Al-Saadi Gaddafi: Libya calling

The leader's son opens his arms to foreign investors

The official media announcement is on the dry side. The secretariat of Libya's General People's Committee has decided to establish an international investment zone in the north-west of the country.

It takes Al-Saadi Gaddafi, the second son of Muammar - Libya's leader since 1969 - to spell out the real significance of the move. "We are talking about two systems and one country," he says in his Paris hotel room, using a phrase associated with China's approach to Hong Kong. "This is a historical decision."

This oil-rich, one-time pariah state has come in from the cold so quickly in recent years that abrupt policy U-turns are losing their power to surprise. But still, the multi-billion-pound project overseen by Gaddafi is extraordinarily ambitious.

The idea is to construct a mini-Hong Kong along a 40 kilometre stretch of desert and sea not far from the Tunisian border. In the vision outlined by Gaddafi, this new metropolis, between Zawara and Abu Kammash, would be a centre of tourism, hi-tech industry and medical and educational accomplishment - all in a country whose long years of isolation from the West left it ill-equipped to adapt to the fast pace of modern life and business.

"In Libya, we have many problems," he says, speaking in deliberate, heavily accented English and resorting occasionally to an interpreter. "Infra-structure, communications and health - we always hear from the government they want to solve all these problems. But nothing ever happens really. It's a bit slow and we still have tough laws, and the bureaucracy in Libya is slow and a bit backward. So we thought we would do something to accelerate it a little bit."

He talks of "primary agreements" with the Dubai-based Emaar Properties, which is currently engaged on the construction of Burj Dubai, soon to be the world's tallest tower, as well as the King Abdullah economic city in Saudi Arabia. "We will do a joint venture with them to build infrastructure and to contact other investors, to organise the marketing," says Gaddafi. Perhaps 40 per cent of this company, he adds, might in time be sold "to the Libyan people" and even floated.

A harbour and airport are also part of the blueprint. "Now we are in the phase where we are doing the masterplan," he says, disclosing that the UK-based WS Atkins, an international engineering consultancy with plenty of experience in Libya, is putting that masterplan together.

"I would like to do joint ventures with different foreign companies, especially from countries advanced in education or healthcare or computers. If, for example, we did an American-Libyan university there, or an English-Libyan hospital, this would do a lot to train and help the Libyan people."

In some ways, though, even more remarkable than the scale of the undertaking is the degree of autonomy envisaged by Gaddafi in bringing his vision to fruition. Libya has, after all, been in the grip of a single strongman leader for 37 years.

"It will be semi-independent from Libya - part of the country but semi-independent," he says. "We will make an administration to rule the area." He confirms that his father has given permission for this "sensitive" project to go ahead.

The difference promises to be most keenly felt in the domain of investment policy. "In Libya," he explains, "it is not allowed for foreigners to own land. But here, on this land, you can have a 99-year lease.

"We will put on this land a different system from what we have in Libya. We would like to create an environment that enables investors to make projects like they do in Paris, New York and London."

Taxes would be low and an offshore banking centre - and possibly, eventually, a stock market - would be part of the mix. "We are still studying with Emaar and others the final form of the general law of the zone," he says, offering an assurance that the Libyan government will consent to whatever is decided.

A further possible attraction for foreigners is the promise of a liberal social regime. "We will make the whole environment there suitable for everybody - for Muslim, for Christian, for Jewish people. There is no discrimination."

So would he expect people to build churches and synagogues there? "Yes, there's no problem. There won't be any limitations."

Gaining access to the area should also be relatively straightforward, with Gaddafi promising "a representative office in all our embassies in the world just to work on visas for the zone". As for the number of residents, this will depend on the masterplan - "but I don't think it will be millions". (This desert state, more than three times the size of France, has a population of fewer than six million.) "It will be little and elegant," he says.

Gaddafi says he expects the first building to start in "a maximum of two years" and it is clear he will be heavily involved. "In the beginning, I have to be there to be sure that everything is in order and nothing stops the project and the plans. I will live in the new city."

It promises to be a big change for a 33-year-old, who used to be a professional footballer in Italy. Gaddafi spent time with Perugia and Udinese but made little impression and even suffered a positive drug test. This he later ascribed to medicine he had been taking for a back problem - one that eventually required surgery.

His passion for football endured, though. He played a leading role in Libya's unsuccessful bid to stage the 2010 World Cup and is a former board member of Juventus - the famous Turin club relegated in the summer in the wake of a match-fixing scandal - where the Libyan Arab Foreign Investment Company has a minority stake.

He also takes a close interest in the affairs of other Libyan business interests such as Tamoil, the £2bn oil refining and marketing company which sponsors Juventus and is now up for sale. Even so, the new investment zone will be a stern test of his management skills, with his performance likely to come under scrutiny from those who see him as a possible successor to his father, as well as from the international investment community.

A final thought: is Gaddafi hoping to make money out of this ambitious project himself? "No, I'm a dreamer. You see your dream come true - this is more important than the money."