul Clients include Mellitah Oil & Gas, Mabruk, Ras Lanuf, Waha The event will have the involvement of the NOC Libya, Govern- ment Officials, International Oil Companies and Service Provid- [email protected] www.taparkco.com ers already in or looking to get involved in Libya and the latest developments in this sector. www.libyaoilgas.com Tel: +218 91-212-1272 Fax: +218 21-4910464 Hay Demashque, Al-Hadba Al-Khadra, Tripoli - P.O. Box 83510 - Libya

22 Business Eye April 2013 April 2013 Business Eye 23

Oil & Gas Oil & Gas

Bashir Garea last year. gested in interviews that different levels 2013 licensing round is In the second EPSA IV bid round in Decem- of prequalification ber 2005, the maximum share allowed to could be set. This IOCs under the model contract varied from raises the possibil- 20 percent in the proven Sirte Basin to 35 ity that some blocks percent in the Bourma offshore area and the could be restricted not Libya’s top priority Cyrenaica platform, and 40 percent for the to the majors, while frontier Kufra basin. However, in Bourma, frontier blocks or By John Hamilton IOCs bid an average of 18.2 percent, in Cyre- those likely to result Supported by: naica 26.4 percent, and in Kufra 17.6 percent. in small marginal SECOND In the Ghadames and Murzuq Basins, where discoveries could be n comments made to various interna- NOC was prepared to allow IOC shares of 25 made available to in- NEW LIBYA National Oil tional news agencies, Oil and Gas Min- percent, companies bid 9.3 percent and 8.3 dependent and jun- Corporation Libya ister Abdulbari Al-Arusi has suggested percent respectively. This set a trend for the ior IOCs which until OIL & GAS FORUM 2013 that Libya could hold an international subsequent two rounds. now have played only 23rd & 24th May 2013, 5* Venue in Istanbul Iupstream licensing round by the end of this a minor role. Any year. This raises a number of vital questions change of this sort for the sector. would represent a radical departure Oil companies considering participating in Do the NOC and the new from the way the any such round will want to know whether country has handled the terms on offer will be improved; whether Oil and Gas Ministry its potential resourc- SECOND any other changes will be made to the EPSA- have the capacity not es until now. IV contract model; will the areas on offer INFRASTRUCTURE & CONSTRUCTION be more prospective than those in the four only to successfully hold Another change rounds since 2005; will a new hydrocarbons such a round, but also likely to improve LIBYA SUMMIT 2013 law be in place and, if not, how will the round outcomes would be 29th-30th April 2013, Istanbul deal with potentially gas-prone blocks? to then successfully to extend the length of the initial explora- Developments, Strategies and Opportunities within negotiate the fine details Infrastructure & Construction in the new Libya Arusi has said that international oil compa- tion period from five to seven or even ten nies (IOCs) would benefit from improved of EPSAs and supervise email: [email protected] years which would al- terms in what would effectively be EPSA-V new IOC operations? or call us on: +44 (0) 207 127 4501 licensing. Without fundamental changes it leviate the time pres- is unlikely that a new round would be effec- sure experienced Ministry of Oil & NOC headquarters Tripoli tive in helping Libya achieve its objective of by IOCs prior to the OK-Libya-Summits13-105x148.indd 1 tions surrounding the location of the NOC’s20/03/2013 07:57 increasing production to 2m b/d in the next revolution. headquarters, and the increasingly frequent few years. percent of the additional oil and 46 percent tier blocks in Kufra, Cyrenaica and the west- labour protests at fields and facilities. After of the additional gas in place discovered dur- ern part of the offshore, then interest will Under the previous regime, it sometimes Many analysts considered that it was never took years for companies to get seismic two years in which many of the most quali- According to the National Oil Company ing the 2007-2011 period. The remaining ad- certainly be higher. possible for Nippon to make a profit on the crews or rigs in place and NOC joint com- fied and experienced cadres from the NOC (NOC), the impact of the previous four ditional resources were added via NOC’s own 8 percent share it bid for offshore Area 2 in mittees regularly took months to approve ex- have left the company or been forced out, rounds was extremely modest. Fifty-four ex- discoveries or those of IOCs with explora- The level of production share which com- the December 2005 round or for Gazprom to ploration plans and sanction new wells. This industry experts are already questioning ploration licences were awarded to 29 IOCs tion agreed under previous EPSA models. panies offered in past rounds was to a large make a profit on the 9.8 percent production was just one of the reasons why the costs of where the expertise can be found to manage (including 15 consortia). To date these explo- extent their own responsibility. In recent share it bid for the gas-prone Area 64 in the running exploration programmes in Libya ongoing projects. rations have added to the hydrocarbons in IMPACT OF THE FIRST FOUR ROUNDS years, NOC officials and other analysts have 2007 round. Many other companies placed turned out to be much higher than expected. place 3.2bn barrels (bbl) of oil and 8.99 tril- frequently pointed out that IOCs themselves From the IOCs’ perspective as well, the first themselves in similar positions. The average The NOC made this problem worse by scruti- Other priorities, such as the drafting of the lion cubic feet of gas. This amounts to just 37 choose to make extraordinarily competitive four rounds failed. The NOC licensed 15 and production share bid by companies across all nising the fine detail of cost recovery claims new hydrocarbons law, establishing a strat- offers which means that it is impossible for 23 areas in the first two rounds in 2005, then four rounds was approximately 12 percent. for even trivial items, building in further egy for the development of gas resources and them to develop discoveries profitably. ten out of 14 areas offered in 2006, and finally delays. tackling the politically sensitive issue of en- But while companies are not obliged to sub- five out of the 12 areas offered in 2007. But hanced oil recovery, also demand the partici- Last September, the then Oil and Gas Minis- mit overly competitive bids, the licensing this massive effort with combined invest- IS LIBYA READY? pation of the sector’s most qualified officials. ments amounting to hundreds of millions of ter Abdel Rahman Ben Yezza said: “If there is round system as it currently stands offers no Without fundamental a bid round, the conditions are clearly stated. other mechanism for evaluating IOC offers. Finally, there is the question of whether Lib- dollars is likely to result in the development ya is really ready for another licensing round. For all these reasons, the question of a new li- It is up to the investors to decide whether to There is currently no way that the NOC can, changes it is unlikely that a of just half a dozen new fields. Do the NOC and the new Oil and Gas Minis- censing round, while of dominant interest to come into Libya. There is some homework to for instance, make allowance for the superi- or technical ability of some companies. NOC try have the capacity not only to successfully the international media and IOCs looking for new round would be effective Interest in Libyan assets waned over the pe- be done by people who want to come in.” officials have over the past year considered hold such a round, but also to then success- potential new opportunities, may well not be in helping Libya achieve riod not only because of the trend of overly fully negotiate the fine details of EPSAs and the first priority for Libya itself. IOCS’ COMPETITIVE BIDS possible revisions to the rules to get around competitive production shares, but also be- this problem. supervise new IOC operations? its objective of increasing cause the assets on offer were not attractive The extent to which IOCs saddled them- John Hamilton is a contributing editor at Af- production to 2m b/d in the enough. If the authorities are willing to offer selves with what are now uncommercial pro- WAYS TO IMPROVE Politically and bureaucratically, both in- rican Energy (www.africa-energy.com) and a prospective Sirte and Ghadames Basin areas duction shares was further highlighted in a stitutions are already stretched. Senior of- director of Cross-border Information (www. NOC chairman Dr Nouri Berouin has sug- next few years. in the next round, rather than massive fron- presentation by NOC exploration manager ficials have to handle the sensitive ques- crossborderinformation.com)

