Written by banking expert Nouman Al-Bouri
In 2018, the General Electricity Company of Libya contracted a Greek company to build a power plant in the city of Tobruk with a generation capacity of 780 megawatts. The project consists of four gas turbines with a total installed capacity of 780 megawatts. The total value of the contract, which included civil works, installation, and commissioning, amounted to approximately US$400 million.
Today, the plant has been completed, and all four turbines have been installed. However, two essential elements were overlooked during the project planning stage.
First, the General Electricity Company of Libya did not provide the additional US$50 million in funding required to complete the project by expanding fuel storage tank capacity, completing the GIS substation, constructing the plant’s protective building, and adding the administration building and control room. As a result, the current fuel storage capacity is sufficient to operate only two of the four installed turbines, meaning that half of the plant’s generation capacity cannot be utilized.
Second, the company did not complete the construction of the 400-kilovolt transmission line extending from Tobruk to the Al-Marawah substation, and then to Sidi Hamri, to connect it to the national electricity grid. As a result, the existing transmission network can accommodate no more than 200 megawatts, despite the plant having an installed capacity of 780 megawatts. Consequently, the plant is currently operating at no more than 25% of its generation capacity, while the remainder remains idle.
Even more astonishing is that the cost of completing the transmission line is estimated at no more than US$40 million. If this line were properly completed, electricity transmission capacity would increase to approximately 1 gigawatt. This would be sufficient not only to transmit the full output of the Tobruk power plant, but also to provide additional capacity to accommodate any future expansions in electricity generation.
In other words, an additional investment of between US$90 million and US$100 million would have enabled the country to fully utilize the 780 megawatts of installed generation capacity, while also providing additional capacity for the future.
This case represents a clear example of how weak planning and poor project management can undermine a major investment in infrastructure. At a time when Libya is suffering from a severe electricity generation deficit and frequent power outages, we find that a newly built power plant is operating at only a quarter of its capacity because the essential infrastructure required to operate it at full capacity was not completed.
The result is that, by failing to invest an additional amount equivalent to approximately 25% of the project’s cost, the country is now benefiting from only 25% of the actual value of an investment worth US$400 million.
Can what happened simply be described as poor planning and poor management? Or does it reflect a deeper flaw in the way major infrastructure projects are planned, coordinated, and implemented?
