New capital projects, from upgraded port facilities to multi-lane motorways to underground metros, have been a hallmark of Algeria’s transport sector in recent years. While bottlenecks persist – including an over-reliance on road transport and limited rail connectivity – generous public spending on transport infrastructure, largely funded by oil and gas revenues, has ensured continuous development in the segment since the early 2000s. According to the Ministry of Transport (MoT), in the period from 2010-14, the sector benefitted from a €35.7bn allocation. The private sector has taken a leading role in the transport and communications sectors, accounting for 83.5% of total spending in 2014 and contributing €14.2bn to GDP, up from €8.6bn in 2010 and €7.6bn in 2008.

While the sharp decline in hydrocarbons revenues since 2014 is leading the government to re-evaluate spending priorities, the government appears to remain committed to maintaining capital investment in the sector. The government’s latest five-year plan, which accounts for the years 2015 to 2019, allocates AD832.7bn (€7.7bn) to the transport sector, ensuring significant continued development of transportation networks in the coming years.

Taking Stock

Algeria’s transport sector has had some significant accomplishments in the past decade, including establishing the country’s first underground metro, extending the road and rail networks, and making large-scale improvements to port and airport infrastructure. While these efforts have increased connectivity within Algeria’s vast territory and facilitated travel in the capital, the sector continues to suffer from congestion issues and high costs, as well as fragmentation in the logistics and distribution segments. “Intermodal transport is crucial for the modernisation of the transport system here. To that end, we expect to see the Algiers airport connected to the Algiers metro in the next four years,” Tahar Allache, CEO of Aéroport d’Alger, told OBG.

In a country that relies primarily on road transport for the overland movement of goods, congestion issues in a fragmented road network have kept transport costs high. Meanwhile, an insufficiently developed rail network functions predominantly as a mode of passenger transport, with only 2% used for overland freight transport. Inadequate port infrastructure and limited connectivity to logistics platforms also continue to have a negative impact on the country’s logistics performance, while a lack of competition within the air transport sector has inhibited domestic market development.

The sector’s current five-year plan is designed to help it overcome some of these challenges. The plan maintains an emphasis on extending the rail and road networks, while aiming to improve port performance with the construction of a new port and increase air and maritime fleet capacity.

Road Network

With 97% of domestic freight being transported by road, much of the recent infrastructure work in the transport sector has aimed to expand the country’s existing 112,000-km road network. According to the Ministry of Public Works (MoPW), in the decade to 2014 the government invested €46.9bn in road infrastructure. Two flagship projects in particular – the East-West Highway and the Hauts Plateaux Highway – showcase the government’s commitment to the development of the road network, in a bid to improve efficiency and reduce transport costs. Representing a combined investment of €16.2bn, the two projects are expected to significantly reduce congestion on several national roads, especially on the outskirts of coastal cities, while lowering distribution costs for outlying areas.

These extensions to the road network come at a critical time, when congestion is negatively impacting transport costs and demand continues to rise. According to the MoT, the number of vehicles on Algeria’s roads is forecast to increase from 8m at present to 20m by 2025. In the capital alone, an estimated 4m vehicles are active on a daily basis. A study by the MoPW estimates that the newly-finished EastWest Highway will absorb as much as 85% of national traffic, including 50% of trucks.

East-West Highway

Extending over 1216 km, the East-West Highway connects Annaba, near the Tunisian border in the east of the country, to Tlemcen, near the Moroccan border in the west of the country, passing through Algeria’s northern urban centres en route. Construction of the €9.6bn six-lane highway began in 2007 and was split into three sections.

The western and central sections, totalling 528 km, were awarded to a consortium made up of China Rail Construction Corporation and China International Trust and Investment Corporation in 2006 at a value of €5.5bn. The eastern section – a 399-km stretch – was awarded to the Japanese Consortium for Algerian Highways, made up of Nishimatsu Construction, Itochu, Hazama, Kajima and Taisei Corporation, at a value of €3.9bn. The remainder was contracted to local companies. Despite delays affecting the eastern section of the highway, the entire highway is set to be open to circulation by end-2015, with the exception of a 5-km section in Djebahia (Bouira), prone to landslides, where maintenance work to stabilise the soil is ongoing. The minister of public works, Adbelkader Ouali, told local media in November 2015 that the maintenance work could stretch until mid-2016.

