PPIAF Assistance in Tunisia

Transcription

1 PPIAF Assistance in Tunisia November 2011 Tunisia is the northernmost country in Africa with an estimated population of just over 10.4 million. Tunisia has a diverse economy, mostly in the agricultural, mining, tourism, and manufacturing sectors. Real growth, which averaged almost 5% over the past decade, declined to 4.6% in 2008 and to 3 4% in because of economic contraction and slowing of import demand in Europe, Tunisia's largest export market. The January 2011 Tunisian revolution has had a negative impact on the short-term economic outlook, particularly in the area of tourism and foreign direct investment. Tunisia s GDP, previously expected to rise, is now projected to slow down, notably increasing the rate of unemployment. Despite the country s short-term challenges, its economic outlook remains positive. The interim government has announced an economic and social emergency plan that outlines measures covering aspects of security, employment, private sector growth and financing support, and regional development. Tunisia will need to reach even higher growth levels to create sufficient employment opportunities for an already large number of unemployed as well as the growing population of university graduates. To support job creation, it is important to have a good business climate that includes sufficient infrastructure to support future growth. Technical Assistance for Enabling Environment Reforms Tunisia s Ministry of Development and International Cooperation requested the World Bank s assistance to review the perspectives and constraints for private participation in infrastructure in Tunisia. From a Diagnostic Study, it aimed to transition to tangible policy reforms through a sequence of measures to raise awareness and build consensus. PPIAF assistance was requested in early 2003 to fund a study covering cross-sectoral aspects of private participation in infrastructure in Tunisia, as well as a round table/dissemination workshop to discuss and build consensus on the findings of the report and disseminate the study to stakeholders. The PPIAFfunded study consisted of an action plan to attract private participation in infrastructure, as well as a report summarizing a legal study, macro-economic study, financial study, employment study, and report on international experience. The PPIAF-funded study and workshop held in Tunis on December 16 17, 2003 focused on, among others, the following activities: 1) the phasing of sector reforms and private participation in infrastructure transactions; 2) the possible creation and strengthening of regulatory institutions; 3) the identification of priority sectors for private investment; 4) a financial analysis of key sector agencies and an analysis of the economic, financial, and fiscal impact of private participation in infrastructure; 5) the possibility to modernize the legal framework through a build-operate-transfer or concession law, similar to the experience of other countries; 6) labor issues in private participation in infrastructure; and 7) definition of possible measures to strengthen the capacity of the administration related to any of the areas listed above. The PPIAF-funded activity contributed to best practice in several ways. In particular, the close involvement of government officials and local consultants in the study laid foundations for greater ownership. Substance-wise, new types of contracts such as design-build-own, which had not been used in Tunisia before, were introduced. The government agreed to develop and publicize its own Private Participation in Infrastructure Strategy and Action Plan based on the proposals made in the PPIAF-funded study. This included strengthening the autonomy of the existing telecommunications regulator. In 2006 a 35% controlling stake in Tunisie Telecom (the incumbent national fixed line and mobile operator) was divested for $2.25 billion. To date, an additional 4.6 million people in Tunisia now have access to telecommunications, $643 million was committed to be invested in telecommunications assets and $80 million in revenues is expected to be remitted to the government. The Private Participation in Infrastructure Strategy and Action Plan also included several options for improved cost recovery in solid waste management and created a commission charged with the drafting of a Framework Law for Concessions. The resulting Law was adopted in April

