Expanding rail capacity remains a priority for Algeria

Algeria has set ambitious targets for rail development, aiming to increase annual rail transport capacity to 17m tonnes of goods and 60m passengers by 2021. In 2017 annual capacity of cargo via rail reached 5m tonnes, while the number of passengers travelling via rail in the first 11 months of 2018 was 43m. Additionally, there are plans to extend the rail network from 4200 km in 2017 to 6500 km by 2021 and 12,500 km by 2030.

To help meet these targets, in 2018 the government allocated AD127bn (€922m) to the National Rail Transport Company (Société Nationale des Transports Ferroviaires, SNTF), the agency in charge of managing and operating the rail system, for its renovation and investment plans. Of that total, AD68bn (€493.7m) has already been used by the SNTF to cover the 2018-19 period, while AD59bn (€428.3) has been earmarked for investments in 2020 and beyond. Improving rail transport has been a priority for the government in successive national development plans, which have yielded positive results. In 2017 the SNTF recorded losses of AD1bn (€7.3m) compared to losses of AD6bn (€43.6m) in 2015. With the company focused on improving and expanding its fleet, coupled with a strategy to boost its media presence, SNTF is likely to see positive annual revenues in the near future.

Renovation & Training

The 2015-19 national development plan has placed renewed emphasis on improving rail services through renovating existing infrastructure and enhancing staff training. “The renovation process entails refurbishing old trains locally and purchasing new trains from abroad,” Yacine Bendjaballah, managing director of SNTF, told OBG. To encourage technology transfer and ensure that the renovation process incorporates the most up-to-date practices, SNTF has enlisted the support of various foreign firms for a number of projects. In 2015 SNTF signed contracts with French companies Faiveley Transport and Compin to assist in the refurbishment of 202 carriages. Faiveley won a contract worth €75m to improve the interior design, while Compin won a €45m contract to upgrade the air conditioning onboard.

As for new trains, in July 2015 SNTF awarded France’s Alstom a contract worth approximately €200m to supply 17 dual-mode 25-KV alternating current trains, specially adapted to cope with extreme temperatures and wind-blown sand. Each 110-metre-long six-carriage set can seat 254 passengers, including 60 in first class. Assembly took place at Alstom’s Reichshoffen plant in eastern France, and the first train arrived in Algeria in January 2018. The fleet made its passenger debut on the Algiers-Oran service on March 3, 2018, serving as a testimony to Algeria’s ongoing commitment to modernise and extend its rail network.

Another area set to receive significant investment is customer service. In 2017 SNTF began recruiting personnel from specialised academies and working to educate the new staff members on ways to improve customer service on its trains. “As part of our customer service diagnostic operation, we created a feedback system,” Bendjaballah told OBG. “One area for improvement frequently mentioned by clients was meals. Thus, providing a quality meal has become especially important for us, and we are trying to address the issue,” Bendjaballah also told OBG that SNTF was might look to develop services beyond trains by giving clients special discounts on certain taxi services.

Raised Profile

Approximately 43m passengers travelled on trains in the January-November 2018 period, up from 29m in 2015. According to SNTF, the target of 60m passengers annually by 2021 will become a reality once the 2300-km extension is complete, with a number of signs indicating growing interest. “Ongoing renovation works have boosted SNTF’s visibility, which has helped to increase passenger numbers,” he told OBG. “Many people are taking trains out of curiosity because they heard someone talk about recent improvements or because they read an article in the newspaper.” SNTF’s media strategy includes hosting events in public places and engaging directly with potential clients. For example, in 2018 SNTF launched an accident awareness programme and staged events across the capital city of Algiers, including at Place des Martyrs.


In comparison to SNTF’s progress on increasing passenger capacity, the sector is awaiting efforts to boost annual cargo volumes. Though merchandise transported via rail rose by 31% from 3.8m tonnes in 2017 to 5m tonnes in 2018, this increase does not accurately reflect the reality on the ground. Production at the El Hadjar steel facility slowed down in 2016, before picking back up in the 2017-18 period, which suggests that the 31% increase would be more accurately viewed as a return to normality. “We are waiting for new industrial complexes to begin production so that we can start transporting more goods,” Bendjaballah told OBG. One such complex is the Bellara steel plant in the Jijel wilaya (province). The $2bn site is being built to meet national requirements for various steel products, such as bars for reinforcing concrete. Slated to go on-line by the end of 2018, Bellara is expected to produce around 2m tonnes of steel products annually, and SNTF is set to provide the site with rail freight services.

The Bellara rail link is part of a wider strategy to extend rail freight to major economic and industrial centres, and the company is investing in specialised equipment, such as 30 locomotives and 380 phosphate wagons. “Rail freight should take off in the medium term,” Abdelkrim Nait Ibrahim, director of local logistics group Universal Transit, told OBG. “The authorities are focusing on infrastructure, which is a great move, but it is also crucial to have the right equipment, such as specialised carriages.” SNTF also plans to improve connectivity between ports and rail. Containers account for 70% of freight transport, but containers are evolving constantly. For example, high-cube containers are increasingly replacing standard containers. Rail Link – a joint venture between SNTF and France-based global maritime leader CMA CGM – was set up partly to facilitate this transition. However, to transport high-cube containers in Algeria, the infrastructure would need to be adjusted, otherwise the trains cannot pass due to height restrictions. To overcome this barrier, SNTF decided to develop its own transport line for standard containers. Once larger cargo ships can dock at Algerian ports, SNTF’s long-term vision is to reorganise operations to create a “railway backbone” placing high cube containers at the centre of operations. The backbone aims to standardise rail and port facilities to be able to receive high-cube containers, and thereby make the most of Algeria’s location as a hub for Mediterranean-African trade. High-cube containers are slightly larger than standard containers and are generally considered more cost effective for large merchandise such as white goods. SNTF plans to introduce long double-decker trains stacked with high-cube containers and develop interconnectivity with other modes of transport to facilitate transnational transport. At the moment, ships need to make long journeys through potentially unsafe regions such as the Horn of Africa, but with interconnectivity being boosted, both journey times and risks are expected to decrease.


The most obvious opportunities for investment lie in maintaining and upgrading existing infrastructure. The strategy for maintaining the rail network is based on outsourcing to private companies. “As part of our plan to improve services, we are currently at the stage where we are prioritising the assembly of locomotives and carriages locally. Surrounding these projects are tender calls for various items, such as windows, cables and electronic components. If private companies invest in these segments, they can participate in the process of assembling the trains,” Bendjaballah told OBG. There is considerable potential for growth in the rail segment if planned projects are carried out. Whether rail freight takes off in the near term mostly depends on the success of state efforts to boost industrial output. Though the 2019 draft budget reduced the public financing allocated to the sector by 26.6%, Abdelghani Zalene, minister of public works and transport, told local media in late 2018 that existing rail and road projects would remain top priorities.

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The Report: Algeria 2018

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