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 Division Maghreb and Iran Department Middle East & North Africa Regional Office 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 Research CNPAC National Center for the Prevention of Road Accidents DPTP Provincial Directorates of MPW DRCR Directorate of Road and Road Traffic ERR Economic Rate of Return EVAL Simplified Road Evaluation Model GDP Gross Domestic Product ICB International Competitive Bidding IFEER Institute for Equipment and Road Maintenance Training LCB Local Competitive Bidding LPEE Public Laboratory for Experiments and Studies MARA Ministry of Agriculture and Agricultural Reform MOI Ministry of Interior MOT Ministry of Transport MPW Ministry of Public Works NTMP National Transport Master Plan ONCF National Railway ONT National Transport Office O & M Operations and Maintenance PERL Public Enterprise Restructuring Loan RD Regional Directorate of MPW RF Road Fund VAT Value Added Tax VOC Vehicle Operating Costs This report was prepared on the basis of appraisal and post-appraisal missions from June 1993 to April 1995 led by Jaffar Bentchikou (Sr. Highway Engineer) and comprising Michel Loir (Sr. Transport Economist), Henri Beenhakker (Pr. Economist), Fransois-Daniel Migeon, Yasser Henda and Stephane Grandguillaume (consultants), with the assistance of Michelle Detwiler and Brigitte Grant. Peer reviewers were Peter Long (Pr. Highway Engineer) and Aldhemar Byl (Sr. Transport Economist). The processing of 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 MOROCCO SECONDARY, TERTIARY AND RURAL ROADS PROJECT 37AFF APPRANSAL [RIEORT TAB8LE O1F CONTENTS Table of Contents ..................................................... i Loan and Project Summary ............................................... iv 1. The Transport Sector .......................... I A. Transport and the Economy ................ ..1.................... The Geographic and Economic Framework ......................... I Medium-Term Macroeconomic Outlook ........................... 3 Description of the Transport Sector .............................. 4 B. Transport Institutions .. ......................................... 5 C. Private Sector Involvement in Transport .......................I........ . 6 D. Transport Investments in Recent Years .............................. . 7 E. Transport Sector Issues ......................................... 9 F. Bank Experience in the Transport Sector ............................... 10 II. The Highway Subsector ............................................. 12 A. The Road Network ............................................ 12 B. Road Transport Demand ........................................ 15 C. Road Safety ................................................ 15 D. The Road Transport Market ................ ...................... 17 E. Administration ............................................... 19 F. Planning, Budgeting, Financing .................................... 20 Planning ............................................... 20 Budgeting .............................................. 21 Financing .............................................. 23 G. The Road Fund .............................................. 26 111. The Project ..................................................... 29 A. Background and Objectives ....................................... 29 B. Description ................................................. 29 C. Rural Roads ................................................ 30 Concept and Content ....................................... 30 Cost and Financing ........................................ 31 Implementation ........................................... 31 D. Branch Roads ....... ............. ........................... 33 Concept and Content ....................................... 33 Cost and Financing ........................................ 35 Implementation ........................................... 35 E. Network Management .................... I ..................... 36 Concept and Content ....................................... 36 Cost and Financing ........................................ 38 Implementation ........................................... 38 F. Road Safety ................................................ 39 Concept and Content ....................................... 39 Cost and Financing ........................................ 42 Implementation ........................................... 42 G. Road Transport .............................................. 42 Concept and Content ........ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42 H. Costs and Financing ......... . . .. . . . . . ............ . . .. . . . .. . . . 43 Costs ................................................. 43 Financing .............................................. 44 I. Procurement ................................................ 44 W orks ................................................ 44 Goods ................................................ 46 Consulting Services ........................................ 46 General ............................................... 47 J. Disbursements ............................................... 47 K. Workshops, Implementation, Reporting and Auditing ........ .. ............. 48 L. Environmental Impact ......................................... 49 IV. Economic Justification ....... .............. .......................... 51 A. General ....... ................ .......................... 51 B. Rural Roads ................................................ 52 C. Branch Roads ............................................... 55 D. Network Management ......................................... 56 V. Agreements and Recommendation ................. ....................... 59 A. Agreements and Understandings Reached at Negotiations ....... .. ........... 59 B. Conditions of Board Presentation ................................... 59 C. Other Covenants ............................................. 60 D. Recommendation ...... .............. . ........................ 60 ANNEXES TO CHAPTER 11 ............................................... 61 Annex 2.1: Road Accidents .............................................. 61 ANNEXES TO CHAPTER III ............................................... 66 Annex 3. 1: First Year Program ............................................ 66 A. Rural Roads ................................................ 66 B. Network Management .......................................... 67 C. Road Safety ................................................ 68 Annex 3.2: Letter of Sector Strategy ........................................ 70 Road Transport ......................................... 70 Funding of Road Maintenance ................................. 70 Road Safety ............................................ 70 Annex 3.3: Project Costs, Financing and Disbursement Schedule ....................... 71 Annex 3.4: LCB Procedures ............................................. 81 Bid alterations ........................................... 81 Two envelopes ........................................... 81 Hiring of consultants ....................................... 81 Advertising period ........................................ 81 Limited LCB ............................................ 81 Annex 3.5: Project Implementation Schedule ................................... 82 MAP: IBRD 25834 Tables and Figures Project Cost ....................................................... v Financing Plan ...................................................... v Estimated Disbursements ................................................ v Table 1.1: Transport Public Investments ...................................... 7 Figure 1.2: Composition of Transport Investments ................................ 7 Table 2.1: Evolution of the Road Network ..................................... 12 Table 2.2: Paved Road Network Density ...................................... 13 Table 2.3: Distribution of Paved Roads according to Width .......................... 14 Table 2.4: Evolution of Paved Road Conditions .................................. 14 Table 2.5: Average Distribution of Daily Traffic ................................. 15 Figure 2.6: Growth of Road Accidents ....................................... 15 Figure 2.7: Growth of Accidents on Interurban Roads .............................. 16 Figure 2.8: Deviation from Smeed's Formula ................................... 16 Table 2.9: Actual Maintenance and Investment Spending ............................ 22 Table 2.10: Evolution of Communal Budgets ................................... 24 Table 2.11 Evolution and Structure of Road Fund Revenues .......................... 26 Table 2.12: Road Fund Actual Contribution to Maintenance .......................... 27 Table 3.1: Rural Roads, Indicators .......................................... 31 Table 3.2: Funding of Road Maintenance, Indicators ............................... 32 Table 3.3: Branch Roads, Length .......................................... 33 Table 3.4: Branch Roads, Indicators ......................................... 34 Table 3.5: Branch Roads, Per km Average Base Cost .............................. 35 Table 3.6: Network Management, Indicators .................................... 38 Figure 3.7: Fatalities & Fatality Risk ........................................ 39 Table 3.8: Road Safety, Indicators .......................................... 41 Table 3.9: Trucking, Indicators ............................................ 43 Table 3.10: Project Cost Summary .......................................... 43 Table 3.12: Procurement Arrangements ....................................... 44 Table 3.13: Allocation and Disbursement of the Loan .............................. 47 Table 4.1: ERRs of Investments in Equipment ................................... 58 Table 3.1.1: Paved Roads ............................................... 66 Table 3.1.2: Unpaved Roads ............................................. 66 Table 3.1.4: Network Management ......................................... 67 KINGDOM OF MOROCCO SECONDARY, TERTIARY AND RURAL ROADS PROJECT Borrower Kingdom of Morocco. Amount $57.6 million. Terms Twenty years, including a five-year grace period, at the Bank's standard variable interest rate. Objectives (a) address core needs of the rural poor by improving access to social services and to market; (b) accelerate private sector development by reducing regulatory con- straints in road transport and by increased resort to road works and supervision by contract; (c) develop road management expertise in the new regional directorates; and (d) improve road safety. Project (a) improving about 1,133 km of priority unpaved rural roads to all- Descrip- weather gravel standard, constructing 96 km of paved rural roads, tion and finalizing the road reclassification (21% of cost); (b) improving about 2,219 km of paved branch roads (formerly classified in the secondary and tertiary networks) by carrying out maintenance backlog resealings, structural overlays and/or widening works; (66% of cost); (c) improving network management (technical support, planning and pro- gramming, improvement phasing and training) and renewal of essen- tial road maintenance equipment (6% of cost); (d) streamlining the road safety organization and supporting priority actions (7% of cost). Project The main benefits will involve savings in road transport costs and improved Benefits access to remote rural areas, which will translate into lower consumer prices, higher farm gate prices for agricultural produce and reduction in rural poverty. The provision of agricultural extension services will also be facilitated, with a secondary impact on agricultural production. Project The risk of under-funding road maintenance activities is key. The project Risks will mitigate it with the agreed monitoring of road budgets. 2 Loan and Project Summary Project Cost Local Foreign Total ($ million) A. Rural Roads 18.9 16.6 35.4 B. Branch Roads 57.4 51.4 108.8 C. Network Management 5.1 5.2 10.3 D. Road Safety 5.6 5.6 11.1 Total Base Cost 86.9 78.7 165.6 Physical Contingencies 8.9 8.1 17.0 Price Contingencies 6.0 5.5 11.5 Total Project Coste 101.8 92.3 194.1 a/ Local costs ($101.8 million equivalent) include $48.2 million equivalent in taxes and duties, to be financed by Government. (Here and throughout the report, some totals do not add up due to rounding). Financing Local Foreign Total Plan ($ million) IBRD 19.2 38.4 57.6 Government 63.8 7.2 71.0 Local Governments 0.4 0.0 0.4 OECF, Japan 18.3 44.6 62.9 Grant (to be identified) 0.1 2.1 2.2 Total 101.8 92.3 194.1 Estimated Dis- Fiscal Year FY96 FY97 FY98 FY99 FY00 bursements ($ million) Annual 6.4 12.8 19.2 12.8 6.4 Cumulative 6.4 19.2 38.4 51.2 57.6 Economic ERR per subproject ranges from 12% to over 50%. ERR exceeds Rate of Re- 40% for the overall project. turn Map IBRD 25834 KINGDOM OF MOROCCO SECONDARY, TERTIARY AND RURAL ROADS PROJECT 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 African continent. Its vast territory (some 459,000 km2 without Western Sahara) is characterized by a great diversity of landscapes, from a 3,500 km long and flat coastline bordering the Atlantic ocean and the Mediterranean sea to the high Atlas Mountains stretching across the country from the southwest to the northeast; and of climates, from temperate in the north to arid in the south. The population of 25.5 million (in mid-1992) is concentrated in the northern region and growing at a fast pace (about 2.3% annually). The rate of urbanization has increased from around 30% in 1970 to about 50% at present. Whereas the coastal cities of Casablanca with a population of three million, and Rabat-Sale with one million are respectively, the economic and administrative capitals of Morocco, and dominate the urban hierarchy, the rapid urban development has also favored emergence of 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 more balanced distribution of the population between urban centers (15 cities of 100,000 and more) and rural areas. This spread, together with the relative complementary nature of regions in terms economic production, generate high transport needs. The main flows of passengers and goods are heavily concentrated in the Casablanca-Rabat transport corridor, 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 container and roll on-roll off traffic is handled. Other major traffic generation centers are Agadir and Marrakech. Morocco is also the largest exporter of raw phosphate and by-products in the world, which generate heavy rail traffic from mining zones in the center and south of 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 an increasing share of merchandise exports in recent years (37% in 1991, against less than 10% 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 liberalization measures aimed at creating incentives to import substitution and export growth, and has been able to combine sustained growth with rigorous stabilization, low inflation, balance of payments improvements, and good debt management. The results of Morocco's macroeconomic adjustment and structural reform program are impressive. Major macroeconomic imbalances that characterized the late 1970's and early 1980's have been gradually corrected. The central Government deficit declined to 3 % of GDP, compared to 12% in 1983 (before debt relief in both cases). On the external front, a combination of real devaluation and trade reform to encourage manufactured export growth have succeeded 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 and with low inflation. Average GDP growth over 1984-90, for example, amounted to almost 5%, while inflation averaged 4% over the last three years of the period. At the same time, 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 rescheduling agreements beginning in October 1983 (including six Paris-Club agreements and three London-Club agreements). The debt service to exports ratio, which averaged 38% over 1980-83, had been brought down to less than 28% by 1991. Macroeconomic adjustment has also been accompanied by economic liberalization and structural reform. There has been significant progress in liberalizing the financial sector and external trade, as well as improving the management, efficiency, and transparency of the public enterprise sector. In agriculture, reforms have also progressed well. 1.4 More recently, Morocco has been enduring unfavorable exogenous influences together with drought. Agriculture suffered from drought in 1992 and 1993, but other aspects of macroeconomic performance and management have been more positive. Growth in non-agricultural GDP, for example, averaged 3.8% in 1992. The budget deficit remained around 2% of GDP in 1992 and 1993, despite the larger public investment and relief expenditures induced by drought, an arrears clearance program, and sluggish trade tax revenues. Money and credit growth continued to slow down following the surge when credit controls were removed in 1991. This is reflected in moderate inflation (close to 5% in 1992, with a continuing downward trend in late months) and high interest rates (about 10% in real terms) which, however, have eased slightly over the 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 manufactured exports, mainly to Europe, have been compensated by favorable trends in other current account items such as tourism receipts, and the current account deficit remained around 2% of GDP in 1993. Gains from rescheduling ended with the February 1992 Paris Club Agreement. Nonetheless, capital inflows bolstered by disbursements from multilaterals and sharply increasing direct foreign investment flows are keeping pace with gross financing requirements of about $2.5 billion per year. While access to foreign exchange has been liberalized, no apparent disequilibrium has emerged in the foreign exchange market and the Dirham rate, pegged to a basket of currencies, has remained fairly constant 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. The privatization program, launched in October 1982, has generated significant interest among foreign investors and is expected to generate more than $200 million of Treasury receipts. In the financial sector, 1993 reforms include enactment of a new Banking law to set up a more rigorous framework for Bank regulation and supervision and other laws to invigorate the stock exchange and capital markets, the introduction of stricter prudential regulations, and a reduction in mandatory subscription to low-interest Treasury bonds from 32 to 25% of banks' sight deposits. Other reforms in 1992-93 include cuts in 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 current transactions, capital transactions related to foreign investments and on private foreign borrowing, a reduction in the maximum import duty, suppression of remaining import licensing except for cereal, sugar, and edible oils (due to be removed in 1994), and drafting of legislation to homogenize investment codes across sectors. Medium-Term Macroeconomic Outlook 1.5 Even under relatively conservative assumptions, Morocco's medium-term prospects look favorable. Satisfactory growth with low inflation, gradual improvement in the country's debt indicators, and strengthening of the macroeconomic framework should be achieved. Direct foreign investment are also expected to be forthcoming, fueling export capability. Central Government investment will likely concentrate on social sectors and infrastructure as a way to support private sector development. The budget and the current account should be balanced within a few years, giving the domestic private sector easier access to investment resources and enhancing Morocco's credit-worthiness. Altogether, a GDP growth rate of 4.5-5% annually would seem consistent with containing unemployment at current level despite the above 3 % expected increase