24 Business Eye April 2013 April 2013 Business Eye 25 Finance Finance

number of private-sector banks sold stakes to international bank- First, if they hope to avoid the resistance to change of existing banks, ing partners. Most post-acquisition experiences have illustrated the new entrants need to understand that the Libyan banking industry challenges of investing in existing Libyan banks, and it is widely ru- lags behind in terms of infrastructure, and thus they need to help in moured that BNP Paribas is looking to exit from its investment in modernising the sector and introducing technologies into a much Small is Beautiful Sahara Bank. slower market, and to less sophisticated and experienced human resources. ALTERNATIVE APPROACHES There are a number of alternatives through which the Libyan bank- Second, they must engage in capacity building, which should focus ing industry could be improved: on technical training as well as the important leadership training, in vs Bigger is Better order to build a cadre that can serve the industry in the future. A mis- (1) Privatise banks; (2) Restructure banks using international consultants; take that will not serve the new entrants well is to bring expatriate An alternative approach to banking in Libya (3) Merge banks and restructure them; management teams that are unused to the local ecosystem, and thus (4) Split banks and restructure them; and suffer a culture and local understanding gap when dealing with local (5) Offer new banking licences. Space does not allow a detailed analy- staff. Of course, some expats add considerable value, but not neces- sis of each option. sarily an entire management team. This may indeed have a detrimen- tal impact on a bank's performance. Suffice it to say, a combination of the above is probably required. Finally, they need to know that the Libyan private sector is small and The theory that small is beautiful essentially states that smaller in- the country now needs, more than ever, a special focus on the SME stitutions empower people. Hence, breaking up the four giants into sector. Small to medium-sized banks are better positioned to serve eight medium-sized banks perhaps makes sense. By creating four the needs of SMEs and Libyan entrepreneurs. The bigger banks are more banks and supplementing that with may be five new licences, unlikely to consider such smaller SME-related transactions because, the banking sector would then have 13 banks. This is below the re- from a cost and time perspective, it is often more profitable to deal gion's average, though measured in per capita terms, it is higher. with larger clients and opportunities. The bank break-up would, in turn, create greater competition in the market and the wise banker will understand that he or she needs to pay ever more attention to their smaller clients to create value for their shareholders. Small to medium-sized banks are better For detailed sector analysis, visit: www.oeacapital.com positioned to serve the needs of SMEs and Libyan entrepreneurs

The essence of the issue is: Will this lead to more efficiency and better quality services?

Amr Farkas and Abdulla Boulsien, OEA There is reason to believe it will, primarily because it is easier to deal with and restructure smaller institutions. In the process of splitting, Advisors, Libya,argue while foreign banks new management teams can be installed in the newly created enti- should be able to enter the market, the prime ties along with an updated operational framework to incorporate new credit analysis and approval systems. Furthermore, the CBL could objective has to be for Libyan existing banks to be perhaps designate a number of the new banks to be ‘SME-focused’ in- stitutions, with a view to creating in-house expertise which can help restructured and split to become more efficient. support SMEs during their lifetimes.

The banking industry would certainly be disrupted if new entities are These lawyers are Central Bank of Libya created through the division of existing banks. So the second natural step to this process would be to restrict any sale of such banks for a specialists: minimum of three years and, given their less cumbersome size, to im- - Emerging markets fter the 2008 recession, the Obama administration argued to promote competition, ultimately for the benefit of industry and prove them operationally and introduce policies and frameworks for that the idea of "too big to fail" had to be rejected in the the Libyan consumer. However, when one assesses the Libyan bank- - International trade efficiency and transparency. Naturally, Libyan consumers and com- banking industry. In Britain, both the Prime Minister and ing sector, one finds that approximately 87 percent of the asset base - Infrastructure panies would benefit and the Libyan treasury would own assets that the Chancellor of the Exchequer expressed their dismay at is in the hands of four banks: Al Gumhouria Bank, National Commer- should have a higher valuation than before the split. - Natural resources Athe fact that banks globally had to receive bailouts from governments. cial Bank (NCB), Sahara/BNP Paribas, and Wahda/Arab Bank. These - Transportation How does this relate to Libya? are all essentially state-owned banks, are far from efficient and do not The concept here should not preclude the entry of foreign banks. In- effectively perform their core intermediary activity which is lending deed, the opportunities presented by smaller banks in Libya are far CURRENT SITUATION (their average loan to asset ratio is 18 percent). superior to those offered by the giants — largely because of the natu- Now in Libya's banking industry is currently experiencing mergers and ac- ral resistance to change that the large banks and so many other large quisitions promoted by international players (mainly GCC banks) RESTRUCTURING ATTEMPTS corporations exhibit. Also, smaller banks should be easier to restruc- Libya. anxious to own a part of the Libyan banking pie. Two such institutions In recent years there have been a number of attempts to restruc- ture, particularly newly created ones. are the Al-Rayan Islamic Bank of Qatar and ABC Bank of Bahrain. ture, improve and introduce efficiency into the public sector bank- www.clydeco.com ing industry. With this in mind, the CBL privatised stakes in some ADVICE FOR NEW ENTRANTS The Central Bank of Libya (CBL) has promoted the entry of foreign public sector banks. BNP Paribas (France) and Arab Bank (Jordan) What do the new (mainly foreign) entrants seeking to capitalise on banks into the Libyan market in order to enhance performance and purchased stakes in Sahara Bank and Wahda Bank respectively. A the underdeveloped Libyan market need to know?

