FOR OFFICIAL USE ONLY Report No: PAD4098 INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT PROGRAM PAPER ON A PROPOSED ADDITIONAL LOAN AND RESTRUCTURING IN THE AMOUNT OF US$150 MILLION TO THE KINGDOM OF MOROCCO FOR AN URBAN TRANSPORT PROGRAM-FOR-RESULTS OCTOBER 12, 2020 Transport Global Practice Middle East and North Africa Region This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. The World Bank Morocco Urban Transport Program PforR AF (P173048) CURRENCY EQUIVALENTS (Exchange Rate Effective September 30, 2020) Currency Unit = Moroccan Dirhams (MAD) MAD 9.2556 = US$1 US$ 0.1080 = MAD 1 FISCAL YEAR January 1 - December 31 Regional Vice President: Ferid Belhaj Country Director: Jesko S. Hentschel Regional Director: Paul Noumba Um Practice Manager: Olivier P. Le Ber Task Team Leader(s): Nabil Samir Page 1 of 132 The World Bank Morocco Urban Transport Program PforR AF (P173048) ABBREVIATIONS AND ACRONYMS AF Additional Financing BGE General Budget of the State BRT Bus Rapid Transit CAPEX Capital expenses CAS Special purpose account CCTV Closed Circuit Television CNCP National Commission of Public Procurement COFOG Classification of the Functions of Government CPF Country Partnership Framework CoP Community of Practice CY Calendar Year DDUT Division of Urban Mobility and Transport DGCL General Directorate of Local Governments DGCT General Directorate of Territorial Governments DLI Disbursement-Linked Indicator DLR Disbursement-Linked Result DMUT Directorate of Urban Mobility and Transport DSA Debt Sustainability Analysis ECI Associations of Urban Agglomerations EIA Environmental Impact Assessment EIRR Economic Internal Rate of Return E&S Environmental and Social ESSA Environmental and Social Systems Assessment ESMP Environmental and Social Management Plan FART Urban Transport Fund FDI Foreign Direct Investments FEC Municipal Infrastructure Fund FM Financial Management FSA Fiduciary Systems Assessment FY Fiscal Year GDP Gross Domestic Product GFN Gross Financing Needs GHG Greenhouse Gas GoM Government of Morocco GRM Grievance Redress Mechanism GRS Grievance Redress Service IBRD International Bank for Reconstruction and Development IFI International Financial Institution IMF International Monetary Fund INDH National Initiative for Human Development IP Implementation Progress Page 2 of 132 The World Bank Morocco Urban Transport Program PforR AF (P173048) IRI Intermediate Result Indicators IS Corporate tax IT Information Technologies IVA Independent Verification Agency MAD Moroccan Dirham M&E Monitoring & Evaluation MoF Ministry of Finance MoH Ministry of Health MoI Ministry of Interior MS Moderately Satisfactory MSME Micro, Small and Medium Enterprises NPV Net Present Value OHS Occupational Health and Safety O&M Operations and Maintenance ONCB Open National Competitive Building ONCF National Railways Agency ONEE National Agency for Water and Electricity OP Operational Policy OPEX Operation Expenses OPRC Operations Procurement Review Committee PAP Program Action Plan PCM Private Capital Mobilization PDO Program Development Objective PEFA Public Expenditure and Financial Accountability PFM Program Financial Management PforR Program-for-Results POM Program Operations Manual PPC Priority Program of Corridors PPD Public Procurement Decree SDL Municipally-owned enterprise SIBE Site of Biological and Ecological Interest SNMU National Strategy for Urban Mobility SOE State-Owned Enterprise TA Technical Assessment TGR General Treasury of the Kingdom UNDP United Nations Development Program US$ / USD United States Dollar USM Millions of United States Dollar VKT Vehicle Kilometers Traveled VOC Vehicle Operating Cost WHO World Health Organization Page 3 of 132 The World Bank Morocco Urban Transport Program PforR AF (P173048) . BASIC INFORMATION – PARENT (Morocco Urban Transport Project (P4R) - P149653) Country Product Line Team Leader(s) Morocco IBRD/IDA Nabil Samir Does this operation have an IPF Project ID Financing Instrument component? Practice Area (Lead) P149653 Program-for-Results No Transport Financing Implementing Agency: Ministry of Interior - General Directorate for Territorial Government Is this a regionally tagged project? Bank/IFC Collaboration No No Original Approval Date Effectiveness Date Closing Date 09-Dec-2015 30-Jun-2021 Program Development Objective(s) The Program Development Objective is to strengthen the capacity of urban transport institutions to plan, implement and monitor infrastructure and services, and to improve the level of service of urban transport in targeted corridors in the program area. Ratings (from Parent ISR) Implementation Latest ISR Page 4 of 132 The World Bank Morocco Urban Transport Program PforR AF (P173048) 15-Jun-2017 24-Apr-2018 07-Dec-2018 03-Jun-2019 02-Dec-2019 09-Jun-2020 Progress towards achievement of S S MS MS MS MS PDO Overall Implementation S S MS MS MS S Progress (IP) Overall Risk S S S S S S Technical S S S S S S Fiduciary Systems S S S S S MS E&S Systems S S S S S S Disbursement Linked Indicators S S S S S S (DLI) Monitoring and Evaluation S S S S S BASIC INFORMATION – ADDITIONAL FINANCING (Morocco Urban Transport Program PforR AF - P173048) Project ID Project Name Additional Financing Type Morocco Urban Transport P173048 Restructuring, Scale Up Program PforR AF Will there be additional financing for the IPF Financing instrument Product line Approval Date component? Program-for-Results IBRD/IDA 03-Nov-2020 No Financing Projected Date of Full Bank/IFC Collaboration Disbursement 30-Jun-2024 No Page 5 of 132 The World Bank Morocco Urban Transport Program PforR AF (P173048) Is this a regionally tagged project? No Disbursement Summary (from Parent ISR) Net Source of Funds Total Disbursed Remaining Balance Disbursed Commitments IBRD 200.00 186.00 14.00 93 % IDA % Grants % PROGRAM FINANCING DATA – ADDITIONAL FINANCING (Morocco Urban Transport Program PforR AF - P173048) FINANCING DATA (US$, Millions) SUMMARY (Total Financing) -NewFi n1 Proposed Additional Total Proposed Current Financing Financing Financing Government program Cost 350.00 1220.00 1570.00 Total Operation Cost 350.00 205.00 555.00 Total Program Cost 349.50 204.63 554.13 Other Costs .50 .38 .88 Total Financing 350.00 205.00 555.00 Financing Gap 0 0 0 DETAILS – Additional Financing Counterpart Funding 35.00 Borrower/Recipient 35.00 Unguaranteed commercial financing 20.00 International Bank for Reconstruction and Development (IBRD) 150.00 Total 205.00 Page 6 of 132 The World Bank Morocco Urban Transport Program PforR AF (P173048) COMPLIANCE Policy Has the parent Program been under implementation for at least 12 months? Yes Have the DO and IP ratings for the parent Program been rated moderately satisfactory or better for at least the last 12 months? Yes Does the program depart from the CPF in content or in other significant respects? No Does the Program require any waivers from Bank policies? No INSTITUTIONAL DATA Practice Area (Lead) Transport Contributing Practice Areas Climate Change and Disaster Screening This operation has been screened for short and long-term climate change and disaster risks TASK TEAM Bank Staff Name Role Specialization Unit Team Leader (ADM Nabil Samir Transport / Operations IMNT1 Responsible) Page 7 of 132 The World Bank Morocco Urban Transport Program PforR AF (P173048) Procurement Specialist (ADM Moustapha Ould El Bechir Procurement EMNRU Responsible) Financial Management Jean Charles Amon Kra Financial Management EMNGU Specialist (ADM Responsible) Financial Management Laila Moudden Financial Management EMNGU Specialist Environmental Specialist (ADM Khalid Anouar Environment SMNEN Responsible) Social Specialist (ADM Markus Friedrich Vorpahl Social SMNSO Responsible) Elena Segura Labadia Team Member Legal LEGAM Elkin Kenneth Bello Team Member Urban Transport ISAT1 Quintero Hajar Tazi Team Member Administrative support IMNT1 Houcine Gabi Team Member Social SMNSO Khadija Sebbata Team Member Administrative support MNCMA Marc Marie Francois Team Member Transport IMNT1 Navelet Noualhier Thierry Denis Desclos Team Member Urban Transport IMNT1 Extended Team Name Title Organization Location Page 8 of 132 The World Bank Morocco Urban Transport Program PforR AF (P173048) Kingdom of Morocco Morocco Urban Transport Program Program-for-Results Additional FInancing TABLE OF CONTENTS I. INTRODUCTION .............................................................................................................. 10 II. BACKGROUND AND RATIONALE FOR ADDITIONAL FINANCING ........................................ 10 III. PROPOSED CHANGES ..................................................................................................... 25 IV. APPRAISAL SUMMARY .................................................................................................. .38 V. KEY RISKS ...................................................................................................................... 48 VI. WORLD BANK GRIEVANCE REDRESS .............................................................................., 48 VII.SUMMARY TABLE OF CHANGES……………………………………………………………………………………....50 VIII.DETAILED CHANGE(S)................................................... ...................................................50 IX. RESULTS FRAMEWORK AND MONITORING..................................................................... 52 ANNEX 1: INTEGRATED RISK ASSESSMENT ............................................................................85 ANNEX 2: TECHNICAL ASSESSMENT – ADDENDUM ................................................................86 ANNEX 3: FIDUCIARY SYSTEMS ASSESSMENT – ADDENDUM ................................................ 102 ANNEX 4: ENVIRONMENT AND SOCIAL SYSTEMS ASSESSMENT – ADDENDUM ..................... 115 ANNEX 5: MODIFIED PROGRAM ACTION PLAN……………………………………………………………………..127 Page 9 of 132 The World Bank Morocco Urban Transport Program PforR AF (P173048) I. INTRODUCTION 1. This Program Paper seeks the approval of the Executive Directors to provide an Additional Financing (AF) in the amount of US$150 million to the Kingdom of Morocco for the Urban Transport Program-for- Results (P149653). This AF will support the existing Program-for-Results (PforR), which was approved on December 9, 2015 for an original loan amount of US$200 million with a closing date of June 30, 2021. Progress towards achieving the Program Development Objective (PDO) and overall Implementation Progress (IP) are assessed as “Moderately Satisfactory” (MS) and “Satisfactory (S)”, respectively, at this stage. The cumulative disbursement for the PforR is nearly 93 percent of the total loan amount (including 25 percent advance). The proposed AF is justified by the fact that the Program is progressively achieving tangible results1, that urban transport remains a pressing national priority, and that it will be particularly needed as a key enabler of socio-economic recovery post-Covid-19 pandemic. 2. This AF would serve to scale up and deepen the positive impacts of the Program building on its current achievements, address emerging mobility needs and priorities (including related to the negative impact of Covid-19 pandemic on mobility), and adjust, where needed, the approach of the existing operation (including through a concurrent level 2 restructuring). The government program remains mostly in line with the one supported by the parent operation, with updates to adapt to the evolving context of mobility (including the recent advanced regionalization process) in the country and to reflect emerging local mobility needs. The proposed AF will focus for the most part on deepening the activities supported by the current Program, both for urban transport sector reforms focused on strengthening the capacity of institutions to plan, implement and monitor infrastructure and services, and investments focused on improving the level of service of urban transport (as reflected by the Disbursement-linked Indicators - DLI framework) and adjust it towards increased outcome orientation. The AF will mostly support the same type of expenditures as the parent operation, albeit in a more integrated fashion and with an emphasis on specific subprojects with a high level of preparedness and commitment given emerging local mobility needs. The original PDO, geographic scope and institutional arrangements of the Program will be maintained given their continued relevance and appropriateness. The concurrent restructuring would harmonize the closing date of the original loan and the AF and reallocate the DLI amounts not yet achieved (specifically for DLI#5, DLI#6, and DLI#7) to subsequent Disbursement-linked Results (DLRs) of the same DLIs. The implementation period of the Program (including under the original loan) would therefore be extended by three years with a new closing date of June 30, 2024. II. BACKGROUND AND RATIONALE FOR ADDITIONAL FINANCING A - Background and context Country context 3. Morocco, a lower-middle-income country of about 35 million people, has been on a steady economic development path in the past decades while still facing development challenges. Thanks in part to large public investments, political, institutional and sector reforms, and measures to ensure macroeconomic 1 Both in terms of institutional reforms and infrastructure and service delivery. Page 10 of 132 The World Bank Morocco Urban Transport Program PforR AF (P173048) stability, Morocco has made significant socio-economic progress over the past 15 years. The accelerated economic growth2 in this period has led to dramatic improvements towards eradicating extreme poverty, increasing life expectancy, improving access to basic public services, and developing public infrastructure. Yet, despite these achievements, Morocco continues to face development challenges, and a large part of the aspirations of its citizens for a better life remain unmet. Unemployment remains high, particularly among youth and women3, service delivery is in need of improvement, social and territorial disparities persist, and transparency, adequate governance and public accountability is a work in progress. 4. The Moroccan macro-fiscal framework, economy and labor market are expected to be severely impacted by the Covid-19 crisis. This substantial shock affects both domestic economic activity and external demand. Few sectors have been spared but the contraction is primarily driven by a drop in the production of goods and services, a reduction in exports, disruption of global value chains, as well as a decline in tourism due to travel restrictions and border lockdowns. The labor market is facing a shock of historical proportion, with vulnerable workers, including those in the informal sector being particularly affected. The combined negative effects have led to widespread job and income losses. Morocco’s twin deficits are projected to deteriorate but remain manageable. Despite lower imports, the current account deficit is expected to widen to 8.4 percent in 2020 reflecting sharp declines in export and tourism revenues and remittances. On the fiscal side, revenue will be lower than previously expected in 2020 and 2021 while expenditures are projected to increase in 2020 on the back of additional spending on health, social protection, and other Covid-19 policy responses. As a result, the World Bank expects the overall fiscal deficit to widen to 7.6 percent of GDP in 2020, almost 4 percentage points higher than projected pre- Covid-19 crisis. Both public and external debt are projected to rise but remain sustainable. Box 1. Morocco’s national Covid-19 response The Government of Morocco (GoM) has taken swift action to contain the immediate Covid-19 health and economic impacts, and plan for recovery4. Below is a summary of the main economic and social measures taken to date. Health response. The Government’s preparedness plan was developed in collaboration with WHO, including drugs, equipment and medical supplies. Covid-19 testing capacity has been reinforced in 37 public and private laboratories. Standard operating procedures and protocols for quarantine, isolation, case management, and infection prevention and control (IPC) have been developed. In terms of actual isolation/quarantine and case management, several military facilities (including temporary hospitals - “Hôpitaux de campagne”) have been mobilized at the regional level, while 46 public hospitals were strengthened to handle and treat coronavirus patients. A fully electronic health information system has been put in place which will regularly be updated with laboratory testing results, enabling real-time epidemiologic reporting and informing evidence-based decision-making. Economic Watch Committee (CVE). The Committee is administered by the Ministry of the Economy, Finance, and Administration Reform. It is responsible for monitoring the development of the economic 2 With Gross Domestic Product (GDP) per capita increasing from US$1,995 in 2004 to reach US$3,450 in 2019. 3 With female labor participation rate at around 23 percent, close to half the rate of comparable countries. 4 In coordination with other programs and initiatives of the GoM, including: (i) the third phase of the National Initiative for Human Development (INDH) that focuses on health, education and employment, and (ii) the unified social registry (RSU) under development that aims to identify in a more streamlined manner beneficiaries from social assistance programs, both with the support of the World Bank. Page 11 of 132 The World Bank Morocco Urban Transport Program PforR AF (P173048) situation and identifying measures to support impacted sectors. It has defined an action plan through end of June with a series of economic and social response measures. Covid-19 Pandemic Fund. The Covid-19 Pandemic Fund is made up of contributions from the Government, private sector as well as individuals. To date, the Fund collected resources amounting to US$3.5 billion (3 percent of GDP). The Fund covers expenditures for the health sector and makes payments of social allowances and unemployment benefits to workers in the formal and informal sectors. Support to households. The Pandemic Fund paid: (a) monthly allowances of MAD 2,000 to formal sectors workers, that is workers affiliated with the national social security agency, Caisse Nationale de Securité Sociale (CNSS); (b) a monthly social allowance of MAD 800 to 1,200 for households of workers in the informal sector not affiliated with CNSS (depending on the size of the household); and (c) a monthly social allowance of MAD 800 to 1,200 to all households beneficiaries of the RAMED program (non-contributory health insurance). Support to MSMEs. The Government has taken measure to allow Caisse Centrale de Garantie (CCG) to provide up to 95 percent guarantees to working capital loans extended by commercial banks to MSMEs. The GoM has also established a moratorium on the repayment of bank loans to companies until June 2020. Central Bank measures. In March 2020, Bank al-Maghrib (BAM) reduced the policy rate by 25 basis points to 2.0 percent and broadened the dirham’s fluctuation band to +/-5 percent (from +/-2.5 percent). In June 2020, BAM has reduced again the policy rate by 50 basis points by 1.5 percent. A range of measures were adopted to meet bank demand for liquidity and to support bank credit to affected sectors and SMEs, including partial and temporary relaxations of liquidity coverage and capital conservation buffer requirements – in combination with increased public guarantees. Measures to facilitate digital payments. The central bank also took measures to: (a) facilitate the remote opening of accounts to foster access to a transaction account by lowering the requirements on KYC5 and move to e-KYC; (b) simplify the requirement for opening a merchant mobile money accounts; and (c) simplify the requirement for opening low balance (up to MAD 5,000) payment account for individual. Digital connectivity. The Government is working with telecom operators to ensure the continuity of network operation. In addition to monitoring and optimizing the digital networks in order to face the 40 percent increased traffic, telecom operators contributed to provide immediate digital solutions, including connectivity solutions for remote decision-making process, free of charge educational platforms, and digital solutions for financial compensation of workers. Sectoral context 5. Morocco is currently in a relatively advanced stage of its urbanization due to rural migration and the rapid growth of its urban population in the last decades. Twenty-three million inhabitants currently reside in cities, representing 63 percent of the population of the country as opposed to 5 million in 1970 (35 percent of the total population). By 2050, it is anticipated that 70 percent of the population will live in urban areas, which will represent an addition in urban population of ten million. The rural population will mostly stay flat in the same period. Approximately one third of the urban population, representing close to 7 million, is located in agglomerations of more than one million inhabitants. Most of the continuing urban development in Morocco occurs in peri-urban areas at low densities, away from high density areas concentrated in the urban centers. 5 Know Your Customer, i.e. customer identity verification process. Page 12 of 132 The World Bank Morocco Urban Transport Program PforR AF (P173048) 6. Urban areas increasingly contribute to Morocco’s economy while entrenched urban poverty, vulnerability and inequality remains. Urban areas are the most important contributor to the national economy, they represent around 75 percent of GDP and 60 percent of jobs. Despite worthwhile initiatives such as the National Initiative for Human Development (INDH), urban areas remain plagued by important pockets of poverty. Roughly one million people in urban areas live below the relative poverty threshold (US$1.3 per day) and an additional 13.6 percent (2.3 million) is economically vulnerable, with a higher likelihood of falling into poverty when exposed to shocks. Urban unemployment stands at 14 percent compared to 3.8 percent in rural areas. 7. Demand for urban mobility in Morocco’s main primary and secondary cities has sharply increased in the last decades. Several factors that are anticipated to persist through the next decades explain this situation. Cities have spread rapidly due to the sustained urbanization and the demand for lower density residential areas. Morocco’s recent economic progress has resulted in more fast-paced activities and the development of many business activities outside the city centers. Significant societal shifts, such as the greater presence of women in the labor market (although decreasing in recent years) and the increased autonomy of younger households, have also contributed to increased mobility needs. These changes have resulted in a considerable growth of trips. Most cities have at least doubled the total number of trips taken in the last 30 years. A significant lengthening of commutes has also been noted. This has put substantial pressure on the urban transport systems of Morocco’s large agglomerations. 8. To cope with this growth, substantial investments (particularly from the Government of Morocco) have been injected in the sector this past decade. This effort, amounting to several billions of dirhams, has first translated into the development and expansion of urban roads, in particular bypass and ring roads or other associated infrastructure works, which have been implemented in the main agglomerations and cities to ease traffic (including for public transport). In addition, several mass transit projects in the form of urban rail6 have been completed in the past decade, particularly in Greater Rabat and Casablanca. These investments have proven to be satisfactory overall in terms of level of service which compares favorably with international standards. While bus services remain one of the weak links in urban mobility, several new concessions in this area have recently been signed between private operators and the relevant local authorities, offering promising perspectives in this regard in the medium term. 9. However, since the past decade in particular, most users of public transport in large agglomerations have still been suffering from slow, underperforming and unreliable services. Despite recent improvement in select corridors, the commercial speed of public urban transport, as reported by operators, remains particularly low and unpredictable in the main corridors of the large agglomerations. It may go down to around 5 kilometers per hour on average in the country’s densest urban areas during peak hours. This situation is mostly due to congestion that causes frequent unnecessary stops, interaction with cars, and inefficient boarding and alighting. Users of other motorized modes of transportation (cars, taxis, and microvans) are also suffering from this trend. Covid-19 is likely to compound this issue unless efforts are made to support safe and efficient public urban transport and change the anticipated trajectory in the modal shift towards private vehicles (similarly to other developing countries). The current situation already results in a loss of time, productivity, and quality of life for citizens. The economic cost of 6 Commonly referred to as tramways. Page 13 of 132 The World Bank Morocco Urban Transport Program PforR AF (P173048) congestion is usually estimated for Morocco at around 3 percent of GDP, using other developing countries as benchmarks. It also has important financial consequences for the private sector, as bus operators consider that it increases their operating costs by at least 10 percent. In addition, it deprives the vast majority of reliable public transport services, renders bus schedules useless, and contributes even further to its unattractiveness to citizens who may prefer to walk, even several kilometers, for time-sensitive trips. 10. Urban transport remains mostly inadequate, notably for the poor, the youth, women, and people with limited mobility, despite recent improvements resulting from the GoM’s efforts. This situation has a particularly severe impact on the poor7 and the lower-middle class, hindering their access to jobs, education, and health services, which perpetuates the current perception of relative social integration deficit in the country. As a result, walking remains the primary mode of transport of the poor, despite the urban environment being for the most part unfavorable to pedestrians and the increasing length of trips. Similarly, despite significant progress achieved in select areas and corridors, a majority of women in large agglomerations still consider that the state of public transport, particularly in terms of level of service, obstructs their access to basic social services, limits their labor force participation, and potentially reduces their income. In particular, in terms of personal safety, women in Morocco, similarly to other developing countries, have frequently indicated in surveys and interviews a preference for stricter enforcement measures such as closed-circuit television (CCTV) cameras, security presence, etc., in buses in particular (similarly to urban rail) to prevent potential misbehavior by fellow passengers and crew in some instances. Similar issues of affordability, availability, and reliability of urban transport prevent unemployed urban youth from reaching their full potential by hindering their physical access to potential economic opportunities, jobs or vocational training to develop skills that are desired by employers. In particular, citizens with limited mobility8 (including the disabled, the elderly and women that are pregnant or are carrying children) face issues of physical inaccessibility, despite increasing attention being paid to their needs by the GoM. Urban infrastructure such as sidewalks, pedestrian crossings, and bus stops severely lack accessibility-related design features9 (such as pavement ramps) or are often blocked by parked cars or other obstacles. Covid-19 is likely to exacerbate social exclusion in this regard, including in terms of lack of accessibility and affordability10, in particular if safe and efficient public urban transport is neglected. The vulnerable population groups described herein will also be most affected (in both physical and economic sense) by the anticipated manifestations of climate change. 11. The negative contribution of urban mobility in Morocco to climate change remains substantial. The transport sector accounts for about 25 percent of energy consumption in Morocco (mainly by fossil fuels) and contributes significantly to climate change. It produces more than one-fifth of the country's greenhouse gas (GHG) emissions, mainly carbon dioxide (CO2), nitrous oxide (N2O) and methane. 7 According to recent World Bank calculations (2019), the share of poor in Morocco who consider transport spending to be an important issue for them increased significantly between 2000 and 2013, from nearly 20 percent to 77 percent. Similarly, the share of vulnerable and lower-middle class citizens with the same perception increased during the same period from 17 percent to 70 percent and from 15 percent to 57 percent, respectively. 8 Representing between 15 and 20 percent of citizens in major cities according to different surveys. 9 Outside of select pilots such as Marrakesh where significant physical improvements have been made by the Government of Morocco and the municipality of Marrakesh with the support of the World Bank and the Government of Japan to include features that improve accessibility for these citizens including ones with visual, hearing, and mobility disabilities in urban infrastructure. 10 Instances of abnormally higher than usual fares have already been noted in informal urban transport in particular. Page 14 of 132 The World Bank Morocco Urban Transport Program PforR AF (P173048) Although the sector’s annual CO2 emissions are lower than most middle-income countries, with about 15 million metric tons (185 kilograms per thousand dollars of GDP), they are growing at a rapid rate (more than 5 percent per year). Most of these emissions are generated in urban areas, with Casablanca accounting for about one-third of national CO2 emissions. The GoM has demonstrated its commitment for improvement in this regard, including through the promotion of sustainable urban transport. This has included the deployment of new urban transport fleets with improved emission standards in most agglomerations of the country. However, given the current trend of continued growth in the rate of motorization (especially private cars, which are expected to be more widely used post-Covid-19 in the status-quo scenario in terms of development of the public urban transport sector) linked to rising incomes and the significant increase in travel time due to urban sprawl in most cities, the negative contribution of the country’s urban transport to climate change is expected to increase further in the coming decades if not forcefully addressed11, including by the promotion of public transport. The status-quo scenario would likely cause disadvantaged groups12 to suffer disproportionately from the adverse effects of climate change, potentially resulting in greater subsequent inequality in the long run. 12. Despite the significant progress made in recent years13, air pollution in most of Morocco's major cities is reaching significant levels due in part to transport activities, with negative impacts on health of urban citizens. Recent studies carried out by the World Bank have revealed that, despite significant improvements over the last decade, current air pollution levels in most Moroccan cities (to which urban transport makes a significant contribution) are still well above the threshold recommended by the World Health Organization (WHO). Air pollution by fine particles (or PM 2.5), mainly emitted by vehicles, among other sources, has the most serious impact on health. Casablanca and Tangiers are the Moroccan cities with the highest pollution levels measured by this indicator, with approximately double the maximum average annual pollution concentration of 10 µg/m3 recommended by the WHO. The monetary value of health damage caused by air pollution in urban areas (a majority of which is generated by vehicles) at the national level has been recently estimated by the World Bank at around US$400 million (with Casablanca accounting for nearly half of this amount), or about 0.3 percent of the country’s GDP. Box 2. Anticipated impacts of the Covid-19 on urban mobility in Morocco Based on the experience of countries where the situation has in principle stabilized (such as China or South Korea), it is likely that the Covid-19 crisis will significantly affect the urban mobility sector in Morocco, making investment and promotion of (safe) public transport and non-motorized transport more critical than ever. Overall, the current disruption may indeed create permanent changes. If public urban transport is not properly incentivized, it may in particular promote the use of private vehicles, with the important 11 Knowing that Morocco aims to reduce its greenhouse gas emissions in 2030 by 42 percent compared to emissions forecast by 2030. 12 Roughly one million people in urban areas live below the relative poverty threshold (US$1.3 per day) and an additional 13.6 percent (2.3 million) is economically vulnerable, with a higher likelihood of falling into poverty when exposed to shocks. 13 Including the following measures taken in recent years: (i) improvement of the standards of quality of transport fuels, (ii) adoption and enforcement of Euro 4 norms for all imported vehicles and all vehicles produced or assembled in Morocco, (iii) legal restriction of the importation of most second-hand vehicles (older than five years old) to gradually decrease the national average fleet age, and (iv) modernization of vehicle inspection centers through an increased participation of the private sector. Page 15 of 132 The World Bank Morocco Urban Transport Program PforR AF (P173048) impact in terms of environmental impact and competitiveness of cities due to congestion. This will mainly be through the changes it would cause in demand and supply, largely due to the health, behavioral and socio-economic resulting consequences. This would mainly manifest itself through changes in transport demand. Once the situation has stabilized, total demand is expected to remain overall more or less the same (due to the high proportion of essential journeys: work, studies, administrative and social services, necessary purchases, etc.) or slightly decrease. On the other hand, it is likely that there will be significant changes in the short and medium term in the distribution of this demand by mode of transport. In particular, initial reluctance from citizens is expected towards public transport (buses, light rail, trains, taxis and car-pooling) because of the proximity of users (including in stations) and the need to touch surfaces (doors, bars, seats, etc.) that were previously touched by large numbers of people. However, the reduction in demand for public transport will be tempered by the fact that many users, particularly those living in peri-urban areas, have few other alternatives. Conversely, the demand for individual transport (private cars, two-wheelers and walking) is expected to increase sharply, as already observed in some countries. Finally, it is possible that the demand for mobility will at least temporarily modify a portion of the typical origins-destinations pairs of the network, with some dense areas becoming less attractive. The crisis will also inevitably influence transport supply. For example, health constraints will at least initially impose limits on the maximum number of passengers per vehicle and reduce the capacity of the public transport system (unless vehicle rotations can be significantly increased). This is likely to have a significant financial impact on operators, particularly combined with the volatility (if not substantial decrease) of demand and the stability (if not increase as a result of additional disinfection costs) of their expenses which are for the most part fixed. In this context, it is more important than ever to accelerate reforms and investments in public transport. The financial deficit of the sector is likely to widen as a result, generating substantial liquidity needs for operators. Unless efforts are made to change the anticipated trajectory in the modal shift towards private vehicles, Covid-19 will exacerbate social exclusion (including in terms of lack of affordability), productivity loss due to congestion, emissions, and traffic accidents, among others. 13. In the context of the recently advanced regionalization process and as recommended by the new National Strategy for Urban Mobility (SNMU, summarized in Annex 2), the urban transport sector still requires accelerated and mainstreamed strengthening in terms of capacity and coordination, including at the municipal level, despite notable progress in recent years, including in the context of the Program14. The Urban Transport Fund still needs to continue to be sustained as the sector’s funding mechanism, given its critical role in urban transport. The current sector-wide institutional model for the financing, planning and delivery of urban transport services and infrastructure needs to be further mainstreamed. The institutional arrangements for inter-municipal cooperation are yet to be fully adopted and operationalized. This has hampered the coordination at the agglomeration level, long regarded as necessary for increased network synergies or economies of scale in urban transport. The creation, operationalization and strengthening of sectoral municipal enterprises for urban mobility planning and management, also need to be mainstreamed and accelerated when relevant for the country’s largest agglomerations. Finally, the provision of public transport services by private operators, despite significant progress in recent years, is still in need of continuous improvement to consolidate recent progress. 