of the country's labor force. The main risks relate to drought, which causes agricultural production to fall and inflates the food import bill, and to external shocks like a reduction of phosphate world market prices or of tourism earnings. While current reserves are sufficient to cover even major shocks for up to two years, recurrent or sustained exogenous 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, especially those in social sectors. Despite a decline in the percentage of the population living in absolute poverty over the last two decades, recent surveys show that a large number of households are vulnerable and such social indicators as access to safe water, basic health care, and primary schooling, rank low compared to countries with similar per capita income. Regional disparities exist in the incidence of poverty and in the provision of essential social services. Rapid and lasting improvements in social indicators call for reallocation of public expenditures, notably in favor of rural areas, and for measures to increase their efficiency. Good progress is being made in these directions. Private sector development is another key priority. The private sector already accounts for close to 75 % of manufacturing output and almost all of agricultural production. To further promote private entrepreneurship as the engine of growth, an adequate program of structural and incentive reforms, including reduction of corporate and personal income taxes to levels prevalent in competing countries, needs to be complemented by provision of adequate infrastructure, services, and financial intermediation. Decentralization and better public sector management constitute another challenge. Social services delivery is increasingly shifting toward local communities following the transfer by the central Government of 30% of the value added tax receipts to them. Few, however, have the financial and managerial capabilities to handle their new functions. Further strengthening of these capabilities is required. The same consideration applies to "core" public utilities not yet slated for privatization. Finally, environmental and water resources have been under growing 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 next two decades. Improvements in environmental and water resources management call for a program to create a suitable institutional framework, including regulations for environmental protection and price incentives, and undertaking priority investments. The Moroccan authorities have already recognized the long-term development issues which they are addressing with Bank assistance. Description of the Transport Sector 1.7 The Moroccan land transport system is well diversified and includes some 60,000 km of roads, a railway network of about 1,900 km (of which 975 km of tracks are electrified, and 240 km are doubled), 11 commercial ports, and 20 airports handling scheduled 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 million passenger/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 great strategic 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 vastly improved shuttle services (its market share is estimated as 20%). Air transport plays a major role in the country's economy, especially for tourism which is one of the main sources of foreign exchange earnings. Three airports, Casablanca, Agadir, and Marrakech, account for about 80 % of total passenger traffic. The recently built Mohamed V terminal in Casablanca provides excellent services in a well decorated setting. The national airline, Royal Air Maroc operates a fleet of 28 aircraft (including two Boeing 747) on a national and worldwide network, carrying some two million passengers annually. The airline is profitable, partly because of high tariffs on routes to Europe where 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 links and substantial investments have been proposed by ONCF for execution during 1994- 2000. These investments are economically justified, although some of lesser priority, like doubling 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 the drain on a very tight Government budget. Port infrastructure has expanded rapidly in response to increased maritime transport under the export promotion policy and modernization needs. Total port traffic did not change much during 1988-92, fluctuating around 40 million tons, but its composition undertook significant restructuring with containerized and roll on-roll off traffic raising their share to about 30% of general cargo at present. A few ports are specialized: petroleum products are mostly handled in Mohammedia and phosphate rocks in Jorf Lasfar and Safi. The largest amount of traffic is concentrated on four major ports, with the complex of Casablanca and Mohammedia absorbing close to 60% of total and practically all container movements. In addition, there are nine small fishing ports. Port infrastructure is amply sufficient to handle Moroccan 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 of goods in ports. This should be remedied by institutional measures and not by creating new storage areas. For airports, the current capacity is a adequate, and the investment program proposed by Office National des Aeroports, the airport agency, is essentially (more than 75%) for air traffic control, and rehabilitation of existing equipment and runways. B. TRANSPORT INSTITUTIONS 1.9 The Government agencies involved in the administration of the transport system are: (a) the Ministry of Public Works and Training (MPW), which is responsible for the construction and maintenance of the national, regional and provincial road networks, and owns the port infrastructure which an autonomous public enterprise, Office de Developpement et d'Equipement des 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, and supervises several public enterprises operating in these sub-sectors, like ONT (which has a freight forwarding monopoly on public transport), a parastatal for luxury bus intercity transport, CNPAC (a national committee for prevention of road accidents), ONCF (the railway company), the Office des Aeroports of Casablanca, and Royal Air Maroc; (c) the Ministry of Shipping and Fisheries, which regulates shipping and oversees 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 MPW to 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 coordination in investment planning. Instances have occurred where the Prime Minister was called to arbitrate on issues of commercial nature (pricing of phosphate transport by rail for instance). The MOT has an important role to play in that regard, and should greatly benefit from the results of the National Transport Master Plan, to be completed soon, and technical assistance provided under the Bank's Highway Sector Project. Vis-a-vis the parastatals, the policy has moved toward giving them larger autonomy and, in some cases (Luxury Bus Intercity Transport) privatization. The financial restructuring of a number of 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 its freedom to operate and compete is sometimes constrained by regulations and dominant positions maintained by public enterprises. Most studies and works related to road infrastructure are carried out by private contracting and consulting industries where local and foreign interests are often associated. Force account is limited to routine maintenance which does not appear to be attractive to the private sector since it takes place in isolated areas and is difficult to program thus making it impossible for a private organization to obtain an annual volume of works sufficient to sustain the necessary investments in equipment. Recent surveys demonstrated that track construction and rehabilitation in poor rural areas would not take place in some cases if not by force account, which justifies the decision to create nine mechanized brigades under the regional directorates of public works. Motorway concession to the private sector has been envisaged, but Morocco does not seem ready for it. Attempts to set up a private organization for toll collection on the Rabat-Casablanca motorway failed, no one showing interest. Office National des Transports (ONT) has a monopoly on freight forwarding and controls trucking otherwise performed under private ownership. For railways, track renewal and maintenance is generally executed by ONCF whereas new construction is primarily contracted out. To a large extent, the rolling stock originates from an ONCF subsidiary together with refitting of second-hand railway cars in its own workshops. The current organization works 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 of railway catering may be considered. In ports, maintenance and construction managed by Office de Developpement et d'Equipement des Ports are largely executed by private firms. Maintenance of port equipment is also contracted out. Cargo handling by private organizations rather than Office de Developpement et d'Equipement des Ports is a possibility 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 with Government which does not address the question of privatization. The Contract Plan expires in 1996. In the maritime sub-sector, public enterprises remain dominant: Comanav for liner services, Marphocean for chemicals and phosphate, Petrocab for petroleum products, and Sofruma for citrus. Possibilities to privatize the latter two companies should be examined. There are also several Moroccan private shipping lines involved, both in citrus and passenger transport. A number of foreign shipping lines are also present, ensuring some degree of competition. Altogether, Moroccan shipping lines control about 20% of the total volume (33% of total value) of Moroccan freight and about 50% of general cargo traffic. Finally, the private sector remains embryonic in air transport infrastructure and services. The Transport Sector 7 D. TRANSPORT INVESTMENTS IN RECENT YEARS 1.12 Capacity constraints started to appear in the mid-seventies as the infrastructure inherited at independence did not keep up with the rapid economic growth that followed it and required both rehabilitation and modernization. Investments rose swiftly from an average of Dh 1.1 billion annually over 1973-80 to Dh 2.5 billion over 1980-87, and close to Dh 4.5 billion over 1988-92. Table 1.1 gives details on the composition of planned and actual investments over the last decade. Table 1.1: Transport Public Investments (Dh million) Sub-sectors 1981-1987 1988-1992 1988-1992 Ratio Actual 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. IBRD Highway 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 above estimate includes a notional estimate of Dh 600 million for 1988. 1.13 The above table and Figure 1.2: Composition of Transport Investrnents, shows a 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 early eighties, 31 % of actual transport investments went to port expansion in Jorf Lasfar and Agadir, a third to roads, and 22% to railroads. During 1988-92, a significant effort was made to improve roads, which absorbed 46% of total investment resources, whereas 8 ChWter I investments in ports and railways combined Figure 1.2: Composition of Transport Investments dropped to 28.5% from (% of total) 53% in the previous peri- od. 1.14 Although from 1990 to 1992 the percent- - age of total capital expen- I 1 ditures allocated to the transport sector increased swiftly from 10% to 17%, the 1992 allocation is still not sufficient in view of the large backlog of rehabilitation and de- ferred periodic maintenance in the road and rail sub-sectors. In addition, the 17% is low in comparison with other countries (for instance, Hungary, Iran, Turkey). Current progress 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 remain appropriate 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 to Kenitra and Larache, completion of railway line doubling between Rabat and Kenitra, installation of container handling equipment and construction of grain silos in major ports. 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 to health care and education, and to supplies of input needed by agriculture and market outlets for its products. 1.17 A fine balance should be struck between alleviating poverty in rural areas, very much of Government concern in late years, and maintaining traffic fluidity in the most active provinces, without which the other objective of facilitating private sector develop- ment would be jeopardized. A 10,000 km rural road development program has been adopted in response to the former requirement, respectively providing for paving and The Transport Sector 9 gravelling of 3,500 km and 6,500 km of roads over a seven-year period. Dh 630 million have been allocated in the 1995 budget to implementation of its first phase, of which Dh 460 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 on efficient transport, which in turn requires an optimal allocation of scarce resources among the various modes, and cost efficient supply of transport services. Four key areas have 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 the structure of the investment program and prioritize investments in support of continued economic growth and trade development. It often calls for slowing down of new construction to avoid investing too far ahead of demand (this is especially true of the motorway and of the track doubling program) and concentrating on actions designed to optimize the utilization of existing infrastructure assets. Good coordination of grouped investments by competing and/or complementary transport modes in densely trafficked corridors will become a key ingredient to good planning, for which increasing attention should be given to dissemination of more refined appraisal methodologies. The planning organization has moved toward decentralization which, together with partial transfer of financial responsibilities, should lead to more demand driven programs; still, safeguards should exist to maintain the national coherence of the transport system and actions should be designed to clarify roles at every tier of the organization and provide the necessary training. 1.20 Public enterprise reform was initiated in 1987 with the Bank's First Public Enterprise Restructuring Loan (PERL). Support was also given through investment lending, and the reform and financial restructuring of the public enterprises is now an integral part of the adjustment process, the main objectives being to increase operational efficiency, reduce public sector deficits, and provide services conducive to economic growth. Contract-Plans have already been used to assign clear objectives and apportion responsibilities to achieve them between the Government and public enterprises; Royal Air Maroc successfully implemented one such Contract-Plan. ONCF, saddled with large debts 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 establish the limits to its autonomy and a more adequate cost recovery system, as well as define Government obligations to railways (compensation of deficit making public services, contribution to investments). Difficult negotiations spanning several years finally came to fruition in November 1994 with signing of an agreement on a 26 % phosphate tariff increase 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 is expected to contribute to enhanced planning and operational and financial performance. 1.21 Many transport services are still entrusted to public monopolies often lacking resources to invest in new equipment and technology, which on top of operational inefficiencies, result in mediocre service delivery. There is growing awareness that poor transport performance is a drag on the national economic growth, and that fostering private 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 the exception of CTM-LN, an interurban bus company privatized in late 1994. Issues are complex and the Government has yet to formulate a strategy for increased private sector participation to transport. The Bank study on Private Provision of Infrastructure scheduled for discussion with Government in the fall of 1995 will contribute to that objective. 1.22 Road transport issues are discussed in Chapter II, The Highway Subsector and addressed in Chapter 111, he Project. F. BANK EXPERIENCE IN THE TRANSPORT SECTOR 1.23 The Bank provided loans totalling $491 million equivalent to the Moroccan Government from 1969 to 1992 for the construction, improvement, and rehabilitation of main roads under five highway projects, of rural feeder roads under ten agricultural projects, and for rehabilitation and modernization of port facilities under two port projects. The highway projects were designed to encourage investments with high returns to the economy, particularly maintenance and rehabilitation, and to help build up the staffing and organization of the agencies responsible for road construction and maintenance, and for transport coordination. The rural roads projects have met specific needs as part of agricultural packages, and were designed as transport and agriculture integrated investments. Bank involvement in financing these roads has encouraged the Ministry of Agriculture and Agrarian Reform, and MPW to cooperate more closely and consistently in determining appropriate design standards, and in making arrangements for the maintenance of these low-volume roads. 1.24 The Project Performance Audit Report for the First, Second, third, and Fourth Highway Projects (respectively Loan 642-MOR, Credit 167-MOR, Loan 955-MOR, and Loan 1830-MOR), designed to improve traffic conditions, highway maintenance, and transport planning, outline their successful implementation with rates of return above appraisal estimates despite cost overruns. Loan covenants were generally adhered to, but progress sought on transport planning did not fully materialize, in part because of split responsibilities and limited cooperation between MOT and MPW. Disbursement lagged considerably behind physical implementation of the projects because of slow processing by the Government of payment requests. The situation improved following the implementation of the SAL which streamlined budget procedures at the country level. 1.25 The Highway Sector Loan (Loan 3168-MOR) provided $79 million to priority road strengthening and maintenance; it also sought efficiency improvements in road The Transport Sector 11 network management, in the transport market through deregulation of the trucking industry and adjustment of road user charges, and in the construction industry. The project has been successful to date for all components related to road management and road works. It incurred delays in the execution of other components under MOT and achieved only modest progress toward deregulation. 