Tunisia is considered to be one of the success stories – if not the success story – of the Arab Spring, but that does not mean its economy has escaped the turbulence of recent years. The instability generated by Tunisia’s 2011 revolution resulted in the delayed roll out of important infrastructural projects and needed maintenance of existing infrastructure. Although Tunisia’s utility infrastructure (water, electricity and gas) ranks strongly by regional standards, its transport-related infrastructure – historically one of the country’s important comparative advantages, with high levels of productivity and reliable performance – has deteriorated in recent years. From 2010 to 2014, the country dropped 49 places in the World Bank’s Logistics Performance Index country rankings, falling from 61st to 110th. However, the 10m-person country has an extensive backbone of maritime and aviation infrastructure, and in total travel and transport activities comprise nearly three-quarters of Tunisia’s service exports. While there is room for improving internal connectivity to the poorer interior regions, the national highway network is also relatively well developed, with 20,000 km of paved roads. To reverse the decline of recent years, and in turn improve maintenance, capacity and efficiency, the country is rolling out several initiatives to boost connectivity, in collaboration with external donors and private sector partners. Among the new projects mooted are a new Africa-focused freight carrier, highway upgrades and a pending open skies agreement – all of which, if executed in a timely fashion, should help Tunisia begin to move up the rankings.
In Tunisia 96% of foreign commercial trade is conducted by sea. At least 80% of maritime trade is processed through Radès Port, the country’s principal container facility. Tunisia has eight other ports, including a second container port in Sfax, Tunisia’s second-largest city, and smaller, more specialised commercial ports in cities including Bizerte, Sousse, Gabès, Skhira and Zarzis. The port of Skhira specialises in the transport of petroleum, while Bizerte and Zarzis have free trade zones. Two state-owned enterprises (SOEs) – the Office de la Marine Marchande et des Ports and the Société Tunisienne d’Acconage et de Manutention (STAM) – manage port operations and employees, respectively.
In light of the country’s close links with Europe for both trade and tourism, its maritime infrastructure has traditionally been relatively efficient, with a range of passenger, container and bulk terminals throughout Tunisia. The turbulence of recent years has had an impact, however, and there is currently significant scope for improvement in terms of both operational efficiency and infrastructure, especially at Radès Port, with long dwell times and inadequate terminal space costing the government $300m annually according to the World Bank (see analysis). In a 2015 report, the World Bank also pointed to overstaffing and poor performance ratios, governance problems in Customs and complicated tariff regimes. In 2008 plans to circumvent structural inefficiencies at Radès by creating a purpose-built deep-sea container port at Enfidha, just north of Sousse, were proposed, and while the government has continued to study the project, it has yet to break ground.
Globally, Maghreb countries have the lowest intra-regional trade in goods (ranging from 3-5% of their total trade). Although diplomatic disputes between Algeria and Morocco contribute to this, poor road and rail connectivity is also a central cause of the lack of regional trade integration. In April 2015 Yassine Ben Jaballah, director of Algeria’s national rail company, announced plans for a trans-Maghreb high-speed train linking Casablanca, Algiers and Tunis. Technical studies for the project have begun in Algeria, which has reportedly ordered 30 freight locomotives for the project. Construction of the line into Tunisia is unlikely to happen in the short term, with the Ministry of Transport yet to release specifics on the project. A planned extension of the Tunis-Sfax-Gabès highway onto Medenine and then Ras Jdir on the Libyan border, planned for completion in 2014, has been delayed. The African Development Bank was cofinancing the Medenine-Ras Jdir section of the project, which would stretch over 104 km to the Libyan border at an estimated cost of €225m. However, only 27% of the highway has been completed due to financing difficulties. In 2015 Tunisia announced plans to modernise its nine land border terminals with Algeria and its two border terminals with Libya.
