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Document of

The World Bank

Report No. 12761-MOR

STAFF APPRAISAL REPORT

KINGDOM OF MOROCCO

SECONDARY, TERTIARY AND RURAL ROADS PROJECT

MAY 11, 1995

Private Sector Development, Finance and Infrastructure DivisionMaghreb and Iran DepartmentMiddle East & North Africa Regional Office

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CURRENCY EQUIVALENTS(As of April 1, 1995)

US$1 =Dh 8.6

FISCAL YEAR

January 1 - December 31

ACRONYMS AND ABBREVIATIONS

CNER National Center for Road Study and ResearchCNPAC National Center for the Prevention of Road AccidentsDPTP Provincial Directorates of MPWDRCR Directorate of Road and Road TrafficERR Economic Rate of ReturnEVAL Simplified Road Evaluation ModelGDP Gross Domestic ProductICB International Competitive BiddingIFEER Institute for Equipment and Road Maintenance TrainingLCB Local Competitive BiddingLPEE Public Laboratory for Experiments and StudiesMARA Ministry of Agriculture and Agricultural ReformMOI Ministry of InteriorMOT Ministry of TransportMPW Ministry of Public WorksNTMP National Transport Master PlanONCF National RailwayONT National Transport OfficeO & M Operations and MaintenancePERL Public Enterprise Restructuring LoanRD Regional Directorate of MPWRF Road FundVAT Value Added TaxVOC Vehicle Operating Costs

This report was prepared on the basis of appraisal and post-appraisal missions from June 1993 to April1995 led by Jaffar Bentchikou (Sr. Highway Engineer) and comprising Michel Loir (Sr. TransportEconomist), Henri Beenhakker (Pr. Economist), Fransois-Daniel Migeon, Yasser Henda and StephaneGrandguillaume (consultants), with the assistance of Michelle Detwiler and Brigitte Grant. Peer reviewerswere Peter Long (Pr. Highway Engineer) and Aldhemar Byl (Sr. Transport Economist). The processingof the project was supervised by Amir Al-Khafaji, Chief, Private Sector Development, Finance &Infrastructure Division (MNIPI) and Daniel Ritchie, Director, Maghreb and Iran Department.

KINGDOM OF MOROCCOSECONDARY, TERTIARY AND RURAL ROADS PROJECT

37AFF APPRANSAL [RIEORT

TAB8LE O1F CONTENTS

Table of Contents ..................................................... i

Loan and Project Summary ............................................... iv

1. The Transport Sector .......................... IA. Transport and the Economy ................ .. 1....................

The Geographic and Economic Framework ......................... IMedium-Term Macroeconomic Outlook ........................... 3Description of the Transport Sector .............................. 4

B. Transport Institutions .. ......................................... 5C. Private Sector Involvement in Transport ....................... I........ . 6D. Transport Investments in Recent Years .............................. . 7E. Transport Sector Issues ......................................... 9F. Bank Experience in the Transport Sector ............................... 10

II. The Highway Subsector ............................................. 12A. The Road Network ............................................ 12B. Road Transport Demand ........................................ 15C. Road Safety ................................................ 15D. The Road Transport Market ................ ...................... 17E. Administration ............................................... 19F. Planning, Budgeting, Financing .................................... 20

Planning ............................................... 20Budgeting .............................................. 21Financing .............................................. 23

G. The Road Fund .............................................. 26

111. The Project ..................................................... 29A. Background and Objectives ....................................... 29B. Description ................................................. 29C. Rural Roads ................................................ 30

Concept and Content ....................................... 30Cost and Financing ........................................ 31Implementation ........................................... 31

D. Branch Roads ....... ............. ........................... 33Concept and Content ....................................... 33Cost and Financing ........................................ 35Implementation ........................................... 35

E. Network Management .................... I ..................... 36Concept and Content ....................................... 36Cost and Financing ........................................ 38Implementation ........................................... 38

F. Road Safety ................................................ 39Concept and Content ....................................... 39Cost and Financing ........................................ 42Implementation ........................................... 42

G. Road Transport .............................................. 42

Concept and Content ........ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42H. Costs and Financing ......... . . .. . . . . . ............ . . .. . . . .. . . . 43

Costs ................................................. 43Financing .............................................. 44

I. Procurement ................................................ 44W orks ................................................ 44Goods ................................................ 46Consulting Services ........................................ 46General ............................................... 47

J. Disbursements ............................................... 47K. Workshops, Implementation, Reporting and Auditing ........ .. ............. 48L. Environmental Impact ......................................... 49

IV. Economic Justification ....... .............. .......................... 51A. General ....... ................ .......................... 51B. Rural Roads ................................................ 52C. Branch Roads ............................................... 55D. Network Management ......................................... 56

V. Agreements and Recommendation ................. ....................... 59A. Agreements and Understandings Reached at Negotiations ....... .. ........... 59B. Conditions of Board Presentation ................................... 59C. Other Covenants ............................................. 60D. Recommendation ...... .............. . ........................ 60

ANNEXES TO CHAPTER 11 ............................................... 61

Annex 2.1: Road Accidents .............................................. 61

ANNEXES TO CHAPTER III ............................................... 66

Annex 3. 1: First Year Program ............................................ 66A. Rural Roads ................................................ 66B. Network Management .......................................... 67C. Road Safety ................................................ 68

Annex 3.2: Letter of Sector Strategy ........................................ 70Road Transport ......................................... 70Funding of Road Maintenance ................................. 70Road Safety ............................................ 70

Annex 3.3: Project Costs, Financing and Disbursement Schedule ....................... 71

Annex 3.4: LCB Procedures ............................................. 81Bid alterations ........................................... 81Two envelopes ........................................... 81Hiring of consultants ....................................... 81Advertising period ........................................ 81Limited LCB ............................................ 81

Annex 3.5: Project Implementation Schedule ................................... 82

MAP: IBRD 25834

Tables and FiguresProject Cost ....................................................... vFinancing Plan ...................................................... vEstimated Disbursements ................................................ vTable 1.1: Transport Public Investments ...................................... 7

Figure 1.2: Composition of Transport Investments ................................ 7Table 2.1: Evolution of the Road Network ..................................... 12Table 2.2: Paved Road Network Density ...................................... 13Table 2.3: Distribution of Paved Roads according to Width .......................... 14Table 2.4: Evolution of Paved Road Conditions .................................. 14Table 2.5: Average Distribution of Daily Traffic ................................. 15Figure 2.6: Growth of Road Accidents ....................................... 15Figure 2.7: Growth of Accidents on Interurban Roads .............................. 16Figure 2.8: Deviation from Smeed's Formula ................................... 16Table 2.9: Actual Maintenance and Investment Spending ............................ 22Table 2.10: Evolution of Communal Budgets ................................... 24Table 2.11 Evolution and Structure of Road Fund Revenues .......................... 26Table 2.12: Road Fund Actual Contribution to Maintenance .......................... 27Table 3.1: Rural Roads, Indicators .......................................... 31Table 3.2: Funding of Road Maintenance, Indicators ............................... 32Table 3.3: Branch Roads, Length .......................................... 33Table 3.4: Branch Roads, Indicators ......................................... 34Table 3.5: Branch Roads, Per km Average Base Cost .............................. 35Table 3.6: Network Management, Indicators .................................... 38Figure 3.7: Fatalities & Fatality Risk ........................................ 39Table 3.8: Road Safety, Indicators .......................................... 41Table 3.9: Trucking, Indicators ............................................ 43Table 3.10: Project Cost Summary .......................................... 43Table 3.12: Procurement Arrangements ....................................... 44Table 3.13: Allocation and Disbursement of the Loan .............................. 47Table 4.1: ERRs of Investments in Equipment ................................... 58Table 3.1.1: Paved Roads ............................................... 66Table 3.1.2: Unpaved Roads ............................................. 66Table 3.1.4: Network Management ......................................... 67


Borrower Kingdom of Morocco.

Amount $57.6 million.

Terms Twenty years, including a five-year grace period, at the Bank's standardvariable interest rate.

Objectives (a) address core needs of the rural poor by improving access to socialservices and to market;

(b) accelerate private sector development by reducing regulatory con-straints in road transport and by increased resort to road works andsupervision by contract;

(c) develop road management expertise in the new regional directorates;and

(d) improve road safety.

Project (a) improving about 1,133 km of priority unpaved rural roads to all-Descrip- weather gravel standard, constructing 96 km of paved rural roads,tion and finalizing the road reclassification (21% of cost);

(b) improving about 2,219 km of paved branch roads (formerly classifiedin the secondary and tertiary networks) by carrying out maintenancebacklog resealings, structural overlays and/or widening works; (66%of cost);

(c) improving network management (technical support, planning and pro-gramming, improvement phasing and training) and renewal of essen-tial road maintenance equipment (6% of cost);

(d) streamlining the road safety organization and supporting priorityactions (7% of cost).

Project The main benefits will involve savings in road transport costs and improvedBenefits access to remote rural areas, which will translate into lower consumer

prices, higher farm gate prices for agricultural produce and reduction inrural poverty. The provision of agricultural extension services will also befacilitated, with a secondary impact on agricultural production.

Project The risk of under-funding road maintenance activities is key. The projectRisks will mitigate it with the agreed monitoring of road budgets.

2 Loan and Project Summary

Project Cost Local Foreign Total

($ million)A. Rural Roads 18.9 16.6 35.4B. Branch Roads 57.4 51.4 108.8C. Network Management 5.1 5.2 10.3D. Road Safety 5.6 5.6 11.1

Total Base Cost 86.9 78.7 165.6Physical Contingencies 8.9 8.1 17.0Price Contingencies 6.0 5.5 11.5

Total Project Coste 101.8 92.3 194.1a/ Local costs ($101.8 million equivalent) include $48.2 millionequivalent in taxes and duties, to be financed by Government.

(Here and throughout the report, some totals do notadd up due to rounding).

Financing Local Foreign TotalPlan ($ million)

IBRD 19.2 38.4 57.6Government 63.8 7.2 71.0Local Governments 0.4 0.0 0.4OECF, Japan 18.3 44.6 62.9Grant (to be identified) 0.1 2.1 2.2

Total 101.8 92.3 194.1

Estimated Dis- Fiscal Year FY96 FY97 FY98 FY99 FY00bursements ($ million)

Annual 6.4 12.8 19.2 12.8 6.4Cumulative 6.4 19.2 38.4 51.2 57.6

Economic ERR per subproject ranges from 12% to over 50%. ERR exceedsRate of Re- 40% for the overall project.turnMap IBRD 25834


0. THE_ T(RAMSPORr an'Toon

A. TRANSPORT AND THE ECONOMY

The Geographic and Economic Framework

1.1 The Kingdom of Morocco occupies the north-west corner of the Africancontinent. Its vast territory (some 459,000 km2 without Western Sahara) is characterizedby a great diversity of landscapes, from a 3,500 km long and flat coastline bordering theAtlantic ocean and the Mediterranean sea to the high Atlas Mountains stretching acrossthe country from the southwest to the northeast; and of climates, from temperate in thenorth to arid in the south. The population of 25.5 million (in mid-1992) is concentratedin the northern region and growing at a fast pace (about 2.3% annually). The rate ofurbanization has increased from around 30% in 1970 to about 50% at present. Whereasthe coastal cities of Casablanca with a population of three million, and Rabat-Sale withone million are respectively, the economic and administrative capitals of Morocco, anddominate the urban hierarchy, the rapid urban development has also favored emergenceof medium-sized cities like Fes (600,000) and Meknes (500,000) in the east, Marrakech(600,000) in the south, and Tanger (350,000) in the north, contributing to a morebalanced distribution of the population between urban centers (15 cities of 100,000 andmore) and rural areas. This spread, together with the relative complementary nature ofregions in terms economic production, generate high transport needs. The main flows ofpassengers and goods are heavily concentrated in the Casablanca-Rabat transportcorridor, with continuation eastward towards Fes and Meknes and northwards to Tanger.Casablanca is the largest port where 75% of the foreign trade and 90% of the containerand roll on-roll off traffic is handled. Other major traffic generation centers are Agadirand Marrakech. Morocco is also the largest exporter of raw phosphate and by-productsin the world, which generate heavy rail traffic from mining zones in the center and southof the country to the ports of Casablanca, Safi, and Jorf Lasfar. Manufacturing industry,contributing close to one-fifth of value added or as much as agriculture, has taken anincreasing share of merchandise exports in recent years (37% in 1991, against less than10% a decade earlier). With income growth averaging some 4% per year during 1981-1990, per capita income rose to $1,040 in 1992.

1.2 Since 1983, the Moroccan Government has been pursuing trade liberalizationmeasures aimed at creating incentives to import substitution and export growth, and hasbeen able to combine sustained growth with rigorous stabilization, low inflation, balanceof payments improvements, and good debt management. The results of Morocco'smacroeconomic adjustment and structural reform program are impressive. Majormacroeconomic imbalances that characterized the late 1970's and early 1980's have beengradually corrected. The central Government deficit declined to 3 % of GDP, comparedto 12% in 1983 (before debt relief in both cases). On the external front, a combinationof real devaluation and trade reform to encourage manufactured export growth havesucceeded in drastically reducing the large current account deficits of the early 1980's,notwithstanding large interest payments on foreign debt. The average current account

2 Chapter I

deficit over the period 1988-91 amounted to about 2% of GDP (before debt relief),compared with almost 10% during the period 1980-1983.

1.3 Remarkably, macroeconomic adjustment has been achieved without recession andwith low inflation. Average GDP growth over 1984-90, for example, amounted to almost5%, while inflation averaged 4% over the last three years of the period. At the sametime, external debt service ratios, which had risen to record levels in the early 1980's,have been brought down to manageable levels following a series of debt reschedulingagreements beginning in October 1983 (including six Paris-Club agreements and threeLondon-Club agreements). The debt service to exports ratio, which averaged 38% over1980-83, had been brought down to less than 28% by 1991. Macroeconomic adjustmenthas also been accompanied by economic liberalization and structural reform. There hasbeen significant progress in liberalizing the financial sector and external trade, as wellas improving the management, efficiency, and transparency of the public enterprisesector. In agriculture, reforms have also progressed well.

1.4 More recently, Morocco has been enduring unfavorable exogenous influencestogether with drought. Agriculture suffered from drought in 1992 and 1993, but otheraspects of macroeconomic performance and management have been more positive.Growth in non-agricultural GDP, for example, averaged 3.8% in 1992. The budgetdeficit remained around 2% of GDP in 1992 and 1993, despite the larger publicinvestment and relief expenditures induced by drought, an arrears clearance program, andsluggish trade tax revenues. Money and credit growth continued to slow down followingthe surge when credit controls were removed in 1991. This is reflected in moderateinflation (close to 5% in 1992, with a continuing downward trend in late months) andhigh interest rates (about 10% in real terms) which, however, have eased slightly overthe past few months. The balance of payments has not shown signs of deterioration,despite transitory difficulties. The lower food exports and higher food import require-ments triggered by drought, and a recent slowdown in the growth of manufacturedexports, mainly to Europe, have been compensated by favorable trends in other currentaccount items such as tourism receipts, and the current account deficit remained around2% of GDP in 1993. Gains from rescheduling ended with the February 1992 Paris ClubAgreement. Nonetheless, capital inflows bolstered by disbursements from multilateralsand sharply increasing direct foreign investment flows are keeping pace with grossfinancing requirements of about $2.5 billion per year. While access to foreign exchangehas been liberalized, no apparent disequilibrium has emerged in the foreign exchangemarket and the Dirham rate, pegged to a basket of currencies, has remained fairlyconstant in real terms. The level of reserves slightly increased to five months of imports(over $3.5 billion). The momentum of reforms shows no signs of abating. Theprivatization program, launched in October 1982, has generated significant interestamong foreign investors and is expected to generate more than $200 million of Treasuryreceipts. In the financial sector, 1993 reforms include enactment of a new Banking lawto set up a more rigorous framework for Bank regulation and supervision and other lawsto invigorate the stock exchange and capital markets, the introduction of stricterprudential regulations, and a reduction in mandatory subscription to low-interest Treasurybonds from 32 to 25% of banks' sight deposits. Other reforms in 1992-93 include cutsin the corporate tax rate and rate reductions in the top bracket of personal income tax,

Te Transport Sector 3

the removal of remaining restrictions on access to foreign exchange for currenttransactions, capital transactions related to foreign investments and on private foreignborrowing, a reduction in the maximum import duty, suppression of remaining importlicensing except for cereal, sugar, and edible oils (due to be removed in 1994), anddrafting of legislation to homogenize investment codes across sectors.

Medium-Term Macroeconomic Outlook

1.5 Even under relatively conservative assumptions, Morocco's medium-termprospects look favorable. Satisfactory growth with low inflation, gradual improvementin the country's debt indicators, and strengthening of the macroeconomic frameworkshould be achieved. Direct foreign investment are also expected to be forthcoming,fueling export capability. Central Government investment will likely concentrate on socialsectors and infrastructure as a way to support private sector development. The budget andthe current account should be balanced within a few years, giving the domestic privatesector easier access to investment resources and enhancing Morocco's credit-worthiness.Altogether, a GDP growth rate of 4.5-5% annually would seem consistent withcontaining unemployment at current level despite the above 3 % expected increase of thecountry's labor force. The main risks relate to drought, which causes agriculturalproduction to fall and inflates the food import bill, and to external shocks like a reductionof phosphate world market prices or of tourism earnings. While current reserves aresufficient to cover even major shocks for up to two years, recurrent or sustainedexogenous adverse effects would clearly create major difficulties. On the other hand,domestic political risks and risks of policy slippage appear to be relatively limited.

1.6 Main challenges remain in meeting longer-term development needs, especiallythose in social sectors. Despite a decline in the percentage of the population living inabsolute poverty over the last two decades, recent surveys show that a large number ofhouseholds are vulnerable and such social indicators as access to safe water, basic healthcare, and primary schooling, rank low compared to countries with similar per capitaincome. Regional disparities exist in the incidence of poverty and in the provision ofessential social services. Rapid and lasting improvements in social indicators call forreallocation of public expenditures, notably in favor of rural areas, and for measures toincrease their efficiency. Good progress is being made in these directions. Private sectordevelopment is another key priority. The private sector already accounts for close to 75 %of manufacturing output and almost all of agricultural production. To further promoteprivate entrepreneurship as the engine of growth, an adequate program of structural andincentive reforms, including reduction of corporate and personal income taxes to levelsprevalent in competing countries, needs to be complemented by provision of adequateinfrastructure, services, and financial intermediation. Decentralization and better publicsector management constitute another challenge. Social services delivery is increasinglyshifting toward local communities following the transfer by the central Government of30% of the value added tax receipts to them. Few, however, have the financial andmanagerial capabilities to handle their new functions. Further strengthening of thesecapabilities is required. The same consideration applies to "core" public utilities not yetslated for privatization. Finally, environmental and water resources have been undergrowing strain in late years. Worrisome aspects of environmental degradation include

4 Chapter I

deforestation, soil erosion, and water and air pollution as a result of industrialization.Projected water demand and supply patterns anticipate a critical deficit within the nexttwo decades. Improvements in environmental and water resources management call fora program to create a suitable institutional framework, including regulations forenvironmental protection and price incentives, and undertaking priority investments. TheMoroccan authorities have already recognized the long-term development issues whichthey are addressing with Bank assistance.

Description of the Transport Sector

1.7 The Moroccan land transport system is well diversified and includes some 60,000km of roads, a railway network of about 1,900 km (of which 975 km of tracks areelectrified, and 240 km are doubled), 11 commercial ports, and 20 airports handlingscheduled flights. Road transport carries by far the largest share of total traffic,accounting for more than 90% of intercity passenger traffic (estimated at about 22 millionpassenger/kin), and 75% of freight traffic without phosphate (about 7 billion ton-km).The railway, operated by ONCF (Office National des Chemins de Fer), has greatstrategic importance as the land carrier of phosphate exports (about four billion ton-km)and plays an increasing role for passenger transport between Marrakech and Kenitra,most especially between Casablanca and Rabat following the introduction of vastlyimproved shuttle services (its market share is estimated as 20%). Air transport plays amajor role in the country's economy, especially for tourism which is one of the mainsources of foreign exchange earnings. Three airports, Casablanca, Agadir, andMarrakech, account for about 80 % of total passenger traffic. The recently built MohamedV terminal in Casablanca provides excellent services in a well decorated setting. Thenational airline, Royal Air Maroc operates a fleet of 28 aircraft (including two Boeing747) on a national and worldwide network, carrying some two million passengersannually. The airline is profitable, partly because of high tariffs on routes to Europewhere competition is restricted.

1.8 Both road and rail traffic have increased fairly steadily over the past decade (5 %for road and 4% for rail). Railroad capacity seems close to saturation on several linksand substantial investments have been proposed by ONCF for execution during 1994-2000. These investments are economically justified, although some of lesser priority, likedoubling of Kenitra-Sidi Kacem, construction of the Sidi Yayia-Mechraa Bel Ksiri line,and the electrification of the Fes-Oujda line, may have to be postponed to minimize thedrain on a very tight Government budget. Port infrastructure has expanded rapidly inresponse to increased maritime transport under the export promotion policy andmodernization needs. Total port traffic did not change much during 1988-92, fluctuatingaround 40 million tons, but its composition undertook significant restructuring withcontainerized and roll on-roll off traffic raising their share to about 30% of general cargoat present. A few ports are specialized: petroleum products are mostly handled inMohammedia and phosphate rocks in Jorf Lasfar and Safi. The largest amount of trafficis concentrated on four major ports, with the complex of Casablanca and Mohammediaabsorbing close to 60% of total and practically all container movements. In addition,there are nine small fishing ports. Port infrastructure is amply sufficient to handleMoroccan sea-trade, recent studies showing an excess capacity of about 100 million tons.

The Transport Sector 5

Constraints do however, exist for storage as a result of abnormally slow turnaround ofgoods in ports. This should be remedied by institutional measures and not by creatingnew storage areas. For airports, the current capacity is a adequate, and the investmentprogram proposed by Office National des Aeroports, the airport agency, is essentially(more than 75%) for air traffic control, and rehabilitation of existing equipment andrunways.

B. TRANSPORT INSTITUTIONS

1.9 The Government agencies involved in the administration of the transport systemare:

(a) the Ministry of Public Works and Training (MPW), which is responsiblefor the construction and maintenance of the national, regional andprovincial road networks, and owns the port infrastructure which anautonomous public enterprise, Office de Developpement et d'Equipementdes Ports (ODEP) operates under its supervision;

(b) the Ministry of Transport (MOT) which is responsible for regulation,coordination, and development of road and rail services, air transport, andsupervises several public enterprises operating in these sub-sectors, likeONT (which has a freight forwarding monopoly on public transport), aparastatal for luxury bus intercity transport, CNPAC (a national committeefor prevention of road accidents), ONCF (the railway company), theOffice des Aeroports of Casablanca, and Royal Air Maroc;

(c) the Ministry of Shipping and Fisheries, which regulates shipping andoversees the shipping parastatals;

(d) the Ministry of Interior (MOI) which supervises the local Government,and as such should play a role when communal road networks are created,transferring construction and maintenance of these roads from the MPWto the communes.

1. 10 Given the large number of agencies involved in management of the sub-sectors,there is sometimes an overlap of responsibilities between them, and poor coordinationin investment planning. Instances have occurred where the Prime Minister was called toarbitrate on issues of commercial nature (pricing of phosphate transport by rail forinstance). The MOT has an important role to play in that regard, and should greatlybenefit from the results of the National Transport Master Plan, to be completed soon, andtechnical assistance provided under the Bank's Highway Sector Project. Vis-a-vis theparastatals, the policy has moved toward giving them larger autonomy and, in some cases(Luxury Bus Intercity Transport) privatization. The financial restructuring of a numberof them and the preparation of contract-plans clearly defining the respective responsibili-ties of the Government and Management has been increasingly favored (such contract-plans concerning Royal Air Maroc, Office de Developpement et d'Equipement des Ports,and ONCF are being prepared or revised).