1.26 The First Port Project became effective in 1986 and provided a $22 million loan to improve sector institutions and help maintain infrastructure in the ports of Casablanca and Mohammedia. The project, now completed, served to establish a good dialogue in the sub-sector and helped set the stage for a larger and more comprehensive FY91 Port Sector Project. This project provides two loans, one to Ofice de Developpement et d'Equipement des Ports and one to the Government totalling $132 million, primarily for the modernization, adaptation, and rehabilitation of existing infrastructure. In particular, the project finances facilities for container and Ro-Ro handling in the ports of Casablanca and Tanger, and the construction of a coal terminal in the port of Jorf Lasfar. A Contract-Plan was also drawn up during preparation of the project that included a revision to the infrastructure fee paid by Office de Developpement et d'Equipement des Ports to the Government. KINGDOM OF MOROCCO SECONDARY, TERTIARY AND RURAL ROADS PROJECT H00 THE HOGHWAY SUBSECTOR A. THE ROAD NETWORK 2.1 Classification. The classified Moroccan road network expanded slightly from 58,500 kms in 1988 to more than 59,500 kms in 1992. In addition, there are about 11,000 kms of tracks managed by the Ministry of Agriculture (MARA), plus an undetermined length of tracks within irrigated agriculture areas managed by specialized agencies under MARA. A breakdown of the network between paved and unpaved roads is 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 4.0 Unpaved 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 over 1983-88 to about 280 kms over 1988-92 (-20%). Altogether, the overall construction program in the last four years mainly consisted of road paving (85% of total), with a large concentration on the former secondary and tertiary roads. Regional development and improved connections to Saharan provinces were the main objectives. The stringent national budget led to development of cofinancing agreements between DRCR and local governments to speed up implementation of highly needed road projects. The local governments contributed some Dh 92.5 million, or about 50% of the program cofinanced with DRCR over the period. About 25% of the 1,320 kms of roads built between 1988 and 1992 came under such cofinancing agreements. A motorway network is being developed, limited at present to some 70 kilometers between Rabat and Casablanca. Construction of 136 kilometers toward Kenitra is in progress, and close to 500 kilometers are at feasibility study stage. 2.3 The evolving patterns of administrative and economic activities have made obsolete the 1947 classification of the road network, which comprised three categories of roads: primary, secondary, and tertiary. It was abrogated by Decree 2-83-620 of February 1990, which introduced a new classification in four functional categories: motorways and national roads, linking major cities and economic centers and connecting to neighboring countries; regional roads, linking mid-size cities within economic regions; provincial roads, for collector roads linking villages and rural market centers to the regional networks; and communal roads for local roads. The new classification is the first step in the gradual transfer of ownership of the unpaved rural roads to the communes because their position closer to the users should permit optimizing at the local level the use 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 for appointment of Provincial Reclassification Committees jointly by the Ministers of the Interior, Public Works, and Transport, to review the classification proposals regarding the provincial and communal networks and advise the Ministers who will respectively sign the by laws listing the roads that fall under the two categories. At this stage, only the national and regional networks have been officially created (Arrete 78-093 dated March 11, 1993), each comprising about 10,500 kms of roads. Flnalizing the road reclassification 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 8.5 km/100 km2 is less than 6% of the national average in France for instance, but, is twice as high as in North African countries like Algeria and Egypt. However, judging by the extent of the paved portion of its network, Morocco may compare less favorably with others. Using such standards as the GNP per capita, population, and the country's dimension, the 29,500 km-long paved road network is about half that of other northern mediterranean countries. The average density of this paved network is 1.2 km/i,000 population and 4.2 km/100 km2, with a concentration in the most populated areas as shown 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 1.56 Tensift (Marrakech) 1.04 8.86 Center (Casablanca) 1.00 15.51 North West (Rabat) 0.96 15.40 Center North (Fes) 1.26 7.72 Oriental (Oujda) 1.50 3.09 Center South (Meknes) 1.80 3.87 National 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 to full utilization of the mining, agricultural, and tourism potential in remote areas, and its development is also sought as a way to reduce emigration of the rural poor to crowded cities. The recent National Transport Master Plan (NTMP) concludes that a 10% expansion of the road network would be sufficient to accommodate traffic growth of the next 20 years, implying yearly additions of about 300 kms. Therefore, the current construction pace is fully consistent with meeting long term development objectives. 2.6 Quality. Quality is where the Moroccan road network may have the most obvious deficit, with scantily built unpaved rural roads and substandard narrow paved branch roads, most of them in mediocre conditions. Unpaved roads represent half of the total road length (against two-third in Algeria, for instance), and paved ones are generally too narrow 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 generally considered as the norm for safe crossing of two heavy vehicles. The proportion of roads less than 4.5 m-wide, which generally implies driving on the road shoulders for crossings where a truck is involved, represent 54% of total. The emphasis is now placed on road widening in the sub-sector investment program. According to the NTMP, future traffic growth would warrant adding some 4,500 kms of 7 m-wide roads within the next 20 years. As for unpaved roads, they are haphazardly built and lack drainage structure on more than 70% of their length. 2.7 The condition of the Moroccan road network remains mediocre despite the increasing priority given to maintenance in the 1980's. The evolution registered in this area 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 39 Secondary 14 16 46 46 52 18 40 32 36 Tertiary 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 the average proportion of those in good condition from 20% in 1983, to 22% in 1988, and to 41 % in 1992. But the increase observed in the proportion of roads in bad condition from 36% in 1983 to 44% in 1992 is indicative of a steady deterioration of a large portion of the Moroccan network, which the current maintenance and rehabilitation effort is unable to remedy. Because budget resources are limited, the maintenance strategy has to focus on roads with the highest traffic, thereby neglecting others also exposed to traffic and weather related deterioration. MPW estimated that at least 1,500 kms of road strengthening and 1,500 kns of road rehabilitation and periodic maintenance would be required to catch up with the maintenance backlog, respectively 88 % and 15 % in excess of what is done at present. As for unpaved roads, maintenance is not organized and rarely done, explaining why over 80 % of their length is in bad condition. Therefore, the fiuding of road maintenance should be monitored (ara 3.13), and the quality of both rural roads (para 3.9) and branch roads (para 3.21) should be improved. The Highway Subsector 15 B. ROAD TRANSPORT DEMAND 2.8 Between 1980 and 1988, the national vehicle fleet grew at an average annual rate of 3.9%. Improved economic conditions over the last four years induced a faster growth at an annual rate of about 5% to reach a total of 742,000 vehicles in 1992. The proportion 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 vehicles which 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 in the 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 total 4,500 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 7,400 adt). DRCR conducts traffic counts each year on the whole paved network but with heavier sampling rates on its most important parts. Traffic grew from 22.1 million vehicle/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 without quantitative as well as qualitative adjustment of road infrastructure will lead to increased congestion and eventually curb traffic growth. Roads carry the brunt of the national passenger and freight traffic (respectively 90% of passenger-kms and 70% of ton-kms in 1988), and keeping road capacity ahead of transport demand is an important condition of sustainable economic growth. The road widening component of the project will help expand the capacity of existing roads. The rural areas is where a deficit of transport services is felt most acutely. Poor road conditions combined with low revenues greatly restrains the mobility of people and exchange of their products. The Rural Transport Study financed under Loan 3168-MOR, still in progress, has showed that motor vehicles accounted for less than 45% of total movements. Low productivity transport using animals 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 record 3,605 people killed in 1994. Figure 2.6: Growth of Road Accidents shows that casualties are 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 on accidents and casualties on both urban and interurban roads and compare their growth with growth in population, vehicle fleet and traffic. Interurban roads account for one 16 Chapter II fourth of the accidents but three fourths of the Figure 2.6: Growth of Road Accidents casualties (Figure 2.7: (urban and rural areas) Growth of Accidents on -_- Interurban Roads). 20 % 2.11 Over 1988-1992, 1 the fatality rate (number of killed per million of D: population) has increased 9 a 989 1 90 199I I992 from 104 to 133 (the , I ,.d EEC average is 157); the global road fatality risk (number of killed per million vehicle) has increased from 4,180 to 4,750 (the EEC average is 377); and the interurban road fatality risk (number of killed per 100 million vehicle-km) has increased 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 is even more obvious when using 11% ~~~~~~~~~~Smeed's formula (INU-63, A Sys- tematic Approach to Road Safety ___,____ _ r , _? in Developing Countries). Smeed had established that the fatality risk is mostly a function of the level of motorization (ratio of ve- hicle fleet to population) and a 0% .MP low' , 0 lm IN2 relationship has been calibrated FTwa.s.d.i for low-motorized countries. The Moroccan interurban road fatality risk 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 local awareness of road safety issues has also increased Figure 2.8: Deviation from Smeed's Formula and 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 _ k portant 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 The Highway Subsector 17 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 bus services, was privatized in 1994. Market access is regulated by a National Transport Commission. The Ministry of Transport (MOT) has a representative in each major town whose assignment is to organize and control the operations of the local bus stations. Main regulations include: (a) licensing of bus operators on given routes with specification of service frequency by a Provincial Committee; (b) capping of bus fares by a Commission reporting to the Prime Minister, based on proposals made by MOT. The market share of interurban services has slowly declined to about 50% at present. Transport by private vehicle maintained its share at around 30% of vehicle-kms. Taxis constitute the expanding 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 should be made in enforcing higher safety standards. Renewal and upgrading of the bus fleet is hampered 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 not legally authorized to do public transport; (b) operators of trucks of eight tons gross weight and above restricting their activity to own account transport: they must be licensed by the Road Transport Directorate at MOT after consultation with ONCF, the railway company, and the Office National des Transports (ONT); (c) operators of trucks of eight tons gross weight and above engaging in public transport: they are required to do business through ONT, a public agency operating along commercial principles with a monopoly on road freight forwarding. Supply of public transport is fragmented, the owners rarely having more than two trucks, and truckers operating under ONT's tutelage are generally required to join cooperatives, which are assigned transport quotas. The separation of ownership from operations is a distinct feature of the Moroccan system; it tends to weaken the trucking industry and is not conducive to raising professional standards, which are low. Licenses are often granted as reward for services rendered by an individual or his family to the Kingdom, and they are rented by truckers at a cost which, in recent years, decreased as a result of less restrictive licensing by MOT. ONT collects freight payments on behalf of its affiliates against their paying a fee for the service. The current trucking organization was established by Dahir 1.63.260 of November 12, 1963. 2.15 The trucking market is highly distorted. About 40% of all goods are transported by trucks of less than eight tons gross weight which have become quite active on the public transport market in violation of the law. This a complex phenomenon both reflecting a deficit of trucking services in certain areas, the rural ones especially, and evasion tactics by truckers and shippers anxious to free themselves from the cumbersome ONT system. These illegal operations have been tolerated silently by the MOT which left them exposed to individual sanctions and abuses, and created incentives to go for quick gains by overloading trucks at the expense of road safety. Pending issuance of new legislation and as an interim measure, the Minister of Transport instructed law enforcement 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 is estimated to control no more than a third of road freight transport, and its share of the international trucking market is at a low 10% reflecting the Moroccan truckers inability to compete for quality transport with foreign truckers. About 70% of goods directly carried by ONT's affiliates relate to the public sector, another clue that private sector shippers tend to contract outside ONT. The ongoing privatization program will further erode the ONT market base. Finally, own account transport represents about 35% of freight moved by roads, which is high. 2.16 ONT has been credited in the past with a positive contribution to market efficiency by allowing private truckers with limited means and organization to minimize overhead costs and empty back-haul costs (the overall load factor for most interurban movements is a satisfactory 60%). No subsidies have been called from Government. But the negative sides of the ONT system have been increasingly visible with the evolution in complexity of the national and international markets and increasing needs for high standard of services. ONT is a bureaucratic organization of some 1,200 staff which shows 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 a reference tariff approved by MOT with preferential rates that, truckers complain, are too low to allow for normal renewal of their aging truck fleet. The relatively high fee charged by ONT for its services (4-5% of freight rates on average, plus 1% to compensate truckers for empty back-hauls) is another bone of contention. In practice, truckers bypass ONT as much as possible, making direct transport arrangements with regular customers, and go to ONT's offices only to regularize the paperwork and pay the fee. ONT's monopoly also seems to place restrictions on development of intermodal (rail and road) services, as ONCF for instance is barred from purchasing trucks. There is growing awareness that better and cheaper transport, so essential to economic growth and international competitiveness, can only be achieved by eliminating the ONT monopoly on freight forwarding and establishing market-based trucking prices, which again implies changing Law 1.63.260. Inproving road transport efficiency is an important project objective 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 are mediocre and technical standards are loosely enforced. To address this issue, a national center for control of vehicles has been created under MOT and the Highway Sector Project provides financing to build needed facilities and equip them. The national center will control the 58 vehicle inspection centers. The building and the equipment are operational but the current lack of budget appropriations does not allow recruiting staff and delays launching of the Bank financed technical assistance program. The Highway Subsector 19 E. ADMINISTRATION 2.18 The Road and Traffic Department (DRCR) of the MPW is responsible for the design, construction, and maintenance of the National, Regional, and Provincial networks (Document in project file: DRCR's Organization). The headquarters only deals with matters of general planning, coordination, and supervision. The peripheral offices are largely autonomous for programming of road works, contract awards and management, and supervision of works. The field organization consists of 40 provincial offices and 80 subdivisions. Since 1983, seven regional offices have existed as an intermediary layer between central directorates (DRCR and the other directorates under MPW) and provincial offices, to provide support in the execution of their mission, exclusive of activities related to day-to-day operations. The 1992 Constitution granted regions a legal status and the tendency is to use this administrative level to re-equilibrate the distribution of responsibilities between central and decentralized organizations, which were given too much 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 Director exerts no line authority over Provincial Directors, except when he receives specific delegation from the Minister. The thrust of the experiment is to concentrate managerial competence (particularly for planning and economic studies) at the regional level. Current missions of the Regional Director are: (a) commissioning of studies of common interest to enhance cost effectiveness of road works; (b) supervision of technical studies by central directorates, to improve project programming and project implementation (physical and financial); (c) verification of quality of executed works and of road management data collected within an annual program agreed by central directorates; (d) technical assistance to provinces that request it, and training; (e) coordination of preparation of the multi-year action program and dissemination of improved appraisal techniques; monitoring of budget execution by provinces; (f) operation and maintenance of the regional equipment fleet. The Regional Director may be authorized to set up force account units if DRCR is satisfied with current performance of the equipment fleet. The Regional Director is further entrusted with development of the regional economic data base. Pilot regional directorates are just starting to get organized to handle their enlarged missions. Their future role and possible spreading of the experiment to the other four regions critically hinges on a rapid build-up of expertise and skills. Because the Regional Directors 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 operations of 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 and contribute to financing of the construction of the Rabat-Larache section, which started in 1992. Between Dh 300 and 400 million are collected annually. 