2 The government also acknowledged the need to separate the regulatory and operating functions in the port and airport sectors, and different models for trading electricity were discussed. In water and sanitation, the two national public enterprises and the respective sector Ministry acknowledged the need to broaden private sector participation beyond sub-contracting and build-operate-transfer contracts, but no next steps were agreed to. Results of PPIAF s Activities for Tunisia s Enabling Environment Reforms Plans/strategies prepared Workshops/seminars Etude sur la Participation Privée dans les Infrastructures en Tunisie et Annexes, June 2003 Workshop on private participation in infrastructure in Tunisia held in Tunis, December 16 17, 2003 Policies adopted, legislation passed/amended, or regulation issued/revised Plans/strategies adopted Outcomes Loi n du 1 er avril 2008, relative au régime des concessions Government agreed to develop and publicize its own Private Participation in Infrastructure Strategy and Action Plan based on proposals in PPIAF-funded study, which included strengthening the autonomy of the telecommunications regulator, 2005 Technical Assistance for Tunisia s Agriculture and Sanitation Sectors In 1999 the Tunisian Ministry of the Interior and Local Development and the Ministry of Agriculture and Hydraulic Resources produced a national master plan to replace the country s 50-plus local slaughterhouses by eight regional facilities, one for each economic region, including one for the Greater Sfax metropolitan area. To facilitate the implementation of the national master plan, the seven municipalities of the metropolitan Sfax area formed an inter-communal syndicate. The government s objective was to achieve greater economic efficiency, eliminate environmental and public health hazards, and reduce the financial burden that city-operated slaughterhouses impose on municipal budgets. To reach this objective, the government ruled out the operation of the slaughterhouses under direct municipal management and gave the municipal authorities a broad mandate and incentives to invite private investors and operators to bid for the concession of specialized income-generating city services, such as slaughterhouses, under various private sector participation schemes. The World Bank s Third Municipal Development Project and Agence Française de Développement (AFD) s Projet de Soutien aux Municipalités supported the government s objectives and addressed a number of critical economic, financial, social and environmental issues that the Municipality of Sfax and other main Tunisian cities face. Under this pioneering project, Sfax would be the first large Tunisian municipality entering into an association with the private sector to operate a slaughterhouse. The four slaughterhouses (Sfax, Sakiet-Ezzit, Sakiet-Eddayer, and Gremda) owned by, operated by, and located on the territory of the Municipality of Sfax, would be shut down and replaced by a single state-of-the-art facility. Private contractors and operators would be invited to bid competitively for the 1) construction on a turn-key basis and 2) operation of the new facility, with a focus on improving the processing capacity and 2

3 quality of operation (with a particular emphasis on environmental and public health considerations) and reducing operating costs. The Municipality of Sfax teamed with the central government and created a company, Abattoirs Unifiés de Sfax or Society for the Greater Sfax Unified Slaughterhouse (AUS), which would tender for and own the new slaughterhouse facility. However, due to the magnitude, novelty, and potential risks of the project, the World Bank and AFD recommended that AUS recruit an international advisor with expertise and a successful track record in private sector participation and a certain degree of familiarity with slaughterhouse operations. Thus PPIAF assistance was requested in 2008 from the municipal government of Sfax and AUS to successfully integrate the four existing and deficient slaughterhouses into one new facility, operating under the highest quality standards as part of an effective private sector participation arrangement. In particular, technical assistance included: A review and validation of the existing infrastructure development strategies and the technical, environmental, institutional, legal, and financial studies commissioned by the Municipality of Sfax and the AUS in connection with the slaughterhouse project, with the purposes of: 1) ensuring a viable and sound slaughterhouse project; and 2) incorporating the necessary elements, at an early stage, for private sector participation in the slaughterhouse operation The provision of procurement advice to the municipal authorities and AUS Support to AUS regarding the design of the new slaughterhouse facility as a public-private partnership The main concrete results were: 1) the bidding document for the specialized firm that will carry out the detailed design, prepare tender documents for construction and equipment, supervise the project, and ensure quality certification is complete and has been approved by Tunisia s National Procurement Commission a breakthrough for the Municipality of Sfax as well as for the intercommunalité and decentralization processes; 2) a preliminary design that calls for a reduced facility that could be expanded in the future; 3) acknowledgement that the Greater Sfax Unified Slaughterhouse faces two major constraints to its feasibility: the low tariffs of its services and the inefficient management of personnel; and 4) recognition that the way to ensure that AUS management takes a commercial approach is through a public-private partnership operation. The government took ownership of the PPIAF-funded activity and made steps toward implementing the recommendations of the final report. However, due to the recent political turmoil surrounding the Arab Spring, the project has been put on hold. Results of PPIAF s Activities in Tunisia s Agriculture and Sanitation Sectors Plans/strategies prepared Project cycle-related assistance Transaction support Workshops/seminars Tunisia Sfax Regional Slaughterhouse Technical Assistance, which provides an in-depth analysis of public-private partnership options for the design and management of Tunisia s slaughtering and processing facilities, June 2009 Bidding document for the specialized firm that will carry out the detailed design, prepare tender documents for construction and equipment, supervise the project, and ensure quality certification, June 2009 Four-day study tour of two modern French slaughterhouses operated by municipal governments, April

