TRIPOLI: Libya is considering the sale of a steel plant and eight other state companies as part of efforts to overhaul an inefficient industrial sector, a government minister said.
Outside its wealthy oil sector, Libya’s economy is hampered by inefficiency, a lack of private capital, and bureaucracy, the legacy of decades of state control under Moammar Gadhafi.
Since Gadhafi’s overthrow in 2011, the government has been trying to convince local and foreign investors to inject fresh funds and expertise into ailing industrial plants, some of which are working well below capacity or have been closed.
So far it has had little success, partly due to fighting among rival tribal militias and attacks by Islamist militants – security is so bad the prime minister was briefly kidnapped earlier this month.
Political infighting has complicated plans to overhaul legalization and ready firms for sale; strikes at oil fields and ports have hurt oil and gas production, disrupting power supplies to households and companies.
But in a first, concrete step toward privatization, the government has launched a process to estimate the value and performance of nine firms which could be sold, Industry Minister Suleiman al-Fitouri said in an interview as part of the Reuters Middle East Investment Summit.
Among the firms are the Misrata steel mill company, a soft drinks firm and a factory for truck trailers in Tajoura near Tripoli, he said.
“We need to evaluate first, then we make the decision,” Fitouri said. “I think the valuation will take some time, maybe three months.”
Misrata-based Libyan Iron and Steel Co. is one of North Africa’s largest steelmakers, with an annual capacity during normal times of 1.6 million tons. Power shortages have forced it to slash output and shut one of its two steel melting shops, company officials told Reuters in September.
Investors could buy up to 100 percent of firms on sale or operate them under public-private partnerships, Fitouri said, without being more specific.
The government would also consider reviving efforts to sell the Abu Kammash petrochemicals plant, which has been shut down.
“There were some [bidding] rounds for partnership or full investment but these were not successful,” he said.