2013-03-03 10:47:54 - New Construction market report from Business Monitor International: "Algeria Infrastructure Report 2013"
BMI View: The outlook for the Algerian construction sector points to a strong rebound in 2013, as the government's ambitious investment plan in the infrastructure network will continue over the coming quarters and tenders of which are currently (December 2012) being completed. Reasonable growth rates and rising oil prices, as well as a period of political stability, in relation to neighboring countries, are helping to maintain Algeria's inflows of foreign investment. The construction sector is estimated to have seen a year-on-year (y-o-y) contraction of 0.3% in 2012, with an industry value of US$17.9bn. Over the 10-year forecast period, average y-o-y growth will be 6.3%, from 2013 to 2022, with industry value to stand at US$48.2bn by the end of this
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The key trends and developments in Algeria's Infrastructure sector are:
* The Algerian government announced in December 2010 its aim to produce as much electricity from renewable sources as it currently produces from its natural gas plants, and in October 2011 stated its intention to invest EUR15bn into alternative energy over 20 years to support electricity production. The plan will aim to develop solar, wind and geothermal power plants, with cooperation agreements having already been signed with a host of countries including France, the US, Brazil, Russia, China and Germany.
* 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 150-megawatt (MW) Hassi R'mel gassolar hybrid power plant, which will generate 30MW of power through solar energy. The first-of-its-kind EUR350mn (US$507.19mn) plant was constructed by Solar Power Plant One, a joint venture (JV) between New Energy Algeria (NEAL) and Spanish company Abener. 'The power plant will be constructed in Boughezoul, on the northern edge of the Sahara desert'. It is expected that the BMU will provide EUR7mn, towards the construction of the power plant and renewables test centre. In addition, a group of Algerian national banks will 80% of the project, which will save more than 7mn cubic metres per annum of gas and significantly decrease carbon dioxide emissions.
* In May 2011, 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 government announced in July 2012 that it would build 750 new hotels in 48 locations by 2015. The hotels will cost a total of US$5bn to build. The hotel-building program is intended to double the number of hotel rooms available in the country. There were a total of 1,200 hotels within the country at the end of 2011, including 13 five-star establishments.
* A joint venture has been awarded a contract to provide signalling and telecommunications equipment for a railway line between Djelfa and Laghouat, reports Transport Weekly. The ESTEL RA joint venture is comprised of the Algerian national railway SNTF and German conglomerate Siemens. Siemens' share of the contract is valued at EUR68mn (US$87.7mn). ESTEL RA will install equipment at six railway stations and across 108km of railway track. Commissioning is scheduled to commence in Q315 and is part of the Algerian government's US$20bn railway modernisation programme.
* A consortium of UK freight rail company Colas Rail and Algerian firm KOU.G.C has been awarded a contract to extend Alger metro Line 1 by 4km. The extension from Hai El Badr to El Harrach-Centre is scheduled to open in November 2014, following a 23-month construction project worth EUR85mn (US$106mn). Project leader Colas Rail says its share is slightly more than half, including tracklaying, power supplies, tunnel ventilation and the ticketing system.
* Qatar International (a JV between Qatar Mining and Qatar Steel) will hold a 49% stake in the Bellara complex located in the eastern city of Jijel. Algerian national producer Sider (Entreprise Nationale de Siderurgie) will retain the remaining 51% share. The first phase of the build is expected to begin in 2013, and cost $2bn. The joint venture (JV) has announced that it plans to put out at least 2mn tonnes per annum (mtpa) of steel from the plant by 2017, rising to 5mtpa in the final phase - making it potentially the largest producer of steel in the region.
* At the moment the Algerian Government has dedicated US$40bn as part of the five-year plan focused on transport infrastructure, from which US$520mn is dedicated for the enhancement of airport infrastructure and upgrading technology. At the Algeria Infrastructure Summit held in September 2012, plans for the enhancement of the country's infrastructure sector were announced. In particular, US$156bn government investments are planned for new projects, and US$130bn allocated for current rail, road and water projects. In addition a further US$114.4bn will be dedicated to the development of education, healthcare and housing infrastructure.
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