2.21 The communal networks, once established, will be under the responsibility of the communes, 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 handle directly their new road responsibilities. The current strategy is to develop a system of conventions by which a commune would entrust the local public works subdivision with responsibilities 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 is structured 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 data base; (c) administration and finance. CNER employs about 50 staff, half of which are road engineers and technicians. It still derives most of its revenues from contracts awarded by DRCR, but has a branch dealing with military airports and recently developed its consulting activities outside Morocco. A road maintenance strategy for 1992-2012 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 and vehicle costs under each variant of maintenance, and optimizes the use of scarce maintenance budgets. Road roughness measurements and other tasks needed to develop and update the paved road data base is entrusted to CNER with support given by DRCR's technical divisions. Actions currently planned focus on two aspects: (a) strengthening of the road data base, through auditing of collection and measurement methods; (b) more accurate perception of maintenance priorities, by making HDM III available to regions after proper calibration. CNER will play an important role in the institution 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 1992 Constitution stops making reference to the concept of plan. The current approach favors flexibility 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-year rolling action programs. Yearly budgets are directly derived from such programs. The Planning Directorate at MPW has nominal responsibility to monitor planning DRCR activities, but has very little influence in practice for lack of proper analytical tools and information. The Planning Directorate concentrates its current efforts on improving systems to monitor financial and physical implementation of road investment budgets. 2.24 A decision has been made to transfer planning responsibilities to the regions in order to avoid past pitfalls when, first, excessive decentralization gave too much influence in decision making to local politicians. Then, excessive centralization fed into a normative approach to road work programming which produced some poor choices and implementation problems when locals would lack motivation to execute works that they did not see as needed as assessed by central programming institutions. At present, DRCR allocates a tentative budget to each province on the basis of four criteria: (a) length of paved roads in bad and very bad condition; (b) traffic on paved roads; (c) total length of roads; (d) length of mountain roads. Weights are given to each criteria. For unpaved The Highway Subsector 21 roads, quotas are estimated on the basis of other objective criteria like the proportion of the rural population and of rural roads in the respective province. Coordination of the programming work done by the local DPTP is vested in a Committee (Comite Technique de Decentralisation). Guidelines are given on how priorities should be established. Minimum economic returns on the investments (12%) and service standards are among the main applied norms. Greater emphasis is also placed on the state of preparation of technical studies, and a 2-year maturation period applies from programming to execution date. The still ongoing road reclassification further facilitates the identification of priorities. 2.25 Recently, simplified pavement management system (EVAL) has been used to compute the economic rates of return of proposed road investments. The linear assumptions behind many cost functions tend to exaggerate the benefits of reduced roughness for extreme values, and more significant and comparable results will be possible by using HDM III. This model may be too complex however to be used by the DPTPs, hence the strategy under the proposed project is to build expertise in its utilization at the regional level where the equipment and training effort will be concentrated (paras 3.30 - 3.33). Consideration should further be given to streamlining of appraisal techniques to ensure compatibility of construction, modernization, and maintenance investments. The current practice is to allocate resources to each sub- program on the basis of perceived priorities; a more objective allocation of budget resources would likely raise the overall economic efficiency of the road investment budget. Budgeting 2.26 The global road budget is negotiated each year by MPW with the Ministry of Finance. By late January each year, the road budget is allocated to the DPTPs by DRCR after clearance by the Minister and the Central Controller in the Ministry of Finance. The local DPTP has direct authority from the Minister to commit and spend within its allocated budget and represents MPW in the provinces; he remains overseen by DRCR in personnel management matters. Significant improvement in actual implementation of road budgets was achieved in the late eighties as a result of legislation that authorizes the start of procurement in the year preceding the actual budget appropriations. Procurement is a lengthy process, and this practice mobilizes contractors quickly after the budget is allocated. The actual road spending ratio of 60% of approved budgets over 1981-85 has gone up to about 80%, which is about satisfactory. 2.27 Despite overall budget stringencies and commitments under SAL II which reduced the importance of infrastructure spending from 3% of total expenditures in the early eighties to 2% at present, road expenditures increased from Dh 1.02 billion in 1989 to Dh 1.46 billion in 1993 (+44% in current dirham; + 12.5% in constant dirham). Table 2.9 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 4,979.0 New construction 262.0 275.5 202.7 253.6 215.0 1,208.8 Equipment 59.0 32.3 29.0 24.2 1.0 145.5 Miscellaneous 8.6 11:7 8.5 124 DA. 54.2 Total 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 to maintenance (rehabilitation, strengthening, and periodic and routine maintenance) which, given that about 90% of the equipment was assigned to maintenance tasks, rose from 73% of total road expenses in 1989 to about 84% in 1993. This evolution seems consistent with enhanced economic efficiency of road programs, as rates of return on money spent to reduce a maintenance backlog are generally much higher than those on investments in road construction. Amounts budgeted for new construction in 1994 were down to Dh 196 million, two-third of which for rural roads, out of a total road budget of Dh 1.5 billion in which maintenance accounted for close to 87%. The 1995 budget was increased to just under Dh 2 billion (+33% in current dirham) with incremental resources allocated in full to implementation of the 10,000 km rural road development program; the budget structure otherwise remained unchanged from previous year. In a context of tighter public finance where most budgets other than those directed to social sector needs had to be cut by 3-5 %, the rather favorable treatment received by the road budget reflects the continued Government commitment to better road maintenance, and there is little room for further shifts in favor of maintenance since they would come at the expense of the high priority rural road program. Therefore, the objective under the project should be to maintain the same level of maintenance assuming no real increase in the total road budget. Opportunities to bring maintenance budgets closer to what they should ideally be (the gap is currently estimated at about 70%) are entirely contingent upon relaxation of the overall Government budget constraint on which one can only speculate at this stage. 2.29 Under the Highway Sector Project (Loan 3168-MOR) the practice of carrying out annual reviews with the Bank of the road investment programs was established. Agreement has been reached at negotiations to continue the practice. The Government will submit to the Bank's representatives the proposed road investment program for the following year, together with the technical and economic justification of its elements. Thereafter, the Government will finalize the program, taking the Bank's comments into consideration and ensuring the prompt implementation of the program. The program will include in particular road rehabilitation and overlay, construction of facilities and provision of equipment and indicate the financing considered. The Highway Subsector 23 2.30 The DPTP maintains administrative accounts, commitments and payments and monthly statements are sent to DRCR. Under standard payment procedures, the DPTP sends instructions to the local General Treasurer with copy to DRCR, to pay contractors or suppliers within approved contracts. When foreign financing is involved, the DPTP will issue a two-part payment order, with one relating to loan financing and the other to counterpart funding. The General Treasurer will not proceed with the latter's payment unless he gets notification by the Minister of Finance that the particular contract is eligible under that loan, irrespective of the contract amount. For instance, this notification is given once the Bank has sent its no objection telex. This procedure is rather cumbersome and there are instances when the General Treasurer is notified of loan eligibility only after months of delay. After the payment is made, the local General Treasurer sends the accounting documentation to the central General Treasurer who then debits the Bank special account and sends a monthly statement of all debits to the Budget Directorate based on which applications for replenishment of the special account are prepared. Disbursement of Loan 3168-MOR has sometimes been hampered by the replenishment speed of the Treasury circuit, which is slower than the commitment and payment speed. Procedures should be streamlined to ensure (a) prompt notification of loan eligibility to the local General Treasurers within the SOEs limits; and (b) a smoother flow of payment requests requiring better contract management and coordination between MPW and the Ministry of Finance. Financing 2.31 Local financing of road expenditures comes essentially from the Government budget 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 to earmark tax revenue and additional transfers from central to local governments beyond what it has already conceded, namely the initial endowment of the Road Fund, and the transfer of 30% of the value added tax (VAT) to local governments. The tax base is heavily tapped and the potential resources that it could yield seem predesignated by the Ministry of Finance for general uses. The possibility of increasing road funding, as desired, hinges on finding ways to raise more user charges. A study is being financed under the Highway Sector Project to seek, among other things, feasible methods for steadier funding of road maintenance. Donor financing of the Moroccan road budget was on average 46% of total over 1988-92. The African Development Bank (AfDB) and the World Bank used to be the sole contributors. AfDB approved a $92 million loan under its Third Road Maintenance Project dealing with the primary and the secondary networks. Japan provided grant financing for construction of an institute specialized in road 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 the central budget before 1990. Amounts spent by DRCR on communal roads stayed below Dh 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 in response to emergencies caused by bad weather making roads impassable. The 1990 Decree 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 makes it eligible for maintenance subsidies from the Government current budget based on recommendations by the Ministry of Interior (MOI). The financial implications of the new system raised great concern in the communes, seeing that they might have to bear additional costs while getting no new resources, and contributed to delay initiation of the formal communal network classification process by almost three years. Pending completion 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 Communes 1989 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 3451 VAT transfer 892 743 841 1539 453 785 409 567 1345 1528 1249 2106 Bonosnp 485 285 469 520 115 850 180 143 599 1135 648 663 others 1797 1885 1737 781 794 845 1099 657 2591 2729 2836 1439 Stotal 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 3721 Investnents 1327 1408 1158 1251 552 810 704 751 1878 2218 1862 2001 De service 280 313 377 387 33 51 65 96 313 364 442 482 s.-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 1455 Of Wiich: infrastnxture Of Wiich: infrastzcure Of vhich: infrastrcture rent 174 187 209 87 12 353 18 24 186 540 227 110 Csital 389 360 397 410 265 440 435 441 654 800 832 851 Total 563 547 605 497 277 793 453 464 839 1340 1058 961 lmrve: Data base on conuraial finance. Although it dDes not seem fdly satisfactory, the estimates given here shotddbe dl a a gDodapproxizmtion of rality. Finance Project approved in June 1993, faces a narrow resource base and enlarged costs following the creation of 500 new communes recently and recruitment of about 40,000 people. Table 2.10: Evolution of Communal Budgets, gives an overview of the evolution of communal budgets between 1988 and 1992. Local revenues were boosted by implementation in 1988 of a 1985 Law allocating 30% of the value added tax (VAT) to them. Local taxes accruing to communal budgets rose from Dh 2.2 billion in 1989 to Dh 3.4 billion in 1992. The VAT transfers of Dh 2.1 billion in 1992 are comprised of two elements: an operating subsidy roughly estimated at Dh 0.7 billion, and subsidies earmarked for investment expenditures. The current revenue of communes was then around Dh 4 billion in 1992 against current expenditures of Dh 3.7 billion; the gross cash flow roughly matched more the debt service requirements. Table 2.10 also shows that some Dh 110 million was spent on infrastructure maintenance in 1992, or about half the average allocation of 1989 and 1991, and only 20% of the 1990 allocation. Most of these resources go to the urban networks. The same applies to capital expenditures, although funing of intercity roads by communes is on the rise through cofinancing arrangements The Highway Subsector 25 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 larger maintenance requirements faced that year by communes had to be financed indirectly by borrowing, which is abnormal and indicative of severe cash shortages. The item other revenues broadly corresponds to surpluses from previous years available for investment expenditures only. 2.34 The 1,200 rural communes collected only 31% of total local communal taxes in 1992 which, together with the operating subsidy portion of the VAT, gave them current revenues of almost Dh 1.5 billion against current expenditures of Dh 855 million. The surplus of about Dh 500 million (after debt servicing) meant, however, that each rural commune had Dh 0.4 million on average to finance the minimum investments needed by their population. The financial condition of rural communes did gain strength (table 2.10 shows local tax revenue increasing by 86% between 1989 and 1992) but does not allow them 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 differ greatly among communes. A few enjoy relative financial easiness linked, for instance, to forestry resources, while most derive more than 90% of their revenue from VAT transfers. 2.35 According to table 2.10, rural communes spent less than Dh 20 million per year on road infrastructure from 1989 to 1992 (this average excludes 1990 which appears to be 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 annual cost of routine and of periodic maintenance for unpaved roads around Dh 1,800 and Dh 2,700 per km respectively (the latter reflects local conditions whereby only a third of the road length is treated). For paved roads, corresponding costs are Dh 9,800 and Dh 7,000. With an average of 10 km of unpaved roads and 3,5 km of paved ones in each rural commune, fully funded road maintenance implies spending an additional Dh 104,000 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 will have to come from outside, preferably through the road fund. Development and modernization of their road network is another constraint that rural communes face. Much higher costs per km are involved, not commensurate to the above estimate of resources available for investment. That leaves most rural communes with no other alternative than seeking Government subsidies to cover a substantial part of investments programmed under the 10,000 km rural road development program partly financed under the project. 2.36 Funding of the 10,000 km rural road development program relies on the assumption 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 would bridge the gap with its own resources but may defer implementation of that particular sub-project to the program's late years. The communes would be required to maintain the road after its paving or gravelling if it fell within the communal network. To ensure a cost effective use of resources allocated to communal roads maintenance, the recipient communes 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 DRCR experience of cofinancing projects with communes has lead to strengthening conditions of eligibility to loan funds, from verification that proposed investments are technically feasible and economically justified and assurances that road maintenance will be properly programmed 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 underfunding of road maintenance that prevailed in the early eighties and, more specifically to provide stable funding for core operations. The Minister of Public Works has authority to commit funds within budget limits approved by the Parliament under conditions similar to those applicable to the general budget. Basically, the RF is just a special account which complement the general budget resources allocated to DRCR under chapter 2,107, item 31, and one of two sources adding up to the make the DRCR budget. The RF, which has a 12-item structure, was meant to cover all needs for routine maintenance (including reopening of roads after snow falls and floods) and about 65 % of periodic resealing operations, but its actual applications covered a broader spectrum including road strengthening and rehabilitation, feasibility studies of maintenance projects, printing expenses 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 604 million in 1994. In 1995, additional tax revenue equivalent to Dh 460 million was earmarked to the RF to finance the 10,000 km rural road development program. It changes the definition of the RF now to finance new construction. Still, the Loi de Finances 1995 stipulates that no less of 55% of its resources should be used for maintenance. Just coincidentally, the RF also represents about 55 % of the 1995 total road budget. 2.38 Resources in 1994 came from three earmarked taxes on: (a) fuel consumption (Dh 18 and 10 per liter respectively for gasoline and diesel oil); (b) vehicle registration (a surcharge of Dh 150 per HP for passenger cars and Dh 30 per ton of gross weight for trucks); (c) the gross weight of vehicles (rates range from Dh 650 under 5 tons to Dh 10,700 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 doubling of the earmarked fuel tax. Table 2.11 shows the evolution and structure of RF actual revenues 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) 246 285 325 813 Registration taxes 67 66 139 134 'Axle-load' taxes 121 127 140 144 total 434 478 604 1090 The Highway Subsector 27 2.39 Actual revenues to date have always been above forecast. For instance, the 1994 budget assumed revenues of Dh 530 million, compared to actual revenues of Dh 604 million. Excess revenues are carried over to the following year RF budget. In 1995, the budget 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 for rural road construction. In 1995, the RF will still have the 1994 carry-over revenue of Dh 74 million to bring total resources available for spending to Dh 1,164 million. In 1996, the carry-over effect should be small, and the RF total revenue will normally be around Dh 1,150 million, barring drastic changes in the traffic level. An interesting feature of the RF is, besides the relaxation of the budget annuality rule, that its revenues are indexed on traffic which have been growing consistently, thereby ensuring increased funding for maintenance. Under tight budget conditions likely to extend to the medium term, 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 increased funding that the RF "mechanics" will generate. 