February 26, 2008

Emirates International makes Algeria business push

By William Maclean and Hamid Ould Ahmed, Reuters

ALGIERS, Feb 25 (Reuters) - Riding a wave of Gulf Arab investor confidence in North Africa, Emirates International Investment Co plans to build a $5 billion park to give crowded Algiers a "green belt" where stressed residents can unwind.

Abu Dhabi-based EIIC will use its own resources to finance Dounya Parc on 670 hectares in the Algerian capital with 25 percent of the land set aside for commercial and residential use, company official Khayam Turki told Reuters on Monday.

"There are a lot of incentives, tax breaks, but also a political eagerness to see us start something," said Turki, director general of EIIC unit Societe des Parcs d'Alger, which is developing the park on the Mediterranean city's south side.

The venture is the latest example of a Gulf Arab investor rush to North Africa, where Arabs are challenging traditional European business dominance by capturing a growing share of the telecom, tourism and banking markets.
North African businessmen say western suspicion of Arabs in the wake of the Sept. 11, 2001 attacks on the United States pushed Arab countries to find new destinations for the reserves built up from oil prices.

A BIG MARKET
Turki, a Tunisian, said Arabs as investors and tourists were increasingly curious about the variety of Arab cultures.
"Something happened after September 11 -- the Arab world's identification with itself is much stronger," he said. "The Gulf countries are investing much more in Egypt and North Africa.
"People from Algeria, Tunisia and Morocco are also traveling much more in the Gulf and Middle East as tourists. This is very new," he said.
"For example, Arabs from Morocco are very different from the other parts of the Arab world. So now we've opened a big market, and we're all here to discover our neighbours. It's not the only reason (for Arab business success), but it's something."

Top Arab investor in Algeria is Egypt's Orascom Telecom and Orascom Construction Industries, with almost $10 billion invested in telecom, cement, and water desalination. Qatar Telecommunications Co is also present in the mobile sector.

UAE's Emaar company is planning to invest $20 billion in development projects in and around Algiers.

Local business people in Algeria, an OPEC member state slowly emerging from years of political violence, say the country is in dire need of greater investment and exposure to international best practices in services.
Crowded, rundown Algiers is a prime example. The city's up to four million population, beset by homelessness and unemployment and traumatised by periodic political violence, has few public parks and those that exist are overcrowded at weekends.

With help from U.S.-based consultancy McKinsey on strategy and U.S. engineering company Parsons on master planning, EIIC plans to designate 75 percent of Dounya Parc's surface area as rolling grassland and botanical gardens for recreational use.

"MAKE MONEY ON THE BUIDLINGS"
Due to be completed in five years, EIIC will surround the main central park with a commercial and residential district that will include hotels, lakes, a convention centre, golf course and hospitals and provide about 25,000 jobs.

"Seventy five percent of the park is going to be a huge investment with no return," Turki said. "We have it for five years to make it happen, and then it's given back to the state to operate."
"So we are going to make the money on the buildings - the hotels, the towers, the offices," he said, adding he hoped the park would encourage Algerians to holiday at home. Normally, Algerians able to afford a holiday go to Tunisia and Morocco.

EIIC also has other projects in Algeria including a $200 million luxury hotel development near Algiers, a dairy farm complex in the south and an electrical cable manufacturing company. (Editing by Toni Reinhold)