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CAPITAL STAICE PAIPR
Proposal randoco -ndionn For the i-icw of the
Devolopreirt Loan Committee
MOROCCO LO- 1-UYTCUYA IRRIGATION II
AID-DLCP-667
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DEPAMRlNT OF STATE AGENCY FOR Ii fIATI NampLDEVF1OF4ENT
Washin-wn DC 053
AID-DLCP-667( January 26 1968
MEMORANLIM FOR THE DEVELOPMENT LOAN C0MM4TTEE
SUBJECT MOROCCO - Lower Moulouya Irrigation II
Attached for your review are the recommendations forauthorization of a loan in the amount not to exceed $5000000 to the Government (f the Kingdom of Morocco to assist in financing the costs of the Lower Moulouya Irrigation II Project
This loan proposal is scheduled for consideration bythe Development Loan Staff Coimmttee at a meeting on ThursdayFebruary 1 1968 at 300 pm
Rachel C Rogers Assistant Secretary Development Loan Committee
Attacimnentns Summary and Recommendations Proc2ct Analysis ANNEXME A-E
7
__ _ _ __ _ _ __ _ _
UMOROCCO - rvJT J TTRIGATiTOl II
TABLE OF CONTENTS
SECTION I - BACECNOUND
A Hjtr Tvr-nt (f the Pre4nct B Borrcwr 3
crt-TmC EYI 3D ontcnhLc -rent Plan jet to GCM DeveO E Rctnthnh off Prrj-evt to U
SECTION II PROJECT tNALIJS
A Tht Projecrt
Du mncryirtio B En c Anay- C r1 i P1M D Technica2_ Annr y E Pinneji2i tr tu fBcr-rr
Th t f o Iri rl win I t -(
rin 3 Citrai U v rt F niac 4 Balpqe 5 Foreign IGti 2
F Other Conil iti(n 1 Iniract -f cn 2 Impact -fc Projerct en P vbt 3 Excers Prorr ty
A fritnce Strategy a
5
3 6 22
2 24 2
24
7 7
nterpr 7 27
4 Other Fml Uorn Srnurc- of Fnng 27 SECTION III - PROJECT IMPL METATIOCN
A Perimcter A]rdnn trrt in 29 B Inplemntaticn chedule C Waivers
ANNEX A - MAP OF LOFTR OIrJTf) JYP PERTMErTFR A lEX B - SECTOR 27 (GAP OF IlRAL FVTE OF R7MJ ii ANW X1C TCIHTCAL DlSCRTTrOr OF PROJECt ANNEX D STAPTORY C(TKKTT ANN E - LOAN 1UTO ArToN
2 31_ _ _ _ _
UL IJMJITLI OFFICIPL IJ3E
ST ~IMAPY MMRDFCCOEN MIONS
I OMC 1LOYA FRICATTOR II
1APPTCAT- Tht- Gs-vrnmfnt of the Kingdom of Mororco
2 AMOUNT$W
3TPALcoT mw $ LonACTIVITY~ AID r~jv~ OM Contribution
$~TTT~hTotal It DFSCRT11TION OF (TVTY raV irl-igztirn of 71400-) aerfs of farmshy
and in L-roultuynt River barin in northeastern MoroccotTJT
5 PtTEPOSE OF 1PAN Tch - jt n financing thfe rontr of US oan-a d thirdj rcintiy rv] rcrvices rpcuirid for the prnjrcf Lc
1aa2
an] thir I ccunt unJ-r th-t 3nm~cu be fi nanrrd by 1T3shyur$ Morocc-n ii uroha- d frus th US Tr-jriury with thc
prore- [L th- -n
6 cy~~wr IpTIY P-i n of Th er Mrul(ouyqi Trrigv icr1 I foc~--r St jni -h and- French r Tirrrv-1 r
~rir tc Mr f nr r r n~T rnhwnii r hdas (ry af ~7 -tI - ~rj on thT c crvit ion for on ofc
the urnrr-iI-vj rnri~-l 11 had P n oxtcnJ4shynv v)VQ n m3J~- I lor tht -ly ~ jr that yi-ar th Deve~c-rnt
In u 1th-ori -- i c -- Ito37i5iOn fcr the -t rig cf thamp- tr hich i nt-n1idr te fi nar rr- l r vtcr-ve and trrJr in -~ ttic- ovcr a fiv- y-rir priod Tho cnshy-t-uc t 1 n i rn n d u n r t h 1t 1c-av hrw~c r wi I not in a -t b ccmpo otee unt il mi-- 6 it the ~s Z~~~ncmr 5211 a-rQ hre urcle r i r i at~irr rc h ich about ner lplusmnre vrrrnmrjI y
tind - 11til3 e r b-rfntyunr(der irr7--)itrthcn - in
~ri-t~rTof rocstBC UT n VIforM rnvit fi abroiti rrc
( f 2mo thL-l4ItE OFF CIAL iruge y ~hn --Is t uni m t -r--nty rr- i icnr 7 nderi
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0 STATU FT CPITIRTA Se Pnn D
10 JU FREOLED ISET-S 11nne
cf a loan to the Government of the11 RECOChDtVTT( Authorization
i-- an to txceed $50000) with th l t - -- -occo in runt niot
yeairMaturity including a 10-year -rnee period
annum during the grace period 2-ilnteret Krrr thereafter
RepayTrt Princiraland interent in US dollars
i rce US for dollar disbursements and MoroccoProcur ind other free world countries for disshy
burncment of US-owned Dirhams
CAPITAL ASSISTANCE CC3TTrEE
Capital Development Offl-er AFRCDF Scan P Walsh
Counei GCAr-R Willis W Jourdin
rnriner AFRCDFgNGR Thomas V Leahy
Agricultural 01er AYRFID Curl E Ferguson
Dek Oficer AFRNA Da yMcCall
fl-fltDOFFICIAL USE
V gt~ 7Ct ci f f Pojct
Ti - lcr -n t Mujoiiya as a plarined irrIgated pttrshyrre tr t-vrnriIn I)c 1- ou jO q joint Franco-S)roii Tirogram The Mc-~i l Fi fer r I t i- fr gtrt i r im Lwe_-n the form~r Froncri zon
i-2 tlnkr anir cnrmer ~-ihzone on lheft t 1rink Conshy~c f t 1Jni d iv- hn dwnm iwhieh was -tr~rtE-d in 1952
ind 17F r 2f 10rt rdl I on cu iv 7r- of u1srcul ~rigep Fn 1 ivltini~rlt 00C 1-m rf tiunrie and oanfTh
tPti~rfl tl r1ili mank onanArg irrigation in the Triffa plal n ~nns ii 1oArrfcd thft water corvwvAn-J nystnn rnjtic ampan on wujijr
~~-f Wrri -jr t I prr jecet si ldun ~ t M omo f -L1n(
pA r pirraliiit rAw~or k~ri I rAO I1n Mkrch hO ni nl tn _zci r con)i b- 1 n th 111Y rni tb- i
+ f - lttc~ f th M- -- Y6-Y I I fpoundtorage damn ( thl ~rin--Ir-tL ioi I i i i gtyir T rvrI and Hich L~i rt -otal ctier
ny nswj~~raecawilp vi ahnd devc lopr-nt
tr It Ft- r 5x -
Sir ~lisanc -ott In-rras Tn I-ay 1963 an unr cshy i r - - r-h-~ r i- (n i-I r the M- 4)rsi- K i11a d a
ILft y~C IT - i r it Ill fjr f t it 1hvr -- Ut CAcn7d(e v1
trt i If 1 - ~ 1 t Iic rI- -n - Tcir it d orti 25 m I
S 7 r in 1- mrain rneroir ~InAIL crgt r ~ r 1 t ~ o l on Mnrz-h T 1 that )T - or r(- t
~~ 0c ~W- 1)-Pr It f) rn It1t r Iil 11 cm
rrr~~rdI n)r r - r) Ir y i t1- Pni Arr r 7 tr- r~r -iVtIdni norrjr--iof hic- rt isn
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1-m~l 1Yy utno J w nhulphnte appred makingr tar J-e of i t All of thr factors combinod
he ftrthe -i crip inoi h- irted $32 I r) it ir te from to t Ttirn- (ent n of which
t- ~r) rIf-shyr tn 1 amp-inrIt)h or From to - in r-t r m th 1ft E ink hasc k Id rchabilitattonc ouab1e of delivering 4ater to
before t will bethe left ban- areas Work theb1litation on rehashyof the tunnrel is exnected to begin in MayJune i38 In June IX)5 the Grt4 rubrnitA to AVP a ecmprehensive study andfor the completion of plirthe pro ie-r together withthis purpose AID rjvio-w if the-
a request cr- a oan fordcrcumentsthXe proIecrt rained and of its experlonce with
th-e plir a n2rhr-r of q- tionn concerning the adequacyarising Vrom ofthe limitcl iValability of skilled roroccanersonri] cce tuated by the2 d ermrturetinuing unroved of fore vn technic ins)
Ing 1rcchirec arid tenure problems lnndequwpe GOM rroJect financ
conshyand inadequate projcct mranngement Moreoverto I- nn cver-awnbitinus what atreardccuntry -id( Moroccan proram for dovelopmeitof its surface water irriwatinn tential arneared as wel to havelro re-ponslble fr b-entb
-sI- v of avalla gtrrnpower for the utlionj of
Si- - t t t h-e Lower tinulouya project Itself AID thenfinancing of
f - of studies by the Unlt-d StatesAgriul- tEir nford RI-3rrch Institute with the
OA) iniri both informtion con-ernirgr(-lrrt n Or the molouya -r one hand ani manpovrr
prorifies assnonrront of thefor in-- ns betweenfar-i )-co the dry Jlnd and irrlratedon cth- e resultsirdi-ti -qrly of the initial SRI stuliethat t least ra
in ren-ral terms Investment in Morocnn1e t ri-ure would te morerar li productivelrid- It Thn GC14 hasr i rrnm sinrfor e irntryctlon of frti iz-r the re Z tr in rain f-1itg farirp are --rW t Moro t-
uo A fin ql SRI udy wasbullbypriorities fr invtronf u in the Thin nttdv -- r-letd in Novombrhas C- of 17 Inn-rzjrehersIve measuresIs nhortage to allevia-eof btij2p- T-aowr in ift7 agriculturalnps to re voj fhe progra-ns has taken]ori _- probl-ms In the Mollouya andornnized t t rtt has reshycf if - i nageot of irrigt ion projectprovid- fcr tohe (i-rt -0 i7 + nf( r a)thriy ani reponsibility for thpof Jm~tera inMorocco
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1967 to irrcveTporformnnce in grculturc In the early psrt of the year the GCQ4 recorgnn7ed it a initrative system to rrozn for greater loca responzipuIty nnd crntrnl over agricultural progrrswhich inclulcd in partcmLar the minagement of the M4oulouya Perii-ttcr and instituted a ajor rrive to recriit principally in Europe foreigntxn- tc -rk orr rri y a r-nritc-3 In GCM prrqrnms In July one of
of A- cuA tue The att r ir cvr atic with USAIDPabat has affirmed his active interert in the Moulouya arid in the US role in its financing
E Fe)ationhipn of Project to US Ansimtince StrateT
Im~rvNrm-crt in Moroccos economic performance is itself a major US objecti e in Morocco as well ar an Iportant contributing influence toUS political objectives in Morocco It is believed that evidence of econc-ric improvwr ent will strerthen the GOMs capacity to maintain its moderatint role in Arab and international councils and its friendly relatiorns with the US
AID strategy is to assist Moroccan econcmic development within the framework of the Consultative Grcur (CG) crganized by the IBRD The CG has endorzed the GOM priority on agricultural development One of the prime objectives of the AID prcgram in Mcrocco is to increase agriculshytur1 rrcdurticn which i in accrd with US policy to reduce on a worldshywide bazis f-ependence on US food esnistance over the next five years
AID ian-stqnce to the aericultur l sector Is directed at increasingPrc+ -tion dry-2and farming as wel as irrigated farming in the LoweyMou]cya Rlv-r Bsrin where the US has provided $23 million of loan assitance einc -lr60nn well as $3 millicn equivalent in ocal currencyloans The rnture of AID assitance to Moroccan agriculture has evolved from major erade TVA and SRI during the last two yearsrtd by U2DA to d-tcrwir- tl new investrent with highest return as well as to plan Fpecific agricuUural develci-nent programs In dry-land farming AID has provided te hrcal ansiftance an- feed grain donations to improveanimal brcen and feedin ard technical assistance and local currencyloans to ipcrenie cereals rr-yiution There projects art continuing and (xrandling rticuarly in cereals production where additional TA in seedproduction an] xt-nsion techniques is being provided AID also expects in thir fischl yeatr tc providr- fnreign exchange through a DevelopmentLean for the Ariculture 2ector to financ necessary on-farm equipmentand commodity imoorts particularly those arising from US technical assistance )rograms
As a result of previous [IS assistence in the Lower Moulouya thisproject ha b--cede Ientifipd In Moroccan eye as one of major US inshyvoverrt Th G has for sore time been -eking additional US loan assistancpe t-Vomm lete t -ind our continued ruport of the project has ansumeri polit-al as vell as eccnomic important in UJS-Moroccan relations
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v a~hiv IXVA- julqrcjct a- prrscnt ly ront rp1at iuA r- i rtk N o op ) ruct ion ha- t-tn iir~jPrti--n with r -shy
t zj Teim ri i t1i r streq F nn inrr i ratnr~~1
7 Irtf no t~hr I-Iin cr-tor- r tr Tvi-iffa ari 4 4 1f~n a~jicrnt t-) t- rig~ht n rX1 ft - - ynI Ri $ver ar
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tt roh j t ht t of tnIai r T 1 rI n wf r ardofz - -an It ro ins ai~~re ait iplusmnr -MT r on
ill -r Ir i -r 0I- -- (n ti I a jr ranal-
I n r 4 o fid on-i-tr1 ri-I ofr2 the Irm f ir Ii rec
f - p ji oi if ri r4rn H r1irrt icalci~
J -P - r i ~wc i t he 1 I t k j- vt~ c a fIofy faie i t~njp f I nnuji (- n 1 t in N11t~ht i itor
o hi f~m r-i -sV
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ioriginally begun under the Spnnihh rgime Work was resumed by the GOM under a contract concluded in late 1959 Major difficlilties with the tunnel structure have been known for some time On comTletion of a series of studies of the problems involved the GOM nvited bids inNovember (767 on a pronrosed contract for the correction of structural-defects i-he tunv It Jn bnticiiated that this contract will be finarced _y the GO fr wn recurees
The Bou Arcg area which lie to the Northwest of the Zebra andalong the Mediterranean Coast will ]ikewise be affected by the delay in passage of water through the Left Bank Dead Head Tunnel The BouArr- - - ontplnn s~re 31000 acres of irrlgablf lrnd While the elttent n lr nni - ytr running from the northwest portion of t -h 11 shy h1s argely been completedneither i of the other irrishygation works required h~iv- - ver n --rt of the d-zign studies for thin area ha- u t L
The bulk of the DLF I-an of $23 million of hiehity over $20 million had been disburd as of the end (f wvmrber- 107 was (or is being) utilized for cn~tructinn of the cehrnKastoragedam and of the Bou Areg Tunnel and the Bcu Areg High Line Canal Sraller amounts were utilized for advisory engineering services providedby a US firm design services and construction of some of the main canal drainage rnd distr1rmtion woks The balance of the loan is expected to be disbursed before the end of this year for reimrburseshyent of the costs of contrEcts already completed or presently under way
The GOM has in addition exp-nded an estimated $13 million since the beginning of 1960 about $3 million of which represents the cost of hydroelectric installatiuns at the Mochra-Klila Dam and on the Bou AregHigh Line Canv1 About million vas expondet on reconstruction and the bn2nc Tprerents entimated costs of operation and maintenace of completedworks The DLF Joan of 1960 war intended to assist in financing a -r second phase of project works in the Mculouya Perimeter As indicated nbive the works ndrtakn in his phase (apErt from the repair of thn Left Bank Depd Head TunnE a jrrng to a close
In view of the Izeable rpuirces devct0-I tc thp Mculouya over a rither long reriod of ytrs--by the Spaninh French ar-I MroccanGovernments prior to l6O and th qC-M and AID frox 31960 to l2--to achieve the installation of the bulk of the major installations required for water ntorare and rranzmi-ion it Ia been conzidered that at this next stage of drvelcp eat of the erimeter the principalfocus of attention should be on t1ose works which will offer the
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-7shygreatest and most rapid returns on ndd1tio resources required fortheir comyletion In the Interest of rbtainir an asrrrent ofr It fr the crnletion of the reirainder of the Troject AIDri ained rvienof the Stanford Revar(h Institute to rrenarea tuy i th orrn nrd returns for the vnriou rcrtions of theroject for h h i rr h beern pJanncd but not cnrrpleted
the he hat the completion of
the reynainintz ork-requivd(which P-nti fird Ip following Sectorsray up on tn iI thejwwould appear to offer the optimum coabination of hirhi nremental investmentard early comption
No of Apror To P- riuirred
Triffa Main 317 Triffa Sector 27 Triffa Sector 28 Zebra Collective 1500 Zebra Remainder 14250 Bou Are Central 16250 Bou Areg Remainder
TCtAI)
- Includes cre 8000 aeri o being equipped
If the above is to be accomplished over the next five years asenvisioned by the GOM the schedule would imply the bringing under irrishygation of around 1500) acres per year This is around two or three-times the GO hi torical rate of dvelopment of irrigation in theMoulouya over ast seven years While the GOM has recently reorshyganized its e cnt structure to permit greater local autonomy inf1 e ranagemo- rrigation perimeters and has recently accorded avery high -- -r to acceleration of developnent of the V 1 ouya inparticu t -vident that given the manpower constrai ts involvedin the Mr n operation the- above target way well be it- ible of achievenrnt
The GOM hM itself recognized the elements of thl -- I i lindhas in dizcuss ins with USATDRabat requested considersti- -f hfinancing by AID of the dollar costs of a management crht with oUS -irri to take or c(vnpletely the management unctions fror thi
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- Left Pnnk Dvd H-d Tunn]
5 r-y rd t final tng of ire aration for ther-rT ir cvf ni r r imy - rz--rt ha recently beenr-t) l i w t e rr - tht - I afid if exToected to ubrit hit writt(-n r-rt jr DC Aii preliminary impressions baled on a 9Ite nErerti(n indi-ate thit a -rt1fartorj repair con bemade in c)nIdprnbly le- t n-ne for lfan -than previously conshytemplnted
The early ccmrt-tnn nf thi work in lmnortanit nine IL c t Ft th avai-bility of pr~ct wrte for the entire Left Brnk
Z~bra Collectlv-
Thin 1 on ara ofrXPr-ctively ond tribal land that will be divjded and allotted tr J-ted tribal -b-hrc who will become soleowncr3 A Pirpe rart ti Tniran -aratirn and developent hasalready bern co-plet] 2pani levelirg r-mains to be done as well ae conztruct c~n of b-tcn dnd drina- works
7eDo i F--vino-
The northrrn ecti n tht rmrainder of th Zebra will requirethe extnzi-n cf thct Train 4]h will be ccrrleted with financingccmmritted under Phase II of fth tr-Ject Land preparation and levelingwill be required anlnp with h ntruct n of distribution and drainagebullir r]
T ectinr f th- rrainler of bra will requiret- rd i i w -J n rrd h c and engishyrnr nw d t i f -tritst t n and dlarn -rk
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foeuro rginprng im hhve b- 7cr)Pletcd fcr the irrigationthe Bou Are- Fr the o-t rt hu- I cf the
of rcquired construction
of main carrl Rnraljor dr- nRe worx z develoFerit and cronstruction of zbldiary li tribution -r irnge y--r rrrairns to I undertaken
Th P- Arrg Tunnel wr orml td in 267 and construptcn sunder way on Ih-Yin Canal rrired tL nvcy water the suthrnf e of Areg ervie ra
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Sector
~hi Trifi - tnz r -n~ irlrpmi rritt of r tur-~~~rb th ri B u Ar- I t r i 1Y h- nof~ Fa-uA flnricir-z I- T-1-rv igtn t ih-b r
CL ir ra r I th- ityterjThd t ) rah)rt nry to rItihi cofltrictjcn l~n- rvlfAi i-)t arvi r rf fgtrrn h
n n mt rJ z-n fl -V7~1 thin at-1 h rrroxv ytv7 v -I t
f--yI rtn ha not e T
Ct 0
0~~ Iv
-13shy
elevated area requirin iat-r to be puiiped to the irrigated land with both highr capital costs (about 1 million) and higher oreration and maintenance costs (150 Dirham per hcttare via-a-vir 100 Dihams perhevtare for the grnvity irrifrted ares) The ony work presenl-ly cotiishypleted in the Triff Hih Ser-ic Area is the preliminary engineering stirUes Cimi-ir to th Tr Pa r thu TrIffa ]Igh Service areawill reiir an ex I uvnt ricd bfore agricultural proshyduction cn be initlat-2i
The above considerations reiult in the following revised ranking of priorities
Project Area 1FY (M Priority
Triffa Main 21 I Sector 27 8 I Sector 28 9 I Bou Areg Central 6 II Bou Areg Rerainders 6 II Zebra Collective 5 II Zebra Remtd nders 5 II Triffa Ent 6 III Triffa High ervice 5 III
SRI 11ed a ccst contingency f7actor of 25 and a cumulative costescLlatior factor of 3I per annum These factors appear excessivelyhigh in th( light of (1) project experience to date and (2) the fact that from his roint the technical rirks involved arre of a much lower orl- r f 1h thnse inhtrent in the major works Just comshy1 I intion nrd contingency factor of 15 has there-
S chtiMnte- Itlizcd in this rarer The ii n-ttr costs the to ) ject (in n]ace of factors
i by )I nrt 11 thIrhe nf th nJter atve I[cwver rrtnrecr-y factor euld Increase the IPE ] hi ra]y th- IIRF fcr the TrIfa Sector 27 ansnunirg a
oct crortlr7crncy A can be seen as the conAngency I thf cc curve rrv to the right and inter ects the
ur h h 4r- rnr rate of return)
C Finreirifg inr
Cot o the prJect wor fmcentntgenent nnd engin-erinm advisoryrvices for the proued t rd tsge of the Mmlouya Project are
ctirt a Crollows
nF3r AVAILArBILE COPY
Best Av DlableD
7 17 shy
(In Millions Of Dollars)
Righi Pank
Trffa Main 34 poundSt (r 27 08 S ctor 6 0Q
51 Left ank
7bra Collective 12bra Remainde r- 54 Tou Areg Central 74 Lou Areg Remaluders 68 heft Bank Dcad Head Tunnel 30
238 Services
Management 20 Advisory Engineerin 05
25 SUB TOTAL 37
Escalation amp Contingencies 15 47
TOTAL 361
It is proposed that the AID Development Loan for this stage of the Moulouya ProJet be limited to $5 million an amount which would be sufficient te reet the cost of any US goods and services required for the works to oe undertaken Thus the loan would finance the dollar costs of manrement and engineering advisory services to be provided by US firms erstimated at $25 million The balance would be available to meet any ther US cofts that might arise for constructicn cuipment and nateria]
The balnnmc of funds required would be provided by the GOM from its own budgetary resources including as appropriate agreed allocations of the counfryj-uie dirham proceeds of US surplus agricultural programs in Morocco
To a l-ge extent construction works In the Mou]ouya (other than the Bou Ar- Tunnel and Mechra Klila Dam) have taken place under a largenumber of roll contracts with Moroccan firms It is anticipated that this will ontinue to be the pratice in the forthcoming development stage Th iit is evident that the great bulk of project cests in this next stage will be local costs
-E5 -
In the event that not all of av l able fuInd- under the loan are required for TKI eo It i ouied that any remaininrn balance be utilized for the payment lo -ovalccztn f the project This would be aceoomplirhe by utili7irn th- h r vroceeds of the loan to purehare US-use dirhsmn (frcr th U Oi-irrirg Officer) which would be utili ed to rrimbure th fc u a t local - nditurrs
Thi arranrit 3ir ila ) fstV utilitd In the - of the D-e l-INAieret Loar tJr U Atrrert SinceYr usii Conv rf i cn therc loans are rcpiviible in dollars nd rince Morocco in a n-ar excess local currency couintry the fert ) f e transaction in tc provide a means for obtaining ccnvrrrs cn a-cr th life of the loan of otherwire inconvertibie U5 holding irhrs hich are in exces of its localrequireme t
In 1967 over 15 million dirhams (abceut $3 million) of PL 480
Section l04(g) loan fun cre in msgreement with the CON allocated for the financing of various contractr reloting to projects in the Moulouya It in anticipited tht ndditional allocations will be made out of the local currency proceed generated from current and antishycipated US 7urplu agricultural rmodity programs in Morocco
It has been proposed that the dirham equivalent of $45 million of the proceeds of the October F67 rurplus agricultural commodity Sales Agreement be allocated for a Section Cb(g) loan for the Mulouya In nadition it is estimated that a $]35 million (in$ioz1ble dirhshyequlviJent) woull be available from 7uprl]eental surplun agrIcultura con -ity rales programs under Titlo I an-d Title IV in calendar 196F for allocation for loans for development projects in Morocco These two amounts combined would provide about 6 of the G014 resources reshyquired for the project over the next five years On thic basis there would appear to be rcasonble propect tht the GO should be in a rorition to provide cver the S e year rriod of the project the addishytional resources renuired for itF ccmpletion
Tt I contemplatd that na additlonal US dollar financing of the Moulouya byon-l the $ iilon rorosed herein will be provided for tl cplei n ef h M _11-nuya rince the bringing under irrigation of th- 11O0Y ies include] in the propore] project will substantlally cornIete the works criginally conwtemplated hen h DLF loan was authorshyized in 106 The remainler zf the workr h(- be within the capabilit3 of the GOM to complete with It- o-n resourcec
MT M T M
-16shy
) Technical Anily ir
The Moulouya Rivr which is cre of tne largest in Morocco originatesin the idll Atans
Moulouya and which oztend scuthward
Kediterrancn l re
t rre
Pr
ard n
flows rrpr
orre 25) mriles northeast thr Agorinn border
to the
In- agricitui 1 in li j i nt( iljr r Th- rst rind most
t 2 1ir i t i h- i n th rwrht born of thshy-- e 31nmiler frem the Mediterranean
Lea To tho wet cf the Tiffa and nn th- left bank( of the Moulouya isthe Zebra nlain 14wiuntain rv-arate the Zebra frcm th -ea and fron theBou Art-r i-ll]zain which - ctI nrrthwe(st of the Zebra The Bou Areg a coital phtain sclte 19 mils lorg and h miles wide separated fr-nthe n-a by a Ihow sa2t water lagoon Southwest of the Zebra is theGireb plain which hun land ruitable for irrigation in its routheasternportion The Gareb i at a higher elevation than the three other plainsard if ultimately irr-gatcd vould require pumping fro the lower level Zebra conv(yance system
Water from the Noulouya River is stored brhind the Mechra Klila Dam whichwas coniletd with fjiancri rc AID loan (3-A-2 (DLF Lcan l6)Water ir rclca ed downstr(a (1bcut c) miles) to the Mechra Homadi reFrshyvoir and d]iversion dcim in1h-r divert-d to th right oad left bankcunals About 75 kilometer (1 miles) of the Triffu (right bank) maingravity ciral hay ben copletd und consderable cr) has been carri-dout in the Tri on) distr Iution and drainage netw rks land levelngend other farm iwnrovwments About 37 kilometers (22 wiles) of the Zebra(left bank) main gravi-ty canal and the tunnel 6 miles (101()7 JIrenrTrcters) betxeen the Zebra area end the Bou Areg area have been comrneted
The GOM illrrfo m certqin -rk nr-Aded fcr develormnt of the gravityir~zgata yt-- for n 71-) acres over the next five yarr Thiscffort vi2 be eonern rait-r urcr the develo-ment cf areas thot providethe great-rt ecnnomic returrs nnd the developnent of a cadre of Iorocearperornel adequ tly tran-yi in the an2gerent of the project SeeAnnex C for further Irojcl details
e- enmL Ev1ation
Mt Infratrueturr The --trnal highway co-munication network i t arid rfi Isirm nf re- i n-ote siler in-1 shy
uzeather raved rc
____________________TAM
- t 7shy
Other communlca 1 i i t ih Lh arr-- inlude the nrninlineof the Oujda-Fe--C- t h~rh l e0tnnd to AlgeriaSpanish enclove rt the 1 fir idto cmmercial airport at Oujda andNador with regular national onI int rnational ervice5s
Th verirtr 1 u ~Ath r nr r t crocd by 60 kvJ i i i u rrd t 5( kr It na ortr kk f~ditcrl rower1(Qp x I -y yrar) -o n d hr rritIronr
at the Mechra-Yplusmnilj l inm fnd the Bou Areff contral poter Statin The townare connected to ranrh cther and th2 r-rt of Mcrocco by telerhone andtelegraph 1 ner
b Sol Soil rvey 7rd land ]a-ifctons have been completed i-nthe Mcloulva rer eter oanntrantbi- with French firmr u-ing Frenchmethods The Trifa -1n wr initialy rraped at a cealeof 150000with certain area ub entiy rer-aLd at 15000 110000 or 120000dependin I nn the cor1cjeity of YJ rattcrns The Zebra plain has beenmapped at a reale cf 20O00 nod th- Bou Areg plain at a scale Df 150OO On thp baf Yr nf ther urvy th cla sified the soilsGC hain terms of r-uitnbility for irrigation as follows
Land Ciaifcation (Aere)
CasrI amp IT Class III Clans IV Totas Triffa Plain 17000 29[00 22725 99625Zebra Plain CbO 1275 4050 211425Bou Areg Plain 75)00 l6qo 3 0 3067)Gareb Plain 13 05 10 70 0
Inclurez 1750 acres for lfigh Service Area
The findings thi indicate that ( i) arriratry 5of the area in thefour rlain- i suited to irrigation (Clare I anl II) (ii) more than3 ir suitabr bt with one Or mcre imrtat~ons Irro=ed by underrablefeatur-s such an to wrafhy oil characteristJcn trnine- r restrltedbull rio (CIar TIV) and (iij) ls than 2 of th- area in only margina)lysuited for irrinticn(Class TV) In ther7e lattrr ardrn only rmi-intrnsive orop rotations blUponsblhe
The oi nicn f the Cn-lting Envneer (1ydrctechrJ) th respect to) therd carrffjn n that hfle 3 Bureau for P ltr0tion -tandards werirt ernoy-d te rlasnificatinn ir aceurat- and n rrti with3and rlaced in r d rLrnble categories more
uere thnn right ha bern the caseUS tandardr folIced The clasifatinn ha 0a been reviewed andfound to be atifactory by the USPA tayr Hoever r areas of complcxroil Ttternr hch to date have only been ru-d to a oale of 150))rome reraTpin tray be necesary as a banis fcr rrerarnZ
- g~T PRAvVLAFJLE EOPv
final designs of irrigation and drztinne- rystems parcellization into farms and planning of land preparation measures In addition considering the high average salt ccntent of ater frcm he c ilouya hiver a rorm of systematic leachin- will be reqirer- to f ree-rt aculation of salts in the soilsparticularly in h ebra Crt in will nlso1e plain ureas require nitrogenphosphorus crd possibly other nutrient to obtain satisfactory yields
c Water On the basis of studies by the GCM which have been reviewed bythe Consultirr Fnr ncri and the U au of 1ccoi-ation it is thecorclusion of A tt (i) the q lity of water in the Lower Houlouya
is below averpge bvt crp rble to thtof certain rivers in the US whichisotnteLoh~uoybrve successfully been usc for irrif ton for periods cxeccdin 100 yearsOj5) there is clearly a sufficient a )unt of i ter to irrif-ate the 128010
bullcrer to be served in the [rlcentIty ar n3 Addi-tional s-tudioser (c requilrecj dcter-Inc if adeqiuate water is a- ilable for irrigationof 376QGO vc rc
The only signifcant urce of vp y fOr irrigation water in the perimeteris the oulouya Vi~cr io jc n1 is 1re ntly being irrigated from wells most Iround water i - - 1 Alouya contains dissoived salts which i xr Lrn - hvriny reak flowto iJOx PIn iuting [cricd of c n ccntraticn is 750 ppm On Thi- basis of USDA Salinity Lot) atory criteria fte v ater is class 03-SI (hl-h salinity-low a-alinity) Vile water is thus of mediocre qualityit is ccmrarable to that of river successfully used for irrigation in the US (eg the Lower Colorado Rier) and poses no serious problems to irrir-ation in the Moulouya perir( cfr provided the W4 adheres to recorrmended programs for meeting leaching reoairements
With ref-pect to the 128000 acr project the demand for water reasured at the Mechra Hoadi diversion dair is estizated at about 575 million cubic meters per year as follows
remand for Wter
Peak Flow Annual Total (August) (m 3 million)
Agrieulture (176000 acres) 337 m3s 806 Municipal amp Industrial Consumption 8m3 23
Total 4 uy62123000 acres to be irrigateA by Gravity 255 m3s 575
(The e dpeak requirzents of 345 s compares with a 35 m3 s design
capacity of the main canal at the diversion dam including 18 m3 s for the Right Bank and 17 m3 s fcc the Left Bank)
I
- 19 -
This estimate is based on probaole rainfall cropping patterns plant requirements evapo-transpiration and other expected losses of irrigashytion water The estimate is believed by the Consulting Engineer to be reasonable but subject to refinement on the basis of tests to be carried out on a continuing basis
The annual average availability of wuter from the Moulouya river is estirated at 1100 million mn or about double the estimated requirement for the gravity areas
Estimated Availability of Water
Twelve Year Annual Average for Moulouya River 3 m3 second 1100 million m3year
Maximum inflow Observed 8000 m3second(1963) 3h00 million m3 (1962-63)
Miniwum inflow Observed 1 msecond (1951) 532 million m3 (1956-57)
On this basis it appears that there should be ample water available for irrigation of the gravity area as the water availability obtained from twelve years observation exceeds the requirements in all but the 1956-57 season shown above Prior to the development of land with purped service areas (the Gare-b and the Triffa ig h Service) a review and analysis of the river hydrology should be unidertaken to assess the availability and regulashytion of the river flows
d Studies Entincering and Construction The overall irrigation scheme outlined by the 1uM defirs the ajor features and th( magnitude of the work to be accomplished to attain the ultimate goal
This scheme is being carried olut in phases over a long time period The present phase encorpasses the development planned within the priorities indicated by the Stanford Research Institute (SRI) study for the gravity irrigation system
The studies for land classifliration have been completed for the gravity irrigation system in the Triffa Bou Areg and Zebra plains by French firms and were considered reasonably accurate by the Consulting Engineer Land consolidation and parcellinrg has been completed by 0MET in the Bou Areg Central area the Zebra Collctive and Zebra Remainder sectors 7 thru 10 Land consolidation and pareeLlni ar( needed for Triffa sectors 27 and 28 Bou Areg Rematnder arid Z(bra Rerrirder sectors I and 2 The engineering designs for the Triffa main sector 27 and 28 and the Zebra Collective have been or are being completed by the G0M forces The engineering design for the Cefntral Bou Areg and Zebra Remainder sectors 7 tnru 10 has been or in being connpeted uy Hydrotechnic Engineering design will be required or the 1ou Are remainder sectors D-3 thru D-7 and Q4 thru G-6 and Zebra Rer ainler sectors 1 and 2 The engineering designfor the Dead Ilead Thnnel has been undertaken by SCET who have preshypared anid issued an Avant Projet for bid invitations for construction
14 M)j6Fj Cshy
-20-
This firm will also undcrtnk- uu-orviston of construction The engineer ing not yet performed can be aea ished by GOM forces andor private engineering firms
Construction of the extension to the rrain irrigation and drainage canals Jand preparation rector cinl ani drninaive ditches will be performed unllr cntact t) 1 cc rt~r~iet m)t hi in the ene of the
r-abilit tion of the L2tL Pz- Dd iarl Trnc t
e Cronning Patterns The existing erning pattern in the Moulcuya including botnirrigatcd and dry farm ingincludes grain forage citrus vegetables olives grapes and 6 small amount of leciduous fruits and nuts Of the roughly 2140Cy) acres of agricultural production in the Moulouya about 177000 acres are in field crops 24)) in vegetables 16Y)O in citrus 15000 in grrrcs 540Y) in forage crops 1700 in olives and 15)0 in other fruits and nuts
Taking into consideration rast and present trends in plantings as well as agronomic and price and marketing factrrs the following projection of cropping patterns has been developed for the Lower Moulouya
PROJECTED POPPTG PATTFRNS T1 HE LOWER MOULOUYA
(In per cent of total irrigated area)
Left Bank and Triffa High Serice
Triffa Sector - Sectcr rriffa Class Class Class
crop Main 27 28 East I amp II III IV
Citrus 40 60 10 10 10 Vegetables 15 10 15 1) 20 10
Crtton 15 20 10
Fcragpr 10 20 25 30 4o 30
heat 10 6 20 25 20 35 4o
Grip 25 24 35 15 Dy beans 5 10
Sunflower 10 olives 5 0
100 10) 100 100) 1i 1052i 100
a Incltdes double cropping
- - r- euro --- 7
~7~TF~Wr~e~ALUSE
-21 -
The projected cropping pattern for the Bou Areg plain includes cottonLJrirdg the frrt Five yearnejtinted 1r of the Class I)fand
the project jitwould be grown on nnII landn Tht renresert only 960etrravres) ectz ri)cr)e area The cotton acr~a e ry increasep 2ceafter live years if ritisfactory drainage conditionshyrre achieved in the Bou Arev
cotton grown i 1xonp tarx- Trdltionally Morocco export its-Jr- cron an irr IJ hort cble to rmeett Cotton the reuirrents
r the oroccan 2pinningr mills The croppni-attrn of the Triffa East (about 180n acres) Js projectedt Tnrlude 15- (about 27 acres) in cotton It is likely that becausef ihe limited extnt of Class I and II lands in the Triffa Eas cotton not increase beyond that percentage
1t i evident that the amount of irrigated cotton that is likely to bein ther-n Moulouya is minimal even assuming that local drainage condi-T nare i asuitable
f Technical Sundnv--s The AID Project Engineer hps reviewed ii) thedat and ajor construction performed to date onronct and finds the technical requirements this long-ranRe phasedsufficiently defineoto ccntinue the project on an orderly schedule The estimates of cost of prsirct facilities have been determin-d by SRI from average va)ues oftrit cots obtained frorr reviously ntiarded contracts and from etniled( -s-nand analysis prepared by the iHydrotechnic Enginering fir oft-o tyieal sectors located in the Bou Areg area The costs for the arc ent contract have bcen estimated by the USAID It is consideredthat the depree of engijeering planning undertaken and the deterrrinitonr to the US Goverrment are adequate to meet the applicable requireshySt- n Section 611 of thie Foreign Asistance Act
7717gt
1 --shy
-22-
E Financial Status of Borrower
1 The Moroccan Economy
Grrwth of MorocLcts GDP in real term averaged about 24 per yearin 1(4 and lr li Per capita DP In 1C 5 wan anproximotely t162 A (er Irr-ht in (6 resu]trd n a drcrcne of slightly nver in GDP which tlh vpulatior grc~vth avrring 3P4 per year rnrsJted in a decline of -r ornita GDP In 16 ii brut $154 A recnd droughtcccijrred In C67 but i not expeetid to have the severe effects of the 165 drought Crop forecasts for the first nine months of 1967 indicate a 4 increase in real GDP above the 1966 level This is also the economic grcrdth rate estimated by the IBRD for the pezxA 1965-70
Moroccos economy is heavily dependent upon the agricultural sector thich has averaged about 15 growth per annum However growth of the mal modern segment of Moroccos agricultural sector has inshy-reased at the rate of about 7 per annum
In 96 the International Banik for Reconstruction and Development (IBRD) preented a number of recommendationr denigrned to increase Moroccos economic growth rate On the bacis of these recomfndations the G004 proceeded with planning the necesrary program to increase investment levels fr- the i 63-65 level of 11 of GNP to 1r of GNP and stimulate the rate of economic growth from 2 to an average of over )4 annually for the five years 66-70 In addJtion the GC4 has taken measures to curb the population grovth rat while placing increased emphasis on raising production of both dryland (wheat) and Irrigated agriculture
2 Investment and Savinms
The level of total gross investment has remaind at aboit 11 of GNP for vera year althugh the percentnoe declined slightly in 165 Under the GO Three Yea5 Plan 1965-67 the gross investment t-3rget woz ret at DH 3 billion- Actual invev-tment expenditures for the three yearpeirod reached about DH 46 billion of which the Governshyment ezxenditure amounted to DH 1 billion a against DH 21 billion budgeted Thin may have beeo partly de to the GOMs deliberate ausshyterity pollcy under the hIF rtbJli7tion prci1rnr but more probably it van duxe to the shortage of trained cadres to -lan and execute projects
In the private cectcr conziderable inounts of ravings may be hoarded due to lack of project attractive t- inventors The lvl of private investment has been runnihg at about 51 of GNP thrrugh 195 The 0014 4 incentive to private instors hnr cut profit taxes from 4320 to V and announced a tpn year guarantc-e against tax increases
]L- $ = DH 506
777=-77- NQ
r y 7k1- T e - W lk In
j - 1) 7k- - _
- 23-
Loan are avaiiable to )rivlite irve-tcrn freo th 3JfIDiN s rctr special funda to prcmote touricm devc firvcnt
Under the 1r86-1972 plan abut to br irtntt level are to be accelerated considerably reaching A of GNP liv ]970 Mor(- Irlyir haviiy on foreign 1 to aciuw cc higher lve1
3 Central Government FinancP
The Moroccan money supply which had Incrrased ify 76 per cent in 2965 remained virtually unchanged in 966 The first half of 1967 witnessed a 5 Ter cent increase in the money supply Te major part of thi increase as concentrated in June and July uhen the supply reached V14 0j lion Currency In circulation expanded rapidly in June and July
nnl factrrn being reinforced by commodity hcnrding related to the 1ide~l Et crisis Demand deposits did not show their normal decline nthe first half of 1967 Deposits with commercial banks declined nlightly while deposits with the Treabury increased as public and semi public agencies contisued their transfers from the banking system to the Treasury The increase in money supply in the first half of (7 ran I raced to tho nzon1 sonal increase in net foreign assets not c y the custcirry rlelir In claims on the private sector Clsirl (n the erivate sector declined slighty until May 1967 but Increased hr-gb June and Jily due primarily to additional financing of textile stocks ClbiJ ante Government rose by 10 per cent in the first half of 967 the in central brnk claims on the GovernmentI being rmainly offset by larger deposits with the Treasury
Ordinary budgetary revenues which incrurted by 5 rcr ent in 1566 tre cxrcted t-) increase by 7 per cent in 1( to DII 21 billion DeampDite a derea3e in agricultural tax reccipt r- fror diret taxes rose by 10 ppr cent in 1966 and a 2 increas estinated for S67 due to tric or controls on income declarationr d an accelerashytion of tax cller ns Owing mainly to a relaxation of the import
program in late 1 5 and a concomitant increase in tariffs on certain ccnonter goods customs reneipts increased by 21 per cent in 1966 Although budgetary estimates call for s decline of 3 per cent in customs receipts in 1S67 it is likely that actual receipts will be considerably larger in view of the import liberalizatidn measures intro)duced subseshyquent to the estimates Receipts from indirect taxes state monopolies and other serces are expected to be 11 iv- cent Ipher in 1967 owing to increased profit on -ugar sabr-i and L r(m the newly created Office do Ccrmercalisaticn - d-tation (OCE)
Recurrent ordinary buiL e(enditures increased by 34 per cent in 1966 ar-i are expected to increase by an additional 7 per cent in 1567 reachin- D1122 billion Although wage and salary scales in the public
Banque Nationale pour le Developement Economique
TT~~- - I777
2 Cf
sector have1bec z h t - rrvirI urli 11i g 14-6 -nd PO becnue rX toi Ijt e f (]r o n 4
ill tile ic urrnnye andr)not i on dnd Publi ht rentrn -yr-otn lno IncreasedOthrr t ill- t il r ne by ) vr cert in J6(
i ninlyrt -br h Inc-l
( Ihe ( t r- rl t ip t t C itur f T)h 21h iilli n
is (( ItI t lt r c0 a- r n n o I- c t b It ihstnl id vv ih n t r-t have hn(er - en 1t2
(IM ii ture( T f fu traordJ nary budrzct exshypend ituren a r y -t c ~ i vi -iscz Portal Checking sy-stcsul)rrcing t (I ltIt Ct -- ind creirn shy
nnet The f r er tnc I hha ccrc ed from a htih of DH 5-7 millIJn in _ 5 millIn r C46 F cr ats foi ]7 place Cro n w I 1(DI)J79 ill ni DDn etlc fi nancing has alo u 1) 5 p (- I3A27 iIliun to an entirnted DH 1142 million
1 14V ) I nv 1 ri n nI(c1 franc n is 77-ected to be ol t y ncrewed bcrrowing fr-ir t he Cestra 9ank which hud been held at mcdert vols iln 165 nnd 1a66 Under the 1TFtaiby agreement of October 16 the qob) agreed to taBe a3] rocrrnary meurer to maintain as table curoonry rPnt inl th nr1d-elrto th b a ent of the ePrncriynnd a vnbl- hn1incc X nvroent P rt artt to t rt fien of tho Ccntin- Honk rstz (erct are nct t r itr June 30 Y-ke 7 lov l b th n Diif ) mill] (n tlcnber -c P thai I o illin usit I ])ecthr 31I62 (GC bc w t
C B1rtrp - vt DH 12 iri 1i nor ]S67 or DH 6S ij lionEan tisated (r fo than the aproved crd it expanwim
Thitrd ordivary nil extraordnnry buThTt deficit of DII 7-19 millI n fcrecat Fr 1 67 in exnected to be fnanced by not freign
tan reof DII )75 mi~l in nt recurity 12ue 1 T111I vlion a - nt ry tiat Po n Che )ir d-nC i 73 r5 Pn
riI is u h i a vti v mrr nrr-e jssIof fvr is id a erital The vnfsa revcred in 1d6 when lnrger r nyrentn eEecially on food itcmo an n -lewdoun in
igo ra a deficit of $1 millcn ProjectiOnz-vt rvultvd in ror 17 r~ieat inrrerned importsonly partially ccnrennate by addshytsa t frnreirn r ntil rrceiprs ard mprrvement in the nervices account will reult -n et of aprroximately $)20million As rhoim in the following tabl -r tion for l33 and 169 how overall deficits of
14 and m] ivi_y$i It
rqVV t1 4~
C)rgt
---
1 -)I+-IRF1
1ROCCO - rTANC OF PAYME 1qrt - 169]_ 5
6rfi0 1 1C(8lr67 i r(o
)xrurt 2t L( I L-5
Trade Bnlance 11 15 - 75 shy - 75
rviee- ret - 7 - 5) -35 -23 -2
J]-i of Good rnd Service- - 3 - 65 -II - ti - (5
Trn-Ifr Pr ynts (nt) P 21 33 37 33
on-cntnry Carital (not) 92 64 6 6 5
Err-rs nnd Ov rrion- (not) - 23 -2 1 3
eranl Bannic __ - _3 -_ 3 - 1i4
Atrh thert ircjected reficitn are of the nnme order of 1 nishytude a7 thcr incurred in the period i66 the Situatlcn i findarentallydifferent both in rerprct to the source of the deficits and in rer-ect to the meat0Y gtr m etin7tecr In the f rrer caive M5recco uffered
_frcrr a very h-vy cutfc of Drivtes cuitv fo-ivr with a shar) decline In forein nt exerditures in Morocco In the iatter case th projected deficits r- rcre a functicn or accelerated crcwth risingdebt ervieiiw tri tho abnrcn of forv eeble additiens foreign reshybull ourcs nere7ory 4( r2Vm rAf finmncting To nect the def-cits during the reriol 161 61h MWreco ob1id to drw down rorcin exchange reserves of over $]c milicn The snrti tpv of financing is no longerpozslble ince no or-res- ruch reserve- Even ifMorocco yr
mn nina r rve_ ore (]rrfii on to th r-ixirun etnt enribe nnd the [iI tnfldy i- un M-r-r e i32 till relA re nt rnt 15 millicnj1itionn ftr ign as- e n 1 6 beyond hat r recnently fcreeeshyable with ver nri- nry Officilr in In i6 reserves are cotImnted Pt 72million c hih crn V 3 million i caly required for currency coy r
Foreign InJebtrdne n of th GOM Mnroccos external rtnte ard rutlie enterprie dett amounted to
$r) millivn in lr6 Debt vervcirig rpynents for (66 trtaled about
$5) rillion g-eement approved in October 3(67
I- -- Ishy
37 millin or arprcxitrrntoy (j Iroccor totnl eXoort earning of h28 millicn GCnerally nxt rrO dbt FervicJng renuiremennt of leas
than r of totna -ort nnrlt In onrldered to I r tirfactoryrntio D-bt r rnJrcLct n Ir the reriod 1-(y 3on Trerent external debt including thnt wrtl(n irreently undibur-ed are hown n th fr lv tahlr
)] L v yr t n
Eternn Vtnte anc ] bntcrnrie Debt
M131 o)nr
Y aI Net Outrtnnling Debt Debt Service
(6 it 479r5 $367 J-67 452 3)6
Z616 44469 2 0 2C-
365I3 37 389
33 383 33 6 371
5-h 31 n 352 275 34121
]176 2661 32It 1977 21133 311 177 22)6 307 19 i0l74 256
1733 255
rgtternal debt rharre n rerent debt nnr rhon above do not increase ubtanti-lly over t rt 1)year- reaching a maximum of h44 millior
in J6 and decrpt- n cr - tently threoafter At the are time exportearninr r _rc extett nc-are Aring that Morocco does not inshycreswre it etrnn2 cbt t irate ubrtantially nb-vc ihat has been the core th adfiticrn dbt e roquirrentn reulting from the propo t Icon o 5 ijilion co r 7crncepr-ional term hould not have a i-nifiant affect n 1r o - ab lty to neet itv g rc-atedebt ericn rcnrib2t~e- the pros ectr of reprment of thin loan ore coniderci rearcnb)
U I -
F ot h-v C IuIJI rmt I shy
1 V amp~ rVml KI
PUC- -jrVi Jt t 1 11 nflrcj urlc 1- th )qn --P I uti u rhnrrl -1r- thr U- Tr- ry- R- -nymc nt
c2Il f n 6 1 bf r I- till 11 nfl r- n-r i n of O r--niC(Io~hi U 1 1 rr to
Tn vil ) f rvc hi tvlrll 1 (In- - n- u--n E r me rrinshycgtay F rntwir w ourc o -o- rvI ortf-V3 1 rncing of
Uf f -r rrrir- ur3r 4~ v -rin Iltrt nt ndd shyt -n t ) in- lint r b t l r -n rort- o-orco trorl-- V -P
r i 1rnd h L-torie Furcl-trin firr- thrjt US r r~ crvirrf- u~d be~
T L I1 c vt r- -ly ] -ubt fu 1 n vi pw -I -ror-co Ir of
ut1JpcO In thi rjert f it -- r- 21 npnred by d1-nr- cothcr t~han the US
2 ]P-t ofI Prr l1 on Prw- Fntrrr
Phij rrcjJ-t -11 n-t h~ -in nrwerq Prrt n rr- tc ntrshyr~A~r fi-mc 1bho und for --roern p o n
3_~~PrCT--rty
rr-vIi-n 1 h -d r the loan ragreement for Icntifitcation ef any r mIjrpt n ctri b- rt througn ut 1zatn (f xccr- prorerty
If rv c u~eAID n-mrcf u urr thi )cn - I~ut~ em avoi3ablo r rovvrirrnt -rrperty rather than nce iteni
4 Otli-r Fr- Wo--] n-Fnlc4rm
Dr mi tW- o] 14rocco- i~ajr ovr-ec -f exte rnaX
rrtan~- hrtvfb - I r ~ ant fl Fr n fole by Kv-it
Sgio F rneflit r b-en 1lmrntrd to tcfohnjip n5tnnen bi eoni~in I th u y f Fr--h tprhntcian tcacrr ind cther
~ti~r t~ ec-tnmIyrt-n Friinch Aid to Mcreco In 1065c~oc~ (P-art f-r txychnirril aItn -- j se of tl5 w1nfor bu~dget rurport f ir in rt t- $1 1ri1 icin in ennita -rojectM- n vx- rrcd
1Vw1tvnn tioI t-) Frenh rurtnnd +16 r11ion tie-I to -onyiint to orrrcr Frrmh ccilcn~For _-rrc-ratod land and rquirrmcnt
West GTrrnmnny liar agrcrcd to nrovIe ccme j27 mM22~cn 1n catital arirtanre and cromrndity lnoi7 t n OfIcon( q92 thi o totril$223 miJ lien ha actuary b-Pn cr-Itt--d under Inn ngrepment This
And a lk5 million commodity loan both) signed in 1965 All Wet Gerzaan
Ufla
-28shy
capital asnistance I vuectI to be tied to German exports Germanyhas in addition 1uvvded r tteysubbtantial technical assistance f
The IBRP hah rade four 1nns to Morocco since 1962 totaling$6) million Ofthin totnl a [175 million loan in 1965 wos fordevelopient of the gidi lit-r irrigation perimeter Other assistance by internntIcnal Iending arncie include an $11 million credit byIDA in 1C65 for rcendary diicction projects and an IFC ln and inshyvestrent of $1 1 ri jnic alo in
F tit i by [c - dncr tr dh elo snt ofMorccco rircuVt r oii +h b-]n jt-TKT r nbove n 2 )6 niliion Kuwait enn in i66 for develomyment of the Tensaout Prnm n irrnten nrooetand a $77 million Kuwait
0jl n )nnsn r(niti-nertcir
loan for extrnion of the Tadri~ Irrigation Perimeter
The following- trbe surrlnrlzes other free world arlztance (excluiin technical assistanc-) to Morocco for the years 1(62-66
($ Millions)
1 62 1cf_63 96) 19r65 19)66 Fneea 4) 5PO 64o 700 shyWet Germany 223 gu 1t 53 281 IRD 15 175 10) 175 IDA 110 IF C 1 5 7 7 7 0 I15
TOTAL 55 62 1U3 W
b Includer only lo-ng term loans and exporter credits - Includfs 25 million private capital
Eternal ansiztnnce to the Lowier Moulouya Irrigation Perimeter -nce 1060 hres been con[fined to US upport Consdiering AIDs previcus
involvement in and conmitnert to the Lower Moulouya an AID lean in P2t to be Lhi mol aprroriate source of financing for this project
LID
II
q
-29-
SECTION ITI- Y-TTYT TIMPLPTrION
A Periret-r Ad-instrrti-
Authority for irplerrentvtnn of the deveorpent prrgrn frr the LowerMoulcuya Perimeter and rs wel arth crnntinuinz mrnnrrmenertC tt r t- rrtnr V theltbi nad overationity iOfic 1cne 4
n r I e1i- i d Vit4 i Iv ~ Ct rreated i Otb (rJ rn-- of evcn inrmi-rriional offices hich reelaced the Office de Mire en Valeur Aamprlcole (OMVA) Under the OMXA and itspredecessor agencies authority for ad-inLtration cf irrigtion proJect war centralized in Rabat
Under the new regional office organization responsibility for adminshyistering ORMVAM is vested in on Adminirtrative Board of 10 members headed by the Minister of Agriculture and Agrarian Reform as chairman All ether board members (other than the Chairman and a representative of theInterministerial Economic Ccrmittee) represent agencies or activities inthe region of the r-eriret-r whic comprises parts of two provinces Localretresentatives on the Board inc]-de the governors of the two provincesOujda and Nador the presidents -f the two provincial asembtes and of the two provincial chambers of agriculture as well as the perimeter Director
The responsibilities of thie Administrative Board include review of theecys program establishment of its organizational structure developshynt -)f its annual budget and establishment of rates and conditions of
Siyfent for water and other services provided in the perimeter
The Director of OP4VAI-I is dbarged with the responsibility for executionPthe vclicies established by the Administrative Board end administration of oil ORMVAM functions This responsibility includes selection of staffn pserating perrcnnel acting s officia ORNIVAM representative in all ntztinns with -tate and othbr public or private bodies and the
f of funds within limit Indivated by the Ministers f Financetent rn fricultural and Agrarian Reorm
Perimeter Oranizatlon
ORVAM oreanizatlonal structure consists of a directnrate five maj-r rvlces or d-vsicns and one separate bureau Two services qei Administratif et Comptabl- and Service du Yatrial are conshycor - th adminisration and lcgistical support of ORMVAM operationshi1e the remainirg three services rind the separate bureau are Involved in t-hni al matters associated with agrcultural developrent Each ervice has one or more subordinate bureaus Fei-ce Chiefs and thehead 0 rch bure-u report directly to the ORMVAM4 Director
-~F7E MEw-
-30shy
2 Perimeter 01ttffnr
OPIVAM orgttnlrntlon treture calls for 557 positions of whichI L or 7 Mlled n were nher 29 1567 37 of the 71 Postshytion vacancies reported 1ern the high and middle levels Foreign(chiefly Euronean) technclan occupy I)of the 16 high level positionsthat ere filled at thfit tire
Whil OPM ut in th- lcng run lor to Mercecos oducational yster to prvidr tn crrf-nn2 to ratisfy current rdurojectd rcshyquirement th currnt high and mlddle level vacancies rrouire uersonnelwith oxt nive nrior rxericnce To fll this preent need it will be necessary for CRIVAM to continue its program of recruiting foreigntechnicians until ruch tire ns graduates of Moroccan educational programsacquire the necesnry exrerience The managerent assistance componentof thin pro~ject ]e-rribed In the Project analysis will to some extentalleviate OFIWAMs high level personnel requirements
3 Inw1 ernetation Sehedu]
Months Implementation Action
1 0 Sign Loan Agrcement
2 2 C-tiify conditions precedent and Y4tiate procedures for selection of US firm for management contract
2 Negotiation of extension of advisory Engineering Services
h 4 Contract (Hydrotechnic) Negotiation of Managerment Contract
5 60Cmpletion of Project
C Waivers
Sect ion 7 rf AID Regulation 7 provides in substance that theUnited State ill not finance direct costs of construction work performedby third cc-ur y nationals unless the total co-tn of the project withvhich thr ennrtrumticn w(r is asEcciated donot exceed $2On)O orafter excluding national of the country in vhich the site of constructionis located and Dersons vho nave resided therein uninterruptedly for morethan three years imrnedJately prior to any determination under Regulation 7at leant 0 of all uernons who work under the contract at the site of conbulltruction are United States citizens or the employment of third countrynationals is necessary to avoid excerrive corts to the United States
3
31
Section 2175 authr-ri th Regional Anitant Administratorto waive the nrovinions of Sectionthat it is 2073 if he dcterriner in any coneimportant te the nationrn intercrt of the United Stutes tofinance the direct eots of construction work performed by third country
nationals
A prviou1y r ic i c t tht for thr ct Tartthe -r c ct b- 1jeuj out r -cnorbr f cnrtructioncontracts with Morcccrr contrctnr an in the i-t Uowfevvr itentirely psnible that there may b- roe contractn with cntructlonfirms partly owned by third country nntionaln and that ruch firjs anwell as the surely Moroccan-owrned firms may enloy third country niationalsIn such canes a difficult rrobic-i iould arise in meeting the terms ofRegulation 7 since an a practical matter Aericans are not reaonablyavailable for ermployn ont by such contrnetorn and our previcus experiencewith the Naunsseur Ccnv(r-ion project thatin Morocco has indicatedAmerican contractors would not be interested in bidding cn small conshytracts in that country
It in therefore recommended that the Annitant Adinitratordetermine rursuant to Section 2q75 of Regulation 7 to waive theapplication of Regulation 7 to thic iroject since the project 411 conshytribute to the attainrent of US foreign policy objectiver and the cbJe-tives of the Foreign Arsistnnce Program
LITI L USE
LfI~~5xA~us
lit
4 A J A 45 4 k
t A S T
S(3
I A444ilA~~l~)
7 -74
tAM= D
SECTOR 27
10000
t Co0Na includez25 cgtri oncFcttlrvI ncy I8s ~ ~ C t C- Includes 50 constriJcltiotrgrc
2000 60
IU
0
z
bull cosYsA shy----- i
600L _
400
200
0 5 I0 15 20
INTEREST RATE
I ~ 7 J7777
ANIAampX C
PROJECT DESCRn1 rOll
The project com)onents to te undertaken on the MIoulouya Irrigation Project over the next five years contists of the following
C(n1rtion of the rrLin casuals and bianch canbls to provide the suource of waler to the sctors be developed in theto TriffBou Areg and Zebra areas This construction will include the necessarystructures such as reulators highway bridges aqueducts water intake
and discharge structures etc
2 Iand Txeloommerit which includes engineering land consolishyt and iuvtllng lard preparation (subsoiling ripping destoning etc) and installation of water distribution canals (secondary tertiary and quurtunary) and drainage collector ditches for the Triffa main covering 24000 acres in sctors 8 9 10 16 20 21 23 24 25A 2513 27 and 28 Lou Areg Central covering 16250 acres in sectors Dltirough D2B and G1 thru-4h G313 i0u Areg Remainder covering 15000 acres in s-ctors D3 through D7 and GA through (6 Zebra Collective covering 45)0 acres in sectors 3 4 5 rind 6 and Zebra Rer-iinder covering 14250 acres in sectors 1 2 and 7 through 10 and th remainder of sectors 34 and 5 The total land to be developed is about 74000 acres
3 Canalization of the Oued Zeluan and nued Sidi-Amar in the Bou Areg Plain consisting of strairltening englarging and regularizing of these streams to carry the flood waters to the sea Drainage interceptor canals are to be constructed parallel to the sea in the Bou Areg Plain In the Triffa Plain the Oued Riada main drain will be deepened and enlarged and secondary drains will be excavated to provide for drainageof the Madagh area This will include the construction of bridges and culverts and other related work
4 Major Commorn Works will consist of
a Clearing of the Mo-1ouya riverbed downstream of the Mechra KLila barn caused roy flood dariwe and the installation of a set of stop logs for maintenance of pillway gate-
b Design supervision and construction of repairs to the ]elt Lank dead head tunel
c Conctruction and establishment of sib-division Offices and installations for farmer support such as CMVand farm stables
1 C
-2shy
5 Manavmtnt It ha been proposed that a US management firm be ewployed by th- C4 to manage and operate the entire Bou Areg area Such manageent -iuld encomparn all activities from the initial concept to final irIrp igricultural production Such activities would Include resp r-ibilsect -or supervnsion of engtneering and constriction of primary
S- Jry r complete developfnent of land training n in g tinul irription practicen preparation of market
t - r1t- (ot--rnu trplusmnining of a Moroccan cadre to take over h v--it Bou Areg dreara P the
At this writing the n-pt of turning over to a private UZSfirm execushyresponsibl]ity I h management of the establilrment and initial
op-ration of irr1gati the Bou Arog area has been only broadly de iiitd by the GCJO It Intended that proposals will be invited from a r -onable ntnber of f|ed US firms that a selection will be made an-n 7 them and a more do iled and cornprehenrive definition of the rer6 -Ps to be performed be eztabliched at that time It haa been
stimated that the t- of ruch a contract will be about $2 mir- n In any event the -ts of this contract other engineering arvl s to be provided undt n extension of the Ilydrotechnic contract and ether US corts will not ed the proposed $5 mllaion developzont Jean fr the project
The cle 3ifications duties ant 1ncnslbilities of the management personnel ill ha-- to be clearly defined i agreed to by the GCM Perimeter Directo- and other GOM Agencies luding arrangements for the necessary gistic support
Svxlale Docu-
1
4
LD ED 0ICIAL
-IAIDshy
A1trX D
C6JCK LIST OF STATUTORY CRITERIA
(Development Loan Fund)
1 FAA 0102 Extent to which U3 cormodities and services are furnished consistent with improving the US balance of payments See Sections II-C II-F
2 AA sect2O]ihi lanner in which loan wil promote countrys economic develo shy rit emphasizing help for long-range plans and programs designed to developeconomic tesourcos and increase productive capacities See Section I-D
i FAA sectT] h)(IL Information and conclusion on availability of financincfrom other free-world sources including private sources within the United States See Section II-F
FAA sect20l( )2 Information and conclusion on activitys economic and technical soundness including the capacity of the recipient country to reshypay the loan at a reasonable rate of interest See Sections II-B II-D and II-E
5 FAA 1201(h)( Information and conclusion on existence of reasonable promise activity will contribute to developrmnt of economic resources or increase of productive capacities See Sectiona II-B and II-D
_92_(b 4Information and conclusion on activitys relationship toothor development activities and its contribution to realizable longshyrange objectives See Sections I-D and I-E
The following abbreviations are und FAA - Foroirn Assistance Act of 1961 as amerded by the Foreign Asaistaice
Act of 1967 App - Foreign Assistance and Polated Agencies Appropriations Act 1968
AFEVCDF 1066
L1
-2shy
7 FAA f12O1(b)(5)_ Countrys self-help masures including institution of Foreign Assistance Act investment pliaranty programs Investment Guaranty
bull Agreement signed with Morocco 331o6l See Sections I-D and II-EI
_A ))(6) Information and conclusion on possible effects on US econowy with soecial refererne to areas of substantial -labor surplusSee Section II-F
9 FAA q201 (h)() Information and conclusion on the dagree to which thA country iv wiki- progress toward respect for the rule of law freedom of expression and of the press and recognition~yf the importance of individual freedom initiative and private enterprise
10 FAA -1201(b)(8) Information and conclusion on the degree to which the country is taking steps to improve its c]Laato for private investment See Sccton II-E
31 FAA R LbJi Inforrat-on and conclusion on whether or not the activityto b financed will contribute to the achievement of self-sustaining growthSee Sections I-D and II-B
12 FAA fi2Ol(bj Inforruation and conclusion on reasonalbe prospects of reshypayment See Section II-E
13 FAA fl20JL() Info-ation on applicability of the twenty country ceil4ng2
14 FAA fl201 L Information and coclusion on legality (under laws of the country end the US) and reasonableness of lending and ralendinr terms Loan will be on minimum termspermitted under FAA These are deemed reasonable see Sectioam Evidence will be renuired from the GGM as to the legality of the loan agreemnt
1 E 2 Information and conclusion on availability of an applicationFAA together with sufficient information and assurances to indicate reasonably that funds will be used in an economcally and technically sound manner See Sections I-A II-B and II-D Application received Janury 15 1968
16 FAA fl201(fL If a project inforntion and conclusion whether it will promote the economic developapent of the requesting country taking into account the countrys human and material resource requiremnts and the reshylationship between the ultimate objes6ives of the project and the countrys overall economic development See Sections I-D and II-B
17 FAAJ 20ij(J If a project information and conclusion whether it cifishycally provides for appropriate participation by private enterprise 8ce Sections YI-C and 114
I- FAA i22(a) Total amount of money under loan which is going directly to private enterprise is going to intermediate credit institutions or other borrowers for use by private enterprise is being used to finance imports
rfro private sources or is otherwise beirg used to finance procurementsfrcm private souwces See Sections II-C and II-2
9 FAA 207 Infosation on the emphasis placed en
(a) encouraging development of economic political and social institushytins No apparent relationship
(b) nelC-help in mectingthe countrys food nredo Project Vill conshytribute to production of food for lccal consumptioa
(c) in-proving availability in the country of evucated trained manpower Project will contribute to the deicloginext of trained manpower as one of the functions of the management contract (Soe Annex C para 5)
(d) prcgrams aimed at -malnutrition disease eradi atDn slum clearanceWater purification sewage disposal health education naternal and child care(includin fimrily pJnrning)) -nd cthcr public health ausistarice See
(c) other develoment activities including industrial development free
labor unions cooperatives tnd voluntary agencie transn)rtatin and ccshymwquication nrStczn capubiliTies for economic planning and public adlinisshytration arban develo-mment and modernization of laws to feilltate econcnicdevelopjen- GO- intends encourage develo vient of cooperat yes particularlyin the Left Pank areas Project will also develop capabiLi ics for cconoaicplanning and public a6~inistration (Annex C para 5) Other not applicable
20 Information on the extent to which the r-untry is
(a) cttcmting to increase food production and food sto a-e anddistribution felitics This project is one evidence of Moroccos efforts in this direction See also Section I-D and I-E
b) creating- a favorable climate for foreign and dmestic iri-ate enterprise and invcstrrment The GCM has recently reduced profits twes anrannounced a ten year guarantee against tax increases See Section II-E-2
(c) increasing the role of the neonle in the developnental procecsNo apparent relationship to this project
(d) allocating expenditures to development rather than to unn-cessarymilitary purpoes or intervention in other free countries affair See Sections I-D and Ii-
(e) willing --nribute funds to the project or program Th iOMhas already dcvo o-sidcrable resources to the project It has badieted13 million for th i oulouya for i7 See Section I-C
(If) making economic zocial and political refo ns such as taxc coliecshytion iYprovcmenLs and chan es in land tenure a Royal Comm ision has been appointed to make recomendation on land tenure probleras in the Lower I oulouya
(g) responding to the economic political and social concerns of its people and showing a determination to take volf-help wcasuren See Sections I-D and II-E
IT
-ovi~cd l v r 13 1968
- 4 - LDffIED OFFICIAL USE
21 FAA Inforn ation about multilateral assistance being Iurnished to t e country and whether the loan will encourage recgional development prog-rams The I1D has eztablihcd a Consultative Group for Morocco which rvicws the GOM development program anui prgress See Section II-F-4 for infoaation on othtr donor assistance to Morocco
22 A Extent to which the loan will contribute to the objective of ass ring naximu par icipation in the task of econonic dovelop--ent on the pL-t 0 _he people of the developing countries through the encouragement of cocr-tic private and local govenmental inLitutious o apparent
relationship
23 F _-_Dta_ Infor-ation and corissions whether loan will oncourageeffor s of t1e country to (a) increase tie flow of international trade (b) fostcr private initiative and comptition (c) encourage development and usceo co opratives credit unions and savingss and loan associations (d) disourgo monopolistic practices (c) improvo technical efficiency of industry ariculture and commerce (f) strenSthn free labor unions This project is cxpected to increase technical efficiency oi-agriculture
2_ C-1L lnforzrition and conclusion on how the loan will encourage US privte trade and investment abroad and how it uill encourage private US participation in foreign assistance prograas (incluiing use of private trade channels and the services of US private enterprise) See Section II-
25 VA-+_ Conclusion and supporting information on compliance with tho Co resional policy that engineering and professional servicos of US fir-ms and their affiliates are to bo used in connection with capital project3 to the nixinua extent consistent with the national interest US engineerirn and innsgcment services will be financed tnder this loan
2$ Inforamtion and ccnclusions who+her loan will pormit American rx-l] business to participate equitably in the furnishing of goods and
z orvices by To be satisfied in Loan Agreementfinanced it
27 - t(a App I18 Complianco with restriction of co -zodity procureshy o UsMS except as otherwise determined by the Picsicent and subject to ttu--- rcortir require r-nts Procurement will - liumited to the US for
reiabnrs nts and to ioocco and other free world countries 1-or US-cwne(d rhu disburseacnts
23 -i Comiance with bulk cozodity procurement restriction topriecc no l-ho han the nkarkot price prevailing in tho US at tia of
bull puchas Not applicable
29 FA Cozpliance with requirement that matrin insurance be purchased on commceities if the participating country discri-inates and that insurance be placed in the US To be satisfied in Loan Agreement
30 IA 6(a) Information at to the utilization of excers personal property in lieu of procurement of new items Will be required ai appropriate under terns of Lean Agreement
f
1 77--7 -77-77-777
31 FAA 61](a)(_) information and conclusion on availability of enginoering i financial and other plans nccx sary to carry out tho assittance and of a
reasonably firm cstimate of the cost of the assistanco to the United States
See Section II-D
32-ecessaryFAA t611(a)_(2) legislative action r6quired within recipient country and ibasis Cor reasonable anticipation such action will be completed in time to pormit orderly accompli-hirtnt of purposes of loan See Section I-A
33 n _AA161nJ0] If water or water-relatod land resource construcshy
tion project or program information and conclusion on a benefit-cost comshy
putation See Section II-B
3 4 VAA 611(c) Compliance with requirement that contracts for construction be let on comp-ctitive basis to mamum extent practicable To be satisfied
in Loan Agreement
If a loan for a project of $1 million or more certificatin35 FAA _61l(r) by the principal AID officer in the country as to the capability of the
country (both financirl and human resources) to effectively maintain and
utilize the project taking into account other US-financed projects (Such
certification is to be pproved by the Administrator aL the time the loan
is authorized) In process of being obtained
36 FAsgJ2 _6_h Appropriate steps that have b-en taken to assure that to the miaximum extent possible the country is contributing local currencies to net th-2 cost of contractural and other services and foreign currencies o- icd by tho US are utilized to meet the cost of contractual and other services The GU-M is contributing over $30 million to compleXton of this project Excess US-use dirhams will be used for eligible project costs other than US goods and services
37 FAA p619 Compliance with requirement that assistance to newly independent countries be furnished through multilateral organizations or plans to maxishymum extent appropriate Not deemed appropriate in view of previous AID financing and ccoiitment to the project See Sections I-A and I-D
38 FAA sect620(a) AcnO7a n3]7(b) Compliance with prohibitions
against assistance to Cuba ard any countr (a) which furnishes assistance to Cuba or failed to take appropriate steps by February 14 1964 to prevent ships or aircraft unier its registry from carrying equipment materials or supplies from or to Cuba or (b) which sells furnishes or permits any ships under its registry fr-om carrying items of primary atrategic signifishycance or itcms of economic assistance Morocco is not-known to be in Violation of these sections
39 FAA q620GL_ If assistance to the government of a country existence of determination it is not controlled by the international Communist movement The Secretary of State so determined on October 11 191
40 FAA 620(c) If assistance to the government of a country existonce of Indebtedness to a US citizen for goods or services furnished or ordered whore ouch citizen has exhaustod available legal romodiesor where the debt
i - ow - -- _---- --shy
- --
-6shy
is not denied or ontested by such government or the indebtedness arises under an unconditional guararty of payrrent given by such govornmunt No such indebtedness is known to exist
41 FA _(a2LdL If assisitance for any productive enterprise which will corashypote with US enterprise existence of agreement by the recipient country to prevent export to the US of more than 20 of the enterprises annual production during the life of the loan Not applicable
42 FA4 - 16Q_0_ A If assistance to the government of a country extent to which it (including government agenies or ruhdivisions) has after January 1 1962 taken steps o repudiate or nullify cuatracts or taken any action which has the effect of nationalizing expropriating or otherwise seizingownership or control ofprcpertv of US citizens or entities beneficially owned by them without taking appropriate stops to discha i ge its obligations No such steps cr actions are-known to have been taken by the GOM
43 FAA~L AjPj_10_9 Compliance with assistance toQ0 prohibitions against any Comunst codntry ozocco is not considered to be a cocinrunist country
44 FAA - 620(gJ Corliance with prohibition against use of assistonce to comp satc owners for expropriated or nationalized property To be satisfied in Loan Agreement
45 F AA 8620(h Compliance with regulations and procedures adopted to inshysure against ue of assistance in a manner hich contrary to the best inshyterests of the US promotes or assists the foreign aid projects or activities of the Communist-bloc countries To be satisfied in Loan Agreement
46 FAA 06-O(j)_ Exitence of determiration that the country is engaging in or preparing for aggressive military efforts No such determination has been made
L_62_O Information47 FAA on representation of the country at any intershynational confererce when that representation includes the planning of activishyties involving insurrection or subversion against the US or countries recoiving US assistance No such representition is known to have A occarrect
8 FAA 62JJ Existence of a determination that the country has permitted or failed to prevent destruction of US property by mob action or has failed to take steps to prevent a recurrence and-to pay compensation NO such destruction is known to have tak-n place
49 PAA l620(k) If construction of productive enterprise where eggregate value of assistanc to be furnished by US will exceed $1OO million identification of Gtntutoryauthority Not npplicable
i-xQ2MZZ=
1 shy
U 6 50 _Af( QCinsidoration which has been given to denlying assistance X to thu government of a country which after December 31 1966 has failed to
- institto the investnint guaranty program for the spcific risks of inconshy
vertibility and expropriation or confiscation Satisfied See No 7 above
S51S J lj Compliance with-prohibitions-againstn as~istance to countries which traffic or permittraffickingwith North Vietnam Morocco is not known to be in violation
52 E_-L620(_L If country has seized or imposed any penalty or sanction against vn US fishing vessel on account of its fishing activities in
intcrnationul waters information on the consideiation which has been given to excludirg the country from assistance No such situation is known to exist
53 FAA FA r) UAR restriction Not applicable620(p 9117
54 FAA R620tl) Existence of default undhr any Foreign Assistance Act loan to the country No such default exists
55 F ) C-nsider tion of whether co ntry is devoting unnecessary percentage of buKet for military purposes or use of foreign exchange for milita-y equipment
56 FAA 62o(t) Proibition on aid if country has severed diplomatic relations with US unless agreements have been negotiated after resumpshytion Diplomatic r(lations have not been severed
57 FAA 9620(u) Statur of the country on delinquent UN obligations Morocco is not known to be dlinquent on its UN~obligation
58 FAA R636(i) Prohibition on financing non-US manufactured motor vehicles Will be satisfied in Loan Agreement and Implementation Letter
59 App 102 Compliance with requirement that payments in excess of $25000 for architectural and en Jneering services on any one project be reported to Congress Such reports will be made
60 App R1O4 Compliance with bar against funds to pay pensions etc for military personnel Such payments will not be eligible for financing under th Loan Agreement
61 App 9106 If country attr ipts to create distinctions because of their race or religion among Americans in granting personal or commercial access or other rights otherwise avaVIfable to US citizens generally application which will be made in negotit ttons of contrary principles as expressed by Congress Morocco is not ku IDhave made any such attempts
iInD OFFIIt t USE
0k
OFFICIAL USE 62 AIwp Rii Compliance with existing requfremets for security clearance
of personnel Will be satisfied in Loan Agreement and Implementation Letter
63 App R1l2 Compliance with requirement for approval of cortractors and contract terms for capital projects Will be satisfied in Loan Agreement
clJ164 Aup Cmpliance with bar nRainst use of funds to Tay assessments etc of US meiber Such payments will not be eligible for financing under the Loan Agreemunt
6 Anp P115 Ccmpliance with regulations on employment of US and local personnel for funds obligated after April 30 1961 (Regulation 7) See Section III-C
66 Aim Vietnam iron and steel restrictions Not applicable
67 p l9 If a country other than Greece Turkey Iran Israel Republicof China Phillipines or Korea reduction in assistance by amounts spent for the purchase of sophisticated military equipment
68 Anp fi4O1 Compliance with bar against use of funds for publicity or proshypagjanda purposes within US not heretofore authorized by Congress Such use of funds will not be eligible for financing under the Loan Agreement
Morocco is a traditional Islamic monarchy with a constitution The conshystitution was implemented followaing a popular referendum in 1962 National regional and professional elective bodies including a parliament were established by universal suffrage under the constitution in 1963 The parliament was suspended in 1961 in a State of Exception because of its inability to agree on measures with adequate urgency to meet the prevailingecononde imperatives In July 1967 the King appointed a Prime Minister to direct a Cabinet of appointed technicians
The constitutional framework nevertheless remains intact in Morocco and nationwide popular elections for some of the professional chambers were held in August and September 1966 The press is relatively free in Morocco and the right of diLsent prevails provided that such dissent does not violate the prohibition against political attacks on the instishytution of the monarchy or the person of the monarch
LI Under the revised US AID Policy for Africa agreed to in November 1966 Morocco is designated a development emphasis country entitled to receive continuing support on a country basis as part of a multilaterally coorshydinated countrj program Morocco was subsequently included in Presidential Determination 67-14 (January 5 1967) I
LIM=TE OFFICIAL USE~i
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DEPQbi) STATE AGENCY FOR INERNATIONAL DEVELOPMENT
WASHINGTON DC 052
CAPITAL ASSISTANCE LOA11 AUTHORIZATION
Provided from Develoroent Loan Funds Morocco Second Lower Moulouya Irrigation Loan
Pursuant to the authority vested in the Assistant Administrator for Africa of the Agency for International Development
AI)by the Foreign Assistance Act of 1961 as amended theIAct) and the delegations of authority issued thereunder I
have received and t-en into consideration a certification from the Director of USAIDMorocco as to the financial and human resources capability of Morocco to effectively utilize the Lower Moulouya Irrigation Project taking into account among other things the
maintenance and utilization of projects in Morocco previously financed or assisted by the United States and I hereby authorize the establishshyment of a loan pursuant to Part I Chapter 2 Title I the Development Loan Fund to the Government of the Kingdom of Morocco (Borrower) of not to exceed five million dollars ($5000000) to assist in financing the fore] gn exchange and local currency costs of goods and services for the third phase of the Lower Moulouya Irrigation Project subject to the foLlowing terms and conditions
1 Interest Rate and Terms of Repayment Borrower shall repay the loan to AID in forty (40) years including a grace period not to exceed ten (10) years Borrower shall pay interest on the unrepaid principal and any interest accrued thereon at the rate of (a) two percent (2) per annum during the grace period and (b) two and
one-half percent (2-12) per annum thereafter
2 Currency of Pepayment Repayment of the loan and paymenu of interest shall be made in United States dollars
- t- n t - - - shy
3 Other Terms and Conditions amp(a)Goods and Services financed under the loan
shall have their source and origin in
(i) the United States if disbursements therefor are made in United States dollars or
(ii) any country in the free world including Morocco if disbursements therefor are made in Moroccan currency
(b) AID Regulation 7 shall not apply to construction -work financed under the loan because as detailed in Section IIIC of Capital Assistance Paper No P 667 it is important to the national interest of the United States that the direct costs of construction work performed by third-country nationals be financed out of funds made available by the Act
(a) Such other terms and conditions as AID may deem advisable
Assistant Administrator for Africa
Date
~~~~~~~~~~~~~~~~~~ - q v
7
DEPAMRlNT OF STATE AGENCY FOR Ii fIATI NampLDEVF1OF4ENT
Washin-wn DC 053
AID-DLCP-667( January 26 1968
MEMORANLIM FOR THE DEVELOPMENT LOAN C0MM4TTEE
SUBJECT MOROCCO - Lower Moulouya Irrigation II
Attached for your review are the recommendations forauthorization of a loan in the amount not to exceed $5000000 to the Government (f the Kingdom of Morocco to assist in financing the costs of the Lower Moulouya Irrigation II Project
This loan proposal is scheduled for consideration bythe Development Loan Staff Coimmttee at a meeting on ThursdayFebruary 1 1968 at 300 pm
Rachel C Rogers Assistant Secretary Development Loan Committee
Attacimnentns Summary and Recommendations Proc2ct Analysis ANNEXME A-E
7
__ _ _ __ _ _ __ _ _
UMOROCCO - rvJT J TTRIGATiTOl II
TABLE OF CONTENTS
SECTION I - BACECNOUND
A Hjtr Tvr-nt (f the Pre4nct B Borrcwr 3
crt-TmC EYI 3D ontcnhLc -rent Plan jet to GCM DeveO E Rctnthnh off Prrj-evt to U
SECTION II PROJECT tNALIJS
A Tht Projecrt
Du mncryirtio B En c Anay- C r1 i P1M D Technica2_ Annr y E Pinneji2i tr tu fBcr-rr
Th t f o Iri rl win I t -(
rin 3 Citrai U v rt F niac 4 Balpqe 5 Foreign IGti 2
F Other Conil iti(n 1 Iniract -f cn 2 Impact -fc Projerct en P vbt 3 Excers Prorr ty
A fritnce Strategy a
5
3 6 22
2 24 2
24
7 7
nterpr 7 27
4 Other Fml Uorn Srnurc- of Fnng 27 SECTION III - PROJECT IMPL METATIOCN
A Perimcter A]rdnn trrt in 29 B Inplemntaticn chedule C Waivers
ANNEX A - MAP OF LOFTR OIrJTf) JYP PERTMErTFR A lEX B - SECTOR 27 (GAP OF IlRAL FVTE OF R7MJ ii ANW X1C TCIHTCAL DlSCRTTrOr OF PROJECt ANNEX D STAPTORY C(TKKTT ANN E - LOAN 1UTO ArToN
2 31_ _ _ _ _
UL IJMJITLI OFFICIPL IJ3E
ST ~IMAPY MMRDFCCOEN MIONS
I OMC 1LOYA FRICATTOR II
1APPTCAT- Tht- Gs-vrnmfnt of the Kingdom of Mororco
2 AMOUNT$W
3TPALcoT mw $ LonACTIVITY~ AID r~jv~ OM Contribution
$~TTT~hTotal It DFSCRT11TION OF (TVTY raV irl-igztirn of 71400-) aerfs of farmshy
and in L-roultuynt River barin in northeastern MoroccotTJT
5 PtTEPOSE OF 1PAN Tch - jt n financing thfe rontr of US oan-a d thirdj rcintiy rv] rcrvices rpcuirid for the prnjrcf Lc
1aa2
an] thir I ccunt unJ-r th-t 3nm~cu be fi nanrrd by 1T3shyur$ Morocc-n ii uroha- d frus th US Tr-jriury with thc
prore- [L th- -n
6 cy~~wr IpTIY P-i n of Th er Mrul(ouyqi Trrigv icr1 I foc~--r St jni -h and- French r Tirrrv-1 r
~rir tc Mr f nr r r n~T rnhwnii r hdas (ry af ~7 -tI - ~rj on thT c crvit ion for on ofc
the urnrr-iI-vj rnri~-l 11 had P n oxtcnJ4shynv v)VQ n m3J~- I lor tht -ly ~ jr that yi-ar th Deve~c-rnt
In u 1th-ori -- i c -- Ito37i5iOn fcr the -t rig cf thamp- tr hich i nt-n1idr te fi nar rr- l r vtcr-ve and trrJr in -~ ttic- ovcr a fiv- y-rir priod Tho cnshy-t-uc t 1 n i rn n d u n r t h 1t 1c-av hrw~c r wi I not in a -t b ccmpo otee unt il mi-- 6 it the ~s Z~~~ncmr 5211 a-rQ hre urcle r i r i at~irr rc h ich about ner lplusmnre vrrrnmrjI y
tind - 11til3 e r b-rfntyunr(der irr7--)itrthcn - in
~ri-t~rTof rocstBC UT n VIforM rnvit fi abroiti rrc
( f 2mo thL-l4ItE OFF CIAL iruge y ~hn --Is t uni m t -r--nty rr- i icnr 7 nderi
betAvailal DOlIT
0 STATU FT CPITIRTA Se Pnn D
10 JU FREOLED ISET-S 11nne
cf a loan to the Government of the11 RECOChDtVTT( Authorization
i-- an to txceed $50000) with th l t - -- -occo in runt niot
yeairMaturity including a 10-year -rnee period
annum during the grace period 2-ilnteret Krrr thereafter
RepayTrt Princiraland interent in US dollars
i rce US for dollar disbursements and MoroccoProcur ind other free world countries for disshy
burncment of US-owned Dirhams
CAPITAL ASSISTANCE CC3TTrEE
Capital Development Offl-er AFRCDF Scan P Walsh
Counei GCAr-R Willis W Jourdin
rnriner AFRCDFgNGR Thomas V Leahy
Agricultural 01er AYRFID Curl E Ferguson
Dek Oficer AFRNA Da yMcCall
fl-fltDOFFICIAL USE
V gt~ 7Ct ci f f Pojct
Ti - lcr -n t Mujoiiya as a plarined irrIgated pttrshyrre tr t-vrnriIn I)c 1- ou jO q joint Franco-S)roii Tirogram The Mc-~i l Fi fer r I t i- fr gtrt i r im Lwe_-n the form~r Froncri zon
i-2 tlnkr anir cnrmer ~-ihzone on lheft t 1rink Conshy~c f t 1Jni d iv- hn dwnm iwhieh was -tr~rtE-d in 1952
ind 17F r 2f 10rt rdl I on cu iv 7r- of u1srcul ~rigep Fn 1 ivltini~rlt 00C 1-m rf tiunrie and oanfTh
tPti~rfl tl r1ili mank onanArg irrigation in the Triffa plal n ~nns ii 1oArrfcd thft water corvwvAn-J nystnn rnjtic ampan on wujijr
~~-f Wrri -jr t I prr jecet si ldun ~ t M omo f -L1n(
pA r pirraliiit rAw~or k~ri I rAO I1n Mkrch hO ni nl tn _zci r con)i b- 1 n th 111Y rni tb- i
+ f - lttc~ f th M- -- Y6-Y I I fpoundtorage damn ( thl ~rin--Ir-tL ioi I i i i gtyir T rvrI and Hich L~i rt -otal ctier
ny nswj~~raecawilp vi ahnd devc lopr-nt
tr It Ft- r 5x -
Sir ~lisanc -ott In-rras Tn I-ay 1963 an unr cshy i r - - r-h-~ r i- (n i-I r the M- 4)rsi- K i11a d a
ILft y~C IT - i r it Ill fjr f t it 1hvr -- Ut CAcn7d(e v1
trt i If 1 - ~ 1 t Iic rI- -n - Tcir it d orti 25 m I
S 7 r in 1- mrain rneroir ~InAIL crgt r ~ r 1 t ~ o l on Mnrz-h T 1 that )T - or r(- t
~~ 0c ~W- 1)-Pr It f) rn It1t r Iil 11 cm
rrr~~rdI n)r r - r) Ir y i t1- Pni Arr r 7 tr- r~r -iVtIdni norrjr--iof hic- rt isn
n s~~~il -nl--1a tt rr ~ f~ fc
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1-m~l 1Yy utno J w nhulphnte appred makingr tar J-e of i t All of thr factors combinod
he ftrthe -i crip inoi h- irted $32 I r) it ir te from to t Ttirn- (ent n of which
t- ~r) rIf-shyr tn 1 amp-inrIt)h or From to - in r-t r m th 1ft E ink hasc k Id rchabilitattonc ouab1e of delivering 4ater to
before t will bethe left ban- areas Work theb1litation on rehashyof the tunnrel is exnected to begin in MayJune i38 In June IX)5 the Grt4 rubrnitA to AVP a ecmprehensive study andfor the completion of plirthe pro ie-r together withthis purpose AID rjvio-w if the-
a request cr- a oan fordcrcumentsthXe proIecrt rained and of its experlonce with
th-e plir a n2rhr-r of q- tionn concerning the adequacyarising Vrom ofthe limitcl iValability of skilled roroccanersonri] cce tuated by the2 d ermrturetinuing unroved of fore vn technic ins)
Ing 1rcchirec arid tenure problems lnndequwpe GOM rroJect financ
conshyand inadequate projcct mranngement Moreoverto I- nn cver-awnbitinus what atreardccuntry -id( Moroccan proram for dovelopmeitof its surface water irriwatinn tential arneared as wel to havelro re-ponslble fr b-entb
-sI- v of avalla gtrrnpower for the utlionj of
Si- - t t t h-e Lower tinulouya project Itself AID thenfinancing of
f - of studies by the Unlt-d StatesAgriul- tEir nford RI-3rrch Institute with the
OA) iniri both informtion con-ernirgr(-lrrt n Or the molouya -r one hand ani manpovrr
prorifies assnonrront of thefor in-- ns betweenfar-i )-co the dry Jlnd and irrlratedon cth- e resultsirdi-ti -qrly of the initial SRI stuliethat t least ra
in ren-ral terms Investment in Morocnn1e t ri-ure would te morerar li productivelrid- It Thn GC14 hasr i rrnm sinrfor e irntryctlon of frti iz-r the re Z tr in rain f-1itg farirp are --rW t Moro t-
uo A fin ql SRI udy wasbullbypriorities fr invtronf u in the Thin nttdv -- r-letd in Novombrhas C- of 17 Inn-rzjrehersIve measuresIs nhortage to allevia-eof btij2p- T-aowr in ift7 agriculturalnps to re voj fhe progra-ns has taken]ori _- probl-ms In the Mollouya andornnized t t rtt has reshycf if - i nageot of irrigt ion projectprovid- fcr tohe (i-rt -0 i7 + nf( r a)thriy ani reponsibility for thpof Jm~tera inMorocco
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1967 to irrcveTporformnnce in grculturc In the early psrt of the year the GCQ4 recorgnn7ed it a initrative system to rrozn for greater loca responzipuIty nnd crntrnl over agricultural progrrswhich inclulcd in partcmLar the minagement of the M4oulouya Perii-ttcr and instituted a ajor rrive to recriit principally in Europe foreigntxn- tc -rk orr rri y a r-nritc-3 In GCM prrqrnms In July one of
of A- cuA tue The att r ir cvr atic with USAIDPabat has affirmed his active interert in the Moulouya arid in the US role in its financing
E Fe)ationhipn of Project to US Ansimtince StrateT
Im~rvNrm-crt in Moroccos economic performance is itself a major US objecti e in Morocco as well ar an Iportant contributing influence toUS political objectives in Morocco It is believed that evidence of econc-ric improvwr ent will strerthen the GOMs capacity to maintain its moderatint role in Arab and international councils and its friendly relatiorns with the US
AID strategy is to assist Moroccan econcmic development within the framework of the Consultative Grcur (CG) crganized by the IBRD The CG has endorzed the GOM priority on agricultural development One of the prime objectives of the AID prcgram in Mcrocco is to increase agriculshytur1 rrcdurticn which i in accrd with US policy to reduce on a worldshywide bazis f-ependence on US food esnistance over the next five years
AID ian-stqnce to the aericultur l sector Is directed at increasingPrc+ -tion dry-2and farming as wel as irrigated farming in the LoweyMou]cya Rlv-r Bsrin where the US has provided $23 million of loan assitance einc -lr60nn well as $3 millicn equivalent in ocal currencyloans The rnture of AID assitance to Moroccan agriculture has evolved from major erade TVA and SRI during the last two yearsrtd by U2DA to d-tcrwir- tl new investrent with highest return as well as to plan Fpecific agricuUural develci-nent programs In dry-land farming AID has provided te hrcal ansiftance an- feed grain donations to improveanimal brcen and feedin ard technical assistance and local currencyloans to ipcrenie cereals rr-yiution There projects art continuing and (xrandling rticuarly in cereals production where additional TA in seedproduction an] xt-nsion techniques is being provided AID also expects in thir fischl yeatr tc providr- fnreign exchange through a DevelopmentLean for the Ariculture 2ector to financ necessary on-farm equipmentand commodity imoorts particularly those arising from US technical assistance )rograms
As a result of previous [IS assistence in the Lower Moulouya thisproject ha b--cede Ientifipd In Moroccan eye as one of major US inshyvoverrt Th G has for sore time been -eking additional US loan assistancpe t-Vomm lete t -ind our continued ruport of the project has ansumeri polit-al as vell as eccnomic important in UJS-Moroccan relations
1i
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dtr fr ~yt-tn
v a~hiv IXVA- julqrcjct a- prrscnt ly ront rp1at iuA r- i rtk N o op ) ruct ion ha- t-tn iir~jPrti--n with r -shy
