British firms eye dividend of diplomacy with Libya

Foreign Office minister Mike O'Brien will lead a trade mission to Libya next month following Tony Blair's historic meeting last week with Colonel Muammar Gaddafi.

Foreign Office minister Mike O'Brien will lead a trade mission to Libya next month following Tony Blair's historic meeting last week with Colonel Muammar Gaddafi.

Companies including construction groups Balfour Beatty and Amec have already contacted the mission's organiser, UK Trade & Investment, the Government's trade lobbying body. Billions of pounds worth of contracts are up for grabs.

Mr O'Brien said: "There has been a lot of interest from the business community in the UK. US companies will follow. I would like to get British people on the ground first."

Today, British Airways increased the number of flights from the UK to Libya to six per week to cope with increasing demand. A spokeswoman said most of the travellers were businessmen working in the oil industry, but added that she hoped the continuing rehabilitation of the country would boost its appeal to tourists.

Last year, the Government renegotiated the bilateral agreement with Tripoli which had limited the number of flights BA could operate to four per week.

Colin Adams, chairman of construction consultancy BCCB, said that Libya wanted help to rebuild its ports, airports and roads, as well as in other areas. "The work needed there is dramatic. The Libyans have plenty of money to finance this from the oil industry. Healthcare is also a priority. They have quite basic hospitals. The other area is schools, with Libyans having huge admiration for the UK's education system."

He added that there was also huge potential for British companies to help develop the country's tourist industry. Libya has unspoilt beaches and impressive archaeological ruins.

The US still has a trade embargo in place with the North African state because of its recent links with terrorists, although this could be lifted later this year. Until then, British companies would not face any competition for the contracts from US construction companies.

One British company, BCCB member Global Sport International, has already been hired by the Libyan government to front its bid to host the 2010 World Cup. Earlier this year, GSI submitted Libya's bid prospectus to Fifa, football's ruling body, which Mr Adams said was "warmly received".

Col Gaddafi is a great football fan. Last year his son, the Libyan football captain Saadi Gaddafi, joined Italian side Perugia but has been suspended after failing a drugs test. The Libyan government also owns a stake in Serie A champions Juventus.

One company to benefit from the improved relations is Shell. After three years of negotiations, it has signed a seven-year partnership deal with Libya's national oil company allowing it to explore for oil and gas in the country. BAE Systems is also in talks to provide civil airport services.