The outlook for the Algerian construction sector in 2012 remains positive but low-key. Reasonable growth rates and rising oil prices are helping to maintain investor confidence in the sector but unrest in the region continues to dampen enthusiasm. The construction sector is set to see 5.5% year-on-year growth in 2012 rising to an industry value of $21.7bn. Over the forecast period average y-o-y growth will be 4% to 2016 when the industry value will stand at 27.8bn.

Algeria Infrastructure Market Report 2012

• • In October 2011, the Algerian Transport Ministry announced plans for a new port. The port will be located between Algiers and Tenes and will be built to relieve congestion at ports including Tenes, Bejaia, and Oran. The new port is part of Algeria’s preparations for growth in foreign trade.
• • In July 2011, the Algerian government launched its 150MW Hassi R’mel gas-solar hybrid power plant, which will generate 30MW of power through solar energy. The first-of-its-kind EUR350mn (US$507.19mn) plant was constructed bySolar Power Plant One, a joint venture (JV) between New Energy Algeria (NEAL) and Spanish company Abener. A group of Algerian national banks funded 80% of the project, which will save more than 7mn cubic metres per annum of gas and significantly decrease carbon dioxide emissions.
• • In May 20111, Algeria’s first modern tram network started commercial service in Algiers. The Urban and Suburban Bus Transportation for Algiers (ETUSA) operates a 7.2km line, which covers 13 stations from Bab Ezzouar to Bordji El Kiffan. The line is scheduled to extend to 23km and cover 38 stops after the completion of two under-construction sections. Alstom, the project leader for the Mediterrail consortium, is providing platforms, rails, and electrification, signalling and ticketing systems, as well as civil engineering services.

The Algerian economy is forecast to grow by just 2.9% year-on-year (y-o-y) in 2011 and 2012 respectively. While we foresee elevated growth rates in fixed investment and government spending, we expect the country’s imports to rise much faster. We maintain our view that the Algerian economy will experience marginal rates of growth over the medium term.

We foresee the growth in natural gas revenues more than making up for the stagnation in oil revenues, which will help support the government’s expansionary policy. With hydrocarbon revenues accounting for approximately two-thirds of fiscal revenues, the government’s ability to reap increasing returns will be critical both to supporting infrastructure development as well as to responding to signs of public unrest. We expect fiscal expenditures to be elevated during 2011 and 2012 as the government continues to mollify the public through spending measures, and we project government spending to rise by 6.0% per year in 2011 and 2012 respectively.

Table of Content

Executive Summary . 5
Market Overview . 6
Building Materials . 8
Global  8
Industry Trend Analysis – Building Materials: China To Remain Demand Driver; Developed Markets Offer Little Support .. 8
Africa .. 15
Industry Trend Analysis – Building Materials: Rising Capacity And Competition, But Risks Remain .. 15
SWOT Analysis . 20
Algeria Infrastructure Industry SWOT . 20
Industry Forecast Scenario  21
Table: Algeria Construction And Infrastructure Industry Data  21
Major Infrastructure Developments and Key Projects . 24
Transport Infrastructure Overview .. 24
Table: Major Projects – Transport . 26
Energy and Utilities Infrastructure Overview . 27
Table: Major Projects – Energy And Utilities.. 29
Residential/Non-Residential Construction and Social Infrastructure Overview.. 30
Major Projects Table – Residential/Non-Residential Construction and Social Infrastructure . 31
Key Projects .. 31
Business Environment Ratings .. 32
Rewards .. 32
Risks . 32
Regional Overview  33
Industry Trend Analysis – GCC Outperforms As North Africa Fails To Make A Dent .. 33
Middle East And North Africa Infrastructure Business Environment Ratings  38
Company Monitor  39
Sonelgaz .. 39
Acciona Agua  41
Orascom Construction Industries .. 43
Global Overview .. 45
Infrastructure Finance In 2012: Déjà Vu?  45
Methodology .. 51
Industry Forecasts  51
Construction Industry .. 52
Data Methodology . 52
New Infrastructure Data Sub-sectors  52
Construction . 53
Capital Investment . 54
Construction Sector Employment  55
Infrastructure Business Environment Rating .. 56
Table: Infrastructure Business Environment Indicators . 57
Project Finance Ratings  58
Table: Design And Construction Phase .. 59
Table: Commissioning And Operating Phase – Commercial Construction  60
Table: Commissioning And Operating Phase – Energy And Utilities  61
Table: Commissioning And Operating Phase – Transport . 62
Sources .. 64

Table: Algeria Construction And Infrastructure Industry Data . 21
Table: Major Projects – Transport . 26
Table: Major Projects – Energy And Utilities. 29
Major Projects Table – Residential/Non-Residential Construction and Social Infrastructure . 31
Table: Infrastructure Business Environment Indicators . 57
Table: Design And Construction Phase . 59
Table: Commissioning And Operating Phase – Commercial Construction . 60
Table: Commissioning And Operating Phase – Energy And Utilities . 61
Table: Commissioning And Operating Phase – Transport . 62