Carol Reed/LONDON

A potential multi-billion-dollar business deal involving reconstruction of Libya's aviation infrastructure is being put on the table by the state's leader, Col Muammer Gadaffi, as a bargaining chip for Western states to lift their close to a decade-long sanctions against the North African country.

British Aerospace has confirmed that it has been in exploratory talks with Tripoli over rebuilding the country's civil aviation infrastructure following an approach by a middleman acting on behalf of the Libyan regime nearly a year ago.

The UK Government and the United Nations say that the negotiations did not constitute a breach of sanctions, which were imposed on Tripoli in 1992 after Libya's refusal to hand over for trial two alleged plotters in the1988 bombing of a Pan Am Boeing 747, en route from London to New York, over Scotland. The crash killed 259 people on board and 11 on the ground.

Details of BAe's discussions were published in UK newspaper The Express, which quoted leaked documents between BAe and Libya's authorities, including one addressed to Libya's director-general of civil aviation and the chairman of Libyan Arab Airlines. In the letter, BAe says that it "-wishes to confirm its desire to support you in developing your civil aviation infrastructure as soon as political circumstances allow".

The letter outlines a deal involving pilot and engineer training, modernisation of existing airports and runways, plus construction of new ones, and the setting up of air traffic control and related safety infrastructure systems. Modernisation of Libyan Arab Airlines' ageing fleet of mainly Boeing 727s and Fokker F27s is also mentioned, although BAe does not confirm reports that Libya is considering buying more than 30 aircraft, plus spares and maintenance. The deal, reportly worth around £6 billion ($9.7 billion), is expected to be paid for primarily with oil. The document added that military aircraft could form part of a follow-on deal.

Under the UN embargo, companies cannot supply arms, aircraft, spares or airfield infrastructure items, although civil air traffic control equipment is an exception.

Source: Flight International