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By Sami Zaptia.
Tripoli, 22 March 2013:
The Third Deputy Prime Minister, Abdelsalam Al-Qadi, has warned foreign companies with contracts to complete should . . .[restrict]return to Libya and resume operations or risk having their contracts terminated.
The statement came after the GNC passed the 2013 budget this week totalling LD 66.86 billion of which 28 percent or LD 19.3 billion were allocated to development and reconstruction projects.
Neither Al-Qadi nor the government have made any announcements about the breakdown of this LD 19.3 billion. For example, it is yet to be clarified what proportion of this money will be set aside for paying old pre-2011 debts and what portion will be for new work.
There has also been no clarification regarding the matter of compensation demanded by foreign contractors and the role of force majeure.
It will be interesting to see what if any guarantees the Zeidan government will make with regards to security and if it is offering any new measures to allay security concerns.
Moreover, it will also be interesting to see if any foreign contractors feel confident enough about the security situation in Libya enabling them to resume their contracts. Whilst the Libyan government may feel that the security situation is stable in the country, ultimately it is the perception of the security situation by foreign contracting companies that matters.
The Libyan government has attempted to lure foreign contractors back to work in Libya by offering 50 percent payment of their debts, on the condition that they resume work. However, if they feel that the security situation does not enable them to return, this offer may not be tempting enough. [/restrict]
