As a result of high oil revenues over the past decade, Algeria’s transport infrastructure has been significantly overhauled, benefitting from generous public sector spending. Tens of billions of euros have been channelled into roads, rails, ports and airports over the past five years alone, with an equivalent amount due to be disbursed through 2019.


During the 2010-14 period, the government allocated €30.1bn to be used for road expansion and maintenance, as well as improvements in port infrastructure, with an extra €27.2bn invested in the railway sector and air transport infrastructure. This has allowed for heavy investment in urban transport through the establishment of several tramway lines across Algerian cities, as well as large-scale improvements to airport infrastructure.

The high level of construction activity along major thoroughfares and in city centres stands in stark contrast to the economic stagnation of Algeria’s European counterparts (see Construction chapter). However, as the country’s economy continues to grow, persistent bottlenecks in land transportation and port infrastructure are negatively impacting growth, underscoring the need to improve efficiencies for the businesses operating in the country.

Work To Be Done

The scope of work that remains to be done is clear. Aside from being the largest country in Africa, with an area of 2.3m sq km, Algeria’s population density is largely skewed towards the northern mountainous areas by the coast. This has resulted in transport congestion around the main cities and major road links, negatively impacting access to key ports for importers and exporters and putting upward pressure on transportation costs. This concentration also means that areas in Algeria’s southern fringes and central plateau region have suffered from low connectivity to major transport routes and hence, poor access to export hubs.

Overcoming these bottlenecks has been a government priority. Investment in roads, railways and port infrastructure is set to not only reduce distribution and export costs, but also minimise developmental differences and help encourage growth outside traditional urban areas, particularly in manufacturing.

Road Expansion

A considerable degree of recent infrastructure work has been focused on expanding the country’s road network. According to the Ministry of Public Works, the state has invested €46.9bn in road infrastructure over the past decade. The recently announced five-year plan, which will run from 2015-19, will maintain the government’s focus on road development, with authorities unveiling a AD4trn (€37.2bn) investment plan for the country’s roads over that period (see analysis).

Pressure to continue developing road connections across the country is ever growing. According to figures from the Ministry of Transport, Algeria will have 20m vehicles on the roads by 2025, compared to 8m at present. This is driven by several factors, including rising incomes, which have led many Algerians to seek private transportation as a day-to-day option. “Another parameter for the heavy reliance on automotive transport is the price of petrol, which makes the cost of personal vehicles minimal,” Mohamed Mahiddine, director general for roads at the Ministry of Public Works, told OBG. Furthermore, as in the rest of North Africa, the bulk of domestic freight is transported by road. In this context, road expansion in Algeria has become an issue both of reach and capacity given the country’s growing traffic.

One of the major projects under development has been the East-West Highway, which will link the country from the Tunisian border all the way west to Morocco, tracing Algeria’s northern urban centres. Most of the highway is completed; however, the remaining 87-km section on the east of the country has suffered delays due to a tunnel collapse, as well as repeated disputes over financial compensations and contract terms between the government and COOJAL, a Japanese consortium in charge of this section of the highway (see analysis). The project’s completion date has been postponed to 2015.

Sabri Bencherif, general manager of Algerian transport company GFT, told OBG, “The East-West Highway has slightly improved the situation, but so far the lack of the auxiliary roads to the ports makes the road infrastructure insufficient.”

In 2014 work is slated to commence on another ambitious project – the 1020-km Hauts Plateaux Highway. Similar to the East-West Highway, the new road will link the country from one side to the other, though tracing a more southern route, along Algeria’s mountainous plateaux. The project is expected to cost roughly €6.62bn and connect several cities in the region, as well as export hubs in the north of the country. To this end, construction is progressing on 23 auxiliary roads linking the East-West Highway and the Hauts Plateaux Highway and connecting them to port cities in the north (see analysis).


Some of Algeria’s larger ongoing road projects are working to increase connectivity by forming one component of a larger network. The Trans-Saharan Highway, for example, is a multi-country project that eventually aims to link Algeria, Mali, Nigeria, Tunisia, Niger and Chad through roadways totalling 9400 km. The project began in 1975 but has been marred by financing issues and political instability in neighbouring countries over the years. However, momentum is picking up. In 2013 Algeria announced a €36.8m investment in the modernisation of some of the links of the continental highway on the Algerian side. Only about 200 km of links are missing, with work on the road sections between the town of Silet, towards Timiaouine, and Tin Zaouatine currently under construction. Algeria’s total investment in the project will be €1.84bn for over 3000 km of road; however, full completion will depend on the finalisation of road sections in Mali and Chad.

