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Cablegate: Opportunities for U.S. Firms As Libya Invests Billions in National Infrastructure Development Tripoli 00000942 001.2 of 002

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PP RUEHBC RUEHDE RUEHKUK RUEHROV
DE RUEHTRO #0942/01 3471338
ZNY CCCCC ZZH
P 121338Z DEC 08
FM AMEMBASSY TRIPOLI
TO RUEHC/SECSTATE WASHDC PRIORITY 4223
INFO RUEHEE/ARAB LEAGUE COLLECTIVE
RUEHRO/AMEMBASSY ROME PRIORITY 0486
RUEHVT/AMEMBASSY VALLETTA PRIORITY 0369
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RHEHAAA/NSC WASHINGTON DC
RUEHTRO/AMEMBASSY TRIPOLI 4745

C O N F I D E N T I A L SECTION 01 OF 02 TRIPOLI 000942

SIPDIS

STATE FOR NEA/MAG, EEB (EGAN); COMMERCE (MASON)

E.O. 12958: DECL: 11/24/2018
TAGS: PREL ECON ETRD PGOV LY
SUBJECT: OPPORTUNITIES FOR U.S. FIRMS AS LIBYA INVESTS BILLIONS IN NATIONAL INFRASTRUCTURE DEVELOPMENT TRIPOLI 00000942 001.2 OF 002

CLASSIFIED BY: Chris Stevens, CDA, U.S. Embassy Tripoli, U.S. Department of State. REASON: 1.4 (b), (d)

1. (C) Summary: In a recent meeting with CDA, the powerful head of Libya's Housing and Infrastructure Board (HIB), Abuzeid Dorda, discussed Libya's development needs and the current state-of-play in U.S.-Libyan relations. Dorda portrayed the current period in U.S.-Libyan relations as "sensitive" and cautioned either side against taking action that could "lead to doubts." Regarding the putative January 2009 start date for Muammar al-Qadhafi's oil wealth distribution program, Dorda said the target date would likely slip as the plan was being debated. Dorda, who oversees a USD 100 billion infrastructure development budget, said there is a good future for U.S. firms who are willing to take the risk, noting the example of AECOM, which is managing Libya's housing and infrastructure projects. As for Saif al-Islam al-Qadhafi's recent trip to the U.S. and his stated plans to introduce a constitution to Libya by September 2009, the anniversary of the coup that brought his father to power, Dorda said Saif had "many good ideas" but they needed to be discussed further, given Libya's history and the importance of its tribal structure. The way forward, in Dorda's view is to improve education, spur industrialization, and build new cities. End summary.

LIBYA: "HANDLE WITH CARE"

2. (C) Abuzeid Dorda, a former prime minister and UN permrep who is currently the chair of Libya's multi-billionaire dollar-endowed Housing and Infrastructure Board (HIB), discussed Libya's development needs and the state-of-play in U.S.-Libyan relations in a recent meeting at his headquarters in Tajura, a few miles east of Tripoli, with CDA and Econoff. Dorda portrayed the current period in U.S.-Libyan relations as "sensitive" and cautioned either side from making any moves that could "lead to doubts." The U.S. should remember that Libya is different from other countries, is proud of its independence, and bristles when others try to dictate. Giving an example, Dorda told us as a young official, he met with the French diplomats arranging for the visit of then-Prime Minister Jacques Chirac. The diplomats made many demands, to which Dorda told them, "we are not one of your African countries you can boss around." In the end, the Libyans rejected a French proposal for a cultural agreement solely for reasons of pride.

AL-QADHAFI: A PHILOSOPHER, YET PRAGMATIC, TOO

3. (C ) Regarding the purported January 2009 start date for Muammar al-Qadhafi's oil wealth distribution program, Dorda said it was still under discussion and would not start by January. Indirectly criticizing the initiative, which would entail distributing approximately USD 4,000 monthly to each Libyan family and transferring responsibility for basic governmental functions such as health and education to "the people," Dorda said Libya needed to increase its wealth, not waste it. People would just spend the money on consumer goods, rather investing it in their communities as al-Qadhafi had envisioned. Dorda said al-Qadhafi's proposal should not be taken literally. "Al-Qadhafi is a philosopher but he is also responsible." Technocrats in the leadership (such as Dorda himself, he implied) would eventually agree on a way to implement al-Qadhafi's vision in a way that served the national interest.

DEVELOPING LIBYA'S INFRASTRUCTURE: BUSINESS IS BOOMING

4. (SBU) When asked about opportunities for U.S. businesses in Libya, Dorda said there is a good future for U.S. firms who are willing to take the risk. He cited the American project management company, AECOM, as an excellent example. AECOM won a major contract to oversee the HIB's nation-wide infrastructure development program. Dorda said he is effectively privatizing his own agency by outsourcing the work to AECOM. In the process, he is also transferring several hundred Libyan HIB employees to AECOM, where he hopes they will receive training and learn American business best practices. Dorda said U.S. firms have missed an important time to sign other large contracts with HIB. HIB's development budget is USD 100 billion; USD 47 billion worth of contracts were signed in the last year. Dorda said he sees a need for large U.S. construction companies to undertake urban re-development projects. plans.

URBAN RENEWAL VERSUS TRIBAL INTERESTS

5. (C) Turning to Saif al-Islam al-Qadhafi's recent trip to the U.S. and his stated plans to introduce a constitution to Libya by September 2009, Dorda said Saif had many good ideas but "they need to be discussed further." In Libya, tribes are still very strong and so, even if a country has political parties, TRIPOLI 00000942 002.2 OF 002 they are still controlled by the tribes. The way forward, in Dorda's view, is to improve education, spur industrialization, and build new cities and not old villages. This will lead to the development of civil society and reduce the influence of the tribes. He said as chair of HIB, he often had to negotiate with tribes, especially in eastern Libya where they are particularly strong, over the location of new housing developments or other infrastructure improvements. Tribal interests were not always in synch with national interests, he said.

6. (C) Comment: Dorda has been entrusted with the overhauling of Libya's decaying infrastructure and he has chosen to contract out much of the management to an American firm, AECOM. In effect, he is privatizing what has been a government function while transforming the Housing and Infrastructure Board into an oversight body. His approach is innovative for Libya, which is emerging from decades of a centrally-planned economy, and may serve as a model for al-Qadhafi's ambitious plans to downsize the government. End comment.
STEVENS

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