Arab Contractors poised after agreement between Egypt and Libya

Sara El Issawy, Sunday 12 Dec 2010

The manager of Arab Contractors has welcomed an official agreement between Egypt and Libya that will give Egyptian construction companies a greater share of the country's infrastructure projects.

Libya infrastructure thriving market appeals to Chinese and Turkish companies. (Photo: Reuters)


"The Libyan market is more competitive than before", said Osman El Shemi, who sits on the Board of Directors as well as managing the company's Libyan operations.  

The Egyptian construction company recently won a bid to build a 70 km long road in Tobrok, which lies close to the Egyptian border, beating off rival bids from Turkey and China. "Market forces are currently driving the market making it harder for Egyptian companies," El Shemi told Ahram Online in the Libyan capital of Tripoli.

"In the past, Egypt enjoyed preferential treatment which enabled us to engage in every public project," said El Shemi, adding that the liberalization of the Libyan economy has seen Egypt's share in its construction market contract. Arab Contractors has operated in Libya since the 1960s, working on infrastructure, public and military projects.

The reputation of Egyptian firms has suffered in Libya from the inefficiency and low standards of quality of smaller companies. "Unfortunately, this tainted our reputation, and contributed in decreasing our market share," added El Shemi.  

Since launching, in 2008, a program aimed at modernizing its infrastructure, Libya has seen an opening up of its construction projects to foreign firms. "Chinese and Turkish companies have forged their places in the market," explained El Shemi. "They now hold investments of 18 and $20 billion respectively. They are mostly big, well reputed companies. Fortunately, this is about to change."

The official agreement signed two days ago between the two countries gives Egyptian companies the privilege of executing public projects unopposed. A committee made up of delegates from both countries will choose who to award contracts to from large, well reputed Egyptian construction companies.

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