Tunisia’s largest airport is TunisCarthage International Airport, located 8 km from Tunis city centre. There are seven smaller airports in Tunisia, four of which currently handle international charter and seasonal flights: Djerba, Enfidha, Monastir and Sfax. Of these, Enfidha Airport, located near Sousse, services 19 airlines, making it Tunisia’s second-busiest airport. Three other airports, in Tozeur, Tabarka and Gafsa, are labelled “international” airports. However, these airports host only domestic flights to and from Tunis on Tunisair. The majority state-owned national carrier Tunisair retains a leading share in most of the main routes, and holds a near monopoly in the domestic market through its subsidiary Tunisair Express. On the back of declining passenger numbers – which dropped 25% in the first nine months of 2015 compared to 2014 as a result of the
decline in the number of foreign visitors – Tunisair is grappling with mounting debt, which totalled TD936.2m (€429.3m) as of September 2015, representing a year-on-year increase of 134%. Deep structural reforms are currently being negotiated in a bid to bring the firm back on its feet and Tunisair Express, which operates most of its flights locally, is expected to be merged in the near future with its parent company. Limited local competition has come from the privately held carriers Nouvelair, a charter airline specialising in holiday bookings, and Sfax-based carrier Syphax Airlines, founded in 2011. In 2013 Nouvelair began offering regular flights to France and Germany, while in April 2014 Syphax became the first Tunisian airline to launch a long-haul flight (Tunis-Montreal). The company subsequently signed an agreement to undertake long-haul flights to and from China, but due to financial difficulties suspended all operations in 2015.
As with many aviation markets – and indeed most of its peers in North Africa – in the emerging world, liberalisation in Tunisia’s aviation market has been limited. However, this is starting to change, as the country begins to selectively allow in low-cost competition. In 2014, low-cost carriers Transavia and Vueling launched flights to Djerba and Tunis, respectively. German carrier TUI fly followed, opening a flight to Enfidha in 2015. Ryanair may be next. Talks between the low-cost giant and Tunisia’s Ministry of Tourism are under way. Potential for growth in the low-cost market is huge in Tunisia, given the country’s significant domestic travel to and from Western European destinations, which already account for 63% of departing flights (see Tourism chapter). However, it may take some time for passenger volumes for low-cost carriers to pick up following the drop in visitor arrivals after terrorist attacks in the summer of 2015. UK-based travel operator Thomson Airways has announced it will cancel all flights to Tunisia until November 1, 2016, citing consular warnings from the UK government. Passenger traffic declined by an estimated 21.5% in Tunisia between 2014 and 2015 following the attacks.
One major reform, which should help stoke a significant increase in visitor figures, is the pending open skies agreement with the EU. In the pipeline for several years already, the agreement has gathered momentum recently, with a six-month round of negotiations launched at the end of November 2015 for the gradual liberalisation of air traffic between Tunisia and the EU. The deal is expected to allow new airlines to penetrate the market at competitive rates, and consequently bolster tourist numbers. This should also allow Tunisia to tap into the expected rise in global air passengers, the number of which is due to more than double in size over the next 20 years. The
agreement is also expected to have a knock-on effect on a number of related services, such as ground transportation, technical assistance, catering and cleaning services.
While 2015 was a challenging year for passenger traffic, Tunisia has seen advances in boosting logistics and air cargo capacity. In January 2015 UPS and its local Tunisian partner, Express Logistic, launched reciprocal cargo flights from Enfidha Airport to Germany and Malta. Nine months later, the pair launched a new Tunisian cargo airline, Air Cargo Express, which aims to start daily flights from its Enfidha hub to 51 African countries in the first quarter of 2016. The project will make Enfidha Tunisia’s first ever hub for Africa-bound cargo transit. In July 2015 Netherlands-based international courier TNT launched a flight linking Tunis to its hub in Leige, Belgium via Marseilles. Mahmoud Ben Abbes, general-director of TNT’s Tunisian partner Comatral, said that the project was proof that despite post-revolutionary challenges “good intentions can go a long way,” and stated that “had it not been for the patience and trust” of TNT’s Dutch headquarters the project could not have moved forward. There have also been improvements in efficiency at the household level, with upgrades to national distribution chains and improved payment processes. According to Yosri Bachouch, projects monitoring officer at Tunisia’s National Postal Service, La Poste has over the course of 2015 been working on/ rolling out new dispatching platforms across different areas of the country, with a new modern central hub for express mail services close to Tunisia Carthage International Airport. “We’ve been collaborating with app developers and international settlements providers such as the Universal Postal Union, World Trade Organisation and World Customs Organisation, to reinforce logistics, innovation and the development of e-commerce,” Bachouch told OBG. Challenges remain, though, due to the inefficient performance of Tunisian SOEs, which renders efficient servicing of freight and logistics difficult. Competition from Tunisia’s unregulated shipping in the informal market continues to cost logistics companies revenue.
By – Oxford Business Group : https://www.oxfordbusinessgroup.com/overview/gearing-building-its-reputation-stability-country-midst-upgrading-its-infrastructure