“This project will be important to increase economic exchanges between Algeria and our neighbours. Furthermore, it will potentially help to bring a lot of informal commerce that happens in the border areas into the formal economy,” Mohamed Ayadi, secretary general of the Liaison Committee for the TransSaharan Highway, told OBG.


As part of wider efforts to alleviate congestion on the country’s roads and shift freight transportation to lower-cost, higher-volume networks, rail has become a priority for the government. There are currently 4500 km of railways spread across the country, but a government plan to boost freight and passenger rail transport will see that number rise significantly. In a speech in February 2014 the minister of transport, Amar Ghoul, said that the length of railway lines in Algeria is expected to extend to 12,500 km in the medium term.

Passenger rail is also receiving close attention given the predicted increase in annual passenger figures, which are expected to rise from 30m in 2011 to 80m by 2015, according to the National Company for Rail Transport (Société Nationale des Transports Ferroviaires, SNTF), the government’s railway body. Commuter transport to the outskirts of major cities will represent 93% of all passenger traffic, according to SNTF estimates, though the plan also aims to reduce travel times on some major intercity routes. Railway authorities expect that the current modernisation process will reduce travel times for the trip from Algiers to Annaba from 10 to 5.5 hours, for example. Shorter travel times are key for making long-distance train travel more attractive.

Over the long term, travel by rail in Algeria is set to become easier thanks to the construction of a high-speed railway. A new €9.6bn high-speed line will run for 1385 km and link the country from east to west. The tender to build the railway was recently awarded to the Chinese contractor China Rail Construction Corporation. Furthermore, the SNTF is investing €1.2bn on the modernisation of the country’s railway equipment. In August 2014 it signed a contract with French manufacturer Alstom to supply the Algerian railway system with 17 new diesel-powered railway carriages to improve connections between the capital Algiers and the other main cities.


Maritime transport accounts for 95% of the country’s international trade, according to the European Commission. In terms of container traffic – as evidenced by the country’s sizeable current account deficit and high level of manufactured goods imports – Algeria remains a major importer, with 800,000 inbound twenty-foot equivalent units (TEUs) per year, versus 50,000 TEUs of exports departing from Algerian ports. This trend is forecast to continue, with imports up 8% in 2013. Of the 800,000 TEUs imported yearly, about half come from Europe, while up to 230,000 TEUs arrive from Asia.

Container & Bulk

The majority of containerised sea-bound cargo traffic passes through the port of Algiers, which is managed by Entreprise Portuaire d’Alger and DP World. In the first quarter of 2014 the total amount of cargo handled in the capital’s port rose 17.8% to reach 2.7m tonnes, according to government figures. Of these, container traffic remained the most significant contributor, accounting for 863,920 tonnes over the period. Bulk cargo handling was led by hydrocarbons, which totalled 495,434 tonnes, and agricultural products and food commodities, which accounted for 503,568 tonnes. On the lower-volume end of the spectrum, the port of Algiers also handled 113,668 tonnes of construction materials in the first quarter of 2014 – mostly cement to make up for the insufficient domestic supply. In total, of the 2.7m tonnes of cargo handled by the port over the period, up to 74% were imports.

“The traffic through most Algerian ports has risen significantly over the past few years driven by growing imports of construction materials, which are required for the development of transportation infrastructure throughout the country,” Noureddine Hadjioui, CEO of Port d’Arzew, told OBG. With many largescale construction projects in the pipeline, this trend is likely to be sustained. “The outlook for transit volumes of construction materials is very encouraging, especially since demand for port facilities is set to increase in the coming years,” Djelloul Achour, managing director of the Port de Béjaïa, told OBG.


Most maritime trade is handled by private companies. The public shipping outfit Compagnie Nationale Algérienne de Navigation (CNAN) has seen its influence wane over the years due to low government investment; however, the situation is being reversed, as authorities make efforts to match port revamping with the reinvigoration of the national shipping fleet. An AD120bn (€1.1bn) investment programme will fund the acquisition of 27 new vessels, adding to the company’s 16 existing ships. Of the new vessels, 25 will be cargo ships, while the remaining two will focus on passenger transport.