14 It should be noted in this regard that the strategic engagement, technical assistance, and operational support of the World Bank to the Government of Morocco in this sector has spanned over a decade, including an in-depth technical assistance and capacity building program from 2008 to 2013, a Development Policy Loan in 2011 and the ongoing PforR operation. Page 16 of 132 The World Bank Morocco Urban Transport Program PforR AF (P173048) Parent Program performance 14. The proposed AF in the amount of US$150 million will support the ongoing Urban Transport PforR (P149653) under implementation. This existing Program was approved on December 9, 2015 for an original loan amount of US$200 million with the closing date of June 30, 2021. Progress towards achieving the Program Development Objective (PDO) and overall Implementation Progress (IP) ratings are respectively “Moderately Satisfactory” (MS) and “Satisfactory” (S) at this stage. A significant part of the loan amount has been disbursed to date (68 percent, in addition to the 25 percent advance) with the Government contributing around US$150 million to Program implementation. Table 1. Program ratings Category Rating of parent Program at Updated rating of AF Program Concept Note parent Program (as (PCN) stage of June 15, 2020) Program Development Objective (PDO) Moderately Satisfactory (MS) MS Overall Implementation Progress (IP) MS Satisfactory (S) Technical S S Fiduciary S MS15 Environment and Social (E&S) S S Disbursement-Linked Indicators (DLI) S S Monitoring and Evaluation (M&E) S S 15. Implementation progress has translated in the Program gradually achieving tangible results, both in terms of institutional reforms and infrastructure and service delivery, as follows. - In terms of institutional reforms as part of the Program, (i) a strengthened central computer- based M&E system for the sector has been designed, installed, tested, and implemented in the majority of large municipalities (in greater Casablanca, Agadir, Marrakesh, Fez, Oujda, Settat, and Khouribga) to increase central capacity to monitor the sector (DLI#1), (ii) the Urban Transport Fund as the financing mechanism of the sector has been operationalized and strengthened and has benefited from sufficient financial resources to support the sector (DLI#2), (iii) associations of urban agglomerations have been operationalized in several of the largest urban areas of the country, including in Greater Casablanca, Rabat, and Agadir, to strengthen inter-municipal coordination of urban transport (DLI#3), (iv) urban mobility master plans have been prepared in several agglomerations, including Greater Agadir, Fez, Oujda, and El Jadida, using a structured process and a participatory approach to improve technical capacity to plan urban transport (DLI#4), and (v) urban transport enterprises have been operationalized (or have achieved significant progress in this regard) in several agglomerations, notably in Agadir, to improve capacity to deliver urban transport infrastructure and services (DLI#5). These results, that still 15 MS rating is due to: (i) delays in the production and consolidation of financial statements (particularly given Covid- 19 impact on local coordination and capacity), (ii) delays in the transmission as a result of the final audit report, and (iii) interpretation and use of country procurement regulation during the bid evaluation process of a few contracts under the Program. Mitigating measures include technical assistance being provided to the counterpart as well as additional support to be provided as part of the proposed AF. Page 17 of 132 The World Bank Morocco Urban Transport Program PforR AF (P173048) need to be mainstreamed in other agglomerations, have translated in the achievement within the planned timeframe of the targets of the PDO#1 indicator measuring the capacity of urban transport institutions to plan, implement and monitor infrastructure and services. - In terms of infrastructure and service delivery as part of the Program, while originally progressing more slowly than anticipated in the first years of implementation, three urban transport corridors focused on buses (for total of 20 kilometers in Rabat and Marrakesh16) have been developed or are at their final stage of development and/or optimization. These corridors include a combination of infrastructure17, systems18, and equipment and goods19 to improve the level of service for urban transport users. The progress achieved in this gradual implementation (as measured by DLI#6) is intended to result in journey time savings for users (as measured by DLI#7 and PDO#2), once completed and/or optimized in a few months with additional efforts from the GoM. It should be noted that the evolution of the Covid-19 pandemic has slowed down and/or halted infrastructure and service delivery in the country in this regard. Recent measurement carried out by the Ministry of Interior (MoI)20 and communicated to the World Bank have showed a satisfactory decrease of typical journey times for users of two of these corridors21. Other urban transport expenditures have been carried out as part of the Program, including in Tangiers, Rabat, Marrakesh, and Casablanca. The deployment of new bus concessions in several of the largest agglomerations of the country was also supported by the Program when needed to enable the achievement of its PDO. Table 2. Program expenditures22 to date (in MAD million) Municipality 2014-2017 2018 2019 Total Rabat 1,077 437 628 2,142 Casablanca 68 127 238 433 Tangier 605 9 10 624 Marrakesh 223 2 13 238 Settat 2 0 0 2 Agadir 3 1 0 4 Oujda 2 0 3 5 Kénitra 3 0 0 3 Fez 4 1 1 6 El Jadida 5 0 0 5 Total 1,992 577 893 3,462 16 Located mainly along Abderrahim Bouabid avenue in Rabat, Hassan 2 and Annasr avenues in Rabat, and Hassan 2 avenue in Marrakesh. 17 Including inter alia urban road works and associated infrastructure. 18 Including inter alia traffic management systems, fare management systems and intelligent transport systems. 19 Including inter alia rolling stock, fare collection equipment, and street lighting equipment and systems. 20 Which will be verified in the next verification mission carried out by the Independent Verification Agency. 21 With these two corridors respectively achieving 100 and 136 percent of their targets in journey time reduction. 22 Including inter alia urban road works and associated infrastructure, rolling stock, traffic management systems, fare collection equipment, street lighting equipment and systems, and consulting and non-consulting services. Page 18 of 132 The World Bank Morocco Urban Transport Program PforR AF (P173048) 16. Program implementation has led to substantial Private Capital Mobilization (PCM) in the country’s urban transport sector in accordance with Maximizing Finance for Development (MFD) approach. The recent awarding and effectiveness of the above-mentioned new bus concessions for Greater Rabat and Casablanca has specifically enabled the commercial financing by the concessionaire of the purchase of a substantial part of the bus fleet, which is now mostly in service in Greater Rabat and pending full deployment in Greater Casablanca. This would represent, once fully carried out, an estimated US$50 million in PCM in total. This has been in addition to the ongoing and planned coverage of operation and maintenance costs for the full length of the concession (typically for 15 to 20 years). Commercial financing by private concessionaire is likely to continue to be mobilized to complement the activities of the Program under the proposed AF, particularly in terms of feeder buses, with estimated amounts ranging between US$10 to US$20 million. Table 3. Program outputs and outcomes Indicator Status Details PDO#1 - Number of Achieved A substantial number of cities in the cities in the Program Program Area (21, compared to 15 Area that improved initially anticipated) improved their their urban transport urban transport institutional institutional assessment score by at least 10 assessment score by percent. at least 10 percent PDO#2 and DLI#7 - Partly achieved (as per the The progress achieved in the gradual Percentage of information transmitted by the implementation of corridors (as corridors in the counterpart in June 2020, to be measured by DLI#6) would result in Priority Program of verified by the Independent journey time savings for users (as Corridors supported Verification Agency (IVA) before the measured by DLI#7 and PDO#2), once under the Program end of 2020) completed and/or optimized in a few that meet their months. Recent measurement objective in carried out by the Ministry of Interior reduction of urban has already showed a satisfactory transport journey decrease of typical journey times for time users of two-third of the targeted corridors. DLI#1 - Strengthened Achieved (as per the conclusions of Strengthened central computer- M&E system for the the recent verification mission based M&E system for the sector has urban transport carried out by the IVA in May and been designed, installed, tested, and sector June 2020) implemented in the majority of large municipalities, covering Casablanca, Agadir, Rabat, Mohammedia, Marrakesh, Fez, Oujda, Settat, and Khouribga. DLI#2 - Strengthened Achieved (as per the conclusions of The Urban Transport Fund has been Urban Transport the recent verification mission operationalized and strengthened Page 19 of 132 The World Bank Morocco Urban Transport Program PforR AF (P173048) Fund carried out by the IVA) and has benefited from sufficient financial resources to support the sector. DLI#3 - Number of Achieved Associations of urban agglomerations operational have been operationalized in several associations of urban of the largest urban areas of the agglomerations country, including Greater Casablanca, Rabat, and Agadir. DLI#4 - Number of Achieved Urban mobility master plans have urban mobility been prepared in several master plans agglomerations using a structured prepared using a process and a participatory approach structured process for several municipalities and and a participatory agglomerations of the country, approach including Greater Agadir, Fez, Oujda, and El Jadida. DLI#5 - Number of Partly achieved (as per the Urban transport enterprises have operational conclusions of the recent verification been operationalized (or have municipally owned mission carried out by the IVA) achieved significant progress in this urban transport regard) in several agglomerations, enterprises including Agadir and Marrakesh. DLI#6 - Percentage of Partly achieved Three urban transport corridors Priority Program of focused on buses (for a total of 20 Corridors completed kilometers in Rabat and Marrakesh) and open to traffic have been developed or are at their final stage of development and/or optimization. 17. The early delays in terms of infrastructure and service delivery during the first years of the Program were due to several factors that have since been addressed. These factors include: (i) significant initial learning curve, particularly at the local level, due to the new nature of the PforR instrument23; (ii) innovative nature of the particular subprojects; (iii) the recent advanced regionalization process which led to a substantial increase in operational and administrative tasks at the local level, combined with the limited number of additional human resources at their level24; (iv) occasional internal coordination issues at the local level; (v) the large scope of the Program and multiplicity of actors, particularly at the local level, compared to the allocated human and technical resources; (vi) initial lack of mechanism for financial incentives in the form of transfers from the central level for some of the PforR subprojects; and (vii) severe financial and operational difficulties of urban transport operators in several of the agglomerations of the Program as a consequence of particular legacy contractual arrangements, among other factors. These factors have been addressed during implementation for the most part as follows and constitute lessons learned for the AF: (i) the capacity and practical knowledge of stakeholders on the PforR instrument, 23 The Program was the first PforR in Morocco with decentralized implementation at the local level. 24 Resulting from the gradual transfer of a greater number of responsibilities. Page 20 of 132 The World Bank Morocco Urban Transport Program PforR AF (P173048) including at the local level, has progressively been increased through hands-on support25; (ii) the subprojects have benefitted from technical assistance as needed, including with the support of the Bank; (iii) the Government has provided support to municipalities to adapt to the recent advanced regionalization process (which has now stabilized) and will continue to do so, including through the ongoing Municipal Performance PforR; (iv) occasional internal coordination issues at the local level have been resolved as needed; (v) the decision to strengthen the main entity in charge of the management of the sector and of the Program at the central level has been formalized to adapt to its wide scope of responsibilities; (vi) financial incentives for urban transport infrastructure and systems have subsequently been provided to support Program expenditures; and (vii) new concessions have been awarded to replace the ones that were suffering from financial and operational difficulties. 18. The following lessons learned have been drawn from the evolution of the sectoral context, the emergence of new needs, and the implementation of the parent operation and informed the design of the proposed AF. These include: (i) a more focused scope in terms of infrastructure development to reduce the complexity of the Program and the multiplicity of actors involved at the local level; (ii) the prioritization for infrastructure development of agglomerations and municipalities where the provision of urban transport services has shown strong potential; (iii) the reliance on a strengthened entity in charge of the management of the sector and of the Program at the central level; (iv) the clearer formalization through pre-approved investment framework agreements of financial incentives for urban transport infrastructure and systems in the form of transfers from the central level; and (v) the need for sustained technical assistance for local counterparts, including with the support of the Bank and other development partners. B - Rationale for the Additional Financing 19. The World Bank remains uniquely positioned to continue assisting the GoM in addressing public transport reform and supporting investments given its extensive experience in this area. Aside from in- depth knowledge of the local context in Morocco gained during the ongoing Program implementation, the World Bank brings global experience drawing on its international and regional engagement in urban transport in several developing countries and cities around the world (including India, Indonesia, the Philippines, Mexico, Brazil, and Colombia). The World Bank is therefore in a strong position to support the GoM in implementing its urban transport program, including in terms of coordination of the various stakeholders at different government levels as well as civil society and the private sector. The World Bank’s involvement in the sector would also help: (i) ensure the use of technical expertise for policy analyses and project design, (ii) contribute to maximizing PCM based on the MFD approach to the extent possible, and (iii) raise awareness of the need to go beyond investments in infrastructure to address mobility issues in the broader context of increasing urbanization, economic development, poverty reduction, emerging new technologies, and climate change. 20. A PforR AF remains the preferred modality, as opposed to a new operation (potentially using a different instrument), as the current PDO remains relevant and the major components of the Program will continue to be supported. In the context of the recent advanced regionalization process and of emerging local needs, and as confirmed by the SNMU, the urban transport sector still lags behind in terms 25 The PforR instrument has since been used extensively in Morocco, with of total of 6 programs supported. Page 21 of 132 The World Bank Morocco Urban Transport Program PforR AF (P173048) of: (i) access of urban citizens to social services and economic opportunities, (ii) accelerated and mainstreamed development of urban transport corridors, and (iii) sectoral reforms and capacity building. C - Alignment with objectives of CPF 21. The proposed AF is in line with the World Bank Group (WBG) Country Partnership Framework (CPF) for Morocco for FY2019-2024 (Report No. 131039-MA) that was discussed by the Board of Executive Directors on February 19, 2019. The AF would support the CPF Strategic Focus Area A “Promoting job creation by the private sector” in several ways. Specifically, the delivery of key urban transport infrastructure and services would contribute to CPF Objective 1, “More efficient environment for business and competitiveness”, and CPF Objective 2, “Increase opportunities for private sector growth with a focus on MSMEs and youth employability”, by efficiently linking the private sector and citizens (including the poor, the youth26, women, and people with limited mobility) to economic and employment opportunities in urban areas. In this regard, the AF would also support the CPF Cross-Cutting Theme “Gender, empowering women and girls for shared prosperity”. The AF would also support the CPF Strategic Focus Area C, “Promoting inclusive and resilient territorial development”. In particular, the AF would contribute to CPF Objective 8, “Improve performance of key infrastructure delivery services of cities and agglomerations”, by strengthening the capacity of urban transport institutions and delivering key urban transport infrastructure and services for an improved the level of service for citizens in urban areas where entrenched poverty remains. In line with the Program, the AF would particularly support the renewing the social contract pillar of the WBG MENA enlarged strategy through the strengthening of the capacity of sector-specific institutions and the development of a program of urban transport expenditures that would ultimately result in an eased access to economic opportunities and social services to citizens (particularly the most vulnerable ones), which is also in line with the WBG twin goals of ending extreme poverty and promoting shared prosperity by fostering the income growth of the bottom 40 percent in a sustainable manner. The proposed AF will also support the WBG Covid-19 Crisis Response Approach Paper’s Pillar 3 (Ensuring Sustainable Business Growth and Job Creation) and Pillar 4 (Strengthening Policies, Institutions and Investments for Rebuilding Better), and is in line with the MENA-wide platform supporting a coordinated response. D - Country program adjustment responding to Covid-19 22. Over the past two decades, Morocco achieved significant economic and social progress due to large public investments, structural reforms, along with measures to ensure macroeconomic stability. High investment efforts and a capital-intensive development model achieved sustained growth, significant improvements towards eradicating extreme poverty, increased life expectancy, greater access to basic public services, and significant public infrastructure development while falling short of creating sufficient jobs, especially for the young, and reducing geographical and socio-economic inequalities. Further, the Covid-19 shock is now abruptly pushing the economy into a severe recession, the first one since 1995, and threatening those social and economic gains reached over the past years. The WBG’s engagement under 26 Current urban transport issues prevent unemployed urban youth from reaching their full potential by hindering their physical access to potential economic opportunities, jobs and/or vocational training to develop skills that are desired by employers. Page 22 of 132 The World Bank Morocco Urban Transport Program PforR AF (P173048) the 2019-2024 CPF27, will therefore need to be adjusted to support the country in its Relief, Restructuring, and Resilient Recovery. Impact of the Covid-19 pandemic on Morocco28 and Government response 23. The Moroccan economy is expected to be severely impacted by the Covid-19 crisis29 on both domestic economic activity and external demand. Real GDP is projected to contract by 6.3 percent in 2020 in the baseline scenario, a sharp contrast to the 3.6 percent expansion projected before the outbreak. Few sectors have been spared but the contraction is primarily driven by a drop in the production of goods and services, a reduction in exports, disruption of global value chains, as well as a decline in tourism due to travel restrictions and border lockdowns. 24. The labor market is facing a shock of historical proportion, with vulnerable workers, including those in the informal sector being particularly affected. Enterprises have faced disruption of value chains, workers’ mobility, temporary closures as well as slowing global demand. The combined negative effects have led to widespread job and income losses – already at the end of April, one third of households had lost their source of income. The World Bank estimates30 that the share of citizens that are poor or vulnerable to falling into poverty is expected to increase from 24.4 percent of the total population in 2019 to 27.5 percent in 2020. 25. Morocco’s twin deficits are projected to deteriorate but remain manageable. Despite lower imports, the current account deficit is expected to widen to 9.9 percent in 2020 reflecting sharp declines in export and tourism revenues and remittances. On the fiscal side, revenue will be lower than previously expected in 2020 and 2021 while expenditures are projected to increase in 2020 on the back of additional spending on health, social protection, and other Covid-19 policy responses. As a result, the World Bank expects the overall fiscal deficit to widen to 7.6 percent of GDP in 2020, almost 4 percentage points larger than projected pre-Covid-19. Both public and external debt are projected to rise but will remain sustainable. 26. The GoM’s response to date has been swift and decisive. In addition to quickly closing borders, building, and strengthening the health system, the GoM has created a high level Covid-19 Economic Watch Committee (CVE) to monitor the situation and formulate policies and measures to support impacted sectors. The WBG is supporting the CVE with just-in-time policy notes and analysis for targeted sectors. A special Covid-19 Pandemic Fund31 has been created to support economic recovery of impacted sectors as well as cash payments to households. The Pandemic Fund has reached over 6 million people and households (950,000 formal sector workers affiliated to the National Social Security Agency and 5.5 million workers operating in the informal sector). Health, private sector support and safety net support measures 27 The CPF is structured around three strategic focus areas. These are: Focus Area A - Promoting Job Creation by the Private Sector; Focus Area B - Strengthening Human Capital; and Focus Area C - Promoting Inclusive and Resilient Territorial Development. The CPF has Governance and Citizen Engagement as its foundational pillar, as well as two cross-cutting themes: Gender and Digital Technology. 28 All forecasts in this section (unless otherwise stated) are those of the World Bank staff. 29 With more than 120,000 confirmed cases and 2,100 resulting fatalities by the end of September 2020. 30 Using an expenditure threshold of purchasing power parity US$5.5. 31 State budget and public enterprises (67 percent), banks (10 percent), the private sector (13 percent) and others (10 percent) contribute to the Fund. Page 23 of 132 The World Bank Morocco Urban Transport Program PforR AF (P173048) have been put in place. These include short-term work arrangements, social security tax reductions, and extension of credit to private sector enterprises. Safety net measures are being put in place with additional cash payments for beneficiaries of large social programs and extension of such measures to the informal sector. GoM response also included the preparation of a Revised Finance Law, the first in 30 years, which was adopted on July 7, 2020 with three main pillars: (1) Support from the Government and other institutions for the gradual recovery of economic activity; (2) Preservation of jobs; and (3) Acceleration of administrative reforms. WBG support for responding to the crisis 27. Current WBG engagement has been adjusted according to the three phases of Relief, Restructuring, and Resilient Recovery, and the FY21 pipeline was reprioritized to free up lending space as follows under the below priorities: - Support to health for saving lives threatened by the virus. An additional financing and a restructuring of the ongoing Health Support PforR (US$35 million) aiming at strengthening case detection, surveillance and case management were approved by the Board on June 16, 2020. In addition, a Development Policy Financing (DPF) with a Catastrophe Deferred Drawdown Option (CAT-DDO) was restructured to include a health-related catastrophe trigger and as a result, US$275 million were disbursed on April 3, 2020 [Relief]. - Protecting the poor and vulnerable. One line of support included the Financial and Digital Inclusion DPF series. The first of this series (US$500 million) was approved by the Board on June 22, 2020. The operation had been planned before the onset of Covid-19 but was adjusted to respond to urgent needs. As such, the first DPF included policy measures for establishing the special Covid-19 Pandemic Fund that finances cash transfers to formal and informal sector employees and households [Relief]. It also included the development of a digital ID to facilitate financial inclusion and the expansion of social protection programs [Restructuring], a regulatory reform for the development of inclusive insurance [Restructuring and Recovery], and an expansion of access to broadband connectivity of underserved urban and rural areas [Restructuring and Recovery]. The planned Morocco Emergency Cash Transfer Covid-19 Response project (under preparation) would support the Government’s safety net response while also laying the foundation for a more comprehensive and inclusive income transfer program which the King announced in August 2020. - Ensuring sustainable business growth and job creation. The World Bank is currently in the process of restructuring the Financing Innovative Startups and SMEs project to support startups and incubators that are hard hit by the pandemic [Restructuring and Recovery]. As the Covid-19 crisis is expected to increase firms’ reliance on digital services, the Financial and Digital Inclusion DPF promotes access to global digital services, crowdfunding for innovative startups and cashless payments [Restructuring and Recovery]. To address the constraints to access to finance due to the pandemic, the DPF also supports reforming the legal framework for minority investors protection and investment in small businesses [Restructuring]. Finally, the DPF supports the reform of the regulatory framework for e-procurement and the participation of SMEs, self- entrepreneurs, and cooperatives into public procurement [Relief, Restructuring and Recovery]. - Strengthening policies, institutions, and investment for rebuilding better. The World Bank is supporting this pillar through its support to the CVE as well as various Ministries by providing analytical work and data analytics; as well as through support to the reforms to promote Page 24 of 132 The World Bank Morocco Urban Transport Program PforR AF (P173048) competition and investment in the digital infrastructure markets [Restructuring and Recovery] and to the reforms of public procurement [Relief, Restructuring and Recovery]. Several of the planned FY21 projects have assumed higher importance in the current Covid-19 and post-Covid- 19 circumstances – including the planned Green Generation PforR (under preparation), supporting digital solutions for small-scale agriculture, and this proposed AF supporting urban public transport capacity which will be key for a safe return to urban movements. Selectivity, complementarity, and partnerships 28. Morocco’s partner countries and organizations are making a joint effort to support the country during this crisis. A group of financing partners (African Development Bank - AfDB, European Investment Bank - EIB, French Development Agency - AFD, German Development Bank - KfW, European Union, and European Bank for Reconstruction and Development - EBRD) has been meeting regularly over the past months to discuss complementarity of support. The WBG is conducting social and economic monitoring analytics with the United Nations Development Program (UNDP) and has recently published an economic monitor with a special focus on the impact of the Covid-19 crisis. On April 7, 2020, Morocco drew US$3 billion of available resources under a Precautionary Credit Line with the IMF, thereby bolstering their official reserves and supporting economic stability. Further, the authorities are mobilizing an additional compared to their pre-Covid-19 plans (non-programmed) US$1 billion in bilateral and multilateral support in 2020 from international financing institutions (World Bank, AfDB, EBRD, EIB, Islamic Development Bank - IsDB, and Arab Monetary Fund - AMF) as well as bilateral agencies (KfW and AFD) and the European Union. III. PROPOSED CHANGES A - Program Development Objective (PDO) and Key Results 29. The current PDO and key results areas remain for the most part relevant and will therefore be retained with minor revisions and new intermediate indicators will be added. The PDO is to strengthen the capacity of urban transport institutions to plan, implement and monitor infrastructure and services, and to improve the level of service of urban transport in targeted corridors in the Program Area. The original Program Area32 mentioned in the current PDO will be retained in the AF as the current geographic scope remains relevant. The current PDO indicators33 will be retained in the AF. Results Area 1 will be revised in the AF from “Strengthening central capacity to plan and monitor urban transport” to “Strengthening central capacity to coordinate, support and monitor urban transport” in line with the recent institutional changes in terms of decentralization in Morocco. Current Results Area 2 “Strengthening local capacity to plan, implement and monitor urban transport” and Results Area 3 32 Constituted of the Béni Mellal-Khénifra, Casablanca-Settat, Drâa-Tafilalet, Fès-Meknès, Marrakech-Safi, Oriental, Rabat-Salé-Kénitra, Souss-Massa and Tanger-Tétouan-Al Hoceïma regions. 33 PDO Indicator 1 “Number of cities in the Program Area that improved their urban transport institutional assessment score by at least 10 percent” and PDO Indicator 2 “Percentage of corridors in the Priority Program of Corridors supported under the Program that meet their objective in reduction of urban transport journey time”. Page 25 of 132 The World Bank Morocco Urban Transport Program PforR AF (P173048) “Improving level of service of urban transport on targeted corridors” will be retained in the AF. The following additional intermediate indicators will be added: - User satisfaction rate for the implemented corridors, disaggregated by gender; - Change in the share of female ridership in targeted corridors; - Percentage of progress in the execution of the Priority Program of Corridors; - Awarding, extension or amendment as needed of urban mobility concessions for the implemented corridors; - Deployment of an operational Grievance Redress Mechanism (GRM) for the operations of the implemented corridors; - Preparation and implementation of gender action plans for urban transport at the local level; and - Cumulative greenhouse gas (GHG) emission saved (in tons) as a result of the Program. Table 4. Summary of the change and/or expansion to the results framework Indicator Status Expansion/revision in AF PDO#1: Number of cities in the Achieved Retained, expanded in scale Program Area that improved their (with an incremental target of urban transport institutional 15 municipalities), and extended assessment score by at least 10 to 2024 percent PDO#2 and Intermediate Results Partly achieved (as per Expanded in scale (in line with Indicator 6: Percentage of corridors in the information increase in DLI#6 target), the Priority Program of Corridors transmitted by the refined, and extended supported under the Program that counterpart, to be meet their objective in reduction of verified by the IVA before urban transport journey time the end of 2020) Intermediate Results Indicator 1: Achieved (as per the Expanded in scope, refined, and Strengthened M&E system for the conclusions of the recent extended urban transport sector verification mission carried out by the IVA in May and June 2020) Intermediate Results Indicator 2: Achieved (as per the Retained, refined, and extended Strengthened Urban Transport Fund conclusions of the recent verification mission carried out by the IVA in May and June 2020) Intermediate Results Indicator 3: Achieved Retained, expanded in scale Number of operational associations of (with an incremental target of 2 urban agglomerations agglomerations or municipalities), refined, and extended Intermediate Results Indicator 4: Achieved Retained, expanded in scale Number of urban mobility master (with an incremental target of 2 plans prepared using a structured agglomerations or process and a participatory approach municipalities), and extended Page 26 of 132 The World Bank Morocco Urban Transport Program PforR AF (P173048) Indicator Status Expansion/revision in AF Intermediate Results Indicator 5: Partly achieved (as per Retained, refined, expanded in Number of operational municipally the conclusions of the scale (with an incremental owned urban transport enterprises recent verification target of 2 municipalities or mission carried out by agglomerations), and extended the IVA in May and June 2020) Intermediate Results Indicator 6: Partly achieved Expanded in scale (with an Percentage of Priority Program of incremental target of 2 Corridors completed and open to additional corridors for a total of traffic around 25 kilometers), refined, and extended Intermediate Results Indicator 7: Partly achieved Expanded though the inclusion Direct Program beneficiaries of the above-mentioned (as a percentage of targets), of which additional intermediate female (percentage) indicators under the AF B - Revised Program boundaries 30. The government program34, combining urban transport sector reforms and investments, remains largely unchanged, with updates to adapt to the evolving context of mobility (including the recent advanced regionalization process) in the country and to reflect emerging local mobility needs. Its objectives remain to reduce economic disparities by improving the access of citizens to social services and economic opportunities and foster urban economic development by enhancing productivity through improved urban transport. This government program (described in more details in Annex 2) for this sector is complementary to other government programs for the urban sector supported by the World Bank (including Casablanca Municipal Support PforR and the Municipal Performance PforR). It remains structured around Subprogram 1 focused on the strengthening of the institutions of the sector, Subprogram 2 focused on the strengthening of the financing mechanism of the sector, and Subprogram 3 focused on the development of urban transport corridors to improve access of citizens to economic opportunities and social services35. Morocco’s new National Strategy for Urban Mobility, recently prepared by the Ministry of Interior with the support of the World Bank, has confirmed the continued relevance of the government program with the need to further focus on the cross-cutting theme of adequacy, efficiency36, and sustainability of urban transport services. 31. Within the government program, the AF will focus for the most part on activities that are similar to the current Program. AF activities will cover strengthening central capacity to coordinate, support, and monitor urban transport, respectively at the central level and in the Program Area, focusing on the 34 That includes projects and activities in the urban transport sector programmed by the Government of Morocco as identified in the context of Program preparation. 35 It should be noted that major projects that have been formally announced and programmed for the 2020-2025 period or are already under construction as part of Subprogram 3, including 2 urban light rail lines and 2 BRT lines in Casablanca (a combined 50 kilometers for a cost of around MAD 9 billion), and a BRT line in Agadir (15 kilometers for a cost of around MAD 1 billion), leading to substantial increase in size of the updated government program. 36 Including by using disruptive technologies with the participation of the private sector. Page 27 of 132 The World Bank Morocco Urban Transport Program PforR AF (P173048) recently created unified administrative structure in the MoI dedicated to the urban mobility nationwide, as part of Subprogram 137, and the Urban Transport Fund which has been supported under the parent operation, as part of Subprogram 2. At the local level, the AF will cover strengthening municipal capacity to plan, implement, and monitor urban transport in primary and secondary cities in the Program Area, as part of Subprogram 1. AF activities under Subprogram 3 will cover expenditures, located in cities of more than 100,000 inhabitants in the Program Area, that include civil works, systems and equipment in line with the parent operation for subprojects that aim at improving the level of service of urban transport users along priority corridors, with a particular focus on Casablanca and Agadir, in support of the updated Priority Program of Corridors (PPC) as described in the table below. The table below presents the AF scope as compared to the government program. Table 5. Scope comparison between the AF and the government program, 2020-2025 GOVERNMENT ACTIVITIES SUPPORTED ACTIVITIES SCOPE OF THE AF PROGRAM (BY BY THE PARENT SUPPORTED BY THE SUBPROGRAM) PROGRAM AF Activities to strengthen Activities to Within Program Area central M&E system for strengthen central the sector (linked to capacity to monitor, DLI#1) coordinate, and support monitor urban transport Activities to strengthen Similar to the parent Within Program Area local capacity to Program (with (with a focus on coordinate initiatives at increased outcome additional the agglomeration level orientation) agglomerations for the Subprogram 1: through inter-municipal AF) Strengthening of the cooperation entities or institutions of the similar arrangements sector (linked to DLI#3) Activities to strengthen Similar to the parent Within Program Area local technical capacity Program (with a focus on and resources to plan additional urban transport municipalities and activities via urban agglomerations for the mobility master plans or AF) similar documents (linked to DLI#4) Activities to strengthen Similar to the parent Within Program Area local capacity to Program (with (with a focus on implement and monitor increased outcome additional urban transport orientation) municipalities for the infrastructure and AF) 37 Absorbing most of the units, services and entities previously involved in the sector at the central level. Page 28 of 132 The World Bank Morocco Urban Transport Program PforR AF (P173048) systems through urban transport enterprises or similar arrangements (linked to DLI#5) Capacity building Similar to the parent Within Program Area activities Program (with focus on emerging topics) Subprogram 2: Activities to strengthen Similar to the parent Central level and within Strengthening of the the Urban Transport Program Program Area sustainable financing Fund (linked to DLI#2) mechanism of the sector (DLI#2) Subprogram 3: Urban transport Urban transport Within Program Area Development of urban infrastructure and infrastructure and (with a focus on transport corridors to systems as part of the systems as part of the Casablanca and Agadir improve access of Priority Program of updated PPC for the AF) citizens to economic Corridors - PPC (linked opportunities and to DLI#6 and DLI#7) social services (DLI#6 and DLI#7) Table 6. Updated Priority Program of Corridors38, disaggregated by city City Length Nature of the corridors (in km) Casablanca 30 Bus Rapid Transit (BRT)39 and bus lanes (demarcated) and associated infrastructure, systems, and equipment Rabat 15 Bus lanes (demarcated) and associated infrastructure, systems, and equipment Agadir 15 BRT40 and associated infrastructure, systems, and equipment Marrakesh 8 Bus lanes (segregated) and associated infrastructure, systems, and equipment Oujda 5 Bus lanes (segregated) and associated infrastructure, systems, and equipment Kénitra 5 Bus lanes (demarcated) and associated infrastructure, systems, and equipment Fès 4 Bus lanes (demarcated) and associated infrastructure, systems, and equipment Tangier 3 Bus lanes (demarcated) and associated infrastructure, systems, and equipment Tétouan 3 Bus lanes (demarcated) and associated infrastructure, systems, and equipment Total 88 C - Program Financing and Expenditure Framework 38 Indicative, prior to the formal adoption by the Urban Transport Fund of the updated version of the PPC, linked to the proposed AF. 39 Added to the PPC as part of revised government program. 40 Added to the PPC as part of revised government program. Page 29 of 132 The World Bank Morocco Urban Transport Program PforR AF (P173048) 32. The AF will largely support the same type of expenditures as the parent operation. Typical expenditures will similarly include infrastructure41, systems42, equipment and goods43, and services44 (as presented in the table below) albeit in a more integrated fashion. Indeed, the AF will support the subset of Subcomponent 3 focused on urban transport corridors in the form of Bus Rapid Transit (BRT) systems. A particular emphasis will be given to Casablanca and Agadir subprojects given their level of preparedness and commitment. In addition, to enable the achievement of the PDO given the impact of the Covid-19 pandemic, the expenditure menu of the Program will be expanded under the AF to include temporary operational subsidies that are likely to be needed in the short to medium run to ensure operational continuity of urban transport services and prevent significant financial setbacks at the level of operators, especially if the current situation persists or resurges. The conditions and eligibility criteria for such temporary subsidies will be defined (and included in the Program Operations Manual - POM) once these contingencies materialize. The POM will be updated by the Borrower no later than 45 days after the loan effectiveness. Table 7. Forecasted expenditures under the AF by subprogram (2020-2023) Program expenditures by subprogram Amount (US$ million) Subprogram 1: Strengthening of the institutions of the sector 4 Subprogram 2: Strengthening of the sustainable financing mechanism of the 1 sector Subprogram 3: Development of urban transport corridors 180 Total 185 Table 8. Forecasted expenditures (in US$ million) of Subprogram 3 to be supported by the AF by type (2020-2023) Type of expenditures 2021 2022 2023 Total Civil works 32 38 38 108 Systems 9 10 10 29 Equipment and goods 7 8 8 23 Consulting and non-consulting services 6 7 7 20 Total 54 63 63 180 33. The GoM’s commitment to support public expenditures (including for the AF-supported activities) through stronger revenue mobilization has been confirmed and reflected in 2020 Budget Law. The AF is aligned with the objectives of the government program of improving the delivery of services and infrastructure for urban citizens. AF activities contained in the expenditure framework meets the directions set by the GoM. Similar to the parent operation, proceeds of the AF will be entirely reflected in the General Budget of the State as is customary for the vast majority of PforR financing in Morocco. 