This chapter starts by assessing the performance of the transport sector56 with respect to the stock of infrastructure and its allocative and technical efficiency in terms of regional benchmarks. The second section describes the institutional arrangements in the sector, with shared responsibilities among the Ministry of Transport, the Ministry of Public Works, and state-owned enterprises. It reviews the status of sectors strategies as reflected through the subsector master plans. The third section analyzes public expenditure in the sector, focusing on the impacts of investment policy on the stock of infrastructure and on current expenditures. The fourth section quantifies the fiscal position of state-owned enterprises. Recommendations are proposed in final section. The analysis is complemented with a diagnostic of each subsector—railways, roads, ports, and civil aviation. These are contained in the annexes D, E, F and G.
A. Performance of the Transport and Public Works Sector
In infrastructure stock, Algeria compares favorably with other countries in the region; however, some capacity bottlenecks are still constraining sector response to social and economic needs. Substantial investments have built up significant transport infrastructure, reflected by favorable network density indicators (Table 5.1). Algeria has 107,000 kilometers of roads (of which 72 percent are paved), 4,940 kilometers of railway lines, 10 commercial ports spread along the coast, 11 international airports, and 22 national airports. The railway infrastructure is by and large under utilized at less than 1 million traffic units per kilometer (Figure 5.1). So are many airports, three-fourths of which record less than 10 aircraft movements daily. Certain bottlenecks have persisted—for example, the road linking major cities of the northern region is chronically congested. The planned 1,260 kilometer-long East–West Motorway should address that issue, but barely 125 kilometers are in operation and only 169 kilometers are under construction. Population growth and urbanization are challenging urban transport infrastructure, especially in Algiers, where construction started on the first metro line in 1982 but is not expected to open until 2008.
Transports and public works strongly suffered the security crisis of the 1990s. During this decade, Algeria went through an episode of acute violence and terrorism, originating from extreme fundamentalist groups. The security crisis had a significant impact over both sectors through three mechanisms: (a) the choice of modes, (b) the lack of maintenance on several regions of the country most affected by the conflict; and (c) the direct losses incurred in infrastructure, and specifically in the railroad sector.
Table 5.1 Roads and Railways Infrastructure Stock Condition and Utilization:
Figure 5.1 Productivity of Algerian Railways: a Regional Comparison
Source: International Union of Railways, 2003 statistics (except for Egypt, 2004)
The lack of maintenance and delays in technological change are aging assets, thus limiting productivity of the sector. Only 39 percent of the road network was reported in good condition in 2003. The lack of timely maintenance has particularly damaged rural roads, of which 70 percent are in fair or poor condition. The stock of operating railways is aging and needs renewal. SNTF, the state-owned railway enterprise, indicated a locomotive availability rate of 53 percent in 2004. In ports, technologically outdated facilities prevent port operations from meeting standards of best practice. The Algiers container terminal does not exceed 7 moves per crane per hour, compared with modern terminals equipped with gantry cranes that score 15 to 45 moves per crane per hour. Meanwhile, the Algiers’ area has a pressing need for a world-class container terminal to accommodate its growing traffic. In airports, the Ministry of Public Works reports that the average runway has reached 15 years without proper maintenance, exceeding the internationally accepted safety standard of a 10-year lifetime.
An uneven performance of transport services hinder growth and productivity of other economic sectors. The quality, timeliness, and costs of transport services have a direct impact on the productivity of the economy, for they lay at the core of logistics chains. On the one hand, great improvements have been made in cargo handling by port enterprises, with average ship turnaround times at Algerian ports falling from 5.5 days in 2003 to 3.2 days in 2004 (as reported by the Ministry of Transport). Waiting times for container ships at Algerian ports also score well, averaging 6 hours in 2004, while African and European waiting times average 48 and 2 hours respectively.57 On the other hand, cargo dwell times in Algerian ports because of delays at customs averaged 12 days (compared to 3 days in Morocco), and went up to 44 days in 2001, as reported by the Investment Climate Assessment (World Bank 2006a). Technical efficiency is low in the railway sector, where infrastructure, staff, locomotive, freight wagon, and passenger productivity indicators score two to three times lower than those of Tunisia and Morocco (Figure 5.1). Such inefficiencies significantly increase the costs of goods and services. Similarly, some bottlenecks in ports and localized road congestion in urban areas also threaten the productivity of the economy.
Public transport services partly meet the needs of the population. In Algiers, a 2004 Transport Household Survey by the Ministry of Transport revealed 80 percent of the population as dissatisfied with the quality of transport services. Individual urban trips consume an average of 80 minutes each day. Such information confirms is the need and room for improving the quality of public transport supply in Algier. Similarly, the state-owned railway enterprise, SNTF, has been unable to provide passengers with reliable services and schedules in recent years. As a result, railway passenger traffic decreased by 17 percent from 2000 to 2004 (Ministère des Transports 2005). Similarly, domestic passenger air traffic was 45 percent lower in 2004 than in 2002, with the state-owned monopoly, Air Algérie, unable to fill the supply gap that it inherited from the disarray of Khalifa Airways, the private company58 that had control of 52 percent of domestic traffic in 2002.