Capacity Constraints

Despite its reliance on imports arriving by sea, Algeria’s transport infrastructure is hindered by the capacity of its 10 ports, most of which have comparatively shallow draughts and, as such, can only handle ships of a limited size. Because larger ships cannot dock, satisfying the high demand for imports requires repeated trips using feeder vessels, which raises overall transport costs. “As an example, a 20-feet container from Asia will cost around €1470 to bring to Algeria, and a 40-feet container from Asia will go as high as €3381,” Farid Belbouab, deputy managing director of CMA CGM Agencies, told OBG. Another factor contributing to higher costs is the limited volume of containerised exports from Algeria’s ports. Mohamed Nait Ibrahim, managing director of Universal Transit, told OBG, “Compared to other destinations, the high price of sending a container to Algeria is partially due to the fact that it leaves the country empty.”

Besides these high transportation costs, bureaucracy also adds to the burden, with lengthy average waiting periods to unload merchandise in Algerian ports increasing costs even further. “Since it is connected to large road and rail networks, Port Of Ghazaouet serves a vast hinterland, which combined with the efficiency of the transport chain, port services and the quality of Customs, is helping to optimise transit costs for businesses in foreign trade,” Brahim Abdelmalek, CEO of Port de Ghazaouet, told OBG. Some operators have been trying to avoid the problems related to long waiting times for unloading and clearing merchandise with the creation of dry ports. In February 2014 the SNTF announced an uptick in the number of containers transported to dry-port areas around the Algiers port, from 72 to 300 containers per day. However, due to the port’s central location and impact on some of the city’s thoroughfares, authorities have been trying to reduce the amount of truck transport. To the west, the manager of the Oran port, Entreprise Portuaire d’ Oran, has likewise announced plans to build a €22m dry port. In March 2014 state-owned SNTR also announced a joint venture with French logistics group APRC to both establish and manage several logistics platforms across Algeria.

Although dry ports could potentially have a positive impact in terms of creating more room for processing cargo, an easing of bureaucracy will also need to be implemented. “The amount of paperwork that delays the transport of merchandise from the port to the dry port translates into a lot of loss efficiencies, so the concept is still not working well in Algeria thus far,” Belbouab told OBG (see analysis).

Management of port facilities falls under the Ministry of Transport, with a different state company managing each commercial port. Most of Algeria’s ports are exclusively managed by the government, with a few exceptions. In 2004, Singapore-based private firm Portek signed a deal with Entreprise Portuaire de Béjaïa, the public firm that runs the city’s port, to manage two container terminals for a period of 20 years. In addition, port operator DP World took control of one terminal at the port of Algiers in 2009 in a 30-year concession that also awarded management of the container terminal at the port of Djen Djen, east of the capital. “Apart from Djen Djen, there hasn’t been a new port built since independence, meaning large congestion in the major cities,” Adlane Belabdelouahab, managing director of Turkish shipping firm Arkas, told OBG. “There are plans on the table for a modern port that could rival those in other parts of the Mediterranean, but a concrete study must first be carried out.” Additional private and public investment is currently being directed towards port expansion to improve handling conditions and capacity (see analysis).

Port Potential

With growth in the port of Algiers limited by the lack of available space for increasing capacity, a plan to build a new port in a location away from the bay of Algiers has been a topic of discussion for several years. The coast between Ténès and the west of the capital has been suggested to house the new facility, and the government recently announced the conclusion of studies to determine the port’s ideal location; however, no specific plan has as yet been disclosed.

With import inflows expected to continue climbing, a new port on the central coast would do much to alleviate congestion. “Algeria could build a port that is just as big and relevant as Tanger-Med in Morocco,” Laurent Vandewinckel, general manager at Maersk, told OBG. “This would be a great benefit for the country’s economics, and improve the quality and diversity of imports for the local market.”


With 52 airports served by paved runways, Algeria has successfully developed a well-distributed network of aviation facilities to cover the massive territory, though domestic volumes remain muted. Growing international traffic – mostly due to the rising number of connections to the East and Europe – however, has pushed for the modernisation and expansion of infrastructure at key nodes.

The number of connections has also been increasing, though authorities have been reluctant to fully open the country’s air traffic market in order to help protect the profitability of flag carrier Air Algérie. While this has largely served to keep ticket prices elevated, it has also limited a faster rise in the number of international travellers arriving in the country. Authorities have progressively introduced changes to the 1998 law regulating civil aviation, opening the door for foreign companies to operate flights in and out of Algeria under certain conditions – namely bilateral agreements. However, there has so far been no clear step towards the signing of an open skies agreement with the EU as, for example, neighbouring Morocco did in 2006.

