Identifier
Created
Classification
Origin
09TRIPOLI741
2009-09-15 15:06:00
CONFIDENTIAL
Embassy Tripoli
Cable title:
VISA WOES AND LIBYAN BUREAUCRACY: CHINESE COMPANIES FACE SIMILAR ISSUES AS U.S. FIRMS IN LIBYA
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C O N F I D E N T I A L SECTION 01 OF 02 TRIPOLI 000741
SIPDIS
STATE FOR NEA/MAG; STATE PLEASE PASS TO USTR PAUL BURKHEAD;
COMMERCE FOR NATE MASON; ENERGY FOR GINA ERICKSON; PARIS AND
LONDON FOR NEA WATCHERS
E.O. 12958: DECL: 8/5/2019
TAGS: ECON, EFIN, ELTN, LY, ETRD, ECPS, EPET, CH
SUBJECT: VISA WOES AND LIBYAN BUREAUCRACY: CHINESE COMPANIES FACE
SIMILAR ISSUES AS U.S. FIRMS IN LIBYA
REF: TRIPOLI 517
TRIPOLI 00000741 001.2 OF 002
CLASSIFIED BY: Gene Cretz, Ambassador, U.S. Embassy Tripoli,
U.S. Department of State.
REASON: 1.4 (b),(d)
C O N F I D E N T I A L SECTION 01 OF 02 TRIPOLI 000741
SIPDIS
STATE FOR NEA/MAG; STATE PLEASE PASS TO USTR PAUL BURKHEAD;
COMMERCE FOR NATE MASON; ENERGY FOR GINA ERICKSON; PARIS AND
LONDON FOR NEA WATCHERS
E.O. 12958: DECL: 8/5/2019
TAGS: ECON, EFIN, ELTN, LY, ETRD, ECPS, EPET, CH
SUBJECT: VISA WOES AND LIBYAN BUREAUCRACY: CHINESE COMPANIES FACE
SIMILAR ISSUES AS U.S. FIRMS IN LIBYA
REF: TRIPOLI 517
TRIPOLI 00000741 001.2 OF 002
CLASSIFIED BY: Gene Cretz, Ambassador, U.S. Embassy Tripoli,
U.S. Department of State.
REASON: 1.4 (b),(d)
1. (C) Summary: In a recent meeting, the Chinese Commercial
Counselor outlined the main sectors in which Chinese companies
work in Libya as well as the challenges these firms face.
Twenty Chinese firms are registered with the People's Republic
of China Embassy in Libya, working mainly in construction,
telecommunications, and oil services. Chinese companies face
some of the same challenges as American firms here, i.e. delays
in securing visa approvals, dealing with capricious and
suddenly-announced commercial laws (like the residency visa
regulations),and having to double-track issues through the
byzantine Libyan bureaucracy. End summary.
2. (C) Econoff met with the commercial section of the Embassy of
the People's Republic of China (PRC),which is comprised of a
Commercial Counselor (Guo Chang Zhan) and a Second Secretary for
Commercial Affairs (Qu Yuan). Zhan has had previous postings in
Senegal and Ghana, while Libya is the first overseas posting for
Yuan. They outlined the main sectors in which Chinese companies
work in Libya, as well as the challenges these firms face.
According to Zhan, Chinese companies face some of the same
challenges as American firms doing business in Libya, including
delays in securing visa approvals, dealing with capricious and
suddenly-announced commercial laws (like the residency visa
fees),and having to double-track issues through the opaque
Libyan bureaucracy.
3. (C) Zhan said twenty Chinese firms are registered with the
PRC Embassy in Libya, working mainly in construction,
telecommunications, and oil services. In accordance with Libyan
labor laws, the companies employ Libyan staff in at least 30
percent of their positions. Some Chinese firms are engaged in
the trade of goods, including trucks, which are sold via Libyan
distributors.
CHINESE FIRMS BUILDING HOUSES, INFRASTRUCTURE, AND RAILROADS...
4. (C) In terms of construction, Chinese firms have contracts
with the Housing and Infrastructure Board (HIB),which are
managed by the American company AECOM. [Note: AECOM provides
overall program management and consulting to HIB. End Note.]
China Railway Construction (CRC) is working on the 172 km
stretch of railway between Tripoli and Ras Edjeer and the line
between Al-Khums (east of Tripoli) and Sirte. [Note: Russian
Railways is working on the 554 km railroad line between Sirte
and Benghazi. End note.] CRC is also working on the 800 km
railroad line between Misrata, on the Mediterranean Coast, and
Sebha, in southern Libya.