6 ChWter I

C. PRIVATE SECTOR INVOLVEMENT IN TRANSPORT

1.11 The private sector plays an active part in provision of transport services, but itsfreedom to operate and compete is sometimes constrained by regulations and dominantpositions maintained by public enterprises. Most studies and works related to roadinfrastructure are carried out by private contracting and consulting industries where localand foreign interests are often associated. Force account is limited to routine maintenancewhich does not appear to be attractive to the private sector since it takes place in isolatedareas and is difficult to program thus making it impossible for a private organization toobtain an annual volume of works sufficient to sustain the necessary investments inequipment. Recent surveys demonstrated that track construction and rehabilitation in poorrural areas would not take place in some cases if not by force account, which justifiesthe decision to create nine mechanized brigades under the regional directorates of publicworks. Motorway concession to the private sector has been envisaged, but Morocco doesnot seem ready for it. Attempts to set up a private organization for toll collection on theRabat-Casablanca motorway failed, no one showing interest. Office National desTransports (ONT) has a monopoly on freight forwarding and controls trucking otherwiseperformed under private ownership. For railways, track renewal and maintenance isgenerally executed by ONCF whereas new construction is primarily contracted out. Toa large extent, the rolling stock originates from an ONCF subsidiary together withrefitting of second-hand railway cars in its own workshops. The current organizationworks well, and ONCF is among the best performing railways in the developing world.Greater private involvement is to be sought in the service area. Sub-contracting ofrailway catering may be considered. In ports, maintenance and construction managed byOffice de Developpement et d'Equipement des Ports are largely executed by privatefirms. Maintenance of port equipment is also contracted out. Cargo handling by privateorganizations rather than Office de Developpement et d'Equipement des Ports is apossibility in the long run, but not advisable in the short run since Office de Developpem-ent et d 'Equipement des Ports is an efficient organization and signed a Contract Plan withGovernment which does not address the question of privatization. The Contract Planexpires in 1996. In the maritime sub-sector, public enterprises remain dominant:Comanav for liner services, Marphocean for chemicals and phosphate, Petrocab forpetroleum products, and Sofruma for citrus. Possibilities to privatize the latter twocompanies should be examined. There are also several Moroccan private shipping linesinvolved, both in citrus and passenger transport. A number of foreign shipping lines arealso present, ensuring some degree of competition. Altogether, Moroccan shipping linescontrol about 20% of the total volume (33% of total value) of Moroccan freight andabout 50% of general cargo traffic. Finally, the private sector remains embryonic in airtransport infrastructure and services.


D. TRANSPORT INVESTMENTS IN RECENT YEARS

1.12 Capacity constraints started to appear in the mid-seventies as the infrastructureinherited at independence did not keep up with the rapid economic growth that followedit and required both rehabilitation and modernization. Investments rose swiftly from anaverage of Dh 1.1 billion annually over 1973-80 to Dh 2.5 billion over 1980-87, andclose to Dh 4.5 billion over 1988-92. Table 1.1 gives details on the composition ofplanned and actual investments over the last decade.

Table 1.1: Transport Public Investments(Dh million)

Sub-sectors 1981-1987 1988-1992 1988-1992 RatioActual Planned (1) Actual (2) (2)1(1)

Roads

Highways 4,133 6,634 5,805 88%

Local roads 1,300 3,660 3700' 101%

Transport 486 1,065 971 91%

total 5,919 11,359 10,476 92%

Railways

Infrastructure 2,350 2,044 2,151 105%

Rolling stock 1,634 2,115 1,473 70%

total 3,984 4,159 3,624 87%

Maritime

Infrastructure 4,464 1,625 1,887 116%

Equipment 1,118 1,200 966 81%

sub-total 5,582 2,825 2,853 101%

Shipping 450 2,180 678 31%

total 6,032 5,005 3,531 71%

Aeronautical

Airports 502 1657 2,022 122%

RAM 1,581 2377 3,066 129%

total 2,083 4,034 5,088 126%

Grand Total 18,018 24,557 22,719 93%

Source: MOT, MPW, MOI, Ministry of Fisheries and Shipping for data related to 1988-1992. IBRDHighway Sector Project, Staff Appraisal Report, for the others.

a/ Investments in local roads were estimated by MOI as Dh 3.1 billion during 1989-92. The aboveestimate includes a notional estimate of Dh 600 million for 1988.

1.13 The above table and Figure 1.2: Composition of Transport Investrnents, showsa relatively high implementation of investments programmed in the last five years (93 %).It also outlines the changes in relative priorities given to sub-sectors. During the earlyeighties, 31 % of actual transport investments went to port expansion in Jorf Lasfar andAgadir, a third to roads, and 22% to railroads. During 1988-92, a significant effort wasmade to improve roads, which absorbed 46% of total investment resources, whereas

8 ChWter I

investments in ports andrailways combined Figure 1.2: Composition of Transport Investmentsdropped to 28.5% from (% of total)53% in the previous peri-od.

1.14 Although from1990 to 1992 the percent- -age of total capital expen- I 1ditures allocated to thetransport sector increasedswiftly from 10% to17%, the 1992 allocationis still not sufficient inview of the large backlogof rehabilitation and de-ferred periodic maintenance in the road and rail sub-sectors. In addition, the 17% is lowin comparison with other countries (for instance, Hungary, Iran, Turkey). Currentprogress must be pursued.

1.15 The overall strategy under the 1988-92 plan was four-pronged:

(a) supp ort regio nal development and the rural population;(b) maintain existing assets;(c) impr ove planning and met hods for selection of sub-proje cts; and(d) optimize operations.

1.16 Good progress has been made toward meeting these objectives, which will remainappropriate for years to come. The priority actions other than maintenance and rehabilita-tion include upgrading of the rural road network, stage construction of the motorway toKenitra and Larache, completion of railway line doubling between Rabat and Kenitra,installation of container handling equipment and construction of grain silos in majorports. For roads, the emphasis should be placed on:

(a) rehabilitating and widening roads of local interest;(b) incre asing the capacity of trunk roads at risk for traffic congestion

(Rabat-Tanger, Rabat-Fes, Casablanca-EI-Jadida, and Casablanca-Settat);and

(c) constructing roads to isolated rural areas in order to improve access tohealth care and education, and to supplies of input needed by agricultureand market outlets for its products.

1.17 A fine balance should be struck between alleviating poverty in rural areas, verymuch of Government concern in late years, and maintaining traffic fluidity in the mostactive provinces, without which the other objective of facilitating private sector develop-ment would be jeopardized. A 10,000 km rural road development program has beenadopted in response to the former requirement, respectively providing for paving and


gravelling of 3,500 km and 6,500 km of roads over a seven-year period. Dh 630 millionhave been allocated in the 1995 budget to implementation of its first phase, of which Dh460 million is raised from tax fuel increases earmarked for the Road Fund.

E. TRANSPORT SECTOR ISSUES

1.18 International competitiveness of the Moroccan economy is critically dependent onefficient transport, which in turn requires an optimal allocation of scarce resourcesamong the various modes, and cost efficient supply of transport services. Four key areashave been identified as warranting further attention by Government:

(a) investment rationalization and planning;(b) public enterprise management and potential for privatization;(c) sector liberalization, with improved access to markets and increased

competition; and(d) environmental and safety aspects of transport programs.

1.19 With rising budget constraints, there is a compelling need to rationalize thestructure of the investment program and prioritize investments in support of continuedeconomic growth and trade development. It often calls for slowing down of newconstruction to avoid investing too far ahead of demand (this is especially true of themotorway and of the track doubling program) and concentrating on actions designed tooptimize the utilization of existing infrastructure assets. Good coordination of groupedinvestments by competing and/or complementary transport modes in densely traffickedcorridors will become a key ingredient to good planning, for which increasing attentionshould be given to dissemination of more refined appraisal methodologies. The planningorganization has moved toward decentralization which, together with partial transfer offinancial responsibilities, should lead to more demand driven programs; still, safeguardsshould exist to maintain the national coherence of the transport system and actions shouldbe designed to clarify roles at every tier of the organization and provide the necessarytraining.

1.20 Public enterprise reform was initiated in 1987 with the Bank's First PublicEnterprise Restructuring Loan (PERL). Support was also given through investmentlending, and the reform and financial restructuring of the public enterprises is now anintegral part of the adjustment process, the main objectives being to increase operationalefficiency, reduce public sector deficits, and provide services conducive to economicgrowth. Contract-Plans have already been used to assign clear objectives and apportionresponsibilities to achieve them between the Government and public enterprises; RoyalAir Maroc successfully implemented one such Contract-Plan. ONCF, saddled with largedebts and deprived of the Government financial support that was once forthcoming,currently was one of the public enterprise most in need of a Contract-Plan to establishthe limits to its autonomy and a more adequate cost recovery system, as well as defineGovernment obligations to railways (compensation of deficit making public services,contribution to investments). Difficult negotiations spanning several years finally cameto fruition in November 1994 with signing of an agreement on a 26 % phosphate tariffincrease retroactive to January 1, 1994 and on the 1993-99 Contract-Plan. In the port

10 Chapter I

sub-sector, a Contract-Plan with Office de D&veloppement et d'Equipement des Ports isexpected to contribute to enhanced planning and operational and financial performance.

1.21 Many transport services are still entrusted to public monopolies often lackingresources to invest in new equipment and technology, which on top of operationalinefficiencies, result in mediocre service delivery. There is growing awareness that poortransport performance is a drag on the national economic growth, and that fosteringprivate provision of transport services would have a strong impact on current constraints.The privatization program launched under Law 39-89 does not target transport, with theexception of CTM-LN, an interurban bus company privatized in late 1994. Issues arecomplex and the Government has yet to formulate a strategy for increased private sectorparticipation to transport. The Bank study on Private Provision of Infrastructurescheduled for discussion with Government in the fall of 1995 will contribute to thatobjective.

1.22 Road transport issues are discussed in Chapter II, The Highway Subsector andaddressed in Chapter 111, he Project.

F. BANK EXPERIENCE IN THE TRANSPORT SECTOR

1.23 The Bank provided loans totalling $491 million equivalent to the MoroccanGovernment from 1969 to 1992 for the construction, improvement, and rehabilitation ofmain roads under five highway projects, of rural feeder roads under ten agriculturalprojects, and for rehabilitation and modernization of port facilities under two portprojects. The highway projects were designed to encourage investments with high returnsto the economy, particularly maintenance and rehabilitation, and to help build up thestaffing and organization of the agencies responsible for road construction andmaintenance, and for transport coordination. The rural roads projects have met specificneeds as part of agricultural packages, and were designed as transport and agricultureintegrated investments. Bank involvement in financing these roads has encouraged theMinistry of Agriculture and Agrarian Reform, and MPW to cooperate more closely andconsistently in determining appropriate design standards, and in making arrangements forthe maintenance of these low-volume roads.

1.24 The Project Performance Audit Report for the First, Second, third, and FourthHighway Projects (respectively Loan 642-MOR, Credit 167-MOR, Loan 955-MOR, andLoan 1830-MOR), designed to improve traffic conditions, highway maintenance, andtransport planning, outline their successful implementation with rates of return aboveappraisal estimates despite cost overruns. Loan covenants were generally adhered to, butprogress sought on transport planning did not fully materialize, in part because of splitresponsibilities and limited cooperation between MOT and MPW. Disbursement laggedconsiderably behind physical implementation of the projects because of slow processingby the Government of payment requests. The situation improved following theimplementation of the SAL which streamlined budget procedures at the country level.

1.25 The Highway Sector Loan (Loan 3168-MOR) provided $79 million to priorityroad strengthening and maintenance; it also sought efficiency improvements in road


network management, in the transport market through deregulation of the truckingindustry and adjustment of road user charges, and in the construction industry. Theproject has been successful to date for all components related to road management androad works. It incurred delays in the execution of other components under MOT andachieved only modest progress toward deregulation.

1.26 The First Port Project became effective in 1986 and provided a $22 million loanto improve sector institutions and help maintain infrastructure in the ports of Casablancaand Mohammedia. The project, now completed, served to establish a good dialogue inthe sub-sector and helped set the stage for a larger and more comprehensive FY91 PortSector Project. This project provides two loans, one to Ofice de Developpement etd'Equipement des Ports and one to the Government totalling $132 million, primarily forthe modernization, adaptation, and rehabilitation of existing infrastructure. In particular,the project finances facilities for container and Ro-Ro handling in the ports of Casablancaand Tanger, and the construction of a coal terminal in the port of Jorf Lasfar. AContract-Plan was also drawn up during preparation of the project that included arevision to the infrastructure fee paid by Office de Developpement et d'Equipement desPorts to the Government.


H00 THE HOGHWAY SUBSECTOR

A. THE ROAD NETWORK

2.1 Classification. The classified Moroccan road network expanded slightly from58,500 kms in 1988 to more than 59,500 kms in 1992. In addition, there are about11,000 kms of tracks managed by the Ministry of Agriculture (MARA), plus anundetermined length of tracks within irrigated agriculture areas managed by specializedagencies under MARA. A breakdown of the network between paved and unpaved roadsis given in table 2.1.

Table 2.1: Evolution of the Road Network(km)

Road standard 1988 1992 increase %

Paved 28,500 29,626 1,126 4.0Unpaved 30.000 29.898 J1Q2 -0.3

Total 58,500 59,524 1,024 1.8

Source: MPW

2.2 Budget constraints and the greater priority given to maintenance caused construc-tion of paved roads to slow down from annual increases of 350 kms on average over1983-88 to about 280 kms over 1988-92 (-20%). Altogether, the overall constructionprogram in the last four years mainly consisted of road paving (85% of total), with alarge concentration on the former secondary and tertiary roads. Regional developmentand improved connections to Saharan provinces were the main objectives. The stringentnational budget led to development of cofinancing agreements between DRCR and localgovernments to speed up implementation of highly needed road projects. The localgovernments contributed some Dh 92.5 million, or about 50% of the program cofinancedwith DRCR over the period. About 25% of the 1,320 kms of roads built between 1988and 1992 came under such cofinancing agreements. A motorway network is beingdeveloped, limited at present to some 70 kilometers between Rabat and Casablanca.Construction of 136 kilometers toward Kenitra is in progress, and close to 500 kilometersare at feasibility study stage.

2.3 The evolving patterns of administrative and economic activities have madeobsolete the 1947 classification of the road network, which comprised three categoriesof roads: primary, secondary, and tertiary. It was abrogated by Decree 2-83-620 ofFebruary 1990, which introduced a new classification in four functional categories:motorways and national roads, linking major cities and economic centers and connectingto neighboring countries; regional roads, linking mid-size cities within economic regions;provincial roads, for collector roads linking villages and rural market centers to theregional networks; and communal roads for local roads. The new classification is the firststep in the gradual transfer of ownership of the unpaved rural roads to the communesbecause their position closer to the users should permit optimizing at the local level theuse of public expenditures for roads and a management more responsive to rural transport

The Highway Subsector 13

demand. The reclassification process was defined in the Decree; providing forappointment of Provincial Reclassification Committees jointly by the Ministers of theInterior, Public Works, and Transport, to review the classification proposals regardingthe provincial and communal networks and advise the Ministers who will respectivelysign the by laws listing the roads that fall under the two categories. At this stage, onlythe national and regional networks have been officially created (Arrete 78-093 datedMarch 11, 1993), each comprising about 10,500 kms of roads. Flnalizing the roadreclassification is an essential project element (para 3.12).

2.4 Density. The Moroccan road network is insufficiently developed, albeit com-mensurate to the current level of economic activities. The road density of around 8.5km/100 km2 is less than 6% of the national average in France for instance, but, is twiceas high as in North African countries like Algeria and Egypt. However, judging by theextent of the paved portion of its network, Morocco may compare less favorably withothers. Using such standards as the GNP per capita, population, and the country'sdimension, the 29,500 km-long paved road network is about half that of other northernmediterranean countries. The average density of this paved network is 1.2 km/i,000population and 4.2 km/100 km2, with a concentration in the most populated areas asshown in table 2.2.

Table 2.2: Paved Road Network Density(1992 - km)

Regions Per 1,000 people Per 100 km2

South (Agadir) 2.22 1.56Tensift (Marrakech) 1.04 8.86Center (Casablanca) 1.00 15.51North West (Rabat) 0.96 15.40Center North (Fes) 1.26 7.72Oriental (Oujda) 1.50 3.09Center South (Meknes) 1.80 3.87National Average 1.27 4.17

Source: DRCR. Conseil d'evaluation et d'orientation du secteur routier. (Section 12. December 1992 )

2.5 Lack of adequate road infrastructure may be perceived locally as a bottleneck tofull utilization of the mining, agricultural, and tourism potential in remote areas, and itsdevelopment is also sought as a way to reduce emigration of the rural poor to crowdedcities. The recent National Transport Master Plan (NTMP) concludes that a 10%expansion of the road network would be sufficient to accommodate traffic growth of thenext 20 years, implying yearly additions of about 300 kms. Therefore, the currentconstruction pace is fully consistent with meeting long term development objectives.

2.6 Quality. Quality is where the Moroccan road network may have the most obviousdeficit, with scantily built unpaved rural roads and substandard narrow paved branchroads, most of them in mediocre conditions. Unpaved roads represent half of the totalroad length (against two-third in Algeria, for instance), and paved ones are generally toonarrow as shown in table 2.3.

14 Chapter II

Table 2.3: Distribution of Paved Roads according to Width(1991 sample totalling 87% of paved roads)

Road width Road length %(m) (km)

- less than 3.5 m 3,550 13.8- from 3.5 to 4.5 m 10,392 40.2- from 4.5 to 5.5 m 2,851 11.0- from 5.5 to 6.5 m 6,087 23.6- above 6.5 m 2,936 114

Total 25,816 100.0

About two thirds of paved roads are less than 6 m-wide, whereas 7 m is generallyconsidered as the norm for safe crossing of two heavy vehicles. The proportion of roadsless than 4.5 m-wide, which generally implies driving on the road shoulders for crossingswhere a truck is involved, represent 54% of total. The emphasis is now placed on roadwidening in the sub-sector investment program. According to the NTMP, future trafficgrowth would warrant adding some 4,500 kms of 7 m-wide roads within the next 20years. As for unpaved roads, they are haphazardly built and lack drainage structure onmore than 70% of their length.

2.7 The condition of the Moroccan road network remains mediocre despite theincreasing priority given to maintenance in the 1980's. The evolution registered in thisarea for paved roads since 1983 is shown in table 2.4 .

Table 2.4: Evolution of Paved Road Conditions(over 10 years)

Category Good (%) Fair (%) Bad (%)

1983 1988 1992 1983 1988 1992 1983 1988 1992

Primary 33 36 48 39 36 13 28 28 39Secondary 14 16 46 46 52 18 40 32 36Tertiary 14 13 33 46 27 16 40 60 51

Total network 20 22 41 44 35 16 36 43 44

Over 10 years, good progress was made in all three categories of roads, raising theaverage proportion of those in good condition from 20% in 1983, to 22% in 1988, andto 41 % in 1992. But the increase observed in the proportion of roads in bad conditionfrom 36% in 1983 to 44% in 1992 is indicative of a steady deterioration of a largeportion of the Moroccan network, which the current maintenance and rehabilitation effortis unable to remedy. Because budget resources are limited, the maintenance strategy hasto focus on roads with the highest traffic, thereby neglecting others also exposed totraffic and weather related deterioration. MPW estimated that at least 1,500 kms of roadstrengthening and 1,500 kns of road rehabilitation and periodic maintenance would berequired to catch up with the maintenance backlog, respectively 88 % and 15 % in excessof what is done at present. As for unpaved roads, maintenance is not organized andrarely done, explaining why over 80 % of their length is in bad condition. Therefore, thefiuding of road maintenance should be monitored (ara 3.13), and the quality of bothrural roads (para 3.9) and branch roads (para 3.21) should be improved.


B. ROAD TRANSPORT DEMAND

2.8 Between 1980 and 1988, the national vehicle fleet grew at an average annual rateof 3.9%. Improved economic conditions over the last four years induced a faster growthat an annual rate of about 5% to reach a total of 742,000 vehicles in 1992. Theproportion of heavy vehicles (trucks and buses) remained stable around 30% of total,despite a much faster growth of new registration in this category than for light vehicleswhich suggests that the heavy vehicle fleet is now younger than it was four years ago.

2.9 About 70% of national traffic is concentrated on 30% of the paved network.Table 2.5 shows traffic intensity on the primary and secondary networks (as defined inthe 1947 classification).

Table 2.5: Average Distribution of Daily Traffic(1992; average daily traffic - adt)

Network above from 2,000 from 750 from 200 below total4,500 to 4,500 to 1,990 to 749 200

Primary 15 % 22 % 31 % 26 % 6 % 100 %Secondary 10 % 23 % 48 % 19 % 0 % 100 %

The roads links to major economic centers are those most traveled, like the Casablanca-Rabat motorway (18,000 adt), Rabat-Kenitra (12,600 adt), and Rabat-Fes (around 7,400adt). DRCR conducts traffic counts each year on the whole paved network but withheavier sampling rates on its most important parts. Traffic grew from 22.1 millionvehicle/kilometers per day in 1988 to 29.5 million in 1992, at an annual rate of 7.5%,well above the 2% rate achieved over 1980-88. Continuation of this trend withoutquantitative as well as qualitative adjustment of road infrastructure will lead to increasedcongestion and eventually curb traffic growth. Roads carry the brunt of the nationalpassenger and freight traffic (respectively 90% of passenger-kms and 70% of ton-kmsin 1988), and keeping road capacity ahead of transport demand is an important conditionof sustainable economic growth. The road widening component of the project will helpexpand the capacity of existing roads. The rural areas is where a deficit of transportservices is felt most acutely. Poor road conditions combined with low revenues greatlyrestrains the mobility of people and exchange of their products. The Rural TransportStudy financed under Loan 3168-MOR, still in progress, has showed that motor vehiclesaccounted for less than 45% of total movements. Low productivity transport usinganimals certainly feeds the spiral of poverty in remote areas. The rural road component(para 3.9) of the project is designed to alleviate these problems.