26 Business Eye April 2013 April 2013 Business Eye 27 Finance Finance

LOCAL OPPOSITION Bank In February, three organisations – the GUMHOURIA BANK OPENS National Labor Organisation for the Protection of the Revolution and the Fight ISLAMIC BANKING BRANCHES The licensing against Corruption, the Supreme Com- IN MARCH mission of Labour for Libya and the NCB Libya African branch of the 17 February Revolutionar- As part of the develop- ment of its strategic plan By Sami Zaptia ies Association — issued a joint statement saying they rejected a decision made by the to upgrade its operations Investment Central Bank to sell 74 percent of NCB’s and efficiency, Gumhou- The Central Bank of Libya has denied shares to ABC. Calling the sale a “betrayal ria Bank announced the a number of stories being reported by and abandonment of Libya’s sovereign opening of three Islamic various media outlets that it had issued Portfolio (LAP) economic potential”, they claimed that the banking branches in different parts of the licenses to foreign banks to operate inde- NCB was “one of the most successful Libyan country during March. participates in pendently in Libya. In its statement, the banks” and not in any financial difficulties. bank stressed that any licenses issued to The first Islamic banking branch was opened any foreign banks to operate in Libya had The three called on the General National on 16 March in Derna. The branch is to have Brussels forum to be in partnership with a Libyan bank. Congress and the Prime Minister to put a training centre attached which will pro- a stop to the sale and prevent “one of the vide training for staff elsewhere in Libya as on Africa The Central Bank, the sole authority respon- largest Libyan banks from being lost, in the the bank seeks to improve its nationwide sible for issuing licenses to foreign banks to same manner as Wahda and Aman banks”. services. operate in the country, also denied media By Sami Zaptia rumours that it plans to sell the National Claiming they welcome the reform of In the Nefusa Mountains, the bank opened a Commercial Bank (NCB) to Bahrain based the banking sector, they demanded that branch in Timzine and an “Islamic Window” in the town of Tandamira on the 23 March. An Arab Banking Corporation (ABC) or that shares not be sold to non-Libyan enti- Islamic branch was to open to open in Zintan it has made a decision to specifically bar ties. Cooperation with international on 30 March. any Egyptian banks temporarily from banks was welcome, they said, but should bidding for operating licenses in Libya. only go as far as technology exchange.

LAP Managing Director, Ahmed Kashadah

We don’t just help businesses start their ascent. We take We’re often there your goals to heart and use our he Libya African Investment Port- largest companies in the world. are present throughout Africa: North, south, experience to help you at every folio (LAP) took part in an inter- At the plenary session, in the section entitled east and west. We are in property, oil and gas, before a business stage of your journey. Because we believe our greatest success national forum on Africa in March “African countries: new and key partners of becomes successful. mining and agriculture.” is helping you achieve yours. during which it gave assurances South-South Cooperation,” LAP Managing And still there Find out more at ey.com. Tthat its sovereign wealth fund (SWF) arm Director, Ahmed Kashadah gave a presenta- “We believe in this continent and believe in when they do. will now concentrate on investments and not tion in which he gave its people. We See More | Achievement politics. a brief outline of LAP believe that and its future plans. + 218 21 334 4130 with more ci- [email protected] LAP is part of the Libyan Investment Au- Kashadah also paid vility and more tribute to the “hard thority (LIA), Libya’s sovereign wealth fund We invest in different democracy work done by the organisation,which was created in 2006. It throughout the controls about $5.2 billion of wide-ranging LAP’s management sectors in Africa and we are region, there investments and assets including Oil Libya, to improve its image” present throughout Africa: will be unlim- Afriqiyah Airways, Sahel-Saharan Invest- and confirmed that ited potential ment and Trade Bank (BISC), LAP Green the portfolio is “now North, south, east and west. and we believe Network, Libyan African Investment Trade working with full We are in property, oil and Company and Libyan African Portfolio (Sui- professionalism and in the region.” sse) SA for investment pur- gas, mining and poses only. It will not agriculture.” “Africa is a The Seventh Crans Montana Forum on Afri- be the service arm of growing force ca and South-South Cooperation is an annu- political or private in the inter- al event dedicated to new African economies interests.” national com- and Africa’s global integration. The 2013 fo- munity. Africa rum held in Brussels 6-9 March was entitled “We see the African has great ambition and we believe that with “Africa in 2013 – Upheavals and Changes” and region as an important part of the future gen- its people, friends and allies, it will reach its was attended by numerous African ministers, eration of Libya. Our main strategy is to in- ambitions.” current and former heads of states, interna- vest in private equity with capital growth. We ©2013 EYGM Limited. All Rights Reserved. All Rights Limited. ©2013 EYGM tional investors and leaders of some of the invest in different sectors in Africa and we For more details go to: www.lap.ly