...AND ALSO ACTIVE IN TELECOMS
5. (C) Chinese firms are also active in Libya's
telecommunications sector. In April, the firm Huawei
Technologies Co., Ltd. won a contract with Libya Telecom and
Technology (LTT) to deploy "fiber to the home" networks for
households in 800 homes on the Airport Road in Alzohor District
in Tripoli in the first phase. The firm plans to expand network
coverage to other districts in the project's second phase. In
2008 the Chinese telecommunications equipment supplier ZTE
Corporation won a USD 58 million network expansion contract from
Libyana, one of two Libyan mobile network operators. The deal
enables Libyana to expand its existing network from 1 million to
6.5 million lines. [Note: Libyana is one of two mobile phone
operators owned by the General Post and Telecommunications
Company (GPTC),the other being Al Madar. GPTC is run by
Mohammed al-Qadhafi, the eldest son of Muammar al-Qadhafi. End
note.] ZTE also has a contract with LTT to build a WiMAX
wireless Internet network, covering eight cities in Libya, and
has already begun offering services in Tripoli.
THE CNPC-VERENEX SAGA
6. (C) Econoff raised the issue of the pending sale of Canadian
oil company Verenex to the Chinese National Petroleum Company
(CNPC) (reftel). While CNPC has made a play at acquiring
Canadian oil firm Verenex - the only successful oil exploration
company in Libya thus far - it has not enlisted the help of the
PRC Embassy in lobbying the Libyan government on its behalf.
Zhan said he heard the proposed deal was "unsuccessful," as he
had heard Libya's National Oil Company (NOC) would not approve
TRIPOLI 00000741 002.2 OF 002
the CNPC sale because the NOC desired to purchase Verenex.
[Note: The CNPC offer to purchase Verenex expired on August 24,
and CNPC did not move to renew that offer. End Note.]
WITH HEADACHES OVER VISAS AND CUMBERSOME LIBYAN BUREAUCRACY
7. (C) Zhan commented Chinese firms had complained about "sudden
and unreasonable regulations" that caused work delays and
related increases in operating costs. For example, the recent
new decree requiring foreign workers to pay fees for residency
permits (500 Libyan dinars, equivalent to about USD 400) had
caused construction firms' costs to sky-rocket. He
characterized the Libyan government as "inefficient" and lacking
coordination among various entities. On visas, for example, he
said approvals had to be obtained not only from immigration
officials but also from the Labor Office, and there was little
coordination between the two. As a result, companies often have
to wait several months for visa approvals for their employees.
Additionally, Zhan noted that many Chinese companies have had
trouble importing equipment needed for projects due to new
"fees" that are suddenly imposed on those imports.
COMMENT
8. (C) Comment: Chinese companies have carved out some niches
for themselves in the Libyan market, namely in construction and
telecommunications. Anecdotal evidence indicates that the
Chinese commercial presence in Libya is growing, with scores of
Chinese workers thronging flights between Tripoli and Benghazi,
and Turkish Air flights regularly sold out with Chinese workers
transiting Istanbul en route to Libya. Nevertheless, Chinese
companies appear to face some of the same challenges as American
firms, most of which seem to originate from Libya's opaque
bureaucracy. End comment.
CRETZ
SIPDIS
STATE FOR NEA/MAG; STATE PLEASE PASS TO USTR PAUL BURKHEAD;
COMMERCE FOR NATE MASON; ENERGY FOR GINA ERICKSON; PARIS AND
LONDON FOR NEA WATCHERS
E.O. 12958: DECL: 8/5/2019
TAGS: ECON, EFIN, ELTN, LY, ETRD, ECPS, EPET, CH
SUBJECT: VISA WOES AND LIBYAN BUREAUCRACY: CHINESE COMPANIES FACE
SIMILAR ISSUES AS U.S. FIRMS IN LIBYA
REF: TRIPOLI 517
TRIPOLI 00000741 001.2 OF 002
CLASSIFIED BY: Gene Cretz, Ambassador, U.S. Embassy Tripoli,
U.S. Department of State.
REASON: 1.4 (b),(d)
1. (C) Summary: In a recent meeting, the Chinese Commercial
Counselor outlined the main sectors in which Chinese companies
work in Libya as well as the challenges these firms face.
Twenty Chinese firms are registered with the People's Republic
of China Embassy in Libya, working mainly in construction,
telecommunications, and oil services. Chinese companies face
some of the same challenges as American firms here, i.e. delays
in securing visa approvals, dealing with capricious and
suddenly-announced commercial laws (like the residency visa
regulations),and having to double-track issues through the
byzantine Libyan bureaucracy. End summary.
2. (C) Econoff met with the commercial section of the Embassy of
the People's Republic of China (PRC),which is comprised of a
Commercial Counselor (Guo Chang Zhan) and a Second Secretary for
Commercial Affairs (Qu Yuan). Zhan has had previous postings in
Senegal and Ghana, while Libya is the first overseas posting for
Yuan. They outlined the main sectors in which Chinese companies
work in Libya, as well as the challenges these firms face.