41 Including inter alia urban road works and associated infrastructure. 42 Including inter alia traffic management systems, fare management systems and intelligent transport systems. 43 Including inter alia rolling stock, fare collection equipment, and street lighting equipment and systems. 44 Including consulting and non-consulting services. Page 30 of 132 The World Bank Morocco Urban Transport Program PforR AF (P173048) Overall, domestic revenue measures to finance the general state budget through 2020 Budget Law include increasing certain taxes (partly the national corporate tax - IS) by reducing specific deductions, exemptions, and credits and privatizing certain government assets and State-Owned Enterprise (SOEs). The GoM committed, through the 2020 Budget Law, to use mobilized revenues to develop public infrastructure, improve access to basic public services, support private sector development (with a focus on employment), and strengthen social safety nets. Overall predictability of the GoM’s expenditure programs is ensured by the existence of several tools developed in the context of the Organic Law pertaining to the Budget Law and endorsed by the parliament, including the three-year programmatic budget, the annual performance project, and the annual performance report. Overall, as per the 2017 PEFA, the predictability of the GoM’s expenditures is robust with the relevant indicator rated as high based on timely release of the budget appropriations to the budget holders. 34. Specifically, the predictability of Program expenditure framework is supported by established mechanisms for fiscal transfers from the General Budget of the State (BGE45) to municipalities and their urban transport enterprises. AF expenditures will mostly be financed by the Urban Transport Fund and its associated special purpose account46 dedicated for urban transport capital grant transfer and other related activities. The Urban Transport Fund is annually funded with the required financial resources by the Government in accordance with the formal agreement reached by the MoI and the Ministry of Finance. The budget structure of its special purpose account is aligned with the BGE which conforms with the international budget classification47 as confirmed by the last Public Expenditure and Financial Accountability (PEFA) report which rated it as high. Transfers from the Urban Transport Fund are typically complemented for urban transport expenditures by: (i) relevant municipalities from other available sources of funds such as regular central transfers, own resources (surpluses and local taxes) and borrowing from the Municipal Infrastructure Fund (FEC, in French), and (ii) transfers from other departments (or entities such as regions, whose budget receive funding from the CAS-Régions48, following the recently operationalized advanced regionalization process) or special purpose accounts that flow through the BGE, particularly the CAS-TVA, managed by the MoI’s DGCT on behalf of local governments which serves as one of the main for governmental transfers to regional governments. 35. Morocco’s overall medium-term fiscal outlook49 is adequate to ensure the sustainability of the AF- supported Program, despite the current global uncertainty related to the Covid-19 pandemic. Morocco entered this crisis with sound macroeconomic fundamentals, a sustainable fiscal and external path, strong economic policy institutions and a robust government commitment to maintaining macroeconomic and debt sustainability. However, baseline macroeconomic projections carried out by the World Bank assume a significant shock to the economy in 2020 driven by the Covid-19 pandemic followed by a gradual recovery starting in 2021. Morocco was well equipped to weather the first phase of this storm compared to its peers but the second wave, after the lockdown has been eased, is more challenging in the medium term. Following a contraction of -6.3 percent in 2020, economic growth is expected to rebound to 3.4 percent in 2021 and to average 3.8 percent over the medium term. Inflation will hit 0.2 percent in 2020 45 Managed by the Ministry of Finance (MoF). 46 In French, « CAS - Fonds d’accompagnement des réformes du transport routier urbain et interurbain » (CAS- FART). 47 Classification of the Functions of Government (COFOG). 48 In French, « CAS - Fonds spécial relatif au produit des parts d’impôts affectées aux régions ». 49 World Bank staff estimates. Page 31 of 132 The World Bank Morocco Urban Transport Program PforR AF (P173048) before rebounding to 1.2 percent in 2021 and averaging 1.9 percent over the medium term. After increasing to 4.9 percent of GDP in 2020, the primary deficit is expected to drop back to 2.8 percent in 2021 and decline to 1.1 percent by 2025. The current account deficit is expected to worsen significantly in 2020, recording 9.9 percent of GDP, before narrowing gradually to 5.2 percent over the medium term as exports, tourism receipts, FDI and remittances recover. Central government debt remains sustainable under a variety of shocks, with rising vulnerabilities to the Debt-to-GDP ratio and to Gross Financing Needs (GFN). Under the baseline scenario, Morocco’s central government debt is projected to breach the Debt Sustainability Analysis (DSA) debt burden threshold for emerging markets (70 percent of GDP) starting in 2020 due to the temporary Covid-19 pandemic. However, the debt to GDP ratio will stabilize in 2021-22 and then follow a declining path over the medium term. More specifically, debt levels will reach 78.9 percent of GDP in 2022 due to the protracted economic recovery from the Covid-19 pandemic shock, and will gradually decline to 76.4 percent by 2025, as growth rebounds and accelerates over the medium term, and as fiscal deficits decline. D - Revised Disbursement Linked Indicators (DLIs) 36. DLI#1, “Strengthened M&E system for the urban transport sector” will be expanded in scope, refined, and extended under the AF. The introduction of additional Disbursement-Linked Results (DLRs) will reflect the recent refining of governmental attributions in the sector as a result of the recent institutional reforms in terms of decentralization in Morocco. DLI#1 under the AF will focus on the operationalization of the recently created unified administrative structure in the MoI dedicated to the coordination, support and M&E of urban mobility nationwide, consolidating most of the units, services and entities previously involved in the sector at the central level. The operationalization of this structure, with the support of the Bank when needed, will entail, inter alia: (i) selection and appointment of staff with the required skills and qualifications for its key positions, (ii) preparation and adoption of operational procedures for this structure, (iii) refining of the strengthened M&E system and adaptation of its design and features to the new attributions of the unified structure, (iv) design, based on needs identified by the M&E system, and delivery of a technical support program (including in terms of capacity building) for select cities in the targeted areas, and (v) leadership and facilitation of a Community of Practice (CoP) to enable increased M&E of the sector and foster coordination, collaboration and knowledge exchange for the joint development of urban transport solutions. A total of US$14.625 million will be allocated to this DLI with a time horizon extended by 3 years as part of the AF. The DLI verification protocols for DLI#1 has been adjusted accordingly. 37. DLI#2, “Strengthened Urban Transport Fund” will be retained, refined (with the purpose of increased outcome orientation), and extended under the AF. The DLI#2 under the AF will focus on consolidating the strengthening of the Urban Transport Fund by ensuring its sustainability and optimizing the manner it assumes its intended functions. Specifically, DLI#2 will support, inter alia: (i) continuing to ensure sustained allocation of timely and sufficient financial resources to the Urban Transport Fund and its use for the financing of planned urban transport projects (as an addition to the DLI verification protocol of the parent operation where the focus was more process oriented), (ii) assessing the appropriateness, relevance, and potential modalities of maximizing alternative and private capital mobilization in urban mobility, and (iii) refining and streamlining the current financial procedures and documentation of the Urban Transport Fund. DLI#2 will be allocated a total of US$20 million and its time horizon will be extended by 3 years. The verification protocols of DLI#2 will be adjusted accordingly. Page 32 of 132 The World Bank Morocco Urban Transport Program PforR AF (P173048) 38. DLI#3, “Number of operational associations of urban agglomerations” will be retained, expanded in scale, refined, and extended under the AF. The AF clarified for DLI#3 the eligibility of other arrangements with the same objectives as associations of urban agglomerations for an increased impact on urban transport coordination at the agglomeration level. Based on the lessons learned from the parent PforR, the condition of overall satisfactory performance of the said entity in its intended functions was added in the DLI verification protocol compared to the parent operation where the focus was more process-oriented. A total of US$15 million will be allocated to the DLI and its time horizon extended by 3 years as part of the AF. The verification protocols of DLI#3 have been revised accordingly. 39. DLI#4, “Number of urban mobility master plans prepared using a structured process and a participatory approach” will be retained, expanded in scale, and extended. A total of US$15 million will be allocated to the DLI and its time horizon extended by 3 years as part of the AF. The DLI verification protocols will be adjusted accordingly. 40. DLI#5, “Number of operational municipally-owned urban transport enterprises” will be retained, refined (with the purpose of increased outcome orientation), expanded in scale, and extended. DLI#5 under the AF will clarify the eligibility of entities with wider functions (including bus, light rail, traffic management, parking, etc.). With the purpose of increased outcome orientation and based on the lessons learned from the parent PforR, the condition of overall satisfactory performance of the said enterprise in its intended functions was added in the DLI verification protocol compared to the parent operation where the focus was more process-oriented. A total of US$10 million will be allocated to the DLI and its time horizon extended by 3 years as part of the AF. The DLI verification protocols for DLI#5 under the AF will be adjusted accordingly. 41. DLI#6, “Percentage of Priority Program of Corridors completed and open to traffic”, will be expanded in scale, refined based on lessons learned, and extended. The DLI#6 under the AF will support the development and opening to traffic of urban transport corridors to be included in the updated version of the original Priority Program of Corridors considered eligible under the Program for a minimal cumulative length of 25 kilometers (a cumulative 45 kilometers for the Program). The updated Priority Program of Corridors will include, inter alia, new corridors that have recently been formally agreed upon by the GoM and local governments (such as the Agadir BRT subproject) and/or have seen recent progress in their preparation (such as the Casablanca BRT). Developed BRT infrastructure, systems and equipment will have female-friendly design features in terms of security, physical accessibility (for the mobility impaired), and hard and soft integration as well as services that are more adapted to female needs. This would result in increased access for and use by women as measured by the indicator “Change in the share of female ridership in targeted corridors” added under the AF. Newly introduced DLI#6.1 under the AF will be linked to the rate of progress in budgetary execution rate of urban transport corridors using the lessons learned from the parent operation to enable DLI#6 to reflect tangible physical progress in their implementation. A total of US$65 million will be allocated to DLI#6 (including US$50 million for the new DLI#6.1) and its time horizon extended by 3 years as part of the AF. The DLI verification protocols will be adjusted accordingly. The undisbursed balance under this DLI (US$21.5 million) for the parent operation will be reallocated to the same DLI under the AF. Page 33 of 132 The World Bank Morocco Urban Transport Program PforR AF (P173048) 42. DLI#7, “Percentage of corridors in the Priority Program of Corridors supported under the Program that meet their objective in reduction of urban transport journey time”, will be expanded in scale, refined based on lessons learned, and extended. Based on the lessons learned from the parent PforR, the DLI will be refined by including, when warranted, waiting time in journey time calculation to reflect increased frequency of service as a result of the Program for a more comprehensive measurement of its impact. An intermediate indicator will be introduced to measure overall improvement of the level of service of AF corridors measured by a marked increase in the satisfaction of urban transport users (both males and females) of the urban transport corridors developed as part of DLI#6. A total of US$10 million will be allocated to the DLI and its time horizon extended by 3 years as part of the AF. The DLI verification protocols will be adjusted accordingly. The undisbursed balance under this DLI (US$30 million) for the parent operation will be reallocated to the same DLI under the AF. 43. The summary of the change and/or expansion to the DLI framework and its corresponding allocation is presented below. Table 9. Summary of the change and/or expansion to the DLI framework DLI Status Expansion/revision in Justification AF DLI#1 - Strengthened Achieved (as per Expanded in scope, To reflect the recent refining M&E system for the the conclusions of refined, and extended of governmental attributions urban transport the recent in the sector as a result of sector verification the recent advanced mission carried regionalization process in out by the IVA) Morocco DLI#2 - Strengthened Achieved (as per Retained, refined, and To consolidate the Urban Transport Fund the conclusions of extended strengthening of the Urban the recent Transport Fund by ensuring verification its sustainability and mission carried optimizing the manner it out by the IVA) assumes its intended functions DLI#3 - Number of Achieved Retained, expanded in To further mainstream these operational scale (with an arrangements for increased associations of urban incremental target of 2 local coordination for urban agglomerations agglomerations or transport at the municipalities), refined, agglomeration-level in the and extended country, with increased outcome orientation based on lessons learned (with an added condition of overall satisfactory performance of the said entity in its intended functions) DLI#4 - Number of Achieved Retained, expanded in To further mainstream the Page 34 of 132 The World Bank Morocco Urban Transport Program PforR AF (P173048) DLI Status Expansion/revision in Justification AF urban mobility master scale (with an improvement of local plans prepared using incremental target of 2 technical capacity to plan a structured process agglomerations or urban transport in the and a participatory municipalities), and country approach extended DLI#5 - Number of Partly achieved Retained, refined, To further mainstream the operational (as per the expanded in scale (with improvement of local municipally-owned conclusions of the an incremental target of capacity to deliver urban urban transport recent verification 2 municipalities or transport infrastructure and enterprises mission carried agglomerations), and services in Morocco, with out by the IVA) extended increased outcome orientation and based on lessons learned (with an added condition of overall satisfactory performance of these entities in their intended functions) DLI#6 - Percentage of Partly achieved Expanded in scale (with To accelerate the Priority Program of an incremental target of development of urban Corridors completed 2 additional corridors transport corridors for and open to traffic for a total of around 25 improved access of citizens, kilometers), refined, based on lessons learned and extended DLI#6.1 - Percentage Newly introduced Newly introduced To reflect physical progress in of progress in the the implementation of urban execution of the transport corridors based on Priority Program of lessons learned from the Corridors parent PforR DLI#7 - Percentage of Partly achieved Expanded in scale (in To accelerate the corridors in the (as per the line with increase in development of urban Priority Program of information DLI#6 target), refined, transport corridors for Corridors supported transmitted by and extended. improved access of citizens under the Program the counterpart, that meet their to be verified in objective in reduction the next of urban transport verification journey time mission carried out by the IVA) Table 10. Disbursement-Linked Indicators allocation DLI Allocation (in USD million) Parent operation AF Total Page 35 of 132 The World Bank Morocco Urban Transport Program PforR AF (P173048) DLI#1 - Strengthened M&E system for 24.5 14.625 39.125 the urban transport sector DLI#2 - Strengthened Urban Transport 35 20 55 Fund DLI#3 - Number of operational 25 15 40 associations of urban agglomerations DLI#4 - Number of urban mobility master 30 15 45 plans prepared using a structured process and a participatory approach DLI#5 - Number of operational 25 10 35 municipally-owned urban transport enterprises DLI#6 - Percentage of Priority Program of 30 15 45 Corridors completed and open to traffic DLI#6.1 - Percentage of progress in the 0 50 50 execution of the Priority Program of Corridors DLI#7 - Percentage of corridors in the 30 10 40 Priority Program of Corridors supported under the Program that meet their objective in reduction of urban transport journey time Front-end fee to be paid pursuant to 0.5 0.375 0.87550 relevant section of the Legal Agreement Total 200 150 350 E - Concurrent restructuring Reallocation of funds 44. The concurrent restructuring (Level 2) entails the reallocation of undisbursed DLI amounts under the parent operation. The undisbursed amounts (not taking into account advances) for the DLI amounts not yet achieved under the parent operation, specifically US$12.5 million for DLI#5, US$21.5 million for DLI#6, and US$30 million for DLI#7, will be reallocated to subsequent Disbursement-Linked Results (DLRs) of the same DLIs. Extension of the Program’s closing date 45. The above-mentioned restructuring will extend the Program’s closing date. The new closing date of June 30, 2024 (instead of June 30, 2021) for the original loan would harmonize the timeframe of the Program, with both the parent PforR and its proposed additional financing concluding on the same date. This would enable the continuation of the reporting of progress under the indicators included as part of the original results framework. 50 Equivalent to 0.25 percent of the loan amount. Page 36 of 132 The World Bank Morocco Urban Transport Program PforR AF (P173048) F - Institutional arrangement changes 46. The main institutional arrangements for the AF will remain largely unchanged from the parent operation. The Ministry of Interior will continue as the agency responsible for the Program, using its existing internal coordination mechanisms and consulting other stakeholders, including other ministries, civil society and the private sector as appropriate. The General Directorate of Territorial Governments (DGCT) of the MoI (previously named General Directorate of Local Governments - DGCL) will remain the focal point for the World Bank for the AF. The Division of Urban Mobility and Transport (DDUT) of the DGCT, which was responsible for the monitoring and coordination of day-to-day implementation of the Program, will continue this role for the AF. The DDUT has been replaced by a Directorate (the DMUT51), consolidating most of the units, services and entities previously involved in the sector at the level of the MoI, with the technical assistance of the World Bank under the AF, and equipped with an additional amount of human resources. In line with the parent operation, participating municipalities will be in charge of planning, budgeting, and implementing the AF activities at the municipal level, mostly through urban transport enterprises (or similar arrangements). Participating municipalities will therefore continue to be directly or indirectly responsible for procurement, contract administration and management, technical supervision, monitoring and reporting of progress of these subprojects to the MoI. G - Fiduciary arrangement changes 47. While fiduciary systems and arrangements for the Program are largely retained for its AF, time- bound actions in this regard have been included in the updated Program Action Plan (PAP) to address identified challenges and gaps. These actions, focused on capacity building and adequate support and detailed in the relevant annex, have been identified and defined in the Fiduciary Systems Assessment (FSA) addendum that was carried out as part of the AF preparation and in accordance with Bank Policy on Program-for-Results Financing to evaluate the Program procurement, financial management, governance and anti-corruption systems. The overall fiduciary risk of the operation is rated Substantial based on this analysis. A particular focus was put on areas that have not seen as considerable progress as was originally anticipated and additional areas that have been identified during Program implementation. H - Environmental and social arrangement changes 48. The AF will rely for the most part on the ongoing Program’s environmental and social systems and arrangements with adjustments as needed to improve performance in this regard. These actions, detailed in the relevant annex, have been identified and defined in the Environmental and Social Systems Assessment (ESSA) addendum that was carried out as part of the AF preparation and in accordance with the relevant policies. These environmental and social actions mostly focus (including for gender) on tools, procedures, processes, mechanism (including for grievance redress). A particular focus was put on areas that have not seen as considerable progress as was originally anticipated, new areas which have been identified during the implementation of the current Program, and actions that address the current Covid- 19 pandemic context. As part of AF supervision, the World Bank will monitor adequate and timely implementation to the updated PAP, including for environmental and social matters. 51 Directorate of Urban Mobility and Transport. Page 37 of 132 The World Bank Morocco Urban Transport Program PforR AF (P173048) IV. APPRAISAL SUMMARY A. Technical 49. As confirmed by the updated Technical Assessment carried out during the AF preparation, the strategic relevance and timeliness of the Program remains substantial. In the context of the recent institutional changes linked to the decentralization process in Morocco and as recommended by the new National Strategy for Urban Mobility, the urban transport sector still requires an accelerated and mainstreamed strengthening in terms of capacity and coordination, including at the municipal level. Since the past decade, most users of public urban transport in large agglomerations have been suffering from inadequate speed and reliability. In terms of timeliness, with the sharp increase in the last decades of demand for urban mobility in Morocco’s main primary and secondary cities, urban transport remains a pressing priority for the Government, municipalities, and citizens and will be particularly needed as an enabler of socio-economic recovery post-Covid-19. 50. In line with the parent operation, the AF has been assessed as technically sound and adequately structured to alleviate the issues of the sector. The AF includes the relevant types of activities to strengthen the capacity of urban transport institutions to plan, implement and monitor infrastructure and services, and improve the level of service of urban transport on targeted corridors. In line with the parent operation, the AF will continue to conform to the best practices in designing an urban transport program, drawn from lessons learned from previous World Bank interventions. The technical assessment of AF expenditures conducted by the World Bank during preparation concluded that the typical subprojects are overall technically appropriate, and their implementation is within the capacity of municipalities with the appropriate arrangements. The AF will continue benefitting from a high level of support from stakeholders and development partners. Continuity of institutional and financial sustainability of the Program under the AF is indeed expected, in line with the parent operation. In terms of technical risk, in line with the parent operation, delivery and funding risk remains substantial, particularly related to Covid-19, with a potential impact timeliness and quality of delivery of the expenditures. 51. The capacity of the MoI and of participating municipalities has been confirmed during preparation as adequate considering the AF needs. The DGCT of the MoI, as the focal point for the World Bank for the parent PforR and its AF through its DDUT, has demonstrated during implementation that it possessed sectoral adequate expertise and ability to provide support to municipalities and has developed the necessary internal capacity to manage the Program after an initial learning curve. The elevation of DDUT into a Directorate with more resources would enable this entity to focus on missions with more added value rather than mostly routine operational and administrative tasks as it was the case in the past. Participating municipalities, particularly through their urban transport enterprises, have demonstrated to possess the technical and managerial expertise to successfully fulfill their mission as part of the AF, in line with the level of sophistication complexity of planned investments. As part of the updated Program Action Plan, (i) adequate Program support arrangements will be adopted, operationalized and/or maintained by participating municipalities, particularly through their urban transport enterprises, and (ii) complementary technical support activities will be designed based on identified needs and delivered to these entities by the MoI, with the support of the World Bank, for the implementation of AF expenditures. Page 38 of 132 The World Bank Morocco Urban Transport Program PforR AF (P173048) 52. A cost-benefit analysis was used to assess the economic impact of the expenditures supported by the AF, which confirmed their expected economic viability. The analysis, comparing the with-project scenario and the do-nothing scenario on a 20-year horizon, accounted for capital and operational expenditures investments (including capital expenditures - CAPEX and operational expenditures - OPEX) and economic benefits in term of savings in travel time and vehicle operating costs (VOC), reduction of GHG emissions, and real estate appreciation. Overall, the urban transport corridors supported by the AF have an estimated positive Net Present Value (NPV) of US$146 million and an Economic Internal Rate of Return (EIRR) of 15 percent as shown in the table below. To ensure a robust result, a sensitivity analysis has been carried out with the following variations: a 20 percent capital cost overrun, a 20 percent decrease in ridership, and a combination of these two scenarios. None of these variations brought the EIRR below the 8 percent minimum. The NPV calculated with an 8 percent discount rate remains positive in all cases. These expenditures are consequently expected to be worthwhile and beneficial for society at large. Table 11. Conclusions of the economic analysis Base case 20 percent capital 20 percent Combined case cost overrun decrease in ridership EIRR (in percent) 14 12 11 9 NPV (in US$ million) 101 72 49 20 B. Fiduciary 53. The update of the integrated Fiduciary Systems Assessment (FSA) of the Program was carried out by the World Bank, as part of the preparation of the proposed AF. Based on the requirements of the World Bank policy and procedures for PforR Financing and drawing from knowledge of Morocco’s public procurement and financial management (FM) systems and the analysis of available documents and working sessions with the key stakeholders52, the FSA addendum53 concludes that the Program’s fiduciary systems provide reasonable assurance that the financing proceeds will be used for intended purposes, with due attention to the principles of economy, efficiency, effectiveness, transparency, and accountability. 54. The FSA update concludes that the Program’s fiduciary systems provide assurance that the financing proceeds will be used for intended purposes. The fiduciary risk is assessed to be Substantial. The potential risks are mainly related to: (i) instances of expenditures in the Program financial statements that are outside its scope (as identified in 2017 and 2018 financial audit reports of the parent PforR); (ii) delay in preparation of financial statements of the Program due to late submission by participating municipalities of financial data (substantial increase in operational and administrative tasks of municipalities and difficulty in interpreting eligibility criteria of expenditures were identified in the parent PforR); (iii) budgeting delays at the level of participating municipalities due to the impact of the Covid-19 pandemic and other factors, resulting in subprojects potentially not receiving adequate funding to timely achieve the expected Program results and in DLIs not being met; (iv) the potential re-prioritization by the GoM in 52 With an emphasis on Rabat (MoI and MoF), Casablanca and Agadir. 53 Covering the Program’s financial management (FM), governance, and procurement systems. Page 39 of 132 The World Bank Morocco Urban Transport Program PforR AF (P173048) its programming of expenditures that are not within the scope of the Program; and (v) issues in interpretation of country procurement regulation during the bid evaluation process of a few contracts and the use of standard bidding documents in some tenders under the Program. 55. Mitigating measures have been identified and will be put in place based on the lessons learned from the parent PforR in terms of fiduciary implementation and in synergy with the ongoing Municipal Performance PforR54 activities. This will enable to strengthen both financial management and procurement capacities at central and municipal level with continuous training and technical assistance. This will be complemented by annual performance assessment of participating municipalities of indicators related to governance and transparency, auditing and control, and expenditure management. Other mitigation measures will relate at procurement level to the development of model contracts and training for staff involved in AF implementation. The Bank will closely monitor Program expenditures in terms of eligibility through reviews during AF supervision (focus will be made on the monitoring and review of Urban Transport Fund’s relevant expenditures, as well those executed by participating municipalities), including to ensure that expenditures accounted for are within the scope of the Program. The Bank will also continue providing technical assistance as developed in the parent operation to produce timely and acceptable financial statements of the Program. 56. The implementing agency will execute the Program activities in accordance with the “Guidelines on Preventing and Combating Fraud and Corruption in Program-for-Results Financing,” dated February 1, 2012, and revised July 10, 2015. The implementing agency will: (i) share information with the World Bank regarding all allegations of fraud and corruption in connection with the Program, investigate all credible allegations received, report to the World Bank on actions taken, and cooperate in any inquiry that may be conducted by the World Bank into allegations or other indications of fraud and corruption in connection with the Program; and (ii) monitor and abide by the World Bank's list of debarred/suspended firms. C. Environment and Social 57. An Addendum to the Environmental and Social Systems Assessment (ESSA) of the parent Program has been prepared by the World Bank in close cooperation with Program counterparts. The Addendum does not constitute a new ESSA and will be considered together with the ESSA of the parent Program. The ESSA of the parent Program assessed, against the requirements of Bank Policy/Bank Directive on Program- for-Results Financing (formerly OP/BP 9.00), the national and municipal systems with respect to institutional capacity and performance, policy and regulatory bases, consultation mechanisms and GRM to manage and mitigate the impacts. The portfolio of projects to be undertaken under the AF was analyzed to identify typical environmental and social effects. The Addendum to the ESSA (see Annex 4) is based on a review of the Program implementation experiences, the existing regulatory and legal framework related to environmental and social matters, consultations with the Program stakeholders, and site visits. The intent of the Addendum is to ensure that environment and social risk continue to be avoided, reduced and mitigated adequately. 54 The Municipal Performance PforR is supporting the MoI (DGCT) to strengthen its support systems for municipalities. Activities under this PforR will include the development and implementation of a comprehensive capacity-building program available to municipalities seeking to improve their performance, including the dimensions of planning, management, and budgeting. Page 40 of 132 The World Bank Morocco Urban Transport Program PforR AF (P173048) 58. As for the parent Program, the environmental and social (E&S) risks and negative impacts associated with the AF are considered moderate in their entirety. They will be reversible and easily mitigated with proposed measures. They will be easy to identify in advance and to prevent and minimize through effective mitigation measures and will be subject to a monitoring and follow-up system that will allow for the identification and management of potential risks in real time. The Program will not result in any land acquisition. In line with the parent Program, it will use either the existing right-of-way or state- owned or municipality-owned lands. Some sections will need to be managed carefully regarding the negative impacts that the works may have on traditional informal markets and itinerant merchants and on limited instances of informal housing encroaching on the right-of-way. Such impacts will require proper planning, including potentially the preparation of mitigation and compensation plans. 59. E&S systems to manage related risks have been set up under the parent Program and will continue to be used, with the required strengthening, under the activities to be supported through the AF. The geographical scope of the AF will remain the same as under the parent Program, with a focus on Casablanca and Agadir. No major changes are expected as the main institutional arrangements for the AF will remain largely unchanged from the parent operation. No changes in the regulatory and legal framework pertaining to the management of E&S risks have been identified. The proposed adjustments to the results areas and DLI indicators under the AF would not require changes in the E&S risk management systems, as they are mostly adjustments in timing of the existing DLIs requiring changes of management procedures, without including new activities. The management of E&S risks and impacts of the parent Program is rated Moderately Satisfactory. The action plan for the environmental and social assessment of the parent Program is partly completed (preparation and dissemination of the environmental and social management guide, training of stakeholders on its provisions and use, designation of focal points at the level of the participating communes, etc.) although it requires a continuation of the efforts made. Due to the weak appropriation by the focal points of the procedures included in the environmental and social management guide, monitoring and reporting on the work sites is not carried out systematically. The oversight by an E&S focal point at the central level will be strengthened, including the monitoring of works and GRMs. 60. Consultations. The ESSA of the parent Program was disclosed on November 1, 2015, on the World Bank website, after a consultation workshop undertaken in March 2015. Further consultations have been conducted prior to the completion of the AF appraisal and used non-contact methodologies as appropriate in the Covid-19 context following established World Health Organization (WHO) and Ministry of Health (MoH) protocols during the pandemic. Comments of such public consultations have been included in the ESSA addendum and action plan. Further consultations will be undertaken throughout Program implementation to ensure communication with stakeholders and beneficiaries. Most expenditures supported by the existing Program have been informed by planning processes that have included participation from local population (often during public consultations). To the extent possible, data collection and monitoring will be done in a gender- and age-disaggregated manner to contribute to a better understanding of the demographic profile of the affected population. D. Waivers of Bank policies 61. Not applicable. Page 41 of 132 The World Bank Morocco Urban Transport Program PforR AF (P173048) E. Changes to the risk profile of the operation 62. The overall risk rating and several specific risk ratings of the original operation, assessed by the Word Bank, have been decreased at this stage from Substantial to Moderate, taking into account the Program performance to date and the residual risk approach. The overall risk and several specific risk ratings are therefore rated Moderate”, whereas fiduciary risk is rated Substantial. Macroeconomic risk rating has been increased from Moderate to Substantial due to the ongoing Covid-19 pandemic. While Morocco has demonstrated its willingness and capability to adjust macro-fiscal policies and to introduce corrective measures to overcome the impact of shocks55, the ongoing Covid-19 pandemic effects may prove difficult to successfully weather. These potential macroeconomic impacts might in particular result in substantial Program funding (and hence delivery) and sustainability risks. No particular new risk is expected to be introduced as a result of the changes proposed. Table 12. Summary of the change and/or expansion in terms of risks Risk Category Recent Rating Revised Rating Rationale for Change (H, S, M, or L) (H, S, M, or L56) Political and governance Moderate Moderate No change Macroeconomic Moderate Substantial Increased due the ongoing Covid-19 pandemic that might result in adverse effects which may prove challenging to successfully weather. Sector Strategies and Moderate Moderate (decreased) No change Policies Technical Design of Substantial Moderate (decreased) Decreased taking into Project or Program account the Program performance to date and the residual risk approach Institutional Capacity for Substantial Moderate (decreased) Decreased taking into Implementation and account the Program Sustainability performance to date and the residual risk approach Fiduciary Substantial Substantial (no change) No change Environmental and Social Moderate Moderate (no change) No change Stakeholders Substantial Moderate (decreased) Decreased taking into account the Program performance to date and the residual risk approach 55 Indeed, Morocco managed to keep its investment grade rating and its access to international financial markets with relatively favorable conditions. 