t zj Teim ri i t1i r streq F nn inrr i ratnr~~1
7 Irtf no t~hr I-Iin cr-tor- r tr Tvi-iffa ari 4 4 1f~n a~jicrnt t-) t- rig~ht n rX1 ft - - ynI Ri $ver ar
1ST -iI rrigg i~~ th-f 1 -n ~ 1 y an I
r -r V 114tf th r r t
4~ Ii ino~~ it Y ~ ~ ift- i anu ic
z iri h -Ir r fcn~ ~ailtoiibef
r i wt Ir FA or rr f I th ~ -d f I 1f+ j--ri j11
~ ~~~~f ho-~ r tjc~f~~ n anrrii ~(n tf t~-
tt roh j t ht t of tnIai r T 1 rI n wf r ardofz - -an It ro ins ai~~re ait iplusmnr -MT r on
ill -r Ir i -r 0I- -- (n ti I a jr ranal-
I n r 4 o fid on-i-tr1 ri-I ofr2 the Irm f ir Ii rec
f - p ji oi if ri r4rn H r1irrt icalci~
J -P - r i ~wc i t he 1 I t k j- vt~ c a fIofy faie i t~njp f I nnuji (- n 1 t in N11t~ht i itor
o hi f~m r-i -sV
tiv o ahv r
m 1 n- t frI~rn va~f j- u iti I
ioriginally begun under the Spnnihh rgime Work was resumed by the GOM under a contract concluded in late 1959 Major difficlilties with the tunnel structure have been known for some time On comTletion of a series of studies of the problems involved the GOM nvited bids inNovember (767 on a pronrosed contract for the correction of structural-defects i-he tunv It Jn bnticiiated that this contract will be finarced _y the GO fr wn recurees
The Bou Arcg area which lie to the Northwest of the Zebra andalong the Mediterranean Coast will ]ikewise be affected by the delay in passage of water through the Left Bank Dead Head Tunnel The BouArr- - - ontplnn s~re 31000 acres of irrlgablf lrnd While the elttent n lr nni - ytr running from the northwest portion of t -h 11 shy h1s argely been completedneither i of the other irrishygation works required h~iv- - ver n --rt of the d-zign studies for thin area ha- u t L
The bulk of the DLF I-an of $23 million of hiehity over $20 million had been disburd as of the end (f wvmrber- 107 was (or is being) utilized for cn~tructinn of the cehrnKastoragedam and of the Bou Areg Tunnel and the Bcu Areg High Line Canal Sraller amounts were utilized for advisory engineering services providedby a US firm design services and construction of some of the main canal drainage rnd distr1rmtion woks The balance of the loan is expected to be disbursed before the end of this year for reimrburseshyent of the costs of contrEcts already completed or presently under way
The GOM has in addition exp-nded an estimated $13 million since the beginning of 1960 about $3 million of which represents the cost of hydroelectric installatiuns at the Mochra-Klila Dam and on the Bou AregHigh Line Canv1 About million vas expondet on reconstruction and the bn2nc Tprerents entimated costs of operation and maintenace of completedworks The DLF Joan of 1960 war intended to assist in financing a -r second phase of project works in the Mculouya Perimeter As indicated nbive the works ndrtakn in his phase (apErt from the repair of thn Left Bank Depd Head TunnE a jrrng to a close
In view of the Izeable rpuirces devct0-I tc thp Mculouya over a rither long reriod of ytrs--by the Spaninh French ar-I MroccanGovernments prior to l6O and th qC-M and AID frox 31960 to l2--to achieve the installation of the bulk of the major installations required for water ntorare and rranzmi-ion it Ia been conzidered that at this next stage of drvelcp eat of the erimeter the principalfocus of attention should be on t1ose works which will offer the
br De I(
Docuamp ampi- _ Z
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-7shygreatest and most rapid returns on ndd1tio resources required fortheir comyletion In the Interest of rbtainir an asrrrent ofr It fr the crnletion of the reirainder of the Troject AIDri ained rvienof the Stanford Revar(h Institute to rrenarea tuy i th orrn nrd returns for the vnriou rcrtions of theroject for h h i rr h beern pJanncd but not cnrrpleted
the he hat the completion of
the reynainintz ork-requivd(which P-nti fird Ip following Sectorsray up on tn iI thejwwould appear to offer the optimum coabination of hirhi nremental investmentard early comption
No of Apror To P- riuirred
Triffa Main 317 Triffa Sector 27 Triffa Sector 28 Zebra Collective 1500 Zebra Remainder 14250 Bou Are Central 16250 Bou Areg Remainder
TCtAI)
- Includes cre 8000 aeri o being equipped
If the above is to be accomplished over the next five years asenvisioned by the GOM the schedule would imply the bringing under irrishygation of around 1500) acres per year This is around two or three-times the GO hi torical rate of dvelopment of irrigation in theMoulouya over ast seven years While the GOM has recently reorshyganized its e cnt structure to permit greater local autonomy inf1 e ranagemo- rrigation perimeters and has recently accorded avery high -- -r to acceleration of developnent of the V 1 ouya inparticu t -vident that given the manpower constrai ts involvedin the Mr n operation the- above target way well be it- ible of achievenrnt
The GOM hM itself recognized the elements of thl -- I i lindhas in dizcuss ins with USATDRabat requested considersti- -f hfinancing by AID of the dollar costs of a management crht with oUS -irri to take or c(vnpletely the management unctions fror thi
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b Th - urJrtaen rn the jleft Bank under the proshyposed thir i-e of the rojc-t are i follows
- Left Pnnk Dvd H-d Tunn]
5 r-y rd t final tng of ire aration for ther-rT ir cvf ni r r imy - rz--rt ha recently beenr-t) l i w t e rr - tht - I afid if exToected to ubrit hit writt(-n r-rt jr DC Aii preliminary impressions baled on a 9Ite nErerti(n indi-ate thit a -rt1fartorj repair con bemade in c)nIdprnbly le- t n-ne for lfan -than previously conshytemplnted
The early ccmrt-tnn nf thi work in lmnortanit nine IL c t Ft th avai-bility of pr~ct wrte for the entire Left Brnk
Z~bra Collectlv-
Thin 1 on ara ofrXPr-ctively ond tribal land that will be divjded and allotted tr J-ted tribal -b-hrc who will become soleowncr3 A Pirpe rart ti Tniran -aratirn and developent hasalready bern co-plet] 2pani levelirg r-mains to be done as well ae conztruct c~n of b-tcn dnd drina- works
7eDo i F--vino-
The northrrn ecti n tht rmrainder of th Zebra will requirethe extnzi-n cf thct Train 4]h will be ccrrleted with financingccmmritted under Phase II of fth tr-Ject Land preparation and levelingwill be required anlnp with h ntruct n of distribution and drainagebullir r]
T ectinr f th- rrainler of bra will requiret- rd i i w -J n rrd h c and engishyrnr nw d t i f -tritst t n and dlarn -rk
Piu A rp
foeuro rginprng im hhve b- 7cr)Pletcd fcr the irrigationthe Bou Are- Fr the o-t rt hu- I cf the
of rcquired construction
of main carrl Rnraljor dr- nRe worx z develoFerit and cronstruction of zbldiary li tribution -r irnge y--r rrrairns to I undertaken
Th P- Arrg Tunnel wr orml td in 267 and construptcn sunder way on Ih-Yin Canal rrired tL nvcy water the suthrnf e of Areg ervie ra
I h z-uir-i intluding the -rtablishshyn -F r rnity rvice andIn fit Th rlulrem-rntr for
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F~~ntur~ nrl i tu Cct (wicFenture _to 11( Ettinate JI6 ) to 0j67 im-rtpatv 7-t 1
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Wt r 2torvge 1 95 1)6and Pegulation
Right ank 137 31 10 79
L-ft Bank 25 87 n6 143 239
Far- De ]crl 0 )5 1 b I26
S I M O ALA1 348 356
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At indicatnd In the- tdl iv 11 - rnt it~ocotof the rxojroct are t hi~-hor tnan the ic60) 1orccasts Th y tarc Ah-wever 1hchr by cnr murth~cul~ averllsv( a igiificqntjsCfect t~cn the bt-ric lfer-7t I-tio n- rigill lly rc~r~t
V I ) u O21he 1)+ -J iv )ir(t In h jiv kinvnft bed tado in Lh Tnwr Liynnui vni cif hrrlt rnr 7cst- wrr uniershytaen ic r ii -tQ j ta the Aurpo3vt o 02thl rirarnkinr of r- Ln t -Ir ca th cenm I rr1 urn 1e11 frrn n ow
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elevated area requirin iat-r to be puiiped to the irrigated land with both highr capital costs (about 1 million) and higher oreration and maintenance costs (150 Dirham per hcttare via-a-vir 100 Dihams perhevtare for the grnvity irrifrted ares) The ony work presenl-ly cotiishypleted in the Triff Hih Ser-ic Area is the preliminary engineering stirUes Cimi-ir to th Tr Pa r thu TrIffa ]Igh Service areawill reiir an ex I uvnt ricd bfore agricultural proshyduction cn be initlat-2i
The above considerations reiult in the following revised ranking of priorities
Project Area 1FY (M Priority
Triffa Main 21 I Sector 27 8 I Sector 28 9 I Bou Areg Central 6 II Bou Areg Rerainders 6 II Zebra Collective 5 II Zebra Remtd nders 5 II Triffa Ent 6 III Triffa High ervice 5 III
SRI 11ed a ccst contingency f7actor of 25 and a cumulative costescLlatior factor of 3I per annum These factors appear excessivelyhigh in th( light of (1) project experience to date and (2) the fact that from his roint the technical rirks involved arre of a much lower orl- r f 1h thnse inhtrent in the major works Just comshy1 I intion nrd contingency factor of 15 has there-
S chtiMnte- Itlizcd in this rarer The ii n-ttr costs the to ) ject (in n]ace of factors
i by )I nrt 11 thIrhe nf th nJter atve I[cwver rrtnrecr-y factor euld Increase the IPE ] hi ra]y th- IIRF fcr the TrIfa Sector 27 ansnunirg a
oct crortlr7crncy A can be seen as the conAngency I thf cc curve rrv to the right and inter ects the
ur h h 4r- rnr rate of return)
C Finreirifg inr
Cot o the prJect wor fmcentntgenent nnd engin-erinm advisoryrvices for the proued t rd tsge of the Mmlouya Project are
ctirt a Crollows
nF3r AVAILArBILE COPY
Best Av DlableD
7 17 shy
(In Millions Of Dollars)
Righi Pank
Trffa Main 34 poundSt (r 27 08 S ctor 6 0Q
51 Left ank
7bra Collective 12bra Remainde r- 54 Tou Areg Central 74 Lou Areg Remaluders 68 heft Bank Dcad Head Tunnel 30
238 Services
Management 20 Advisory Engineerin 05
25 SUB TOTAL 37
Escalation amp Contingencies 15 47
TOTAL 361
It is proposed that the AID Development Loan for this stage of the Moulouya ProJet be limited to $5 million an amount which would be sufficient te reet the cost of any US goods and services required for the works to oe undertaken Thus the loan would finance the dollar costs of manrement and engineering advisory services to be provided by US firms erstimated at $25 million The balance would be available to meet any ther US cofts that might arise for constructicn cuipment and nateria]
The balnnmc of funds required would be provided by the GOM from its own budgetary resources including as appropriate agreed allocations of the counfryj-uie dirham proceeds of US surplus agricultural programs in Morocco
To a l-ge extent construction works In the Mou]ouya (other than the Bou Ar- Tunnel and Mechra Klila Dam) have taken place under a largenumber of roll contracts with Moroccan firms It is anticipated that this will ontinue to be the pratice in the forthcoming development stage Th iit is evident that the great bulk of project cests in this next stage will be local costs
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In the event that not all of av l able fuInd- under the loan are required for TKI eo It i ouied that any remaininrn balance be utilized for the payment lo -ovalccztn f the project This would be aceoomplirhe by utili7irn th- h r vroceeds of the loan to purehare US-use dirhsmn (frcr th U Oi-irrirg Officer) which would be utili ed to rrimbure th fc u a t local - nditurrs
Thi arranrit 3ir ila ) fstV utilitd In the - of the D-e l-INAieret Loar tJr U Atrrert SinceYr usii Conv rf i cn therc loans are rcpiviible in dollars nd rince Morocco in a n-ar excess local currency couintry the fert ) f e transaction in tc provide a means for obtaining ccnvrrrs cn a-cr th life of the loan of otherwire inconvertibie U5 holding irhrs hich are in exces of its localrequireme t
In 1967 over 15 million dirhams (abceut $3 million) of PL 480
Section l04(g) loan fun cre in msgreement with the CON allocated for the financing of various contractr reloting to projects in the Moulouya It in anticipited tht ndditional allocations will be made out of the local currency proceed generated from current and antishycipated US 7urplu agricultural rmodity programs in Morocco
It has been proposed that the dirham equivalent of $45 million of the proceeds of the October F67 rurplus agricultural commodity Sales Agreement be allocated for a Section Cb(g) loan for the Mulouya In nadition it is estimated that a $]35 million (in$ioz1ble dirhshyequlviJent) woull be available from 7uprl]eental surplun agrIcultura con -ity rales programs under Titlo I an-d Title IV in calendar 196F for allocation for loans for development projects in Morocco These two amounts combined would provide about 6 of the G014 resources reshyquired for the project over the next five years On thic basis there would appear to be rcasonble propect tht the GO should be in a rorition to provide cver the S e year rriod of the project the addishytional resources renuired for itF ccmpletion
Tt I contemplatd that na additlonal US dollar financing of the Moulouya byon-l the $ iilon rorosed herein will be provided for tl cplei n ef h M _11-nuya rince the bringing under irrigation of th- 11O0Y ies include] in the propore] project will substantlally cornIete the works criginally conwtemplated hen h DLF loan was authorshyized in 106 The remainler zf the workr h(- be within the capabilit3 of the GOM to complete with It- o-n resourcec
MT M T M
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) Technical Anily ir
The Moulouya Rivr which is cre of tne largest in Morocco originatesin the idll Atans
Moulouya and which oztend scuthward
Kediterrancn l re
t rre
Pr
ard n
flows rrpr
orre 25) mriles northeast thr Agorinn border
to the
In- agricitui 1 in li j i nt( iljr r Th- rst rind most
t 2 1ir i t i h- i n th rwrht born of thshy-- e 31nmiler frem the Mediterranean
Lea To tho wet cf the Tiffa and nn th- left bank( of the Moulouya isthe Zebra nlain 14wiuntain rv-arate the Zebra frcm th -ea and fron theBou Art-r i-ll]zain which - ctI nrrthwe(st of the Zebra The Bou Areg a coital phtain sclte 19 mils lorg and h miles wide separated fr-nthe n-a by a Ihow sa2t water lagoon Southwest of the Zebra is theGireb plain which hun land ruitable for irrigation in its routheasternportion The Gareb i at a higher elevation than the three other plainsard if ultimately irr-gatcd vould require pumping fro the lower level Zebra conv(yance system
Water from the Noulouya River is stored brhind the Mechra Klila Dam whichwas coniletd with fjiancri rc AID loan (3-A-2 (DLF Lcan l6)Water ir rclca ed downstr(a (1bcut c) miles) to the Mechra Homadi reFrshyvoir and d]iversion dcim in1h-r divert-d to th right oad left bankcunals About 75 kilometer (1 miles) of the Triffu (right bank) maingravity ciral hay ben copletd und consderable cr) has been carri-dout in the Tri on) distr Iution and drainage netw rks land levelngend other farm iwnrovwments About 37 kilometers (22 wiles) of the Zebra(left bank) main gravi-ty canal and the tunnel 6 miles (101()7 JIrenrTrcters) betxeen the Zebra area end the Bou Areg area have been comrneted
The GOM illrrfo m certqin -rk nr-Aded fcr develormnt of the gravityir~zgata yt-- for n 71-) acres over the next five yarr Thiscffort vi2 be eonern rait-r urcr the develo-ment cf areas thot providethe great-rt ecnnomic returrs nnd the developnent of a cadre of Iorocearperornel adequ tly tran-yi in the an2gerent of the project SeeAnnex C for further Irojcl details
e- enmL Ev1ation
Mt Infratrueturr The --trnal highway co-munication network i t arid rfi Isirm nf re- i n-ote siler in-1 shy
uzeather raved rc
____________________TAM
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Other communlca 1 i i t ih Lh arr-- inlude the nrninlineof the Oujda-Fe--C- t h~rh l e0tnnd to AlgeriaSpanish enclove rt the 1 fir idto cmmercial airport at Oujda andNador with regular national onI int rnational ervice5s
Th verirtr 1 u ~Ath r nr r t crocd by 60 kvJ i i i u rrd t 5( kr It na ortr kk f~ditcrl rower1(Qp x I -y yrar) -o n d hr rritIronr
at the Mechra-Yplusmnilj l inm fnd the Bou Areff contral poter Statin The townare connected to ranrh cther and th2 r-rt of Mcrocco by telerhone andtelegraph 1 ner
b Sol Soil rvey 7rd land ]a-ifctons have been completed i-nthe Mcloulva rer eter oanntrantbi- with French firmr u-ing Frenchmethods The Trifa -1n wr initialy rraped at a cealeof 150000with certain area ub entiy rer-aLd at 15000 110000 or 120000dependin I nn the cor1cjeity of YJ rattcrns The Zebra plain has beenmapped at a reale cf 20O00 nod th- Bou Areg plain at a scale Df 150OO On thp baf Yr nf ther urvy th cla sified the soilsGC hain terms of r-uitnbility for irrigation as follows
Land Ciaifcation (Aere)
CasrI amp IT Class III Clans IV Totas Triffa Plain 17000 29[00 22725 99625Zebra Plain CbO 1275 4050 211425Bou Areg Plain 75)00 l6qo 3 0 3067)Gareb Plain 13 05 10 70 0
Inclurez 1750 acres for lfigh Service Area
The findings thi indicate that ( i) arriratry 5of the area in thefour rlain- i suited to irrigation (Clare I anl II) (ii) more than3 ir suitabr bt with one Or mcre imrtat~ons Irro=ed by underrablefeatur-s such an to wrafhy oil characteristJcn trnine- r restrltedbull rio (CIar TIV) and (iij) ls than 2 of th- area in only margina)lysuited for irrinticn(Class TV) In ther7e lattrr ardrn only rmi-intrnsive orop rotations blUponsblhe
The oi nicn f the Cn-lting Envneer (1ydrctechrJ) th respect to) therd carrffjn n that hfle 3 Bureau for P ltr0tion -tandards werirt ernoy-d te rlasnificatinn ir aceurat- and n rrti with3and rlaced in r d rLrnble categories more
uere thnn right ha bern the caseUS tandardr folIced The clasifatinn ha 0a been reviewed andfound to be atifactory by the USPA tayr Hoever r areas of complcxroil Ttternr hch to date have only been ru-d to a oale of 150))rome reraTpin tray be necesary as a banis fcr rrerarnZ
- g~T PRAvVLAFJLE EOPv
final designs of irrigation and drztinne- rystems parcellization into farms and planning of land preparation measures In addition considering the high average salt ccntent of ater frcm he c ilouya hiver a rorm of systematic leachin- will be reqirer- to f ree-rt aculation of salts in the soilsparticularly in h ebra Crt in will nlso1e plain ureas require nitrogenphosphorus crd possibly other nutrient to obtain satisfactory yields
c Water On the basis of studies by the GCM which have been reviewed bythe Consultirr Fnr ncri and the U au of 1ccoi-ation it is thecorclusion of A tt (i) the q lity of water in the Lower Houlouya
is below averpge bvt crp rble to thtof certain rivers in the US whichisotnteLoh~uoybrve successfully been usc for irrif ton for periods cxeccdin 100 yearsOj5) there is clearly a sufficient a )unt of i ter to irrif-ate the 128010
bullcrer to be served in the [rlcentIty ar n3 Addi-tional s-tudioser (c requilrecj dcter-Inc if adeqiuate water is a- ilable for irrigationof 376QGO vc rc
The only signifcant urce of vp y fOr irrigation water in the perimeteris the oulouya Vi~cr io jc n1 is 1re ntly being irrigated from wells most Iround water i - - 1 Alouya contains dissoived salts which i xr Lrn - hvriny reak flowto iJOx PIn iuting [cricd of c n ccntraticn is 750 ppm On Thi- basis of USDA Salinity Lot) atory criteria fte v ater is class 03-SI (hl-h salinity-low a-alinity) Vile water is thus of mediocre qualityit is ccmrarable to that of river successfully used for irrigation in the US (eg the Lower Colorado Rier) and poses no serious problems to irrir-ation in the Moulouya perir( cfr provided the W4 adheres to recorrmended programs for meeting leaching reoairements
With ref-pect to the 128000 acr project the demand for water reasured at the Mechra Hoadi diversion dair is estizated at about 575 million cubic meters per year as follows
remand for Wter
Peak Flow Annual Total (August) (m 3 million)
Agrieulture (176000 acres) 337 m3s 806 Municipal amp Industrial Consumption 8m3 23
Total 4 uy62123000 acres to be irrigateA by Gravity 255 m3s 575
(The e dpeak requirzents of 345 s compares with a 35 m3 s design
capacity of the main canal at the diversion dam including 18 m3 s for the Right Bank and 17 m3 s fcc the Left Bank)
I
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This estimate is based on probaole rainfall cropping patterns plant requirements evapo-transpiration and other expected losses of irrigashytion water The estimate is believed by the Consulting Engineer to be reasonable but subject to refinement on the basis of tests to be carried out on a continuing basis
The annual average availability of wuter from the Moulouya river is estirated at 1100 million mn or about double the estimated requirement for the gravity areas
Estimated Availability of Water
Twelve Year Annual Average for Moulouya River 3 m3 second 1100 million m3year
Maximum inflow Observed 8000 m3second(1963) 3h00 million m3 (1962-63)
Miniwum inflow Observed 1 msecond (1951) 532 million m3 (1956-57)
On this basis it appears that there should be ample water available for irrigation of the gravity area as the water availability obtained from twelve years observation exceeds the requirements in all but the 1956-57 season shown above Prior to the development of land with purped service areas (the Gare-b and the Triffa ig h Service) a review and analysis of the river hydrology should be unidertaken to assess the availability and regulashytion of the river flows
d Studies Entincering and Construction The overall irrigation scheme outlined by the 1uM defirs the ajor features and th( magnitude of the work to be accomplished to attain the ultimate goal
This scheme is being carried olut in phases over a long time period The present phase encorpasses the development planned within the priorities indicated by the Stanford Research Institute (SRI) study for the gravity irrigation system
The studies for land classifliration have been completed for the gravity irrigation system in the Triffa Bou Areg and Zebra plains by French firms and were considered reasonably accurate by the Consulting Engineer Land consolidation and parcellinrg has been completed by 0MET in the Bou Areg Central area the Zebra Collctive and Zebra Remainder sectors 7 thru 10 Land consolidation and pareeLlni ar( needed for Triffa sectors 27 and 28 Bou Areg Rematnder arid Z(bra Rerrirder sectors I and 2 The engineering designs for the Triffa main sector 27 and 28 and the Zebra Collective have been or are being completed by the G0M forces The engineering design for the Cefntral Bou Areg and Zebra Remainder sectors 7 tnru 10 has been or in being connpeted uy Hydrotechnic Engineering design will be required or the 1ou Are remainder sectors D-3 thru D-7 and Q4 thru G-6 and Zebra Rer ainler sectors 1 and 2 The engineering designfor the Dead Ilead Thnnel has been undertaken by SCET who have preshypared anid issued an Avant Projet for bid invitations for construction
14 M)j6Fj Cshy
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This firm will also undcrtnk- uu-orviston of construction The engineer ing not yet performed can be aea ished by GOM forces andor private engineering firms
Construction of the extension to the rrain irrigation and drainage canals Jand preparation rector cinl ani drninaive ditches will be performed unllr cntact t) 1 cc rt~r~iet m)t hi in the ene of the
r-abilit tion of the L2tL Pz- Dd iarl Trnc t
e Cronning Patterns The existing erning pattern in the Moulcuya including botnirrigatcd and dry farm ingincludes grain forage citrus vegetables olives grapes and 6 small amount of leciduous fruits and nuts Of the roughly 2140Cy) acres of agricultural production in the Moulouya about 177000 acres are in field crops 24)) in vegetables 16Y)O in citrus 15000 in grrrcs 540Y) in forage crops 1700 in olives and 15)0 in other fruits and nuts
Taking into consideration rast and present trends in plantings as well as agronomic and price and marketing factrrs the following projection of cropping patterns has been developed for the Lower Moulouya
PROJECTED POPPTG PATTFRNS T1 HE LOWER MOULOUYA
(In per cent of total irrigated area)
Left Bank and Triffa High Serice
Triffa Sector - Sectcr rriffa Class Class Class
crop Main 27 28 East I amp II III IV
Citrus 40 60 10 10 10 Vegetables 15 10 15 1) 20 10
Crtton 15 20 10
Fcragpr 10 20 25 30 4o 30
heat 10 6 20 25 20 35 4o
Grip 25 24 35 15 Dy beans 5 10
Sunflower 10 olives 5 0
100 10) 100 100) 1i 1052i 100
a Incltdes double cropping
- - r- euro --- 7
~7~TF~Wr~e~ALUSE
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The projected cropping pattern for the Bou Areg plain includes cottonLJrirdg the frrt Five yearnejtinted 1r of the Class I)fand
the project jitwould be grown on nnII landn Tht renresert only 960etrravres) ectz ri)cr)e area The cotton acr~a e ry increasep 2ceafter live years if ritisfactory drainage conditionshyrre achieved in the Bou Arev
cotton grown i 1xonp tarx- Trdltionally Morocco export its-Jr- cron an irr IJ hort cble to rmeett Cotton the reuirrents
r the oroccan 2pinningr mills The croppni-attrn of the Triffa East (about 180n acres) Js projectedt Tnrlude 15- (about 27 acres) in cotton It is likely that becausef ihe limited extnt of Class I and II lands in the Triffa Eas cotton not increase beyond that percentage
1t i evident that the amount of irrigated cotton that is likely to bein ther-n Moulouya is minimal even assuming that local drainage condi-T nare i asuitable
f Technical Sundnv--s The AID Project Engineer hps reviewed ii) thedat and ajor construction performed to date onronct and finds the technical requirements this long-ranRe phasedsufficiently defineoto ccntinue the project on an orderly schedule The estimates of cost of prsirct facilities have been determin-d by SRI from average va)ues oftrit cots obtained frorr reviously ntiarded contracts and from etniled( -s-nand analysis prepared by the iHydrotechnic Enginering fir oft-o tyieal sectors located in the Bou Areg area The costs for the arc ent contract have bcen estimated by the USAID It is consideredthat the depree of engijeering planning undertaken and the deterrrinitonr to the US Goverrment are adequate to meet the applicable requireshySt- n Section 611 of thie Foreign Asistance Act
7717gt
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E Financial Status of Borrower
1 The Moroccan Economy
Grrwth of MorocLcts GDP in real term averaged about 24 per yearin 1(4 and lr li Per capita DP In 1C 5 wan anproximotely t162 A (er Irr-ht in (6 resu]trd n a drcrcne of slightly nver in GDP which tlh vpulatior grc~vth avrring 3P4 per year rnrsJted in a decline of -r ornita GDP In 16 ii brut $154 A recnd droughtcccijrred In C67 but i not expeetid to have the severe effects of the 165 drought Crop forecasts for the first nine months of 1967 indicate a 4 increase in real GDP above the 1966 level This is also the economic grcrdth rate estimated by the IBRD for the pezxA 1965-70
Moroccos economy is heavily dependent upon the agricultural sector thich has averaged about 15 growth per annum However growth of the mal modern segment of Moroccos agricultural sector has inshy-reased at the rate of about 7 per annum
In 96 the International Banik for Reconstruction and Development (IBRD) preented a number of recommendationr denigrned to increase Moroccos economic growth rate On the bacis of these recomfndations the G004 proceeded with planning the necesrary program to increase investment levels fr- the i 63-65 level of 11 of GNP to 1r of GNP and stimulate the rate of economic growth from 2 to an average of over )4 annually for the five years 66-70 In addJtion the GC4 has taken measures to curb the population grovth rat while placing increased emphasis on raising production of both dryland (wheat) and Irrigated agriculture
2 Investment and Savinms
The level of total gross investment has remaind at aboit 11 of GNP for vera year althugh the percentnoe declined slightly in 165 Under the GO Three Yea5 Plan 1965-67 the gross investment t-3rget woz ret at DH 3 billion- Actual invev-tment expenditures for the three yearpeirod reached about DH 46 billion of which the Governshyment ezxenditure amounted to DH 1 billion a against DH 21 billion budgeted Thin may have beeo partly de to the GOMs deliberate ausshyterity pollcy under the hIF rtbJli7tion prci1rnr but more probably it van duxe to the shortage of trained cadres to -lan and execute projects
In the private cectcr conziderable inounts of ravings may be hoarded due to lack of project attractive t- inventors The lvl of private investment has been runnihg at about 51 of GNP thrrugh 195 The 0014 4 incentive to private instors hnr cut profit taxes from 4320 to V and announced a tpn year guarantc-e against tax increases
]L- $ = DH 506
777=-77- NQ
r y 7k1- T e - W lk In
j - 1) 7k- - _
- 23-
Loan are avaiiable to )rivlite irve-tcrn freo th 3JfIDiN s rctr special funda to prcmote touricm devc firvcnt
Under the 1r86-1972 plan abut to br irtntt level are to be accelerated considerably reaching A of GNP liv ]970 Mor(- Irlyir haviiy on foreign 1 to aciuw cc higher lve1
3 Central Government FinancP
The Moroccan money supply which had Incrrased ify 76 per cent in 2965 remained virtually unchanged in 966 The first half of 1967 witnessed a 5 Ter cent increase in the money supply Te major part of thi increase as concentrated in June and July uhen the supply reached V14 0j lion Currency In circulation expanded rapidly in June and July
nnl factrrn being reinforced by commodity hcnrding related to the 1ide~l Et crisis Demand deposits did not show their normal decline nthe first half of 1967 Deposits with commercial banks declined nlightly while deposits with the Treabury increased as public and semi public agencies contisued their transfers from the banking system to the Treasury The increase in money supply in the first half of (7 ran I raced to tho nzon1 sonal increase in net foreign assets not c y the custcirry rlelir In claims on the private sector Clsirl (n the erivate sector declined slighty until May 1967 but Increased hr-gb June and Jily due primarily to additional financing of textile stocks ClbiJ ante Government rose by 10 per cent in the first half of 967 the in central brnk claims on the GovernmentI being rmainly offset by larger deposits with the Treasury
Ordinary budgetary revenues which incrurted by 5 rcr ent in 1566 tre cxrcted t-) increase by 7 per cent in 1( to DII 21 billion DeampDite a derea3e in agricultural tax reccipt r- fror diret taxes rose by 10 ppr cent in 1966 and a 2 increas estinated for S67 due to tric or controls on income declarationr d an accelerashytion of tax cller ns Owing mainly to a relaxation of the import
program in late 1 5 and a concomitant increase in tariffs on certain ccnonter goods customs reneipts increased by 21 per cent in 1966 Although budgetary estimates call for s decline of 3 per cent in customs receipts in 1S67 it is likely that actual receipts will be considerably larger in view of the import liberalizatidn measures intro)duced subseshyquent to the estimates Receipts from indirect taxes state monopolies and other serces are expected to be 11 iv- cent Ipher in 1967 owing to increased profit on -ugar sabr-i and L r(m the newly created Office do Ccrmercalisaticn - d-tation (OCE)
Recurrent ordinary buiL e(enditures increased by 34 per cent in 1966 ar-i are expected to increase by an additional 7 per cent in 1567 reachin- D1122 billion Although wage and salary scales in the public
Banque Nationale pour le Developement Economique
TT~~- - I777
2 Cf
sector have1bec z h t - rrvirI urli 11i g 14-6 -nd PO becnue rX toi Ijt e f (]r o n 4
ill tile ic urrnnye andr)not i on dnd Publi ht rentrn -yr-otn lno IncreasedOthrr t ill- t il r ne by ) vr cert in J6(
i ninlyrt -br h Inc-l
( Ihe ( t r- rl t ip t t C itur f T)h 21h iilli n
is (( ItI t lt r c0 a- r n n o I- c t b It ihstnl id vv ih n t r-t have hn(er - en 1t2
(IM ii ture( T f fu traordJ nary budrzct exshypend ituren a r y -t c ~ i vi -iscz Portal Checking sy-stcsul)rrcing t (I ltIt Ct -- ind creirn shy
nnet The f r er tnc I hha ccrc ed from a htih of DH 5-7 millIJn in _ 5 millIn r C46 F cr ats foi ]7 place Cro n w I 1(DI)J79 ill ni DDn etlc fi nancing has alo u 1) 5 p (- I3A27 iIliun to an entirnted DH 1142 million
1 14V ) I nv 1 ri n nI(c1 franc n is 77-ected to be ol t y ncrewed bcrrowing fr-ir t he Cestra 9ank which hud been held at mcdert vols iln 165 nnd 1a66 Under the 1TFtaiby agreement of October 16 the qob) agreed to taBe a3] rocrrnary meurer to maintain as table curoonry rPnt inl th nr1d-elrto th b a ent of the ePrncriynnd a vnbl- hn1incc X nvroent P rt artt to t rt fien of tho Ccntin- Honk rstz (erct are nct t r itr June 30 Y-ke 7 lov l b th n Diif ) mill] (n tlcnber -c P thai I o illin usit I ])ecthr 31I62 (GC bc w t
C B1rtrp - vt DH 12 iri 1i nor ]S67 or DH 6S ij lionEan tisated (r fo than the aproved crd it expanwim
Thitrd ordivary nil extraordnnry buThTt deficit of DII 7-19 millI n fcrecat Fr 1 67 in exnected to be fnanced by not freign
tan reof DII )75 mi~l in nt recurity 12ue 1 T111I vlion a - nt ry tiat Po n Che )ir d-nC i 73 r5 Pn
riI is u h i a vti v mrr nrr-e jssIof fvr is id a erital The vnfsa revcred in 1d6 when lnrger r nyrentn eEecially on food itcmo an n -lewdoun in
igo ra a deficit of $1 millcn ProjectiOnz-vt rvultvd in ror 17 r~ieat inrrerned importsonly partially ccnrennate by addshytsa t frnreirn r ntil rrceiprs ard mprrvement in the nervices account will reult -n et of aprroximately $)20million As rhoim in the following tabl -r tion for l33 and 169 how overall deficits of
14 and m] ivi_y$i It
rqVV t1 4~
C)rgt
---
1 -)I+-IRF1
1ROCCO - rTANC OF PAYME 1qrt - 169]_ 5
6rfi0 1 1C(8lr67 i r(o
)xrurt 2t L( I L-5
Trade Bnlance 11 15 - 75 shy - 75
rviee- ret - 7 - 5) -35 -23 -2
J]-i of Good rnd Service- - 3 - 65 -II - ti - (5
Trn-Ifr Pr ynts (nt) P 21 33 37 33
on-cntnry Carital (not) 92 64 6 6 5
Err-rs nnd Ov rrion- (not) - 23 -2 1 3
eranl Bannic __ - _3 -_ 3 - 1i4
Atrh thert ircjected reficitn are of the nnme order of 1 nishytude a7 thcr incurred in the period i66 the Situatlcn i findarentallydifferent both in rerprct to the source of the deficits and in rer-ect to the meat0Y gtr m etin7tecr In the f rrer caive M5recco uffered
_frcrr a very h-vy cutfc of Drivtes cuitv fo-ivr with a shar) decline In forein nt exerditures in Morocco In the iatter case th projected deficits r- rcre a functicn or accelerated crcwth risingdebt ervieiiw tri tho abnrcn of forv eeble additiens foreign reshybull ourcs nere7ory 4( r2Vm rAf finmncting To nect the def-cits during the reriol 161 61h MWreco ob1id to drw down rorcin exchange reserves of over $]c milicn The snrti tpv of financing is no longerpozslble ince no or-res- ruch reserve- Even ifMorocco yr
mn nina r rve_ ore (]rrfii on to th r-ixirun etnt enribe nnd the [iI tnfldy i- un M-r-r e i32 till relA re nt rnt 15 millicnj1itionn ftr ign as- e n 1 6 beyond hat r recnently fcreeeshyable with ver nri- nry Officilr in In i6 reserves are cotImnted Pt 72million c hih crn V 3 million i caly required for currency coy r
Foreign InJebtrdne n of th GOM Mnroccos external rtnte ard rutlie enterprie dett amounted to
$r) millivn in lr6 Debt vervcirig rpynents for (66 trtaled about
$5) rillion g-eement approved in October 3(67
I- -- Ishy
37 millin or arprcxitrrntoy (j Iroccor totnl eXoort earning of h28 millicn GCnerally nxt rrO dbt FervicJng renuiremennt of leas
than r of totna -ort nnrlt In onrldered to I r tirfactoryrntio D-bt r rnJrcLct n Ir the reriod 1-(y 3on Trerent external debt including thnt wrtl(n irreently undibur-ed are hown n th fr lv tahlr
)] L v yr t n
Eternn Vtnte anc ] bntcrnrie Debt
M131 o)nr
Y aI Net Outrtnnling Debt Debt Service
(6 it 479r5 $367 J-67 452 3)6
Z616 44469 2 0 2C-
365I3 37 389
33 383 33 6 371
5-h 31 n 352 275 34121
]176 2661 32It 1977 21133 311 177 22)6 307 19 i0l74 256
1733 255
rgtternal debt rharre n rerent debt nnr rhon above do not increase ubtanti-lly over t rt 1)year- reaching a maximum of h44 millior
in J6 and decrpt- n cr - tently threoafter At the are time exportearninr r _rc extett nc-are Aring that Morocco does not inshycreswre it etrnn2 cbt t irate ubrtantially nb-vc ihat has been the core th adfiticrn dbt e roquirrentn reulting from the propo t Icon o 5 ijilion co r 7crncepr-ional term hould not have a i-nifiant affect n 1r o - ab lty to neet itv g rc-atedebt ericn rcnrib2t~e- the pros ectr of reprment of thin loan ore coniderci rearcnb)
U I -
F ot h-v C IuIJI rmt I shy
1 V amp~ rVml KI
PUC- -jrVi Jt t 1 11 nflrcj urlc 1- th )qn --P I uti u rhnrrl -1r- thr U- Tr- ry- R- -nymc nt
c2Il f n 6 1 bf r I- till 11 nfl r- n-r i n of O r--niC(Io~hi U 1 1 rr to
Tn vil ) f rvc hi tvlrll 1 (In- - n- u--n E r me rrinshycgtay F rntwir w ourc o -o- rvI ortf-V3 1 rncing of
Uf f -r rrrir- ur3r 4~ v -rin Iltrt nt ndd shyt -n t ) in- lint r b t l r -n rort- o-orco trorl-- V -P
r i 1rnd h L-torie Furcl-trin firr- thrjt US r r~ crvirrf- u~d be~
T L I1 c vt r- -ly ] -ubt fu 1 n vi pw -I -ror-co Ir of
ut1JpcO In thi rjert f it -- r- 21 npnred by d1-nr- cothcr t~han the US
2 ]P-t ofI Prr l1 on Prw- Fntrrr
Phij rrcjJ-t -11 n-t h~ -in nrwerq Prrt n rr- tc ntrshyr~A~r fi-mc 1bho und for --roern p o n
3_~~PrCT--rty
rr-vIi-n 1 h -d r the loan ragreement for Icntifitcation ef any r mIjrpt n ctri b- rt througn ut 1zatn (f xccr- prorerty
If rv c u~eAID n-mrcf u urr thi )cn - I~ut~ em avoi3ablo r rovvrirrnt -rrperty rather than nce iteni
4 Otli-r Fr- Wo--] n-Fnlc4rm
Dr mi tW- o] 14rocco- i~ajr ovr-ec -f exte rnaX
rrtan~- hrtvfb - I r ~ ant fl Fr n fole by Kv-it
Sgio F rneflit r b-en 1lmrntrd to tcfohnjip n5tnnen bi eoni~in I th u y f Fr--h tprhntcian tcacrr ind cther
~ti~r t~ ec-tnmIyrt-n Friinch Aid to Mcreco In 1065c~oc~ (P-art f-r txychnirril aItn -- j se of tl5 w1nfor bu~dget rurport f ir in rt t- $1 1ri1 icin in ennita -rojectM- n vx- rrcd
1Vw1tvnn tioI t-) Frenh rurtnnd +16 r11ion tie-I to -onyiint to orrrcr Frrmh ccilcn~For _-rrc-ratod land and rquirrmcnt
West GTrrnmnny liar agrcrcd to nrovIe ccme j27 mM22~cn 1n catital arirtanre and cromrndity lnoi7 t n OfIcon( q92 thi o totril$223 miJ lien ha actuary b-Pn cr-Itt--d under Inn ngrepment This
And a lk5 million commodity loan both) signed in 1965 All Wet Gerzaan
Ufla
-28shy
capital asnistance I vuectI to be tied to German exports Germanyhas in addition 1uvvded r tteysubbtantial technical assistance f
The IBRP hah rade four 1nns to Morocco since 1962 totaling$6) million Ofthin totnl a [175 million loan in 1965 wos fordevelopient of the gidi lit-r irrigation perimeter Other assistance by internntIcnal Iending arncie include an $11 million credit byIDA in 1C65 for rcendary diicction projects and an IFC ln and inshyvestrent of $1 1 ri jnic alo in
F tit i by [c - dncr tr dh elo snt ofMorccco rircuVt r oii +h b-]n jt-TKT r nbove n 2 )6 niliion Kuwait enn in i66 for develomyment of the Tensaout Prnm n irrnten nrooetand a $77 million Kuwait
0jl n )nnsn r(niti-nertcir
loan for extrnion of the Tadri~ Irrigation Perimeter
The following- trbe surrlnrlzes other free world arlztance (excluiin technical assistanc-) to Morocco for the years 1(62-66
($ Millions)
1 62 1cf_63 96) 19r65 19)66 Fneea 4) 5PO 64o 700 shyWet Germany 223 gu 1t 53 281 IRD 15 175 10) 175 IDA 110 IF C 1 5 7 7 7 0 I15
TOTAL 55 62 1U3 W
b Includer only lo-ng term loans and exporter credits - Includfs 25 million private capital
Eternal ansiztnnce to the Lowier Moulouya Irrigation Perimeter -nce 1060 hres been con[fined to US upport Consdiering AIDs previcus
involvement in and conmitnert to the Lower Moulouya an AID lean in P2t to be Lhi mol aprroriate source of financing for this project
LID
II
q
-29-
SECTION ITI- Y-TTYT TIMPLPTrION
A Periret-r Ad-instrrti-
Authority for irplerrentvtnn of the deveorpent prrgrn frr the LowerMoulcuya Perimeter and rs wel arth crnntinuinz mrnnrrmenertC tt r t- rrtnr V theltbi nad overationity iOfic 1cne 4
n r I e1i- i d Vit4 i Iv ~ Ct rreated i Otb (rJ rn-- of evcn inrmi-rriional offices hich reelaced the Office de Mire en Valeur Aamprlcole (OMVA) Under the OMXA and itspredecessor agencies authority for ad-inLtration cf irrigtion proJect war centralized in Rabat
Under the new regional office organization responsibility for adminshyistering ORMVAM is vested in on Adminirtrative Board of 10 members headed by the Minister of Agriculture and Agrarian Reform as chairman All ether board members (other than the Chairman and a representative of theInterministerial Economic Ccrmittee) represent agencies or activities inthe region of the r-eriret-r whic comprises parts of two provinces Localretresentatives on the Board inc]-de the governors of the two provincesOujda and Nador the presidents -f the two provincial asembtes and of the two provincial chambers of agriculture as well as the perimeter Director
The responsibilities of thie Administrative Board include review of theecys program establishment of its organizational structure developshynt -)f its annual budget and establishment of rates and conditions of
Siyfent for water and other services provided in the perimeter
The Director of OP4VAI-I is dbarged with the responsibility for executionPthe vclicies established by the Administrative Board end administration of oil ORMVAM functions This responsibility includes selection of staffn pserating perrcnnel acting s officia ORNIVAM representative in all ntztinns with -tate and othbr public or private bodies and the
f of funds within limit Indivated by the Ministers f Financetent rn fricultural and Agrarian Reorm
Perimeter Oranizatlon
ORVAM oreanizatlonal structure consists of a directnrate five maj-r rvlces or d-vsicns and one separate bureau Two services qei Administratif et Comptabl- and Service du Yatrial are conshycor - th adminisration and lcgistical support of ORMVAM operationshi1e the remainirg three services rind the separate bureau are Involved in t-hni al matters associated with agrcultural developrent Each ervice has one or more subordinate bureaus Fei-ce Chiefs and thehead 0 rch bure-u report directly to the ORMVAM4 Director
-~F7E MEw-
-30shy
2 Perimeter 01ttffnr
OPIVAM orgttnlrntlon treture calls for 557 positions of whichI L or 7 Mlled n were nher 29 1567 37 of the 71 Postshytion vacancies reported 1ern the high and middle levels Foreign(chiefly Euronean) technclan occupy I)of the 16 high level positionsthat ere filled at thfit tire
Whil OPM ut in th- lcng run lor to Mercecos oducational yster to prvidr tn crrf-nn2 to ratisfy current rdurojectd rcshyquirement th currnt high and mlddle level vacancies rrouire uersonnelwith oxt nive nrior rxericnce To fll this preent need it will be necessary for CRIVAM to continue its program of recruiting foreigntechnicians until ruch tire ns graduates of Moroccan educational programsacquire the necesnry exrerience The managerent assistance componentof thin pro~ject ]e-rribed In the Project analysis will to some extentalleviate OFIWAMs high level personnel requirements
3 Inw1 ernetation Sehedu]
Months Implementation Action
1 0 Sign Loan Agrcement
2 2 C-tiify conditions precedent and Y4tiate procedures for selection of US firm for management contract
2 Negotiation of extension of advisory Engineering Services
h 4 Contract (Hydrotechnic) Negotiation of Managerment Contract
5 60Cmpletion of Project
C Waivers
Sect ion 7 rf AID Regulation 7 provides in substance that theUnited State ill not finance direct costs of construction work performedby third cc-ur y nationals unless the total co-tn of the project withvhich thr ennrtrumticn w(r is asEcciated donot exceed $2On)O orafter excluding national of the country in vhich the site of constructionis located and Dersons vho nave resided therein uninterruptedly for morethan three years imrnedJately prior to any determination under Regulation 7at leant 0 of all uernons who work under the contract at the site of conbulltruction are United States citizens or the employment of third countrynationals is necessary to avoid excerrive corts to the United States
3
31
Section 2175 authr-ri th Regional Anitant Administratorto waive the nrovinions of Sectionthat it is 2073 if he dcterriner in any coneimportant te the nationrn intercrt of the United Stutes tofinance the direct eots of construction work performed by third country
nationals
A prviou1y r ic i c t tht for thr ct Tartthe -r c ct b- 1jeuj out r -cnorbr f cnrtructioncontracts with Morcccrr contrctnr an in the i-t Uowfevvr itentirely psnible that there may b- roe contractn with cntructlonfirms partly owned by third country nntionaln and that ruch firjs anwell as the surely Moroccan-owrned firms may enloy third country niationalsIn such canes a difficult rrobic-i iould arise in meeting the terms ofRegulation 7 since an a practical matter Aericans are not reaonablyavailable for ermployn ont by such contrnetorn and our previcus experiencewith the Naunsseur Ccnv(r-ion project thatin Morocco has indicatedAmerican contractors would not be interested in bidding cn small conshytracts in that country
It in therefore recommended that the Annitant Adinitratordetermine rursuant to Section 2q75 of Regulation 7 to waive theapplication of Regulation 7 to thic iroject since the project 411 conshytribute to the attainrent of US foreign policy objectiver and the cbJe-tives of the Foreign Arsistnnce Program
LITI L USE
LfI~~5xA~us
lit
4 A J A 45 4 k
t A S T
S(3
I A444ilA~~l~)
7 -74
tAM= D
SECTOR 27
10000
t Co0Na includez25 cgtri oncFcttlrvI ncy I8s ~ ~ C t C- Includes 50 constriJcltiotrgrc
2000 60
IU
0
z
bull cosYsA shy----- i
600L _
400
200
0 5 I0 15 20
INTEREST RATE
I ~ 7 J7777
ANIAampX C
PROJECT DESCRn1 rOll
The project com)onents to te undertaken on the MIoulouya Irrigation Project over the next five years contists of the following
C(n1rtion of the rrLin casuals and bianch canbls to provide the suource of waler to the sctors be developed in theto TriffBou Areg and Zebra areas This construction will include the necessarystructures such as reulators highway bridges aqueducts water intake
and discharge structures etc
2 Iand Txeloommerit which includes engineering land consolishyt and iuvtllng lard preparation (subsoiling ripping destoning etc) and installation of water distribution canals (secondary tertiary and quurtunary) and drainage collector ditches for the Triffa main covering 24000 acres in sctors 8 9 10 16 20 21 23 24 25A 2513 27 and 28 Lou Areg Central covering 16250 acres in sectors Dltirough D2B and G1 thru-4h G313 i0u Areg Remainder covering 15000 acres in s-ctors D3 through D7 and GA through (6 Zebra Collective covering 45)0 acres in sectors 3 4 5 rind 6 and Zebra Rer-iinder covering 14250 acres in sectors 1 2 and 7 through 10 and th remainder of sectors 34 and 5 The total land to be developed is about 74000 acres
3 Canalization of the Oued Zeluan and nued Sidi-Amar in the Bou Areg Plain consisting of strairltening englarging and regularizing of these streams to carry the flood waters to the sea Drainage interceptor canals are to be constructed parallel to the sea in the Bou Areg Plain In the Triffa Plain the Oued Riada main drain will be deepened and enlarged and secondary drains will be excavated to provide for drainageof the Madagh area This will include the construction of bridges and culverts and other related work
4 Major Commorn Works will consist of
a Clearing of the Mo-1ouya riverbed downstream of the Mechra KLila barn caused roy flood dariwe and the installation of a set of stop logs for maintenance of pillway gate-
b Design supervision and construction of repairs to the ]elt Lank dead head tunel
c Conctruction and establishment of sib-division Offices and installations for farmer support such as CMVand farm stables
1 C
-2shy
5 Manavmtnt It ha been proposed that a US management firm be ewployed by th- C4 to manage and operate the entire Bou Areg area Such manageent -iuld encomparn all activities from the initial concept to final irIrp igricultural production Such activities would Include resp r-ibilsect -or supervnsion of engtneering and constriction of primary
S- Jry r complete developfnent of land training n in g tinul irription practicen preparation of market
t - r1t- (ot--rnu trplusmnining of a Moroccan cadre to take over h v--it Bou Areg dreara P the
At this writing the n-pt of turning over to a private UZSfirm execushyresponsibl]ity I h management of the establilrment and initial
op-ration of irr1gati the Bou Arog area has been only broadly de iiitd by the GCJO It Intended that proposals will be invited from a r -onable ntnber of f|ed US firms that a selection will be made an-n 7 them and a more do iled and cornprehenrive definition of the rer6 -Ps to be performed be eztabliched at that time It haa been
stimated that the t- of ruch a contract will be about $2 mir- n In any event the -ts of this contract other engineering arvl s to be provided undt n extension of the Ilydrotechnic contract and ether US corts will not ed the proposed $5 mllaion developzont Jean fr the project
The cle 3ifications duties ant 1ncnslbilities of the management personnel ill ha-- to be clearly defined i agreed to by the GCM Perimeter Directo- and other GOM Agencies luding arrangements for the necessary gistic support
Svxlale Docu-
1
4
LD ED 0ICIAL
-IAIDshy
A1trX D
C6JCK LIST OF STATUTORY CRITERIA
(Development Loan Fund)
1 FAA 0102 Extent to which U3 cormodities and services are furnished consistent with improving the US balance of payments See Sections II-C II-F
2 AA sect2O]ihi lanner in which loan wil promote countrys economic develo shy rit emphasizing help for long-range plans and programs designed to developeconomic tesourcos and increase productive capacities See Section I-D
i FAA sectT] h)(IL Information and conclusion on availability of financincfrom other free-world sources including private sources within the United States See Section II-F
FAA sect20l( )2 Information and conclusion on activitys economic and technical soundness including the capacity of the recipient country to reshypay the loan at a reasonable rate of interest See Sections II-B II-D and II-E
5 FAA 1201(h)( Information and conclusion on existence of reasonable promise activity will contribute to developrmnt of economic resources or increase of productive capacities See Sectiona II-B and II-D
_92_(b 4Information and conclusion on activitys relationship toothor development activities and its contribution to realizable longshyrange objectives See Sections I-D and I-E
The following abbreviations are und FAA - Foroirn Assistance Act of 1961 as amerded by the Foreign Asaistaice
Act of 1967 App - Foreign Assistance and Polated Agencies Appropriations Act 1968
AFEVCDF 1066
L1
-2shy
7 FAA f12O1(b)(5)_ Countrys self-help masures including institution of Foreign Assistance Act investment pliaranty programs Investment Guaranty
bull Agreement signed with Morocco 331o6l See Sections I-D and II-EI
_A ))(6) Information and conclusion on possible effects on US econowy with soecial refererne to areas of substantial -labor surplusSee Section II-F
9 FAA q201 (h)() Information and conclusion on the dagree to which thA country iv wiki- progress toward respect for the rule of law freedom of expression and of the press and recognition~yf the importance of individual freedom initiative and private enterprise
10 FAA -1201(b)(8) Information and conclusion on the degree to which the country is taking steps to improve its c]Laato for private investment See Sccton II-E
31 FAA R LbJi Inforrat-on and conclusion on whether or not the activityto b financed will contribute to the achievement of self-sustaining growthSee Sections I-D and II-B
12 FAA fi2Ol(bj Inforruation and conclusion on reasonalbe prospects of reshypayment See Section II-E
13 FAA fl20JL() Info-ation on applicability of the twenty country ceil4ng2
14 FAA fl201 L Information and coclusion on legality (under laws of the country end the US) and reasonableness of lending and ralendinr terms Loan will be on minimum termspermitted under FAA These are deemed reasonable see Sectioam Evidence will be renuired from the GGM as to the legality of the loan agreemnt
1 E 2 Information and conclusion on availability of an applicationFAA together with sufficient information and assurances to indicate reasonably that funds will be used in an economcally and technically sound manner See Sections I-A II-B and II-D Application received Janury 15 1968
16 FAA fl201(fL If a project inforntion and conclusion whether it will promote the economic developapent of the requesting country taking into account the countrys human and material resource requiremnts and the reshylationship between the ultimate objes6ives of the project and the countrys overall economic development See Sections I-D and II-B
17 FAAJ 20ij(J If a project information and conclusion whether it cifishycally provides for appropriate participation by private enterprise 8ce Sections YI-C and 114
I- FAA i22(a) Total amount of money under loan which is going directly to private enterprise is going to intermediate credit institutions or other borrowers for use by private enterprise is being used to finance imports
rfro private sources or is otherwise beirg used to finance procurementsfrcm private souwces See Sections II-C and II-2
9 FAA 207 Infosation on the emphasis placed en
(a) encouraging development of economic political and social institushytins No apparent relationship
(b) nelC-help in mectingthe countrys food nredo Project Vill conshytribute to production of food for lccal consumptioa
(c) in-proving availability in the country of evucated trained manpower Project will contribute to the deicloginext of trained manpower as one of the functions of the management contract (Soe Annex C para 5)
(d) prcgrams aimed at -malnutrition disease eradi atDn slum clearanceWater purification sewage disposal health education naternal and child care(includin fimrily pJnrning)) -nd cthcr public health ausistarice See
(c) other develoment activities including industrial development free
labor unions cooperatives tnd voluntary agencie transn)rtatin and ccshymwquication nrStczn capubiliTies for economic planning and public adlinisshytration arban develo-mment and modernization of laws to feilltate econcnicdevelopjen- GO- intends encourage develo vient of cooperat yes particularlyin the Left Pank areas Project will also develop capabiLi ics for cconoaicplanning and public a6~inistration (Annex C para 5) Other not applicable
20 Information on the extent to which the r-untry is
(a) cttcmting to increase food production and food sto a-e anddistribution felitics This project is one evidence of Moroccos efforts in this direction See also Section I-D and I-E
b) creating- a favorable climate for foreign and dmestic iri-ate enterprise and invcstrrment The GCM has recently reduced profits twes anrannounced a ten year guarantee against tax increases See Section II-E-2
(c) increasing the role of the neonle in the developnental procecsNo apparent relationship to this project
(d) allocating expenditures to development rather than to unn-cessarymilitary purpoes or intervention in other free countries affair See Sections I-D and Ii-
(e) willing --nribute funds to the project or program Th iOMhas already dcvo o-sidcrable resources to the project It has badieted13 million for th i oulouya for i7 See Section I-C
(If) making economic zocial and political refo ns such as taxc coliecshytion iYprovcmenLs and chan es in land tenure a Royal Comm ision has been appointed to make recomendation on land tenure probleras in the Lower I oulouya
(g) responding to the economic political and social concerns of its people and showing a determination to take volf-help wcasuren See Sections I-D and II-E
IT
-ovi~cd l v r 13 1968
- 4 - LDffIED OFFICIAL USE
21 FAA Inforn ation about multilateral assistance being Iurnished to t e country and whether the loan will encourage recgional development prog-rams The I1D has eztablihcd a Consultative Group for Morocco which rvicws the GOM development program anui prgress See Section II-F-4 for infoaation on othtr donor assistance to Morocco
22 A Extent to which the loan will contribute to the objective of ass ring naximu par icipation in the task of econonic dovelop--ent on the pL-t 0 _he people of the developing countries through the encouragement of cocr-tic private and local govenmental inLitutious o apparent
relationship
23 F _-_Dta_ Infor-ation and corissions whether loan will oncourageeffor s of t1e country to (a) increase tie flow of international trade (b) fostcr private initiative and comptition (c) encourage development and usceo co opratives credit unions and savingss and loan associations (d) disourgo monopolistic practices (c) improvo technical efficiency of industry ariculture and commerce (f) strenSthn free labor unions This project is cxpected to increase technical efficiency oi-agriculture
2_ C-1L lnforzrition and conclusion on how the loan will encourage US privte trade and investment abroad and how it uill encourage private US participation in foreign assistance prograas (incluiing use of private trade channels and the services of US private enterprise) See Section II-
25 VA-+_ Conclusion and supporting information on compliance with tho Co resional policy that engineering and professional servicos of US fir-ms and their affiliates are to bo used in connection with capital project3 to the nixinua extent consistent with the national interest US engineerirn and innsgcment services will be financed tnder this loan
2$ Inforamtion and ccnclusions who+her loan will pormit American rx-l] business to participate equitably in the furnishing of goods and
z orvices by To be satisfied in Loan Agreementfinanced it
27 - t(a App I18 Complianco with restriction of co -zodity procureshy o UsMS except as otherwise determined by the Picsicent and subject to ttu--- rcortir require r-nts Procurement will - liumited to the US for
reiabnrs nts and to ioocco and other free world countries 1-or US-cwne(d rhu disburseacnts
23 -i Comiance with bulk cozodity procurement restriction topriecc no l-ho han the nkarkot price prevailing in tho US at tia of
bull puchas Not applicable
29 FA Cozpliance with requirement that matrin insurance be purchased on commceities if the participating country discri-inates and that insurance be placed in the US To be satisfied in Loan Agreement
30 IA 6(a) Information at to the utilization of excers personal property in lieu of procurement of new items Will be required ai appropriate under terns of Lean Agreement
f
1 77--7 -77-77-777
31 FAA 61](a)(_) information and conclusion on availability of enginoering i financial and other plans nccx sary to carry out tho assittance and of a
reasonably firm cstimate of the cost of the assistanco to the United States
See Section II-D
32-ecessaryFAA t611(a)_(2) legislative action r6quired within recipient country and ibasis Cor reasonable anticipation such action will be completed in time to pormit orderly accompli-hirtnt of purposes of loan See Section I-A
33 n _AA161nJ0] If water or water-relatod land resource construcshy
tion project or program information and conclusion on a benefit-cost comshy
putation See Section II-B
3 4 VAA 611(c) Compliance with requirement that contracts for construction be let on comp-ctitive basis to mamum extent practicable To be satisfied
in Loan Agreement
If a loan for a project of $1 million or more certificatin35 FAA _61l(r) by the principal AID officer in the country as to the capability of the
country (both financirl and human resources) to effectively maintain and
utilize the project taking into account other US-financed projects (Such
certification is to be pproved by the Administrator aL the time the loan
is authorized) In process of being obtained
36 FAsgJ2 _6_h Appropriate steps that have b-en taken to assure that to the miaximum extent possible the country is contributing local currencies to net th-2 cost of contractural and other services and foreign currencies o- icd by tho US are utilized to meet the cost of contractual and other services The GU-M is contributing over $30 million to compleXton of this project Excess US-use dirhams will be used for eligible project costs other than US goods and services
37 FAA p619 Compliance with requirement that assistance to newly independent countries be furnished through multilateral organizations or plans to maxishymum extent appropriate Not deemed appropriate in view of previous AID financing and ccoiitment to the project See Sections I-A and I-D
38 FAA sect620(a) AcnO7a n3]7(b) Compliance with prohibitions
against assistance to Cuba ard any countr (a) which furnishes assistance to Cuba or failed to take appropriate steps by February 14 1964 to prevent ships or aircraft unier its registry from carrying equipment materials or supplies from or to Cuba or (b) which sells furnishes or permits any ships under its registry fr-om carrying items of primary atrategic signifishycance or itcms of economic assistance Morocco is not-known to be in Violation of these sections
39 FAA q620GL_ If assistance to the government of a country existence of determination it is not controlled by the international Communist movement The Secretary of State so determined on October 11 191
40 FAA 620(c) If assistance to the government of a country existonce of Indebtedness to a US citizen for goods or services furnished or ordered whore ouch citizen has exhaustod available legal romodiesor where the debt
i - ow - -- _---- --shy
- --
-6shy
is not denied or ontested by such government or the indebtedness arises under an unconditional guararty of payrrent given by such govornmunt No such indebtedness is known to exist
41 FA _(a2LdL If assisitance for any productive enterprise which will corashypote with US enterprise existence of agreement by the recipient country to prevent export to the US of more than 20 of the enterprises annual production during the life of the loan Not applicable
42 FA4 - 16Q_0_ A If assistance to the government of a country extent to which it (including government agenies or ruhdivisions) has after January 1 1962 taken steps o repudiate or nullify cuatracts or taken any action which has the effect of nationalizing expropriating or otherwise seizingownership or control ofprcpertv of US citizens or entities beneficially owned by them without taking appropriate stops to discha i ge its obligations No such steps cr actions are-known to have been taken by the GOM
43 FAA~L AjPj_10_9 Compliance with assistance toQ0 prohibitions against any Comunst codntry ozocco is not considered to be a cocinrunist country
44 FAA - 620(gJ Corliance with prohibition against use of assistonce to comp satc owners for expropriated or nationalized property To be satisfied in Loan Agreement
45 F AA 8620(h Compliance with regulations and procedures adopted to inshysure against ue of assistance in a manner hich contrary to the best inshyterests of the US promotes or assists the foreign aid projects or activities of the Communist-bloc countries To be satisfied in Loan Agreement
46 FAA 06-O(j)_ Exitence of determiration that the country is engaging in or preparing for aggressive military efforts No such determination has been made
L_62_O Information47 FAA on representation of the country at any intershynational confererce when that representation includes the planning of activishyties involving insurrection or subversion against the US or countries recoiving US assistance No such representition is known to have A occarrect
8 FAA 62JJ Existence of a determination that the country has permitted or failed to prevent destruction of US property by mob action or has failed to take steps to prevent a recurrence and-to pay compensation NO such destruction is known to have tak-n place
49 PAA l620(k) If construction of productive enterprise where eggregate value of assistanc to be furnished by US will exceed $1OO million identification of Gtntutoryauthority Not npplicable
i-xQ2MZZ=
1 shy
U 6 50 _Af( QCinsidoration which has been given to denlying assistance X to thu government of a country which after December 31 1966 has failed to
- institto the investnint guaranty program for the spcific risks of inconshy
vertibility and expropriation or confiscation Satisfied See No 7 above
S51S J lj Compliance with-prohibitions-againstn as~istance to countries which traffic or permittraffickingwith North Vietnam Morocco is not known to be in violation
52 E_-L620(_L If country has seized or imposed any penalty or sanction against vn US fishing vessel on account of its fishing activities in
intcrnationul waters information on the consideiation which has been given to excludirg the country from assistance No such situation is known to exist
53 FAA FA r) UAR restriction Not applicable620(p 9117
54 FAA R620tl) Existence of default undhr any Foreign Assistance Act loan to the country No such default exists
55 F ) C-nsider tion of whether co ntry is devoting unnecessary percentage of buKet for military purposes or use of foreign exchange for milita-y equipment
56 FAA 62o(t) Proibition on aid if country has severed diplomatic relations with US unless agreements have been negotiated after resumpshytion Diplomatic r(lations have not been severed
57 FAA 9620(u) Statur of the country on delinquent UN obligations Morocco is not known to be dlinquent on its UN~obligation
58 FAA R636(i) Prohibition on financing non-US manufactured motor vehicles Will be satisfied in Loan Agreement and Implementation Letter
59 App 102 Compliance with requirement that payments in excess of $25000 for architectural and en Jneering services on any one project be reported to Congress Such reports will be made
60 App R1O4 Compliance with bar against funds to pay pensions etc for military personnel Such payments will not be eligible for financing under th Loan Agreement
61 App 9106 If country attr ipts to create distinctions because of their race or religion among Americans in granting personal or commercial access or other rights otherwise avaVIfable to US citizens generally application which will be made in negotit ttons of contrary principles as expressed by Congress Morocco is not ku IDhave made any such attempts
iInD OFFIIt t USE
0k
OFFICIAL USE 62 AIwp Rii Compliance with existing requfremets for security clearance
of personnel Will be satisfied in Loan Agreement and Implementation Letter
63 App R1l2 Compliance with requirement for approval of cortractors and contract terms for capital projects Will be satisfied in Loan Agreement
clJ164 Aup Cmpliance with bar nRainst use of funds to Tay assessments etc of US meiber Such payments will not be eligible for financing under the Loan Agreemunt
6 Anp P115 Ccmpliance with regulations on employment of US and local personnel for funds obligated after April 30 1961 (Regulation 7) See Section III-C
66 Aim Vietnam iron and steel restrictions Not applicable
67 p l9 If a country other than Greece Turkey Iran Israel Republicof China Phillipines or Korea reduction in assistance by amounts spent for the purchase of sophisticated military equipment
68 Anp fi4O1 Compliance with bar against use of funds for publicity or proshypagjanda purposes within US not heretofore authorized by Congress Such use of funds will not be eligible for financing under the Loan Agreement
Morocco is a traditional Islamic monarchy with a constitution The conshystitution was implemented followaing a popular referendum in 1962 National regional and professional elective bodies including a parliament were established by universal suffrage under the constitution in 1963 The parliament was suspended in 1961 in a State of Exception because of its inability to agree on measures with adequate urgency to meet the prevailingecononde imperatives In July 1967 the King appointed a Prime Minister to direct a Cabinet of appointed technicians
The constitutional framework nevertheless remains intact in Morocco and nationwide popular elections for some of the professional chambers were held in August and September 1966 The press is relatively free in Morocco and the right of diLsent prevails provided that such dissent does not violate the prohibition against political attacks on the instishytution of the monarchy or the person of the monarch
LI Under the revised US AID Policy for Africa agreed to in November 1966 Morocco is designated a development emphasis country entitled to receive continuing support on a country basis as part of a multilaterally coorshydinated countrj program Morocco was subsequently included in Presidential Determination 67-14 (January 5 1967) I
LIM=TE OFFICIAL USE~i
- l go
bull ~ -
f
DEPQbi) STATE AGENCY FOR INERNATIONAL DEVELOPMENT
WASHINGTON DC 052
CAPITAL ASSISTANCE LOA11 AUTHORIZATION
Provided from Develoroent Loan Funds Morocco Second Lower Moulouya Irrigation Loan
Pursuant to the authority vested in the Assistant Administrator for Africa of the Agency for International Development
AI)by the Foreign Assistance Act of 1961 as amended theIAct) and the delegations of authority issued thereunder I
have received and t-en into consideration a certification from the Director of USAIDMorocco as to the financial and human resources capability of Morocco to effectively utilize the Lower Moulouya Irrigation Project taking into account among other things the
maintenance and utilization of projects in Morocco previously financed or assisted by the United States and I hereby authorize the establishshyment of a loan pursuant to Part I Chapter 2 Title I the Development Loan Fund to the Government of the Kingdom of Morocco (Borrower) of not to exceed five million dollars ($5000000) to assist in financing the fore] gn exchange and local currency costs of goods and services for the third phase of the Lower Moulouya Irrigation Project subject to the foLlowing terms and conditions
1 Interest Rate and Terms of Repayment Borrower shall repay the loan to AID in forty (40) years including a grace period not to exceed ten (10) years Borrower shall pay interest on the unrepaid principal and any interest accrued thereon at the rate of (a) two percent (2) per annum during the grace period and (b) two and
one-half percent (2-12) per annum thereafter
2 Currency of Pepayment Repayment of the loan and paymenu of interest shall be made in United States dollars
- t- n t - - - shy
3 Other Terms and Conditions amp(a)Goods and Services financed under the loan
shall have their source and origin in
(i) the United States if disbursements therefor are made in United States dollars or
(ii) any country in the free world including Morocco if disbursements therefor are made in Moroccan currency
(b) AID Regulation 7 shall not apply to construction -work financed under the loan because as detailed in Section IIIC of Capital Assistance Paper No P 667 it is important to the national interest of the United States that the direct costs of construction work performed by third-country nationals be financed out of funds made available by the Act
(a) Such other terms and conditions as AID may deem advisable
Assistant Administrator for Africa
Date
~~~~~~~~~~~~~~~~~~ - q v
7
__ _ _ __ _ _ __ _ _
UMOROCCO - rvJT J TTRIGATiTOl II
TABLE OF CONTENTS
SECTION I - BACECNOUND
A Hjtr Tvr-nt (f the Pre4nct B Borrcwr 3
crt-TmC EYI 3D ontcnhLc -rent Plan jet to GCM DeveO E Rctnthnh off Prrj-evt to U
SECTION II PROJECT tNALIJS
A Tht Projecrt
Du mncryirtio B En c Anay- C r1 i P1M D Technica2_ Annr y E Pinneji2i tr tu fBcr-rr
Th t f o Iri rl win I t -(
rin 3 Citrai U v rt F niac 4 Balpqe 5 Foreign IGti 2
F Other Conil iti(n 1 Iniract -f cn 2 Impact -fc Projerct en P vbt 3 Excers Prorr ty
A fritnce Strategy a
5
3 6 22
2 24 2
24
7 7
nterpr 7 27
4 Other Fml Uorn Srnurc- of Fnng 27 SECTION III - PROJECT IMPL METATIOCN
A Perimcter A]rdnn trrt in 29 B Inplemntaticn chedule C Waivers
ANNEX A - MAP OF LOFTR OIrJTf) JYP PERTMErTFR A lEX B - SECTOR 27 (GAP OF IlRAL FVTE OF R7MJ ii ANW X1C TCIHTCAL DlSCRTTrOr OF PROJECt ANNEX D STAPTORY C(TKKTT ANN E - LOAN 1UTO ArToN
2 31_ _ _ _ _
UL IJMJITLI OFFICIPL IJ3E
ST ~IMAPY MMRDFCCOEN MIONS
I OMC 1LOYA FRICATTOR II
1APPTCAT- Tht- Gs-vrnmfnt of the Kingdom of Mororco
2 AMOUNT$W
3TPALcoT mw $ LonACTIVITY~ AID r~jv~ OM Contribution
$~TTT~hTotal It DFSCRT11TION OF (TVTY raV irl-igztirn of 71400-) aerfs of farmshy
and in L-roultuynt River barin in northeastern MoroccotTJT
5 PtTEPOSE OF 1PAN Tch - jt n financing thfe rontr of US oan-a d thirdj rcintiy rv] rcrvices rpcuirid for the prnjrcf Lc
1aa2
an] thir I ccunt unJ-r th-t 3nm~cu be fi nanrrd by 1T3shyur$ Morocc-n ii uroha- d frus th US Tr-jriury with thc
prore- [L th- -n
6 cy~~wr IpTIY P-i n of Th er Mrul(ouyqi Trrigv icr1 I foc~--r St jni -h and- French r Tirrrv-1 r
~rir tc Mr f nr r r n~T rnhwnii r hdas (ry af ~7 -tI - ~rj on thT c crvit ion for on ofc
the urnrr-iI-vj rnri~-l 11 had P n oxtcnJ4shynv v)VQ n m3J~- I lor tht -ly ~ jr that yi-ar th Deve~c-rnt
In u 1th-ori -- i c -- Ito37i5iOn fcr the -t rig cf thamp- tr hich i nt-n1idr te fi nar rr- l r vtcr-ve and trrJr in -~ ttic- ovcr a fiv- y-rir priod Tho cnshy-t-uc t 1 n i rn n d u n r t h 1t 1c-av hrw~c r wi I not in a -t b ccmpo otee unt il mi-- 6 it the ~s Z~~~ncmr 5211 a-rQ hre urcle r i r i at~irr rc h ich about ner lplusmnre vrrrnmrjI y
tind - 11til3 e r b-rfntyunr(der irr7--)itrthcn - in
~ri-t~rTof rocstBC UT n VIforM rnvit fi abroiti rrc
( f 2mo thL-l4ItE OFF CIAL iruge y ~hn --Is t uni m t -r--nty rr- i icnr 7 nderi
betAvailal DOlIT
0 STATU FT CPITIRTA Se Pnn D
10 JU FREOLED ISET-S 11nne
cf a loan to the Government of the11 RECOChDtVTT( Authorization
i-- an to txceed $50000) with th l t - -- -occo in runt niot
yeairMaturity including a 10-year -rnee period
annum during the grace period 2-ilnteret Krrr thereafter
RepayTrt Princiraland interent in US dollars
i rce US for dollar disbursements and MoroccoProcur ind other free world countries for disshy
burncment of US-owned Dirhams
CAPITAL ASSISTANCE CC3TTrEE
Capital Development Offl-er AFRCDF Scan P Walsh
Counei GCAr-R Willis W Jourdin
rnriner AFRCDFgNGR Thomas V Leahy
Agricultural 01er AYRFID Curl E Ferguson
Dek Oficer AFRNA Da yMcCall
fl-fltDOFFICIAL USE
V gt~ 7Ct ci f f Pojct
Ti - lcr -n t Mujoiiya as a plarined irrIgated pttrshyrre tr t-vrnriIn I)c 1- ou jO q joint Franco-S)roii Tirogram The Mc-~i l Fi fer r I t i- fr gtrt i r im Lwe_-n the form~r Froncri zon
i-2 tlnkr anir cnrmer ~-ihzone on lheft t 1rink Conshy~c f t 1Jni d iv- hn dwnm iwhieh was -tr~rtE-d in 1952
ind 17F r 2f 10rt rdl I on cu iv 7r- of u1srcul ~rigep Fn 1 ivltini~rlt 00C 1-m rf tiunrie and oanfTh
tPti~rfl tl r1ili mank onanArg irrigation in the Triffa plal n ~nns ii 1oArrfcd thft water corvwvAn-J nystnn rnjtic ampan on wujijr
~~-f Wrri -jr t I prr jecet si ldun ~ t M omo f -L1n(
pA r pirraliiit rAw~or k~ri I rAO I1n Mkrch hO ni nl tn _zci r con)i b- 1 n th 111Y rni tb- i
+ f - lttc~ f th M- -- Y6-Y I I fpoundtorage damn ( thl ~rin--Ir-tL ioi I i i i gtyir T rvrI and Hich L~i rt -otal ctier
ny nswj~~raecawilp vi ahnd devc lopr-nt
tr It Ft- r 5x -
Sir ~lisanc -ott In-rras Tn I-ay 1963 an unr cshy i r - - r-h-~ r i- (n i-I r the M- 4)rsi- K i11a d a
ILft y~C IT - i r it Ill fjr f t it 1hvr -- Ut CAcn7d(e v1
trt i If 1 - ~ 1 t Iic rI- -n - Tcir it d orti 25 m I
S 7 r in 1- mrain rneroir ~InAIL crgt r ~ r 1 t ~ o l on Mnrz-h T 1 that )T - or r(- t
~~ 0c ~W- 1)-Pr It f) rn It1t r Iil 11 cm
rrr~~rdI n)r r - r) Ir y i t1- Pni Arr r 7 tr- r~r -iVtIdni norrjr--iof hic- rt isn
n s~~~il -nl--1a tt rr ~ f~ fc
4n x1n h
[E
717--r- ~ --- -shy - kz
~ kA1
1-m~l 1Yy utno J w nhulphnte appred makingr tar J-e of i t All of thr factors combinod
he ftrthe -i crip inoi h- irted $32 I r) it ir te from to t Ttirn- (ent n of which
t- ~r) rIf-shyr tn 1 amp-inrIt)h or From to - in r-t r m th 1ft E ink hasc k Id rchabilitattonc ouab1e of delivering 4ater to
before t will bethe left ban- areas Work theb1litation on rehashyof the tunnrel is exnected to begin in MayJune i38 In June IX)5 the Grt4 rubrnitA to AVP a ecmprehensive study andfor the completion of plirthe pro ie-r together withthis purpose AID rjvio-w if the-
a request cr- a oan fordcrcumentsthXe proIecrt rained and of its experlonce with
th-e plir a n2rhr-r of q- tionn concerning the adequacyarising Vrom ofthe limitcl iValability of skilled roroccanersonri] cce tuated by the2 d ermrturetinuing unroved of fore vn technic ins)
Ing 1rcchirec arid tenure problems lnndequwpe GOM rroJect financ
conshyand inadequate projcct mranngement Moreoverto I- nn cver-awnbitinus what atreardccuntry -id( Moroccan proram for dovelopmeitof its surface water irriwatinn tential arneared as wel to havelro re-ponslble fr b-entb
-sI- v of avalla gtrrnpower for the utlionj of
Si- - t t t h-e Lower tinulouya project Itself AID thenfinancing of
f - of studies by the Unlt-d StatesAgriul- tEir nford RI-3rrch Institute with the
OA) iniri both informtion con-ernirgr(-lrrt n Or the molouya -r one hand ani manpovrr
prorifies assnonrront of thefor in-- ns betweenfar-i )-co the dry Jlnd and irrlratedon cth- e resultsirdi-ti -qrly of the initial SRI stuliethat t least ra
in ren-ral terms Investment in Morocnn1e t ri-ure would te morerar li productivelrid- It Thn GC14 hasr i rrnm sinrfor e irntryctlon of frti iz-r the re Z tr in rain f-1itg farirp are --rW t Moro t-
uo A fin ql SRI udy wasbullbypriorities fr invtronf u in the Thin nttdv -- r-letd in Novombrhas C- of 17 Inn-rzjrehersIve measuresIs nhortage to allevia-eof btij2p- T-aowr in ift7 agriculturalnps to re voj fhe progra-ns has taken]ori _- probl-ms In the Mollouya andornnized t t rtt has reshycf if - i nageot of irrigt ion projectprovid- fcr tohe (i-rt -0 i7 + nf( r a)thriy ani reponsibility for thpof Jm~tera inMorocco
_-7
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44
F-1
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1967 to irrcveTporformnnce in grculturc In the early psrt of the year the GCQ4 recorgnn7ed it a initrative system to rrozn for greater loca responzipuIty nnd crntrnl over agricultural progrrswhich inclulcd in partcmLar the minagement of the M4oulouya Perii-ttcr and instituted a ajor rrive to recriit principally in Europe foreigntxn- tc -rk orr rri y a r-nritc-3 In GCM prrqrnms In July one of
of A- cuA tue The att r ir cvr atic with USAIDPabat has affirmed his active interert in the Moulouya arid in the US role in its financing
E Fe)ationhipn of Project to US Ansimtince StrateT
Im~rvNrm-crt in Moroccos economic performance is itself a major US objecti e in Morocco as well ar an Iportant contributing influence toUS political objectives in Morocco It is believed that evidence of econc-ric improvwr ent will strerthen the GOMs capacity to maintain its moderatint role in Arab and international councils and its friendly relatiorns with the US
AID strategy is to assist Moroccan econcmic development within the framework of the Consultative Grcur (CG) crganized by the IBRD The CG has endorzed the GOM priority on agricultural development One of the prime objectives of the AID prcgram in Mcrocco is to increase agriculshytur1 rrcdurticn which i in accrd with US policy to reduce on a worldshywide bazis f-ependence on US food esnistance over the next five years
AID ian-stqnce to the aericultur l sector Is directed at increasingPrc+ -tion dry-2and farming as wel as irrigated farming in the LoweyMou]cya Rlv-r Bsrin where the US has provided $23 million of loan assitance einc -lr60nn well as $3 millicn equivalent in ocal currencyloans The rnture of AID assitance to Moroccan agriculture has evolved from major erade TVA and SRI during the last two yearsrtd by U2DA to d-tcrwir- tl new investrent with highest return as well as to plan Fpecific agricuUural develci-nent programs In dry-land farming AID has provided te hrcal ansiftance an- feed grain donations to improveanimal brcen and feedin ard technical assistance and local currencyloans to ipcrenie cereals rr-yiution There projects art continuing and (xrandling rticuarly in cereals production where additional TA in seedproduction an] xt-nsion techniques is being provided AID also expects in thir fischl yeatr tc providr- fnreign exchange through a DevelopmentLean for the Ariculture 2ector to financ necessary on-farm equipmentand commodity imoorts particularly those arising from US technical assistance )rograms
As a result of previous [IS assistence in the Lower Moulouya thisproject ha b--cede Ientifipd In Moroccan eye as one of major US inshyvoverrt Th G has for sore time been -eking additional US loan assistancpe t-Vomm lete t -ind our continued ruport of the project has ansumeri polit-al as vell as eccnomic important in UJS-Moroccan relations
1i
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ioriginally begun under the Spnnihh rgime Work was resumed by the GOM under a contract concluded in late 1959 Major difficlilties with the tunnel structure have been known for some time On comTletion of a series of studies of the problems involved the GOM nvited bids inNovember (767 on a pronrosed contract for the correction of structural-defects i-he tunv It Jn bnticiiated that this contract will be finarced _y the GO fr wn recurees
The Bou Arcg area which lie to the Northwest of the Zebra andalong the Mediterranean Coast will ]ikewise be affected by the delay in passage of water through the Left Bank Dead Head Tunnel The BouArr- - - ontplnn s~re 31000 acres of irrlgablf lrnd While the elttent n lr nni - ytr running from the northwest portion of t -h 11 shy h1s argely been completedneither i of the other irrishygation works required h~iv- - ver n --rt of the d-zign studies for thin area ha- u t L
The bulk of the DLF I-an of $23 million of hiehity over $20 million had been disburd as of the end (f wvmrber- 107 was (or is being) utilized for cn~tructinn of the cehrnKastoragedam and of the Bou Areg Tunnel and the Bcu Areg High Line Canal Sraller amounts were utilized for advisory engineering services providedby a US firm design services and construction of some of the main canal drainage rnd distr1rmtion woks The balance of the loan is expected to be disbursed before the end of this year for reimrburseshyent of the costs of contrEcts already completed or presently under way
The GOM has in addition exp-nded an estimated $13 million since the beginning of 1960 about $3 million of which represents the cost of hydroelectric installatiuns at the Mochra-Klila Dam and on the Bou AregHigh Line Canv1 About million vas expondet on reconstruction and the bn2nc Tprerents entimated costs of operation and maintenace of completedworks The DLF Joan of 1960 war intended to assist in financing a -r second phase of project works in the Mculouya Perimeter As indicated nbive the works ndrtakn in his phase (apErt from the repair of thn Left Bank Depd Head TunnE a jrrng to a close
In view of the Izeable rpuirces devct0-I tc thp Mculouya over a rither long reriod of ytrs--by the Spaninh French ar-I MroccanGovernments prior to l6O and th qC-M and AID frox 31960 to l2--to achieve the installation of the bulk of the major installations required for water ntorare and rranzmi-ion it Ia been conzidered that at this next stage of drvelcp eat of the erimeter the principalfocus of attention should be on t1ose works which will offer the
br De I(
Docuamp ampi- _ Z
i - 7 shy
-7shygreatest and most rapid returns on ndd1tio resources required fortheir comyletion In the Interest of rbtainir an asrrrent ofr It fr the crnletion of the reirainder of the Troject AIDri ained rvienof the Stanford Revar(h Institute to rrenarea tuy i th orrn nrd returns for the vnriou rcrtions of theroject for h h i rr h beern pJanncd but not cnrrpleted
the he hat the completion of
the reynainintz ork-requivd(which P-nti fird Ip following Sectorsray up on tn iI thejwwould appear to offer the optimum coabination of hirhi nremental investmentard early comption
No of Apror To P- riuirred
Triffa Main 317 Triffa Sector 27 Triffa Sector 28 Zebra Collective 1500 Zebra Remainder 14250 Bou Are Central 16250 Bou Areg Remainder
TCtAI)
- Includes cre 8000 aeri o being equipped
If the above is to be accomplished over the next five years asenvisioned by the GOM the schedule would imply the bringing under irrishygation of around 1500) acres per year This is around two or three-times the GO hi torical rate of dvelopment of irrigation in theMoulouya over ast seven years While the GOM has recently reorshyganized its e cnt structure to permit greater local autonomy inf1 e ranagemo- rrigation perimeters and has recently accorded avery high -- -r to acceleration of developnent of the V 1 ouya inparticu t -vident that given the manpower constrai ts involvedin the Mr n operation the- above target way well be it- ible of achievenrnt
The GOM hM itself recognized the elements of thl -- I i lindhas in dizcuss ins with USATDRabat requested considersti- -f hfinancing by AID of the dollar costs of a management crht with oUS -irri to take or c(vnpletely the management unctions fror thi
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b Th - urJrtaen rn the jleft Bank under the proshyposed thir i-e of the rojc-t are i follows
- Left Pnnk Dvd H-d Tunn]
5 r-y rd t final tng of ire aration for ther-rT ir cvf ni r r imy - rz--rt ha recently beenr-t) l i w t e rr - tht - I afid if exToected to ubrit hit writt(-n r-rt jr DC Aii preliminary impressions baled on a 9Ite nErerti(n indi-ate thit a -rt1fartorj repair con bemade in c)nIdprnbly le- t n-ne for lfan -than previously conshytemplnted
The early ccmrt-tnn nf thi work in lmnortanit nine IL c t Ft th avai-bility of pr~ct wrte for the entire Left Brnk
Z~bra Collectlv-
Thin 1 on ara ofrXPr-ctively ond tribal land that will be divjded and allotted tr J-ted tribal -b-hrc who will become soleowncr3 A Pirpe rart ti Tniran -aratirn and developent hasalready bern co-plet] 2pani levelirg r-mains to be done as well ae conztruct c~n of b-tcn dnd drina- works
7eDo i F--vino-
The northrrn ecti n tht rmrainder of th Zebra will requirethe extnzi-n cf thct Train 4]h will be ccrrleted with financingccmmritted under Phase II of fth tr-Ject Land preparation and levelingwill be required anlnp with h ntruct n of distribution and drainagebullir r]
T ectinr f th- rrainler of bra will requiret- rd i i w -J n rrd h c and engishyrnr nw d t i f -tritst t n and dlarn -rk
Piu A rp
foeuro rginprng im hhve b- 7cr)Pletcd fcr the irrigationthe Bou Are- Fr the o-t rt hu- I cf the
of rcquired construction
of main carrl Rnraljor dr- nRe worx z develoFerit and cronstruction of zbldiary li tribution -r irnge y--r rrrairns to I undertaken
Th P- Arrg Tunnel wr orml td in 267 and construptcn sunder way on Ih-Yin Canal rrired tL nvcy water the suthrnf e of Areg ervie ra
I h z-uir-i intluding the -rtablishshyn -F r rnity rvice andIn fit Th rlulrem-rntr for
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F~~ntur~ nrl i tu Cct (wicFenture _to 11( Ettinate JI6 ) to 0j67 im-rtpatv 7-t 1
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Wt r 2torvge 1 95 1)6and Pegulation
Right ank 137 31 10 79
L-ft Bank 25 87 n6 143 239
Far- De ]crl 0 )5 1 b I26
S I M O ALA1 348 356
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1 dv1 ment cot
rFT-r AVAILABLE COPY
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4
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At indicatnd In the- tdl iv 11 - rnt it~ocotof the rxojroct are t hi~-hor tnan the ic60) 1orccasts Th y tarc Ah-wever 1hchr by cnr murth~cul~ averllsv( a igiificqntjsCfect t~cn the bt-ric lfer-7t I-tio n- rigill lly rc~r~t
V I ) u O21he 1)+ -J iv )ir(t In h jiv kinvnft bed tado in Lh Tnwr Liynnui vni cif hrrlt rnr 7cst- wrr uniershytaen ic r ii -tQ j ta the Aurpo3vt o 02thl rirarnkinr of r- Ln t -Ir ca th cenm I rr1 urn 1e11 frrn n ow
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elevated area requirin iat-r to be puiiped to the irrigated land with both highr capital costs (about 1 million) and higher oreration and maintenance costs (150 Dirham per hcttare via-a-vir 100 Dihams perhevtare for the grnvity irrifrted ares) The ony work presenl-ly cotiishypleted in the Triff Hih Ser-ic Area is the preliminary engineering stirUes Cimi-ir to th Tr Pa r thu TrIffa ]Igh Service areawill reiir an ex I uvnt ricd bfore agricultural proshyduction cn be initlat-2i
The above considerations reiult in the following revised ranking of priorities
Project Area 1FY (M Priority
Triffa Main 21 I Sector 27 8 I Sector 28 9 I Bou Areg Central 6 II Bou Areg Rerainders 6 II Zebra Collective 5 II Zebra Remtd nders 5 II Triffa Ent 6 III Triffa High ervice 5 III
SRI 11ed a ccst contingency f7actor of 25 and a cumulative costescLlatior factor of 3I per annum These factors appear excessivelyhigh in th( light of (1) project experience to date and (2) the fact that from his roint the technical rirks involved arre of a much lower orl- r f 1h thnse inhtrent in the major works Just comshy1 I intion nrd contingency factor of 15 has there-
S chtiMnte- Itlizcd in this rarer The ii n-ttr costs the to ) ject (in n]ace of factors
i by )I nrt 11 thIrhe nf th nJter atve I[cwver rrtnrecr-y factor euld Increase the IPE ] hi ra]y th- IIRF fcr the TrIfa Sector 27 ansnunirg a
oct crortlr7crncy A can be seen as the conAngency I thf cc curve rrv to the right and inter ects the
ur h h 4r- rnr rate of return)
C Finreirifg inr
Cot o the prJect wor fmcentntgenent nnd engin-erinm advisoryrvices for the proued t rd tsge of the Mmlouya Project are
ctirt a Crollows
nF3r AVAILArBILE COPY
Best Av DlableD
7 17 shy
(In Millions Of Dollars)
Righi Pank
Trffa Main 34 poundSt (r 27 08 S ctor 6 0Q
51 Left ank
7bra Collective 12bra Remainde r- 54 Tou Areg Central 74 Lou Areg Remaluders 68 heft Bank Dcad Head Tunnel 30
238 Services
Management 20 Advisory Engineerin 05
25 SUB TOTAL 37
Escalation amp Contingencies 15 47
TOTAL 361
It is proposed that the AID Development Loan for this stage of the Moulouya ProJet be limited to $5 million an amount which would be sufficient te reet the cost of any US goods and services required for the works to oe undertaken Thus the loan would finance the dollar costs of manrement and engineering advisory services to be provided by US firms erstimated at $25 million The balance would be available to meet any ther US cofts that might arise for constructicn cuipment and nateria]
The balnnmc of funds required would be provided by the GOM from its own budgetary resources including as appropriate agreed allocations of the counfryj-uie dirham proceeds of US surplus agricultural programs in Morocco
To a l-ge extent construction works In the Mou]ouya (other than the Bou Ar- Tunnel and Mechra Klila Dam) have taken place under a largenumber of roll contracts with Moroccan firms It is anticipated that this will ontinue to be the pratice in the forthcoming development stage Th iit is evident that the great bulk of project cests in this next stage will be local costs
-E5 -
