Last updated: August 14, 2011 8:05 pm

China mulls return to Benghazi projects

In the western outskirts of Benghazi, hundreds of five-storey, half-built buildings are spread along the road towards the Libyan frontline in Brega.

The west Benghazi project for 20,000 housing units is now under rebel guard, the walls surrounding the vast scheme sprawled with anti-Gaddafi graffiti.

One of Col Muammer Gaddafi’s mega-projects in the east, the huge, semi-complete site is a valuable reminder of the depth of business relations that tied Tripoli to Beijing.

French mean business in Benghazi

If fortune favours the bold, many in rebel-held Benghazi would like to see the French showered in riches, Simeon Kerr reports.

In response to Paris’s quick military action to support the city in March, stickers around town say “Merci France”, while a large portrait of a beaming Nicolas Sarkozy overlooks the city’s main square.

The private sector is moving quickly to tap the potential for business and recover lost assets. In a wealthy suburb of Benghazi, one entrepreneur with interests in Libya has set up a French business centre, offering a quiet location for discreet meetings. The brainchild of a French executive at a logistics company with offices across Libya, the centre has already hosted large French oil and telecoms companies.

“We have to stay very low-profile for security reasons now,” he told the Financial Times. He asked the FT not to identify the companies involved for fear of retaliation against their offices and assets in Tripoli.

“That’s how they act there,” he said. He is now seeking to set up a scheduled cargo flight to Benghazi, allowing aid groups to cut the costs of transporting the emergency supplies that keep the city’s hospitals open.

By using the aircraft to serve other destinations in Africa, such as Nigeria and Kenya, he hopes to make the service cost-effective.

For now, business is impossible with UN sanctions affecting all of Libya. Given France’s position in the war, the executive believes the country’s fortunes are yoked to the rebels’ National Transitional Council. “We want to stay in Libya after the crisis but if the NTC doesn’t win, it will be bye-bye for French firms – we aren’t stupid,” he said.

Once one of Col Gaddafi’s closest supporters, China is now shifting its stance as the war moves into its sixth month. Relations are warming between the rebel council and the Chinese government, which has sent a small team from Beijing to keep lines of communication open with the civilian National Transitional Council.

“This is a very important shift from the previous attitude,” says a Chinese foreign ministry official. “They have big investments in Libya and know they won’t be able to protect them once Gaddafi has gone.”

Other major projects include the construction of a freight and passenger railway linking the east to the capital.

After bilateral visits, China is now preparing to send humanitarian supplies, such as food and medicine, to Benghazi.

A Chinese official in Benghazi says that Beijing is still encouraging a negotiated solution to the crisis. “Step by step the relationship is developing,” the Chinese official says. “We hope Libya can find a political solution – fighting won’t solve anything.”

In the meantime China is monitoring the situation with a temporary delegation, much smaller than the larger, more permanent post set up by strong NTC allies such as the UK, US and France.

The housing project, reportedly valued at $6bn, is one of the most valuable emblems of the shifting relationship. In the manager’s office, one of the few buildings in good condition after widespread looting of the site, formal photos of the beaming Chinese management team from 2009 still adorn the walls.

“The Chinese are coming back in one or two months,” says one of the foremen, who declined to give his name, referring inquiries to the rebel council.

China State Construction and Engineering Corporation was the lead contractor, with US company Aecom as adviser on a project on the contract, reportedly valued at as much as $6bn.

The Chinese official says there may be an agreement with the NTC in the future, but doubts that work will restart until the “situation is calm”.

The memory of the 20-day operation to evacuate more than 36,000 Chinese workers on planes, ships and buses in March – the largest evacuation of Chinese nationals – remains fresh in the official’s memory. “China will come back to complete some of these projects, but we need stability to come back and complete projects,” he says.

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