Libya: a tale of two strategies
- From: Vol 3, Issue 5 (May 2002)
- Category: General
- Region: Middle East
- Country: Libya
- Related Companies: Alstom, Enel, Fisia Italimpianti, Halcrow, Marubeni, Nippon Koei UK, Sidem, VA Tech (Wabag) and Weir Westgarth
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Libya is an unusual water market for foreign investors, playing host to water projects at opposite ends of the spectrum, from small, local desalination plants, to the so-called eighth wonder of the world – the Great Man-made River scheme (GMMR).
The country has long relied on desalination plants as a result of its lack of surface water and rainfall. For much of the past two decades, however, the government has concentrated its efforts in the water sector upon the $25 billion GMMR scheme and reduced the rate of construction of new desalination plants.
Today, as part of its plans to attract foreign investment, the government has recognised that economic and industrial diversification away from oil will require increased power capacity and water resources. With a lack of viable alternatives, there seems to be little option but to focus on desalination. The lure of such schemes is that they offer an attractive combination of water supplies and power generation. As a result, there is likely to be an increasing number of opportunities for private companies in the country.
Water demand is also increasing as a result of the growing number of tourists on the Libyan coast. A massive complex is being constructed by Italian company Valtur at Villa Silin, 90km east of Tripoli. Water
demand for the resort is expected to be so high that the government has insisted upon the development of a new desalination plant as part of the deal. The cost of the plant is being split between Valtur and the Libyan government. It is not yet known who is to build and operate the plant.
Libya may have the largest desalination capacity in the region outside of the GCC states, but it is still a long way behind Saudi Arabia, Kuwait and the UAE. Despite the impact of the government’s commitment
to the GMMR, Libya’s current desalination capacity is set to increase by more than 40% over the next ten years. The General Electricity Company of Libya (Gecol) launched a $900 million desalination plant
construction programme in 2001. Omran Ibrahim Abukraa, the secretary of the popular committee for Gecol, says that eleven plants are to be constructed, contributing combined capacity of 700,000m3/d of water.
Work has already started on three plants – Gulf Stream, Tobruk and Zuara – although not on the largest in Tripoli. The Tripoli plant will have a capacity of 250,000m3/d of water and the design and construction tenders for the plant have already been issued. French company Sidem, Weir Westgarth of the UK, Fisia Italimpianti of Italy and the Japanese Marubeni Corporation have all made bids. Companies involved on the power side of the combined desalination/power plants include Alstom of France, South Africa’s Eskom and Enelpower of Italy.
Gecol has invited three companies – Weir Westgarth, Sidem and Austria’s VA Tech – to bid for the contract to build the Abutaraba desalination plant, east of Benghazi. The plant will use multi-effect
distillation (MED) technology to produce 40,000m3/d of water. Sidem has already won the contract for the similar sized Zuara plant.
The Great Man-made River project
Apart from the current round of desalination projects, the big long-term hope in the development of the Libyan water sector is the famous Great Man-made River project.
The concept is the simple one of pumping groundwater from both the southeastern and southwestern sparsely populated Saharan regions and piping it to the more populated coastal fringe, where almost all of
the country’s towns and non-oil industries are located. The scheme also aims to increase the amount of agricultural land in Libya and enable the continued growth of the tourist sector.
The ‘river’ is to consist of several huge pipelines of 4m in diameter, which are to be buried underground in order to reduce the effect of evaporation. The pipelines will extend for a total of 4000km, justifying the GMMR Authority’s claim that the project is the world’s biggest ever water transport scheme.
The development of the first of the five planned GMMR phases started in 1990 but progress faltered when construction company Dong Ah ran into financial difficulties. The South Korean company was managing most of the work on the initial two phases, including planning, construction, operation and maintenance. The contracts for the first two phases totalled $10.2 billion. Despite the company’s financial difficulties, the project has already created large areas of new agricultural land.
GMMR-I was completed in November 1994, supplying 2Mm3/d of water to the second largest city in the country, Benghazi. The infrastructure is already in place to increase this to 3.6Mm3/d if the need arises.
The second phase, completed in September 2000, will enable 2.5Mm3/d of water to be supplied to Tripoli along a 1670km pipeline and another 1Mm3/d to the Jeffara plain.
The GMMR Authority has awarded a number of contracts for work on the third phase of the scheme. Construction of GMMR-III was originally to be given to Dong Ah, but the company’s difficulties have
resulted in a reduced role. The design work on GMMR-III was awarded to Nippon Koei UK, the British subsidiary of Japanese company Nippon Koei, and Halcrow Group, also of the UK, at the end of 2001.
The third phase involves the construction of two pipelines and the setting up of two well fields at Al Jaghboub and Kufra. The first pipeline is to transport water from Al Jaghboub to Tobruk, and the second
from Kufra to Agedabia. Once the design phase of GMMR-III has been completed, the GMMR Authority will give its final approval for the phase to continue and tender documents for construction will be issued – probably in 2004.
The GMMR Authority has also issued a number of contracts for smaller projects concentrated along the coast, mainly as part of a $300 million irrigation plan.
A total of 200km of pipeline is being laid by local firm Al Nahr Company (ANC), while a $38 million contract to construct the Abu Zayman water storage complex and related infrastructure was awarded to
STFA of Turkey during the first quarter of 2001. ANC is 75% owned by the Libyan government and 25% by Dong Ah.
A further tender for three pumping stations and related facilities has received bids from six Libyan and foreign companies, including German firm Man Ghh, but the outcome is not yet known. The irrigation project will link into the Hasouna Jefara end of the GMMR.
The government continues to place a great deal of faith in the GMMR and states that it will be cheaper in the long run than a never-ending stream of desalination plants and increased volumes of expensive imported water. Whether this is true or not remains to be seen but it is certainly an impressive monument to modern water sector technology.