In the event that not all of av l able fuInd- under the loan are required for TKI eo It i ouied that any remaininrn balance be utilized for the payment lo -ovalccztn f the project This would be aceoomplirhe by utili7irn th- h r vroceeds of the loan to purehare US-use dirhsmn (frcr th U Oi-irrirg Officer) which would be utili ed to rrimbure th fc u a t local - nditurrs
Thi arranrit 3ir ila ) fstV utilitd In the - of the D-e l-INAieret Loar tJr U Atrrert SinceYr usii Conv rf i cn therc loans are rcpiviible in dollars nd rince Morocco in a n-ar excess local currency couintry the fert ) f e transaction in tc provide a means for obtaining ccnvrrrs cn a-cr th life of the loan of otherwire inconvertibie U5 holding irhrs hich are in exces of its localrequireme t
In 1967 over 15 million dirhams (abceut $3 million) of PL 480
Section l04(g) loan fun cre in msgreement with the CON allocated for the financing of various contractr reloting to projects in the Moulouya It in anticipited tht ndditional allocations will be made out of the local currency proceed generated from current and antishycipated US 7urplu agricultural rmodity programs in Morocco
It has been proposed that the dirham equivalent of $45 million of the proceeds of the October F67 rurplus agricultural commodity Sales Agreement be allocated for a Section Cb(g) loan for the Mulouya In nadition it is estimated that a $]35 million (in$ioz1ble dirhshyequlviJent) woull be available from 7uprl]eental surplun agrIcultura con -ity rales programs under Titlo I an-d Title IV in calendar 196F for allocation for loans for development projects in Morocco These two amounts combined would provide about 6 of the G014 resources reshyquired for the project over the next five years On thic basis there would appear to be rcasonble propect tht the GO should be in a rorition to provide cver the S e year rriod of the project the addishytional resources renuired for itF ccmpletion
Tt I contemplatd that na additlonal US dollar financing of the Moulouya byon-l the $ iilon rorosed herein will be provided for tl cplei n ef h M _11-nuya rince the bringing under irrigation of th- 11O0Y ies include] in the propore] project will substantlally cornIete the works criginally conwtemplated hen h DLF loan was authorshyized in 106 The remainler zf the workr h(- be within the capabilit3 of the GOM to complete with It- o-n resourcec
MT M T M
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) Technical Anily ir
The Moulouya Rivr which is cre of tne largest in Morocco originatesin the idll Atans
Moulouya and which oztend scuthward
Kediterrancn l re
t rre
Pr
ard n
flows rrpr
orre 25) mriles northeast thr Agorinn border
to the
In- agricitui 1 in li j i nt( iljr r Th- rst rind most
t 2 1ir i t i h- i n th rwrht born of thshy-- e 31nmiler frem the Mediterranean
Lea To tho wet cf the Tiffa and nn th- left bank( of the Moulouya isthe Zebra nlain 14wiuntain rv-arate the Zebra frcm th -ea and fron theBou Art-r i-ll]zain which - ctI nrrthwe(st of the Zebra The Bou Areg a coital phtain sclte 19 mils lorg and h miles wide separated fr-nthe n-a by a Ihow sa2t water lagoon Southwest of the Zebra is theGireb plain which hun land ruitable for irrigation in its routheasternportion The Gareb i at a higher elevation than the three other plainsard if ultimately irr-gatcd vould require pumping fro the lower level Zebra conv(yance system
Water from the Noulouya River is stored brhind the Mechra Klila Dam whichwas coniletd with fjiancri rc AID loan (3-A-2 (DLF Lcan l6)Water ir rclca ed downstr(a (1bcut c) miles) to the Mechra Homadi reFrshyvoir and d]iversion dcim in1h-r divert-d to th right oad left bankcunals About 75 kilometer (1 miles) of the Triffu (right bank) maingravity ciral hay ben copletd und consderable cr) has been carri-dout in the Tri on) distr Iution and drainage netw rks land levelngend other farm iwnrovwments About 37 kilometers (22 wiles) of the Zebra(left bank) main gravi-ty canal and the tunnel 6 miles (101()7 JIrenrTrcters) betxeen the Zebra area end the Bou Areg area have been comrneted
The GOM illrrfo m certqin -rk nr-Aded fcr develormnt of the gravityir~zgata yt-- for n 71-) acres over the next five yarr Thiscffort vi2 be eonern rait-r urcr the develo-ment cf areas thot providethe great-rt ecnnomic returrs nnd the developnent of a cadre of Iorocearperornel adequ tly tran-yi in the an2gerent of the project SeeAnnex C for further Irojcl details
e- enmL Ev1ation
Mt Infratrueturr The --trnal highway co-munication network i t arid rfi Isirm nf re- i n-ote siler in-1 shy
uzeather raved rc
____________________TAM
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Other communlca 1 i i t ih Lh arr-- inlude the nrninlineof the Oujda-Fe--C- t h~rh l e0tnnd to AlgeriaSpanish enclove rt the 1 fir idto cmmercial airport at Oujda andNador with regular national onI int rnational ervice5s
Th verirtr 1 u ~Ath r nr r t crocd by 60 kvJ i i i u rrd t 5( kr It na ortr kk f~ditcrl rower1(Qp x I -y yrar) -o n d hr rritIronr
at the Mechra-Yplusmnilj l inm fnd the Bou Areff contral poter Statin The townare connected to ranrh cther and th2 r-rt of Mcrocco by telerhone andtelegraph 1 ner
b Sol Soil rvey 7rd land ]a-ifctons have been completed i-nthe Mcloulva rer eter oanntrantbi- with French firmr u-ing Frenchmethods The Trifa -1n wr initialy rraped at a cealeof 150000with certain area ub entiy rer-aLd at 15000 110000 or 120000dependin I nn the cor1cjeity of YJ rattcrns The Zebra plain has beenmapped at a reale cf 20O00 nod th- Bou Areg plain at a scale Df 150OO On thp baf Yr nf ther urvy th cla sified the soilsGC hain terms of r-uitnbility for irrigation as follows
Land Ciaifcation (Aere)
CasrI amp IT Class III Clans IV Totas Triffa Plain 17000 29[00 22725 99625Zebra Plain CbO 1275 4050 211425Bou Areg Plain 75)00 l6qo 3 0 3067)Gareb Plain 13 05 10 70 0
Inclurez 1750 acres for lfigh Service Area
The findings thi indicate that ( i) arriratry 5of the area in thefour rlain- i suited to irrigation (Clare I anl II) (ii) more than3 ir suitabr bt with one Or mcre imrtat~ons Irro=ed by underrablefeatur-s such an to wrafhy oil characteristJcn trnine- r restrltedbull rio (CIar TIV) and (iij) ls than 2 of th- area in only margina)lysuited for irrinticn(Class TV) In ther7e lattrr ardrn only rmi-intrnsive orop rotations blUponsblhe
The oi nicn f the Cn-lting Envneer (1ydrctechrJ) th respect to) therd carrffjn n that hfle 3 Bureau for P ltr0tion -tandards werirt ernoy-d te rlasnificatinn ir aceurat- and n rrti with3and rlaced in r d rLrnble categories more
uere thnn right ha bern the caseUS tandardr folIced The clasifatinn ha 0a been reviewed andfound to be atifactory by the USPA tayr Hoever r areas of complcxroil Ttternr hch to date have only been ru-d to a oale of 150))rome reraTpin tray be necesary as a banis fcr rrerarnZ
- g~T PRAvVLAFJLE EOPv
final designs of irrigation and drztinne- rystems parcellization into farms and planning of land preparation measures In addition considering the high average salt ccntent of ater frcm he c ilouya hiver a rorm of systematic leachin- will be reqirer- to f ree-rt aculation of salts in the soilsparticularly in h ebra Crt in will nlso1e plain ureas require nitrogenphosphorus crd possibly other nutrient to obtain satisfactory yields
c Water On the basis of studies by the GCM which have been reviewed bythe Consultirr Fnr ncri and the U au of 1ccoi-ation it is thecorclusion of A tt (i) the q lity of water in the Lower Houlouya
is below averpge bvt crp rble to thtof certain rivers in the US whichisotnteLoh~uoybrve successfully been usc for irrif ton for periods cxeccdin 100 yearsOj5) there is clearly a sufficient a )unt of i ter to irrif-ate the 128010
bullcrer to be served in the [rlcentIty ar n3 Addi-tional s-tudioser (c requilrecj dcter-Inc if adeqiuate water is a- ilable for irrigationof 376QGO vc rc
The only signifcant urce of vp y fOr irrigation water in the perimeteris the oulouya Vi~cr io jc n1 is 1re ntly being irrigated from wells most Iround water i - - 1 Alouya contains dissoived salts which i xr Lrn - hvriny reak flowto iJOx PIn iuting [cricd of c n ccntraticn is 750 ppm On Thi- basis of USDA Salinity Lot) atory criteria fte v ater is class 03-SI (hl-h salinity-low a-alinity) Vile water is thus of mediocre qualityit is ccmrarable to that of river successfully used for irrigation in the US (eg the Lower Colorado Rier) and poses no serious problems to irrir-ation in the Moulouya perir( cfr provided the W4 adheres to recorrmended programs for meeting leaching reoairements
With ref-pect to the 128000 acr project the demand for water reasured at the Mechra Hoadi diversion dair is estizated at about 575 million cubic meters per year as follows
remand for Wter
Peak Flow Annual Total (August) (m 3 million)
Agrieulture (176000 acres) 337 m3s 806 Municipal amp Industrial Consumption 8m3 23
Total 4 uy62123000 acres to be irrigateA by Gravity 255 m3s 575
(The e dpeak requirzents of 345 s compares with a 35 m3 s design
capacity of the main canal at the diversion dam including 18 m3 s for the Right Bank and 17 m3 s fcc the Left Bank)
I
- 19 -
This estimate is based on probaole rainfall cropping patterns plant requirements evapo-transpiration and other expected losses of irrigashytion water The estimate is believed by the Consulting Engineer to be reasonable but subject to refinement on the basis of tests to be carried out on a continuing basis
The annual average availability of wuter from the Moulouya river is estirated at 1100 million mn or about double the estimated requirement for the gravity areas
Estimated Availability of Water
Twelve Year Annual Average for Moulouya River 3 m3 second 1100 million m3year
Maximum inflow Observed 8000 m3second(1963) 3h00 million m3 (1962-63)
Miniwum inflow Observed 1 msecond (1951) 532 million m3 (1956-57)
On this basis it appears that there should be ample water available for irrigation of the gravity area as the water availability obtained from twelve years observation exceeds the requirements in all but the 1956-57 season shown above Prior to the development of land with purped service areas (the Gare-b and the Triffa ig h Service) a review and analysis of the river hydrology should be unidertaken to assess the availability and regulashytion of the river flows
d Studies Entincering and Construction The overall irrigation scheme outlined by the 1uM defirs the ajor features and th( magnitude of the work to be accomplished to attain the ultimate goal
This scheme is being carried olut in phases over a long time period The present phase encorpasses the development planned within the priorities indicated by the Stanford Research Institute (SRI) study for the gravity irrigation system
The studies for land classifliration have been completed for the gravity irrigation system in the Triffa Bou Areg and Zebra plains by French firms and were considered reasonably accurate by the Consulting Engineer Land consolidation and parcellinrg has been completed by 0MET in the Bou Areg Central area the Zebra Collctive and Zebra Remainder sectors 7 thru 10 Land consolidation and pareeLlni ar( needed for Triffa sectors 27 and 28 Bou Areg Rematnder arid Z(bra Rerrirder sectors I and 2 The engineering designs for the Triffa main sector 27 and 28 and the Zebra Collective have been or are being completed by the G0M forces The engineering design for the Cefntral Bou Areg and Zebra Remainder sectors 7 tnru 10 has been or in being connpeted uy Hydrotechnic Engineering design will be required or the 1ou Are remainder sectors D-3 thru D-7 and Q4 thru G-6 and Zebra Rer ainler sectors 1 and 2 The engineering designfor the Dead Ilead Thnnel has been undertaken by SCET who have preshypared anid issued an Avant Projet for bid invitations for construction
14 M)j6Fj Cshy
-20-
This firm will also undcrtnk- uu-orviston of construction The engineer ing not yet performed can be aea ished by GOM forces andor private engineering firms
Construction of the extension to the rrain irrigation and drainage canals Jand preparation rector cinl ani drninaive ditches will be performed unllr cntact t) 1 cc rt~r~iet m)t hi in the ene of the
r-abilit tion of the L2tL Pz- Dd iarl Trnc t
e Cronning Patterns The existing erning pattern in the Moulcuya including botnirrigatcd and dry farm ingincludes grain forage citrus vegetables olives grapes and 6 small amount of leciduous fruits and nuts Of the roughly 2140Cy) acres of agricultural production in the Moulouya about 177000 acres are in field crops 24)) in vegetables 16Y)O in citrus 15000 in grrrcs 540Y) in forage crops 1700 in olives and 15)0 in other fruits and nuts
Taking into consideration rast and present trends in plantings as well as agronomic and price and marketing factrrs the following projection of cropping patterns has been developed for the Lower Moulouya
PROJECTED POPPTG PATTFRNS T1 HE LOWER MOULOUYA
(In per cent of total irrigated area)
Left Bank and Triffa High Serice
Triffa Sector - Sectcr rriffa Class Class Class
crop Main 27 28 East I amp II III IV
Citrus 40 60 10 10 10 Vegetables 15 10 15 1) 20 10
Crtton 15 20 10
Fcragpr 10 20 25 30 4o 30
heat 10 6 20 25 20 35 4o
Grip 25 24 35 15 Dy beans 5 10
Sunflower 10 olives 5 0
100 10) 100 100) 1i 1052i 100
a Incltdes double cropping
- - r- euro --- 7
~7~TF~Wr~e~ALUSE
-21 -
The projected cropping pattern for the Bou Areg plain includes cottonLJrirdg the frrt Five yearnejtinted 1r of the Class I)fand
the project jitwould be grown on nnII landn Tht renresert only 960etrravres) ectz ri)cr)e area The cotton acr~a e ry increasep 2ceafter live years if ritisfactory drainage conditionshyrre achieved in the Bou Arev
cotton grown i 1xonp tarx- Trdltionally Morocco export its-Jr- cron an irr IJ hort cble to rmeett Cotton the reuirrents
r the oroccan 2pinningr mills The croppni-attrn of the Triffa East (about 180n acres) Js projectedt Tnrlude 15- (about 27 acres) in cotton It is likely that becausef ihe limited extnt of Class I and II lands in the Triffa Eas cotton not increase beyond that percentage
1t i evident that the amount of irrigated cotton that is likely to bein ther-n Moulouya is minimal even assuming that local drainage condi-T nare i asuitable
f Technical Sundnv--s The AID Project Engineer hps reviewed ii) thedat and ajor construction performed to date onronct and finds the technical requirements this long-ranRe phasedsufficiently defineoto ccntinue the project on an orderly schedule The estimates of cost of prsirct facilities have been determin-d by SRI from average va)ues oftrit cots obtained frorr reviously ntiarded contracts and from etniled( -s-nand analysis prepared by the iHydrotechnic Enginering fir oft-o tyieal sectors located in the Bou Areg area The costs for the arc ent contract have bcen estimated by the USAID It is consideredthat the depree of engijeering planning undertaken and the deterrrinitonr to the US Goverrment are adequate to meet the applicable requireshySt- n Section 611 of thie Foreign Asistance Act
7717gt
1 --shy
-22-
E Financial Status of Borrower
1 The Moroccan Economy
Grrwth of MorocLcts GDP in real term averaged about 24 per yearin 1(4 and lr li Per capita DP In 1C 5 wan anproximotely t162 A (er Irr-ht in (6 resu]trd n a drcrcne of slightly nver in GDP which tlh vpulatior grc~vth avrring 3P4 per year rnrsJted in a decline of -r ornita GDP In 16 ii brut $154 A recnd droughtcccijrred In C67 but i not expeetid to have the severe effects of the 165 drought Crop forecasts for the first nine months of 1967 indicate a 4 increase in real GDP above the 1966 level This is also the economic grcrdth rate estimated by the IBRD for the pezxA 1965-70
Moroccos economy is heavily dependent upon the agricultural sector thich has averaged about 15 growth per annum However growth of the mal modern segment of Moroccos agricultural sector has inshy-reased at the rate of about 7 per annum
In 96 the International Banik for Reconstruction and Development (IBRD) preented a number of recommendationr denigrned to increase Moroccos economic growth rate On the bacis of these recomfndations the G004 proceeded with planning the necesrary program to increase investment levels fr- the i 63-65 level of 11 of GNP to 1r of GNP and stimulate the rate of economic growth from 2 to an average of over )4 annually for the five years 66-70 In addJtion the GC4 has taken measures to curb the population grovth rat while placing increased emphasis on raising production of both dryland (wheat) and Irrigated agriculture
2 Investment and Savinms
The level of total gross investment has remaind at aboit 11 of GNP for vera year althugh the percentnoe declined slightly in 165 Under the GO Three Yea5 Plan 1965-67 the gross investment t-3rget woz ret at DH 3 billion- Actual invev-tment expenditures for the three yearpeirod reached about DH 46 billion of which the Governshyment ezxenditure amounted to DH 1 billion a against DH 21 billion budgeted Thin may have beeo partly de to the GOMs deliberate ausshyterity pollcy under the hIF rtbJli7tion prci1rnr but more probably it van duxe to the shortage of trained cadres to -lan and execute projects
In the private cectcr conziderable inounts of ravings may be hoarded due to lack of project attractive t- inventors The lvl of private investment has been runnihg at about 51 of GNP thrrugh 195 The 0014 4 incentive to private instors hnr cut profit taxes from 4320 to V and announced a tpn year guarantc-e against tax increases
]L- $ = DH 506
777=-77- NQ
r y 7k1- T e - W lk In
j - 1) 7k- - _
- 23-
Loan are avaiiable to )rivlite irve-tcrn freo th 3JfIDiN s rctr special funda to prcmote touricm devc firvcnt
Under the 1r86-1972 plan abut to br irtntt level are to be accelerated considerably reaching A of GNP liv ]970 Mor(- Irlyir haviiy on foreign 1 to aciuw cc higher lve1
3 Central Government FinancP
The Moroccan money supply which had Incrrased ify 76 per cent in 2965 remained virtually unchanged in 966 The first half of 1967 witnessed a 5 Ter cent increase in the money supply Te major part of thi increase as concentrated in June and July uhen the supply reached V14 0j lion Currency In circulation expanded rapidly in June and July
nnl factrrn being reinforced by commodity hcnrding related to the 1ide~l Et crisis Demand deposits did not show their normal decline nthe first half of 1967 Deposits with commercial banks declined nlightly while deposits with the Treabury increased as public and semi public agencies contisued their transfers from the banking system to the Treasury The increase in money supply in the first half of (7 ran I raced to tho nzon1 sonal increase in net foreign assets not c y the custcirry rlelir In claims on the private sector Clsirl (n the erivate sector declined slighty until May 1967 but Increased hr-gb June and Jily due primarily to additional financing of textile stocks ClbiJ ante Government rose by 10 per cent in the first half of 967 the in central brnk claims on the GovernmentI being rmainly offset by larger deposits with the Treasury
Ordinary budgetary revenues which incrurted by 5 rcr ent in 1566 tre cxrcted t-) increase by 7 per cent in 1( to DII 21 billion DeampDite a derea3e in agricultural tax reccipt r- fror diret taxes rose by 10 ppr cent in 1966 and a 2 increas estinated for S67 due to tric or controls on income declarationr d an accelerashytion of tax cller ns Owing mainly to a relaxation of the import
program in late 1 5 and a concomitant increase in tariffs on certain ccnonter goods customs reneipts increased by 21 per cent in 1966 Although budgetary estimates call for s decline of 3 per cent in customs receipts in 1S67 it is likely that actual receipts will be considerably larger in view of the import liberalizatidn measures intro)duced subseshyquent to the estimates Receipts from indirect taxes state monopolies and other serces are expected to be 11 iv- cent Ipher in 1967 owing to increased profit on -ugar sabr-i and L r(m the newly created Office do Ccrmercalisaticn - d-tation (OCE)
Recurrent ordinary buiL e(enditures increased by 34 per cent in 1966 ar-i are expected to increase by an additional 7 per cent in 1567 reachin- D1122 billion Although wage and salary scales in the public
Banque Nationale pour le Developement Economique
TT~~- - I777
2 Cf
sector have1bec z h t - rrvirI urli 11i g 14-6 -nd PO becnue rX toi Ijt e f (]r o n 4
ill tile ic urrnnye andr)not i on dnd Publi ht rentrn -yr-otn lno IncreasedOthrr t ill- t il r ne by ) vr cert in J6(
i ninlyrt -br h Inc-l
( Ihe ( t r- rl t ip t t C itur f T)h 21h iilli n
is (( ItI t lt r c0 a- r n n o I- c t b It ihstnl id vv ih n t r-t have hn(er - en 1t2
(IM ii ture( T f fu traordJ nary budrzct exshypend ituren a r y -t c ~ i vi -iscz Portal Checking sy-stcsul)rrcing t (I ltIt Ct -- ind creirn shy
nnet The f r er tnc I hha ccrc ed from a htih of DH 5-7 millIJn in _ 5 millIn r C46 F cr ats foi ]7 place Cro n w I 1(DI)J79 ill ni DDn etlc fi nancing has alo u 1) 5 p (- I3A27 iIliun to an entirnted DH 1142 million
1 14V ) I nv 1 ri n nI(c1 franc n is 77-ected to be ol t y ncrewed bcrrowing fr-ir t he Cestra 9ank which hud been held at mcdert vols iln 165 nnd 1a66 Under the 1TFtaiby agreement of October 16 the qob) agreed to taBe a3] rocrrnary meurer to maintain as table curoonry rPnt inl th nr1d-elrto th b a ent of the ePrncriynnd a vnbl- hn1incc X nvroent P rt artt to t rt fien of tho Ccntin- Honk rstz (erct are nct t r itr June 30 Y-ke 7 lov l b th n Diif ) mill] (n tlcnber -c P thai I o illin usit I ])ecthr 31I62 (GC bc w t
C B1rtrp - vt DH 12 iri 1i nor ]S67 or DH 6S ij lionEan tisated (r fo than the aproved crd it expanwim
Thitrd ordivary nil extraordnnry buThTt deficit of DII 7-19 millI n fcrecat Fr 1 67 in exnected to be fnanced by not freign
tan reof DII )75 mi~l in nt recurity 12ue 1 T111I vlion a - nt ry tiat Po n Che )ir d-nC i 73 r5 Pn
riI is u h i a vti v mrr nrr-e jssIof fvr is id a erital The vnfsa revcred in 1d6 when lnrger r nyrentn eEecially on food itcmo an n -lewdoun in
igo ra a deficit of $1 millcn ProjectiOnz-vt rvultvd in ror 17 r~ieat inrrerned importsonly partially ccnrennate by addshytsa t frnreirn r ntil rrceiprs ard mprrvement in the nervices account will reult -n et of aprroximately $)20million As rhoim in the following tabl -r tion for l33 and 169 how overall deficits of
14 and m] ivi_y$i It
rqVV t1 4~
C)rgt
---
1 -)I+-IRF1
1ROCCO - rTANC OF PAYME 1qrt - 169]_ 5
6rfi0 1 1C(8lr67 i r(o
)xrurt 2t L( I L-5
Trade Bnlance 11 15 - 75 shy - 75
rviee- ret - 7 - 5) -35 -23 -2
J]-i of Good rnd Service- - 3 - 65 -II - ti - (5
Trn-Ifr Pr ynts (nt) P 21 33 37 33
on-cntnry Carital (not) 92 64 6 6 5
Err-rs nnd Ov rrion- (not) - 23 -2 1 3
eranl Bannic __ - _3 -_ 3 - 1i4
Atrh thert ircjected reficitn are of the nnme order of 1 nishytude a7 thcr incurred in the period i66 the Situatlcn i findarentallydifferent both in rerprct to the source of the deficits and in rer-ect to the meat0Y gtr m etin7tecr In the f rrer caive M5recco uffered
_frcrr a very h-vy cutfc of Drivtes cuitv fo-ivr with a shar) decline In forein nt exerditures in Morocco In the iatter case th projected deficits r- rcre a functicn or accelerated crcwth risingdebt ervieiiw tri tho abnrcn of forv eeble additiens foreign reshybull ourcs nere7ory 4( r2Vm rAf finmncting To nect the def-cits during the reriol 161 61h MWreco ob1id to drw down rorcin exchange reserves of over $]c milicn The snrti tpv of financing is no longerpozslble ince no or-res- ruch reserve- Even ifMorocco yr
mn nina r rve_ ore (]rrfii on to th r-ixirun etnt enribe nnd the [iI tnfldy i- un M-r-r e i32 till relA re nt rnt 15 millicnj1itionn ftr ign as- e n 1 6 beyond hat r recnently fcreeeshyable with ver nri- nry Officilr in In i6 reserves are cotImnted Pt 72million c hih crn V 3 million i caly required for currency coy r
Foreign InJebtrdne n of th GOM Mnroccos external rtnte ard rutlie enterprie dett amounted to
$r) millivn in lr6 Debt vervcirig rpynents for (66 trtaled about
$5) rillion g-eement approved in October 3(67
I- -- Ishy
37 millin or arprcxitrrntoy (j Iroccor totnl eXoort earning of h28 millicn GCnerally nxt rrO dbt FervicJng renuiremennt of leas
than r of totna -ort nnrlt In onrldered to I r tirfactoryrntio D-bt r rnJrcLct n Ir the reriod 1-(y 3on Trerent external debt including thnt wrtl(n irreently undibur-ed are hown n th fr lv tahlr
)] L v yr t n
Eternn Vtnte anc ] bntcrnrie Debt
M131 o)nr
Y aI Net Outrtnnling Debt Debt Service
(6 it 479r5 $367 J-67 452 3)6
Z616 44469 2 0 2C-
365I3 37 389
33 383 33 6 371
5-h 31 n 352 275 34121
]176 2661 32It 1977 21133 311 177 22)6 307 19 i0l74 256
1733 255
rgtternal debt rharre n rerent debt nnr rhon above do not increase ubtanti-lly over t rt 1)year- reaching a maximum of h44 millior
in J6 and decrpt- n cr - tently threoafter At the are time exportearninr r _rc extett nc-are Aring that Morocco does not inshycreswre it etrnn2 cbt t irate ubrtantially nb-vc ihat has been the core th adfiticrn dbt e roquirrentn reulting from the propo t Icon o 5 ijilion co r 7crncepr-ional term hould not have a i-nifiant affect n 1r o - ab lty to neet itv g rc-atedebt ericn rcnrib2t~e- the pros ectr of reprment of thin loan ore coniderci rearcnb)
U I -
F ot h-v C IuIJI rmt I shy
1 V amp~ rVml KI
PUC- -jrVi Jt t 1 11 nflrcj urlc 1- th )qn --P I uti u rhnrrl -1r- thr U- Tr- ry- R- -nymc nt
c2Il f n 6 1 bf r I- till 11 nfl r- n-r i n of O r--niC(Io~hi U 1 1 rr to
Tn vil ) f rvc hi tvlrll 1 (In- - n- u--n E r me rrinshycgtay F rntwir w ourc o -o- rvI ortf-V3 1 rncing of
Uf f -r rrrir- ur3r 4~ v -rin Iltrt nt ndd shyt -n t ) in- lint r b t l r -n rort- o-orco trorl-- V -P
r i 1rnd h L-torie Furcl-trin firr- thrjt US r r~ crvirrf- u~d be~
T L I1 c vt r- -ly ] -ubt fu 1 n vi pw -I -ror-co Ir of
ut1JpcO In thi rjert f it -- r- 21 npnred by d1-nr- cothcr t~han the US
2 ]P-t ofI Prr l1 on Prw- Fntrrr
Phij rrcjJ-t -11 n-t h~ -in nrwerq Prrt n rr- tc ntrshyr~A~r fi-mc 1bho und for --roern p o n
3_~~PrCT--rty
rr-vIi-n 1 h -d r the loan ragreement for Icntifitcation ef any r mIjrpt n ctri b- rt througn ut 1zatn (f xccr- prorerty
If rv c u~eAID n-mrcf u urr thi )cn - I~ut~ em avoi3ablo r rovvrirrnt -rrperty rather than nce iteni
4 Otli-r Fr- Wo--] n-Fnlc4rm
Dr mi tW- o] 14rocco- i~ajr ovr-ec -f exte rnaX
rrtan~- hrtvfb - I r ~ ant fl Fr n fole by Kv-it
Sgio F rneflit r b-en 1lmrntrd to tcfohnjip n5tnnen bi eoni~in I th u y f Fr--h tprhntcian tcacrr ind cther
~ti~r t~ ec-tnmIyrt-n Friinch Aid to Mcreco In 1065c~oc~ (P-art f-r txychnirril aItn -- j se of tl5 w1nfor bu~dget rurport f ir in rt t- $1 1ri1 icin in ennita -rojectM- n vx- rrcd
1Vw1tvnn tioI t-) Frenh rurtnnd +16 r11ion tie-I to -onyiint to orrrcr Frrmh ccilcn~For _-rrc-ratod land and rquirrmcnt
West GTrrnmnny liar agrcrcd to nrovIe ccme j27 mM22~cn 1n catital arirtanre and cromrndity lnoi7 t n OfIcon( q92 thi o totril$223 miJ lien ha actuary b-Pn cr-Itt--d under Inn ngrepment This
And a lk5 million commodity loan both) signed in 1965 All Wet Gerzaan
Ufla
-28shy
capital asnistance I vuectI to be tied to German exports Germanyhas in addition 1uvvded r tteysubbtantial technical assistance f
The IBRP hah rade four 1nns to Morocco since 1962 totaling$6) million Ofthin totnl a [175 million loan in 1965 wos fordevelopient of the gidi lit-r irrigation perimeter Other assistance by internntIcnal Iending arncie include an $11 million credit byIDA in 1C65 for rcendary diicction projects and an IFC ln and inshyvestrent of $1 1 ri jnic alo in
F tit i by [c - dncr tr dh elo snt ofMorccco rircuVt r oii +h b-]n jt-TKT r nbove n 2 )6 niliion Kuwait enn in i66 for develomyment of the Tensaout Prnm n irrnten nrooetand a $77 million Kuwait
0jl n )nnsn r(niti-nertcir
loan for extrnion of the Tadri~ Irrigation Perimeter
The following- trbe surrlnrlzes other free world arlztance (excluiin technical assistanc-) to Morocco for the years 1(62-66
($ Millions)
1 62 1cf_63 96) 19r65 19)66 Fneea 4) 5PO 64o 700 shyWet Germany 223 gu 1t 53 281 IRD 15 175 10) 175 IDA 110 IF C 1 5 7 7 7 0 I15
TOTAL 55 62 1U3 W
b Includer only lo-ng term loans and exporter credits - Includfs 25 million private capital
Eternal ansiztnnce to the Lowier Moulouya Irrigation Perimeter -nce 1060 hres been con[fined to US upport Consdiering AIDs previcus
involvement in and conmitnert to the Lower Moulouya an AID lean in P2t to be Lhi mol aprroriate source of financing for this project
LID
II
q
-29-
SECTION ITI- Y-TTYT TIMPLPTrION
A Periret-r Ad-instrrti-
Authority for irplerrentvtnn of the deveorpent prrgrn frr the LowerMoulcuya Perimeter and rs wel arth crnntinuinz mrnnrrmenertC tt r t- rrtnr V theltbi nad overationity iOfic 1cne 4
n r I e1i- i d Vit4 i Iv ~ Ct rreated i Otb (rJ rn-- of evcn inrmi-rriional offices hich reelaced the Office de Mire en Valeur Aamprlcole (OMVA) Under the OMXA and itspredecessor agencies authority for ad-inLtration cf irrigtion proJect war centralized in Rabat
Under the new regional office organization responsibility for adminshyistering ORMVAM is vested in on Adminirtrative Board of 10 members headed by the Minister of Agriculture and Agrarian Reform as chairman All ether board members (other than the Chairman and a representative of theInterministerial Economic Ccrmittee) represent agencies or activities inthe region of the r-eriret-r whic comprises parts of two provinces Localretresentatives on the Board inc]-de the governors of the two provincesOujda and Nador the presidents -f the two provincial asembtes and of the two provincial chambers of agriculture as well as the perimeter Director
The responsibilities of thie Administrative Board include review of theecys program establishment of its organizational structure developshynt -)f its annual budget and establishment of rates and conditions of
Siyfent for water and other services provided in the perimeter
The Director of OP4VAI-I is dbarged with the responsibility for executionPthe vclicies established by the Administrative Board end administration of oil ORMVAM functions This responsibility includes selection of staffn pserating perrcnnel acting s officia ORNIVAM representative in all ntztinns with -tate and othbr public or private bodies and the
f of funds within limit Indivated by the Ministers f Financetent rn fricultural and Agrarian Reorm
Perimeter Oranizatlon
ORVAM oreanizatlonal structure consists of a directnrate five maj-r rvlces or d-vsicns and one separate bureau Two services qei Administratif et Comptabl- and Service du Yatrial are conshycor - th adminisration and lcgistical support of ORMVAM operationshi1e the remainirg three services rind the separate bureau are Involved in t-hni al matters associated with agrcultural developrent Each ervice has one or more subordinate bureaus Fei-ce Chiefs and thehead 0 rch bure-u report directly to the ORMVAM4 Director
-~F7E MEw-
-30shy
2 Perimeter 01ttffnr
OPIVAM orgttnlrntlon treture calls for 557 positions of whichI L or 7 Mlled n were nher 29 1567 37 of the 71 Postshytion vacancies reported 1ern the high and middle levels Foreign(chiefly Euronean) technclan occupy I)of the 16 high level positionsthat ere filled at thfit tire
Whil OPM ut in th- lcng run lor to Mercecos oducational yster to prvidr tn crrf-nn2 to ratisfy current rdurojectd rcshyquirement th currnt high and mlddle level vacancies rrouire uersonnelwith oxt nive nrior rxericnce To fll this preent need it will be necessary for CRIVAM to continue its program of recruiting foreigntechnicians until ruch tire ns graduates of Moroccan educational programsacquire the necesnry exrerience The managerent assistance componentof thin pro~ject ]e-rribed In the Project analysis will to some extentalleviate OFIWAMs high level personnel requirements
3 Inw1 ernetation Sehedu]
Months Implementation Action
1 0 Sign Loan Agrcement
2 2 C-tiify conditions precedent and Y4tiate procedures for selection of US firm for management contract
2 Negotiation of extension of advisory Engineering Services
h 4 Contract (Hydrotechnic) Negotiation of Managerment Contract
5 60Cmpletion of Project
C Waivers
Sect ion 7 rf AID Regulation 7 provides in substance that theUnited State ill not finance direct costs of construction work performedby third cc-ur y nationals unless the total co-tn of the project withvhich thr ennrtrumticn w(r is asEcciated donot exceed $2On)O orafter excluding national of the country in vhich the site of constructionis located and Dersons vho nave resided therein uninterruptedly for morethan three years imrnedJately prior to any determination under Regulation 7at leant 0 of all uernons who work under the contract at the site of conbulltruction are United States citizens or the employment of third countrynationals is necessary to avoid excerrive corts to the United States
3
31
Section 2175 authr-ri th Regional Anitant Administratorto waive the nrovinions of Sectionthat it is 2073 if he dcterriner in any coneimportant te the nationrn intercrt of the United Stutes tofinance the direct eots of construction work performed by third country
nationals
A prviou1y r ic i c t tht for thr ct Tartthe -r c ct b- 1jeuj out r -cnorbr f cnrtructioncontracts with Morcccrr contrctnr an in the i-t Uowfevvr itentirely psnible that there may b- roe contractn with cntructlonfirms partly owned by third country nntionaln and that ruch firjs anwell as the surely Moroccan-owrned firms may enloy third country niationalsIn such canes a difficult rrobic-i iould arise in meeting the terms ofRegulation 7 since an a practical matter Aericans are not reaonablyavailable for ermployn ont by such contrnetorn and our previcus experiencewith the Naunsseur Ccnv(r-ion project thatin Morocco has indicatedAmerican contractors would not be interested in bidding cn small conshytracts in that country
It in therefore recommended that the Annitant Adinitratordetermine rursuant to Section 2q75 of Regulation 7 to waive theapplication of Regulation 7 to thic iroject since the project 411 conshytribute to the attainrent of US foreign policy objectiver and the cbJe-tives of the Foreign Arsistnnce Program
LITI L USE
LfI~~5xA~us
lit
4 A J A 45 4 k
t A S T
S(3
I A444ilA~~l~)
7 -74
tAM= D
SECTOR 27
10000
t Co0Na includez25 cgtri oncFcttlrvI ncy I8s ~ ~ C t C- Includes 50 constriJcltiotrgrc
2000 60
IU
0
z
bull cosYsA shy----- i
600L _
400
200
0 5 I0 15 20
INTEREST RATE
I ~ 7 J7777
ANIAampX C
PROJECT DESCRn1 rOll
The project com)onents to te undertaken on the MIoulouya Irrigation Project over the next five years contists of the following
C(n1rtion of the rrLin casuals and bianch canbls to provide the suource of waler to the sctors be developed in theto TriffBou Areg and Zebra areas This construction will include the necessarystructures such as reulators highway bridges aqueducts water intake
and discharge structures etc
2 Iand Txeloommerit which includes engineering land consolishyt and iuvtllng lard preparation (subsoiling ripping destoning etc) and installation of water distribution canals (secondary tertiary and quurtunary) and drainage collector ditches for the Triffa main covering 24000 acres in sctors 8 9 10 16 20 21 23 24 25A 2513 27 and 28 Lou Areg Central covering 16250 acres in sectors Dltirough D2B and G1 thru-4h G313 i0u Areg Remainder covering 15000 acres in s-ctors D3 through D7 and GA through (6 Zebra Collective covering 45)0 acres in sectors 3 4 5 rind 6 and Zebra Rer-iinder covering 14250 acres in sectors 1 2 and 7 through 10 and th remainder of sectors 34 and 5 The total land to be developed is about 74000 acres
3 Canalization of the Oued Zeluan and nued Sidi-Amar in the Bou Areg Plain consisting of strairltening englarging and regularizing of these streams to carry the flood waters to the sea Drainage interceptor canals are to be constructed parallel to the sea in the Bou Areg Plain In the Triffa Plain the Oued Riada main drain will be deepened and enlarged and secondary drains will be excavated to provide for drainageof the Madagh area This will include the construction of bridges and culverts and other related work
4 Major Commorn Works will consist of
a Clearing of the Mo-1ouya riverbed downstream of the Mechra KLila barn caused roy flood dariwe and the installation of a set of stop logs for maintenance of pillway gate-
b Design supervision and construction of repairs to the ]elt Lank dead head tunel
c Conctruction and establishment of sib-division Offices and installations for farmer support such as CMVand farm stables
1 C
-2shy
5 Manavmtnt It ha been proposed that a US management firm be ewployed by th- C4 to manage and operate the entire Bou Areg area Such manageent -iuld encomparn all activities from the initial concept to final irIrp igricultural production Such activities would Include resp r-ibilsect -or supervnsion of engtneering and constriction of primary
S- Jry r complete developfnent of land training n in g tinul irription practicen preparation of market
t - r1t- (ot--rnu trplusmnining of a Moroccan cadre to take over h v--it Bou Areg dreara P the
At this writing the n-pt of turning over to a private UZSfirm execushyresponsibl]ity I h management of the establilrment and initial
op-ration of irr1gati the Bou Arog area has been only broadly de iiitd by the GCJO It Intended that proposals will be invited from a r -onable ntnber of f|ed US firms that a selection will be made an-n 7 them and a more do iled and cornprehenrive definition of the rer6 -Ps to be performed be eztabliched at that time It haa been
stimated that the t- of ruch a contract will be about $2 mir- n In any event the -ts of this contract other engineering arvl s to be provided undt n extension of the Ilydrotechnic contract and ether US corts will not ed the proposed $5 mllaion developzont Jean fr the project
The cle 3ifications duties ant 1ncnslbilities of the management personnel ill ha-- to be clearly defined i agreed to by the GCM Perimeter Directo- and other GOM Agencies luding arrangements for the necessary gistic support
Svxlale Docu-
1
4
LD ED 0ICIAL
-IAIDshy
A1trX D
C6JCK LIST OF STATUTORY CRITERIA
(Development Loan Fund)
1 FAA 0102 Extent to which U3 cormodities and services are furnished consistent with improving the US balance of payments See Sections II-C II-F
2 AA sect2O]ihi lanner in which loan wil promote countrys economic develo shy rit emphasizing help for long-range plans and programs designed to developeconomic tesourcos and increase productive capacities See Section I-D
i FAA sectT] h)(IL Information and conclusion on availability of financincfrom other free-world sources including private sources within the United States See Section II-F
FAA sect20l( )2 Information and conclusion on activitys economic and technical soundness including the capacity of the recipient country to reshypay the loan at a reasonable rate of interest See Sections II-B II-D and II-E
5 FAA 1201(h)( Information and conclusion on existence of reasonable promise activity will contribute to developrmnt of economic resources or increase of productive capacities See Sectiona II-B and II-D
_92_(b 4Information and conclusion on activitys relationship toothor development activities and its contribution to realizable longshyrange objectives See Sections I-D and I-E
The following abbreviations are und FAA - Foroirn Assistance Act of 1961 as amerded by the Foreign Asaistaice
Act of 1967 App - Foreign Assistance and Polated Agencies Appropriations Act 1968
AFEVCDF 1066
L1
-2shy
7 FAA f12O1(b)(5)_ Countrys self-help masures including institution of Foreign Assistance Act investment pliaranty programs Investment Guaranty
bull Agreement signed with Morocco 331o6l See Sections I-D and II-EI
_A ))(6) Information and conclusion on possible effects on US econowy with soecial refererne to areas of substantial -labor surplusSee Section II-F
9 FAA q201 (h)() Information and conclusion on the dagree to which thA country iv wiki- progress toward respect for the rule of law freedom of expression and of the press and recognition~yf the importance of individual freedom initiative and private enterprise
10 FAA -1201(b)(8) Information and conclusion on the degree to which the country is taking steps to improve its c]Laato for private investment See Sccton II-E
31 FAA R LbJi Inforrat-on and conclusion on whether or not the activityto b financed will contribute to the achievement of self-sustaining growthSee Sections I-D and II-B
12 FAA fi2Ol(bj Inforruation and conclusion on reasonalbe prospects of reshypayment See Section II-E
13 FAA fl20JL() Info-ation on applicability of the twenty country ceil4ng2
14 FAA fl201 L Information and coclusion on legality (under laws of the country end the US) and reasonableness of lending and ralendinr terms Loan will be on minimum termspermitted under FAA These are deemed reasonable see Sectioam Evidence will be renuired from the GGM as to the legality of the loan agreemnt
1 E 2 Information and conclusion on availability of an applicationFAA together with sufficient information and assurances to indicate reasonably that funds will be used in an economcally and technically sound manner See Sections I-A II-B and II-D Application received Janury 15 1968
16 FAA fl201(fL If a project inforntion and conclusion whether it will promote the economic developapent of the requesting country taking into account the countrys human and material resource requiremnts and the reshylationship between the ultimate objes6ives of the project and the countrys overall economic development See Sections I-D and II-B
17 FAAJ 20ij(J If a project information and conclusion whether it cifishycally provides for appropriate participation by private enterprise 8ce Sections YI-C and 114
I- FAA i22(a) Total amount of money under loan which is going directly to private enterprise is going to intermediate credit institutions or other borrowers for use by private enterprise is being used to finance imports
rfro private sources or is otherwise beirg used to finance procurementsfrcm private souwces See Sections II-C and II-2
9 FAA 207 Infosation on the emphasis placed en
(a) encouraging development of economic political and social institushytins No apparent relationship
(b) nelC-help in mectingthe countrys food nredo Project Vill conshytribute to production of food for lccal consumptioa
(c) in-proving availability in the country of evucated trained manpower Project will contribute to the deicloginext of trained manpower as one of the functions of the management contract (Soe Annex C para 5)
(d) prcgrams aimed at -malnutrition disease eradi atDn slum clearanceWater purification sewage disposal health education naternal and child care(includin fimrily pJnrning)) -nd cthcr public health ausistarice See
(c) other develoment activities including industrial development free
labor unions cooperatives tnd voluntary agencie transn)rtatin and ccshymwquication nrStczn capubiliTies for economic planning and public adlinisshytration arban develo-mment and modernization of laws to feilltate econcnicdevelopjen- GO- intends encourage develo vient of cooperat yes particularlyin the Left Pank areas Project will also develop capabiLi ics for cconoaicplanning and public a6~inistration (Annex C para 5) Other not applicable
20 Information on the extent to which the r-untry is
(a) cttcmting to increase food production and food sto a-e anddistribution felitics This project is one evidence of Moroccos efforts in this direction See also Section I-D and I-E
b) creating- a favorable climate for foreign and dmestic iri-ate enterprise and invcstrrment The GCM has recently reduced profits twes anrannounced a ten year guarantee against tax increases See Section II-E-2
(c) increasing the role of the neonle in the developnental procecsNo apparent relationship to this project
(d) allocating expenditures to development rather than to unn-cessarymilitary purpoes or intervention in other free countries affair See Sections I-D and Ii-
(e) willing --nribute funds to the project or program Th iOMhas already dcvo o-sidcrable resources to the project It has badieted13 million for th i oulouya for i7 See Section I-C
(If) making economic zocial and political refo ns such as taxc coliecshytion iYprovcmenLs and chan es in land tenure a Royal Comm ision has been appointed to make recomendation on land tenure probleras in the Lower I oulouya
(g) responding to the economic political and social concerns of its people and showing a determination to take volf-help wcasuren See Sections I-D and II-E
IT
-ovi~cd l v r 13 1968
- 4 - LDffIED OFFICIAL USE
21 FAA Inforn ation about multilateral assistance being Iurnished to t e country and whether the loan will encourage recgional development prog-rams The I1D has eztablihcd a Consultative Group for Morocco which rvicws the GOM development program anui prgress See Section II-F-4 for infoaation on othtr donor assistance to Morocco
22 A Extent to which the loan will contribute to the objective of ass ring naximu par icipation in the task of econonic dovelop--ent on the pL-t 0 _he people of the developing countries through the encouragement of cocr-tic private and local govenmental inLitutious o apparent
relationship
23 F _-_Dta_ Infor-ation and corissions whether loan will oncourageeffor s of t1e country to (a) increase tie flow of international trade (b) fostcr private initiative and comptition (c) encourage development and usceo co opratives credit unions and savingss and loan associations (d) disourgo monopolistic practices (c) improvo technical efficiency of industry ariculture and commerce (f) strenSthn free labor unions This project is cxpected to increase technical efficiency oi-agriculture
2_ C-1L lnforzrition and conclusion on how the loan will encourage US privte trade and investment abroad and how it uill encourage private US participation in foreign assistance prograas (incluiing use of private trade channels and the services of US private enterprise) See Section II-
25 VA-+_ Conclusion and supporting information on compliance with tho Co resional policy that engineering and professional servicos of US fir-ms and their affiliates are to bo used in connection with capital project3 to the nixinua extent consistent with the national interest US engineerirn and innsgcment services will be financed tnder this loan
2$ Inforamtion and ccnclusions who+her loan will pormit American rx-l] business to participate equitably in the furnishing of goods and
z orvices by To be satisfied in Loan Agreementfinanced it
27 - t(a App I18 Complianco with restriction of co -zodity procureshy o UsMS except as otherwise determined by the Picsicent and subject to ttu--- rcortir require r-nts Procurement will - liumited to the US for
reiabnrs nts and to ioocco and other free world countries 1-or US-cwne(d rhu disburseacnts
23 -i Comiance with bulk cozodity procurement restriction topriecc no l-ho han the nkarkot price prevailing in tho US at tia of
bull puchas Not applicable
29 FA Cozpliance with requirement that matrin insurance be purchased on commceities if the participating country discri-inates and that insurance be placed in the US To be satisfied in Loan Agreement
30 IA 6(a) Information at to the utilization of excers personal property in lieu of procurement of new items Will be required ai appropriate under terns of Lean Agreement
f
1 77--7 -77-77-777
31 FAA 61](a)(_) information and conclusion on availability of enginoering i financial and other plans nccx sary to carry out tho assittance and of a
reasonably firm cstimate of the cost of the assistanco to the United States
See Section II-D
32-ecessaryFAA t611(a)_(2) legislative action r6quired within recipient country and ibasis Cor reasonable anticipation such action will be completed in time to pormit orderly accompli-hirtnt of purposes of loan See Section I-A
33 n _AA161nJ0] If water or water-relatod land resource construcshy
tion project or program information and conclusion on a benefit-cost comshy
putation See Section II-B
3 4 VAA 611(c) Compliance with requirement that contracts for construction be let on comp-ctitive basis to mamum extent practicable To be satisfied
in Loan Agreement
If a loan for a project of $1 million or more certificatin35 FAA _61l(r) by the principal AID officer in the country as to the capability of the
country (both financirl and human resources) to effectively maintain and
utilize the project taking into account other US-financed projects (Such
certification is to be pproved by the Administrator aL the time the loan
is authorized) In process of being obtained
36 FAsgJ2 _6_h Appropriate steps that have b-en taken to assure that to the miaximum extent possible the country is contributing local currencies to net th-2 cost of contractural and other services and foreign currencies o- icd by tho US are utilized to meet the cost of contractual and other services The GU-M is contributing over $30 million to compleXton of this project Excess US-use dirhams will be used for eligible project costs other than US goods and services
37 FAA p619 Compliance with requirement that assistance to newly independent countries be furnished through multilateral organizations or plans to maxishymum extent appropriate Not deemed appropriate in view of previous AID financing and ccoiitment to the project See Sections I-A and I-D
38 FAA sect620(a) AcnO7a n3]7(b) Compliance with prohibitions
against assistance to Cuba ard any countr (a) which furnishes assistance to Cuba or failed to take appropriate steps by February 14 1964 to prevent ships or aircraft unier its registry from carrying equipment materials or supplies from or to Cuba or (b) which sells furnishes or permits any ships under its registry fr-om carrying items of primary atrategic signifishycance or itcms of economic assistance Morocco is not-known to be in Violation of these sections
39 FAA q620GL_ If assistance to the government of a country existence of determination it is not controlled by the international Communist movement The Secretary of State so determined on October 11 191
40 FAA 620(c) If assistance to the government of a country existonce of Indebtedness to a US citizen for goods or services furnished or ordered whore ouch citizen has exhaustod available legal romodiesor where the debt
i - ow - -- _---- --shy
- --
-6shy
is not denied or ontested by such government or the indebtedness arises under an unconditional guararty of payrrent given by such govornmunt No such indebtedness is known to exist
41 FA _(a2LdL If assisitance for any productive enterprise which will corashypote with US enterprise existence of agreement by the recipient country to prevent export to the US of more than 20 of the enterprises annual production during the life of the loan Not applicable
42 FA4 - 16Q_0_ A If assistance to the government of a country extent to which it (including government agenies or ruhdivisions) has after January 1 1962 taken steps o repudiate or nullify cuatracts or taken any action which has the effect of nationalizing expropriating or otherwise seizingownership or control ofprcpertv of US citizens or entities beneficially owned by them without taking appropriate stops to discha i ge its obligations No such steps cr actions are-known to have been taken by the GOM
43 FAA~L AjPj_10_9 Compliance with assistance toQ0 prohibitions against any Comunst codntry ozocco is not considered to be a cocinrunist country
44 FAA - 620(gJ Corliance with prohibition against use of assistonce to comp satc owners for expropriated or nationalized property To be satisfied in Loan Agreement
45 F AA 8620(h Compliance with regulations and procedures adopted to inshysure against ue of assistance in a manner hich contrary to the best inshyterests of the US promotes or assists the foreign aid projects or activities of the Communist-bloc countries To be satisfied in Loan Agreement
46 FAA 06-O(j)_ Exitence of determiration that the country is engaging in or preparing for aggressive military efforts No such determination has been made
L_62_O Information47 FAA on representation of the country at any intershynational confererce when that representation includes the planning of activishyties involving insurrection or subversion against the US or countries recoiving US assistance No such representition is known to have A occarrect
8 FAA 62JJ Existence of a determination that the country has permitted or failed to prevent destruction of US property by mob action or has failed to take steps to prevent a recurrence and-to pay compensation NO such destruction is known to have tak-n place
49 PAA l620(k) If construction of productive enterprise where eggregate value of assistanc to be furnished by US will exceed $1OO million identification of Gtntutoryauthority Not npplicable
i-xQ2MZZ=
1 shy
U 6 50 _Af( QCinsidoration which has been given to denlying assistance X to thu government of a country which after December 31 1966 has failed to
- institto the investnint guaranty program for the spcific risks of inconshy
vertibility and expropriation or confiscation Satisfied See No 7 above
S51S J lj Compliance with-prohibitions-againstn as~istance to countries which traffic or permittraffickingwith North Vietnam Morocco is not known to be in violation
52 E_-L620(_L If country has seized or imposed any penalty or sanction against vn US fishing vessel on account of its fishing activities in
intcrnationul waters information on the consideiation which has been given to excludirg the country from assistance No such situation is known to exist
53 FAA FA r) UAR restriction Not applicable620(p 9117
54 FAA R620tl) Existence of default undhr any Foreign Assistance Act loan to the country No such default exists
55 F ) C-nsider tion of whether co ntry is devoting unnecessary percentage of buKet for military purposes or use of foreign exchange for milita-y equipment
56 FAA 62o(t) Proibition on aid if country has severed diplomatic relations with US unless agreements have been negotiated after resumpshytion Diplomatic r(lations have not been severed
57 FAA 9620(u) Statur of the country on delinquent UN obligations Morocco is not known to be dlinquent on its UN~obligation
58 FAA R636(i) Prohibition on financing non-US manufactured motor vehicles Will be satisfied in Loan Agreement and Implementation Letter
59 App 102 Compliance with requirement that payments in excess of $25000 for architectural and en Jneering services on any one project be reported to Congress Such reports will be made
60 App R1O4 Compliance with bar against funds to pay pensions etc for military personnel Such payments will not be eligible for financing under th Loan Agreement
61 App 9106 If country attr ipts to create distinctions because of their race or religion among Americans in granting personal or commercial access or other rights otherwise avaVIfable to US citizens generally application which will be made in negotit ttons of contrary principles as expressed by Congress Morocco is not ku IDhave made any such attempts
iInD OFFIIt t USE
0k
OFFICIAL USE 62 AIwp Rii Compliance with existing requfremets for security clearance
of personnel Will be satisfied in Loan Agreement and Implementation Letter
63 App R1l2 Compliance with requirement for approval of cortractors and contract terms for capital projects Will be satisfied in Loan Agreement
clJ164 Aup Cmpliance with bar nRainst use of funds to Tay assessments etc of US meiber Such payments will not be eligible for financing under the Loan Agreemunt
6 Anp P115 Ccmpliance with regulations on employment of US and local personnel for funds obligated after April 30 1961 (Regulation 7) See Section III-C
66 Aim Vietnam iron and steel restrictions Not applicable
67 p l9 If a country other than Greece Turkey Iran Israel Republicof China Phillipines or Korea reduction in assistance by amounts spent for the purchase of sophisticated military equipment
68 Anp fi4O1 Compliance with bar against use of funds for publicity or proshypagjanda purposes within US not heretofore authorized by Congress Such use of funds will not be eligible for financing under the Loan Agreement
Morocco is a traditional Islamic monarchy with a constitution The conshystitution was implemented followaing a popular referendum in 1962 National regional and professional elective bodies including a parliament were established by universal suffrage under the constitution in 1963 The parliament was suspended in 1961 in a State of Exception because of its inability to agree on measures with adequate urgency to meet the prevailingecononde imperatives In July 1967 the King appointed a Prime Minister to direct a Cabinet of appointed technicians
The constitutional framework nevertheless remains intact in Morocco and nationwide popular elections for some of the professional chambers were held in August and September 1966 The press is relatively free in Morocco and the right of diLsent prevails provided that such dissent does not violate the prohibition against political attacks on the instishytution of the monarchy or the person of the monarch
LI Under the revised US AID Policy for Africa agreed to in November 1966 Morocco is designated a development emphasis country entitled to receive continuing support on a country basis as part of a multilaterally coorshydinated countrj program Morocco was subsequently included in Presidential Determination 67-14 (January 5 1967) I
LIM=TE OFFICIAL USE~i
- l go
bull ~ -
f
DEPQbi) STATE AGENCY FOR INERNATIONAL DEVELOPMENT
WASHINGTON DC 052
CAPITAL ASSISTANCE LOA11 AUTHORIZATION
Provided from Develoroent Loan Funds Morocco Second Lower Moulouya Irrigation Loan
Pursuant to the authority vested in the Assistant Administrator for Africa of the Agency for International Development
AI)by the Foreign Assistance Act of 1961 as amended theIAct) and the delegations of authority issued thereunder I
have received and t-en into consideration a certification from the Director of USAIDMorocco as to the financial and human resources capability of Morocco to effectively utilize the Lower Moulouya Irrigation Project taking into account among other things the
maintenance and utilization of projects in Morocco previously financed or assisted by the United States and I hereby authorize the establishshyment of a loan pursuant to Part I Chapter 2 Title I the Development Loan Fund to the Government of the Kingdom of Morocco (Borrower) of not to exceed five million dollars ($5000000) to assist in financing the fore] gn exchange and local currency costs of goods and services for the third phase of the Lower Moulouya Irrigation Project subject to the foLlowing terms and conditions
1 Interest Rate and Terms of Repayment Borrower shall repay the loan to AID in forty (40) years including a grace period not to exceed ten (10) years Borrower shall pay interest on the unrepaid principal and any interest accrued thereon at the rate of (a) two percent (2) per annum during the grace period and (b) two and
one-half percent (2-12) per annum thereafter
2 Currency of Pepayment Repayment of the loan and paymenu of interest shall be made in United States dollars
- t- n t - - - shy
3 Other Terms and Conditions amp(a)Goods and Services financed under the loan
shall have their source and origin in
(i) the United States if disbursements therefor are made in United States dollars or
(ii) any country in the free world including Morocco if disbursements therefor are made in Moroccan currency
(b) AID Regulation 7 shall not apply to construction -work financed under the loan because as detailed in Section IIIC of Capital Assistance Paper No P 667 it is important to the national interest of the United States that the direct costs of construction work performed by third-country nationals be financed out of funds made available by the Act
(a) Such other terms and conditions as AID may deem advisable
Assistant Administrator for Africa
Date
~~~~~~~~~~~~~~~~~~ - q v
7
UL IJMJITLI OFFICIPL IJ3E
ST ~IMAPY MMRDFCCOEN MIONS
I OMC 1LOYA FRICATTOR II
1APPTCAT- Tht- Gs-vrnmfnt of the Kingdom of Mororco
2 AMOUNT$W
3TPALcoT mw $ LonACTIVITY~ AID r~jv~ OM Contribution
$~TTT~hTotal It DFSCRT11TION OF (TVTY raV irl-igztirn of 71400-) aerfs of farmshy
and in L-roultuynt River barin in northeastern MoroccotTJT
5 PtTEPOSE OF 1PAN Tch - jt n financing thfe rontr of US oan-a d thirdj rcintiy rv] rcrvices rpcuirid for the prnjrcf Lc
1aa2
an] thir I ccunt unJ-r th-t 3nm~cu be fi nanrrd by 1T3shyur$ Morocc-n ii uroha- d frus th US Tr-jriury with thc
prore- [L th- -n
6 cy~~wr IpTIY P-i n of Th er Mrul(ouyqi Trrigv icr1 I foc~--r St jni -h and- French r Tirrrv-1 r
~rir tc Mr f nr r r n~T rnhwnii r hdas (ry af ~7 -tI - ~rj on thT c crvit ion for on ofc
the urnrr-iI-vj rnri~-l 11 had P n oxtcnJ4shynv v)VQ n m3J~- I lor tht -ly ~ jr that yi-ar th Deve~c-rnt
In u 1th-ori -- i c -- Ito37i5iOn fcr the -t rig cf thamp- tr hich i nt-n1idr te fi nar rr- l r vtcr-ve and trrJr in -~ ttic- ovcr a fiv- y-rir priod Tho cnshy-t-uc t 1 n i rn n d u n r t h 1t 1c-av hrw~c r wi I not in a -t b ccmpo otee unt il mi-- 6 it the ~s Z~~~ncmr 5211 a-rQ hre urcle r i r i at~irr rc h ich about ner lplusmnre vrrrnmrjI y
tind - 11til3 e r b-rfntyunr(der irr7--)itrthcn - in
~ri-t~rTof rocstBC UT n VIforM rnvit fi abroiti rrc
( f 2mo thL-l4ItE OFF CIAL iruge y ~hn --Is t uni m t -r--nty rr- i icnr 7 nderi
betAvailal DOlIT
0 STATU FT CPITIRTA Se Pnn D
10 JU FREOLED ISET-S 11nne
cf a loan to the Government of the11 RECOChDtVTT( Authorization
i-- an to txceed $50000) with th l t - -- -occo in runt niot
yeairMaturity including a 10-year -rnee period
annum during the grace period 2-ilnteret Krrr thereafter
RepayTrt Princiraland interent in US dollars
i rce US for dollar disbursements and MoroccoProcur ind other free world countries for disshy
burncment of US-owned Dirhams
CAPITAL ASSISTANCE CC3TTrEE
Capital Development Offl-er AFRCDF Scan P Walsh
Counei GCAr-R Willis W Jourdin
rnriner AFRCDFgNGR Thomas V Leahy
Agricultural 01er AYRFID Curl E Ferguson
Dek Oficer AFRNA Da yMcCall
fl-fltDOFFICIAL USE
V gt~ 7Ct ci f f Pojct
Ti - lcr -n t Mujoiiya as a plarined irrIgated pttrshyrre tr t-vrnriIn I)c 1- ou jO q joint Franco-S)roii Tirogram The Mc-~i l Fi fer r I t i- fr gtrt i r im Lwe_-n the form~r Froncri zon
i-2 tlnkr anir cnrmer ~-ihzone on lheft t 1rink Conshy~c f t 1Jni d iv- hn dwnm iwhieh was -tr~rtE-d in 1952
ind 17F r 2f 10rt rdl I on cu iv 7r- of u1srcul ~rigep Fn 1 ivltini~rlt 00C 1-m rf tiunrie and oanfTh
tPti~rfl tl r1ili mank onanArg irrigation in the Triffa plal n ~nns ii 1oArrfcd thft water corvwvAn-J nystnn rnjtic ampan on wujijr
~~-f Wrri -jr t I prr jecet si ldun ~ t M omo f -L1n(
pA r pirraliiit rAw~or k~ri I rAO I1n Mkrch hO ni nl tn _zci r con)i b- 1 n th 111Y rni tb- i
+ f - lttc~ f th M- -- Y6-Y I I fpoundtorage damn ( thl ~rin--Ir-tL ioi I i i i gtyir T rvrI and Hich L~i rt -otal ctier
ny nswj~~raecawilp vi ahnd devc lopr-nt
tr It Ft- r 5x -
Sir ~lisanc -ott In-rras Tn I-ay 1963 an unr cshy i r - - r-h-~ r i- (n i-I r the M- 4)rsi- K i11a d a
ILft y~C IT - i r it Ill fjr f t it 1hvr -- Ut CAcn7d(e v1
trt i If 1 - ~ 1 t Iic rI- -n - Tcir it d orti 25 m I
S 7 r in 1- mrain rneroir ~InAIL crgt r ~ r 1 t ~ o l on Mnrz-h T 1 that )T - or r(- t
~~ 0c ~W- 1)-Pr It f) rn It1t r Iil 11 cm
rrr~~rdI n)r r - r) Ir y i t1- Pni Arr r 7 tr- r~r -iVtIdni norrjr--iof hic- rt isn
n s~~~il -nl--1a tt rr ~ f~ fc
4n x1n h
[E
717--r- ~ --- -shy - kz
~ kA1
1-m~l 1Yy utno J w nhulphnte appred makingr tar J-e of i t All of thr factors combinod
he ftrthe -i crip inoi h- irted $32 I r) it ir te from to t Ttirn- (ent n of which
t- ~r) rIf-shyr tn 1 amp-inrIt)h or From to - in r-t r m th 1ft E ink hasc k Id rchabilitattonc ouab1e of delivering 4ater to
before t will bethe left ban- areas Work theb1litation on rehashyof the tunnrel is exnected to begin in MayJune i38 In June IX)5 the Grt4 rubrnitA to AVP a ecmprehensive study andfor the completion of plirthe pro ie-r together withthis purpose AID rjvio-w if the-
a request cr- a oan fordcrcumentsthXe proIecrt rained and of its experlonce with
th-e plir a n2rhr-r of q- tionn concerning the adequacyarising Vrom ofthe limitcl iValability of skilled roroccanersonri] cce tuated by the2 d ermrturetinuing unroved of fore vn technic ins)
Ing 1rcchirec arid tenure problems lnndequwpe GOM rroJect financ
conshyand inadequate projcct mranngement Moreoverto I- nn cver-awnbitinus what atreardccuntry -id( Moroccan proram for dovelopmeitof its surface water irriwatinn tential arneared as wel to havelro re-ponslble fr b-entb
-sI- v of avalla gtrrnpower for the utlionj of
Si- - t t t h-e Lower tinulouya project Itself AID thenfinancing of
f - of studies by the Unlt-d StatesAgriul- tEir nford RI-3rrch Institute with the
OA) iniri both informtion con-ernirgr(-lrrt n Or the molouya -r one hand ani manpovrr
prorifies assnonrront of thefor in-- ns betweenfar-i )-co the dry Jlnd and irrlratedon cth- e resultsirdi-ti -qrly of the initial SRI stuliethat t least ra
in ren-ral terms Investment in Morocnn1e t ri-ure would te morerar li productivelrid- It Thn GC14 hasr i rrnm sinrfor e irntryctlon of frti iz-r the re Z tr in rain f-1itg farirp are --rW t Moro t-
uo A fin ql SRI udy wasbullbypriorities fr invtronf u in the Thin nttdv -- r-letd in Novombrhas C- of 17 Inn-rzjrehersIve measuresIs nhortage to allevia-eof btij2p- T-aowr in ift7 agriculturalnps to re voj fhe progra-ns has taken]ori _- probl-ms In the Mollouya andornnized t t rtt has reshycf if - i nageot of irrigt ion projectprovid- fcr tohe (i-rt -0 i7 + nf( r a)thriy ani reponsibility for thpof Jm~tera inMorocco
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1967 to irrcveTporformnnce in grculturc In the early psrt of the year the GCQ4 recorgnn7ed it a initrative system to rrozn for greater loca responzipuIty nnd crntrnl over agricultural progrrswhich inclulcd in partcmLar the minagement of the M4oulouya Perii-ttcr and instituted a ajor rrive to recriit principally in Europe foreigntxn- tc -rk orr rri y a r-nritc-3 In GCM prrqrnms In July one of
of A- cuA tue The att r ir cvr atic with USAIDPabat has affirmed his active interert in the Moulouya arid in the US role in its financing
E Fe)ationhipn of Project to US Ansimtince StrateT
Im~rvNrm-crt in Moroccos economic performance is itself a major US objecti e in Morocco as well ar an Iportant contributing influence toUS political objectives in Morocco It is believed that evidence of econc-ric improvwr ent will strerthen the GOMs capacity to maintain its moderatint role in Arab and international councils and its friendly relatiorns with the US
AID strategy is to assist Moroccan econcmic development within the framework of the Consultative Grcur (CG) crganized by the IBRD The CG has endorzed the GOM priority on agricultural development One of the prime objectives of the AID prcgram in Mcrocco is to increase agriculshytur1 rrcdurticn which i in accrd with US policy to reduce on a worldshywide bazis f-ependence on US food esnistance over the next five years
AID ian-stqnce to the aericultur l sector Is directed at increasingPrc+ -tion dry-2and farming as wel as irrigated farming in the LoweyMou]cya Rlv-r Bsrin where the US has provided $23 million of loan assitance einc -lr60nn well as $3 millicn equivalent in ocal currencyloans The rnture of AID assitance to Moroccan agriculture has evolved from major erade TVA and SRI during the last two yearsrtd by U2DA to d-tcrwir- tl new investrent with highest return as well as to plan Fpecific agricuUural develci-nent programs In dry-land farming AID has provided te hrcal ansiftance an- feed grain donations to improveanimal brcen and feedin ard technical assistance and local currencyloans to ipcrenie cereals rr-yiution There projects art continuing and (xrandling rticuarly in cereals production where additional TA in seedproduction an] xt-nsion techniques is being provided AID also expects in thir fischl yeatr tc providr- fnreign exchange through a DevelopmentLean for the Ariculture 2ector to financ necessary on-farm equipmentand commodity imoorts particularly those arising from US technical assistance )rograms
As a result of previous [IS assistence in the Lower Moulouya thisproject ha b--cede Ientifipd In Moroccan eye as one of major US inshyvoverrt Th G has for sore time been -eking additional US loan assistancpe t-Vomm lete t -ind our continued ruport of the project has ansumeri polit-al as vell as eccnomic important in UJS-Moroccan relations
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ioriginally begun under the Spnnihh rgime Work was resumed by the GOM under a contract concluded in late 1959 Major difficlilties with the tunnel structure have been known for some time On comTletion of a series of studies of the problems involved the GOM nvited bids inNovember (767 on a pronrosed contract for the correction of structural-defects i-he tunv It Jn bnticiiated that this contract will be finarced _y the GO fr wn recurees
The Bou Arcg area which lie to the Northwest of the Zebra andalong the Mediterranean Coast will ]ikewise be affected by the delay in passage of water through the Left Bank Dead Head Tunnel The BouArr- - - ontplnn s~re 31000 acres of irrlgablf lrnd While the elttent n lr nni - ytr running from the northwest portion of t -h 11 shy h1s argely been completedneither i of the other irrishygation works required h~iv- - ver n --rt of the d-zign studies for thin area ha- u t L
The bulk of the DLF I-an of $23 million of hiehity over $20 million had been disburd as of the end (f wvmrber- 107 was (or is being) utilized for cn~tructinn of the cehrnKastoragedam and of the Bou Areg Tunnel and the Bcu Areg High Line Canal Sraller amounts were utilized for advisory engineering services providedby a US firm design services and construction of some of the main canal drainage rnd distr1rmtion woks The balance of the loan is expected to be disbursed before the end of this year for reimrburseshyent of the costs of contrEcts already completed or presently under way
The GOM has in addition exp-nded an estimated $13 million since the beginning of 1960 about $3 million of which represents the cost of hydroelectric installatiuns at the Mochra-Klila Dam and on the Bou AregHigh Line Canv1 About million vas expondet on reconstruction and the bn2nc Tprerents entimated costs of operation and maintenace of completedworks The DLF Joan of 1960 war intended to assist in financing a -r second phase of project works in the Mculouya Perimeter As indicated nbive the works ndrtakn in his phase (apErt from the repair of thn Left Bank Depd Head TunnE a jrrng to a close
In view of the Izeable rpuirces devct0-I tc thp Mculouya over a rither long reriod of ytrs--by the Spaninh French ar-I MroccanGovernments prior to l6O and th qC-M and AID frox 31960 to l2--to achieve the installation of the bulk of the major installations required for water ntorare and rranzmi-ion it Ia been conzidered that at this next stage of drvelcp eat of the erimeter the principalfocus of attention should be on t1ose works which will offer the
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-7shygreatest and most rapid returns on ndd1tio resources required fortheir comyletion In the Interest of rbtainir an asrrrent ofr It fr the crnletion of the reirainder of the Troject AIDri ained rvienof the Stanford Revar(h Institute to rrenarea tuy i th orrn nrd returns for the vnriou rcrtions of theroject for h h i rr h beern pJanncd but not cnrrpleted
the he hat the completion of
the reynainintz ork-requivd(which P-nti fird Ip following Sectorsray up on tn iI thejwwould appear to offer the optimum coabination of hirhi nremental investmentard early comption
No of Apror To P- riuirred
Triffa Main 317 Triffa Sector 27 Triffa Sector 28 Zebra Collective 1500 Zebra Remainder 14250 Bou Are Central 16250 Bou Areg Remainder
TCtAI)
- Includes cre 8000 aeri o being equipped
If the above is to be accomplished over the next five years asenvisioned by the GOM the schedule would imply the bringing under irrishygation of around 1500) acres per year This is around two or three-times the GO hi torical rate of dvelopment of irrigation in theMoulouya over ast seven years While the GOM has recently reorshyganized its e cnt structure to permit greater local autonomy inf1 e ranagemo- rrigation perimeters and has recently accorded avery high -- -r to acceleration of developnent of the V 1 ouya inparticu t -vident that given the manpower constrai ts involvedin the Mr n operation the- above target way well be it- ible of achievenrnt
The GOM hM itself recognized the elements of thl -- I i lindhas in dizcuss ins with USATDRabat requested considersti- -f hfinancing by AID of the dollar costs of a management crht with oUS -irri to take or c(vnpletely the management unctions fror thi
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b Th - urJrtaen rn the jleft Bank under the proshyposed thir i-e of the rojc-t are i follows
- Left Pnnk Dvd H-d Tunn]
5 r-y rd t final tng of ire aration for ther-rT ir cvf ni r r imy - rz--rt ha recently beenr-t) l i w t e rr - tht - I afid if exToected to ubrit hit writt(-n r-rt jr DC Aii preliminary impressions baled on a 9Ite nErerti(n indi-ate thit a -rt1fartorj repair con bemade in c)nIdprnbly le- t n-ne for lfan -than previously conshytemplnted
The early ccmrt-tnn nf thi work in lmnortanit nine IL c t Ft th avai-bility of pr~ct wrte for the entire Left Brnk
Z~bra Collectlv-
Thin 1 on ara ofrXPr-ctively ond tribal land that will be divjded and allotted tr J-ted tribal -b-hrc who will become soleowncr3 A Pirpe rart ti Tniran -aratirn and developent hasalready bern co-plet] 2pani levelirg r-mains to be done as well ae conztruct c~n of b-tcn dnd drina- works
7eDo i F--vino-
The northrrn ecti n tht rmrainder of th Zebra will requirethe extnzi-n cf thct Train 4]h will be ccrrleted with financingccmmritted under Phase II of fth tr-Ject Land preparation and levelingwill be required anlnp with h ntruct n of distribution and drainagebullir r]
T ectinr f th- rrainler of bra will requiret- rd i i w -J n rrd h c and engishyrnr nw d t i f -tritst t n and dlarn -rk
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foeuro rginprng im hhve b- 7cr)Pletcd fcr the irrigationthe Bou Are- Fr the o-t rt hu- I cf the
of rcquired construction
of main carrl Rnraljor dr- nRe worx z develoFerit and cronstruction of zbldiary li tribution -r irnge y--r rrrairns to I undertaken
Th P- Arrg Tunnel wr orml td in 267 and construptcn sunder way on Ih-Yin Canal rrired tL nvcy water the suthrnf e of Areg ervie ra
I h z-uir-i intluding the -rtablishshyn -F r rnity rvice andIn fit Th rlulrem-rntr for
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Wt r 2torvge 1 95 1)6and Pegulation
Right ank 137 31 10 79
L-ft Bank 25 87 n6 143 239
Far- De ]crl 0 )5 1 b I26
S I M O ALA1 348 356
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At indicatnd In the- tdl iv 11 - rnt it~ocotof the rxojroct are t hi~-hor tnan the ic60) 1orccasts Th y tarc Ah-wever 1hchr by cnr murth~cul~ averllsv( a igiificqntjsCfect t~cn the bt-ric lfer-7t I-tio n- rigill lly rc~r~t
V I ) u O21he 1)+ -J iv )ir(t In h jiv kinvnft bed tado in Lh Tnwr Liynnui vni cif hrrlt rnr 7cst- wrr uniershytaen ic r ii -tQ j ta the Aurpo3vt o 02thl rirarnkinr of r- Ln t -Ir ca th cenm I rr1 urn 1e11 frrn n ow
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elevated area requirin iat-r to be puiiped to the irrigated land with both highr capital costs (about 1 million) and higher oreration and maintenance costs (150 Dirham per hcttare via-a-vir 100 Dihams perhevtare for the grnvity irrifrted ares) The ony work presenl-ly cotiishypleted in the Triff Hih Ser-ic Area is the preliminary engineering stirUes Cimi-ir to th Tr Pa r thu TrIffa ]Igh Service areawill reiir an ex I uvnt ricd bfore agricultural proshyduction cn be initlat-2i
The above considerations reiult in the following revised ranking of priorities
Project Area 1FY (M Priority
Triffa Main 21 I Sector 27 8 I Sector 28 9 I Bou Areg Central 6 II Bou Areg Rerainders 6 II Zebra Collective 5 II Zebra Remtd nders 5 II Triffa Ent 6 III Triffa High ervice 5 III
SRI 11ed a ccst contingency f7actor of 25 and a cumulative costescLlatior factor of 3I per annum These factors appear excessivelyhigh in th( light of (1) project experience to date and (2) the fact that from his roint the technical rirks involved arre of a much lower orl- r f 1h thnse inhtrent in the major works Just comshy1 I intion nrd contingency factor of 15 has there-
S chtiMnte- Itlizcd in this rarer The ii n-ttr costs the to ) ject (in n]ace of factors
i by )I nrt 11 thIrhe nf th nJter atve I[cwver rrtnrecr-y factor euld Increase the IPE ] hi ra]y th- IIRF fcr the TrIfa Sector 27 ansnunirg a
oct crortlr7crncy A can be seen as the conAngency I thf cc curve rrv to the right and inter ects the
ur h h 4r- rnr rate of return)
C Finreirifg inr
Cot o the prJect wor fmcentntgenent nnd engin-erinm advisoryrvices for the proued t rd tsge of the Mmlouya Project are
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nF3r AVAILArBILE COPY
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(In Millions Of Dollars)
Righi Pank
Trffa Main 34 poundSt (r 27 08 S ctor 6 0Q
51 Left ank
7bra Collective 12bra Remainde r- 54 Tou Areg Central 74 Lou Areg Remaluders 68 heft Bank Dcad Head Tunnel 30
238 Services
Management 20 Advisory Engineerin 05
25 SUB TOTAL 37
Escalation amp Contingencies 15 47
TOTAL 361
It is proposed that the AID Development Loan for this stage of the Moulouya ProJet be limited to $5 million an amount which would be sufficient te reet the cost of any US goods and services required for the works to oe undertaken Thus the loan would finance the dollar costs of manrement and engineering advisory services to be provided by US firms erstimated at $25 million The balance would be available to meet any ther US cofts that might arise for constructicn cuipment and nateria]
The balnnmc of funds required would be provided by the GOM from its own budgetary resources including as appropriate agreed allocations of the counfryj-uie dirham proceeds of US surplus agricultural programs in Morocco
To a l-ge extent construction works In the Mou]ouya (other than the Bou Ar- Tunnel and Mechra Klila Dam) have taken place under a largenumber of roll contracts with Moroccan firms It is anticipated that this will ontinue to be the pratice in the forthcoming development stage Th iit is evident that the great bulk of project cests in this next stage will be local costs
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In the event that not all of av l able fuInd- under the loan are required for TKI eo It i ouied that any remaininrn balance be utilized for the payment lo -ovalccztn f the project This would be aceoomplirhe by utili7irn th- h r vroceeds of the loan to purehare US-use dirhsmn (frcr th U Oi-irrirg Officer) which would be utili ed to rrimbure th fc u a t local - nditurrs
Thi arranrit 3ir ila ) fstV utilitd In the - of the D-e l-INAieret Loar tJr U Atrrert SinceYr usii Conv rf i cn therc loans are rcpiviible in dollars nd rince Morocco in a n-ar excess local currency couintry the fert ) f e transaction in tc provide a means for obtaining ccnvrrrs cn a-cr th life of the loan of otherwire inconvertibie U5 holding irhrs hich are in exces of its localrequireme t
In 1967 over 15 million dirhams (abceut $3 million) of PL 480
Section l04(g) loan fun cre in msgreement with the CON allocated for the financing of various contractr reloting to projects in the Moulouya It in anticipited tht ndditional allocations will be made out of the local currency proceed generated from current and antishycipated US 7urplu agricultural rmodity programs in Morocco
It has been proposed that the dirham equivalent of $45 million of the proceeds of the October F67 rurplus agricultural commodity Sales Agreement be allocated for a Section Cb(g) loan for the Mulouya In nadition it is estimated that a $]35 million (in$ioz1ble dirhshyequlviJent) woull be available from 7uprl]eental surplun agrIcultura con -ity rales programs under Titlo I an-d Title IV in calendar 196F for allocation for loans for development projects in Morocco These two amounts combined would provide about 6 of the G014 resources reshyquired for the project over the next five years On thic basis there would appear to be rcasonble propect tht the GO should be in a rorition to provide cver the S e year rriod of the project the addishytional resources renuired for itF ccmpletion
Tt I contemplatd that na additlonal US dollar financing of the Moulouya byon-l the $ iilon rorosed herein will be provided for tl cplei n ef h M _11-nuya rince the bringing under irrigation of th- 11O0Y ies include] in the propore] project will substantlally cornIete the works criginally conwtemplated hen h DLF loan was authorshyized in 106 The remainler zf the workr h(- be within the capabilit3 of the GOM to complete with It- o-n resourcec
MT M T M
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The Moulouya Rivr which is cre of tne largest in Morocco originatesin the idll Atans
Moulouya and which oztend scuthward
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flows rrpr
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to the
In- agricitui 1 in li j i nt( iljr r Th- rst rind most
t 2 1ir i t i h- i n th rwrht born of thshy-- e 31nmiler frem the Mediterranean
Lea To tho wet cf the Tiffa and nn th- left bank( of the Moulouya isthe Zebra nlain 14wiuntain rv-arate the Zebra frcm th -ea and fron theBou Art-r i-ll]zain which - ctI nrrthwe(st of the Zebra The Bou Areg a coital phtain sclte 19 mils lorg and h miles wide separated fr-nthe n-a by a Ihow sa2t water lagoon Southwest of the Zebra is theGireb plain which hun land ruitable for irrigation in its routheasternportion The Gareb i at a higher elevation than the three other plainsard if ultimately irr-gatcd vould require pumping fro the lower level Zebra conv(yance system
Water from the Noulouya River is stored brhind the Mechra Klila Dam whichwas coniletd with fjiancri rc AID loan (3-A-2 (DLF Lcan l6)Water ir rclca ed downstr(a (1bcut c) miles) to the Mechra Homadi reFrshyvoir and d]iversion dcim in1h-r divert-d to th right oad left bankcunals About 75 kilometer (1 miles) of the Triffu (right bank) maingravity ciral hay ben copletd und consderable cr) has been carri-dout in the Tri on) distr Iution and drainage netw rks land levelngend other farm iwnrovwments About 37 kilometers (22 wiles) of the Zebra(left bank) main gravi-ty canal and the tunnel 6 miles (101()7 JIrenrTrcters) betxeen the Zebra area end the Bou Areg area have been comrneted
The GOM illrrfo m certqin -rk nr-Aded fcr develormnt of the gravityir~zgata yt-- for n 71-) acres over the next five yarr Thiscffort vi2 be eonern rait-r urcr the develo-ment cf areas thot providethe great-rt ecnnomic returrs nnd the developnent of a cadre of Iorocearperornel adequ tly tran-yi in the an2gerent of the project SeeAnnex C for further Irojcl details
e- enmL Ev1ation
Mt Infratrueturr The --trnal highway co-munication network i t arid rfi Isirm nf re- i n-ote siler in-1 shy
uzeather raved rc
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Other communlca 1 i i t ih Lh arr-- inlude the nrninlineof the Oujda-Fe--C- t h~rh l e0tnnd to AlgeriaSpanish enclove rt the 1 fir idto cmmercial airport at Oujda andNador with regular national onI int rnational ervice5s
Th verirtr 1 u ~Ath r nr r t crocd by 60 kvJ i i i u rrd t 5( kr It na ortr kk f~ditcrl rower1(Qp x I -y yrar) -o n d hr rritIronr
at the Mechra-Yplusmnilj l inm fnd the Bou Areff contral poter Statin The townare connected to ranrh cther and th2 r-rt of Mcrocco by telerhone andtelegraph 1 ner
b Sol Soil rvey 7rd land ]a-ifctons have been completed i-nthe Mcloulva rer eter oanntrantbi- with French firmr u-ing Frenchmethods The Trifa -1n wr initialy rraped at a cealeof 150000with certain area ub entiy rer-aLd at 15000 110000 or 120000dependin I nn the cor1cjeity of YJ rattcrns The Zebra plain has beenmapped at a reale cf 20O00 nod th- Bou Areg plain at a scale Df 150OO On thp baf Yr nf ther urvy th cla sified the soilsGC hain terms of r-uitnbility for irrigation as follows
Land Ciaifcation (Aere)
CasrI amp IT Class III Clans IV Totas Triffa Plain 17000 29[00 22725 99625Zebra Plain CbO 1275 4050 211425Bou Areg Plain 75)00 l6qo 3 0 3067)Gareb Plain 13 05 10 70 0
Inclurez 1750 acres for lfigh Service Area
The findings thi indicate that ( i) arriratry 5of the area in thefour rlain- i suited to irrigation (Clare I anl II) (ii) more than3 ir suitabr bt with one Or mcre imrtat~ons Irro=ed by underrablefeatur-s such an to wrafhy oil characteristJcn trnine- r restrltedbull rio (CIar TIV) and (iij) ls than 2 of th- area in only margina)lysuited for irrinticn(Class TV) In ther7e lattrr ardrn only rmi-intrnsive orop rotations blUponsblhe
The oi nicn f the Cn-lting Envneer (1ydrctechrJ) th respect to) therd carrffjn n that hfle 3 Bureau for P ltr0tion -tandards werirt ernoy-d te rlasnificatinn ir aceurat- and n rrti with3and rlaced in r d rLrnble categories more
uere thnn right ha bern the caseUS tandardr folIced The clasifatinn ha 0a been reviewed andfound to be atifactory by the USPA tayr Hoever r areas of complcxroil Ttternr hch to date have only been ru-d to a oale of 150))rome reraTpin tray be necesary as a banis fcr rrerarnZ
- g~T PRAvVLAFJLE EOPv
final designs of irrigation and drztinne- rystems parcellization into farms and planning of land preparation measures In addition considering the high average salt ccntent of ater frcm he c ilouya hiver a rorm of systematic leachin- will be reqirer- to f ree-rt aculation of salts in the soilsparticularly in h ebra Crt in will nlso1e plain ureas require nitrogenphosphorus crd possibly other nutrient to obtain satisfactory yields
c Water On the basis of studies by the GCM which have been reviewed bythe Consultirr Fnr ncri and the U au of 1ccoi-ation it is thecorclusion of A tt (i) the q lity of water in the Lower Houlouya
is below averpge bvt crp rble to thtof certain rivers in the US whichisotnteLoh~uoybrve successfully been usc for irrif ton for periods cxeccdin 100 yearsOj5) there is clearly a sufficient a )unt of i ter to irrif-ate the 128010
bullcrer to be served in the [rlcentIty ar n3 Addi-tional s-tudioser (c requilrecj dcter-Inc if adeqiuate water is a- ilable for irrigationof 376QGO vc rc
The only signifcant urce of vp y fOr irrigation water in the perimeteris the oulouya Vi~cr io jc n1 is 1re ntly being irrigated from wells most Iround water i - - 1 Alouya contains dissoived salts which i xr Lrn - hvriny reak flowto iJOx PIn iuting [cricd of c n ccntraticn is 750 ppm On Thi- basis of USDA Salinity Lot) atory criteria fte v ater is class 03-SI (hl-h salinity-low a-alinity) Vile water is thus of mediocre qualityit is ccmrarable to that of river successfully used for irrigation in the US (eg the Lower Colorado Rier) and poses no serious problems to irrir-ation in the Moulouya perir( cfr provided the W4 adheres to recorrmended programs for meeting leaching reoairements
With ref-pect to the 128000 acr project the demand for water reasured at the Mechra Hoadi diversion dair is estizated at about 575 million cubic meters per year as follows
remand for Wter
Peak Flow Annual Total (August) (m 3 million)
Agrieulture (176000 acres) 337 m3s 806 Municipal amp Industrial Consumption 8m3 23
Total 4 uy62123000 acres to be irrigateA by Gravity 255 m3s 575
(The e dpeak requirzents of 345 s compares with a 35 m3 s design
capacity of the main canal at the diversion dam including 18 m3 s for the Right Bank and 17 m3 s fcc the Left Bank)
I
- 19 -
This estimate is based on probaole rainfall cropping patterns plant requirements evapo-transpiration and other expected losses of irrigashytion water The estimate is believed by the Consulting Engineer to be reasonable but subject to refinement on the basis of tests to be carried out on a continuing basis
The annual average availability of wuter from the Moulouya river is estirated at 1100 million mn or about double the estimated requirement for the gravity areas
Estimated Availability of Water
Twelve Year Annual Average for Moulouya River 3 m3 second 1100 million m3year
Maximum inflow Observed 8000 m3second(1963) 3h00 million m3 (1962-63)
Miniwum inflow Observed 1 msecond (1951) 532 million m3 (1956-57)
On this basis it appears that there should be ample water available for irrigation of the gravity area as the water availability obtained from twelve years observation exceeds the requirements in all but the 1956-57 season shown above Prior to the development of land with purped service areas (the Gare-b and the Triffa ig h Service) a review and analysis of the river hydrology should be unidertaken to assess the availability and regulashytion of the river flows
d Studies Entincering and Construction The overall irrigation scheme outlined by the 1uM defirs the ajor features and th( magnitude of the work to be accomplished to attain the ultimate goal
This scheme is being carried olut in phases over a long time period The present phase encorpasses the development planned within the priorities indicated by the Stanford Research Institute (SRI) study for the gravity irrigation system
The studies for land classifliration have been completed for the gravity irrigation system in the Triffa Bou Areg and Zebra plains by French firms and were considered reasonably accurate by the Consulting Engineer Land consolidation and parcellinrg has been completed by 0MET in the Bou Areg Central area the Zebra Collctive and Zebra Remainder sectors 7 thru 10 Land consolidation and pareeLlni ar( needed for Triffa sectors 27 and 28 Bou Areg Rematnder arid Z(bra Rerrirder sectors I and 2 The engineering designs for the Triffa main sector 27 and 28 and the Zebra Collective have been or are being completed by the G0M forces The engineering design for the Cefntral Bou Areg and Zebra Remainder sectors 7 tnru 10 has been or in being connpeted uy Hydrotechnic Engineering design will be required or the 1ou Are remainder sectors D-3 thru D-7 and Q4 thru G-6 and Zebra Rer ainler sectors 1 and 2 The engineering designfor the Dead Ilead Thnnel has been undertaken by SCET who have preshypared anid issued an Avant Projet for bid invitations for construction
14 M)j6Fj Cshy
-20-
This firm will also undcrtnk- uu-orviston of construction The engineer ing not yet performed can be aea ished by GOM forces andor private engineering firms
Construction of the extension to the rrain irrigation and drainage canals Jand preparation rector cinl ani drninaive ditches will be performed unllr cntact t) 1 cc rt~r~iet m)t hi in the ene of the
r-abilit tion of the L2tL Pz- Dd iarl Trnc t