The Houari Boumediene airport in Algiers remains the country’s busiest air hub, with 5.8m passengers in 2014. Passenger figures are still largely driven by a strong increase in the number of international passengers, which rose 10.7% to 4.2m in 2013. Domestic passengers arriving in the capital also rose over the year, by 7.4% to reach 1.6m.


However, these consistent increases have been putting a strain on airport infrastructure, which is projected to reach saturation by 2018, according to the authorities. As such, a programme to expand airport capacity was started in 2014, with authorities building a new €312m terminal that will be able to accommodate 10m passengers by 2018.

This build-out is far from being the only one. Oran’s airport is also expanding capacity, constructing a new AD14bn (€130.2m) terminal able to receive 2.5m passengers, as well as extending the existing runway to allow the airport to receive more flights. “Oran’s airport will need to update its cargo capacity in order to keep pace with the development of the auto industry in Oran,” Abdelaziz Abderrahmane Lotfi, director general of Union Trans, told OBG. In a similar spirit, the Constantine airport opened its new 80,000-sq-metre terminal in June 2013. At a cost of AD1.2bn (€11.2m), the new terminal will enable the airport to handle up to 1m passengers per year.

Even regional airports are seeing upgrades to boost international connectivity. Although much smaller, the Béjaïa airport to the east of Algiers has also witnessed a considerable increase in passengers, which rose to 295,000 in 2013. This has mostly been driven by Algerians living abroad who return using the airport’s direct connections to France and Belgium, especially during the summer months. A current plan to expand the runway nearly six-fold, from the current 500 metres to 2900 metres, will allow Béjaïa airport to receive larger aircraft in the future.


Although domestic flights between Algeria’s major airports are becoming increasingly commonplace, a lack of competition has greatly prevented a corresponding increase in the connection choices available to customers. While international airlines are allowed to serve various airports in Algeria, domestic connections are still limited to Air Algérie and Tassili Airlines, which is wholly owned by Sonatrach – the state-owned energy company.

Developing more internal connections between Algerian cities will be essential to promoting air transport in the country as a viable and attractive option. For this to happen, however, more competition needs to be allowed, particularly at a time when greater investment in road connections and railway links will eventually lead to shorter land travel times.

Further highway development is likely to negatively impact the sector, as evidenced by the 60% dip in the number of passengers travelling by air between Oran and Algiers in the wake of the opening of the first section of the East-West Highway.

The lack of competition in Algeria’s air transport market also works as a deterrent to growth in the tourism industry. Indeed, this has had a negative effect not only on the number of travellers entering Algeria, but also on the ease of travelling around the country. “Algeria remains an expensive destination to fly to as a result of the absence of a truly open skies policy, although various initiatives are currently being considered in this regard,” Thomas Bommer, director-general of Swissport, told OBG.

Another challenge being faced by companies interested in serving the Algerian market for international connections is the sales structure. Given the low penetration of credit cards and rudimentary online payment systems, airlines offering flights to the increasing number of Algerians travelling abroad need to open brick-and-mortar distribution networks to really establish a presence in the market.

Although there is currently no low-cost operator serving Algeria internationally or domestically, some airlines that operate a low-cost model in European countries, such as Air Berlin, have recently started to serve Algeria – though they are competing on an equal basis with traditional airlines for the profitable routes into the country. In this sense, domestic airlines have an economic advantage, as they are not forced to compete with low-cost providers, which is the case in many other markets.

Urban Transport Options

Some of Algeria’s most prominent transportation projects in recent years have been urban networks involving tramways and metros. The need is clear: with a fast-growing population and densely-urbanised cities, some of the largest population centres in the country are suffering from significant traffic congestion (see Real Estate chapter). While private automotive transport remains the dominant means of travel, the establishment of well-managed and relatively efficient public transport systems is slowly beginning to attract growing numbers of commuters.

According to the Entreprise du Métro d’Alger – which manages the capital’s metro, along with the tramway systems in Algiers, Oran and Constantine – as of August 2013, up to 39m passengers had used the capital’s metro and tramway lines since their inception in 2011 and 2012, respectively. In Oran, between the start of operations of its tramway system in May 2013 and August of the same year, 1.5m people had ridden on the new system.