56 The possible risk ratings of a World Bank operation are in ascending order: Low (L), Moderate (M), Substantial (S) and High (H). Page 42 of 132 The World Bank Morocco Urban Transport Program PforR AF (P173048) Other Moderate Moderate (no change) No change Overall Substantial Moderate (decreased) Decreased taking into account the Program performance to date and the residual risk approach F. Corporate requirements a - Gender 63. The parent Program has satisfactorily implemented earlier identified gender-focused measures . These included, based on the analysis (including quantitatively) of gender gaps informed by various studies, including of the World Bank: - In terms of improved access, including for women, as a result of the introduction of new bus operators and fleets in Rabat and Casablanca with the support of the Program, an increased supply of high-quality urban transport services (with improved service frequencies) was achieved, yielding significant benefits for women as confirmed by various surveys carried out by operators57. - In terms of improved security for vulnerable users, including women, several features have been included to enable a safer environment for users and citizens in general and women in particular (including in terms of harassment). This was an important issue as only 5 percent of women (compared to 15 percent of men) expressed feeling safe in buses in a survey carried out in 2016 in the greater Rabat region, versus around 97 percent for both men and women for light rail (i.e. tramways). This has been addressed as follows: o Video surveillance systems in buses in particular in Rabat and Casablanca58 have been deployed to increase personal safety by preventing potential misbehavior by fellow passengers that usually affects women more. o A more systematic use of controllers in buses (which is a measure frequently recommended by women in satisfaction surveys and interviews) was also carried out as a result of the introduction of new operators in these cities. o Improved street lighting systems have been installed along the targeted urban transport corridors (including bus stations) in several cities (particularly Rabat) which typically lead to an increased sense of security after sunset for urban transport users and pedestrians, particularly females. o Bus supply has been increased in several cities (particularly Rabat and Casablanca) through incentives for fleet renewal by operators, which has partly addressed previously inadequate service capacity, contributing to decrease overcrowding during peak hours which reduces the risk of misbehavior (including harassment) affecting female passengers in particular. 57 In Morocco as in comparable countries, women are responsible for most of the domestic and informal activities which usually require them to make shorter, more frequent, and less direct trips (multiple legs, off the main routes, and/or off-peak hours) compared to men. 58 An Area Traffic Control system, with CCTV, is under implementation in Casablanca. Page 43 of 132 The World Bank Morocco Urban Transport Program PforR AF (P173048) - In terms of improved road safety, including for women59, several features and devices have been implemented in various cities with the objectives of traffic-calming and reducing traffic-related crashes (including traffic management systems, road signage and road markings, safety grids, speed humps, pedestrian refuges, etc.), with significant benefits for vulnerable groups (including women). 64. The AF will continue to support activities aimed at reducing the gender gap in mobility, with a particular focus on improving personal security for women60, based on the progress achieved and the analysis (including quantitatively) of remaining gaps. These include: - In terms of access, this will be addressed as follows: o Increased supply of urban transport services (with higher service frequencies and adapted operation schedules in line with the increase in bus fleet) along the targeted urban transport corridors, which will significantly benefit women based on consultations carried out in the design phase of these subprojects. o Design features that accommodate the needs of women such as stowage space in buses (including for goods, strollers, etc.) as well convenience stores and clean and safe public restrooms in transfer stations. o Physical accessibility features benefitting mobility-impaired users (including women) such as pavement ramps, handlebars, reduced grade separation, etc. will be mainstreamed as much as possible. o Hard and soft integration features for urban transport (including interchange stations and fare integration systems for instance) that will particularly benefit women as they typically tend as a category of users to do more multi-legs trips than men. - In terms of security, the AF will continue to support, in the implementation of urban transport corridors, the deployment of features enabling a safer environment for users and citizens in general and women in particular (including in terms of harassment) as previously described and through the preparation and implementation of gender action plans at the local level, based on best practices, for the promotion of sustainable improvements in personal security dimensions, among other aspects. It is anticipated that the following outcomes will be achieved by the Program: o Promote women’s security in urban transport services and the public space through improvements in the physical infrastructure, use of gender Codes of Conduct (when possible) as well as gender sensitization61 of operators, local stakeholders and implementing agencies. o Raise community awareness on gender-sensitive needs in personal security dimensions in using urban transport services. 59 Walking is usually the primary mode of transport of women as they tend to have lower rates of motorization in urban areas (compared to men). It is estimated that 76 percent of women practice walking compared to 57 percent of men. This makes them more vulnerable to traffic accidents which disproportionately affects pedestrian in terms of fatalities. 60 For women, walking alone in the street is sometimes an obstacle course. Women frequently experience derogatory remarks and insults. According to official figures, almost two out of three Moroccan women are victims of violence. Public places are the environment where physical violence against women is most manifest. 61 In coordination with other gender-related engagements of the GoM, including in terms of regulatory reform, in partnership with civil society and development partners. Page 44 of 132 The World Bank Morocco Urban Transport Program PforR AF (P173048) 65. The below results chain for the AF links the remaining gaps and disparities issues of the sector to the actions, and related indicators. Table 13. Gender results chain ANALYSIS ON GENDER GAPS ACTIVITIES AND/OR ACTIONS INDICATORS Lack of access to adapted and - BRT infrastructure, systems - Direct Program beneficiaries, sufficient urban transport and equipment with female- of which female services (around 90 percent of friendly design features, - Change in the share of female women surveyed in a 2016 physical accessibility features, ridership in targeted corridors survey carried out by the World and hard and soft integration - User satisfaction rate Bank in Morocco expressed that features. (percentage) for the they would use public transport - BRT services that are more implemented corridors, more often if operations that adapted to female needs disaggregated by gender are more adapted to their (increased frequency and needs were accessible). These reliability) and adapted findings have been confirmed operations (including higher during AF preparation in the service frequencies and context of discussions with operation schedules in line with female users and potential women’s typical needs) users (with a notable improvement in the perception of these actors in this area in recent years). Lack of perception of safety and - BRT infrastructure, systems - Direct Program beneficiaries, security in urban transport and equipment with features of which female services (almost 100 percent of (including video surveillance - Change in the share of female women surveyed in a 2016 systems in buses and stations, a ridership in targeted corridors survey carried out by the World more systematic use of - User satisfaction rate Bank in Morocco stated that controllers, improved street (percentage) for the they would use public transport lighting systems, etc.) implemented corridors, more often if the security would - Gender action plans at the disaggregated by gender be improved, compared to 90 local level, based on best - Preparation and percent of all respondents). practices, for the promotion of implementation of gender These findings have been sustainable improvements in action plans for urban transport confirmed during AF personal security dimensions, at the local level preparation in the context of among other aspects, including discussions with female users through gender sensitization of and potential users (with a operators (including through notable improvement in the the use of gender Codes of perception of these actors in Conduct), local stakeholders this area in recent years). and implementing agencies Page 45 of 132 The World Bank Morocco Urban Transport Program PforR AF (P173048) b - Climate Change 66. The existing Program has been performing well with regards to climate change, and several climate and disaster-oriented features and measures have been included in Program expenditures and activities. These include: - In terms of mitigation, development of urban transport infrastructure along the targeted corridors to provide preferential treatment in traffic to buses (as the most efficient public transport mode) and encourage modal shift from private cars in Rabat and Marrakesh. - In terms of mitigation, renewal, with the support of the Program, of bus fleets in Rabat and Casablanca, replacing outdated vehicles that used to greatly contribute to greenhouse gas emissions given their high average mileage by ones with significantly stricter emissions standards, and introduction on a pilot basis of electric buses in Marrakesh. - In terms of mitigation, deployment of traffic management systems in Rabat and Casablanca to contribute to the reduction of emissions rates by improving and controlling the flow of traffic, particularly in congested areas. - In terms of both mitigation and adaptation, delivery of workshops and trainings for key staff in various municipalities on climate matters in urban transport to raise awareness and capacity. - In terms of adaptation, improvement, when required, of drainage structures in Rabat, Marrakesh, and Tangier to improve climate resilience of targeted urban transport corridors, particularly in terms of flood prevention and reduction. - In terms of both adaptation and mitigation, inclusion of the environmental dimension (with a focus on climate and air pollution) in the preparation of urban mobility master plan by participating municipalities with the support of the Program in Agadir, El Jadida, Fez, and Oujda. 67. In the same manner as the parent operation, the AF will continue incorporating climate and disaster-oriented expenditures, activities, and measures and address additional identified gaps in this regard. These include: - In terms of mitigation, development of urban transport corridors for buses in the form of BRT systems (with the acquisition of dedicated rolling stock with stricter emissions standards) to provide high-capacity mobility services in a more climate-friendly fashion and encourage modal shift from private cars which have a substantial carbon footprint per average passenger carried62. - In terms of mitigation, delivery of workshops and trainings for key staff in relevant municipalities and operators on climate matters in urban transport to raise awareness and capacity, with a particular focus on additional areas that would contribute to reduce the carbon footprint of urban mobility such as demand management (including integration of urban transport and urban planning), and energy-efficient bus operations (including eco-driving as needed). - In terms of adaptation, incorporation as needed of climate and disaster resilience principles in the updated planning documents (including urban mobility master plans) detailed designs of supported urban transport corridors. - In terms of adaptation, delivery of workshops and trainings for key staff of relevant counterparts at the central and local level on climate adaptation in urban transport infrastructure to raise 62 Emission reductions have been estimated at around 461 thousand tons in total (over 20 years of operations), stemming in part from modal shift from private cars and taxis (for an estimated total of more than 17 thousand vehicles) and improved operations. Modal shift will need to continue to benefit from sustained institutional and regulatory reform for the sector to incentivize public transport. Page 46 of 132 The World Bank Morocco Urban Transport Program PforR AF (P173048) awareness and capacity, with a particular focus on associated drainage and flood mitigation systems in order to strengthen their resilience to natural hazards and the anticipated impacts of climate variability. - In terms of both adaptation and mitigation, inclusion of the environmental dimension (with a focus on climate) in the preparation by participating municipalities of additional urban mobility planning documents supported by the AF. - In terms of climate change adaptation, reliable and efficient urban transport system will allow country’s population most vulnerable to climate change (the poor and lower-middle class, the youth, women, people with chronic health conditions – respiratory and cardiovascular, and people with limited mobility) to have improved, reliable access to the most important services, vital for their livelihoods, health and safety: employment, education, and healthcare. This will be especially important in the context of growing population and urbanization in the country. 68. An assessment of climate and disaster risks was carried out by the World Bank during the AF preparation and identified mostly low to moderate exposure. The World Bank climate and disaster risk screening tool was administered for this purpose and the related standard report was generated. The assessment has identified moderate climate change exposure to hazards that are likely to be relevant to the Program location (particularly in the future) which include extreme temperature, extreme precipitation and flooding, and storm surges63. Exposure to geophysical hazards has been assessed as low. Overall, no high risks were identified linked to climate change or geophysical hazards. Disadvantaged groups are likely to suffer disproportionately from the anticipated adverse effects of climate change, if unaddressed, resulting in greater subsequent inequality in the long run. c - Citizen Engagement 69. The current operation has been performing well on citizen engagement. Most expenditures supported by the existing Program have been informed by planning processes that have included participation from civil society representing the local population (often during public consultations), particularly during the preparation of urban mobility master plans. This has resulted in the views of relevant stakeholders being reflected in their design as much as possible. In particular, the Program has incentivized the finalization of such documents following a participatory approach for Greater Agadir, El Jadida, Oujda, and Fez, which would lead to ensure the sustainability and generalization of this approach in the context of the additional financing. In addition, beneficiaries have been able to give their feedback during implementation on particular expenditures, including through the Grievance Redress Mechanisms which have been established, strengthened or formalized by the participating municipalities during Program implementation. 70. In line with the parent operation, the AF will continue to incorporate such benefits while addressing identified gaps. AF-supported subprojects which have already benefitted from participatory approach, mostly during the preparation of urban mobility master plans (or similar), will continue to deploy as needed inclusive consultations with the residents of the respective municipalities up to finalization, update and/or adjustments of detailed designs when required. During implementation, in order to enable 63 A storm surge is a notable and intermittent rise in the water level on the coastline resulting from strong winds due to meteorological and/or geological phenomena. Page 47 of 132 The World Bank Morocco Urban Transport Program PforR AF (P173048) beneficiaries to continue providing feedback on relevant subprojects, participating municipalities (particularly in Casablanca and Agadir) will establish, strengthen or formalize their respective GRMs. Participating urban transport enterprises will also be encouraged to enhance the capacity of their departments or units in charge of citizens and public relations, particularly documentation and processing procedures of their GRMs and their responsiveness to public queries, complaints, and suggestions. GRMs for participating municipalities and urban transport enterprises will be linked with the centralized GRM of the GoM (chikaya.ma), managed for urban matters by the Ministry of Interior. Moreover, support will be provided for community monitoring of AF-supported subprojects and activities, including through the use of disruptive technologies such as mobile applications and social media platforms. Finally, the Program will aim to contribute to rebuilding the trust of public transport users by implementing public awareness raising campaigns on safe and secure transport, and precautions for urban transport users related to Covid-19 transmission, particularly for vulnerable groups (including the elderly and persons with disabilities). The World Bank will showcase international good practices in this regard as needed. V. KEY RISKS 71. The overall risk rating and several specific risk ratings, except macroeconomic risk, have been decreased from Substantial to Moderate at this stage taking into account the Program performance to date and the residual risk approach. Fiduciary risk is rated Substantial. The macroeconomic risk has been increased from Moderate to Substantial due to the ongoing Covid-19 pandemic adverse effects which may prove challenging for the Government of Morocco to successfully weather. These potential macroeconomic impacts might result in substantial Program funding (and hence delivery) and sustainability risks. No new risk is expected to be introduced as a result of the changes proposed. The change (or lack thereof) in overall risk rating and respective specific risk ratings is presented in table 12 above. The Program under the AF will put in place, including at the level of the updated Program Action Plan (PAP), mitigating mechanisms, measures and actions to address specific risks with a focus on strengthening central and local capacity to perform oversight and properly plan and implement Program activities. VI. WORLD BANK GRIEVANCE REDRESS 72. Communities and individuals who believe that they are adversely affected by a World Bank (WB) supported Program may submit complaints to existing Program-level grievance redress mechanisms or the WB’s Grievance Redress Service (GRS). The GRS ensures that complaints received are promptly reviewed in order to address project-related concerns. Project affected communities and individuals may submit their complaint to the WB’s independent Inspection Panel which determines whether harm occurred, or could occur, as a result of WB non-compliance with its policies and procedures. Complaints may be submitted at any time after concerns have been brought directly to the World Bank's attention, and Bank Management has been given an opportunity to respond. For information on how to submit complaints to the World Bank’s corporate Grievance Redress Service (GRS), please visit http://www.worldbank.org/en/projects-operations/products-and-services/grievance-redress-service. For Page 48 of 129 The World Bank Morocco Urban Transport Program PforR AF (P173048) information on how to submit complaints to the World Bank Inspection Panel, please visit www.inspectionpanel.org. Page 49 of 132 The World Bank Morocco Urban Transport Program PforR AF (P173048) VII. SUMMARY TABLE OF CHANGES Changed Not Changed Change in Project's Development Objectives ✔ Change in Program Scope ✔ Change in Results Framework ✔ Change in Loan Closing Date(s) ✔ Reallocation between Disbursement Categories ✔ Change in Program Action Plan ✔ Change in Implementing Agency ✔ Cancellations Proposed ✔ Change in Disbursements Arrangements ✔ Change in Safeguard Policies Triggered ✔ Change in Legal Covenants ✔ Change in Institutional Arrangements ✔ Change in Technical Method ✔ Change in Fiduciary ✔ Change in Environmental and Social Aspects ✔ Other Change(s) ✔ VIII. DETAILED CHANGE(S) PROGRAM DEVELOPMENT OBJECTIVE Current PDO The Program Development Objective is to strengthen the capacity of urban transport institutions to plan, implement and monitor infrastructure and services, and to improve the level of service of urban transport in Page 50 of 132 The World Bank Morocco Urban Transport Program PforR AF (P173048) targeted corridors in the program area. Proposed New PDO The Program Development Objective is to strengthen the capacity of urban transport institutions to plan, implement and monitor infrastructure and services, and to improve the level of service of urban transport in targeted corridors in the Program Area. LOAN CLOSING DATE(S) Ln/Cr/Tf Status Original Closing Current Proposed Proposed Deadline Closing(s) Closing for Withdrawal Applications IBRD-85600 Effective 30-Jun-2020 30-Jun-2021 30-Jun-2024 30-Oct-2024 Page 51 of 132 The World Bank Morocco Urban Transport Program PforR AF (P173048) IX. RESULTS FRAMEWORK AND MONITORING Results Framework COUNTRY: Morocco Morocco Urban Transport Program PforR AF Program Development Objective(s) The Program Development Objective is to strengthen the capacity of urban transport institutions to plan, implement and monitor infrastructure and services, and to improve the level of service of urban transport in targeted corridors in the Program Area. Project Development Objective Indicators by Objectives/ Outcomes Indicator Name DLI Baseline Intermediate Targets End Target 1 2 Number of cities of more than 100,000 inhabitants that improved their institutional score Number of cities (with more than 100,000 inhabitants) that improved their urban transport institutional 0.00 22.00 25.00 27.00 assessment score by at least 10 percent (Number) Action: This indicator has been Revised Percentage of corridors supported by the Program that meet their objectives in terms of time saved Page 52 of 132 The World Bank Morocco Urban Transport Program PforR AF (P173048) Indicator Name DLI Baseline Intermediate Targets End Target 1 2 Percentage of corridors in the Priority Program of Corridors (PPC) supported under the Program that meet their 0.00 0.00 57.00 95.00 objectives in reduction of urban transport journey time (Percentage) Action: This indicator has been Revised Intermediate Results Indicators by Results Areas Indicator Name DLI Baseline Intermediate Targets End Target 1 2 Strengthened central capacity to coordinate, support and monitor urban transport (Action: This Result Area has been Revised) Actions to further strengthen National M&E, coordination, and National M&E, coordination, and National M&E, coordination, and Strengthened M&E system for the urban national M&E, coordination, and support for the urban transport support for the urban transport support for the urban transport transport sector (Text) support for the urban transport sector have started to be further sector has been strengthened to sector have continued to function sector have been identified. strengthened. function as needed. as needed. Action: This indicator has been Revised Actions to further strengthen the The Urban Transport Fund has been Strengthened Urban Transport Fund Actions identified under DLR #2.5 Actions identified under DLR #2.6 Urban Transport Fund have been strengthened to function as (Text) have been completed. have been completed. identified. needed. Action: This indicator has been Revised Page 53 of 132 The World Bank Morocco Urban Transport Program PforR AF (P173048) Indicator Name DLI Baseline Intermediate Targets End Target 1 2 Strengthened local capacity to plan, implement and monitor urban transport Number of operational associations of 3.00 4.00 4.00 5.00 urban agglomerations (Number) Action: This indicator has been Revised Number of urban mobility master plans prepared using a structured process and 7.00 8.00 9.00 9.00 a participatory approach (Number) Action: This indicator has been Revised Number of operational municipality- owned urban transport enterprises 4.00 5.00 6.00 6.00 (Number) Action: This indicator has been Revised Improved level of service of urban transport on targeted corridors Percentage of Priority Program of Corridors completed and open to traffic 8.50 30.00 50.00 (Percentage) Action: This indicator has been Revised Percentage of progress in the execution of the Priority Program of 0.00 50.00 100.00 Corridors (Percentage) Page 54 of 132 The World Bank Morocco Urban Transport Program PforR AF (P173048) Indicator Name DLI Baseline Intermediate Targets End Target 1 2 Action: This indicator is New Percentage of corridors supported by Program that meet their time saving 0.00 57.00 95.00 objectives (Percentage) Action: This indicator has been Revised Direct Program beneficiaries (Number) 0.00 40,000.00 70,000.00 150,000.00 Action: This indicator has been Revised of which female (Percentage) 0.00 50.00 Action: This indicator has been Revised User satisfaction rate (percentage) for the implemented corridors, 0.00 0.00 0.00 75.00 disaggregated by gender (Percentage) Action: This indicator is New of which female (Percentage) 0.00 0.00 0.00 80.00 Action: This indicator is New of which male (Percentage) 0.00 70.00 Page 55 of 132 The World Bank Morocco Urban Transport Program PforR AF (P173048) Indicator Name DLI Baseline Intermediate Targets End Target 1 2 Action: This indicator is New Awarding, extension or amendment as needed of urban mobility concessions for No No No Yes implemented corridors (Yes/No) Action: This indicator is New Deployment of an operational Grievance Redress Mechanism (GRM) for the No No No Yes operations of implemented corridors (Yes/No) Action: This indicator is New Preparation and implementation of gender action plans for urban transport No No No Yes at the local level (Yes/No) Action: This indicator is New Change in the share of female ridership in 0.00 10.00 targeted corridors (Percentage) Action: This indicator is New Cumulative GHG emission saved (in tons) 0.00 10,000.00 as a result of the Program (Number) Action: This indicator is New Page 56 of 132 The World Bank Morocco Urban Transport Program PforR AF (P173048) Monitoring & Evaluation Plan: PDO Indicators Methodology for Data Responsibility for Data Indicator Name Definition/Description Frequency Datasource Collection Collection Yearly institutional assessment carried out by the DGCT (MoI) to Yearly urban assess the country’s transport largest primary and institutional secondary cities, based, assessment among others, on their carried out by (i) level of inter- The indicator measures the the DGCT municipal cooperation Number of cities (with more than 100,000 progress in the number of (similarly to and coordination of inhabitants) that improved their urban cities of more than 100,000 Annual DGCT (MoI) parent urban transport, (i) transport institutional assessment score inhabitants that improved operation), capacity and resources by at least 10 percent their institutional score with updates to plan and monitor based on the urban transport recent needs infrastructure and and evolution services, and (iii) of the sector. capacity to implement urban transport infrastructure and services Percentage of corridors in the Priority Percentage of targeted Field Average urban transport Program of Corridors (PPC) supported corridors that are measurement journey time, as the Annual DGCT (MoI) under the Program that meet their developed and for which carried out by average time (in objectives in reduction of urban transport collected average urban the Ministry minutes) that is journey time transport journey time is of Interior necessary for buses to Page 57 of 132 The World Bank Morocco Urban Transport Program PforR AF (P173048) the average time (in using consulta complete a corridor, minutes) that is necessary nts and data accounting for all for buses to complete a from necessary operational corridor, accounting for all operators stops, is collected on the necessary operational when ground stops, is within agreed available. using consultants. targets. During civil works, journey time will be considered constant for the Program. Monitoring & Evaluation Plan: Intermediate Results Indicators Methodology for Data Responsibility for Data Indicator Name Definition/Description Frequency Datasource Collection Collection Collection of The indicator measures the administrative and progress achieved in operational Administrative strengthening the M&E, documentation of the and coordination, and support said unified structure operational system for the urban dedicated to M&E, Strengthened M&E system for the urban Annual documentatio DGCT (MoI) transport sector as part the coordination, and transport sector n and data of improvement of the central support of the sector, the DGCT capacity to coordinate, regarding its formal (MoI) support and monitor the creation, its human sector resources, its procedures, and its actions. Page 58 of 132 The World Bank Morocco Urban Transport Program PforR AF (P173048) The indicator measures the Administrative progress achieved in and Collection of strengthening the Urban operational administrative and DGCT (MoI) and Urban Transport Fund as part of Annual. documentatio operational Transport Fund Strengthened Urban Transport Fund the improvement of n of the Urban documentation of the Committee. central capacity to Transport Urban Transport Fund. coordinate, support and Fund. monitor the sector This indicator measures the mainstreaming of Collection by the DGCT operational associations of Relevant (MoI) of the relevant urban agglomerations associations administrative, financial inter-municipal Number of operational associations of Annual. of urban and operational DGCT (MoI) coordination arrangements urban agglomerations agglomeration documentation of the to strengthen local capacity s. relevant associations of to plan, implement and urban agglomerations. monitor urban transport Collection by the DGCT This indicator measures the (MoI) of the relevant mainstreaming of urban administrative and DGCT (MoI), in Number of urban mobility master plans Relevant mobility master plans Annual. operational coordination with the prepared using a structured process and a municipalities. prepared using a documentation relevant municipalities. participatory approach structured process and a pertaining to the master participatory approach. plans from the relevant municipalities. Page 59 of 132 The World Bank Morocco Urban Transport Program PforR AF (P173048) Collection by the DGCT (MoI) of the relevant Relevant DGCT (MoI), in This indicator measures the administrative, financial municipally- coordination with the Number of operational municipality- mainstreaming operational Annual. and operational owned relevant municipally owned urban transport enterprises municipality-owned urban documentation of the enterprises. owned enterprise. transport enterprises. relevant municipally- owned enterprises. The indicator tracks the Collection of share of Priority Program administrative and of Corridors completed and DGCT (MoI), in Relevant operational open to traffic as a coordination with the implementing documentation of Percentage of Priority Program of measure of improved level Annual. relevant implementing agencies at physical progress, Corridors completed and open to traffic of service of urban agencies at the local the local level. completion and use of transport on targeted level. infrastructure and corridors. systems. Calculation of the rate of certified physical progress of AF MoI, in collaboration The indicator measures the Operational, subprojects, as the with the relevant local Percentage of progress in the percentage of progress in contractual Annual cumulative contractual entities in charge of execution of the Priority Program of the execution of the and financial amount certified as subprojects Corridors Priority Program of data completed divided by implementation. Corridors under the AF. the corresponding contractual commitment amounts. Page 60 of 132 The World Bank Morocco Urban Transport Program PforR AF (P173048) This indicator tracks the percentage of corridors DGCT (MoI), in supported by Program that coordination with the Percentage of corridors supported by meet their time saving Annual. relevant implementing Program that meet their time saving objectives as a measure of agencies at the local objectives improved level of service of level. urban transport on targeted corridors. This indicator measures the Operational data on DGCT (MI), in Operational number of daily users of daily ridership, collected coordination with the Annual data on daily Direct Program beneficiaries urban transport corridors by urban transport relevant entities at the ridership carried out in the context operators local level. of the Program of which female Public Collection of data among transport user public transport user Twice (mid- surveys through surveys to be Relevant implementing The indicator measures the term and User satisfaction rate (percentage) for the (including commissioned by agencies at the local progress in the user last year of implemented corridors, disaggregated by baseline as implementing agencies level, in coordination satisfaction rate for the implement gender much as and/or operators among with the DGCT (MoI). implemented corridors. ation). possible) to be the users of carried out. implemented corridors. of which female of which male Page 61 of 132 The World Bank Morocco Urban Transport Program PforR AF (P173048) Administrative and Collection of operational administrative and data operational data pertaining to pertaining to the formal This indicator measures the Twice (mid- the formal DGCT (MoI), in awarding, extension or formal awarding, extension term and awarding, coordination with the Awarding, extension or amendment as amendment, as needed, or amendment, as needed, last year of extension or relevant implementing needed of urban mobility concessions for of urban mobility of urban mobility implement amendment, agencies at the local implemented corridors concessions for concessions for ation). as needed, of level. implemented implemented corridors. urban mobility corridors in the context concessions of the additional for financing implemented corridors. The indicator measures the existence of an operational Grievance Redress Mechanism (GRM) for the Administrative DGCT (MoI), in operations of implemented and Collection on data on coordination with the Deployment of an operational Grievance corridors, deployed to Monthly operational said GRM, once relevant Redress Mechanism (GRM) for the ensure that citizens have data on said deployed. implementing agencies operations of implemented corridors the possibility to provide GRM. at the local level. feedback and that any reclamation received appropriately handled and addressed until its conclusion. Page 62 of 132 The World Bank Morocco Urban Transport Program PforR AF (P173048) The indicator measures the achievement in the Operational Documentation of the Twice (mid- DGCT (MoI), in preparation and data of the level of implementation term and coordination with the Preparation and implementation of implementation of gender relevant of said actions by the last year of relevant gender action plans for urban transport at actions plans for urban implementing relevant implementing implement implementing agencies the local level transport at the local level agencies at agencies at the local ation). at the local level. for the corridors the local level. level. implemented under the additional financing Surveys (in stations The indicator measures the and/or on-board ) or change in the share of Once (last other similar acceptable Operational MoI, in coordination female ridership in year of means of gender- data on urban with relevant local Change in the share of female ridership in targeted corridors under Program disaggregated ridership transport ride entities, particularly targeted corridors the AF as a result of implement data at the level of rship. operators improved conditions for ation) urban transport women, including in terms operators for targeted of safety and security. corridors under the AF MoI in This indicator measures the Estimated based on coordination Cumulative GHG emission saved (in tons) GHG emissions saved (in Annual operational data and MoI with relevant as a result of the Program tons) as a result of Program assumptions. local entities activities Page 63 of 132 The World Bank Morocco Urban Transport Program PforR AF (P173048) Disbursement Linked Indicators Matrix DLI IN00874887 A CTION DLI 1 Strenghtened M&E system for the urban transport sector Type of DLI Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount Process No Text 20.00 0.00 Period Value Allocated Amount (USD) Formula Current M&E system is paper-based and limited Baseline in scope and depth Year 1 20.00 Year 2 0.00 Year 3 0.00 Action: This DLI has been Revised. See below. DLI IN00876079 ACTION DLI 1 Strenghtened M&E system for the urban transport sector Type of DLI Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount Output No Text 14.62 0.00 Period Value Allocated Amount (USD) Formula Actions to further strengthen national M&E, Baseline coordination, and support for the urban transport sector have been identified. Page 64 of 132 The World Bank Morocco Urban Transport Program PforR AF (P173048) National M&E, coordination, and support for the Year 1 urban transport sector have started to be further 0.00 strengthened. National M&E, coordination, and support for the Year 2 urban transport sector has been strengthened to 10.00 function as needed. National M&E, coordination, and support for the Year 3 urban transport sector have continued to 4.62 function as needed. DLI IN00874888 A CTION DLI 2 Strengthened Urban Transport Fund Type of DLI Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount Process No Text 25.00 0.00 Period Value Allocated Amount (USD) Formula The Urban Transport Fund’s institutional and Baseline financial arrangements are under preparation. Year 1 25.00 Year 2 0.00 Year 3 0.00 Action: This DLI has been Revised. See below. Page 65 of 132 The World Bank Morocco Urban Transport Program PforR AF (P173048) DLI IN00876080 ACTION DLI 2 Strengthened Urban Transport Fund Type of DLI Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount Output No Text 20.00 0.00 Period Value Allocated Amount (USD) Formula Actions to further strengthen the Urban Baseline Transport Fund have been identified. Actions identified under DLR #2.5 have been Year 1 10.00 completed Actions identified under DLR #2.6 have been Year 2 10.00 completed The Urban Transport Fund has been Year 3 0.00 strengthened to function as needed. DLI IN00874889 A CTION DLI 3 Number of operational associations of urban aglomerations Type of DLI Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount Intermediate Outcome No Number 16.66 0.00 Period Value Allocated Amount (USD) Formula Baseline 0.00 Year 1 16.66 Year 2 0.00 Page 66 of 132 The World Bank Morocco Urban Transport Program PforR AF (P173048) Year 3 0.00 Action: This DLI has been Revised. See below. DLI IN00876226 ACTION DLI 3 Number of operational associations of urban aglomerations Type of DLI Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount Output Yes Number 15.00 0.00 Period Value Allocated Amount (USD) Formula Baseline 3.00 Year 1 4.00 7.50 Year 2 4.00 0.00 Year 3 5.00 7.50 DLI IN00874890 A CTION DLI 4 Number of urban mobility masterplans prepared using a structured process and participatory approach Type of DLI Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount Output Yes Number 15.00 0.00 Period Value Allocated Amount (USD) Formula Baseline 3.00 