Gov¡¯t to aid Libya project with US$100 million

The government and creditors have decided to provide financial support of US$100 million to the bankrupt Dong-Ah Construction Industrial Co. to help it conclude the waterway construction project in Libya.

If the second phase of construction of the waterway is completed in 2002, Dong-Ah can receive uncollected amount of US$300 million and a reserved fee of US$300 million. The creditors also will be able to collect US$600 million, including performance bonds.

The total amount Dong-Ah and creditors can retrieve is US$1.2 billion. Yet if the construction is suspended, not a single penny will be collected. The Ministry of Construction and Transportation reported Thursday that either the government or the creditors would finance US$100 million, the current financing shortfall, of the total US$450 million necessary for the completion of the second phase of construction.

Earlier, the Libyan government said it would pay the uncollected US$300 million first, if the Korean government guarantees the second phase of construction. Instead, Libya demanded that the money not be retrieved by the creditors but be put into the construction, ministry officials said.

Sin Yeon-Su ysshin@donga.com