According to Zhan, Chinese companies face some of the same
challenges as American firms doing business in Libya, including
delays in securing visa approvals, dealing with capricious and
suddenly-announced commercial laws (like the residency visa
fees),and having to double-track issues through the opaque
Libyan bureaucracy.
3. (C) Zhan said twenty Chinese firms are registered with the
PRC Embassy in Libya, working mainly in construction,
telecommunications, and oil services. In accordance with Libyan
labor laws, the companies employ Libyan staff in at least 30
percent of their positions. Some Chinese firms are engaged in
the trade of goods, including trucks, which are sold via Libyan
distributors.
CHINESE FIRMS BUILDING HOUSES, INFRASTRUCTURE, AND RAILROADS...
4. (C) In terms of construction, Chinese firms have contracts
with the Housing and Infrastructure Board (HIB),which are
managed by the American company AECOM. [Note: AECOM provides
overall program management and consulting to HIB. End Note.]
China Railway Construction (CRC) is working on the 172 km
stretch of railway between Tripoli and Ras Edjeer and the line
between Al-Khums (east of Tripoli) and Sirte. [Note: Russian
Railways is working on the 554 km railroad line between Sirte
and Benghazi. End note.] CRC is also working on the 800 km
railroad line between Misrata, on the Mediterranean Coast, and
Sebha, in southern Libya.
...AND ALSO ACTIVE IN TELECOMS
5. (C) Chinese firms are also active in Libya's
telecommunications sector. In April, the firm Huawei
Technologies Co., Ltd. won a contract with Libya Telecom and
Technology (LTT) to deploy "fiber to the home" networks for
households in 800 homes on the Airport Road in Alzohor District
in Tripoli in the first phase. The firm plans to expand network
coverage to other districts in the project's second phase. In
2008 the Chinese telecommunications equipment supplier ZTE
Corporation won a USD 58 million network expansion contract from
Libyana, one of two Libyan mobile network operators. The deal
enables Libyana to expand its existing network from 1 million to
6.5 million lines. [Note: Libyana is one of two mobile phone
operators owned by the General Post and Telecommunications
Company (GPTC),the other being Al Madar. GPTC is run by
Mohammed al-Qadhafi, the eldest son of Muammar al-Qadhafi. End
note.] ZTE also has a contract with LTT to build a WiMAX
wireless Internet network, covering eight cities in Libya, and
has already begun offering services in Tripoli.
THE CNPC-VERENEX SAGA
6. (C) Econoff raised the issue of the pending sale of Canadian
oil company Verenex to the Chinese National Petroleum Company
(CNPC) (reftel). While CNPC has made a play at acquiring
Canadian oil firm Verenex - the only successful oil exploration
company in Libya thus far - it has not enlisted the help of the
PRC Embassy in lobbying the Libyan government on its behalf.
Zhan said he heard the proposed deal was "unsuccessful," as he
had heard Libya's National Oil Company (NOC) would not approve
TRIPOLI 00000741 002.2 OF 002
the CNPC sale because the NOC desired to purchase Verenex.
[Note: The CNPC offer to purchase Verenex expired on August 24,
and CNPC did not move to renew that offer. End Note.]
WITH HEADACHES OVER VISAS AND CUMBERSOME LIBYAN BUREAUCRACY
7. (C) Zhan commented Chinese firms had complained about "sudden
and unreasonable regulations" that caused work delays and
related increases in operating costs. For example, the recent
new decree requiring foreign workers to pay fees for residency
permits (500 Libyan dinars, equivalent to about USD 400) had
caused construction firms' costs to sky-rocket. He
characterized the Libyan government as "inefficient" and lacking
coordination among various entities. On visas, for example, he
said approvals had to be obtained not only from immigration
officials but also from the Labor Office, and there was little
coordination between the two. As a result, companies often have
to wait several months for visa approvals for their employees.
Additionally, Zhan noted that many Chinese companies have had
trouble importing equipment needed for projects due to new
"fees" that are suddenly imposed on those imports.
COMMENT
8. (C) Comment: Chinese companies have carved out some niches
for themselves in the Libyan market, namely in construction and
telecommunications. Anecdotal evidence indicates that the
Chinese commercial presence in Libya is growing, with scores of
Chinese workers thronging flights between Tripoli and Benghazi,
and Turkish Air flights regularly sold out with Chinese workers
transiting Istanbul en route to Libya. Nevertheless, Chinese
companies appear to face some of the same challenges as American
firms, most of which seem to originate from Libya's opaque
bureaucracy. End comment.
CRETZ