At present, Oran, Algiers and Constantine are the only cities to have such public transport systems; however, 12 other cities, including Batna and Béjaïa, are set to receive tramway systems. In May 2014 construction started on the new tramway in the city of Sétif, for example. The AD38bn (€353.4m) project was awarded in 2013 to a consortium made up of companies including Turkey’s Yapı Merkezi and France’s Alstom. The 30-station, 22.4-km line is expected to transport 5000 commuters per diem.


In July 2014 a consortium comprising South Korean contractor Daewoo and GS Engineering & Construction was chosen to build the inaugural line of the tramway system in the eastern city of Annaba. The project will cost €430m and is expected be completed in 36 months, with a second tramway line planned for the city at a later stage. The €250m Mostaganem tramway line, which will stretch 14 km with 24 stations, is already under construction. The project was awarded in 2013 to a Franco-Spanish consortium made up of Corsán-Corviam Construcción, Isolux Ingeniería and Alstom.

In July 2014 a tender for the building of a tramway system in the city of Batna was also launched. The project will involve building a 15-km line that will be served by 25 stations. Similar tramway projects are also expected to be tendered soon for the cities of Sidi Bel Abbès, Ouargla and Tlemcen.

The networks of existing tramway systems are also in the process of being upgraded and expanded. In Algiers the expansion of the capital’s tramway system saw the opening of a new 4.2-km eastbound line in April 2014, which includes six new stops linking Bordj El Kiffan to Café Chergui. Also under way is construction on another extension linking Café Chergui to Dergana, which is set to open in the summer of 2015. A further 6.5-km extension towards the west of the city, connecting Les Fusillés to Bir Mourad Raïs, is also on the horizon.

Battling Inefficiency

Algeria’s transport network has historically been constrained by operational inefficiencies, which drive up costs and slow down turnaround times. According to the 2014 World Bank “Doing Business” report, Algeria ranked 133rd out of 189 countries in terms of ease of trading across borders, down from 131st in 2013.

This very low ranking is due to several factors, including the lengthy waiting periods for exporting and importing procedures. Indeed, bringing a container into the country takes an average of 27 days, between document preparation, Customs clearance and port handling. Document preparation alone can take up to 10 days (see analysis).

For a nation that depends so heavily on imports and maritime trade, these long waiting times translate to significant additional costs and increased prices for consumers. “The idea of a one-stop bureau to deal with all the paperwork has yet to take root, so paperwork and cargo need to move around between several institutions before they can be taken out of the port,” Belbouab told OBG.

Things seem to be moving in the right direction. Béjaïa Mediterranean Terminal, a joint venture between state-owned Entreprise Portuaire de Béjaïa and private port operator Portek, tasked with managing the city’s port facility, has already implemented a guichet unique (single window) in order to ease merchandise handling in the port’s facilities.

In an interview with local media in January 2014, Ghoul announced that the guichet unique is also being tested in the port of Algiers before being rolled out to other ports in the country. Greater efficiencies could also be achieved by increasing the use of technology and electronic equipment as a means to facilitate Customs and clearance processes in the country’s ports. However, implementation of new kinds of technology often conflicts with the demands of local labour unions, making it difficult to reconcile the pursuit of greater efficiency with the pressures on the state to protect jobs in the sector.

Several market operators, in addition to the EUAlgeria Association Council, have stressed the need to resolve disputes arising from a 2010 Customs law forcing shippers to collect payments for the compte d’escale (disbursement account) from customers up to 90 days after delivery, after which point they are unable to repatriate the funds. This has led many companies to accumulate large reserves of blocked money in the Customs authority – because of this, there is an estimated €147m-368m currently frozen in the market. While many in the industry and abroad advocate a reform of these procedures, no concrete government action has been taken thus far.


The new five-year plan and its heavy focus on infrastructure expansion demonstrates the government’s commitment to boost transport capacity over the coming years. The country’s networks have already seen significant improvements in terms of hard infrastructure, with new roads and railways, expanded draughts and new berths at ports, and larger terminals at major airports. This sort of capital-intensive spending is likely to continue, even as the state sees a drop in oil revenues – its primary income.

More crucially, the government is gradually shifting attention to soft infrastructure to ensure that processes and execution keep pace with capacity upgrades. This necessitates improvements to Algeria’s Customs processes, container handling and multimodal facilities, as well as increased competition – all of which have the potential to significantly reduce both distribution costs and shipping times.