2.40 Established to insulate road maintenance from the general revenue budgeting process and meet essential expenditure requirements, the RF has made an increasing and valuable 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 lags between cash collection and spending authorization, and between commitments and payments. 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 narrow range, with a low of 41.7% in 1991 and around 47% in most recent years. These fluctuations show that the RF does have a stabilizing, albeit moderate effect on the road maintenance budget. Regular funding of road works is indeed a desirable quality that the RF helps enhance. The main driving force behind this evolution has been the strong commitment by Government to better road maintenance to which it allocated an annual average of about Dh 1 billion over the period under review, compared to Dh 350 million between 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 1995 maintenance 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 years in real terms, since no more funding of unpaved roads maintenance from the general budget is needed given the considerable effort consented in favor of these roads under the 10,000 km rural roads program. Previous concerns about the state of neglect in which the 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 for non-rural roads, an objective sought through the proposed project conditionality. Increasing RF resources to fully cover recurrent maintenance, and eliminating at the same time the general budget allocations to maintenance will ensure that funding will increase in line at least with road traffic. The maintenance strategy should be to make progress as permitted by improvement of general budget condition toward the optimal program, which would require annual strengthening of 1,500 km and resurfacing of an equivalent length at a total cost of Dh 2.15 billion (70% above current level). There is no easy way to raise additional user fees. The Bank financed study on redefinition of the RF' confirmed the conclusions of the 1988 study: road users are generally overtaxed, and the fact that user fees paid by heavy trucks and semi-trailers trucks do not cover a fair share of road costs (cost coverage of 0.8 and 0.6 respectively) does not imply that they could 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 ranging from 40 to 50% of vehicle prices hamper timely vehicle fleet renewal and development of road transport, as evidenced by the low market share of Moroccan truckers on international transport. Reducing these ownership-based taxes would seem desirable and create opportunities to increase user fees. The Government budget constraint, however, would hardly allow it to simultaneously reduce overall taxation on truckers and raise their user charges accruing to the RF to finance more maintenance, because it would inevitably mean less revenue in coverage of general Government functions. This assessment in favor of the status-quo will be reexamined at mid-term review with a view to determine if improved conditions would warrant action on pending road taxation issues. 1/ BCEOM. "Actualisation du Fonds Routier. Mission d'Appui Technique" July 1994 KINGDOM OF MOROCCO SECONDARY, TERTIARY AND RURAL ROADS PROJECT 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 areas in the subsector, road safety and the secondary and tertiary road network, to continue to benefit from the Bank's dialogue in these key areas. 3.2 Rationale for Bank Involvement. The Bank played has a unique role in fostering sound institutional developments in road maintenance, road funding and network management. It is important that the Bank continue to be involved in the next phase of these reforms. Furthermore, the Bank's development strategy in Morocco focuses on private sector development, social sectors, poverty alleviation, conservation of water resources, protection of the environment, and public sector finance and management. The proposed 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 social services and to market; (b) accelerate private sector development by reducing regulatory constraints in road transport and by increased resort to road works and supervision by 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, the project will prepare the ground for further social and economic development of these areas. It will also work toward efficient decentralization of road management and should eventually lead to better prioritization of road works and a more cost effective use of public 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-weather gravel standard, constructing 96 km of paved rural roads, and finalizing the road reclassification; (b) improving about 2,219 km of paved branch roads (formerly classified in the secondary and tertiary networks) by carrying out maintenance backlog resealings, 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 road maintenance 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 highway network and prepare the future transfer of ownership of the farm-to-market roads to local governments 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 of appropriate standards, the Government intends to bear some of the financial burden for both investment and maintenance. In 1995, the Government adopted a national program of 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 have contributed to the preparation of this element, in particular, the study of unpaved rural roads improvement and maintenance, the rural transport study and the supplementary road user charges study. These studies have reviewed about 38,140 km of unpaved rural roads (both classified and unclassified). Only 20% of the reviewed roads have adequate formation and drainage while 30% are unusable at least 30 days a year. The volume is 10 vehicles of average daily traffic (adt) or less on 70% of this network. No maintenance is usually budgeted or carried out. The studies have identified 14,970 km (90% classified) for which various strategies of improvement are technically and economically justified. 3.8 Objectives. To alleviate rural poverty by improving access to social services and market in remote rural areas and prepare the ground for further social and economic development of remote montainous areas. 3.9 Description. The project will help finalize highway reclassification and will improve 1,133 km of unpaved rural roads to all-weather standards. The improvement works include earthworks to correct bad spots, construction of drainage infrastructure and laying a base/surfacing layer of natural gravel. Finally, the project will construct 96 kan of paved rural roads to a low-volume road standard (4 m of pavement over 8 m of formation 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 6,000 ruptions' Traffic mln veh- 11 11 12 14 17 km/yr Value for each individual section (example for P 3108, Azilal): Traffic inter- day-km 2,124 2,124 2,124 708 708 ruptions 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 10,000 km national rural road program. While this ratio is expected to also apply to the project roads, the specific sections for such cofinancing have not yet been identified. For the rehabilitation of unpaved rural roads, the average base cost of the improvement works is Dh 198,000/km ($22,500/km). One hundred and thirty three km will be financed by local sources (the central and local governments) in 1995 and 1996 while the remaining 1,000 km will be financed at 72% by the Bank. For the construction of paved rural roads, the average cost is Dh 826,000/km ($96,100/km). Implementation 3.12 Reclassification of the highway network. The Ministries involved signed an inter-ministerial bylaw on August 10, 1993 and issued corresponding circulars to set up the required Provincial Reclassification Committees. The Communes do not currently have the resources needed to operate and maintain a large network. Furthermore, a large portion of unpaved rural roads is not yet in maintainable shape (non-engineered tracks that received only sporadic emergency maintenance from MPW and need improvement before being entered into scheduled maintenance programs). Therefore, no ownership transfer is currently necessary. The initial reclassification is scheduled to be completed by 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, however funding of road maintenance may be more difficult in the next few years. In 1995, the Road Fund has been considerably increased, through higher fuel taxes, to reach Dh 1.090 million. The increase (Dh 460 million) has been earmarked to finance the 10,000 km national rural road construction program. During negotiations, an understanding was reached that the Government will give high priority to funding maintenance of classified roads and that the corresponding needs will be evaluated on the basis of the indicators below. 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 Provincial Directorates (DPTP) using the road fund to finance the national rural road construction program. 3.15 For the sections cofinanced by a local government, an agreement will be signed between 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. The programs for the second (404 km) and third (500 kIn) years will be selected among the 14,970 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 km of 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 point in highway transport. These roads connect the rural feeder roads to the secondary social and economic centers and these centers to the main trunk highways, They are in the process of being reclassified from the old categories of Secondary and Tertiary to National, Regional and Provincial. The extent of the branch road network (about 20,040 km) is roughly adequate for the current road transport demand and the need to access rural and remote areas, however, most of its pavement is now too old, narrow and thin for its traffic. Furthermore, it suffered the most when maintenance budgets were restricted. About 34% of the secondary and 43% of the tertiary roads are currently classified as being unacceptable shape. About 7% of primary, 14% of secondary and 44% of tertiary paved roads have pavements narrower than 4 m. MPW has developed a systematic approach for the rehabilitation of the branch road network that combines pavement widening and overlaying with a resurfacing program to also reabsorb the periodic maintenance backlog. The selection of both the sections and the type of works is based on network-wide analyses carried out with the Bank's model HDM III, with input data from the road data bank, which is systematically updated by periodic road data collections. The process takes into account the technical advantages and the cost reduction associated with combining widening with overlay. The overall strategy and the balance between costly structural overlay providing a good service level to the road user and more cost efficient resurfacing, has been defined to maximize the length of roads with 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 methodology for selecting and justifying widening works, and identified 3,000 km on which feasibility studies were carried out to select the sections for widening. Separate network-wide studies 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 an existing pavement from 3 to 7 m wide and carry from 500 to 6,400 vehicles adt. The sections in best shape, i.e. with acceptable cracking, roughness and width will have potholes patched, pavement edges repaired, cracks sealed, side ditches reshaped, culverts and other drainage elements cleaned, shoulders overlaid and leveled and then will receive a double base surface treatment (DBST). Sections with higher roughness but with acceptable remaining pavement life will, in addition, receive a thin reshaping layer (gravel-emulsion mixture) just before the DBST is laid. Sections with little remaining pavement life will receive a structural overlay instead of the reshaping layer. Sections earmarked for widening will have pavements widened to 6 or 7 m, depending on the traffic (threshold at 4,000 adt) and formations widened to 8, 10 or 12 m, depending on the traffic and the relief. In general, widening and structural overlays will use thick layers of crushed natural gravel, mechanically stabilized. 3.21 Indicators. Three sets of indicators will be used for monitoring progress in achieving project objectives, from the network point of view, from the project element point of view and finally from the individual section point of view. Target values are indicated 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 4,359 km/yr Average for the project element: Roughness mm/ln 3,724 3,700 3,450 3,150 2,800 Traffic mln veh- 685 717 752 788 823 kml/yr Works comr- % of project 0 0 34 67 100 pleted 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 of similar works in 1989-1991, updated to 1995. Quantities are defined on the basis of preliminary engineering (general cross-sections based on Moroccan standards, and information in the road data base checked and complemented by specific field investigations). The cost of the detailed design of the pavement and of quality control during 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 financing allocation has been done on a regional basis, with OECF financing all four types of works 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 km in 1997 and 1998. Implementation 3.24 Organization. DRCR will implement this element also through DPTP. The DPTPs 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 that the project items are executed within the defined project objectives. As is the practice in DRCR for contracts of this size, the DPTPs will also act as the Engineer, administer the road works contract, make the measurements and give contractual orders to the contractor, while quality and material control will be subcontracted to the regional road laboratories (LPEE). 3.25 However, in an effort to test organizational arrangements that have been proven successful in other countries, a supervising consultant will be appointed on a pilot basis to 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 is to implement tighter quality control schemes, streamline the role of the DPTPs and privatize some tasks that could be implemented more efficiently by the private sector. In general, for a given DPTP, there is no continuity in the workload for this type of supervision and thus, as the type, qualification and experience required from personnel may be different from what is necessary to carry out the other duties, hiring out more specialized consultants to face a peak in workload should be a good strategy. The longer term objective is to develop the consulting industry and improve the quality of road designs 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 into contract packages of various sizes, best suited to attract international, national and local contractors, 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 work program 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 at better network management through the development of newly created Regional Directorates (RD). The role of these Regional Directorates will focus on four main themes: network management; technical excellence; the project cycle and communication dynamics (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 snow removal 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 over major 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 on Regionalization). Network Management. 7he Project 37 (a) Force account v/s contractors. Maintenance by force account is now limited to emergency maintenance and routine maintenance activities and opening/improving of unpaved rural roads for which there are no piece- meal workers or contractors available in the region. Following this move to contracting out, DRCR's equipment fleet is now under-utilized and aging. DRCR intends to transfer responsibility for managing the fleet to the RDs, aiming to increase its efficiency and reduce its running costs. This requires increasing its mobility with low-bed trucks. The RDs will also keep a dialogue with the regional road construction industry and be the nerve center for promoting and testing actions aimed at maintaining the 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 is offering to the road users, initiate preventive actions and carry out specific audits at the request of MPW. (c) Monitoring of studies and works. The RDs will manage and improve the road data bank and develop procedures for regular collection of traffic and road inventory data. The RDs will coordinate efforts for improved project management. The project will develop a specific project monitoring tool, (para 3.77) integrating project and construction task management with financial management and building a management information system around it. (d) Personmel. The RDs will be essential elements in training and career development of technical staff. The training of DRCR staff will focus on network management, project management, scheduling, and programming. The project will complement training actions with study tours and will provide international experts. 3.31 Technical Excellence. The DPTPs face from time to time technical or economic problems that require outside expertise, such adapting selected road technologies to local conditions. The RDs will be natural clearing houses for developing regional expertise and privileged recipients of technology transfers. The project will provide a mechanism for finding and mobilizing such expertise with minimum delay. Expertise will be needed in the 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 to develop planning and programming capabilities at the Regional level. Improvements will be 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. The study will define and rank the possible improvements and define parame- ters for optimal phasing overtime. This will ensure coherence of the investments 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, and setup 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 25 ntenance by Contract Periodic % 5 7,5 13 19 25 Maintenance by Contract Cost and Financing 3.35 The base cost of the 30 utility vehicles is estimated at Dh 9 million and the other 21 pieces of equipment are estimated at Dh 48 million. The institutional development actions 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 as in indicators of fatality rate' and risk6. Officials are increasingly aware that the number of unsafe roads has reached levels intolerable for Morocco at its current development level. To significantly reverse the current trend, the Government is committed to implementing a comprehensive and multi-faceted road safety program, focusing simulta- neously on key but complementary elements, implemented in a sustained effort over a long period. 3.38 Preparation. Two road safety experts were appointed to carry out a country-wide review and analysis of all major road safety elements, using a methodology originally developed for Eastern and Central Europe to assess the effectiveness of road safety measures and permit reliable comparisons between countries. On the basis of this and other data and analyses, a National Symposium was organized June 8 & 9, 1993 to debate the various actions and strategies. 