The provision of transport infrastructure and services is divided between the Ministry of Transport and the Ministry of Public Works. The Ministry of Transport is responsible for policy orientation, planning, regulation, and supervision of activities aimed at transportation of goods and passengers by land (roads or rail), by sea, and by air. In addition, the ministry is responsible for the planning, design, construction and maintenance of railway infrastructure. The Ministry of Public Works is responsible for planning, design, construction and maintenance of roads,59 ports, and airport infrastructure. Table 5.2 provides an overview of the distribution of roles in transport for each subsector of the central government, government agencies and state-owned enterprises, local authorities, and the private sector.
Table 5.2 Distribution of Roles in Transport Infrastructure Provision and Services
Subsector
Central
government
Government Agencies and
State-Owned Enterprises
Local authorities
Private sector
EPICs/a
EPEs/b
Roads
Infrastructure Services
MTP/DTP—Construction and maintenance of national roads
MTP/DTP—Construction and maintenance of quays, jetties, etc.
Port enterprises
Maritime
transport
Maritime transport enterprises
Private maritime companies
Air Transport Infrastructure
Infrastructure
Superstructure & services
MTP/DTP—Construction and maintenance of airfields & runways
EGSA—Terminal construction and airports operation
ENNA—Air navigation
Air Transport
ONM—Meteorology
Air Algérie
Private companies— Charter & corporate services; international market)
Urban Transport
Infrastructure
Services
ETUSA—Bus operations
ETU Oran, Constantine, Annaba
EMA—Construction of the metro and tramways
Private bus operators
Source : Bank staff elaboration
Notes: a/ EPIC refers to Etablissement Public à Caractère Industriel et Commercial
b/ EPE refers to Entreprise Publique Economique. EPEs are meant to be privatized ultimately
Private sector involvement has been limited to a few transport services to date. Major amendments to the legal and regulatory framework to foster private participation in infrastructure and services have been made since the late 1980s. Law 88–17 on land transportation introduced deregulation in road services. Law 98–06 on civil aviation partly liberalized air transport services and paved the way for concessions in airports. Similarly, Law 98–05 on maritime transport adopted the Landlord Port model.60 Despite recent government efforts to implement the intended underlying reforms, no infrastructure concession has materialized in the transport sector61. The concession that was envisaged in 2002 of the Algiers airport aborted when no credible proposal was received. Similarly, the concession of the East–West Motorway did not generate market interest. Hence, both projects ended up financed on the government’s budget. Only a few transport services are currently operated by the private sector, thanks to the new deregulations. These primarily concern intercity and urban road transport, where private operators have gained increasing market shares over public operators. In 2004, the private sector detained 97 and 93 percent of the public road freight and passenger capacities respectively. Private bus operators in Algiers have four times more capacity than that of ETUSA, the state-owned operator. In 2004, the private sector accounted for 30 percent of the international air transportation market and a 93 percent market share of the non-oil maritime transportation market.
Institutional reforms are underway at the Ministry of Transport to achieve cost-effective transportation services. The ministry has prepared a forward-looking “roadmap” that paves the way for institutional reforms in each subsector. An overview of the principles at the core of these reforms is provided in Box 5.1. The reforms have three strategic axes.
Restructure the market of transport services with a view to introduce competition and increase private sector involvement.
Focus the Ministry of Transport on its core roles.
Create a space for regulation and establishing regulatory arrangements, notably in the maritime transport and port sector, and in civil aviation and airports.
The Sector strategy: Status of master plans
Master plans dating back to the 1970s and 1980s still guide current investments in the transport sector. Recently, efforts have been made at the Ministry of Transport and the Ministry of Public Works to review and update master plans for ports, airports, and roads (see status in Table 5.3). A 1992 multimodal National Transport Study sets out detailed investment programs for the sector. However, the prevailing master plan for railways, which underpins the 1992 study, dates back to the 1970s. It was conceptualized around an ambitious industrial model that does not exist, including heavy industries justifying the use of railways. PCSC projects in the rail sector focuses mainly on rehabilitation and modernization of the network. The development of new railways receives only 14 percent of the rail envelope. In absolute terms, however, investments in new railways are more than twice that of the 2000–04 period. In the road sector, construction of the East–West Motorway, which was planned in the 1980s, represents 57 percent of the 2005–09 investment program. The Algiers metro project also dates back to the early 1980s. Overall, delays in implementation have resulted in past master plans being carried forward without proper updating.
A comprehensive planning of transport developments is hindered by the multiple shortcomings in the institutional setup. Transport policy falls solely under the Ministry of Transport. Planning falls under the Ministry of Transport with respect to railways, and it falls to the Ministry of Public Works with respect to roads.62 A coordination committee between ministries was established in 1997; however, complementarities between transport modes fall short. For example, as reported by the Ministry of Public Works (MPW), the Road Master Plan for 2005–25—which was initiated in 2002 and is currently under discussion—does not take into account to date the massive investment programs in railways over 2005–09. Too often, unresolved overlap prevails. In the ports and airports sectors, the Ministry of Public Works is preparing infrastructure master plans, while the Ministry of Transport (MT)is simultaneously preparing development plans (Table 5.3). More generally, incentives for rationale planning seem to be weak in the MPW/MT coordination network. On the one hand, state-owned enterprises (SOEs) operating the facilities under the supervision of the Ministry of Transport need resources for both maintenance and new development of infrastructure. On the other hand, the Ministry of Public Works has to execute the government’s budget in this area. All in all, improved institutional coordination would certainly improve planning across the sector.
Table 5.3 Status of Transport Master Plans and Budgets Allocated to Corresponding
New Infrastructure Developments under PCSC