28 Business Eye April 2013 April 2013 Business Eye 29 IT-Telecoms IT-Telecoms

E-commerce: the future The future of LTNET e-commerce in Libya of online retail in Libya has only just begun Libya Trade By AbdulMagid Bensaid, General Manager, Computer Libya Network for e-trade An efficient e-commerce system ncreased internet use has opened new business. The internet is becoming the pre- completely new concept for Libya. With all doors for businesses worldwide in the ferred marketplace for both businesses sell- items delivered either the same or next day, would also support Libya’s plans form of e-commerce. When it comes ing direct to the consumer - business-to-con- the response has been so positive that the to online shopping, Libya is lagging be- sumer (B2C) - and trade between businesses firm is now looking at expanding its coverage to diversify from hydrocarbons Ihind many countries, not least because much -business-to-business (B2B) - especially in of the country. of the population struggles to maintain a countries where the internet is widely-used. by helping establish a transit reliable internet connection. However, with Using international standards for e-com- trade industry. the country’s first e-business showing how Computer Libya is one of the pioneers in merce, it has also adopted various technolo- online business in Libya can be done, this B2C trade in Libya. Selling computers, print- gies to enhance consumers’ trust in shopping could be about to change. ers, software and accessories, the company is By Sami Zaptia over the internet, as people new to the online running the country’s first fully-functional Minister of Economy Mustafa Abofanas & Korean Ambassador Lee Jomg-kook marketplace can be wary. Electronic business, also known as electron- and exclusively online store, www.computer. he Libya Trade Network (LTNET) is the new electronic An efficient e-commerce system would also support Libya’s plans ic commerce or e-commerce, is a sector that ly, with a broader vision of “building a prom- “Unified Window” portal that the Ministry of Economy to diversify from hydrocarbons by helping establish a transit Computer Libya encrypts its customers’ per- now counts as a driving force for the national ising future for e-commerce in Libya.” After is setting up with help from South Korea, in an effort to trade industry. economy in much of the developed world. some six months of research and prepara- sonal data and communications, to protect Tstreamline the process of importing and exporting goods. Statistics show that in the United States, one tion, the store went online in January. their privacy. The company is also working To help activate the new LTNET system across all areas and sec- of the countries with the most internet users, with financial institutions in the UK to pro- The objective of LTNET is to organise and develop the external tors connected to external trade, the Ministry of Economy is to e-commerce is the key driver of its economy. OVERCOMING LOCAL CHALLENGES cess credit card transactions and, to enable trade sector in Libya by improving efficiency, by reducing the reform current laws and enact appropriate new legislation. TO E-COMMERCE this, Computer Libya has to comply with EU number of different documents and departments involved in NEW CONCEPT FOR LIBYA The company uses its regulations. processing trade transactions. In Libya, e-commerce own drivers and, at pre- is not yet a well- sent, only delivers to BUSINESS BENEFITS EASIER WITH E-TRADE known concept. The Tripoli, although even The number of internet users worldwide has In his opening remarks at the LTNET workshop in Tripoli, on 11 adoption of e-com- The number of in the capital this is a grown to 1.78 billion with the e-commerce March, attended by Korean Ambassador Lee Jomg-kook, Econ- merce compared to challenge, as there is no turnover reaching $10 trillion. Therefore, if a omy Minister Mustafa Abofanas said Libya was “depending a lot internet use is also internet users formal address system. business can succeed with e-commerce, this on this system in improving the process of import and export. lagging and not fol- Most Libyans do not use will result in more income and wider market- The system is to ease the process of trade, documentation and lowing the world- worldwide has grown mail and those who do, ing options. Online marketing has become an banking, improve the quality of processes, exploit Libya’s ports wide trend. Sooner have a post office box, so capacity, improve trade regionally and internationally, and im- to 1.78 billion with the important aspect of business since it can eas- or later, however, e- Computer Libya takes prove e-commerce.” ily translate into direct sales, with ‘clickable’ commerce will find its e-commerce turnover down details of the ex- advertisements which allow consumers to way in Libya, as the reaching $10 trillion act location when orders The Korean delegation highlighted that the country’s unified adoption of technolo- are placed, to enable buy goods then and there. trade window has been instrumental in Korea’s high ranking as gies, including satel- delivery. a trade nation and that Korea it ranked top out of 190 countries lite dishes and mobile Online trading also enables businesses to in e-government. devices, means that Another problem with reach much wider audiences while cutting Libyans are steadily e-commerce in Libya is the costs of traditional retail, such as shop The head of Libya’s LTNET, Emhemed Al-Dirweesh, said that getting online. that most Libyans do not have credit cards. rentals. Likewise, consumers can save time customs, customs clearers, ports, banks and chambers of com- Computer Libya offers a cash on delivery and money by shopping in the comfort of merce would all be part of the LTNET system, helping bring Libya There is little doubt that the internet and e- service, which most of its customers use. their own homes. In 2013, the future of e- closer to paperless commerce, trade procedures and processes. commerce are now an integral part of global Home delivery from online shopping is a commerce in Libya has only just begun. MANY POTENTIAL BENEFITS Ultimately these reductions in procedures could mean that im- ports to Libya are processed within one day and the cost will fall to about 0.8 percent instead of the current 3-4 percent of invoice The Ministry of Industry has reported that it is making steady progress in its aim to achieve value. Tunisia is already processing goods within one day and in MINISTRY OF INDUSTRY e-government. The Ministry has said that it has already noted a marked improvement in Korea the process takes about 12 hours. increased efficiency and productivity as well as quality of work. MAKES STEPS TOWARDS In addition the new system is forecast to make savings of up to It reported that it has been developing its website and communications network and that $1 billion after three years of operation based on 2010 trade sta- E-GOVERNMENT it is currently working on its financial and administrative system. It is also planning for the tistics – with savings coming from new customs duties that are implementation of its e-communications and e-legal systems. otherwise lost, time saved and increased volumes of trade.