e Cronning Patterns The existing erning pattern in the Moulcuya including botnirrigatcd and dry farm ingincludes grain forage citrus vegetables olives grapes and 6 small amount of leciduous fruits and nuts Of the roughly 2140Cy) acres of agricultural production in the Moulouya about 177000 acres are in field crops 24)) in vegetables 16Y)O in citrus 15000 in grrrcs 540Y) in forage crops 1700 in olives and 15)0 in other fruits and nuts
Taking into consideration rast and present trends in plantings as well as agronomic and price and marketing factrrs the following projection of cropping patterns has been developed for the Lower Moulouya
PROJECTED POPPTG PATTFRNS T1 HE LOWER MOULOUYA
(In per cent of total irrigated area)
Left Bank and Triffa High Serice
Triffa Sector - Sectcr rriffa Class Class Class
crop Main 27 28 East I amp II III IV
Citrus 40 60 10 10 10 Vegetables 15 10 15 1) 20 10
Crtton 15 20 10
Fcragpr 10 20 25 30 4o 30
heat 10 6 20 25 20 35 4o
Grip 25 24 35 15 Dy beans 5 10
Sunflower 10 olives 5 0
100 10) 100 100) 1i 1052i 100
a Incltdes double cropping
- - r- euro --- 7
~7~TF~Wr~e~ALUSE
-21 -
The projected cropping pattern for the Bou Areg plain includes cottonLJrirdg the frrt Five yearnejtinted 1r of the Class I)fand
the project jitwould be grown on nnII landn Tht renresert only 960etrravres) ectz ri)cr)e area The cotton acr~a e ry increasep 2ceafter live years if ritisfactory drainage conditionshyrre achieved in the Bou Arev
cotton grown i 1xonp tarx- Trdltionally Morocco export its-Jr- cron an irr IJ hort cble to rmeett Cotton the reuirrents
r the oroccan 2pinningr mills The croppni-attrn of the Triffa East (about 180n acres) Js projectedt Tnrlude 15- (about 27 acres) in cotton It is likely that becausef ihe limited extnt of Class I and II lands in the Triffa Eas cotton not increase beyond that percentage
1t i evident that the amount of irrigated cotton that is likely to bein ther-n Moulouya is minimal even assuming that local drainage condi-T nare i asuitable
f Technical Sundnv--s The AID Project Engineer hps reviewed ii) thedat and ajor construction performed to date onronct and finds the technical requirements this long-ranRe phasedsufficiently defineoto ccntinue the project on an orderly schedule The estimates of cost of prsirct facilities have been determin-d by SRI from average va)ues oftrit cots obtained frorr reviously ntiarded contracts and from etniled( -s-nand analysis prepared by the iHydrotechnic Enginering fir oft-o tyieal sectors located in the Bou Areg area The costs for the arc ent contract have bcen estimated by the USAID It is consideredthat the depree of engijeering planning undertaken and the deterrrinitonr to the US Goverrment are adequate to meet the applicable requireshySt- n Section 611 of thie Foreign Asistance Act
7717gt
1 --shy
-22-
E Financial Status of Borrower
1 The Moroccan Economy
Grrwth of MorocLcts GDP in real term averaged about 24 per yearin 1(4 and lr li Per capita DP In 1C 5 wan anproximotely t162 A (er Irr-ht in (6 resu]trd n a drcrcne of slightly nver in GDP which tlh vpulatior grc~vth avrring 3P4 per year rnrsJted in a decline of -r ornita GDP In 16 ii brut $154 A recnd droughtcccijrred In C67 but i not expeetid to have the severe effects of the 165 drought Crop forecasts for the first nine months of 1967 indicate a 4 increase in real GDP above the 1966 level This is also the economic grcrdth rate estimated by the IBRD for the pezxA 1965-70
Moroccos economy is heavily dependent upon the agricultural sector thich has averaged about 15 growth per annum However growth of the mal modern segment of Moroccos agricultural sector has inshy-reased at the rate of about 7 per annum
In 96 the International Banik for Reconstruction and Development (IBRD) preented a number of recommendationr denigrned to increase Moroccos economic growth rate On the bacis of these recomfndations the G004 proceeded with planning the necesrary program to increase investment levels fr- the i 63-65 level of 11 of GNP to 1r of GNP and stimulate the rate of economic growth from 2 to an average of over )4 annually for the five years 66-70 In addJtion the GC4 has taken measures to curb the population grovth rat while placing increased emphasis on raising production of both dryland (wheat) and Irrigated agriculture
2 Investment and Savinms
The level of total gross investment has remaind at aboit 11 of GNP for vera year althugh the percentnoe declined slightly in 165 Under the GO Three Yea5 Plan 1965-67 the gross investment t-3rget woz ret at DH 3 billion- Actual invev-tment expenditures for the three yearpeirod reached about DH 46 billion of which the Governshyment ezxenditure amounted to DH 1 billion a against DH 21 billion budgeted Thin may have beeo partly de to the GOMs deliberate ausshyterity pollcy under the hIF rtbJli7tion prci1rnr but more probably it van duxe to the shortage of trained cadres to -lan and execute projects
In the private cectcr conziderable inounts of ravings may be hoarded due to lack of project attractive t- inventors The lvl of private investment has been runnihg at about 51 of GNP thrrugh 195 The 0014 4 incentive to private instors hnr cut profit taxes from 4320 to V and announced a tpn year guarantc-e against tax increases
]L- $ = DH 506
777=-77- NQ
r y 7k1- T e - W lk In
j - 1) 7k- - _
- 23-
Loan are avaiiable to )rivlite irve-tcrn freo th 3JfIDiN s rctr special funda to prcmote touricm devc firvcnt
Under the 1r86-1972 plan abut to br irtntt level are to be accelerated considerably reaching A of GNP liv ]970 Mor(- Irlyir haviiy on foreign 1 to aciuw cc higher lve1
3 Central Government FinancP
The Moroccan money supply which had Incrrased ify 76 per cent in 2965 remained virtually unchanged in 966 The first half of 1967 witnessed a 5 Ter cent increase in the money supply Te major part of thi increase as concentrated in June and July uhen the supply reached V14 0j lion Currency In circulation expanded rapidly in June and July
nnl factrrn being reinforced by commodity hcnrding related to the 1ide~l Et crisis Demand deposits did not show their normal decline nthe first half of 1967 Deposits with commercial banks declined nlightly while deposits with the Treabury increased as public and semi public agencies contisued their transfers from the banking system to the Treasury The increase in money supply in the first half of (7 ran I raced to tho nzon1 sonal increase in net foreign assets not c y the custcirry rlelir In claims on the private sector Clsirl (n the erivate sector declined slighty until May 1967 but Increased hr-gb June and Jily due primarily to additional financing of textile stocks ClbiJ ante Government rose by 10 per cent in the first half of 967 the in central brnk claims on the GovernmentI being rmainly offset by larger deposits with the Treasury
Ordinary budgetary revenues which incrurted by 5 rcr ent in 1566 tre cxrcted t-) increase by 7 per cent in 1( to DII 21 billion DeampDite a derea3e in agricultural tax reccipt r- fror diret taxes rose by 10 ppr cent in 1966 and a 2 increas estinated for S67 due to tric or controls on income declarationr d an accelerashytion of tax cller ns Owing mainly to a relaxation of the import
program in late 1 5 and a concomitant increase in tariffs on certain ccnonter goods customs reneipts increased by 21 per cent in 1966 Although budgetary estimates call for s decline of 3 per cent in customs receipts in 1S67 it is likely that actual receipts will be considerably larger in view of the import liberalizatidn measures intro)duced subseshyquent to the estimates Receipts from indirect taxes state monopolies and other serces are expected to be 11 iv- cent Ipher in 1967 owing to increased profit on -ugar sabr-i and L r(m the newly created Office do Ccrmercalisaticn - d-tation (OCE)
Recurrent ordinary buiL e(enditures increased by 34 per cent in 1966 ar-i are expected to increase by an additional 7 per cent in 1567 reachin- D1122 billion Although wage and salary scales in the public
Banque Nationale pour le Developement Economique
TT~~- - I777
2 Cf
sector have1bec z h t - rrvirI urli 11i g 14-6 -nd PO becnue rX toi Ijt e f (]r o n 4
ill tile ic urrnnye andr)not i on dnd Publi ht rentrn -yr-otn lno IncreasedOthrr t ill- t il r ne by ) vr cert in J6(
i ninlyrt -br h Inc-l
( Ihe ( t r- rl t ip t t C itur f T)h 21h iilli n
is (( ItI t lt r c0 a- r n n o I- c t b It ihstnl id vv ih n t r-t have hn(er - en 1t2
(IM ii ture( T f fu traordJ nary budrzct exshypend ituren a r y -t c ~ i vi -iscz Portal Checking sy-stcsul)rrcing t (I ltIt Ct -- ind creirn shy
nnet The f r er tnc I hha ccrc ed from a htih of DH 5-7 millIJn in _ 5 millIn r C46 F cr ats foi ]7 place Cro n w I 1(DI)J79 ill ni DDn etlc fi nancing has alo u 1) 5 p (- I3A27 iIliun to an entirnted DH 1142 million
1 14V ) I nv 1 ri n nI(c1 franc n is 77-ected to be ol t y ncrewed bcrrowing fr-ir t he Cestra 9ank which hud been held at mcdert vols iln 165 nnd 1a66 Under the 1TFtaiby agreement of October 16 the qob) agreed to taBe a3] rocrrnary meurer to maintain as table curoonry rPnt inl th nr1d-elrto th b a ent of the ePrncriynnd a vnbl- hn1incc X nvroent P rt artt to t rt fien of tho Ccntin- Honk rstz (erct are nct t r itr June 30 Y-ke 7 lov l b th n Diif ) mill] (n tlcnber -c P thai I o illin usit I ])ecthr 31I62 (GC bc w t
C B1rtrp - vt DH 12 iri 1i nor ]S67 or DH 6S ij lionEan tisated (r fo than the aproved crd it expanwim
Thitrd ordivary nil extraordnnry buThTt deficit of DII 7-19 millI n fcrecat Fr 1 67 in exnected to be fnanced by not freign
tan reof DII )75 mi~l in nt recurity 12ue 1 T111I vlion a - nt ry tiat Po n Che )ir d-nC i 73 r5 Pn
riI is u h i a vti v mrr nrr-e jssIof fvr is id a erital The vnfsa revcred in 1d6 when lnrger r nyrentn eEecially on food itcmo an n -lewdoun in
igo ra a deficit of $1 millcn ProjectiOnz-vt rvultvd in ror 17 r~ieat inrrerned importsonly partially ccnrennate by addshytsa t frnreirn r ntil rrceiprs ard mprrvement in the nervices account will reult -n et of aprroximately $)20million As rhoim in the following tabl -r tion for l33 and 169 how overall deficits of
14 and m] ivi_y$i It
rqVV t1 4~
C)rgt
---
1 -)I+-IRF1
1ROCCO - rTANC OF PAYME 1qrt - 169]_ 5
6rfi0 1 1C(8lr67 i r(o
)xrurt 2t L( I L-5
Trade Bnlance 11 15 - 75 shy - 75
rviee- ret - 7 - 5) -35 -23 -2
J]-i of Good rnd Service- - 3 - 65 -II - ti - (5
Trn-Ifr Pr ynts (nt) P 21 33 37 33
on-cntnry Carital (not) 92 64 6 6 5
Err-rs nnd Ov rrion- (not) - 23 -2 1 3
eranl Bannic __ - _3 -_ 3 - 1i4
Atrh thert ircjected reficitn are of the nnme order of 1 nishytude a7 thcr incurred in the period i66 the Situatlcn i findarentallydifferent both in rerprct to the source of the deficits and in rer-ect to the meat0Y gtr m etin7tecr In the f rrer caive M5recco uffered
_frcrr a very h-vy cutfc of Drivtes cuitv fo-ivr with a shar) decline In forein nt exerditures in Morocco In the iatter case th projected deficits r- rcre a functicn or accelerated crcwth risingdebt ervieiiw tri tho abnrcn of forv eeble additiens foreign reshybull ourcs nere7ory 4( r2Vm rAf finmncting To nect the def-cits during the reriol 161 61h MWreco ob1id to drw down rorcin exchange reserves of over $]c milicn The snrti tpv of financing is no longerpozslble ince no or-res- ruch reserve- Even ifMorocco yr
mn nina r rve_ ore (]rrfii on to th r-ixirun etnt enribe nnd the [iI tnfldy i- un M-r-r e i32 till relA re nt rnt 15 millicnj1itionn ftr ign as- e n 1 6 beyond hat r recnently fcreeeshyable with ver nri- nry Officilr in In i6 reserves are cotImnted Pt 72million c hih crn V 3 million i caly required for currency coy r
Foreign InJebtrdne n of th GOM Mnroccos external rtnte ard rutlie enterprie dett amounted to
$r) millivn in lr6 Debt vervcirig rpynents for (66 trtaled about
$5) rillion g-eement approved in October 3(67
I- -- Ishy
37 millin or arprcxitrrntoy (j Iroccor totnl eXoort earning of h28 millicn GCnerally nxt rrO dbt FervicJng renuiremennt of leas
than r of totna -ort nnrlt In onrldered to I r tirfactoryrntio D-bt r rnJrcLct n Ir the reriod 1-(y 3on Trerent external debt including thnt wrtl(n irreently undibur-ed are hown n th fr lv tahlr
)] L v yr t n
Eternn Vtnte anc ] bntcrnrie Debt
M131 o)nr
Y aI Net Outrtnnling Debt Debt Service
(6 it 479r5 $367 J-67 452 3)6
Z616 44469 2 0 2C-
365I3 37 389
33 383 33 6 371
5-h 31 n 352 275 34121
]176 2661 32It 1977 21133 311 177 22)6 307 19 i0l74 256
1733 255
rgtternal debt rharre n rerent debt nnr rhon above do not increase ubtanti-lly over t rt 1)year- reaching a maximum of h44 millior
in J6 and decrpt- n cr - tently threoafter At the are time exportearninr r _rc extett nc-are Aring that Morocco does not inshycreswre it etrnn2 cbt t irate ubrtantially nb-vc ihat has been the core th adfiticrn dbt e roquirrentn reulting from the propo t Icon o 5 ijilion co r 7crncepr-ional term hould not have a i-nifiant affect n 1r o - ab lty to neet itv g rc-atedebt ericn rcnrib2t~e- the pros ectr of reprment of thin loan ore coniderci rearcnb)
U I -
F ot h-v C IuIJI rmt I shy
1 V amp~ rVml KI
PUC- -jrVi Jt t 1 11 nflrcj urlc 1- th )qn --P I uti u rhnrrl -1r- thr U- Tr- ry- R- -nymc nt
c2Il f n 6 1 bf r I- till 11 nfl r- n-r i n of O r--niC(Io~hi U 1 1 rr to
Tn vil ) f rvc hi tvlrll 1 (In- - n- u--n E r me rrinshycgtay F rntwir w ourc o -o- rvI ortf-V3 1 rncing of
Uf f -r rrrir- ur3r 4~ v -rin Iltrt nt ndd shyt -n t ) in- lint r b t l r -n rort- o-orco trorl-- V -P
r i 1rnd h L-torie Furcl-trin firr- thrjt US r r~ crvirrf- u~d be~
T L I1 c vt r- -ly ] -ubt fu 1 n vi pw -I -ror-co Ir of
ut1JpcO In thi rjert f it -- r- 21 npnred by d1-nr- cothcr t~han the US
2 ]P-t ofI Prr l1 on Prw- Fntrrr
Phij rrcjJ-t -11 n-t h~ -in nrwerq Prrt n rr- tc ntrshyr~A~r fi-mc 1bho und for --roern p o n
3_~~PrCT--rty
rr-vIi-n 1 h -d r the loan ragreement for Icntifitcation ef any r mIjrpt n ctri b- rt througn ut 1zatn (f xccr- prorerty
If rv c u~eAID n-mrcf u urr thi )cn - I~ut~ em avoi3ablo r rovvrirrnt -rrperty rather than nce iteni
4 Otli-r Fr- Wo--] n-Fnlc4rm
Dr mi tW- o] 14rocco- i~ajr ovr-ec -f exte rnaX
rrtan~- hrtvfb - I r ~ ant fl Fr n fole by Kv-it
Sgio F rneflit r b-en 1lmrntrd to tcfohnjip n5tnnen bi eoni~in I th u y f Fr--h tprhntcian tcacrr ind cther
~ti~r t~ ec-tnmIyrt-n Friinch Aid to Mcreco In 1065c~oc~ (P-art f-r txychnirril aItn -- j se of tl5 w1nfor bu~dget rurport f ir in rt t- $1 1ri1 icin in ennita -rojectM- n vx- rrcd
1Vw1tvnn tioI t-) Frenh rurtnnd +16 r11ion tie-I to -onyiint to orrrcr Frrmh ccilcn~For _-rrc-ratod land and rquirrmcnt
West GTrrnmnny liar agrcrcd to nrovIe ccme j27 mM22~cn 1n catital arirtanre and cromrndity lnoi7 t n OfIcon( q92 thi o totril$223 miJ lien ha actuary b-Pn cr-Itt--d under Inn ngrepment This
And a lk5 million commodity loan both) signed in 1965 All Wet Gerzaan
Ufla
-28shy
capital asnistance I vuectI to be tied to German exports Germanyhas in addition 1uvvded r tteysubbtantial technical assistance f
The IBRP hah rade four 1nns to Morocco since 1962 totaling$6) million Ofthin totnl a [175 million loan in 1965 wos fordevelopient of the gidi lit-r irrigation perimeter Other assistance by internntIcnal Iending arncie include an $11 million credit byIDA in 1C65 for rcendary diicction projects and an IFC ln and inshyvestrent of $1 1 ri jnic alo in
F tit i by [c - dncr tr dh elo snt ofMorccco rircuVt r oii +h b-]n jt-TKT r nbove n 2 )6 niliion Kuwait enn in i66 for develomyment of the Tensaout Prnm n irrnten nrooetand a $77 million Kuwait
0jl n )nnsn r(niti-nertcir
loan for extrnion of the Tadri~ Irrigation Perimeter
The following- trbe surrlnrlzes other free world arlztance (excluiin technical assistanc-) to Morocco for the years 1(62-66
($ Millions)
1 62 1cf_63 96) 19r65 19)66 Fneea 4) 5PO 64o 700 shyWet Germany 223 gu 1t 53 281 IRD 15 175 10) 175 IDA 110 IF C 1 5 7 7 7 0 I15
TOTAL 55 62 1U3 W
b Includer only lo-ng term loans and exporter credits - Includfs 25 million private capital
Eternal ansiztnnce to the Lowier Moulouya Irrigation Perimeter -nce 1060 hres been con[fined to US upport Consdiering AIDs previcus
involvement in and conmitnert to the Lower Moulouya an AID lean in P2t to be Lhi mol aprroriate source of financing for this project
LID
II
q
-29-
SECTION ITI- Y-TTYT TIMPLPTrION
A Periret-r Ad-instrrti-
Authority for irplerrentvtnn of the deveorpent prrgrn frr the LowerMoulcuya Perimeter and rs wel arth crnntinuinz mrnnrrmenertC tt r t- rrtnr V theltbi nad overationity iOfic 1cne 4
n r I e1i- i d Vit4 i Iv ~ Ct rreated i Otb (rJ rn-- of evcn inrmi-rriional offices hich reelaced the Office de Mire en Valeur Aamprlcole (OMVA) Under the OMXA and itspredecessor agencies authority for ad-inLtration cf irrigtion proJect war centralized in Rabat
Under the new regional office organization responsibility for adminshyistering ORMVAM is vested in on Adminirtrative Board of 10 members headed by the Minister of Agriculture and Agrarian Reform as chairman All ether board members (other than the Chairman and a representative of theInterministerial Economic Ccrmittee) represent agencies or activities inthe region of the r-eriret-r whic comprises parts of two provinces Localretresentatives on the Board inc]-de the governors of the two provincesOujda and Nador the presidents -f the two provincial asembtes and of the two provincial chambers of agriculture as well as the perimeter Director
The responsibilities of thie Administrative Board include review of theecys program establishment of its organizational structure developshynt -)f its annual budget and establishment of rates and conditions of
Siyfent for water and other services provided in the perimeter
The Director of OP4VAI-I is dbarged with the responsibility for executionPthe vclicies established by the Administrative Board end administration of oil ORMVAM functions This responsibility includes selection of staffn pserating perrcnnel acting s officia ORNIVAM representative in all ntztinns with -tate and othbr public or private bodies and the
f of funds within limit Indivated by the Ministers f Financetent rn fricultural and Agrarian Reorm
Perimeter Oranizatlon
ORVAM oreanizatlonal structure consists of a directnrate five maj-r rvlces or d-vsicns and one separate bureau Two services qei Administratif et Comptabl- and Service du Yatrial are conshycor - th adminisration and lcgistical support of ORMVAM operationshi1e the remainirg three services rind the separate bureau are Involved in t-hni al matters associated with agrcultural developrent Each ervice has one or more subordinate bureaus Fei-ce Chiefs and thehead 0 rch bure-u report directly to the ORMVAM4 Director
-~F7E MEw-
-30shy
2 Perimeter 01ttffnr
OPIVAM orgttnlrntlon treture calls for 557 positions of whichI L or 7 Mlled n were nher 29 1567 37 of the 71 Postshytion vacancies reported 1ern the high and middle levels Foreign(chiefly Euronean) technclan occupy I)of the 16 high level positionsthat ere filled at thfit tire
Whil OPM ut in th- lcng run lor to Mercecos oducational yster to prvidr tn crrf-nn2 to ratisfy current rdurojectd rcshyquirement th currnt high and mlddle level vacancies rrouire uersonnelwith oxt nive nrior rxericnce To fll this preent need it will be necessary for CRIVAM to continue its program of recruiting foreigntechnicians until ruch tire ns graduates of Moroccan educational programsacquire the necesnry exrerience The managerent assistance componentof thin pro~ject ]e-rribed In the Project analysis will to some extentalleviate OFIWAMs high level personnel requirements
3 Inw1 ernetation Sehedu]
Months Implementation Action
1 0 Sign Loan Agrcement
2 2 C-tiify conditions precedent and Y4tiate procedures for selection of US firm for management contract
2 Negotiation of extension of advisory Engineering Services
h 4 Contract (Hydrotechnic) Negotiation of Managerment Contract
5 60Cmpletion of Project
C Waivers
Sect ion 7 rf AID Regulation 7 provides in substance that theUnited State ill not finance direct costs of construction work performedby third cc-ur y nationals unless the total co-tn of the project withvhich thr ennrtrumticn w(r is asEcciated donot exceed $2On)O orafter excluding national of the country in vhich the site of constructionis located and Dersons vho nave resided therein uninterruptedly for morethan three years imrnedJately prior to any determination under Regulation 7at leant 0 of all uernons who work under the contract at the site of conbulltruction are United States citizens or the employment of third countrynationals is necessary to avoid excerrive corts to the United States
3
31
Section 2175 authr-ri th Regional Anitant Administratorto waive the nrovinions of Sectionthat it is 2073 if he dcterriner in any coneimportant te the nationrn intercrt of the United Stutes tofinance the direct eots of construction work performed by third country
nationals
A prviou1y r ic i c t tht for thr ct Tartthe -r c ct b- 1jeuj out r -cnorbr f cnrtructioncontracts with Morcccrr contrctnr an in the i-t Uowfevvr itentirely psnible that there may b- roe contractn with cntructlonfirms partly owned by third country nntionaln and that ruch firjs anwell as the surely Moroccan-owrned firms may enloy third country niationalsIn such canes a difficult rrobic-i iould arise in meeting the terms ofRegulation 7 since an a practical matter Aericans are not reaonablyavailable for ermployn ont by such contrnetorn and our previcus experiencewith the Naunsseur Ccnv(r-ion project thatin Morocco has indicatedAmerican contractors would not be interested in bidding cn small conshytracts in that country
It in therefore recommended that the Annitant Adinitratordetermine rursuant to Section 2q75 of Regulation 7 to waive theapplication of Regulation 7 to thic iroject since the project 411 conshytribute to the attainrent of US foreign policy objectiver and the cbJe-tives of the Foreign Arsistnnce Program
LITI L USE
LfI~~5xA~us
lit
4 A J A 45 4 k
t A S T
S(3
I A444ilA~~l~)
7 -74
tAM= D
SECTOR 27
10000
t Co0Na includez25 cgtri oncFcttlrvI ncy I8s ~ ~ C t C- Includes 50 constriJcltiotrgrc
2000 60
IU
0
z
bull cosYsA shy----- i
600L _
400
200
0 5 I0 15 20
INTEREST RATE
I ~ 7 J7777
ANIAampX C
PROJECT DESCRn1 rOll
The project com)onents to te undertaken on the MIoulouya Irrigation Project over the next five years contists of the following
C(n1rtion of the rrLin casuals and bianch canbls to provide the suource of waler to the sctors be developed in theto TriffBou Areg and Zebra areas This construction will include the necessarystructures such as reulators highway bridges aqueducts water intake
and discharge structures etc
2 Iand Txeloommerit which includes engineering land consolishyt and iuvtllng lard preparation (subsoiling ripping destoning etc) and installation of water distribution canals (secondary tertiary and quurtunary) and drainage collector ditches for the Triffa main covering 24000 acres in sctors 8 9 10 16 20 21 23 24 25A 2513 27 and 28 Lou Areg Central covering 16250 acres in sectors Dltirough D2B and G1 thru-4h G313 i0u Areg Remainder covering 15000 acres in s-ctors D3 through D7 and GA through (6 Zebra Collective covering 45)0 acres in sectors 3 4 5 rind 6 and Zebra Rer-iinder covering 14250 acres in sectors 1 2 and 7 through 10 and th remainder of sectors 34 and 5 The total land to be developed is about 74000 acres
3 Canalization of the Oued Zeluan and nued Sidi-Amar in the Bou Areg Plain consisting of strairltening englarging and regularizing of these streams to carry the flood waters to the sea Drainage interceptor canals are to be constructed parallel to the sea in the Bou Areg Plain In the Triffa Plain the Oued Riada main drain will be deepened and enlarged and secondary drains will be excavated to provide for drainageof the Madagh area This will include the construction of bridges and culverts and other related work
4 Major Commorn Works will consist of
a Clearing of the Mo-1ouya riverbed downstream of the Mechra KLila barn caused roy flood dariwe and the installation of a set of stop logs for maintenance of pillway gate-
b Design supervision and construction of repairs to the ]elt Lank dead head tunel
c Conctruction and establishment of sib-division Offices and installations for farmer support such as CMVand farm stables
1 C
-2shy
5 Manavmtnt It ha been proposed that a US management firm be ewployed by th- C4 to manage and operate the entire Bou Areg area Such manageent -iuld encomparn all activities from the initial concept to final irIrp igricultural production Such activities would Include resp r-ibilsect -or supervnsion of engtneering and constriction of primary
S- Jry r complete developfnent of land training n in g tinul irription practicen preparation of market
t - r1t- (ot--rnu trplusmnining of a Moroccan cadre to take over h v--it Bou Areg dreara P the
At this writing the n-pt of turning over to a private UZSfirm execushyresponsibl]ity I h management of the establilrment and initial
op-ration of irr1gati the Bou Arog area has been only broadly de iiitd by the GCJO It Intended that proposals will be invited from a r -onable ntnber of f|ed US firms that a selection will be made an-n 7 them and a more do iled and cornprehenrive definition of the rer6 -Ps to be performed be eztabliched at that time It haa been
stimated that the t- of ruch a contract will be about $2 mir- n In any event the -ts of this contract other engineering arvl s to be provided undt n extension of the Ilydrotechnic contract and ether US corts will not ed the proposed $5 mllaion developzont Jean fr the project
The cle 3ifications duties ant 1ncnslbilities of the management personnel ill ha-- to be clearly defined i agreed to by the GCM Perimeter Directo- and other GOM Agencies luding arrangements for the necessary gistic support
Svxlale Docu-
1
4
LD ED 0ICIAL
-IAIDshy
A1trX D
C6JCK LIST OF STATUTORY CRITERIA
(Development Loan Fund)
1 FAA 0102 Extent to which U3 cormodities and services are furnished consistent with improving the US balance of payments See Sections II-C II-F
2 AA sect2O]ihi lanner in which loan wil promote countrys economic develo shy rit emphasizing help for long-range plans and programs designed to developeconomic tesourcos and increase productive capacities See Section I-D
i FAA sectT] h)(IL Information and conclusion on availability of financincfrom other free-world sources including private sources within the United States See Section II-F
FAA sect20l( )2 Information and conclusion on activitys economic and technical soundness including the capacity of the recipient country to reshypay the loan at a reasonable rate of interest See Sections II-B II-D and II-E
5 FAA 1201(h)( Information and conclusion on existence of reasonable promise activity will contribute to developrmnt of economic resources or increase of productive capacities See Sectiona II-B and II-D
_92_(b 4Information and conclusion on activitys relationship toothor development activities and its contribution to realizable longshyrange objectives See Sections I-D and I-E
The following abbreviations are und FAA - Foroirn Assistance Act of 1961 as amerded by the Foreign Asaistaice
Act of 1967 App - Foreign Assistance and Polated Agencies Appropriations Act 1968
AFEVCDF 1066
L1
-2shy
7 FAA f12O1(b)(5)_ Countrys self-help masures including institution of Foreign Assistance Act investment pliaranty programs Investment Guaranty
bull Agreement signed with Morocco 331o6l See Sections I-D and II-EI
_A ))(6) Information and conclusion on possible effects on US econowy with soecial refererne to areas of substantial -labor surplusSee Section II-F
9 FAA q201 (h)() Information and conclusion on the dagree to which thA country iv wiki- progress toward respect for the rule of law freedom of expression and of the press and recognition~yf the importance of individual freedom initiative and private enterprise
10 FAA -1201(b)(8) Information and conclusion on the degree to which the country is taking steps to improve its c]Laato for private investment See Sccton II-E
31 FAA R LbJi Inforrat-on and conclusion on whether or not the activityto b financed will contribute to the achievement of self-sustaining growthSee Sections I-D and II-B
12 FAA fi2Ol(bj Inforruation and conclusion on reasonalbe prospects of reshypayment See Section II-E
13 FAA fl20JL() Info-ation on applicability of the twenty country ceil4ng2
14 FAA fl201 L Information and coclusion on legality (under laws of the country end the US) and reasonableness of lending and ralendinr terms Loan will be on minimum termspermitted under FAA These are deemed reasonable see Sectioam Evidence will be renuired from the GGM as to the legality of the loan agreemnt
1 E 2 Information and conclusion on availability of an applicationFAA together with sufficient information and assurances to indicate reasonably that funds will be used in an economcally and technically sound manner See Sections I-A II-B and II-D Application received Janury 15 1968
16 FAA fl201(fL If a project inforntion and conclusion whether it will promote the economic developapent of the requesting country taking into account the countrys human and material resource requiremnts and the reshylationship between the ultimate objes6ives of the project and the countrys overall economic development See Sections I-D and II-B
17 FAAJ 20ij(J If a project information and conclusion whether it cifishycally provides for appropriate participation by private enterprise 8ce Sections YI-C and 114
I- FAA i22(a) Total amount of money under loan which is going directly to private enterprise is going to intermediate credit institutions or other borrowers for use by private enterprise is being used to finance imports
rfro private sources or is otherwise beirg used to finance procurementsfrcm private souwces See Sections II-C and II-2
9 FAA 207 Infosation on the emphasis placed en
(a) encouraging development of economic political and social institushytins No apparent relationship
(b) nelC-help in mectingthe countrys food nredo Project Vill conshytribute to production of food for lccal consumptioa
(c) in-proving availability in the country of evucated trained manpower Project will contribute to the deicloginext of trained manpower as one of the functions of the management contract (Soe Annex C para 5)
(d) prcgrams aimed at -malnutrition disease eradi atDn slum clearanceWater purification sewage disposal health education naternal and child care(includin fimrily pJnrning)) -nd cthcr public health ausistarice See
(c) other develoment activities including industrial development free
labor unions cooperatives tnd voluntary agencie transn)rtatin and ccshymwquication nrStczn capubiliTies for economic planning and public adlinisshytration arban develo-mment and modernization of laws to feilltate econcnicdevelopjen- GO- intends encourage develo vient of cooperat yes particularlyin the Left Pank areas Project will also develop capabiLi ics for cconoaicplanning and public a6~inistration (Annex C para 5) Other not applicable
20 Information on the extent to which the r-untry is
(a) cttcmting to increase food production and food sto a-e anddistribution felitics This project is one evidence of Moroccos efforts in this direction See also Section I-D and I-E
b) creating- a favorable climate for foreign and dmestic iri-ate enterprise and invcstrrment The GCM has recently reduced profits twes anrannounced a ten year guarantee against tax increases See Section II-E-2
(c) increasing the role of the neonle in the developnental procecsNo apparent relationship to this project
(d) allocating expenditures to development rather than to unn-cessarymilitary purpoes or intervention in other free countries affair See Sections I-D and Ii-
(e) willing --nribute funds to the project or program Th iOMhas already dcvo o-sidcrable resources to the project It has badieted13 million for th i oulouya for i7 See Section I-C
(If) making economic zocial and political refo ns such as taxc coliecshytion iYprovcmenLs and chan es in land tenure a Royal Comm ision has been appointed to make recomendation on land tenure probleras in the Lower I oulouya
(g) responding to the economic political and social concerns of its people and showing a determination to take volf-help wcasuren See Sections I-D and II-E
IT
-ovi~cd l v r 13 1968
- 4 - LDffIED OFFICIAL USE
21 FAA Inforn ation about multilateral assistance being Iurnished to t e country and whether the loan will encourage recgional development prog-rams The I1D has eztablihcd a Consultative Group for Morocco which rvicws the GOM development program anui prgress See Section II-F-4 for infoaation on othtr donor assistance to Morocco
22 A Extent to which the loan will contribute to the objective of ass ring naximu par icipation in the task of econonic dovelop--ent on the pL-t 0 _he people of the developing countries through the encouragement of cocr-tic private and local govenmental inLitutious o apparent
relationship
23 F _-_Dta_ Infor-ation and corissions whether loan will oncourageeffor s of t1e country to (a) increase tie flow of international trade (b) fostcr private initiative and comptition (c) encourage development and usceo co opratives credit unions and savingss and loan associations (d) disourgo monopolistic practices (c) improvo technical efficiency of industry ariculture and commerce (f) strenSthn free labor unions This project is cxpected to increase technical efficiency oi-agriculture
2_ C-1L lnforzrition and conclusion on how the loan will encourage US privte trade and investment abroad and how it uill encourage private US participation in foreign assistance prograas (incluiing use of private trade channels and the services of US private enterprise) See Section II-
25 VA-+_ Conclusion and supporting information on compliance with tho Co resional policy that engineering and professional servicos of US fir-ms and their affiliates are to bo used in connection with capital project3 to the nixinua extent consistent with the national interest US engineerirn and innsgcment services will be financed tnder this loan
2$ Inforamtion and ccnclusions who+her loan will pormit American rx-l] business to participate equitably in the furnishing of goods and
z orvices by To be satisfied in Loan Agreementfinanced it
27 - t(a App I18 Complianco with restriction of co -zodity procureshy o UsMS except as otherwise determined by the Picsicent and subject to ttu--- rcortir require r-nts Procurement will - liumited to the US for
reiabnrs nts and to ioocco and other free world countries 1-or US-cwne(d rhu disburseacnts
23 -i Comiance with bulk cozodity procurement restriction topriecc no l-ho han the nkarkot price prevailing in tho US at tia of
bull puchas Not applicable
29 FA Cozpliance with requirement that matrin insurance be purchased on commceities if the participating country discri-inates and that insurance be placed in the US To be satisfied in Loan Agreement
30 IA 6(a) Information at to the utilization of excers personal property in lieu of procurement of new items Will be required ai appropriate under terns of Lean Agreement
f
1 77--7 -77-77-777
31 FAA 61](a)(_) information and conclusion on availability of enginoering i financial and other plans nccx sary to carry out tho assittance and of a
reasonably firm cstimate of the cost of the assistanco to the United States
See Section II-D
32-ecessaryFAA t611(a)_(2) legislative action r6quired within recipient country and ibasis Cor reasonable anticipation such action will be completed in time to pormit orderly accompli-hirtnt of purposes of loan See Section I-A
33 n _AA161nJ0] If water or water-relatod land resource construcshy
tion project or program information and conclusion on a benefit-cost comshy
putation See Section II-B
3 4 VAA 611(c) Compliance with requirement that contracts for construction be let on comp-ctitive basis to mamum extent practicable To be satisfied
in Loan Agreement
If a loan for a project of $1 million or more certificatin35 FAA _61l(r) by the principal AID officer in the country as to the capability of the
country (both financirl and human resources) to effectively maintain and
utilize the project taking into account other US-financed projects (Such
certification is to be pproved by the Administrator aL the time the loan
is authorized) In process of being obtained
36 FAsgJ2 _6_h Appropriate steps that have b-en taken to assure that to the miaximum extent possible the country is contributing local currencies to net th-2 cost of contractural and other services and foreign currencies o- icd by tho US are utilized to meet the cost of contractual and other services The GU-M is contributing over $30 million to compleXton of this project Excess US-use dirhams will be used for eligible project costs other than US goods and services
37 FAA p619 Compliance with requirement that assistance to newly independent countries be furnished through multilateral organizations or plans to maxishymum extent appropriate Not deemed appropriate in view of previous AID financing and ccoiitment to the project See Sections I-A and I-D
38 FAA sect620(a) AcnO7a n3]7(b) Compliance with prohibitions
against assistance to Cuba ard any countr (a) which furnishes assistance to Cuba or failed to take appropriate steps by February 14 1964 to prevent ships or aircraft unier its registry from carrying equipment materials or supplies from or to Cuba or (b) which sells furnishes or permits any ships under its registry fr-om carrying items of primary atrategic signifishycance or itcms of economic assistance Morocco is not-known to be in Violation of these sections
39 FAA q620GL_ If assistance to the government of a country existence of determination it is not controlled by the international Communist movement The Secretary of State so determined on October 11 191
40 FAA 620(c) If assistance to the government of a country existonce of Indebtedness to a US citizen for goods or services furnished or ordered whore ouch citizen has exhaustod available legal romodiesor where the debt
i - ow - -- _---- --shy
- --
-6shy
is not denied or ontested by such government or the indebtedness arises under an unconditional guararty of payrrent given by such govornmunt No such indebtedness is known to exist
41 FA _(a2LdL If assisitance for any productive enterprise which will corashypote with US enterprise existence of agreement by the recipient country to prevent export to the US of more than 20 of the enterprises annual production during the life of the loan Not applicable
42 FA4 - 16Q_0_ A If assistance to the government of a country extent to which it (including government agenies or ruhdivisions) has after January 1 1962 taken steps o repudiate or nullify cuatracts or taken any action which has the effect of nationalizing expropriating or otherwise seizingownership or control ofprcpertv of US citizens or entities beneficially owned by them without taking appropriate stops to discha i ge its obligations No such steps cr actions are-known to have been taken by the GOM
43 FAA~L AjPj_10_9 Compliance with assistance toQ0 prohibitions against any Comunst codntry ozocco is not considered to be a cocinrunist country
44 FAA - 620(gJ Corliance with prohibition against use of assistonce to comp satc owners for expropriated or nationalized property To be satisfied in Loan Agreement
45 F AA 8620(h Compliance with regulations and procedures adopted to inshysure against ue of assistance in a manner hich contrary to the best inshyterests of the US promotes or assists the foreign aid projects or activities of the Communist-bloc countries To be satisfied in Loan Agreement
46 FAA 06-O(j)_ Exitence of determiration that the country is engaging in or preparing for aggressive military efforts No such determination has been made
L_62_O Information47 FAA on representation of the country at any intershynational confererce when that representation includes the planning of activishyties involving insurrection or subversion against the US or countries recoiving US assistance No such representition is known to have A occarrect
8 FAA 62JJ Existence of a determination that the country has permitted or failed to prevent destruction of US property by mob action or has failed to take steps to prevent a recurrence and-to pay compensation NO such destruction is known to have tak-n place
49 PAA l620(k) If construction of productive enterprise where eggregate value of assistanc to be furnished by US will exceed $1OO million identification of Gtntutoryauthority Not npplicable
i-xQ2MZZ=
1 shy
U 6 50 _Af( QCinsidoration which has been given to denlying assistance X to thu government of a country which after December 31 1966 has failed to
- institto the investnint guaranty program for the spcific risks of inconshy
vertibility and expropriation or confiscation Satisfied See No 7 above
S51S J lj Compliance with-prohibitions-againstn as~istance to countries which traffic or permittraffickingwith North Vietnam Morocco is not known to be in violation
52 E_-L620(_L If country has seized or imposed any penalty or sanction against vn US fishing vessel on account of its fishing activities in
intcrnationul waters information on the consideiation which has been given to excludirg the country from assistance No such situation is known to exist
53 FAA FA r) UAR restriction Not applicable620(p 9117
54 FAA R620tl) Existence of default undhr any Foreign Assistance Act loan to the country No such default exists
55 F ) C-nsider tion of whether co ntry is devoting unnecessary percentage of buKet for military purposes or use of foreign exchange for milita-y equipment
56 FAA 62o(t) Proibition on aid if country has severed diplomatic relations with US unless agreements have been negotiated after resumpshytion Diplomatic r(lations have not been severed
57 FAA 9620(u) Statur of the country on delinquent UN obligations Morocco is not known to be dlinquent on its UN~obligation
58 FAA R636(i) Prohibition on financing non-US manufactured motor vehicles Will be satisfied in Loan Agreement and Implementation Letter
59 App 102 Compliance with requirement that payments in excess of $25000 for architectural and en Jneering services on any one project be reported to Congress Such reports will be made
60 App R1O4 Compliance with bar against funds to pay pensions etc for military personnel Such payments will not be eligible for financing under th Loan Agreement
61 App 9106 If country attr ipts to create distinctions because of their race or religion among Americans in granting personal or commercial access or other rights otherwise avaVIfable to US citizens generally application which will be made in negotit ttons of contrary principles as expressed by Congress Morocco is not ku IDhave made any such attempts
iInD OFFIIt t USE
0k
OFFICIAL USE 62 AIwp Rii Compliance with existing requfremets for security clearance
of personnel Will be satisfied in Loan Agreement and Implementation Letter
63 App R1l2 Compliance with requirement for approval of cortractors and contract terms for capital projects Will be satisfied in Loan Agreement
clJ164 Aup Cmpliance with bar nRainst use of funds to Tay assessments etc of US meiber Such payments will not be eligible for financing under the Loan Agreemunt
6 Anp P115 Ccmpliance with regulations on employment of US and local personnel for funds obligated after April 30 1961 (Regulation 7) See Section III-C
66 Aim Vietnam iron and steel restrictions Not applicable
67 p l9 If a country other than Greece Turkey Iran Israel Republicof China Phillipines or Korea reduction in assistance by amounts spent for the purchase of sophisticated military equipment
68 Anp fi4O1 Compliance with bar against use of funds for publicity or proshypagjanda purposes within US not heretofore authorized by Congress Such use of funds will not be eligible for financing under the Loan Agreement
Morocco is a traditional Islamic monarchy with a constitution The conshystitution was implemented followaing a popular referendum in 1962 National regional and professional elective bodies including a parliament were established by universal suffrage under the constitution in 1963 The parliament was suspended in 1961 in a State of Exception because of its inability to agree on measures with adequate urgency to meet the prevailingecononde imperatives In July 1967 the King appointed a Prime Minister to direct a Cabinet of appointed technicians
The constitutional framework nevertheless remains intact in Morocco and nationwide popular elections for some of the professional chambers were held in August and September 1966 The press is relatively free in Morocco and the right of diLsent prevails provided that such dissent does not violate the prohibition against political attacks on the instishytution of the monarchy or the person of the monarch
LI Under the revised US AID Policy for Africa agreed to in November 1966 Morocco is designated a development emphasis country entitled to receive continuing support on a country basis as part of a multilaterally coorshydinated countrj program Morocco was subsequently included in Presidential Determination 67-14 (January 5 1967) I
LIM=TE OFFICIAL USE~i
- l go
bull ~ -
f
DEPQbi) STATE AGENCY FOR INERNATIONAL DEVELOPMENT
WASHINGTON DC 052
CAPITAL ASSISTANCE LOA11 AUTHORIZATION
Provided from Develoroent Loan Funds Morocco Second Lower Moulouya Irrigation Loan
Pursuant to the authority vested in the Assistant Administrator for Africa of the Agency for International Development
AI)by the Foreign Assistance Act of 1961 as amended theIAct) and the delegations of authority issued thereunder I
have received and t-en into consideration a certification from the Director of USAIDMorocco as to the financial and human resources capability of Morocco to effectively utilize the Lower Moulouya Irrigation Project taking into account among other things the
maintenance and utilization of projects in Morocco previously financed or assisted by the United States and I hereby authorize the establishshyment of a loan pursuant to Part I Chapter 2 Title I the Development Loan Fund to the Government of the Kingdom of Morocco (Borrower) of not to exceed five million dollars ($5000000) to assist in financing the fore] gn exchange and local currency costs of goods and services for the third phase of the Lower Moulouya Irrigation Project subject to the foLlowing terms and conditions
1 Interest Rate and Terms of Repayment Borrower shall repay the loan to AID in forty (40) years including a grace period not to exceed ten (10) years Borrower shall pay interest on the unrepaid principal and any interest accrued thereon at the rate of (a) two percent (2) per annum during the grace period and (b) two and
one-half percent (2-12) per annum thereafter
2 Currency of Pepayment Repayment of the loan and paymenu of interest shall be made in United States dollars
- t- n t - - - shy
3 Other Terms and Conditions amp(a)Goods and Services financed under the loan
shall have their source and origin in
(i) the United States if disbursements therefor are made in United States dollars or
(ii) any country in the free world including Morocco if disbursements therefor are made in Moroccan currency
(b) AID Regulation 7 shall not apply to construction -work financed under the loan because as detailed in Section IIIC of Capital Assistance Paper No P 667 it is important to the national interest of the United States that the direct costs of construction work performed by third-country nationals be financed out of funds made available by the Act
(a) Such other terms and conditions as AID may deem advisable
Assistant Administrator for Africa
Date
~~~~~~~~~~~~~~~~~~ - q v
7
0 STATU FT CPITIRTA Se Pnn D
10 JU FREOLED ISET-S 11nne
cf a loan to the Government of the11 RECOChDtVTT( Authorization
i-- an to txceed $50000) with th l t - -- -occo in runt niot
yeairMaturity including a 10-year -rnee period
annum during the grace period 2-ilnteret Krrr thereafter
RepayTrt Princiraland interent in US dollars
i rce US for dollar disbursements and MoroccoProcur ind other free world countries for disshy
burncment of US-owned Dirhams
CAPITAL ASSISTANCE CC3TTrEE
Capital Development Offl-er AFRCDF Scan P Walsh
Counei GCAr-R Willis W Jourdin
rnriner AFRCDFgNGR Thomas V Leahy
Agricultural 01er AYRFID Curl E Ferguson
Dek Oficer AFRNA Da yMcCall
fl-fltDOFFICIAL USE
V gt~ 7Ct ci f f Pojct
Ti - lcr -n t Mujoiiya as a plarined irrIgated pttrshyrre tr t-vrnriIn I)c 1- ou jO q joint Franco-S)roii Tirogram The Mc-~i l Fi fer r I t i- fr gtrt i r im Lwe_-n the form~r Froncri zon
i-2 tlnkr anir cnrmer ~-ihzone on lheft t 1rink Conshy~c f t 1Jni d iv- hn dwnm iwhieh was -tr~rtE-d in 1952
ind 17F r 2f 10rt rdl I on cu iv 7r- of u1srcul ~rigep Fn 1 ivltini~rlt 00C 1-m rf tiunrie and oanfTh
tPti~rfl tl r1ili mank onanArg irrigation in the Triffa plal n ~nns ii 1oArrfcd thft water corvwvAn-J nystnn rnjtic ampan on wujijr
~~-f Wrri -jr t I prr jecet si ldun ~ t M omo f -L1n(
pA r pirraliiit rAw~or k~ri I rAO I1n Mkrch hO ni nl tn _zci r con)i b- 1 n th 111Y rni tb- i
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he ftrthe -i crip inoi h- irted $32 I r) it ir te from to t Ttirn- (ent n of which
t- ~r) rIf-shyr tn 1 amp-inrIt)h or From to - in r-t r m th 1ft E ink hasc k Id rchabilitattonc ouab1e of delivering 4ater to
before t will bethe left ban- areas Work theb1litation on rehashyof the tunnrel is exnected to begin in MayJune i38 In June IX)5 the Grt4 rubrnitA to AVP a ecmprehensive study andfor the completion of plirthe pro ie-r together withthis purpose AID rjvio-w if the-
a request cr- a oan fordcrcumentsthXe proIecrt rained and of its experlonce with
th-e plir a n2rhr-r of q- tionn concerning the adequacyarising Vrom ofthe limitcl iValability of skilled roroccanersonri] cce tuated by the2 d ermrturetinuing unroved of fore vn technic ins)
Ing 1rcchirec arid tenure problems lnndequwpe GOM rroJect financ
conshyand inadequate projcct mranngement Moreoverto I- nn cver-awnbitinus what atreardccuntry -id( Moroccan proram for dovelopmeitof its surface water irriwatinn tential arneared as wel to havelro re-ponslble fr b-entb
-sI- v of avalla gtrrnpower for the utlionj of
Si- - t t t h-e Lower tinulouya project Itself AID thenfinancing of
f - of studies by the Unlt-d StatesAgriul- tEir nford RI-3rrch Institute with the
OA) iniri both informtion con-ernirgr(-lrrt n Or the molouya -r one hand ani manpovrr
prorifies assnonrront of thefor in-- ns betweenfar-i )-co the dry Jlnd and irrlratedon cth- e resultsirdi-ti -qrly of the initial SRI stuliethat t least ra
in ren-ral terms Investment in Morocnn1e t ri-ure would te morerar li productivelrid- It Thn GC14 hasr i rrnm sinrfor e irntryctlon of frti iz-r the re Z tr in rain f-1itg farirp are --rW t Moro t-
uo A fin ql SRI udy wasbullbypriorities fr invtronf u in the Thin nttdv -- r-letd in Novombrhas C- of 17 Inn-rzjrehersIve measuresIs nhortage to allevia-eof btij2p- T-aowr in ift7 agriculturalnps to re voj fhe progra-ns has taken]ori _- probl-ms In the Mollouya andornnized t t rtt has reshycf if - i nageot of irrigt ion projectprovid- fcr tohe (i-rt -0 i7 + nf( r a)thriy ani reponsibility for thpof Jm~tera inMorocco
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1967 to irrcveTporformnnce in grculturc In the early psrt of the year the GCQ4 recorgnn7ed it a initrative system to rrozn for greater loca responzipuIty nnd crntrnl over agricultural progrrswhich inclulcd in partcmLar the minagement of the M4oulouya Perii-ttcr and instituted a ajor rrive to recriit principally in Europe foreigntxn- tc -rk orr rri y a r-nritc-3 In GCM prrqrnms In July one of
of A- cuA tue The att r ir cvr atic with USAIDPabat has affirmed his active interert in the Moulouya arid in the US role in its financing
E Fe)ationhipn of Project to US Ansimtince StrateT
Im~rvNrm-crt in Moroccos economic performance is itself a major US objecti e in Morocco as well ar an Iportant contributing influence toUS political objectives in Morocco It is believed that evidence of econc-ric improvwr ent will strerthen the GOMs capacity to maintain its moderatint role in Arab and international councils and its friendly relatiorns with the US
AID strategy is to assist Moroccan econcmic development within the framework of the Consultative Grcur (CG) crganized by the IBRD The CG has endorzed the GOM priority on agricultural development One of the prime objectives of the AID prcgram in Mcrocco is to increase agriculshytur1 rrcdurticn which i in accrd with US policy to reduce on a worldshywide bazis f-ependence on US food esnistance over the next five years
AID ian-stqnce to the aericultur l sector Is directed at increasingPrc+ -tion dry-2and farming as wel as irrigated farming in the LoweyMou]cya Rlv-r Bsrin where the US has provided $23 million of loan assitance einc -lr60nn well as $3 millicn equivalent in ocal currencyloans The rnture of AID assitance to Moroccan agriculture has evolved from major erade TVA and SRI during the last two yearsrtd by U2DA to d-tcrwir- tl new investrent with highest return as well as to plan Fpecific agricuUural develci-nent programs In dry-land farming AID has provided te hrcal ansiftance an- feed grain donations to improveanimal brcen and feedin ard technical assistance and local currencyloans to ipcrenie cereals rr-yiution There projects art continuing and (xrandling rticuarly in cereals production where additional TA in seedproduction an] xt-nsion techniques is being provided AID also expects in thir fischl yeatr tc providr- fnreign exchange through a DevelopmentLean for the Ariculture 2ector to financ necessary on-farm equipmentand commodity imoorts particularly those arising from US technical assistance )rograms
As a result of previous [IS assistence in the Lower Moulouya thisproject ha b--cede Ientifipd In Moroccan eye as one of major US inshyvoverrt Th G has for sore time been -eking additional US loan assistancpe t-Vomm lete t -ind our continued ruport of the project has ansumeri polit-al as vell as eccnomic important in UJS-Moroccan relations
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ioriginally begun under the Spnnihh rgime Work was resumed by the GOM under a contract concluded in late 1959 Major difficlilties with the tunnel structure have been known for some time On comTletion of a series of studies of the problems involved the GOM nvited bids inNovember (767 on a pronrosed contract for the correction of structural-defects i-he tunv It Jn bnticiiated that this contract will be finarced _y the GO fr wn recurees
The Bou Arcg area which lie to the Northwest of the Zebra andalong the Mediterranean Coast will ]ikewise be affected by the delay in passage of water through the Left Bank Dead Head Tunnel The BouArr- - - ontplnn s~re 31000 acres of irrlgablf lrnd While the elttent n lr nni - ytr running from the northwest portion of t -h 11 shy h1s argely been completedneither i of the other irrishygation works required h~iv- - ver n --rt of the d-zign studies for thin area ha- u t L
The bulk of the DLF I-an of $23 million of hiehity over $20 million had been disburd as of the end (f wvmrber- 107 was (or is being) utilized for cn~tructinn of the cehrnKastoragedam and of the Bou Areg Tunnel and the Bcu Areg High Line Canal Sraller amounts were utilized for advisory engineering services providedby a US firm design services and construction of some of the main canal drainage rnd distr1rmtion woks The balance of the loan is expected to be disbursed before the end of this year for reimrburseshyent of the costs of contrEcts already completed or presently under way
The GOM has in addition exp-nded an estimated $13 million since the beginning of 1960 about $3 million of which represents the cost of hydroelectric installatiuns at the Mochra-Klila Dam and on the Bou AregHigh Line Canv1 About million vas expondet on reconstruction and the bn2nc Tprerents entimated costs of operation and maintenace of completedworks The DLF Joan of 1960 war intended to assist in financing a -r second phase of project works in the Mculouya Perimeter As indicated nbive the works ndrtakn in his phase (apErt from the repair of thn Left Bank Depd Head TunnE a jrrng to a close
In view of the Izeable rpuirces devct0-I tc thp Mculouya over a rither long reriod of ytrs--by the Spaninh French ar-I MroccanGovernments prior to l6O and th qC-M and AID frox 31960 to l2--to achieve the installation of the bulk of the major installations required for water ntorare and rranzmi-ion it Ia been conzidered that at this next stage of drvelcp eat of the erimeter the principalfocus of attention should be on t1ose works which will offer the
br De I(
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-7shygreatest and most rapid returns on ndd1tio resources required fortheir comyletion In the Interest of rbtainir an asrrrent ofr It fr the crnletion of the reirainder of the Troject AIDri ained rvienof the Stanford Revar(h Institute to rrenarea tuy i th orrn nrd returns for the vnriou rcrtions of theroject for h h i rr h beern pJanncd but not cnrrpleted
the he hat the completion of
the reynainintz ork-requivd(which P-nti fird Ip following Sectorsray up on tn iI thejwwould appear to offer the optimum coabination of hirhi nremental investmentard early comption
No of Apror To P- riuirred
Triffa Main 317 Triffa Sector 27 Triffa Sector 28 Zebra Collective 1500 Zebra Remainder 14250 Bou Are Central 16250 Bou Areg Remainder
TCtAI)
- Includes cre 8000 aeri o being equipped
If the above is to be accomplished over the next five years asenvisioned by the GOM the schedule would imply the bringing under irrishygation of around 1500) acres per year This is around two or three-times the GO hi torical rate of dvelopment of irrigation in theMoulouya over ast seven years While the GOM has recently reorshyganized its e cnt structure to permit greater local autonomy inf1 e ranagemo- rrigation perimeters and has recently accorded avery high -- -r to acceleration of developnent of the V 1 ouya inparticu t -vident that given the manpower constrai ts involvedin the Mr n operation the- above target way well be it- ible of achievenrnt
The GOM hM itself recognized the elements of thl -- I i lindhas in dizcuss ins with USATDRabat requested considersti- -f hfinancing by AID of the dollar costs of a management crht with oUS -irri to take or c(vnpletely the management unctions fror thi
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b Th - urJrtaen rn the jleft Bank under the proshyposed thir i-e of the rojc-t are i follows
- Left Pnnk Dvd H-d Tunn]
5 r-y rd t final tng of ire aration for ther-rT ir cvf ni r r imy - rz--rt ha recently beenr-t) l i w t e rr - tht - I afid if exToected to ubrit hit writt(-n r-rt jr DC Aii preliminary impressions baled on a 9Ite nErerti(n indi-ate thit a -rt1fartorj repair con bemade in c)nIdprnbly le- t n-ne for lfan -than previously conshytemplnted
The early ccmrt-tnn nf thi work in lmnortanit nine IL c t Ft th avai-bility of pr~ct wrte for the entire Left Brnk
Z~bra Collectlv-
Thin 1 on ara ofrXPr-ctively ond tribal land that will be divjded and allotted tr J-ted tribal -b-hrc who will become soleowncr3 A Pirpe rart ti Tniran -aratirn and developent hasalready bern co-plet] 2pani levelirg r-mains to be done as well ae conztruct c~n of b-tcn dnd drina- works
7eDo i F--vino-
The northrrn ecti n tht rmrainder of th Zebra will requirethe extnzi-n cf thct Train 4]h will be ccrrleted with financingccmmritted under Phase II of fth tr-Ject Land preparation and levelingwill be required anlnp with h ntruct n of distribution and drainagebullir r]
T ectinr f th- rrainler of bra will requiret- rd i i w -J n rrd h c and engishyrnr nw d t i f -tritst t n and dlarn -rk
Piu A rp
foeuro rginprng im hhve b- 7cr)Pletcd fcr the irrigationthe Bou Are- Fr the o-t rt hu- I cf the
of rcquired construction
of main carrl Rnraljor dr- nRe worx z develoFerit and cronstruction of zbldiary li tribution -r irnge y--r rrrairns to I undertaken
Th P- Arrg Tunnel wr orml td in 267 and construptcn sunder way on Ih-Yin Canal rrired tL nvcy water the suthrnf e of Areg ervie ra
I h z-uir-i intluding the -rtablishshyn -F r rnity rvice andIn fit Th rlulrem-rntr for
o1 th I- P Crk t the- RhL et) I n air aly Ii- ted
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Wt r 2torvge 1 95 1)6and Pegulation
Right ank 137 31 10 79
L-ft Bank 25 87 n6 143 239
Far- De ]crl 0 )5 1 b I26
S I M O ALA1 348 356
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At indicatnd In the- tdl iv 11 - rnt it~ocotof the rxojroct are t hi~-hor tnan the ic60) 1orccasts Th y tarc Ah-wever 1hchr by cnr murth~cul~ averllsv( a igiificqntjsCfect t~cn the bt-ric lfer-7t I-tio n- rigill lly rc~r~t
V I ) u O21he 1)+ -J iv )ir(t In h jiv kinvnft bed tado in Lh Tnwr Liynnui vni cif hrrlt rnr 7cst- wrr uniershytaen ic r ii -tQ j ta the Aurpo3vt o 02thl rirarnkinr of r- Ln t -Ir ca th cenm I rr1 urn 1e11 frrn n ow
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elevated area requirin iat-r to be puiiped to the irrigated land with both highr capital costs (about 1 million) and higher oreration and maintenance costs (150 Dirham per hcttare via-a-vir 100 Dihams perhevtare for the grnvity irrifrted ares) The ony work presenl-ly cotiishypleted in the Triff Hih Ser-ic Area is the preliminary engineering stirUes Cimi-ir to th Tr Pa r thu TrIffa ]Igh Service areawill reiir an ex I uvnt ricd bfore agricultural proshyduction cn be initlat-2i
The above considerations reiult in the following revised ranking of priorities
Project Area 1FY (M Priority
Triffa Main 21 I Sector 27 8 I Sector 28 9 I Bou Areg Central 6 II Bou Areg Rerainders 6 II Zebra Collective 5 II Zebra Remtd nders 5 II Triffa Ent 6 III Triffa High ervice 5 III
SRI 11ed a ccst contingency f7actor of 25 and a cumulative costescLlatior factor of 3I per annum These factors appear excessivelyhigh in th( light of (1) project experience to date and (2) the fact that from his roint the technical rirks involved arre of a much lower orl- r f 1h thnse inhtrent in the major works Just comshy1 I intion nrd contingency factor of 15 has there-
S chtiMnte- Itlizcd in this rarer The ii n-ttr costs the to ) ject (in n]ace of factors
i by )I nrt 11 thIrhe nf th nJter atve I[cwver rrtnrecr-y factor euld Increase the IPE ] hi ra]y th- IIRF fcr the TrIfa Sector 27 ansnunirg a
oct crortlr7crncy A can be seen as the conAngency I thf cc curve rrv to the right and inter ects the
ur h h 4r- rnr rate of return)
C Finreirifg inr
Cot o the prJect wor fmcentntgenent nnd engin-erinm advisoryrvices for the proued t rd tsge of the Mmlouya Project are
ctirt a Crollows
nF3r AVAILArBILE COPY
Best Av DlableD
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(In Millions Of Dollars)
Righi Pank
Trffa Main 34 poundSt (r 27 08 S ctor 6 0Q
51 Left ank
7bra Collective 12bra Remainde r- 54 Tou Areg Central 74 Lou Areg Remaluders 68 heft Bank Dcad Head Tunnel 30
238 Services
Management 20 Advisory Engineerin 05
25 SUB TOTAL 37
Escalation amp Contingencies 15 47
TOTAL 361
It is proposed that the AID Development Loan for this stage of the Moulouya ProJet be limited to $5 million an amount which would be sufficient te reet the cost of any US goods and services required for the works to oe undertaken Thus the loan would finance the dollar costs of manrement and engineering advisory services to be provided by US firms erstimated at $25 million The balance would be available to meet any ther US cofts that might arise for constructicn cuipment and nateria]
The balnnmc of funds required would be provided by the GOM from its own budgetary resources including as appropriate agreed allocations of the counfryj-uie dirham proceeds of US surplus agricultural programs in Morocco
To a l-ge extent construction works In the Mou]ouya (other than the Bou Ar- Tunnel and Mechra Klila Dam) have taken place under a largenumber of roll contracts with Moroccan firms It is anticipated that this will ontinue to be the pratice in the forthcoming development stage Th iit is evident that the great bulk of project cests in this next stage will be local costs
-E5 -
In the event that not all of av l able fuInd- under the loan are required for TKI eo It i ouied that any remaininrn balance be utilized for the payment lo -ovalccztn f the project This would be aceoomplirhe by utili7irn th- h r vroceeds of the loan to purehare US-use dirhsmn (frcr th U Oi-irrirg Officer) which would be utili ed to rrimbure th fc u a t local - nditurrs
Thi arranrit 3ir ila ) fstV utilitd In the - of the D-e l-INAieret Loar tJr U Atrrert SinceYr usii Conv rf i cn therc loans are rcpiviible in dollars nd rince Morocco in a n-ar excess local currency couintry the fert ) f e transaction in tc provide a means for obtaining ccnvrrrs cn a-cr th life of the loan of otherwire inconvertibie U5 holding irhrs hich are in exces of its localrequireme t
In 1967 over 15 million dirhams (abceut $3 million) of PL 480
Section l04(g) loan fun cre in msgreement with the CON allocated for the financing of various contractr reloting to projects in the Moulouya It in anticipited tht ndditional allocations will be made out of the local currency proceed generated from current and antishycipated US 7urplu agricultural rmodity programs in Morocco
It has been proposed that the dirham equivalent of $45 million of the proceeds of the October F67 rurplus agricultural commodity Sales Agreement be allocated for a Section Cb(g) loan for the Mulouya In nadition it is estimated that a $]35 million (in$ioz1ble dirhshyequlviJent) woull be available from 7uprl]eental surplun agrIcultura con -ity rales programs under Titlo I an-d Title IV in calendar 196F for allocation for loans for development projects in Morocco These two amounts combined would provide about 6 of the G014 resources reshyquired for the project over the next five years On thic basis there would appear to be rcasonble propect tht the GO should be in a rorition to provide cver the S e year rriod of the project the addishytional resources renuired for itF ccmpletion
Tt I contemplatd that na additlonal US dollar financing of the Moulouya byon-l the $ iilon rorosed herein will be provided for tl cplei n ef h M _11-nuya rince the bringing under irrigation of th- 11O0Y ies include] in the propore] project will substantlally cornIete the works criginally conwtemplated hen h DLF loan was authorshyized in 106 The remainler zf the workr h(- be within the capabilit3 of the GOM to complete with It- o-n resourcec
MT M T M
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) Technical Anily ir
The Moulouya Rivr which is cre of tne largest in Morocco originatesin the idll Atans
Moulouya and which oztend scuthward
Kediterrancn l re
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Pr
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flows rrpr
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to the
In- agricitui 1 in li j i nt( iljr r Th- rst rind most
t 2 1ir i t i h- i n th rwrht born of thshy-- e 31nmiler frem the Mediterranean
Lea To tho wet cf the Tiffa and nn th- left bank( of the Moulouya isthe Zebra nlain 14wiuntain rv-arate the Zebra frcm th -ea and fron theBou Art-r i-ll]zain which - ctI nrrthwe(st of the Zebra The Bou Areg a coital phtain sclte 19 mils lorg and h miles wide separated fr-nthe n-a by a Ihow sa2t water lagoon Southwest of the Zebra is theGireb plain which hun land ruitable for irrigation in its routheasternportion The Gareb i at a higher elevation than the three other plainsard if ultimately irr-gatcd vould require pumping fro the lower level Zebra conv(yance system
Water from the Noulouya River is stored brhind the Mechra Klila Dam whichwas coniletd with fjiancri rc AID loan (3-A-2 (DLF Lcan l6)Water ir rclca ed downstr(a (1bcut c) miles) to the Mechra Homadi reFrshyvoir and d]iversion dcim in1h-r divert-d to th right oad left bankcunals About 75 kilometer (1 miles) of the Triffu (right bank) maingravity ciral hay ben copletd und consderable cr) has been carri-dout in the Tri on) distr Iution and drainage netw rks land levelngend other farm iwnrovwments About 37 kilometers (22 wiles) of the Zebra(left bank) main gravi-ty canal and the tunnel 6 miles (101()7 JIrenrTrcters) betxeen the Zebra area end the Bou Areg area have been comrneted
The GOM illrrfo m certqin -rk nr-Aded fcr develormnt of the gravityir~zgata yt-- for n 71-) acres over the next five yarr Thiscffort vi2 be eonern rait-r urcr the develo-ment cf areas thot providethe great-rt ecnnomic returrs nnd the developnent of a cadre of Iorocearperornel adequ tly tran-yi in the an2gerent of the project SeeAnnex C for further Irojcl details
e- enmL Ev1ation
Mt Infratrueturr The --trnal highway co-munication network i t arid rfi Isirm nf re- i n-ote siler in-1 shy
uzeather raved rc
____________________TAM
- t 7shy
Other communlca 1 i i t ih Lh arr-- inlude the nrninlineof the Oujda-Fe--C- t h~rh l e0tnnd to AlgeriaSpanish enclove rt the 1 fir idto cmmercial airport at Oujda andNador with regular national onI int rnational ervice5s
Th verirtr 1 u ~Ath r nr r t crocd by 60 kvJ i i i u rrd t 5( kr It na ortr kk f~ditcrl rower1(Qp x I -y yrar) -o n d hr rritIronr
at the Mechra-Yplusmnilj l inm fnd the Bou Areff contral poter Statin The townare connected to ranrh cther and th2 r-rt of Mcrocco by telerhone andtelegraph 1 ner
b Sol Soil rvey 7rd land ]a-ifctons have been completed i-nthe Mcloulva rer eter oanntrantbi- with French firmr u-ing Frenchmethods The Trifa -1n wr initialy rraped at a cealeof 150000with certain area ub entiy rer-aLd at 15000 110000 or 120000dependin I nn the cor1cjeity of YJ rattcrns The Zebra plain has beenmapped at a reale cf 20O00 nod th- Bou Areg plain at a scale Df 150OO On thp baf Yr nf ther urvy th cla sified the soilsGC hain terms of r-uitnbility for irrigation as follows
Land Ciaifcation (Aere)
CasrI amp IT Class III Clans IV Totas Triffa Plain 17000 29[00 22725 99625Zebra Plain CbO 1275 4050 211425Bou Areg Plain 75)00 l6qo 3 0 3067)Gareb Plain 13 05 10 70 0
Inclurez 1750 acres for lfigh Service Area
The findings thi indicate that ( i) arriratry 5of the area in thefour rlain- i suited to irrigation (Clare I anl II) (ii) more than3 ir suitabr bt with one Or mcre imrtat~ons Irro=ed by underrablefeatur-s such an to wrafhy oil characteristJcn trnine- r restrltedbull rio (CIar TIV) and (iij) ls than 2 of th- area in only margina)lysuited for irrinticn(Class TV) In ther7e lattrr ardrn only rmi-intrnsive orop rotations blUponsblhe
The oi nicn f the Cn-lting Envneer (1ydrctechrJ) th respect to) therd carrffjn n that hfle 3 Bureau for P ltr0tion -tandards werirt ernoy-d te rlasnificatinn ir aceurat- and n rrti with3and rlaced in r d rLrnble categories more
uere thnn right ha bern the caseUS tandardr folIced The clasifatinn ha 0a been reviewed andfound to be atifactory by the USPA tayr Hoever r areas of complcxroil Ttternr hch to date have only been ru-d to a oale of 150))rome reraTpin tray be necesary as a banis fcr rrerarnZ
- g~T PRAvVLAFJLE EOPv
final designs of irrigation and drztinne- rystems parcellization into farms and planning of land preparation measures In addition considering the high average salt ccntent of ater frcm he c ilouya hiver a rorm of systematic leachin- will be reqirer- to f ree-rt aculation of salts in the soilsparticularly in h ebra Crt in will nlso1e plain ureas require nitrogenphosphorus crd possibly other nutrient to obtain satisfactory yields
c Water On the basis of studies by the GCM which have been reviewed bythe Consultirr Fnr ncri and the U au of 1ccoi-ation it is thecorclusion of A tt (i) the q lity of water in the Lower Houlouya
is below averpge bvt crp rble to thtof certain rivers in the US whichisotnteLoh~uoybrve successfully been usc for irrif ton for periods cxeccdin 100 yearsOj5) there is clearly a sufficient a )unt of i ter to irrif-ate the 128010
bullcrer to be served in the [rlcentIty ar n3 Addi-tional s-tudioser (c requilrecj dcter-Inc if adeqiuate water is a- ilable for irrigationof 376QGO vc rc
The only signifcant urce of vp y fOr irrigation water in the perimeteris the oulouya Vi~cr io jc n1 is 1re ntly being irrigated from wells most Iround water i - - 1 Alouya contains dissoived salts which i xr Lrn - hvriny reak flowto iJOx PIn iuting [cricd of c n ccntraticn is 750 ppm On Thi- basis of USDA Salinity Lot) atory criteria fte v ater is class 03-SI (hl-h salinity-low a-alinity) Vile water is thus of mediocre qualityit is ccmrarable to that of river successfully used for irrigation in the US (eg the Lower Colorado Rier) and poses no serious problems to irrir-ation in the Moulouya perir( cfr provided the W4 adheres to recorrmended programs for meeting leaching reoairements
With ref-pect to the 128000 acr project the demand for water reasured at the Mechra Hoadi diversion dair is estizated at about 575 million cubic meters per year as follows
remand for Wter
Peak Flow Annual Total (August) (m 3 million)
Agrieulture (176000 acres) 337 m3s 806 Municipal amp Industrial Consumption 8m3 23
Total 4 uy62123000 acres to be irrigateA by Gravity 255 m3s 575
(The e dpeak requirzents of 345 s compares with a 35 m3 s design
capacity of the main canal at the diversion dam including 18 m3 s for the Right Bank and 17 m3 s fcc the Left Bank)
I
- 19 -
This estimate is based on probaole rainfall cropping patterns plant requirements evapo-transpiration and other expected losses of irrigashytion water The estimate is believed by the Consulting Engineer to be reasonable but subject to refinement on the basis of tests to be carried out on a continuing basis
The annual average availability of wuter from the Moulouya river is estirated at 1100 million mn or about double the estimated requirement for the gravity areas
Estimated Availability of Water
Twelve Year Annual Average for Moulouya River 3 m3 second 1100 million m3year
Maximum inflow Observed 8000 m3second(1963) 3h00 million m3 (1962-63)
Miniwum inflow Observed 1 msecond (1951) 532 million m3 (1956-57)
On this basis it appears that there should be ample water available for irrigation of the gravity area as the water availability obtained from twelve years observation exceeds the requirements in all but the 1956-57 season shown above Prior to the development of land with purped service areas (the Gare-b and the Triffa ig h Service) a review and analysis of the river hydrology should be unidertaken to assess the availability and regulashytion of the river flows
d Studies Entincering and Construction The overall irrigation scheme outlined by the 1uM defirs the ajor features and th( magnitude of the work to be accomplished to attain the ultimate goal
This scheme is being carried olut in phases over a long time period The present phase encorpasses the development planned within the priorities indicated by the Stanford Research Institute (SRI) study for the gravity irrigation system
The studies for land classifliration have been completed for the gravity irrigation system in the Triffa Bou Areg and Zebra plains by French firms and were considered reasonably accurate by the Consulting Engineer Land consolidation and parcellinrg has been completed by 0MET in the Bou Areg Central area the Zebra Collctive and Zebra Remainder sectors 7 thru 10 Land consolidation and pareeLlni ar( needed for Triffa sectors 27 and 28 Bou Areg Rematnder arid Z(bra Rerrirder sectors I and 2 The engineering designs for the Triffa main sector 27 and 28 and the Zebra Collective have been or are being completed by the G0M forces The engineering design for the Cefntral Bou Areg and Zebra Remainder sectors 7 tnru 10 has been or in being connpeted uy Hydrotechnic Engineering design will be required or the 1ou Are remainder sectors D-3 thru D-7 and Q4 thru G-6 and Zebra Rer ainler sectors 1 and 2 The engineering designfor the Dead Ilead Thnnel has been undertaken by SCET who have preshypared anid issued an Avant Projet for bid invitations for construction
14 M)j6Fj Cshy
-20-
This firm will also undcrtnk- uu-orviston of construction The engineer ing not yet performed can be aea ished by GOM forces andor private engineering firms
Construction of the extension to the rrain irrigation and drainage canals Jand preparation rector cinl ani drninaive ditches will be performed unllr cntact t) 1 cc rt~r~iet m)t hi in the ene of the
r-abilit tion of the L2tL Pz- Dd iarl Trnc t
e Cronning Patterns The existing erning pattern in the Moulcuya including botnirrigatcd and dry farm ingincludes grain forage citrus vegetables olives grapes and 6 small amount of leciduous fruits and nuts Of the roughly 2140Cy) acres of agricultural production in the Moulouya about 177000 acres are in field crops 24)) in vegetables 16Y)O in citrus 15000 in grrrcs 540Y) in forage crops 1700 in olives and 15)0 in other fruits and nuts
Taking into consideration rast and present trends in plantings as well as agronomic and price and marketing factrrs the following projection of cropping patterns has been developed for the Lower Moulouya
PROJECTED POPPTG PATTFRNS T1 HE LOWER MOULOUYA
(In per cent of total irrigated area)
Left Bank and Triffa High Serice
Triffa Sector - Sectcr rriffa Class Class Class
crop Main 27 28 East I amp II III IV
Citrus 40 60 10 10 10 Vegetables 15 10 15 1) 20 10
Crtton 15 20 10
Fcragpr 10 20 25 30 4o 30
heat 10 6 20 25 20 35 4o
Grip 25 24 35 15 Dy beans 5 10
Sunflower 10 olives 5 0
100 10) 100 100) 1i 1052i 100
a Incltdes double cropping
- - r- euro --- 7
~7~TF~Wr~e~ALUSE
-21 -
The projected cropping pattern for the Bou Areg plain includes cottonLJrirdg the frrt Five yearnejtinted 1r of the Class I)fand
the project jitwould be grown on nnII landn Tht renresert only 960etrravres) ectz ri)cr)e area The cotton acr~a e ry increasep 2ceafter live years if ritisfactory drainage conditionshyrre achieved in the Bou Arev
cotton grown i 1xonp tarx- Trdltionally Morocco export its-Jr- cron an irr IJ hort cble to rmeett Cotton the reuirrents
r the oroccan 2pinningr mills The croppni-attrn of the Triffa East (about 180n acres) Js projectedt Tnrlude 15- (about 27 acres) in cotton It is likely that becausef ihe limited extnt of Class I and II lands in the Triffa Eas cotton not increase beyond that percentage
1t i evident that the amount of irrigated cotton that is likely to bein ther-n Moulouya is minimal even assuming that local drainage condi-T nare i asuitable
f Technical Sundnv--s The AID Project Engineer hps reviewed ii) thedat and ajor construction performed to date onronct and finds the technical requirements this long-ranRe phasedsufficiently defineoto ccntinue the project on an orderly schedule The estimates of cost of prsirct facilities have been determin-d by SRI from average va)ues oftrit cots obtained frorr reviously ntiarded contracts and from etniled( -s-nand analysis prepared by the iHydrotechnic Enginering fir oft-o tyieal sectors located in the Bou Areg area The costs for the arc ent contract have bcen estimated by the USAID It is consideredthat the depree of engijeering planning undertaken and the deterrrinitonr to the US Goverrment are adequate to meet the applicable requireshySt- n Section 611 of thie Foreign Asistance Act
7717gt
1 --shy
-22-
E Financial Status of Borrower
1 The Moroccan Economy
Grrwth of MorocLcts GDP in real term averaged about 24 per yearin 1(4 and lr li Per capita DP In 1C 5 wan anproximotely t162 A (er Irr-ht in (6 resu]trd n a drcrcne of slightly nver in GDP which tlh vpulatior grc~vth avrring 3P4 per year rnrsJted in a decline of -r ornita GDP In 16 ii brut $154 A recnd droughtcccijrred In C67 but i not expeetid to have the severe effects of the 165 drought Crop forecasts for the first nine months of 1967 indicate a 4 increase in real GDP above the 1966 level This is also the economic grcrdth rate estimated by the IBRD for the pezxA 1965-70
Moroccos economy is heavily dependent upon the agricultural sector thich has averaged about 15 growth per annum However growth of the mal modern segment of Moroccos agricultural sector has inshy-reased at the rate of about 7 per annum
In 96 the International Banik for Reconstruction and Development (IBRD) preented a number of recommendationr denigrned to increase Moroccos economic growth rate On the bacis of these recomfndations the G004 proceeded with planning the necesrary program to increase investment levels fr- the i 63-65 level of 11 of GNP to 1r of GNP and stimulate the rate of economic growth from 2 to an average of over )4 annually for the five years 66-70 In addJtion the GC4 has taken measures to curb the population grovth rat while placing increased emphasis on raising production of both dryland (wheat) and Irrigated agriculture
2 Investment and Savinms
The level of total gross investment has remaind at aboit 11 of GNP for vera year althugh the percentnoe declined slightly in 165 Under the GO Three Yea5 Plan 1965-67 the gross investment t-3rget woz ret at DH 3 billion- Actual invev-tment expenditures for the three yearpeirod reached about DH 46 billion of which the Governshyment ezxenditure amounted to DH 1 billion a against DH 21 billion budgeted Thin may have beeo partly de to the GOMs deliberate ausshyterity pollcy under the hIF rtbJli7tion prci1rnr but more probably it van duxe to the shortage of trained cadres to -lan and execute projects
In the private cectcr conziderable inounts of ravings may be hoarded due to lack of project attractive t- inventors The lvl of private investment has been runnihg at about 51 of GNP thrrugh 195 The 0014 4 incentive to private instors hnr cut profit taxes from 4320 to V and announced a tpn year guarantc-e against tax increases
]L- $ = DH 506
777=-77- NQ
r y 7k1- T e - W lk In
j - 1) 7k- - _
- 23-
Loan are avaiiable to )rivlite irve-tcrn freo th 3JfIDiN s rctr special funda to prcmote touricm devc firvcnt
Under the 1r86-1972 plan abut to br irtntt level are to be accelerated considerably reaching A of GNP liv ]970 Mor(- Irlyir haviiy on foreign 1 to aciuw cc higher lve1
3 Central Government FinancP
The Moroccan money supply which had Incrrased ify 76 per cent in 2965 remained virtually unchanged in 966 The first half of 1967 witnessed a 5 Ter cent increase in the money supply Te major part of thi increase as concentrated in June and July uhen the supply reached V14 0j lion Currency In circulation expanded rapidly in June and July
nnl factrrn being reinforced by commodity hcnrding related to the 1ide~l Et crisis Demand deposits did not show their normal decline nthe first half of 1967 Deposits with commercial banks declined nlightly while deposits with the Treabury increased as public and semi public agencies contisued their transfers from the banking system to the Treasury The increase in money supply in the first half of (7 ran I raced to tho nzon1 sonal increase in net foreign assets not c y the custcirry rlelir In claims on the private sector Clsirl (n the erivate sector declined slighty until May 1967 but Increased hr-gb June and Jily due primarily to additional financing of textile stocks ClbiJ ante Government rose by 10 per cent in the first half of 967 the in central brnk claims on the GovernmentI being rmainly offset by larger deposits with the Treasury
Ordinary budgetary revenues which incrurted by 5 rcr ent in 1566 tre cxrcted t-) increase by 7 per cent in 1( to DII 21 billion DeampDite a derea3e in agricultural tax reccipt r- fror diret taxes rose by 10 ppr cent in 1966 and a 2 increas estinated for S67 due to tric or controls on income declarationr d an accelerashytion of tax cller ns Owing mainly to a relaxation of the import
program in late 1 5 and a concomitant increase in tariffs on certain ccnonter goods customs reneipts increased by 21 per cent in 1966 Although budgetary estimates call for s decline of 3 per cent in customs receipts in 1S67 it is likely that actual receipts will be considerably larger in view of the import liberalizatidn measures intro)duced subseshyquent to the estimates Receipts from indirect taxes state monopolies and other serces are expected to be 11 iv- cent Ipher in 1967 owing to increased profit on -ugar sabr-i and L r(m the newly created Office do Ccrmercalisaticn - d-tation (OCE)
Recurrent ordinary buiL e(enditures increased by 34 per cent in 1966 ar-i are expected to increase by an additional 7 per cent in 1567 reachin- D1122 billion Although wage and salary scales in the public
Banque Nationale pour le Developement Economique
TT~~- - I777
2 Cf
sector have1bec z h t - rrvirI urli 11i g 14-6 -nd PO becnue rX toi Ijt e f (]r o n 4
ill tile ic urrnnye andr)not i on dnd Publi ht rentrn -yr-otn lno IncreasedOthrr t ill- t il r ne by ) vr cert in J6(
i ninlyrt -br h Inc-l
( Ihe ( t r- rl t ip t t C itur f T)h 21h iilli n
is (( ItI t lt r c0 a- r n n o I- c t b It ihstnl id vv ih n t r-t have hn(er - en 1t2
(IM ii ture( T f fu traordJ nary budrzct exshypend ituren a r y -t c ~ i vi -iscz Portal Checking sy-stcsul)rrcing t (I ltIt Ct -- ind creirn shy
nnet The f r er tnc I hha ccrc ed from a htih of DH 5-7 millIJn in _ 5 millIn r C46 F cr ats foi ]7 place Cro n w I 1(DI)J79 ill ni DDn etlc fi nancing has alo u 1) 5 p (- I3A27 iIliun to an entirnted DH 1142 million
1 14V ) I nv 1 ri n nI(c1 franc n is 77-ected to be ol t y ncrewed bcrrowing fr-ir t he Cestra 9ank which hud been held at mcdert vols iln 165 nnd 1a66 Under the 1TFtaiby agreement of October 16 the qob) agreed to taBe a3] rocrrnary meurer to maintain as table curoonry rPnt inl th nr1d-elrto th b a ent of the ePrncriynnd a vnbl- hn1incc X nvroent P rt artt to t rt fien of tho Ccntin- Honk rstz (erct are nct t r itr June 30 Y-ke 7 lov l b th n Diif ) mill] (n tlcnber -c P thai I o illin usit I ])ecthr 31I62 (GC bc w t
C B1rtrp - vt DH 12 iri 1i nor ]S67 or DH 6S ij lionEan tisated (r fo than the aproved crd it expanwim
Thitrd ordivary nil extraordnnry buThTt deficit of DII 7-19 millI n fcrecat Fr 1 67 in exnected to be fnanced by not freign
tan reof DII )75 mi~l in nt recurity 12ue 1 T111I vlion a - nt ry tiat Po n Che )ir d-nC i 73 r5 Pn
riI is u h i a vti v mrr nrr-e jssIof fvr is id a erital The vnfsa revcred in 1d6 when lnrger r nyrentn eEecially on food itcmo an n -lewdoun in
igo ra a deficit of $1 millcn ProjectiOnz-vt rvultvd in ror 17 r~ieat inrrerned importsonly partially ccnrennate by addshytsa t frnreirn r ntil rrceiprs ard mprrvement in the nervices account will reult -n et of aprroximately $)20million As rhoim in the following tabl -r tion for l33 and 169 how overall deficits of
14 and m] ivi_y$i It
rqVV t1 4~
C)rgt
---
1 -)I+-IRF1
1ROCCO - rTANC OF PAYME 1qrt - 169]_ 5
6rfi0 1 1C(8lr67 i r(o
)xrurt 2t L( I L-5
Trade Bnlance 11 15 - 75 shy - 75
rviee- ret - 7 - 5) -35 -23 -2
J]-i of Good rnd Service- - 3 - 65 -II - ti - (5
Trn-Ifr Pr ynts (nt) P 21 33 37 33
on-cntnry Carital (not) 92 64 6 6 5
Err-rs nnd Ov rrion- (not) - 23 -2 1 3
eranl Bannic __ - _3 -_ 3 - 1i4
Atrh thert ircjected reficitn are of the nnme order of 1 nishytude a7 thcr incurred in the period i66 the Situatlcn i findarentallydifferent both in rerprct to the source of the deficits and in rer-ect to the meat0Y gtr m etin7tecr In the f rrer caive M5recco uffered
_frcrr a very h-vy cutfc of Drivtes cuitv fo-ivr with a shar) decline In forein nt exerditures in Morocco In the iatter case th projected deficits r- rcre a functicn or accelerated crcwth risingdebt ervieiiw tri tho abnrcn of forv eeble additiens foreign reshybull ourcs nere7ory 4( r2Vm rAf finmncting To nect the def-cits during the reriol 161 61h MWreco ob1id to drw down rorcin exchange reserves of over $]c milicn The snrti tpv of financing is no longerpozslble ince no or-res- ruch reserve- Even ifMorocco yr
mn nina r rve_ ore (]rrfii on to th r-ixirun etnt enribe nnd the [iI tnfldy i- un M-r-r e i32 till relA re nt rnt 15 millicnj1itionn ftr ign as- e n 1 6 beyond hat r recnently fcreeeshyable with ver nri- nry Officilr in In i6 reserves are cotImnted Pt 72million c hih crn V 3 million i caly required for currency coy r
Foreign InJebtrdne n of th GOM Mnroccos external rtnte ard rutlie enterprie dett amounted to
$r) millivn in lr6 Debt vervcirig rpynents for (66 trtaled about
$5) rillion g-eement approved in October 3(67
I- -- Ishy
37 millin or arprcxitrrntoy (j Iroccor totnl eXoort earning of h28 millicn GCnerally nxt rrO dbt FervicJng renuiremennt of leas
than r of totna -ort nnrlt In onrldered to I r tirfactoryrntio D-bt r rnJrcLct n Ir the reriod 1-(y 3on Trerent external debt including thnt wrtl(n irreently undibur-ed are hown n th fr lv tahlr
)] L v yr t n
Eternn Vtnte anc ] bntcrnrie Debt
M131 o)nr
Y aI Net Outrtnnling Debt Debt Service
(6 it 479r5 $367 J-67 452 3)6
Z616 44469 2 0 2C-
365I3 37 389
33 383 33 6 371
5-h 31 n 352 275 34121
]176 2661 32It 1977 21133 311 177 22)6 307 19 i0l74 256
1733 255
rgtternal debt rharre n rerent debt nnr rhon above do not increase ubtanti-lly over t rt 1)year- reaching a maximum of h44 millior
in J6 and decrpt- n cr - tently threoafter At the are time exportearninr r _rc extett nc-are Aring that Morocco does not inshycreswre it etrnn2 cbt t irate ubrtantially nb-vc ihat has been the core th adfiticrn dbt e roquirrentn reulting from the propo t Icon o 5 ijilion co r 7crncepr-ional term hould not have a i-nifiant affect n 1r o - ab lty to neet itv g rc-atedebt ericn rcnrib2t~e- the pros ectr of reprment of thin loan ore coniderci rearcnb)
U I -
F ot h-v C IuIJI rmt I shy
1 V amp~ rVml KI
PUC- -jrVi Jt t 1 11 nflrcj urlc 1- th )qn --P I uti u rhnrrl -1r- thr U- Tr- ry- R- -nymc nt
c2Il f n 6 1 bf r I- till 11 nfl r- n-r i n of O r--niC(Io~hi U 1 1 rr to
Tn vil ) f rvc hi tvlrll 1 (In- - n- u--n E r me rrinshycgtay F rntwir w ourc o -o- rvI ortf-V3 1 rncing of
Uf f -r rrrir- ur3r 4~ v -rin Iltrt nt ndd shyt -n t ) in- lint r b t l r -n rort- o-orco trorl-- V -P
r i 1rnd h L-torie Furcl-trin firr- thrjt US r r~ crvirrf- u~d be~
T L I1 c vt r- -ly ] -ubt fu 1 n vi pw -I -ror-co Ir of
ut1JpcO In thi rjert f it -- r- 21 npnred by d1-nr- cothcr t~han the US
2 ]P-t ofI Prr l1 on Prw- Fntrrr
Phij rrcjJ-t -11 n-t h~ -in nrwerq Prrt n rr- tc ntrshyr~A~r fi-mc 1bho und for --roern p o n
3_~~PrCT--rty
rr-vIi-n 1 h -d r the loan ragreement for Icntifitcation ef any r mIjrpt n ctri b- rt througn ut 1zatn (f xccr- prorerty
If rv c u~eAID n-mrcf u urr thi )cn - I~ut~ em avoi3ablo r rovvrirrnt -rrperty rather than nce iteni
4 Otli-r Fr- Wo--] n-Fnlc4rm
Dr mi tW- o] 14rocco- i~ajr ovr-ec -f exte rnaX
rrtan~- hrtvfb - I r ~ ant fl Fr n fole by Kv-it
Sgio F rneflit r b-en 1lmrntrd to tcfohnjip n5tnnen bi eoni~in I th u y f Fr--h tprhntcian tcacrr ind cther
~ti~r t~ ec-tnmIyrt-n Friinch Aid to Mcreco In 1065c~oc~ (P-art f-r txychnirril aItn -- j se of tl5 w1nfor bu~dget rurport f ir in rt t- $1 1ri1 icin in ennita -rojectM- n vx- rrcd
1Vw1tvnn tioI t-) Frenh rurtnnd +16 r11ion tie-I to -onyiint to orrrcr Frrmh ccilcn~For _-rrc-ratod land and rquirrmcnt