C. ROAD SAFETY

2.10 Roads and streets in Morocco are becoming increasingly unsafe, with a record3,605 people killed in 1994. Figure 2.6: Growth of Road Accidents shows that casualtiesare growing from year to year and the rate of growth itself has grown steadily over 1988-1992, which is greatly disturbing. Annex 2.1: Road Accidents, gives statistical details onaccidents and casualties on both urban and interurban roads and compare their growthwith growth in population, vehicle fleet and traffic. Interurban roads account for one

16 Chapter II

fourth of the accidentsbut three fourths of the Figure 2.6: Growth of Road Accidentscasualties (Figure 2.7: (urban and rural areas)Growth of Accidents on -_-Interurban Roads). 20 %

2.11 Over 1988-1992, 1

the fatality rate (numberof killed per million of D:

population) has increased 9 a 989 1 90 199I I992

from 104 to 133 (the , I ,.dEEC average is 157); theglobal road fatality risk (number of killed per million vehicle) has increased from 4,180to 4,750 (the EEC average is 377); and the interurban road fatality risk (number of killed

per 100 million vehicle-km) hasincreased from 20.3 to 22.9 (the

Figure 2.7: Growth of Accidents on Interur- EEC average is 2. 7)ban Roads

.___- ; 2.12 The deteriorating trend iseven more obvious when using

11% ~~~~~~~~~~Smeed's formula (INU-63, A Sys-tematic Approach to Road Safety

___,____ _ r , _? in Developing Countries). Smeedhad established that the fatalityrisk is mostly a function of thelevel of motorization (ratio of ve-hicle fleet to population) and a

0% .MP low' , 0 lm IN2 relationship has been calibratedFTwa.s.d.i for low-motorized countries. The

Moroccan interurban road fatalityrisk has steadily deteriorated over 1988-1992 from 6% to 30% worse than the average(Figure 2.8: Deviation from Smeed's Formula). One positive point, though, is that localawareness of road safetyissues has also increased Figure 2.8: Deviation from Smeed's Formulaand lessons from past pro- -_-

jects (INU-93, Review of 30%'

World Bank Experience in 25%

Road Safety) show that 20%

this is the single most im- 15% - _ 11 _ kportant element that could 10%_

set the stage for a compre- 5%

hensive road safety pro- 0%gram to significantly re- 15%19 - 2

1988 1989 1990 1991 1992

verse the current trend.______________7lh project includes such *F6bltiRaf /Populaton 3FelityRiskIV.hicles l

a program (para. 3.40). 010vialontom Smned's Formulai


D. THE ROAD TRANSPORT MARKET

2.13 Interurban bus services are operated mainly by small private companies or coop-eratives; CTM-LN, the only parastatal which provides nationwide luxury interurban busservices, was privatized in 1994. Market access is regulated by a National TransportCommission. The Ministry of Transport (MOT) has a representative in each major townwhose assignment is to organize and control the operations of the local bus stations. Mainregulations include: (a) licensing of bus operators on given routes with specification ofservice frequency by a Provincial Committee; (b) capping of bus fares by a Commissionreporting to the Prime Minister, based on proposals made by MOT. The market shareof interurban services has slowly declined to about 50% at present. Transport by privatevehicle maintained its share at around 30% of vehicle-kms. Taxis constitute theexpanding segment of the market, a significant and fast growing portion of which oper-ates without license. The quality of services is generally satisfactory, but progress shouldbe made in enforcing higher safety standards. Renewal and upgrading of the bus fleet ishampered by pricing regulations.

2.14 The trucking industry, entirely in private hands, falls into three categories: (a)operators of trucks of less than eight tons gross weight, which are free to operate but notlegally authorized to do public transport; (b) operators of trucks of eight tons grossweight and above restricting their activity to own account transport: they must belicensed by the Road Transport Directorate at MOT after consultation with ONCF, therailway company, and the Office National des Transports (ONT); (c) operators of trucksof eight tons gross weight and above engaging in public transport: they are required todo business through ONT, a public agency operating along commercial principles witha monopoly on road freight forwarding. Supply of public transport is fragmented, theowners rarely having more than two trucks, and truckers operating under ONT's tutelageare generally required to join cooperatives, which are assigned transport quotas. Theseparation of ownership from operations is a distinct feature of the Moroccan system; ittends to weaken the trucking industry and is not conducive to raising professionalstandards, which are low. Licenses are often granted as reward for services rendered byan individual or his family to the Kingdom, and they are rented by truckers at a costwhich, in recent years, decreased as a result of less restrictive licensing by MOT. ONTcollects freight payments on behalf of its affiliates against their paying a fee for theservice. The current trucking organization was established by Dahir 1.63.260 ofNovember 12, 1963.

2.15 The trucking market is highly distorted. About 40% of all goods are transportedby trucks of less than eight tons gross weight which have become quite active on thepublic transport market in violation of the law. This a complex phenomenon bothreflecting a deficit of trucking services in certain areas, the rural ones especially, andevasion tactics by truckers and shippers anxious to free themselves from the cumbersomeONT system. These illegal operations have been tolerated silently by the MOT which leftthem exposed to individual sanctions and abuses, and created incentives to go for quickgains by overloading trucks at the expense of road safety. Pending issuance of newlegislation and as an interim measure, the Minister of Transport instructed lawenforcement units to waive provisions of Dahir 1.63.260 barring 8-ton trucks from doing

18 Chapter 11

public transport (Directive 16/DTT/DPCS/SR of May 25, 1994). For its part, ONT isestimated to control no more than a third of road freight transport, and its share of theinternational trucking market is at a low 10% reflecting the Moroccan truckers inabilityto compete for quality transport with foreign truckers. About 70% of goods directlycarried by ONT's affiliates relate to the public sector, another clue that private sectorshippers tend to contract outside ONT. The ongoing privatization program will furthererode the ONT market base. Finally, own account transport represents about 35% offreight moved by roads, which is high.

2.16 ONT has been credited in the past with a positive contribution to marketefficiency by allowing private truckers with limited means and organization to minimizeoverhead costs and empty back-haul costs (the overall load factor for most interurbanmovements is a satisfactory 60%). No subsidies have been called from Government. Butthe negative sides of the ONT system have been increasingly visible with the evolutionin complexity of the national and international markets and increasing needs for highstandard of services. ONT is a bureaucratic organization of some 1,200 staff whichshows some of the negative characteristics of the civil service, including low responsive-ness to commercial needs of shippers. It also acts as a marketing agency, charging areference tariff approved by MOT with preferential rates that, truckers complain, are toolow to allow for normal renewal of their aging truck fleet. The relatively high feecharged by ONT for its services (4-5% of freight rates on average, plus 1% tocompensate truckers for empty back-hauls) is another bone of contention. In practice,truckers bypass ONT as much as possible, making direct transport arrangements withregular customers, and go to ONT's offices only to regularize the paperwork and pay thefee. ONT's monopoly also seems to place restrictions on development of intermodal (railand road) services, as ONCF for instance is barred from purchasing trucks. There isgrowing awareness that better and cheaper transport, so essential to economic growth andinternational competitiveness, can only be achieved by eliminating the ONT monopolyon freight forwarding and establishing market-based trucking prices, which again implieschanging Law 1.63.260. Inproving road transport efficiency is an important projectobjective and liberalizing road transport is a project element (paras 3.51 - 3.54).

2.17 There are 58 technical inspection centers in Morocco, but their performances aremediocre and technical standards are loosely enforced. To address this issue, a nationalcenter for control of vehicles has been created under MOT and the Highway SectorProject provides financing to build needed facilities and equip them. The national centerwill control the 58 vehicle inspection centers. The building and the equipment areoperational but the current lack of budget appropriations does not allow recruiting staffand delays launching of the Bank financed technical assistance program.


E. ADMINISTRATION

2.18 The Road and Traffic Department (DRCR) of the MPW is responsible for thedesign, construction, and maintenance of the National, Regional, and Provincial networks(Document in project file: DRCR's Organization). The headquarters only deals withmatters of general planning, coordination, and supervision. The peripheral offices arelargely autonomous for programming of road works, contract awards and management,and supervision of works. The field organization consists of 40 provincial offices and 80subdivisions. Since 1983, seven regional offices have existed as an intermediary layerbetween central directorates (DRCR and the other directorates under MPW) andprovincial offices, to provide support in the execution of their mission, exclusive ofactivities related to day-to-day operations. The 1992 Constitution granted regions a legalstatus and the tendency is to use this administrative level to re-equilibrate the distributionof responsibilities between central and decentralized organizations, which were given toomuch autonomy at the expense of national coherence in road network development.

2.19 MPW created three pilot regional directorates on September 1, 1992: Center-North (Fes), Center-South (Meknes), and Tensift (Marrakech). The Regional Directorexerts no line authority over Provincial Directors, except when he receives specificdelegation from the Minister. The thrust of the experiment is to concentrate managerialcompetence (particularly for planning and economic studies) at the regional level. Currentmissions of the Regional Director are: (a) commissioning of studies of common interestto enhance cost effectiveness of road works; (b) supervision of technical studies bycentral directorates, to improve project programming and project implementation(physical and financial); (c) verification of quality of executed works and of roadmanagement data collected within an annual program agreed by central directorates; (d)technical assistance to provinces that request it, and training; (e) coordination ofpreparation of the multi-year action program and dissemination of improved appraisaltechniques; monitoring of budget execution by provinces; (f) operation and maintenanceof the regional equipment fleet. The Regional Director may be authorized to set up forceaccount units if DRCR is satisfied with current performance of the equipment fleet. TheRegional Director is further entrusted with development of the regional economic database. Pilot regional directorates are just starting to get organized to handle their enlargedmissions. Their future role and possible spreading of the experiment to the other fourregions critically hinges on a rapid build-up of expertise and skills. Because the RegionalDirectors have an essential role to play in optimizing public expenditures for roads,fostering their development will be an important means of improving network manage-ment under the project (paras 3.30 - 3.33).

2.20 The parastatal Autoroutes du Maroc is entrusted with management and operationsof the Casablanca-Larache motorway. Tolls are currently collected on the Casablanca-Rabat section; they are intended to cover the costs borne by Autoroutes du Maroc andcontribute to financing of the construction of the Rabat-Larache section, which startedin 1992. Between Dh 300 and 400 million are collected annually.

2.21 The communal networks, once established, will be under the responsibility of thecommunes, supervised by the Ministry of the Interior. With the exception of large towns,

20 Chapter II

which have their own technical road service, the communes cannot afford to handledirectly their new road responsibilities. The current strategy is to develop a system ofconventions by which a commune would entrust the local public works subdivision withresponsibilities to manage and execute road maintenance on its behalf.

2.22 The National Center for Road Study and Research (CNER) was created in 1979,then established as a financially autonomous agency under MPW in 1986. CNER isstructured in four divisions: (a) research and dissemination of technical know how; (b)monitoring of the Moroccan road network; (c) development and processing of a road database; (c) administration and finance. CNER employs about 50 staff, half of which areroad engineers and technicians. It still derives most of its revenues from contractsawarded by DRCR, but has a branch dealing with military airports and recentlydeveloped its consulting activities outside Morocco. A road maintenance strategy for1992-2012 has been developed by CNER, using SYGER (road management system),which is an application of the HDM III model; it computes the discounted total road andvehicle costs under each variant of maintenance, and optimizes the use of scarcemaintenance budgets. Road roughness measurements and other tasks needed to developand update the paved road data base is entrusted to CNER with support given byDRCR's technical divisions. Actions currently planned focus on two aspects: (a)strengthening of the road data base, through auditing of collection and measurementmethods; (b) more accurate perception of maintenance priorities, by making HDM IIIavailable to regions after proper calibration. CNER will play an important role in theinstitution building envisaged at regional level.

F. PLANNING, BUDGETING, FINANCING

Planning

2.23 Preparation of a formal plan covering 1993-97 has been abandoned, as the 1992Constitution stops making reference to the concept of plan. The current approach favorsflexibility and more active involvement of regions in the programming of road works.The initiative to prepare plans rests with DRCR, which resorts to a system of 5-yearrolling action programs. Yearly budgets are directly derived from such programs. ThePlanning Directorate at MPW has nominal responsibility to monitor planning DRCRactivities, but has very little influence in practice for lack of proper analytical tools andinformation. The Planning Directorate concentrates its current efforts on improvingsystems to monitor financial and physical implementation of road investment budgets.

2.24 A decision has been made to transfer planning responsibilities to the regions inorder to avoid past pitfalls when, first, excessive decentralization gave too muchinfluence in decision making to local politicians. Then, excessive centralization fed intoa normative approach to road work programming which produced some poor choices andimplementation problems when locals would lack motivation to execute works that theydid not see as needed as assessed by central programming institutions. At present, DRCRallocates a tentative budget to each province on the basis of four criteria: (a) length ofpaved roads in bad and very bad condition; (b) traffic on paved roads; (c) total length ofroads; (d) length of mountain roads. Weights are given to each criteria. For unpaved


roads, quotas are estimated on the basis of other objective criteria like the proportion ofthe rural population and of rural roads in the respective province. Coordination of theprogramming work done by the local DPTP is vested in a Committee (Comite Techniquede Decentralisation). Guidelines are given on how priorities should be established.Minimum economic returns on the investments (12%) and service standards are amongthe main applied norms. Greater emphasis is also placed on the state of preparation oftechnical studies, and a 2-year maturation period applies from programming to executiondate. The still ongoing road reclassification further facilitates the identification ofpriorities.

2.25 Recently, simplified pavement management system (EVAL) has been used tocompute the economic rates of return of proposed road investments. The linearassumptions behind many cost functions tend to exaggerate the benefits of reducedroughness for extreme values, and more significant and comparable results will bepossible by using HDM III. This model may be too complex however to be used by theDPTPs, hence the strategy under the proposed project is to build expertise in itsutilization at the regional level where the equipment and training effort will beconcentrated (paras 3.30 - 3.33). Consideration should further be given to streamliningof appraisal techniques to ensure compatibility of construction, modernization, andmaintenance investments. The current practice is to allocate resources to each sub-program on the basis of perceived priorities; a more objective allocation of budgetresources would likely raise the overall economic efficiency of the road investmentbudget.

Budgeting

2.26 The global road budget is negotiated each year by MPW with the Ministry ofFinance. By late January each year, the road budget is allocated to the DPTPs by DRCRafter clearance by the Minister and the Central Controller in the Ministry of Finance. Thelocal DPTP has direct authority from the Minister to commit and spend within itsallocated budget and represents MPW in the provinces; he remains overseen by DRCRin personnel management matters. Significant improvement in actual implementation ofroad budgets was achieved in the late eighties as a result of legislation that authorizes thestart of procurement in the year preceding the actual budget appropriations. Procurementis a lengthy process, and this practice mobilizes contractors quickly after the budget isallocated. The actual road spending ratio of 60% of approved budgets over 1981-85 hasgone up to about 80%, which is about satisfactory.

2.27 Despite overall budget stringencies and commitments under SAL II which reducedthe importance of infrastructure spending from 3% of total expenditures in the earlyeighties to 2% at present, road expenditures increased from Dh 1.02 billion in 1989 toDh 1.46 billion in 1993 (+44% in current dirham; + 12.5% in constant dirham). Table2.9 gives their breakdown and evolution of actual road expenditures over 1989-93.

22 Chapter II

Table 2.9: Actual Maintenance and Inveshnent Spending*(Dh million)

Budget Items 1989 1990 1991 1992 1993** Total

Maintenance & modern-ization

- routine 259.7 396.2 297.5 284.3 275.0 1,512.- other 426.3 538.2 699.0 847.8 955.0 73,466.3

sub total 686.0 934.4 996.5 1,132.1 1,230.0 4,979.0New construction 262.0 275.5 202.7 253.6 215.0 1,208.8Equipment 59.0 32.3 29.0 24.2 1.0 145.5Miscellaneous 8.6 11:7 8.5 124 DA. 54.2Total 1,015.6 1,253.9 1,236.7 1,422.3 1,459.0 6,387.5

Source: DRCR * amounts shown include Road Fund sources** the breakdown of 1993 expenses is a mission estimate

2.28 Government spending in the road sub-sector mainly increased in relation tomaintenance (rehabilitation, strengthening, and periodic and routine maintenance) which,given that about 90% of the equipment was assigned to maintenance tasks, rose from73% of total road expenses in 1989 to about 84% in 1993. This evolution seemsconsistent with enhanced economic efficiency of road programs, as rates of return onmoney spent to reduce a maintenance backlog are generally much higher than those oninvestments in road construction. Amounts budgeted for new construction in 1994 weredown to Dh 196 million, two-third of which for rural roads, out of a total road budgetof Dh 1.5 billion in which maintenance accounted for close to 87%. The 1995 budgetwas increased to just under Dh 2 billion (+33% in current dirham) with incrementalresources allocated in full to implementation of the 10,000 km rural road developmentprogram; the budget structure otherwise remained unchanged from previous year. In acontext of tighter public finance where most budgets other than those directed to socialsector needs had to be cut by 3-5 %, the rather favorable treatment received by the roadbudget reflects the continued Government commitment to better road maintenance, andthere is little room for further shifts in favor of maintenance since they would come atthe expense of the high priority rural road program. Therefore, the objective under theproject should be to maintain the same level of maintenance assuming no real increasein the total road budget. Opportunities to bring maintenance budgets closer to what theyshould ideally be (the gap is currently estimated at about 70%) are entirely contingentupon relaxation of the overall Government budget constraint on which one can onlyspeculate at this stage.

2.29 Under the Highway Sector Project (Loan 3168-MOR) the practice of carrying outannual reviews with the Bank of the road investment programs was established.Agreement has been reached at negotiations to continue the practice. The Governmentwill submit to the Bank's representatives the proposed road investment program for thefollowing year, together with the technical and economic justification of its elements.Thereafter, the Government will finalize the program, taking the Bank's comments intoconsideration and ensuring the prompt implementation of the program. The program willinclude in particular road rehabilitation and overlay, construction of facilities andprovision of equipment and indicate the financing considered.


2.30 The DPTP maintains administrative accounts, commitments and payments andmonthly statements are sent to DRCR. Under standard payment procedures, the DPTPsends instructions to the local General Treasurer with copy to DRCR, to pay contractorsor suppliers within approved contracts. When foreign financing is involved, the DPTPwill issue a two-part payment order, with one relating to loan financing and the other tocounterpart funding. The General Treasurer will not proceed with the latter's paymentunless he gets notification by the Minister of Finance that the particular contract iseligible under that loan, irrespective of the contract amount. For instance, thisnotification is given once the Bank has sent its no objection telex. This procedure israther cumbersome and there are instances when the General Treasurer is notified of loaneligibility only after months of delay. After the payment is made, the local GeneralTreasurer sends the accounting documentation to the central General Treasurer who thendebits the Bank special account and sends a monthly statement of all debits to the BudgetDirectorate based on which applications for replenishment of the special account areprepared. Disbursement of Loan 3168-MOR has sometimes been hampered by thereplenishment speed of the Treasury circuit, which is slower than the commitment andpayment speed. Procedures should be streamlined to ensure (a) prompt notification ofloan eligibility to the local General Treasurers within the SOEs limits; and (b) a smootherflow of payment requests requiring better contract management and coordination betweenMPW and the Ministry of Finance.

Financing

2.31 Local financing of road expenditures comes essentially from the Governmentbudget and the Road Fund, which is discussed in the following section. Budgetary con-straints have been rising in recent years and the Ministry of Finance is very reluctant toearmark tax revenue and additional transfers from central to local governments beyondwhat it has already conceded, namely the initial endowment of the Road Fund, and thetransfer of 30% of the value added tax (VAT) to local governments. The tax base isheavily tapped and the potential resources that it could yield seem predesignated by theMinistry of Finance for general uses. The possibility of increasing road funding, asdesired, hinges on finding ways to raise more user charges. A study is being financedunder the Highway Sector Project to seek, among other things, feasible methods forsteadier funding of road maintenance. Donor financing of the Moroccan road budget wason average 46% of total over 1988-92. The African Development Bank (AfDB) and theWorld Bank used to be the sole contributors. AfDB approved a $92 million loan underits Third Road Maintenance Project dealing with the primary and the secondarynetworks. Japan provided grant financing for construction of an institute specialized inroad maintenance and road equipment training, and for technical assistance to train train-ers. Japan is cofinancing the present project.

2.32 Funding of communal road maintenance outside town limits was sourced in thecentral budget before 1990. Amounts spent by DRCR on communal roads stayed belowDh 50 million in recent years, 90% of which were for maintenance of paved roads.There was no regular maintenance for unpaved roads, most interventions being inresponse to emergencies caused by bad weather making roads impassable. The 1990Decree on road classification creates a communal network to be managed and financed

24 Chapter II

by communes (art. 2) and, when local resources are not sufficient, its article five makesit eligible for maintenance subsidies from the Government current budget based onrecommendations by the Ministry of Interior (MOI). The financial implications of thenew system raised great concern in the communes, seeing that they might have to bearadditional costs while getting no new resources, and contributed to delay initiation of theformal communal network classification process by almost three years. Pendingcompletion of this process, the old funding system remains in place.

2.33 The communal finance system, to be reformed under the Morocco First Municipal

Tkle 210: Bulutlon of Communal Budgets

(Dh million)

Urban Nlmidpalities Rural Communes All Communes1989 1990 1991 1992 1989 1990 1991 1992 1989 1990 1991 1992

Rczenues:

Local taxes 1619 1788 2936 2384 573 697 905 1067 2191 2485 3841 3451VAT transfer 892 743 841 1539 453 785 409 567 1345 1528 1249 2106Bonosnp 485 285 469 520 115 850 180 143 599 1135 648 663others 1797 1885 1737 781 794 845 1099 657 2591 2729 2836 1439Stotal 4792 4701 5983 5225 1934 3177 2592 2435 6726 7878 8575 7659

Expenses::nmt 2443 1975 3432 2866 746 634 1211 855 3189 2609 4643 3721Investnents 1327 1408 1158 1251 552 810 704 751 1878 2218 1862 2001

De service 280 313 377 387 33 51 65 96 313 364 442 482s.-total 4050 3696 4966 4503 1331 1495 1981 1701 5381 5191 6947 6205

Balance:

Total 742 1005 1017 721 603 1682 611 733 1346 2687 1628 1455Of Wiich: infrastnxture Of Wiich: infrastzcure Of vhich: infrastrcture

rent 174 187 209 87 12 353 18 24 186 540 227 110

Csital 389 360 397 410 265 440 435 441 654 800 832 851Total 563 547 605 497 277 793 453 464 839 1340 1058 961lmrve: Data base on conuraial finance. Although it dDes not seem fdly satisfactory, the estimates given here shotddbe dl aa gDodapproxizmtion of rality.

Finance Project approved in June 1993, faces a narrow resource base and enlarged costsfollowing the creation of 500 new communes recently and recruitment of about 40,000people. Table 2.10: Evolution of Communal Budgets, gives an overview of the evolutionof communal budgets between 1988 and 1992. Local revenues were boosted byimplementation in 1988 of a 1985 Law allocating 30% of the value added tax (VAT) tothem. Local taxes accruing to communal budgets rose from Dh 2.2 billion in 1989 to Dh3.4 billion in 1992. The VAT transfers of Dh 2.1 billion in 1992 are comprised of twoelements: an operating subsidy roughly estimated at Dh 0.7 billion, and subsidiesearmarked for investment expenditures. The current revenue of communes was thenaround Dh 4 billion in 1992 against current expenditures of Dh 3.7 billion; the gross cashflow roughly matched more the debt service requirements. Table 2.10 also shows thatsome Dh 110 million was spent on infrastructure maintenance in 1992, or about half theaverage allocation of 1989 and 1991, and only 20% of the 1990 allocation. Most of theseresources go to the urban networks. The same applies to capital expenditures, althoughfuning of intercity roads by communes is on the rise through cofinancing arrangements


with the Government, currently estimated at a third of their infrastructure capital budget.The evolution of borrowing shows a peak in 1990 which suggests that the largermaintenance requirements faced that year by communes had to be financed indirectly byborrowing, which is abnormal and indicative of severe cash shortages. The item otherrevenues broadly corresponds to surpluses from previous years available for investmentexpenditures only.

2.34 The 1,200 rural communes collected only 31% of total local communal taxes in1992 which, together with the operating subsidy portion of the VAT, gave them currentrevenues of almost Dh 1.5 billion against current expenditures of Dh 855 million. Thesurplus of about Dh 500 million (after debt servicing) meant, however, that each ruralcommune had Dh 0.4 million on average to finance the minimum investments needed bytheir population. The financial condition of rural communes did gain strength (table 2.10shows local tax revenue increasing by 86% between 1989 and 1992) but does not allowthem to fully meet their obligations and remains too weak to sustain large borrowing.This average picture still gives an imperfect rendition of real situations which differgreatly among communes. A few enjoy relative financial easiness linked, for instance,to forestry resources, while most derive more than 90% of their revenue from VATtransfers.

