Political uncertainty hits contract awards in Algeria

28 November 2012

The level of construction awards in Algeria this year has seen a significant drop from the $3.2bn of contracts awarded in 2010

Algeria may have avoided the political turmoil that has engulfed other countries in North Africa, but its projects market has still felt the impact of the uncertainty that has swept the region following the recent Arab Uprisings.

So far this year there have been only $230m of construction awards in the country, down 83 per cent from the $1.4bn awarded last year, which itself was a significant drop from the $3.2bn of contracts awarded in 2010.

Unfulfilled potential in Algeria

The total value of awards is a disappointment as many expected the country, with its large oil and gas reserves, educated and growing population and close proximity to Europe, to be a major market for contractors seeking new opportunities.

The one bright spot this year has been the award of a $230m contract to a joint venture of Athens-based Consolidated Contractors Company and UAE-based Drake & Scull International by Societe Algero-Emiratie de Promotion Immobiliere to build a major new real estate development.

Algeria top construction awards 2012
ProjectClientValue ($m)
Forum el-Djazair: zone 1 – residential buildings de Promotion ImmobiliereSociete Algero-Emiratie 230
For further information visit www.meed.com/meedprojects

This mixed-use scheme involves the construction of four residential towers, office buildings, a shopping mall, hotels, and a clinic.

Despite this success, contractors will be hoping for a return to previous years when the Algerian government was prepared to invest heavily in construction projects.

In 2011, the National Agency for Design & Management Djamaa el-Djazair (Anargema) awarded Beijing-based China State Construction Engineering Corporation a $1.3bn contract to build the new Grand Mosque in Algiers.

Before 2011, transport was the focus. Covering an area of 2.3 million square kilometres, Algeria is the tenth-largest country by area in the world and the authorities have been keen to invest and upgrade the country’s road and rail infrastructure for its 37 million people.

In a bid to reduce traffic congestion, the National Agency of Studies and of Follow-up of the Realisation of Railway Investments (Anesrif) is constructing a 66-kilometre double-track line from the single electrified railway track between Tlemcen to Akkid Abbas.

Upcoming tender deadlines
ProjectClientSubmission
Algerian Desert CityL’Establissement de la Ville de Hassi MessaoudQ1 2013
Societe des Parcs d’AlgerEmirates International Investment CompanyQ2 2013
Anesrif-Laghout railway lineNational Agency of Studies and Follow-up of the Realisation of Railway InvestmentsQ3 2013
For further information visit www.meed.com/meedprojects

The market could perform much better next year. There are $12.4bn of construction projects that are due to be awarded. The largest two schemes are major real estate developments.

L’Establissement de la Ville de Hassi Messaoud is planning to start work on its $6bn Desert City. It will be built in Hassi Messaoud located in the wilaya of Ouargla. It will cover an area of more than 45 sq km and will be a community for the oil and gas industry.

The Desert City development will comprise administrative facilities, academic institutions, research and development centres, and sports facilities.

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