“The Bouira area remains quite congested,” Lakhdar Rekhroukh, CEO of Cosider Group, told OBG. “While there is the auxiliary road project currently under construction there, it is nonetheless important to develop rail infrastructure there in order to improve transport to and from the port.”

Auxiliary Roads

Work on 15 auxiliary roads totalling 900 km is also under way. The freeways will connect several northern cities as well as the country’s 11 ports to the East-West Highway. In October 2015 the 100-km freeway linking the port city of Béjaïa to the East-West Highway was the most advanced, having reached 42% completion, according to the state-owned National Highways Agency (Agence Nationale des Autoroutes, ANA). This was followed by the 24%-complete 13-km freeway connecting the port of Ghazaouet (Tlemcen), the 21%-complete 26-km freeway from the port of Oran and the 20%-complete 20-km freeway from Batna. Least advanced was the 48-km freeway connecting Tizi Ouzou to the new highway, with 17%.

As construction of the main highway comes to an end, authorities are turning their attention to the highway’s support facilities. The minister of public works announced the creation of a new agency in October 2015. The Algérienne des Autoroutes (ADA), will be in charge of building the ancillary infrastructure, including toll stations. The new agency is the result of a merger between the Agence de Gestion des Autoroutes (AGA) and ANA. As of October 2015 the toll payment systems were undergoing studies.

Hauts Plateaux

Like the East-West Highway, the 1020-km Hauts Plateaux Highway will trace a horizontal route across the country, though further south, connecting Tlemcen to Tébessa and traversing eight wilayas (provinces). Unlike the East-West Highway, execution of the roughly €6.62bn project was awarded to a mix of public and private domestic companies. Construction has been divided into three large and critical sections: a 220-km eastern section, a 495-km central section and a 305-km western section. The Hauts Plateaux Highway and the East-West Highway will also be connected by 12 auxiliary roads.

Algerian contractor Cosider is set to kick off the infrastructure works with a 102-km section connecting Batna and Khenchela. Though work was scheduled to start in November 2014, in October 2015 it had yet to begin. Once completed, the road is expected to improve connectivity between the eight wilayas and the more developed economic centres in the north, stimulating industrial activity.

Connecting Dots

Another highway currently under construction, the North-South Highway, will intersect the East-West Highway and provide links to the Hauts Plateaux Highway. Incorporating some existing roads, the North-South Highway will also be a component of a much larger road – the Trans-Saharan Highway – a multi-country 9400-km route connecting Algiers to Lagos, and traversing a total of six African countries: Algeria, Mali, Niger, Nigeria, Chad and Tunisia. First proposed in 1975, the project aims to promote trade between the Maghreb and West Africa, and between these and the European continent via the Mediterranean. The last section of the Algerian component, a 395-km stretch from Silet (Tamanrasset) to Timiaouine, is expected to be complete in 2017. According to the MoPW, the project was allocated €2.7bn from 2005 to 2014. Once complete, the Algerian section will extend over 3000 km.

Air Transport

Also facing rising demand are the country’s airports. With 52 airports served by paved runways, Algeria has a well-distributed network of aviation facilities, though with limited capacity. “Algeria’s air transport market has been growing significantly in recent years, with traffic at the airports of Algiers and Oran registering annual growth rates for international traffic of over 8% for aircraft movements and over 24% for cargo volumes,” Thomas Bommer, CEO of ground handling company Swissport, told OBG.

A rise in international traffic is attracting a growing number of international carriers, with some 15 now serving the North African market – including two Algerian carriers – although capacity remains an issue. “Algeria’s geographic position is an inherent strength for the air transport sector,” Allache told OBG. “As a result, as economic growth continues in sub-Saharan Africa, the country’s potential as a hub will become increasingly evident.”

