Expansion of the highway network to reshape land transport

In its efforts to overhaul transport infrastructure, Algeria has directed significant investment towards its road network. In addition to nearing completion on the East-West Highway, construction is also starting on another major project – the Hauts Plateaux Highway, running further south. These two routes, which will cost a combined total of around €16.2bn, will cross the country in two bands from east to west, connected by an array of auxiliary roads.

“The goal is that by 2025, 44 wilaya (province) capitals will be connected to motorways, except the four big wilayas in the south, which will be connected to the road network, but not the main highways directly,” Mohamed Mahiddine, director general for roads at the Ministry of Public Works, told OBG.

The two flagship projects are the country’s most visible efforts to reduce the cost and historical inefficiencies associated with road transport. Other lower-profile work is also taking place across Algeria’s 115,000-km road network, with modernisation efforts underpinning lane enlargement operations aimed at increasing the capacity of existing roads.

The need for the upgrades is clear. According to figures from the Ministry of Public Works, the current 8m vehicles using the roads today will have nearly tripled by 2025. With the unrest of the 1990s having damaged roads and forced a suspension of maintenance work, modernising the country’s roads and expanding the existing network became a government priority in the early 2000s.

Funding

While previous road expansion initiatives had focused on the more populous north of the country, government efforts are now increasingly targeting the central and southern wilayas, connecting them to the northern economic centres of Algiers, Oran, Béjaïa, Constantine and Annaba.

Under the recently unveiled five-year plan, road development is set to receive close to AD4trn (€37.2bn) in government investment from 2015 to 2019. The large funding is understandable: Algeria is Africa’s largest country by area, mixing a rugged coast with mountainous terrain and large desert areas. This has kept some of the more isolated areas of the country disconnected from economic centres and served as a trigger for the concentration of urbanisation in the more populous northern regions.

Planning Ahead

Current road construction follows the 2005-25 National Road and Highway Plan (Schéma Directeur Routier et Autoroutier 2005-25), which has been in force throughout the last three of Algeria’s five-year plans and solidifies the priority status of major road developments.

The €9.6bn, six-lane East-West Highway fell under the 2005-09 five-year plan, for example, with construction starting in 2007 and split among three segments. The western and central sections were handled by the Chinese consortium China International Trust and Investment Corporation (CITIC) and China Rail Construction Corporation (CRCC), while the eastern part was awarded to the Japanese Consortium for Algerian Highways (COJAAL).

According to a study by the Ministry of Public Works, the East-West Highway should absorb as much as 85% of national traffic, including 50% of trucks. The project has also generated more than 100,000 jobs, according to press reports, and will link the country from its border with Morocco all the way to Tunisia. The highway, which runs for 1216 km and will connect some of the country’s most populous cities in the north, is nearing completion, with only 87 km of construction remaining as of late 2014.

Bids for the highway construction rights came from all over the globe, with international consortia and more than 60 companies from Japan, Germany, China, France, Portugal, Italy and the US vying for the contracts. The successful bidders included a Chinese consortium, a Hong Kong-based consortium, and several Canadian and French enterprises.

The Chinese consortium, consisting of CITIC and CRCC, won a €351m contract to construct two major sections of the highway in the centre and west of the country, totalling more than 550 km. Indeed, involvement in the East-West Highway is China’s biggest foreign venture to date in Algeria.

The contract for the construction of the most-costly stretch of the highway – a 399-km section with a price tag of over €3.9bn – was awarded to COJAAL in September 2006. Comprising five companies headquartered in Tokyo, including Japan’s two largest contractors, Kajima and Taisei, along with Hazama, Nishimatsu and Itochu, the consortium successfully outbid five other firms for the project.

However, the scheduled completion of the final segment was pushed to 2015, with the Algerian government announcing in October 2014 that the contract with COJAAL had been cancelled – a result of disputes over payments and delays. The government has been looking for a new contractor.

There have been other challenges as well, including a tunnel collapse between Constantine and Skikda in 2014, in addition to corruption allegations related to a section between Lakhdaria and Bouïra in 2009. However, the project by and large has been built with relatively impressive speed.

In 2014 Algerian authorities began constructing ancillary infrastructure, including a network of petrol stations and a toll system that will eventually help finance future maintenance of the new highway. Similar to other road projects in the country, the construction of the complementary infrastructure was divided into three sections and will take place over an 18- to 24-month timeframe.

Taming The Mountains

As one flagship infrastructure project nears completion, the government has shifted attention to its other major roadwork – the 1020-km, cross-country Hauts Plateaux Highway. Set to commence construction in late 2014, the highway is budgeted at around €6.62bn and follows a similar east-to-west trajectory, albeit in the country’s central high plateau region further south.

The Hauts Plateaux Highway will connect Saïda and Souguer, in the eastern wilaya of Tiaret, to Boughezoul in the Médéa province, moving on to Aïn El Hadjel in M’Sila wilaya and continuing to Batna, Khenchela and Tébessa. The road will finish in Bouchebka by the Algerian-Tunisia border. The government expects the highway to help link these cities to the more developed economic centres in the north, as well as encourage the establishment of new industries in less developed regions of the country.

Much like the East-West Highway, this project will be divided into three sections; although, unlike the previous project, the tender is only open to domestic firms. “We are focusing this project on Algerian companies because we want to encourage local firms, in order to create economic development and allow them to gain experience,” Mahiddine told OBG.

Connecting The Dots

The flagship projects are impressive, but to ensure their sustainability they also require a whole host of new linkages with existing provincial and local roads, as well as with one another. “The East-West Highway has slightly improved the situation, but so far the lack of auxiliary roads to the ports makes the road infrastructure insufficient,” Sabri Bencherif, general manager at Global Freight Transit, a logistics operator, told OBG.

These freeways – or penetrantes – will form the connecting spokes of Algeria’s road infrastructure, and, according to the National Road and Highway Plan, all of the planned auxiliary roads are expected to be completed by 2025.

The 11 auxiliary roads linking the country’s ports to the East-West Highway should all be under construction by early 2015. In March 2014 work began on the 48-km auxiliary road that will link the Tizi Ouzu region to the new highway, scheduled to take 36 months and cost AD55.9bn (€519.9m). Work is also set to begin on links with the cities of Batna, Annaba, Skikda and Guelma. Further south, another 12 auxiliary roads will link the East-West Highway to the Hauts Plateaux Highway.

In The Works

In addition to these two major roadways, Algeria’s Ministry of Public Works is also planning a North-South Highway, which will intersect the East-West Highway to better connect southern provinces, as well as several roads that will encircle the capital. The three major bypasses planned for Algiers will offer several alternative routes that avoid the congested city centre, for a total of 490 km.

The projects have not been without challenges. Construction delays on the 100-km link between Bouïra and the port city of Béjaïa, which began in the summer of 2013, have prompted the government to consider annulling the contract with AlgerianChinese consortium CRCC Sapta, according to local media reports. “Béjaïa is taking time because there are issues related to securing private lands for the road. It takes longer because we aim to treat these issues in a friendly manner,” Mahiddine told OBG.

Algeria’s transport sector is undergoing a phase of unprecedented expansion. The country’s heavy investments in its road network in particular are set to improve connections across the country.

In addition to the new links provided by the EastWest Highway and the Hauts Plateaux Highway, the series of connections to the country’s ports will help improve intermodal freight transport over the coming years. This in turn should help lower transportation costs for Algerian industries and businesses.