Companies

Building firms get payout for Libya pull-out

By Wang Wen (China Daily)
Updated: 2011-03-29 14:28

Two Beijing construction firms that were forced to abandon contracted projects in Libya have received early insurance payouts to cover their losses in resettling evacuated workers.

In an unprecedented move on Monday, Beijing Construction Engineering Group (BCEG) and Beijing Hongfu Group were given a combined 132 million yuan ($19.63 million) by China Export and Credit Insurance Corporation, known as Sinosure.

Both companies were hired by Libya in 2009 to build a total of 15,000 homes in the country. However, workers were pulled off sites when violence broke out between government forces and rebel groups. It was not revealed where the sites are.

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Hongfu received 85.68 million yuan, while BCEG got 46.31 million yuan. The firms insured the projects against commercial and political risk in 2009 and 2010 respectively.

"The payment will help us a lot," said Jiao Yusuo, deputy secretary of the Party committee at BCEG, which is resettling 2,816 staff evacuated from Libya in February. "Our group lost more than 3 billion yuan in total."

The company had completed almost 30 percent of its project when the security situation worsened, he said.

Sinosure is the only Chinese company that will underwrite political risk. The payment on Monday accounts for just 50 percent of BCEG's and Hongfu's total claims.

Payouts often take months but the process in this case was sped up due to the huge amount of money both firms have lost, said Wang Hong, director of foreign economic cooperation for Beijing's commerce commission.