Most international flights connect at the capital’s Houari Boumediene Airport, Algeria’s largest, which welcomed 6.4m passengers in 2014, up from nearly 6m in 2013. “Algeria is experiencing over 250,000 movements per year, with annual growth of nearly 5%,” Youcef Safir, general manager of Entreprise Nationale de Navigation Aérienne, told OBG. “In this context we are investing in modern equipment – such as radar, ADSB, VSAT and microwave transmission – as well as new control towers at five major airports.”

The rise in international demand has outpaced domestic activity. With Algeria having yet to adopt an open skies policy, the domestic market remains largely exploited solely by the country’s two domestic companies: the national carrier Air Algérie and Tassili Airlines, a subsidiary of the state-owned energy company Sonatrach, and the second airline to establish domestic flights in 2013. The lack of competition has had a stifling effect on the market, with growth in domestic travel continuing to lag behind growth in international traffic. Domestic passenger traffic at the Houari Boumediene Airport grew 7% in 2013, reaching 1.69m, compared to almost 11% growth in international traffic.


To meet demand, authorities are working to expand and modernise airport infrastructure at key nodes. The Houari Boumediene Airport is set to receive a brand new terminal on the west side, increasing its annual capacity to 10m passengers by 2018, when the expansion is expected to be complete. Work on the 73-ha extension started in late 2014 and is expected to cost AD90.3bn (€830.8m).

In the longer-term, a third terminal on the east side of the facility is also part of expansion plans and is projected to become operational in 2032. Access to the new facilities will be facilitated by a planned metro line connecting El Harrach to Bab Ezzouar, expected to come on-line by 2020.

Outside the capital, Oran’s Ahmed Ben Bella Airport, the second-largest in the country and a major hub for the energy sector, will also see the addition of a new international terminal, raising the airport’s annual capacity from 800,000 to 2.5m. With a price tag of AD14bn (€128.8m), Algerian contractor Cosider began construction of the new facility in late 2012. Despite an initial delivery date of end-2015, delays have pushed the expected completion date back to March 2017. A number of regional airports, including the airports of the two port cities Béjaïa and Annaba, are also undergoing expansions.


Algeria is home to two domestic carriers, both of whom provide international services. The largest is state-owned Air Algérie, which has been undergoing reorganisation since October 2015. The airline’s restructuring plan will see the creation of four subsidiaries: one catering to passengers, another to freight transport (cargo), a third to handling (loading and baggage check) and a fourth for aircraft maintenance and repair.

The airline’s plan also includes the reorganisation of flights and the expansion of the air fleet from 44 units to 59 by 2017. By end-2016 the airline will have 16 new aircraft, including eight Boeing 737-800s and two Boeing 737-700Cs. To improve its pool of human capital, in late 2014 Air Algérie also signed a contract with the Oxford Aviation Academy for the training of 200 new pilots. The restructuring is expected to increase the competitiveness of the national carrier and lead to greater efficiencies, paving the way for the possibility of an open skies policy in the medium-term. With a 12-aircraft fleet, Tassili Airlines has a significant role in the domestic transport market, with 40% of its activity reserved for charter flights. The carrier’s international presence has expanded in recent years. It now has three regular flights, from Algiers to Marseille, Strasbourg and Lyon, and in late 2015 local media reported near-term plans to establish an Algiers-Paris flight.

Maritime Transport

With 95% of international trade, and 98% of hydrocarbons trade, being transported by sea, maritime transport is of obvious strategic importance to the Algerian government. However, it remains the source of substantial inefficiency within the transport sector. Algeria’s 1200-km coast is served by 11 commercial ports.