2.35 According to table 2.10, rural communes spent less than Dh 20 million per yearon road infrastructure from 1989 to 1992 (this average excludes 1990 which appears tobe an exception), which amounts to Dh 15-20 thousand per commune and per year.These meager resources mostly went to street networks. Consultants estimate the annualcost of routine and of periodic maintenance for unpaved roads around Dh 1,800 and Dh2,700 per km respectively (the latter reflects local conditions whereby only a third of theroad length is treated). For paved roads, corresponding costs are Dh 9,800 and Dh7,000. With an average of 10 km of unpaved roads and 3,5 km of paved ones in eachrural commune, fully funded road maintenance implies spending an additional Dh104,000 per year and commune, more than five times the actual spending in recent years.This is not achievable under current and foreseeable conditions, and financial support willhave to come from outside, preferably through the road fund. Development andmodernization of their road network is another constraint that rural communes face.Much higher costs per km are involved, not commensurate to the above estimate ofresources available for investment. That leaves most rural communes with no otheralternative than seeking Government subsidies to cover a substantial part of investmentsprogrammed under the 10,000 km rural road development program partly financed underthe project.

2.36 Funding of the 10,000 km rural road development program relies on theassumption that an average of 12.5% of its cost will be financed by the communes.Should communes be unable to bring the needed cofinancing, the Government wouldbridge the gap with its own resources but may defer implementation of that particularsub-project to the program's late years. The communes would be required to maintainthe road after its paving or gravelling if it fell within the communal network. To ensurea cost effective use of resources allocated to communal roads maintenance, the recipientcommunes will sign a contract with DRCR by which the latter would have delegated

26 Chapter II

responsibility to program, design, and supervise road works. For investments, the DRCRexperience of cofinancing projects with communes has lead to strengthening conditionsof eligibility to loan funds, from verification that proposed investments are technicallyfeasible and economically justified and assurances that road maintenance will be properlyprogrammed and executed.

G. THE ROAD FUND

2.37 The Special Fund for Road Maintenance (Compte d'Affectation Speciale 35-56),or Road Fund (RF) was created in December 1988 to remedy the severe underfundingof road maintenance that prevailed in the early eighties and, more specifically to providestable funding for core operations. The Minister of Public Works has authority to commitfunds within budget limits approved by the Parliament under conditions similar to thoseapplicable to the general budget. Basically, the RF is just a special account whichcomplement the general budget resources allocated to DRCR under chapter 2,107, item31, and one of two sources adding up to the make the DRCR budget. The RF, which hasa 12-item structure, was meant to cover all needs for routine maintenance (includingreopening of roads after snow falls and floods) and about 65 % of periodic resealingoperations, but its actual applications covered a broader spectrum including roadstrengthening and rehabilitation, feasibility studies of maintenance projects, printingexpenses of car registration stickers, and rebuilding of bridges and road structures.Resources generated by the RF increased from Dh 434 million in 1989 to around Dh 604million in 1994. In 1995, additional tax revenue equivalent to Dh 460 million wasearmarked to the RF to finance the 10,000 km rural road development program. Itchanges the definition of the RF now to finance new construction. Still, the Loi deFinances 1995 stipulates that no less of 55% of its resources should be used formaintenance. Just coincidentally, the RF also represents about 55 % of the 1995 total roadbudget.

2.38 Resources in 1994 came from three earmarked taxes on: (a) fuel consumption (Dh18 and 10 per liter respectively for gasoline and diesel oil); (b) vehicle registration (asurcharge of Dh 150 per HP for passenger cars and Dh 30 per ton of gross weight fortrucks); (c) the gross weight of vehicles (rates range from Dh 650 under 5 tons to Dh10,700 above 33 tons), a simplification of the more focussed but less manageable axle-load charging basis. The additional resources created in 1995 came solely from doublingof the earmarked fuel tax. Table 2.11 shows the evolution and structure of RF actualrevenues from 1989 to 1994, and the budgeted revenues for 1995.

Table 2.11 Evolution and Structure of Road Fund Revenues(Dh million)

sources 1989 1991 1994 budget-1995

T.I.C. (fuel taxes) 246 285 325 813Registration taxes 67 66 139 134'Axle-load' taxes 121 127 140 144

total 434 478 604 1090


2.39 Actual revenues to date have always been above forecast. For instance, the 1994budget assumed revenues of Dh 530 million, compared to actual revenues of Dh 604million. Excess revenues are carried over to the following year RF budget. In 1995, thebudget forecast has been based on a more realistic estimate of likely tax revenues,namely Dh 630 million for "normal" revenues, and Dh 460 million for the surcharge forrural road construction. In 1995, the RF will still have the 1994 carry-over revenue ofDh 74 million to bring total resources available for spending to Dh 1,164 million. In1996, the carry-over effect should be small, and the RF total revenue will normally bearound Dh 1,150 million, barring drastic changes in the traffic level. An interestingfeature of the RF is, besides the relaxation of the budget annuality rule, that its revenuesare indexed on traffic which have been growing consistently, thereby ensuring increasedfunding for maintenance. Under tight budget conditions likely to extend to the mediumterm, the Dh 880 million general budget allocation to DRCR is not expected to increase,and safeguarding the integrity of the maintenance tasks will hinge on the increasedfunding that the RF "mechanics" will generate.

2.40 Established to insulate road maintenance from the general revenue budgetingprocess and meet essential expenditure requirements, the RF has made an increasing andvaluable contribution to the road budget as shown in table 2.12.

Table 2.12: Road Fund Actual Contribution to Maintenance(Dh million)

1989 1990 1991 1992 1993 1994

Total Maintenance 686 934 997 1,132 1,230 1,300

Of which:

Road Fund 312 425 416 535 575 610

% of total 45 46 42 47 47 47

Source: DRCR

2.41 The amounts shown for RF financing differ from revenues because of lagsbetween cash collection and spending authorization, and between commitments andpayments. Overall, the RF financed about 46% of total road maintenance over 1989-94,including close to 85% of routine maintenance and about 30% of other mainte-nance/modernization expenditures. The RF share of total stayed in a relatively narrowrange, with a low of 41.7% in 1991 and around 47% in most recent years. Thesefluctuations show that the RF does have a stabilizing, albeit moderate effect on the roadmaintenance budget. Regular funding of road works is indeed a desirable quality that theRF helps enhance. The main driving force behind this evolution has been the strongcommitment by Government to better road maintenance to which it allocated an annualaverage of about Dh 1 billion over the period under review, compared to Dh 350 millionbetween 1981 and 1987. In real terms, the 1994 budget is 40% higher than in 1989.

2.42 Funding of road maintenance will be constrained over the next 5 years. The 1995maintenance budget of around Dh 1,276 million (Dh 572 million from the general

28 Chapter 11

budget, and Dh 704 million from the RF) is practically unchanged from previous yearsin real terms, since no more funding of unpaved roads maintenance from the generalbudget is needed given the considerable effort consented in favor of these roads underthe 10,000 km rural roads program. Previous concerns about the state of neglect in whichthe unpaved roads were kept have been addressed in 1995 in a most comprehensive way.The effort should now concentrate on preventing erosion of the maintenance budget fornon-rural roads, an objective sought through the proposed project conditionality.Increasing RF resources to fully cover recurrent maintenance, and eliminating at thesame time the general budget allocations to maintenance will ensure that funding willincrease in line at least with road traffic. The maintenance strategy should be to makeprogress as permitted by improvement of general budget condition toward the optimalprogram, which would require annual strengthening of 1,500 km and resurfacing of anequivalent length at a total cost of Dh 2.15 billion (70% above current level). There isno easy way to raise additional user fees. The Bank financed study on redefinition of theRF' confirmed the conclusions of the 1988 study: road users are generally overtaxed, andthe fact that user fees paid by heavy trucks and semi-trailers trucks do not cover a fairshare of road costs (cost coverage of 0.8 and 0.6 respectively) does not imply that theycould bear higher user fees since they already carry a heavy burden from general taxation(the ratio of general taxes to user charges is of 3). Customs and import duties rangingfrom 40 to 50% of vehicle prices hamper timely vehicle fleet renewal and developmentof road transport, as evidenced by the low market share of Moroccan truckers oninternational transport. Reducing these ownership-based taxes would seem desirable andcreate opportunities to increase user fees. The Government budget constraint, however,would hardly allow it to simultaneously reduce overall taxation on truckers and raise theiruser charges accruing to the RF to finance more maintenance, because it would inevitablymean less revenue in coverage of general Government functions. This assessment infavor of the status-quo will be reexamined at mid-term review with a view to determineif improved conditions would warrant action on pending road taxation issues.

1/ BCEOM. "Actualisation du Fonds Routier. Mission d'Appui Technique" July 1994


M.0 TH PROJECT

A. BACKGROUND AND OBJECTIVES

3.1 The project was originally identified in 1991 as a rural roads project. In 1992,however, the Government requested that its scope be extended to the other priority areasin the subsector, road safety and the secondary and tertiary road network, to continue tobenefit from the Bank's dialogue in these key areas.

3.2 Rationale for Bank Involvement. The Bank played has a unique role infostering sound institutional developments in road maintenance, road funding and networkmanagement. It is important that the Bank continue to be involved in the next phase ofthese reforms. Furthermore, the Bank's development strategy in Morocco focuses onprivate sector development, social sectors, poverty alleviation, conservation of waterresources, protection of the environment, and public sector finance and management. Theproposed project contributes in many ways to implementation of this strategy.

3.3 Objectives. The project objectives are to:

(a) address core needs of the rural poor by improving access to socialservices and to market;

(b) accelerate private sector development by reducing regulatory constraintsin road transport and by increased resort to road works and supervisionby contract;

(c) develop road management expertise in the new regional directorates; and(d) improve road safety.

3.4 In addition, by constructing all-weather access to remote mountainous areas, theproject will prepare the ground for further social and economic development of theseareas. It will also work toward efficient decentralization of road management and shouldeventually lead to better prioritization of road works and a more cost effective use ofpublic resources allocated to highways.

B. DESCRIPTION

3.5 Description. The proposed project includes:

(a) improving about 1,133 kmn of priority unpaved rural roads to all-weathergravel standard, constructing 96 km of paved rural roads, and finalizingthe road reclassification;

(b) improving about 2,219 km of paved branch roads (formerly classified inthe secondary and tertiary networks) by carrying out maintenance backlogresealings, structural overlays and/or widening works;

30 Chapter Iff

(c) improving network management (technical support, planning and program-ming, improvement phasing and training) and renewal of essential roadmaintenance equipment; and

(d) streamlining the road safety organization and supporting priority actions.

C. RURAL ROADS

Concept and Content

3.6 Policy. The Government intends to finalize the reclassification of the highwaynetwork and prepare the future transfer of ownership of the farm-to-market roads to localgovernments because their closer position to the users should permit network manage-ment that is more responsive to rural road transport demand. To encourage the use ofappropriate standards, the Government intends to bear some of the financial burden forboth investment and maintenance. In 1995, the Government adopted a national programof construction of 10,000 km of rural roads over a seven-year period.

3.7 Preparation. Several studies carried out under the Highway Sector Project havecontributed to the preparation of this element, in particular, the study of unpaved ruralroads improvement and maintenance, the rural transport study and the supplementaryroad user charges study. These studies have reviewed about 38,140 km of unpaved ruralroads (both classified and unclassified). Only 20% of the reviewed roads have adequateformation and drainage while 30% are unusable at least 30 days a year. The volume is10 vehicles of average daily traffic (adt) or less on 70% of this network. No maintenanceis usually budgeted or carried out. The studies have identified 14,970 km (90%classified) for which various strategies of improvement are technically and economicallyjustified.

3.8 Objectives. To alleviate rural poverty by improving access to social services andmarket in remote rural areas and prepare the ground for further social and economicdevelopment of remote montainous areas.

3.9 Description. The project will help finalize highway reclassification and willimprove 1,133 km of unpaved rural roads to all-weather standards. The improvementworks include earthworks to correct bad spots, construction of drainage infrastructure andlaying a base/surfacing layer of natural gravel. Finally, the project will construct 96 kanof paved rural roads to a low-volume road standard (4 m of pavement over 8 m offormation for a design speed of 60 kmlh)

The Project 31

3.10 Indicators.

Table 3.1: Rural Roads, Indicators

Target Values

Indicator Unit 1994 1995 1996 1997 1998

Average for the project element:

Constructed km 0 0 325 729 1,229

Traffic inter- day-km 20,360 20,360 16,600 11,800 6,000ruptions'

Traffic mln veh- 11 11 12 14 17km/yr

Value for each individual section (example for P 3108, Azilal):

Traffic inter- day-km 2,124 2,124 2,124 708 708ruptions

Traffic adt 97 97 97 107 117

Cost and Financing

3.11 Local governments are expected to cofinance an average of 12.5% of the 10,000km national rural road program. While this ratio is expected to also apply to the projectroads, the specific sections for such cofinancing have not yet been identified. For therehabilitation of unpaved rural roads, the average base cost of the improvement worksis Dh 198,000/km ($22,500/km). One hundred and thirty three km will be financed bylocal sources (the central and local governments) in 1995 and 1996 while the remaining1,000 km will be financed at 72% by the Bank. For the construction of paved ruralroads, the average cost is Dh 826,000/km ($96,100/km).

Implementation

3.12 Reclassification of the highway network. The Ministries involved signed aninter-ministerial bylaw on August 10, 1993 and issued corresponding circulars to set upthe required Provincial Reclassification Committees. The Communes do not currentlyhave the resources needed to operate and maintain a large network. Furthermore, a largeportion of unpaved rural roads is not yet in maintainable shape (non-engineered tracksthat received only sporadic emergency maintenance from MPW and need improvementbefore being entered into scheduled maintenance programs). Therefore, no ownershiptransfer is currently necessary. The initial reclassification is scheduled to be completedby December 31, 1995.

2/ Number of days per year for which traffic was interrupted more than eight hours.

32 Chapter III

3.13 Funding of road maintenance. Recent progress has been satisfactory, howeverfunding of road maintenance may be more difficult in the next few years. In 1995, theRoad Fund has been considerably increased, through higher fuel taxes, to reach Dh 1.090million. The increase (Dh 460 million) has been earmarked to finance the 10,000 kmnational rural road construction program. During negotiations, an understanding wasreached that the Government will give high priority to funding maintenance of classifiedroads and that the corresponding needs will be evaluated on the basis of the indicatorsbelow.

Table 3.2: Funding of Road Maintenance, Indicators

Target Values

Indicator' Unit 1995 1996 1997 1998 1999

Classified Paved Roads:

Appropriations Dh/km 23,000 23,690 24,400 25,130 25,580

Classified Unpaved Roads:

Appropriations Dh/ka 2,000 2,060 2,120 2,190 2,250

3.14 Organization. DRCR will implement the road works through its ProvincialDirectorates (DPTP) using the road fund to finance the national rural road constructionprogram.

3.15 For the sections cofinanced by a local government, an agreement will be signedbetween local authorities and the Government through the MPW. Among other things,the agreement will specifically spell out:

(a) financing shares of the improvement works;(b) implementation and disbursement procedures; and(c) the responsibilities and duties of the DPTP.

3.16 Schedule. Implementation of 133 km has started in 1995 under local financing.The works program for 1996 (192 km) is in Annex 3.1: Mrst Year Program. Theprograms for the second (404 km) and third (500 kIn) years will be selected among the14,970 km targeted for improvement during the technico-economic screening process.The following criteria will be used for selection:

(a) indicator of traffic interruptions;(b) social and administrative importance of the zone of influence;(c) agricultural potential of the zone of influence;

3. The appropriations are computed by dividing the sum of road maintenance items(routine, periodic and rehabilitation) from all budgets, but excluding overhead expenses,equipment and general studies, by the length of the classified roads (in 1995: 30,374 kmof paved roads and 30,075 km of unpaved roads).

The Project 33

(d) presence of an integrated development project; and(e) for the paved rural roads construction, economic rate of return.

D. BRANCH ROADS

Concept and Content

3.17 Policy. The quality of the branch roads has been identified as being a weak pointin highway transport. These roads connect the rural feeder roads to the secondary socialand economic centers and these centers to the main trunk highways, They are in theprocess of being reclassified from the old categories of Secondary and Tertiary toNational, Regional and Provincial. The extent of the branch road network (about 20,040km) is roughly adequate for the current road transport demand and the need to accessrural and remote areas, however, most of its pavement is now too old, narrow and thinfor its traffic. Furthermore, it suffered the most when maintenance budgets wererestricted. About 34% of the secondary and 43% of the tertiary roads are currentlyclassified as being unacceptable shape. About 7% of primary, 14% of secondary and44% of tertiary paved roads have pavements narrower than 4 m. MPW has developeda systematic approach for the rehabilitation of the branch road network that combinespavement widening and overlaying with a resurfacing program to also reabsorb theperiodic maintenance backlog. The selection of both the sections and the type of worksis based on network-wide analyses carried out with the Bank's model HDM III, withinput data from the road data bank, which is systematically updated by periodic road datacollections. The process takes into account the technical advantages and the costreduction associated with combining widening with overlay. The overall strategy and thebalance between costly structural overlay providing a good service level to the road userand more cost efficient resurfacing, has been defined to maximize the length of roadswith good service levels to the year 2002, under the most probable budget constraint.Thereafter, the proportion of structural overlays is expected to decrease.

3.18 Preparation. A specific study of classified narrow roads set up the methodologyfor selecting and justifying widening works, and identified 3,000 km on which feasibilitystudies were carried out to select the sections for widening. Separate network-widestudies have selected and justified the remaining sections.

3.19 Physical Objectives.

Table 3.3: Branch Roads, Length

(km)

Overlay Surfacing Total

Widening 420 412 832

No widening 781 606 1,387

Total 1,201 1,018 2,219

34 Chapter 1II

3.20 Description. The identified roads consist of several sections in the seven regions,for an average length of 12.6 km. Individual sections are from 1 to 55 km long, have anexisting pavement from 3 to 7 m wide and carry from 500 to 6,400 vehicles adt. Thesections in best shape, i.e. with acceptable cracking, roughness and width will havepotholes patched, pavement edges repaired, cracks sealed, side ditches reshaped, culvertsand other drainage elements cleaned, shoulders overlaid and leveled and then will receivea double base surface treatment (DBST). Sections with higher roughness but withacceptable remaining pavement life will, in addition, receive a thin reshaping layer(gravel-emulsion mixture) just before the DBST is laid. Sections with little remainingpavement life will receive a structural overlay instead of the reshaping layer. Sectionsearmarked for widening will have pavements widened to 6 or 7 m, depending on thetraffic (threshold at 4,000 adt) and formations widened to 8, 10 or 12 m, depending onthe traffic and the relief. In general, widening and structural overlays will use thicklayers of crushed natural gravel, mechanically stabilized.

3.21 Indicators. Three sets of indicators will be used for monitoring progress inachieving project objectives, from the network point of view, from the project elementpoint of view and finally from the individual section point of view. Target values areindicated in table 3.4.

Table 3.4: Branch Roads, Indicators

Target Values

Indicator Unit 1994 1995 1996 1997 1998

Average for the branch roads network:

Roughness mm/lum 3,7244 3,700 3,670 3,640 3,600

Traffic mln veh- 3,594 3,774 3,963 4,161 4,359km/yr

Average for the project element:

Roughness mm/ln 3,724 3,700 3,450 3,150 2,800

Traffic mln veh- 685 717 752 788 823kml/yr

Works comr- % of project 0 0 34 67 100pleted

Value for individual sections (example for R302 Pk75.5-83.5, Taounate):

Roughness mm/km 5,600 5,600 2,000 2,020 2,040

Traffic adt 1,651 1,725 1,803 1,884 1,969

A/ Average for the five last years.

The Project 3S

Cost and Financing

3.22 Unit costs of the cost estimates are based on a detailed analysis of actual cost ofsimilar works in 1989-1991, updated to 1995. Quantities are defined on the basis ofpreliminary engineering (general cross-sections based on Moroccan standards, andinformation in the road data base checked and complemented by specific fieldinvestigations). The cost of the detailed design of the pavement and of quality controlduring implementation is estimated at 5% of the cost of the road works.

Table 3.5: Branch Roads, Per km Average Base Cost

('OOOs)

Overlay Surfacing

Widening Dh 693 ($81) Dh 468 ($54)

No widening Dh 416 ($48) Dh 279 ($32)

3.23 OECF, Japan will finance 1,624 km in parallel with the Bank. The financingallocation has been done on a regional basis, with OECF financing all four types ofworks and the corresponding consultant services in five regions (Centre, Centre-Nord,Centre-Sud, Nord-Ouest and Tensift). For the two other regions (Oriental and South),the Government will finance 210 km in 1996 and the World Bank will finance 385 kmin 1997 and 1998.

Implementation

3.24 Organization. DRCR will implement this element also through DPTP. TheDPTPs will act as the Owner's representative for contractual relationships and as such,finalize the pavement designs, define the detailed contract elements and make sure thatthe project items are executed within the defined project objectives. As is the practice inDRCR for contracts of this size, the DPTPs will also act as the Engineer, administer theroad works contract, make the measurements and give contractual orders to thecontractor, while quality and material control will be subcontracted to the regional roadlaboratories (LPEE).

3.25 However, in an effort to test organizational arrangements that have been provensuccessful in other countries, a supervising consultant will be appointed on a pilot basisto supervise road works in the Oriental region (Provinces of Bouarfa, Oujda and Nador).This corresponds to about 15% of the cost of the element. The short term objective isto implement tighter quality control schemes, streamline the role of the DPTPs andprivatize some tasks that could be implemented more efficiently by the private sector. Ingeneral, for a given DPTP, there is no continuity in the workload for this type ofsupervision and thus, as the type, qualification and experience required from personnelmay be different from what is necessary to carry out the other duties, hiring out morespecialized consultants to face a peak in workload should be a good strategy. The longerterm objective is to develop the consulting industry and improve the quality of roaddesigns by giving consultants the opportunity to get hands-on experience and feed-back

36 Chapter i

on details and constructibility of their road designs. Road works will be grouped intocontract packages of various sizes, best suited to attract international, national and localcontractors, wherever appropriate and feasible.

3.26 Schedule. Implementation of 210 km has started in 1995 under local financing.Implementation of 1,624 km will start in 1996 under OECF cofinancing. The workprogram for the Bank's financing will start in 1997 (193 kIn) and in 1998 (192 kIn).Individual sections will be selected using an agreed methodology (para 4.13).

E. NETWORK MANAGEMENT

Concept and Content

3.27 Policy. DRCR is in the process of improving its organizational setup, aiming atbetter network management through the development of newly created RegionalDirectorates (RD). The role of these Regional Directorates will focus on four mainthemes: network management; technical excellence; the project cycle and communicationdynamics (Document in project file: Framework for Regionalization).

3.28 Preparation of this element was carried out by DRCR.

3.29 Physical Objectives

(a) Network management:(i) Procurement of 30 utility vehicles and 7 low-bed trucks for

operating the road network, and replacement of 14 pieces of snowremoval equipment.

(ii) Development of a realistic road equipment rental tariff.(iii) Implementation and development of the pavement management

system in the RDs.(iv) Training of road personnel.

(b) Technical excellence:(i) Technical support to the newly created Environment Unit and

development of the RDs' awareness of environment issues.(ii) Development of the RDs' capability and expertise in planning and

programming of road works.(c) Project cycle:

(i) Study of the phasing and coherence of improvement works overmajor branches of the network.

(d) Communication dynamics:(i) development of communication methods and skills on pilot

projects.