3.39 Objectives. The immediate objective will be to reverse the escalating trend in annual road fatalities. In the medium term, the objective will be to return to an average level 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 avoid any 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 factor on the efficiency of road safety actions is the institutional setup, because its nature calls for close coordination between several sectors (transport, education, interior, information, etc.) to obtain the necessary synergetic effect. The experience shows that two conditions are needed, political accountability given to a single Government member and an administrative coordination structure in charge of preparing strategies, implementing them 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 in charge of road safety, however, horizontal coordination is currently carried out through ad-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 b accompanied 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 with relatively low cost remedial actions. A pilot audit on 2,800 km of roads has already allowed identification of 500 black spots and progressive development of a methodology for designing a program of low cost remedial actions. The project will support further development of this concept. 3.45 For both CNPAC and DRCR, the project will support limited technical assistance from appropriate road safety experts and training abroad for staff. 3.46 Rehabilitation of road accident black-spots. The project will finance three year of 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 would show significant result over a sustained period without the strict enforcement of appropriate laws and regulations. Setting up appropriate speed limits, making safety belts and helmets mandatory, preventing driving-while-intoxicated, regulating maximum driving time for professional drivers and instituting a point system for driving licenses are proven road safety measures. They are the most efficient measures available when complemented by appropriate sanctions and strictly enforced. They are almost worthless otherwise. Most of these measures are being introduced in the revision of the Highway Code that is being prepared for rapid submission to Parliament, with a hardened and dissuasive schedule of fines and legal sanctions. The rest are being considered. However, the most critical need is to improve enforcement. The project will support this improvement by financing 70 radars and vehicles for speed limit enforcement on inter- urban roads for the Gendarmerie and providing corresponding technical assistance and training. 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 are based 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 cofimancier has yet to be identified. Implementation 3.50 Organization. The Minister of Transport will have overall responsibility for this element, and CNPAC will be the implementing agency. Once procured, ownership of the enforcement 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 be implemented by DRCR. G. ROAD TRANSPORT Concept and Content 3.51 Policy. Agreement was reached at Negotiations that, in order to liberalize the trucking market and to promote greater trucking efficiency, the Government will: (a) permit unrestrictedfor-hire operations of trucks weighing eight tons gross or 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: Letter of Sector Strategy), which has been signed as a condition of Board Presentation. A covenant specifies that presentation to Parliament of the corresponding law will be done by December 31, 1998. 3.53 Preparation. Implementation of the above policy means a drastic change in ONT's mission as well as its restructuring. ONT may still play an important role in the new enviromnent, but this role would be service-oriented and demand-driven. Studies are in progress to ascertain service areas where ONT could redirect its activity and define a new corporate plan. Upon conclusion of these studies by mid-1995, an action plan will be 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, play a more active role in training and advising truckers, create conditions conducive to creation of small to medium size trucking companies, and bridge existing gaps in the organization of land transport, through establishment of trucking service centers along most 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 45,000 travelled T-km pro- millions ton- 45,000 45,000 45,000 45,000 45,000 duced 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 55,000 travelled T-km pro- millions ton- 62,000 62,000 62,000 62,000 62,000 duced 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 21 2. Paved Branch Roads 542.67 486.05 1,028.72 57.38 51.41 108.78 47 66 3. Network Management 49.33 50.28 99.61 5.09 5.18 10.27 50 6 4. Road Safety 53.16 52.61 105.77 5.57 5.56 11.13 50 7 Total BkSB-INE COSTS PhysicalContingencies 84.62 77.22 161.84 8.88 8.11 16.99 48 10 Price 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. Base cost 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% to 4.4. % 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) IGngdom of Local GRANT (to be World Morocco Governments identifled) Bank Japan Total AmFount Amount Amount Amount Amount Amount 1. Rural Roads 13.604 0.425 - 26.676 - 40.704 2. Paved Branch Roads 48.547 - - 17.968 61.617 128.132 3. Network Vbnagement 4.797 - - 5.993 1.238 12.029 4. 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 selected regions. 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 and Negotiations, however, because these sections are fully financed from local sources, there is 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 be bid by International Competitive Bidding (ICB), using one of the Bank's standard bidding documents on a slice-and-package basis, when the estimated amount is $2 million or more. The slices will consist of works within a single Province. The corresponding DPTP will be responsible for finalizing the pavement design and supervising the works, as the contractual Owner's Representative. Bid advertising, opening and evaluation will be carried out at the Regional level. Contractors will be permitted to offer rebates if awarded more than one slice. Contract amounts will range from $0.4 to $5.0 million per slice and from $1.0 to $10.0 million per package. The larger amounts should be attractive to international contractors not already present in Morocco. 3.59 A prequalification process, satisfactory to the Bank and updated annually, will evaluate contractors on the basis of their capacity to carry out project works satisfactori- ly. The process will be based on the satisfactory completion of works of similar size and nature, contractor's personnel and equipment, and his financial situation. After prequalification, potential bidders will be classified to bid for one or more slices, up to their evaluated capacity. The Project 45 3.60 Unpaved rural road works are dispersed throughout remote locations and are difficult to package for ICB. Thus they will be bid through Local Competitive Bidding (LCB) and carried out by small local contractors under the supervision of the DPTP, who will be the Owner's Representative. The DPTP will have contractual authority to order and certify works and authorize payments. Because of the novelty of this type of work for the contracting industry, prequalification procedures will be used and updated annually on a regional basis. Other civil works, will also be procured by LCB. Table 3.12: Procurement arrangements ($ million) Procurement Method International Local Competitive Competitive Consulting Bidding Bidding Services Other NPBF. Total A. Hardware 1. 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. Goods For MPW 7.178 - - - - 7.178 (4.207) (4.207) For MOT 3.888 - - - - 3.668 B Software 1. 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 Cntrl lFstly 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 only supplier located in Morocco, by DPTP, for all its works within the province, at rates approved by the Ministry of Energy and Mining. Under the Highway Sector Project, the supply of bituminous products was included in the bidding documents, however, bidders had the choice to either include bituminous products in their bid prices or to request DPTP to supply them the bitumen at the set rate. In the latter case, the bidding procedure produced 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 worked satisfactorily, under the proposed project it will be mandatory for the contractors to buy their own bitumen. In line with world-wide practice, this change will streamline contractual responsibilities, reduce potential coordination conflicts and lighten the administrative workload of DPTP. The contracts will include provisions for quality controls 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 domestic manufacturers 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 schedule could not be procured under ICB, will be procured by LCB (maximum aggregated amount of $1.6 million) or international shopping (minimum three quotations; maximum aggregated amount of $1.5 million). Proprietary software and technical documentation will be procured directly from the original manufacturers for a maximum aggregated amount of $40,000. Consulting Services 3.63 Consulting services will be procured according to Bank Guidelines. Consulting services for detailed pavement design and quality control during construction, estimated at $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 supply of software and technical documentation will be grouped into framework agreements with joint-venture consulting firms offering a wide range of experts. The contracts will spell out rates and procedures for identification and mobilization of the personnel and procedures for participation of DRCR staff to international seminars and refresher courses. The agreements will include the payment of tuition and transport and per diem for trainees. Most interventions will be short in time with a short period between the definition 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 consulting ventures, in accordance with Bank Guidelines. 3.65 Training in Morocco for DRCR will be organized by Ecole Hassania des Travaux Publics or IFEER. Training for Road Safety and Road Transport will be organized by training operators who will be procured from short-lists in accordance with Bank Guidelines. 3.66 The Study of Road Itineraries and other consulting services and technical assistance, estimated at $0.6 million, will be procured from short-listed firms or individual experts selected by the executing agencies. The short-lists will not include more than two firms from the same country. The Project 47 3.67 Publicly owned consulting firms will not be eligible to participate, even as partners 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 a threshold of $0.5 million will not be subject to prior review. Other contracts will be subject to prior review. This review process will cover about 85% of the total value of Bank-financed items and may cover 100%, if the Ministry of Finance continues the current 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 are however required to make some procedures acceptable to the Bank (Annex 3.4: LCB Pro- cedures). During negotiations, agreement was reached on all the above procurement arrangements. J. DISBURSEMENTS 3.70 The Bank will disburse on the basis of Table 3.13: Allocation and Disbursement of the Loan. The Loan is expected to become effective in October 1995, and to be fully disbursed by the closing date of June 30, 2000. This is six months shorter than the historical 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 and training procured under contracts valued at more than $0.1 million, for works valued at more 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 will be made available to Bank supervision missions and to the auditor. These documents will be retained for one year after Bank receipt of the audit report for the fiscal year in which the last withdrawal from the loan account was made. 3.72 To facilitate disbursements, a Special Account will be opened and maintained in a fully convertible and stable currency and operated on terms and conditions satisfactory to the Bank. The Special Account will cover the Bank's share of eligible expenses in both local and foreign currencies. The authorized allocation will be $4.3 million, i.e. the Bank's share of the estimated four-month average of project expenditures. The borrower will submit regular monthly replenishment applications promptly after receipt and reconciliation of monthly bank statements from the bank holding the account. During 48 Chapter III periods of large expenditures, applications may be submitted at intervals of less than a month. Table 3.13: Allocation and disbursement of the Loan ($ million) Loan Dlsbursement Am ount % A. Road Works 43.5 72% C. Goods 3.7 100% foreign D. ConsultantServices & Training 5.0 100% Una ll c a te d 5.4 Total 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 management software, a summary is in Annex 3.5. The technical assistance to DRCR for network management includes the purchase of software and training for promoting the use of project management principles and software, first at DRCR headquarters and second at the Regional Directorates and finally at the DPTPs. Also, DRCR will receive assistance to develop a specific computer application (in the Windows environment) to integrate scheduling software with procurement monitoring and financial monitoring (commitments and disbursements) in both Dirhams and US Dollars. The application will be a single place to record important project information, to monitor procurement, schedule, covenants, indicators, unallocated amounts of the Bank loan, availability of cofinancing and counterpart funds, the expected cost at completion, keep project accounts, including commitments, 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 core programming could be easily transposed for use in other foreign-financed projects in Morocco. 3.74 The project will include a kick-off workshop before project effectiveness. The workshop will put together participants (CNPAC, DRCR and its regional and provincial Directors, Finance officers and a representative sample of Local Governments) and finalize 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-term adjustment 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 reached at 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 will be DRCR and CNPAC for their respective project components. 3.77 Each implementing agency will prepare quarterly progress reports in a format acceptable to the Bank. Each report will give project indicators data, indicate progress made, problems encountered, remedial steps proposed and project activities scheduled for 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 the physical completion of the project works. This report will include in particular, a detailed account of final project costs and disbursements, general characteristics of project execution and benefits, the degree to which project objectives were achieved and an assessment of how the Government and the Bank implemented their respective obligations. 3.78 The implementing agencies will maintain separate records and accounts for all project expenditures. These records will identify all project transactions on an on-going basis and show their financing. All supporting documentation will be retained for audit and review by the Bank. Quarterly accounts will be prepared in a format approved by the Bank and incorporated in the quarterly progress reports. These accounts will summarize 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 accounts each fiscal year. The audit will employ principles acceptable to the Bank and will cover the Special Account, the financial statements and the Statements of Expenditures. The reports will be submitted to the Bank not later than six months after the end of the fiscal year. L. ENVIRONMENTAL IMPACT 3.80 As road works will be limited to improvement and maintenance of existing roads with no alignment change, no serious potentially adverse environmental impact is expected. The project has environmental benefits (development of the Environment Unit, environment-conscious institutional improvements, improved accessibility, reduced damage/soil erosion, and improved vehicular and pedestrian safety). Special attention will be paid to providing adequate drainage, ensuring slope stability and preserving archeological materials in excavations. In accordance with established guidelines, the project has been rated B. 3.81 The roads works (widening, surfacing, strengthening) appraised have been carefully assessed with regards to their potential effects on the environment. There will be 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 technical guidelines. Before they would start, the road works will have followed a two-step environmental screening: first, DPTP will have filled out a specific questionnaire to identify potential enviromnental risks and, second, any identified potential adverse impacts will have been addressed and mitigating measures implemented. 3.82 Once completed, these works will be beneficial to the environment by reducing congestion, improving accessibility to markets, schools and medical services and improving pedestrian and vehicular safety. The highway safety, network management and institutional developments component will have a highly positive impact on the environment. The highway safety improvements will reduce human casualties and will decrease the risk of accidental pollution thus alleviating infrastructure threats to health and the natural environment (water, soils). The network management component is environmentally friendly since it is principally aimed at improving routine maintenance. The ability to assess the environmental impact of roads works will be fostered within the institutional development component. In close coordination with the Under-Secretary of State for the Environment, Ministry of Interior, DRCR has created an internal environment office to develop operational guidelines for environmental impact assessment of all the major road works, provide guidance and coordinate actions on environment issues related to road works. KINGDOM OF MOROCCO SECONDARY, TERTIARY AND RURAL ROADS PROJECT 0v. 1E1CO)MON)C JUSTOFDCATOC)N A. GENERAL 4.1 Scope of analysis. An analysis to establish economic justification will be done for the main components of the proposed project, i.e. rural roads, branch roads and road maintenance equipment. The economic evaluation does not include technical assistance for network management, or road safety actions. It is a generally accepted fact that institution-building is essential to ensure the sustainability of project benefits, through more effective programming and execution of future road projects, as well as better returns for roads expenditures. Although these benefits would materialize in various forms, they significantly outweigh the technical assistance expenditures entailed. As far as road safety is concerned, the project inaugurates at still a modest level the kind of systematic action which will need to be to be developed and amplified if the national scourge of road casualties and fatalities has any chance to be curbed and brought back to normal proportion. The 1990 National Transport Master Plan7 made a compelling argument on how much is at stake by making road uses safer. Based on conditions prevailing in 1988, the direct economic costs per fatality was estimated as Dh 273,000 or 40 times the average GDP per capita. In 1994 prices, it brings total economic losses from road fatalities to more than Dh 0.7 billion. Including social costs more than double these 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 direct economic losses and close to twice as much when social costs are included. The component for rehabilitation of road accident black spots implies investing Dh 1,25 million on average for each one. Given the higher frequency of accidents at these locations (2-2,5 accident per year) resulting in annual losses equivalent to about DhO.8 million, social costs included, just reducing the frequency of road accidents by one- fourth would ensure a normal economic return on the investment. Higher impacts on road safety can reasonably be expected, an indication of the strong justification of the component. Further details on the economic analysis methodology used are in the Document 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 the project roads. Savings will come primarily from reduced vehicle operating costs and lower road maintenance costs. Indirect benefits will be quite significant under the rural roads component, which will improve access to remote rural areas, triggering production and consumption effects. Agricultural inputs will become available at lower prices, and products will be more competitive on the market. Improved accessibility will also extend to social services, producing a healthier and better educated population. Agricultural activities 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 Directeur des Transports. Annexe: Details des Analyses Techniques. Chapitre 2.3. 