Leveraging its geographic positioning at the centre of the Mediterranean, Tunisia’s transport sector has been crucial for the country’s economic progress. Well-connected shipping and air transport lines have proven essential to developing the tourism sector and raising commercial trade levels in international markets. Key industrial segments such as aeronautics, automotive components and agro-industrial processing have been built on the premise of efficient transport networks that interlink the country’s production base with international value-chains, such as those in Europe.
In post-revolutionary Tunisia where economic disparities across geographic lines continue to be a source of social unrest, internal transport links between the more developed coastal cities and the country’s interior remain a key factor for ongoing development. With the urgency to make economic opportunities more accessible to larger swaths of the population, as well as connect businesses with export routes, the government, alongside multi-lateral lenders such as the European Investment Bank, announced large-scale investments in November 2016 at the “Tunisia 2020” conference held in Tunis. A total of 22 transport projects budgeted at TD4.3bn (€1.7bn) will be included in the spending, with a deepwater seaport to be built in Enfidha, city-linking highways across the country and a potential new international airport for the capital.
According to the World Bank’s “Doing Business 2018” report comparing the ease of doing business across 190 economies, Tunisia was ranked 88th for its facilitation of trading across borders. Even with the advantage of having one of its main port facilities close to the economic capital, the ranking underlines several difficulties that continue to weigh down economic activity. “The major issues when exporting from Tunisia to the rest of the African markets are the delays on administrative processes and the logistic limitations,” Walid Chatti, general manager of Skidata, told OBG. According to the report, it costs an average of $469 to export a container from Tunisia in terms of border compliance. This is slightly higher than the mean of $465 in the Middle East and North Africa region (MENA), but comparably much higher than Morocco, estimated at $156. Exporting procedures at the border take typically take 50 hours in Tunisia, compared to 19 hours in Morocco. Tunisia fares much better when compared with Algeria, where exporting a container costs an average of $593 and 118 hours in border compliance.
However, the World Bank’s report highlights the cost and time bottlenecks that can make logistics expensive for domestic and international firms operating in Tunisia, representing 20% of operating costs, according to local press. “Tunisia’s concern is the excessive Customs delays,” Tahar Ktari, regional managing director, Maghreb, at global inspection and certification firm SGS Tunisie, told OBG. “It takes three weeks to ship something from Scandinavia to Tunisia. However, the wait at the port can be another three weeks.”
Land transportation remains critical for commercial exchanges between Tunisia and neighbouring Libya and Algeria. According to 2016 data from the World Bank, 11% of the country’s trade is done within the MENA region. Additionally, international road links become increasingly busy over the summer months with the added volume of Tunisian and foreign travellers within the Maghreb region.
The country’s road network is made up of 20,000-km of roads and highways and is under the supervision of the state-owned Tunisie Autoroutes, which was created and granted concession to expand and maintain the system in 1986. The existing toll-highway network includes the 247-km connection between Tunis and Sfax to the south, the 51-km northern connection to the coastal city of Bizerte , as well as the 67-km linkage between Tunis and Oued Zarga. In November 2016 the 54-km link between Oued Ezagua and Boussalem was inaugurated. The project, budgeted at TD430m (€165.1m) was partially financed by the Kuwait-based Arab Fund for Economic and Social Development. The prevailing social environment stalled progress of road construction projects, such as the blocking of work by protests in 2013 after a failure to pay workers’ salaries. “The 60-km project for the link between Tunis and Bizerte took about two years to complete,” Chokri Driss, former president of the Tunisian Federation of Construction Entrepreneurs, told OBG. “Now, the Sfax to Gabes highway, which began in 2009, is still not finished, with about 50-km to be done out of a total 130 km.”
The TD800m (€307m) Sfax-Gabes highway was delayed between 2010 and 2015 due to difficulties in securing the necessary land plots, creating a critical obstacle for project completion. However, a resolution was found in July 2015 and the first 100-km section of the highway was opened in August 2017. An 84-km project between Gabes and Ras El Jedir had similar delays due to land acquisition and is scheduled to open in 2020 after a previously expected 2017 completion date.
Payment for these improvements is being assisted by multi-lateral loans. In 2015 the World Bank approved a $230m loan to develop and improve Tunisian roads in rural areas as part of the “Road Transport Corridors Project”, focused on widening 146-km of roads in some of the country’s least connected areas. According to the World Bank, the project will help link the 374,000 people living in rural areas to coastal parts of the country. Expected to be completed in 2020, the programme will renovate key road networks, including the link between Jebel El Oust, near Tunis, to Zaghouan and the link between the central Tunisian city of Kairouan and the coastal resort town of Sousse.
With as much as 98% of all cargo entering Tunisia through its maritime port network, sea transport remains an essential tool to maintain the country’s dynamic trade relations. There are currently eight ports in operation across the country, although lack of adequate investment to modernise facilities has left some of them unable to properly deal with the new generations of cargo ships. This is expected to change through a programme of investments that will use both public funds as well as attract private investors through public-private partnership agreements (see analysis). Labour protests and some retraction in traffic due to regional instability have also led to irregular performance volumes since 2011.
Total import-export traffic across Tunisian ports reached 21.6m tonnes in the first nine months of 2017, according to Tunisia’s Merchant Marine and Ports Authority, representing a 4.8% reduction compared to the same period of the previous year.