30 Business Eye April 2013 April 2013 Business Eye 31 IT-Telecoms IT-Telecoms Libyan cyber security mission RLTT to revolutionise to US later this month By Nigel Ash Libyan telecoms sector

The United States is hosting a group of ten Cyber Security Agency. SILICON VALLEY EXPERTISE Libyan officials at the end of April on a trip to The visit, says USTDA, will give delegation At the Libya Summit investment conference held in see what American cyber security firms have The agency notes: “Currently Libya ranks members, headed by Communications and to offer to protect Libyan computer systems. below many countries in the indices most Informatics Deputy Minister Ali Abdouallah, November, the ITC sector was highlighted as a vital often used to determine ICT and networked the opportunity to quiz leaders in the US cy- The visit comes at a time when the govern- readiness”. However the agency expects ICT ber security industry as well as government ‘enabler’ of the rest of the Libyan economy ment is looking towards e-government and usage to rise rapidly, with the expansion officials and to learn about American tech- planning to enhance its information and of telecommunications across the country nologies and best practice. communications technology infrastructure, serving as a catalyst to boost economic op- By Sami Zaptia to modernise its overall operations. portunities and improve public services. Other members of the Libyan team will in- clude representatives of the National Infor- SUPPORTING E-LIBYA mation Security and Safety Authority, the

According to the US Trade and Develop- Central Bank of Libya, the General Informa- IT users in IT exhibition Tripoli ment Agency (USTDA), “The new Libyan The ten-day mission will tion Authority and Libya Post, Telecommu- After decades of state-controlled monopoly in the telecoms sec- ENABLING ECONOMIC DEVELOPMENT government recognises that the success of tor, a new private company was launched in 2012 – revolutionis- involve a trip to Silicon nication and Information Technology. The ITC sector is expected to be in the forefront of the develop- national reform depends on a robust infor- ing the Libyan telecoms sector. ment of the new competitive Libyan economy. At the Libya Sum- mation structure that can deliver modern Valley, at which the Libyan The ten-day mission will involve a trip to mit investment conference held in November, the ITC sector was e-services. A high-profile ‘e-Libya’ strategy delegation will give a Rawafed Libya for Technology and Telecommunications (RLTT) Silicon Valley, at which the Libyan delega- highlighted as a vital ‘enabler’ of the rest of the Libyan economy is being developed to transform government has secured an exclusive contract with Skylogic, Eutelsat’s 100- presentation on current tion will give a presentation on current cy- as well as being an important candidate for Libya’s diversifica- operations, improve transparency and po- percent-owned operator of the Ka beam used for satellite inter- cyber security infrastructure ber security infrastructure developments tion away from hydrocarbons. RLTT’s early move into the sector litical participation and provide a suite of net services. RLTT has now secured all the capacity supplied by developments in the country. in the country. It will be attended by Ameri- should place it in a strong position, ahead of other competitors digital services for citizens.” USTDA add that Skylogic/Eutelsat for beams 79 and 80 which were previously can technology and service providers and expected to enter this sector. among the list of ICT initiatives, the govern- consulting firms, as well as US government shared by a variety of distributors. ment intends to establish is a new National representatives. COVERAGE IN EAST AND WEST LIBYA Beam 79 covers the greater Tripoli area from the eastern suburb of Tajoura to as far south as Gharian in the Nafusa Mountains and up to the Tunisian border. This beam is already active and Indian company wins Almadar has been used by existing satellite-dish-based internet service providers. On the other hand, beam 80 covers the Jebel Akhdar mountains from the Egyptian border to the south of Ajdabiya in- business support contract cluding Benghazi. This beam had been inactive and began service on 1 March 2013.

Almadar exhibition stand As of January 2013, the Ka beams used to transmit existing servic- ibyan mobile operator Almadar has have chosen the ROC Revenue Assurance es became the exclusive rights of RLTT under its new agreement. awarded a contract to Indian finan- and Fraud Management solutions from Sub- It is expected that RLTT will honour existing agreements granted cial software company Subex to pro- ex”, said Jamal Hegag, chairman of Almadar. by previous license holders to Libyan customers. vide it with a revenue assurance and “Subex’s experience in the global revenue and Lfraud management system. fraud management space is unparalleled and PRIVATE SECTOR SERVICE STANDARDS we are confident that this engagement will The Bangalore–based company, which pro- RLTT is confident that through modern technology and manage- enable us do our business in a more effective ment, and as a private sector company, it will be able to offer a vides business support systems (BSSs) for manner”. communications service providers (CSPs), very high quality of service and customer satisfaction in a sector says it won the bid to provide its Revenue which suffers from a lack of competition and customer care. It has “Libya is an interesting telecom market with Operations Center (ROC) system in a com- identified a great real need in this rapidly expanding sector which a lot of potential,” said Vinod Kumar, Chief petitive tendering process. has great potential for long-term growth. Operating Officer, Subex. “Our market lead- The system helps sustain profitable growth ership and strong domain capabilities in the This news will no doubt come as great relief to Libyan internet us- and sound financial health through a series area of Revenue Assurance and Fraud Man- ers who had to endure very poor internet services from the state- of operations including revenue assurance, agement help us enable our customers to owned monopoly LTT. Its monopolistic position and ultimate fraud management, credit risk management realise operational efficiencies and improve “Libya is an interesting control by one of Qaddafi’s sons meant that consumers never had and inter-party settlement. profits.” telecom market with a any choice. Now it is expected that all state-monopolies will be opened up to private sector competition, allowing the consumer “We are taking a fresh approach to our busi- Subex's customers include 33 of the world’s lot of potential,” a choice which will hopefully be more responsive to customer ness proposition and it was important to 50 biggest telecommunications service pro- demand. build the right ecosystem. As a first step, we viders worldwide.

32 Business Eye April 2013 April 2013 Business Eye 33 Fairs LibyaHerald Interested in advertising….. See who else is reading the Libya Herald Business Eye available in print and pdf download from www.libyaherald.com

One page: from LD4,000 / US$3,500 Half page: LD2,500 / US$2,200 Tripoli’s Quarter page: LD1,500 / US$1,300 BUSINESS EYE Full information on: International www.libyaherald.com/advertising

