The construction of a national railway has been a goal of the Libyan Government since the closure of the old railway in 1965. Since 1998, the Libyan Government has been planning for a 3170 km 1,435 mm (4 ft 8 1⁄2 in) standard gauge network. The network is to stretch along the length of Libya's Mediterranean coast from Tunisia to Egypt, extending from the western city of Ras Jdeir (at the Libyan Tunisian border) to Imsaid in the west (at the Libyan Egyptian border) with a total coastal length of 2178 km. The network would extend southwards to a length of 992 km.
As a firm commitment towards the implementation of the railway project, the Libyan Railroads Execution and Management Board (LREMB) was created by law No. 14 of 2003 to oversee and implement the railway projects in Libya.
The railway network is to cover:
- Ras Jdeir - Tripoli
- Tripoli - Sirte
- Sirte - Benghazi
- Benghazi - Imsaid
- Al Heesha - Sabha
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n addition to the national railway project, the government has also planned for the building of the Tripoli Metro. Decree 121 of 2006 gave the LREMB the task of implementing the Tripoli Metro. According to the LREMB, the Tripoli Metro to be constructed would have the following specifications:
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In 2008, the Libyan government, the Russian Railways (RZD) and the China Railway Construction Corporation (CRCC) reached a USD 12 billion dollar deal to construct the national railway. RZD was commissioned as a secondary main contractor, receiving approximately one third of the project and tasked with the laying of 554 kilometres of track from Sirte to Benghazi. The contract with RZD was worth USD 4.5 billion and was signed on 17 April 2008. CRCC was awarded the remaining contracts, and was tasked with building an 800 kilometres line from Sebha to Misurata, a 352 kilometre line between al Khums and Sirte, and then in 2009 was awarded a further contract for building a 172 kilometre track from Tripoli to Ras Jdeir.
Work had commenced by both the CRCC and the RZD on their respective contracts before the 2011 revolution. However, no work has taken place since the revolution. Before the project was stopped, RZD had built 100 km of the roadway and 30km of the railroad. CRCC had formally started work on building of the 453 km line between Tripoli and Sirte in November 2008.
In a firm indication that the national rail network would still go ahead, the General National Congress in early 2013 commissioned the Communications and Transportation Committee to appoint a new president and vice-president for the new railways implementation project. On 7 January 2013, GNC's decision No 122 of 2013 was issued which named Dr Ali Abd Alraheem Mousa Aisheida as president, and Mr Adel Mohammed Aljameel was appointed as a deputy president of the LREMB. Another indication of resumption of the project was given by the then Transport Minister, Abd Al Gadir Mohammed Ahmed, who stated in early 2013 that the national railway project was presented to the Cabinet of Ministers who voted in consensus on the resumption of the project. A budget of LD 300 million was allocated to LREMB. Negotiations between the Libyan side and CRCC and RZD commenced shortly after.
On the 26th June 2013, an MOU was signed in Libya between LREMB and CRCC for the re-activation of the three contracts signed between the two parties. No indication has been given as to whether the terms of the contract have been amended or whether CRCC would receive compensation for any losses incurred during the revolution.
Although a Russian delegation visited Libya a few times since February 2013 to discuss the reactivation of the RZD contract, the LREMB has still not commented on whether the contract with RZD would be reactivated. However in January of this year, Ansaldo STS returned EUR 41 million of the EUR 71 million advance payments made by RZD for a EUR 202 million subcontract to provide signalling for the Surt-Benghazi line. This may be an indication that RZD has still not reached an agreement with LREMB for the re-activation of their contract.
Force Majeure clauses were activated when construction was stopped due to the 2011 revolution. As the application of Libyan law is almost systematically asserted in international contracts to which Libyan entities are parties, Libyan law will apply to determine whether RZD's contract with LREMB can be terminated due to the application of force majeure, thus releasing the parties from their contractual obligations and liability for non-performance. Whether the parties can invoke force majeure will depend very much on the terms of the contract.
If the contract is not re-activated, an alternative railway scheme nominated by the Libyan government is to use the USD 5 billion compensation deal for the Italian colonisation of Libya for the building of the railway network with a new contractor.
Whether the RZD contract is re-activated or not, the efficient completion of the Libyan rail network is paramount and can be an important vehicle for economic growth and development of the country. It will link production sites to regional and international markets, promote the national and cross-border integration of regions, facilitate access to the labour market, education and health services, and alleviate the heavy traffic on the roads of Tripoli.
If new contracts are to be signed for the railway network, Libya should carefully consider whether it would be a good approach to allow the private sector to participate in the financing, construction and operation of the railway infrastructure. PPPs can open up possibilities to build and operate efficient rail systems.
However, PPPs particularly for urban railway projects do not have a very long track record. International experience with this model in the urban transport sector is still limited and no urban rail PPP has yet to run its full concession period. Careful planning is of utmost importance for a PPP project in the railway sector to succeed.
The Libyan Government has undoubtedly considered the prospect of involving the private sector in the rail sector. The then Minister of Transport, Abd Alqader Moahmmed Ahmed said in a statement in March 2013, that if the Libyan Railways Network and the Tripoli Metro had been implemented, they would have taken up the entire development budget for that year, suggesting the only way forward is by getting the local and international private sectors involved. It is clear that new solutions need to be drawn up in order to ensure Libya can successfully complete these projects.