52 Chapter IV purchase of snow removal equipment. For the branch roads component, additional benefits will flow from improvements in traffic conditions and road safety. 4.3 Risks. There are technical and financial risks. First, traffic counts and estimates of vehicle operating costs can be inaccurate, as can estimates of project costs prior to the bid stage. These uncertainties (most relevant for rural roads where the little traffic that exists is quite volatile, the vehicle fleet differs from the national average in age and structure, 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 the economic analysis with the hypotheses selected. Second, central and local government funding constraints may not only imperil execution of sub-projects, but may more generally weaken the sector environment in which the project operates and jeopardize achievement of its general objectives. The project will mitigate the risk of underfunding of maintenance activities with the setting up of agreed maintenance budget monitoring indicators, while the mechanism for cofinancing rural roads with local governments will shape a local environment favorable to the success of the rural roads component. 4.4 Sustainability of investment. Maintaining the flow of benefits over the economic life of the project will be contingent on ensuring adequate road maintenance after implementation. Thus, sustainability prospects are enhanced by good institutional arrangements, stable funding mechanisms and sound system administration, which the project will endeavor to achieve. B. RURAL ROADS 4.5 Selection of sections and investment level. This component is designed to alleviate transport constraints in remote rural areas by improving their linkages to major roads and reducing economic distances between villages to promote closer socioeconomic integration. The economic feasibility study covered about 38,000 km of unpaved rural roads, most of which are in bad to very bad condition because they were built scantily and not maintained thereafter. The project roads were selected on the basis of an agreed methodology. The sector approach means that this methodology will be used to define the content of the second and third year of works. The content of the first year was established on the basis of the results of conclusive economic studies, which nevertheless will need to be redone: in the case of paving, to apply the agreed methodology; in the case of unpaved roads, to reflect the shift from spot gravelling to general gravelling with drainage. The revised rates of return on works under the first year will be reported to the Bank by September 30, 1995. The methodology selected for economic analysis consists of three steps: (a) the first step is to select the roads, adhering to minimum rates of 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 the basis of three criteria: frequency of road closing, importance of social and administrative centers located in the area served by the roads, and the potential for agricultural development in the area; (c) the third step is to carry out a detailed economic analysis based 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 vehicle operating costs through improved road service standards, linked to the construction standard selected; substitution of standard two-wheel-drive vehicles for costlier all-terrain vehicles being a source of additional benefits; (b) most identified roads are impassible due to inclement weather for 30 days or more each year; recourse to non-motorized transport during road closures will fall off, and be eliminated completely in the case of paving projects (over 50% of the transport of people and goods is on foot or using animals); (c) experience has shown that paving a rural road brings an increase in traffic through the dual effect of generated and diverted traffic. Savings on maintenance are not taken 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 populations living in newly accessible remote rural areas: (a) feasibility studies show that average vehicle 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 per vehicle km on a paved road; (b) when roads are closed, those living in remote areas use non-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 for products "imported" into the once inaccessible area, and additional income for local producers "exported" to markets outside the area. Surveys have shown considerable price differences (between 50% and 100%) between markets in well-served areas and markets in inaccessible areas. Remote populations are often also the poorest, which makes the impact of lower prices for products consumed and higher income for producers relatively more important (average spending per capita is an estimated $350 in rural areas, or half the average for the country as a whole). Improving access by road will also make the local transportation market more competitive, ensuring that lower costs are passed on in lower transport prices. Other non-quantified benefits include less damage to goods transported under unreliable conditions and lower losses of produce that could not be transported out in time. Finally, better access to socioeconomic services outside the area (agricultural extension, schooling, hospitals or dispensaries) will raise living standards over time. 4.9 Results and sensitivity analysis. The part of the first year program that relates to paving 70 km of rural roads has yet to be evaluated. There is a strong presumption of high returns on these operations. Economic studies done using a different methodology have been presented by DRCR and show a minimum internal rate of return of 33% for the Talsint-Anoual road (20 km) and a maximum internal rate of return of 80% for the Souk Larbaa-Had Court road (12 km). It was deemed preferable to recalculate the rates of return since the data used were relatively old and in order to give the same methodological treatment to all the project roads. The revised calculations will be reported to the Bank no later than September 30, 1995. They will include the sensitivity 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), which would 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 economic calculations are also to be completed by September 30, 1995. These sections were evaluated by the Bank in 1994, but at a lower construction standard. The results for the four sections in the province of Settat (55 kIn) produced internal rates of return at that time of between 62% and 102% for the base hypothesis, and 53% to 84% for the hypothesis using a 15% higher investment cost. Internal rates of return for the base hypothesis were 143% for the Zagora-Beni Zoli section in the province of Ouarzazate and 74% for the J. Houafat-S. Med Oudad section in the province of Sidi Kacem. The calculations 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 be carried out for reasons having to do with insufficient commitment by the political authorities seems unlikely if not non-existent, for this component is part of the vast national program to build 10,000 km of rural roads in seven years, and the financing has already been allocated under the 1995 Loi de Finance. A large part of the program, as well 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 is minimized by the low rate of participation expected (12.5%) and the possibility of using the Commune Infrastructure Fund, or allocating part of value-added tax revenues, or even rescheduling works to a later date but with full Road Fund financing. The technical risks at the implementation stage will be mitigated by strict quality standards in preparing documents and evaluating bids and by DRCR follow-up on work under its purview. The economic risk related to a poor assessment of local needs will be limited by broad-based consultations with grassroots groups for the multi-criteria analysis stage, and by requiring local communities to participate in order to verify that the expected economic benefits are likely to be produced. In some cases (province of Azilal), non-road investments planned by the Government will favor the development of newly accessible areas, making the investment in roads even more worthwhile. 4.12 Sustainability of the investment. Proper maintenance of the project roads is essential. Regular funding for maintenance must be ensured in a regular fashion, an objective that is sought through the provisions on road budgets contained in the legal documents. Sound programming and execution of the works is the other constraint, which ties in to some extent with clarifying responsibilities for road administration, which will be made easier by completion before the end of 1995 of the operation to reclassify road systems that is now under way. In addition, the framework agreements between DRCR and the provincial councils on implementing the rural road-building program will facilitate more specific definitions of responsibilities shared by the two parties, ratifying for 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 been adopted in identifying economically justifiable sub-projects. Rates of return will be established by the methodology described in Economic Evaluation Details. Agreement was reached during negotiations that this methodology will be used in selecting the project routes for the second year program, and it was also used in evaluating the first year program, with the findings indicated herein. In general terms, the methodology is based on application of the HDM III model, with exogenous variables added to evaluate rates of return on widening projects. Those variables include having to maintain the shoulders of the roads, which are used by vehicles when passing and overtaking, and increased vehicle operating costs on account of the repeated deceleration and acceleration such maneuvers entail. Narrow paved roads (less than 4.5 m wide) makeup 55% of the Moroccan system, and the proposed project will reduce the shortfall in capacity of many of these. The program for the first year has been identified as follows: (a) 15 homogeneous road categories were established to classify the approximately 30,000 km of paved roads; traffic thresholds were calculated for each category using the HDM III model to evaluate the maximum amount of investment for widening that would be consistent with obtaining a rate of return of at least 12%; close to 4,000 km of roads were shown to be potentially viable; (b) a multi-criteria analysis was then conducted to rank the sections of roads presumed to satisfy the minimum return criterion; the first criterion is road condition and existing traffic, the second net agricultural value added per kilometer of project road. This analysis brought the list of roads considered eligible for the project to a level compatible with the overall funding constraints, i.e. roads covering about 700 km; (c) the roads ranking highest were then subjected to a detailed economic analysis using the agreed methodology. It was determined that combining the widening with the existing roadway treatments produced a 12% minimum rate of return on the marginal investment for widening. This was done to offset insufficient returns on widening 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 costs will be reduced by reducing roughness through strengthening and resealing work; eliminating traffic on shoulders will be another factor in lowering vehicle operating costs for widening works; finally, repeated deceleration and acceleration and reduced speed in passing and overtaking on narrow roads entail increased costs that widening will eliminate; (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 immediate beneficiaries: (a) the former will save on transportation costs; and (b) the administration will 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 maintenance policy which has been found to be optimum in simulations using the HDM III model. It can 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. In addition, DRCR will benefit from combining strengthening/resealing and widening operations, 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 from 20% to 13% of the total when traffic on the project roads increases from 250 to 900 vehicles per day. 4.16 Non-quantified benefits. Consumers and producers will benefit indirectly from the existence of an increasingly competitive market, and multiplier effects on incomes are likely to occur. The benefits to the administration will allow it to cover a larger system with a constant budget, with the secondary effect of increasing the number of road users who will benefit directly from a system in better condition. 4.17 Results and sensitivity analysis. None of the project roads, which cover a total of 385 kcm, is programmed for execution in 1996, so that no results of economic analysis are available as yet. The studies will be done according to the agreed methodology. From the results of the economic calculations done by the Bank in 1994 on more than 2,450 km of roads (from which the project roads will be selected), we can assume a very strong economic justification for this component. Internal rates of return ranged from 50% to 75% for the base hypothesis, 36% to 65% for the 15% cost overrun hypothesis, 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 traffic and costs thanks to the quality of preparation studies and experience acquired by DRCR on similar projects. The methodology for analysis of sub-projects in the year two and year three programs has been mastered by DRCR, making it unlikely that uneconomic investments would be programmed. The technical assistance called for in the project will improve the likelihood of sound work supervision by the regional offices of DRCR. The mid-term review will provide an opportunity to detect any weaknesses in execution that could 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 its equipment needs based on foreseeable plans. Several conclusions emerged: (a) the priority recently assigned to supporting rural development by improving road access means having available equipment that is suited to use in demanding terrain; (b) the major 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 is not unusual) and road wash-outs caused by rain on unsurfaced roads; (c) the fleet of equipment available, comprising 942 personnel transportation units and 892 units for work 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 and difficulties with the supply of spare parts; (d) work on force account should take a relatively 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 under way, as well as equipment to be used in improving access. Two types of equipment will be financed by the project: all-terrain utility vehicles and snow removal equipment. 4.20 Benefits. The benefits analysis focuses on reducing in operating costs by substituting new equipment for old equipment, after having verified that the available fleet after investment is the right size in relation to needs. For utility vehicles, studies have shown that the total fleet of 203 all-terrain vehicles could be reduced to 109. Given the need for renewal, plans call for purchasing 74 units, of which 34 would be financed under the Third African Development Bank Project. The size of the fleet proposed is justified by the launching of the national program to build 10,000 km of rural roads in seven years, and the needs of 80 subdivisions of the DPTP. The removal equipment includes 13 fixed-blade snowplows and 6 snow blowers to keep the fleet at its optimum size. This equipment is used mostly on the trunk roads, where road closing not only cut off populations in remote areas but also the regions in the interior which are linked by these roads. Between the winter of 1991 and the winter of 1994 there were an average of 150 days of road closures per year and 4 days per road. Renewal is necessary because current equipment is between 20-25 years old. Finally, the renewal of the 7 low-bed trucks will also increase the mobility and the efficiency of the force account crews working on regravelling rural routes and shoulders. Benefits are lower operating and maintenance costs and increased productivity. Operating costs have been estimated on the basis of cost accounting data provided by DRCR (for older equipment, they range from 6% 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 without the project, the analysis foresees major repairs as being necessary every five years to keep the equipment operating. Productivity gains are in direct relation to the high availability level for new equipment. Data provided by DRCR show that productivity will increase 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 of equipment renewal. In the case of snow removal operations, the costs associated with waiting and rerouting to different itineraries are borne by the users of the roads, who will therefore benefit from better coverage of snow removal needs. 4.22 Non-quantified benefits. Strengthening controls on works will foster greater cost effectiveness for road budgets. The renewal of snow removal equipment will prevent a rapid increase in the breakdown rate of the existing fleet, which would cause delays in performing the work and longer periods of road closure. The populations affected are important, and the benefits they will receive from improved performance by snow removal equipment will outweigh the cost of the investment outlays. The fact that these effects are dissimilar makes them difficult to quantify. 58 Chapter IV 4.23 Results and sensitivity analysis. The results of the economic calculations are presented in Table 4.1: ERRs of Investments in Equipment. Table 4.1: ERRs of Investments in Equipment Type of equipment Cost (be- ERRs ERRs ERRs fore 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 to 27.5% if the cost is increased by 10%, and to 24.9% if the breakdown rate is lowered by 15%. 4.24 Risks. Thc primary risk is that equipment will be poorly used. This risk, which is already low, will be reduced even further by the development under the project of the Regional Directorates, which are responsible for equipment management. 4.25 Sustainability of the investment. The quality of equipment maintenance is a guarantee of its survival. The seven Regional Directorates have each a regional workshop. Generally speaking, the shops have qualified staff and operate effectively. Modem methods of preventive maintenance are applied. The very age of the equipment in use bears witness to the local capacity for maintaining equipment in operating condition under difficult circumstances. It could be inferred from this that the risk of improper maintenance of the project equipment is low, particularly since the creation of the IFEER in 1993. Financed by Japan, the IFEER provides training for DRCR staff, especially mechanics and equipment drivers. The professional qualifications required for sustainable equipment use will progressively be raised. KINGDOM OF MOROCCO SECONDARY, TERTIARY AND RURAL ROADS PROJECT 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 road investment programs (para 2.29). 