4 Outcomes Consensus achieved The government agreed to implement the options in the final report, June 2009 Technical Assistance for Tunisia s Transport Sector Tunisia s economic development has been largely driven by the opportunities created by links with Europe. To take advantage of its geographical proximity, Tunisia took early proactive measures and has successfully developed export-oriented manufacturing industries since the 1970s. As a result, in 2009 Tunisia s exports contributed to about 60% of its GDP, against one third 20 years prior. Given its orientation, trade facilitation and logistics is central to Tunisia s competitiveness strategy. Exporters are part of production cycles in Europe, which increasingly require just in time delivery, especially in the largest exporting industries such as automotive or garment. Producers also need to reduce logistics costs stemming from delays and inefficiencies on their imported inputs or domestic operations. These concerns have become increasingly crucial over the last decade, with renewed competition from Eastern Europe. For Tunisian exporters, excessive trade logistics costs, delays, and inefficiencies are a recipe for losing market share. It is even more important in the context of the current global economic downturn, when demand is low, and competitors from more distant locations benefit from lower shipping prices. The Tunisian Ministry of Transport and the Ministry of Development sought the World Bank s assistance in 2007 to analyze Tunisia s competitiveness in logistics infrastructure and services and assess traderelated infrastructure, domestic and international services, as well as procedural requirements. The main conclusion was that the Tunisian performance in terms of infrastructure, service, and procedures was less than stellar for a country with the level of development and closeness to Europe. Moreover, based on projections for GDP growth, the volume of logistics flows is expected to double over the coming decade, thereby putting substantial strains on the existing infrastructure (notably ports and warehousing), services, and business practices and procedures. With the help of key government agencies within the Tunisian government, the World Bank prepared a logistics Action Plan to bring Tunisia s connection to international markets at the level of the most advanced countries in this field, such as China or Thailand. One key component of this Action Plan was to develop a network of logistics zones. The Ministry of Transport thus requested PPIAF assistance in 2009 to establish template bidding documents for a concession contract of these logistics zones and to tailor them to a test case regarding the development by private investors of a logistic zone at the port of Radès that can be replicated in other zones. The conceding authority is the Office de la Marine Marchande et des Ports (OMMP), and this concessioning would be the first case of private investment in logistics zones in Tunisia. In addition to the draft bidding documents, the outputs included recommendations on the structure and key provisions of concession contracts for logistics zones and recommendations on the organization of the selection of private investors. The government issued a tender in June 2010 but it failed to attract private investors. The government has since indicated that once the political turmoil in the country subsides, and should the government still choose to pursue the Radès project in the future, the Ministry of Transport will finalize the bidding documents addressing the consultants and lawyers recommendations on possible reasons for the tender failure. These recommendations are expected to serve as helpful guidance to the Ministry of Transport and OMMP in the concessioning of logistics zones in the future. 4

5 Results of PPIAF s Activities in Tunisia s Transport Sector Project cycle-related assistance Transaction support Observations sur le Projet de Dossier d Appel d Offres, December 2010 Dossier d Appel d Offres International La réalisation et l exploitation d une zone d activités logistiques à Radès, June