Some – not all - of the companies and organisations which have received printed copies of the Libya Fair at the end Herald Business Eye magazine …6,000 copies distributed to… of an era LIBYAN GOVERNMENT / GNC ƒƒDeloitte MISURATA ƒƒThe Prime Minister’s office ƒƒLibyan Iron and Steel company – LISCO ƒƒThe Minister of Economy CONSTRUCTION /ENGINEERING ƒƒMisurata Airport ƒƒThe Foreign Minister ƒƒThe National Real Estate Investment ƒƒMisurata Chamber of Commerce ƒƒThe Minister of Planning & Construction Company – NRIC ƒƒMisurata Free Zone Salaheddin Hamza, head of the Libyan Fairs Organisation. ƒƒThe Minister of Housing and Utilities ƒƒBechtel ƒƒAl Naseem Dairy factory ƒƒThe Minister of Electric- ƒƒMafaza ity and Renewable Energy BUSINESS ORGANISATIONS ƒƒThe Minister of Culture AIRLINES By Michel Cousins ƒƒLibyan Businessmen Council ƒƒThe Minister of Justice ƒƒThe Tripoli Chamber of Commerce ƒƒAlitalia ƒƒThe Minister of Health ƒƒThe General Union of Cham- ƒƒAir Malta he 41st Tripoli International Fair building and other Roman statues such as in contact with the government about this. ƒƒThe Libyan Investment Authority (LIA) (TIF) will take place on 2–12 April that the she-wolf suckling Romulus and Re- bers of Commerce ƒƒEtihad They’re considering it. We have to move to ƒƒThe Libyan African Invest- ƒƒCommittee of Libyan Businesswomen ƒƒQatari with participants from at least 11 mus, the legendary founders of Rome, were another, bigger site.” ment Portfolio (LAP) ƒƒBritish Airways countries, as well as five Libyan removed and sent to a depository where they ƒƒThe Privatization and In- EMBASSIES ƒƒEmirates ministries and some 20 state and private or- still remain. vestment Board (PIB) T Moving has become all the more urgent be- ƒƒThe US embassy ƒƒTurkish ganisations and companies. ƒƒNumerous GNC members ƒƒAfriqiyah cause of the loss of the outdoor industrial ƒƒThe British embassy Even during the Qaddafi era, it was extremely ƒƒThe Italian embassy ƒƒLibyan Airlines exhibition area. Last year, a court handed it HOTELS “It going to be better than before,” declared active, apart from the sanctions period when ƒƒThe Italian Foreign Trade Office – ICE Salaheddin Hamza, head of the Libyan Fairs there were no fairs. In 2010, at the last of the back to the family from whom it had been ƒƒCorinthia Hotel ƒƒThe French embassy CAR RENTAL ƒƒRadisson BluHotel Qaddafi-era TIFs, there were 1,000 local and taken decades ago. “We can use it this year,” ƒƒThe Portuguese embassy ƒƒBudget Organisation. Part of the Ministry of the ƒƒAl Waddan Hotel Economy, it is responsible not just for TIF international exhibitors from 29 countries. said Hamza, but that after that, nothing is ƒƒThe Spanish embassy ƒƒHertz ƒƒRixos hotel ƒƒThe Japanese embassy but for planned international fairs in Beng- certain. Other exhibitors who hire the TIF ƒƒPlasma Hotel ƒƒThe Korean embassy AUTOMOTIVE hazi, Misrata and Sebha. NEW CHALLENGES grounds are already looking for alternatives ƒƒThobacts Hotel ƒƒThe Korean Trade Association – KOTRA ƒƒVW Despite Hamaza’s optimism, the revolution as a result. ƒƒThe Dutch embassy ƒƒAudi INTERNATIONAL OIL COMPANIES In fact, this year has seen one of the lowest has finally stripped the old lady of her lead- ƒƒThe Canadian embassy ƒƒToyota turnouts in the fair’s history. National pavil- ing role. The government wants to decen- And so, after 85 years, this year’s fair could ƒƒBP ƒƒThe Turkish embassy ƒƒStatoil ƒƒThe Indian embassy ions include France, Turkey, China, Tunisia tralise and share the be the last on COMMUNICATIONS & IT and Egypt, as well as Algeria and Iran and Su- ƒƒWintershall ƒƒThe Austrian embassy activity with the fairs the iconic site. ƒƒOMV ƒƒThe Swiss embassy ƒƒHatif Libya dan. He was optimistic nonetheless. “More ƒƒLibyan Spider in Benghazi, Misrata But even be- ƒƒTotal ƒƒThe Bangladeshi embassy than 250 companies have sent applications,” and Sebha. Also, Trip- ƒƒAl Wadi Communications fore the revo- ƒƒEni North Africa he said, speaking less than three weeks be- oli itself is now awash The Tripoli fair is the oldest ƒƒSchlumberger BUSINESS EVENTS/TRADE MISSIONS lution, the MULTI-SECTOR fore the Fair was due to open. with privately-organ- international fair in both ƒƒRepsolGreenstream ƒƒThe Middle East Association (MEA) ised exhibitions and decision to ƒƒHess ƒƒThe Libyan British Busi- ƒƒHommer/Gree (Mersin) ƒƒAkida (LG) LONG HISTORY conferences. TIF is Africa and the Arab world relocate had ƒƒPetrobras ness Council (LBBC) ƒƒDaikin It is a far cry from the fair’s former glory. The just one among many been made. ƒƒTurkish INSIAD BANKS ƒƒThe EIC British Trade Delegation ƒƒAl Ghazaly Group Tripoli fair is the oldest international fair in — and the competition The talk was of ƒƒJotun paints is dynamic and professional. ƒƒThe Central Bank of Libya ƒƒThe Advantage Austria Trade Delegation both Africa and the Arab world. Launched by a site near the Swani Road, in south Tripoli. ƒƒThe Libyan Foreign Bank ƒƒThe Privatization & Investment Board ƒƒRoya graphics the city of Rome in 1927, it was intended as ƒƒBaraka Bank (PIB) Renewable Energy Conference the top Italian trade fair and, until the Sec- This year’s relatively low turnout is a conse- According to the Minister of the Economy, ƒƒFirst Gulf Libya Bank ƒƒThe LTNET/KTNET Libyan Korean INSURANCE ond World War, it was, with representatives quence of all that but it also reflects concerns Mustafa Abofanas, two potential sites are be- ƒƒLibya Qatari bank Trade Network Conference ƒƒSahara Insurance in 17 countries, including France, the UK, about security in the country and whether ƒƒThe British Arab Commer- ƒƒThe Libyan Korean Knowledge Shar- ƒƒArig Insurance ing studied. “It is very important for Tripoli ƒƒBeltone Insurance Turkey and Germany, enticing companies to the government is moving quickly enough to cial Banking – BACB ing Programme (KSP) Conference International Fair to have a new and larger ƒƒHSBC ƒƒThe Libyan Business Council An- exhibit. open up the economy. location, which includes hotels and res- nual General Meeting INTERNATIONAL ORGANISATION NEW SITE NEEDED taurants,” he told the Libya Herald. An an- LEGAL AND ACCOUNTING ƒƒThe UKTI Airports delegation ƒƒUNDP It flourished again during the period of the ƒƒThe US Embassy/AmCham nouncement would be made shortly, he said. ƒƒTumi Law Firm ƒƒEU Kingdom (1951-1969), especially after the But there are other, more particular, issues ƒƒErnst & Young ƒƒThe Canadian embassy net- discovery of oil when its impressive entrance for TIF. At the centre of Tripoli, there is ƒƒClyde & Co work meeting buildings were ‘decolonised’ and ‘Arabised’ no room for parking and no room to grow. The present site is expected to be handed to reflect the country’s independence. The “TIF’s capacity does not match up to partici- over to the Ministry of Culture to develop massive statue of Minerva on top of the main pants’ requirements,” said Hamza. “We’re into a cultural centre. To advertise in June, August, October and December: [email protected]

