The Amount Of Chinese Funded Libya Project Exceeds 20 Billion US Dollars &Nbsp, And The Loss Is Temporarily Difficult To Estimate.

Fire and bullets in Libya once again test the safety of Chinese funded projects.

Zhang Xiang, director of the comprehensive Department of China's contractors for foreign contractors, told reporters yesterday that the current situation from the industry is that enterprises generally say that even if Libya is restored to peace, project The possibility of retention is not great.

Du Shengxi, Minister of corporate culture of China Communications Construction Group Co., Ltd. (hereinafter referred to as "Zhong Jiao group"), told reporters that the China Communications Group mainly undertook the development and construction of housing infrastructure in Libya. Since the evacuation of personnel in March, the project has been closed down and no new projects have been launched.

"There must be losses." Du Shengxi said, but only after the situation is stabilized can comprehensive statistics be carried out.

At the beginning of this year, Zhong Manying, director of the West Asia division of the Ministry of Commerce of China, told our reporter that as of then, 26 Chinese funded enterprises had entered Libya, involving about 20000000000 US dollars, mainly in housing, railways, petroleum services and communications.

In March, the data released by the Ministry of commerce at a regular press conference showed that China was in Libya The total number of contracted large projects is 50, involving the sum of $18 billion 800 million.

This week, Libya's turbulent political situation for nearly half a year witnessed a critical turning point. Libya's leader Al-qaddafi and its capital, Tripoli, have been crumbling under the continuing attack of Libya's armed opposition. A strong man who has been on the international stage for decades has left the world with a weak figure.

For the vast number of Chinese funded enterprises in Libya, the urgent matter is the current property. Preservation And the post Al-qaddafi era decision evaluation.

Loss assessment

According to the Ministry of Commerce statistics, as of 2009, China has accumulated a total of Libya. Investment 426 billion 900 million dollars.

Zhong Manying has pointed out to our newspaper reporters that because Libya's industry is not developed, its direct investment in China is very small. Chinese enterprises began to enter Libya in large scale in 2007 and 2008, mainly in the field of foreign contracted projects and infrastructure construction, especially in the field of housing construction.

Yesterday, the China mechanical and electrical import and Export Chamber of Commerce (hereinafter referred to as "mechanical and electrical chamber of Commerce") told our reporter that they are very concerned about the recent situation in Libya and the opposition's position, so as to safeguard the interests of the industry and enterprises.

The person said that from the current situation, all projects are in a state of suspension. From the statistical data, the mechatronic chamber of Commerce has lost billions of dollars, including telecommunications, cement production lines, railway construction and other industries, including ZTE, HUAWEI, China building materials and other enterprises.

"Of course, we hope to safeguard the interests of the enterprise, but a considerable number of projects are carried out in half. It is not clear whether the damage is caused by the war, nor the loss caused by natural rust, and the current state of public order." This person said, "some enterprises have commissioned local caretakers, but most of the middlemen have failed to get in touch."

For example, a half built half cement project may include construction machinery and equipment, raw materials, and related equipment beside the construction site.

For a long time, Libya has implemented a single state economy, and once rich in oil resources, it was once rich in Africa. In the early 90s of last century, the economy declined due to Lockerbie and UN sanctions. In 2003, Libya began to carry out economic reform, speed up infrastructure construction and gradually improve investment environment.

"In 2008, Libya jumped into the top three new projects of China's foreign contracted projects." Zhang Xiang told our reporter that at present, the news that enterprises have heard through various channels shows that even if the peace is restored, the possibility of the project being retained is not large, and the prospect is not very optimistic.

"At the beginning of the turbulent situation in Libya, we announced a contract based on the project, but this is not equivalent to the actual loss." He said, "because the time limit for signing contracts for foreign contracts is completed in several years, and the bidding documents are different. The amount of the contract is not equal to the funds invested in the event of turbulence, nor is it equal to the loss of the actual project, which is rather complicated. Now the statistics of enterprises are very difficult, and we are even less clear now.

Layout of Chinese funded enterprises

In April 2009, the China Communications Group and the Libya administration development center signed 5000 sets of design and construction contracts for housing and related infrastructure projects, with a total value of about $1 billion 50 million in April 2009.

The project is located 40 kilometers south of Benghazi, the second largest city in Libya.

The group entered the Libya project contracting market in early 2008, and the projects signed include housing construction and urban road network construction.

For the possible loss of the enterprise, Du Shengxi said that before the project was carried out, the China Communications Group had already invested the project insurance, but whether the loss due to war losses could be claimed and the amount of compensation was large, the China Communications Group was still in a wait-and-see attitude.

"What we can do now is to prepare the pre purchase materials, such as the purchase list, the completion scale and the advance fund list in Libya, to prepare for future claims." Du Shengxi expressed the hope that the original contract will continue to be fulfilled after the situation in Libya is stable.

In fact, since February of this year, the turbulent situation in Libya has caused losses to our export enterprises, including local project stoppage and personnel evacuation.

Among them, the Gezhouba Dam group, the first Chinese company to benefit from the Libya incident claims, was awarded the China Export and Credit Insurance Corp's first compensation of 162 million yuan in March 18th.

Official information shows that the Gezhouba Dam group built 7300 housing projects in Libya, with a total contract value of 5 billion 544 million yuan. The project started in 2009 and was suspended after the situation in Libya.

Public information shows that in March 2009, the group also signed a contract for the renovation of old cities with Libya, surveying, evaluating, planning, designing and constructing the infrastructure of two blocks located in the southwest of Tripoli.

In April of this year, China National Machinery Industry Corp also received the first insurance compensation for the Libya housing construction project, which was paid by China Export and Credit Insurance Corp for 44 million 650 thousand and 900 yuan.

Half up or rebuilding?

This reporter was informed that last week, the mechanical and electrical chamber of Commerce has just organized enterprises to carry out the "post Al-qaddafi era" industry layout of the internal exchanges, mainly discuss the old projects and the next stage of strategic deployment of enterprises facing unexpected situations.

From the perspective of corporate reflection, on the one hand, there is no bottom and the Libya market is hard to enter in the short term. On the other hand, companies are worried that if the Al-qaddafi administration falls, can the new government get the arrears of previous projects?

The experts said that because Chinese enterprises contracted in Libya were mostly government projects such as infrastructure construction, so no matter who took over the power in the future, the politicians in accordance with international practice were obliged to compensate the debt.

Another problem facing enterprises is how to evaluate those projects if the previous projects need to be rebuilt.

People familiar with the matter pointed out that if the war is over, any government will need to rebuild it, and will start with electricity, communications and cement. If the original project is damaged too seriously, it should be abandoned; if the reservation is relatively good, the two sides will have the intention to do it again. Due to the change of the main body of the contract, it is necessary to make some adjustment with the new government.

"The key to the intervention is to get clear accounts of old projects." The above pointed out.

Will the turbulent international situation affect the Chinese enterprises' "going global" strategy?

Du Shengxi said that the pace of their "going out" will not stop or slow down because of the Libya incident. "But this incident can provide us with lessons and lessons we can learn from, so that we can learn to better guard against risks."