July 1, 2009 -- Development and construction is a huge priority in Algeria. About 10 per cent of the population is employed by the industry and the size of the market has been described as ‘monumental’ by Middle East and Africa specialist Oxford Business Group (OBG).

Having been through civil war in the 1990s and at the beginning of this century, construction was not a primary concern, but oil revenue means the country has cash to spend.

This huge opportunity includes the government’s £92 billion programme to upgrade the country’s infrastructure, £73bn on energy and £8.3bn on ecotourism projects.

Then there are the private developers building resorts, business centres and healthcare cities – Dubai firm Emaar alone is investing more than £12bn.

On a smaller, but equally interesting scale, what is claimed to be the world’s third largest mosque is being built at a cost of £611 million in Algiers.

Infrastructure

President Abdelaziz Bouteflika announced last year that between 2009 and 2013, £92bn will be spent on infrastructure. One major project is the £6.7bn east-west motorway which runs across the north of the country, connecting Algeria with Morocco and Tunisia. It will run 1,200 km and is due to be finished in January 2010. There is also the £6.7bn, 1,300 km Hauts Plateaux Beltway project being planned.

The Algiers metro is currently under construction by Vinci and Spanish-owned Construcctiones Auxiliar de Ferrocarriles and the first phase will open in October. In May the client Entreprise de Metro d’Alger invited tenders for the design of four sections worth about £600m.

A £920m High Plateau railway is planned from east-to-west, parallel with the Mediterranean coast. The 630 km passenger and freight rail line forms part of a £2.3bn spending plan for Algeria’s rail network. The project is being procured as a single contract, but work will be split into four packages, with final bids expected by the end of June.

Housing

Algeria’s last five year plan, the Programme Complémentaire de Soutien à la Croissance Economique (PCSC) includes 1 million affordable homes, plus a further 250,000 in the Hauts Plateaux and southern regions. But OBG says this housing built is not always of the best quality as they are being put up so fast. Once the homes are built – due to finish this year – the country will still have a big deficit.

Health and education

Emaar is building its healthcare city in Staoueli, part of its £12bn investment in the country. The government has ambitious plans and has already proposed 65 general hospitals, 168 health centres and 76 polyclinics, all at various stages of development. Also, 180 schools are planned or under construction.

Tourism

This is a slowly growing industry in Algeria, which contributes 1.7 per cent of GDP. It has great potential to grow once the international situation settles. The president has said that he wants to: “gradually position Algeria as a world-renowned destination in coming years”. The OBG reports that by 2025 the government plans for 20 m visitors a year, including internal tourism. Currently it is 1.7 m.

Need to know Algeria

President Bouteflika was elected for a third term in April, after he changed the constitutional law last year in his favour – previously it only allowed the country’s leader to stand for two terms. He had begun to restore order in the country, however it is now going through another period of restlessness and there have been several terrorist attacks lately.

Richard McCallum, an intercultural trainer at Farnham Castle, says that while there are huge opportunities, these must be balanced against the security situation. “It’s a market that people see as being lucrative. Tourism has gone completely under but there is a huge coastline with some great beaches, for example. They can’t do that before they have sorted out the unrest,” he says.

And this does make it difficult to work in the country. “It’s always a concern for companies. Check Foreign and Commonwealth Office advice,” he says, adding that foreigners fly between cities rather than driving. Business trips are usually escorted and delegates will stay in secure hotels, he adds.

As with other Arab nations, older people are much respected. “The power is in the hands of older people in business and politics. Grey hairs tend to do well,” says Mr McCallum.

And he warns never to assume that someone drinks alcohol – which is illegal in the country. “If you are entertaining, never presume that someone drinks. It can be something of an insult or suggest that you think they are not a good Muslim.”

The French influence is very much in evidence from its days when it was almost another department of France and it is still the language of business.

Number crunch: Algeria

30 percentage of GDP that fossil fuels contribute

£67.3bn – foreign exchange reserves

£92bn – public investment programme for infrastructure

£2.8bn – total investment from France in 2007