West GTrrnmnny liar agrcrcd to nrovIe ccme j27 mM22~cn 1n catital arirtanre and cromrndity lnoi7 t n OfIcon( q92 thi o totril$223 miJ lien ha actuary b-Pn cr-Itt--d under Inn ngrepment This
And a lk5 million commodity loan both) signed in 1965 All Wet Gerzaan
Ufla
-28shy
capital asnistance I vuectI to be tied to German exports Germanyhas in addition 1uvvded r tteysubbtantial technical assistance f
The IBRP hah rade four 1nns to Morocco since 1962 totaling$6) million Ofthin totnl a [175 million loan in 1965 wos fordevelopient of the gidi lit-r irrigation perimeter Other assistance by internntIcnal Iending arncie include an $11 million credit byIDA in 1C65 for rcendary diicction projects and an IFC ln and inshyvestrent of $1 1 ri jnic alo in
F tit i by [c - dncr tr dh elo snt ofMorccco rircuVt r oii +h b-]n jt-TKT r nbove n 2 )6 niliion Kuwait enn in i66 for develomyment of the Tensaout Prnm n irrnten nrooetand a $77 million Kuwait
0jl n )nnsn r(niti-nertcir
loan for extrnion of the Tadri~ Irrigation Perimeter
The following- trbe surrlnrlzes other free world arlztance (excluiin technical assistanc-) to Morocco for the years 1(62-66
($ Millions)
1 62 1cf_63 96) 19r65 19)66 Fneea 4) 5PO 64o 700 shyWet Germany 223 gu 1t 53 281 IRD 15 175 10) 175 IDA 110 IF C 1 5 7 7 7 0 I15
TOTAL 55 62 1U3 W
b Includer only lo-ng term loans and exporter credits - Includfs 25 million private capital
Eternal ansiztnnce to the Lowier Moulouya Irrigation Perimeter -nce 1060 hres been con[fined to US upport Consdiering AIDs previcus
involvement in and conmitnert to the Lower Moulouya an AID lean in P2t to be Lhi mol aprroriate source of financing for this project
LID
II
q
-29-
SECTION ITI- Y-TTYT TIMPLPTrION
A Periret-r Ad-instrrti-
Authority for irplerrentvtnn of the deveorpent prrgrn frr the LowerMoulcuya Perimeter and rs wel arth crnntinuinz mrnnrrmenertC tt r t- rrtnr V theltbi nad overationity iOfic 1cne 4
n r I e1i- i d Vit4 i Iv ~ Ct rreated i Otb (rJ rn-- of evcn inrmi-rriional offices hich reelaced the Office de Mire en Valeur Aamprlcole (OMVA) Under the OMXA and itspredecessor agencies authority for ad-inLtration cf irrigtion proJect war centralized in Rabat
Under the new regional office organization responsibility for adminshyistering ORMVAM is vested in on Adminirtrative Board of 10 members headed by the Minister of Agriculture and Agrarian Reform as chairman All ether board members (other than the Chairman and a representative of theInterministerial Economic Ccrmittee) represent agencies or activities inthe region of the r-eriret-r whic comprises parts of two provinces Localretresentatives on the Board inc]-de the governors of the two provincesOujda and Nador the presidents -f the two provincial asembtes and of the two provincial chambers of agriculture as well as the perimeter Director
The responsibilities of thie Administrative Board include review of theecys program establishment of its organizational structure developshynt -)f its annual budget and establishment of rates and conditions of
Siyfent for water and other services provided in the perimeter
The Director of OP4VAI-I is dbarged with the responsibility for executionPthe vclicies established by the Administrative Board end administration of oil ORMVAM functions This responsibility includes selection of staffn pserating perrcnnel acting s officia ORNIVAM representative in all ntztinns with -tate and othbr public or private bodies and the
f of funds within limit Indivated by the Ministers f Financetent rn fricultural and Agrarian Reorm
Perimeter Oranizatlon
ORVAM oreanizatlonal structure consists of a directnrate five maj-r rvlces or d-vsicns and one separate bureau Two services qei Administratif et Comptabl- and Service du Yatrial are conshycor - th adminisration and lcgistical support of ORMVAM operationshi1e the remainirg three services rind the separate bureau are Involved in t-hni al matters associated with agrcultural developrent Each ervice has one or more subordinate bureaus Fei-ce Chiefs and thehead 0 rch bure-u report directly to the ORMVAM4 Director
-~F7E MEw-
-30shy
2 Perimeter 01ttffnr
OPIVAM orgttnlrntlon treture calls for 557 positions of whichI L or 7 Mlled n were nher 29 1567 37 of the 71 Postshytion vacancies reported 1ern the high and middle levels Foreign(chiefly Euronean) technclan occupy I)of the 16 high level positionsthat ere filled at thfit tire
Whil OPM ut in th- lcng run lor to Mercecos oducational yster to prvidr tn crrf-nn2 to ratisfy current rdurojectd rcshyquirement th currnt high and mlddle level vacancies rrouire uersonnelwith oxt nive nrior rxericnce To fll this preent need it will be necessary for CRIVAM to continue its program of recruiting foreigntechnicians until ruch tire ns graduates of Moroccan educational programsacquire the necesnry exrerience The managerent assistance componentof thin pro~ject ]e-rribed In the Project analysis will to some extentalleviate OFIWAMs high level personnel requirements
3 Inw1 ernetation Sehedu]
Months Implementation Action
1 0 Sign Loan Agrcement
2 2 C-tiify conditions precedent and Y4tiate procedures for selection of US firm for management contract
2 Negotiation of extension of advisory Engineering Services
h 4 Contract (Hydrotechnic) Negotiation of Managerment Contract
5 60Cmpletion of Project
C Waivers
Sect ion 7 rf AID Regulation 7 provides in substance that theUnited State ill not finance direct costs of construction work performedby third cc-ur y nationals unless the total co-tn of the project withvhich thr ennrtrumticn w(r is asEcciated donot exceed $2On)O orafter excluding national of the country in vhich the site of constructionis located and Dersons vho nave resided therein uninterruptedly for morethan three years imrnedJately prior to any determination under Regulation 7at leant 0 of all uernons who work under the contract at the site of conbulltruction are United States citizens or the employment of third countrynationals is necessary to avoid excerrive corts to the United States
3
31
Section 2175 authr-ri th Regional Anitant Administratorto waive the nrovinions of Sectionthat it is 2073 if he dcterriner in any coneimportant te the nationrn intercrt of the United Stutes tofinance the direct eots of construction work performed by third country
nationals
A prviou1y r ic i c t tht for thr ct Tartthe -r c ct b- 1jeuj out r -cnorbr f cnrtructioncontracts with Morcccrr contrctnr an in the i-t Uowfevvr itentirely psnible that there may b- roe contractn with cntructlonfirms partly owned by third country nntionaln and that ruch firjs anwell as the surely Moroccan-owrned firms may enloy third country niationalsIn such canes a difficult rrobic-i iould arise in meeting the terms ofRegulation 7 since an a practical matter Aericans are not reaonablyavailable for ermployn ont by such contrnetorn and our previcus experiencewith the Naunsseur Ccnv(r-ion project thatin Morocco has indicatedAmerican contractors would not be interested in bidding cn small conshytracts in that country
It in therefore recommended that the Annitant Adinitratordetermine rursuant to Section 2q75 of Regulation 7 to waive theapplication of Regulation 7 to thic iroject since the project 411 conshytribute to the attainrent of US foreign policy objectiver and the cbJe-tives of the Foreign Arsistnnce Program
LITI L USE
LfI~~5xA~us
lit
4 A J A 45 4 k
t A S T
S(3
I A444ilA~~l~)
7 -74
tAM= D
SECTOR 27
10000
t Co0Na includez25 cgtri oncFcttlrvI ncy I8s ~ ~ C t C- Includes 50 constriJcltiotrgrc
2000 60
IU
0
z
bull cosYsA shy----- i
600L _
400
200
0 5 I0 15 20
INTEREST RATE
I ~ 7 J7777
ANIAampX C
PROJECT DESCRn1 rOll
The project com)onents to te undertaken on the MIoulouya Irrigation Project over the next five years contists of the following
C(n1rtion of the rrLin casuals and bianch canbls to provide the suource of waler to the sctors be developed in theto TriffBou Areg and Zebra areas This construction will include the necessarystructures such as reulators highway bridges aqueducts water intake
and discharge structures etc
2 Iand Txeloommerit which includes engineering land consolishyt and iuvtllng lard preparation (subsoiling ripping destoning etc) and installation of water distribution canals (secondary tertiary and quurtunary) and drainage collector ditches for the Triffa main covering 24000 acres in sctors 8 9 10 16 20 21 23 24 25A 2513 27 and 28 Lou Areg Central covering 16250 acres in sectors Dltirough D2B and G1 thru-4h G313 i0u Areg Remainder covering 15000 acres in s-ctors D3 through D7 and GA through (6 Zebra Collective covering 45)0 acres in sectors 3 4 5 rind 6 and Zebra Rer-iinder covering 14250 acres in sectors 1 2 and 7 through 10 and th remainder of sectors 34 and 5 The total land to be developed is about 74000 acres
3 Canalization of the Oued Zeluan and nued Sidi-Amar in the Bou Areg Plain consisting of strairltening englarging and regularizing of these streams to carry the flood waters to the sea Drainage interceptor canals are to be constructed parallel to the sea in the Bou Areg Plain In the Triffa Plain the Oued Riada main drain will be deepened and enlarged and secondary drains will be excavated to provide for drainageof the Madagh area This will include the construction of bridges and culverts and other related work
4 Major Commorn Works will consist of
a Clearing of the Mo-1ouya riverbed downstream of the Mechra KLila barn caused roy flood dariwe and the installation of a set of stop logs for maintenance of pillway gate-
b Design supervision and construction of repairs to the ]elt Lank dead head tunel
c Conctruction and establishment of sib-division Offices and installations for farmer support such as CMVand farm stables
1 C
-2shy
5 Manavmtnt It ha been proposed that a US management firm be ewployed by th- C4 to manage and operate the entire Bou Areg area Such manageent -iuld encomparn all activities from the initial concept to final irIrp igricultural production Such activities would Include resp r-ibilsect -or supervnsion of engtneering and constriction of primary
S- Jry r complete developfnent of land training n in g tinul irription practicen preparation of market
t - r1t- (ot--rnu trplusmnining of a Moroccan cadre to take over h v--it Bou Areg dreara P the
At this writing the n-pt of turning over to a private UZSfirm execushyresponsibl]ity I h management of the establilrment and initial
op-ration of irr1gati the Bou Arog area has been only broadly de iiitd by the GCJO It Intended that proposals will be invited from a r -onable ntnber of f|ed US firms that a selection will be made an-n 7 them and a more do iled and cornprehenrive definition of the rer6 -Ps to be performed be eztabliched at that time It haa been
stimated that the t- of ruch a contract will be about $2 mir- n In any event the -ts of this contract other engineering arvl s to be provided undt n extension of the Ilydrotechnic contract and ether US corts will not ed the proposed $5 mllaion developzont Jean fr the project
The cle 3ifications duties ant 1ncnslbilities of the management personnel ill ha-- to be clearly defined i agreed to by the GCM Perimeter Directo- and other GOM Agencies luding arrangements for the necessary gistic support
Svxlale Docu-
1
4
LD ED 0ICIAL
-IAIDshy
A1trX D
C6JCK LIST OF STATUTORY CRITERIA
(Development Loan Fund)
1 FAA 0102 Extent to which U3 cormodities and services are furnished consistent with improving the US balance of payments See Sections II-C II-F
2 AA sect2O]ihi lanner in which loan wil promote countrys economic develo shy rit emphasizing help for long-range plans and programs designed to developeconomic tesourcos and increase productive capacities See Section I-D
i FAA sectT] h)(IL Information and conclusion on availability of financincfrom other free-world sources including private sources within the United States See Section II-F
FAA sect20l( )2 Information and conclusion on activitys economic and technical soundness including the capacity of the recipient country to reshypay the loan at a reasonable rate of interest See Sections II-B II-D and II-E
5 FAA 1201(h)( Information and conclusion on existence of reasonable promise activity will contribute to developrmnt of economic resources or increase of productive capacities See Sectiona II-B and II-D
_92_(b 4Information and conclusion on activitys relationship toothor development activities and its contribution to realizable longshyrange objectives See Sections I-D and I-E
The following abbreviations are und FAA - Foroirn Assistance Act of 1961 as amerded by the Foreign Asaistaice
Act of 1967 App - Foreign Assistance and Polated Agencies Appropriations Act 1968
AFEVCDF 1066
L1
-2shy
7 FAA f12O1(b)(5)_ Countrys self-help masures including institution of Foreign Assistance Act investment pliaranty programs Investment Guaranty
bull Agreement signed with Morocco 331o6l See Sections I-D and II-EI
_A ))(6) Information and conclusion on possible effects on US econowy with soecial refererne to areas of substantial -labor surplusSee Section II-F
9 FAA q201 (h)() Information and conclusion on the dagree to which thA country iv wiki- progress toward respect for the rule of law freedom of expression and of the press and recognition~yf the importance of individual freedom initiative and private enterprise
10 FAA -1201(b)(8) Information and conclusion on the degree to which the country is taking steps to improve its c]Laato for private investment See Sccton II-E
31 FAA R LbJi Inforrat-on and conclusion on whether or not the activityto b financed will contribute to the achievement of self-sustaining growthSee Sections I-D and II-B
12 FAA fi2Ol(bj Inforruation and conclusion on reasonalbe prospects of reshypayment See Section II-E
13 FAA fl20JL() Info-ation on applicability of the twenty country ceil4ng2
14 FAA fl201 L Information and coclusion on legality (under laws of the country end the US) and reasonableness of lending and ralendinr terms Loan will be on minimum termspermitted under FAA These are deemed reasonable see Sectioam Evidence will be renuired from the GGM as to the legality of the loan agreemnt
1 E 2 Information and conclusion on availability of an applicationFAA together with sufficient information and assurances to indicate reasonably that funds will be used in an economcally and technically sound manner See Sections I-A II-B and II-D Application received Janury 15 1968
16 FAA fl201(fL If a project inforntion and conclusion whether it will promote the economic developapent of the requesting country taking into account the countrys human and material resource requiremnts and the reshylationship between the ultimate objes6ives of the project and the countrys overall economic development See Sections I-D and II-B
17 FAAJ 20ij(J If a project information and conclusion whether it cifishycally provides for appropriate participation by private enterprise 8ce Sections YI-C and 114
I- FAA i22(a) Total amount of money under loan which is going directly to private enterprise is going to intermediate credit institutions or other borrowers for use by private enterprise is being used to finance imports
rfro private sources or is otherwise beirg used to finance procurementsfrcm private souwces See Sections II-C and II-2
9 FAA 207 Infosation on the emphasis placed en
(a) encouraging development of economic political and social institushytins No apparent relationship
(b) nelC-help in mectingthe countrys food nredo Project Vill conshytribute to production of food for lccal consumptioa
(c) in-proving availability in the country of evucated trained manpower Project will contribute to the deicloginext of trained manpower as one of the functions of the management contract (Soe Annex C para 5)
(d) prcgrams aimed at -malnutrition disease eradi atDn slum clearanceWater purification sewage disposal health education naternal and child care(includin fimrily pJnrning)) -nd cthcr public health ausistarice See
(c) other develoment activities including industrial development free
labor unions cooperatives tnd voluntary agencie transn)rtatin and ccshymwquication nrStczn capubiliTies for economic planning and public adlinisshytration arban develo-mment and modernization of laws to feilltate econcnicdevelopjen- GO- intends encourage develo vient of cooperat yes particularlyin the Left Pank areas Project will also develop capabiLi ics for cconoaicplanning and public a6~inistration (Annex C para 5) Other not applicable
20 Information on the extent to which the r-untry is
(a) cttcmting to increase food production and food sto a-e anddistribution felitics This project is one evidence of Moroccos efforts in this direction See also Section I-D and I-E
b) creating- a favorable climate for foreign and dmestic iri-ate enterprise and invcstrrment The GCM has recently reduced profits twes anrannounced a ten year guarantee against tax increases See Section II-E-2
(c) increasing the role of the neonle in the developnental procecsNo apparent relationship to this project
(d) allocating expenditures to development rather than to unn-cessarymilitary purpoes or intervention in other free countries affair See Sections I-D and Ii-
(e) willing --nribute funds to the project or program Th iOMhas already dcvo o-sidcrable resources to the project It has badieted13 million for th i oulouya for i7 See Section I-C
(If) making economic zocial and political refo ns such as taxc coliecshytion iYprovcmenLs and chan es in land tenure a Royal Comm ision has been appointed to make recomendation on land tenure probleras in the Lower I oulouya
(g) responding to the economic political and social concerns of its people and showing a determination to take volf-help wcasuren See Sections I-D and II-E
IT
-ovi~cd l v r 13 1968
- 4 - LDffIED OFFICIAL USE
21 FAA Inforn ation about multilateral assistance being Iurnished to t e country and whether the loan will encourage recgional development prog-rams The I1D has eztablihcd a Consultative Group for Morocco which rvicws the GOM development program anui prgress See Section II-F-4 for infoaation on othtr donor assistance to Morocco
22 A Extent to which the loan will contribute to the objective of ass ring naximu par icipation in the task of econonic dovelop--ent on the pL-t 0 _he people of the developing countries through the encouragement of cocr-tic private and local govenmental inLitutious o apparent
relationship
23 F _-_Dta_ Infor-ation and corissions whether loan will oncourageeffor s of t1e country to (a) increase tie flow of international trade (b) fostcr private initiative and comptition (c) encourage development and usceo co opratives credit unions and savingss and loan associations (d) disourgo monopolistic practices (c) improvo technical efficiency of industry ariculture and commerce (f) strenSthn free labor unions This project is cxpected to increase technical efficiency oi-agriculture
2_ C-1L lnforzrition and conclusion on how the loan will encourage US privte trade and investment abroad and how it uill encourage private US participation in foreign assistance prograas (incluiing use of private trade channels and the services of US private enterprise) See Section II-
25 VA-+_ Conclusion and supporting information on compliance with tho Co resional policy that engineering and professional servicos of US fir-ms and their affiliates are to bo used in connection with capital project3 to the nixinua extent consistent with the national interest US engineerirn and innsgcment services will be financed tnder this loan
2$ Inforamtion and ccnclusions who+her loan will pormit American rx-l] business to participate equitably in the furnishing of goods and
z orvices by To be satisfied in Loan Agreementfinanced it
27 - t(a App I18 Complianco with restriction of co -zodity procureshy o UsMS except as otherwise determined by the Picsicent and subject to ttu--- rcortir require r-nts Procurement will - liumited to the US for
reiabnrs nts and to ioocco and other free world countries 1-or US-cwne(d rhu disburseacnts
23 -i Comiance with bulk cozodity procurement restriction topriecc no l-ho han the nkarkot price prevailing in tho US at tia of
bull puchas Not applicable
29 FA Cozpliance with requirement that matrin insurance be purchased on commceities if the participating country discri-inates and that insurance be placed in the US To be satisfied in Loan Agreement
30 IA 6(a) Information at to the utilization of excers personal property in lieu of procurement of new items Will be required ai appropriate under terns of Lean Agreement
f
1 77--7 -77-77-777
31 FAA 61](a)(_) information and conclusion on availability of enginoering i financial and other plans nccx sary to carry out tho assittance and of a
reasonably firm cstimate of the cost of the assistanco to the United States
See Section II-D
32-ecessaryFAA t611(a)_(2) legislative action r6quired within recipient country and ibasis Cor reasonable anticipation such action will be completed in time to pormit orderly accompli-hirtnt of purposes of loan See Section I-A
33 n _AA161nJ0] If water or water-relatod land resource construcshy
tion project or program information and conclusion on a benefit-cost comshy
putation See Section II-B
3 4 VAA 611(c) Compliance with requirement that contracts for construction be let on comp-ctitive basis to mamum extent practicable To be satisfied
in Loan Agreement
If a loan for a project of $1 million or more certificatin35 FAA _61l(r) by the principal AID officer in the country as to the capability of the
country (both financirl and human resources) to effectively maintain and
utilize the project taking into account other US-financed projects (Such
certification is to be pproved by the Administrator aL the time the loan
is authorized) In process of being obtained
36 FAsgJ2 _6_h Appropriate steps that have b-en taken to assure that to the miaximum extent possible the country is contributing local currencies to net th-2 cost of contractural and other services and foreign currencies o- icd by tho US are utilized to meet the cost of contractual and other services The GU-M is contributing over $30 million to compleXton of this project Excess US-use dirhams will be used for eligible project costs other than US goods and services
37 FAA p619 Compliance with requirement that assistance to newly independent countries be furnished through multilateral organizations or plans to maxishymum extent appropriate Not deemed appropriate in view of previous AID financing and ccoiitment to the project See Sections I-A and I-D
38 FAA sect620(a) AcnO7a n3]7(b) Compliance with prohibitions
against assistance to Cuba ard any countr (a) which furnishes assistance to Cuba or failed to take appropriate steps by February 14 1964 to prevent ships or aircraft unier its registry from carrying equipment materials or supplies from or to Cuba or (b) which sells furnishes or permits any ships under its registry fr-om carrying items of primary atrategic signifishycance or itcms of economic assistance Morocco is not-known to be in Violation of these sections
39 FAA q620GL_ If assistance to the government of a country existence of determination it is not controlled by the international Communist movement The Secretary of State so determined on October 11 191
40 FAA 620(c) If assistance to the government of a country existonce of Indebtedness to a US citizen for goods or services furnished or ordered whore ouch citizen has exhaustod available legal romodiesor where the debt
i - ow - -- _---- --shy
- --
-6shy
is not denied or ontested by such government or the indebtedness arises under an unconditional guararty of payrrent given by such govornmunt No such indebtedness is known to exist
41 FA _(a2LdL If assisitance for any productive enterprise which will corashypote with US enterprise existence of agreement by the recipient country to prevent export to the US of more than 20 of the enterprises annual production during the life of the loan Not applicable
42 FA4 - 16Q_0_ A If assistance to the government of a country extent to which it (including government agenies or ruhdivisions) has after January 1 1962 taken steps o repudiate or nullify cuatracts or taken any action which has the effect of nationalizing expropriating or otherwise seizingownership or control ofprcpertv of US citizens or entities beneficially owned by them without taking appropriate stops to discha i ge its obligations No such steps cr actions are-known to have been taken by the GOM
43 FAA~L AjPj_10_9 Compliance with assistance toQ0 prohibitions against any Comunst codntry ozocco is not considered to be a cocinrunist country
44 FAA - 620(gJ Corliance with prohibition against use of assistonce to comp satc owners for expropriated or nationalized property To be satisfied in Loan Agreement
45 F AA 8620(h Compliance with regulations and procedures adopted to inshysure against ue of assistance in a manner hich contrary to the best inshyterests of the US promotes or assists the foreign aid projects or activities of the Communist-bloc countries To be satisfied in Loan Agreement
46 FAA 06-O(j)_ Exitence of determiration that the country is engaging in or preparing for aggressive military efforts No such determination has been made
L_62_O Information47 FAA on representation of the country at any intershynational confererce when that representation includes the planning of activishyties involving insurrection or subversion against the US or countries recoiving US assistance No such representition is known to have A occarrect
8 FAA 62JJ Existence of a determination that the country has permitted or failed to prevent destruction of US property by mob action or has failed to take steps to prevent a recurrence and-to pay compensation NO such destruction is known to have tak-n place
49 PAA l620(k) If construction of productive enterprise where eggregate value of assistanc to be furnished by US will exceed $1OO million identification of Gtntutoryauthority Not npplicable
i-xQ2MZZ=
1 shy
U 6 50 _Af( QCinsidoration which has been given to denlying assistance X to thu government of a country which after December 31 1966 has failed to
- institto the investnint guaranty program for the spcific risks of inconshy
vertibility and expropriation or confiscation Satisfied See No 7 above
S51S J lj Compliance with-prohibitions-againstn as~istance to countries which traffic or permittraffickingwith North Vietnam Morocco is not known to be in violation
52 E_-L620(_L If country has seized or imposed any penalty or sanction against vn US fishing vessel on account of its fishing activities in
intcrnationul waters information on the consideiation which has been given to excludirg the country from assistance No such situation is known to exist
53 FAA FA r) UAR restriction Not applicable620(p 9117
54 FAA R620tl) Existence of default undhr any Foreign Assistance Act loan to the country No such default exists
55 F ) C-nsider tion of whether co ntry is devoting unnecessary percentage of buKet for military purposes or use of foreign exchange for milita-y equipment
56 FAA 62o(t) Proibition on aid if country has severed diplomatic relations with US unless agreements have been negotiated after resumpshytion Diplomatic r(lations have not been severed
57 FAA 9620(u) Statur of the country on delinquent UN obligations Morocco is not known to be dlinquent on its UN~obligation
58 FAA R636(i) Prohibition on financing non-US manufactured motor vehicles Will be satisfied in Loan Agreement and Implementation Letter
59 App 102 Compliance with requirement that payments in excess of $25000 for architectural and en Jneering services on any one project be reported to Congress Such reports will be made
60 App R1O4 Compliance with bar against funds to pay pensions etc for military personnel Such payments will not be eligible for financing under th Loan Agreement
61 App 9106 If country attr ipts to create distinctions because of their race or religion among Americans in granting personal or commercial access or other rights otherwise avaVIfable to US citizens generally application which will be made in negotit ttons of contrary principles as expressed by Congress Morocco is not ku IDhave made any such attempts
iInD OFFIIt t USE
0k
OFFICIAL USE 62 AIwp Rii Compliance with existing requfremets for security clearance
of personnel Will be satisfied in Loan Agreement and Implementation Letter
63 App R1l2 Compliance with requirement for approval of cortractors and contract terms for capital projects Will be satisfied in Loan Agreement
clJ164 Aup Cmpliance with bar nRainst use of funds to Tay assessments etc of US meiber Such payments will not be eligible for financing under the Loan Agreemunt
6 Anp P115 Ccmpliance with regulations on employment of US and local personnel for funds obligated after April 30 1961 (Regulation 7) See Section III-C
66 Aim Vietnam iron and steel restrictions Not applicable
67 p l9 If a country other than Greece Turkey Iran Israel Republicof China Phillipines or Korea reduction in assistance by amounts spent for the purchase of sophisticated military equipment
68 Anp fi4O1 Compliance with bar against use of funds for publicity or proshypagjanda purposes within US not heretofore authorized by Congress Such use of funds will not be eligible for financing under the Loan Agreement
Morocco is a traditional Islamic monarchy with a constitution The conshystitution was implemented followaing a popular referendum in 1962 National regional and professional elective bodies including a parliament were established by universal suffrage under the constitution in 1963 The parliament was suspended in 1961 in a State of Exception because of its inability to agree on measures with adequate urgency to meet the prevailingecononde imperatives In July 1967 the King appointed a Prime Minister to direct a Cabinet of appointed technicians
The constitutional framework nevertheless remains intact in Morocco and nationwide popular elections for some of the professional chambers were held in August and September 1966 The press is relatively free in Morocco and the right of diLsent prevails provided that such dissent does not violate the prohibition against political attacks on the instishytution of the monarchy or the person of the monarch
LI Under the revised US AID Policy for Africa agreed to in November 1966 Morocco is designated a development emphasis country entitled to receive continuing support on a country basis as part of a multilaterally coorshydinated countrj program Morocco was subsequently included in Presidential Determination 67-14 (January 5 1967) I
LIM=TE OFFICIAL USE~i
- l go
bull ~ -
f
DEPQbi) STATE AGENCY FOR INERNATIONAL DEVELOPMENT
WASHINGTON DC 052
CAPITAL ASSISTANCE LOA11 AUTHORIZATION
Provided from Develoroent Loan Funds Morocco Second Lower Moulouya Irrigation Loan
Pursuant to the authority vested in the Assistant Administrator for Africa of the Agency for International Development
AI)by the Foreign Assistance Act of 1961 as amended theIAct) and the delegations of authority issued thereunder I
have received and t-en into consideration a certification from the Director of USAIDMorocco as to the financial and human resources capability of Morocco to effectively utilize the Lower Moulouya Irrigation Project taking into account among other things the
maintenance and utilization of projects in Morocco previously financed or assisted by the United States and I hereby authorize the establishshyment of a loan pursuant to Part I Chapter 2 Title I the Development Loan Fund to the Government of the Kingdom of Morocco (Borrower) of not to exceed five million dollars ($5000000) to assist in financing the fore] gn exchange and local currency costs of goods and services for the third phase of the Lower Moulouya Irrigation Project subject to the foLlowing terms and conditions
1 Interest Rate and Terms of Repayment Borrower shall repay the loan to AID in forty (40) years including a grace period not to exceed ten (10) years Borrower shall pay interest on the unrepaid principal and any interest accrued thereon at the rate of (a) two percent (2) per annum during the grace period and (b) two and
one-half percent (2-12) per annum thereafter
2 Currency of Pepayment Repayment of the loan and paymenu of interest shall be made in United States dollars
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3 Other Terms and Conditions amp(a)Goods and Services financed under the loan
shall have their source and origin in
(i) the United States if disbursements therefor are made in United States dollars or
(ii) any country in the free world including Morocco if disbursements therefor are made in Moroccan currency
(b) AID Regulation 7 shall not apply to construction -work financed under the loan because as detailed in Section IIIC of Capital Assistance Paper No P 667 it is important to the national interest of the United States that the direct costs of construction work performed by third-country nationals be financed out of funds made available by the Act
(a) Such other terms and conditions as AID may deem advisable
Assistant Administrator for Africa
Date
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Ti - lcr -n t Mujoiiya as a plarined irrIgated pttrshyrre tr t-vrnriIn I)c 1- ou jO q joint Franco-S)roii Tirogram The Mc-~i l Fi fer r I t i- fr gtrt i r im Lwe_-n the form~r Froncri zon
i-2 tlnkr anir cnrmer ~-ihzone on lheft t 1rink Conshy~c f t 1Jni d iv- hn dwnm iwhieh was -tr~rtE-d in 1952
ind 17F r 2f 10rt rdl I on cu iv 7r- of u1srcul ~rigep Fn 1 ivltini~rlt 00C 1-m rf tiunrie and oanfTh
tPti~rfl tl r1ili mank onanArg irrigation in the Triffa plal n ~nns ii 1oArrfcd thft water corvwvAn-J nystnn rnjtic ampan on wujijr
~~-f Wrri -jr t I prr jecet si ldun ~ t M omo f -L1n(
pA r pirraliiit rAw~or k~ri I rAO I1n Mkrch hO ni nl tn _zci r con)i b- 1 n th 111Y rni tb- i
+ f - lttc~ f th M- -- Y6-Y I I fpoundtorage damn ( thl ~rin--Ir-tL ioi I i i i gtyir T rvrI and Hich L~i rt -otal ctier
ny nswj~~raecawilp vi ahnd devc lopr-nt
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ILft y~C IT - i r it Ill fjr f t it 1hvr -- Ut CAcn7d(e v1
trt i If 1 - ~ 1 t Iic rI- -n - Tcir it d orti 25 m I
S 7 r in 1- mrain rneroir ~InAIL crgt r ~ r 1 t ~ o l on Mnrz-h T 1 that )T - or r(- t
~~ 0c ~W- 1)-Pr It f) rn It1t r Iil 11 cm
rrr~~rdI n)r r - r) Ir y i t1- Pni Arr r 7 tr- r~r -iVtIdni norrjr--iof hic- rt isn
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he ftrthe -i crip inoi h- irted $32 I r) it ir te from to t Ttirn- (ent n of which
t- ~r) rIf-shyr tn 1 amp-inrIt)h or From to - in r-t r m th 1ft E ink hasc k Id rchabilitattonc ouab1e of delivering 4ater to
before t will bethe left ban- areas Work theb1litation on rehashyof the tunnrel is exnected to begin in MayJune i38 In June IX)5 the Grt4 rubrnitA to AVP a ecmprehensive study andfor the completion of plirthe pro ie-r together withthis purpose AID rjvio-w if the-
a request cr- a oan fordcrcumentsthXe proIecrt rained and of its experlonce with
th-e plir a n2rhr-r of q- tionn concerning the adequacyarising Vrom ofthe limitcl iValability of skilled roroccanersonri] cce tuated by the2 d ermrturetinuing unroved of fore vn technic ins)
Ing 1rcchirec arid tenure problems lnndequwpe GOM rroJect financ
conshyand inadequate projcct mranngement Moreoverto I- nn cver-awnbitinus what atreardccuntry -id( Moroccan proram for dovelopmeitof its surface water irriwatinn tential arneared as wel to havelro re-ponslble fr b-entb
-sI- v of avalla gtrrnpower for the utlionj of
Si- - t t t h-e Lower tinulouya project Itself AID thenfinancing of
f - of studies by the Unlt-d StatesAgriul- tEir nford RI-3rrch Institute with the
OA) iniri both informtion con-ernirgr(-lrrt n Or the molouya -r one hand ani manpovrr
prorifies assnonrront of thefor in-- ns betweenfar-i )-co the dry Jlnd and irrlratedon cth- e resultsirdi-ti -qrly of the initial SRI stuliethat t least ra
in ren-ral terms Investment in Morocnn1e t ri-ure would te morerar li productivelrid- It Thn GC14 hasr i rrnm sinrfor e irntryctlon of frti iz-r the re Z tr in rain f-1itg farirp are --rW t Moro t-
uo A fin ql SRI udy wasbullbypriorities fr invtronf u in the Thin nttdv -- r-letd in Novombrhas C- of 17 Inn-rzjrehersIve measuresIs nhortage to allevia-eof btij2p- T-aowr in ift7 agriculturalnps to re voj fhe progra-ns has taken]ori _- probl-ms In the Mollouya andornnized t t rtt has reshycf if - i nageot of irrigt ion projectprovid- fcr tohe (i-rt -0 i7 + nf( r a)thriy ani reponsibility for thpof Jm~tera inMorocco
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1967 to irrcveTporformnnce in grculturc In the early psrt of the year the GCQ4 recorgnn7ed it a initrative system to rrozn for greater loca responzipuIty nnd crntrnl over agricultural progrrswhich inclulcd in partcmLar the minagement of the M4oulouya Perii-ttcr and instituted a ajor rrive to recriit principally in Europe foreigntxn- tc -rk orr rri y a r-nritc-3 In GCM prrqrnms In July one of
of A- cuA tue The att r ir cvr atic with USAIDPabat has affirmed his active interert in the Moulouya arid in the US role in its financing
E Fe)ationhipn of Project to US Ansimtince StrateT
Im~rvNrm-crt in Moroccos economic performance is itself a major US objecti e in Morocco as well ar an Iportant contributing influence toUS political objectives in Morocco It is believed that evidence of econc-ric improvwr ent will strerthen the GOMs capacity to maintain its moderatint role in Arab and international councils and its friendly relatiorns with the US
AID strategy is to assist Moroccan econcmic development within the framework of the Consultative Grcur (CG) crganized by the IBRD The CG has endorzed the GOM priority on agricultural development One of the prime objectives of the AID prcgram in Mcrocco is to increase agriculshytur1 rrcdurticn which i in accrd with US policy to reduce on a worldshywide bazis f-ependence on US food esnistance over the next five years
AID ian-stqnce to the aericultur l sector Is directed at increasingPrc+ -tion dry-2and farming as wel as irrigated farming in the LoweyMou]cya Rlv-r Bsrin where the US has provided $23 million of loan assitance einc -lr60nn well as $3 millicn equivalent in ocal currencyloans The rnture of AID assitance to Moroccan agriculture has evolved from major erade TVA and SRI during the last two yearsrtd by U2DA to d-tcrwir- tl new investrent with highest return as well as to plan Fpecific agricuUural develci-nent programs In dry-land farming AID has provided te hrcal ansiftance an- feed grain donations to improveanimal brcen and feedin ard technical assistance and local currencyloans to ipcrenie cereals rr-yiution There projects art continuing and (xrandling rticuarly in cereals production where additional TA in seedproduction an] xt-nsion techniques is being provided AID also expects in thir fischl yeatr tc providr- fnreign exchange through a DevelopmentLean for the Ariculture 2ector to financ necessary on-farm equipmentand commodity imoorts particularly those arising from US technical assistance )rograms
As a result of previous [IS assistence in the Lower Moulouya thisproject ha b--cede Ientifipd In Moroccan eye as one of major US inshyvoverrt Th G has for sore time been -eking additional US loan assistancpe t-Vomm lete t -ind our continued ruport of the project has ansumeri polit-al as vell as eccnomic important in UJS-Moroccan relations
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I n r 4 o fid on-i-tr1 ri-I ofr2 the Irm f ir Ii rec
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J -P - r i ~wc i t he 1 I t k j- vt~ c a fIofy faie i t~njp f I nnuji (- n 1 t in N11t~ht i itor
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ioriginally begun under the Spnnihh rgime Work was resumed by the GOM under a contract concluded in late 1959 Major difficlilties with the tunnel structure have been known for some time On comTletion of a series of studies of the problems involved the GOM nvited bids inNovember (767 on a pronrosed contract for the correction of structural-defects i-he tunv It Jn bnticiiated that this contract will be finarced _y the GO fr wn recurees
The Bou Arcg area which lie to the Northwest of the Zebra andalong the Mediterranean Coast will ]ikewise be affected by the delay in passage of water through the Left Bank Dead Head Tunnel The BouArr- - - ontplnn s~re 31000 acres of irrlgablf lrnd While the elttent n lr nni - ytr running from the northwest portion of t -h 11 shy h1s argely been completedneither i of the other irrishygation works required h~iv- - ver n --rt of the d-zign studies for thin area ha- u t L
The bulk of the DLF I-an of $23 million of hiehity over $20 million had been disburd as of the end (f wvmrber- 107 was (or is being) utilized for cn~tructinn of the cehrnKastoragedam and of the Bou Areg Tunnel and the Bcu Areg High Line Canal Sraller amounts were utilized for advisory engineering services providedby a US firm design services and construction of some of the main canal drainage rnd distr1rmtion woks The balance of the loan is expected to be disbursed before the end of this year for reimrburseshyent of the costs of contrEcts already completed or presently under way
The GOM has in addition exp-nded an estimated $13 million since the beginning of 1960 about $3 million of which represents the cost of hydroelectric installatiuns at the Mochra-Klila Dam and on the Bou AregHigh Line Canv1 About million vas expondet on reconstruction and the bn2nc Tprerents entimated costs of operation and maintenace of completedworks The DLF Joan of 1960 war intended to assist in financing a -r second phase of project works in the Mculouya Perimeter As indicated nbive the works ndrtakn in his phase (apErt from the repair of thn Left Bank Depd Head TunnE a jrrng to a close
In view of the Izeable rpuirces devct0-I tc thp Mculouya over a rither long reriod of ytrs--by the Spaninh French ar-I MroccanGovernments prior to l6O and th qC-M and AID frox 31960 to l2--to achieve the installation of the bulk of the major installations required for water ntorare and rranzmi-ion it Ia been conzidered that at this next stage of drvelcp eat of the erimeter the principalfocus of attention should be on t1ose works which will offer the
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-7shygreatest and most rapid returns on ndd1tio resources required fortheir comyletion In the Interest of rbtainir an asrrrent ofr It fr the crnletion of the reirainder of the Troject AIDri ained rvienof the Stanford Revar(h Institute to rrenarea tuy i th orrn nrd returns for the vnriou rcrtions of theroject for h h i rr h beern pJanncd but not cnrrpleted
the he hat the completion of
the reynainintz ork-requivd(which P-nti fird Ip following Sectorsray up on tn iI thejwwould appear to offer the optimum coabination of hirhi nremental investmentard early comption
No of Apror To P- riuirred
Triffa Main 317 Triffa Sector 27 Triffa Sector 28 Zebra Collective 1500 Zebra Remainder 14250 Bou Are Central 16250 Bou Areg Remainder
TCtAI)
- Includes cre 8000 aeri o being equipped
If the above is to be accomplished over the next five years asenvisioned by the GOM the schedule would imply the bringing under irrishygation of around 1500) acres per year This is around two or three-times the GO hi torical rate of dvelopment of irrigation in theMoulouya over ast seven years While the GOM has recently reorshyganized its e cnt structure to permit greater local autonomy inf1 e ranagemo- rrigation perimeters and has recently accorded avery high -- -r to acceleration of developnent of the V 1 ouya inparticu t -vident that given the manpower constrai ts involvedin the Mr n operation the- above target way well be it- ible of achievenrnt
The GOM hM itself recognized the elements of thl -- I i lindhas in dizcuss ins with USATDRabat requested considersti- -f hfinancing by AID of the dollar costs of a management crht with oUS -irri to take or c(vnpletely the management unctions fror thi
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b Th - urJrtaen rn the jleft Bank under the proshyposed thir i-e of the rojc-t are i follows
- Left Pnnk Dvd H-d Tunn]
5 r-y rd t final tng of ire aration for ther-rT ir cvf ni r r imy - rz--rt ha recently beenr-t) l i w t e rr - tht - I afid if exToected to ubrit hit writt(-n r-rt jr DC Aii preliminary impressions baled on a 9Ite nErerti(n indi-ate thit a -rt1fartorj repair con bemade in c)nIdprnbly le- t n-ne for lfan -than previously conshytemplnted
The early ccmrt-tnn nf thi work in lmnortanit nine IL c t Ft th avai-bility of pr~ct wrte for the entire Left Brnk
Z~bra Collectlv-
Thin 1 on ara ofrXPr-ctively ond tribal land that will be divjded and allotted tr J-ted tribal -b-hrc who will become soleowncr3 A Pirpe rart ti Tniran -aratirn and developent hasalready bern co-plet] 2pani levelirg r-mains to be done as well ae conztruct c~n of b-tcn dnd drina- works
7eDo i F--vino-
The northrrn ecti n tht rmrainder of th Zebra will requirethe extnzi-n cf thct Train 4]h will be ccrrleted with financingccmmritted under Phase II of fth tr-Ject Land preparation and levelingwill be required anlnp with h ntruct n of distribution and drainagebullir r]
T ectinr f th- rrainler of bra will requiret- rd i i w -J n rrd h c and engishyrnr nw d t i f -tritst t n and dlarn -rk
Piu A rp
foeuro rginprng im hhve b- 7cr)Pletcd fcr the irrigationthe Bou Are- Fr the o-t rt hu- I cf the
of rcquired construction
of main carrl Rnraljor dr- nRe worx z develoFerit and cronstruction of zbldiary li tribution -r irnge y--r rrrairns to I undertaken
Th P- Arrg Tunnel wr orml td in 267 and construptcn sunder way on Ih-Yin Canal rrired tL nvcy water the suthrnf e of Areg ervie ra
I h z-uir-i intluding the -rtablishshyn -F r rnity rvice andIn fit Th rlulrem-rntr for
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Wt r 2torvge 1 95 1)6and Pegulation
Right ank 137 31 10 79
L-ft Bank 25 87 n6 143 239
Far- De ]crl 0 )5 1 b I26
S I M O ALA1 348 356
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At indicatnd In the- tdl iv 11 - rnt it~ocotof the rxojroct are t hi~-hor tnan the ic60) 1orccasts Th y tarc Ah-wever 1hchr by cnr murth~cul~ averllsv( a igiificqntjsCfect t~cn the bt-ric lfer-7t I-tio n- rigill lly rc~r~t
V I ) u O21he 1)+ -J iv )ir(t In h jiv kinvnft bed tado in Lh Tnwr Liynnui vni cif hrrlt rnr 7cst- wrr uniershytaen ic r ii -tQ j ta the Aurpo3vt o 02thl rirarnkinr of r- Ln t -Ir ca th cenm I rr1 urn 1e11 frrn n ow
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elevated area requirin iat-r to be puiiped to the irrigated land with both highr capital costs (about 1 million) and higher oreration and maintenance costs (150 Dirham per hcttare via-a-vir 100 Dihams perhevtare for the grnvity irrifrted ares) The ony work presenl-ly cotiishypleted in the Triff Hih Ser-ic Area is the preliminary engineering stirUes Cimi-ir to th Tr Pa r thu TrIffa ]Igh Service areawill reiir an ex I uvnt ricd bfore agricultural proshyduction cn be initlat-2i
The above considerations reiult in the following revised ranking of priorities
Project Area 1FY (M Priority
Triffa Main 21 I Sector 27 8 I Sector 28 9 I Bou Areg Central 6 II Bou Areg Rerainders 6 II Zebra Collective 5 II Zebra Remtd nders 5 II Triffa Ent 6 III Triffa High ervice 5 III
SRI 11ed a ccst contingency f7actor of 25 and a cumulative costescLlatior factor of 3I per annum These factors appear excessivelyhigh in th( light of (1) project experience to date and (2) the fact that from his roint the technical rirks involved arre of a much lower orl- r f 1h thnse inhtrent in the major works Just comshy1 I intion nrd contingency factor of 15 has there-
S chtiMnte- Itlizcd in this rarer The ii n-ttr costs the to ) ject (in n]ace of factors
i by )I nrt 11 thIrhe nf th nJter atve I[cwver rrtnrecr-y factor euld Increase the IPE ] hi ra]y th- IIRF fcr the TrIfa Sector 27 ansnunirg a
oct crortlr7crncy A can be seen as the conAngency I thf cc curve rrv to the right and inter ects the
ur h h 4r- rnr rate of return)
C Finreirifg inr
Cot o the prJect wor fmcentntgenent nnd engin-erinm advisoryrvices for the proued t rd tsge of the Mmlouya Project are
ctirt a Crollows
nF3r AVAILArBILE COPY
Best Av DlableD
7 17 shy
(In Millions Of Dollars)
Righi Pank
Trffa Main 34 poundSt (r 27 08 S ctor 6 0Q
51 Left ank
7bra Collective 12bra Remainde r- 54 Tou Areg Central 74 Lou Areg Remaluders 68 heft Bank Dcad Head Tunnel 30
238 Services
Management 20 Advisory Engineerin 05
25 SUB TOTAL 37
Escalation amp Contingencies 15 47
TOTAL 361
It is proposed that the AID Development Loan for this stage of the Moulouya ProJet be limited to $5 million an amount which would be sufficient te reet the cost of any US goods and services required for the works to oe undertaken Thus the loan would finance the dollar costs of manrement and engineering advisory services to be provided by US firms erstimated at $25 million The balance would be available to meet any ther US cofts that might arise for constructicn cuipment and nateria]
The balnnmc of funds required would be provided by the GOM from its own budgetary resources including as appropriate agreed allocations of the counfryj-uie dirham proceeds of US surplus agricultural programs in Morocco
To a l-ge extent construction works In the Mou]ouya (other than the Bou Ar- Tunnel and Mechra Klila Dam) have taken place under a largenumber of roll contracts with Moroccan firms It is anticipated that this will ontinue to be the pratice in the forthcoming development stage Th iit is evident that the great bulk of project cests in this next stage will be local costs
-E5 -
In the event that not all of av l able fuInd- under the loan are required for TKI eo It i ouied that any remaininrn balance be utilized for the payment lo -ovalccztn f the project This would be aceoomplirhe by utili7irn th- h r vroceeds of the loan to purehare US-use dirhsmn (frcr th U Oi-irrirg Officer) which would be utili ed to rrimbure th fc u a t local - nditurrs
Thi arranrit 3ir ila ) fstV utilitd In the - of the D-e l-INAieret Loar tJr U Atrrert SinceYr usii Conv rf i cn therc loans are rcpiviible in dollars nd rince Morocco in a n-ar excess local currency couintry the fert ) f e transaction in tc provide a means for obtaining ccnvrrrs cn a-cr th life of the loan of otherwire inconvertibie U5 holding irhrs hich are in exces of its localrequireme t
In 1967 over 15 million dirhams (abceut $3 million) of PL 480
Section l04(g) loan fun cre in msgreement with the CON allocated for the financing of various contractr reloting to projects in the Moulouya It in anticipited tht ndditional allocations will be made out of the local currency proceed generated from current and antishycipated US 7urplu agricultural rmodity programs in Morocco
It has been proposed that the dirham equivalent of $45 million of the proceeds of the October F67 rurplus agricultural commodity Sales Agreement be allocated for a Section Cb(g) loan for the Mulouya In nadition it is estimated that a $]35 million (in$ioz1ble dirhshyequlviJent) woull be available from 7uprl]eental surplun agrIcultura con -ity rales programs under Titlo I an-d Title IV in calendar 196F for allocation for loans for development projects in Morocco These two amounts combined would provide about 6 of the G014 resources reshyquired for the project over the next five years On thic basis there would appear to be rcasonble propect tht the GO should be in a rorition to provide cver the S e year rriod of the project the addishytional resources renuired for itF ccmpletion
Tt I contemplatd that na additlonal US dollar financing of the Moulouya byon-l the $ iilon rorosed herein will be provided for tl cplei n ef h M _11-nuya rince the bringing under irrigation of th- 11O0Y ies include] in the propore] project will substantlally cornIete the works criginally conwtemplated hen h DLF loan was authorshyized in 106 The remainler zf the workr h(- be within the capabilit3 of the GOM to complete with It- o-n resourcec
MT M T M
-16shy
) Technical Anily ir
The Moulouya Rivr which is cre of tne largest in Morocco originatesin the idll Atans
Moulouya and which oztend scuthward
Kediterrancn l re
t rre
Pr
ard n
flows rrpr
orre 25) mriles northeast thr Agorinn border
to the
In- agricitui 1 in li j i nt( iljr r Th- rst rind most
t 2 1ir i t i h- i n th rwrht born of thshy-- e 31nmiler frem the Mediterranean
Lea To tho wet cf the Tiffa and nn th- left bank( of the Moulouya isthe Zebra nlain 14wiuntain rv-arate the Zebra frcm th -ea and fron theBou Art-r i-ll]zain which - ctI nrrthwe(st of the Zebra The Bou Areg a coital phtain sclte 19 mils lorg and h miles wide separated fr-nthe n-a by a Ihow sa2t water lagoon Southwest of the Zebra is theGireb plain which hun land ruitable for irrigation in its routheasternportion The Gareb i at a higher elevation than the three other plainsard if ultimately irr-gatcd vould require pumping fro the lower level Zebra conv(yance system
Water from the Noulouya River is stored brhind the Mechra Klila Dam whichwas coniletd with fjiancri rc AID loan (3-A-2 (DLF Lcan l6)Water ir rclca ed downstr(a (1bcut c) miles) to the Mechra Homadi reFrshyvoir and d]iversion dcim in1h-r divert-d to th right oad left bankcunals About 75 kilometer (1 miles) of the Triffu (right bank) maingravity ciral hay ben copletd und consderable cr) has been carri-dout in the Tri on) distr Iution and drainage netw rks land levelngend other farm iwnrovwments About 37 kilometers (22 wiles) of the Zebra(left bank) main gravi-ty canal and the tunnel 6 miles (101()7 JIrenrTrcters) betxeen the Zebra area end the Bou Areg area have been comrneted
The GOM illrrfo m certqin -rk nr-Aded fcr develormnt of the gravityir~zgata yt-- for n 71-) acres over the next five yarr Thiscffort vi2 be eonern rait-r urcr the develo-ment cf areas thot providethe great-rt ecnnomic returrs nnd the developnent of a cadre of Iorocearperornel adequ tly tran-yi in the an2gerent of the project SeeAnnex C for further Irojcl details
e- enmL Ev1ation
Mt Infratrueturr The --trnal highway co-munication network i t arid rfi Isirm nf re- i n-ote siler in-1 shy
uzeather raved rc
____________________TAM
- t 7shy
Other communlca 1 i i t ih Lh arr-- inlude the nrninlineof the Oujda-Fe--C- t h~rh l e0tnnd to AlgeriaSpanish enclove rt the 1 fir idto cmmercial airport at Oujda andNador with regular national onI int rnational ervice5s
Th verirtr 1 u ~Ath r nr r t crocd by 60 kvJ i i i u rrd t 5( kr It na ortr kk f~ditcrl rower1(Qp x I -y yrar) -o n d hr rritIronr
at the Mechra-Yplusmnilj l inm fnd the Bou Areff contral poter Statin The townare connected to ranrh cther and th2 r-rt of Mcrocco by telerhone andtelegraph 1 ner
b Sol Soil rvey 7rd land ]a-ifctons have been completed i-nthe Mcloulva rer eter oanntrantbi- with French firmr u-ing Frenchmethods The Trifa -1n wr initialy rraped at a cealeof 150000with certain area ub entiy rer-aLd at 15000 110000 or 120000dependin I nn the cor1cjeity of YJ rattcrns The Zebra plain has beenmapped at a reale cf 20O00 nod th- Bou Areg plain at a scale Df 150OO On thp baf Yr nf ther urvy th cla sified the soilsGC hain terms of r-uitnbility for irrigation as follows
Land Ciaifcation (Aere)
CasrI amp IT Class III Clans IV Totas Triffa Plain 17000 29[00 22725 99625Zebra Plain CbO 1275 4050 211425Bou Areg Plain 75)00 l6qo 3 0 3067)Gareb Plain 13 05 10 70 0
Inclurez 1750 acres for lfigh Service Area
The findings thi indicate that ( i) arriratry 5of the area in thefour rlain- i suited to irrigation (Clare I anl II) (ii) more than3 ir suitabr bt with one Or mcre imrtat~ons Irro=ed by underrablefeatur-s such an to wrafhy oil characteristJcn trnine- r restrltedbull rio (CIar TIV) and (iij) ls than 2 of th- area in only margina)lysuited for irrinticn(Class TV) In ther7e lattrr ardrn only rmi-intrnsive orop rotations blUponsblhe
The oi nicn f the Cn-lting Envneer (1ydrctechrJ) th respect to) therd carrffjn n that hfle 3 Bureau for P ltr0tion -tandards werirt ernoy-d te rlasnificatinn ir aceurat- and n rrti with3and rlaced in r d rLrnble categories more
uere thnn right ha bern the caseUS tandardr folIced The clasifatinn ha 0a been reviewed andfound to be atifactory by the USPA tayr Hoever r areas of complcxroil Ttternr hch to date have only been ru-d to a oale of 150))rome reraTpin tray be necesary as a banis fcr rrerarnZ
- g~T PRAvVLAFJLE EOPv
final designs of irrigation and drztinne- rystems parcellization into farms and planning of land preparation measures In addition considering the high average salt ccntent of ater frcm he c ilouya hiver a rorm of systematic leachin- will be reqirer- to f ree-rt aculation of salts in the soilsparticularly in h ebra Crt in will nlso1e plain ureas require nitrogenphosphorus crd possibly other nutrient to obtain satisfactory yields
c Water On the basis of studies by the GCM which have been reviewed bythe Consultirr Fnr ncri and the U au of 1ccoi-ation it is thecorclusion of A tt (i) the q lity of water in the Lower Houlouya
is below averpge bvt crp rble to thtof certain rivers in the US whichisotnteLoh~uoybrve successfully been usc for irrif ton for periods cxeccdin 100 yearsOj5) there is clearly a sufficient a )unt of i ter to irrif-ate the 128010
bullcrer to be served in the [rlcentIty ar n3 Addi-tional s-tudioser (c requilrecj dcter-Inc if adeqiuate water is a- ilable for irrigationof 376QGO vc rc
The only signifcant urce of vp y fOr irrigation water in the perimeteris the oulouya Vi~cr io jc n1 is 1re ntly being irrigated from wells most Iround water i - - 1 Alouya contains dissoived salts which i xr Lrn - hvriny reak flowto iJOx PIn iuting [cricd of c n ccntraticn is 750 ppm On Thi- basis of USDA Salinity Lot) atory criteria fte v ater is class 03-SI (hl-h salinity-low a-alinity) Vile water is thus of mediocre qualityit is ccmrarable to that of river successfully used for irrigation in the US (eg the Lower Colorado Rier) and poses no serious problems to irrir-ation in the Moulouya perir( cfr provided the W4 adheres to recorrmended programs for meeting leaching reoairements
With ref-pect to the 128000 acr project the demand for water reasured at the Mechra Hoadi diversion dair is estizated at about 575 million cubic meters per year as follows
remand for Wter
Peak Flow Annual Total (August) (m 3 million)
Agrieulture (176000 acres) 337 m3s 806 Municipal amp Industrial Consumption 8m3 23
Total 4 uy62123000 acres to be irrigateA by Gravity 255 m3s 575
(The e dpeak requirzents of 345 s compares with a 35 m3 s design
capacity of the main canal at the diversion dam including 18 m3 s for the Right Bank and 17 m3 s fcc the Left Bank)
I
- 19 -
This estimate is based on probaole rainfall cropping patterns plant requirements evapo-transpiration and other expected losses of irrigashytion water The estimate is believed by the Consulting Engineer to be reasonable but subject to refinement on the basis of tests to be carried out on a continuing basis
The annual average availability of wuter from the Moulouya river is estirated at 1100 million mn or about double the estimated requirement for the gravity areas
Estimated Availability of Water
Twelve Year Annual Average for Moulouya River 3 m3 second 1100 million m3year
Maximum inflow Observed 8000 m3second(1963) 3h00 million m3 (1962-63)
Miniwum inflow Observed 1 msecond (1951) 532 million m3 (1956-57)
On this basis it appears that there should be ample water available for irrigation of the gravity area as the water availability obtained from twelve years observation exceeds the requirements in all but the 1956-57 season shown above Prior to the development of land with purped service areas (the Gare-b and the Triffa ig h Service) a review and analysis of the river hydrology should be unidertaken to assess the availability and regulashytion of the river flows
d Studies Entincering and Construction The overall irrigation scheme outlined by the 1uM defirs the ajor features and th( magnitude of the work to be accomplished to attain the ultimate goal
This scheme is being carried olut in phases over a long time period The present phase encorpasses the development planned within the priorities indicated by the Stanford Research Institute (SRI) study for the gravity irrigation system
The studies for land classifliration have been completed for the gravity irrigation system in the Triffa Bou Areg and Zebra plains by French firms and were considered reasonably accurate by the Consulting Engineer Land consolidation and parcellinrg has been completed by 0MET in the Bou Areg Central area the Zebra Collctive and Zebra Remainder sectors 7 thru 10 Land consolidation and pareeLlni ar( needed for Triffa sectors 27 and 28 Bou Areg Rematnder arid Z(bra Rerrirder sectors I and 2 The engineering designs for the Triffa main sector 27 and 28 and the Zebra Collective have been or are being completed by the G0M forces The engineering design for the Cefntral Bou Areg and Zebra Remainder sectors 7 tnru 10 has been or in being connpeted uy Hydrotechnic Engineering design will be required or the 1ou Are remainder sectors D-3 thru D-7 and Q4 thru G-6 and Zebra Rer ainler sectors 1 and 2 The engineering designfor the Dead Ilead Thnnel has been undertaken by SCET who have preshypared anid issued an Avant Projet for bid invitations for construction
14 M)j6Fj Cshy
-20-
This firm will also undcrtnk- uu-orviston of construction The engineer ing not yet performed can be aea ished by GOM forces andor private engineering firms
Construction of the extension to the rrain irrigation and drainage canals Jand preparation rector cinl ani drninaive ditches will be performed unllr cntact t) 1 cc rt~r~iet m)t hi in the ene of the
r-abilit tion of the L2tL Pz- Dd iarl Trnc t
e Cronning Patterns The existing erning pattern in the Moulcuya including botnirrigatcd and dry farm ingincludes grain forage citrus vegetables olives grapes and 6 small amount of leciduous fruits and nuts Of the roughly 2140Cy) acres of agricultural production in the Moulouya about 177000 acres are in field crops 24)) in vegetables 16Y)O in citrus 15000 in grrrcs 540Y) in forage crops 1700 in olives and 15)0 in other fruits and nuts
Taking into consideration rast and present trends in plantings as well as agronomic and price and marketing factrrs the following projection of cropping patterns has been developed for the Lower Moulouya
PROJECTED POPPTG PATTFRNS T1 HE LOWER MOULOUYA
(In per cent of total irrigated area)
Left Bank and Triffa High Serice
Triffa Sector - Sectcr rriffa Class Class Class
crop Main 27 28 East I amp II III IV
Citrus 40 60 10 10 10 Vegetables 15 10 15 1) 20 10
Crtton 15 20 10
Fcragpr 10 20 25 30 4o 30
heat 10 6 20 25 20 35 4o
Grip 25 24 35 15 Dy beans 5 10
Sunflower 10 olives 5 0
100 10) 100 100) 1i 1052i 100
a Incltdes double cropping
- - r- euro --- 7
~7~TF~Wr~e~ALUSE
-21 -
The projected cropping pattern for the Bou Areg plain includes cottonLJrirdg the frrt Five yearnejtinted 1r of the Class I)fand
the project jitwould be grown on nnII landn Tht renresert only 960etrravres) ectz ri)cr)e area The cotton acr~a e ry increasep 2ceafter live years if ritisfactory drainage conditionshyrre achieved in the Bou Arev
cotton grown i 1xonp tarx- Trdltionally Morocco export its-Jr- cron an irr IJ hort cble to rmeett Cotton the reuirrents
r the oroccan 2pinningr mills The croppni-attrn of the Triffa East (about 180n acres) Js projectedt Tnrlude 15- (about 27 acres) in cotton It is likely that becausef ihe limited extnt of Class I and II lands in the Triffa Eas cotton not increase beyond that percentage
1t i evident that the amount of irrigated cotton that is likely to bein ther-n Moulouya is minimal even assuming that local drainage condi-T nare i asuitable
f Technical Sundnv--s The AID Project Engineer hps reviewed ii) thedat and ajor construction performed to date onronct and finds the technical requirements this long-ranRe phasedsufficiently defineoto ccntinue the project on an orderly schedule The estimates of cost of prsirct facilities have been determin-d by SRI from average va)ues oftrit cots obtained frorr reviously ntiarded contracts and from etniled( -s-nand analysis prepared by the iHydrotechnic Enginering fir oft-o tyieal sectors located in the Bou Areg area The costs for the arc ent contract have bcen estimated by the USAID It is consideredthat the depree of engijeering planning undertaken and the deterrrinitonr to the US Goverrment are adequate to meet the applicable requireshySt- n Section 611 of thie Foreign Asistance Act
7717gt
1 --shy
-22-
E Financial Status of Borrower
1 The Moroccan Economy
Grrwth of MorocLcts GDP in real term averaged about 24 per yearin 1(4 and lr li Per capita DP In 1C 5 wan anproximotely t162 A (er Irr-ht in (6 resu]trd n a drcrcne of slightly nver in GDP which tlh vpulatior grc~vth avrring 3P4 per year rnrsJted in a decline of -r ornita GDP In 16 ii brut $154 A recnd droughtcccijrred In C67 but i not expeetid to have the severe effects of the 165 drought Crop forecasts for the first nine months of 1967 indicate a 4 increase in real GDP above the 1966 level This is also the economic grcrdth rate estimated by the IBRD for the pezxA 1965-70
Moroccos economy is heavily dependent upon the agricultural sector thich has averaged about 15 growth per annum However growth of the mal modern segment of Moroccos agricultural sector has inshy-reased at the rate of about 7 per annum
In 96 the International Banik for Reconstruction and Development (IBRD) preented a number of recommendationr denigrned to increase Moroccos economic growth rate On the bacis of these recomfndations the G004 proceeded with planning the necesrary program to increase investment levels fr- the i 63-65 level of 11 of GNP to 1r of GNP and stimulate the rate of economic growth from 2 to an average of over )4 annually for the five years 66-70 In addJtion the GC4 has taken measures to curb the population grovth rat while placing increased emphasis on raising production of both dryland (wheat) and Irrigated agriculture
2 Investment and Savinms
The level of total gross investment has remaind at aboit 11 of GNP for vera year althugh the percentnoe declined slightly in 165 Under the GO Three Yea5 Plan 1965-67 the gross investment t-3rget woz ret at DH 3 billion- Actual invev-tment expenditures for the three yearpeirod reached about DH 46 billion of which the Governshyment ezxenditure amounted to DH 1 billion a against DH 21 billion budgeted Thin may have beeo partly de to the GOMs deliberate ausshyterity pollcy under the hIF rtbJli7tion prci1rnr but more probably it van duxe to the shortage of trained cadres to -lan and execute projects
In the private cectcr conziderable inounts of ravings may be hoarded due to lack of project attractive t- inventors The lvl of private investment has been runnihg at about 51 of GNP thrrugh 195 The 0014 4 incentive to private instors hnr cut profit taxes from 4320 to V and announced a tpn year guarantc-e against tax increases
]L- $ = DH 506
777=-77- NQ
r y 7k1- T e - W lk In
j - 1) 7k- - _
- 23-
Loan are avaiiable to )rivlite irve-tcrn freo th 3JfIDiN s rctr special funda to prcmote touricm devc firvcnt
Under the 1r86-1972 plan abut to br irtntt level are to be accelerated considerably reaching A of GNP liv ]970 Mor(- Irlyir haviiy on foreign 1 to aciuw cc higher lve1
3 Central Government FinancP
The Moroccan money supply which had Incrrased ify 76 per cent in 2965 remained virtually unchanged in 966 The first half of 1967 witnessed a 5 Ter cent increase in the money supply Te major part of thi increase as concentrated in June and July uhen the supply reached V14 0j lion Currency In circulation expanded rapidly in June and July
nnl factrrn being reinforced by commodity hcnrding related to the 1ide~l Et crisis Demand deposits did not show their normal decline nthe first half of 1967 Deposits with commercial banks declined nlightly while deposits with the Treabury increased as public and semi public agencies contisued their transfers from the banking system to the Treasury The increase in money supply in the first half of (7 ran I raced to tho nzon1 sonal increase in net foreign assets not c y the custcirry rlelir In claims on the private sector Clsirl (n the erivate sector declined slighty until May 1967 but Increased hr-gb June and Jily due primarily to additional financing of textile stocks ClbiJ ante Government rose by 10 per cent in the first half of 967 the in central brnk claims on the GovernmentI being rmainly offset by larger deposits with the Treasury
Ordinary budgetary revenues which incrurted by 5 rcr ent in 1566 tre cxrcted t-) increase by 7 per cent in 1( to DII 21 billion DeampDite a derea3e in agricultural tax reccipt r- fror diret taxes rose by 10 ppr cent in 1966 and a 2 increas estinated for S67 due to tric or controls on income declarationr d an accelerashytion of tax cller ns Owing mainly to a relaxation of the import
program in late 1 5 and a concomitant increase in tariffs on certain ccnonter goods customs reneipts increased by 21 per cent in 1966 Although budgetary estimates call for s decline of 3 per cent in customs receipts in 1S67 it is likely that actual receipts will be considerably larger in view of the import liberalizatidn measures intro)duced subseshyquent to the estimates Receipts from indirect taxes state monopolies and other serces are expected to be 11 iv- cent Ipher in 1967 owing to increased profit on -ugar sabr-i and L r(m the newly created Office do Ccrmercalisaticn - d-tation (OCE)
Recurrent ordinary buiL e(enditures increased by 34 per cent in 1966 ar-i are expected to increase by an additional 7 per cent in 1567 reachin- D1122 billion Although wage and salary scales in the public
Banque Nationale pour le Developement Economique
TT~~- - I777
2 Cf
sector have1bec z h t - rrvirI urli 11i g 14-6 -nd PO becnue rX toi Ijt e f (]r o n 4
ill tile ic urrnnye andr)not i on dnd Publi ht rentrn -yr-otn lno IncreasedOthrr t ill- t il r ne by ) vr cert in J6(
i ninlyrt -br h Inc-l
( Ihe ( t r- rl t ip t t C itur f T)h 21h iilli n
is (( ItI t lt r c0 a- r n n o I- c t b It ihstnl id vv ih n t r-t have hn(er - en 1t2
(IM ii ture( T f fu traordJ nary budrzct exshypend ituren a r y -t c ~ i vi -iscz Portal Checking sy-stcsul)rrcing t (I ltIt Ct -- ind creirn shy
nnet The f r er tnc I hha ccrc ed from a htih of DH 5-7 millIJn in _ 5 millIn r C46 F cr ats foi ]7 place Cro n w I 1(DI)J79 ill ni DDn etlc fi nancing has alo u 1) 5 p (- I3A27 iIliun to an entirnted DH 1142 million
1 14V ) I nv 1 ri n nI(c1 franc n is 77-ected to be ol t y ncrewed bcrrowing fr-ir t he Cestra 9ank which hud been held at mcdert vols iln 165 nnd 1a66 Under the 1TFtaiby agreement of October 16 the qob) agreed to taBe a3] rocrrnary meurer to maintain as table curoonry rPnt inl th nr1d-elrto th b a ent of the ePrncriynnd a vnbl- hn1incc X nvroent P rt artt to t rt fien of tho Ccntin- Honk rstz (erct are nct t r itr June 30 Y-ke 7 lov l b th n Diif ) mill] (n tlcnber -c P thai I o illin usit I ])ecthr 31I62 (GC bc w t
C B1rtrp - vt DH 12 iri 1i nor ]S67 or DH 6S ij lionEan tisated (r fo than the aproved crd it expanwim
Thitrd ordivary nil extraordnnry buThTt deficit of DII 7-19 millI n fcrecat Fr 1 67 in exnected to be fnanced by not freign
tan reof DII )75 mi~l in nt recurity 12ue 1 T111I vlion a - nt ry tiat Po n Che )ir d-nC i 73 r5 Pn
riI is u h i a vti v mrr nrr-e jssIof fvr is id a erital The vnfsa revcred in 1d6 when lnrger r nyrentn eEecially on food itcmo an n -lewdoun in
igo ra a deficit of $1 millcn ProjectiOnz-vt rvultvd in ror 17 r~ieat inrrerned importsonly partially ccnrennate by addshytsa t frnreirn r ntil rrceiprs ard mprrvement in the nervices account will reult -n et of aprroximately $)20million As rhoim in the following tabl -r tion for l33 and 169 how overall deficits of
14 and m] ivi_y$i It
rqVV t1 4~
C)rgt
---
1 -)I+-IRF1
1ROCCO - rTANC OF PAYME 1qrt - 169]_ 5
6rfi0 1 1C(8lr67 i r(o
)xrurt 2t L( I L-5
Trade Bnlance 11 15 - 75 shy - 75
rviee- ret - 7 - 5) -35 -23 -2
J]-i of Good rnd Service- - 3 - 65 -II - ti - (5
Trn-Ifr Pr ynts (nt) P 21 33 37 33
on-cntnry Carital (not) 92 64 6 6 5
Err-rs nnd Ov rrion- (not) - 23 -2 1 3
eranl Bannic __ - _3 -_ 3 - 1i4
Atrh thert ircjected reficitn are of the nnme order of 1 nishytude a7 thcr incurred in the period i66 the Situatlcn i findarentallydifferent both in rerprct to the source of the deficits and in rer-ect to the meat0Y gtr m etin7tecr In the f rrer caive M5recco uffered
_frcrr a very h-vy cutfc of Drivtes cuitv fo-ivr with a shar) decline In forein nt exerditures in Morocco In the iatter case th projected deficits r- rcre a functicn or accelerated crcwth risingdebt ervieiiw tri tho abnrcn of forv eeble additiens foreign reshybull ourcs nere7ory 4( r2Vm rAf finmncting To nect the def-cits during the reriol 161 61h MWreco ob1id to drw down rorcin exchange reserves of over $]c milicn The snrti tpv of financing is no longerpozslble ince no or-res- ruch reserve- Even ifMorocco yr
mn nina r rve_ ore (]rrfii on to th r-ixirun etnt enribe nnd the [iI tnfldy i- un M-r-r e i32 till relA re nt rnt 15 millicnj1itionn ftr ign as- e n 1 6 beyond hat r recnently fcreeeshyable with ver nri- nry Officilr in In i6 reserves are cotImnted Pt 72million c hih crn V 3 million i caly required for currency coy r
Foreign InJebtrdne n of th GOM Mnroccos external rtnte ard rutlie enterprie dett amounted to
$r) millivn in lr6 Debt vervcirig rpynents for (66 trtaled about
$5) rillion g-eement approved in October 3(67
I- -- Ishy
37 millin or arprcxitrrntoy (j Iroccor totnl eXoort earning of h28 millicn GCnerally nxt rrO dbt FervicJng renuiremennt of leas
than r of totna -ort nnrlt In onrldered to I r tirfactoryrntio D-bt r rnJrcLct n Ir the reriod 1-(y 3on Trerent external debt including thnt wrtl(n irreently undibur-ed are hown n th fr lv tahlr
)] L v yr t n
Eternn Vtnte anc ] bntcrnrie Debt
M131 o)nr
Y aI Net Outrtnnling Debt Debt Service
(6 it 479r5 $367 J-67 452 3)6
Z616 44469 2 0 2C-
365I3 37 389
33 383 33 6 371
5-h 31 n 352 275 34121
]176 2661 32It 1977 21133 311 177 22)6 307 19 i0l74 256
1733 255
rgtternal debt rharre n rerent debt nnr rhon above do not increase ubtanti-lly over t rt 1)year- reaching a maximum of h44 millior
in J6 and decrpt- n cr - tently threoafter At the are time exportearninr r _rc extett nc-are Aring that Morocco does not inshycreswre it etrnn2 cbt t irate ubrtantially nb-vc ihat has been the core th adfiticrn dbt e roquirrentn reulting from the propo t Icon o 5 ijilion co r 7crncepr-ional term hould not have a i-nifiant affect n 1r o - ab lty to neet itv g rc-atedebt ericn rcnrib2t~e- the pros ectr of reprment of thin loan ore coniderci rearcnb)
U I -
F ot h-v C IuIJI rmt I shy
1 V amp~ rVml KI
PUC- -jrVi Jt t 1 11 nflrcj urlc 1- th )qn --P I uti u rhnrrl -1r- thr U- Tr- ry- R- -nymc nt
c2Il f n 6 1 bf r I- till 11 nfl r- n-r i n of O r--niC(Io~hi U 1 1 rr to
Tn vil ) f rvc hi tvlrll 1 (In- - n- u--n E r me rrinshycgtay F rntwir w ourc o -o- rvI ortf-V3 1 rncing of
Uf f -r rrrir- ur3r 4~ v -rin Iltrt nt ndd shyt -n t ) in- lint r b t l r -n rort- o-orco trorl-- V -P
r i 1rnd h L-torie Furcl-trin firr- thrjt US r r~ crvirrf- u~d be~
T L I1 c vt r- -ly ] -ubt fu 1 n vi pw -I -ror-co Ir of
ut1JpcO In thi rjert f it -- r- 21 npnred by d1-nr- cothcr t~han the US
2 ]P-t ofI Prr l1 on Prw- Fntrrr
Phij rrcjJ-t -11 n-t h~ -in nrwerq Prrt n rr- tc ntrshyr~A~r fi-mc 1bho und for --roern p o n
3_~~PrCT--rty
rr-vIi-n 1 h -d r the loan ragreement for Icntifitcation ef any r mIjrpt n ctri b- rt througn ut 1zatn (f xccr- prorerty
If rv c u~eAID n-mrcf u urr thi )cn - I~ut~ em avoi3ablo r rovvrirrnt -rrperty rather than nce iteni
4 Otli-r Fr- Wo--] n-Fnlc4rm
Dr mi tW- o] 14rocco- i~ajr ovr-ec -f exte rnaX
rrtan~- hrtvfb - I r ~ ant fl Fr n fole by Kv-it
Sgio F rneflit r b-en 1lmrntrd to tcfohnjip n5tnnen bi eoni~in I th u y f Fr--h tprhntcian tcacrr ind cther
~ti~r t~ ec-tnmIyrt-n Friinch Aid to Mcreco In 1065c~oc~ (P-art f-r txychnirril aItn -- j se of tl5 w1nfor bu~dget rurport f ir in rt t- $1 1ri1 icin in ennita -rojectM- n vx- rrcd
1Vw1tvnn tioI t-) Frenh rurtnnd +16 r11ion tie-I to -onyiint to orrrcr Frrmh ccilcn~For _-rrc-ratod land and rquirrmcnt
West GTrrnmnny liar agrcrcd to nrovIe ccme j27 mM22~cn 1n catital arirtanre and cromrndity lnoi7 t n OfIcon( q92 thi o totril$223 miJ lien ha actuary b-Pn cr-Itt--d under Inn ngrepment This
And a lk5 million commodity loan both) signed in 1965 All Wet Gerzaan
Ufla
-28shy
capital asnistance I vuectI to be tied to German exports Germanyhas in addition 1uvvded r tteysubbtantial technical assistance f
The IBRP hah rade four 1nns to Morocco since 1962 totaling$6) million Ofthin totnl a [175 million loan in 1965 wos fordevelopient of the gidi lit-r irrigation perimeter Other assistance by internntIcnal Iending arncie include an $11 million credit byIDA in 1C65 for rcendary diicction projects and an IFC ln and inshyvestrent of $1 1 ri jnic alo in
F tit i by [c - dncr tr dh elo snt ofMorccco rircuVt r oii +h b-]n jt-TKT r nbove n 2 )6 niliion Kuwait enn in i66 for develomyment of the Tensaout Prnm n irrnten nrooetand a $77 million Kuwait
0jl n )nnsn r(niti-nertcir
loan for extrnion of the Tadri~ Irrigation Perimeter
The following- trbe surrlnrlzes other free world arlztance (excluiin technical assistanc-) to Morocco for the years 1(62-66
($ Millions)
1 62 1cf_63 96) 19r65 19)66 Fneea 4) 5PO 64o 700 shyWet Germany 223 gu 1t 53 281 IRD 15 175 10) 175 IDA 110 IF C 1 5 7 7 7 0 I15
TOTAL 55 62 1U3 W
b Includer only lo-ng term loans and exporter credits - Includfs 25 million private capital
Eternal ansiztnnce to the Lowier Moulouya Irrigation Perimeter -nce 1060 hres been con[fined to US upport Consdiering AIDs previcus
involvement in and conmitnert to the Lower Moulouya an AID lean in P2t to be Lhi mol aprroriate source of financing for this project
LID
II
q
-29-
SECTION ITI- Y-TTYT TIMPLPTrION
A Periret-r Ad-instrrti-
Authority for irplerrentvtnn of the deveorpent prrgrn frr the LowerMoulcuya Perimeter and rs wel arth crnntinuinz mrnnrrmenertC tt r t- rrtnr V theltbi nad overationity iOfic 1cne 4
n r I e1i- i d Vit4 i Iv ~ Ct rreated i Otb (rJ rn-- of evcn inrmi-rriional offices hich reelaced the Office de Mire en Valeur Aamprlcole (OMVA) Under the OMXA and itspredecessor agencies authority for ad-inLtration cf irrigtion proJect war centralized in Rabat
Under the new regional office organization responsibility for adminshyistering ORMVAM is vested in on Adminirtrative Board of 10 members headed by the Minister of Agriculture and Agrarian Reform as chairman All ether board members (other than the Chairman and a representative of theInterministerial Economic Ccrmittee) represent agencies or activities inthe region of the r-eriret-r whic comprises parts of two provinces Localretresentatives on the Board inc]-de the governors of the two provincesOujda and Nador the presidents -f the two provincial asembtes and of the two provincial chambers of agriculture as well as the perimeter Director
The responsibilities of thie Administrative Board include review of theecys program establishment of its organizational structure developshynt -)f its annual budget and establishment of rates and conditions of
Siyfent for water and other services provided in the perimeter
The Director of OP4VAI-I is dbarged with the responsibility for executionPthe vclicies established by the Administrative Board end administration of oil ORMVAM functions This responsibility includes selection of staffn pserating perrcnnel acting s officia ORNIVAM representative in all ntztinns with -tate and othbr public or private bodies and the
f of funds within limit Indivated by the Ministers f Financetent rn fricultural and Agrarian Reorm
Perimeter Oranizatlon
ORVAM oreanizatlonal structure consists of a directnrate five maj-r rvlces or d-vsicns and one separate bureau Two services qei Administratif et Comptabl- and Service du Yatrial are conshycor - th adminisration and lcgistical support of ORMVAM operationshi1e the remainirg three services rind the separate bureau are Involved in t-hni al matters associated with agrcultural developrent Each ervice has one or more subordinate bureaus Fei-ce Chiefs and thehead 0 rch bure-u report directly to the ORMVAM4 Director
-~F7E MEw-
-30shy
2 Perimeter 01ttffnr
OPIVAM orgttnlrntlon treture calls for 557 positions of whichI L or 7 Mlled n were nher 29 1567 37 of the 71 Postshytion vacancies reported 1ern the high and middle levels Foreign(chiefly Euronean) technclan occupy I)of the 16 high level positionsthat ere filled at thfit tire
Whil OPM ut in th- lcng run lor to Mercecos oducational yster to prvidr tn crrf-nn2 to ratisfy current rdurojectd rcshyquirement th currnt high and mlddle level vacancies rrouire uersonnelwith oxt nive nrior rxericnce To fll this preent need it will be necessary for CRIVAM to continue its program of recruiting foreigntechnicians until ruch tire ns graduates of Moroccan educational programsacquire the necesnry exrerience The managerent assistance componentof thin pro~ject ]e-rribed In the Project analysis will to some extentalleviate OFIWAMs high level personnel requirements
3 Inw1 ernetation Sehedu]
Months Implementation Action
1 0 Sign Loan Agrcement
2 2 C-tiify conditions precedent and Y4tiate procedures for selection of US firm for management contract
2 Negotiation of extension of advisory Engineering Services
h 4 Contract (Hydrotechnic) Negotiation of Managerment Contract
5 60Cmpletion of Project
C Waivers
Sect ion 7 rf AID Regulation 7 provides in substance that theUnited State ill not finance direct costs of construction work performedby third cc-ur y nationals unless the total co-tn of the project withvhich thr ennrtrumticn w(r is asEcciated donot exceed $2On)O orafter excluding national of the country in vhich the site of constructionis located and Dersons vho nave resided therein uninterruptedly for morethan three years imrnedJately prior to any determination under Regulation 7at leant 0 of all uernons who work under the contract at the site of conbulltruction are United States citizens or the employment of third countrynationals is necessary to avoid excerrive corts to the United States
3
31
Section 2175 authr-ri th Regional Anitant Administratorto waive the nrovinions of Sectionthat it is 2073 if he dcterriner in any coneimportant te the nationrn intercrt of the United Stutes tofinance the direct eots of construction work performed by third country
nationals
A prviou1y r ic i c t tht for thr ct Tartthe -r c ct b- 1jeuj out r -cnorbr f cnrtructioncontracts with Morcccrr contrctnr an in the i-t Uowfevvr itentirely psnible that there may b- roe contractn with cntructlonfirms partly owned by third country nntionaln and that ruch firjs anwell as the surely Moroccan-owrned firms may enloy third country niationalsIn such canes a difficult rrobic-i iould arise in meeting the terms ofRegulation 7 since an a practical matter Aericans are not reaonablyavailable for ermployn ont by such contrnetorn and our previcus experiencewith the Naunsseur Ccnv(r-ion project thatin Morocco has indicatedAmerican contractors would not be interested in bidding cn small conshytracts in that country
It in therefore recommended that the Annitant Adinitratordetermine rursuant to Section 2q75 of Regulation 7 to waive theapplication of Regulation 7 to thic iroject since the project 411 conshytribute to the attainrent of US foreign policy objectiver and the cbJe-tives of the Foreign Arsistnnce Program
LITI L USE
LfI~~5xA~us
lit
4 A J A 45 4 k
t A S T
S(3
I A444ilA~~l~)
7 -74
tAM= D
SECTOR 27
10000
t Co0Na includez25 cgtri oncFcttlrvI ncy I8s ~ ~ C t C- Includes 50 constriJcltiotrgrc
2000 60
IU
0
z
bull cosYsA shy----- i
600L _
400
200
0 5 I0 15 20
INTEREST RATE
I ~ 7 J7777
ANIAampX C
PROJECT DESCRn1 rOll
The project com)onents to te undertaken on the MIoulouya Irrigation Project over the next five years contists of the following
C(n1rtion of the rrLin casuals and bianch canbls to provide the suource of waler to the sctors be developed in theto TriffBou Areg and Zebra areas This construction will include the necessarystructures such as reulators highway bridges aqueducts water intake
and discharge structures etc
2 Iand Txeloommerit which includes engineering land consolishyt and iuvtllng lard preparation (subsoiling ripping destoning etc) and installation of water distribution canals (secondary tertiary and quurtunary) and drainage collector ditches for the Triffa main covering 24000 acres in sctors 8 9 10 16 20 21 23 24 25A 2513 27 and 28 Lou Areg Central covering 16250 acres in sectors Dltirough D2B and G1 thru-4h G313 i0u Areg Remainder covering 15000 acres in s-ctors D3 through D7 and GA through (6 Zebra Collective covering 45)0 acres in sectors 3 4 5 rind 6 and Zebra Rer-iinder covering 14250 acres in sectors 1 2 and 7 through 10 and th remainder of sectors 34 and 5 The total land to be developed is about 74000 acres
3 Canalization of the Oued Zeluan and nued Sidi-Amar in the Bou Areg Plain consisting of strairltening englarging and regularizing of these streams to carry the flood waters to the sea Drainage interceptor canals are to be constructed parallel to the sea in the Bou Areg Plain In the Triffa Plain the Oued Riada main drain will be deepened and enlarged and secondary drains will be excavated to provide for drainageof the Madagh area This will include the construction of bridges and culverts and other related work
4 Major Commorn Works will consist of
a Clearing of the Mo-1ouya riverbed downstream of the Mechra KLila barn caused roy flood dariwe and the installation of a set of stop logs for maintenance of pillway gate-
b Design supervision and construction of repairs to the ]elt Lank dead head tunel
c Conctruction and establishment of sib-division Offices and installations for farmer support such as CMVand farm stables
1 C
-2shy
5 Manavmtnt It ha been proposed that a US management firm be ewployed by th- C4 to manage and operate the entire Bou Areg area Such manageent -iuld encomparn all activities from the initial concept to final irIrp igricultural production Such activities would Include resp r-ibilsect -or supervnsion of engtneering and constriction of primary
S- Jry r complete developfnent of land training n in g tinul irription practicen preparation of market
t - r1t- (ot--rnu trplusmnining of a Moroccan cadre to take over h v--it Bou Areg dreara P the
At this writing the n-pt of turning over to a private UZSfirm execushyresponsibl]ity I h management of the establilrment and initial
op-ration of irr1gati the Bou Arog area has been only broadly de iiitd by the GCJO It Intended that proposals will be invited from a r -onable ntnber of f|ed US firms that a selection will be made an-n 7 them and a more do iled and cornprehenrive definition of the rer6 -Ps to be performed be eztabliched at that time It haa been
stimated that the t- of ruch a contract will be about $2 mir- n In any event the -ts of this contract other engineering arvl s to be provided undt n extension of the Ilydrotechnic contract and ether US corts will not ed the proposed $5 mllaion developzont Jean fr the project
The cle 3ifications duties ant 1ncnslbilities of the management personnel ill ha-- to be clearly defined i agreed to by the GCM Perimeter Directo- and other GOM Agencies luding arrangements for the necessary gistic support
Svxlale Docu-
1
4
LD ED 0ICIAL
-IAIDshy
A1trX D
C6JCK LIST OF STATUTORY CRITERIA
(Development Loan Fund)
1 FAA 0102 Extent to which U3 cormodities and services are furnished consistent with improving the US balance of payments See Sections II-C II-F
2 AA sect2O]ihi lanner in which loan wil promote countrys economic develo shy rit emphasizing help for long-range plans and programs designed to developeconomic tesourcos and increase productive capacities See Section I-D
i FAA sectT] h)(IL Information and conclusion on availability of financincfrom other free-world sources including private sources within the United States See Section II-F
FAA sect20l( )2 Information and conclusion on activitys economic and technical soundness including the capacity of the recipient country to reshypay the loan at a reasonable rate of interest See Sections II-B II-D and II-E
5 FAA 1201(h)( Information and conclusion on existence of reasonable promise activity will contribute to developrmnt of economic resources or increase of productive capacities See Sectiona II-B and II-D
_92_(b 4Information and conclusion on activitys relationship toothor development activities and its contribution to realizable longshyrange objectives See Sections I-D and I-E
The following abbreviations are und FAA - Foroirn Assistance Act of 1961 as amerded by the Foreign Asaistaice
Act of 1967 App - Foreign Assistance and Polated Agencies Appropriations Act 1968
AFEVCDF 1066
L1
-2shy
7 FAA f12O1(b)(5)_ Countrys self-help masures including institution of Foreign Assistance Act investment pliaranty programs Investment Guaranty
bull Agreement signed with Morocco 331o6l See Sections I-D and II-EI
_A ))(6) Information and conclusion on possible effects on US econowy with soecial refererne to areas of substantial -labor surplusSee Section II-F
9 FAA q201 (h)() Information and conclusion on the dagree to which thA country iv wiki- progress toward respect for the rule of law freedom of expression and of the press and recognition~yf the importance of individual freedom initiative and private enterprise
10 FAA -1201(b)(8) Information and conclusion on the degree to which the country is taking steps to improve its c]Laato for private investment See Sccton II-E
31 FAA R LbJi Inforrat-on and conclusion on whether or not the activityto b financed will contribute to the achievement of self-sustaining growthSee Sections I-D and II-B
12 FAA fi2Ol(bj Inforruation and conclusion on reasonalbe prospects of reshypayment See Section II-E
13 FAA fl20JL() Info-ation on applicability of the twenty country ceil4ng2
14 FAA fl201 L Information and coclusion on legality (under laws of the country end the US) and reasonableness of lending and ralendinr terms Loan will be on minimum termspermitted under FAA These are deemed reasonable see Sectioam Evidence will be renuired from the GGM as to the legality of the loan agreemnt
1 E 2 Information and conclusion on availability of an applicationFAA together with sufficient information and assurances to indicate reasonably that funds will be used in an economcally and technically sound manner See Sections I-A II-B and II-D Application received Janury 15 1968