3.30 Description. (details are in the Docwnent in project file: Notes onRegionalization). Network Management.

7he Project 37

(a) Force account v/s contractors. Maintenance by force account is nowlimited to emergency maintenance and routine maintenance activities andopening/improving of unpaved rural roads for which there are no piece-meal workers or contractors available in the region. Following this moveto contracting out, DRCR's equipment fleet is now under-utilized andaging. DRCR intends to transfer responsibility for managing the fleet tothe RDs, aiming to increase its efficiency and reduce its running costs.This requires increasing its mobility with low-bed trucks. The RDs willalso keep a dialogue with the regional road construction industry and bethe nerve center for promoting and testing actions aimed at maintainingthe current momentum away from force account works to more mainte-nance works by contract.

(b) Quality. The RDs will monitor the quality of the service DRCR isoffering to the road users, initiate preventive actions and carry out specificaudits at the request of MPW.

(c) Monitoring of studies and works. The RDs will manage and improve theroad data bank and develop procedures for regular collection of traffic androad inventory data. The RDs will coordinate efforts for improved projectmanagement. The project will develop a specific project monitoring tool,(para 3.77) integrating project and construction task management withfinancial management and building a management information systemaround it.

(d) Personmel. The RDs will be essential elements in training and careerdevelopment of technical staff. The training of DRCR staff will focus onnetwork management, project management, scheduling, and programming.The project will complement training actions with study tours and willprovide international experts.

3.31 Technical Excellence. The DPTPs face from time to time technical or economicproblems that require outside expertise, such adapting selected road technologies to localconditions. The RDs will be natural clearing houses for developing regional expertise andprivileged recipients of technology transfers. The project will provide a mechanism forfinding and mobilizing such expertise with minimum delay. Expertise will be needed inthe following fields in particular:

(a) road safety;(b) environmental impact of road works; and(c) use of local materials.

3.32 Project Cycle. The economic planning and programming of road investments,once tentative, is now institutionalized with annual Bank reviews. DRCR now intends todevelop planning and programming capabilities at the Regional level. Improvements willbe sought in the following fields:

(a) Research to find the optimum balance among various types of road invest-ments (maintenance v/s construction; types of works; class of road;regional balance; etc.).

38 Chapter Iff

(b) Integration of the regional level in the overall planning process.(c) Development of the RDs' programming capabilities on the basis of the

HDM III model.(d) Regular updating of vehicle operating costs.(e) As TA to institutional development, a study will look at how road

improvements could be phased and integrated over major itineraries. Thestudy will define and rank the possible improvements and define parame-ters for optimal phasing overtime. This will ensure coherence of theinvestments and minimize total cost over the long term.

3.33 Communication Dynamics. The RDs will be at the hubs of information circulation.They will in particular properly organize the information elements,process them, andsetup and lead teams to tackle specific issues.

3.34 Indicators

Table 3.6: Network Management, Indicators

Target Values

Indicator Unit 1994 1995 1996 1997 1998

Average for the MPW network:

Routine Mai- % 5 7,5 13 19 25ntenance byContract

Periodic % 5 7,5 13 19 25Maintenanceby Contract

Cost and Financing

3.35 The base cost of the 30 utility vehicles is estimated at Dh 9 million and the other21 pieces of equipment are estimated at Dh 48 million. The institutional developmentactions are estimated at Dh 20 million.

Implementation

3.36 DRCR will implement this element mostly through its Regional Directorates.

The Project 39

F. ROAD SAFETY

Concept and Content

3.37 Policy. There is an increasing trend in road accidents and fatalities, as well asin indicators of fatality rate' and risk6. Officials are increasingly aware that the numberof unsafe roads has reached levels intolerable for Morocco at its current developmentlevel. To significantly reverse the current trend, the Government is committed toimplementing a comprehensive and multi-faceted road safety program, focusing simulta-neously on key but complementary elements, implemented in a sustained effort over along period.

3.38 Preparation. Two road safety experts were appointed to carry out a country-widereview and analysis of all major road safety elements, using a methodology originallydeveloped for Eastern and Central Europe to assess the effectiveness of road safetymeasures and permit reliable comparisons between countries. On the basis of this andother data and analyses, a National Symposium was organized June 8 & 9, 1993 todebate the various actions and strategies.

3.39 Objectives. The immediate objective will be to reverse the escalating trend inannual road fatalities. In the medium term, the objective will be to return to an averagelevel of road fatality risk for low-motorized countries according to the Smeed relationship(para 2.10). Thereafter, the objective will be to keep the forward momentum and avoidany new growth in annual road fatalities. (Figure 3.7: Fatalities & Fatality Risk).

3.40 Description. This element will include in particular:

(a) institutional improvements:(i) increase budgetary financing for preventive actions;(ii) substantially increase road enforcement fines;(iii) systematically introduce safety audits;(iv) training and technical assistance.

(b) a rehabilitation program for accident black-spots; and(c) procurement of enforcement equipment.

3.41 Institutional improvements. After the awareness level, the most influential factoron the efficiency of road safety actions is the institutional setup, because its nature callsfor close coordination between several sectors (transport, education, interior, information,etc.) to obtain the necessary synergetic effect. The experience shows that two conditionsare needed, political accountability given to a single Government member and anadministrative coordination structure in charge of preparing strategies, implementingthem and evaluating their effects. In Morocco, these two elements are already in place

5/ Number killed per million of population

6/ Number killed per thousand vehicles

40 Chapter III

and would be fine tuned under the project. The Minister of Transport is explicitly incharge of road safety, however, horizontal coordination is currently carried out throughad-hoc committees on specific road safety issues.

Figure 3.7: Fatalities & Fatality Risk

___________3_______ 0

N U ~ ~~365 ,0

3.50 - - -- - )C 0~ C -t: s~~~~~~ s~~~~Year~~~~~~~~~"U

3M 2,600~~~Sed l Cuiia mo:LoMer,d..Mrcc:a~s

3.42 The National Road Accidents Prevntion Committee (CNPAC) role is2 bein

3.43 The currentayse ofa Aucdetomobilentionsuac CmintMroco CNAs inl man otern

intaroeducn an mtecghanism linin apointributionmerttsbor from thuooieisurancted indutory

an oa oemet.Agreement was reached at negotiations that tersrcuigo CNPAC'srl will baccompanied ty theiial strengtheng oefinitsiannufal budgetwith sfthe eararing, togte witho

launrgesharemofphaies no-ontest(aid compnsathesot tor the enforcementd officer)sroadeenforce-mnata fiones. icniefrisrnc opne oivs n rvnieatos hc

The Project 4)

3.44 Road safety audits have proven to be a new and valuable tool for identifying,before road works are carried out, road design features that are relatively unsafe and,for existing roads, identifying potential safety hazards that could be removed withrelatively low cost remedial actions. A pilot audit on 2,800 km of roads has alreadyallowed identification of 500 black spots and progressive development of a methodologyfor designing a program of low cost remedial actions. The project will support furtherdevelopment of this concept.

3.45 For both CNPAC and DRCR, the project will support limited technical assistancefrom appropriate road safety experts and training abroad for staff.

3.46 Rehabilitation of road accident black-spots. The project will finance three yearof the national rehabilitation program for high accident areas, estimated at Dh 80 million.

3.47 Enforcement of the Highway Code. No road safety improvement program wouldshow significant result over a sustained period without the strict enforcement ofappropriate laws and regulations. Setting up appropriate speed limits, making safety beltsand helmets mandatory, preventing driving-while-intoxicated, regulating maximumdriving time for professional drivers and instituting a point system for driving licensesare proven road safety measures. They are the most efficient measures available whencomplemented by appropriate sanctions and strictly enforced. They are almost worthlessotherwise. Most of these measures are being introduced in the revision of the HighwayCode that is being prepared for rapid submission to Parliament, with a hardened anddissuasive schedule of fines and legal sanctions. The rest are being considered. However,the most critical need is to improve enforcement. The project will support thisimprovement by financing 70 radars and vehicles for speed limit enforcement on inter-urban roads for the Gendarmerie and providing corresponding technical assistance andtraining. This effort is essential because of its expected impact on road user behavior.

3.48 Indicators. The following indicators will be used to monitor progress. They arebased on projections of population and vehicle fleet growth, and Smeed's relationship.Details on the assumptions are in Annex 2.2.

Table 3.8: Road Safety, Indicators

(Units)

Target Values

Present Short Term Medium Term Long Term

1994 1996 2000 2005

Fatalities 3,605 3,572 3,521 3,512

Fatality rate 131 124 113 103

Fatality risk 4.1 3.7 3.0 2.5

42 Chapter III

Cost and Financing

3.49 Speed limit enforcement equipment will be cofinanced by a grant. The cofimancierhas yet to be identified.

Implementation

3.50 Organization. The Minister of Transport will have overall responsibility for thiselement, and CNPAC will be the implementing agency. Once procured, ownership of theenforcement and rescue equipment will be transferred to the relevant units of Gendarmer-ie. The black-spot rehabilitation program and the highway safety audit element will beimplemented by DRCR.

G. ROAD TRANSPORT

Concept and Content

3.51 Policy. Agreement was reached at Negotiations that, in order to liberalize thetrucking market and to promote greater trucking efficiency, the Government will:

(a) permit unrestrictedfor-hire operations of trucks weighing eight tons grossor less;

(b) abolish the mandatory use of ONTfor road freight forwarding;(c) eliminate trucking tariff controls; and(d) introduce simplified procedures and professional qualification standards

for access to the trucking industry, without any quantitative limits.

3.52 These principles are spelled out in the Letter of Sector Strategy (Annex 3.2: Letterof Sector Strategy), which has been signed as a condition of Board Presentation. Acovenant specifies that presentation to Parliament of the corresponding law will be doneby December 31, 1998.

3.53 Preparation. Implementation of the above policy means a drastic change inONT's mission as well as its restructuring. ONT may still play an important role in thenew enviromnent, but this role would be service-oriented and demand-driven. Studies arein progress to ascertain service areas where ONT could redirect its activity and definea new corporate plan. Upon conclusion of these studies by mid-1995, an action plan willbe prepared to facilitate the transition and minimize social costs associated with staff lay-offs and redeployment. ONT is expected to maintain a freight forwarding function, playa more active role in training and advising truckers, create conditions conducive tocreation of small to medium size trucking companies, and bridge existing gaps in theorganization of land transport, through establishment of trucking service centers alongmost trafficked roads and trucking stations in the vicinity of main international ports.

The Project 43

3.54 Indicators.

Table 3.9: Trucking, Indicators

Target Values

Indicator Unit 1994 1995 1996 1997 1998

Average for the eight-ton trucks:

Number number 126,000 127,000 128,000 129,000 130,000

Age years 8 8 8 8 8

Distance km 45,000 45,000 45,000 45,000 45,000travelled

T-km pro- millions ton- 45,000 45,000 45,000 45,000 45,000duced km

Average for the larger trucks:

Number number 76,000 77,000 78,000 79,000 80,000

Age years 8 8 8 8 8

Distance km 55,000 55,000 55,000 55,000 55,000travelled

T-km pro- millions ton- 62,000 62,000 62,000 62,000 62,000duced km

H. COSTS AND FINANCING

Costs

Table 3.10: Project Cost summary($ million)

% % Total(Dh Million) (US$ Mlllion) Foreign Base

Local Foreign Total Local Foreign lotal Exchange Costs

1. Rural Roads 184.96 162.18 347.14 18.88 16.56 35.44 47 212. Paved Branch Roads 542.67 486.05 1,028.72 57.38 51.41 108.78 47 663. Network Management 49.33 50.28 99.61 5.09 5.18 10.27 50 64. Road Safety 53.16 52.61 105.77 5.57 5.56 11.13 50 7

Total BkSB-INE COSTSPhysicalContingencies 84.62 77.22 161.84 8.88 8.11 16.99 48 10Price Conbngencies 93.55 84.97 178.51 6.00 5.48 11.48 48 7

Total PROJECT COSTS 1,o.29 9,1Z 91

3.55 Project cost estimates are summarized in Table 3.10: Project Cost Summary. Basecost estimates are expressed in April 1995 prices. Adding physical contingencies of 10%and price contingencies of 2.2% a year for the foreign cost and for local cost, (4.2% to4.4. % respectively), brings the total project cost to Dh 1,921 million or $194,1 million,

44 Chapter III

48% of which is foreign cost and 25% duties and taxes. (Annex 3.3: Project Costs,fnancing and Disbursement Schedule).

Financing

Table 3.11: Project Financing($ million)

IGngdomof Local GRANT (to be World

Morocco Governments identifled) Bank Japan TotalAmFount Amount Amount Amount Amount Amount

1. Rural Roads 13.604 0.425 - 26.676 - 40.7042. Paved Branch Roads 48.547 - - 17.968 61.617 128.1323. Network Vbnagement 4.797 - - 5.993 1.238 12.0294. RDad Safety 4.080 - 2.192 6.953 - 13.225

Total 1s bursement 7T-27 U4 Zs57.9 6.6 D9

3.56 OECF, Japan will finance 72% of some of the paved branch roads in selectedregions. The Bank will finance 72% of the remaining civil works and 100% of the cost(taxes excluded) of goods and services.

3.57 Implementation of some works started during the period between Appraisal andNegotiations, however, because these sections are fully financed from local sources, thereis no retroactive financing for the World Bank loan.

L. PROCUREMENT

Works

3.58 Works will be procured under Bank Guidelines. The amounts and methods of pro-curement are in Table 3.12: Procurement Arrangements. Works on paved roads, will bebid by International Competitive Bidding (ICB), using one of the Bank's standard biddingdocuments on a slice-and-package basis, when the estimated amount is $2 million ormore. The slices will consist of works within a single Province. The correspondingDPTP will be responsible for finalizing the pavement design and supervising the works,as the contractual Owner's Representative. Bid advertising, opening and evaluation willbe carried out at the Regional level. Contractors will be permitted to offer rebates ifawarded more than one slice. Contract amounts will range from $0.4 to $5.0 million perslice and from $1.0 to $10.0 million per package. The larger amounts should beattractive to international contractors not already present in Morocco.

3.59 A prequalification process, satisfactory to the Bank and updated annually, willevaluate contractors on the basis of their capacity to carry out project works satisfactori-ly. The process will be based on the satisfactory completion of works of similar size andnature, contractor's personnel and equipment, and his financial situation. Afterprequalification, potential bidders will be classified to bid for one or more slices, up totheir evaluated capacity.

The Project 45

3.60 Unpaved rural road works are dispersed throughout remote locations and aredifficult to package for ICB. Thus they will be bid through Local Competitive Bidding(LCB) and carried out by small local contractors under the supervision of the DPTP, whowill be the Owner's Representative. The DPTP will have contractual authority to orderand certify works and authorize payments. Because of the novelty of this type of workfor the contracting industry, prequalification procedures will be used and updatedannually on a regional basis. Other civil works, will also be procured by LCB.

Table 3.12: Procurement arrangements($ million)

Procurement MethodInternational LocalCompetitive Competitive Consulting

Bidding Bidding Services Other NPBF. Total

A. Hardware1. Road Works

Rural Roads - 37000 37.000(24.073) (24.073)

Paved Branch Roads 113-031 7787 - - - 120817(16.140) (16.140)

Black Spots - 8.503 - - - 8.503(6.122) (6.122)

2. GoodsFor MPW 7.178 - - - - 7.178

(4.207) (4.207)For MOT 3.888 - - - - 3.668

B Software1. MPW

a. FraneworkAgreenent - - 4.045 0.106 - 4.151(1.599) (0.086) (1.885)

b. Lcl Training - 0.531 - 0.531

c. Design & Qua ry CntrllFstly Lab Tests - - 1.530 2.794 - 4.324

(0.876) (0.876)kbstly Design - - 5.882 - - 5.882

(2.930) (2.930)d. Studies, WV - - 0.633 - - 0.633

(0.486) (0.486)e. Other, WM - - 1.240 - - 1.240

(0.952) (0.952)2. CNAC - - 0.144 - - 0.144

a. (0.119) (0.119)otal ------

(20.347) (30.195) (6.963) (0.086) - (57.590)

ote: Figures in parenthesis are the respective anmunts financed by World Bank

3.61 Procurement of bitumen products for roadworks is usually done from the onlysupplier located in Morocco, by DPTP, for all its works within the province, at ratesapproved by the Ministry of Energy and Mining. Under the Highway Sector Project, thesupply of bituminous products was included in the bidding documents, however, biddershad the choice to either include bituminous products in their bid prices or to requestDPTP to supply them the bitumen at the set rate. In the latter case, the bidding procedureproduced two contracts, one for the works and one for the supply of bitumen, both of

46 Chapter III

which were will be eligible for Bank financing. Although this procedure workedsatisfactorily, under the proposed project it will be mandatory for the contractors to buytheir own bitumen. In line with world-wide practice, this change will streamlinecontractual responsibilities, reduce potential coordination conflicts and lighten theadministrative workload of DPTP. The contracts will include provisions for qualitycontrols at the production site.

Goods

3.62 Most of the goods (vehicles and equipment) will be procured under ICB in a slice-and-package procurement procedure per implementing agency. Eligible domesticmanufacturers would receive the 15% preference margin in bid evaluation under ICB.Some software, some documentation and small equipment, of a value of less than$100,000 for each contract, which for reasons of procurement efficiency and/or schedulecould not be procured under ICB, will be procured by LCB (maximum aggregatedamount of $1.6 million) or international shopping (minimum three quotations; maximumaggregated amount of $1.5 million). Proprietary software and technical documentationwill be procured directly from the original manufacturers for a maximum aggregatedamount of $40,000.

Consulting Services

3.63 Consulting services will be procured according to Bank Guidelines. Consultingservices for detailed pavement design and quality control during construction, estimatedat $2.8 million, will be procured from LPEE, the government-owned road laboratory,because the project works are too small and too scattered to attract other laboratories.

3.64 The technical support to DRCR, training abroad of DRCR staff and the supplyof software and technical documentation will be grouped into framework agreements withjoint-venture consulting firms offering a wide range of experts. The contracts will spellout rates and procedures for identification and mobilization of the personnel andprocedures for participation of DRCR staff to international seminars and refreshercourses. The agreements will include the payment of tuition and transport and per diemfor trainees. Most interventions will be short in time with a short period between thedefinition of the expertise and the mobilization of the expert. The framework agreements,estimated at $4.2 million, will be procured from a short-list of international consultingventures, in accordance with Bank Guidelines.

3.65 Training in Morocco for DRCR will be organized by Ecole Hassania des TravauxPublics or IFEER. Training for Road Safety and Road Transport will be organized bytraining operators who will be procured from short-lists in accordance with BankGuidelines.

3.66 The Study of Road Itineraries and other consulting services and technicalassistance, estimated at $0.6 million, will be procured from short-listed firms orindividual experts selected by the executing agencies. The short-lists will not includemore than two firms from the same country.

The Project 47

3.67 Publicly owned consulting firms will not be eligible to participate, even aspartners in joint-ventures, unless they meet the following criteria:

(a) independent, commercially oriented legal entity;(b) reasonably autonomous financially (as shown by the nature of its revenues

in audited accounts);(c) managerially autonomous; and(d) able to meet all qualifications and contractual obligations.

General

3.68 Works contracts below a threshold of $1.5 million and goods contracts below athreshold of $0.5 million will not be subject to prior review. Other contracts will besubject to prior review. This review process will cover about 85% of the total value ofBank-financed items and may cover 100%, if the Ministry of Finance continues thecurrent practice of systematically requesting Bank approval before any financial commit-ment.

3.69 LCB procedures are generally found acceptable to the Bank, a few changes arehowever required to make some procedures acceptable to the Bank (Annex 3.4: LCB Pro-cedures). During negotiations, agreement was reached on all the above procurementarrangements.

J. DISBURSEMENTS

3.70 The Bank will disburse on the basis of Table 3.13: Allocation and Disbursementof the Loan. The Loan is expected to become effective in October 1995, and to be fullydisbursed by the closing date of June 30, 2000. This is six months shorter than thehistorical 6.5-year disbursement profile for transport projects in Morocco. The disburse-ment schedule is in Annex 3.3. Project completion is expected by December 31, 1999.

3.71 Full documentation will be required for disbursements for consulting services andtraining procured under contracts valued at more than $0.1 million, for works valued atmore than $0.5 million, and for goods valued at more than $0.25 million. All other dis-bursements will be made against Statement of Expenditures. Supporting documents willbe made available to Bank supervision missions and to the auditor. These documents willbe retained for one year after Bank receipt of the audit report for the fiscal year in whichthe last withdrawal from the loan account was made.

3.72 To facilitate disbursements, a Special Account will be opened and maintained ina fully convertible and stable currency and operated on terms and conditions satisfactoryto the Bank. The Special Account will cover the Bank's share of eligible expenses in bothlocal and foreign currencies. The authorized allocation will be $4.3 million, i.e. theBank's share of the estimated four-month average of project expenditures. The borrowerwill submit regular monthly replenishment applications promptly after receipt andreconciliation of monthly bank statements from the bank holding the account. During

48 Chapter III

periods of large expenditures, applications may be submitted at intervals of less than amonth.

Table 3.13: Allocation and disbursement of the Loan($ million)

Loan DlsbursementAm ount %

A. Road Works 43.5 72%C. Goods 3.7 100% foreignD. ConsultantServices & Training 5.0 100%Una ll c a te d 5.4Total 57.6

Loan amount hinanced by World Bank

K. WORKSHOPS, IMPLEMENTATION, REPORTING AND AUDITING

3.73 The project implementation schedule has been developed with project managementsoftware, a summary is in Annex 3.5. The technical assistance to DRCR for networkmanagement includes the purchase of software and training for promoting the use ofproject management principles and software, first at DRCR headquarters and second atthe Regional Directorates and finally at the DPTPs. Also, DRCR will receive assistanceto develop a specific computer application (in the Windows environment) to integratescheduling software with procurement monitoring and financial monitoring (commitmentsand disbursements) in both Dirhams and US Dollars. The application will be a singleplace to record important project information, to monitor procurement, schedule,covenants, indicators, unallocated amounts of the Bank loan, availability of cofinancingand counterpart funds, the expected cost at completion, keep project accounts, includingcommitments, report progress and keep track of historical changes and prepare disburse-ment forecasts. DRCR has agreed to develop the application in such a way that its coreprogramming could be easily transposed for use in other foreign-financed projects inMorocco.

3.74 The project will include a kick-off workshop before project effectiveness. Theworkshop will put together participants (CNPAC, DRCR and its regional and provincialDirectors, Finance officers and a representative sample of Local Governments) andfinalize details of project implementation procedures (administrative, financial manage-ment and procurement).

3.75 Before the third project year, the same participants will meet again for a mid-termadjustment workshop. Agreement on the mandate of the mid-term adjustment workshop,the format and content of the progress reports and of the completion report was reachedat negotiations. The mandate of the workshop will include, in particular, the review of:

(a) implementation of the sectoral and project objectives;

The Project 49

(b) implementation schedule and project impact indicators;(c) expenditure levels in the implementation of the maintenance and invest-

ment programs and their sources of funding;(d) planned expenditure levels for the coming three years by major category

of expenditure, including financing;(e) composition and status of all project activities.

3.76 The Borrower will be the Kingdom of Morocco. The implementing agencies willbe DRCR and CNPAC for their respective project components.

3.77 Each implementing agency will prepare quarterly progress reports in a formatacceptable to the Bank. Each report will give project indicators data, indicate progressmade, problems encountered, remedial steps proposed and project activities scheduledfor the next quarter. At the end, DRCR will prepare the overall project completion report(integrating input from CNPAC), which will be issued no later than six months after thephysical completion of the project works. This report will include in particular, a detailedaccount of final project costs and disbursements, general characteristics of projectexecution and benefits, the degree to which project objectives were achieved and anassessment of how the Government and the Bank implemented their respectiveobligations.