With the rising importance of tourism for Tunisia’s economic development, the air transport sector is taking steps to ensure its compatibility in the space. According to the Ministry of Transport, the air sector accounts for 52% of tourist arrivals, 2% of GDP and provides 35,000 direct and indirect jobs. The country has nine international airports, including the Tunis-Carthage International Airport, the premier facility located in the capital, with a number of the other airports receiving their traffic on a seasonal basis, catering for tourist charter flights, the majority of which link directly to several European cities.
Following the 2011 revolution, regional instability and a string of terrorist attacks in the country’s tourism areas in 2015 translated into several years of erratic passenger figures and uncertainty for the sector. However, a positive shift in security perceptions saw the country receive growing numbers of foreign visitors. According to the Ministry of Tourism and Handicrafts, tourist arrivals reached 7.1m during 2017, a 23.2% increase from 2016. This was led mainly by growth in air traffic with European and Maghreb countries, which rose by 20% and 31%, respectively. Despite its increasingly widening net of international connectivity, the performance of Tunisia’s air sector’s remains intrinsically linked to its nearest air markets.
Tunisia’s air sector has become more globalised in recent years with the expansion of the national carrier, Tunisair, into sub-Saharan Africa. Tunisair increased the number of links from Tunis to other African capitals from three to nine between 2009 and 2017, with more expected to come. In mid-2016 the firm began venturing further abroad with twice-weekly flights connecting Tunis with Montreal, Canada, after the acquisition of a new Airbus A330, bringing its fleet total to 29.
Despite recent expansions, Tunisair has faced several years of instability, suffering from delays and a reduction in passenger numbers. As of March 2017 the company operated daily connections to Africa, Europe and the Middle East and although it has been expanding its reach, Tunisair continues to face financial difficulties. In 2014 a restructuring plan was approved by the Tunisian state, which owns over 64% of the airline. Part of the TD130m (€49.9m) strategy included the drastic reduction of its formerly 8200 employees, with roughly 1000 workers initially made redundant once the implementation of the plan began in 2015. Additionally, 400 workers were asked to participate in voluntary departures as of 2016.
Improving Tunisair’s competitiveness will be critical following the signing of the “Open Skies” agreement, introducing low-cost carrier connections between Tunisia and the EU in December 2017 and expected to bring an additional 800,000 travellers to the country annually following its implementation in 2018. The home of Tunisair, the Tunis-Carthage International Airport, is exempt from the agreement for a period of five years, with Tunisian authorities hoping this will give the carrier enough time to find financial equilibrium.
Increased urbanisation and rising inner-city traffic has spurred the need to multiply urban transportation options, especially in the capital, where citizens face growing commutes in order to move between the central districts and the suburbs.
A lack of investment in maintenance has worsened the public transport situation in Tunis. A study by the World Bank in 2015 found the city had only 220 functioning buses to cover a similar number of bus lines. Under-investment is partly caused by management of the urban transport system under a grouping of public companies in charge of different transport systems. As bus and train fare increases are capped by the government, the cost of transport is no longer covered by user fees, leading to the accumulation of debts by transport providers and poor service provision.
In late 2017 the Tunisian government began the development of the “National Transport Master Plan for 2040”. This is likely to prioritise necessary expansion of transport networks for the future, which may make it easier to mobilise private and domestic investments for the sector. The strategy document is scheduled to be ready during the first half of 2018.
The capital of Tunis is serviced by six tramway lines extending 48-km, with additional links to the nearby suburbs secured through a 23-km network of railways. A third, 18.8-km light railway line connects the northern neighbourhoods of La Marsa, La Goulette and Sidi Bou Said to the city centre.
The planned Rapid Rail Network is aimed at improving city mobility by reducing traffic between the outskirts and the city centre. Plans for the estimated $2.8bn project detailed by the European Investment Bank, one of its donors, expect the network’s five express railway lines to move roughly 600,000 people daily between the city and its suburbs once it is completed. In 2013 the contract to build the first phase of the project was awarded to a consortium comprised of French civil-engineering firm Colas, global industrial-manufacturer Siemens and Tunisian civil-engineering firm, Somatra-Get. The initial phase will extend for 20-km and is budgeted to cost €140m, with initial government estimates aiming for the project to be operational by October 2018. However, an announcement in March 2018 to local media revealed only one of the new lines would be operational as early as 2019.
In the east of the country, planning for the construction of a 70-km light-rail system in the coastal city of Sfax is expected to begin in 2019, according to government plans. Budgeted at €1.4bn, the completion of its first section is expected as early as 2021. The system will likely involve a combination of trams and a network of priority lanes for buses. In July 2017 a new international railway connection between Tunis and Annaba in the east of Algeria was inaugurated and currently operates thrice weekly.
Ongoing investment in transport networks can have a long-term and positive effect on Tunisia’s economic development. Better roads, ports and airports will likely help improve logistics operations for domestic and international businesses operating in the country and help support the steady recovery of the valuable tourism industry. Equally important will be the expansion of the internal connections to support lacking development of the country’s interior. The execution of transport projects, however, is likely to depend on how well the country can continue to attract multi-lateral financing institutions and private operators to participate in infrastructure projects.
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