34 Business Eye April 2013 April 2013 Business Eye 35 SPECIAL FOCUS FDI LIBYA Focusing PRINCIPAL SPONSOR on Libya’s future FDI Libya to be held in London on May 29th and 30th BUILDING ON SUCCESS FOCUSING ON THE FU TURE

FDI Libya conference will bring together the visions of Marcus Aurelius arch Tripoli Libyan celebrating the 2011 revolution

Michael Thomas – former he Libyan economy is recovering. Oil cranes working”. The government of Libya the corporate world and the new authorities in Libya. Director General of the production is now nearing its pre- not only has to grapple with creating a new Middle East Association, revolution output after being shut constitution as well as developing the levers of now Chairman of Pace Group down during the war and the Libyan government; at the same time, it must also deal FDI Libya will host a spectrum of prominent business Teconomy has more than doubled in size since with the neglected and in some cases destroyed last year. This was the report of Ralph Chami infrastructure. Libya cannot possibly be rebuilt who led a recent two-week-long IMF mission to in a day but Libyan talent is now returning to leaders and senior government officials from Libya Tripoli. According to him, the latest indicators the country from overseas. The Libyan private are pointing to a restoration of hydrocarbon sector is fast emerging and it will develop much output later this year and a full recovery of of the infrastructural growth in the future. and beyond. growth in the non-hydrocarbon sector in 2014. Stability and security are priorities for foreign Accordingly, Michael Thomas, the former investors so it was extremely good to see the Director General of the UK’s Middle East As- anniversary of the revolution pass without any sociation and now Chairman of Pace Group, major incidents. That the government is giving and a Director of the Arab British Chamber of priority to education and training and the crea- Commerce, says that businesses should now tion of a new police force is also reassuring. be preparing themselves for what is likely to be the fastest developing market in the MENA OPPORTUNITIES FOR FDI region for the next four to five years, with ''Companies should also be looking to the future the added attraction for investors that the with FDI, and planning now,” Michael Thomas Libya market is on the doorstep of Europe. advised.“The opportunities in Libya will be on-going and immense'' and he highlighted the INVESTORS AND DECISION MAKERS TO MEET following for future consideration by investors. Fastest developing With this in mind, Pace Group is co-sponsoring a ORGANISED BY CORPORATE SPONSORS major international conference on foreign direct The financial services sector is a key area market in the investment in Libya, FDI Libya, to be held in for FDI and an opportunity for develop- MENA region for London on 29 and 30 May. Participants will in- ment, particularly in the fields of legal ser- clude high-level delegations from Libya, London vices, banking services and insurance as the next four to and the EU, Washington and Istanbul and the well as to increase and develop some of the five years, with the GCC. This will provide a major opportunity for current institutional capacity constraints. investors to learn, first hand, the priorities of the added attraction Libyan government and meet decision makers. The development of renewable energy both solar for investors that and wind power, and Libya's fishing industry [email protected] Michael Thomas says: “We must all work with would look to Europe as a major market. FDI the Libya market the government of Libya and follow their Libya will be addressing all these opportunities is on the doorstep drumbeat to support them.” With this in mind and more. Foreign investment could enable a key priority after oil and gas is employment Libya to develop its position as a key supplier of Europe. for the citizens of Libya; in short, “to get the to Europe, as well as a gateway to Africa.

