x Abu Dhabi, UAEMonday 24 July 2017

$45bn of projects halted in Tunisia

Billions of dollars worth of major infrastructure projects in Tunisia are little more than holes in the ground

The coastline north of Raoued - proposed location for the Tunis Financial Harbour project - shows no sign of development.
The coastline north of Raoued - proposed location for the Tunis Financial Harbour project - shows no sign of development.

TUNIS // Almost US$45 billion (Dh165.28bn) worth of projects announced by Gulf investors in Tunisia during the tenure of the former president, Zine el Abidine Ben Ali, have either been cancelled or failed to progress beyond initial construction phases.

With Mr Ben Ali ousted amid a popular uprising two months ago, the future for the projects that remain has grown even cloudier.

Tunis Sports City, a $5bn complex of sports facilities, apartments, stores and offices launched in 2006 by Sharjah's Bukhatir Group, is perhaps emblematic of the slow progress Gulf companies have made with Tunisian projects. Although the project's first phase is progressing with infrastructure work, its headquarters, a squat, mirror-glassed building on the north side of the Lake of Tunis, remains the only finished building on the site five years after its announcement.

"The problem is that now with what just happened in Tunisia, for things to return in view of property, I think we will wait for a year and a half or two years," an employee at the Tunis Sports City project said in the cavernous headquarters, showing off a series of scale models of golf courses, apartment buildings and a stadium. "You wait until things start to resume."

The Bukhatir offices in the UAE did not respond to a request for comment on the status of the project.

The Tunis Financial Harbour, a $3bn project by Bahrain's Gulf Finance House on more than 500 hectares near the Tunis suburb of Raoued, has also gone nowhere since its launch in 2008.

A project that Esam Janahi, Gulf Finance's chairman, said in December would harness "the impressive economic potential within the Tunisian economy" is little more than an open expanse of land in a less-developed area north of the main Tunis airport. People in the nearby towns of Raoued and Kalaat el Andalous have not even heard of the project.

Meanwhile, a $10bn City of Roses, or Bled El Ward, launched by Abu Dhabi's Al Maabar was cancelled last year, and Sama Dubai, a developer owned by Dubai Holding, pulled out of its $25bn Portes de la Mediterranee project in the capital in 2009.

Dubai's Emaar Properties, the Middle East's biggest developer, also announced a $1.88bn Tunisian project that it later cancelled.

Imad Nesnas, the project manager of Tunis Financial Harbour, said the offshore centre was still on track despite the lack of progress. The land had been acquired, he said, and two contracts to design and supervise infrastructure construction were awarded last year. The proposed layout of roads and other infrastructure was now awaiting approval from city authorities.

"We have dealt throughout with the state of Tunis pertaining to an agreement ratified by the parliament of Tunis," Mr Nesnas said.

The recent uprisings in Tunisia and Egypt have put a major dent in the North African countries' economies and scared away many foreign tourists and investors.

An official in Tunisia's transitional government said last month the upheaval had already shaved $5bn to $8bn off economic activity. Returning to the growth rates of the past - Tunisia's economy grew by more than 4 per cent a year for most of the past decade - hinges in part on a return of confidence from foreigners, including Gulf investors with large projects in both countries.

Moncef Cheikhrouhou, a Tunisian economist who teaches at HEC Paris business school, said the post-revolutionary appeal to foreigners had to include the prospect of strong returns.

"The first message I would send to Gulf investors and the sovereign wealth funds is to invest in democracy in Tunisia," he said. "Invest in the transition. It's profitable in the long term."

 

afitch@thenational.ae

Depth of corruption, b4