3.78 The implementing agencies will maintain separate records and accounts for allproject expenditures. These records will identify all project transactions on an on-goingbasis and show their financing. All supporting documentation will be retained for auditand review by the Bank. Quarterly accounts will be prepared in a format approved bythe Bank and incorporated in the quarterly progress reports. These accounts willsummarize actual v/s planned expenditures both per fiscal year and cumulated to date.

3.79 An independent auditor, acceptable to the Bank, will audit the project accountseach fiscal year. The audit will employ principles acceptable to the Bank and will coverthe Special Account, the financial statements and the Statements of Expenditures. Thereports will be submitted to the Bank not later than six months after the end of the fiscalyear.

L. ENVIRONMENTAL IMPACT

3.80 As road works will be limited to improvement and maintenance of existing roadswith no alignment change, no serious potentially adverse environmental impact isexpected. The project has environmental benefits (development of the Environment Unit,environment-conscious institutional improvements, improved accessibility, reduceddamage/soil erosion, and improved vehicular and pedestrian safety). Special attention willbe paid to providing adequate drainage, ensuring slope stability and preservingarcheological materials in excavations. In accordance with established guidelines, theproject has been rated B.

3.81 The roads works (widening, surfacing, strengthening) appraised have beencarefully assessed with regards to their potential effects on the environment. There willbe no alignment change nor any resettlement; erosion control will be incorporated into

50 Chapter III

the engineering design; and materials selection will follow environment-aware technicalguidelines. Before they would start, the road works will have followed a two-stepenvironmental screening: first, DPTP will have filled out a specific questionnaire toidentify potential enviromnental risks and, second, any identified potential adverseimpacts will have been addressed and mitigating measures implemented.

3.82 Once completed, these works will be beneficial to the environment by reducingcongestion, improving accessibility to markets, schools and medical services andimproving pedestrian and vehicular safety. The highway safety, network management andinstitutional developments component will have a highly positive impact on theenvironment. The highway safety improvements will reduce human casualties and willdecrease the risk of accidental pollution thus alleviating infrastructure threats to healthand the natural environment (water, soils). The network management component isenvironmentally friendly since it is principally aimed at improving routine maintenance.The ability to assess the environmental impact of roads works will be fostered within theinstitutional development component. In close coordination with the Under-Secretary ofState for the Environment, Ministry of Interior, DRCR has created an internalenvironment office to develop operational guidelines for environmental impact assessmentof all the major road works, provide guidance and coordinate actions on environmentissues related to road works.


0v. 1E1CO)MON)C JUSTOFDCATOC)N

A. GENERAL

4.1 Scope of analysis. An analysis to establish economic justification will be donefor the main components of the proposed project, i.e. rural roads, branch roads and roadmaintenance equipment. The economic evaluation does not include technical assistancefor network management, or road safety actions. It is a generally accepted fact thatinstitution-building is essential to ensure the sustainability of project benefits, throughmore effective programming and execution of future road projects, as well as betterreturns for roads expenditures. Although these benefits would materialize in variousforms, they significantly outweigh the technical assistance expenditures entailed. As faras road safety is concerned, the project inaugurates at still a modest level the kind ofsystematic action which will need to be to be developed and amplified if the nationalscourge of road casualties and fatalities has any chance to be curbed and brought backto normal proportion. The 1990 National Transport Master Plan7 made a compellingargument on how much is at stake by making road uses safer. Based on conditionsprevailing in 1988, the direct economic costs per fatality was estimated as Dh 273,000or 40 times the average GDP per capita. In 1994 prices, it brings total economic lossesfrom road fatalities to more than Dh 0.7 billion. Including social costs more than doublethese losses. Casualties and property damages result in additional losses. Altogether,accidents in Morocco may cost as much as Dh 10 billion per year in terms of directeconomic losses and close to twice as much when social costs are included. Thecomponent for rehabilitation of road accident black spots implies investing Dh 1,25million on average for each one. Given the higher frequency of accidents at theselocations (2-2,5 accident per year) resulting in annual losses equivalent to about DhO.8million, social costs included, just reducing the frequency of road accidents by one-fourth would ensure a normal economic return on the investment. Higher impacts onroad safety can reasonably be expected, an indication of the strong justification of thecomponent. Further details on the economic analysis methodology used are in theDocument in project file: Economic Evaluation Details.

4.2 Benefits. The major direct benefits will be derived from lower transport costs,which will stimulate trade and help raise living standards in the areas served by theproject roads. Savings will come primarily from reduced vehicle operating costs andlower road maintenance costs. Indirect benefits will be quite significant under the ruralroads component, which will improve access to remote rural areas, triggering productionand consumption effects. Agricultural inputs will become available at lower prices, andproducts will be more competitive on the market. Improved accessibility will also extendto social services, producing a healthier and better educated population. Agriculturalactivities will benefit the most. Similar socioeconomic benefits can be cited to justify the

2/ 'Sch6ma Directeur National des Transports (SDNT)-1990- Rapport de Mission 5: Synthese et Plan Directeurdes Transports. Annexe: Details des Analyses Techniques. Chapitre 2.3.

52 Chapter IV

purchase of snow removal equipment. For the branch roads component, additionalbenefits will flow from improvements in traffic conditions and road safety.

4.3 Risks. There are technical and financial risks. First, traffic counts and estimatesof vehicle operating costs can be inaccurate, as can estimates of project costs prior to thebid stage. These uncertainties (most relevant for rural roads where the little traffic thatexists is quite volatile, the vehicle fleet differs from the national average in age andstructure, and the cost of civil works contracts depends on the level of competition,which is difficult to predict) are addressed by a sensitivity analysis of the findings of theeconomic analysis with the hypotheses selected. Second, central and local governmentfunding constraints may not only imperil execution of sub-projects, but may moregenerally weaken the sector environment in which the project operates and jeopardizeachievement of its general objectives. The project will mitigate the risk of underfundingof maintenance activities with the setting up of agreed maintenance budget monitoringindicators, while the mechanism for cofinancing rural roads with local governments willshape a local environment favorable to the success of the rural roads component.

4.4 Sustainability of investment. Maintaining the flow of benefits over theeconomic life of the project will be contingent on ensuring adequate road maintenanceafter implementation. Thus, sustainability prospects are enhanced by good institutionalarrangements, stable funding mechanisms and sound system administration, which theproject will endeavor to achieve.

B. RURAL ROADS

4.5 Selection of sections and investment level. This component is designed toalleviate transport constraints in remote rural areas by improving their linkages to majorroads and reducing economic distances between villages to promote closer socioeconomicintegration. The economic feasibility study covered about 38,000 km of unpaved ruralroads, most of which are in bad to very bad condition because they were built scantilyand not maintained thereafter. The project roads were selected on the basis of an agreedmethodology. The sector approach means that this methodology will be used to definethe content of the second and third year of works. The content of the first year wasestablished on the basis of the results of conclusive economic studies, which neverthelesswill need to be redone: in the case of paving, to apply the agreed methodology; in thecase of unpaved roads, to reflect the shift from spot gravelling to general gravelling withdrainage. The revised rates of return on works under the first year will be reported tothe Bank by September 30, 1995. The methodology selected for economic analysisconsists of three steps: (a) the first step is to select the roads, adhering to minimum ratesof return at a threshold of 12% using one of the three possible construction standard.About 15,000 km of rural roads met this criterion and comprise a pool of possible sub-projects; (b) the second step is to ask local organizations to rank the sub-projects on thebasis of three criteria: frequency of road closing, importance of social and administrativecenters located in the area served by the roads, and the potential for agriculturaldevelopment in the area; (c) the third step is to carry out a detailed economic analysisbased on the HDM III model complemented by a modelling exercise to include the cost

Economic Justification 53

of road closing in the general case, and the creation of traffic in the case of paving.Existing traffic is assumed to grow at an annual rate of 5%.

4.6 Benefits. The three main sources of benefits are as follows: (a) lower vehicleoperating costs through improved road service standards, linked to the constructionstandard selected; substitution of standard two-wheel-drive vehicles for costlier all-terrainvehicles being a source of additional benefits; (b) most identified roads are impassibledue to inclement weather for 30 days or more each year; recourse to non-motorizedtransport during road closures will fall off, and be eliminated completely in the case ofpaving projects (over 50% of the transport of people and goods is on foot or usinganimals); (c) experience has shown that paving a rural road brings an increase in trafficthrough the dual effect of generated and diverted traffic. Savings on maintenance are nottaken into account here, as most of these rural roads are not currently maintainable.

4.7 Beneficiaries. Direct beneficiaries are road users, first of all, and the populationsliving in newly accessible remote rural areas: (a) feasibility studies show that averagevehicle operating costs on roads of poor condition are about Dh 5.2 per vehicle km,falling to Dh 3.9 per vehicle km on a road in satisfactory condition, and to Dh 3 pervehicle km on a paved road; (b) when roads are closed, those living in remote areas usenon-motorized transport, which is 2.1 times more expensive than motorized transport;the resulting savings are theirs entirely.

4.8 Non-quantified benefits. These are considered in terms of lower prices forproducts "imported" into the once inaccessible area, and additional income for localproducers "exported" to markets outside the area. Surveys have shown considerable pricedifferences (between 50% and 100%) between markets in well-served areas and marketsin inaccessible areas. Remote populations are often also the poorest, which makes theimpact of lower prices for products consumed and higher income for producers relativelymore important (average spending per capita is an estimated $350 in rural areas, or halfthe average for the country as a whole). Improving access by road will also make thelocal transportation market more competitive, ensuring that lower costs are passed on inlower transport prices. Other non-quantified benefits include less damage to goodstransported under unreliable conditions and lower losses of produce that could not betransported out in time. Finally, better access to socioeconomic services outside the area(agricultural extension, schooling, hospitals or dispensaries) will raise living standardsover time.

4.9 Results and sensitivity analysis. The part of the first year program thatrelates to paving 70 km of rural roads has yet to be evaluated. There is a strongpresumption of high returns on these operations. Economic studies done using a differentmethodology have been presented by DRCR and show a minimum internal rate of returnof 33% for the Talsint-Anoual road (20 km) and a maximum internal rate of return of80% for the Souk Larbaa-Had Court road (12 km). It was deemed preferable torecalculate the rates of return since the data used were relatively old and in order to givethe same methodological treatment to all the project roads. The revised calculations willbe reported to the Bank no later than September 30, 1995. They will include thesensitivity analysis to verify the values of the more decisive parameters (traffic and new

54 Chapter IV

traffic, cost of investment, duration of road closures and estimated cost thereof), whichwould bring the internal rate of return to the threshold of 12%.

4.10 For the other sections included in the program for year one, the economiccalculations are also to be completed by September 30, 1995. These sections wereevaluated by the Bank in 1994, but at a lower construction standard. The results for thefour sections in the province of Settat (55 kIn) produced internal rates of return at thattime of between 62% and 102% for the base hypothesis, and 53% to 84% for thehypothesis using a 15% higher investment cost. Internal rates of return for the basehypothesis were 143% for the Zagora-Beni Zoli section in the province of Ouarzazateand 74% for the J. Houafat-S. Med Oudad section in the province of Sidi Kacem. Thecalculations should now be redone, however, using the correct construction standard.

4.11 Risks. The risk that the rural roads component of the project would not becarried out for reasons having to do with insufficient commitment by the politicalauthorities seems unlikely if not non-existent, for this component is part of the vastnational program to build 10,000 km of rural roads in seven years, and the financing hasalready been allocated under the 1995 Loi de Finance. A large part of the program, aswell as the sub-projects financed by the Bank, call for participation of the communes,and their generally difficult financial situation could make this problematic. This risk isminimized by the low rate of participation expected (12.5%) and the possibility of usingthe Commune Infrastructure Fund, or allocating part of value-added tax revenues, oreven rescheduling works to a later date but with full Road Fund financing. The technicalrisks at the implementation stage will be mitigated by strict quality standards in preparingdocuments and evaluating bids and by DRCR follow-up on work under its purview. Theeconomic risk related to a poor assessment of local needs will be limited by broad-basedconsultations with grassroots groups for the multi-criteria analysis stage, and by requiringlocal communities to participate in order to verify that the expected economic benefitsare likely to be produced. In some cases (province of Azilal), non-road investmentsplanned by the Government will favor the development of newly accessible areas, makingthe investment in roads even more worthwhile.

4.12 Sustainability of the investment. Proper maintenance of the project roads isessential. Regular funding for maintenance must be ensured in a regular fashion, anobjective that is sought through the provisions on road budgets contained in the legaldocuments. Sound programming and execution of the works is the other constraint, whichties in to some extent with clarifying responsibilities for road administration, which willbe made easier by completion before the end of 1995 of the operation to reclassify roadsystems that is now under way. In addition, the framework agreements between DRCRand the provincial councils on implementing the rural road-building program willfacilitate more specific definitions of responsibilities shared by the two parties, ratifyingfor example DRCR's role in managing the endeavor.

Economic Justification SS

C. BRANCH ROADS

4.13 Selection of sections and investment level. A sector approach has beenadopted in identifying economically justifiable sub-projects. Rates of return will beestablished by the methodology described in Economic Evaluation Details. Agreementwas reached during negotiations that this methodology will be used in selecting theproject routes for the second year program, and it was also used in evaluating the firstyear program, with the findings indicated herein. In general terms, the methodology isbased on application of the HDM III model, with exogenous variables added to evaluaterates of return on widening projects. Those variables include having to maintain theshoulders of the roads, which are used by vehicles when passing and overtaking, andincreased vehicle operating costs on account of the repeated deceleration and accelerationsuch maneuvers entail. Narrow paved roads (less than 4.5 m wide) makeup 55% of theMoroccan system, and the proposed project will reduce the shortfall in capacity of manyof these. The program for the first year has been identified as follows: (a) 15homogeneous road categories were established to classify the approximately 30,000 kmof paved roads; traffic thresholds were calculated for each category using the HDM IIImodel to evaluate the maximum amount of investment for widening that would beconsistent with obtaining a rate of return of at least 12%; close to 4,000 km of roadswere shown to be potentially viable; (b) a multi-criteria analysis was then conducted torank the sections of roads presumed to satisfy the minimum return criterion; the firstcriterion is road condition and existing traffic, the second net agricultural value addedper kilometer of project road. This analysis brought the list of roads considered eligiblefor the project to a level compatible with the overall funding constraints, i.e. roadscovering about 700 km; (c) the roads ranking highest were then subjected to a detailedeconomic analysis using the agreed methodology. It was determined that combining thewidening with the existing roadway treatments produced a 12% minimum rate of returnon the marginal investment for widening. This was done to offset insufficient returns onwidening operations per se with the generally high returns on resealing and strengthen-ing. Annual growth in traffic of 4.5% is assumed.

4.14 Benefits. Benefits are derived from various sources: (a) vehicle operating costswill be reduced by reducing roughness through strengthening and resealing work;eliminating traffic on shoulders will be another factor in lowering vehicle operating costsfor widening works; finally, repeated deceleration and acceleration and reduced speedin passing and overtaking on narrow roads entail increased costs that widening willeliminate; (b) the cost of maintaining the shoulders and pavement edges will be reduced;(c) studies have shown positive effects on road safety from widening from 6 to 7 m.These effects have been modelled and included as exogenous factors in the model.

4.15 Beneficiaries. Road users and the network administration will be the immediatebeneficiaries: (a) the former will save on transportation costs; and (b) the administrationwill save on its road maintenance and rehabilitation budget. The resealing and strengthen-ing works provided for in this component are part of an optimum system maintenancepolicy which has been found to be optimum in simulations using the HDM III model. Itcan be said, then, that this component will contribute to the effort to bring down road

56 Chapter IV

maintenance costs over the long term, and therefore helps reduce road budgets. Inaddition, DRCR will benefit from combining strengthening/resealing and wideningoperations, producing economies of scale estimated at 8.5% of the cost of the works.Generally speaking, the proportion of benefits flowing to the administration ranges from20% to 13% of the total when traffic on the project roads increases from 250 to 900vehicles per day.

4.16 Non-quantified benefits. Consumers and producers will benefit indirectly fromthe existence of an increasingly competitive market, and multiplier effects on incomesare likely to occur. The benefits to the administration will allow it to cover a largersystem with a constant budget, with the secondary effect of increasing the number ofroad users who will benefit directly from a system in better condition.

4.17 Results and sensitivity analysis. None of the project roads, which cover atotal of 385 kcm, is programmed for execution in 1996, so that no results of economicanalysis are available as yet. The studies will be done according to the agreedmethodology. From the results of the economic calculations done by the Bank in 1994on more than 2,450 km of roads (from which the project roads will be selected), we canassume a very strong economic justification for this component. Internal rates of returnranged from 50% to 75% for the base hypothesis, 36% to 65% for the 15% cost overrunhypothesis, and 40% to 71 % if traffic is overestimated by 20 %.

4.18 Risks. The risks appear to be low. There are good data on average daily trafficand costs thanks to the quality of preparation studies and experience acquired by DRCRon similar projects. The methodology for analysis of sub-projects in the year two andyear three programs has been mastered by DRCR, making it unlikely that uneconomicinvestments would be programmed. The technical assistance called for in the project willimprove the likelihood of sound work supervision by the regional offices of DRCR. Themid-term review will provide an opportunity to detect any weaknesses in execution thatcould compromise the integrity of the objectives of this component of the project.

D. NETWORK MANAGEMENT

4.19 Investment under study. DRCR recently undertook a full reassessment of itsequipment needs based on foreseeable plans. Several conclusions emerged: (a) thepriority recently assigned to supporting rural development by improving road accessmeans having available equipment that is suited to use in demanding terrain; (b) themajor obstacles to mobility in rural areas during the winter, which lasts six months(about 1,300 km of mountain roads are exposed), are snowfalls (30 cm in 24 hours isnot unusual) and road wash-outs caused by rain on unsurfaced roads; (c) the fleet ofequipment available, comprising 942 personnel transportation units and 892 units forwork by force account, is obsolete (averaging 10 and 12 years old, respectively),increasing operating costs and down time as a result of more frequent breakdowns anddifficulties with the supply of spare parts; (d) work on force account should take arelatively smaller share, at least for programmable and easily measurable work.Accordingly, equipment should be replaced selectively, giving first priority to

Economic Justification 57

transportation equipment needed by teams performing studies and monitoring work underway, as well as equipment to be used in improving access. Two types of equipment willbe financed by the project: all-terrain utility vehicles and snow removal equipment.

4.20 Benefits. The benefits analysis focuses on reducing in operating costs bysubstituting new equipment for old equipment, after having verified that the availablefleet after investment is the right size in relation to needs. For utility vehicles, studieshave shown that the total fleet of 203 all-terrain vehicles could be reduced to 109. Giventhe need for renewal, plans call for purchasing 74 units, of which 34 would be financedunder the Third African Development Bank Project. The size of the fleet proposed isjustified by the launching of the national program to build 10,000 km of rural roads inseven years, and the needs of 80 subdivisions of the DPTP. The removal equipmentincludes 13 fixed-blade snowplows and 6 snow blowers to keep the fleet at its optimumsize. This equipment is used mostly on the trunk roads, where road closing not only cutoff populations in remote areas but also the regions in the interior which are linked bythese roads. Between the winter of 1991 and the winter of 1994 there were an averageof 150 days of road closures per year and 4 days per road. Renewal is necessary becausecurrent equipment is between 20-25 years old. Finally, the renewal of the 7 low-bedtrucks will also increase the mobility and the efficiency of the force account crewsworking on regravelling rural routes and shoulders. Benefits are lower operating andmaintenance costs and increased productivity. Operating costs have been estimated on thebasis of cost accounting data provided by DRCR (for older equipment, they range from6% to 8% of purchase price to 15 % to 17% at the end of the period; for new equipment,the comparable range is between 1% to 3.5% and 4% to 6.5%). For the scenario withoutthe project, the analysis foresees major repairs as being necessary every five years tokeep the equipment operating. Productivity gains are in direct relation to the highavailability level for new equipment. Data provided by DRCR show that productivity willincrease by about 50% for all-terrain vehicles and low-bed trucks, and by about 100%for snow removal equipment.

4.21 Beneficiaries. The public works administration will be the direct beneficiary ofequipment renewal. In the case of snow removal operations, the costs associated withwaiting and rerouting to different itineraries are borne by the users of the roads, who willtherefore benefit from better coverage of snow removal needs.

4.22 Non-quantified benefits. Strengthening controls on works will foster greatercost effectiveness for road budgets. The renewal of snow removal equipment will preventa rapid increase in the breakdown rate of the existing fleet, which would cause delays inperforming the work and longer periods of road closure. The populations affected areimportant, and the benefits they will receive from improved performance by snowremoval equipment will outweigh the cost of the investment outlays. The fact that theseeffects are dissimilar makes them difficult to quantify.

58 Chapter IV

4.23 Results and sensitivity analysis. The results of the economic calculations arepresented in Table 4.1: ERRs of Investments in Equipment.

Table 4.1: ERRs of Investments in Equipment

Type of equipment Cost (be- ERRs ERRs ERRsfore taxes) base Cost + Availability(Dh OOO's) case 10% + 15%

Utility vehicles 5,900 31.6% 27.1% 24.7%Snow plows 11,098 23.5% 19.6% 17.1%Snow blowers 14,400 39.1% 33.0% 30.2%Low-bed trucks 9,805 33.5% 28.6% 26.0%

Total 41,203 32.5% 27.5% 24.9%

Table 4.1 confirms that the proposed investment is based on a sound economic rationale,with an average internal rate of return of 32.5% for the base scenario. The rate falls to27.5% if the cost is increased by 10%, and to 24.9% if the breakdown rate is loweredby 15%.

4.24 Risks. Thc primary risk is that equipment will be poorly used. This risk, whichis already low, will be reduced even further by the development under the project of theRegional Directorates, which are responsible for equipment management.

4.25 Sustainability of the investment. The quality of equipment maintenance is aguarantee of its survival. The seven Regional Directorates have each a regionalworkshop. Generally speaking, the shops have qualified staff and operate effectively.Modem methods of preventive maintenance are applied. The very age of the equipmentin use bears witness to the local capacity for maintaining equipment in operatingcondition under difficult circumstances. It could be inferred from this that the risk ofimproper maintenance of the project equipment is low, particularly since the creation ofthe IFEER in 1993. Financed by Japan, the IFEER provides training for DRCR staff,especially mechanics and equipment drivers. The professional qualifications required forsustainable equipment use will progressively be raised.


W.A SGREEMENTS AND RECOMMENDATUOO

A. AGREEMENTS AND UNDERSTANDINGS REACHED AT NEGOTIATIONS

5.1 To continue the practice of carrying out annual reviews with the Bank of the roadinvestment programs (para 2.29).

5.2 To give high priority to funding maintenance of classified roads and thecorresponding needs to be evaluated on the basis of appropriate indicators (para 3.13).

5.3 To enlarge the CNPAC role to specifically cover the definition of a highwaysafety policy, together with the preparation of corresponding action plans, the preparationof reforms in law and regulations and highway safety coordination (Para 3.42).

5.4 To accompany the restructuring of the CNPAC by the strengthening of its annualbudget with the earmarking to it of a large share of the no-contest (paid on the spot tothe enforcement officer) road enforcement fines (para 3.43).

5.5 To liberalize the trucking market and to promote greater trucking efficiency, theGovernment will (para 3.51):

(a) permit unrestricted for-hire operations of trucks weighing eight tons grossor less;

(b) abolish the mandatory use of ONT for road freight forwarding;(c) eliminate trucking tariff controls; and(d) introduce simplified procedures and professional qualification standards for

access to the trucking industry, without any quantitative limits.