April 2013 Business Eye 37 SPECIAL FOCUS FDI LIBYA SPECIAL FOCUS FDI LIBYA Investors need not worry Forging a Pace Group Interview with GNC Member, Muhammad Ali Abdullah By Omayma El Ella - North Africa Analyst, Pace Group PARTNERSHIP for economic growth fter a roundtable meeting at the House of Lords in London Abdullah wants this FDI conference to be a forum where a bridge on 13 March to discuss the upcoming FDI Libya confer- will be built between expectations and needs, bringing all the stake- ence, GNC member Muhammad Ali Abdullah, a member holders together to talk directly to each other about Libyan expecta- through international of the Finance and Planning and the Telecom and Trans- tions and what resources foreign investors can bring. The conference Aportation committees, talked to the Pace Group team about what this should provide a platform to manage those expectations in terms of conference might be able to deliver. He also reflected on where the timelines, priorities and “tangible short term goals with strategic investment GNC was currently as a political unit in developing the Libyan econo- vision.” my and how investors could work with the new government to foster By Chuck Dittrich, Executive Director, business and partnerships. US-Libya Business Association FDI Libya roundtable meeting at the House of Lords in London - March 2013 CONFIDENCE-BUILDING The value of engaging To begin with, Abdullah argued that the primary issue right now in Libya-investor relations was “confidence building,” assuring inves- economically with Libya tors that the value of engaging economically with Libya outweighs n March 12, 2013, Libyan 5. Robust Transparency and Pub- Ministry may allow the foreign partner the problem of risk. This is closely tied to the fact that Libya is still outweighs the problem of risk. Prime Minister Ali Zeidan lic Participation Rules; to own 60 percent of a Libyan company. in a stagnant “pre-constitution” phase and the “solidity of any participated in a discussion 6. Responsible Business Conduct; legislation today will last only as long as the constitution remains in Washington with members 7. Narrowly-Tailored Reviews of Na- Clarifying the criteria would symbolise un-ratified.” Ambiguity about current legislation is a natural Oof the US-Libya Business Association tional Security Considerations. the government’s commitment to global consequence. (USLBA) and other business leaders. business standards of transparency and This deceptively simple short list is impartiality. Also, allowing the creation Despite this ambiguity, however, Abdullah emphasised that com- Among the topics discussed was Libya’s remarkably difficult to translate into law of limited liability companies and the panies and partners had to be willing to adapt to the new business strategy to welcome international invest- and, in fact, represents decades of politi- participation of foreign limited liabil- environment and be dynamic. He stressed that there would be no BRITAIN & LIBYA, ment in order to increase job creation, cal, legal and regulatory development in ity companies, according to the owner- legislation that would prevent or hinder businesses from coming greatly expand and modernise the na- both the United States and Europe. How- ship percentages of Decision 207, would in. tion’s infrastructure and fully integrate ever, adherence to these core values has stimulate the Libyan private sector. OLD FRIENDS Libya’s economy into the rules-based resulted in the world’s largest bilateral All laws would be reviewed after the constitution was ratified, global trading and investment system economic relationship which accounts for Taking such bold steps requires deep including trade laws, he said, but there was no need for foreign By Robin Lamb, Libyan British Business Council (LBBC) and the regional Maghreb economy. half of global economic output and nearly confidence in the future. Only then investors to worry as it was in fact the pre-revolution legislative $1 trillion in trade, supporting millions will all parties begin to envision the system that was a hindrance. New laws would be much more The Libyan British Business Council (LBBC) brought its first business The following day, US Secretary of State of jobs on both sides of the Atlantic. full potential of Libya joining the business-friendly. delegation to the new Libya in September 2011 and since then it has John Kerry, in a joint press conference world economy on an equal footing. been back several times. It will be back again in the week beginning 11 with Prime Minister Zeidan, expressed a AIMING FOR GLOBAL BUSINESS STANDARDS He cited the financial reform law as being one piece of legislation May 2013, following up on our mission in January this year. desire for “an economic environment in On May 29-30, 2013, USLBA, the Libyan currently under review by the GNC to optimise the business pro- In the Libyan context, maximising invest- British Business Council, the Libyan private Libya that will spur outside investment and ment will require political courage and curement and financial transaction process. Transparency, cor- As well as arranging business delegations to Libya, the LBBC arranges sector, international investors and the foster entrepreneurship, and to work to the support of the Libyan business com- ruption and bureaucratic delay were key issues that the GNC were or attends events in the UK to brief British businesses on Libya. One of governments of Libya, the UK and the US promote the kind of stability that will make munity. For example, Article 3 of Economy working to address in these reformulations. these will be the FDI Libya event in London 29-30 May. investment in Libya even more attractive.” will meet in London at FDI Libya to explore Ministry Decision 207 of 2012 limits concrete steps to achieve common goals for foreign investors to a 49-percent equity As to the existing investment laws that continue to be a source of One thing that invariably comes out of these events is how well in- OPEN INVESTMENT CLIMATES economic growth, job creation, entrepre- worry for many foreign investors, Abdullah stressed that the per- dividual British people and Libyans get on. The two seem to share a stake in Libyan joint ventures companies. neurship and innovation. www.us-lba.org centages of ownership should not be a cause for concern and that common-sense approach to the world which makes for a meeting of Open investment climates have fuelled investors and Libyans were missing the point on the objective of minds. They certainly share a lot of history. Going way back, both were US and European growth for centu- Increasing the maximum allotted percent- partnerships. The value of what was being put on the table was the once colonies of the same empire, ancient Rome, whose one emperor ries. Almost a year ago, the US and the age would enable investors to partner crucial determining factor, and if both partners, regardless of who of Libyan origin, Septimius Severus, ended his life in Britain, in York. EU articulated a shared commitment to with small Libyan entrepreneurs, thereby Almost a year ago, the US was the majority shareholder, bring that value, than both partners The UK is now home to the largest community of Libyans outside Libya, seven principles for international invest- helping to diversify the Libyan economy. and the EU articulated a would profit. supplemented over the years by thousands of Libyan students studying ment that can serve as a roadmap as Libya An increase of the percentage would allow shared commitment to seven at British universities and thousands of Libyan doctors working in the develops the legal and regulatory envi- foreign investors to move away from local principles for international NEED TO ENGAGE ALL STAKEHOLDERS National Health Service (NHS). ronment to attract foreign investment. agency agreements that Hafed al-Ghwell of the World Bank and Abdullah Boulsien of investment that can serve as When asked about what he would like to see the UK doing in terms a roadmap as Libya develops of engagement with Libya in the business environment, he said All of this means that Britain’s institutions, its language, its education They include: OEA Capital have characterised as fostering that the “UK needs to step up its ground engagement and lessen and its people are familiar to Libyans who know what they’re getting 1. Open and Non-Discriminato- rent-seeking instead of real value addition. the legal and regulatory its risk assessment works and in fact take more risks in Libya.” when they do business with it. ry Investment Climates; environment to This assertion reflects the desire of many Libyans for meaningful 2. A Level Playing Field; Additionally, under Article 3, “for special attract foreign investor engagement that will lead to job creation. www.lbbc.org.uk 3. Strong Protection for Inves- considerations regarding nature of activ- tors and Investments; ity or its location or technical or tech- investment. 4. Fair and Binding Dispute Settlement; nological requirements,” the Economy

38 Business Eye April 2013 April 2013 Business Eye 39 STRATEGIC PARTNERS

Take part in this event 29-30 May The Landmark London

PLATINUM SPONSOR www.fdilibya.com

Official Airline Master 210x297 Eng.indd 4 5/27/12 4:54 PM