Year 1 15.00 Page 67 of 132 The World Bank Morocco Urban Transport Program PforR AF (P173048) Year 2 0.00 Year 3 0.00 Action: This DLI has been Revised. See below. DLI IN00876227 ACTION DLI 4 Number of urban mobility masterplans prepared using a structured process and participatory approach Type of DLI Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount Output Yes Number 15.00 0.00 Period Value Allocated Amount (USD) Formula Baseline 7.00 Year 1 8.00 7.50 Year 2 9.00 7.50 Year 3 9.00 0.00 DLI IN00874891 A CTION DLI 5 Number of operational municipally-owned urban transport enterprises Type of DLI Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount Outcome No Number 25.00 0.00 Period Value Allocated Amount (USD) Formula Baseline 2.00 Page 68 of 132 The World Bank Morocco Urban Transport Program PforR AF (P173048) Year 1 25.00 Year 2 0.00 Year 3 0.00 Action: This DLI has been Revised. See below. DLI IN00876222 ACTION DLI 5 Number of operational municipally-owned urban transport enterprises Type of DLI Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount Output Yes Number 10.00 0.00 Period Value Allocated Amount (USD) Formula Baseline 4.00 Year 1 5.00 5.00 Year 2 6.00 5.00 Year 3 6.00 0.00 DLI IN00874892 A CTION DLI 6 Percentage of Priority Program of Corridors completed and open to traffic Type of DLI Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount Outcome No Percentage 30.00 0.00 Period Value Allocated Amount (USD) Formula Page 69 of 132 The World Bank Morocco Urban Transport Program PforR AF (P173048) Baseline 0.00 Year 1 30.00 Year 2 0.00 Year 3 0.00 Action: This DLI has been Revised. See below. DLI IN00876228 ACTION DLI 6 Percentage of Priority Program of Corridors completed and open to traffic Type of DLI Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount Output Yes Percentage 15.00 0.00 Period Value Allocated Amount (USD) Formula Baseline 30.00 Year 1 30.00 0.00 Year 2 30.00 0.00 Year 3 50.00 15.00 Page 70 of 132 The World Bank Morocco Urban Transport Program PforR AF (P173048) DLI IN00882420 A CTION DLI 6.1 Percentage of progress in the execution of the Priority Program of Corridors Type of DLI Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount Output Yes Percentage 50.00 0.00 Period Value Allocated Amount (USD) Formula Baseline 0.00 Year 1 0.00 0.00 Year 2 50.00 25.00 Year 3 100.00 25.00 Action: This DLI is New DLI IN00874893 A CTION Percentage of corridors in the Priority Program of Corridors supported under the Program that meet their objective in DLI 7 reduction of urban transport journey time Type of DLI Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount Outcome No Percentage 30.00 0.00 Period Value Allocated Amount (USD) Formula Baseline 0.00 Year 1 30.00 Page 71 of 132 The World Bank Morocco Urban Transport Program PforR AF (P173048) Year 2 0.00 Year 3 0.00 Action: This DLI has been Revised. See below. DLI IN00876508 ACTION Percentage of corridors in the Priority Program of Corridors supported under the Program that meet their objective in DLI 7 reduction of urban transport journey time Type of DLI Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount Outcome Yes Percentage 10.00 0.00 Period Value Allocated Amount (USD) Formula Baseline 0.00 Year 1 0.00 0.00 Year 2 57.00 0.00 Year 3 95.00 10.00 Verification Protocol Table: Disbursement Linked Indicators DLI 1 Strenghtened M&E system for the urban transport sector Description Page 72 of 132 The World Bank Morocco Urban Transport Program PforR AF (P173048) Data source/ Agency Verification Entity Procedure DLI 1 Strenghtened M&E system for the urban transport sector For DLR#1.5, disbursements will be triggered when the national M&E, coordination and support for the urban transport sector has been further strengthened following (i) the operationalization of the newly created unified administrative structure dedicated to this purpose through the selection and appointment of staff with the required skills and qualifications for its key positions and the preparation and adoption of its organizational and operational procedures and documentation for this structure, and (ii) the design and delivery of a first round of technical support program in urban mobility for select cities (at least 5); all as further described in the Program Operations Manual. For DLR#1.6, disbursements will be triggered when the national M&E, coordination and support for the urban transport sector has been further strengthened, following (i) the continuity of provision of the required staff for the said he newly created unified administrative structure dedicated to this purpose, (ii) the design, based on needs identified based on M&E, and delivery by the said structure of a second round of a technical support program for select cities (at least 5), (iii) the Description refinement, as needed, by the said structure of the strengthened M&E system and the adaptation of its features to the new attributions of the unified structure, and (iv) the leadership and facilitation by the said structure of a Community of Practice (CoP) deemed functional and active at the national level to enable increased M&E of the sector and foster coordination, collaboration and knowledge exchange for the joint development of urban transport solutions; all as further described in the Program Operations Manual. A unified structure for the coordination, support and M&E of urban mobility is one that consolidates all (or most of) the units, services and entities previously involved in the sector at the central level in the Ministry of Interior as the line ministry for urban mobility. Organizational and operational procedures and documentation are ones formalizing the creation and operationalization of Page 73 of 132 The World Bank Morocco Urban Transport Program PforR AF (P173048) the said structure, including organizational hierarchies, roles and responsibilities, and accountabilities (including through internal protocols and operational guidelines), and necessary sectoral toolkits and technical resources. A technical support program in urban mobility is a program, satisfactory in form and substance, that comprises activities (including in terms of capacity building) to provide and share technical expertise in one or several of the following areas identified : (a) implementation and M&E of urban mobility activities and projects (particularly mass transit ones), (b) preparation, negotiation, monitoring, and supervision of contractual arrangements with urban mobility operators, (c) application of disruptive technologies in urban mobility, and (d) multimodal integration and demand management of mobility, including the management of traffic, parking, and land-use. A strengthened M&E system is the improved process to analyze and monitor sectoral activities, projects, and investments. A Community of Practice (CoP) is group of experts and practitioners that interacts regularly using a formal framework on urban transport for a similar objective. The said CoP will be considered functional and active if the following conditions are satisfied: (a) formal framework organizing its operations and activities, and (b) regular interactions as necessary between its members including through physical (conferences, workshops, seminars, etc.) and/or virtual (webinars, videoconferences, etc., particularly given the Covid-19-related context) means. DGCT (MoI) Data source/ Agency IGAT as the IVA of the Program. Verification Entity For DLR#1.5, review by the Ministry of Interior and verification by the IVA of the administrative and operational documentation of the unified structure regarding its formal creation, the appointment of its staff, the preparation and adoption of its operational procedures, and of the delivery of the first round of its technical support program. Procedure For DLR#1.6, review by the Ministry of Interior and verification by the IVA of the administrative and operational documentation of the unified structure for its continued provision with the required staff, of the delivery of the second Page 74 of 132 The World Bank Morocco Urban Transport Program PforR AF (P173048) round of its technical support program, and of the refining as needed of the strengthened M&E system and adaptation of its design and features to the new attributions of the unified structure. DLI 2 Strengthened Urban Transport Fund Description Data source/ Agency Verification Entity Procedure DLI_TBL_VERIFICATION DLI 2 Strengthened Urban Transport Fund For DLR#2.5, disbursements will be triggered when the Urban Transport Fund has been further strengthened through: (i) the provision of the Urban Transport Fund with sufficient financial resources; (ii) the update of its Priority Program of Corridors (PPC) as needed in line with the AF; and (iii) the continuity of its operational processes, including the frequency of its meetings (at least on a bi-annual basis) and the preparation of an annual report on its activities; all as further described in the Program Operations Manual. For DLR#2.6, disbursements will be triggered when the Urban Transport Fund has been further strengthened through: (i) Description the refinement and streamlining of its current financial procedures and documentation (particularly in terms of disbursement, and debt repayment) and update of its operational manual in this regard; (ii) the continuity of its operational processes, including the frequency of its meetings (at least on a bi-annual basis) and the preparation of an annual report on its activities; (iii) the carrying out by the Ministry of Finance, in partnership with other relevant actors, of an assessment (based on a structured analysis) of the opportunity and relevance of maximizing alternative or private financing for the urban mobility sector, and the recommendation (as appropriate and relevant) of possible implementation methods; (iv) the provision of Urban Transport Fund with sufficient financial resources; and (vi) the provision by the Urban Transport Fund of adequate funding to urban transport projects for an amount equivalent to at least 75 percent of its annual programmed Page 75 of 132 The World Bank Morocco Urban Transport Program PforR AF (P173048) disbursement requests validated by the Urban Transport Fund; all as further described in the Program Operations Manual. An annual report is one that provides a comprehensive description of the Urban Transport Fund’s activities for the previous year. Sufficient financial resources are ones that are provided to the Urban Transport Fund to result in its end-year fund balance being equivalent to at least the 6-month fund disbursement commitment amount or a similar metric. DGCT and Urban Transport Fund. Data source/ Agency IGAT as the IVA of the Program. Verification Entity For DLR#2.5, review by the Ministry of Interior and verification by the IVA of the relevant administrative, financial and operational documentation for the activities of the Urban Transport Fund, including, inter alia, its financial statements, minutes of meetings, and annual reports. Procedure For DLR#2.6, review by the Ministry of Interior and verification by the IVA of the relevant administrative, financial and operational documentation for the activities of the Urban Transport Fund, including inter alia its operations manual, financial statements, disbursement forms, minutes of meetings, and annual reports. DLI 3 Number of operational associations of urban aglomerations Description Data source/ Agency Verification Entity Procedure Page 76 of 132 The World Bank Morocco Urban Transport Program PforR AF (P173048) DLI_TBL_VERIFICATION DLI 3 Number of operational associations of urban aglomerations Inter-municipal coordination arrangements, including associations of urban agglomerations (ECI in French) or other similar arrangements satisfactory for the World Bank with urban transport attributions will be considered operational and judged eligible to count towards the targets if all the following conditions are satisfied: (i) formal approval of creation or adoption by the Ministry of Interior; (ii) definition and adoption of budgetary or expenditure sharing arrangements for the inter- municipal cooperation arrangement; (iii) preparation and adoption of operational protocols and guidelines to streamline roles, responsibilities, and accountabilities for the arrangement (as part of their operational procedures or framework agreements, in line with the applicable national framework); (iv) creation or designation of administrative or management structure (or similar arrangement in accordance with the applicable regulation) for its management and/or supervision; and Description (v) overall satisfactory performance in its intended functions in terms of management and coordination of transport services at the agglomeration level, as measured by the oversight of the preparation of planning documents and/or studies, the awarding, extension or amendment of urban transport concessions (or equivalent), and/or the regular adequate monitoring and supervision of urban transport service delivery. From a baseline of 3, for each additional association of urban agglomerations deemed operational, 7,500,000 may be made available for withdrawal by the Borrower, up to 15,000,000. DGCT (MoI) and relevant associations of urban agglomerations. Data source/ Agency IGAT as the IVA of the Program. Verification Entity Review by the Ministry of Interior and verification by the IVA of the relevant administrative, financial and operational documentation (including financial statements, disbursement forms, minutes of meetings) of the relevant inter-municipal coordination arrangements regarding inter alia its creation or adoption, its budgetary or expenditure sharing arrangements Procedure (or equivalent), operational protocols and guidelines (or equivalent), and existing administrative structure (or similar arrangement in accordance with the applicable regulation). Page 77 of 132 The World Bank Morocco Urban Transport Program PforR AF (P173048) DLI_TBL_VERIFICATION DLI 4 Number of urban mobility masterplans prepared using a structured process and participatory approach Description Data source/ Agency Verification Entity Procedure DLI 4 Number of urban mobility masterplans prepared using a structured process and participatory approach A finalized (or significantly updated) urban mobility master plans(or equivalent) will be eligible to count towards the targets if carried out by an independent consulting firm on behalf of a city of more than 100,000 inhabitants (based on latest available census) using a structured process and participatory approach. A structured process is one that includes inter alia as applicable : (i) review of the legal, regulatory, and institutional framework of mobility, description of main stakeholders and their role, and identification of specific local factors and trends influencing mobility; (ii) description of the current characteristics of mobility systems or flows based on existing data and additional data collected if needed, and identification of current mobility needs, issues and deficiencies; (iii) determination of gaps to desired future outcomes by forecasting future mobility demand, needs, and distribution based on trends in Description urban, demographic and/or socio-economic development; (iv) identification of potential options to achieve future outcomes and evaluation of the impacts, technical feasibility, requirements, constraints, risks and opportunities of these alternatives; and (v) recommendation, based on the evaluation of considered options, of a detailed action plan to reach desired mobility outcome, and preparation of a mid-term priority action plan with a strong focus on its main components. A participatory approach is one that entails involvement and participation of stakeholders (including civil society representatives such as for instance non-governmental organization working on gender issues) in the preparation of said documents through inter alia at least one of the following measures: (i) conduct of survey to collect data on and reflect views of beneficiaries; (ii) representation in the steering committee, technical committee, and/or ad-hoc structures; (iii) Page 78 of 132 The World Bank Morocco Urban Transport Program PforR AF (P173048) information sharing and dissemination of relevant documentation in advance and response to requests for clarification; and/or (iv) holding of pre-approval consultations and documentation of outcomes of the discussions, and incorporation of feedback and outcomes of consultations in the planning process when relevant. From a baseline of 7, for each additional urban mobility master plans prepared using a structured process and a participatory approach, 7,500,000 may be made available for withdrawal by the Borrower, up to 15,000,000. DGCT (MoI) Data source/ Agency IGAT as the IVA of the Program. Verification Entity Review by the Ministry of Interior and verification by the IVA of the administrative and operational documentation Procedure (including deliverables) for the finalized studies focusing on the process and approach followed. DLI_TBL_VERIFICATION DLI 5 Number of operational municipally-owned urban transport enterprises Description Data source/ Agency Verification Entity Procedure DLI_TBL_VERIFICATION DLI 5 Number of operational municipally-owned urban transport enterprises A municipally-owned urban mobility enterprise, in the form of a local joint-ownership company (SDL in French) or a satisfactory equivalent, for a city (or several) of more than 100,000 inhabitants will be considered operational and judged Description eligible to count towards the targets if all the following conditions are satisfied: (i) legal existence; (ii) production of an annual report (or equivalent); (iii) appointment of staff or a management structure with the required skills and qualifications (or existence of a similar arrangement in accordance with the applicable regulation for its management Page 79 of 132 The World Bank Morocco Urban Transport Program PforR AF (P173048) and/or supervision); (iv) existence or preparation and adoption of an Action Plan and/or Investment Program (or equivalent); and (v) satisfactory delivery of (a) infrastructure (defined as the implementation or contractual commitment of at least 50 percent of its annual investment programs) and/or (b) services (defined as the adequate provision of services in terms of supply and/or quality in line with the relevant agreed contractual agreement or equivalent). An urban transport enterprise is a public entity that oversees, among others, one or several of the following missions : planning, technical support, project management, supervision, financing, contract management, monitoring and evaluation, auditing, etc. of urban mobility actions, initiatives, projects and/or operations on behalf of one or several municipalities. An annual report is one that provides a comprehensive description of the activities of the entity for the previous (or ongoing) fiscal year. An Action Plan and/or Investment Program (or equivalent) is one that includes the actions, initiatives, and/or projects to be carried out by the enterprise. From a baseline of 4, for each municipally owned urban transport Enterprises deemed operational, 5,000,000 may be made available for withdrawal by the Borrower, up to USD 10,000,000. DGCT and relevant municipally-owned urban transport enterprises Data source/ Agency IGAT as the IVA of the Program Verification Entity Review by the MoI and verification by the IVA of the administrative and operational documentation on the municipal urban Procedure mobility enterprise, including in terms of creation or extension of attributions, human resources, reporting, and planning. DLI 6 Percentage of Priority Program of Corridors completed and open to traffic Description Page 80 of 132 The World Bank Morocco Urban Transport Program PforR AF (P173048) Data source/ Agency Verification Entity Procedure DLI 6 Percentage of Priority Program of Corridors completed and open to traffic Percentage of Priority Program of Corridors remains defined as the portion of the total of kilometers of corridors recommended by the updated Priority Program of Corridors that are considered eligible to the PforR Program. Kilometers of corridors, implemented according to standards to be defined in the Program Operations Manual (POM), will be considered eligible to count towards the targets if completed and open to traffic for urban transport during the implementation period of the Program. A minimal cumulative length of eligible corridors of 45 kilometers is required to be completed and open to traffic under the PforR Program (including its Additional Financing) before the end of the implementation period of the Program. Description From a baseline of 30, for each percentage point of Priority Program of Corridors completed and open to traffic, 7,500,000 may be made available for withdrawal by the Borrower, up to 15,000,000. Under the AF, DLI 6.1 will be linked to budgetary execution rate of Priority Program of Corridors under the AF, which is the rate of certified physical progress of AF subprojects, calculated as the cumulative contractual amount certified as completed divided by the corresponding contractual commitment amounts. For each additional percent in the budgetary execution rate of the targeted corridors under the AF, a scalable amount may be made available by the World Bank for withdrawal by Recipient. DGCT (MoI). Data source/ Agency IGAT as the IVA of the Program. Verification Entity Page 81 of 132 The World Bank Morocco Urban Transport Program PforR AF (P173048) Review and verification by the IVA of administrative and operational documentation of physical progress of infrastructure and the physical verification (if necessary) of a sample of corridors (including for adherence to the standards defined in the Procedure POM). DLI_TBL_VERIFICATION DLI 6.1 Percentage of progress in the execution of the Priority Program of Corridors The indicator measures the percentage of progress (measured by the budgetary execution rate) in the execution of the new eligible subprojects (as defined in the POM) in the Priority Program of Corridors under the AF. The rate of physical progress of infrastructure will calculated as the budgetary execution rate of infrastructure (including related equipment, systems and services) i.e. the cumulative contractual amount certified as completed divided by the corresponding contractual commitment amounts (up to US$ 150 millions). The cumulative contractual amount certified as completed will be the amount certified by the relevant implementing agencies for each subproject based on the Description recommendations of contracted supervision consultants or equivalent in this regard. During the last year of implementation, certification of the finalization of the relevant infrastructures and/or its operation will be sufficient to confirm the achievement of the target of the indicator. From a baseline of 0, for each percentage point of progress in the execution of new eligible sub-projects under the Priority Program of Corridors, 500,000 may be made available for withdrawal by the Borrower, up to 50,000,000. Operational, contractual and financial data and documentation consolidated by the MoI, in collaboration with the relevant Data source/ Agency local entities in charge of the implementation of AF subprojects. IGAT as the IVA of the Program. Verification Entity Review and verification by the IVA of operational, contractual and financial data and documentation of physical progress of infrastructure. Procedure Page 82 of 132 The World Bank Morocco Urban Transport Program PforR AF (P173048) DLI_TBL_VERIFICATION Percentage of corridors in the Priority Program of Corridors supported under the Program that meet their objective in DLI 7 reduction of urban transport journey time Description Data source/ Agency Verification Entity Procedure Percentage of corridors in the Priority Program of Corridors supported under the Program that meet their objective in DLI 7 reduction of urban transport journey time Average urban transport journey time is the average time (in minutes) that is necessary for buses to complete a corridor, accounting for all necessary operational stops, with waiting time when appropriate. During civil works, journey time will be considered constant for the Program. A targeted corridor is one for which Program-supported infrastructure and/or systems have been implemented and operated and that will be included in the PPC and the POM. Urban transport journey time reduction targets are the target in percentage (to be determined in the PPC and included in the POM) for each corridor. Partial achievement of targets will result in the disbursement of proportional amounts as Description needed. For each percentage of targeted corridors that achieved their reduction in average journey time of urban transport under the AF, a scalable amount may be made available by the World Bank for withdrawal by Recipient. From a baseline of 57, for each percentage point of corridors in the Priority Program of Corridors supported under the Program that meet their objective in reduction of urban transport journey time, US$ 263,158 is available for withdrawal by the Borrower, up to 10,000,000. Page 83 of 132 The World Bank Morocco Urban Transport Program PforR AF (P173048) DGCT (MoI) Data source/ Agency IGAT as the IVA of the Program. Verification Entity Review and verification by the IVA of the operational process and method used for data collection and systems used for this purpose, in coordination with urban transport operators as needed, for average journey time on targeted corridors and Procedure additional measurements carried out on a sample of corridors (if necessary). . Page 84 of 132 The World Bank Morocco Urban Transport Program PforR AF (P173048) ANNEX 1: INTEGRATED RISK ASSESSMENT . SYSTEMATIC OPERATIONS RISK-RATING TOOL (SORT) Risk Category Latest ISR Rating Current Rating Political and Governance  Moderate  Moderate Macroeconomic  Moderate  Substantial Sector Strategies and Policies  Moderate  Moderate Technical Design of Project or Program  Substantial  Moderate Institutional Capacity for Implementation and  Substantial  Moderate Sustainability Fiduciary  Substantial  Substantial Environment and Social  Moderate  Moderate Stakeholders  Substantial  Moderate Other  Moderate  Moderate Overall  Substantial  Moderate . Page 85 of 132 ANNEX 2: TECHNICAL ASSESSMENT – ADDENDUM I. Program definition and boundaries A. Government program 1. The Government program, combining urban transport sector reforms and investments, remains largely unchanged, with updates to adapt to the evolving context of mobility (including the recent advanced regionalization process) in the country and to reflect emerging local mobility needs. Its objectives remain to reduce economic disparities by improving the access of citizen to social services and economic opportunities and foster urban economic development by enhancing productivity through improved urban transport. The Government program remains structured around Subprogram 1 focused on strengthening of the institutions of the sector, Subprogram 2 focused on strengthening the financing mechanisms of the sector, and Subprogram 3 focused on the development of urban transport corridors to improve access of citizens to economic opportunities and social services. The National Strategy for Urban Mobility (SNMU, summarized in the box below) for Morocco, recently prepared by the MoI with the support of the World Bank, has confirmed the continued relevance of the Government program with the need to further focus on the cross-cutting theme of adequacy, efficiency64, and sustainability of urban transport services. 2. In line with the parent operation, Subprogram 1 of the Government program focuses on strengthening of the institutions of the sector, with updates to adapt to the evolving context of mobility (particularly the recent advanced regionalization process) in the country. At the central level, this subprogram aims at strengthening the capacity to coordinate, support and monitor the sector through the operationalization of the recently created unified administrative structure in the MoI in charge of urban mobility nationwide, absorbing most of the units, services and entities previously involved in the sector at the central level. The operationalization of this structure will entail, inter alia: (i) selection and appointment of staff with the required skills and qualifications for its key positions, (ii) preparation and adoption of operational procedures for this structure, (iii) refining of the strengthened M&E system and adaptation of its design and features to the new attributions of the unified structure, and (iv) design and delivery by the unified structured of a technical support program (including in terms of capacity building) for select cities in the targeted areas in the following areas: implementation and M&E of urban mobility activities and projects (particularly mass transit ones), preparation, negotiation, monitoring, and supervision of contractual arrangements with urban mobility operators, application of disruptive technologies in urban mobility, and multimodal integration and demand management of mobility, including the management of traffic, parking, and land-use. 3. At the local level, this subprogram aims at strengthening municipal coordination at the agglomeration level by supporting the generalization of inter-municipal coordination arrangements such as associations of urban agglomerations for urban transport and similar (such as for instance inter-municipal contractual agreements for the joint provision of public services spanning multiple municipalities) and support their operationalization. The regulatory framework for these arrangements will continue to be refined when 64 Including by using disruptive technologies with the participation of the private sector. Page 86 of 132 The World Bank Morocco Urban Transport Program PforR AF (P173048) required. Complementary institutional measures and capacity building initiatives to support proper planning of urban transport at the agglomeration level will also be carried out. This subprogram aims at strengthening municipal capacity to plan, monitor, deliver urban transport infrastructure and services. This would entail the generalization of municipal urban mobility enterprises as agencies for the sector 65 by incentivizing the (i) creation and operationalization of such entities in charge of managing urban mobility initiatives, projects and operations on behalf of municipalities, and (ii) the extension of the functions of existing ones to other modes (bus, light rail, traffic management, parking, etc.) to reduce institutional fragmentation of urban mobility, foster integrated urban mobility management, and promote multimodal synergies and complementarity rather than competition as it is currently the case. This would also entail the preparation of urban mobility planning studies (including urban mobility, logistics, parking, traffic management, fares, demand management, etc.) that are increasingly relevant to supplement and complement the more general studies that have been carried out in recent years. Other initiatives will need to be carried out for this purpose, particularly to strengthen the capacity and framework for service provision by private operators, including through: (i) the development of updated model contracts for urban mobility concessions (including operational requirements, specifications, and incentives) based on international best practices and local experience gained in recent years, (ii) the improvement of the procedures for management and supervision of such contracts by local authorities to enable the awarding of new urban mobility concessions (or restructuring of existing ones) with increased efficiency and/or sustainability provisions, and (iii) capacity building activities for municipalities on the preparation and management of urban transport concessions (or equivalent). 4. Subprogram 2 of the Government program focuses on strengthening the financing mechanisms of the sector. The Government is committed to continue to support urban transport investments through the Urban Transport Fund given that the sector remains a national priority. The Government will continue to ensure sustained allocation of timely and sufficient financial resources to the Urban Transport Fund. For this purpose, the opportunity and acceptability in the short and medium term of increasing certain sources of revenue (fiscal or other) at the national level currently used in Morocco or to create new ones to finance, directly or indirectly, the urban mobility sector will be explored in the context of the ongoing local tax reform. The Urban Transport Fund will gradually acquire additional human, logistical and technical resources as appropriate, continually reinforce the capacity of its key staff and decision-makers, and refine and streamline its current financial procedures and documentation for efficiency purposes. The Urban Transport Fund will also assess the appropriateness and relevance of the evolution of the Urban Transport Fund into a “second-generation” fund with a higher level of financial, legal, institutional and organizational autonomy. 5. Subprogram 3 of the Government program focuses on the development of urban transport corridors to improve access of citizens to economic opportunities and social services. The Government program comprises expenditures to improve the level of service of urban transport on corridors for an improved access of citizens to economic opportunities and social services. Expenditures include infrastructure, systems66, and equipment (including rolling stock) to develop urban transport corridors in the form of urban light rail lines, Bus Rapid Transit (BRT) lines, bus lanes and associated infrastructure (including in terms of urban roads for bypass and distribution purposes and bridges, underpasses and overpasses for intersection management, and urban renewal actions) and feeder services. Major projects that have been formally announced and programmed for the 2020-2025 period or are already under construction include 65 In the form of local joint-ownership companies or other arrangements. 66 Including traffic management systems, fare management systems and intelligent transport systems. Page 87 of 132 The World Bank Morocco Urban Transport Program PforR AF (P173048) 2 urban light rail lines and 2 BRT lines in Casablanca (a combined 50 kilometers for a cost of around MAD 9 billion), and a BRT line in Agadir (15 kilometers for a cost of around MAD 1 billion). An additional pipeline of several projects in the country’s largest cities and agglomerations, where urban mobility issues are relatively more acute, have been identified for the next decade with the support of the World Bank67. Their implementation is conditional to the preparation of additional studies to confirm their feasibility, relevance and appropriateness, and to the availability of financial resources at the central and local level. Box 1. Overview of the National Urban Mobility Strategy of Morocco - Axis 168 of the SNMU, “Performance, quality of service and integration” focuses on: (i) optimizing existing urban mobility infrastructures, systems and processes, through the improvement of public transport (especially buses) in complementarity with reformed paratransit, as well as traffic management and demand management policies (especially parking), (ii) carrying out the required investments in urban transport corridors (with priority given to Bus Rapid Transit - BRT) and associated infrastructure to improve traffic flow, in particular for public transport, and (iii) improving integrated urban mobility for greater economic, social and environmental efficiency. - Axis 269 of the SNMU, “Governance and management”, aims at sustaining, accelerating and generalizing the progress achieved in this area through: (i) strengthening the role of the Government in terms of technical support at the local level, (ii) strengthening the capacity and coordination of municipalities in terms of planning, management, and delivery of urban mobility (in particular through inter-municipal cooperation arrangements and urban transport enterprises) in support of the advanced regionalization process, and (iii) promoting balanced and appropriate contractual arrangements to ensure the delivery of sustainable and quality services for users by the private sector. - Axis 370 of the SNMU, “Financing”, focuses on: (i) the continuation of the proactive role of the Government in this area, (ii) the mobilization of additional financial resources (including fiscal ones) at the local level for the sector, (iii) the maximization of private sector financing for suitable investments. - Axis 471 of the SNMU, “Social and environmental coherence”, focuses, through specific measures, on the mitigation of the impacts of urban mobility, in terms of: (i) social aspects (inclusion, informality, road safety and security, as an important issue for women), and (ii) environmental aspects (climate change and air pollution). - Axis 572 of the SNMU, “Disruptive technologies”, aims to ensure the adaptation of urban mobility to major emerging trends in innovation through: (i) the adoption of a proactive technology intelligence approach, (ii) the development of specific technical expertise and capacity, and (iii) the strengthening of the regulatory framework in this area to accompany these different trends. B. PforR Program 6. Within the Government program, the AF will focus for the most part on similar activities as the current PforR Program. AF activities will cover strengthening central capacity to coordinate, support, and 67 Including around 200 kilometers of BRT lines. 68 Linked to DLI#4, DLI#6 and DLI#7 of the Program. 69 Linked to DLI#1, DLI#3, DLI#4 et DLI#5 of the Program. 70 Linked to DLI#2 of the Program. 71 Linked to DLI#4 and DLI#7 of the Program. 72 Linked to DLI#6 and DLI#7 of the Program. Page 88 of 132 The World Bank Morocco Urban Transport Program PforR AF (P173048) monitor urban transport, including at the central level and in the Program Area, focusing on the recently created unified administrative structure in the MoI dedicated to the urban mobility nationwide, as part of Subprogram 173, and the Urban Transport Fund which has been supported in the parent operation, as part of Subprogram 2. At the local level, AF will cover strengthening municipal capacity to plan, implement, and monitor urban transport in primary and secondary cities in the Program Area, as part of Subprogram 1. AF activities under Subprogram 3 will cover expenditures, located in cities of more than 100,000 inhabitants in the Program Area, that include civil works, systems and equipment in line with the parent operation for subprojects that aim at reducing the journey time of urban transport users along priority corridors, with a particular focus on Casablanca and Agadir for a total of 25 kilometers under the AF. In addition, given the impact of the Covid-19 pandemic, the expenditure menu of the Program will be expanded under the AF to include temporary operational subsidies that might be needed in the short to medium run to ensure operational continuity of urban transport services and prevent significant financial setbacks at the level of operators, especially if the current situation persists or resurges. The table below present the AF Program (gray shaded cells) as compared with the Government program. Table 1. Comparison of scope between AF Program (gray cells) and the Government program, 2020- 2025 Subprogram 1: Strengthening of the institutions of the sector Activities to strengthen central capacity to coordinate, support, and monitor urban transport (expanded from “activities to strengthen central M&E system for the sector”) Activities to strengthen local capacity to coordinate initiatives at the agglomeration level through inter- Within Program Area74 municipal cooperation entities or similar arrangements Activities to strengthen local technical capacity and resources to plan urban transport activities via urban mobility master plans or similar documents Activities to strengthen local capacity to implement and monitor urban transport infrastructure and Outside of Program systems through urban transport enterprises or Area similar arrangements Capacity building activities Subprogram 2: Strengthening of the sustainable financing mechanism of the sector Activities to strengthen the Urban Transport Fund Central-level 73 Absorbing most of the units, services and entities previously involved in the sector at the central level. 