5.6 Agreement on procurement arrangements (para 3.69).

5.7 Agreement on the mandate of the mid-term adjustment workshop, the format andcontent of the progress reports and of the completion report (para 3.75).

5.8 Agreement on the methodology to be used in selecting the project roads for thesecond and third year programs (para 4.13).

B. CONDITIONS OF BOARD PRESENTATION

5.9 The signature by the Government of the Letter of Sector Strategy (para 5.52).

60 Chapter V

C. OTHER COVENANTS

5.10 Presentation to Parliament by December 31, 1998 of the laws and regulationsliberalizing the trucking market (para 3.52).

D. RECOMMENDATION

5.11 With the above agreements, conditions and assurances, the project is suitable fora $57.6 million Bank loan to the Kingdom of Morocco, at the Bank's standard variableinterest rate, to be repaid over 20 years, including five of grace.


Ammp-K 2.1 - RoAiD AicanweN

All Road Accidents

All Accidents Ratio to PopulationY7 Popula ton Vehicles Accident; Ca suale e s Accidents Ca sualbe s

of vich of ich Fa ta ltyAll Fatal Fabtlides Injunes All Fatal Rate Injuies

(P) (V) (AA) (FA) (F) (I) (AA)/(P) (FA)/P (F() (I)/(P)min %G 'OOs %G # %G # %G # i i %G i

1.98 20.4 477 24,975 1,962 2,232 33,654 1,222 96 109 1,6461983 21.0 2.59% 506 6% 25,048 0% 1,817 2,110 -5% 33,710 1,194 87 101 -8% 1,6081984 21.5 2.72% 520 3% 24,109 -4% 1,793 2,071 -2% 32,192 1,119 83 96 4% 1,4951985 22.1 2.69% 537 3% 24,408 1% 1,804 2,112 2% 33,269 1,103 82 95 -1% 1,5041986 22.7 2.55% 556 4% 25,009 2% 1,927 2,218 5% 34,286 1,102 85 98 2% 1,5111987 23.3 2.55% 580 4% 27,154 9% 1,952 2,269 2% 35,902 1,167 84 98 0% 1,5431988 23.9 2.55% 596 3% 29,172 7% 2,158 2,494 10% 40,692 1,223 90 105 7% 1,7061989 24.5 2.55% 635 7% 30,673 5% 2,204 2,588 4% 43,788 1,254 90 106 1% 1,7901990 25.1 2.56% 667 5% 32,992 8% 2,355 2,777 7% 47,301 1,315 94 111 5% 1,8851991 25.7 2.40% 700 5% 36,443 10% 2,561 3,103 12% 53,205 1,418 100 121 9% 2,0711992 26.3 2.34% 760 9% 41,331 13% 2,898 3,524 14% 61,205 1,572 110 134 11% 2,3281993 26.9 2.27% 846 11% 41,821 1% 2,828 3,359 -5% 61,750 1,555 105 125 -7% 2,2961994 27.5 2.21% 875 3% 43,681 4% 3,072 3,605 7% 65,058 1,589 112 131 5% 2,367S;i? es: DEESR Recueils d'accidents corporels de la circulalon routiere

Comptage roulier94MN1PH PopuIaton projecions

%G Annual GrowtiNumber

min million; index

62 Annex 2.1

All Road Accidents

Ratio to Vehicles Other Ratios [ Smeed's RelationshipY Accident Casualtes Fatmes &Itibmabn Predicled (F)J/(V Actial % Difference

oftvich FTality level All Lo0 orocco All LowAll Fafel Risk Injunies ccidents Injunes Counties Motbized Counties Mobrized

(AA)/(V FA)/(V (F)/(V) Il)/(Vl F/A)I)I) (V)TP) (A2Z IA3) (F)/IV) %D(A2) %Dr(AOi i i %G j 1 1OOs OMs i i ii %D %D

1982 52 4.1 4.68 71 8.9 6.6 23.34 3.96 4.13 4.68 18% 13%1983 50 3.6 4.17 -11% 67 8A 6.3 24.13 3.86 4.04 4.17 8% 3%1984 46 3A 3.98 -4% 62 8.6 6.4 24.14 3.86 4.04 3.98 3% -1%1985 45 3.4 3.93 -1% 62 8.7 6.3 24.28 3.84 4.03 3.93 2% -2%1986 45 3.5 3.99 1 % 62 8. 6.5 24.51 3.81 4.00 3.99 5% 0%1987 47 3A 3.91 -2% 62 8A 6.3 24.93 3.76 3.96 3.91 4% -1%1988 49 3.6 4.18 7% 68 8.5 6.1 24.98 3.76 3.95 4.18 11% 6%1989 48 3.5 4.08 -3% 69 8.4 5.9 25.96 3.65 3.85 4.08 12% 6%1990 49 3.5 4.16 2% 71 8A 5.9 26.58 3.59 3.79 4.16 16% 10%1991 52 3.7 4.43 6% 76 8.5 5.8 27.24 3.52 3.73 4.43 26% 19%1992 54 3.8 4.64 5% 81 8.5 5.8 28.90 3.37 3.59 4.64 38% 29%1993 49 3.3 3.97 -14% 73 8.0 5.4 31.46 3.16 3.40 3.97 26% 17%1994 50 3.5 4.12 4% 74 8.3 5.5 31.83 3.13 3.37 4.12 31% 22%

Smeed's relatonship:(A2) (F)/(V) -42 [(V)/(P)l PWR (-0.75)(A31 (F)/(V) =32 [(V)/(P)I P WR (-0.65)

Road Accidents 63

Interurban Road Accidents

Traffic Accidents Raeo to Traffic 6 Annual Growtth7Yr Veh-km Accident Casualtes Accidents CasualSes Traic Accidents Casualtes

per of vd*h of hiAh of vAiiehDay Year All Fatal Fatlites Injuries All Fatal Famlites Injuries All Fabl Fatsli%es Injuriesmin 10mhF I# i i i i %G 7%G %G %G9%

1982 21.2 77.3 6,470 1,207 1,443 12127 83 18.7 156.91983 20.6 75.2 6,183 1,130 1,381 11,869 82.2 15.0 18.4 157.8 -3% -4% -6% -4% -2%1984 20.0 73.1 5,710 1,084 1,331 11,028 78.1 14.8 18.2 150.8 -3% -8% -4% -4% -7%1985 20.4 74.5 5,668 1,068 1,333 11,263 76.0 14.3 17.9 151.1 2% -1% -1% 0% 2%1986 18.5 67.7 6,159 1,182 1,446 12,228 91.0 17.5 21.4 180.7 -9% 9% 11% 8% 9%1987 20.2 73.8 6,408 1,151 1,437 12,599 86.8 15.6 19.5 170.7 9% 4% -3% -1% 3%1988 20.3 73.9 7,333 1333 1,634 14,773 99.2 18.0 22.1 199.8 0% 14% 16% 14% 17%1989 23.9 87.1 8,005 1,411 1,749 16,339 91.9 16.2 20.1 187.6 18% 9% 6% 7% 11%1990 26.0 94.9 8,695 1,532 1,919 17,832 91.6 16.1 20.2 187.9 9% 9% 9% 10% 9%1991 27.7 101.1 10,019 1,664 2,140 20,965 99.1 16.5 21.2 207.4 6% 15% 9% 12% 18%1992 29.6 108.1 11,122 1,907 2,476 24,114 102.8 17.6 22.9 223.0 7% 11% 15% 16% 15%1993 31.3 114.2 11,159 1,806 2,268 24,267 97.7 15.8 19.9 212.4 6% 0% -5% -8% 1%1994 33.5 122.3 11,851 2,041 2508 25,453 96.9 16.7 20.5 208.2 7% 6% 13% 11% 5%So .rer DEESR Recuels d'accident corpems de la cdtulalion mutibm

Cobt%ge mouer 94

64 Annex 2.1

Futur Road Accidents

AllAccidents Ratio to PopulationVr Popula ton Vehicles Accidenft Casualves Accidents Casua les

of vMich of vd*hi _All Fatbl FatSlites Iniuries All Fabl Fatality Injuries

Rate(P} {~~~V) (AA) (FA) (F) (l) (AA)/(P) (FAT/IMT (F)/(P) MAP)/P

min %G 96% %G # i i i %G i199 26.3 76SW 41,331 Z,89w 3,524 61,205 1,572 110 134 2,3281993 26.9 2.27% 846 11% 3,358 4.7% 125 -7%1994 27.5 2.21% 875 3% 3,605 7.4% 131 5%1995 28.1 2.15% 919 5% 3,588 -0.5% 128 -3%

i~ 29 i.i~i~i~ % 3,6S -05% 121 -3%1998 29.9 2.08% 1,064 5% 3,539 -0.5% 118 -2%1999 30.5 2.01% 1,117 5% 3,523 -0.5% 115 -2%

3- .,,' 1i_ 15%- 1,173 *5% .3,21 0,0%,; 113 -2%2~61 3i.8266~ 1,~19 4% 319 -0.1% Ill -2%

2002 32A 1.98% 1,268 4% 3,517 -0.1 % 109 -2%2003 33.0 1.91% 1,319 4% 3,515 -0.1% 106 -2%2004 33.6 1.84% 1,372 4% 3,514 -0.1 % 104 -2%

342-110. 12 4% ._._-_-_._ 3,512 -0.1% 103 -2%Annual (3rown

Numbermln millioni index

Road Accidents 65

FutLir Road Accidents

Ratio to Vehicles Other Ratios Smeed's RelationshipYr- Acciden& Casualtes Fatlites Mobnzaton Prediced (F)I/(V Ackial % Difkrence

of Which a, level Aff Lorw Morocco All LowAll Fatal Fatality Injunies Accidents Injunes Counties Mobtzed Counties Motnzed

Risk(AA)/V FA)/V (F)/(V)- (I)/(V) (F)/(AA) (F)1(1) (V1/P) (A2) (A3) (F-)/(V) %U(A4 %D (A3

i I I i %G: 1/1000 1/100 100 i %G i %D %DT9U2 54 4.64 0 .b 5. 28.9U 3.37 3.b5 4.64 38% 29%1993 3.97 -14A% 31.46 3.16 -6.2% 3.40 3.97 26% 17%1994 4.12 3.8% 31.83 3.13 -0.9% 3.37 4.12 31% 22%1995 3.91 -5.2% 32.72 3.07 -2.0% 3.32 3.91 27% 18%199 3.70 -5.2% 33.61 3.01 -2.0% 3.26 0 370 23%; 14A1997 3.51 -52% 34.54 2.95 -2.0% 3.20 3.51 19% 101998 3.33 -52% 35.53 2.89 -2.1% 3.14 3.33 15% 6%1999 3.15 -5.2% 36.57 2.82 -2.1% 3.08 3.15 12% 2%2000 3.00 4.8% 37.6 2.76 -2.2% 3,03 3.00 9% '1%2001 2.89 -3.9% 38.38 2.72 -1.4% 2.99 2.89 6% -302002 2.77 -3.9% 39.14 2.68 -1.5% 2.95 2.77 3% -6%2003 2.67 -3.9% 39.94 2.64 -1.5% 2.91 2.67 1 % -8%2004 2.56 -3.9% 40.79 2.60 -1.6% 2.87 2.56 -2% -11%2005 246 -3.9% 41.67 258S -1.6% 283 U28 -4% =1

Smeed's relatonship:(A2) (F)/(V) 42 [(V)/(P)J PWR (-0.75)(A3) (F)/(V) =82 l(V)/(P)] PWR (-0.65)

ANNEXES TO CHAPTER HIKINGDOM OF MOROCCO


ANNEX M:N FoR$T YEAR PROGRAM

A. RURAL ROADS

Table 3.1.1: Paved Roads

Region DPTP Road Length (km) ERR

Centre Khouribga CT 1647 12 37,24

North West Kenitra CT 2316 12 80Chefchaouen CT 8307 26 36

Oriental Figuig CT 3473 20 32,92

Total 70

Table 3.1.2. Unpaved Roads

Province Road No. Connection Length ERR(kIn)

Ouarzazate CT 6957 Zagora-Beni Zoli 24 143

Tiznit CT 7058 Anzi-Amzil 17 38,2

Agadir CT 7056 RR 105 PK 94 Ida Ougnidif 5 417,9

Total Southern Region 46

Settat CT 1442 Sidi Hajjaj-Tlate Loulad 16 80,4

CT 1426 Sidi B. Kacem-Tnine B. 15 102,5Khlough

CT 1432 Ben Ahmned-Guisser 12 62,6

CT 1433 Sidi Hajjaj-Biar Bouhnik 12 74,2

Total Central Region 55

Sidi Kacem CT 2424 J. Houafat-S. Med Oudad 24 74,3

Total North West Region 24

Aggregate Total 125

First Year Program 67

B. NETWORK MANAGEMENT

Table 3.1.4: Network Management

Material 1996 1997 Total

Low-bed trucks 4 3 7

Snow plows 5 5 10

Snow blowers 2 2 4

Utility vehicles 30 - 30

Sub-total 41 10 51

68 Annex 3. 1

C. ROAD SAFETY

ANCIEN CLASSEMEJT iOUVEAU CLASISEMENT ROUTE NATURE STAVE DE NERE COiTACCIDEN'rS KoH) COUTRTP DTP ROUTE P.K. P.K. RC'UTE P.K. P.K. COUPEE Dt) PN L'ETUDE ACCID. COOT COUT CO T OPERATIO 96_________ -___________ DEBUT FIN DEBUT FIN ECONOM SOCIAL TOTAL: KDA4) ( KDH )

P CENTRE CAEABLAN(.A RPH 8 13+000 RNI 373+000 Recl. P. LC En cours 14 2982 58i24 8e06 700 70013+300 373+30 CT 1028 Rect P. L CarrL f En cours 14 2982 51324 9£06 1300 170018 +400 3 '79+400 C;T 1027 R ecl. P.L. et T.P Carrs En cours 15 3195 6240 9435 1000 (100(I22O000 23+C000 382+-000 383+00a Trav. Agglo. En cours 1 9 4 047 7104 11'351 150ti 150024+500 3 t45C0 CT 1022 Carra rcur En cours 8 170-4 332:3 5C3? Z 600 600

EL JAC DDA RP t 62+200 62+EOO RN 1 4'2-200 422+800 Rect. P. L. En cours 2 4233 632 1258 ;0) 50065+700 6,+lOO 4)5+ 4-7+1()0 Rect, T. P. Encours 10 2130 4160 6290 1000 1000

_______ _ 7 _~Q _3+0 ____k~ _ nor _9 404 .0 __9 . _50 _

SETTAT RP l 29+000 RN 1 3ti9+000 Rect. T. P. En cours 6 1278 2496 3774 1500 1500

TOTAL REGION CE 'NTRE 1 SE 1 37414 36608 55352 8100 8100NORD KENITRA RP 2 25+610 26+E45 RN 1 242+-200 243+2:50 RS 212 Carrefour En cours 2 |4216 | 32 1258 1500 1500OlJEST 156+000 14+0(10 Deasst. let. En cours 2000 2(:00

iRR 413 o 3 14)0()| | RR4t9 Ract. T. P. Encours 1050 1)50 |

. 142+43'L_ _N __ 10400 125|0(30Carrefour 2_)80 3145__ 501) --ef-urSIDlt KACFM RPP6 142+200 142+,i37 RN I 104+000 105+0( Rect. T. P. En cours 5 1065 2080 3145 500 500Redm. 0. H

.__ 3 ]RR413 46+100 ! RS211 |Carrafour Encours 260 260

TOTAL REGION NORDK OLUEST _ 7 1491 2912 4403 5310 5310

ORIENTAL NACOR RP :39 357+500 RN 1 2 C;T 3101 Carrafour P' 50E1 5o0OR 2RP9 351++200 Ans.irzc6 Carrefour Encours 550

RP 33 A500!

RP 39 343+7140 RF' 27 Carrefour A.P 3| i 500

RP 39 RN2 I3 1 C'o0 Rect. T P. En cours |5 550 |

OT_ IO_ __- __ __ORIENTAL zzzz _ 2IC,-- I l10{TOTAL REGIONs ORIENTAL 1 |H H°L 2 0' 0 221C00 2100

First Year Program 09

C. ROAD SAFETY

______ COUTA~~~~~~~~~~~~~~~~~CIOItNTC' ~~~~~~~~~~rCOOT

ANCIEN CLASSEMIENT NOUVEAU CLASSEMENT j ROUTE NATURiE STADE DE N8RE -OUT A_CD_NTS _ KDi) C

.R-TP DTP ROUTE P.K. P.I. ROUTE P.K. P.K. COUPEE DU PN L'ETUDE ACCID. COUT COUT cOrT OPERJlTIO 06_. . _____ DEBUT FIN -- DEBUr FIN . IEC NOI SOCIAL TOTAL f KDH) L KDH)

jCENTREINORD TAZA RP I RN 6 2 '24900 Eiar. 0 .A. Disp. 7 1491 2912 4403 60 600

iTOTAL REGION CENTRE NORD 1-7 1491 2912 4403 6001 600

hTENSIFT |MARRAKECH F.P 40 131+029 RN 8 122+000 Roct. P.L En cours 4 1 352 1t664 2516 1000 1000

16b3+02£ 166 +29 157+000 1t7+500 Rect. PiL En cours 5 1065 208( 3145 1500 1500

150+529 141+500 CT341)2 Amena. canef. En cours 11 2343 457fi 8919 ;00 500

180+029 1'1+000 Rect. P.L En cours 4 1352 1 664 2516 300 900

_16+029 1554 900 CT 6458 Amenar.. carref, En cours 2 426 632 1.58 ,0) 500__ _ _ _ __ _ _ _ __ _ _ _ _.__ _ _ _ _ __ _ __ _ ____._.__ 1 7 3

TOTAL REGION TENSIFT - 26 15538 10816 16354 4300 4300

TOTAL GLOBAL : : 2-18 80 5_2 20 410 _4 _ 1ETOTAL: GLOBAL I 128 12726j 153 2481 80512j 20 410 20 410


AmmEx 3D2 LETTER OF SECTOR STATIETY

1. The transport sector and the road infrastructure sector play an important role inthe Government's Development Strategy. To this effect, the Government will take thenecessary measures to improve access to rural areas and to alleviate road and roadtransport constraints to doing business in the private sector. The Government will alsotake the necessary measures to strengthen the institutions in charge of road maintenance,management of the road sector and of road safety.

Road Transport

2. In order to promote greater trucking efficiency, essential measures will be takento liberalize the transport market. To this effect the Government will prepare a draft Lawby December 31, 1995 covering the following measures:

(a) Permit unrestricted for-hire operations of trucks weighing eight tons grossor less.

(b) Abolish the mandatory use of ONT for freight forwarding and implementits new mission.

(c) Establish trucking tariff freedom.(d) introduce simplified procedures and professional qualification standards for

access to the trucking industry without any quantitative limits.

Funding of Road Maintenance

3. In reference to the Government's statement on the strengthening of infrastructures,high priority will be given to the maintenance of classified roads, by setting up adequatefmancing means, in conformity with the existing laws and regulations.

Road Safety

4. By December 31, 1996, the Government will submit to Parliament a draft Lawaiming at redefining the role of the National Road Accidents Prevention Committee(CNPAC) and at giving it a parastatal status to cover in particular the definition of ahighway safety policy, together with the preparation of corresponding action plans, thepreparation of reforms in law and regulations and the coordination of actions aimed atroad unsafety.

5. The Govermnent will arrange that CNPAC restructuring will be accompanied bythe strengthening of its financial means, in particular by earmarking to it 50% of no-contest (paid on the spot to the enforcement officer) road enforcement fines.

KINGDOM OF MOROCCO


ANNEX 3.3: PROJECT COSTS, FINANCING AND DISBURSEMENT SCHEDULE

MoroccoSecondary, Tertiary and Rural Roads Project

Componants by Finazncier(USS Million)

Kingdom of Local GRANT (to be Local Duties

Morocco Governments identified) World Bank Jasan _ Total For. (Excl. &Amount t Am ount A Aounr t Aounr j Aount t Exch T Taxes

1. Rural Roads 13.604 33.4 0.425 1.0 - - 26.676 65.5 - - 40.704 21.0 19.017 11.578 10.1092. Paved Branch Roads 48.547 37.9 - - 17.968 14.0 61.617 48.1 128.132 66.0 60.567 36.858 30.707

3. Network Management 4.797 39.9 - - - - 5.993 49.8 1.238 10.3 12.029 6.2 6.081 2.261 3.686

4. Road Safety 4.080 30.8 - - 2.192 16.6 6.953 52.6 7- - 13.225 6. 6.631 2.854 :3.74A

Total Disburuement 71.027 36.6 0.425 0.2 2.192 1.1 57.590 29.7 62.856 32.4 194.090 100.0 92.295 53.552 48.243

Tue May 09 14:34:20 1995

72 Annex 3.3


Uapezsditure Accounts by ?inauiciers(UJs$ Million)

Kingdom of Local GRANT (to be Local DutiesMooc Qgemnj idetifpdj Wrl Ban __ Rn _ Total For. (Excl. &

Amount t Amount -t Amount. 3 Amun Amount t Amount Exgh, taaes IAXC

I. Investment CostsA. Civil Works

Unpaved Road Works 12.503 33.8 0.425 1.1 - 24.073 65.1 - - 37.000 19.1 17.724 10.026 9.250PBR Japan 12.984 35.2 - - - - - - 23.868 64.8 36.852 19.0 19.525 10.483 8.845PBR COV 7.787 100.0 - - - - - - 7.787 4.0 3.751 2.167 1.869PBR Centre 7.548 32.0 - - - -16.039 68.0 23.5e7 12.2 11.362 G.S64 5.661PBR Centre Nord 1.872 32.0 - - - - -3.979 68.0 5.851 3.0 2.819 1.628 1.404PBR Centre Sud 1.936 32.0 - - - 4.113 68.0 6.049 3.1 2.914 1.683 1.452PBR Nord QueSt 4.599 32.0 - - - -9.774 68.0 14.373 7.4 6.924 4.000 3.450PBR Tensift 1.809 32.0 - - - . -3.844 68.0 5.653 2.9 2.723 1.573 1.357PBR Oriental 4.247 28.0 - - - -10.921 72.0 - - 15.168 7.8 7.210 4.317 3.640PBR Sud 2.030 28.0 - - - -5.219 72.0 - - 7.249 3.7 3.431 2.078 1.740Sl1ack Spot Road Works .2,.3J1 .. 28.0. 6______ -___ I.122 72..20 4,073. .. ~. .i.. 2..L3J.9 ..2..041A

Subtotal Civil Works 59.695 35.5 0.425 0.3 - -46.335 27.6 61.617 36.7 168.072 86.6 80.456 46.909 40.707E.Goods

1. Road Equipment 2.590 42.8 - - 3.467 57.2 - - 6.057 3.1 3.173 0.294 2.5902. Ron-road Equipment

For MPW 0.020 19.0 - -0.086 81.0 - . 0.106 0.1 0.086 - 0.020

Subtotal Non-road Equipment 0.937 38.8 - -1.395 57.7 0.086 3.5 - - 2.418 1.2 1.415 0.066 0.9373. Vehicles

For MPW 0.381 34.0 - - - - 0.740 66.0 - - 1.121 0.6 0.504 0.236 0.381For CNPAC 0..L579. 4.2.1 0 -. 7972I ...57I-9 1,__ -.. 376 &O.2 0S.760i 0.0.Q38i .0,579Subtotal Vehicles 0S.960 38.4.2L __ 0,797 __...._L 0,7401 ..... ~ 29.6.2..9,497 1.2.63 ..&,2.2 05.9i0

