Ahmed Bouzguenda, General Manager, Société Bouzguenda Frères: Interview

Interview: Ahmed Bouzguenda

How would you describe the ways in which Tunisian construction has evolved in recent times?

AHMED BOUZGUENDA: The construction sector is highly dependent on infrastructure projects and on the budget allocated them by the state. Investments in infrastructure have been steadily increasing since the revolution. Roads and highways are being built, while sewage treatment plants and other structural projects have been put back on track. The new investment law, which came into effect on January 1, 2017, will not affect spending. Thanks to all these factors, the sector was on an upward curve in 2016.

Nonetheless, many things remain to be done in Tunisia: the interior regions need development, new roads are needed to increase trade and many areas need connecting to the electrical network. Tunisia has to increase its commitment to executing these projects.

Each year, between 40% and 50% of planned projects do not see the light of day. If we take roads, for example, most of the projects are very late, mainly because the state faces great difficulties in expropriating the lands. Officials should improve their efficiency in ensuring projects are completed on time.

What measures could be taken to boost the sector?

BOUZGUENDA: To ease the feasibility of construction projects, as well as other parts of the economy, Tunisia would highly benefit from a reform of the administration. The current administrative processes are way too long and it hurts the whole value chain. Directors from the public administration should also be chosen for their ability to make decisions. Many administration executives prefer to delay or even stop the decision-making process for fear of facing consequences afterwards, even if they are reliable people. The people in charge of giving the green light on a public project should be able to do so easily, once all the necessary elements have been approved. To switch some projects from a public funding model to a public-private partnership model could also help to finish them on time and within budget. Another issue is the fact that a large portion of land in Tunisia is registered as agricultural land on which nothing can be built. The government should make it easier to rezone this land as land for building on, especially in urban areas.

In what segments are the biggest opportunities for growth within the construction sector?

BOUZGUENDA: Since the upgrade of the road network is one of the main priorities, I believe it will be a strong segment in 2017, with the highway linking Gabès to the Libyan border being one good example. I know there is also an important project to upgrade the main ports of the country, as well as building a brand new one in deep water. Discussions have started around moving the Tunis airport to another area, which could be a huge opportunity for construction and engineering companies. Water treatment also presents interesting opportunities, with desalination and sewage treatment plants projects scheduled. Lastly, two 470-MW-capacity plants should stimulate investment in the electricity production segment. Other specific projects will require the skills of civil engineering companies, such as dams, railroads and housing.

How will real estate evolve in the next few years?

BOUZGUENDA: There is currently a positive trend in the immovable corporate property segment, with both local and foreign companies investing in new premises and production units, though private real estate should slow down a little. The stock of new buildings has been catching up with demand and the market will stabilise, especially in the high-end segment. Elsewhere, the tools set up by the government to ease access to social housing for low income households should keep this segment growing. Some new measures will also help sustain the sector in 2017, such as the fact that Libyan citizens now are entitled to buy properties in Tunisia.