Tripoli West faces delays as Gecol tries to secure budget

09 May 2008
Contractors fear project will be postponed as financing is not yet in place.

A project to build a 1,400MW power plant near Tripoli is facing major delays after the developers failed to secure funding for the scheme.

No payment has been made for work on the Tripoli West project and contractors now fear it will suffer lengthy delays.

The plight of the project contrasts with the long-delayed Al-Khaleej (Gulf) steam-power facility, which is expected to receive approval after letters of credit for the scheme were issued to contractors by Bahrain-based Arab Banking Corporation.

"We are seriously afraid about the viability of Tripoli West because there has been no progress," says one source close to the project. "The people at Gecol [General Electricity Company of Libya] used to inform us that they would open letters of credit soon, but recently the feeling has totally changed."

According to contractors, the problem is one that Gecol has struggled with before. Having awarded the projects to contractors in early 2008, it is only now trying to secure a budget.

"The budget has not been allocated," says another project source. "We do not expect to get it before the end of August."

A decision by Libyan leader Muammar Gaddafi to abolish the country's ministries has also had significant repercussions for the power sector. The Electricity, Water & Gas Ministry was one of the ministries to be scrapped, with its responsibilities taken over by a new super ministry for infrastructure and services.

The shake-up also means that the government has not yet finalised the allocation of budgets to individual ministries for this year.

Both the Al-Khaleej and Tripoli West projects were tendered as five separate packages rather than on a turnkey basis, a first for Gecol. Both plants will have a capacity of 1,400MW.

For Tripoli West, South Korea's Daewoo Engineering & Construction was awarded the civil works package. Another Korean company, Hyundai Engineering & Construction, will install the steam turbine and carry out electromechanical works. Doosan Heavy Industries & Construction, also Korean, will provide the boiler, and Greece's Archirodon will carry out offshore work.

Hyundai and Doosan will carry out the same work on the al-Khaleej plant, together with Turkey's Gama, which was awarded the civil works package, and France's Geocean, which won the offshore works package.

The Al-Khaleej project has gone through several incarnations since it was first launched in 2001. Most recently, Gecol considered increasing its desalination capacity from 1.5 million gallons a day (g/d) to 8.8 million g/d. The additional capacity was to replace the Sirte desalination plant, which Gecol had decided to scrap.

Now plans for the Sirte plant are back on track and bids for the project are due at the end of May.

Several contractors have told MEED the project is not of interest to them, but Gecol will need at least two bids if the scheme is to go ahead (MEED 29:2:08).

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