Subtotal Goods 4.487 40.9 - -2.192 20.0 4.292 39.1 - -10.9,71 5.'? 5.850 0.634 4.487C. ConsultaLnts & Training

Dsgn & Qlt Ctrl, Unpaved 1.101 29.7 - - - - 2.603 70.3 - - 3.704 1.9 1.292 1.552 0.259Osgn & QC, PER Centre 1.187 100.0 - - - 1.187 0.6 0.406 0.505 0.275Osgn & QC, POR Centre Nord 0.295 100.0 - - - - - - 0.295 0.2 0.101 0.125 0.068Osgn & QC, PBR Centre Sud 0.304 100.0 - - - 0.304 0.2 0.104 0.130 0.071Dsgn & QC, PER Nord Quest 0.723 100.0 - - -- - - 0.723 0.4 0.248 0.308 0.168Osgn & QC, PER Tensift 0.285 100.0 - - -- - 0.285 0.1 0.097 0.121 0.066Dsgn & QC, PER Oriental 0.180 23.2 - -0.595 76.8 - 0775 0.4 0.265 0.330 0.180Dsgn & QC, PBR Sud 0.085 23.2 - - -0.281 78.8 - - 0.366 0.2 0.125 0.156 0.085Dsgn & QC. PBR Oriental & Sud 0.389 100.0 - - - - -- - 0.389 0.2 0.137 0.162 0.090Dsgn & Olt Ctrl, Black spots 0.099 23.2 - - - 0.327 76.8 - - 0.426 0.2 ')048 0.178 0.099Super-vising Cons. 0.288 23.2 - - 0.952 76.8 - . 1.240 0.6 0 424 0.02F 0.288General Studies 0.147 23.2 - 0.486 76.8 - .633 0.3 0.409 0-077 0.147Locail Consultants 0,137 23.2 -0.454 76.8 - C.591 0.3 - 0.454 0,137Foreign Consultants 0.384 23.2 - 0.610 36 9 0.660 39.9 1JESS 01.9 1,.271 - 0.364Training Abroad - - 0 .377 100 0 - - 0 377 0.2 0.377 -Training in Morocco 1.111 100.0 - - - - - 11 O 0.07 1.004 Air Travel - -169 40.3 0.2501 o. 0 423 3 420Other Expenses /a ..._122 .21.2 _ ... 0f 1i2.1 &.12.2 0 1i ~ ~ 2Subtotal Consultants & Training .A 5 ... -~ .. dl.i~.LI -,-- .. ii.2V .. 2..~0.8. ..k,.53 W

Total1 Disbureftment c0£2 6. .425 1.' 5'~590 29 7 62.8'lc 32.4 194-090 1 OC, 0 2 .299 5 3.-55?- 48_243

\s Nipe, t,dgng, Ve]h, Spc Sprt

lue May 09 16:34:2S 1995

Project Costs, Financing and Disbutrserernt Sc hedule 73

Moroc_oSecondary, Tertiary a,-d R,ira. Roads Project

Expenditure Accounts by Components - Totals Including Contingencies(Us5 Millicn;)

PavedRural Branch Necwork RoadRoad Roads Man acerea t S

I. Investment CostsA. Civil Works

Unpaved Road Works 37.00 - - 37.00PBR Japan - 36.85 - - 36.85PBR GOV 7 79 _ 7,79PBR Centre - 23 59 - - 23,59PBR Centre Nord - 5.85 - - 5.5PBR Centre Sud - 6.05 - - 6.05PBR Nord Ouest - 14.37 - - 14.37PBR Tensift - 5.65 - 5.65PBR Oriental - 15.17 - - 15.17PBR Sud - 7.25 - - 7.25Black Spot Road Works - - --- t 8.50 8.50

Subtotal Civil Works 37.00 122.57 - 8.50 168.07B. Goods

1. Road Equipment - - 6.06 - 6.062. Non-road Equipment

For MPW - - 0.11 - 0.11For CNPAC - - - 2.31 2.31

Subtotal Non-road Equipment - - 0.11 2.31 2.423. Vehicles

For MPW - - 1.12 - 1.12For CNPAC - - ---------------- lt 1.38 1.38

Subtotal Vehicles - - 1.12 1.38 2..50Subtotal Goods - - 7.28 3.69 10.97C. Consultants & Training

Dsgn & Qlt Ctrl, Unpaved 3.70 - - - 3.70Dsgn & QC, PBR Centre - 1.19 - - 1.19Dsgn & QC, PBR Centre Nord - 0.29 - - 0.29Dsgn & QC, PBR Centre Sud - 0.30 - - 0.30Dsgn & QC, PBR Nord Ouest - 0.72 - - 0.72Dsgn & QC, PBR Tensift - 0.28 - - 0.28Dsgn & QC, PBR Oriental - 0.77 - - 0.77Dsgn & QC, PBR Sud - 0.37 - - 0.37Dsgn & QC, PBR Oriental & Sud - 0.39 - - 0.39Dsgn & Qlt Ctrl, Black Spots - - - 0.43 0.43Supervising Cons. - 1.24 - - 1.24General Studies - - 0.63 - 0.63Local Consultants - - 0.38 0.21 0.59Foreign Consultants - - 1.45 0.21 1.65Training Abroad - - 0.27 0.11 0.38Training in Morocco - - 1.11 - 1.11Air Travel - - 0.37 0.05 0.42Other Expenses /a - - 0.54 0.03 0.57

Subtotal Consultants & Training 3.70 5.56 4,75 1.03 15.05Total PROJECT COSTS 40.70 128.13 12.03 13.22 194.09

Taxes 10.11 30.71 3.69 3.74 48.24Foreign Exchange 19.02 60.57 6.08 6.63 92.30

\a M1s, Ldgng, veh, off Spc & Sprt

74 Annex 3.3

moroccosecondary, Tertiary and Rural Roads Project

Local/Formign/Tax-e by Financiera(USS Million)

Kingdom of Local GRANT (to beMorocco Governments jdentiJisdL World Bank anan Total

Amount % Amount % Amount % Amount % Amount Aon

I. Foreign 7.182 7.8 - - 2.089 2.3 38.421 41.6 44.604 48.3 92.295 47.6II. Local (Excl. Taxes) 15.619 29.2 0.408 0.8 0.103 0.2 19.169 35.8 18.252 34.1 53.552 27.6I1I. Taxes 48.226 lQ0.0 0017___ 424 - - 2U 24. 9

Total Project 71.027 36.6 0.425 0.2 2.192 1.1 57.590 29.7 62.856 32.4 194.090 100.0

Tue May 09 16:34;33 1995

Project Costs, Financing and Disbursement Schedule 75


Diubursemoat Accounts by Financiers(US$ Million)

Kingdom of Local GRANT (to be Local DutiesMorcc ~ ~ ~agzmcnc jidenlifeild Wrd Bank _jAan Total For. (Excl. &

Aouni Amount Amount W amQunt t Aount Anount V £2ch Tax Taxes

A. Rural Road Works12% local govt 0.833 24.5 0.425 12.5 - - 2.143 63.0 - - 3.402 1.8 1.630 0.922 0.8500 S local govt 8.S28 28.0 - - - - 21.929 72.0 - - 30.458 15.7 14.590 8.253 7.614100 % govt 3 141 100. 30141 - - - - 3 141 1.lS05 0 1 0 735

Subtotal Rural Road Works 12.503 33.8 0.425 1.1 - - 24.073 65.1 - - 37.000 19.1 17.724 10.026 9.250D. Civil Works 45.440 35.1 - - - - 22.262 17.2 61.617 47.6 129.320 66.6 62.115 36.168 31.037C. Goods 4.467 41.1 - 2.192 20.2 4.207 38.7 - - 10.866 5.6 5.765 0.634 4.467D. Consultants 7.506 49.1 - - - - 6.550 42.8 1.238 8.1 15.295 7.9 6.086 5.721 3.489E. Training 6 91 50 0_498 0 - - - . 1.aL0 _ _ 1.609 o.s0.605 1004.04 -

Total 71.027 36.6 0.425 0.2 2.192 1.1 57.590 29.7 62.856 32.4 194.090 100.0 92.295 53.552 48,243

Tue May 09 16:34z16 1995

76 Annex 3.3

Moroccosecondary, Tertiary and Rural Roads Project

Allocation of Loan ProceedsWorld Bank(US$ Million)

Suggested AllocatiQn ofLoan Proceeds Loan Amounts

Disbursement Total Project Cost Average Disbursement I Unallocated AllocatedLoan Amount W TcLa Local Foreign TotAl Loal Foreign Total Total Local' Foreign Total LTocal Foreign

A. Rural road WorksRoad Works (121 LG) 1.948 63.000 3.402 1.772 1.630 63.000 28.979 100.000 2.143 0.195 0.047 0.148 1.948 0.467 1.481Road Works (Ot LG) 19.936 72.000 30.458 15.868 14.590 72.000 46.254 100.000 21.929 1.994 0.667 1.326 19.936 6.672 13.264Road Works (100% Gov) - - 3141 1.636 1.505 - - - - --

Subtotal Rural road Works 21.884 - 37.000 19.276 17.724 - - - 24.073 2.188 0.714 1.475 21.884 7.139 14.745B. Paved Road Works 20.238 17.215 129.320 67.205 62.115 17.215 11.231 23.689 22.262 2.024 0.686 1.338 20.238 6.861 13.377C. Goods 3.661 38.714 10.866 5.101 5.765 38.714 10.398 63.769 4.207 0.546 0.066 0.480 3.661 0.464 3.197D. Consultant Services & Training 6.408 41.698 16.904 10.213 6.691 41.698 31.705 56.950 7.049 0.641 0.294 0.346 6.408 2.944 3.464

Unallocated 5 .399 - _ _ ------Total 57.590 29.672 194.090 101.795 92.295 - - - 57.590 5.399 1.761 3.638 52.191 17.408 34.783

Loan amounts financed by World Bank

Tue May 09 09:36:26 1995

Project Costs, Financing and Disbursement Schedule 77

moroccosecondary, Tertiary and Rural Roads Project

Procuremeznt Accourto by Financiers(US$ Million)

Kingdom of Local GRANT (to be Local DutiesMorocco Governments identified W _XXd_BAnk _Japa Total For. (Excl. &

Amount % Amououn % Amount % Amnunt A nount Amount - Exch, Taxes) Taxes

A. Hardware1. Road Worka

Rural Roads(Wo ) 9.362 27.6 0.425 1.3 - - 24.073 71.1 - - 33.859 17.4 16.220 9.175 0.465Rural roads (Gvt) 3.141 100.0 - - - - - - - - 3.141 1.6 1.505 0.851 0.785Paved Branch Roads 43.060 35.6 - - - - 16.140 13.4 61.617 51.0 120.817 62.2 58.042 33.779 28.996Black Spots 2.381 28,-Q _ _2 - .122 7_2 -- -_ 5.5 8 ..S03 4.4 4.A07 3 2,389 2..041Subtotal Road Works 57.943 34.B 0.425 0.3 .. - 46.335 27.9 61.617 37.0 166.320 85.7 79.839 46.194 40.2872. GoodsFor MPW 2.971 41.4 - - 4.207 58.6 - - 7.178 3.7 3.676 0.530 2.971For MOT 1.496 40.6 - - 2,192 .59.4 - - - - 3.688 1.9 2.0B9 0 1 496Subtotal Goods 4.467 41.1 - - 2.192 __2._ 420Q.2 4.7 1 6 - .866 56 5765 0.634 4.467Subtotal Hardware 62.410 35.2 0.425 0.2 2.192 1.2 50.541 28.5 61.617 34.8 177.186 91.3 85.604 46.828 44.754H. Software

1. MPWa. Framework Agreement 1.228 29.6 - - - - 1.685 40.6 1.238 29.8 4.151 2.1 2.184 1.319 0.648b. Lcl Training 0.531 100.0 - - - - - - - - 0.531 0.3 0.051 0.480 -c. Deaign & Quality Cntrl

Mostly Lab Tests 3.447 79.7 - - - - 0.876 20.3 - - 4.324 2.2 1.484 1.837 1.003Mostly Design 2.952 50.2 - - - -...... &2,930 49.8 - _ 5.882 3.0 2.057 2.446 1.379Subtotal D-sign a Quality Cntrl 6.399 62.7 3 - 0 86 37.3 10.205 5.3 3.541 4.282 2.382d. Studies. MPW 0.147 23.2 - - - -0.486 76.8 - - 0.633 0.3 0.409 0.077 0.147e. Other, MPW Q.288 23.2 - - - - .952 76.8 - - - 1.240 0.6 0.424 0.528 0.288Subtotal MPW 8.592 51.3 - - 6.929 41.3 1.238 7.4 16.760 8.6 6.609 6.687 3.4642. CNPAC 0.025 17.2 - - - - 0Q11 82.8 - - 0,.44 0.1 0.Q82 0.038 0. 025Subtotal Software 8.617 _L. - - - - 7,049 41.7 1.23a 7.3 16.-9 04 8.7 6.691 6.724 3.489Total 71.027 36.6 0.425 0.2 2.192 1.1 57.590 29.7 62.856 32.4 194.090 100.0 92.295 53.552 48.243

Tue May 09 16:34:37 1995

78 Annex 3.3

M4oroccoSecondary, Tertiary and Rural Roads Project

Inflation and Exchange Rates

Up toUp to Project

Niegotiation start 1996 1997 1998 1222_ 2000 2001 2002

Inflation (in %la) /aAll

Annual ratesLocal 8.0 2.1 4.3 4.3 4.4 4.4 4.4 4.4 4.4Foreign 2.7 1.1 2.2 2.2 2.2 2.2 2.2 2.2 2.2Compounded ratesLocal 8.0 2.1 4.3 8.8 13.5 18.5 23.7 29.2 34.8Foreign 2.7 1.1 2.2 4.5 6.8 9.1 11.5 14.0 16.5Jung4

Annual ratesLocal 4.3 2.1 4.3 4.3 4.4 4.4 4.4 4.4 4.4Foreign 2.7 1.1 2.2 2.2 2.2 2.2 2.2 2.2 2.2Compounded ratesLocal 4.3 2.1 4.3 8.8 13.5 18.5 23.7 29.2 34.8Foreign 2.7 1.1 2.2 4.5 6.8 9.1 11.5 14.0 16.5Japan

Annual ratesLocal 0.0 3.8 4.6 4.6 4.6 4.6 4.6 4.6 4.6Foreign 0.0 2.8 3.3 3.3 3.3 3.3 3.3 3.3 3.3Compounded ratesLocal 0.0 3.8 6.2 11.1 16.2 21.5 27.1 33.0 39.1Foreign 0.0 2.8 4.5 7.9 11.5 15.2 19.0 22.9 27.0jun95

Annual ratesLocal 0.0 2.1 4.3 4.3 4.4 4.4 4.4 4.4 4.4Foreign 0.0 1.1 2.2 2.2 2.2 2.2 2.2 2.2 2.2Compounded ratesLocal 0.0 2.1 4.3 8.8 13.5 18.5 23.7 29.2 34.8Foreign 0.0 1.1 2.2 4.5 6.8 9.1 11.5 14.0 16.5Exchange rates (Local/Foreign) /b

AllRates actually used 9.5 9.6 9.8 10.0 10.2 10.4 10.6 10.9 11.1Constant purchasing parity rates 9.5 9.6 9.8 10.0 10.2 10.4 10.6 10.9 11.1% deviation 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0Jun94Rates actually used 9.7 9.8 10.0 10.2 10.4 10.6 10.9 11.1 11.3Constant purchasing parity rates 9.7 9.8 10.0 10.2 10.4 10.6 10.9 11.1 11.3t deviation 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0JapanRates actually used 9.4 9.5 9.6 9.7 9.9 10.0 10.1 10.2 10.4Constant purchasing parity rates 9.4 9.5 9.6 9.7 9.9 10.0 10.1 10.2 10.4t deviation 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0jun95Rates actually used 8.6 8.7 6.9 9.0 9.2 9.4 9.6 9.8 10.1Constant purchasing parity rates 8.6 8.7 8.A 9.0 9.2 9.4 9.6 9.8 10.1t deviation 0.0 0.0 O.U 0.0 0.0 0.0 0.0 0.0 0.0

\a Yearly values are within Each Project Year\b Yearly values are at Project Year Midpoints

Amount (US$ min)_ M X b en O CM C

o o 0 0 0 0 0 o o o o o o o6

Dec-95

Jun-96 .

Dec-96

Jun-97

Dec-97

Jun-98 0 X

Dec-98

CD,

Jun-99 -a

Dec-99

Jun-00 n

Dec-00

Jun-01

Dec-01

0 Q

80 Annex 3.3


Project Areas by Implementing Agencien

(US$ Million)

MOTMPh- - MOT (RoadDRCR CNPAC Tansport Ta

A. Region CentraDTP Azilal 0.123 - - 0.123DTP Ben Slimane 3.971 - - 3.971DTP Beni Mellal 8.962 - - 8.962OTP Casablanca 0.221 - - 0.221DTP 51 Jadida 1.176 - - 1.176DTP Xbouribga 1.049 - - 1.049DTP Settat 927 -

Subtotal Region Centre 24.774 - - 24.774D. Region Centre Nord

DTP Al Hoceima 0.820 - - 0.820DTP Boulemane 1.569 - - 1.569DTP Fea 0.670- - - 0.670DTP Taounate 1.819 - - 1.819DTP Taza 1.268 1-2.l - 6

Subtotal Region Centre Nord 6.146 - - 6.146C. Region Centre Sud

DTP Errachidia 3.826 - - 3.826DTP Ifrane 0.674 - - 0.674DTP Xhenifra 0.164 - - 0.164DTP M4eknes 13 - -

Subtotal Region Centre Sud 6.057 - - 6.057D. Region Word Ouseat

DTP Chefchaouen - -

DTP Kenitra 2.198 - - 2.198DTP Khemisset 9.295 - - 9.295DTP Larache - -

DTP Rabat 1.076 - - 1.076DTP Sidi Xacem 2.063 - - 2.063rTP Tanger - -

DTrP Tetouan 0,760 - ------ 0.76"0_USubtotal Region Nord Ou-at 15.393 15.3

R. legion TensiftDTP E1 Kelaa - - -

DTP Essaouira 1.231 - - 1.231DTP Marrakech 2,144 - - 2.144DTP Safi 2.562 -... - 2562

Subtotal Rlgion Tanaift 5.938 - 5.938F. Region Oriental

DTP Douarfa - - - -

DTP Oujda 4.194 - - 4.194DTP Nador 12 98l - 12-SR2

Subtotal Regioa oriental 17.182 - - 17.1820. legion Sud*

DTP Agadir 1.861 - - 1.861DTP Guelmin - - - -

DTP Ouarzasate 3.290 - - 3.290DTP Taroudante 0.549 - - 0.549DTP Tata 1.914 - - 1.914DTP Tiznit -_

Subtotal Region Bud 7.615 - - 7.61SH. Oriental & Sud /a - - - _1. Police and Gendarmerie - 3.688 - 3.688J. Country-wide 107-L .5. 4 L1 ..i -.107.292

Total PROJECT COSTS 190.258 3.32 - 194.090

\a Region-wide

Tue May 09 09:46:59 1995


AmmN3 3A4 L(CB PROC1EDOURES

Issue Agreement

Bid alterations (Decree 2-76479, Art. 33)

Bid evaluation committee may not only No bidder should be requested or permit-seek clarification from bidders, but may ted to alter his bid,after the first bid hasalso request bidders to modify their bid been opened.after bid opening.

Two envelopes (Decree 2-76-479, Art 33 (ii))

Bids are submitted in two envelopes for The two envelopes will be opened at thetechnical and price offers. The technical same time. Prices from all bids receivedenvelope is opened first, with the poten- will be announced during the public bidtial on-the-spot rejection of the bid. The opening session. The bid evaluation com-price envelope of rejected bids are re- mittee will review all technical and priceturned unopened. proposals received before submitting a

recommendation.

Hiring of consultants (Decree 2-76-479)

The hiring of consultants is not differenti- A letter of Invitation will be addressed toated from procurement of works and a preselected short-list of a minimum ofgoods and therefore follows an open three, and a maximum of six, consul-competitive bidding process. tants. There will be no public opening of

proposal received.

Advertising period (Decree 2-76-479, Art. 28)

Advertising period may be as short as 15 Normal advertising period should be 45days. days and should not be shorter than 30

days.

Limited LCB (Decree 2-76-479, Art. 27-35)

Limited LCB (appel d'offres restreint) is No such limited LCB is foreseen underpermitted under certain conditions the project

May 9, 1995m:\jaffar\95\morocco\1cb .sar

Annex 3.5 Project Implementation Schedule

1995 1996 1997 1998 1999ID Task Name 01 02 I Q3 Q4 0 Q1 0 Q2 |Q3 04 0 1 Q2 0 Q3 0 Q4 Ql Q2 0 Q3 Q4 Q1 Q2 03 Q41 Project Effectiveness Oct 1 '95 * Project Effectiveness

2 Kick-Off Workshop Sep 15 95 * Kick-Off Workshop

3 Mid-TermAdjustmentWorkshop Sep 15 '97 * Mid-Term Adjustment Workshop

4 Road Reclassification Completed Dec 31 '95* Road Reclassification Completed

5 Rural Roads

6 Local Financing (133 km) Dec 31 96

7 First Year Program (192 km) Jan 1 96 Dec 31 97

8 Second Year Program (404 km) Jan 1 97 Dec 3198

9 Third Year Program (500 ki) Jan 1 98

10 Branch Roads

11 Local Financing (210 km) Dec 31 96

12 OECF Financing (1,624 km) Jan 1 96

13 Second YearProgram (193km) Jan1 97 Dec31'98

14 Third Year Program (192 km) Jan 1 98 j

15 Network Management I I Network Management

16 Equipment Jan 98 Dec31'98

17 TA and Training V TA and TraInIng

18 Institutional Development Jan 1 96 Dec 31 98

19 Implementation Support Jan 1 96 Dec 31 98

; 20 Environment Unit Jan 1 '96 Dec 31 98

21 Road Safety _ - - Road Safety

22 Institutional Improvements i Jan 1 96 Dec31 98

23 Accident Black-Spots Jan 1 96 Dec31 98

24 Enforcement Equipement Jun 1 96 May 30 97

Jun i .96 may 30'97

oo

IBRD) 25834

12 Io 8 TANGki 2

4 ETCKJAN

MOROCCO V , AL HOCEIMAA

SECONDARY, TERTIARY AND RURAL ROADS PROJECT LARACHE ', A,.

PAVED BRANCH ROADS TO BE IMPROVED

MOTORWAY 5k. , i

- MAIN ROADS

SECONDARY ROADS T

____OTHER ROADS NATZA..3

-- RrVERS RABAT T. 'NM

ELEVATIONS ABOVE I ,00 METERS

0 SELECrED TOWNSCAE T@ PROINCrECAPITALS

® NATIONAL CAPITAL

REGION BOUNDARIES EL JADID ER

- - INTERNATIONAL BOUNDARIES l...

EXTaOU,* = NE<S=~~~~~~~OED E Id

- -- INTERNATIONAL BOUNDARY IAPPROXIMATE) C KO~O E

O 22 50 75 SO .6,,KLA

O 25 50 75 IOR,o.....

Thnonor Ooo Al7i , \-j

AGADIR IR TRO_JDANNT I u 30

TIZ ~ ~ To

J p.?~~~PRO M

C-1-t~~~~~~~~~~~~-

CANARYISLANDSI

(*in) 2>ol w A P P R O X I M

CANARY~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~A _9I'T___4~~~~~~~~~~~~~~~~~~., Torp-> re

I I ; !~~~~~~~~~~~~~~~~~~~~~~~1

IMAGING

Report No: 12761 MORType: SAR

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