The country’s two main hydrocarbons ports – the port of Arzew and the port of Skikda – together account for some 70% of national traffic, while the ports of Algiers and Béjaïa together account for another 20%. Most Algerian ports continue to face capacity constraints, due primarily to inadequate infrastructure. With shallow draughts averaging 11 metres, many modern ships are unable to dock at Algerian ports. Because of this, merchandise must be transferred to feeder vessels at trans-shipment hubs such as Algésiras and Valence (Spain), Cagliari (Italy), Marsaxlokk (Malta) and Tanger Med (Morocco). This drives up costs, increases the risk of delays and pushes up congestion.

Given the limited volume of manufactured exports in Algeria – imports are estimated to account for up to 75% of container traffic – a significant number of containers get shipped back to the point of origin empty. This, coupled with cumbersome bureaucratic procedures and lengthy average periods for unloading merchandise, has kept the cost of sea transport high in Algeria.

“For maritime transportation there are two key aspects that deserve priority support. The first priority is the need to organise and optimise physical flows of goods throughout the maritime and port logistics chain. For this, the redevelopment and extension of our docks and logistics platforms are urgently needed,” Mohamed Dib, general director, Société Générale Maritime (GEMA), told OBG. “The second key area is the need to organise and optimise information flows through the establishment of an electronic single window and the automatic processing of information in real time.”

According to the World Bank, in 2014 the cost of importing a container stood at €1186, having increased from €1176 in 2011, while the cost of exporting a container was only slightly lower, at €1133 the same year, up from €1113 in 2011. Though these figures compare well to other Sub-Saharan economies, they are nonetheless significantly higher than neighbours Morocco (€531 for exporting and €865 for importing) and Tunisia (€718 and €812, respectively). The inefficiencies have inevitably affected Algeria’s competitiveness.

At Capacity

Traffic at Algeria’s ports has risen significantly over the past decade, driven primarily by rising imports of cement and construction materials to supply the large number of major public works projects currently under way. This increase has placed further pressure on existing port infrastructure and highlighted capacity constraints, particularly for the treatment of containerised cargo. Container traffic at the port of Algiers, which handles some 60% of national containerised cargo, more than doubled in the decade to 2014, reaching 856,595 twenty-foot equivalent units (TEUs ) in 2014, according to the Entreprise Portuaire d’Alger, the agency in charge of managing the port, along with DP World.

Reduced import volumes as a consequence of the economic slowdown are expected to slow this growth in 2015 and into 2016. Imports were down 11.3% year-on-year (y-o-y) in the first nine months of 2015, from €39.4bn to €35bn, according to the Ministry of Finance. Some ports are already feeling the effects. Traffic at the port of Djen Djen was down 2% y-o-y in the first seven months of 2015, from nearly 2.85m tonnes to 2.78m tonnes, according to the Entreprise Portuaire de Djen Djen (EPJ).

Even so, most Algerian ports will continue to operate at or beyond capacity. While hydrocarbons terminals have improved over the years, most of the country’s ports have seen little expansion, in large part because the port sites are now constrained by urban sprawl, including the port of Algiers.

Djen Djen Expansion

However, work is ongoing on a number of key facilities. A significant share of current expansion work is taking place at the Djen Djen port, the country’s deepest, with a 17-metre draught and currently the only one with the potential to become a trans-shipment hub in the western Mediterranean. Built after independence to handle the steel traffic for the region of Bellara, the port of Djen Djen has seen its importance increase significantly in the past few years. The port is now an important entry point for imports of cereals and vehicles, and it saw its traffic increase from 2.74m tonnes in 2010 to 4.7m tonnes in 2014.

Authorities hope to develop the Djen Djen port into a large container handling facility for both trans-shipment and origin and destination cargo. To this end, a 78.5-ha container terminal with a capacity to handle 2m TEUs per year is being built, with trans-shipment activity to account for 49% of that volume, according to EPJ. In addition to the terminal, a central jetty parallel to the western quay is also being built and the existing quay extended.

The project follows previous extension work, including the enlargement of two jetties to 250m and 400m in length, completed in July 2015. The Djen Djen port will also benefit from improved connectivity when the freeway connecting the site to the East-West Highway opens to traffic.