74 The Program Area is constituted of the following regions: Béni Mellal-Khénifra, Casablanca-Settat, Drâa-Tafilalet, Fès-Meknès, Marrakech-Safi, Oriental, Rabat-Salé-Kénitra, Souss-Massa and Tanger-Tétouan-Al Hoceïma. Page 89 of 132 The World Bank Morocco Urban Transport Program PforR AF (P173048) Subprogram 3: Development of urban transport corridors to improve access of citizens to economic opportunities and social services Within Program Area, priority75, and low to moderate risk76 Urban transport infrastructure and systems Outside Program Area, non-priority and/or high risk II. Program capacity assessment A. Capacity assessment of the Ministry of Interior (MoI) 7. The capacity of the MoI, as the agency responsible for the Program and its AF, has been confirmed as adequate taking into account the AF needs. The General Directorate of Territorial Governments (DGCT) of the MoI (previously named General Directorate of Local Governments - DGCL), as the focal point for the World Bank for the parent Program and the proposed AF, has demonstrated its capacity to coordinate the work of Moroccan municipalities and support them in fulfilling their mandates, including through its strong coverage at the regional and local level. The MoI will continue using for the Program existing internal coordination mechanisms which are mostly sound. These mechanisms have evolved in recent years to adapt to the new regulatory context of urban mobility in Morocco, particularly as a result of the recent advanced regionalization process, with its gradual transfer of greater decision-making powers and resources to the local and regional levels. The Division of Urban Mobility and Transport (DDUT) of the DGCT, which was responsible for the monitoring and coordination of day-to-day implementation of the Program and will continue this role for the AF, demonstrated during implementation that it possessed sectoral adequate expertise and ability to provide support to municipalities and has developed the necessary internal capacity to manage the Program after an initial learning curve. The DDUT has been replaced by a Directorate (the DMUT77), absorbing most of the units, services and entities previously involved in the sector at the level of the MoI, with the technical assistance of the World Bank under the AF, and equipped with an additional amount of human resources. This would enable this entity to focus on missions with more added value rather than routine operational and administrative tasks. B. Capacity assessment of the participating municipalities 8. The capacity of participating municipalities to implement AF expenditures has been assessed during preparation as adequate with the appropriate arrangements. Indeed, participating municipalities, particularly through their urban transport enterprises, mostly have the technical and managerial expertise to successfully fulfill their mission in AF, in line with the level of sophistication complexity of subproject investments. While owned by municipalities, urban transport enterprises operate according to private 75 That is, included in the updated Priority Program of Corridors (PPC). 76 That is, unlikely to have a significant adverse impact on the environment and/or affected people, as defined in the Bank Policy on PforR Financing (formerly, OP 9.00) or to involve the procurement of works, goods, non-consulting or consulting services that are above the Bank’s Operations Procurement Review Committee thresholds. 77 Directorate of Urban Mobility and Transport. Page 90 of 132 The World Bank Morocco Urban Transport Program PforR AF (P173048) law78 and are therefore usually able to attract and retain qualified professionals better than most public entities can. These entities also have more flexibility in securing external expertise when needed for technical matters. Increased access to human resources and expertise typically results in a strengthened capacity of cities for infrastructure and service delivery. This delivery model has proved broadly satisfactory in various instances (including in the Program), contributing to deliver planned infrastructure within acceptable timeframe and budget limits79. In addition, adequate project support arrangements will be adopted, operationalized and/or maintained by participating municipalities, particularly to their urban transport enterprises, as part of the updated Program Action Plan. Complementary technical support actions will also be designed based on identified needs and delivered to these entities by the MoI, with the support of the World Bank, for the implementation of AF expenditures. III. Program strategic relevance and technical soundness A. Strategic relevance Program rationale 9. Starting this past decade, most users of public urban transport in large agglomerations have been suffering from inadequate speed and reliability. Despite recent improvement in select corridors as a result of the Program, the commercial speed of public urban transport remains particularly low and unpredictable in large agglomerations. It may go down to around 5 kilometers per hour on average in the country's densest urban areas during peak hours. This situation is mostly due to congestion that causes frequent unnecessary stops, interaction with cars, and inefficient boarding and alighting. Users of other motorized modes (cars, taxis, and microvans) are also suffering from this trend. Covid-19 is likely to compound this issue unless efforts are made to support safe and efficient public urban transport and change the anticipated trajectory in the modal shift towards private vehicles (similarly to other developing countries). This situation results in a loss of time, productivity, and quality of life for citizens. It also has important financial consequences for the private sector, as bus operators consider that it increases their operating costs by at least 10 percent. In addition, it deprives the vast majority of public urban transport of reliability, renders bus schedules useless and contributes even further to its unattractiveness to citizens who may prefer to walk, even several kilometers, for time-sensitive trips. of buses (as the main transit mode in the country) is steadily decreasing and becoming unpredictable in large agglomerations. 10. In the context of the recent advanced regionalization process and as recommended by the new National Strategy for Urban Mobility, the urban transport sector still requires an accelerated and mainstreamed strengthening in terms of capacity and coordination, including at the municipal level, despite notable progress in recent years, including in the context of the Program. The Urban Transport Fund needs to continue to be sustained as the funding mechanism of the sector. The current sector-wide institutional model for the financing, planning and delivery of urban transport services and infrastructure needs to be further refined. The institutional arrangements for inter-municipal cooperation that have been introduced in the 2009 amendment of the Municipal Charter need to be more widely adopted and are operationalized to improve agglomeration-level coordination to achieve network synergies or economies of scale in urban transport. The creation, operationalization and strengthening of sectoral 78 As local joint-ownership companies (Sociétés de Développement local - SDL). 79 It shall be noted that the Supreme Audit Institution of Morocco (Cour des Comptes) has highlighted the lack of operational cost-efficiency of some of these entities. Page 91 of 132 The World Bank Morocco Urban Transport Program PforR AF (P173048) inter-municipal agencies, as municipally-owned enterprises, for urban mobility planning and management need to be mainstreamed and accelerated, where relevant, for the largest agglomerations of the country. The regulatory framework for the provision of public transport services by private operators is still in need of refining. Program timeliness 11. Demand for urban mobility in Morocco’s main primary and secondary cities has sharply increased in the last decades. Several factors that are anticipated to persist through the next decades explain this situation. Cities have spread rapidly due to the sustained urbanization and the demand for lower density residential areas. Morocco’s recent economic progress has resulted in more fast-paced activities and the development of many business activities outside the city centers. Significant societal shifts, such as the greater presence of women in the labor market and the greater autonomy of younger households, have also contributed to increased mobility needs. These changes have resulted in a considerable growth of trips. Most cities have at least doubled the total number of trips taken in the last 30 years. A significant lengthening of commutes has also been noted. This has put substantial pressure on the urban transport systems of Morocco’s large agglomerations. 12. Urban transport remains a pressing priority for the Government, municipalities and citizens and will be particularly needed as an enabler of socio-economic recovery post-Covid-19. Despite recent improvements, citizens still face uneven access to urban transport. There is a need for more structured and integrated interventions to upgrade or expand services in response to the needs of growing urban populations. Cities, as the primary citizen interface for urban transport, continue to require significant strengthening of their institutional capacity to manage and deliver solutions that ensure quality service to all citizens, in line with the recent advanced decentralization reform. Public funds (including municipal resources) remain needed for local priorities to ensure the delivery key services, including to address financial setbacks that may affect stakeholders (in particular in the private sector). 13. To cope with this growth, substantial investments (particularly from the Government of Morocco) have been injected in the sector this past decade. This effort, amounting to several billions of dirhams, has first translated into the development and expansion of urban roads, in particular bypass and ring roads or other associated infrastructure works, which have been implemented in the main agglomerations and cities to ease traffic (including for public transport). In addition, several mass transit projects in the form of urban rail80 have been completed in the past decade, particularly in Greater Rabat and Casablanca. These investments have proven to be satisfactory overall in terms of level of service which compare favorably with international standards. While bus services remain one of the weak links in urban mobility, several new concessions in this area have recently been signed between private operators and the relevant local authorities, offering promising perspectives in this regard in the medium term. Program beneficiaries 14. The Program will continue providing several benefits to the country’s urban citizens. Due to better performing and more accessible urban transport services as is being progressively achieved in the country, urban transport users (including the poor, women and people with limited mobility) will continue 80 Commonly referred to as tramways. Page 92 of 132 The World Bank Morocco Urban Transport Program PforR AF (P173048) benefitting from an enhancement of their productivity, a reduction of vehicle operating costs, and an improvement of access to social services, employment, and economic opportunities. Citizens from participating municipalities at large (including pedestrians) will benefit in the medium to long run from the expected reduction in traffic injuries and fatalities and from the improved air quality due to the decrease in car emissions. Non-participating cities have benefit from knowledge and experience to be generated and shared under the Program and will continue doing so. Program alignment 15. The Program aims to address issues strongly relevant to the GoM, given the strategic midterm priorities detailed in its 2016-2020 political program, stemming from the framework provided by the current Constitution adopted in 2011. The Program will support the “Economic Development and Employment Pillar” of the political program of the GoM by improving the access of citizens, including the poorest households, women, and people with limited mobility, to economic and employment opportunities. Program expenditures will improve the speed and reliability of urban transport which will result in decreased congestion and savings of journey time. This will ultimately increase the productivity of labor, support the emergence of a larger middle class and ensure further sharing prosperity in the country. The Program will support the “Human Development and Social Cohesion” of the political program of the GoM as its activities by facilitating access to social services such as health and education in an inclusive manner. The Program will support the “Governance Pillar” of the political program of the GoM by strengthening the capacity of institutions for an improved service delivery for citizens and by increasing the transparency and accountability of the management of public resources in the urban transport sector. B. Technical soundness Program focus 16. The AF focuses on the relevant activities to strengthen the capacity of urban transport institutions to plan, implement and monitor infrastructure and services, and improve the level of service of urban transport on targeted corridors. The AF expenditures are a key enabler to improve level of service in terms of performance and reliability and therefore result in an increase in the mobility and access of citizens to economic and employment opportunities as well as social services. In line with the parent operation, the itineraries of AF subprojects cover dense urban areas and mostly poor peripheral areas, providing improved accessibility to attractive areas of economic opportunities, employment and social services. As confirmed during preparation, AF subprojects are designed to link residential areas to economic centers such as administrative districts, business districts, commercial areas (including traditional markets), industrial parks, and social services facilities such as hospitals, schools (including vocational ones), and universities. Complementary institutional strengthening activities in the Program are a necessity to enable municipalities to properly plan, monitor and implement urban transport with the support of the Government. Program design 17. In line with its parent operation, the AF will continue to conform to the best practices in designing an urban transport program, drawn from lessons learned from previous World Bank interventions. The AF will continue to combine institutional measures with infrastructure and systems expenditures to Page 93 of 132 The World Bank Morocco Urban Transport Program PforR AF (P173048) achieve the objective of strengthening the capacity of urban transport institutions to plan, implement and monitor infrastructure and services while improving the level of service of urban transport on key corridors. The AF will continue to empower local initiatives, focusing on municipalities with the highest level of capacity, preparedness, interest, and willingness to participate. The AF will continue relying on important support by the central government to cities, focusing on incentives, guidance, steering, coordination, capacity building and knowledge sharing and transfer. Finally, the AF will continue enabling an increased and more sustainable role for the private sector which will be involved in infrastructure construction and systems development and operate urban transport services under balanced contractual arrangements, and co-finance the necessary rolling stock when appropriate. Program expenditures 18. The technical assessment of AF expenditures conducted by the Bank during preparation concluded that the typical subprojects are overall technically appropriate, and their implementation is within the capacity of municipalities with the appropriate arrangements. Technical standards for the AF subprojects compare favorably to international experience and practice for similar investments. As confirmed during Program implementation and AF preparation, the process to plan, design, and execute subprojects is essentially sound. Subprojects are typically defined in planning documents, including urban mobility master plans (PDU) or similar studies, which are generally of adequate quality and are prepared by reputed consulting firms on behalf of municipalities or their relevant urban transport enterprises. AF expenditures are typically designed using the services of specialized consulting firms following the relevant international standards and technical specifications issued and enforced by the GoM. For complex projects, its effectiveness may however depend on the quality of the consultants engaged for the feasibility and design studies, the availability of adequate budget for studies and surveys, and the quality of oversight by the implementing agencies. In terms of execution of civil works, the technical capacity of the country’s construction sector, which is competitive thanks to the large number of qualified local contractors and local subsidiaries of international firms, is commensurate with the typical level of sophistication of the AF subprojects. However, delays and inadequate execution may occur and potentially result in subpar quality of executed works and contribute to decrease the durability of subprojects in the medium run. Key mitigation measures during implementation include the mobilization of adequate project management support arrangements, the use of best practice procedures, and the continuation of day-to-day oversight, guidance, and support by the MoI at the regional level. Program support from stakeholders and development partners 19. The AF will continue benefitting from a high level of support from stakeholders and development partners. The GoM has strong incentives to contribute to the AF results on the ground, including due to the result-linked nature of the financing instrument used. The activities of the AF are core missions of the MoI and municipalities who intend to respond to pressing mobility needs in urban areas. These activities were designed through a participatory approach to ensure full technical and financial support from central, regional, and local actors. Moreover, as customary for urban transport programs, end-users also support the Program, including its timely execution, as they benefit from improved access to economic opportunities and social services, among others. Finally, most donors and IFIs consulted during Program implementation and/or AF preparation81 who support the country’s urban transport sector via technical 81 Including the French Development Agency (AFD), the German Development Agency (GIZ), and the African Development Bank (AfDB). Page 94 of 132 The World Bank Morocco Urban Transport Program PforR AF (P173048) assistance and investment loans intend to remain strongly active in the sector in the future. The World Bank will continue reaching out during implementation to development partners for close coordination and potential collaboration on the AF. Program sustainability 20. Continuity of institutional and financial sustainability of the Program under the AF is expected, in line with the parent operation. In terms of institutional sustainability, urban transport reforms and expenditures, such as those supported by the Program, continue to be endorsed by the highest authority in the country and other central government officials, welcomed by local governments representatives, and urged by civil society as it is seen as instrumental to increase the access of citizens to basic social services and economic opportunities. This has translated into recent announcement by senior state officials of public investments reaching several hundreds of millions of dollars, particularly those to be supported by the AF. The GoM has confirmed its renewed commitment to continue mobilizing as much financial resources (including from the private sector when feasible) as needed for the sector in general and the Urban Transport Fund in particular. In terms of financial sustainability of AF expenditures once in operation, participating municipalities have confirmed during preparation their willingness and capacity to assume their responsibilities in terms of operations and maintenance (O&M), similarly to the parent operation. IV. Program financing and expenditure framework 21. The AF will mostly support the same type of expenditures as the parent operation. Typical expenditures will similarly include infrastructure82, systems83, equipment and goods84, and services85 (as presented in the table below) albeit in a more integrated fashion. Indeed, the AF will support the subset of Subcomponent 3 focused on urban transport corridors in the form of Bus Rapid Transit (BRT) systems. A particular emphasis will be given to Casablanca and Agadir subprojects given their level of preparedness and commitment. In addition, to enable the achievement of the PDO given the impact of the Covid-19 pandemic, the expenditure menu of the Program will be expanded under the AF to include temporary operational subsidies that might be needed in the short to medium run to ensure operational continuity of urban transport services and prevent significant financial setbacks at the level of operators, especially if the current situation persists or resurges. Table 2. Program funding under parent operation and AF Financing source Parent Program AF Program Total IBRD 200 150 350 Borrower 150 35 185 82 Including inter alia urban road works and associated infrastructure. 83 Including inter alia traffic management systems, fare management systems and intelligent transport systems. 84 Including inter alia rolling stock, fare collection equipment, and street lighting equipment and systems. 85 Including consulting and non-consulting services. Page 95 of 132 The World Bank Morocco Urban Transport Program PforR AF (P173048) Table 3. AF Program expenditures by subprogram (2020-2023) AF Program expenditures by subprogram AF amount (US$ Parent Program million) amount (US$ million) Subprogram 1: Strengthening of the institutions of 4 4 the sector Subprogram 2: Strengthening of the sustainable 1 1 financing mechanism of the sector Subprogram 3: Development of urban transport 180 345 corridors Total 185 350 Table 4. Urban transport corridors expenditures (by type) to be supported by the AF (2020- 2023) Type of expenditures 2021 2022 2023 Total Civil works 32 38 38 108 Systems 9 10 10 29 Equipment and goods 7 8 8 23 Consulting and non-consulting services 6 7 7 20 Total 54 63 63 180 22. GoM’s commitment to support public expenditures (including for the AF) through stronger revenue mobilization has been confirmed and reflected in 2020 Budget Law. The AF is aligned with the objectives of the Government objective of improving the delivery of services and infrastructure for urban citizens. AF activities contained in the expenditure framework meets the directions set by the GoM. Similar to the parent operation, AF proceeds will be entirely reflected in the General Budget of the State as is customary for the vast majority of PforR financing in Morocco. Overall, domestic revenue measures to finance the general state budget through 2020 Budget Law include increasing certain taxes (partly the national corporate tax - IS) by reducing specific deductions, exemptions, and credits and privatizing certain government assets and State-Owned Enterprise (SOEs). The GoM committed, through the 2020 Budget Law, to use mobilized revenues to develop public infrastructure, improve access to basic public services, support private sector development (with a focus on employment), and strengthen social safety nets. Overall predictability of the GoM’s expenditure programs is ensured by the existence of several tools developed in the context of the Organic Law pertaining to the Budget Law and endorsed by the parliament, including the three-year programmatic budget, the annual performance project86, and the annual performance report87. Overall, as per the 2017 PEFA, the predictability of the GoM’s expenditures is robust with the relevant indicator rated as high based on timely release of the budget appropriations to the budget holders. 86 Describes the key programs and the associated budget and performance indicators and is endorsed by the Parliament. 87 Summarizes the results achieved and the budget executed for a given year. Page 96 of 132 The World Bank Morocco Urban Transport Program PforR AF (P173048) 23. Specifically, the predictability of Program expenditure framework is supported by established mechanisms for fiscal transfers from the General Budget of the State (BGE) to municipalities and their urban transport enterprises. AF expenditures will mostly be financed by the Urban Transport Fund and its associated special purpose account (CAS88-FART created in 2007) dedicated for urban transport capital grant transfer and other related activities. The Urban Transport Fund is annually funded with the required financial resources by the Government in accordance with the formal agreement reached by the MoI and the Ministry of Finance. The budget structure of its special purpose account is aligned with the General Budget of the State which conforms with the international budget classification89 as confirmed by the last Public Expenditure and Financial Accountability (PEFA) report which rated it as high. Transfers from the Urban Transport Fund are typically complemented for urban transport expenditures by: (i) relevant municipalities from other available sources of funds such as regular central transfers, own resources (surpluses and local taxes) and borrowing from the Municipal Infrastructure Fund (FEC in French), and (ii) transfers from other departments (or entities such as regions following the recently operationalized advanced regionalization process) or special purpose accounts that flow through the BGE, particularly the CAS-TVA, managed by the MoI’s DGCL on behalf of local governments, and the CAS-Regions, which serves as one of the main for governmental transfers to regional governments90. Table 5. Expenditure financing of Subprogram 3 by source (in percentage) Expenditure financing by source (in percentage) 2021 2022 2023 Total Urban Transport Fund 20 25 25 70 Relevant municipality (through the CAS-TVA) 4 4 2 10 Relevant region (through the CAS-Regions) 4 4 2 10 Other sources 2 2 6 10 Total 30 35 35 100 24. Morocco’s overall mid-term fiscal outlook is adequate to ensure the sustainability of the Program, despite the current global uncertainty related to the Covid-19 pandemic. Baseline macroeconomic projections carried out by the World Bank assume a temporary shock to the economy in 2020 driven by the Covid-19 pandemic followed by a recovery starting in 2021. Morocco is well equipped to weather this storm compared to its peers. Morocco entered this crisis with sound macroeconomic fundamentals, a sustainable fiscal and external path, strong economic policy institutions and a robust government commitment to maintaining macroeconomic and debt sustainability. Following a GDP contraction of 4 percent in 2020, economic growth is expected to rebound to 3.4 percent in 2021 and to average 3.8 percent over the medium term. Inflation will hit 0.2 percent in 2020 before rebounding to 1.2 percent in 2021 and averaging 1.9 percent over the medium term. After increasing to 4.9 percent of GDP in 2020, the primary deficit is expected to drop back to 2.9 percent in 2021 and decline to 1.1 percent by 2025. The current account deficit is expected to worsen significantly in 2020, recording 9.9 percent of GDP, before narrowing gradually to 4.6 percent over the medium term as exports, tourism receipts, FDI and remittances recover. Central government debt remains sustainable under a variety of shocks, with rising vulnerabilities to the Debt-to-GDP ratio and to Gross Financing Needs (GFN). Under the baseline scenario, 88 A CAS is typically created by Budget Law, approved by Parliament as part of BGE, and follow the normal budget process in terms of accounting, reporting and controls. 89 Classification of the Functions of Government (COFOG). 90 « Fonds spécial relatif au produit des parts d’impôts affectées aux régions ». Page 97 of 132 The World Bank Morocco Urban Transport Program PforR AF (P173048) Morocco’s central government debt is projected to breach the Debt Sustainability Analysis (DSA) debt burden threshold for emerging markets (70 percent of GDP) starting in 2020 due to the temporary Covid- 19 pandemic. However, the debt to GDP ratio will stabilize in 2021-22 and then follow a declining path over the medium term. More specifically, debt levels will reach 77.8 percent of GDP in 2022 due to the protracted economic recovery from the Covid-19 pandemic shock, and will gradually decline to 74.5 percent by 2025, as growth rebounds and accelerates over the medium term, and as fiscal deficits decline. V. Program result framework and M&E 25. Program result framework and M&E have been updated for the AF. PDO Indicator 1 (“Number of cities that improved their urban transport institutional assessment score by at least 10 percent”) is linked to Intermediate Results Indicator 1 (“Strengthened M&E system for the urban transport sector”), Intermediate Results Indicator 2 (“Strengthened Urban Transport Fund”), Intermediate Results Indicator 3 (“Number of operational associations of urban agglomerations”), Intermediate Results Indicator 4 (“Number of urban mobility master plans prepared based on a structured process and a participatory approach”), Intermediate Results Indicator 5 (“Number of operational municipally-owned urban transport enterprises”) covering Intermediate Results Area 1 (“Strengthened central capacity to plan and monitor urban transport”) and Intermediate Results Area 2 (“Strengthened local capacity to plan, implement and monitor urban transport”) and (ii) PDO Indicator 2 (“Percentage of corridors in the Priority Program of Corridors supported under the Program that meet their objective in reduction of urban transport journey time”), Intermediate Results Indicator 7 (“Direct Program beneficiaries, of which female”) and the newly introduced other intermediate results indicators : “User satisfaction rate for the implemented corridors, disaggregated by gender”; “Change in the share of female ridership in targeted corridors”; ”Percentage of progress in the execution of the Priority Program of Corridors”; “Awarding, extension or amendment as needed of urban mobility concessions for the implemented corridors”; “Deployment of an operational Grievance Redress Mechanism (GRM) for the operations of the implemented corridors”; “Preparation and implementation of gender action plans for urban transport at the local level”; and “Cumulative GHG emission saved (in thousands of tons) as a result of the Program”. The Results Chain of the AF that links the issues of the sector to the AF’s activities, outputs, outcomes, and related DLIs or Intermediate Result Indicators (IRI) is presented below. Table 6. AF’s Results Chain Issues Activities Outputs Outcomes Related DLI or IRI Results Area 1 Need to further Actions to Strengthened Improved delivery DLI#1 strengthen strengthen national M&E, of urban transport national M&E, national coordination, infrastructure and coordination, and coordination, support for the services for support for the support and M&E urban transport citizens urban transport for the urban sector sector given transport sector evolving context Need to further Actions to sustain Sustained Urban Sustained DLI#2 sustain financing the Urban Transport Fund allocation of for the sector Transport Fund financial Page 98 of 132 The World Bank Morocco Urban Transport Program PforR AF (P173048) given emerging resources to the needs sector Results Area 2 Insufficiently Actions to further Established and Improved DLI#3 mainstreamed mainstream inter- strengthened coordination, municipal municipal inter-municipal planning and coordination at cooperation cooperation monitoring of the agglomeration arrangements arrangements urban transport level Unequal local Actions to enable Preparation of Improved DLI#4 planning capacity adequate urban mobility planning of urban in urban transport preparation of planning transport urban mobility documents activities planning documents Unequal local Actions to Established and Strengthened DLI#5 implementing establish and strengthened local capacity to capacity for strengthen urban urban transport implement urban projects and lack transport enterprises transport of intermodal enterprises infrastructure and synergies in urban increased synergy transport in the sector Results Area 3 Unequal and Program- Implemented Improved level of DLI#6 and DLI#7 relatively supported Program- service of urban inadequate urban expenditures supported transport to Other transport level of expenditures increase access of intermediate service due to lack citizens to indicators of dedicated economic infrastructure and opportunities and systems social services VI. Program economic evaluation A. Rationale for public provision and financing 26. The strong rationale for public financing and provision of the activities supported by the Program remains for its AF. Public urban transport investments are quasi-public goods that are still currently undersupplied in Morocco despite significant improvement these past few years in part as a result to the Program. Aside from providing increased connectivity and access to opportunities and social services for citizens (especially the least fortunate ones), public transit indirectly benefits the general public. It typically results in an improvement of air quality because of the related decrease in car emissions. It also causes a reduction in traffic congestion due to the modal shift to a more efficient transport mode in terms of road space. In addition, the investments supported by the AF typically have a limited negative substitution effect. While the urban transport sector is capital-intensive and the investment capacity of private operators remains constrained for infrastructure due to limited financial sustainability of the Page 99 of 132 The World Bank Morocco Urban Transport Program PforR AF (P173048) sector in Morocco as it is the case for most developing countries, particularly in the context of Covid-19, commercial financing by private concessionaire is likely to be mobilized to complement the activities of the Program, particularly in terms of feeder buses, with estimated amounts ranging between US$10 to US$20 million in terms of PCM, in accordance with MFD principles. B. Economic analysis 27. A standard cost-benefit analysis for public transport was used to assess the economic impact of the BRT corridors supported by the AF in Casablanca and Agadir. The economic evaluation, comparing the with-project scenario and the do-nothing scenario on a 20-year horizon, accounted for capital and operational expenditures investments (including CAPEX and OPEX) and economic benefits in term of savings in travel time and vehicle operating costs (VOC), reduction of GHG emissions, and real estate appreciation. Other externalities such as reduction of accidents impacts (fatalities, serious injuries, slight injuries, and property damages) and in local air pollutants91 (PM2.5, NOx, etc.) were not included in the economic evaluation due to the lack of current data. 28. The following methodology has been used to assess the economic benefits of the AF expenditures. Monetary value of time savings is calculated using the generalized time savings per year (in millions of hours per year) and the assumed hourly value of time. Generalized time savings are derived from the number of users, the anticipated increase in speed under the with-project scenario, the average distance per journey, and the corridor length. Monetary value of VOC savings is calculated using avoided vehicles- kilometers traveled (VKT) and modal kilometric VOC. Avoided VKT is derived from the size and/or source of anticipated modal shift. Monetary value of GHG savings is calculated using modal kilometric emissions combined with saved VK in addition to the impact of optimized pubic transport operations along the corridor and the introduction of newer and cleaner engine technologies for public transport fleet. Monetary value of real estate appreciation is derived from estimation of the stock of real assets that is anticipated to benefit from an increase in value and expected increase of value per square meter. Benefits from institutional strengthening supported by the Program in its geographic scope, while substantial, have not been quantified given their intangible nature. 29. The following inputs and assumptions have been used in the economic evaluation. These inputs and assumptions are based on the analysis of available documentation (feasibility studies, urban mobility master plans, data from urban transport operators, etc.) and technical discussions with the AF stakeholders. Budgeted capital investment amounts to US$180 million for a cumulated length of 25 kilometers. Expected ridership on the first full year of operation is 110,000 per day with an average expected growth rate of users of 3 percent. Assumed contribution of modal shift to expected ridership is 40 percent. Estimated kilometric VOC per motorized mode for the first project year are respectively US$0.2 and US$0.3 for cars and taxis (or minivans). Hourly value of time saved per user for the first project year is US$2. 30. The following results have been derived from the economic evaluation carried out. Overall, the urban transport corridors supported by the AF have an estimated positive NPV of US$101 million and an 91 For information, it shall be noted that the monetary value of health damage caused by air pollution in urban areas (a majority of which is generated by vehicles) at the national level has been recently estimated by the World Bank at around US$400 million (with Casablanca accounting for nearly half of this amount), or about 0.3 per cent of the country's GDP. Page 100 of 132 The World Bank Morocco Urban Transport Program PforR AF (P173048) EIRR of 14 percent as shown by the below table. To ensure a robust result, a sensitivity analysis has been carried out with the following variations: a 20 percent capital cost overrun, a 20 percent decrease in ridership, and a combination of these two scenarios. None of these variations brought the EIRR below the 8 percent minimum. The NPV calculated with an 8 percent discount rate remains positive in all cases. These expenditures are consequently expected to be worthwhile and beneficial for society at large. Table 7. Conclusions of the economic analysis Base case 20 % capital cost 20 % decrease Combined case overrun in ridership EIRR (in %) 14 12 11 9 NPV (in US$ million) 101 72 49 20 VII. Program technical risks 31. Based on the parent Program performance to date and residual risk approach, AF delivery risk is deemed moderate, mainly regarding timeliness and quality of delivery of the expenditures. This largely depends on participating municipalities (particularly through their urban transport enterprises) which are in charge of direct implementation of expenditures in terms of design, project management, procurement, contract management, as well as works execution and supervision. Delays in any phase of the process and inadequate execution may occur (particularly if the Covid-19 pandemic persists or resurges) and potentially result in subpar quality of executed works. This situation would contribute to decrease the resilience of infrastructure in the medium run. Key mitigation measures during implementation include the mobilization of adequate project management support arrangements, the use of best practice procedures, and the continuation of day-to-day oversight, guidance, and support by the MoI at the regional level. 32. Program funding risk stems from potential macroeconomic factors. As funds are to be disbursed at central level, there is a risk of discontinued budget allocations and transfers to the local level, particularly resulting from potential macro-fiscal adverse effects linked to the Covid-19 pandemic. This could result in municipalities not receiving adequate funding from the Government of Morocco to implement the Program and achieve the expected results and in DLIs not being met. Mitigation measures entail, similarly to the parent operation, sustained dialogue with the Government of Morocco and close monitoring during implementation to ensure sustained commitment on a minimum level of Program financing. In addition, the World Bank will continue supporting the mobilization by the Government of Morocco of additional funding resources (including from the private sector when feasible) for the sector in general and the Urban Transport Fund in particular to mitigate this risk. Page 101 of 132 The World Bank Morocco Urban Transport Program PforR AF (P173048) ANNEX 3: FIDUCIARY SYSTEMS ASSESSMENT – ADDENDUM A - Introduction 1. The update of the integrated Fiduciary Systems Assessment (FSA) of the Program was carried out by the World Bank, as part of the preparation of the proposed Additional Financing (AF). Based on the requirements of the World Bank policy and procedures for PforR AF and drawing from knowledge of Morocco’s public procurement and FM systems and the analysis of available documents and working sessions with the key stakeholders92, the FSA addendum93 considers whether the Program’s fiduciary systems provide reasonable assurance that the financing proceeds will be used for intended purposes, with due attention to the principles of economy, efficiency, effectiveness, transparency, and accountability. 