Water privatization in Algeria has been carried out in the country’s four largest cities – Algiers, Annaba, Constantine and Oran – in 2005-08 through management contracts. Under a management contract a private company operates a water system for a defined period on behalf of a public authority and is remunerated through a fixed fee as well as a performance-based variable fee. In all four partners the public contract partners is the local utility. The local utilities are all jointly owned by the national water holding company Algerienne de l’Eau and the national sanitation holding company ONA. In other Algerian cities publicly owned and managed utilities continue to provide water and sanitation services alone without the support of private companies.
The World Bank provided technical assistance for the preparation of the privatization of the water and sanitation systems in Annaba, Constantine and Oran, all of which were awarded after competitive bidding. [1] It has not been involved in the preparation of the privatization of Algiers, a contract that has been awarded without competitive bidding.
Algiers. In November 2005 Suez Environnement of France was directly awarded a Euro 113 million, 5.5 year-management contract for Algiers. The local contractual partner, the Algiers water and sanitation utility SEAAL, was only created in April 2006. [2] The government provides US$500m for investments during the period of the management contract. The utility has 460,000 subscribers and 4,400 employees. The objectives of the management contract are to distribute good quality water on a continuous basis, to improve bathing water quality, to rehabilitate infrastructure and to improve customer satisfaction. As of January 2009 the continuity of supply has increased from 16% to 80%, 7 beaches were opened to the public and extensive training has been conducted.[3] In 2011 continuity reached 99%.[4] Customer satisfaction increased from 70% in 2007 to 89% in 2010.[5] The management contract was renewed for another five years and extended to the province of Tipaza in September 2011.[6]
Oran. In November 2007 Aguas de Barcelona from Spain, itself a subsidiary of Suez, was awarded a Euro 30m, 5.5 year-management contract for the city of Oran after competitive bidding. The operator began its work in April 2008. The contractual partner is the water and sanitation utility for Oran, SEAOR.
Annaba. In December 2007 Gelsenwasser from Germany was awarded a Euro 50 million 5.5 year- management contract for the city of Annaba. The contractual partner was the water and sanitation utility for the cities of Annaba and El Tarf, SEATA. However, the investment program stalled and the government cancelled the contract in 2010. Gelsenwasser blamed the failure on slow procurement and a lack of means, while the Algerian authorities say the firm lacked the required expertise.[7]
Constantine. In June 2008 the Société des Eaux de Marseille (SEM) of France, a subsidiary of Suez and Veolia, was awarded a Euro 28m 5.5 year-management contract for Constantine. A first bid had been unsuccessful. SEM had been the sole bidder when the conract was rebid. The contractual partner is the local water and sanitation utility SEACO. In 2010 the government said that SEM was behind schedule.[8]