Since 2014 the port of Oran has also been undergoing an AD11bn (€101.2m) expansion, which includes the construction of a 23.4-ha container terminal, the establishment of a 500m quay and extension of the port’s depth to 13.8m. The expansion is scheduled for completion in late 2016 and will raise the port’s capacity to 500,000 TEUs, the port’s estimated demand by 2017-18.

The project is part of a larger AD50bn (€460m) expansion programme, which will see the construction of a second 900-metre container handling quay and the extension of the port’s depth to 17 metres, raising annual handling capacity to 1.5m containers. The new freeway connecting the port to the East-West Highway, expected to open in 2017, will also improve the port’s connectivity.


Plans for a new deep-water port on the central Algerian coast could signal a new era for the country’s maritime transport. Though the idea has been discussed for some time, the project seems to be moving forward now. In early 2015 the government announced the new port would be built 200 km west of Algiers, between Cherchell and Ténès. In October 2015, Prime Minister Abdelmalek Sellal told local media that construction of the roughly AD200bn (€1.8bn) investment is projected to start in 2016, with work to be carried out by public and private domestic companies in partnership with foreign groups. The port will span more than 100 ha and feature a logistics area of over 300 ha. By enabling modern-generation ships to dock, the new port would also improve efficiency and port performance considerably, in addition to helping to alleviate congestion at the port of Algiers.

Port Management

The establishment of public-private partnerships for the management of port facilities has contributed to a modernisation of management practices. The Béjaïa Mediterranean Terminal was the first mixed-management experience in the country, with Singapore-based Portek winning a concession for the terminal’s management in 2005. In 2008 DP World was awarded a concession to operate the container terminal at the Algiers port, now known as DP World Djazair, and shortly after the operator also took over operations at the port of Djen Djen, giving them a strong foothold in the country.

Two other key initiatives currently under way will also streamline operations and increase the management efficiency and integration of port activities considerably in the coming years. Since April 2014 a new management system – known as Vessel Traffic Management and Information System (VTIMS) – is being installed in the 11 commercial ports, at a cost of €160m. Installation is being carried by an international consortium made up of Indjaz Bouhadid (Algeria), Kongsberg Norcontrol IT (Norway), Ericsson (Sweden), and Korea Trading and Industries. Once installed, the vessel-tracking management system will improve safety to, from and at Algerian ports, while facilitating the movement of goods and passengers.

Earlier in 2015 the transport minister also announced the roll out at the national level of the Guichet Unique (single window), an electronic platform enabling the secure exchange of information between public and private stakeholders, while managing and automating port and logistics processes through a single window for data submission. The scheme, which was introduced at the Béjaïa Mediterranean Terminal, and later adopted by the port of Algiers, will streamline bureaucratic procedures for imports and exports. This commitment to alleviating some of the bureaucratic pressures at Algeria’s ports is evident in other programmes and agreements.

“With respect to the memorandum of understanding signed between the shipping agencies and the Algerian Customs Agency in July 2015, a major objective of this agreement is the facilitation and improved fluidity of maritime and port operations,” Mohammed Dib, general director of GEMA, told OBG. “Furthermore, it is hoped to improve the transparency of Customs procedures and cooperation of all parties in order to strengthen control over cash flows. This cooperation between the APAMA (Association of Algerian Shipping Agents) and the Algerian Customs Agency is an important opportunity to implement standards and simplify procedures for maritime transport-related operations.””

National Fleet

The government is also working to increase the competitiveness of the state-owned Algerian National Navigation Company (Compagnie Nationale Algérienne de Navigation, CNAN). According to local media reports, Algeria’s 12-vessel fleet accounts for less than 500,000 tonnes, or 1.4% of the freight transport market. Authorities aim to increase their market share in non-hydrocarbons freight transport to 25% by 2020. To this end, CNAN’s AD120bn (€1.1bn) development plan includes the acquisition of 27 vessels, 25 of which are cargo and container ships and two ferries. The move comes at a time when the operating environment is increasingly competitive. “Since 2013 the market has seen competition increase, with the arrival of new smaller companies – largely from Turkey and Spain – and some majors, which have set up their own feeder service to Algeria. This in turn is putting downward pressure on prices,” Adlane Belabdelouahab, managing director at Arkas Algeria, told OBG.