2. The FSA update concludes that the Program’s fiduciary systems provide reasonable assurance that the financing proceeds will be used for intended purposes. The overall fiduciary risk for AF is assessed to be Substantial. The potential risks are mainly related to: (i) instances of expenditures in the Program’s financial statements that are outside its scope (as identified in 2017 and 2018 financial audit reports of the parent PforR); (ii) delay in preparation of financial statements of the Program due to late submission by participating municipalities of financial data (substantial increase in operational and administrative tasks of municipalities and difficulty in interpreting eligibility criteria of expenditures were identified in the parent PforR); (iii) budgeting delays at the level of participating municipalities due to the impact of the Covid-19 pandemic and other factors, resulting in subprojects potentially not receiving adequate funding to timely achieve the expected Program results and in DLIs not being met; (iv) re-prioritization by the GoM in the programming of expenditures that are not within the scope of the Program; and (v) interpretation of country procurement regulation during the bid evaluation process of a few contracts and the use of standard bidding documents in some tenders under the Program. 3. Mitigating measures have been identified and will be put in place based on the lessons learned from the parent PforR in terms of fiduciary implementation and in synergy with the Municipal Performance PforR94 activities. This will enable to strengthen both financial management and procurement capacities at central and municipal level with continuous training and technical assistance. This will be complemented with annual performance assessment of participating municipalities of indicators related to governance and transparency, auditing and control, and expenditure management. Other mitigation measures will relate at procurement level to the development of model contracts and training for staff involved in AF implementation. The Bank will closely monitor Program expenditures in terms of eligibility through reviews during AF supervision (focus will be made on review of Urban Transport Fund’s expenditures, as well those executed by participating municipalities). The Bank will also continue providing technical assistance as developed in the parent operation to produce timely and acceptable financial statements of the Program. 92 With an emphasis on Rabat (MoI and MoF), Casablanca and Agadir. 93 Covering the Program’s financial management (FM), governance, and procurement systems. 94 The Municipal Performance PforR is supporting the MoI (DGCT) to strengthen its support systems for municipalities. Activities under this PforR will include the development and implementation of a comprehensive capacity-building program available to municipalities seeking to improve their performance, including the dimensions of planning, management, and budgeting. Page 102 of 132 The World Bank Morocco Urban Transport Program PforR AF (P173048) B - Program Description, Institutional Arrangements, and Expenditure Framework Program Description 4. The Government program, combining urban transport sector reforms and investments, remains mostly in line with the one supported by the parent operation, with updates to adapt to the evolving regulatory context of mobility and emerging local needs. The Government program remains structured around three subprograms strengthening the institutions (Subprogram 1) and the financing of the sector (Subprogram 2), as well as developing urban transport corridors to improve access of citizens to economic opportunities and social services (Subprogram 3). Within the Government program, the AF will focus for the most part on similar activities as the current PforR Program, with a particular focus on Casablanca and Agadir for the Subprogram 3. Institutional Arrangements 5. The main institutional arrangements for AF will remain largely unchanged from the parent operation as their appropriateness and adequacy has been confirmed. At the central level, the Division of Urban Mobility and Transport (DDUT) of the DGCT within the MoI, which was responsible for the monitoring and coordination of day-to-day implementation and the consolidation of its financial statements of the parent PforR, continues this role for AF. The DDUT has been replaced by a Directorate (the DMUT95), which will result in its equipment with additional human resources. At the local level, participating municipalities will continue implementing AF activities at the municipal level, mostly through urban transport enterprises (or similar arrangements), including for fiduciary arrangements. Adequate fiduciary arrangements will need to be maintained by participating municipalities, particularly to their urban transport enterprises, during AF implementation. Complementary support actions (including capacity building) will also be designed based on identified needs and delivered to these entities by the MoI, with the support of the World Bank, for the implementation of activities financed by AF. Expenditure Framework 6. AF will mostly support the same type of expenditures as the parent operation. The expenditure framework of the Program will be supported by the Urban Transport Fund (CAS - FART) and participating municipalities96. Typical expenditures will similarly include infrastructure97, systems98, equipment and goods99, and services100 albeit in a more integrated manner. The Borrower may withdraw an amount not to exceed USD37,500,000 as an advance as stipulated in the Loan Agreement. 7. The expenditure framework covers the three subprograms of AF. On one hand, subprograms 1 and 2 will finance consulting and non-consulting services to support the institutions and sustainable financing mechanism of the sector, including activities for DLI#1, DLI#2, DLI#3, and DLI#4. On the other hand, 95 Directorate of Urban Mobility and Transport (DMUT). 96 These entities have been evaluated in the parent operation. 97 Including inter alia urban road works and associated infrastructure. 98 Including inter alia traffic management systems, fare management systems and intelligent transport systems. 99 Including inter alia rolling stock, fare collection equipment, and street lighting equipment and systems. 100 Including consulting and non-consulting services. Page 103 of 132 The World Bank Morocco Urban Transport Program PforR AF (P173048) subprogram 3 will support financing of the urban transport corridors in the form of Bus Rapid Transit (BRT) systems, located in cities of more than 100,000 inhabitants in the Program Area101. An emphasis will be given to subprojects in Casablanca and Agadir, given their level of preparedness and commitment. 8. The expenditure framework will mainly finance activities under Subprogram 3. It will include subprojects that have been formally announced and programmed for the 2020-2025 period or are already started pre-construction activities. Two urban transport corridors in Agadir and Casablanca102 are subject to additional financing in Subprogram 3. These corridors are budgeted at the local level for around US$90 million each, with a combination of financing sources. The expenditure framework, displayed by subprograms, and their flow of funds, are presented in tables 1, 2, and 3 below. 9. Some expenditure management shortcomings were identified in 2018 financial audit report of the parent PforR in participating municipalities. With respect to the municipalities of Agadir and Casablanca, shortcomings are as follows: (i) low payment rates of urban mobility expenditures over period of 2014- 2018 (45 percent and 40 percent, respectively), and (ii) delay registered in budget allocation for 2018 from central level to the municipal level for Casablanca. Based on the lessons learned, the proposed AF will focus on ensuring commitment from central and local levels to improve the performance in terms of payments delays to the benefit of the Program’s executing agencies in accordance with the signed conventions concluded for the urban mobility development of these cities. The Bank will apply the mitigating measures identified in Subprogram 3103 of the ongoing Municipal Performance PforR where similar shortcomings were identified and responded to through a range of supporting activities to strengthen the expenditure management and efficiency at central and local levels. Table 1. Program funding (in US$ million) under parent operation and AF Financing source Parent Program AF Program Total IBRD 200 150 350 Borrower 150 35 185 Table 2. Program expenditure framework financing (by source in percentage) Expenditure financing by source (in percentage) 2021 2022 2023 Total Urban Transport Fund 20 25 25 70 Relevant municipality (through the CAS-TVA) 4 4 2 10 Relevant region (through the CAS-Regions) 4 4 2 10 Other sources 2 2 6 10 Total 30 40 40 100 101 The Program Area is constituted of the following regions: Béni Mellal-Khénifra, Casablanca-Settat, Drâa-Tafilalet, Fès-Meknès, Marrakech-Safi, Oriental, Rabat-Salé-Kénitra, Souss-Massa and Tanger-Tétouan-Al Hoceïma. 102 The two urban transport corridors supported by the AF correspond respectively to Agadir BRT Line 1 (for a total of around 15 kilometers) and Casablanca BRT Line 2 (for a total of 10 kilometers). 103 Subprogram 3 of this PforR includes capacity building and institutional strengthening at the national, ECI, and municipality levels. Activities will include TA in areas related to public investment management, financial management, procurement, deployment of information management systems, and providing capacity-building support through orientation, training, coaching, peer learning events, and on-the-job training. The DLIs are all substantiated by capacity enhancements at the national, inter-municipal, and municipal levels. Page 104 of 132 The World Bank Morocco Urban Transport Program PforR AF (P173048) Table 3. AF Program expenditures by subprogram (2020-2023) AF Program expenditures by subprogram Amount (US$ million) Subprogram 1: Strengthening of the institutions of the sector 4 Subprogram 2: Strengthening of the sustainable financing mechanism of the 1 sector Subprogram 3: Development of urban transport corridors 180 Total 185 10. In addition, to enable the achievement of the PDO and to help mitigate the impact of the Covid-19 pandemic, the expenditures of the Program will be expanded under the AF. It will include temporary operational subsidies104 that might be needed in the short to medium run to ensure operational continuity of urban transport services and prevent significant financial setbacks at the level of operators, especially if the current situation is sustained or resurges. 11. Expenditures under the AF, which will be executed on behalf of the relevant municipalities by their urban transport enterprises, will typically comprise the following. It will include around 75 percent of civil works (for needed infrastructure, including road works) and systems, around 15 percent of equipment and goods, and around 10 percent of consulting and non-consulting services (see table 4 below). According to their procurement profile, maximum contract amounts are anticipated to be around US$30 million for civil works, US$25 million for goods, US$10 million for non-consulting services, and 10 million for consulting services. Table 4. Forecasted expenditures (in US$ million) by type to be supported by the AF (2020-2023) Type of expenditures 2021 2022 2023 Total Civil works 32 38 38 108 Systems 9 10 10 29 Equipment and goods 7 8 8 23 Consulting and non-consulting services 7 9 9 25 Total 55 65 65 185 Expenditures per subproject (Casablanca) 2021 2022 2023 Total Civil works 24 24 8 56 Systems 7 6 2 15 Equipment and goods 4 6 0 10 Consulting and non-consulting services 5 4 0 9 Total 40 40 10 90 Expenditures per subproject (Agadir) 2021 2022 2023 Total Civil works 8 14 30 52 Systems 2 4 8 14 104 To be channeled from Urban Transport Fund’s own financial resources or Government Covid-19 resources. Page 105 of 132 The World Bank Morocco Urban Transport Program PforR AF (P173048) Equipment and goods 3 2 8 13 Consulting and non-consulting services 1 3 7 11 Total 14 23 53 90 12. Continuity of institutional and financial sustainability of the Program under the AF is expected, in line with the parent operation. In terms of institutional and financial sustainability, urban transport expenditures, such as those supported by the Program, continue to be endorsed by the highest authority in the country and other central government officials, and welcomed by local governments representatives. The GoM has confirmed its renewed commitment105 to continue mobilizing as much financial resources (including from the private sector when feasible) as needed for the sector in general and the Urban Transport Fund in particular. 13. GoM’s commitment to support public expenditures (including for the AF) through stronger revenue mobilization has been confirmed and reflected in 2020 Budget Law. The AF is aligned with the objectives of the Government to improve the delivery of services and infrastructure for urban citizens. AF activities contained in the expenditure framework meets the directions set by the GoM. Like the parent operation, proceeds of AF will be entirely reflected in the General Budget of the State, as is customary for the vast majority of PforR financing in Morocco. 14. Overall predictability of the GoM’s expenditure Programs is ensured by the existence of several tools. These include those developed in the context of the Organic Law pertaining to the Budget Law and endorsed by the parliament, including the three-year Programmatic budget, the annual performance project106, and the annual performance report107. Overall, as per the 2017 PEFA, the predictability of the GoM’s expenditures is robust with the relevant indicator rated as high based on timely release of the budget appropriations to the budget holders. 15. Specifically, the predictability of Program expenditure framework is supported by established mechanisms for fiscal transfers from the General Budget of the State (BGE) to municipalities and their urban transport enterprises. In terms of the flow of funds, AF expenditures will primarily be financed by the Urban Transport Fund and its associated special purpose account (CAS108-FART) dedicated for urban transport capital grant transfer and other related activities. The Urban Transport Fund is annually funded with the required financial resources by the Government in accordance with the formal agreement reached by the MoI and the Ministry of Finance. Indeed, the CAS -FART’s budget composition has gradually increased over the last three years, as verified by DLI#2109 of the parent operation to reach the yearly 105 For instance, the GoM has formalized the Agadir BRT subproject in February 2020 through a framework agreement for the urban development Program of Agadir for the 2020-2024 period with a total budget of around US$600 million. 106 Describes the key Programs and the associated budget and performance indicators and is endorsed by the Parliament. 107 Summarizes the results achieved and the budget executed for a given year. 108 A CAS is typically created by Budget Law, approved by Parliament as part of BGE, and follow the normal budget process in terms of accounting, reporting and controls. 109 DLI#2 in the parent operation focused to strengthen and support reforms of the Urban Transport Fund (FART). DLI#2 disbursed against reinforcement of sustainability of its institutional and financial arrangements and achieved so far 85 percent of its target. Page 106 of 132 The World Bank Morocco Urban Transport Program PforR AF (P173048) target of around US$200 million annually to finance local urban transport projects. The budget structure of CAS-FART is aligned with the General Budget of the State. 16. In parallel, the lessons learned from the parent PforR in terms of execution of the expenditure framework will be applied in AF, as follows: - Disbursement for DLI#6110 related to the development of urban transport corridors in the parent PforR, remains low with an achievement of 8.5 percent against an initial target of 30 percent. The AF includes, as mitigating measure, under DLI#6, a result indicator to better define the assessment of the progress in the execution of the Priority Program of Corridors. Besides, the Bank will continue monitoring expenditures versus disbursements around this DLI#6 during AF implementation. Finally, as part of lessons learned drawn from the implementation of the parent PforR and used in the design of this operation, the subprojects to be supported by the AF already benefit from a clearer formalization, through pre-approved investment framework agreements, of their financial incentives in the form of committed and programmed transfers from the central level, using the Urban Transport Fund as the main vehicle for the flow of funds. - The supervision of the parent PforR enabled to identify obstacles encountered in the execution of the expenditure framework. First, certain expenses in the sector were invested in projects considered as outside of the scope of the parent PforR as per 2018 financial audit report conclusions. The risk that a refund of loan proceeds would be needed, as a result of the Program expenditures being less (at the loan closing date) than disbursements by the Bank, was initially identified for the parent PforR. Mitigating measures have been put in place through: (i) implementation and follow-up of DLI#2 in the parent PforR, (ii) engagement with Urban Transport Fund management to ensure commitment to Program expenditures within the scope of the Program in the AF, and (iii) continuation of Bank fiduciary technical assistance to the DDUT to support the preparation of yearly financial statements of the Program with sufficient expenditures that are within its scope. 17. While Morocco’s overall medium-term fiscal outlook is adequate to ensure the financial sustainability of the AF and the confirmed governmental commitment to the sector, Program funding risk stems from potential macroeconomic factors. Financial sustainability does not pose a risk at the level of the Urban Transport Fund itself in comparison to potential discontinuity of budget allocations from central to local levels because of the Covid-19 pandemic. This could result in municipalities not receiving adequate funding from the GoM to implement the Program and achieve the expected results and in DLIs not being met. Mitigation measures entail, similarly to the parent operation, sustained dialogue with the GoM and close monitoring during implementation to ensure sustained commitment on a minimum level of Program financing. In addition, the World Bank will continue supporting the mobilization by the GoM of additional funding resources (including from the private sector when feasible) for the sector (including to cover punctual operational deficits as warranted) and the Urban Transport Fund to mitigate this risk. C - Program’s Fiduciary Performance and Significant Fiduciary Risks Financial Management (FM)111 110 “Percentage of Priority Program of Corridors completed and open to traffic” 111 The Program’s FM implementation arrangements and framework have been assessed to evaluate the capacity of the implementing agencies to record, control, and manage all Program resources and produce timely, understandable, relevant, and reliable financial information for stakeholders. Page 107 of 132 The World Bank Morocco Urban Transport Program PforR AF (P173048) Planning, budgeting, and transparency 18. The framework for the planning and budgeting of Program expenditures is acceptable. Following their identification112, confirmation of their relevance, feasibility, soundness, and appropriateness, and the availability of financial resources at the central and local level, the planning and programming is typically formalized through investment framework agreement between the GoM and the relevant local entities, with official communications subsequently carried out to increase the transparency of the process. 19. In terms of programming, punctual discontinuity of financial resources for specific expenditures might occur due to competing budgetary needs in the Urban Transport Fund, including within the Government program (as has been the case for the deployment of the light rail system in areas of the country). In other cases, there has been a discrepancy between low expenditures execution rate for specific expenditures while the related special purpose account registered high end-year Fund balance. However, these issues have usually been promptly addressed at the central level by the MoI and the MoF, through their strong coverage at the regional and local level. 20. Mitigations measures were put in place to respond to these shortcomings under the parent PforR, through DLI#2. While the strengthening of the Urban Transport Fund will continue under the AF, budgetary monitoring for its expenditures will need to be timely carried out. It will ensure that budget allocations and transfers to the local level are adequately executed, particularly with the potential macro- fiscal adverse effects linked to the Covid-19 pandemic. Accounting and financial reporting 21. The framework for Program accounting and financial reporting is mostly adequate, albeit suffers from timeliness issues at the local level that have only been partly addressed to date. Overall, the MoI’s budget execution, accounting, and reporting procedures for expenditures carried out at the central level. Transfer mechanisms from the GoM to municipalities and/or their municipally owned enterprises for urban transport subprojects, based on specific special purpose accounts (CAS), typically the CAS-FART and the CAS-TVA113, have sound accounting and reporting procedures that are based on the national PFM framework. 22. Despite a mostly sound accounting and financial reporting framework, the Program faced delays (of 2 to 3 months on average) in the financial reporting by local implementing agencies (particularly municipalities) of expenditures. This, combined with the multiplicity and lack of integrated accounting and reporting systems of participating municipalities with their municipally owned enterprises at the local level, resulted in equivalent delays in the consolidation of the financial statements of the Program. As a result, delay in the transmission of the final audit report was registered and generated a difficulty in the timely reconciliation between disbursements and expenditures. This was mostly due to: (i) the substantial increase in operational and administrative tasks of municipalities resulting from the gradual transfer of greater number of responsibilities to the local and regional levels accompanying the recent advanced 112 Typically, in urban mobility master plans and municipal action plans. 113 Financial procedures for these accounts have been strengthened (or are in the process of being strengthened) with the support of Bank technical assistance including through the Program. Page 108 of 132 The World Bank Morocco Urban Transport Program PforR AF (P173048) regionalization process, combined limited number of additional human resources at the local level, (ii) localized internal coordination issues, and (iii) occasional difficulty in interpreting eligibility criteria of expenditures, which may sometimes subsequently require the restatement of financial statements. This limited at times the quality of financial monitoring of the execution of the Program by the MoI. 23. Mitigating measures have been put in place by the Bank through streamlined technical assistance for the benefit of the counterparts. The risk of delayed financial reporting to enable consolidation of financial statements remains under the AF. The Bank will continue supporting the implementing agencies in producing qualified and timely Program financial statements. Treasury management and funds flow 24. The Program relies on established funds flow arrangements used for fiscal transfers from the General Budget of the State (BGE) to municipalities and their municipally owned enterprises. The funds of the World Bank are transferred in the Program sub-account managed by the General Treasury of the Kingdom114 (TGR) at the Central Bank of Morocco115. Transfer mechanisms from the GoM to municipalities and/or their municipally-owned enterprises for urban transport subprojects are based on special purpose accounts (CAS116). These accounts (including the CAS-FART, the CAS-TVA, and the CAS-Regions) are typically created by Budget Law and approved by Parliament as part of BGE. These accounts follow the national PFM system in terms of accounting, reporting and controls and have dedicated budgetary procedures on: (i) sources of funds, (ii) expenditures to be financed by the funds, (iii) roles and responsibilities of the budget holders, and (iv) ex-post controls for the related expenditures. 25. Average payment lead time of the MoI and municipalities typically ranges between 50 and 80 days117. Average payment lead time for municipally owned enterprises (including urban transport enterprises) typically ranges between 70 and 200 days, which is characteristic of entities that carry out a substantial amount of civil works in Morocco. For instance, the average payment lead time of Casa Transports, the urban transport enterprise of Casablanca (the largest agglomeration in the country) is 130 days118, which is mostly comparable to the National Railways Agency of Morocco (ONCF) with 121 days, and the National Agency for Water and Electricity of Morocco (ONEE) with 128 days. Ongoing efforts are being made by the TGR to reduce this lead time. They include the creation of national and local committees in charge of overseeing the payment lead time and the digitalization of the process. The combined effects of these actions are expected to have a positive impact on the payment of the Program’s activities. Control and oversight 114 « Trésorerie Générale du Royaume ». 115 « Bank Al-Maghrib ». 116 Typically created by Budget Law, approved by Parliament as part of BGE, and follow the normal budget process in terms of accounting, reporting and controls. 117 By virtue of the decree dated 13 November 2003 relating to payment deadlines and interest for payment delays in matters of public contracts, it stipulates that the expenditure must be ordered and paid within a period not exceeding ninety (90) days without which the contractor will benefit automatically and without prior formality of interest for payment delays when the delay is due exclusively to the public entity. 118 Based on MoF data. Page 109 of 132 The World Bank Morocco Urban Transport Program PforR AF (P173048) 26. The Program and its stakeholders are subject to various layers of control and oversight which are for the most part acceptable. The DGCT, as the entity responsible for the Program and its AF within the MoI, is endowed with an adequate internal control platform relying on codified procedures, operational information management systems, and a culture of results. The assessment by the World Bank of the effectiveness of the current practices and the audit reports of the DGCT did not reveal any significant issue. The DGCT’s internal audit system is under the responsibility of the IGAT, which is endowed with 80 qualified auditors and 30 administrative staff. The recent audit report issued by the IGAT on the DGCT did not reveal any anomaly. The World Bank assessed the performance of this entity as adequate. 27. The special purpose accounts119 (typically the CAS-FART, the CAS-TVA, and the CAS-Regions) that channel financial resources through the BGE from the GoM to municipalities and/or their municipally- owned enterprises for urban transport subprojects are subject to the control of the IGF and the IGAT. This is due to their joint management by the MoF and the MoI. The governance of these established mechanisms for fiscal transfers from the General Budget of the State to the local level have mostly been confirmed as sound. These mechanisms will continue to be strengthened in the context of the proposed AF (in line with its parent operation) and the ongoing Municipal Performance PforR. 28. For most municipalities, internal control remains an area of improvement in the financial management system, which is addressed by regular capacity building initiatives carried out by the MoI (included as part of the Program). The internal audit framework is also largely underdeveloped in most municipalities. The quantitative and qualitative analyses of the municipalities have identified the absence and lack of operational internal audit units, except for Casablanca and Agadir (which are the focus of AF). Overall, this framework will continue to be strengthened within the context of the Municipal Performance PforR which will ensure the reinforcement of municipal internal control and audit capacities through a set of measures, supported by an annual performance assessment evaluation and training and hands-on support to the local staff, in collaboration with the MoI. 29. The use of municipally-owned enterprises typically enabled the participating municipalities to benefit from a strengthened control and oversight framework (including in terms of internal audit). A dedicated financial controller is assigned to these entities in most case by the GoM to ensure controlling duties given the allocation of financial resources through the BGE. Municipally-owned enterprises rely on manuals of procedures, information management systems, and a culture of results. These entities can also mobilize additional financial management expertise in this regard for Program and AF subprojects. 30. The external auditing arrangements of the Program, relying on the IGF as the assigned entity in charge of auditing the GoM programs, have been confirmed as adequate. The World Bank carried out a comprehensive assessment of the IGF in 2016, complemented by the 2017 PEFA and annual review120 of the performance of this entity. 31. The latest financial audit report (covering 2018) of the parent PforR included key recommendations which will be monitored by the Bank under this AF. Shortcomings were identified in terms of: (i) delay in the elaboration of the financial reports, (ii) instances of expenditures in the Program’s financial statements that are outside its scope, and (iii) absence of risk mapping. Implementation of the 119 Typically created by Budget Law, approved by Parliament as part of BGE, and follow the normal budget process in terms of accounting, reporting and controls. 120 Carried out in March 2017 and February 2018. Page 110 of 132 The World Bank Morocco Urban Transport Program PforR AF (P173048) recommendations associated with these issues are ongoing and are being monitored as part of the World Bank implementation support missions. 32. The IGF will carry out the financial audits of the Program expenditures from all sources of funds. The scope of those audits will include an opinion on the procurement system (including screening to prevent debarred or suspended firms from being awarded contracts). The audit reports will be submitted no later than nine months after the closure of accounts. Procurement 33. The implementation of the procurement processes and procedures for the Program have been adequate. Residual shortcomings under the Program have pertained to the interpretation and use of country procurement regulation during the bid evaluation process of a limited number of contracts. Indeed, procurement procedures and standards bidding documents have not been customized to the needs of municipalities121 in the context of national reform carried out in recent years to strengthen the procurement regulatory framework. 34. The procurement system relies on the national e-procurement portal which is widely used by municipalities and municipally-owned enterprises, including for the Program. It contributes to improving public access to information, by widely publishing a call for tender, making bidding documents available to all potential bidders, and publishing results of tendering processes122. Overall, as anticipated, the main procurement method used for the Program expenditures is Open National Competitive Bidding (ONCB), with 100 percent of civil works contracts procured for the Program123 using this method. The 2017 national PEFA confirms that, on average, more than 80 percent of the country’s contracts are subject to competitive bidding processes. At the local level, the 2017, 2018 and 2019 data collected from the municipally-owned enterprises of Casablanca and Agadir (including Casa Transport SA and Agadir Mobilité SA) confirms this trend. The use of single source is limited (see table below). While procurement capacity remains limited for an important number of municipalities, the performance of the implementing agencies of the Program at the local level has been found mostly adequate, in line with the level of sophistication complexity of subproject investments. Capacity building under the Program contributed to strengthen the procurement capacity of staff, with around 200 person/days of trainings carried out between 2016 and 2017 by the MoI and the MoF. 35. The use of urban transport enterprises for Program implementation has enabled the participating municipalities to benefit from customized procurement procedures (adapted from the national framework) and mobilize additional procurement expertise to adequately fulfill their mission. Indeed, while owned by municipalities, urban transport enterprises operate according to private law124 and are therefore usually able to attract and retain qualified professionals better than most public entities can. These entities also have more flexibility in securing external expertise (in the form of consulting services) when needed for procurement matters. This resulted in the urban transport enterprise of Casablanca and 121 Overall, about a third of municipalities experience issues in the procurement procedures as per TGR data. 122 Additional recent features that have been included in the e-procurement system include electronic submission of bids and electronic reverse auctions. The use of these features by municipalities remains very limited. 123 In line with the data collected by the MoF that found that between 95 and 97 percent of contracts at the local level used ONCB (with the remainder using Shopping) in recent years. 124 As local joint-ownership companies (« Sociétés de Développement local » - SDL). Page 111 of 132 The World Bank Morocco Urban Transport Program PforR AF (P173048) Agadir (where AF will mainly focus) achieving a completion rate ranging between 90 and 100 percent for launched procurement processes in recent years. Most of their contracts were awarded within the planned budget. The ongoing Covid-19 pandemic (particularly if it persists or resurges) might result in procurement (and contract execution) delays for AF subprojects in the short to medium run, which will be mitigated as needed during implementation by hands-on procurement guidance and support at the local level from the MoI and the MoF, with the support of the Bank. Table 5. Breakdown of the main procurement methods at the participating municipally owned enterprise level (in Agadir and Casablanca) Year Total Number of ONCB Single Average Time-to- amount tenders (% in source (% number of contract (in (MMAD) value) in value) bids days) CASA TRANSPORT SA 2017 501 28 22 (87%) 6 (13%) 3 28 2018 283 28 27 (99%) 1 (1%) 2 28 2019 336 23 20 (93%) 3 (7%) 2 27 AGADIR MOBILITE SA 2019 63 3 3 (100%) 0 - - Source: Municipally owned enterprises 36. Procurement planning and the publication of the plans are made mandatory by the Public Procurement Decree - PPD (No. 2-12-349 of March 20, 2013). This applies to the implementing municipalities with the guidance of the MoI as well as to their municipally owned enterprises. Each public procuring entity is required, according to the PPD, to publish its procurement plan which will include all contracts planned for the fiscal year, under their budget. The publication is done at least in two national newspapers (one in Arabic and one in foreign language) and on the procurement electronic portal125, no later than the end of the first quarter of each fiscal year. This requirement fosters the access to information on procurement opportunities for all potential bidders. In practice, the analyzed municipally- owned enterprises of Casablanca and Agadir (including Casa Transport SA and Agadir Mobilité SA) are complying with this requirement. 37. In terms of contract administration, the deployment of the e-procurement system offers an adequate environment to ensure transparency in this process. In practice, the rollout126 of the e- procurement module at the municipality level helped improve contract administration. Governance and Anticorruption Arrangements 38. The country governance and anticorruption arrangements have been confirmed as adequate. The National Commission of Public Procurement (CNCP) has been strengthened following its effective operationalization in 2018, gaining more autonomy and independence. The number of complaint cases 125 www.marchespublics.ma/pmmp/ 126 Agadir’s municipally-owned enterprise will implement by the end of 2020 an ERP for contract administration and fiduciary activity. Page 112 of 132 The World Bank Morocco Urban Transport Program PforR AF (P173048) handled is more than 200 complaints (less than 5 percent of the cases were related to fraud and corruption). These complaints comprised 11 complaints related to the municipalities submitted to the MoI for processing and 3 requests for information processed. The cases were closed within three months. D - Mitigation Measures and Monitoring of Fiduciary Performance 39. The fiduciary risk for the Program remains rated Substantial given the identified risks, which will be addressed for AF through the identified measures. While the fiduciary systems present elements of strengths that will continue constituting a sound basis for the Program, especially when complemented by complementary measures, the findings of the fiduciary assessment highlighted the risks related to the national fiduciary system itself, including its environment and those related to the implementing agencies with regard to their capacity to implement the Program and adequately carry out their fiduciary functions. The main risks and proposed mitigating measures are specified and summarized in the table below. Table 6. Identified Fiduciary Risks and Mitigation Measures TOPIC RISKS MITIGATION AND RESOLUTON DEADLINE Planning Instances of expenditures - The PIU to prepare yearly financial April 30th of and in the Program’s financial statements for the Program by April 30th each CY. budgeting statements that are and submit to the Bank for approval. outside of its scope - The Bank to conduct expenditure Each reviews during the Program supervision. implementation support mission Capacity Constraints in fiduciary The Bank, in coordination with the DGCT Annually capacity at local level in and the Municipal Performance PforR127, implementing sub- will ensure to enhance fiduciary capacity projects of targeted municipalities through annual training programs. Reporting Potential delay in the The Bank has provided technical Ongoing production and assistance to the DDUT to produce a consolidation of the robust financial statements model for the financial statements of parent Program. The Bank will continue the Program and in the supporting the DDUT in producing quality transmission as result of and timely Program financial statements. the final audit report Audit Suboptimal follow-up of Appointment by the DDUT of a By December audit recommendations designated fiduciary coordination team to 31st 2020 by implementing prepare an action plan for monitoring of agencies. resolution of audit findings. 