16 FAA fl201(fL If a project inforntion and conclusion whether it will promote the economic developapent of the requesting country taking into account the countrys human and material resource requiremnts and the reshylationship between the ultimate objes6ives of the project and the countrys overall economic development See Sections I-D and II-B
17 FAAJ 20ij(J If a project information and conclusion whether it cifishycally provides for appropriate participation by private enterprise 8ce Sections YI-C and 114
I- FAA i22(a) Total amount of money under loan which is going directly to private enterprise is going to intermediate credit institutions or other borrowers for use by private enterprise is being used to finance imports
rfro private sources or is otherwise beirg used to finance procurementsfrcm private souwces See Sections II-C and II-2
9 FAA 207 Infosation on the emphasis placed en
(a) encouraging development of economic political and social institushytins No apparent relationship
(b) nelC-help in mectingthe countrys food nredo Project Vill conshytribute to production of food for lccal consumptioa
(c) in-proving availability in the country of evucated trained manpower Project will contribute to the deicloginext of trained manpower as one of the functions of the management contract (Soe Annex C para 5)
(d) prcgrams aimed at -malnutrition disease eradi atDn slum clearanceWater purification sewage disposal health education naternal and child care(includin fimrily pJnrning)) -nd cthcr public health ausistarice See
(c) other develoment activities including industrial development free
labor unions cooperatives tnd voluntary agencie transn)rtatin and ccshymwquication nrStczn capubiliTies for economic planning and public adlinisshytration arban develo-mment and modernization of laws to feilltate econcnicdevelopjen- GO- intends encourage develo vient of cooperat yes particularlyin the Left Pank areas Project will also develop capabiLi ics for cconoaicplanning and public a6~inistration (Annex C para 5) Other not applicable
20 Information on the extent to which the r-untry is
(a) cttcmting to increase food production and food sto a-e anddistribution felitics This project is one evidence of Moroccos efforts in this direction See also Section I-D and I-E
b) creating- a favorable climate for foreign and dmestic iri-ate enterprise and invcstrrment The GCM has recently reduced profits twes anrannounced a ten year guarantee against tax increases See Section II-E-2
(c) increasing the role of the neonle in the developnental procecsNo apparent relationship to this project
(d) allocating expenditures to development rather than to unn-cessarymilitary purpoes or intervention in other free countries affair See Sections I-D and Ii-
(e) willing --nribute funds to the project or program Th iOMhas already dcvo o-sidcrable resources to the project It has badieted13 million for th i oulouya for i7 See Section I-C
(If) making economic zocial and political refo ns such as taxc coliecshytion iYprovcmenLs and chan es in land tenure a Royal Comm ision has been appointed to make recomendation on land tenure probleras in the Lower I oulouya
(g) responding to the economic political and social concerns of its people and showing a determination to take volf-help wcasuren See Sections I-D and II-E
IT
-ovi~cd l v r 13 1968
- 4 - LDffIED OFFICIAL USE
21 FAA Inforn ation about multilateral assistance being Iurnished to t e country and whether the loan will encourage recgional development prog-rams The I1D has eztablihcd a Consultative Group for Morocco which rvicws the GOM development program anui prgress See Section II-F-4 for infoaation on othtr donor assistance to Morocco
22 A Extent to which the loan will contribute to the objective of ass ring naximu par icipation in the task of econonic dovelop--ent on the pL-t 0 _he people of the developing countries through the encouragement of cocr-tic private and local govenmental inLitutious o apparent
relationship
23 F _-_Dta_ Infor-ation and corissions whether loan will oncourageeffor s of t1e country to (a) increase tie flow of international trade (b) fostcr private initiative and comptition (c) encourage development and usceo co opratives credit unions and savingss and loan associations (d) disourgo monopolistic practices (c) improvo technical efficiency of industry ariculture and commerce (f) strenSthn free labor unions This project is cxpected to increase technical efficiency oi-agriculture
2_ C-1L lnforzrition and conclusion on how the loan will encourage US privte trade and investment abroad and how it uill encourage private US participation in foreign assistance prograas (incluiing use of private trade channels and the services of US private enterprise) See Section II-
25 VA-+_ Conclusion and supporting information on compliance with tho Co resional policy that engineering and professional servicos of US fir-ms and their affiliates are to bo used in connection with capital project3 to the nixinua extent consistent with the national interest US engineerirn and innsgcment services will be financed tnder this loan
2$ Inforamtion and ccnclusions who+her loan will pormit American rx-l] business to participate equitably in the furnishing of goods and
z orvices by To be satisfied in Loan Agreementfinanced it
27 - t(a App I18 Complianco with restriction of co -zodity procureshy o UsMS except as otherwise determined by the Picsicent and subject to ttu--- rcortir require r-nts Procurement will - liumited to the US for
reiabnrs nts and to ioocco and other free world countries 1-or US-cwne(d rhu disburseacnts
23 -i Comiance with bulk cozodity procurement restriction topriecc no l-ho han the nkarkot price prevailing in tho US at tia of
bull puchas Not applicable
29 FA Cozpliance with requirement that matrin insurance be purchased on commceities if the participating country discri-inates and that insurance be placed in the US To be satisfied in Loan Agreement
30 IA 6(a) Information at to the utilization of excers personal property in lieu of procurement of new items Will be required ai appropriate under terns of Lean Agreement
f
1 77--7 -77-77-777
31 FAA 61](a)(_) information and conclusion on availability of enginoering i financial and other plans nccx sary to carry out tho assittance and of a
reasonably firm cstimate of the cost of the assistanco to the United States
See Section II-D
32-ecessaryFAA t611(a)_(2) legislative action r6quired within recipient country and ibasis Cor reasonable anticipation such action will be completed in time to pormit orderly accompli-hirtnt of purposes of loan See Section I-A
33 n _AA161nJ0] If water or water-relatod land resource construcshy
tion project or program information and conclusion on a benefit-cost comshy
putation See Section II-B
3 4 VAA 611(c) Compliance with requirement that contracts for construction be let on comp-ctitive basis to mamum extent practicable To be satisfied
in Loan Agreement
If a loan for a project of $1 million or more certificatin35 FAA _61l(r) by the principal AID officer in the country as to the capability of the
country (both financirl and human resources) to effectively maintain and
utilize the project taking into account other US-financed projects (Such
certification is to be pproved by the Administrator aL the time the loan
is authorized) In process of being obtained
36 FAsgJ2 _6_h Appropriate steps that have b-en taken to assure that to the miaximum extent possible the country is contributing local currencies to net th-2 cost of contractural and other services and foreign currencies o- icd by tho US are utilized to meet the cost of contractual and other services The GU-M is contributing over $30 million to compleXton of this project Excess US-use dirhams will be used for eligible project costs other than US goods and services
37 FAA p619 Compliance with requirement that assistance to newly independent countries be furnished through multilateral organizations or plans to maxishymum extent appropriate Not deemed appropriate in view of previous AID financing and ccoiitment to the project See Sections I-A and I-D
38 FAA sect620(a) AcnO7a n3]7(b) Compliance with prohibitions
against assistance to Cuba ard any countr (a) which furnishes assistance to Cuba or failed to take appropriate steps by February 14 1964 to prevent ships or aircraft unier its registry from carrying equipment materials or supplies from or to Cuba or (b) which sells furnishes or permits any ships under its registry fr-om carrying items of primary atrategic signifishycance or itcms of economic assistance Morocco is not-known to be in Violation of these sections
39 FAA q620GL_ If assistance to the government of a country existence of determination it is not controlled by the international Communist movement The Secretary of State so determined on October 11 191
40 FAA 620(c) If assistance to the government of a country existonce of Indebtedness to a US citizen for goods or services furnished or ordered whore ouch citizen has exhaustod available legal romodiesor where the debt
i - ow - -- _---- --shy
- --
-6shy
is not denied or ontested by such government or the indebtedness arises under an unconditional guararty of payrrent given by such govornmunt No such indebtedness is known to exist
41 FA _(a2LdL If assisitance for any productive enterprise which will corashypote with US enterprise existence of agreement by the recipient country to prevent export to the US of more than 20 of the enterprises annual production during the life of the loan Not applicable
42 FA4 - 16Q_0_ A If assistance to the government of a country extent to which it (including government agenies or ruhdivisions) has after January 1 1962 taken steps o repudiate or nullify cuatracts or taken any action which has the effect of nationalizing expropriating or otherwise seizingownership or control ofprcpertv of US citizens or entities beneficially owned by them without taking appropriate stops to discha i ge its obligations No such steps cr actions are-known to have been taken by the GOM
43 FAA~L AjPj_10_9 Compliance with assistance toQ0 prohibitions against any Comunst codntry ozocco is not considered to be a cocinrunist country
44 FAA - 620(gJ Corliance with prohibition against use of assistonce to comp satc owners for expropriated or nationalized property To be satisfied in Loan Agreement
45 F AA 8620(h Compliance with regulations and procedures adopted to inshysure against ue of assistance in a manner hich contrary to the best inshyterests of the US promotes or assists the foreign aid projects or activities of the Communist-bloc countries To be satisfied in Loan Agreement
46 FAA 06-O(j)_ Exitence of determiration that the country is engaging in or preparing for aggressive military efforts No such determination has been made
L_62_O Information47 FAA on representation of the country at any intershynational confererce when that representation includes the planning of activishyties involving insurrection or subversion against the US or countries recoiving US assistance No such representition is known to have A occarrect
8 FAA 62JJ Existence of a determination that the country has permitted or failed to prevent destruction of US property by mob action or has failed to take steps to prevent a recurrence and-to pay compensation NO such destruction is known to have tak-n place
49 PAA l620(k) If construction of productive enterprise where eggregate value of assistanc to be furnished by US will exceed $1OO million identification of Gtntutoryauthority Not npplicable
i-xQ2MZZ=
1 shy
U 6 50 _Af( QCinsidoration which has been given to denlying assistance X to thu government of a country which after December 31 1966 has failed to
- institto the investnint guaranty program for the spcific risks of inconshy
vertibility and expropriation or confiscation Satisfied See No 7 above
S51S J lj Compliance with-prohibitions-againstn as~istance to countries which traffic or permittraffickingwith North Vietnam Morocco is not known to be in violation
52 E_-L620(_L If country has seized or imposed any penalty or sanction against vn US fishing vessel on account of its fishing activities in
intcrnationul waters information on the consideiation which has been given to excludirg the country from assistance No such situation is known to exist
53 FAA FA r) UAR restriction Not applicable620(p 9117
54 FAA R620tl) Existence of default undhr any Foreign Assistance Act loan to the country No such default exists
55 F ) C-nsider tion of whether co ntry is devoting unnecessary percentage of buKet for military purposes or use of foreign exchange for milita-y equipment
56 FAA 62o(t) Proibition on aid if country has severed diplomatic relations with US unless agreements have been negotiated after resumpshytion Diplomatic r(lations have not been severed
57 FAA 9620(u) Statur of the country on delinquent UN obligations Morocco is not known to be dlinquent on its UN~obligation
58 FAA R636(i) Prohibition on financing non-US manufactured motor vehicles Will be satisfied in Loan Agreement and Implementation Letter
59 App 102 Compliance with requirement that payments in excess of $25000 for architectural and en Jneering services on any one project be reported to Congress Such reports will be made
60 App R1O4 Compliance with bar against funds to pay pensions etc for military personnel Such payments will not be eligible for financing under th Loan Agreement
61 App 9106 If country attr ipts to create distinctions because of their race or religion among Americans in granting personal or commercial access or other rights otherwise avaVIfable to US citizens generally application which will be made in negotit ttons of contrary principles as expressed by Congress Morocco is not ku IDhave made any such attempts
iInD OFFIIt t USE
0k
OFFICIAL USE 62 AIwp Rii Compliance with existing requfremets for security clearance
of personnel Will be satisfied in Loan Agreement and Implementation Letter
63 App R1l2 Compliance with requirement for approval of cortractors and contract terms for capital projects Will be satisfied in Loan Agreement
clJ164 Aup Cmpliance with bar nRainst use of funds to Tay assessments etc of US meiber Such payments will not be eligible for financing under the Loan Agreemunt
6 Anp P115 Ccmpliance with regulations on employment of US and local personnel for funds obligated after April 30 1961 (Regulation 7) See Section III-C
66 Aim Vietnam iron and steel restrictions Not applicable
67 p l9 If a country other than Greece Turkey Iran Israel Republicof China Phillipines or Korea reduction in assistance by amounts spent for the purchase of sophisticated military equipment
68 Anp fi4O1 Compliance with bar against use of funds for publicity or proshypagjanda purposes within US not heretofore authorized by Congress Such use of funds will not be eligible for financing under the Loan Agreement
Morocco is a traditional Islamic monarchy with a constitution The conshystitution was implemented followaing a popular referendum in 1962 National regional and professional elective bodies including a parliament were established by universal suffrage under the constitution in 1963 The parliament was suspended in 1961 in a State of Exception because of its inability to agree on measures with adequate urgency to meet the prevailingecononde imperatives In July 1967 the King appointed a Prime Minister to direct a Cabinet of appointed technicians
The constitutional framework nevertheless remains intact in Morocco and nationwide popular elections for some of the professional chambers were held in August and September 1966 The press is relatively free in Morocco and the right of diLsent prevails provided that such dissent does not violate the prohibition against political attacks on the instishytution of the monarchy or the person of the monarch
LI Under the revised US AID Policy for Africa agreed to in November 1966 Morocco is designated a development emphasis country entitled to receive continuing support on a country basis as part of a multilaterally coorshydinated countrj program Morocco was subsequently included in Presidential Determination 67-14 (January 5 1967) I
LIM=TE OFFICIAL USE~i
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DEPQbi) STATE AGENCY FOR INERNATIONAL DEVELOPMENT
WASHINGTON DC 052
CAPITAL ASSISTANCE LOA11 AUTHORIZATION
Provided from Develoroent Loan Funds Morocco Second Lower Moulouya Irrigation Loan
Pursuant to the authority vested in the Assistant Administrator for Africa of the Agency for International Development
AI)by the Foreign Assistance Act of 1961 as amended theIAct) and the delegations of authority issued thereunder I
have received and t-en into consideration a certification from the Director of USAIDMorocco as to the financial and human resources capability of Morocco to effectively utilize the Lower Moulouya Irrigation Project taking into account among other things the
maintenance and utilization of projects in Morocco previously financed or assisted by the United States and I hereby authorize the establishshyment of a loan pursuant to Part I Chapter 2 Title I the Development Loan Fund to the Government of the Kingdom of Morocco (Borrower) of not to exceed five million dollars ($5000000) to assist in financing the fore] gn exchange and local currency costs of goods and services for the third phase of the Lower Moulouya Irrigation Project subject to the foLlowing terms and conditions
1 Interest Rate and Terms of Repayment Borrower shall repay the loan to AID in forty (40) years including a grace period not to exceed ten (10) years Borrower shall pay interest on the unrepaid principal and any interest accrued thereon at the rate of (a) two percent (2) per annum during the grace period and (b) two and
one-half percent (2-12) per annum thereafter
2 Currency of Pepayment Repayment of the loan and paymenu of interest shall be made in United States dollars
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3 Other Terms and Conditions amp(a)Goods and Services financed under the loan
shall have their source and origin in
(i) the United States if disbursements therefor are made in United States dollars or
(ii) any country in the free world including Morocco if disbursements therefor are made in Moroccan currency
(b) AID Regulation 7 shall not apply to construction -work financed under the loan because as detailed in Section IIIC of Capital Assistance Paper No P 667 it is important to the national interest of the United States that the direct costs of construction work performed by third-country nationals be financed out of funds made available by the Act
(a) Such other terms and conditions as AID may deem advisable
Assistant Administrator for Africa
Date
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before t will bethe left ban- areas Work theb1litation on rehashyof the tunnrel is exnected to begin in MayJune i38 In June IX)5 the Grt4 rubrnitA to AVP a ecmprehensive study andfor the completion of plirthe pro ie-r together withthis purpose AID rjvio-w if the-
a request cr- a oan fordcrcumentsthXe proIecrt rained and of its experlonce with
th-e plir a n2rhr-r of q- tionn concerning the adequacyarising Vrom ofthe limitcl iValability of skilled roroccanersonri] cce tuated by the2 d ermrturetinuing unroved of fore vn technic ins)
Ing 1rcchirec arid tenure problems lnndequwpe GOM rroJect financ
conshyand inadequate projcct mranngement Moreoverto I- nn cver-awnbitinus what atreardccuntry -id( Moroccan proram for dovelopmeitof its surface water irriwatinn tential arneared as wel to havelro re-ponslble fr b-entb
-sI- v of avalla gtrrnpower for the utlionj of
Si- - t t t h-e Lower tinulouya project Itself AID thenfinancing of
f - of studies by the Unlt-d StatesAgriul- tEir nford RI-3rrch Institute with the
OA) iniri both informtion con-ernirgr(-lrrt n Or the molouya -r one hand ani manpovrr
prorifies assnonrront of thefor in-- ns betweenfar-i )-co the dry Jlnd and irrlratedon cth- e resultsirdi-ti -qrly of the initial SRI stuliethat t least ra
in ren-ral terms Investment in Morocnn1e t ri-ure would te morerar li productivelrid- It Thn GC14 hasr i rrnm sinrfor e irntryctlon of frti iz-r the re Z tr in rain f-1itg farirp are --rW t Moro t-
uo A fin ql SRI udy wasbullbypriorities fr invtronf u in the Thin nttdv -- r-letd in Novombrhas C- of 17 Inn-rzjrehersIve measuresIs nhortage to allevia-eof btij2p- T-aowr in ift7 agriculturalnps to re voj fhe progra-ns has taken]ori _- probl-ms In the Mollouya andornnized t t rtt has reshycf if - i nageot of irrigt ion projectprovid- fcr tohe (i-rt -0 i7 + nf( r a)thriy ani reponsibility for thpof Jm~tera inMorocco
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1967 to irrcveTporformnnce in grculturc In the early psrt of the year the GCQ4 recorgnn7ed it a initrative system to rrozn for greater loca responzipuIty nnd crntrnl over agricultural progrrswhich inclulcd in partcmLar the minagement of the M4oulouya Perii-ttcr and instituted a ajor rrive to recriit principally in Europe foreigntxn- tc -rk orr rri y a r-nritc-3 In GCM prrqrnms In July one of
of A- cuA tue The att r ir cvr atic with USAIDPabat has affirmed his active interert in the Moulouya arid in the US role in its financing
E Fe)ationhipn of Project to US Ansimtince StrateT
Im~rvNrm-crt in Moroccos economic performance is itself a major US objecti e in Morocco as well ar an Iportant contributing influence toUS political objectives in Morocco It is believed that evidence of econc-ric improvwr ent will strerthen the GOMs capacity to maintain its moderatint role in Arab and international councils and its friendly relatiorns with the US
AID strategy is to assist Moroccan econcmic development within the framework of the Consultative Grcur (CG) crganized by the IBRD The CG has endorzed the GOM priority on agricultural development One of the prime objectives of the AID prcgram in Mcrocco is to increase agriculshytur1 rrcdurticn which i in accrd with US policy to reduce on a worldshywide bazis f-ependence on US food esnistance over the next five years
AID ian-stqnce to the aericultur l sector Is directed at increasingPrc+ -tion dry-2and farming as wel as irrigated farming in the LoweyMou]cya Rlv-r Bsrin where the US has provided $23 million of loan assitance einc -lr60nn well as $3 millicn equivalent in ocal currencyloans The rnture of AID assitance to Moroccan agriculture has evolved from major erade TVA and SRI during the last two yearsrtd by U2DA to d-tcrwir- tl new investrent with highest return as well as to plan Fpecific agricuUural develci-nent programs In dry-land farming AID has provided te hrcal ansiftance an- feed grain donations to improveanimal brcen and feedin ard technical assistance and local currencyloans to ipcrenie cereals rr-yiution There projects art continuing and (xrandling rticuarly in cereals production where additional TA in seedproduction an] xt-nsion techniques is being provided AID also expects in thir fischl yeatr tc providr- fnreign exchange through a DevelopmentLean for the Ariculture 2ector to financ necessary on-farm equipmentand commodity imoorts particularly those arising from US technical assistance )rograms
As a result of previous [IS assistence in the Lower Moulouya thisproject ha b--cede Ientifipd In Moroccan eye as one of major US inshyvoverrt Th G has for sore time been -eking additional US loan assistancpe t-Vomm lete t -ind our continued ruport of the project has ansumeri polit-al as vell as eccnomic important in UJS-Moroccan relations
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ioriginally begun under the Spnnihh rgime Work was resumed by the GOM under a contract concluded in late 1959 Major difficlilties with the tunnel structure have been known for some time On comTletion of a series of studies of the problems involved the GOM nvited bids inNovember (767 on a pronrosed contract for the correction of structural-defects i-he tunv It Jn bnticiiated that this contract will be finarced _y the GO fr wn recurees
The Bou Arcg area which lie to the Northwest of the Zebra andalong the Mediterranean Coast will ]ikewise be affected by the delay in passage of water through the Left Bank Dead Head Tunnel The BouArr- - - ontplnn s~re 31000 acres of irrlgablf lrnd While the elttent n lr nni - ytr running from the northwest portion of t -h 11 shy h1s argely been completedneither i of the other irrishygation works required h~iv- - ver n --rt of the d-zign studies for thin area ha- u t L
The bulk of the DLF I-an of $23 million of hiehity over $20 million had been disburd as of the end (f wvmrber- 107 was (or is being) utilized for cn~tructinn of the cehrnKastoragedam and of the Bou Areg Tunnel and the Bcu Areg High Line Canal Sraller amounts were utilized for advisory engineering services providedby a US firm design services and construction of some of the main canal drainage rnd distr1rmtion woks The balance of the loan is expected to be disbursed before the end of this year for reimrburseshyent of the costs of contrEcts already completed or presently under way
The GOM has in addition exp-nded an estimated $13 million since the beginning of 1960 about $3 million of which represents the cost of hydroelectric installatiuns at the Mochra-Klila Dam and on the Bou AregHigh Line Canv1 About million vas expondet on reconstruction and the bn2nc Tprerents entimated costs of operation and maintenace of completedworks The DLF Joan of 1960 war intended to assist in financing a -r second phase of project works in the Mculouya Perimeter As indicated nbive the works ndrtakn in his phase (apErt from the repair of thn Left Bank Depd Head TunnE a jrrng to a close
In view of the Izeable rpuirces devct0-I tc thp Mculouya over a rither long reriod of ytrs--by the Spaninh French ar-I MroccanGovernments prior to l6O and th qC-M and AID frox 31960 to l2--to achieve the installation of the bulk of the major installations required for water ntorare and rranzmi-ion it Ia been conzidered that at this next stage of drvelcp eat of the erimeter the principalfocus of attention should be on t1ose works which will offer the
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-7shygreatest and most rapid returns on ndd1tio resources required fortheir comyletion In the Interest of rbtainir an asrrrent ofr It fr the crnletion of the reirainder of the Troject AIDri ained rvienof the Stanford Revar(h Institute to rrenarea tuy i th orrn nrd returns for the vnriou rcrtions of theroject for h h i rr h beern pJanncd but not cnrrpleted
the he hat the completion of
the reynainintz ork-requivd(which P-nti fird Ip following Sectorsray up on tn iI thejwwould appear to offer the optimum coabination of hirhi nremental investmentard early comption
No of Apror To P- riuirred
Triffa Main 317 Triffa Sector 27 Triffa Sector 28 Zebra Collective 1500 Zebra Remainder 14250 Bou Are Central 16250 Bou Areg Remainder
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- Includes cre 8000 aeri o being equipped
If the above is to be accomplished over the next five years asenvisioned by the GOM the schedule would imply the bringing under irrishygation of around 1500) acres per year This is around two or three-times the GO hi torical rate of dvelopment of irrigation in theMoulouya over ast seven years While the GOM has recently reorshyganized its e cnt structure to permit greater local autonomy inf1 e ranagemo- rrigation perimeters and has recently accorded avery high -- -r to acceleration of developnent of the V 1 ouya inparticu t -vident that given the manpower constrai ts involvedin the Mr n operation the- above target way well be it- ible of achievenrnt
The GOM hM itself recognized the elements of thl -- I i lindhas in dizcuss ins with USATDRabat requested considersti- -f hfinancing by AID of the dollar costs of a management crht with oUS -irri to take or c(vnpletely the management unctions fror thi
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5 r-y rd t final tng of ire aration for ther-rT ir cvf ni r r imy - rz--rt ha recently beenr-t) l i w t e rr - tht - I afid if exToected to ubrit hit writt(-n r-rt jr DC Aii preliminary impressions baled on a 9Ite nErerti(n indi-ate thit a -rt1fartorj repair con bemade in c)nIdprnbly le- t n-ne for lfan -than previously conshytemplnted
The early ccmrt-tnn nf thi work in lmnortanit nine IL c t Ft th avai-bility of pr~ct wrte for the entire Left Brnk
Z~bra Collectlv-
Thin 1 on ara ofrXPr-ctively ond tribal land that will be divjded and allotted tr J-ted tribal -b-hrc who will become soleowncr3 A Pirpe rart ti Tniran -aratirn and developent hasalready bern co-plet] 2pani levelirg r-mains to be done as well ae conztruct c~n of b-tcn dnd drina- works
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The northrrn ecti n tht rmrainder of th Zebra will requirethe extnzi-n cf thct Train 4]h will be ccrrleted with financingccmmritted under Phase II of fth tr-Ject Land preparation and levelingwill be required anlnp with h ntruct n of distribution and drainagebullir r]
T ectinr f th- rrainler of bra will requiret- rd i i w -J n rrd h c and engishyrnr nw d t i f -tritst t n and dlarn -rk
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of main carrl Rnraljor dr- nRe worx z develoFerit and cronstruction of zbldiary li tribution -r irnge y--r rrrairns to I undertaken
Th P- Arrg Tunnel wr orml td in 267 and construptcn sunder way on Ih-Yin Canal rrired tL nvcy water the suthrnf e of Areg ervie ra
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Right ank 137 31 10 79
L-ft Bank 25 87 n6 143 239
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At indicatnd In the- tdl iv 11 - rnt it~ocotof the rxojroct are t hi~-hor tnan the ic60) 1orccasts Th y tarc Ah-wever 1hchr by cnr murth~cul~ averllsv( a igiificqntjsCfect t~cn the bt-ric lfer-7t I-tio n- rigill lly rc~r~t
V I ) u O21he 1)+ -J iv )ir(t In h jiv kinvnft bed tado in Lh Tnwr Liynnui vni cif hrrlt rnr 7cst- wrr uniershytaen ic r ii -tQ j ta the Aurpo3vt o 02thl rirarnkinr of r- Ln t -Ir ca th cenm I rr1 urn 1e11 frrn n ow
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elevated area requirin iat-r to be puiiped to the irrigated land with both highr capital costs (about 1 million) and higher oreration and maintenance costs (150 Dirham per hcttare via-a-vir 100 Dihams perhevtare for the grnvity irrifrted ares) The ony work presenl-ly cotiishypleted in the Triff Hih Ser-ic Area is the preliminary engineering stirUes Cimi-ir to th Tr Pa r thu TrIffa ]Igh Service areawill reiir an ex I uvnt ricd bfore agricultural proshyduction cn be initlat-2i
The above considerations reiult in the following revised ranking of priorities
Project Area 1FY (M Priority
Triffa Main 21 I Sector 27 8 I Sector 28 9 I Bou Areg Central 6 II Bou Areg Rerainders 6 II Zebra Collective 5 II Zebra Remtd nders 5 II Triffa Ent 6 III Triffa High ervice 5 III
SRI 11ed a ccst contingency f7actor of 25 and a cumulative costescLlatior factor of 3I per annum These factors appear excessivelyhigh in th( light of (1) project experience to date and (2) the fact that from his roint the technical rirks involved arre of a much lower orl- r f 1h thnse inhtrent in the major works Just comshy1 I intion nrd contingency factor of 15 has there-
S chtiMnte- Itlizcd in this rarer The ii n-ttr costs the to ) ject (in n]ace of factors
i by )I nrt 11 thIrhe nf th nJter atve I[cwver rrtnrecr-y factor euld Increase the IPE ] hi ra]y th- IIRF fcr the TrIfa Sector 27 ansnunirg a
oct crortlr7crncy A can be seen as the conAngency I thf cc curve rrv to the right and inter ects the
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nF3r AVAILArBILE COPY
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(In Millions Of Dollars)
Righi Pank
Trffa Main 34 poundSt (r 27 08 S ctor 6 0Q
51 Left ank
7bra Collective 12bra Remainde r- 54 Tou Areg Central 74 Lou Areg Remaluders 68 heft Bank Dcad Head Tunnel 30
238 Services
Management 20 Advisory Engineerin 05
25 SUB TOTAL 37
Escalation amp Contingencies 15 47
TOTAL 361
It is proposed that the AID Development Loan for this stage of the Moulouya ProJet be limited to $5 million an amount which would be sufficient te reet the cost of any US goods and services required for the works to oe undertaken Thus the loan would finance the dollar costs of manrement and engineering advisory services to be provided by US firms erstimated at $25 million The balance would be available to meet any ther US cofts that might arise for constructicn cuipment and nateria]
The balnnmc of funds required would be provided by the GOM from its own budgetary resources including as appropriate agreed allocations of the counfryj-uie dirham proceeds of US surplus agricultural programs in Morocco
To a l-ge extent construction works In the Mou]ouya (other than the Bou Ar- Tunnel and Mechra Klila Dam) have taken place under a largenumber of roll contracts with Moroccan firms It is anticipated that this will ontinue to be the pratice in the forthcoming development stage Th iit is evident that the great bulk of project cests in this next stage will be local costs
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In the event that not all of av l able fuInd- under the loan are required for TKI eo It i ouied that any remaininrn balance be utilized for the payment lo -ovalccztn f the project This would be aceoomplirhe by utili7irn th- h r vroceeds of the loan to purehare US-use dirhsmn (frcr th U Oi-irrirg Officer) which would be utili ed to rrimbure th fc u a t local - nditurrs
Thi arranrit 3ir ila ) fstV utilitd In the - of the D-e l-INAieret Loar tJr U Atrrert SinceYr usii Conv rf i cn therc loans are rcpiviible in dollars nd rince Morocco in a n-ar excess local currency couintry the fert ) f e transaction in tc provide a means for obtaining ccnvrrrs cn a-cr th life of the loan of otherwire inconvertibie U5 holding irhrs hich are in exces of its localrequireme t
In 1967 over 15 million dirhams (abceut $3 million) of PL 480
Section l04(g) loan fun cre in msgreement with the CON allocated for the financing of various contractr reloting to projects in the Moulouya It in anticipited tht ndditional allocations will be made out of the local currency proceed generated from current and antishycipated US 7urplu agricultural rmodity programs in Morocco
It has been proposed that the dirham equivalent of $45 million of the proceeds of the October F67 rurplus agricultural commodity Sales Agreement be allocated for a Section Cb(g) loan for the Mulouya In nadition it is estimated that a $]35 million (in$ioz1ble dirhshyequlviJent) woull be available from 7uprl]eental surplun agrIcultura con -ity rales programs under Titlo I an-d Title IV in calendar 196F for allocation for loans for development projects in Morocco These two amounts combined would provide about 6 of the G014 resources reshyquired for the project over the next five years On thic basis there would appear to be rcasonble propect tht the GO should be in a rorition to provide cver the S e year rriod of the project the addishytional resources renuired for itF ccmpletion
Tt I contemplatd that na additlonal US dollar financing of the Moulouya byon-l the $ iilon rorosed herein will be provided for tl cplei n ef h M _11-nuya rince the bringing under irrigation of th- 11O0Y ies include] in the propore] project will substantlally cornIete the works criginally conwtemplated hen h DLF loan was authorshyized in 106 The remainler zf the workr h(- be within the capabilit3 of the GOM to complete with It- o-n resourcec
MT M T M
-16shy
) Technical Anily ir
The Moulouya Rivr which is cre of tne largest in Morocco originatesin the idll Atans
Moulouya and which oztend scuthward
Kediterrancn l re
t rre
Pr
ard n
flows rrpr
orre 25) mriles northeast thr Agorinn border
to the
In- agricitui 1 in li j i nt( iljr r Th- rst rind most
t 2 1ir i t i h- i n th rwrht born of thshy-- e 31nmiler frem the Mediterranean
Lea To tho wet cf the Tiffa and nn th- left bank( of the Moulouya isthe Zebra nlain 14wiuntain rv-arate the Zebra frcm th -ea and fron theBou Art-r i-ll]zain which - ctI nrrthwe(st of the Zebra The Bou Areg a coital phtain sclte 19 mils lorg and h miles wide separated fr-nthe n-a by a Ihow sa2t water lagoon Southwest of the Zebra is theGireb plain which hun land ruitable for irrigation in its routheasternportion The Gareb i at a higher elevation than the three other plainsard if ultimately irr-gatcd vould require pumping fro the lower level Zebra conv(yance system
Water from the Noulouya River is stored brhind the Mechra Klila Dam whichwas coniletd with fjiancri rc AID loan (3-A-2 (DLF Lcan l6)Water ir rclca ed downstr(a (1bcut c) miles) to the Mechra Homadi reFrshyvoir and d]iversion dcim in1h-r divert-d to th right oad left bankcunals About 75 kilometer (1 miles) of the Triffu (right bank) maingravity ciral hay ben copletd und consderable cr) has been carri-dout in the Tri on) distr Iution and drainage netw rks land levelngend other farm iwnrovwments About 37 kilometers (22 wiles) of the Zebra(left bank) main gravi-ty canal and the tunnel 6 miles (101()7 JIrenrTrcters) betxeen the Zebra area end the Bou Areg area have been comrneted
The GOM illrrfo m certqin -rk nr-Aded fcr develormnt of the gravityir~zgata yt-- for n 71-) acres over the next five yarr Thiscffort vi2 be eonern rait-r urcr the develo-ment cf areas thot providethe great-rt ecnnomic returrs nnd the developnent of a cadre of Iorocearperornel adequ tly tran-yi in the an2gerent of the project SeeAnnex C for further Irojcl details
e- enmL Ev1ation
Mt Infratrueturr The --trnal highway co-munication network i t arid rfi Isirm nf re- i n-ote siler in-1 shy
uzeather raved rc
____________________TAM
- t 7shy
Other communlca 1 i i t ih Lh arr-- inlude the nrninlineof the Oujda-Fe--C- t h~rh l e0tnnd to AlgeriaSpanish enclove rt the 1 fir idto cmmercial airport at Oujda andNador with regular national onI int rnational ervice5s
Th verirtr 1 u ~Ath r nr r t crocd by 60 kvJ i i i u rrd t 5( kr It na ortr kk f~ditcrl rower1(Qp x I -y yrar) -o n d hr rritIronr
at the Mechra-Yplusmnilj l inm fnd the Bou Areff contral poter Statin The townare connected to ranrh cther and th2 r-rt of Mcrocco by telerhone andtelegraph 1 ner
b Sol Soil rvey 7rd land ]a-ifctons have been completed i-nthe Mcloulva rer eter oanntrantbi- with French firmr u-ing Frenchmethods The Trifa -1n wr initialy rraped at a cealeof 150000with certain area ub entiy rer-aLd at 15000 110000 or 120000dependin I nn the cor1cjeity of YJ rattcrns The Zebra plain has beenmapped at a reale cf 20O00 nod th- Bou Areg plain at a scale Df 150OO On thp baf Yr nf ther urvy th cla sified the soilsGC hain terms of r-uitnbility for irrigation as follows
Land Ciaifcation (Aere)
CasrI amp IT Class III Clans IV Totas Triffa Plain 17000 29[00 22725 99625Zebra Plain CbO 1275 4050 211425Bou Areg Plain 75)00 l6qo 3 0 3067)Gareb Plain 13 05 10 70 0
Inclurez 1750 acres for lfigh Service Area
The findings thi indicate that ( i) arriratry 5of the area in thefour rlain- i suited to irrigation (Clare I anl II) (ii) more than3 ir suitabr bt with one Or mcre imrtat~ons Irro=ed by underrablefeatur-s such an to wrafhy oil characteristJcn trnine- r restrltedbull rio (CIar TIV) and (iij) ls than 2 of th- area in only margina)lysuited for irrinticn(Class TV) In ther7e lattrr ardrn only rmi-intrnsive orop rotations blUponsblhe
The oi nicn f the Cn-lting Envneer (1ydrctechrJ) th respect to) therd carrffjn n that hfle 3 Bureau for P ltr0tion -tandards werirt ernoy-d te rlasnificatinn ir aceurat- and n rrti with3and rlaced in r d rLrnble categories more
uere thnn right ha bern the caseUS tandardr folIced The clasifatinn ha 0a been reviewed andfound to be atifactory by the USPA tayr Hoever r areas of complcxroil Ttternr hch to date have only been ru-d to a oale of 150))rome reraTpin tray be necesary as a banis fcr rrerarnZ
- g~T PRAvVLAFJLE EOPv
final designs of irrigation and drztinne- rystems parcellization into farms and planning of land preparation measures In addition considering the high average salt ccntent of ater frcm he c ilouya hiver a rorm of systematic leachin- will be reqirer- to f ree-rt aculation of salts in the soilsparticularly in h ebra Crt in will nlso1e plain ureas require nitrogenphosphorus crd possibly other nutrient to obtain satisfactory yields
c Water On the basis of studies by the GCM which have been reviewed bythe Consultirr Fnr ncri and the U au of 1ccoi-ation it is thecorclusion of A tt (i) the q lity of water in the Lower Houlouya
is below averpge bvt crp rble to thtof certain rivers in the US whichisotnteLoh~uoybrve successfully been usc for irrif ton for periods cxeccdin 100 yearsOj5) there is clearly a sufficient a )unt of i ter to irrif-ate the 128010
bullcrer to be served in the [rlcentIty ar n3 Addi-tional s-tudioser (c requilrecj dcter-Inc if adeqiuate water is a- ilable for irrigationof 376QGO vc rc
The only signifcant urce of vp y fOr irrigation water in the perimeteris the oulouya Vi~cr io jc n1 is 1re ntly being irrigated from wells most Iround water i - - 1 Alouya contains dissoived salts which i xr Lrn - hvriny reak flowto iJOx PIn iuting [cricd of c n ccntraticn is 750 ppm On Thi- basis of USDA Salinity Lot) atory criteria fte v ater is class 03-SI (hl-h salinity-low a-alinity) Vile water is thus of mediocre qualityit is ccmrarable to that of river successfully used for irrigation in the US (eg the Lower Colorado Rier) and poses no serious problems to irrir-ation in the Moulouya perir( cfr provided the W4 adheres to recorrmended programs for meeting leaching reoairements
With ref-pect to the 128000 acr project the demand for water reasured at the Mechra Hoadi diversion dair is estizated at about 575 million cubic meters per year as follows
remand for Wter
Peak Flow Annual Total (August) (m 3 million)
Agrieulture (176000 acres) 337 m3s 806 Municipal amp Industrial Consumption 8m3 23
Total 4 uy62123000 acres to be irrigateA by Gravity 255 m3s 575
(The e dpeak requirzents of 345 s compares with a 35 m3 s design
capacity of the main canal at the diversion dam including 18 m3 s for the Right Bank and 17 m3 s fcc the Left Bank)
I
- 19 -
This estimate is based on probaole rainfall cropping patterns plant requirements evapo-transpiration and other expected losses of irrigashytion water The estimate is believed by the Consulting Engineer to be reasonable but subject to refinement on the basis of tests to be carried out on a continuing basis
The annual average availability of wuter from the Moulouya river is estirated at 1100 million mn or about double the estimated requirement for the gravity areas
Estimated Availability of Water
Twelve Year Annual Average for Moulouya River 3 m3 second 1100 million m3year
Maximum inflow Observed 8000 m3second(1963) 3h00 million m3 (1962-63)
Miniwum inflow Observed 1 msecond (1951) 532 million m3 (1956-57)
On this basis it appears that there should be ample water available for irrigation of the gravity area as the water availability obtained from twelve years observation exceeds the requirements in all but the 1956-57 season shown above Prior to the development of land with purped service areas (the Gare-b and the Triffa ig h Service) a review and analysis of the river hydrology should be unidertaken to assess the availability and regulashytion of the river flows
d Studies Entincering and Construction The overall irrigation scheme outlined by the 1uM defirs the ajor features and th( magnitude of the work to be accomplished to attain the ultimate goal
This scheme is being carried olut in phases over a long time period The present phase encorpasses the development planned within the priorities indicated by the Stanford Research Institute (SRI) study for the gravity irrigation system
The studies for land classifliration have been completed for the gravity irrigation system in the Triffa Bou Areg and Zebra plains by French firms and were considered reasonably accurate by the Consulting Engineer Land consolidation and parcellinrg has been completed by 0MET in the Bou Areg Central area the Zebra Collctive and Zebra Remainder sectors 7 thru 10 Land consolidation and pareeLlni ar( needed for Triffa sectors 27 and 28 Bou Areg Rematnder arid Z(bra Rerrirder sectors I and 2 The engineering designs for the Triffa main sector 27 and 28 and the Zebra Collective have been or are being completed by the G0M forces The engineering design for the Cefntral Bou Areg and Zebra Remainder sectors 7 tnru 10 has been or in being connpeted uy Hydrotechnic Engineering design will be required or the 1ou Are remainder sectors D-3 thru D-7 and Q4 thru G-6 and Zebra Rer ainler sectors 1 and 2 The engineering designfor the Dead Ilead Thnnel has been undertaken by SCET who have preshypared anid issued an Avant Projet for bid invitations for construction
14 M)j6Fj Cshy
-20-
This firm will also undcrtnk- uu-orviston of construction The engineer ing not yet performed can be aea ished by GOM forces andor private engineering firms
Construction of the extension to the rrain irrigation and drainage canals Jand preparation rector cinl ani drninaive ditches will be performed unllr cntact t) 1 cc rt~r~iet m)t hi in the ene of the
r-abilit tion of the L2tL Pz- Dd iarl Trnc t
e Cronning Patterns The existing erning pattern in the Moulcuya including botnirrigatcd and dry farm ingincludes grain forage citrus vegetables olives grapes and 6 small amount of leciduous fruits and nuts Of the roughly 2140Cy) acres of agricultural production in the Moulouya about 177000 acres are in field crops 24)) in vegetables 16Y)O in citrus 15000 in grrrcs 540Y) in forage crops 1700 in olives and 15)0 in other fruits and nuts
Taking into consideration rast and present trends in plantings as well as agronomic and price and marketing factrrs the following projection of cropping patterns has been developed for the Lower Moulouya
PROJECTED POPPTG PATTFRNS T1 HE LOWER MOULOUYA
(In per cent of total irrigated area)
Left Bank and Triffa High Serice
Triffa Sector - Sectcr rriffa Class Class Class
crop Main 27 28 East I amp II III IV
Citrus 40 60 10 10 10 Vegetables 15 10 15 1) 20 10
Crtton 15 20 10
Fcragpr 10 20 25 30 4o 30
heat 10 6 20 25 20 35 4o
Grip 25 24 35 15 Dy beans 5 10
Sunflower 10 olives 5 0
100 10) 100 100) 1i 1052i 100
a Incltdes double cropping
- - r- euro --- 7
~7~TF~Wr~e~ALUSE
-21 -
The projected cropping pattern for the Bou Areg plain includes cottonLJrirdg the frrt Five yearnejtinted 1r of the Class I)fand
the project jitwould be grown on nnII landn Tht renresert only 960etrravres) ectz ri)cr)e area The cotton acr~a e ry increasep 2ceafter live years if ritisfactory drainage conditionshyrre achieved in the Bou Arev
cotton grown i 1xonp tarx- Trdltionally Morocco export its-Jr- cron an irr IJ hort cble to rmeett Cotton the reuirrents
r the oroccan 2pinningr mills The croppni-attrn of the Triffa East (about 180n acres) Js projectedt Tnrlude 15- (about 27 acres) in cotton It is likely that becausef ihe limited extnt of Class I and II lands in the Triffa Eas cotton not increase beyond that percentage
1t i evident that the amount of irrigated cotton that is likely to bein ther-n Moulouya is minimal even assuming that local drainage condi-T nare i asuitable
f Technical Sundnv--s The AID Project Engineer hps reviewed ii) thedat and ajor construction performed to date onronct and finds the technical requirements this long-ranRe phasedsufficiently defineoto ccntinue the project on an orderly schedule The estimates of cost of prsirct facilities have been determin-d by SRI from average va)ues oftrit cots obtained frorr reviously ntiarded contracts and from etniled( -s-nand analysis prepared by the iHydrotechnic Enginering fir oft-o tyieal sectors located in the Bou Areg area The costs for the arc ent contract have bcen estimated by the USAID It is consideredthat the depree of engijeering planning undertaken and the deterrrinitonr to the US Goverrment are adequate to meet the applicable requireshySt- n Section 611 of thie Foreign Asistance Act
7717gt
1 --shy
-22-
E Financial Status of Borrower
1 The Moroccan Economy
Grrwth of MorocLcts GDP in real term averaged about 24 per yearin 1(4 and lr li Per capita DP In 1C 5 wan anproximotely t162 A (er Irr-ht in (6 resu]trd n a drcrcne of slightly nver in GDP which tlh vpulatior grc~vth avrring 3P4 per year rnrsJted in a decline of -r ornita GDP In 16 ii brut $154 A recnd droughtcccijrred In C67 but i not expeetid to have the severe effects of the 165 drought Crop forecasts for the first nine months of 1967 indicate a 4 increase in real GDP above the 1966 level This is also the economic grcrdth rate estimated by the IBRD for the pezxA 1965-70
Moroccos economy is heavily dependent upon the agricultural sector thich has averaged about 15 growth per annum However growth of the mal modern segment of Moroccos agricultural sector has inshy-reased at the rate of about 7 per annum
In 96 the International Banik for Reconstruction and Development (IBRD) preented a number of recommendationr denigrned to increase Moroccos economic growth rate On the bacis of these recomfndations the G004 proceeded with planning the necesrary program to increase investment levels fr- the i 63-65 level of 11 of GNP to 1r of GNP and stimulate the rate of economic growth from 2 to an average of over )4 annually for the five years 66-70 In addJtion the GC4 has taken measures to curb the population grovth rat while placing increased emphasis on raising production of both dryland (wheat) and Irrigated agriculture
2 Investment and Savinms
The level of total gross investment has remaind at aboit 11 of GNP for vera year althugh the percentnoe declined slightly in 165 Under the GO Three Yea5 Plan 1965-67 the gross investment t-3rget woz ret at DH 3 billion- Actual invev-tment expenditures for the three yearpeirod reached about DH 46 billion of which the Governshyment ezxenditure amounted to DH 1 billion a against DH 21 billion budgeted Thin may have beeo partly de to the GOMs deliberate ausshyterity pollcy under the hIF rtbJli7tion prci1rnr but more probably it van duxe to the shortage of trained cadres to -lan and execute projects
In the private cectcr conziderable inounts of ravings may be hoarded due to lack of project attractive t- inventors The lvl of private investment has been runnihg at about 51 of GNP thrrugh 195 The 0014 4 incentive to private instors hnr cut profit taxes from 4320 to V and announced a tpn year guarantc-e against tax increases
]L- $ = DH 506
777=-77- NQ
r y 7k1- T e - W lk In
j - 1) 7k- - _
- 23-
Loan are avaiiable to )rivlite irve-tcrn freo th 3JfIDiN s rctr special funda to prcmote touricm devc firvcnt
Under the 1r86-1972 plan abut to br irtntt level are to be accelerated considerably reaching A of GNP liv ]970 Mor(- Irlyir haviiy on foreign 1 to aciuw cc higher lve1
3 Central Government FinancP
The Moroccan money supply which had Incrrased ify 76 per cent in 2965 remained virtually unchanged in 966 The first half of 1967 witnessed a 5 Ter cent increase in the money supply Te major part of thi increase as concentrated in June and July uhen the supply reached V14 0j lion Currency In circulation expanded rapidly in June and July
nnl factrrn being reinforced by commodity hcnrding related to the 1ide~l Et crisis Demand deposits did not show their normal decline nthe first half of 1967 Deposits with commercial banks declined nlightly while deposits with the Treabury increased as public and semi public agencies contisued their transfers from the banking system to the Treasury The increase in money supply in the first half of (7 ran I raced to tho nzon1 sonal increase in net foreign assets not c y the custcirry rlelir In claims on the private sector Clsirl (n the erivate sector declined slighty until May 1967 but Increased hr-gb June and Jily due primarily to additional financing of textile stocks ClbiJ ante Government rose by 10 per cent in the first half of 967 the in central brnk claims on the GovernmentI being rmainly offset by larger deposits with the Treasury
Ordinary budgetary revenues which incrurted by 5 rcr ent in 1566 tre cxrcted t-) increase by 7 per cent in 1( to DII 21 billion DeampDite a derea3e in agricultural tax reccipt r- fror diret taxes rose by 10 ppr cent in 1966 and a 2 increas estinated for S67 due to tric or controls on income declarationr d an accelerashytion of tax cller ns Owing mainly to a relaxation of the import
program in late 1 5 and a concomitant increase in tariffs on certain ccnonter goods customs reneipts increased by 21 per cent in 1966 Although budgetary estimates call for s decline of 3 per cent in customs receipts in 1S67 it is likely that actual receipts will be considerably larger in view of the import liberalizatidn measures intro)duced subseshyquent to the estimates Receipts from indirect taxes state monopolies and other serces are expected to be 11 iv- cent Ipher in 1967 owing to increased profit on -ugar sabr-i and L r(m the newly created Office do Ccrmercalisaticn - d-tation (OCE)
Recurrent ordinary buiL e(enditures increased by 34 per cent in 1966 ar-i are expected to increase by an additional 7 per cent in 1567 reachin- D1122 billion Although wage and salary scales in the public
Banque Nationale pour le Developement Economique
TT~~- - I777
2 Cf
sector have1bec z h t - rrvirI urli 11i g 14-6 -nd PO becnue rX toi Ijt e f (]r o n 4
ill tile ic urrnnye andr)not i on dnd Publi ht rentrn -yr-otn lno IncreasedOthrr t ill- t il r ne by ) vr cert in J6(
i ninlyrt -br h Inc-l
( Ihe ( t r- rl t ip t t C itur f T)h 21h iilli n
is (( ItI t lt r c0 a- r n n o I- c t b It ihstnl id vv ih n t r-t have hn(er - en 1t2
(IM ii ture( T f fu traordJ nary budrzct exshypend ituren a r y -t c ~ i vi -iscz Portal Checking sy-stcsul)rrcing t (I ltIt Ct -- ind creirn shy
nnet The f r er tnc I hha ccrc ed from a htih of DH 5-7 millIJn in _ 5 millIn r C46 F cr ats foi ]7 place Cro n w I 1(DI)J79 ill ni DDn etlc fi nancing has alo u 1) 5 p (- I3A27 iIliun to an entirnted DH 1142 million
1 14V ) I nv 1 ri n nI(c1 franc n is 77-ected to be ol t y ncrewed bcrrowing fr-ir t he Cestra 9ank which hud been held at mcdert vols iln 165 nnd 1a66 Under the 1TFtaiby agreement of October 16 the qob) agreed to taBe a3] rocrrnary meurer to maintain as table curoonry rPnt inl th nr1d-elrto th b a ent of the ePrncriynnd a vnbl- hn1incc X nvroent P rt artt to t rt fien of tho Ccntin- Honk rstz (erct are nct t r itr June 30 Y-ke 7 lov l b th n Diif ) mill] (n tlcnber -c P thai I o illin usit I ])ecthr 31I62 (GC bc w t
C B1rtrp - vt DH 12 iri 1i nor ]S67 or DH 6S ij lionEan tisated (r fo than the aproved crd it expanwim
Thitrd ordivary nil extraordnnry buThTt deficit of DII 7-19 millI n fcrecat Fr 1 67 in exnected to be fnanced by not freign
tan reof DII )75 mi~l in nt recurity 12ue 1 T111I vlion a - nt ry tiat Po n Che )ir d-nC i 73 r5 Pn
riI is u h i a vti v mrr nrr-e jssIof fvr is id a erital The vnfsa revcred in 1d6 when lnrger r nyrentn eEecially on food itcmo an n -lewdoun in
igo ra a deficit of $1 millcn ProjectiOnz-vt rvultvd in ror 17 r~ieat inrrerned importsonly partially ccnrennate by addshytsa t frnreirn r ntil rrceiprs ard mprrvement in the nervices account will reult -n et of aprroximately $)20million As rhoim in the following tabl -r tion for l33 and 169 how overall deficits of
14 and m] ivi_y$i It
rqVV t1 4~
C)rgt
---
1 -)I+-IRF1
1ROCCO - rTANC OF PAYME 1qrt - 169]_ 5
6rfi0 1 1C(8lr67 i r(o
)xrurt 2t L( I L-5
Trade Bnlance 11 15 - 75 shy - 75
rviee- ret - 7 - 5) -35 -23 -2
J]-i of Good rnd Service- - 3 - 65 -II - ti - (5
Trn-Ifr Pr ynts (nt) P 21 33 37 33
on-cntnry Carital (not) 92 64 6 6 5
Err-rs nnd Ov rrion- (not) - 23 -2 1 3
eranl Bannic __ - _3 -_ 3 - 1i4
Atrh thert ircjected reficitn are of the nnme order of 1 nishytude a7 thcr incurred in the period i66 the Situatlcn i findarentallydifferent both in rerprct to the source of the deficits and in rer-ect to the meat0Y gtr m etin7tecr In the f rrer caive M5recco uffered
_frcrr a very h-vy cutfc of Drivtes cuitv fo-ivr with a shar) decline In forein nt exerditures in Morocco In the iatter case th projected deficits r- rcre a functicn or accelerated crcwth risingdebt ervieiiw tri tho abnrcn of forv eeble additiens foreign reshybull ourcs nere7ory 4( r2Vm rAf finmncting To nect the def-cits during the reriol 161 61h MWreco ob1id to drw down rorcin exchange reserves of over $]c milicn The snrti tpv of financing is no longerpozslble ince no or-res- ruch reserve- Even ifMorocco yr
mn nina r rve_ ore (]rrfii on to th r-ixirun etnt enribe nnd the [iI tnfldy i- un M-r-r e i32 till relA re nt rnt 15 millicnj1itionn ftr ign as- e n 1 6 beyond hat r recnently fcreeeshyable with ver nri- nry Officilr in In i6 reserves are cotImnted Pt 72million c hih crn V 3 million i caly required for currency coy r
Foreign InJebtrdne n of th GOM Mnroccos external rtnte ard rutlie enterprie dett amounted to
$r) millivn in lr6 Debt vervcirig rpynents for (66 trtaled about
$5) rillion g-eement approved in October 3(67
I- -- Ishy
37 millin or arprcxitrrntoy (j Iroccor totnl eXoort earning of h28 millicn GCnerally nxt rrO dbt FervicJng renuiremennt of leas
than r of totna -ort nnrlt In onrldered to I r tirfactoryrntio D-bt r rnJrcLct n Ir the reriod 1-(y 3on Trerent external debt including thnt wrtl(n irreently undibur-ed are hown n th fr lv tahlr
)] L v yr t n
Eternn Vtnte anc ] bntcrnrie Debt
M131 o)nr
Y aI Net Outrtnnling Debt Debt Service
(6 it 479r5 $367 J-67 452 3)6
Z616 44469 2 0 2C-
365I3 37 389
33 383 33 6 371
5-h 31 n 352 275 34121
]176 2661 32It 1977 21133 311 177 22)6 307 19 i0l74 256
1733 255
rgtternal debt rharre n rerent debt nnr rhon above do not increase ubtanti-lly over t rt 1)year- reaching a maximum of h44 millior
in J6 and decrpt- n cr - tently threoafter At the are time exportearninr r _rc extett nc-are Aring that Morocco does not inshycreswre it etrnn2 cbt t irate ubrtantially nb-vc ihat has been the core th adfiticrn dbt e roquirrentn reulting from the propo t Icon o 5 ijilion co r 7crncepr-ional term hould not have a i-nifiant affect n 1r o - ab lty to neet itv g rc-atedebt ericn rcnrib2t~e- the pros ectr of reprment of thin loan ore coniderci rearcnb)
U I -
F ot h-v C IuIJI rmt I shy
1 V amp~ rVml KI
PUC- -jrVi Jt t 1 11 nflrcj urlc 1- th )qn --P I uti u rhnrrl -1r- thr U- Tr- ry- R- -nymc nt
c2Il f n 6 1 bf r I- till 11 nfl r- n-r i n of O r--niC(Io~hi U 1 1 rr to
Tn vil ) f rvc hi tvlrll 1 (In- - n- u--n E r me rrinshycgtay F rntwir w ourc o -o- rvI ortf-V3 1 rncing of
Uf f -r rrrir- ur3r 4~ v -rin Iltrt nt ndd shyt -n t ) in- lint r b t l r -n rort- o-orco trorl-- V -P
r i 1rnd h L-torie Furcl-trin firr- thrjt US r r~ crvirrf- u~d be~
T L I1 c vt r- -ly ] -ubt fu 1 n vi pw -I -ror-co Ir of
ut1JpcO In thi rjert f it -- r- 21 npnred by d1-nr- cothcr t~han the US
2 ]P-t ofI Prr l1 on Prw- Fntrrr
Phij rrcjJ-t -11 n-t h~ -in nrwerq Prrt n rr- tc ntrshyr~A~r fi-mc 1bho und for --roern p o n
3_~~PrCT--rty
rr-vIi-n 1 h -d r the loan ragreement for Icntifitcation ef any r mIjrpt n ctri b- rt througn ut 1zatn (f xccr- prorerty
If rv c u~eAID n-mrcf u urr thi )cn - I~ut~ em avoi3ablo r rovvrirrnt -rrperty rather than nce iteni
4 Otli-r Fr- Wo--] n-Fnlc4rm
Dr mi tW- o] 14rocco- i~ajr ovr-ec -f exte rnaX
rrtan~- hrtvfb - I r ~ ant fl Fr n fole by Kv-it
Sgio F rneflit r b-en 1lmrntrd to tcfohnjip n5tnnen bi eoni~in I th u y f Fr--h tprhntcian tcacrr ind cther
~ti~r t~ ec-tnmIyrt-n Friinch Aid to Mcreco In 1065c~oc~ (P-art f-r txychnirril aItn -- j se of tl5 w1nfor bu~dget rurport f ir in rt t- $1 1ri1 icin in ennita -rojectM- n vx- rrcd
1Vw1tvnn tioI t-) Frenh rurtnnd +16 r11ion tie-I to -onyiint to orrrcr Frrmh ccilcn~For _-rrc-ratod land and rquirrmcnt
West GTrrnmnny liar agrcrcd to nrovIe ccme j27 mM22~cn 1n catital arirtanre and cromrndity lnoi7 t n OfIcon( q92 thi o totril$223 miJ lien ha actuary b-Pn cr-Itt--d under Inn ngrepment This
And a lk5 million commodity loan both) signed in 1965 All Wet Gerzaan
Ufla
-28shy
capital asnistance I vuectI to be tied to German exports Germanyhas in addition 1uvvded r tteysubbtantial technical assistance f
The IBRP hah rade four 1nns to Morocco since 1962 totaling$6) million Ofthin totnl a [175 million loan in 1965 wos fordevelopient of the gidi lit-r irrigation perimeter Other assistance by internntIcnal Iending arncie include an $11 million credit byIDA in 1C65 for rcendary diicction projects and an IFC ln and inshyvestrent of $1 1 ri jnic alo in
F tit i by [c - dncr tr dh elo snt ofMorccco rircuVt r oii +h b-]n jt-TKT r nbove n 2 )6 niliion Kuwait enn in i66 for develomyment of the Tensaout Prnm n irrnten nrooetand a $77 million Kuwait
0jl n )nnsn r(niti-nertcir
loan for extrnion of the Tadri~ Irrigation Perimeter
The following- trbe surrlnrlzes other free world arlztance (excluiin technical assistanc-) to Morocco for the years 1(62-66
($ Millions)
1 62 1cf_63 96) 19r65 19)66 Fneea 4) 5PO 64o 700 shyWet Germany 223 gu 1t 53 281 IRD 15 175 10) 175 IDA 110 IF C 1 5 7 7 7 0 I15
TOTAL 55 62 1U3 W
b Includer only lo-ng term loans and exporter credits - Includfs 25 million private capital
Eternal ansiztnnce to the Lowier Moulouya Irrigation Perimeter -nce 1060 hres been con[fined to US upport Consdiering AIDs previcus
involvement in and conmitnert to the Lower Moulouya an AID lean in P2t to be Lhi mol aprroriate source of financing for this project
LID
II
q
-29-
SECTION ITI- Y-TTYT TIMPLPTrION
A Periret-r Ad-instrrti-
Authority for irplerrentvtnn of the deveorpent prrgrn frr the LowerMoulcuya Perimeter and rs wel arth crnntinuinz mrnnrrmenertC tt r t- rrtnr V theltbi nad overationity iOfic 1cne 4
n r I e1i- i d Vit4 i Iv ~ Ct rreated i Otb (rJ rn-- of evcn inrmi-rriional offices hich reelaced the Office de Mire en Valeur Aamprlcole (OMVA) Under the OMXA and itspredecessor agencies authority for ad-inLtration cf irrigtion proJect war centralized in Rabat
Under the new regional office organization responsibility for adminshyistering ORMVAM is vested in on Adminirtrative Board of 10 members headed by the Minister of Agriculture and Agrarian Reform as chairman All ether board members (other than the Chairman and a representative of theInterministerial Economic Ccrmittee) represent agencies or activities inthe region of the r-eriret-r whic comprises parts of two provinces Localretresentatives on the Board inc]-de the governors of the two provincesOujda and Nador the presidents -f the two provincial asembtes and of the two provincial chambers of agriculture as well as the perimeter Director
The responsibilities of thie Administrative Board include review of theecys program establishment of its organizational structure developshynt -)f its annual budget and establishment of rates and conditions of
Siyfent for water and other services provided in the perimeter
The Director of OP4VAI-I is dbarged with the responsibility for executionPthe vclicies established by the Administrative Board end administration of oil ORMVAM functions This responsibility includes selection of staffn pserating perrcnnel acting s officia ORNIVAM representative in all ntztinns with -tate and othbr public or private bodies and the
f of funds within limit Indivated by the Ministers f Financetent rn fricultural and Agrarian Reorm
Perimeter Oranizatlon
ORVAM oreanizatlonal structure consists of a directnrate five maj-r rvlces or d-vsicns and one separate bureau Two services qei Administratif et Comptabl- and Service du Yatrial are conshycor - th adminisration and lcgistical support of ORMVAM operationshi1e the remainirg three services rind the separate bureau are Involved in t-hni al matters associated with agrcultural developrent Each ervice has one or more subordinate bureaus Fei-ce Chiefs and thehead 0 rch bure-u report directly to the ORMVAM4 Director
-~F7E MEw-
-30shy
2 Perimeter 01ttffnr
OPIVAM orgttnlrntlon treture calls for 557 positions of whichI L or 7 Mlled n were nher 29 1567 37 of the 71 Postshytion vacancies reported 1ern the high and middle levels Foreign(chiefly Euronean) technclan occupy I)of the 16 high level positionsthat ere filled at thfit tire
Whil OPM ut in th- lcng run lor to Mercecos oducational yster to prvidr tn crrf-nn2 to ratisfy current rdurojectd rcshyquirement th currnt high and mlddle level vacancies rrouire uersonnelwith oxt nive nrior rxericnce To fll this preent need it will be necessary for CRIVAM to continue its program of recruiting foreigntechnicians until ruch tire ns graduates of Moroccan educational programsacquire the necesnry exrerience The managerent assistance componentof thin pro~ject ]e-rribed In the Project analysis will to some extentalleviate OFIWAMs high level personnel requirements
3 Inw1 ernetation Sehedu]
Months Implementation Action
1 0 Sign Loan Agrcement
2 2 C-tiify conditions precedent and Y4tiate procedures for selection of US firm for management contract
2 Negotiation of extension of advisory Engineering Services
h 4 Contract (Hydrotechnic) Negotiation of Managerment Contract
5 60Cmpletion of Project
C Waivers
Sect ion 7 rf AID Regulation 7 provides in substance that theUnited State ill not finance direct costs of construction work performedby third cc-ur y nationals unless the total co-tn of the project withvhich thr ennrtrumticn w(r is asEcciated donot exceed $2On)O orafter excluding national of the country in vhich the site of constructionis located and Dersons vho nave resided therein uninterruptedly for morethan three years imrnedJately prior to any determination under Regulation 7at leant 0 of all uernons who work under the contract at the site of conbulltruction are United States citizens or the employment of third countrynationals is necessary to avoid excerrive corts to the United States
3
31
Section 2175 authr-ri th Regional Anitant Administratorto waive the nrovinions of Sectionthat it is 2073 if he dcterriner in any coneimportant te the nationrn intercrt of the United Stutes tofinance the direct eots of construction work performed by third country
nationals
A prviou1y r ic i c t tht for thr ct Tartthe -r c ct b- 1jeuj out r -cnorbr f cnrtructioncontracts with Morcccrr contrctnr an in the i-t Uowfevvr itentirely psnible that there may b- roe contractn with cntructlonfirms partly owned by third country nntionaln and that ruch firjs anwell as the surely Moroccan-owrned firms may enloy third country niationalsIn such canes a difficult rrobic-i iould arise in meeting the terms ofRegulation 7 since an a practical matter Aericans are not reaonablyavailable for ermployn ont by such contrnetorn and our previcus experiencewith the Naunsseur Ccnv(r-ion project thatin Morocco has indicatedAmerican contractors would not be interested in bidding cn small conshytracts in that country
It in therefore recommended that the Annitant Adinitratordetermine rursuant to Section 2q75 of Regulation 7 to waive theapplication of Regulation 7 to thic iroject since the project 411 conshytribute to the attainrent of US foreign policy objectiver and the cbJe-tives of the Foreign Arsistnnce Program
LITI L USE
LfI~~5xA~us
lit
4 A J A 45 4 k
t A S T
S(3
I A444ilA~~l~)
7 -74
tAM= D
SECTOR 27
10000
t Co0Na includez25 cgtri oncFcttlrvI ncy I8s ~ ~ C t C- Includes 50 constriJcltiotrgrc
2000 60
IU
0
z
bull cosYsA shy----- i
600L _
400
200
0 5 I0 15 20
INTEREST RATE
I ~ 7 J7777
ANIAampX C
PROJECT DESCRn1 rOll
The project com)onents to te undertaken on the MIoulouya Irrigation Project over the next five years contists of the following
C(n1rtion of the rrLin casuals and bianch canbls to provide the suource of waler to the sctors be developed in theto TriffBou Areg and Zebra areas This construction will include the necessarystructures such as reulators highway bridges aqueducts water intake
and discharge structures etc
2 Iand Txeloommerit which includes engineering land consolishyt and iuvtllng lard preparation (subsoiling ripping destoning etc) and installation of water distribution canals (secondary tertiary and quurtunary) and drainage collector ditches for the Triffa main covering 24000 acres in sctors 8 9 10 16 20 21 23 24 25A 2513 27 and 28 Lou Areg Central covering 16250 acres in sectors Dltirough D2B and G1 thru-4h G313 i0u Areg Remainder covering 15000 acres in s-ctors D3 through D7 and GA through (6 Zebra Collective covering 45)0 acres in sectors 3 4 5 rind 6 and Zebra Rer-iinder covering 14250 acres in sectors 1 2 and 7 through 10 and th remainder of sectors 34 and 5 The total land to be developed is about 74000 acres
3 Canalization of the Oued Zeluan and nued Sidi-Amar in the Bou Areg Plain consisting of strairltening englarging and regularizing of these streams to carry the flood waters to the sea Drainage interceptor canals are to be constructed parallel to the sea in the Bou Areg Plain In the Triffa Plain the Oued Riada main drain will be deepened and enlarged and secondary drains will be excavated to provide for drainageof the Madagh area This will include the construction of bridges and culverts and other related work
4 Major Commorn Works will consist of
a Clearing of the Mo-1ouya riverbed downstream of the Mechra KLila barn caused roy flood dariwe and the installation of a set of stop logs for maintenance of pillway gate-
b Design supervision and construction of repairs to the ]elt Lank dead head tunel
c Conctruction and establishment of sib-division Offices and installations for farmer support such as CMVand farm stables
1 C
-2shy
5 Manavmtnt It ha been proposed that a US management firm be ewployed by th- C4 to manage and operate the entire Bou Areg area Such manageent -iuld encomparn all activities from the initial concept to final irIrp igricultural production Such activities would Include resp r-ibilsect -or supervnsion of engtneering and constriction of primary
S- Jry r complete developfnent of land training n in g tinul irription practicen preparation of market
t - r1t- (ot--rnu trplusmnining of a Moroccan cadre to take over h v--it Bou Areg dreara P the
At this writing the n-pt of turning over to a private UZSfirm execushyresponsibl]ity I h management of the establilrment and initial
op-ration of irr1gati the Bou Arog area has been only broadly de iiitd by the GCJO It Intended that proposals will be invited from a r -onable ntnber of f|ed US firms that a selection will be made an-n 7 them and a more do iled and cornprehenrive definition of the rer6 -Ps to be performed be eztabliched at that time It haa been
stimated that the t- of ruch a contract will be about $2 mir- n In any event the -ts of this contract other engineering arvl s to be provided undt n extension of the Ilydrotechnic contract and ether US corts will not ed the proposed $5 mllaion developzont Jean fr the project
The cle 3ifications duties ant 1ncnslbilities of the management personnel ill ha-- to be clearly defined i agreed to by the GCM Perimeter Directo- and other GOM Agencies luding arrangements for the necessary gistic support
Svxlale Docu-
1
4
LD ED 0ICIAL
-IAIDshy
A1trX D
C6JCK LIST OF STATUTORY CRITERIA
(Development Loan Fund)
1 FAA 0102 Extent to which U3 cormodities and services are furnished consistent with improving the US balance of payments See Sections II-C II-F
2 AA sect2O]ihi lanner in which loan wil promote countrys economic develo shy rit emphasizing help for long-range plans and programs designed to developeconomic tesourcos and increase productive capacities See Section I-D
i FAA sectT] h)(IL Information and conclusion on availability of financincfrom other free-world sources including private sources within the United States See Section II-F
FAA sect20l( )2 Information and conclusion on activitys economic and technical soundness including the capacity of the recipient country to reshypay the loan at a reasonable rate of interest See Sections II-B II-D and II-E
5 FAA 1201(h)( Information and conclusion on existence of reasonable promise activity will contribute to developrmnt of economic resources or increase of productive capacities See Sectiona II-B and II-D
_92_(b 4Information and conclusion on activitys relationship toothor development activities and its contribution to realizable longshyrange objectives See Sections I-D and I-E
The following abbreviations are und FAA - Foroirn Assistance Act of 1961 as amerded by the Foreign Asaistaice
Act of 1967 App - Foreign Assistance and Polated Agencies Appropriations Act 1968
AFEVCDF 1066
L1
-2shy
7 FAA f12O1(b)(5)_ Countrys self-help masures including institution of Foreign Assistance Act investment pliaranty programs Investment Guaranty
bull Agreement signed with Morocco 331o6l See Sections I-D and II-EI
_A ))(6) Information and conclusion on possible effects on US econowy with soecial refererne to areas of substantial -labor surplusSee Section II-F
9 FAA q201 (h)() Information and conclusion on the dagree to which thA country iv wiki- progress toward respect for the rule of law freedom of expression and of the press and recognition~yf the importance of individual freedom initiative and private enterprise
10 FAA -1201(b)(8) Information and conclusion on the degree to which the country is taking steps to improve its c]Laato for private investment See Sccton II-E
31 FAA R LbJi Inforrat-on and conclusion on whether or not the activityto b financed will contribute to the achievement of self-sustaining growthSee Sections I-D and II-B
12 FAA fi2Ol(bj Inforruation and conclusion on reasonalbe prospects of reshypayment See Section II-E
13 FAA fl20JL() Info-ation on applicability of the twenty country ceil4ng2
14 FAA fl201 L Information and coclusion on legality (under laws of the country end the US) and reasonableness of lending and ralendinr terms Loan will be on minimum termspermitted under FAA These are deemed reasonable see Sectioam Evidence will be renuired from the GGM as to the legality of the loan agreemnt
1 E 2 Information and conclusion on availability of an applicationFAA together with sufficient information and assurances to indicate reasonably that funds will be used in an economcally and technically sound manner See Sections I-A II-B and II-D Application received Janury 15 1968
16 FAA fl201(fL If a project inforntion and conclusion whether it will promote the economic developapent of the requesting country taking into account the countrys human and material resource requiremnts and the reshylationship between the ultimate objes6ives of the project and the countrys overall economic development See Sections I-D and II-B
17 FAAJ 20ij(J If a project information and conclusion whether it cifishycally provides for appropriate participation by private enterprise 8ce Sections YI-C and 114
I- FAA i22(a) Total amount of money under loan which is going directly to private enterprise is going to intermediate credit institutions or other borrowers for use by private enterprise is being used to finance imports
rfro private sources or is otherwise beirg used to finance procurementsfrcm private souwces See Sections II-C and II-2
9 FAA 207 Infosation on the emphasis placed en
(a) encouraging development of economic political and social institushytins No apparent relationship
(b) nelC-help in mectingthe countrys food nredo Project Vill conshytribute to production of food for lccal consumptioa
(c) in-proving availability in the country of evucated trained manpower Project will contribute to the deicloginext of trained manpower as one of the functions of the management contract (Soe Annex C para 5)
(d) prcgrams aimed at -malnutrition disease eradi atDn slum clearanceWater purification sewage disposal health education naternal and child care(includin fimrily pJnrning)) -nd cthcr public health ausistarice See
(c) other develoment activities including industrial development free
labor unions cooperatives tnd voluntary agencie transn)rtatin and ccshymwquication nrStczn capubiliTies for economic planning and public adlinisshytration arban develo-mment and modernization of laws to feilltate econcnicdevelopjen- GO- intends encourage develo vient of cooperat yes particularlyin the Left Pank areas Project will also develop capabiLi ics for cconoaicplanning and public a6~inistration (Annex C para 5) Other not applicable
20 Information on the extent to which the r-untry is
(a) cttcmting to increase food production and food sto a-e anddistribution felitics This project is one evidence of Moroccos efforts in this direction See also Section I-D and I-E
b) creating- a favorable climate for foreign and dmestic iri-ate enterprise and invcstrrment The GCM has recently reduced profits twes anrannounced a ten year guarantee against tax increases See Section II-E-2
(c) increasing the role of the neonle in the developnental procecsNo apparent relationship to this project
(d) allocating expenditures to development rather than to unn-cessarymilitary purpoes or intervention in other free countries affair See Sections I-D and Ii-
(e) willing --nribute funds to the project or program Th iOMhas already dcvo o-sidcrable resources to the project It has badieted13 million for th i oulouya for i7 See Section I-C
(If) making economic zocial and political refo ns such as taxc coliecshytion iYprovcmenLs and chan es in land tenure a Royal Comm ision has been appointed to make recomendation on land tenure probleras in the Lower I oulouya
(g) responding to the economic political and social concerns of its people and showing a determination to take volf-help wcasuren See Sections I-D and II-E
IT
-ovi~cd l v r 13 1968
- 4 - LDffIED OFFICIAL USE
21 FAA Inforn ation about multilateral assistance being Iurnished to t e country and whether the loan will encourage recgional development prog-rams The I1D has eztablihcd a Consultative Group for Morocco which rvicws the GOM development program anui prgress See Section II-F-4 for infoaation on othtr donor assistance to Morocco
22 A Extent to which the loan will contribute to the objective of ass ring naximu par icipation in the task of econonic dovelop--ent on the pL-t 0 _he people of the developing countries through the encouragement of cocr-tic private and local govenmental inLitutious o apparent
relationship
23 F _-_Dta_ Infor-ation and corissions whether loan will oncourageeffor s of t1e country to (a) increase tie flow of international trade (b) fostcr private initiative and comptition (c) encourage development and usceo co opratives credit unions and savingss and loan associations (d) disourgo monopolistic practices (c) improvo technical efficiency of industry ariculture and commerce (f) strenSthn free labor unions This project is cxpected to increase technical efficiency oi-agriculture
2_ C-1L lnforzrition and conclusion on how the loan will encourage US privte trade and investment abroad and how it uill encourage private US participation in foreign assistance prograas (incluiing use of private trade channels and the services of US private enterprise) See Section II-
25 VA-+_ Conclusion and supporting information on compliance with tho Co resional policy that engineering and professional servicos of US fir-ms and their affiliates are to bo used in connection with capital project3 to the nixinua extent consistent with the national interest US engineerirn and innsgcment services will be financed tnder this loan
2$ Inforamtion and ccnclusions who+her loan will pormit American rx-l] business to participate equitably in the furnishing of goods and
z orvices by To be satisfied in Loan Agreementfinanced it
27 - t(a App I18 Complianco with restriction of co -zodity procureshy o UsMS except as otherwise determined by the Picsicent and subject to ttu--- rcortir require r-nts Procurement will - liumited to the US for
reiabnrs nts and to ioocco and other free world countries 1-or US-cwne(d rhu disburseacnts
23 -i Comiance with bulk cozodity procurement restriction topriecc no l-ho han the nkarkot price prevailing in tho US at tia of
bull puchas Not applicable
29 FA Cozpliance with requirement that matrin insurance be purchased on commceities if the participating country discri-inates and that insurance be placed in the US To be satisfied in Loan Agreement
30 IA 6(a) Information at to the utilization of excers personal property in lieu of procurement of new items Will be required ai appropriate under terns of Lean Agreement
f
1 77--7 -77-77-777
31 FAA 61](a)(_) information and conclusion on availability of enginoering i financial and other plans nccx sary to carry out tho assittance and of a
reasonably firm cstimate of the cost of the assistanco to the United States
See Section II-D
32-ecessaryFAA t611(a)_(2) legislative action r6quired within recipient country and ibasis Cor reasonable anticipation such action will be completed in time to pormit orderly accompli-hirtnt of purposes of loan See Section I-A
33 n _AA161nJ0] If water or water-relatod land resource construcshy
tion project or program information and conclusion on a benefit-cost comshy
putation See Section II-B
3 4 VAA 611(c) Compliance with requirement that contracts for construction be let on comp-ctitive basis to mamum extent practicable To be satisfied
in Loan Agreement
If a loan for a project of $1 million or more certificatin35 FAA _61l(r) by the principal AID officer in the country as to the capability of the
country (both financirl and human resources) to effectively maintain and
utilize the project taking into account other US-financed projects (Such
certification is to be pproved by the Administrator aL the time the loan
is authorized) In process of being obtained
36 FAsgJ2 _6_h Appropriate steps that have b-en taken to assure that to the miaximum extent possible the country is contributing local currencies to net th-2 cost of contractural and other services and foreign currencies o- icd by tho US are utilized to meet the cost of contractual and other services The GU-M is contributing over $30 million to compleXton of this project Excess US-use dirhams will be used for eligible project costs other than US goods and services
37 FAA p619 Compliance with requirement that assistance to newly independent countries be furnished through multilateral organizations or plans to maxishymum extent appropriate Not deemed appropriate in view of previous AID financing and ccoiitment to the project See Sections I-A and I-D
38 FAA sect620(a) AcnO7a n3]7(b) Compliance with prohibitions
against assistance to Cuba ard any countr (a) which furnishes assistance to Cuba or failed to take appropriate steps by February 14 1964 to prevent ships or aircraft unier its registry from carrying equipment materials or supplies from or to Cuba or (b) which sells furnishes or permits any ships under its registry fr-om carrying items of primary atrategic signifishycance or itcms of economic assistance Morocco is not-known to be in Violation of these sections
39 FAA q620GL_ If assistance to the government of a country existence of determination it is not controlled by the international Communist movement The Secretary of State so determined on October 11 191
40 FAA 620(c) If assistance to the government of a country existonce of Indebtedness to a US citizen for goods or services furnished or ordered whore ouch citizen has exhaustod available legal romodiesor where the debt
i - ow - -- _---- --shy
- --
-6shy
is not denied or ontested by such government or the indebtedness arises under an unconditional guararty of payrrent given by such govornmunt No such indebtedness is known to exist
41 FA _(a2LdL If assisitance for any productive enterprise which will corashypote with US enterprise existence of agreement by the recipient country to prevent export to the US of more than 20 of the enterprises annual production during the life of the loan Not applicable
42 FA4 - 16Q_0_ A If assistance to the government of a country extent to which it (including government agenies or ruhdivisions) has after January 1 1962 taken steps o repudiate or nullify cuatracts or taken any action which has the effect of nationalizing expropriating or otherwise seizingownership or control ofprcpertv of US citizens or entities beneficially owned by them without taking appropriate stops to discha i ge its obligations No such steps cr actions are-known to have been taken by the GOM
43 FAA~L AjPj_10_9 Compliance with assistance toQ0 prohibitions against any Comunst codntry ozocco is not considered to be a cocinrunist country
44 FAA - 620(gJ Corliance with prohibition against use of assistonce to comp satc owners for expropriated or nationalized property To be satisfied in Loan Agreement
45 F AA 8620(h Compliance with regulations and procedures adopted to inshysure against ue of assistance in a manner hich contrary to the best inshyterests of the US promotes or assists the foreign aid projects or activities of the Communist-bloc countries To be satisfied in Loan Agreement
46 FAA 06-O(j)_ Exitence of determiration that the country is engaging in or preparing for aggressive military efforts No such determination has been made
L_62_O Information47 FAA on representation of the country at any intershynational confererce when that representation includes the planning of activishyties involving insurrection or subversion against the US or countries recoiving US assistance No such representition is known to have A occarrect
8 FAA 62JJ Existence of a determination that the country has permitted or failed to prevent destruction of US property by mob action or has failed to take steps to prevent a recurrence and-to pay compensation NO such destruction is known to have tak-n place
49 PAA l620(k) If construction of productive enterprise where eggregate value of assistanc to be furnished by US will exceed $1OO million identification of Gtntutoryauthority Not npplicable
i-xQ2MZZ=
1 shy
U 6 50 _Af( QCinsidoration which has been given to denlying assistance X to thu government of a country which after December 31 1966 has failed to
- institto the investnint guaranty program for the spcific risks of inconshy
vertibility and expropriation or confiscation Satisfied See No 7 above
S51S J lj Compliance with-prohibitions-againstn as~istance to countries which traffic or permittraffickingwith North Vietnam Morocco is not known to be in violation
52 E_-L620(_L If country has seized or imposed any penalty or sanction against vn US fishing vessel on account of its fishing activities in
intcrnationul waters information on the consideiation which has been given to excludirg the country from assistance No such situation is known to exist
53 FAA FA r) UAR restriction Not applicable620(p 9117
54 FAA R620tl) Existence of default undhr any Foreign Assistance Act loan to the country No such default exists
55 F ) C-nsider tion of whether co ntry is devoting unnecessary percentage of buKet for military purposes or use of foreign exchange for milita-y equipment
56 FAA 62o(t) Proibition on aid if country has severed diplomatic relations with US unless agreements have been negotiated after resumpshytion Diplomatic r(lations have not been severed
57 FAA 9620(u) Statur of the country on delinquent UN obligations Morocco is not known to be dlinquent on its UN~obligation
58 FAA R636(i) Prohibition on financing non-US manufactured motor vehicles Will be satisfied in Loan Agreement and Implementation Letter
59 App 102 Compliance with requirement that payments in excess of $25000 for architectural and en Jneering services on any one project be reported to Congress Such reports will be made
60 App R1O4 Compliance with bar against funds to pay pensions etc for military personnel Such payments will not be eligible for financing under th Loan Agreement
61 App 9106 If country attr ipts to create distinctions because of their race or religion among Americans in granting personal or commercial access or other rights otherwise avaVIfable to US citizens generally application which will be made in negotit ttons of contrary principles as expressed by Congress Morocco is not ku IDhave made any such attempts
iInD OFFIIt t USE
0k
OFFICIAL USE 62 AIwp Rii Compliance with existing requfremets for security clearance
of personnel Will be satisfied in Loan Agreement and Implementation Letter
63 App R1l2 Compliance with requirement for approval of cortractors and contract terms for capital projects Will be satisfied in Loan Agreement
clJ164 Aup Cmpliance with bar nRainst use of funds to Tay assessments etc of US meiber Such payments will not be eligible for financing under the Loan Agreemunt
6 Anp P115 Ccmpliance with regulations on employment of US and local personnel for funds obligated after April 30 1961 (Regulation 7) See Section III-C
66 Aim Vietnam iron and steel restrictions Not applicable
67 p l9 If a country other than Greece Turkey Iran Israel Republicof China Phillipines or Korea reduction in assistance by amounts spent for the purchase of sophisticated military equipment
68 Anp fi4O1 Compliance with bar against use of funds for publicity or proshypagjanda purposes within US not heretofore authorized by Congress Such use of funds will not be eligible for financing under the Loan Agreement
Morocco is a traditional Islamic monarchy with a constitution The conshystitution was implemented followaing a popular referendum in 1962 National regional and professional elective bodies including a parliament were established by universal suffrage under the constitution in 1963 The parliament was suspended in 1961 in a State of Exception because of its inability to agree on measures with adequate urgency to meet the prevailingecononde imperatives In July 1967 the King appointed a Prime Minister to direct a Cabinet of appointed technicians
The constitutional framework nevertheless remains intact in Morocco and nationwide popular elections for some of the professional chambers were held in August and September 1966 The press is relatively free in Morocco and the right of diLsent prevails provided that such dissent does not violate the prohibition against political attacks on the instishytution of the monarchy or the person of the monarch
LI Under the revised US AID Policy for Africa agreed to in November 1966 Morocco is designated a development emphasis country entitled to receive continuing support on a country basis as part of a multilaterally coorshydinated countrj program Morocco was subsequently included in Presidential Determination 67-14 (January 5 1967) I
LIM=TE OFFICIAL USE~i
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DEPQbi) STATE AGENCY FOR INERNATIONAL DEVELOPMENT
WASHINGTON DC 052
CAPITAL ASSISTANCE LOA11 AUTHORIZATION
Provided from Develoroent Loan Funds Morocco Second Lower Moulouya Irrigation Loan
Pursuant to the authority vested in the Assistant Administrator for Africa of the Agency for International Development
