Ports prepare for a commercial transformation to update facilities and develop new links with foreign partners
TRANSPORT

SHIPPING is especially important for Algeria and about 95 percent of international trade and imports transit via the ports

The transport sector is a groundbreaker as far as opening up Algeria’s economy is concerned. Competition has already been introduced into air transportation, and the maritime sector is now following suit. By the end of this year, the former state monopoly over port operations will be ended, with private companies bidding for services such as piloting and off-loading, though aspects such as port safety and environmental protection will remain under state control.

The Secretary General of the Transport Ministry, Yahia Nazef, comments, “One could say that a taboo has been broken. This progressive opening-up has been designed to introduce the private element and, above all, to see the private sector as complementing the public sector.”
Shipping is especially important for Algeria, as the main population centers and industrial areas face the sea. “About 95 percent of our international trade and imports transit through our ports,” says Mr. Nazef.
The ports come under three regional port authorities: west, centre and east. “They are in effect an extension of the state, making sure that state-related issues are complied with, while at the same time having to deal with commercial matters, which are increasingly in the competitive sphere,” he explains. “In other words, they are trying to wear two hats, which is why we want to separate the two functions, leaving the competitive sphere to private companies.”

Reforming the country’s maritime code will give rise to several investment opportunities. When Mr. Nazef accompanied President Bouteflika on his visit to the United States in October last year, he was able to see new technology now being used in U.S. ports, and to speak about Algeria’s need to update its port facilities.
Selim Saadi, who was Minister of Transport before the last government reshuffle, says contacts with potential U.S. partners are already taking place. “In principle, the entire transportation sector is open. And as far as ports are concerned, we have one example already up and running in the co-operation that exists with the Port of Houston.”

Mr. Saadi is delighted with the way that the sector is being opened up to private business, but he warns against seeing this as a cure-all. “We mustn’t fall into another kind of dogmatism, and believe that privatization in itself is the solution to all our ills.” he says. “The state must remain as a public authority retaining regulatory powers, as is the case around the world.”

One of the longest-established ports along Algeria’s Mediterranean coast is Annaba, which is multifunctional, handling everything from cereals to coal and refined oil products. “We carry out all sorts of activities,” says the port’s CEO, Mr. Salhi. “Some are related to industries located in the region. We import a lot of heavy goods, for the steel and agrochemical industries, as well as exporting phosphate.”
There are extensive facilities at the port, including silos for grain storage. A container terminal has been built, but there is still plenty of room on site for further developments. “We have large areas within the port boundaries that could be turned into facilities for customs clearance or warehousing,” Mr. Salhi says.
Though the bulk of Annaba’s traffic is with Europe, business with the U.S. is far from insignificant. “Unfortunately, there is no direct line to the United States,” Mr. Salhi laments, “but we do handle goods for American corporations, that have been transshipped through Mediterranean ports and are destined for Algeria’s southern oilfields.”

Annaba is fortunate in having a highly developed hinterland, as well as good transportation links with the rest of the country. The city itself has a well-developed infrastructure, including a university and banks. But Mr. Salhi is aware that Annaba will have to keep abreast of developments in the shipping trade – including management reforms within the port – if it is to retain its importance.
“Even if the business that we operate here is a prosperous state concern, it could find itself being courted by investors if its capital is opened up,” he says. “That would stimulate research into performance levels, in a way that will enable us to survive in a competitive world.”

Algeria’s newest port is at Djen-Djen. It was started in the mid-1980s, taking advantage of an unusually deep natural harbor. Originally, the idea was that it would serve a huge new steel-making complex, which was in fact never built. But excellent infrastructure does exist, including good air, rail and road links and a power station. It has a deepwater quay capable of receiving ships up to 120,000 tons and has available handling space of 111 acres. By the end of 2001 the port had received 1.5 million tons of traffic.
“Djen-Djen is one of the best equipped ports in Algeria,” says its CEO Mohamed Atmane. “We invested around $30 million in equipment for the port. We have various new projects in mind, from cereals to iron-ore, and not forgetting container traffic.”

Djen-Djen now specializes in cereals and within six years of starting operations had established itself as Algeria’s premier port for handling this cargo. Forecasts for through traffic in 2002 point to 1.6 million tons of cereal cargo alone. “We manage to reach unloading rates of up to 10,000 tons a day. The cereal goes directly into trucks as we don’t have any silos yet,” Mr. Atmane says.
A proposal to build grain storage is underway and part of the iron and steel quay has been allocated to build silos with a total capacity of 300,000 tons. “Then we will be able to receive larger vessels of 80,000 tons and unload their grain cargo directly into the silos,” he says.
The port was built with big vessels in mind and its draught of between 33 and 60ft makes it possible to berth container ships of the fourth generation (4,000 TEU). Other advantages include a free zone which is only 28 miles away.

Djen-Djen’s facilities promise the port a rosy future. “In five years, I can really see Djen-Djen as Algeria’s number one commercial port, not including the specialist ports handling oil,” he says. “By then we’ll be handling at least half of the country’s grain imports.”
Mr. Atmane points out that as a relatively new port Djen-Djen has all the necessary equipment to meet the environmental protection and safety standards required when dealing with hydrocarbons cargo. “For example, our tug boats have floating booms and other devices aimed at protecting the sea and coast in the event of an emergency,” he says.

Other major ports, like Oran in the west, are fine-tuning the services they provide to ensure that they can perform well in a more competitive environment.
“We are particularly aware of the importance of turn-around times,” says Oran Port’s CEO, Mahmoud Selim Louhibi. “We have a control mechanism, to monitor timings, as well as transit costs. We are able to unload day and night, seven days a week, with more than satisfactory returns.”
Mr. Louhibi believes that Algeria’s ability to handle container traffic will be crucial. “It’s not just about handling the third or fourth generation container ships that you see in New York or Rotterdam, it’s also necessary to have the right industrial facilities” he says. “We have to develop, or we risk being overshadowed,” he adds.