127 The existing Municipal Performance PforR targets enhancing capacities of municipalities through DLI#8 “Percentage of Participating Municipalities benefitting from the capacity building activities requested in their Annual Capacity Building Plans (ACBP)” and its Subprogram 3. Under this subprogram, the DGCT will strengthen its support systems for municipalities and will include the development and implementation of a comprehensive capacity- building Program available to municipalities seeking to improve their performance, including the fiduciary one. Page 113 of 132 The World Bank Morocco Urban Transport Program PforR AF (P173048) Procurement Potential issues in Development of model contracts and By June 30th interpreting and using the standard procurement documents and 2021 local procurement training for staff involved in AF regulation during tender implementation. process and bid evaluation of subprojects. Fraud and The handling of Fraud and - MoI to promptly inform the Bank of all During the Corruption Corruption cases need to credible and material allegations or other Program be done in a timely indications of Fraud and Corruption in implementation manner and the Bank is connection with the Program that come promptly informed by the to its attention, together with the implementing agency investigative and other actions that it Each following the proposes to take. implementation Anticorruption Guidelines - FM implementation support will review support mission for PforRs, in order to adequacy of anti-corruption measures being able to implement put in place (review of regular cases action plans to prevent reports if any are received, etc..) occurring further cases. Page 114 of 132 The World Bank Morocco Urban Transport Program PforR AF (P173048) ANNEX 4: ENVIRONMENT AND SOCIAL SYSTEMS ASSESSMENT – ADDENDUM A - Introduction 1. The proposed additional financing (for an amount of US$150 million) will scale up the positive impacts of the parent operation and will build on its current achievements, while incorporating cross-cutting themes of adequacy, efficiency, sustainability of urban transport services. Such themes are aligned with the emerging challenges to the sector as highlighted by the new National Strategy for Urban Mobility (SNMU) for Morocco, prepared with the support of the Word Bank. 2. Demand for urban mobility in Morocco has sharply increased in the last decades and is yet to be fully satisfied. Several issues remain unsolved for the urban transport sector. Users of public urban transport, in particular the poor and women, suffer from inadequate speed and reliability in large agglomerations. The urban transport sector is characterized by rising congestion and poor road safety. Several structural weaknesses explain this situation, among other: significant historic underinvestment, lack of financial sustainability, and insufficient capacity and deficiencies in the institutional management and coordination of the sector, particularly at the local level. 3. The proposed AF aims at expanding the scale of the current Program Development Objectives (PDO) and key results areas, which remain relevant. The Program Disbursement-Linked Indicators (DLIs) will be reformulated and revised in terms of targets and verification protocol in alignment with their expansion in scale. The original geographic scope and institutional arrangements of the Program will be maintained. The implementation period of the Program will be extended by 3 years with a new closing date of June 30, 2024. 4. To ensure that adverse environmental and social risks and impacts continue to be avoided, reduced and mitigated adequately, the World Bank prepared this addendum to the Environmental and Social Systems Assessment (ESSA) to cover potential additional environmental and social (E&S) aspects that may raise from the Additional Financing. The Addendum does not constitute a new ESSA and will be considered together with the ESSA of the parent Program. The ESSA of the parent Program assessed, against the requirements of Bank Policy/Bank Directive Program-for-Results Financing (formerly OP/BP 9.00), the national and municipal systems with respect to institutional capacity and performance, policy and regulatory bases, consultation mechanisms and GRM to manage and mitigate the impacts. i - Objectives of the ESSA Addendum 5. The objectives of the ESSA Addendum are: i. To assess the implementation progress of the recommendations and actions in the PAP of the Program. ii. To identify relevant legislative and procedural changes since the preparation of the ESSA for the Program. iii. To identify new potential environmental and social risks and impacts from the AF. iv. To recommend measures to further strengthen the environmental and social system. ii - Methodology of the ESSA Addendum Page 115 of 132 The World Bank Morocco Urban Transport Program PforR AF (P173048) 6. The ESSA examines the environmental and social management systems applicable to the Program with a view to assessing their compliance with the provisions of the World Bank Policy and World Bank Directive on Program-for-Results Financing of November 2017, and later amendments. The methodology follows best practices and Bank Guidance on Program-for-Results Financing Environmental and Social Systems Assessment. The purpose of the ESSA addendum is to ensure that the environmental and social risks of the AF will be well managed and that is aligned with the principles of sustainable development. 7. The preparation of the addendum involved a series of interviews and consultation with stakeholders related to the Program. The updated ESSA addendum reflects the review of several documents, including the original ESSA and subsequent reports of World Bank implementation support missions, as well as interviews of key stakeholders including national level agencies, management and staff of local implementing agencies, and project-affected communities. Field level assessments in select cities (Casablanca and Agadir) have been carried out during the preparation phase in March 2020 prior to the national lockdown in Morocco due to the Covid-19 pandemic. Formal virtual consultations on the updated ESSA addendum have been held prior to the completion of the AF appraisal. When relevant, environmental and social risk mitigation measures are incorporated into the Program Action Plan (PAP). B - Description of the AF 8. The AF, amounting to US$150 million, will be focused for the most part on activities similar to those under the current PforR as part of the Government program. The Program’s DLIs would in most cases be maintained and refined to reflect the additional financing. 9. The activities of the AF would focus on strengthening the central capacity to coordinate, support and monitor urban transport at the central level and in the Program Area under Subprogram 1 and Subprogram 2, with a particular focus on financing the sector through the Urban Transport Fund (which was supported in the original Program) by ensuring its sustainability and optimizing the way it performs its intended functions. 10. At the local level, activities under the AF would focus on strengthening the capacity to plan, implement and monitor urban transport in primary and intermediate cities in the Program Area (under Subprogram 1), in particular through the generalization and strengthening of: (i) inter-municipal coordination mechanisms for urban transport such as associations of urban agglomerations (or equivalent), among others, (ii) urban mobility master plans based on a structured process and a participatory approach, and (iii) and urban transport enterprises (or equivalent), among others. 11. The subprojects envisaged under the additional financing (Subprogram 3) would cover a proposed total of 25 kilometers, investments for the development of infrastructure, systems and equipment along the lines of the initial Program, aimed at improving the level of service for users on urban transport corridors in the form of Bus Rapid Transit (BRT). The AF will not include activities and subprojects that should be excluded from PforR Program Financing as per Bank Policy (that is “unlikely to have a significant adverse impact on the environment and/or affected people”, as defined in the relevant operational policy). This component would focus particularly on cities such as Casablanca and Agadir, which recently confirmed and/or formalized this type of project, which would be carried out in partnership between the Government of Morocco and the relevant local authorities. In connection with these investments, Page 116 of 132 The World Bank Morocco Urban Transport Program PforR AF (P173048) additional intermediate indicators are proposed to be added to the Program’s results framework to, among others, monitor for the urban transport corridors, progress in the implementation of these transport corridors, finalization of urban mobility concessions, and improvement in user satisfaction (disaggregated by gender), among others. C - Implementation Progress 12. In preparation of this operation, the World Bank undertook (i) a preparation mission and field visits to selected sub-projects in March 2020, prior to the national lockdown in Morocco due to Covid-19 (and the declaration of a national state of health emergency with strict movement and meeting restrictions), (ii) a social and environmental assessment of the parent Program, and (iii) an analysis of the sub-projects envisaged for the additional financing. The action plan for the environmental and social assessment of the parent project is partly completed (preparation and dissemination of the environmental and social management guide, training of stakeholders on its provisions and use, effective designation of focal points at the level of the participating municipalities, etc.). However, monitoring and reporting on the work sites is not carried out systematically. This relatively poor performance is due to the weak ownership of the procedures by the site-specific focal points, included in the environmental and social management guide, and to the absence of a focal point at the central level, which was not foreseen in the design of the parent project. Such weaknesses were addressed during the design of the AF. In particular, the proposed E&S focal point at the central level will be in charge of raising local capacity, increasing local awareness and ownership, and supervise and provide guidance to local focal points, after being trained by the World Bank. The World Bank will also directly carry out capacity building of the local focal points. This would result in improved performance in the highlighted area. The sub-projects considered for the AF and subject of technical meetings and/or field visits during the preparation mission will not generate significant negative impacts. The preparation of these sub-projects is relatively advanced from an environmental and social point of view, with relevant studies being finalized or updated. 13. The existing Program has been performing well with regards to mitigating the impacts of climate change and the proposed AF is anticipated to have a more significant positive impact in this area. The Program has supported the development of traffic management measures and systems to reduce emissions by improving the flow of traffic and by favoring a lower carbon footprint (including electric buses), particularly in congested areas with greater than average air pollution levels as a result, especially in Rabat, Casablanca, and Marrakesh. The additional financing intends to continue incorporating climate- oriented benefits through the involvement of the private sector and the systematic inclusion of environmental quality standards of the competitively tendered concessions. 14. The existing Program has been performing well with regards to gender. Infrastructure and systems supported by the existing Program included, safety, security, and universal access features that usually have a positive impact on women in urban transport, such as improved lighting in buses and stations (for instance in Rabat and Marrakesh), road safety grids and traffic-calming devices for dedicated lanes (for instance in Rabat and Marrakesh), upgraded intersections and pedestrian crossings (for instance in Rabat), CCTV128 for surveillance on buses, stations and traffic management systems (for instance in Rabat and Casablanca), and physical improvements for people with limited mobility on sidewalks (for instance in 128 Closed-circuit television. Page 117 of 132 The World Bank Morocco Urban Transport Program PforR AF (P173048) Rabat and Marrakesh). The additional financing incorporates gender-sensitive interventions in its supported activities in the same manner. 15. The current operation has been performing well in terms of citizen engagement and its additional financing is expected to continue to similarly incorporate such benefits. Most expenditures supported by the parent Program have been informed by planning processes that have included participation from the local population, during public consultations and disclosure of urban mobility master plans. This has resulted in the views of relevant stakeholders being reflected and integrated in their design. The Program has incentivized the finalization of such documents based on a participatory approach for Greater Agadir, El Jadida, Oujda, and Fez, an approach that would be further expanded in the context of the additional financing. D - Legislative and Procedural Changes 16. The environmental and social system described in the parent ESSA is still applicable both in terms of laws, regulations, standards and in terms of procedures and actual implementation of those laws and standards. There have been no changes in terms of legislation or procedures. E - Environmental and Social Risks and Impacts of the AF 17. The design of the AF does not introduce significant changes in the scope and areas of intervention of the parent Program. The AF does maintain the activities and institutional arrangements and does not introduce new activities that would change the E&S risks associated with the Program. The institutions managing E&S risks centrally and at the municipality are considered robust enough to manage the changes associated with the AF. Generally, the implementation of the Program will likely result in more benefits and positive impacts. The risks associated with the current Covid-19 crisis are going to be mitigated through public health management beyond the PforR scope. 18. None of the Program’s activities are likely to have any impact on Sites of Biological and Ecological Interest (SIBE) in Morocco or to significantly transform natural habitats or significantly modify areas of biodiversity and/or potentially important cultural resources. On the other hand, the Program is intended to bring clear environmental benefits as it will contribute to relieve congestion in urban transport networks. As a result, by making traffic flow more smoothly, the operation will significantly reduce local pollutants and improve air quality, thus having a positive impact on the health of their population. The development of public transport would also help reduce energy consumption. On the one hand, it is generally estimated that a bus consumes half as much energy and emits half as much CO2 as a car. On the other hand, the energy efficiency of a bus per passenger-km is 16 times higher than that of a car. 19. The ESSA for the parent program concluded that E&S impacts will be mainly related to the construction phase, which may lead to: (i) increased air pollution; (ii) uprooting of trees and removal of green spaces; (iii) disruption of ongoing economic activities and loss of income; and (iv) temporary or permanent occupation of private land by agreement or voluntary transfer or by the use of expropriation for public purposes. 20. The Program will not result in any land acquisition, it will use either the existing right-of-way or state- owned or municipality-owned lands, except limited instances of informal housing encroaching on the Page 118 of 132 The World Bank Morocco Urban Transport Program PforR AF (P173048) right-of-way (Salmia), that can be avoided with a relatively minor and localized modification of the alignment. However, there are sections among the considered ones that would need to be managed carefully regarding the negative impacts that the works may generate especially in Casablanca (Hay Hassani - Errahma) and Agadir (Terminus). These sections are presently used by traditional informal markets and by itinerant merchants that would be relocated temporarily or permanently during the works. Temporary or permanent relocation and/or economic displacement, anticipated to be limited in scale, will be managed using procedures deemed satisfactory to the World Bank and to be included in the E&S Guide, which will be part of the Program Operations Manual (POM) to be updated by the Borrower no later than 45 days after the loan effectiveness. 21. Regarding Grievance Redress Mechanisms (GRM) for the cities that are relevant for AF subprojects, the GRM is operational in Casablanca but just initiated for Agadir’s urban transport enterprise, to complement the GRM of the municipality. The DGCT, in charge of managing the Program and its AF at the level of the Ministry of Interior, will need to consolidate all data to be communicated in a format and content that are acceptable to the World Bank and in timely fashion. 22. The main institutions involved in the implementation of the Program are the same as for the parent Program. The Division of Urban Mobility and Transport of the DGCT (DDUT), which was responsible for the monitoring and coordination of day-to-day implementation of the Program, will continue this role for the AF. The DDUT has been replaced by a Directorate, the DMUT (Directorate of Urban Mobility and Transport), absorbing most of the units, services and entities previously involved in the sector at the level of the Ministry of Interior, with the technical assistance of the World Bank under the AF, and equipped with an additional amount of human resources including an E&S focal point. Participating municipalities (Casablanca and Agadir) will continue overseeing planning, budgeting, and implementing the AF activities at the municipal level, mostly through urban transport enterprises (Casa Transport and Agadir Mobilités). Participating municipalities will therefore continue be directly or indirectly responsible for execution, supervision, monitoring and reporting of progress of these subprojects to the Ministry of Interior. 23. As for the parent Program, the environmental and social risks and negative impacts associated with the Program are considered moderate. No additional risks are added through the AF. Program impacts will continue to be reversible and easily mitigated with the proposed mitigation measures. They will be easy to identify in advance and to prevent and minimize through effective mitigation measures as recommended in section VI and the action in section VII, and will be subject to an environmental monitoring and follow-up system that will allow for the identification and management of potential risks in real time. The parent Program performance on E&S systems was consistently rated Satisfactory and is reassessed in the context of this addendum as Moderately Satisfactory. The E&S management systems of the parent Program will be maintained to manage risks and enlarged to cover increased geographical scope and additional activities. 24. In the context of the recent advanced regionalization process and as recommended by the new National Strategy for Urban Mobility, the urban transport sector still requires an accelerated and mainstreamed strengthening in terms of capacity and coordination, including at the municipal level. Since the past decade, most users of public urban transport in large agglomerations have been suffering from inadequate speed and reliability. In terms of timeliness, with the sharply increased in the last decades of demand for urban mobility in Morocco’s main primary and secondary cities, urban transport remains a pressing priority for the Government, municipalities and citizens and will be particularly needed as an Page 119 of 132 The World Bank Morocco Urban Transport Program PforR AF (P173048) enabler of socio-economic recovery post-Covid-19 and aims to address issues strongly relevant to the Government of Morocco. 25. The Program will also give due consideration to the socio-economic and cultural appropriateness of and equitable access to vulnerable groups, including the poor and the disabled. 26. In terms of gender inclusion, the AF will make sure that women benefit from its expanded scope. Specific entry points for gender inclusion rely in DLI#1, DLI#4, and DLI#7. Infrastructure development must take into consideration differences in men and women’s mobility patterns associated to gender roles. Women and men have different mobility needs and patterns. Such differences would be quantified in: (i) monetary costs – consisting of all fees/fares charged for use of any public transport systems and (ii) non- monetary costs by factoring in travel time, transfer, reliability, security and comfort. Female preference mostly revolves around the value of time spent, accessing transportation systems, waiting at stations, and in-vehicle travel: (i) transfers, i.e. value of the time spent transferring and exiting the system to reach a destination, (ii) reliability, i.e. probability at services to occur within an expected time, and (iii) security and comfort, i.e. cost of the risk to personal safety experienced during the travel, as well as the general conditions related to comfort and ease of travel experienced on a trip. 27. These preferences need to be taken in better consideration. Women users, in their role as producers are participating in the Moroccan economy, as well as being the main homemakers and responsible for caring for the family, show different perspectives and preferences in matters related to travel time and transport reliability. Stated preferences models have been used in transport planning to analyze user preferences and define their utility function which might allow to identify modal shift from users. Analysis will have to consider gender perspectives and consider that women and men travel differently and attribute different monetary and non-monetary costs; thus, the utility function would not be homogenous for the transport users. 28. Sexual harassment and violence in public transport impose severe limits women's and girls’ mobility and access to jobs and services. They also limit women’s labor market participation with negative impacts on economic growth. According to the IMF estimates, equality in labor force participation in Morocco could increase the income per capita by 50 percent129. Violence against women and girls in public transport can bring other consequences upon individuals, such as increasing risk of depression, anxiety and post-traumatic stress disorder. F - Recommendations to Strengthen the Environmental and Social System 29. Coordination. To further strengthen E&S management, a focal point at the central level and a focal point at each of the participating municipality involved in the development of urban transport corridors will be assigned. These focal points will also support the strengthening and updating of the Program's E&S management systems taking these emerging issues into account and will update the ESMPs of the sub- projects accordingly. https://www.imf.org/en/News/Articles/2017/03/01/NA030117-Morocco-Reducing-Gender-Inequality-Can- 129 Boost-Growth Page 120 of 132 The World Bank Morocco Urban Transport Program PforR AF (P173048) 30. Studies. The Environmental and Social Impact Assessment (ESIA) of the Casablanca subproject is currently being finalized and will be submitted to the National EIA Committee for analysis with a view to granting environmental acceptability. The ESIA of the Agadir subproject will be updated as planned as it is outdated (having been carried out in 2013), in accordance with Law 12-03 which states that the validity period of an EIA cannot exceed 5 years. This update will be used to: (i) better reflect the budget of project environmental and social mitigation measures that are not covered by the project, (ii) define the management of solid and liquid waste generated at the maintenance center, (iii) formulate the mitigation measures that avoids the use of groundwater resources, (iv) assess the capacity of stakeholders to implement mitigation measures, and (v) define environmental and social provisions for contractors to be included in the bidding documents to ensure that the works companies will comply with the recommendations of the ESIA. 31. Covid-19. The emerging threat of Covid-19 infections during transport operations and construction works will pose additional risks for health and safety that need to be included and strengthened in the Environmental and Social System of the Parent project. Therefore, the Program will protect users’ and public workers’ safety against potential Covid-19 risks, transmissible through human-to-human contagion during construction operations and during Program implementation. Occupational health and safety (OHS) and operations management procedures will need to be developed by local environmental and social focal points to protect workers from Covid-19 infections during construction and for transportation personnel during operations, in accordance with World Health Organization (WHO) guidelines. These procedures will be included in the E&S Guide which is a part of the Program Operations Manual. 32. Gender. The E&S focal points will ensure that a Gender Action Plan is developed to better integrate women’s preferences and safety issues in the Urban Transport Program and will develop dedicated consultations with stakeholders around these issues. 33. Disability. Regarding users with special needs, including with disability (particularly physical and visual), the E&S focal points will ensure that a series of actions on this matter will be identified and prepared to better integrate the needs of this category of users. The focal points will carry out specific consultations for this purpose, as appropriate, with the relevant stakeholders on this topic. 34. Grievance redress. The GRMs of the Program will be further strengthened to be able to manage the focus and new activities under the AF. The GRMs will need to be enhanced to cover the additional scope and increase the capacity to manage the related grievances. The E&S focal points at central and regional level will establish a monitoring and reporting mechanism to include grievances into the regular program reporting. 35. Consultations. The ESSA of the parent Program was subject to public consultations during a workshop with stakeholder representatives in March 2015 and subsequently disclosed. Due to Covid-19 restrictions, the ESSA addendum was not subject to face-to-face consultations. Consultations have been conducted remotely on July 8, 2020 (prior to the completion of the AF appraisal) and used non-contact methodologies as appropriate following the established protocols of the World Health Organization (WHO) and the Ministry of Health (MoH) during the pandemic. The addendum of the ESSA will be made available in French and shared with stakeholders. It was disclosed on the Ministry’s website and the World Bank’s website for remote consultations and distributed to stakeholders through electronic means such as e-mails. Further consultations will be conducted throughout the implementation of the Program to Page 121 of 132 The World Bank Morocco Urban Transport Program PforR AF (P173048) engage with users of public transport, including those with vulnerabilities and to ensure communication with stakeholders and beneficiaries. These consultations will use best practices applicable during the Covid-19 crisis. Most expenditures supported by the existing Program have been informed by planning processes that have included participation from local population (often during public consultations). To the extent possible, data collection and monitoring will be carried out in a gender- and age-disaggregated manner to contribute to a better understanding of the demographic profile of the affected population. Page 122 of 132 G - Action Plan Schedule Status Means of Schedule AF N° Measure Activity Responsibility of parent measuremen Program t Area 1. Strengthening of the environmental and social system Municipal Yes N/A N/A Technical Guide to the - Preparation of the Guide. Partially Workshop Extended to the 1.1 environment - Organization of a presentation and information December reporting new MoI (DGCT) al and social workshop with all stakeholders (on the local 2016 participating management level). municipalities of urban by June 2021 transport Revision of the decree on the EIA for the No. - - 1.2 Ministry of December EIA system integration of public consultation and distribution Droppe Environment 2016 of the documents130. d Designation Yes Report Extended to the Identification of an official to act as the of a focal new 1.3 environmental and social focal point in each Participating December point in each participating municipality (for the entire duration of the municipalities 2016 participating municipalities Program, i.e. 4 years). municipality by June 2021 Setting up of a simple and efficient request Each participating December Yes Grievance Ongoing Managemen management system based on the mechanisms municipality, with 2017 (in data 1.4 t of requests and procedures already in place within each support from the any case at monitoring and municipality (even strengthening it, if necessary) MoI at the least 2 by PIU grievances. and definition of a request follow-up system (see territorial level. months 130 This action will be dropped from the original ESSA PAP and encouraged during AF implementation and in support of strategic country dialogue by environmental colleagues as it is much larger than urban transport. In addition, in the framework of the ASA (P172610) on the implementation of the new ESF at the level of IPF projects in Morocco, this component is taken over and developed in order to integrate social aspects into the national EIA procedure. Page 123 of 132 The World Bank Morocco Urban Transport Program PforR AF (P173048) below). before the start of civil works) Grievance June 2021 Participating 1.5 Strengthen monitoring and reporting system on data GRM Municipalities, AF and parent Program GRM systems monitoring SDLs, and DGCT by PIU Participating GAP June 2021 Gender Ensure consultations with women are feeding into 1.6 Municipalities Action Plan planning of program activities, in particular with DGCT (GAP) security and safety considerations oversight Area 2. Strengthening of the implementation and follow-up of the environmental and social management system Implementation of all the environmental and Partially Reporting Ongoing social management procedures and mechanisms Each participating Extended to the defined in the Municipal Technical Guide, in municipality (in new particular, with regards to the following aspects: collaboration with participating - Public distribution of the ESSA and of municipal the services of the municipalities environmental and social management plans. wilaya, with the by June 2021 - Preparation of environmental and social review possible support forms. of the Ministry of December Environment - Supervision of the work by the municipal Interior). Each 2017 and al and social 2.1 technical personnel responsible for environmental municipality may throughout management and social management. stress the the entire procedures. - Definition and implementation of procedures relevance of these Program. applicable to involuntary rehousing. measures based - Follow-up of complaints and requests. on the planned - Land purchase follow-up. activities and the - Follow-up, implementation and evaluation by selected the municipalities of attenuation and institutional set- compensation measures. up. - Municipal environmental and social reporting. Page 124 of 132 The World Bank Morocco Urban Transport Program PforR AF (P173048) - Establishment and follow-up of agreement protocols between each municipality and specialist bodies (for the follow-up/environmental and social evaluation system). ESIA June 2021 (in document any case before Updating ESIA of the Agadir subproject (dated 2.2 Agadir ESIA Agadir subproject the start of civil 2013) in accordance with Law 12-03, works for any subproject) Participating Reporting Extended to the E&S focal points have to be established at central municipalities, new E&S focal 2.3 and municipality level to ensure monitoring and urban transport participating points reporting enterprises, and municipalities DGCT by June 2021 Area 3. Capacity building in environmental and social management Implementation of all capacity-building initiatives Each participating Partially Reporting Ongoing defined in the Technical Guide, in particular with municipality (in Extended to the regards to the following: collaboration with new - Principles concerning the environmental and the services of the participating social management of the Program (for the Ministry of municipalities technical personnel and elected municipal Interior, including by June 2021 officials). at the territorial Capacity - Methods concerning the integration of the level). Each December 3.1 building environmental and social management into the municipality may 2017 initiatives. capacity-building plan of the Program as such. stress the - Procedures and principles concerning relevance of these involuntary rehousing. measures based - Screening tool applied to projects with a low on the planned social impact and broadened involuntary activities and the rehousing, including aspects linked to the means selected of subsistence and vulnerable groups. institutional set- The World Bank Morocco Urban Transport Program PforR AF (P173048) - Budgetary aspects of environmental and social up. management. - Procedures concerning the consultations with the public on each of the municipal sub-projects (prior to their approval). Ensure public transport planning is taking into Planning and June 2021 Participating Covid-19 account the risks associated with the Covid-19 reporting municipalities pandemic and other public health issues Page 126 of 132 The World Bank Morocco Urban Transport Program PforR AF (P173048) ANNEX 5: MODIFIED PROGRAM ACTION PLAN Action Completion Description Source DLI# Responsibility Timing Measurement Action Identification, Technical Ministry of Due Date 31-Dec-2019 The said study has No Change assessment, and Interior and MoF been carried out. recommendation, based on a structured analysis, of sustainable financial resources for the Urban Transport Fund in particular and the urban transport sector in general Development and Technical Ministry of Due Date 31-Dec-2018 The said guide has No Change dissemination of Interior been prepared and a methodological disseminated. guide on urban mobility master plans for cities Design and Environmental and Social Ministry of Due Date 31-Dec-2017 The said capacity No Change delivery of a Systems Interior building program capacity building in this area has program for been delivered. municipalities in (i) project management applied to urban transport and (ii) preparation and management of urban transport concession and delegated services contracts Designation of Environmental and Social Participating Due Date 31-Dec-2016 The said focal No Change focal points in Systems municipalities points have been participating designated. cities to ensure monitoring and supervision of environmental and social aspects of the Program Preparation and Environmental and Social Ministry of Due Date 31-Dec-2016 The said guide has No Change dissemination of Systems Interior been prepared and municipal disseminated. technical guide Page 127 of 132 The World Bank Morocco Urban Transport Program PforR AF (P173048) for environmental and social management Establishment, Environmental and Social Client Due Date 31-Dec-2017 GRMs have been No Change strengthening or Systems established, formalization of a strengthened or social and formalized environmental GRM by the participating cities Design and Environmental and Social Client Due Date 31-Dec-2017 The said capacity No Change delivery of Systems building activities capacity building have been activities in delivered municipal environmental and social management Design and Fiduciary Systems Client Due Date 31-Mar-2017 The said capacity No Change delivery of a building activities fiduciary capacity have been building action delivered plan for municipalities Operationalizatio Fiduciary Systems Client Due Date 31-Dec-2016 The said No Change n of the central committee has Committee for been regional and operationalized municipal procurement monitoring Establishment, Fiduciary Systems Client Due Date 31-Dec-2017 GRMs have been No Change strengthening or established, formalization of a strengthened or municipal formalized fiduciary GRM (including for procurement) Assessment, Technical MoI Due Date 31-Dec-2021 The said New based on a assessment carried structured out. analysis, of the evolving technological and regulatory context (including the recent advanced regionalization process) of mobility in the Page 128 of 132 The World Bank Morocco Urban Transport Program PforR AF (P173048) country. Operationalizatio Technical Participating Due Date 30-Jun-2021 The said New n and/or municipalities arrangements maintenance of operationalized adequate project and/or maintained. support arrangements for the implementation of AF subprojects. Preparation or Technical MoI Due Date 31-Dec-2021 The said plans New update, using prepared or lessons learned updated. from the Covid-19 pandemic, of a crisis management and operational continuity plans by main urban transport operators. Definition, based Technical MoI Due Date 31-Dec-2021 The New on identified complementary needs, and technical support delivery, as actions designed warranted, of and delivered. complementary technical support actions for the implementation of AF subprojects. Preparation and Environmental and Social MoI / Due Date 30-Jun-2021 The said New dissemination of Systems participating procedures Occupational municipalities prepared and Health and Safety disseminated. (OHS) procedures to protect workers from Covid-19 infections during construction and operations Designation of a Environmental and Social MoI / Due Date 30-Jun-2021 The said focal New focal point at the Systems participating points designated. central level and municipalities a focal point at each of the participating municipalities involved in the development of Page 129 of 132 The World Bank Morocco Urban Transport Program PforR AF (P173048) sub-projects for environmental and social matters Finalization Environmental and Social Participating Due Date 30-Jun-2021 The said studies New and/or update as Systems municipalities finalized and/or needed of updated. required environmental and social studies for sub-projects in line with country systems Development of a Environmental and Social Participating Due Date 30-Jun-2021 The said action New Gender Action Systems municipalities plan prepared. Plan to better integrate women’s needs and preferences (including in terms of safety) in urban transport Establishment, Environmental and Social Participating Due Date 30-Jun-2021 GRMs established, New strengthening or Systems municipalities strengthened or formalization of a formalized. local social and environmental Grievance Redress Mechanisms (GRMs) Development and Fiduciary Systems MoI / MoF Due Date 30-Jun-2021 The said standards New monitoring of the developed and implementation monitored. of fiduciary standards on matters highlighted by audit recommendation s Operationalizatio Fiduciary Systems Participating Due Date 30-Jun-2021 The said New n and/or municipalities arrangements maintenance of operationalized adequate and/or maintained. fiduciary arrangements for the planned subprojects (including the use of external assistance and Page 130 of 132 The World Bank Morocco Urban Transport Program PforR AF (P173048) resources) to support their implementation Design and Fiduciary Systems MoI / MoF Due Date 30-Jun-2021 The said capacity New delivery of a building activities fiduciary capacity carried out. building action plan for participating municipalities Preparation of Fiduciary Systems Participating Due Date 30-Jun-2021 Said documents New standard municipalities prepared and staff procurement trained documents and contracts and training of relevant staff on their use Page 131 of 132 The World Bank Morocco Urban Transport Program PforR AF (P173048) Page 132 of 132