AI)by the Foreign Assistance Act of 1961 as amended theIAct) and the delegations of authority issued thereunder I
have received and t-en into consideration a certification from the Director of USAIDMorocco as to the financial and human resources capability of Morocco to effectively utilize the Lower Moulouya Irrigation Project taking into account among other things the
maintenance and utilization of projects in Morocco previously financed or assisted by the United States and I hereby authorize the establishshyment of a loan pursuant to Part I Chapter 2 Title I the Development Loan Fund to the Government of the Kingdom of Morocco (Borrower) of not to exceed five million dollars ($5000000) to assist in financing the fore] gn exchange and local currency costs of goods and services for the third phase of the Lower Moulouya Irrigation Project subject to the foLlowing terms and conditions
1 Interest Rate and Terms of Repayment Borrower shall repay the loan to AID in forty (40) years including a grace period not to exceed ten (10) years Borrower shall pay interest on the unrepaid principal and any interest accrued thereon at the rate of (a) two percent (2) per annum during the grace period and (b) two and
one-half percent (2-12) per annum thereafter
2 Currency of Pepayment Repayment of the loan and paymenu of interest shall be made in United States dollars
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3 Other Terms and Conditions amp(a)Goods and Services financed under the loan
shall have their source and origin in
(i) the United States if disbursements therefor are made in United States dollars or
(ii) any country in the free world including Morocco if disbursements therefor are made in Moroccan currency
(b) AID Regulation 7 shall not apply to construction -work financed under the loan because as detailed in Section IIIC of Capital Assistance Paper No P 667 it is important to the national interest of the United States that the direct costs of construction work performed by third-country nationals be financed out of funds made available by the Act
(a) Such other terms and conditions as AID may deem advisable
Assistant Administrator for Africa
Date
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1967 to irrcveTporformnnce in grculturc In the early psrt of the year the GCQ4 recorgnn7ed it a initrative system to rrozn for greater loca responzipuIty nnd crntrnl over agricultural progrrswhich inclulcd in partcmLar the minagement of the M4oulouya Perii-ttcr and instituted a ajor rrive to recriit principally in Europe foreigntxn- tc -rk orr rri y a r-nritc-3 In GCM prrqrnms In July one of
of A- cuA tue The att r ir cvr atic with USAIDPabat has affirmed his active interert in the Moulouya arid in the US role in its financing
E Fe)ationhipn of Project to US Ansimtince StrateT
Im~rvNrm-crt in Moroccos economic performance is itself a major US objecti e in Morocco as well ar an Iportant contributing influence toUS political objectives in Morocco It is believed that evidence of econc-ric improvwr ent will strerthen the GOMs capacity to maintain its moderatint role in Arab and international councils and its friendly relatiorns with the US
AID strategy is to assist Moroccan econcmic development within the framework of the Consultative Grcur (CG) crganized by the IBRD The CG has endorzed the GOM priority on agricultural development One of the prime objectives of the AID prcgram in Mcrocco is to increase agriculshytur1 rrcdurticn which i in accrd with US policy to reduce on a worldshywide bazis f-ependence on US food esnistance over the next five years
AID ian-stqnce to the aericultur l sector Is directed at increasingPrc+ -tion dry-2and farming as wel as irrigated farming in the LoweyMou]cya Rlv-r Bsrin where the US has provided $23 million of loan assitance einc -lr60nn well as $3 millicn equivalent in ocal currencyloans The rnture of AID assitance to Moroccan agriculture has evolved from major erade TVA and SRI during the last two yearsrtd by U2DA to d-tcrwir- tl new investrent with highest return as well as to plan Fpecific agricuUural develci-nent programs In dry-land farming AID has provided te hrcal ansiftance an- feed grain donations to improveanimal brcen and feedin ard technical assistance and local currencyloans to ipcrenie cereals rr-yiution There projects art continuing and (xrandling rticuarly in cereals production where additional TA in seedproduction an] xt-nsion techniques is being provided AID also expects in thir fischl yeatr tc providr- fnreign exchange through a DevelopmentLean for the Ariculture 2ector to financ necessary on-farm equipmentand commodity imoorts particularly those arising from US technical assistance )rograms
As a result of previous [IS assistence in the Lower Moulouya thisproject ha b--cede Ientifipd In Moroccan eye as one of major US inshyvoverrt Th G has for sore time been -eking additional US loan assistancpe t-Vomm lete t -ind our continued ruport of the project has ansumeri polit-al as vell as eccnomic important in UJS-Moroccan relations
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ioriginally begun under the Spnnihh rgime Work was resumed by the GOM under a contract concluded in late 1959 Major difficlilties with the tunnel structure have been known for some time On comTletion of a series of studies of the problems involved the GOM nvited bids inNovember (767 on a pronrosed contract for the correction of structural-defects i-he tunv It Jn bnticiiated that this contract will be finarced _y the GO fr wn recurees
The Bou Arcg area which lie to the Northwest of the Zebra andalong the Mediterranean Coast will ]ikewise be affected by the delay in passage of water through the Left Bank Dead Head Tunnel The BouArr- - - ontplnn s~re 31000 acres of irrlgablf lrnd While the elttent n lr nni - ytr running from the northwest portion of t -h 11 shy h1s argely been completedneither i of the other irrishygation works required h~iv- - ver n --rt of the d-zign studies for thin area ha- u t L
The bulk of the DLF I-an of $23 million of hiehity over $20 million had been disburd as of the end (f wvmrber- 107 was (or is being) utilized for cn~tructinn of the cehrnKastoragedam and of the Bou Areg Tunnel and the Bcu Areg High Line Canal Sraller amounts were utilized for advisory engineering services providedby a US firm design services and construction of some of the main canal drainage rnd distr1rmtion woks The balance of the loan is expected to be disbursed before the end of this year for reimrburseshyent of the costs of contrEcts already completed or presently under way
The GOM has in addition exp-nded an estimated $13 million since the beginning of 1960 about $3 million of which represents the cost of hydroelectric installatiuns at the Mochra-Klila Dam and on the Bou AregHigh Line Canv1 About million vas expondet on reconstruction and the bn2nc Tprerents entimated costs of operation and maintenace of completedworks The DLF Joan of 1960 war intended to assist in financing a -r second phase of project works in the Mculouya Perimeter As indicated nbive the works ndrtakn in his phase (apErt from the repair of thn Left Bank Depd Head TunnE a jrrng to a close
In view of the Izeable rpuirces devct0-I tc thp Mculouya over a rither long reriod of ytrs--by the Spaninh French ar-I MroccanGovernments prior to l6O and th qC-M and AID frox 31960 to l2--to achieve the installation of the bulk of the major installations required for water ntorare and rranzmi-ion it Ia been conzidered that at this next stage of drvelcp eat of the erimeter the principalfocus of attention should be on t1ose works which will offer the
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-7shygreatest and most rapid returns on ndd1tio resources required fortheir comyletion In the Interest of rbtainir an asrrrent ofr It fr the crnletion of the reirainder of the Troject AIDri ained rvienof the Stanford Revar(h Institute to rrenarea tuy i th orrn nrd returns for the vnriou rcrtions of theroject for h h i rr h beern pJanncd but not cnrrpleted
the he hat the completion of
the reynainintz ork-requivd(which P-nti fird Ip following Sectorsray up on tn iI thejwwould appear to offer the optimum coabination of hirhi nremental investmentard early comption
No of Apror To P- riuirred
Triffa Main 317 Triffa Sector 27 Triffa Sector 28 Zebra Collective 1500 Zebra Remainder 14250 Bou Are Central 16250 Bou Areg Remainder
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- Includes cre 8000 aeri o being equipped
If the above is to be accomplished over the next five years asenvisioned by the GOM the schedule would imply the bringing under irrishygation of around 1500) acres per year This is around two or three-times the GO hi torical rate of dvelopment of irrigation in theMoulouya over ast seven years While the GOM has recently reorshyganized its e cnt structure to permit greater local autonomy inf1 e ranagemo- rrigation perimeters and has recently accorded avery high -- -r to acceleration of developnent of the V 1 ouya inparticu t -vident that given the manpower constrai ts involvedin the Mr n operation the- above target way well be it- ible of achievenrnt
The GOM hM itself recognized the elements of thl -- I i lindhas in dizcuss ins with USATDRabat requested considersti- -f hfinancing by AID of the dollar costs of a management crht with oUS -irri to take or c(vnpletely the management unctions fror thi
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5 r-y rd t final tng of ire aration for ther-rT ir cvf ni r r imy - rz--rt ha recently beenr-t) l i w t e rr - tht - I afid if exToected to ubrit hit writt(-n r-rt jr DC Aii preliminary impressions baled on a 9Ite nErerti(n indi-ate thit a -rt1fartorj repair con bemade in c)nIdprnbly le- t n-ne for lfan -than previously conshytemplnted
The early ccmrt-tnn nf thi work in lmnortanit nine IL c t Ft th avai-bility of pr~ct wrte for the entire Left Brnk
Z~bra Collectlv-
Thin 1 on ara ofrXPr-ctively ond tribal land that will be divjded and allotted tr J-ted tribal -b-hrc who will become soleowncr3 A Pirpe rart ti Tniran -aratirn and developent hasalready bern co-plet] 2pani levelirg r-mains to be done as well ae conztruct c~n of b-tcn dnd drina- works
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The northrrn ecti n tht rmrainder of th Zebra will requirethe extnzi-n cf thct Train 4]h will be ccrrleted with financingccmmritted under Phase II of fth tr-Ject Land preparation and levelingwill be required anlnp with h ntruct n of distribution and drainagebullir r]
T ectinr f th- rrainler of bra will requiret- rd i i w -J n rrd h c and engishyrnr nw d t i f -tritst t n and dlarn -rk
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of main carrl Rnraljor dr- nRe worx z develoFerit and cronstruction of zbldiary li tribution -r irnge y--r rrrairns to I undertaken
Th P- Arrg Tunnel wr orml td in 267 and construptcn sunder way on Ih-Yin Canal rrired tL nvcy water the suthrnf e of Areg ervie ra
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Right ank 137 31 10 79
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At indicatnd In the- tdl iv 11 - rnt it~ocotof the rxojroct are t hi~-hor tnan the ic60) 1orccasts Th y tarc Ah-wever 1hchr by cnr murth~cul~ averllsv( a igiificqntjsCfect t~cn the bt-ric lfer-7t I-tio n- rigill lly rc~r~t
V I ) u O21he 1)+ -J iv )ir(t In h jiv kinvnft bed tado in Lh Tnwr Liynnui vni cif hrrlt rnr 7cst- wrr uniershytaen ic r ii -tQ j ta the Aurpo3vt o 02thl rirarnkinr of r- Ln t -Ir ca th cenm I rr1 urn 1e11 frrn n ow
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elevated area requirin iat-r to be puiiped to the irrigated land with both highr capital costs (about 1 million) and higher oreration and maintenance costs (150 Dirham per hcttare via-a-vir 100 Dihams perhevtare for the grnvity irrifrted ares) The ony work presenl-ly cotiishypleted in the Triff Hih Ser-ic Area is the preliminary engineering stirUes Cimi-ir to th Tr Pa r thu TrIffa ]Igh Service areawill reiir an ex I uvnt ricd bfore agricultural proshyduction cn be initlat-2i
The above considerations reiult in the following revised ranking of priorities
Project Area 1FY (M Priority
Triffa Main 21 I Sector 27 8 I Sector 28 9 I Bou Areg Central 6 II Bou Areg Rerainders 6 II Zebra Collective 5 II Zebra Remtd nders 5 II Triffa Ent 6 III Triffa High ervice 5 III
SRI 11ed a ccst contingency f7actor of 25 and a cumulative costescLlatior factor of 3I per annum These factors appear excessivelyhigh in th( light of (1) project experience to date and (2) the fact that from his roint the technical rirks involved arre of a much lower orl- r f 1h thnse inhtrent in the major works Just comshy1 I intion nrd contingency factor of 15 has there-
S chtiMnte- Itlizcd in this rarer The ii n-ttr costs the to ) ject (in n]ace of factors
i by )I nrt 11 thIrhe nf th nJter atve I[cwver rrtnrecr-y factor euld Increase the IPE ] hi ra]y th- IIRF fcr the TrIfa Sector 27 ansnunirg a
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(In Millions Of Dollars)
Righi Pank
Trffa Main 34 poundSt (r 27 08 S ctor 6 0Q
51 Left ank
7bra Collective 12bra Remainde r- 54 Tou Areg Central 74 Lou Areg Remaluders 68 heft Bank Dcad Head Tunnel 30
238 Services
Management 20 Advisory Engineerin 05
25 SUB TOTAL 37
Escalation amp Contingencies 15 47
TOTAL 361
It is proposed that the AID Development Loan for this stage of the Moulouya ProJet be limited to $5 million an amount which would be sufficient te reet the cost of any US goods and services required for the works to oe undertaken Thus the loan would finance the dollar costs of manrement and engineering advisory services to be provided by US firms erstimated at $25 million The balance would be available to meet any ther US cofts that might arise for constructicn cuipment and nateria]
The balnnmc of funds required would be provided by the GOM from its own budgetary resources including as appropriate agreed allocations of the counfryj-uie dirham proceeds of US surplus agricultural programs in Morocco
To a l-ge extent construction works In the Mou]ouya (other than the Bou Ar- Tunnel and Mechra Klila Dam) have taken place under a largenumber of roll contracts with Moroccan firms It is anticipated that this will ontinue to be the pratice in the forthcoming development stage Th iit is evident that the great bulk of project cests in this next stage will be local costs
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In the event that not all of av l able fuInd- under the loan are required for TKI eo It i ouied that any remaininrn balance be utilized for the payment lo -ovalccztn f the project This would be aceoomplirhe by utili7irn th- h r vroceeds of the loan to purehare US-use dirhsmn (frcr th U Oi-irrirg Officer) which would be utili ed to rrimbure th fc u a t local - nditurrs
Thi arranrit 3ir ila ) fstV utilitd In the - of the D-e l-INAieret Loar tJr U Atrrert SinceYr usii Conv rf i cn therc loans are rcpiviible in dollars nd rince Morocco in a n-ar excess local currency couintry the fert ) f e transaction in tc provide a means for obtaining ccnvrrrs cn a-cr th life of the loan of otherwire inconvertibie U5 holding irhrs hich are in exces of its localrequireme t
In 1967 over 15 million dirhams (abceut $3 million) of PL 480
Section l04(g) loan fun cre in msgreement with the CON allocated for the financing of various contractr reloting to projects in the Moulouya It in anticipited tht ndditional allocations will be made out of the local currency proceed generated from current and antishycipated US 7urplu agricultural rmodity programs in Morocco
It has been proposed that the dirham equivalent of $45 million of the proceeds of the October F67 rurplus agricultural commodity Sales Agreement be allocated for a Section Cb(g) loan for the Mulouya In nadition it is estimated that a $]35 million (in$ioz1ble dirhshyequlviJent) woull be available from 7uprl]eental surplun agrIcultura con -ity rales programs under Titlo I an-d Title IV in calendar 196F for allocation for loans for development projects in Morocco These two amounts combined would provide about 6 of the G014 resources reshyquired for the project over the next five years On thic basis there would appear to be rcasonble propect tht the GO should be in a rorition to provide cver the S e year rriod of the project the addishytional resources renuired for itF ccmpletion
Tt I contemplatd that na additlonal US dollar financing of the Moulouya byon-l the $ iilon rorosed herein will be provided for tl cplei n ef h M _11-nuya rince the bringing under irrigation of th- 11O0Y ies include] in the propore] project will substantlally cornIete the works criginally conwtemplated hen h DLF loan was authorshyized in 106 The remainler zf the workr h(- be within the capabilit3 of the GOM to complete with It- o-n resourcec
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The Moulouya Rivr which is cre of tne largest in Morocco originatesin the idll Atans
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t 2 1ir i t i h- i n th rwrht born of thshy-- e 31nmiler frem the Mediterranean
Lea To tho wet cf the Tiffa and nn th- left bank( of the Moulouya isthe Zebra nlain 14wiuntain rv-arate the Zebra frcm th -ea and fron theBou Art-r i-ll]zain which - ctI nrrthwe(st of the Zebra The Bou Areg a coital phtain sclte 19 mils lorg and h miles wide separated fr-nthe n-a by a Ihow sa2t water lagoon Southwest of the Zebra is theGireb plain which hun land ruitable for irrigation in its routheasternportion The Gareb i at a higher elevation than the three other plainsard if ultimately irr-gatcd vould require pumping fro the lower level Zebra conv(yance system
Water from the Noulouya River is stored brhind the Mechra Klila Dam whichwas coniletd with fjiancri rc AID loan (3-A-2 (DLF Lcan l6)Water ir rclca ed downstr(a (1bcut c) miles) to the Mechra Homadi reFrshyvoir and d]iversion dcim in1h-r divert-d to th right oad left bankcunals About 75 kilometer (1 miles) of the Triffu (right bank) maingravity ciral hay ben copletd und consderable cr) has been carri-dout in the Tri on) distr Iution and drainage netw rks land levelngend other farm iwnrovwments About 37 kilometers (22 wiles) of the Zebra(left bank) main gravi-ty canal and the tunnel 6 miles (101()7 JIrenrTrcters) betxeen the Zebra area end the Bou Areg area have been comrneted
The GOM illrrfo m certqin -rk nr-Aded fcr develormnt of the gravityir~zgata yt-- for n 71-) acres over the next five yarr Thiscffort vi2 be eonern rait-r urcr the develo-ment cf areas thot providethe great-rt ecnnomic returrs nnd the developnent of a cadre of Iorocearperornel adequ tly tran-yi in the an2gerent of the project SeeAnnex C for further Irojcl details
e- enmL Ev1ation
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Other communlca 1 i i t ih Lh arr-- inlude the nrninlineof the Oujda-Fe--C- t h~rh l e0tnnd to AlgeriaSpanish enclove rt the 1 fir idto cmmercial airport at Oujda andNador with regular national onI int rnational ervice5s
Th verirtr 1 u ~Ath r nr r t crocd by 60 kvJ i i i u rrd t 5( kr It na ortr kk f~ditcrl rower1(Qp x I -y yrar) -o n d hr rritIronr
at the Mechra-Yplusmnilj l inm fnd the Bou Areff contral poter Statin The townare connected to ranrh cther and th2 r-rt of Mcrocco by telerhone andtelegraph 1 ner
b Sol Soil rvey 7rd land ]a-ifctons have been completed i-nthe Mcloulva rer eter oanntrantbi- with French firmr u-ing Frenchmethods The Trifa -1n wr initialy rraped at a cealeof 150000with certain area ub entiy rer-aLd at 15000 110000 or 120000dependin I nn the cor1cjeity of YJ rattcrns The Zebra plain has beenmapped at a reale cf 20O00 nod th- Bou Areg plain at a scale Df 150OO On thp baf Yr nf ther urvy th cla sified the soilsGC hain terms of r-uitnbility for irrigation as follows
Land Ciaifcation (Aere)
CasrI amp IT Class III Clans IV Totas Triffa Plain 17000 29[00 22725 99625Zebra Plain CbO 1275 4050 211425Bou Areg Plain 75)00 l6qo 3 0 3067)Gareb Plain 13 05 10 70 0
Inclurez 1750 acres for lfigh Service Area
The findings thi indicate that ( i) arriratry 5of the area in thefour rlain- i suited to irrigation (Clare I anl II) (ii) more than3 ir suitabr bt with one Or mcre imrtat~ons Irro=ed by underrablefeatur-s such an to wrafhy oil characteristJcn trnine- r restrltedbull rio (CIar TIV) and (iij) ls than 2 of th- area in only margina)lysuited for irrinticn(Class TV) In ther7e lattrr ardrn only rmi-intrnsive orop rotations blUponsblhe
The oi nicn f the Cn-lting Envneer (1ydrctechrJ) th respect to) therd carrffjn n that hfle 3 Bureau for P ltr0tion -tandards werirt ernoy-d te rlasnificatinn ir aceurat- and n rrti with3and rlaced in r d rLrnble categories more
uere thnn right ha bern the caseUS tandardr folIced The clasifatinn ha 0a been reviewed andfound to be atifactory by the USPA tayr Hoever r areas of complcxroil Ttternr hch to date have only been ru-d to a oale of 150))rome reraTpin tray be necesary as a banis fcr rrerarnZ
- g~T PRAvVLAFJLE EOPv
final designs of irrigation and drztinne- rystems parcellization into farms and planning of land preparation measures In addition considering the high average salt ccntent of ater frcm he c ilouya hiver a rorm of systematic leachin- will be reqirer- to f ree-rt aculation of salts in the soilsparticularly in h ebra Crt in will nlso1e plain ureas require nitrogenphosphorus crd possibly other nutrient to obtain satisfactory yields
c Water On the basis of studies by the GCM which have been reviewed bythe Consultirr Fnr ncri and the U au of 1ccoi-ation it is thecorclusion of A tt (i) the q lity of water in the Lower Houlouya
is below averpge bvt crp rble to thtof certain rivers in the US whichisotnteLoh~uoybrve successfully been usc for irrif ton for periods cxeccdin 100 yearsOj5) there is clearly a sufficient a )unt of i ter to irrif-ate the 128010
bullcrer to be served in the [rlcentIty ar n3 Addi-tional s-tudioser (c requilrecj dcter-Inc if adeqiuate water is a- ilable for irrigationof 376QGO vc rc
The only signifcant urce of vp y fOr irrigation water in the perimeteris the oulouya Vi~cr io jc n1 is 1re ntly being irrigated from wells most Iround water i - - 1 Alouya contains dissoived salts which i xr Lrn - hvriny reak flowto iJOx PIn iuting [cricd of c n ccntraticn is 750 ppm On Thi- basis of USDA Salinity Lot) atory criteria fte v ater is class 03-SI (hl-h salinity-low a-alinity) Vile water is thus of mediocre qualityit is ccmrarable to that of river successfully used for irrigation in the US (eg the Lower Colorado Rier) and poses no serious problems to irrir-ation in the Moulouya perir( cfr provided the W4 adheres to recorrmended programs for meeting leaching reoairements
With ref-pect to the 128000 acr project the demand for water reasured at the Mechra Hoadi diversion dair is estizated at about 575 million cubic meters per year as follows
remand for Wter
Peak Flow Annual Total (August) (m 3 million)
Agrieulture (176000 acres) 337 m3s 806 Municipal amp Industrial Consumption 8m3 23
Total 4 uy62123000 acres to be irrigateA by Gravity 255 m3s 575
(The e dpeak requirzents of 345 s compares with a 35 m3 s design
capacity of the main canal at the diversion dam including 18 m3 s for the Right Bank and 17 m3 s fcc the Left Bank)
I
- 19 -
This estimate is based on probaole rainfall cropping patterns plant requirements evapo-transpiration and other expected losses of irrigashytion water The estimate is believed by the Consulting Engineer to be reasonable but subject to refinement on the basis of tests to be carried out on a continuing basis
The annual average availability of wuter from the Moulouya river is estirated at 1100 million mn or about double the estimated requirement for the gravity areas
Estimated Availability of Water
Twelve Year Annual Average for Moulouya River 3 m3 second 1100 million m3year
Maximum inflow Observed 8000 m3second(1963) 3h00 million m3 (1962-63)
Miniwum inflow Observed 1 msecond (1951) 532 million m3 (1956-57)
On this basis it appears that there should be ample water available for irrigation of the gravity area as the water availability obtained from twelve years observation exceeds the requirements in all but the 1956-57 season shown above Prior to the development of land with purped service areas (the Gare-b and the Triffa ig h Service) a review and analysis of the river hydrology should be unidertaken to assess the availability and regulashytion of the river flows
d Studies Entincering and Construction The overall irrigation scheme outlined by the 1uM defirs the ajor features and th( magnitude of the work to be accomplished to attain the ultimate goal
This scheme is being carried olut in phases over a long time period The present phase encorpasses the development planned within the priorities indicated by the Stanford Research Institute (SRI) study for the gravity irrigation system
The studies for land classifliration have been completed for the gravity irrigation system in the Triffa Bou Areg and Zebra plains by French firms and were considered reasonably accurate by the Consulting Engineer Land consolidation and parcellinrg has been completed by 0MET in the Bou Areg Central area the Zebra Collctive and Zebra Remainder sectors 7 thru 10 Land consolidation and pareeLlni ar( needed for Triffa sectors 27 and 28 Bou Areg Rematnder arid Z(bra Rerrirder sectors I and 2 The engineering designs for the Triffa main sector 27 and 28 and the Zebra Collective have been or are being completed by the G0M forces The engineering design for the Cefntral Bou Areg and Zebra Remainder sectors 7 tnru 10 has been or in being connpeted uy Hydrotechnic Engineering design will be required or the 1ou Are remainder sectors D-3 thru D-7 and Q4 thru G-6 and Zebra Rer ainler sectors 1 and 2 The engineering designfor the Dead Ilead Thnnel has been undertaken by SCET who have preshypared anid issued an Avant Projet for bid invitations for construction
14 M)j6Fj Cshy
-20-
This firm will also undcrtnk- uu-orviston of construction The engineer ing not yet performed can be aea ished by GOM forces andor private engineering firms
Construction of the extension to the rrain irrigation and drainage canals Jand preparation rector cinl ani drninaive ditches will be performed unllr cntact t) 1 cc rt~r~iet m)t hi in the ene of the
r-abilit tion of the L2tL Pz- Dd iarl Trnc t
e Cronning Patterns The existing erning pattern in the Moulcuya including botnirrigatcd and dry farm ingincludes grain forage citrus vegetables olives grapes and 6 small amount of leciduous fruits and nuts Of the roughly 2140Cy) acres of agricultural production in the Moulouya about 177000 acres are in field crops 24)) in vegetables 16Y)O in citrus 15000 in grrrcs 540Y) in forage crops 1700 in olives and 15)0 in other fruits and nuts
Taking into consideration rast and present trends in plantings as well as agronomic and price and marketing factrrs the following projection of cropping patterns has been developed for the Lower Moulouya
PROJECTED POPPTG PATTFRNS T1 HE LOWER MOULOUYA
(In per cent of total irrigated area)
Left Bank and Triffa High Serice
Triffa Sector - Sectcr rriffa Class Class Class
crop Main 27 28 East I amp II III IV
Citrus 40 60 10 10 10 Vegetables 15 10 15 1) 20 10
Crtton 15 20 10
Fcragpr 10 20 25 30 4o 30
heat 10 6 20 25 20 35 4o
Grip 25 24 35 15 Dy beans 5 10
Sunflower 10 olives 5 0
100 10) 100 100) 1i 1052i 100
a Incltdes double cropping
- - r- euro --- 7
~7~TF~Wr~e~ALUSE
-21 -
The projected cropping pattern for the Bou Areg plain includes cottonLJrirdg the frrt Five yearnejtinted 1r of the Class I)fand
the project jitwould be grown on nnII landn Tht renresert only 960etrravres) ectz ri)cr)e area The cotton acr~a e ry increasep 2ceafter live years if ritisfactory drainage conditionshyrre achieved in the Bou Arev
cotton grown i 1xonp tarx- Trdltionally Morocco export its-Jr- cron an irr IJ hort cble to rmeett Cotton the reuirrents
r the oroccan 2pinningr mills The croppni-attrn of the Triffa East (about 180n acres) Js projectedt Tnrlude 15- (about 27 acres) in cotton It is likely that becausef ihe limited extnt of Class I and II lands in the Triffa Eas cotton not increase beyond that percentage
1t i evident that the amount of irrigated cotton that is likely to bein ther-n Moulouya is minimal even assuming that local drainage condi-T nare i asuitable
f Technical Sundnv--s The AID Project Engineer hps reviewed ii) thedat and ajor construction performed to date onronct and finds the technical requirements this long-ranRe phasedsufficiently defineoto ccntinue the project on an orderly schedule The estimates of cost of prsirct facilities have been determin-d by SRI from average va)ues oftrit cots obtained frorr reviously ntiarded contracts and from etniled( -s-nand analysis prepared by the iHydrotechnic Enginering fir oft-o tyieal sectors located in the Bou Areg area The costs for the arc ent contract have bcen estimated by the USAID It is consideredthat the depree of engijeering planning undertaken and the deterrrinitonr to the US Goverrment are adequate to meet the applicable requireshySt- n Section 611 of thie Foreign Asistance Act
7717gt
1 --shy
-22-
E Financial Status of Borrower
1 The Moroccan Economy
Grrwth of MorocLcts GDP in real term averaged about 24 per yearin 1(4 and lr li Per capita DP In 1C 5 wan anproximotely t162 A (er Irr-ht in (6 resu]trd n a drcrcne of slightly nver in GDP which tlh vpulatior grc~vth avrring 3P4 per year rnrsJted in a decline of -r ornita GDP In 16 ii brut $154 A recnd droughtcccijrred In C67 but i not expeetid to have the severe effects of the 165 drought Crop forecasts for the first nine months of 1967 indicate a 4 increase in real GDP above the 1966 level This is also the economic grcrdth rate estimated by the IBRD for the pezxA 1965-70
Moroccos economy is heavily dependent upon the agricultural sector thich has averaged about 15 growth per annum However growth of the mal modern segment of Moroccos agricultural sector has inshy-reased at the rate of about 7 per annum
In 96 the International Banik for Reconstruction and Development (IBRD) preented a number of recommendationr denigrned to increase Moroccos economic growth rate On the bacis of these recomfndations the G004 proceeded with planning the necesrary program to increase investment levels fr- the i 63-65 level of 11 of GNP to 1r of GNP and stimulate the rate of economic growth from 2 to an average of over )4 annually for the five years 66-70 In addJtion the GC4 has taken measures to curb the population grovth rat while placing increased emphasis on raising production of both dryland (wheat) and Irrigated agriculture
2 Investment and Savinms
The level of total gross investment has remaind at aboit 11 of GNP for vera year althugh the percentnoe declined slightly in 165 Under the GO Three Yea5 Plan 1965-67 the gross investment t-3rget woz ret at DH 3 billion- Actual invev-tment expenditures for the three yearpeirod reached about DH 46 billion of which the Governshyment ezxenditure amounted to DH 1 billion a against DH 21 billion budgeted Thin may have beeo partly de to the GOMs deliberate ausshyterity pollcy under the hIF rtbJli7tion prci1rnr but more probably it van duxe to the shortage of trained cadres to -lan and execute projects
In the private cectcr conziderable inounts of ravings may be hoarded due to lack of project attractive t- inventors The lvl of private investment has been runnihg at about 51 of GNP thrrugh 195 The 0014 4 incentive to private instors hnr cut profit taxes from 4320 to V and announced a tpn year guarantc-e against tax increases
]L- $ = DH 506
777=-77- NQ
r y 7k1- T e - W lk In
j - 1) 7k- - _
- 23-
Loan are avaiiable to )rivlite irve-tcrn freo th 3JfIDiN s rctr special funda to prcmote touricm devc firvcnt
Under the 1r86-1972 plan abut to br irtntt level are to be accelerated considerably reaching A of GNP liv ]970 Mor(- Irlyir haviiy on foreign 1 to aciuw cc higher lve1
3 Central Government FinancP
The Moroccan money supply which had Incrrased ify 76 per cent in 2965 remained virtually unchanged in 966 The first half of 1967 witnessed a 5 Ter cent increase in the money supply Te major part of thi increase as concentrated in June and July uhen the supply reached V14 0j lion Currency In circulation expanded rapidly in June and July
nnl factrrn being reinforced by commodity hcnrding related to the 1ide~l Et crisis Demand deposits did not show their normal decline nthe first half of 1967 Deposits with commercial banks declined nlightly while deposits with the Treabury increased as public and semi public agencies contisued their transfers from the banking system to the Treasury The increase in money supply in the first half of (7 ran I raced to tho nzon1 sonal increase in net foreign assets not c y the custcirry rlelir In claims on the private sector Clsirl (n the erivate sector declined slighty until May 1967 but Increased hr-gb June and Jily due primarily to additional financing of textile stocks ClbiJ ante Government rose by 10 per cent in the first half of 967 the in central brnk claims on the GovernmentI being rmainly offset by larger deposits with the Treasury
Ordinary budgetary revenues which incrurted by 5 rcr ent in 1566 tre cxrcted t-) increase by 7 per cent in 1( to DII 21 billion DeampDite a derea3e in agricultural tax reccipt r- fror diret taxes rose by 10 ppr cent in 1966 and a 2 increas estinated for S67 due to tric or controls on income declarationr d an accelerashytion of tax cller ns Owing mainly to a relaxation of the import
program in late 1 5 and a concomitant increase in tariffs on certain ccnonter goods customs reneipts increased by 21 per cent in 1966 Although budgetary estimates call for s decline of 3 per cent in customs receipts in 1S67 it is likely that actual receipts will be considerably larger in view of the import liberalizatidn measures intro)duced subseshyquent to the estimates Receipts from indirect taxes state monopolies and other serces are expected to be 11 iv- cent Ipher in 1967 owing to increased profit on -ugar sabr-i and L r(m the newly created Office do Ccrmercalisaticn - d-tation (OCE)
Recurrent ordinary buiL e(enditures increased by 34 per cent in 1966 ar-i are expected to increase by an additional 7 per cent in 1567 reachin- D1122 billion Although wage and salary scales in the public
Banque Nationale pour le Developement Economique
TT~~- - I777
2 Cf
sector have1bec z h t - rrvirI urli 11i g 14-6 -nd PO becnue rX toi Ijt e f (]r o n 4
ill tile ic urrnnye andr)not i on dnd Publi ht rentrn -yr-otn lno IncreasedOthrr t ill- t il r ne by ) vr cert in J6(
i ninlyrt -br h Inc-l
( Ihe ( t r- rl t ip t t C itur f T)h 21h iilli n
is (( ItI t lt r c0 a- r n n o I- c t b It ihstnl id vv ih n t r-t have hn(er - en 1t2
(IM ii ture( T f fu traordJ nary budrzct exshypend ituren a r y -t c ~ i vi -iscz Portal Checking sy-stcsul)rrcing t (I ltIt Ct -- ind creirn shy
nnet The f r er tnc I hha ccrc ed from a htih of DH 5-7 millIJn in _ 5 millIn r C46 F cr ats foi ]7 place Cro n w I 1(DI)J79 ill ni DDn etlc fi nancing has alo u 1) 5 p (- I3A27 iIliun to an entirnted DH 1142 million
1 14V ) I nv 1 ri n nI(c1 franc n is 77-ected to be ol t y ncrewed bcrrowing fr-ir t he Cestra 9ank which hud been held at mcdert vols iln 165 nnd 1a66 Under the 1TFtaiby agreement of October 16 the qob) agreed to taBe a3] rocrrnary meurer to maintain as table curoonry rPnt inl th nr1d-elrto th b a ent of the ePrncriynnd a vnbl- hn1incc X nvroent P rt artt to t rt fien of tho Ccntin- Honk rstz (erct are nct t r itr June 30 Y-ke 7 lov l b th n Diif ) mill] (n tlcnber -c P thai I o illin usit I ])ecthr 31I62 (GC bc w t
C B1rtrp - vt DH 12 iri 1i nor ]S67 or DH 6S ij lionEan tisated (r fo than the aproved crd it expanwim
Thitrd ordivary nil extraordnnry buThTt deficit of DII 7-19 millI n fcrecat Fr 1 67 in exnected to be fnanced by not freign
tan reof DII )75 mi~l in nt recurity 12ue 1 T111I vlion a - nt ry tiat Po n Che )ir d-nC i 73 r5 Pn
riI is u h i a vti v mrr nrr-e jssIof fvr is id a erital The vnfsa revcred in 1d6 when lnrger r nyrentn eEecially on food itcmo an n -lewdoun in
igo ra a deficit of $1 millcn ProjectiOnz-vt rvultvd in ror 17 r~ieat inrrerned importsonly partially ccnrennate by addshytsa t frnreirn r ntil rrceiprs ard mprrvement in the nervices account will reult -n et of aprroximately $)20million As rhoim in the following tabl -r tion for l33 and 169 how overall deficits of
14 and m] ivi_y$i It
rqVV t1 4~
C)rgt
---
1 -)I+-IRF1
1ROCCO - rTANC OF PAYME 1qrt - 169]_ 5
6rfi0 1 1C(8lr67 i r(o
)xrurt 2t L( I L-5
Trade Bnlance 11 15 - 75 shy - 75
rviee- ret - 7 - 5) -35 -23 -2
J]-i of Good rnd Service- - 3 - 65 -II - ti - (5
Trn-Ifr Pr ynts (nt) P 21 33 37 33
on-cntnry Carital (not) 92 64 6 6 5
Err-rs nnd Ov rrion- (not) - 23 -2 1 3
eranl Bannic __ - _3 -_ 3 - 1i4
Atrh thert ircjected reficitn are of the nnme order of 1 nishytude a7 thcr incurred in the period i66 the Situatlcn i findarentallydifferent both in rerprct to the source of the deficits and in rer-ect to the meat0Y gtr m etin7tecr In the f rrer caive M5recco uffered
_frcrr a very h-vy cutfc of Drivtes cuitv fo-ivr with a shar) decline In forein nt exerditures in Morocco In the iatter case th projected deficits r- rcre a functicn or accelerated crcwth risingdebt ervieiiw tri tho abnrcn of forv eeble additiens foreign reshybull ourcs nere7ory 4( r2Vm rAf finmncting To nect the def-cits during the reriol 161 61h MWreco ob1id to drw down rorcin exchange reserves of over $]c milicn The snrti tpv of financing is no longerpozslble ince no or-res- ruch reserve- Even ifMorocco yr
mn nina r rve_ ore (]rrfii on to th r-ixirun etnt enribe nnd the [iI tnfldy i- un M-r-r e i32 till relA re nt rnt 15 millicnj1itionn ftr ign as- e n 1 6 beyond hat r recnently fcreeeshyable with ver nri- nry Officilr in In i6 reserves are cotImnted Pt 72million c hih crn V 3 million i caly required for currency coy r
Foreign InJebtrdne n of th GOM Mnroccos external rtnte ard rutlie enterprie dett amounted to
$r) millivn in lr6 Debt vervcirig rpynents for (66 trtaled about
$5) rillion g-eement approved in October 3(67
I- -- Ishy
37 millin or arprcxitrrntoy (j Iroccor totnl eXoort earning of h28 millicn GCnerally nxt rrO dbt FervicJng renuiremennt of leas
than r of totna -ort nnrlt In onrldered to I r tirfactoryrntio D-bt r rnJrcLct n Ir the reriod 1-(y 3on Trerent external debt including thnt wrtl(n irreently undibur-ed are hown n th fr lv tahlr
)] L v yr t n
Eternn Vtnte anc ] bntcrnrie Debt
M131 o)nr
Y aI Net Outrtnnling Debt Debt Service
(6 it 479r5 $367 J-67 452 3)6
Z616 44469 2 0 2C-
365I3 37 389
33 383 33 6 371
5-h 31 n 352 275 34121
]176 2661 32It 1977 21133 311 177 22)6 307 19 i0l74 256
1733 255
rgtternal debt rharre n rerent debt nnr rhon above do not increase ubtanti-lly over t rt 1)year- reaching a maximum of h44 millior
in J6 and decrpt- n cr - tently threoafter At the are time exportearninr r _rc extett nc-are Aring that Morocco does not inshycreswre it etrnn2 cbt t irate ubrtantially nb-vc ihat has been the core th adfiticrn dbt e roquirrentn reulting from the propo t Icon o 5 ijilion co r 7crncepr-ional term hould not have a i-nifiant affect n 1r o - ab lty to neet itv g rc-atedebt ericn rcnrib2t~e- the pros ectr of reprment of thin loan ore coniderci rearcnb)
U I -
F ot h-v C IuIJI rmt I shy
1 V amp~ rVml KI
PUC- -jrVi Jt t 1 11 nflrcj urlc 1- th )qn --P I uti u rhnrrl -1r- thr U- Tr- ry- R- -nymc nt
c2Il f n 6 1 bf r I- till 11 nfl r- n-r i n of O r--niC(Io~hi U 1 1 rr to
Tn vil ) f rvc hi tvlrll 1 (In- - n- u--n E r me rrinshycgtay F rntwir w ourc o -o- rvI ortf-V3 1 rncing of
Uf f -r rrrir- ur3r 4~ v -rin Iltrt nt ndd shyt -n t ) in- lint r b t l r -n rort- o-orco trorl-- V -P
r i 1rnd h L-torie Furcl-trin firr- thrjt US r r~ crvirrf- u~d be~
T L I1 c vt r- -ly ] -ubt fu 1 n vi pw -I -ror-co Ir of
ut1JpcO In thi rjert f it -- r- 21 npnred by d1-nr- cothcr t~han the US
2 ]P-t ofI Prr l1 on Prw- Fntrrr
Phij rrcjJ-t -11 n-t h~ -in nrwerq Prrt n rr- tc ntrshyr~A~r fi-mc 1bho und for --roern p o n
3_~~PrCT--rty
rr-vIi-n 1 h -d r the loan ragreement for Icntifitcation ef any r mIjrpt n ctri b- rt througn ut 1zatn (f xccr- prorerty
If rv c u~eAID n-mrcf u urr thi )cn - I~ut~ em avoi3ablo r rovvrirrnt -rrperty rather than nce iteni
4 Otli-r Fr- Wo--] n-Fnlc4rm
Dr mi tW- o] 14rocco- i~ajr ovr-ec -f exte rnaX
rrtan~- hrtvfb - I r ~ ant fl Fr n fole by Kv-it
Sgio F rneflit r b-en 1lmrntrd to tcfohnjip n5tnnen bi eoni~in I th u y f Fr--h tprhntcian tcacrr ind cther
~ti~r t~ ec-tnmIyrt-n Friinch Aid to Mcreco In 1065c~oc~ (P-art f-r txychnirril aItn -- j se of tl5 w1nfor bu~dget rurport f ir in rt t- $1 1ri1 icin in ennita -rojectM- n vx- rrcd
1Vw1tvnn tioI t-) Frenh rurtnnd +16 r11ion tie-I to -onyiint to orrrcr Frrmh ccilcn~For _-rrc-ratod land and rquirrmcnt
West GTrrnmnny liar agrcrcd to nrovIe ccme j27 mM22~cn 1n catital arirtanre and cromrndity lnoi7 t n OfIcon( q92 thi o totril$223 miJ lien ha actuary b-Pn cr-Itt--d under Inn ngrepment This
And a lk5 million commodity loan both) signed in 1965 All Wet Gerzaan
Ufla
-28shy
capital asnistance I vuectI to be tied to German exports Germanyhas in addition 1uvvded r tteysubbtantial technical assistance f
The IBRP hah rade four 1nns to Morocco since 1962 totaling$6) million Ofthin totnl a [175 million loan in 1965 wos fordevelopient of the gidi lit-r irrigation perimeter Other assistance by internntIcnal Iending arncie include an $11 million credit byIDA in 1C65 for rcendary diicction projects and an IFC ln and inshyvestrent of $1 1 ri jnic alo in
F tit i by [c - dncr tr dh elo snt ofMorccco rircuVt r oii +h b-]n jt-TKT r nbove n 2 )6 niliion Kuwait enn in i66 for develomyment of the Tensaout Prnm n irrnten nrooetand a $77 million Kuwait
0jl n )nnsn r(niti-nertcir
loan for extrnion of the Tadri~ Irrigation Perimeter
The following- trbe surrlnrlzes other free world arlztance (excluiin technical assistanc-) to Morocco for the years 1(62-66
($ Millions)
1 62 1cf_63 96) 19r65 19)66 Fneea 4) 5PO 64o 700 shyWet Germany 223 gu 1t 53 281 IRD 15 175 10) 175 IDA 110 IF C 1 5 7 7 7 0 I15
TOTAL 55 62 1U3 W
b Includer only lo-ng term loans and exporter credits - Includfs 25 million private capital
Eternal ansiztnnce to the Lowier Moulouya Irrigation Perimeter -nce 1060 hres been con[fined to US upport Consdiering AIDs previcus
involvement in and conmitnert to the Lower Moulouya an AID lean in P2t to be Lhi mol aprroriate source of financing for this project
LID
II
q
-29-
SECTION ITI- Y-TTYT TIMPLPTrION
A Periret-r Ad-instrrti-
Authority for irplerrentvtnn of the deveorpent prrgrn frr the LowerMoulcuya Perimeter and rs wel arth crnntinuinz mrnnrrmenertC tt r t- rrtnr V theltbi nad overationity iOfic 1cne 4
n r I e1i- i d Vit4 i Iv ~ Ct rreated i Otb (rJ rn-- of evcn inrmi-rriional offices hich reelaced the Office de Mire en Valeur Aamprlcole (OMVA) Under the OMXA and itspredecessor agencies authority for ad-inLtration cf irrigtion proJect war centralized in Rabat
Under the new regional office organization responsibility for adminshyistering ORMVAM is vested in on Adminirtrative Board of 10 members headed by the Minister of Agriculture and Agrarian Reform as chairman All ether board members (other than the Chairman and a representative of theInterministerial Economic Ccrmittee) represent agencies or activities inthe region of the r-eriret-r whic comprises parts of two provinces Localretresentatives on the Board inc]-de the governors of the two provincesOujda and Nador the presidents -f the two provincial asembtes and of the two provincial chambers of agriculture as well as the perimeter Director
The responsibilities of thie Administrative Board include review of theecys program establishment of its organizational structure developshynt -)f its annual budget and establishment of rates and conditions of
Siyfent for water and other services provided in the perimeter
The Director of OP4VAI-I is dbarged with the responsibility for executionPthe vclicies established by the Administrative Board end administration of oil ORMVAM functions This responsibility includes selection of staffn pserating perrcnnel acting s officia ORNIVAM representative in all ntztinns with -tate and othbr public or private bodies and the
f of funds within limit Indivated by the Ministers f Financetent rn fricultural and Agrarian Reorm
Perimeter Oranizatlon
ORVAM oreanizatlonal structure consists of a directnrate five maj-r rvlces or d-vsicns and one separate bureau Two services qei Administratif et Comptabl- and Service du Yatrial are conshycor - th adminisration and lcgistical support of ORMVAM operationshi1e the remainirg three services rind the separate bureau are Involved in t-hni al matters associated with agrcultural developrent Each ervice has one or more subordinate bureaus Fei-ce Chiefs and thehead 0 rch bure-u report directly to the ORMVAM4 Director
-~F7E MEw-
-30shy
2 Perimeter 01ttffnr
OPIVAM orgttnlrntlon treture calls for 557 positions of whichI L or 7 Mlled n were nher 29 1567 37 of the 71 Postshytion vacancies reported 1ern the high and middle levels Foreign(chiefly Euronean) technclan occupy I)of the 16 high level positionsthat ere filled at thfit tire
Whil OPM ut in th- lcng run lor to Mercecos oducational yster to prvidr tn crrf-nn2 to ratisfy current rdurojectd rcshyquirement th currnt high and mlddle level vacancies rrouire uersonnelwith oxt nive nrior rxericnce To fll this preent need it will be necessary for CRIVAM to continue its program of recruiting foreigntechnicians until ruch tire ns graduates of Moroccan educational programsacquire the necesnry exrerience The managerent assistance componentof thin pro~ject ]e-rribed In the Project analysis will to some extentalleviate OFIWAMs high level personnel requirements
3 Inw1 ernetation Sehedu]
Months Implementation Action
1 0 Sign Loan Agrcement
2 2 C-tiify conditions precedent and Y4tiate procedures for selection of US firm for management contract
2 Negotiation of extension of advisory Engineering Services
h 4 Contract (Hydrotechnic) Negotiation of Managerment Contract
5 60Cmpletion of Project
C Waivers
Sect ion 7 rf AID Regulation 7 provides in substance that theUnited State ill not finance direct costs of construction work performedby third cc-ur y nationals unless the total co-tn of the project withvhich thr ennrtrumticn w(r is asEcciated donot exceed $2On)O orafter excluding national of the country in vhich the site of constructionis located and Dersons vho nave resided therein uninterruptedly for morethan three years imrnedJately prior to any determination under Regulation 7at leant 0 of all uernons who work under the contract at the site of conbulltruction are United States citizens or the employment of third countrynationals is necessary to avoid excerrive corts to the United States
3
31
Section 2175 authr-ri th Regional Anitant Administratorto waive the nrovinions of Sectionthat it is 2073 if he dcterriner in any coneimportant te the nationrn intercrt of the United Stutes tofinance the direct eots of construction work performed by third country
nationals
A prviou1y r ic i c t tht for thr ct Tartthe -r c ct b- 1jeuj out r -cnorbr f cnrtructioncontracts with Morcccrr contrctnr an in the i-t Uowfevvr itentirely psnible that there may b- roe contractn with cntructlonfirms partly owned by third country nntionaln and that ruch firjs anwell as the surely Moroccan-owrned firms may enloy third country niationalsIn such canes a difficult rrobic-i iould arise in meeting the terms ofRegulation 7 since an a practical matter Aericans are not reaonablyavailable for ermployn ont by such contrnetorn and our previcus experiencewith the Naunsseur Ccnv(r-ion project thatin Morocco has indicatedAmerican contractors would not be interested in bidding cn small conshytracts in that country
It in therefore recommended that the Annitant Adinitratordetermine rursuant to Section 2q75 of Regulation 7 to waive theapplication of Regulation 7 to thic iroject since the project 411 conshytribute to the attainrent of US foreign policy objectiver and the cbJe-tives of the Foreign Arsistnnce Program
LITI L USE
LfI~~5xA~us
lit
4 A J A 45 4 k
t A S T
S(3
I A444ilA~~l~)
7 -74
tAM= D
SECTOR 27
10000
t Co0Na includez25 cgtri oncFcttlrvI ncy I8s ~ ~ C t C- Includes 50 constriJcltiotrgrc
2000 60
IU
0
z
bull cosYsA shy----- i
600L _
400
200
0 5 I0 15 20
INTEREST RATE
I ~ 7 J7777
ANIAampX C
PROJECT DESCRn1 rOll
The project com)onents to te undertaken on the MIoulouya Irrigation Project over the next five years contists of the following
C(n1rtion of the rrLin casuals and bianch canbls to provide the suource of waler to the sctors be developed in theto TriffBou Areg and Zebra areas This construction will include the necessarystructures such as reulators highway bridges aqueducts water intake
and discharge structures etc
2 Iand Txeloommerit which includes engineering land consolishyt and iuvtllng lard preparation (subsoiling ripping destoning etc) and installation of water distribution canals (secondary tertiary and quurtunary) and drainage collector ditches for the Triffa main covering 24000 acres in sctors 8 9 10 16 20 21 23 24 25A 2513 27 and 28 Lou Areg Central covering 16250 acres in sectors Dltirough D2B and G1 thru-4h G313 i0u Areg Remainder covering 15000 acres in s-ctors D3 through D7 and GA through (6 Zebra Collective covering 45)0 acres in sectors 3 4 5 rind 6 and Zebra Rer-iinder covering 14250 acres in sectors 1 2 and 7 through 10 and th remainder of sectors 34 and 5 The total land to be developed is about 74000 acres
3 Canalization of the Oued Zeluan and nued Sidi-Amar in the Bou Areg Plain consisting of strairltening englarging and regularizing of these streams to carry the flood waters to the sea Drainage interceptor canals are to be constructed parallel to the sea in the Bou Areg Plain In the Triffa Plain the Oued Riada main drain will be deepened and enlarged and secondary drains will be excavated to provide for drainageof the Madagh area This will include the construction of bridges and culverts and other related work
4 Major Commorn Works will consist of
a Clearing of the Mo-1ouya riverbed downstream of the Mechra KLila barn caused roy flood dariwe and the installation of a set of stop logs for maintenance of pillway gate-
b Design supervision and construction of repairs to the ]elt Lank dead head tunel
c Conctruction and establishment of sib-division Offices and installations for farmer support such as CMVand farm stables
1 C
-2shy
5 Manavmtnt It ha been proposed that a US management firm be ewployed by th- C4 to manage and operate the entire Bou Areg area Such manageent -iuld encomparn all activities from the initial concept to final irIrp igricultural production Such activities would Include resp r-ibilsect -or supervnsion of engtneering and constriction of primary
S- Jry r complete developfnent of land training n in g tinul irription practicen preparation of market
t - r1t- (ot--rnu trplusmnining of a Moroccan cadre to take over h v--it Bou Areg dreara P the
At this writing the n-pt of turning over to a private UZSfirm execushyresponsibl]ity I h management of the establilrment and initial
op-ration of irr1gati the Bou Arog area has been only broadly de iiitd by the GCJO It Intended that proposals will be invited from a r -onable ntnber of f|ed US firms that a selection will be made an-n 7 them and a more do iled and cornprehenrive definition of the rer6 -Ps to be performed be eztabliched at that time It haa been
stimated that the t- of ruch a contract will be about $2 mir- n In any event the -ts of this contract other engineering arvl s to be provided undt n extension of the Ilydrotechnic contract and ether US corts will not ed the proposed $5 mllaion developzont Jean fr the project
The cle 3ifications duties ant 1ncnslbilities of the management personnel ill ha-- to be clearly defined i agreed to by the GCM Perimeter Directo- and other GOM Agencies luding arrangements for the necessary gistic support
Svxlale Docu-
1
4
LD ED 0ICIAL
-IAIDshy
A1trX D
C6JCK LIST OF STATUTORY CRITERIA
(Development Loan Fund)
1 FAA 0102 Extent to which U3 cormodities and services are furnished consistent with improving the US balance of payments See Sections II-C II-F
2 AA sect2O]ihi lanner in which loan wil promote countrys economic develo shy rit emphasizing help for long-range plans and programs designed to developeconomic tesourcos and increase productive capacities See Section I-D
i FAA sectT] h)(IL Information and conclusion on availability of financincfrom other free-world sources including private sources within the United States See Section II-F
FAA sect20l( )2 Information and conclusion on activitys economic and technical soundness including the capacity of the recipient country to reshypay the loan at a reasonable rate of interest See Sections II-B II-D and II-E
5 FAA 1201(h)( Information and conclusion on existence of reasonable promise activity will contribute to developrmnt of economic resources or increase of productive capacities See Sectiona II-B and II-D
_92_(b 4Information and conclusion on activitys relationship toothor development activities and its contribution to realizable longshyrange objectives See Sections I-D and I-E
The following abbreviations are und FAA - Foroirn Assistance Act of 1961 as amerded by the Foreign Asaistaice
Act of 1967 App - Foreign Assistance and Polated Agencies Appropriations Act 1968
AFEVCDF 1066
L1
-2shy
7 FAA f12O1(b)(5)_ Countrys self-help masures including institution of Foreign Assistance Act investment pliaranty programs Investment Guaranty
bull Agreement signed with Morocco 331o6l See Sections I-D and II-EI
_A ))(6) Information and conclusion on possible effects on US econowy with soecial refererne to areas of substantial -labor surplusSee Section II-F
9 FAA q201 (h)() Information and conclusion on the dagree to which thA country iv wiki- progress toward respect for the rule of law freedom of expression and of the press and recognition~yf the importance of individual freedom initiative and private enterprise
10 FAA -1201(b)(8) Information and conclusion on the degree to which the country is taking steps to improve its c]Laato for private investment See Sccton II-E
31 FAA R LbJi Inforrat-on and conclusion on whether or not the activityto b financed will contribute to the achievement of self-sustaining growthSee Sections I-D and II-B
12 FAA fi2Ol(bj Inforruation and conclusion on reasonalbe prospects of reshypayment See Section II-E
13 FAA fl20JL() Info-ation on applicability of the twenty country ceil4ng2
14 FAA fl201 L Information and coclusion on legality (under laws of the country end the US) and reasonableness of lending and ralendinr terms Loan will be on minimum termspermitted under FAA These are deemed reasonable see Sectioam Evidence will be renuired from the GGM as to the legality of the loan agreemnt
1 E 2 Information and conclusion on availability of an applicationFAA together with sufficient information and assurances to indicate reasonably that funds will be used in an economcally and technically sound manner See Sections I-A II-B and II-D Application received Janury 15 1968
16 FAA fl201(fL If a project inforntion and conclusion whether it will promote the economic developapent of the requesting country taking into account the countrys human and material resource requiremnts and the reshylationship between the ultimate objes6ives of the project and the countrys overall economic development See Sections I-D and II-B
17 FAAJ 20ij(J If a project information and conclusion whether it cifishycally provides for appropriate participation by private enterprise 8ce Sections YI-C and 114
I- FAA i22(a) Total amount of money under loan which is going directly to private enterprise is going to intermediate credit institutions or other borrowers for use by private enterprise is being used to finance imports
rfro private sources or is otherwise beirg used to finance procurementsfrcm private souwces See Sections II-C and II-2
9 FAA 207 Infosation on the emphasis placed en
(a) encouraging development of economic political and social institushytins No apparent relationship
(b) nelC-help in mectingthe countrys food nredo Project Vill conshytribute to production of food for lccal consumptioa
(c) in-proving availability in the country of evucated trained manpower Project will contribute to the deicloginext of trained manpower as one of the functions of the management contract (Soe Annex C para 5)
(d) prcgrams aimed at -malnutrition disease eradi atDn slum clearanceWater purification sewage disposal health education naternal and child care(includin fimrily pJnrning)) -nd cthcr public health ausistarice See
(c) other develoment activities including industrial development free
labor unions cooperatives tnd voluntary agencie transn)rtatin and ccshymwquication nrStczn capubiliTies for economic planning and public adlinisshytration arban develo-mment and modernization of laws to feilltate econcnicdevelopjen- GO- intends encourage develo vient of cooperat yes particularlyin the Left Pank areas Project will also develop capabiLi ics for cconoaicplanning and public a6~inistration (Annex C para 5) Other not applicable
20 Information on the extent to which the r-untry is
(a) cttcmting to increase food production and food sto a-e anddistribution felitics This project is one evidence of Moroccos efforts in this direction See also Section I-D and I-E
b) creating- a favorable climate for foreign and dmestic iri-ate enterprise and invcstrrment The GCM has recently reduced profits twes anrannounced a ten year guarantee against tax increases See Section II-E-2
(c) increasing the role of the neonle in the developnental procecsNo apparent relationship to this project
(d) allocating expenditures to development rather than to unn-cessarymilitary purpoes or intervention in other free countries affair See Sections I-D and Ii-
(e) willing --nribute funds to the project or program Th iOMhas already dcvo o-sidcrable resources to the project It has badieted13 million for th i oulouya for i7 See Section I-C
(If) making economic zocial and political refo ns such as taxc coliecshytion iYprovcmenLs and chan es in land tenure a Royal Comm ision has been appointed to make recomendation on land tenure probleras in the Lower I oulouya
(g) responding to the economic political and social concerns of its people and showing a determination to take volf-help wcasuren See Sections I-D and II-E
IT
-ovi~cd l v r 13 1968
- 4 - LDffIED OFFICIAL USE
21 FAA Inforn ation about multilateral assistance being Iurnished to t e country and whether the loan will encourage recgional development prog-rams The I1D has eztablihcd a Consultative Group for Morocco which rvicws the GOM development program anui prgress See Section II-F-4 for infoaation on othtr donor assistance to Morocco
22 A Extent to which the loan will contribute to the objective of ass ring naximu par icipation in the task of econonic dovelop--ent on the pL-t 0 _he people of the developing countries through the encouragement of cocr-tic private and local govenmental inLitutious o apparent
relationship
23 F _-_Dta_ Infor-ation and corissions whether loan will oncourageeffor s of t1e country to (a) increase tie flow of international trade (b) fostcr private initiative and comptition (c) encourage development and usceo co opratives credit unions and savingss and loan associations (d) disourgo monopolistic practices (c) improvo technical efficiency of industry ariculture and commerce (f) strenSthn free labor unions This project is cxpected to increase technical efficiency oi-agriculture
2_ C-1L lnforzrition and conclusion on how the loan will encourage US privte trade and investment abroad and how it uill encourage private US participation in foreign assistance prograas (incluiing use of private trade channels and the services of US private enterprise) See Section II-
25 VA-+_ Conclusion and supporting information on compliance with tho Co resional policy that engineering and professional servicos of US fir-ms and their affiliates are to bo used in connection with capital project3 to the nixinua extent consistent with the national interest US engineerirn and innsgcment services will be financed tnder this loan
2$ Inforamtion and ccnclusions who+her loan will pormit American rx-l] business to participate equitably in the furnishing of goods and
z orvices by To be satisfied in Loan Agreementfinanced it
27 - t(a App I18 Complianco with restriction of co -zodity procureshy o UsMS except as otherwise determined by the Picsicent and subject to ttu--- rcortir require r-nts Procurement will - liumited to the US for
reiabnrs nts and to ioocco and other free world countries 1-or US-cwne(d rhu disburseacnts
23 -i Comiance with bulk cozodity procurement restriction topriecc no l-ho han the nkarkot price prevailing in tho US at tia of
bull puchas Not applicable
29 FA Cozpliance with requirement that matrin insurance be purchased on commceities if the participating country discri-inates and that insurance be placed in the US To be satisfied in Loan Agreement
30 IA 6(a) Information at to the utilization of excers personal property in lieu of procurement of new items Will be required ai appropriate under terns of Lean Agreement
f
1 77--7 -77-77-777
31 FAA 61](a)(_) information and conclusion on availability of enginoering i financial and other plans nccx sary to carry out tho assittance and of a
reasonably firm cstimate of the cost of the assistanco to the United States
See Section II-D
32-ecessaryFAA t611(a)_(2) legislative action r6quired within recipient country and ibasis Cor reasonable anticipation such action will be completed in time to pormit orderly accompli-hirtnt of purposes of loan See Section I-A
33 n _AA161nJ0] If water or water-relatod land resource construcshy
tion project or program information and conclusion on a benefit-cost comshy
putation See Section II-B
3 4 VAA 611(c) Compliance with requirement that contracts for construction be let on comp-ctitive basis to mamum extent practicable To be satisfied
in Loan Agreement
If a loan for a project of $1 million or more certificatin35 FAA _61l(r) by the principal AID officer in the country as to the capability of the
country (both financirl and human resources) to effectively maintain and
utilize the project taking into account other US-financed projects (Such
certification is to be pproved by the Administrator aL the time the loan
is authorized) In process of being obtained
36 FAsgJ2 _6_h Appropriate steps that have b-en taken to assure that to the miaximum extent possible the country is contributing local currencies to net th-2 cost of contractural and other services and foreign currencies o- icd by tho US are utilized to meet the cost of contractual and other services The GU-M is contributing over $30 million to compleXton of this project Excess US-use dirhams will be used for eligible project costs other than US goods and services
37 FAA p619 Compliance with requirement that assistance to newly independent countries be furnished through multilateral organizations or plans to maxishymum extent appropriate Not deemed appropriate in view of previous AID financing and ccoiitment to the project See Sections I-A and I-D
38 FAA sect620(a) AcnO7a n3]7(b) Compliance with prohibitions
against assistance to Cuba ard any countr (a) which furnishes assistance to Cuba or failed to take appropriate steps by February 14 1964 to prevent ships or aircraft unier its registry from carrying equipment materials or supplies from or to Cuba or (b) which sells furnishes or permits any ships under its registry fr-om carrying items of primary atrategic signifishycance or itcms of economic assistance Morocco is not-known to be in Violation of these sections
39 FAA q620GL_ If assistance to the government of a country existence of determination it is not controlled by the international Communist movement The Secretary of State so determined on October 11 191
40 FAA 620(c) If assistance to the government of a country existonce of Indebtedness to a US citizen for goods or services furnished or ordered whore ouch citizen has exhaustod available legal romodiesor where the debt
i - ow - -- _---- --shy
- --
-6shy
is not denied or ontested by such government or the indebtedness arises under an unconditional guararty of payrrent given by such govornmunt No such indebtedness is known to exist
41 FA _(a2LdL If assisitance for any productive enterprise which will corashypote with US enterprise existence of agreement by the recipient country to prevent export to the US of more than 20 of the enterprises annual production during the life of the loan Not applicable
42 FA4 - 16Q_0_ A If assistance to the government of a country extent to which it (including government agenies or ruhdivisions) has after January 1 1962 taken steps o repudiate or nullify cuatracts or taken any action which has the effect of nationalizing expropriating or otherwise seizingownership or control ofprcpertv of US citizens or entities beneficially owned by them without taking appropriate stops to discha i ge its obligations No such steps cr actions are-known to have been taken by the GOM
43 FAA~L AjPj_10_9 Compliance with assistance toQ0 prohibitions against any Comunst codntry ozocco is not considered to be a cocinrunist country
44 FAA - 620(gJ Corliance with prohibition against use of assistonce to comp satc owners for expropriated or nationalized property To be satisfied in Loan Agreement
45 F AA 8620(h Compliance with regulations and procedures adopted to inshysure against ue of assistance in a manner hich contrary to the best inshyterests of the US promotes or assists the foreign aid projects or activities of the Communist-bloc countries To be satisfied in Loan Agreement
46 FAA 06-O(j)_ Exitence of determiration that the country is engaging in or preparing for aggressive military efforts No such determination has been made
L_62_O Information47 FAA on representation of the country at any intershynational confererce when that representation includes the planning of activishyties involving insurrection or subversion against the US or countries recoiving US assistance No such representition is known to have A occarrect
8 FAA 62JJ Existence of a determination that the country has permitted or failed to prevent destruction of US property by mob action or has failed to take steps to prevent a recurrence and-to pay compensation NO such destruction is known to have tak-n place
49 PAA l620(k) If construction of productive enterprise where eggregate value of assistanc to be furnished by US will exceed $1OO million identification of Gtntutoryauthority Not npplicable
i-xQ2MZZ=
1 shy
U 6 50 _Af( QCinsidoration which has been given to denlying assistance X to thu government of a country which after December 31 1966 has failed to
- institto the investnint guaranty program for the spcific risks of inconshy
vertibility and expropriation or confiscation Satisfied See No 7 above
S51S J lj Compliance with-prohibitions-againstn as~istance to countries which traffic or permittraffickingwith North Vietnam Morocco is not known to be in violation
52 E_-L620(_L If country has seized or imposed any penalty or sanction against vn US fishing vessel on account of its fishing activities in
intcrnationul waters information on the consideiation which has been given to excludirg the country from assistance No such situation is known to exist
53 FAA FA r) UAR restriction Not applicable620(p 9117
54 FAA R620tl) Existence of default undhr any Foreign Assistance Act loan to the country No such default exists
55 F ) C-nsider tion of whether co ntry is devoting unnecessary percentage of buKet for military purposes or use of foreign exchange for milita-y equipment
56 FAA 62o(t) Proibition on aid if country has severed diplomatic relations with US unless agreements have been negotiated after resumpshytion Diplomatic r(lations have not been severed
57 FAA 9620(u) Statur of the country on delinquent UN obligations Morocco is not known to be dlinquent on its UN~obligation
58 FAA R636(i) Prohibition on financing non-US manufactured motor vehicles Will be satisfied in Loan Agreement and Implementation Letter
59 App 102 Compliance with requirement that payments in excess of $25000 for architectural and en Jneering services on any one project be reported to Congress Such reports will be made
60 App R1O4 Compliance with bar against funds to pay pensions etc for military personnel Such payments will not be eligible for financing under th Loan Agreement
61 App 9106 If country attr ipts to create distinctions because of their race or religion among Americans in granting personal or commercial access or other rights otherwise avaVIfable to US citizens generally application which will be made in negotit ttons of contrary principles as expressed by Congress Morocco is not ku IDhave made any such attempts
iInD OFFIIt t USE
0k
OFFICIAL USE 62 AIwp Rii Compliance with existing requfremets for security clearance
of personnel Will be satisfied in Loan Agreement and Implementation Letter
63 App R1l2 Compliance with requirement for approval of cortractors and contract terms for capital projects Will be satisfied in Loan Agreement
clJ164 Aup Cmpliance with bar nRainst use of funds to Tay assessments etc of US meiber Such payments will not be eligible for financing under the Loan Agreemunt
6 Anp P115 Ccmpliance with regulations on employment of US and local personnel for funds obligated after April 30 1961 (Regulation 7) See Section III-C
66 Aim Vietnam iron and steel restrictions Not applicable
67 p l9 If a country other than Greece Turkey Iran Israel Republicof China Phillipines or Korea reduction in assistance by amounts spent for the purchase of sophisticated military equipment
68 Anp fi4O1 Compliance with bar against use of funds for publicity or proshypagjanda purposes within US not heretofore authorized by Congress Such use of funds will not be eligible for financing under the Loan Agreement
Morocco is a traditional Islamic monarchy with a constitution The conshystitution was implemented followaing a popular referendum in 1962 National regional and professional elective bodies including a parliament were established by universal suffrage under the constitution in 1963 The parliament was suspended in 1961 in a State of Exception because of its inability to agree on measures with adequate urgency to meet the prevailingecononde imperatives In July 1967 the King appointed a Prime Minister to direct a Cabinet of appointed technicians
The constitutional framework nevertheless remains intact in Morocco and nationwide popular elections for some of the professional chambers were held in August and September 1966 The press is relatively free in Morocco and the right of diLsent prevails provided that such dissent does not violate the prohibition against political attacks on the instishytution of the monarchy or the person of the monarch
LI Under the revised US AID Policy for Africa agreed to in November 1966 Morocco is designated a development emphasis country entitled to receive continuing support on a country basis as part of a multilaterally coorshydinated countrj program Morocco was subsequently included in Presidential Determination 67-14 (January 5 1967) I
LIM=TE OFFICIAL USE~i
- l go
bull ~ -
f
DEPQbi) STATE AGENCY FOR INERNATIONAL DEVELOPMENT
WASHINGTON DC 052
CAPITAL ASSISTANCE LOA11 AUTHORIZATION
Provided from Develoroent Loan Funds Morocco Second Lower Moulouya Irrigation Loan
Pursuant to the authority vested in the Assistant Administrator for Africa of the Agency for International Development
AI)by the Foreign Assistance Act of 1961 as amended theIAct) and the delegations of authority issued thereunder I
have received and t-en into consideration a certification from the Director of USAIDMorocco as to the financial and human resources capability of Morocco to effectively utilize the Lower Moulouya Irrigation Project taking into account among other things the
maintenance and utilization of projects in Morocco previously financed or assisted by the United States and I hereby authorize the establishshyment of a loan pursuant to Part I Chapter 2 Title I the Development Loan Fund to the Government of the Kingdom of Morocco (Borrower) of not to exceed five million dollars ($5000000) to assist in financing the fore] gn exchange and local currency costs of goods and services for the third phase of the Lower Moulouya Irrigation Project subject to the foLlowing terms and conditions
1 Interest Rate and Terms of Repayment Borrower shall repay the loan to AID in forty (40) years including a grace period not to exceed ten (10) years Borrower shall pay interest on the unrepaid principal and any interest accrued thereon at the rate of (a) two percent (2) per annum during the grace period and (b) two and
one-half percent (2-12) per annum thereafter
2 Currency of Pepayment Repayment of the loan and paymenu of interest shall be made in United States dollars
- t- n t - - - shy
3 Other Terms and Conditions amp(a)Goods and Services financed under the loan
shall have their source and origin in
(i) the United States if disbursements therefor are made in United States dollars or
(ii) any country in the free world including Morocco if disbursements therefor are made in Moroccan currency
(b) AID Regulation 7 shall not apply to construction -work financed under the loan because as detailed in Section IIIC of Capital Assistance Paper No P 667 it is important to the national interest of the United States that the direct costs of construction work performed by third-country nationals be financed out of funds made available by the Act
(a) Such other terms and conditions as AID may deem advisable
Assistant Administrator for Africa
Date
~~~~~~~~~~~~~~~~~~ - q v
7
________
44
F-1
- 4 shy
1967 to irrcveTporformnnce in grculturc In the early psrt of the year the GCQ4 recorgnn7ed it a initrative system to rrozn for greater loca responzipuIty nnd crntrnl over agricultural progrrswhich inclulcd in partcmLar the minagement of the M4oulouya Perii-ttcr and instituted a ajor rrive to recriit principally in Europe foreigntxn- tc -rk orr rri y a r-nritc-3 In GCM prrqrnms In July one of
of A- cuA tue The att r ir cvr atic with USAIDPabat has affirmed his active interert in the Moulouya arid in the US role in its financing
E Fe)ationhipn of Project to US Ansimtince StrateT
Im~rvNrm-crt in Moroccos economic performance is itself a major US objecti e in Morocco as well ar an Iportant contributing influence toUS political objectives in Morocco It is believed that evidence of econc-ric improvwr ent will strerthen the GOMs capacity to maintain its moderatint role in Arab and international councils and its friendly relatiorns with the US
AID strategy is to assist Moroccan econcmic development within the framework of the Consultative Grcur (CG) crganized by the IBRD The CG has endorzed the GOM priority on agricultural development One of the prime objectives of the AID prcgram in Mcrocco is to increase agriculshytur1 rrcdurticn which i in accrd with US policy to reduce on a worldshywide bazis f-ependence on US food esnistance over the next five years
AID ian-stqnce to the aericultur l sector Is directed at increasingPrc+ -tion dry-2and farming as wel as irrigated farming in the LoweyMou]cya Rlv-r Bsrin where the US has provided $23 million of loan assitance einc -lr60nn well as $3 millicn equivalent in ocal currencyloans The rnture of AID assitance to Moroccan agriculture has evolved from major erade TVA and SRI during the last two yearsrtd by U2DA to d-tcrwir- tl new investrent with highest return as well as to plan Fpecific agricuUural develci-nent programs In dry-land farming AID has provided te hrcal ansiftance an- feed grain donations to improveanimal brcen and feedin ard technical assistance and local currencyloans to ipcrenie cereals rr-yiution There projects art continuing and (xrandling rticuarly in cereals production where additional TA in seedproduction an] xt-nsion techniques is being provided AID also expects in thir fischl yeatr tc providr- fnreign exchange through a DevelopmentLean for the Ariculture 2ector to financ necessary on-farm equipmentand commodity imoorts particularly those arising from US technical assistance )rograms
As a result of previous [IS assistence in the Lower Moulouya thisproject ha b--cede Ientifipd In Moroccan eye as one of major US inshyvoverrt Th G has for sore time been -eking additional US loan assistancpe t-Vomm lete t -ind our continued ruport of the project has ansumeri polit-al as vell as eccnomic important in UJS-Moroccan relations
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ioriginally begun under the Spnnihh rgime Work was resumed by the GOM under a contract concluded in late 1959 Major difficlilties with the tunnel structure have been known for some time On comTletion of a series of studies of the problems involved the GOM nvited bids inNovember (767 on a pronrosed contract for the correction of structural-defects i-he tunv It Jn bnticiiated that this contract will be finarced _y the GO fr wn recurees
The Bou Arcg area which lie to the Northwest of the Zebra andalong the Mediterranean Coast will ]ikewise be affected by the delay in passage of water through the Left Bank Dead Head Tunnel The BouArr- - - ontplnn s~re 31000 acres of irrlgablf lrnd While the elttent n lr nni - ytr running from the northwest portion of t -h 11 shy h1s argely been completedneither i of the other irrishygation works required h~iv- - ver n --rt of the d-zign studies for thin area ha- u t L
The bulk of the DLF I-an of $23 million of hiehity over $20 million had been disburd as of the end (f wvmrber- 107 was (or is being) utilized for cn~tructinn of the cehrnKastoragedam and of the Bou Areg Tunnel and the Bcu Areg High Line Canal Sraller amounts were utilized for advisory engineering services providedby a US firm design services and construction of some of the main canal drainage rnd distr1rmtion woks The balance of the loan is expected to be disbursed before the end of this year for reimrburseshyent of the costs of contrEcts already completed or presently under way
The GOM has in addition exp-nded an estimated $13 million since the beginning of 1960 about $3 million of which represents the cost of hydroelectric installatiuns at the Mochra-Klila Dam and on the Bou AregHigh Line Canv1 About million vas expondet on reconstruction and the bn2nc Tprerents entimated costs of operation and maintenace of completedworks The DLF Joan of 1960 war intended to assist in financing a -r second phase of project works in the Mculouya Perimeter As indicated nbive the works ndrtakn in his phase (apErt from the repair of thn Left Bank Depd Head TunnE a jrrng to a close
In view of the Izeable rpuirces devct0-I tc thp Mculouya over a rither long reriod of ytrs--by the Spaninh French ar-I MroccanGovernments prior to l6O and th qC-M and AID frox 31960 to l2--to achieve the installation of the bulk of the major installations required for water ntorare and rranzmi-ion it Ia been conzidered that at this next stage of drvelcp eat of the erimeter the principalfocus of attention should be on t1ose works which will offer the
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-7shygreatest and most rapid returns on ndd1tio resources required fortheir comyletion In the Interest of rbtainir an asrrrent ofr It fr the crnletion of the reirainder of the Troject AIDri ained rvienof the Stanford Revar(h Institute to rrenarea tuy i th orrn nrd returns for the vnriou rcrtions of theroject for h h i rr h beern pJanncd but not cnrrpleted
the he hat the completion of
the reynainintz ork-requivd(which P-nti fird Ip following Sectorsray up on tn iI thejwwould appear to offer the optimum coabination of hirhi nremental investmentard early comption
No of Apror To P- riuirred
Triffa Main 317 Triffa Sector 27 Triffa Sector 28 Zebra Collective 1500 Zebra Remainder 14250 Bou Are Central 16250 Bou Areg Remainder
TCtAI)
- Includes cre 8000 aeri o being equipped
If the above is to be accomplished over the next five years asenvisioned by the GOM the schedule would imply the bringing under irrishygation of around 1500) acres per year This is around two or three-times the GO hi torical rate of dvelopment of irrigation in theMoulouya over ast seven years While the GOM has recently reorshyganized its e cnt structure to permit greater local autonomy inf1 e ranagemo- rrigation perimeters and has recently accorded avery high -- -r to acceleration of developnent of the V 1 ouya inparticu t -vident that given the manpower constrai ts involvedin the Mr n operation the- above target way well be it- ible of achievenrnt
The GOM hM itself recognized the elements of thl -- I i lindhas in dizcuss ins with USATDRabat requested considersti- -f hfinancing by AID of the dollar costs of a management crht with oUS -irri to take or c(vnpletely the management unctions fror thi
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b Th - urJrtaen rn the jleft Bank under the proshyposed thir i-e of the rojc-t are i follows
- Left Pnnk Dvd H-d Tunn]
5 r-y rd t final tng of ire aration for ther-rT ir cvf ni r r imy - rz--rt ha recently beenr-t) l i w t e rr - tht - I afid if exToected to ubrit hit writt(-n r-rt jr DC Aii preliminary impressions baled on a 9Ite nErerti(n indi-ate thit a -rt1fartorj repair con bemade in c)nIdprnbly le- t n-ne for lfan -than previously conshytemplnted
The early ccmrt-tnn nf thi work in lmnortanit nine IL c t Ft th avai-bility of pr~ct wrte for the entire Left Brnk
Z~bra Collectlv-
Thin 1 on ara ofrXPr-ctively ond tribal land that will be divjded and allotted tr J-ted tribal -b-hrc who will become soleowncr3 A Pirpe rart ti Tniran -aratirn and developent hasalready bern co-plet] 2pani levelirg r-mains to be done as well ae conztruct c~n of b-tcn dnd drina- works
7eDo i F--vino-
The northrrn ecti n tht rmrainder of th Zebra will requirethe extnzi-n cf thct Train 4]h will be ccrrleted with financingccmmritted under Phase II of fth tr-Ject Land preparation and levelingwill be required anlnp with h ntruct n of distribution and drainagebullir r]
T ectinr f th- rrainler of bra will requiret- rd i i w -J n rrd h c and engishyrnr nw d t i f -tritst t n and dlarn -rk
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foeuro rginprng im hhve b- 7cr)Pletcd fcr the irrigationthe Bou Are- Fr the o-t rt hu- I cf the
of rcquired construction
of main carrl Rnraljor dr- nRe worx z develoFerit and cronstruction of zbldiary li tribution -r irnge y--r rrrairns to I undertaken
Th P- Arrg Tunnel wr orml td in 267 and construptcn sunder way on Ih-Yin Canal rrired tL nvcy water the suthrnf e of Areg ervie ra
I h z-uir-i intluding the -rtablishshyn -F r rnity rvice andIn fit Th rlulrem-rntr for
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Wt r 2torvge 1 95 1)6and Pegulation
Right ank 137 31 10 79
L-ft Bank 25 87 n6 143 239
Far- De ]crl 0 )5 1 b I26
S I M O ALA1 348 356
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1 dv1 ment cot
rFT-r AVAILABLE COPY
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At indicatnd In the- tdl iv 11 - rnt it~ocotof the rxojroct are t hi~-hor tnan the ic60) 1orccasts Th y tarc Ah-wever 1hchr by cnr murth~cul~ averllsv( a igiificqntjsCfect t~cn the bt-ric lfer-7t I-tio n- rigill lly rc~r~t
V I ) u O21he 1)+ -J iv )ir(t In h jiv kinvnft bed tado in Lh Tnwr Liynnui vni cif hrrlt rnr 7cst- wrr uniershytaen ic r ii -tQ j ta the Aurpo3vt o 02thl rirarnkinr of r- Ln t -Ir ca th cenm I rr1 urn 1e11 frrn n ow
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elevated area requirin iat-r to be puiiped to the irrigated land with both highr capital costs (about 1 million) and higher oreration and maintenance costs (150 Dirham per hcttare via-a-vir 100 Dihams perhevtare for the grnvity irrifrted ares) The ony work presenl-ly cotiishypleted in the Triff Hih Ser-ic Area is the preliminary engineering stirUes Cimi-ir to th Tr Pa r thu TrIffa ]Igh Service areawill reiir an ex I uvnt ricd bfore agricultural proshyduction cn be initlat-2i
The above considerations reiult in the following revised ranking of priorities
Project Area 1FY (M Priority
Triffa Main 21 I Sector 27 8 I Sector 28 9 I Bou Areg Central 6 II Bou Areg Rerainders 6 II Zebra Collective 5 II Zebra Remtd nders 5 II Triffa Ent 6 III Triffa High ervice 5 III
SRI 11ed a ccst contingency f7actor of 25 and a cumulative costescLlatior factor of 3I per annum These factors appear excessivelyhigh in th( light of (1) project experience to date and (2) the fact that from his roint the technical rirks involved arre of a much lower orl- r f 1h thnse inhtrent in the major works Just comshy1 I intion nrd contingency factor of 15 has there-
S chtiMnte- Itlizcd in this rarer The ii n-ttr costs the to ) ject (in n]ace of factors
i by )I nrt 11 thIrhe nf th nJter atve I[cwver rrtnrecr-y factor euld Increase the IPE ] hi ra]y th- IIRF fcr the TrIfa Sector 27 ansnunirg a
oct crortlr7crncy A can be seen as the conAngency I thf cc curve rrv to the right and inter ects the
ur h h 4r- rnr rate of return)
C Finreirifg inr
Cot o the prJect wor fmcentntgenent nnd engin-erinm advisoryrvices for the proued t rd tsge of the Mmlouya Project are
ctirt a Crollows
nF3r AVAILArBILE COPY
Best Av DlableD
7 17 shy
(In Millions Of Dollars)
Righi Pank
Trffa Main 34 poundSt (r 27 08 S ctor 6 0Q
51 Left ank
7bra Collective 12bra Remainde r- 54 Tou Areg Central 74 Lou Areg Remaluders 68 heft Bank Dcad Head Tunnel 30
238 Services
Management 20 Advisory Engineerin 05
25 SUB TOTAL 37
Escalation amp Contingencies 15 47
TOTAL 361
It is proposed that the AID Development Loan for this stage of the Moulouya ProJet be limited to $5 million an amount which would be sufficient te reet the cost of any US goods and services required for the works to oe undertaken Thus the loan would finance the dollar costs of manrement and engineering advisory services to be provided by US firms erstimated at $25 million The balance would be available to meet any ther US cofts that might arise for constructicn cuipment and nateria]
The balnnmc of funds required would be provided by the GOM from its own budgetary resources including as appropriate agreed allocations of the counfryj-uie dirham proceeds of US surplus agricultural programs in Morocco
To a l-ge extent construction works In the Mou]ouya (other than the Bou Ar- Tunnel and Mechra Klila Dam) have taken place under a largenumber of roll contracts with Moroccan firms It is anticipated that this will ontinue to be the pratice in the forthcoming development stage Th iit is evident that the great bulk of project cests in this next stage will be local costs
-E5 -
In the event that not all of av l able fuInd- under the loan are required for TKI eo It i ouied that any remaininrn balance be utilized for the payment lo -ovalccztn f the project This would be aceoomplirhe by utili7irn th- h r vroceeds of the loan to purehare US-use dirhsmn (frcr th U Oi-irrirg Officer) which would be utili ed to rrimbure th fc u a t local - nditurrs
Thi arranrit 3ir ila ) fstV utilitd In the - of the D-e l-INAieret Loar tJr U Atrrert SinceYr usii Conv rf i cn therc loans are rcpiviible in dollars nd rince Morocco in a n-ar excess local currency couintry the fert ) f e transaction in tc provide a means for obtaining ccnvrrrs cn a-cr th life of the loan of otherwire inconvertibie U5 holding irhrs hich are in exces of its localrequireme t
In 1967 over 15 million dirhams (abceut $3 million) of PL 480
Section l04(g) loan fun cre in msgreement with the CON allocated for the financing of various contractr reloting to projects in the Moulouya It in anticipited tht ndditional allocations will be made out of the local currency proceed generated from current and antishycipated US 7urplu agricultural rmodity programs in Morocco
It has been proposed that the dirham equivalent of $45 million of the proceeds of the October F67 rurplus agricultural commodity Sales Agreement be allocated for a Section Cb(g) loan for the Mulouya In nadition it is estimated that a $]35 million (in$ioz1ble dirhshyequlviJent) woull be available from 7uprl]eental surplun agrIcultura con -ity rales programs under Titlo I an-d Title IV in calendar 196F for allocation for loans for development projects in Morocco These two amounts combined would provide about 6 of the G014 resources reshyquired for the project over the next five years On thic basis there would appear to be rcasonble propect tht the GO should be in a rorition to provide cver the S e year rriod of the project the addishytional resources renuired for itF ccmpletion
Tt I contemplatd that na additlonal US dollar financing of the Moulouya byon-l the $ iilon rorosed herein will be provided for tl cplei n ef h M _11-nuya rince the bringing under irrigation of th- 11O0Y ies include] in the propore] project will substantlally cornIete the works criginally conwtemplated hen h DLF loan was authorshyized in 106 The remainler zf the workr h(- be within the capabilit3 of the GOM to complete with It- o-n resourcec
MT M T M
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) Technical Anily ir
The Moulouya Rivr which is cre of tne largest in Morocco originatesin the idll Atans
Moulouya and which oztend scuthward
Kediterrancn l re
t rre
Pr
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flows rrpr
orre 25) mriles northeast thr Agorinn border
to the
In- agricitui 1 in li j i nt( iljr r Th- rst rind most
t 2 1ir i t i h- i n th rwrht born of thshy-- e 31nmiler frem the Mediterranean
Lea To tho wet cf the Tiffa and nn th- left bank( of the Moulouya isthe Zebra nlain 14wiuntain rv-arate the Zebra frcm th -ea and fron theBou Art-r i-ll]zain which - ctI nrrthwe(st of the Zebra The Bou Areg a coital phtain sclte 19 mils lorg and h miles wide separated fr-nthe n-a by a Ihow sa2t water lagoon Southwest of the Zebra is theGireb plain which hun land ruitable for irrigation in its routheasternportion The Gareb i at a higher elevation than the three other plainsard if ultimately irr-gatcd vould require pumping fro the lower level Zebra conv(yance system