Dry Ports

Authorities are looking to increase the number of dry ports across the country and establish a network of logistics platforms. While the port of Algiers has benefitted from the 63,000-sq-metre Rouiba logistics platform 20 km east of Algiers for some time, other ports will also benefit from the establishment of several dry ports and logistics platforms in the coming years. In the east, the new dry port in Bordj-Bou-Arréridj (Tixter), a 60-ha facility with the capacity to handle 200,000 containers annually and 500,000 tonnes of varied cargo, is expected to be operational before the end of 2015.

Though the facility will primarily serve the port of Béjaïa, it will also be connected to the eastern ports of Jijel, Skikda and Annaba. It will function as a storage and distribution centre for containers and merchandise serving the seven neighbouring provinces, with a direct connection to the railway network. The minister of transport told local media in 2015 that this would be the first of five logistics platforms planned at the national level for distribution of merchandise across the country. The port of Béjaïa will also benefit from a second dry port, planned for Ighil Ouberouak, 5 km from the port, while two other dry ports, planned for Jijel, will help decongest the Djen Djen port.


While the completion of the 11 freeways connecting the East-West Highway to the ports will greatly facilitate merchandise transport by road, authorities hope an expanded railway network will play a larger role in the overland transport sector. Spanning some 4500 km, the country’s existing railway network is undergoing notable expansion, with a total of 2300 km of railway under construction as of October 2015, according to the National Agency for Railway Project Studies and Investments. Under the railway expansion programme, by 2020 the network will extend over 12,500 km, providing efficient links to the transportation infrastructure (see analysis).


The combination of ongoing and planned transport infrastructure projects is expected to improve Algeria’s logistics performance in the next few years. Though the country has traditionally fared poorly in logistics assessments, it has recorded recent noteworthy improvements. In the World Bank Logistics Performance Index 2014, Algeria ranked 96th out of 160 countries – a big leap up from 140th (out of 150 countries) in 2007 – outperforming Ghana (100) and Tunisia (110), but below Egypt (62). Algeria’s logistics sector is gaining momentum.

In 2014 the state-owned Société Nationale des Transports Routiers (SNTR) and French Group APRC announced a joint-venture, SNTR Logistics, to establish a logistics and distribution platform network, aimed at not only lowering logistics costs but also capturing 40% of market share of a total of nearly 30m sq metres of logistics platforms.

“In Europe logistics costs are 5% of the product’s value, the global average is 15%. In Algeria, the average is 35%,” APRC’s founder Karim Abdellaoui, told local media in March 2015. “Our objective is to align Algeria with the global average,” he added. According to Abdellaoui, the logistics distribution network will save the state some €10.7bn. The partnership will see SNTR evolve from a transporter to a logistics operator. Algeria’s under-penetrated transportation and logistics industry is beginning to attract international players. “Algeria is diversifying its economic partners, which has become a key driver of growth for the transport industry. We have seen particularly strong demand coming from Spanish companies,” Rachid Ghezlaoui, general manager of Algerian shipping company Transrafa, told OBG.


Despite budgetary constraints, the next five years promise continued development for Algeria’s transport system. While the country will remain largely dependent on its road network for the overland transport of goods in the short-term, the completion of major road projects, in particular the East-West Highway, will help to alleviate road congestion and reduce transport times and costs. The extension of the railway network and the construction of the country’s first deep-water port promise to have a lasting impact on the sector’s performance. In addition to improving connectivity between industrial areas and export and import hubs, an expanded railway system would allow this transport mode to play a larger role in freight transport. In the meantime, improvements to management processes at ports and the reorganisation of state-owned agencies in transport sectors should ensure efficiency gains.