VZCZCXRO2010
RR RUEHTRO
DE RUEHAS #0773/01 1901538
ZNR UUUUU ZZH
R 081538Z JUL 08
FM AMEMBASSY ALGIERS
TO RUEHC/SECSTATE WASHDC 6085
INFO RUEHBP/AMEMBASSY BAMAKO 0624
RUEHEG/AMEMBASSY CAIRO 1049
RUEHFR/AMEMBASSY PARIS 2793
RUEHRB/AMEMBASSY RABAT 2426
RUEHTRO/AMEMBASSY TRIPOLI
RUEHTU/AMEMBASSY TUNIS 7281
RUEHNK/AMEMBASSY NOUAKCHOTT 6446
RUEHNM/AMEMBASSY NIAMEY 1666
RUEHCL/AMCONSUL CASABLANCA 3479
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEATRS/DEPT OF TREASURY WASHDC

UNCLAS SECTION 01 OF 02 ALGIERS 000773 
 
SENSITIVE 
SIPDIS 
 
CAIRO PASS TO TREAS ASEVRENS AND OTA JROWE 
EUCOM PASS TO TREAS OTA CKELLY 
STATE PASS TO OPIC DERB 
 
E.O. 12958: N/A 
TAGS: EFIN EINV ECON AG
SUBJECT: ALGERIA FREES UP PUBLIC LAND FOR DEVELOPMENT 
 
REF: ALGIERS 385 
 
THIS CABLE CONTAINS COMPANY PROPRIETARY INFORMATION NOT TO BE 
SHARED OUTSIDE USG. 
 
¶1. (U) SUMMARY:  Algeria has moved to free up industrial and 
commercial property for private development by auctioning 
parcels of land in the growing community of Blida, near 
Algiers, a move Industry Minister Abdelhamid Temmar called a 
"micro-revolution."  The newly-formed National Agency for 
Land Regulation and Transfer (ANIREF) plans for more public 
auctions and property sales across the country to help 
alleviate the real estate crunch that drives up both 
residential and commercial real estate prices and hampers 
industrial development.  If successful, these moves could 
help spur commercial investment in Algeria, both domestic and 
foreign, by reducing a key obstacle to locating new 
businesses here.  END SUMMARY. 
 
NEW AGENCY AUCTIONS PUBLIC PROPERTIES 
------------------------------------- 
 
¶2. (U) On June 30 ANIREF auctioned seven parcels of 
commercial land in Blida, a growing industrial and 
residential community amid farmland just outside the 
southwest edge of metropolitan Algiers.  Ahmed Saddi, Chief 
of Records and Statistics and acting Director of Investor 
Relations for ANIREF, told us on July 7 that all seven 
parcels were purchased by Algerian investors, while four 
additional parcels that were up for auction went unsold. 
According to Saddi, ANIREF has already opened six of ten 
intended regional offices to manage the conversion of 
publicly-owned commercial lands to private use.  Saddi said 
his agency will conduct public auctions like the one in Blida 
for plots in or near major metropolitan areas, where demand 
is high and the need for transparency greatest.  ANIREF will 
publicly list properties in more rural or remote areas for 
sale, much like the traditional method for home sales, and 
the agency will accept offers it deems best suited for the 
situation.  Saddi also noted that ANIREF is developing a 
database of public lands to be transferred to private hands, 
which should eventually be accessible on the agency's 
website.  The site already lists properties for sale in Blida. 
 
¶3. (U) In the Blida auction, only individuals or entities 
deemed to be "project investors" were qualified to bid.  The 
auction notice specified that both national and foreign 
investors were welcome to bid.  Saddi told us that ANIREF 
will be transferring three basic types of properties: plots 
in government-designated industrial zones; "residual" plots, 
meaning those associated with a dissolved state-owned 
enterprise; and "excess" plots, referring to parcels owned by 
state enterprises but not in use.  Land transfers from ANIREF 
do not necessarily convey permanent title to bid winners.  Of 
the 11 parcels up for auction in Blida, 10 were 
"concessions," offering long-term rights to develop and use a 
plot for industrial or commercial use, with installment 
payments made over 20 years.  One plot up for auction was an 
actual "transfer" property, giving the buyer outright title. 
In general, Saddi said, concession parcels already have 
buildings on them, while transfer properties tend to be empty 
lots.  In Blida, the opening bid price for the concession 
properties ranged from USD 15,000 to USD 280,000 per year for 
20 years, while the minimum bid price for the transfer 
property was roughly USD 150,000.  The results of the auction 
were published on the ANIREF website, and the final price 
paid on the seven closed deals ranged from 130 percent to 300 
percent of the opening bid price. 
 
MINISTERIAL PRIDE 
----------------- 
 
¶4. (SBU) In a meeting with Codel McCollum on June 30 
(septels), Minister of Industry and Investment Promotion 
Abdelhamid Temmar highlighted the Blida auction as proof that 
Algeria was moving forward with land reform.  He admitted 
that land acquisition was often a stumbling block for the 
 
ALGIERS 00000773  002 OF 002 
 
 
creation of new businesses and a deterrent to foreign 
investors looking to Algeria.  Temmar also said that the 
bottleneck over property acquisition for American company 
Guardian Industries, which is interested in manufacturing 
windshields and possibly other glass products for domestic 
use and export, has been resolved.  A Guardian executive told 
us on July 7 that, in fact, the government has offered the 
company two parcels in the Oran area to consider for the site 
of their factory, and that Guardian will shortly dispatch 
engineers to conduct site surveys. 
 
COMMENT: MUCH NEEDED RELIEF 
--------------------------- 
 
¶5. (SBU) As we reported earlier this year (reftel), land use 
policies and titling problems, combined with a high rate of 
public ownership of land and rampant real estate speculation, 
have limited access to and driven up the cost of both 
commercial and residential properties in Algeria, 
particularly in urban centers.  This first successful auction 
of commercial property by ANIREF proves that there is not 
only a demand for these plots, but that investors are willing 
to start or expand industrial or other commercial enterprises 
in Algeria.  We heard from a delegation of American 
businessmen in April that the major obstacles they saw to 
investing in Algeria were government bureaucracy, archaic 
financing rules and procedures, and limited access to 
commercial property.  Minister Temmar may be right in 
boasting that his ministry, which established and oversees 
ANIREF, has taken a step forward toward real investment 
promotion in Algeria by opening up state-owned properties to 
private ownership, or at least to private management. 
DAUGHTON