South Korea's Hyundai, Doosan suspend work on Libyan power plant

TRIPOLI Sun Aug 10, 2014 10:35am EDT

TRIPOLI Aug 10 (Reuters) - South Korea groups Hyundai and Doosan have suspended construction of a 1,400 megawatt Libyan power plant in the town of Sirte because of security concerns, the plant managing director and a town council spokesman said.

"It is only temporary. They had orders from the South Korean government to pull out because of the security situation in Libya," Abu Bakr Makhyoune, the plant's managing director, said.

"Around 570 foreigners working for Hyundai and 382 others working for Doosan started to leave on Saturday," he added.

Libya is facing the worst violence since the fall of former ruler Muammar Gaddafi three years ago. Rival militias have been fighting for control of its two biggest cities for more than a month, turning the capital Tripoli and the eastern city of Benghazi into battlegrounds with more than 200 people killed.

The United Nations and most Western countries have pulled out their diplomats stationed in Libya to protect them.

There have been no recent clashes in Sirte, which is 460 km from Tripoli and 570 km from Benghazi. State news agency Lana and local television stations have reported growing insecurity in Sirte, however, because of the lack of central government support.

In 2007 Hyundai Engineering & Construction Co Ltd and Doosan Engineering won the 1.8 billion dinar ($1.5 billion) contract to build and operate the power plant, along with U.S.-based Bechtel, France's Geocean and Turkey's Gama Enerji (IPO-GAMA.IS).

Makhyoune said Bechtel is still operating in Sirte but without American staff, while 350 workers belonging to Gama Enerji have returned to Sirte after a brief break. Geocean has already left after its contract ended.

The Gulf power plant was scheduled to start operating in 2014 with four oil-fired units of 350 MW each. But construction has been held up by the war that topped Gaddafi in 2011 and then by fighting between a number of armed groups in the three years since then.

Only one 175 MW unit has started production so far.

Around 52 Libyan engineers have taken over operation of the from the departing South Korean staff, Makhyoune said.

"We had many meetings to reassure them (the Korean companies), but they said they had orders from their government," Sirte council spokesman Mohamed al-Amyel said.

($1 = 1.2255 Libyan Dinars) (editing by Jane Baird)