Cablegate: Tunisia - Economic Highlights

VZCZCXYZ0003
PP RUEHWEB

DE RUEHTU #1229/01 3530733
ZNR UUUUU ZZH
P 180733Z DEC 08
FM AMEMBASSY TUNIS
TO RUEHC/SECSTATE WASHDC PRIORITY 5828
INFO RUEATRS/DEPT OF TREASURY WASHINGTON DC PRIORITY
RUCPDOC/USDOC WASHDC PRIORITY
RUCNMGH/MAGHREB COLLECTIVE

UNCLAS TUNIS 001229

SENSITIVE
SIPDIS

STATE FOR NEA/MAG (NADI AND HAYES) AND EEB/CIP/BA (GIBBS)
STATE PASS USTR (BURKHEAD) AND USAID (MCCLOUD)
USDOC FOR ITA/MAC/ONE (NATHAN MASON), ADVOCACY CTR (TABINE), AND
CLDP (TEJTEL AND MCMANUS)
RABAT FOR FAS (AHMED)
CASABLANCA FOR FCS (ORTIZ)
CAIRO FOR FINANCIAL ATTACHE (SEVERENS)
LONDON AND PARIS FOR NEA WATCHER

E.O. 12958: N/A
TAGS: ECON EFIN EINV ENRG ETRD TS
SUBJECT: TUNISIA - ECONOMIC HIGHLIGHTS

1. (U) This cable contains highlights of recent economic
developments in Tunisia on the following topics:

A. Tunisia Tourism Revenue Up
B. Tunisia Gets US $30.6 million Loan For Water Project
C. Sotrapil Cancels Tunisian Oil Pipeline Project
D. Tunisiana Banned From Third Telecoms License

--------------------------
Tunisia Tourism Revenue Up
--------------------------

2. (SBU) Minister of Tourism Khelil Lajimi affirmed Tunisia's
tourism revenue reached 2.90 billion dinars (US $2.4 billion) in the
first ten months of 2008; up 10 percent over the same period the
year before. The number of tourists visiting the country during the
January to October timeframe increased 3.4 percent to 6.28 million.
The government expects final tallies of tourism revenue to increase
8 percent over last year's record figure of 3.0 billion dinars (US
$2.37 billion). The Minister made the announcement during the
parliamentary debates over the national 2009 budget. Despite the
good news for 2008, the Minister mentioned that it is unclear as of
yet what impact the financial crisis will have on the tourist sector
in 2009. Tourism supports roughly 380,000 direct and indirect jobs
in Tunisia. (NOTE: Despite Minister Lajimi's affirmations, local
tour operators confirmed in private discussions with EconOff that
right now there are fewer advanced bookings for the summer months
than in recent years.)

--------------------------------------------- -------
Tunisia Gets US $30.6 million Loan For Water Project
--------------------------------------------- -------

3. (U) On December 11, the African Development Bank (AfDB) Group
Board of Directors approved a 22.91 million Euro (US $30.6 million)
loan to finance phase two of Tunisia's Water Sector Investment
Project (PISEAU II), according to an AfDB statement. PISEAU II is a
component of the Tunisian Water Mobilization and Management Strategy
2002-2011, and a follow up to PISEAU I which lasted from 2002 to
2007. The main objective of PISEAU II is to promote efficient and
integrated management of conventional water resources (including
dams, ponds, boreholes and surface wells) as well as
non-conventional water sources (wastewater and brackish water) to
meet the challenge of water scarcity in the country. The project is
intended to benefit Tunisia's rural population. The goal of the
project is to strengthen irrigated agriculture and increase
available drinking water. The project is also geared to address
water issues related to climate change. Implementation of the
project will begin in 2009 and cover a five-year period. The total
project cost is Euro 122.01 million (US $163.33 million). The
project will be co-financed by the French Development Agency (AFD),
the World Bank and the Tunisian Government. During the last 10
years the World Bank, among others, encouraged and financed GOT
efforts to improve water resource management

--------------------------------------------- -
Sotrapil Cancels Tunisian Oil Pipeline Project
--------------------------------------------- -

4. (U) On December 1 the Tunisian state owned oil and gas pipeline
operator Sotrapil publicly cancelled a fuel pipeline construction
project due to concerns aboutthe project's profitability. The
project was plnned to link the Sahel and Skhira zones by building
on the existing Sidi Khilani-Skhira pipeline. Te 185 km pipeline
was designed to move refined fel products between storage
facilities in centra and southern Tunisia. The project was
initiall scheduled to begin by the end of 2007. Sotrapil sid it
also aimed to cancel apital increases approved by shareholders in
2007 and 2008 and replace them with a smaller share issue that would
boost its capital to TND 16.359 million (US $13.578 million) from
TND 15.730 million (US $13.056 million). In 2001, the GOT sold 30
percent of SOTRAPIL capital on the Tunisian Stock Exchange.

--------------------------------------------
Tunisiana Banned From Third Telecoms License
--------------------------------------------

5. (U) Tunisiana, Tunisia's private mobile phone operator, is barred
from bidding on the recently announced fixed and mobile line tender.
Tunisiana, a joint venture between Egypt's Orascom Telecom and
Kuwait's Wataniya, publicly indicated its interest in acquiring the
license. Instance Nationale de Telecommunications, the
telecommunication regulator, announced the decision to bar Tunisiana
from bidding on December 10 and offered no further explanation for
the decision. The new license includes the right to operate a 3G
mobile phone network, enabling the winning firm to provide
additional services such as mobile broadband. Neither Tunisiana or
Tunisie Telecom are currently allowed to provide 3G services.

GODEC

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