5.2 To give high priority to funding maintenance of classified roads and the corresponding 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 highway safety policy, together with the preparation of corresponding action plans, the preparation of 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 annual budget with the earmarking to it of a large share of the no-contest (paid on the spot to the enforcement officer) road enforcement fines (para 3.43). 5.5 To liberalize the trucking market and to promote greater trucking efficiency, the Government will (para 3.51): (a) permit unrestricted for-hire operations of trucks weighing eight tons gross or 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 and content 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 the second 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 regulations liberalizing the trucking market (para 3.52). D. RECOMMENDATION 5.11 With the above agreements, conditions and assurances, the project is suitable for a $57.6 million Bank loan to the Kingdom of Morocco, at the Bank's standard variable interest rate, to be repaid over 20 years, including five of grace. KINGDOM OF MOROCCO SECONDARY, TERTIARY AND RURAL ROADS PROJECT Ammp-K 2.1 - RoAiD AicanweN All Road Accidents All Accidents Ratio to Population Y7 Popula ton Vehicles Accident; Ca suale e s Accidents Ca sualbe s of vich of ich Fa ta lty All 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 1,646 1983 21.0 2.59% 506 6% 25,048 0% 1,817 2,110 -5% 33,710 1,194 87 101 -8% 1,608 1984 21.5 2.72% 520 3% 24,109 -4% 1,793 2,071 -2% 32,192 1,119 83 96 4% 1,495 1985 22.1 2.69% 537 3% 24,408 1% 1,804 2,112 2% 33,269 1,103 82 95 -1% 1,504 1986 22.7 2.55% 556 4% 25,009 2% 1,927 2,218 5% 34,286 1,102 85 98 2% 1,511 1987 23.3 2.55% 580 4% 27,154 9% 1,952 2,269 2% 35,902 1,167 84 98 0% 1,543 1988 23.9 2.55% 596 3% 29,172 7% 2,158 2,494 10% 40,692 1,223 90 105 7% 1,706 1989 24.5 2.55% 635 7% 30,673 5% 2,204 2,588 4% 43,788 1,254 90 106 1% 1,790 1990 25.1 2.56% 667 5% 32,992 8% 2,355 2,777 7% 47,301 1,315 94 111 5% 1,885 1991 25.7 2.40% 700 5% 36,443 10% 2,561 3,103 12% 53,205 1,418 100 121 9% 2,071 1992 26.3 2.34% 760 9% 41,331 13% 2,898 3,524 14% 61,205 1,572 110 134 11% 2,328 1993 26.9 2.27% 846 11% 41,821 1% 2,828 3,359 -5% 61,750 1,555 105 125 -7% 2,296 1994 27.5 2.21% 875 3% 43,681 4% 3,072 3,605 7% 65,058 1,589 112 131 5% 2,367 S;i? es: DEESR Recueils d'accidents corporels de la circulalon routiere Comptage roulier94 MN1PH PopuIaton projecions %G Annual Growti Number min million ; index 62 Annex 2.1 All Road Accidents Ratio to Vehicles Other Ratios [ Smeed's Relationship Y Accident Casualtes Fatmes &Itibmabn Predicled (F)J/(V Actial % Difference oftvich FTality level All Lo0 orocco All Low All 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(AO i 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 Growtth 7Yr Veh-km Accident Casualtes Accidents CasualSes Traic Accidents Casualtes per of vd*h of hiAh of vAiieh Day Year All Fatal Fatlites Injuries All Fatal Famlites Injuries All Fabl Fatsli%es Injuries min 10mhF I# i i i i %G 7%G %G %G9% 1982 21.2 77.3 6,470 1,207 1,443 12127 83 18.7 156.9 1983 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 Population Vr 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 i 199 26.3 76SW 41,331 Z,89w 3,524 61,205 1,572 110 134 2,328 1993 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 Number mln million i index Road Accidents 65 FutLir Road Accidents Ratio to Vehicles Other Ratios Smeed's Relationship Yr- Acciden& Casualtes Fatlites Mobnzaton Prediced (F)I/(V Ackial % Difkrence of Which a, level Aff Lorw Morocco All Low All 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 %D T9U2 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%; 14A 1997 3.51 -52% 34.54 2.95 -2.0% 3.20 3.51 19% 10 1998 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% -30 2002 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 HI KINGDOM OF MOROCCO SECONDARY, TERTIARY AND RURAL ROADS PROJECT 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 80 Chefchaouen 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. 15 102,5 Khlough 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) COUT RTP 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 700 700 13+300 373+30 CT 1028 Rect P. L CarrL f En cours 14 2982 51324 9£06 1300 1700 18 +400 3 '79+400 C;T 1027 R ecl. P.L. et T.P Carrs En cours 15 3195 6240 9435 1000 (100(I 22O000 23+C000 382+-000 383+00a Trav. Agglo. En cours 1 9 4 047 7104 11'351 150ti 1500 24+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) 500 65+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 8100 NORD KENITRA RP 2 25+610 26+E45 RN 1 242+-200 243+2:50 RS 212 Carrefour En cours 2 |4216 | 32 1258 1500 1500 OlJEST 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-ur SIDlt KACFM RPP6 142+200 142+,i37 RN I 104+000 105+0( Rect. T. P. En cours 5 1065 2080 3145 500 500 Redm. 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 5o0O R 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 I31 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) jCENTRE INORD 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 _ 1 ETOTAL: GLOBAL I 128 12726j 153 2481 80512j 20 410 20 410 KINGDOM OF MOROCCO SECONDARY, TERTIARY AND RURAL ROADS PROJECT AmmEx 3D2 LETTER OF SECTOR STATIETY 1. The transport sector and the road infrastructure sector play an important role in the Government's Development Strategy. To this effect, the Government will take the necessary measures to improve access to rural areas and to alleviate road and road transport constraints to doing business in the private sector. The Government will also take 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 taken to liberalize the transport market. To this effect the Government will prepare a draft Law by December 31, 1995 covering the following measures: (a) Permit unrestricted for-hire operations of trucks weighing eight tons gross or less. (b) Abolish the mandatory use of ONT for freight forwarding and implement its 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 adequate fmancing means, in conformity with the existing laws and regulations. Road Safety 4. By December 31, 1996, the Government will submit to Parliament a draft Law aiming 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 a highway safety policy, together with the preparation of corresponding action plans, the preparation of reforms in law and regulations and the coordination of actions aimed at road unsafety. 5. The Govermnent will arrange that CNPAC restructuring will be accompanied by the 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 SECONDARY, TERTIARY AND RURAL ROADS PROJECT ANNEX 3.3: PROJECT COSTS, FINANCING AND DISBURSEMENT SCHEDULE Morocco Secondary, 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 10.109 2. 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 Morocco Secondary, Tertiary and Rural Roads Project Uapezsditure Accounts by ?inauiciers (UJs$ Million) Kingdom of Local GRANT (to be Local Duties Mooc Qgemnj idetifpdj Wrl Ban __ Rn _ Total For. (Excl. & Amount t Amount -t Amount. 3 Amun Amount t Amount Exgh, taaes IAXC I. Investment Costs A. 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 9.250 PBR Japan 12.984 35.2 - - - - - - 23.868 64.8 36.852 19.0 19.525 10.483 8.845 PBR COV 7.787 100.0 - - - - - - 7.787 4.0 3.751 2.167 1.869 PBR Centre 7.548 32.0 - - - -16.039 68.0 23.5e7 12.2 11.362 G.S64 5.661 PBR Centre Nord 1.872 32.0 - - - - -3.979 68.0 5.851 3.0 2.819 1.628 1.404 PBR Centre Sud 1.936 32.0 - - - 4.113 68.0 6.049 3.1 2.914 1.683 1.452 PBR Nord QueSt 4.599 32.0 - - - -9.774 68.0 14.373 7.4 6.924 4.000 3.450 PBR Tensift 1.809 32.0 - - - . -3.844 68.0 5.653 2.9 2.723 1.573 1.357 PBR Oriental 4.247 28.0 - - - -10.921 72.0 - - 15.168 7.8 7.210 4.317 3.640 PBR Sud 2.030 28.0 - - - -5.219 72.0 - - 7.249 3.7 3.431 2.078 1.740 Sl1ack 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 40.707 E.Goods 1. Road Equipment 2.590 42.8 - - 3.467 57.2 - - 6.057 3.1 3.173 0.294 2.590 2. 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 0.937 3. Vehicles For MPW 0.381 34.0 - - - - 0.740 66.0 - - 1.121 0.6 0.504 0.236 0.381 For CNPAC 0..L579. 4.2.1 0 -.7972I ...57I-9 1,__ -..376 &O.2 0S.760i 0.0.Q38i .0,579 Subtotal 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 4.487 C. ConsultaLnts & Training Dsgn & Qlt Ctrl, Unpaved 1.101 29.7 - - - - 2.603 70.3 - - 3.704 1.9 1.292 1.552 0.259 Osgn & QC, PER Centre 1.187 100.0 - - - 1.187 0.6 0.406 0.505 0.275 Osgn & QC, POR Centre Nord 0.295 100.0 - - - - - - 0.295 0.2 0.101 0.125 0.068 Osgn & QC, PBR Centre Sud 0.304 100.0 - - - 0.304 0.2 0.104 0.130 0.071 Dsgn & QC, PER Nord Quest 0.723 100.0 - - -- - - 0.723 0.4 0.248 0.308 0.168 Osgn & QC, PER Tensift 0.285 100.0 - - -- - 0.285 0.1 0.097 0.121 0.066 Dsgn & QC, PER Oriental 0.180 23.2 - -0.595 76.8 - 0775 0.4 0.265 0.330 0.180 Dsgn & QC, PBR Sud 0.085 23.2 - - -0.281 78.8 - - 0.366 0.2 0.125 0.156 0.085 Dsgn & QC. PBR Oriental & Sud 0.389 100.0 - - - - - - - 0.389 0.2 0.137 0.162 0.090 Dsgn & Olt Ctrl, Black spots 0.099 23.2 - - - 0.327 76.8 - - 0.426 0.2 ')048 0.178 0.099 Super-vising Cons. 0.288 23.2 - - 0.952 76.8 - . 1.240 0.6 0 424 0.02F 0.288 General Studies 0.147 23.2 - 0.486 76.8 - .633 0.3 0.409 0-077 0.147 Locail Consultants 0,137 23.2 -0.454 76.8 - C.591 0.3 - 0.454 0,137 Foreign Consultants 0.384 23.2 - 0.610 36 9 0.660 39.9 1JESS 01.9 1,.271 - 0.364 Training 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 3 420 Other Expenses /a ..._122 .21.2 _ ...0f 1i2.1 &.12.2 0 1i ~ ~ 2 Subtotal 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_o Secondary, Tertiary a,-d R,ira. Roads Project Expenditure Accounts by Components - Totals Including Contingencies (Us5 Millicn;) Paved Rural Branch Necwork Road Road Roads Man acerea t S I. Investment Costs A. Civil Works Unpaved Road Works 37.00 - - 37.00 PBR Japan - 36.85 - - 36.85 PBR GOV 7 79 _ 7,79 PBR Centre - 23 59 - - 23,59 PBR Centre Nord - 5.85 - - 5.5 PBR Centre Sud - 6.05 - - 6.05 PBR Nord Ouest - 14.37 - - 14.37 PBR Tensift - 5.65 - 5.65 PBR Oriental - 15.17 - - 15.17 PBR Sud - 7.25 - - 7.25 Black Spot Road Works - - ---t 8.50 8.50 Subtotal Civil Works 37.00 122.57 - 8.50 168.07 B. Goods 1. Road Equipment - - 6.06 - 6.06 2. Non-road Equipment For MPW - - 0.11 - 0.11 For CNPAC - - - 2.31 2.31 Subtotal Non-road Equipment - - 0.11 2.31 2.42 3. Vehicles For MPW - - 1.12 - 1.12 For CNPAC - - - ---------------lt 1.38 1.38 Subtotal Vehicles - - 1.12 1.38 2..50 Subtotal Goods - - 7.28 3.69 10.97 C. Consultants & Training Dsgn & Qlt Ctrl, Unpaved 3.70 - - - 3.70 Dsgn & QC, PBR Centre - 1.19 - - 1.19 Dsgn & QC, PBR Centre Nord - 0.29 - - 0.29 Dsgn & QC, PBR Centre Sud - 0.30 - - 0.30 Dsgn & QC, PBR Nord Ouest - 0.72 - - 0.72 Dsgn & QC, PBR Tensift - 0.28 - - 0.28 Dsgn & QC, PBR Oriental - 0.77 - - 0.77 Dsgn & QC, PBR Sud - 0.37 - - 0.37 Dsgn & QC, PBR Oriental & Sud - 0.39 - - 0.39 Dsgn & Qlt Ctrl, Black Spots - - - 0.43 0.43 Supervising Cons. - 1.24 - - 1.24 General Studies - - 0.63 - 0.63 Local Consultants - - 0.38 0.21 0.59 Foreign Consultants - - 1.45 0.21 1.65 Training Abroad - - 0.27 0.11 0.38 Training in Morocco - - 1.11 - 1.11 Air Travel - - 0.37 0.05 0.42 Other Expenses /a - - 0.54 0.03 0.57 Subtotal Consultants & Training 3.70 5.56 4,75 1.03 15.05 Total PROJECT COSTS 40.70 128.13 12.03 13.22 194.09 Taxes 10.11 30.71 3.69 3.74 48.24 Foreign Exchange 19.02 60.57 6.08 6.63 92.30 \a M1s, Ldgng, veh, off Spc & Sprt 74 Annex 3.3 morocco secondary, Tertiary and Rural Roads Project Local/Formign/Tax-e by Financiera (USS Million) Kingdom of Local GRANT (to be Morocco 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 47.6 II. 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 27.6 I1I. 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 Morocco Secondary, Tertiary and Rural Roads Project Diubursemoat Accounts by Financiers (US$ Million) Kingdom of Local GRANT (to be Local Duties Morcc ~ ~ ~agzmcnc jidenlifeild Wrd Bank _jAan Total For. (Excl. & Aouni Amount Amount W amQunt t Aount Anount V £2ch Tax Taxes A. Rural Road Works 12% local govt 0.833 24.5 0.425 12.5 - - 2.143 63.0 - - 3.402 1.8 1.630 0.922 0.850 0 S local govt 8.S28 28.0 - - - - 21.929 72.0 - - 30.458 15.7 14.590 8.253 7.614 100 % 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 9.250 D. Civil Works 45.440 35.1 - - - - 22.262 17.2 61.617 47.6 129.320 66.6 62.115 36.168 31.037 C. Goods 4.467 41.1 - 2.192 20.2 4.207 38.7 - - 10.866 5.6 5.765 0.634 4.467 D. Consultants 7.506 49.1 - - - - 6.550 42.8 1.238 8.1 15.295 7.9 6.086 5.721 3.489 E. 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 Morocco secondary, Tertiary and Rural Roads Project Allocation of Loan Proceeds World Bank (US$ Million) Suggested AllocatiQn of Loan Proceeds Loan Amounts Disbursement Total Project Cost Average Disbursement I Unallocated Allocated Loan Amount W TcLa Local Foreign TotAl Loal Foreign Total Total Local' Foreign Total LTocal Foreign A. Rural road Works Road 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 1.481 Road 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 13.264 Road 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 14.745 B. 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 13.377 C. 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 3.197 D. 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 morocco secondary, Tertiary and Rural Roads Project Procuremeznt Accourto by Financiers (US$ Million) Kingdom of Local GRANT (to be Local Duties Morocco Governments identified W _XXd_BAnk _Japa Total For. (Excl. & Amount % Amououn % Amount % Amnunt A nount Amount - Exch, Taxes) Taxes A. Hardware 1. 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 0.465 Rural roads (Gvt) 3.141 100.0 - - - - - - - - 3.141 1.6 1.505 0.851 0.785 Paved Branch Roads 43.060 35.6 - - - - 16.140 13.4 61.617 51.0 120.817 62.2 58.042 33.779 28.996 Black Spots 2.381 28,-Q _ _2 - .122 7_2 -- - _ 5.5 8 ..S03 4.4 4.A07 3 2,389 2..041 Subtotal 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 40.287 2. Goods For MPW 2.971 41.4 - - 4.207 58.6 - - 7.178 3.7 3.676 0.530 2.971 For MOT 1.496 40.6 - - 2,192 .59.4 - - - - 3.688 1.9 2.0B9 0 1 496 Subtotal Goods 4.467 41.1 - - 2.192 __2._ 420Q.2 4.7 1 6 - .866 56 5765 0.634 4.467 Subtotal 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 44.754 H. Software 1. MPW a. Framework Agreement 1.228 29.6 - - - - 1.685 40.6 1.238 29.8 4.151 2.1 2.184 1.319 0.648 b. 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 1.003 Mostly Design 2.952 50.2 - - - - ...... &2,930 49.8 - _ 5.882 3.0 2.057 2.446 1.379 Subtotal D-sign a Quality Cntrl 6.399 62.7 3 - 0 86 37.3 10.205 5.3 3.541 4.282 2.382 d. Studies. MPW 0.147 23.2 - - - -0.486 76.8 - - 0.633 0.3 0.409 0.077 0.147 e. Other, MPW Q.288 23.2 - - - - .952 76.8 - - - 1.240 0.6 0.424 0.528 0.288 Subtotal MPW 8.592 51.3 - - 6.929 41.3 1.238 7.4 16.760 8.6 6.609 6.687 3.464 2. CNPAC 0.025 17.2 - - - - 0Q11 82.8 - - 0,.44 0.1 0.Q82 0.038 0. 025 Subtotal Software 8.617 _L. - - - - 7,049 41.7 1.23a 7.3 16.-9 04 8.7 6.691 6.724 3.489 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 16:34:37 1995 78 Annex 3.3 M4orocco Secondary, Tertiary and Rural Roads Project Inflation and Exchange Rates Up to Up to Project Niegotiation start 1996 1997 1998 1222_ 2000 2001 2002 Inflation (in %la) /a All Annual rates Local 8.0 2.1 4.3 4.3 4.4 4.4 4.4 4.4 4.4 Foreign 2.7 1.1 2.2 2.2 2.2 2.2 2.2 2.2 2.2 Compounded rates Local 8.0 2.1 4.3 8.8 13.5 18.5 23.7 29.2 34.8 Foreign 2.7 1.1 2.2 4.5 6.8 9.1 11.5 14.0 16.5 Jung4 Annual rates Local 4.3 2.1 4.3 4.3 4.4 4.4 4.4 4.4 4.4 Foreign 2.7 1.1 2.2 2.2 2.2 2.2 2.2 2.2 2.2 Compounded rates Local 4.3 2.1 4.3 8.8 13.5 18.5 23.7 29.2 34.8 Foreign 2.7 1.1 2.2 4.5 6.8 9.1 11.5 14.0 16.5 Japan Annual rates Local 0.0 3.8 4.6 4.6 4.6 4.6 4.6 4.6 4.6 Foreign 0.0 2.8 3.3 3.3 3.3 3.3 3.3 3.3 3.3 Compounded rates Local 0.0 3.8 6.2 11.1 16.2 21.5 27.1 33.0 39.1 Foreign 0.0 2.8 4.5 7.9 11.5 15.2 19.0 22.9 27.0 jun95 Annual rates Local 0.0 2.1 4.3 4.3 4.4 4.4 4.4 4.4 4.4 Foreign 0.0 1.1 2.2 2.2 2.2 2.2 2.2 2.2 2.2 Compounded rates Local 0.0 2.1 4.3 8.8 13.5 18.5 23.7 29.2 34.8 Foreign 0.0 1.1 2.2 4.5 6.8 9.1 11.5 14.0 16.5 Exchange rates (Local/Foreign) /b All Rates actually used 9.5 9.6 9.8 10.0 10.2 10.4 10.6 10.9 11.1 Constant 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 0.0 Jun94 Rates actually used 9.7 9.8 10.0 10.2 10.4 10.6 10.9 11.1 11.3 Constant purchasing parity rates 9.7 9.8 10.0 10.2 10.4 10.6 10.9 11.1 11.3 t deviation 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Japan Rates actually used 9.4 9.5 9.6 9.7 9.9 10.0 10.1 10.2 10.4 Constant purchasing parity rates 9.4 9.5 9.6 9.7 9.9 10.0 10.1 10.2 10.4 t deviation 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 jun95 Rates actually used 8.6 8.7 6.9 9.0 9.2 9.4 9.6 9.8 10.1 Constant purchasing parity rates 8.6 8.7 8.A 9.0 9.2 9.4 9.6 9.8 10.1 t 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 Morocco Secondary, Tertiary and Rural Roads Project Project Areas by Implementing Agencien (US$ Million) MOT MPh- - MOT (Road DRCR CNPAC Tansport Ta A. Region Centra DTP Azilal 0.123 - - 0.123 DTP Ben Slimane 3.971 - - 3.971 DTP Beni Mellal 8.962 - - 8.962 OTP Casablanca 0.221 - - 0.221 DTP 51 Jadida 1.176 - - 1.176 DTP Xbouribga 1.049 - - 1.049 DTP Settat 927 - Subtotal Region Centre 24.774 - - 24.774 D. Region Centre Nord DTP Al Hoceima 0.820 - - 0.820 DTP Boulemane 1.569 - - 1.569 DTP Fea 0.670- - - 0.670 DTP Taounate 1.819 - - 1.819 DTP Taza 1.268 1-2.l - 6 Subtotal Region Centre Nord 6.146 - - 6.146 C. Region Centre Sud DTP Errachidia 3.826 - - 3.826 DTP Ifrane 0.674 - - 0.674 DTP Xhenifra 0.164 - - 0.164 DTP M4eknes 13 - - Subtotal Region Centre Sud 6.057 - - 6.057 D. Region Word Ouseat DTP Chefchaouen - - DTP Kenitra 2.198 - - 2.198 DTP Khemisset 9.295 - - 9.295 DTP Larache - - DTP Rabat 1.076 - - 1.076 DTP Sidi Xacem 2.063 - - 2.063 rTP Tanger - - DTrP Tetouan 0,760 - ------ 0.76"0_U Subtotal Region Nord Ou-at 15.393 15.3 R. legion Tensift DTP E1 Kelaa - - - DTP Essaouira 1.231 - - 1.231 DTP Marrakech 2,144 - - 2.144 DTP Safi 2.562 -... - 2562 Subtotal Rlgion Tanaift 5.938 - 5.938 F. Region Oriental DTP Douarfa - - - - DTP Oujda 4.194 - - 4.194 DTP Nador 12 98l - 12-SR2 Subtotal Regioa oriental 17.182 - - 17.182 0. legion Sud* DTP Agadir 1.861 - - 1.861 DTP Guelmin - - - - DTP Ouarzasate 3.290 - - 3.290 DTP Taroudante 0.549 - - 0.549 DTP Tata 1.914 - - 1.914 DTP Tiznit -_ Subtotal Region Bud 7.615 - - 7.61S H. Oriental & Sud /a - - - _ 1. Police and Gendarmerie - 3.688 - 3.688 J. 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 KINGDOM OF MOROCCO SECONDARY, TERTIARY AND RURAL ROADS PROJECT 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 has also 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 the technical and price offers. The technical same time. Prices from all bids received envelope is opened first, with the poten- will be announced during the public bid tial 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 price turned 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 to ated from procurement of works and a preselected short-list of a minimum of goods 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 45 days. 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 under permitted under certain conditions the project May 9, 1995 m:\jaffar\95\morocco\1cb .sar Annex 3.5 Project Implementation Schedule 1995 1996 1997 1998 1999 ID 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 Q4 1 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,* = NEol w A P P R O X I M CANARY~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~A _9I'T___ 4~~~~~~~~~~~~~~~~~~., Torp-> re I I ; !~~~~~~~~~~~~~~~~~~~~~~~1 IMAGING Report No: 12761 MOR Type: SAR