Water from the Noulouya River is stored brhind the Mechra Klila Dam whichwas coniletd with fjiancri rc AID loan (3-A-2 (DLF Lcan l6)Water ir rclca ed downstr(a (1bcut c) miles) to the Mechra Homadi reFrshyvoir and d]iversion dcim in1h-r divert-d to th right oad left bankcunals About 75 kilometer (1 miles) of the Triffu (right bank) maingravity ciral hay ben copletd und consderable cr) has been carri-dout in the Tri on) distr Iution and drainage netw rks land levelngend other farm iwnrovwments About 37 kilometers (22 wiles) of the Zebra(left bank) main gravi-ty canal and the tunnel 6 miles (101()7 JIrenrTrcters) betxeen the Zebra area end the Bou Areg area have been comrneted
The GOM illrrfo m certqin -rk nr-Aded fcr develormnt of the gravityir~zgata yt-- for n 71-) acres over the next five yarr Thiscffort vi2 be eonern rait-r urcr the develo-ment cf areas thot providethe great-rt ecnnomic returrs nnd the developnent of a cadre of Iorocearperornel adequ tly tran-yi in the an2gerent of the project SeeAnnex C for further Irojcl details
e- enmL Ev1ation
Mt Infratrueturr The --trnal highway co-munication network i t arid rfi Isirm nf re- i n-ote siler in-1 shy
uzeather raved rc
____________________TAM
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Other communlca 1 i i t ih Lh arr-- inlude the nrninlineof the Oujda-Fe--C- t h~rh l e0tnnd to AlgeriaSpanish enclove rt the 1 fir idto cmmercial airport at Oujda andNador with regular national onI int rnational ervice5s
Th verirtr 1 u ~Ath r nr r t crocd by 60 kvJ i i i u rrd t 5( kr It na ortr kk f~ditcrl rower1(Qp x I -y yrar) -o n d hr rritIronr
at the Mechra-Yplusmnilj l inm fnd the Bou Areff contral poter Statin The townare connected to ranrh cther and th2 r-rt of Mcrocco by telerhone andtelegraph 1 ner
b Sol Soil rvey 7rd land ]a-ifctons have been completed i-nthe Mcloulva rer eter oanntrantbi- with French firmr u-ing Frenchmethods The Trifa -1n wr initialy rraped at a cealeof 150000with certain area ub entiy rer-aLd at 15000 110000 or 120000dependin I nn the cor1cjeity of YJ rattcrns The Zebra plain has beenmapped at a reale cf 20O00 nod th- Bou Areg plain at a scale Df 150OO On thp baf Yr nf ther urvy th cla sified the soilsGC hain terms of r-uitnbility for irrigation as follows
Land Ciaifcation (Aere)
CasrI amp IT Class III Clans IV Totas Triffa Plain 17000 29[00 22725 99625Zebra Plain CbO 1275 4050 211425Bou Areg Plain 75)00 l6qo 3 0 3067)Gareb Plain 13 05 10 70 0
Inclurez 1750 acres for lfigh Service Area
The findings thi indicate that ( i) arriratry 5of the area in thefour rlain- i suited to irrigation (Clare I anl II) (ii) more than3 ir suitabr bt with one Or mcre imrtat~ons Irro=ed by underrablefeatur-s such an to wrafhy oil characteristJcn trnine- r restrltedbull rio (CIar TIV) and (iij) ls than 2 of th- area in only margina)lysuited for irrinticn(Class TV) In ther7e lattrr ardrn only rmi-intrnsive orop rotations blUponsblhe
The oi nicn f the Cn-lting Envneer (1ydrctechrJ) th respect to) therd carrffjn n that hfle 3 Bureau for P ltr0tion -tandards werirt ernoy-d te rlasnificatinn ir aceurat- and n rrti with3and rlaced in r d rLrnble categories more
uere thnn right ha bern the caseUS tandardr folIced The clasifatinn ha 0a been reviewed andfound to be atifactory by the USPA tayr Hoever r areas of complcxroil Ttternr hch to date have only been ru-d to a oale of 150))rome reraTpin tray be necesary as a banis fcr rrerarnZ
- g~T PRAvVLAFJLE EOPv
final designs of irrigation and drztinne- rystems parcellization into farms and planning of land preparation measures In addition considering the high average salt ccntent of ater frcm he c ilouya hiver a rorm of systematic leachin- will be reqirer- to f ree-rt aculation of salts in the soilsparticularly in h ebra Crt in will nlso1e plain ureas require nitrogenphosphorus crd possibly other nutrient to obtain satisfactory yields
c Water On the basis of studies by the GCM which have been reviewed bythe Consultirr Fnr ncri and the U au of 1ccoi-ation it is thecorclusion of A tt (i) the q lity of water in the Lower Houlouya
is below averpge bvt crp rble to thtof certain rivers in the US whichisotnteLoh~uoybrve successfully been usc for irrif ton for periods cxeccdin 100 yearsOj5) there is clearly a sufficient a )unt of i ter to irrif-ate the 128010
bullcrer to be served in the [rlcentIty ar n3 Addi-tional s-tudioser (c requilrecj dcter-Inc if adeqiuate water is a- ilable for irrigationof 376QGO vc rc
The only signifcant urce of vp y fOr irrigation water in the perimeteris the oulouya Vi~cr io jc n1 is 1re ntly being irrigated from wells most Iround water i - - 1 Alouya contains dissoived salts which i xr Lrn - hvriny reak flowto iJOx PIn iuting [cricd of c n ccntraticn is 750 ppm On Thi- basis of USDA Salinity Lot) atory criteria fte v ater is class 03-SI (hl-h salinity-low a-alinity) Vile water is thus of mediocre qualityit is ccmrarable to that of river successfully used for irrigation in the US (eg the Lower Colorado Rier) and poses no serious problems to irrir-ation in the Moulouya perir( cfr provided the W4 adheres to recorrmended programs for meeting leaching reoairements
With ref-pect to the 128000 acr project the demand for water reasured at the Mechra Hoadi diversion dair is estizated at about 575 million cubic meters per year as follows
remand for Wter
Peak Flow Annual Total (August) (m 3 million)
Agrieulture (176000 acres) 337 m3s 806 Municipal amp Industrial Consumption 8m3 23
Total 4 uy62123000 acres to be irrigateA by Gravity 255 m3s 575
(The e dpeak requirzents of 345 s compares with a 35 m3 s design
capacity of the main canal at the diversion dam including 18 m3 s for the Right Bank and 17 m3 s fcc the Left Bank)
I
- 19 -
This estimate is based on probaole rainfall cropping patterns plant requirements evapo-transpiration and other expected losses of irrigashytion water The estimate is believed by the Consulting Engineer to be reasonable but subject to refinement on the basis of tests to be carried out on a continuing basis
The annual average availability of wuter from the Moulouya river is estirated at 1100 million mn or about double the estimated requirement for the gravity areas
Estimated Availability of Water
Twelve Year Annual Average for Moulouya River 3 m3 second 1100 million m3year
Maximum inflow Observed 8000 m3second(1963) 3h00 million m3 (1962-63)
Miniwum inflow Observed 1 msecond (1951) 532 million m3 (1956-57)
On this basis it appears that there should be ample water available for irrigation of the gravity area as the water availability obtained from twelve years observation exceeds the requirements in all but the 1956-57 season shown above Prior to the development of land with purped service areas (the Gare-b and the Triffa ig h Service) a review and analysis of the river hydrology should be unidertaken to assess the availability and regulashytion of the river flows
d Studies Entincering and Construction The overall irrigation scheme outlined by the 1uM defirs the ajor features and th( magnitude of the work to be accomplished to attain the ultimate goal
This scheme is being carried olut in phases over a long time period The present phase encorpasses the development planned within the priorities indicated by the Stanford Research Institute (SRI) study for the gravity irrigation system
The studies for land classifliration have been completed for the gravity irrigation system in the Triffa Bou Areg and Zebra plains by French firms and were considered reasonably accurate by the Consulting Engineer Land consolidation and parcellinrg has been completed by 0MET in the Bou Areg Central area the Zebra Collctive and Zebra Remainder sectors 7 thru 10 Land consolidation and pareeLlni ar( needed for Triffa sectors 27 and 28 Bou Areg Rematnder arid Z(bra Rerrirder sectors I and 2 The engineering designs for the Triffa main sector 27 and 28 and the Zebra Collective have been or are being completed by the G0M forces The engineering design for the Cefntral Bou Areg and Zebra Remainder sectors 7 tnru 10 has been or in being connpeted uy Hydrotechnic Engineering design will be required or the 1ou Are remainder sectors D-3 thru D-7 and Q4 thru G-6 and Zebra Rer ainler sectors 1 and 2 The engineering designfor the Dead Ilead Thnnel has been undertaken by SCET who have preshypared anid issued an Avant Projet for bid invitations for construction
14 M)j6Fj Cshy
-20-
This firm will also undcrtnk- uu-orviston of construction The engineer ing not yet performed can be aea ished by GOM forces andor private engineering firms
Construction of the extension to the rrain irrigation and drainage canals Jand preparation rector cinl ani drninaive ditches will be performed unllr cntact t) 1 cc rt~r~iet m)t hi in the ene of the
r-abilit tion of the L2tL Pz- Dd iarl Trnc t
e Cronning Patterns The existing erning pattern in the Moulcuya including botnirrigatcd and dry farm ingincludes grain forage citrus vegetables olives grapes and 6 small amount of leciduous fruits and nuts Of the roughly 2140Cy) acres of agricultural production in the Moulouya about 177000 acres are in field crops 24)) in vegetables 16Y)O in citrus 15000 in grrrcs 540Y) in forage crops 1700 in olives and 15)0 in other fruits and nuts
Taking into consideration rast and present trends in plantings as well as agronomic and price and marketing factrrs the following projection of cropping patterns has been developed for the Lower Moulouya
PROJECTED POPPTG PATTFRNS T1 HE LOWER MOULOUYA
(In per cent of total irrigated area)
Left Bank and Triffa High Serice
Triffa Sector - Sectcr rriffa Class Class Class
crop Main 27 28 East I amp II III IV
Citrus 40 60 10 10 10 Vegetables 15 10 15 1) 20 10
Crtton 15 20 10
Fcragpr 10 20 25 30 4o 30
heat 10 6 20 25 20 35 4o
Grip 25 24 35 15 Dy beans 5 10
Sunflower 10 olives 5 0
100 10) 100 100) 1i 1052i 100
a Incltdes double cropping
- - r- euro --- 7
~7~TF~Wr~e~ALUSE
-21 -
The projected cropping pattern for the Bou Areg plain includes cottonLJrirdg the frrt Five yearnejtinted 1r of the Class I)fand
the project jitwould be grown on nnII landn Tht renresert only 960etrravres) ectz ri)cr)e area The cotton acr~a e ry increasep 2ceafter live years if ritisfactory drainage conditionshyrre achieved in the Bou Arev
cotton grown i 1xonp tarx- Trdltionally Morocco export its-Jr- cron an irr IJ hort cble to rmeett Cotton the reuirrents
r the oroccan 2pinningr mills The croppni-attrn of the Triffa East (about 180n acres) Js projectedt Tnrlude 15- (about 27 acres) in cotton It is likely that becausef ihe limited extnt of Class I and II lands in the Triffa Eas cotton not increase beyond that percentage
1t i evident that the amount of irrigated cotton that is likely to bein ther-n Moulouya is minimal even assuming that local drainage condi-T nare i asuitable
f Technical Sundnv--s The AID Project Engineer hps reviewed ii) thedat and ajor construction performed to date onronct and finds the technical requirements this long-ranRe phasedsufficiently defineoto ccntinue the project on an orderly schedule The estimates of cost of prsirct facilities have been determin-d by SRI from average va)ues oftrit cots obtained frorr reviously ntiarded contracts and from etniled( -s-nand analysis prepared by the iHydrotechnic Enginering fir oft-o tyieal sectors located in the Bou Areg area The costs for the arc ent contract have bcen estimated by the USAID It is consideredthat the depree of engijeering planning undertaken and the deterrrinitonr to the US Goverrment are adequate to meet the applicable requireshySt- n Section 611 of thie Foreign Asistance Act
7717gt
1 --shy
-22-
E Financial Status of Borrower
1 The Moroccan Economy
Grrwth of MorocLcts GDP in real term averaged about 24 per yearin 1(4 and lr li Per capita DP In 1C 5 wan anproximotely t162 A (er Irr-ht in (6 resu]trd n a drcrcne of slightly nver in GDP which tlh vpulatior grc~vth avrring 3P4 per year rnrsJted in a decline of -r ornita GDP In 16 ii brut $154 A recnd droughtcccijrred In C67 but i not expeetid to have the severe effects of the 165 drought Crop forecasts for the first nine months of 1967 indicate a 4 increase in real GDP above the 1966 level This is also the economic grcrdth rate estimated by the IBRD for the pezxA 1965-70
Moroccos economy is heavily dependent upon the agricultural sector thich has averaged about 15 growth per annum However growth of the mal modern segment of Moroccos agricultural sector has inshy-reased at the rate of about 7 per annum
In 96 the International Banik for Reconstruction and Development (IBRD) preented a number of recommendationr denigrned to increase Moroccos economic growth rate On the bacis of these recomfndations the G004 proceeded with planning the necesrary program to increase investment levels fr- the i 63-65 level of 11 of GNP to 1r of GNP and stimulate the rate of economic growth from 2 to an average of over )4 annually for the five years 66-70 In addJtion the GC4 has taken measures to curb the population grovth rat while placing increased emphasis on raising production of both dryland (wheat) and Irrigated agriculture
2 Investment and Savinms
The level of total gross investment has remaind at aboit 11 of GNP for vera year althugh the percentnoe declined slightly in 165 Under the GO Three Yea5 Plan 1965-67 the gross investment t-3rget woz ret at DH 3 billion- Actual invev-tment expenditures for the three yearpeirod reached about DH 46 billion of which the Governshyment ezxenditure amounted to DH 1 billion a against DH 21 billion budgeted Thin may have beeo partly de to the GOMs deliberate ausshyterity pollcy under the hIF rtbJli7tion prci1rnr but more probably it van duxe to the shortage of trained cadres to -lan and execute projects
In the private cectcr conziderable inounts of ravings may be hoarded due to lack of project attractive t- inventors The lvl of private investment has been runnihg at about 51 of GNP thrrugh 195 The 0014 4 incentive to private instors hnr cut profit taxes from 4320 to V and announced a tpn year guarantc-e against tax increases
]L- $ = DH 506
777=-77- NQ
r y 7k1- T e - W lk In
j - 1) 7k- - _
- 23-
Loan are avaiiable to )rivlite irve-tcrn freo th 3JfIDiN s rctr special funda to prcmote touricm devc firvcnt
Under the 1r86-1972 plan abut to br irtntt level are to be accelerated considerably reaching A of GNP liv ]970 Mor(- Irlyir haviiy on foreign 1 to aciuw cc higher lve1
3 Central Government FinancP
The Moroccan money supply which had Incrrased ify 76 per cent in 2965 remained virtually unchanged in 966 The first half of 1967 witnessed a 5 Ter cent increase in the money supply Te major part of thi increase as concentrated in June and July uhen the supply reached V14 0j lion Currency In circulation expanded rapidly in June and July
nnl factrrn being reinforced by commodity hcnrding related to the 1ide~l Et crisis Demand deposits did not show their normal decline nthe first half of 1967 Deposits with commercial banks declined nlightly while deposits with the Treabury increased as public and semi public agencies contisued their transfers from the banking system to the Treasury The increase in money supply in the first half of (7 ran I raced to tho nzon1 sonal increase in net foreign assets not c y the custcirry rlelir In claims on the private sector Clsirl (n the erivate sector declined slighty until May 1967 but Increased hr-gb June and Jily due primarily to additional financing of textile stocks ClbiJ ante Government rose by 10 per cent in the first half of 967 the in central brnk claims on the GovernmentI being rmainly offset by larger deposits with the Treasury
Ordinary budgetary revenues which incrurted by 5 rcr ent in 1566 tre cxrcted t-) increase by 7 per cent in 1( to DII 21 billion DeampDite a derea3e in agricultural tax reccipt r- fror diret taxes rose by 10 ppr cent in 1966 and a 2 increas estinated for S67 due to tric or controls on income declarationr d an accelerashytion of tax cller ns Owing mainly to a relaxation of the import
program in late 1 5 and a concomitant increase in tariffs on certain ccnonter goods customs reneipts increased by 21 per cent in 1966 Although budgetary estimates call for s decline of 3 per cent in customs receipts in 1S67 it is likely that actual receipts will be considerably larger in view of the import liberalizatidn measures intro)duced subseshyquent to the estimates Receipts from indirect taxes state monopolies and other serces are expected to be 11 iv- cent Ipher in 1967 owing to increased profit on -ugar sabr-i and L r(m the newly created Office do Ccrmercalisaticn - d-tation (OCE)
Recurrent ordinary buiL e(enditures increased by 34 per cent in 1966 ar-i are expected to increase by an additional 7 per cent in 1567 reachin- D1122 billion Although wage and salary scales in the public
Banque Nationale pour le Developement Economique
TT~~- - I777
2 Cf
sector have1bec z h t - rrvirI urli 11i g 14-6 -nd PO becnue rX toi Ijt e f (]r o n 4
ill tile ic urrnnye andr)not i on dnd Publi ht rentrn -yr-otn lno IncreasedOthrr t ill- t il r ne by ) vr cert in J6(
i ninlyrt -br h Inc-l
( Ihe ( t r- rl t ip t t C itur f T)h 21h iilli n
is (( ItI t lt r c0 a- r n n o I- c t b It ihstnl id vv ih n t r-t have hn(er - en 1t2
(IM ii ture( T f fu traordJ nary budrzct exshypend ituren a r y -t c ~ i vi -iscz Portal Checking sy-stcsul)rrcing t (I ltIt Ct -- ind creirn shy
nnet The f r er tnc I hha ccrc ed from a htih of DH 5-7 millIJn in _ 5 millIn r C46 F cr ats foi ]7 place Cro n w I 1(DI)J79 ill ni DDn etlc fi nancing has alo u 1) 5 p (- I3A27 iIliun to an entirnted DH 1142 million
1 14V ) I nv 1 ri n nI(c1 franc n is 77-ected to be ol t y ncrewed bcrrowing fr-ir t he Cestra 9ank which hud been held at mcdert vols iln 165 nnd 1a66 Under the 1TFtaiby agreement of October 16 the qob) agreed to taBe a3] rocrrnary meurer to maintain as table curoonry rPnt inl th nr1d-elrto th b a ent of the ePrncriynnd a vnbl- hn1incc X nvroent P rt artt to t rt fien of tho Ccntin- Honk rstz (erct are nct t r itr June 30 Y-ke 7 lov l b th n Diif ) mill] (n tlcnber -c P thai I o illin usit I ])ecthr 31I62 (GC bc w t
C B1rtrp - vt DH 12 iri 1i nor ]S67 or DH 6S ij lionEan tisated (r fo than the aproved crd it expanwim
Thitrd ordivary nil extraordnnry buThTt deficit of DII 7-19 millI n fcrecat Fr 1 67 in exnected to be fnanced by not freign
tan reof DII )75 mi~l in nt recurity 12ue 1 T111I vlion a - nt ry tiat Po n Che )ir d-nC i 73 r5 Pn
riI is u h i a vti v mrr nrr-e jssIof fvr is id a erital The vnfsa revcred in 1d6 when lnrger r nyrentn eEecially on food itcmo an n -lewdoun in
igo ra a deficit of $1 millcn ProjectiOnz-vt rvultvd in ror 17 r~ieat inrrerned importsonly partially ccnrennate by addshytsa t frnreirn r ntil rrceiprs ard mprrvement in the nervices account will reult -n et of aprroximately $)20million As rhoim in the following tabl -r tion for l33 and 169 how overall deficits of
14 and m] ivi_y$i It
rqVV t1 4~
C)rgt
---
1 -)I+-IRF1
1ROCCO - rTANC OF PAYME 1qrt - 169]_ 5
6rfi0 1 1C(8lr67 i r(o
)xrurt 2t L( I L-5
Trade Bnlance 11 15 - 75 shy - 75
rviee- ret - 7 - 5) -35 -23 -2
J]-i of Good rnd Service- - 3 - 65 -II - ti - (5
Trn-Ifr Pr ynts (nt) P 21 33 37 33
on-cntnry Carital (not) 92 64 6 6 5
Err-rs nnd Ov rrion- (not) - 23 -2 1 3
eranl Bannic __ - _3 -_ 3 - 1i4
Atrh thert ircjected reficitn are of the nnme order of 1 nishytude a7 thcr incurred in the period i66 the Situatlcn i findarentallydifferent both in rerprct to the source of the deficits and in rer-ect to the meat0Y gtr m etin7tecr In the f rrer caive M5recco uffered
_frcrr a very h-vy cutfc of Drivtes cuitv fo-ivr with a shar) decline In forein nt exerditures in Morocco In the iatter case th projected deficits r- rcre a functicn or accelerated crcwth risingdebt ervieiiw tri tho abnrcn of forv eeble additiens foreign reshybull ourcs nere7ory 4( r2Vm rAf finmncting To nect the def-cits during the reriol 161 61h MWreco ob1id to drw down rorcin exchange reserves of over $]c milicn The snrti tpv of financing is no longerpozslble ince no or-res- ruch reserve- Even ifMorocco yr
mn nina r rve_ ore (]rrfii on to th r-ixirun etnt enribe nnd the [iI tnfldy i- un M-r-r e i32 till relA re nt rnt 15 millicnj1itionn ftr ign as- e n 1 6 beyond hat r recnently fcreeeshyable with ver nri- nry Officilr in In i6 reserves are cotImnted Pt 72million c hih crn V 3 million i caly required for currency coy r
Foreign InJebtrdne n of th GOM Mnroccos external rtnte ard rutlie enterprie dett amounted to
$r) millivn in lr6 Debt vervcirig rpynents for (66 trtaled about
$5) rillion g-eement approved in October 3(67
I- -- Ishy
37 millin or arprcxitrrntoy (j Iroccor totnl eXoort earning of h28 millicn GCnerally nxt rrO dbt FervicJng renuiremennt of leas
than r of totna -ort nnrlt In onrldered to I r tirfactoryrntio D-bt r rnJrcLct n Ir the reriod 1-(y 3on Trerent external debt including thnt wrtl(n irreently undibur-ed are hown n th fr lv tahlr
)] L v yr t n
Eternn Vtnte anc ] bntcrnrie Debt
M131 o)nr
Y aI Net Outrtnnling Debt Debt Service
(6 it 479r5 $367 J-67 452 3)6
Z616 44469 2 0 2C-
365I3 37 389
33 383 33 6 371
5-h 31 n 352 275 34121
]176 2661 32It 1977 21133 311 177 22)6 307 19 i0l74 256
1733 255
rgtternal debt rharre n rerent debt nnr rhon above do not increase ubtanti-lly over t rt 1)year- reaching a maximum of h44 millior
in J6 and decrpt- n cr - tently threoafter At the are time exportearninr r _rc extett nc-are Aring that Morocco does not inshycreswre it etrnn2 cbt t irate ubrtantially nb-vc ihat has been the core th adfiticrn dbt e roquirrentn reulting from the propo t Icon o 5 ijilion co r 7crncepr-ional term hould not have a i-nifiant affect n 1r o - ab lty to neet itv g rc-atedebt ericn rcnrib2t~e- the pros ectr of reprment of thin loan ore coniderci rearcnb)
U I -
F ot h-v C IuIJI rmt I shy
1 V amp~ rVml KI
PUC- -jrVi Jt t 1 11 nflrcj urlc 1- th )qn --P I uti u rhnrrl -1r- thr U- Tr- ry- R- -nymc nt
c2Il f n 6 1 bf r I- till 11 nfl r- n-r i n of O r--niC(Io~hi U 1 1 rr to
Tn vil ) f rvc hi tvlrll 1 (In- - n- u--n E r me rrinshycgtay F rntwir w ourc o -o- rvI ortf-V3 1 rncing of
Uf f -r rrrir- ur3r 4~ v -rin Iltrt nt ndd shyt -n t ) in- lint r b t l r -n rort- o-orco trorl-- V -P
r i 1rnd h L-torie Furcl-trin firr- thrjt US r r~ crvirrf- u~d be~
T L I1 c vt r- -ly ] -ubt fu 1 n vi pw -I -ror-co Ir of
ut1JpcO In thi rjert f it -- r- 21 npnred by d1-nr- cothcr t~han the US
2 ]P-t ofI Prr l1 on Prw- Fntrrr
Phij rrcjJ-t -11 n-t h~ -in nrwerq Prrt n rr- tc ntrshyr~A~r fi-mc 1bho und for --roern p o n
3_~~PrCT--rty
rr-vIi-n 1 h -d r the loan ragreement for Icntifitcation ef any r mIjrpt n ctri b- rt througn ut 1zatn (f xccr- prorerty
If rv c u~eAID n-mrcf u urr thi )cn - I~ut~ em avoi3ablo r rovvrirrnt -rrperty rather than nce iteni
4 Otli-r Fr- Wo--] n-Fnlc4rm
Dr mi tW- o] 14rocco- i~ajr ovr-ec -f exte rnaX
rrtan~- hrtvfb - I r ~ ant fl Fr n fole by Kv-it
Sgio F rneflit r b-en 1lmrntrd to tcfohnjip n5tnnen bi eoni~in I th u y f Fr--h tprhntcian tcacrr ind cther
~ti~r t~ ec-tnmIyrt-n Friinch Aid to Mcreco In 1065c~oc~ (P-art f-r txychnirril aItn -- j se of tl5 w1nfor bu~dget rurport f ir in rt t- $1 1ri1 icin in ennita -rojectM- n vx- rrcd
1Vw1tvnn tioI t-) Frenh rurtnnd +16 r11ion tie-I to -onyiint to orrrcr Frrmh ccilcn~For _-rrc-ratod land and rquirrmcnt
West GTrrnmnny liar agrcrcd to nrovIe ccme j27 mM22~cn 1n catital arirtanre and cromrndity lnoi7 t n OfIcon( q92 thi o totril$223 miJ lien ha actuary b-Pn cr-Itt--d under Inn ngrepment This
And a lk5 million commodity loan both) signed in 1965 All Wet Gerzaan
Ufla
-28shy
capital asnistance I vuectI to be tied to German exports Germanyhas in addition 1uvvded r tteysubbtantial technical assistance f
The IBRP hah rade four 1nns to Morocco since 1962 totaling$6) million Ofthin totnl a [175 million loan in 1965 wos fordevelopient of the gidi lit-r irrigation perimeter Other assistance by internntIcnal Iending arncie include an $11 million credit byIDA in 1C65 for rcendary diicction projects and an IFC ln and inshyvestrent of $1 1 ri jnic alo in
F tit i by [c - dncr tr dh elo snt ofMorccco rircuVt r oii +h b-]n jt-TKT r nbove n 2 )6 niliion Kuwait enn in i66 for develomyment of the Tensaout Prnm n irrnten nrooetand a $77 million Kuwait
0jl n )nnsn r(niti-nertcir
loan for extrnion of the Tadri~ Irrigation Perimeter
The following- trbe surrlnrlzes other free world arlztance (excluiin technical assistanc-) to Morocco for the years 1(62-66
($ Millions)
1 62 1cf_63 96) 19r65 19)66 Fneea 4) 5PO 64o 700 shyWet Germany 223 gu 1t 53 281 IRD 15 175 10) 175 IDA 110 IF C 1 5 7 7 7 0 I15
TOTAL 55 62 1U3 W
b Includer only lo-ng term loans and exporter credits - Includfs 25 million private capital
Eternal ansiztnnce to the Lowier Moulouya Irrigation Perimeter -nce 1060 hres been con[fined to US upport Consdiering AIDs previcus
involvement in and conmitnert to the Lower Moulouya an AID lean in P2t to be Lhi mol aprroriate source of financing for this project
LID
II
q
-29-
SECTION ITI- Y-TTYT TIMPLPTrION
A Periret-r Ad-instrrti-
Authority for irplerrentvtnn of the deveorpent prrgrn frr the LowerMoulcuya Perimeter and rs wel arth crnntinuinz mrnnrrmenertC tt r t- rrtnr V theltbi nad overationity iOfic 1cne 4
n r I e1i- i d Vit4 i Iv ~ Ct rreated i Otb (rJ rn-- of evcn inrmi-rriional offices hich reelaced the Office de Mire en Valeur Aamprlcole (OMVA) Under the OMXA and itspredecessor agencies authority for ad-inLtration cf irrigtion proJect war centralized in Rabat
Under the new regional office organization responsibility for adminshyistering ORMVAM is vested in on Adminirtrative Board of 10 members headed by the Minister of Agriculture and Agrarian Reform as chairman All ether board members (other than the Chairman and a representative of theInterministerial Economic Ccrmittee) represent agencies or activities inthe region of the r-eriret-r whic comprises parts of two provinces Localretresentatives on the Board inc]-de the governors of the two provincesOujda and Nador the presidents -f the two provincial asembtes and of the two provincial chambers of agriculture as well as the perimeter Director
The responsibilities of thie Administrative Board include review of theecys program establishment of its organizational structure developshynt -)f its annual budget and establishment of rates and conditions of
Siyfent for water and other services provided in the perimeter
The Director of OP4VAI-I is dbarged with the responsibility for executionPthe vclicies established by the Administrative Board end administration of oil ORMVAM functions This responsibility includes selection of staffn pserating perrcnnel acting s officia ORNIVAM representative in all ntztinns with -tate and othbr public or private bodies and the
f of funds within limit Indivated by the Ministers f Financetent rn fricultural and Agrarian Reorm
Perimeter Oranizatlon
ORVAM oreanizatlonal structure consists of a directnrate five maj-r rvlces or d-vsicns and one separate bureau Two services qei Administratif et Comptabl- and Service du Yatrial are conshycor - th adminisration and lcgistical support of ORMVAM operationshi1e the remainirg three services rind the separate bureau are Involved in t-hni al matters associated with agrcultural developrent Each ervice has one or more subordinate bureaus Fei-ce Chiefs and thehead 0 rch bure-u report directly to the ORMVAM4 Director
-~F7E MEw-
-30shy
2 Perimeter 01ttffnr
OPIVAM orgttnlrntlon treture calls for 557 positions of whichI L or 7 Mlled n were nher 29 1567 37 of the 71 Postshytion vacancies reported 1ern the high and middle levels Foreign(chiefly Euronean) technclan occupy I)of the 16 high level positionsthat ere filled at thfit tire
Whil OPM ut in th- lcng run lor to Mercecos oducational yster to prvidr tn crrf-nn2 to ratisfy current rdurojectd rcshyquirement th currnt high and mlddle level vacancies rrouire uersonnelwith oxt nive nrior rxericnce To fll this preent need it will be necessary for CRIVAM to continue its program of recruiting foreigntechnicians until ruch tire ns graduates of Moroccan educational programsacquire the necesnry exrerience The managerent assistance componentof thin pro~ject ]e-rribed In the Project analysis will to some extentalleviate OFIWAMs high level personnel requirements
3 Inw1 ernetation Sehedu]
Months Implementation Action
1 0 Sign Loan Agrcement
2 2 C-tiify conditions precedent and Y4tiate procedures for selection of US firm for management contract
2 Negotiation of extension of advisory Engineering Services
h 4 Contract (Hydrotechnic) Negotiation of Managerment Contract
5 60Cmpletion of Project
C Waivers
Sect ion 7 rf AID Regulation 7 provides in substance that theUnited State ill not finance direct costs of construction work performedby third cc-ur y nationals unless the total co-tn of the project withvhich thr ennrtrumticn w(r is asEcciated donot exceed $2On)O orafter excluding national of the country in vhich the site of constructionis located and Dersons vho nave resided therein uninterruptedly for morethan three years imrnedJately prior to any determination under Regulation 7at leant 0 of all uernons who work under the contract at the site of conbulltruction are United States citizens or the employment of third countrynationals is necessary to avoid excerrive corts to the United States
3
31
Section 2175 authr-ri th Regional Anitant Administratorto waive the nrovinions of Sectionthat it is 2073 if he dcterriner in any coneimportant te the nationrn intercrt of the United Stutes tofinance the direct eots of construction work performed by third country
nationals
A prviou1y r ic i c t tht for thr ct Tartthe -r c ct b- 1jeuj out r -cnorbr f cnrtructioncontracts with Morcccrr contrctnr an in the i-t Uowfevvr itentirely psnible that there may b- roe contractn with cntructlonfirms partly owned by third country nntionaln and that ruch firjs anwell as the surely Moroccan-owrned firms may enloy third country niationalsIn such canes a difficult rrobic-i iould arise in meeting the terms ofRegulation 7 since an a practical matter Aericans are not reaonablyavailable for ermployn ont by such contrnetorn and our previcus experiencewith the Naunsseur Ccnv(r-ion project thatin Morocco has indicatedAmerican contractors would not be interested in bidding cn small conshytracts in that country
It in therefore recommended that the Annitant Adinitratordetermine rursuant to Section 2q75 of Regulation 7 to waive theapplication of Regulation 7 to thic iroject since the project 411 conshytribute to the attainrent of US foreign policy objectiver and the cbJe-tives of the Foreign Arsistnnce Program
LITI L USE
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4 A J A 45 4 k
t A S T
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7 -74
tAM= D
SECTOR 27
10000
t Co0Na includez25 cgtri oncFcttlrvI ncy I8s ~ ~ C t C- Includes 50 constriJcltiotrgrc
2000 60
IU
0
z
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600L _
400
200
0 5 I0 15 20
INTEREST RATE
I ~ 7 J7777
ANIAampX C
PROJECT DESCRn1 rOll
The project com)onents to te undertaken on the MIoulouya Irrigation Project over the next five years contists of the following
C(n1rtion of the rrLin casuals and bianch canbls to provide the suource of waler to the sctors be developed in theto TriffBou Areg and Zebra areas This construction will include the necessarystructures such as reulators highway bridges aqueducts water intake
and discharge structures etc
2 Iand Txeloommerit which includes engineering land consolishyt and iuvtllng lard preparation (subsoiling ripping destoning etc) and installation of water distribution canals (secondary tertiary and quurtunary) and drainage collector ditches for the Triffa main covering 24000 acres in sctors 8 9 10 16 20 21 23 24 25A 2513 27 and 28 Lou Areg Central covering 16250 acres in sectors Dltirough D2B and G1 thru-4h G313 i0u Areg Remainder covering 15000 acres in s-ctors D3 through D7 and GA through (6 Zebra Collective covering 45)0 acres in sectors 3 4 5 rind 6 and Zebra Rer-iinder covering 14250 acres in sectors 1 2 and 7 through 10 and th remainder of sectors 34 and 5 The total land to be developed is about 74000 acres
3 Canalization of the Oued Zeluan and nued Sidi-Amar in the Bou Areg Plain consisting of strairltening englarging and regularizing of these streams to carry the flood waters to the sea Drainage interceptor canals are to be constructed parallel to the sea in the Bou Areg Plain In the Triffa Plain the Oued Riada main drain will be deepened and enlarged and secondary drains will be excavated to provide for drainageof the Madagh area This will include the construction of bridges and culverts and other related work
4 Major Commorn Works will consist of
a Clearing of the Mo-1ouya riverbed downstream of the Mechra KLila barn caused roy flood dariwe and the installation of a set of stop logs for maintenance of pillway gate-
b Design supervision and construction of repairs to the ]elt Lank dead head tunel
c Conctruction and establishment of sib-division Offices and installations for farmer support such as CMVand farm stables
1 C
-2shy
5 Manavmtnt It ha been proposed that a US management firm be ewployed by th- C4 to manage and operate the entire Bou Areg area Such manageent -iuld encomparn all activities from the initial concept to final irIrp igricultural production Such activities would Include resp r-ibilsect -or supervnsion of engtneering and constriction of primary
S- Jry r complete developfnent of land training n in g tinul irription practicen preparation of market
t - r1t- (ot--rnu trplusmnining of a Moroccan cadre to take over h v--it Bou Areg dreara P the
At this writing the n-pt of turning over to a private UZSfirm execushyresponsibl]ity I h management of the establilrment and initial
op-ration of irr1gati the Bou Arog area has been only broadly de iiitd by the GCJO It Intended that proposals will be invited from a r -onable ntnber of f|ed US firms that a selection will be made an-n 7 them and a more do iled and cornprehenrive definition of the rer6 -Ps to be performed be eztabliched at that time It haa been
stimated that the t- of ruch a contract will be about $2 mir- n In any event the -ts of this contract other engineering arvl s to be provided undt n extension of the Ilydrotechnic contract and ether US corts will not ed the proposed $5 mllaion developzont Jean fr the project
The cle 3ifications duties ant 1ncnslbilities of the management personnel ill ha-- to be clearly defined i agreed to by the GCM Perimeter Directo- and other GOM Agencies luding arrangements for the necessary gistic support
Svxlale Docu-
1
4
LD ED 0ICIAL
-IAIDshy
A1trX D
C6JCK LIST OF STATUTORY CRITERIA
(Development Loan Fund)
1 FAA 0102 Extent to which U3 cormodities and services are furnished consistent with improving the US balance of payments See Sections II-C II-F
2 AA sect2O]ihi lanner in which loan wil promote countrys economic develo shy rit emphasizing help for long-range plans and programs designed to developeconomic tesourcos and increase productive capacities See Section I-D
i FAA sectT] h)(IL Information and conclusion on availability of financincfrom other free-world sources including private sources within the United States See Section II-F
FAA sect20l( )2 Information and conclusion on activitys economic and technical soundness including the capacity of the recipient country to reshypay the loan at a reasonable rate of interest See Sections II-B II-D and II-E
5 FAA 1201(h)( Information and conclusion on existence of reasonable promise activity will contribute to developrmnt of economic resources or increase of productive capacities See Sectiona II-B and II-D
_92_(b 4Information and conclusion on activitys relationship toothor development activities and its contribution to realizable longshyrange objectives See Sections I-D and I-E
The following abbreviations are und FAA - Foroirn Assistance Act of 1961 as amerded by the Foreign Asaistaice
Act of 1967 App - Foreign Assistance and Polated Agencies Appropriations Act 1968
AFEVCDF 1066
L1
-2shy
7 FAA f12O1(b)(5)_ Countrys self-help masures including institution of Foreign Assistance Act investment pliaranty programs Investment Guaranty
bull Agreement signed with Morocco 331o6l See Sections I-D and II-EI
_A ))(6) Information and conclusion on possible effects on US econowy with soecial refererne to areas of substantial -labor surplusSee Section II-F
9 FAA q201 (h)() Information and conclusion on the dagree to which thA country iv wiki- progress toward respect for the rule of law freedom of expression and of the press and recognition~yf the importance of individual freedom initiative and private enterprise
10 FAA -1201(b)(8) Information and conclusion on the degree to which the country is taking steps to improve its c]Laato for private investment See Sccton II-E
31 FAA R LbJi Inforrat-on and conclusion on whether or not the activityto b financed will contribute to the achievement of self-sustaining growthSee Sections I-D and II-B
12 FAA fi2Ol(bj Inforruation and conclusion on reasonalbe prospects of reshypayment See Section II-E
13 FAA fl20JL() Info-ation on applicability of the twenty country ceil4ng2
14 FAA fl201 L Information and coclusion on legality (under laws of the country end the US) and reasonableness of lending and ralendinr terms Loan will be on minimum termspermitted under FAA These are deemed reasonable see Sectioam Evidence will be renuired from the GGM as to the legality of the loan agreemnt
1 E 2 Information and conclusion on availability of an applicationFAA together with sufficient information and assurances to indicate reasonably that funds will be used in an economcally and technically sound manner See Sections I-A II-B and II-D Application received Janury 15 1968
16 FAA fl201(fL If a project inforntion and conclusion whether it will promote the economic developapent of the requesting country taking into account the countrys human and material resource requiremnts and the reshylationship between the ultimate objes6ives of the project and the countrys overall economic development See Sections I-D and II-B
17 FAAJ 20ij(J If a project information and conclusion whether it cifishycally provides for appropriate participation by private enterprise 8ce Sections YI-C and 114
I- FAA i22(a) Total amount of money under loan which is going directly to private enterprise is going to intermediate credit institutions or other borrowers for use by private enterprise is being used to finance imports
rfro private sources or is otherwise beirg used to finance procurementsfrcm private souwces See Sections II-C and II-2
9 FAA 207 Infosation on the emphasis placed en
(a) encouraging development of economic political and social institushytins No apparent relationship
(b) nelC-help in mectingthe countrys food nredo Project Vill conshytribute to production of food for lccal consumptioa
(c) in-proving availability in the country of evucated trained manpower Project will contribute to the deicloginext of trained manpower as one of the functions of the management contract (Soe Annex C para 5)
(d) prcgrams aimed at -malnutrition disease eradi atDn slum clearanceWater purification sewage disposal health education naternal and child care(includin fimrily pJnrning)) -nd cthcr public health ausistarice See
(c) other develoment activities including industrial development free
labor unions cooperatives tnd voluntary agencie transn)rtatin and ccshymwquication nrStczn capubiliTies for economic planning and public adlinisshytration arban develo-mment and modernization of laws to feilltate econcnicdevelopjen- GO- intends encourage develo vient of cooperat yes particularlyin the Left Pank areas Project will also develop capabiLi ics for cconoaicplanning and public a6~inistration (Annex C para 5) Other not applicable
20 Information on the extent to which the r-untry is
(a) cttcmting to increase food production and food sto a-e anddistribution felitics This project is one evidence of Moroccos efforts in this direction See also Section I-D and I-E
b) creating- a favorable climate for foreign and dmestic iri-ate enterprise and invcstrrment The GCM has recently reduced profits twes anrannounced a ten year guarantee against tax increases See Section II-E-2
(c) increasing the role of the neonle in the developnental procecsNo apparent relationship to this project
(d) allocating expenditures to development rather than to unn-cessarymilitary purpoes or intervention in other free countries affair See Sections I-D and Ii-
(e) willing --nribute funds to the project or program Th iOMhas already dcvo o-sidcrable resources to the project It has badieted13 million for th i oulouya for i7 See Section I-C
(If) making economic zocial and political refo ns such as taxc coliecshytion iYprovcmenLs and chan es in land tenure a Royal Comm ision has been appointed to make recomendation on land tenure probleras in the Lower I oulouya
(g) responding to the economic political and social concerns of its people and showing a determination to take volf-help wcasuren See Sections I-D and II-E
IT
-ovi~cd l v r 13 1968
- 4 - LDffIED OFFICIAL USE
21 FAA Inforn ation about multilateral assistance being Iurnished to t e country and whether the loan will encourage recgional development prog-rams The I1D has eztablihcd a Consultative Group for Morocco which rvicws the GOM development program anui prgress See Section II-F-4 for infoaation on othtr donor assistance to Morocco
22 A Extent to which the loan will contribute to the objective of ass ring naximu par icipation in the task of econonic dovelop--ent on the pL-t 0 _he people of the developing countries through the encouragement of cocr-tic private and local govenmental inLitutious o apparent
relationship
23 F _-_Dta_ Infor-ation and corissions whether loan will oncourageeffor s of t1e country to (a) increase tie flow of international trade (b) fostcr private initiative and comptition (c) encourage development and usceo co opratives credit unions and savingss and loan associations (d) disourgo monopolistic practices (c) improvo technical efficiency of industry ariculture and commerce (f) strenSthn free labor unions This project is cxpected to increase technical efficiency oi-agriculture
2_ C-1L lnforzrition and conclusion on how the loan will encourage US privte trade and investment abroad and how it uill encourage private US participation in foreign assistance prograas (incluiing use of private trade channels and the services of US private enterprise) See Section II-
25 VA-+_ Conclusion and supporting information on compliance with tho Co resional policy that engineering and professional servicos of US fir-ms and their affiliates are to bo used in connection with capital project3 to the nixinua extent consistent with the national interest US engineerirn and innsgcment services will be financed tnder this loan
2$ Inforamtion and ccnclusions who+her loan will pormit American rx-l] business to participate equitably in the furnishing of goods and
z orvices by To be satisfied in Loan Agreementfinanced it
27 - t(a App I18 Complianco with restriction of co -zodity procureshy o UsMS except as otherwise determined by the Picsicent and subject to ttu--- rcortir require r-nts Procurement will - liumited to the US for
reiabnrs nts and to ioocco and other free world countries 1-or US-cwne(d rhu disburseacnts
23 -i Comiance with bulk cozodity procurement restriction topriecc no l-ho han the nkarkot price prevailing in tho US at tia of
bull puchas Not applicable
29 FA Cozpliance with requirement that matrin insurance be purchased on commceities if the participating country discri-inates and that insurance be placed in the US To be satisfied in Loan Agreement
30 IA 6(a) Information at to the utilization of excers personal property in lieu of procurement of new items Will be required ai appropriate under terns of Lean Agreement
f
1 77--7 -77-77-777
31 FAA 61](a)(_) information and conclusion on availability of enginoering i financial and other plans nccx sary to carry out tho assittance and of a
reasonably firm cstimate of the cost of the assistanco to the United States
See Section II-D
32-ecessaryFAA t611(a)_(2) legislative action r6quired within recipient country and ibasis Cor reasonable anticipation such action will be completed in time to pormit orderly accompli-hirtnt of purposes of loan See Section I-A
33 n _AA161nJ0] If water or water-relatod land resource construcshy
tion project or program information and conclusion on a benefit-cost comshy
putation See Section II-B
3 4 VAA 611(c) Compliance with requirement that contracts for construction be let on comp-ctitive basis to mamum extent practicable To be satisfied
in Loan Agreement
If a loan for a project of $1 million or more certificatin35 FAA _61l(r) by the principal AID officer in the country as to the capability of the
country (both financirl and human resources) to effectively maintain and
utilize the project taking into account other US-financed projects (Such
certification is to be pproved by the Administrator aL the time the loan
is authorized) In process of being obtained
36 FAsgJ2 _6_h Appropriate steps that have b-en taken to assure that to the miaximum extent possible the country is contributing local currencies to net th-2 cost of contractural and other services and foreign currencies o- icd by tho US are utilized to meet the cost of contractual and other services The GU-M is contributing over $30 million to compleXton of this project Excess US-use dirhams will be used for eligible project costs other than US goods and services
37 FAA p619 Compliance with requirement that assistance to newly independent countries be furnished through multilateral organizations or plans to maxishymum extent appropriate Not deemed appropriate in view of previous AID financing and ccoiitment to the project See Sections I-A and I-D
38 FAA sect620(a) AcnO7a n3]7(b) Compliance with prohibitions
against assistance to Cuba ard any countr (a) which furnishes assistance to Cuba or failed to take appropriate steps by February 14 1964 to prevent ships or aircraft unier its registry from carrying equipment materials or supplies from or to Cuba or (b) which sells furnishes or permits any ships under its registry fr-om carrying items of primary atrategic signifishycance or itcms of economic assistance Morocco is not-known to be in Violation of these sections
39 FAA q620GL_ If assistance to the government of a country existence of determination it is not controlled by the international Communist movement The Secretary of State so determined on October 11 191
40 FAA 620(c) If assistance to the government of a country existonce of Indebtedness to a US citizen for goods or services furnished or ordered whore ouch citizen has exhaustod available legal romodiesor where the debt
i - ow - -- _---- --shy
- --
-6shy
is not denied or ontested by such government or the indebtedness arises under an unconditional guararty of payrrent given by such govornmunt No such indebtedness is known to exist
41 FA _(a2LdL If assisitance for any productive enterprise which will corashypote with US enterprise existence of agreement by the recipient country to prevent export to the US of more than 20 of the enterprises annual production during the life of the loan Not applicable
42 FA4 - 16Q_0_ A If assistance to the government of a country extent to which it (including government agenies or ruhdivisions) has after January 1 1962 taken steps o repudiate or nullify cuatracts or taken any action which has the effect of nationalizing expropriating or otherwise seizingownership or control ofprcpertv of US citizens or entities beneficially owned by them without taking appropriate stops to discha i ge its obligations No such steps cr actions are-known to have been taken by the GOM
43 FAA~L AjPj_10_9 Compliance with assistance toQ0 prohibitions against any Comunst codntry ozocco is not considered to be a cocinrunist country
44 FAA - 620(gJ Corliance with prohibition against use of assistonce to comp satc owners for expropriated or nationalized property To be satisfied in Loan Agreement
45 F AA 8620(h Compliance with regulations and procedures adopted to inshysure against ue of assistance in a manner hich contrary to the best inshyterests of the US promotes or assists the foreign aid projects or activities of the Communist-bloc countries To be satisfied in Loan Agreement
46 FAA 06-O(j)_ Exitence of determiration that the country is engaging in or preparing for aggressive military efforts No such determination has been made
L_62_O Information47 FAA on representation of the country at any intershynational confererce when that representation includes the planning of activishyties involving insurrection or subversion against the US or countries recoiving US assistance No such representition is known to have A occarrect
8 FAA 62JJ Existence of a determination that the country has permitted or failed to prevent destruction of US property by mob action or has failed to take steps to prevent a recurrence and-to pay compensation NO such destruction is known to have tak-n place
49 PAA l620(k) If construction of productive enterprise where eggregate value of assistanc to be furnished by US will exceed $1OO million identification of Gtntutoryauthority Not npplicable
i-xQ2MZZ=
1 shy
U 6 50 _Af( QCinsidoration which has been given to denlying assistance X to thu government of a country which after December 31 1966 has failed to
- institto the investnint guaranty program for the spcific risks of inconshy
vertibility and expropriation or confiscation Satisfied See No 7 above
S51S J lj Compliance with-prohibitions-againstn as~istance to countries which traffic or permittraffickingwith North Vietnam Morocco is not known to be in violation
52 E_-L620(_L If country has seized or imposed any penalty or sanction against vn US fishing vessel on account of its fishing activities in
intcrnationul waters information on the consideiation which has been given to excludirg the country from assistance No such situation is known to exist
53 FAA FA r) UAR restriction Not applicable620(p 9117
54 FAA R620tl) Existence of default undhr any Foreign Assistance Act loan to the country No such default exists
55 F ) C-nsider tion of whether co ntry is devoting unnecessary percentage of buKet for military purposes or use of foreign exchange for milita-y equipment
56 FAA 62o(t) Proibition on aid if country has severed diplomatic relations with US unless agreements have been negotiated after resumpshytion Diplomatic r(lations have not been severed
57 FAA 9620(u) Statur of the country on delinquent UN obligations Morocco is not known to be dlinquent on its UN~obligation
58 FAA R636(i) Prohibition on financing non-US manufactured motor vehicles Will be satisfied in Loan Agreement and Implementation Letter
59 App 102 Compliance with requirement that payments in excess of $25000 for architectural and en Jneering services on any one project be reported to Congress Such reports will be made
60 App R1O4 Compliance with bar against funds to pay pensions etc for military personnel Such payments will not be eligible for financing under th Loan Agreement
61 App 9106 If country attr ipts to create distinctions because of their race or religion among Americans in granting personal or commercial access or other rights otherwise avaVIfable to US citizens generally application which will be made in negotit ttons of contrary principles as expressed by Congress Morocco is not ku IDhave made any such attempts
iInD OFFIIt t USE
0k
OFFICIAL USE 62 AIwp Rii Compliance with existing requfremets for security clearance
of personnel Will be satisfied in Loan Agreement and Implementation Letter
63 App R1l2 Compliance with requirement for approval of cortractors and contract terms for capital projects Will be satisfied in Loan Agreement
clJ164 Aup Cmpliance with bar nRainst use of funds to Tay assessments etc of US meiber Such payments will not be eligible for financing under the Loan Agreemunt
6 Anp P115 Ccmpliance with regulations on employment of US and local personnel for funds obligated after April 30 1961 (Regulation 7) See Section III-C
66 Aim Vietnam iron and steel restrictions Not applicable
67 p l9 If a country other than Greece Turkey Iran Israel Republicof China Phillipines or Korea reduction in assistance by amounts spent for the purchase of sophisticated military equipment
68 Anp fi4O1 Compliance with bar against use of funds for publicity or proshypagjanda purposes within US not heretofore authorized by Congress Such use of funds will not be eligible for financing under the Loan Agreement
Morocco is a traditional Islamic monarchy with a constitution The conshystitution was implemented followaing a popular referendum in 1962 National regional and professional elective bodies including a parliament were established by universal suffrage under the constitution in 1963 The parliament was suspended in 1961 in a State of Exception because of its inability to agree on measures with adequate urgency to meet the prevailingecononde imperatives In July 1967 the King appointed a Prime Minister to direct a Cabinet of appointed technicians
The constitutional framework nevertheless remains intact in Morocco and nationwide popular elections for some of the professional chambers were held in August and September 1966 The press is relatively free in Morocco and the right of diLsent prevails provided that such dissent does not violate the prohibition against political attacks on the instishytution of the monarchy or the person of the monarch
LI Under the revised US AID Policy for Africa agreed to in November 1966 Morocco is designated a development emphasis country entitled to receive continuing support on a country basis as part of a multilaterally coorshydinated countrj program Morocco was subsequently included in Presidential Determination 67-14 (January 5 1967) I
LIM=TE OFFICIAL USE~i
- l go
bull ~ -
f
DEPQbi) STATE AGENCY FOR INERNATIONAL DEVELOPMENT
WASHINGTON DC 052
CAPITAL ASSISTANCE LOA11 AUTHORIZATION
Provided from Develoroent Loan Funds Morocco Second Lower Moulouya Irrigation Loan
Pursuant to the authority vested in the Assistant Administrator for Africa of the Agency for International Development
AI)by the Foreign Assistance Act of 1961 as amended theIAct) and the delegations of authority issued thereunder I
have received and t-en into consideration a certification from the Director of USAIDMorocco as to the financial and human resources capability of Morocco to effectively utilize the Lower Moulouya Irrigation Project taking into account among other things the
maintenance and utilization of projects in Morocco previously financed or assisted by the United States and I hereby authorize the establishshyment of a loan pursuant to Part I Chapter 2 Title I the Development Loan Fund to the Government of the Kingdom of Morocco (Borrower) of not to exceed five million dollars ($5000000) to assist in financing the fore] gn exchange and local currency costs of goods and services for the third phase of the Lower Moulouya Irrigation Project subject to the foLlowing terms and conditions
1 Interest Rate and Terms of Repayment Borrower shall repay the loan to AID in forty (40) years including a grace period not to exceed ten (10) years Borrower shall pay interest on the unrepaid principal and any interest accrued thereon at the rate of (a) two percent (2) per annum during the grace period and (b) two and
one-half percent (2-12) per annum thereafter
2 Currency of Pepayment Repayment of the loan and paymenu of interest shall be made in United States dollars
- t- n t - - - shy
3 Other Terms and Conditions amp(a)Goods and Services financed under the loan
shall have their source and origin in
(i) the United States if disbursements therefor are made in United States dollars or
(ii) any country in the free world including Morocco if disbursements therefor are made in Moroccan currency
(b) AID Regulation 7 shall not apply to construction -work financed under the loan because as detailed in Section IIIC of Capital Assistance Paper No P 667 it is important to the national interest of the United States that the direct costs of construction work performed by third-country nationals be financed out of funds made available by the Act
(a) Such other terms and conditions as AID may deem advisable
Assistant Administrator for Africa
Date
~~~~~~~~~~~~~~~~~~ - q v
7
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ioriginally begun under the Spnnihh rgime Work was resumed by the GOM under a contract concluded in late 1959 Major difficlilties with the tunnel structure have been known for some time On comTletion of a series of studies of the problems involved the GOM nvited bids inNovember (767 on a pronrosed contract for the correction of structural-defects i-he tunv It Jn bnticiiated that this contract will be finarced _y the GO fr wn recurees
The Bou Arcg area which lie to the Northwest of the Zebra andalong the Mediterranean Coast will ]ikewise be affected by the delay in passage of water through the Left Bank Dead Head Tunnel The BouArr- - - ontplnn s~re 31000 acres of irrlgablf lrnd While the elttent n lr nni - ytr running from the northwest portion of t -h 11 shy h1s argely been completedneither i of the other irrishygation works required h~iv- - ver n --rt of the d-zign studies for thin area ha- u t L
The bulk of the DLF I-an of $23 million of hiehity over $20 million had been disburd as of the end (f wvmrber- 107 was (or is being) utilized for cn~tructinn of the cehrnKastoragedam and of the Bou Areg Tunnel and the Bcu Areg High Line Canal Sraller amounts were utilized for advisory engineering services providedby a US firm design services and construction of some of the main canal drainage rnd distr1rmtion woks The balance of the loan is expected to be disbursed before the end of this year for reimrburseshyent of the costs of contrEcts already completed or presently under way
The GOM has in addition exp-nded an estimated $13 million since the beginning of 1960 about $3 million of which represents the cost of hydroelectric installatiuns at the Mochra-Klila Dam and on the Bou AregHigh Line Canv1 About million vas expondet on reconstruction and the bn2nc Tprerents entimated costs of operation and maintenace of completedworks The DLF Joan of 1960 war intended to assist in financing a -r second phase of project works in the Mculouya Perimeter As indicated nbive the works ndrtakn in his phase (apErt from the repair of thn Left Bank Depd Head TunnE a jrrng to a close
In view of the Izeable rpuirces devct0-I tc thp Mculouya over a rither long reriod of ytrs--by the Spaninh French ar-I MroccanGovernments prior to l6O and th qC-M and AID frox 31960 to l2--to achieve the installation of the bulk of the major installations required for water ntorare and rranzmi-ion it Ia been conzidered that at this next stage of drvelcp eat of the erimeter the principalfocus of attention should be on t1ose works which will offer the
br De I(
Docuamp ampi- _ Z
i - 7 shy
-7shygreatest and most rapid returns on ndd1tio resources required fortheir comyletion In the Interest of rbtainir an asrrrent ofr It fr the crnletion of the reirainder of the Troject AIDri ained rvienof the Stanford Revar(h Institute to rrenarea tuy i th orrn nrd returns for the vnriou rcrtions of theroject for h h i rr h beern pJanncd but not cnrrpleted
the he hat the completion of
the reynainintz ork-requivd(which P-nti fird Ip following Sectorsray up on tn iI thejwwould appear to offer the optimum coabination of hirhi nremental investmentard early comption
No of Apror To P- riuirred
Triffa Main 317 Triffa Sector 27 Triffa Sector 28 Zebra Collective 1500 Zebra Remainder 14250 Bou Are Central 16250 Bou Areg Remainder
TCtAI)
- Includes cre 8000 aeri o being equipped
If the above is to be accomplished over the next five years asenvisioned by the GOM the schedule would imply the bringing under irrishygation of around 1500) acres per year This is around two or three-times the GO hi torical rate of dvelopment of irrigation in theMoulouya over ast seven years While the GOM has recently reorshyganized its e cnt structure to permit greater local autonomy inf1 e ranagemo- rrigation perimeters and has recently accorded avery high -- -r to acceleration of developnent of the V 1 ouya inparticu t -vident that given the manpower constrai ts involvedin the Mr n operation the- above target way well be it- ible of achievenrnt
The GOM hM itself recognized the elements of thl -- I i lindhas in dizcuss ins with USATDRabat requested considersti- -f hfinancing by AID of the dollar costs of a management crht with oUS -irri to take or c(vnpletely the management unctions fror thi
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b Th - urJrtaen rn the jleft Bank under the proshyposed thir i-e of the rojc-t are i follows
- Left Pnnk Dvd H-d Tunn]
5 r-y rd t final tng of ire aration for ther-rT ir cvf ni r r imy - rz--rt ha recently beenr-t) l i w t e rr - tht - I afid if exToected to ubrit hit writt(-n r-rt jr DC Aii preliminary impressions baled on a 9Ite nErerti(n indi-ate thit a -rt1fartorj repair con bemade in c)nIdprnbly le- t n-ne for lfan -than previously conshytemplnted
The early ccmrt-tnn nf thi work in lmnortanit nine IL c t Ft th avai-bility of pr~ct wrte for the entire Left Brnk
Z~bra Collectlv-
Thin 1 on ara ofrXPr-ctively ond tribal land that will be divjded and allotted tr J-ted tribal -b-hrc who will become soleowncr3 A Pirpe rart ti Tniran -aratirn and developent hasalready bern co-plet] 2pani levelirg r-mains to be done as well ae conztruct c~n of b-tcn dnd drina- works
7eDo i F--vino-
The northrrn ecti n tht rmrainder of th Zebra will requirethe extnzi-n cf thct Train 4]h will be ccrrleted with financingccmmritted under Phase II of fth tr-Ject Land preparation and levelingwill be required anlnp with h ntruct n of distribution and drainagebullir r]
T ectinr f th- rrainler of bra will requiret- rd i i w -J n rrd h c and engishyrnr nw d t i f -tritst t n and dlarn -rk
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foeuro rginprng im hhve b- 7cr)Pletcd fcr the irrigationthe Bou Are- Fr the o-t rt hu- I cf the
of rcquired construction
of main carrl Rnraljor dr- nRe worx z develoFerit and cronstruction of zbldiary li tribution -r irnge y--r rrrairns to I undertaken
Th P- Arrg Tunnel wr orml td in 267 and construptcn sunder way on Ih-Yin Canal rrired tL nvcy water the suthrnf e of Areg ervie ra
I h z-uir-i intluding the -rtablishshyn -F r rnity rvice andIn fit Th rlulrem-rntr for
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F~~ntur~ nrl i tu Cct (wicFenture _to 11( Ettinate JI6 ) to 0j67 im-rtpatv 7-t 1
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Wt r 2torvge 1 95 1)6and Pegulation
Right ank 137 31 10 79
L-ft Bank 25 87 n6 143 239
Far- De ]crl 0 )5 1 b I26
S I M O ALA1 348 356
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At indicatnd In the- tdl iv 11 - rnt it~ocotof the rxojroct are t hi~-hor tnan the ic60) 1orccasts Th y tarc Ah-wever 1hchr by cnr murth~cul~ averllsv( a igiificqntjsCfect t~cn the bt-ric lfer-7t I-tio n- rigill lly rc~r~t
V I ) u O21he 1)+ -J iv )ir(t In h jiv kinvnft bed tado in Lh Tnwr Liynnui vni cif hrrlt rnr 7cst- wrr uniershytaen ic r ii -tQ j ta the Aurpo3vt o 02thl rirarnkinr of r- Ln t -Ir ca th cenm I rr1 urn 1e11 frrn n ow
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elevated area requirin iat-r to be puiiped to the irrigated land with both highr capital costs (about 1 million) and higher oreration and maintenance costs (150 Dirham per hcttare via-a-vir 100 Dihams perhevtare for the grnvity irrifrted ares) The ony work presenl-ly cotiishypleted in the Triff Hih Ser-ic Area is the preliminary engineering stirUes Cimi-ir to th Tr Pa r thu TrIffa ]Igh Service areawill reiir an ex I uvnt ricd bfore agricultural proshyduction cn be initlat-2i
The above considerations reiult in the following revised ranking of priorities
Project Area 1FY (M Priority
Triffa Main 21 I Sector 27 8 I Sector 28 9 I Bou Areg Central 6 II Bou Areg Rerainders 6 II Zebra Collective 5 II Zebra Remtd nders 5 II Triffa Ent 6 III Triffa High ervice 5 III
SRI 11ed a ccst contingency f7actor of 25 and a cumulative costescLlatior factor of 3I per annum These factors appear excessivelyhigh in th( light of (1) project experience to date and (2) the fact that from his roint the technical rirks involved arre of a much lower orl- r f 1h thnse inhtrent in the major works Just comshy1 I intion nrd contingency factor of 15 has there-
S chtiMnte- Itlizcd in this rarer The ii n-ttr costs the to ) ject (in n]ace of factors
i by )I nrt 11 thIrhe nf th nJter atve I[cwver rrtnrecr-y factor euld Increase the IPE ] hi ra]y th- IIRF fcr the TrIfa Sector 27 ansnunirg a
oct crortlr7crncy A can be seen as the conAngency I thf cc curve rrv to the right and inter ects the
ur h h 4r- rnr rate of return)
C Finreirifg inr
Cot o the prJect wor fmcentntgenent nnd engin-erinm advisoryrvices for the proued t rd tsge of the Mmlouya Project are
ctirt a Crollows
nF3r AVAILArBILE COPY
Best Av DlableD
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(In Millions Of Dollars)
Righi Pank
Trffa Main 34 poundSt (r 27 08 S ctor 6 0Q
51 Left ank
7bra Collective 12bra Remainde r- 54 Tou Areg Central 74 Lou Areg Remaluders 68 heft Bank Dcad Head Tunnel 30
238 Services
Management 20 Advisory Engineerin 05
25 SUB TOTAL 37
Escalation amp Contingencies 15 47
TOTAL 361
It is proposed that the AID Development Loan for this stage of the Moulouya ProJet be limited to $5 million an amount which would be sufficient te reet the cost of any US goods and services required for the works to oe undertaken Thus the loan would finance the dollar costs of manrement and engineering advisory services to be provided by US firms erstimated at $25 million The balance would be available to meet any ther US cofts that might arise for constructicn cuipment and nateria]
The balnnmc of funds required would be provided by the GOM from its own budgetary resources including as appropriate agreed allocations of the counfryj-uie dirham proceeds of US surplus agricultural programs in Morocco
To a l-ge extent construction works In the Mou]ouya (other than the Bou Ar- Tunnel and Mechra Klila Dam) have taken place under a largenumber of roll contracts with Moroccan firms It is anticipated that this will ontinue to be the pratice in the forthcoming development stage Th iit is evident that the great bulk of project cests in this next stage will be local costs
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In the event that not all of av l able fuInd- under the loan are required for TKI eo It i ouied that any remaininrn balance be utilized for the payment lo -ovalccztn f the project This would be aceoomplirhe by utili7irn th- h r vroceeds of the loan to purehare US-use dirhsmn (frcr th U Oi-irrirg Officer) which would be utili ed to rrimbure th fc u a t local - nditurrs
Thi arranrit 3ir ila ) fstV utilitd In the - of the D-e l-INAieret Loar tJr U Atrrert SinceYr usii Conv rf i cn therc loans are rcpiviible in dollars nd rince Morocco in a n-ar excess local currency couintry the fert ) f e transaction in tc provide a means for obtaining ccnvrrrs cn a-cr th life of the loan of otherwire inconvertibie U5 holding irhrs hich are in exces of its localrequireme t
In 1967 over 15 million dirhams (abceut $3 million) of PL 480
Section l04(g) loan fun cre in msgreement with the CON allocated for the financing of various contractr reloting to projects in the Moulouya It in anticipited tht ndditional allocations will be made out of the local currency proceed generated from current and antishycipated US 7urplu agricultural rmodity programs in Morocco
It has been proposed that the dirham equivalent of $45 million of the proceeds of the October F67 rurplus agricultural commodity Sales Agreement be allocated for a Section Cb(g) loan for the Mulouya In nadition it is estimated that a $]35 million (in$ioz1ble dirhshyequlviJent) woull be available from 7uprl]eental surplun agrIcultura con -ity rales programs under Titlo I an-d Title IV in calendar 196F for allocation for loans for development projects in Morocco These two amounts combined would provide about 6 of the G014 resources reshyquired for the project over the next five years On thic basis there would appear to be rcasonble propect tht the GO should be in a rorition to provide cver the S e year rriod of the project the addishytional resources renuired for itF ccmpletion
Tt I contemplatd that na additlonal US dollar financing of the Moulouya byon-l the $ iilon rorosed herein will be provided for tl cplei n ef h M _11-nuya rince the bringing under irrigation of th- 11O0Y ies include] in the propore] project will substantlally cornIete the works criginally conwtemplated hen h DLF loan was authorshyized in 106 The remainler zf the workr h(- be within the capabilit3 of the GOM to complete with It- o-n resourcec
MT M T M
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) Technical Anily ir
The Moulouya Rivr which is cre of tne largest in Morocco originatesin the idll Atans
Moulouya and which oztend scuthward
Kediterrancn l re
t rre
Pr
ard n
flows rrpr
orre 25) mriles northeast thr Agorinn border
to the
In- agricitui 1 in li j i nt( iljr r Th- rst rind most
t 2 1ir i t i h- i n th rwrht born of thshy-- e 31nmiler frem the Mediterranean
Lea To tho wet cf the Tiffa and nn th- left bank( of the Moulouya isthe Zebra nlain 14wiuntain rv-arate the Zebra frcm th -ea and fron theBou Art-r i-ll]zain which - ctI nrrthwe(st of the Zebra The Bou Areg a coital phtain sclte 19 mils lorg and h miles wide separated fr-nthe n-a by a Ihow sa2t water lagoon Southwest of the Zebra is theGireb plain which hun land ruitable for irrigation in its routheasternportion The Gareb i at a higher elevation than the three other plainsard if ultimately irr-gatcd vould require pumping fro the lower level Zebra conv(yance system
Water from the Noulouya River is stored brhind the Mechra Klila Dam whichwas coniletd with fjiancri rc AID loan (3-A-2 (DLF Lcan l6)Water ir rclca ed downstr(a (1bcut c) miles) to the Mechra Homadi reFrshyvoir and d]iversion dcim in1h-r divert-d to th right oad left bankcunals About 75 kilometer (1 miles) of the Triffu (right bank) maingravity ciral hay ben copletd und consderable cr) has been carri-dout in the Tri on) distr Iution and drainage netw rks land levelngend other farm iwnrovwments About 37 kilometers (22 wiles) of the Zebra(left bank) main gravi-ty canal and the tunnel 6 miles (101()7 JIrenrTrcters) betxeen the Zebra area end the Bou Areg area have been comrneted
The GOM illrrfo m certqin -rk nr-Aded fcr develormnt of the gravityir~zgata yt-- for n 71-) acres over the next five yarr Thiscffort vi2 be eonern rait-r urcr the develo-ment cf areas thot providethe great-rt ecnnomic returrs nnd the developnent of a cadre of Iorocearperornel adequ tly tran-yi in the an2gerent of the project SeeAnnex C for further Irojcl details
e- enmL Ev1ation
Mt Infratrueturr The --trnal highway co-munication network i t arid rfi Isirm nf re- i n-ote siler in-1 shy
uzeather raved rc
____________________TAM
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Other communlca 1 i i t ih Lh arr-- inlude the nrninlineof the Oujda-Fe--C- t h~rh l e0tnnd to AlgeriaSpanish enclove rt the 1 fir idto cmmercial airport at Oujda andNador with regular national onI int rnational ervice5s
Th verirtr 1 u ~Ath r nr r t crocd by 60 kvJ i i i u rrd t 5( kr It na ortr kk f~ditcrl rower1(Qp x I -y yrar) -o n d hr rritIronr
at the Mechra-Yplusmnilj l inm fnd the Bou Areff contral poter Statin The townare connected to ranrh cther and th2 r-rt of Mcrocco by telerhone andtelegraph 1 ner
b Sol Soil rvey 7rd land ]a-ifctons have been completed i-nthe Mcloulva rer eter oanntrantbi- with French firmr u-ing Frenchmethods The Trifa -1n wr initialy rraped at a cealeof 150000with certain area ub entiy rer-aLd at 15000 110000 or 120000dependin I nn the cor1cjeity of YJ rattcrns The Zebra plain has beenmapped at a reale cf 20O00 nod th- Bou Areg plain at a scale Df 150OO On thp baf Yr nf ther urvy th cla sified the soilsGC hain terms of r-uitnbility for irrigation as follows
Land Ciaifcation (Aere)
CasrI amp IT Class III Clans IV Totas Triffa Plain 17000 29[00 22725 99625Zebra Plain CbO 1275 4050 211425Bou Areg Plain 75)00 l6qo 3 0 3067)Gareb Plain 13 05 10 70 0
Inclurez 1750 acres for lfigh Service Area
The findings thi indicate that ( i) arriratry 5of the area in thefour rlain- i suited to irrigation (Clare I anl II) (ii) more than3 ir suitabr bt with one Or mcre imrtat~ons Irro=ed by underrablefeatur-s such an to wrafhy oil characteristJcn trnine- r restrltedbull rio (CIar TIV) and (iij) ls than 2 of th- area in only margina)lysuited for irrinticn(Class TV) In ther7e lattrr ardrn only rmi-intrnsive orop rotations blUponsblhe
The oi nicn f the Cn-lting Envneer (1ydrctechrJ) th respect to) therd carrffjn n that hfle 3 Bureau for P ltr0tion -tandards werirt ernoy-d te rlasnificatinn ir aceurat- and n rrti with3and rlaced in r d rLrnble categories more
uere thnn right ha bern the caseUS tandardr folIced The clasifatinn ha 0a been reviewed andfound to be atifactory by the USPA tayr Hoever r areas of complcxroil Ttternr hch to date have only been ru-d to a oale of 150))rome reraTpin tray be necesary as a banis fcr rrerarnZ
- g~T PRAvVLAFJLE EOPv
final designs of irrigation and drztinne- rystems parcellization into farms and planning of land preparation measures In addition considering the high average salt ccntent of ater frcm he c ilouya hiver a rorm of systematic leachin- will be reqirer- to f ree-rt aculation of salts in the soilsparticularly in h ebra Crt in will nlso1e plain ureas require nitrogenphosphorus crd possibly other nutrient to obtain satisfactory yields
c Water On the basis of studies by the GCM which have been reviewed bythe Consultirr Fnr ncri and the U au of 1ccoi-ation it is thecorclusion of A tt (i) the q lity of water in the Lower Houlouya
is below averpge bvt crp rble to thtof certain rivers in the US whichisotnteLoh~uoybrve successfully been usc for irrif ton for periods cxeccdin 100 yearsOj5) there is clearly a sufficient a )unt of i ter to irrif-ate the 128010
bullcrer to be served in the [rlcentIty ar n3 Addi-tional s-tudioser (c requilrecj dcter-Inc if adeqiuate water is a- ilable for irrigationof 376QGO vc rc
The only signifcant urce of vp y fOr irrigation water in the perimeteris the oulouya Vi~cr io jc n1 is 1re ntly being irrigated from wells most Iround water i - - 1 Alouya contains dissoived salts which i xr Lrn - hvriny reak flowto iJOx PIn iuting [cricd of c n ccntraticn is 750 ppm On Thi- basis of USDA Salinity Lot) atory criteria fte v ater is class 03-SI (hl-h salinity-low a-alinity) Vile water is thus of mediocre qualityit is ccmrarable to that of river successfully used for irrigation in the US (eg the Lower Colorado Rier) and poses no serious problems to irrir-ation in the Moulouya perir( cfr provided the W4 adheres to recorrmended programs for meeting leaching reoairements
With ref-pect to the 128000 acr project the demand for water reasured at the Mechra Hoadi diversion dair is estizated at about 575 million cubic meters per year as follows
remand for Wter
Peak Flow Annual Total (August) (m 3 million)
Agrieulture (176000 acres) 337 m3s 806 Municipal amp Industrial Consumption 8m3 23
Total 4 uy62123000 acres to be irrigateA by Gravity 255 m3s 575
(The e dpeak requirzents of 345 s compares with a 35 m3 s design
capacity of the main canal at the diversion dam including 18 m3 s for the Right Bank and 17 m3 s fcc the Left Bank)
I
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This estimate is based on probaole rainfall cropping patterns plant requirements evapo-transpiration and other expected losses of irrigashytion water The estimate is believed by the Consulting Engineer to be reasonable but subject to refinement on the basis of tests to be carried out on a continuing basis
The annual average availability of wuter from the Moulouya river is estirated at 1100 million mn or about double the estimated requirement for the gravity areas
Estimated Availability of Water
Twelve Year Annual Average for Moulouya River 3 m3 second 1100 million m3year
Maximum inflow Observed 8000 m3second(1963) 3h00 million m3 (1962-63)
Miniwum inflow Observed 1 msecond (1951) 532 million m3 (1956-57)
On this basis it appears that there should be ample water available for irrigation of the gravity area as the water availability obtained from twelve years observation exceeds the requirements in all but the 1956-57 season shown above Prior to the development of land with purped service areas (the Gare-b and the Triffa ig h Service) a review and analysis of the river hydrology should be unidertaken to assess the availability and regulashytion of the river flows
d Studies Entincering and Construction The overall irrigation scheme outlined by the 1uM defirs the ajor features and th( magnitude of the work to be accomplished to attain the ultimate goal
This scheme is being carried olut in phases over a long time period The present phase encorpasses the development planned within the priorities indicated by the Stanford Research Institute (SRI) study for the gravity irrigation system
The studies for land classifliration have been completed for the gravity irrigation system in the Triffa Bou Areg and Zebra plains by French firms and were considered reasonably accurate by the Consulting Engineer Land consolidation and parcellinrg has been completed by 0MET in the Bou Areg Central area the Zebra Collctive and Zebra Remainder sectors 7 thru 10 Land consolidation and pareeLlni ar( needed for Triffa sectors 27 and 28 Bou Areg Rematnder arid Z(bra Rerrirder sectors I and 2 The engineering designs for the Triffa main sector 27 and 28 and the Zebra Collective have been or are being completed by the G0M forces The engineering design for the Cefntral Bou Areg and Zebra Remainder sectors 7 tnru 10 has been or in being connpeted uy Hydrotechnic Engineering design will be required or the 1ou Are remainder sectors D-3 thru D-7 and Q4 thru G-6 and Zebra Rer ainler sectors 1 and 2 The engineering designfor the Dead Ilead Thnnel has been undertaken by SCET who have preshypared anid issued an Avant Projet for bid invitations for construction
14 M)j6Fj Cshy
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This firm will also undcrtnk- uu-orviston of construction The engineer ing not yet performed can be aea ished by GOM forces andor private engineering firms
Construction of the extension to the rrain irrigation and drainage canals Jand preparation rector cinl ani drninaive ditches will be performed unllr cntact t) 1 cc rt~r~iet m)t hi in the ene of the
r-abilit tion of the L2tL Pz- Dd iarl Trnc t
e Cronning Patterns The existing erning pattern in the Moulcuya including botnirrigatcd and dry farm ingincludes grain forage citrus vegetables olives grapes and 6 small amount of leciduous fruits and nuts Of the roughly 2140Cy) acres of agricultural production in the Moulouya about 177000 acres are in field crops 24)) in vegetables 16Y)O in citrus 15000 in grrrcs 540Y) in forage crops 1700 in olives and 15)0 in other fruits and nuts
Taking into consideration rast and present trends in plantings as well as agronomic and price and marketing factrrs the following projection of cropping patterns has been developed for the Lower Moulouya
PROJECTED POPPTG PATTFRNS T1 HE LOWER MOULOUYA
(In per cent of total irrigated area)
Left Bank and Triffa High Serice
Triffa Sector - Sectcr rriffa Class Class Class
crop Main 27 28 East I amp II III IV
Citrus 40 60 10 10 10 Vegetables 15 10 15 1) 20 10
Crtton 15 20 10
Fcragpr 10 20 25 30 4o 30
heat 10 6 20 25 20 35 4o
Grip 25 24 35 15 Dy beans 5 10
Sunflower 10 olives 5 0
100 10) 100 100) 1i 1052i 100
a Incltdes double cropping
- - r- euro --- 7
~7~TF~Wr~e~ALUSE
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The projected cropping pattern for the Bou Areg plain includes cottonLJrirdg the frrt Five yearnejtinted 1r of the Class I)fand
the project jitwould be grown on nnII landn Tht renresert only 960etrravres) ectz ri)cr)e area The cotton acr~a e ry increasep 2ceafter live years if ritisfactory drainage conditionshyrre achieved in the Bou Arev
cotton grown i 1xonp tarx- Trdltionally Morocco export its-Jr- cron an irr IJ hort cble to rmeett Cotton the reuirrents
r the oroccan 2pinningr mills The croppni-attrn of the Triffa East (about 180n acres) Js projectedt Tnrlude 15- (about 27 acres) in cotton It is likely that becausef ihe limited extnt of Class I and II lands in the Triffa Eas cotton not increase beyond that percentage
1t i evident that the amount of irrigated cotton that is likely to bein ther-n Moulouya is minimal even assuming that local drainage condi-T nare i asuitable
f Technical Sundnv--s The AID Project Engineer hps reviewed ii) thedat and ajor construction performed to date onronct and finds the technical requirements this long-ranRe phasedsufficiently defineoto ccntinue the project on an orderly schedule The estimates of cost of prsirct facilities have been determin-d by SRI from average va)ues oftrit cots obtained frorr reviously ntiarded contracts and from etniled( -s-nand analysis prepared by the iHydrotechnic Enginering fir oft-o tyieal sectors located in the Bou Areg area The costs for the arc ent contract have bcen estimated by the USAID It is consideredthat the depree of engijeering planning undertaken and the deterrrinitonr to the US Goverrment are adequate to meet the applicable requireshySt- n Section 611 of thie Foreign Asistance Act
7717gt
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E Financial Status of Borrower
1 The Moroccan Economy
Grrwth of MorocLcts GDP in real term averaged about 24 per yearin 1(4 and lr li Per capita DP In 1C 5 wan anproximotely t162 A (er Irr-ht in (6 resu]trd n a drcrcne of slightly nver in GDP which tlh vpulatior grc~vth avrring 3P4 per year rnrsJted in a decline of -r ornita GDP In 16 ii brut $154 A recnd droughtcccijrred In C67 but i not expeetid to have the severe effects of the 165 drought Crop forecasts for the first nine months of 1967 indicate a 4 increase in real GDP above the 1966 level This is also the economic grcrdth rate estimated by the IBRD for the pezxA 1965-70
Moroccos economy is heavily dependent upon the agricultural sector thich has averaged about 15 growth per annum However growth of the mal modern segment of Moroccos agricultural sector has inshy-reased at the rate of about 7 per annum
In 96 the International Banik for Reconstruction and Development (IBRD) preented a number of recommendationr denigrned to increase Moroccos economic growth rate On the bacis of these recomfndations the G004 proceeded with planning the necesrary program to increase investment levels fr- the i 63-65 level of 11 of GNP to 1r of GNP and stimulate the rate of economic growth from 2 to an average of over )4 annually for the five years 66-70 In addJtion the GC4 has taken measures to curb the population grovth rat while placing increased emphasis on raising production of both dryland (wheat) and Irrigated agriculture
2 Investment and Savinms
The level of total gross investment has remaind at aboit 11 of GNP for vera year althugh the percentnoe declined slightly in 165 Under the GO Three Yea5 Plan 1965-67 the gross investment t-3rget woz ret at DH 3 billion- Actual invev-tment expenditures for the three yearpeirod reached about DH 46 billion of which the Governshyment ezxenditure amounted to DH 1 billion a against DH 21 billion budgeted Thin may have beeo partly de to the GOMs deliberate ausshyterity pollcy under the hIF rtbJli7tion prci1rnr but more probably it van duxe to the shortage of trained cadres to -lan and execute projects
In the private cectcr conziderable inounts of ravings may be hoarded due to lack of project attractive t- inventors The lvl of private investment has been runnihg at about 51 of GNP thrrugh 195 The 0014 4 incentive to private instors hnr cut profit taxes from 4320 to V and announced a tpn year guarantc-e against tax increases
]L- $ = DH 506
777=-77- NQ
r y 7k1- T e - W lk In
j - 1) 7k- - _
- 23-
Loan are avaiiable to )rivlite irve-tcrn freo th 3JfIDiN s rctr special funda to prcmote touricm devc firvcnt
Under the 1r86-1972 plan abut to br irtntt level are to be accelerated considerably reaching A of GNP liv ]970 Mor(- Irlyir haviiy on foreign 1 to aciuw cc higher lve1
3 Central Government FinancP
The Moroccan money supply which had Incrrased ify 76 per cent in 2965 remained virtually unchanged in 966 The first half of 1967 witnessed a 5 Ter cent increase in the money supply Te major part of thi increase as concentrated in June and July uhen the supply reached V14 0j lion Currency In circulation expanded rapidly in June and July
nnl factrrn being reinforced by commodity hcnrding related to the 1ide~l Et crisis Demand deposits did not show their normal decline nthe first half of 1967 Deposits with commercial banks declined nlightly while deposits with the Treabury increased as public and semi public agencies contisued their transfers from the banking system to the Treasury The increase in money supply in the first half of (7 ran I raced to tho nzon1 sonal increase in net foreign assets not c y the custcirry rlelir In claims on the private sector Clsirl (n the erivate sector declined slighty until May 1967 but Increased hr-gb June and Jily due primarily to additional financing of textile stocks ClbiJ ante Government rose by 10 per cent in the first half of 967 the in central brnk claims on the GovernmentI being rmainly offset by larger deposits with the Treasury
Ordinary budgetary revenues which incrurted by 5 rcr ent in 1566 tre cxrcted t-) increase by 7 per cent in 1( to DII 21 billion DeampDite a derea3e in agricultural tax reccipt r- fror diret taxes rose by 10 ppr cent in 1966 and a 2 increas estinated for S67 due to tric or controls on income declarationr d an accelerashytion of tax cller ns Owing mainly to a relaxation of the import
program in late 1 5 and a concomitant increase in tariffs on certain ccnonter goods customs reneipts increased by 21 per cent in 1966 Although budgetary estimates call for s decline of 3 per cent in customs receipts in 1S67 it is likely that actual receipts will be considerably larger in view of the import liberalizatidn measures intro)duced subseshyquent to the estimates Receipts from indirect taxes state monopolies and other serces are expected to be 11 iv- cent Ipher in 1967 owing to increased profit on -ugar sabr-i and L r(m the newly created Office do Ccrmercalisaticn - d-tation (OCE)
Recurrent ordinary buiL e(enditures increased by 34 per cent in 1966 ar-i are expected to increase by an additional 7 per cent in 1567 reachin- D1122 billion Although wage and salary scales in the public
Banque Nationale pour le Developement Economique
TT~~- - I777
2 Cf
sector have1bec z h t - rrvirI urli 11i g 14-6 -nd PO becnue rX toi Ijt e f (]r o n 4
ill tile ic urrnnye andr)not i on dnd Publi ht rentrn -yr-otn lno IncreasedOthrr t ill- t il r ne by ) vr cert in J6(
i ninlyrt -br h Inc-l
( Ihe ( t r- rl t ip t t C itur f T)h 21h iilli n
is (( ItI t lt r c0 a- r n n o I- c t b It ihstnl id vv ih n t r-t have hn(er - en 1t2
(IM ii ture( T f fu traordJ nary budrzct exshypend ituren a r y -t c ~ i vi -iscz Portal Checking sy-stcsul)rrcing t (I ltIt Ct -- ind creirn shy
nnet The f r er tnc I hha ccrc ed from a htih of DH 5-7 millIJn in _ 5 millIn r C46 F cr ats foi ]7 place Cro n w I 1(DI)J79 ill ni DDn etlc fi nancing has alo u 1) 5 p (- I3A27 iIliun to an entirnted DH 1142 million
1 14V ) I nv 1 ri n nI(c1 franc n is 77-ected to be ol t y ncrewed bcrrowing fr-ir t he Cestra 9ank which hud been held at mcdert vols iln 165 nnd 1a66 Under the 1TFtaiby agreement of October 16 the qob) agreed to taBe a3] rocrrnary meurer to maintain as table curoonry rPnt inl th nr1d-elrto th b a ent of the ePrncriynnd a vnbl- hn1incc X nvroent P rt artt to t rt fien of tho Ccntin- Honk rstz (erct are nct t r itr June 30 Y-ke 7 lov l b th n Diif ) mill] (n tlcnber -c P thai I o illin usit I ])ecthr 31I62 (GC bc w t
C B1rtrp - vt DH 12 iri 1i nor ]S67 or DH 6S ij lionEan tisated (r fo than the aproved crd it expanwim
Thitrd ordivary nil extraordnnry buThTt deficit of DII 7-19 millI n fcrecat Fr 1 67 in exnected to be fnanced by not freign
tan reof DII )75 mi~l in nt recurity 12ue 1 T111I vlion a - nt ry tiat Po n Che )ir d-nC i 73 r5 Pn
riI is u h i a vti v mrr nrr-e jssIof fvr is id a erital The vnfsa revcred in 1d6 when lnrger r nyrentn eEecially on food itcmo an n -lewdoun in
igo ra a deficit of $1 millcn ProjectiOnz-vt rvultvd in ror 17 r~ieat inrrerned importsonly partially ccnrennate by addshytsa t frnreirn r ntil rrceiprs ard mprrvement in the nervices account will reult -n et of aprroximately $)20million As rhoim in the following tabl -r tion for l33 and 169 how overall deficits of
14 and m] ivi_y$i It
rqVV t1 4~
C)rgt
---
1 -)I+-IRF1
1ROCCO - rTANC OF PAYME 1qrt - 169]_ 5
6rfi0 1 1C(8lr67 i r(o
)xrurt 2t L( I L-5
Trade Bnlance 11 15 - 75 shy - 75
rviee- ret - 7 - 5) -35 -23 -2
J]-i of Good rnd Service- - 3 - 65 -II - ti - (5
Trn-Ifr Pr ynts (nt) P 21 33 37 33
on-cntnry Carital (not) 92 64 6 6 5
Err-rs nnd Ov rrion- (not) - 23 -2 1 3
eranl Bannic __ - _3 -_ 3 - 1i4
Atrh thert ircjected reficitn are of the nnme order of 1 nishytude a7 thcr incurred in the period i66 the Situatlcn i findarentallydifferent both in rerprct to the source of the deficits and in rer-ect to the meat0Y gtr m etin7tecr In the f rrer caive M5recco uffered
_frcrr a very h-vy cutfc of Drivtes cuitv fo-ivr with a shar) decline In forein nt exerditures in Morocco In the iatter case th projected deficits r- rcre a functicn or accelerated crcwth risingdebt ervieiiw tri tho abnrcn of forv eeble additiens foreign reshybull ourcs nere7ory 4( r2Vm rAf finmncting To nect the def-cits during the reriol 161 61h MWreco ob1id to drw down rorcin exchange reserves of over $]c milicn The snrti tpv of financing is no longerpozslble ince no or-res- ruch reserve- Even ifMorocco yr
mn nina r rve_ ore (]rrfii on to th r-ixirun etnt enribe nnd the [iI tnfldy i- un M-r-r e i32 till relA re nt rnt 15 millicnj1itionn ftr ign as- e n 1 6 beyond hat r recnently fcreeeshyable with ver nri- nry Officilr in In i6 reserves are cotImnted Pt 72million c hih crn V 3 million i caly required for currency coy r
Foreign InJebtrdne n of th GOM Mnroccos external rtnte ard rutlie enterprie dett amounted to
$r) millivn in lr6 Debt vervcirig rpynents for (66 trtaled about
$5) rillion g-eement approved in October 3(67
I- -- Ishy
37 millin or arprcxitrrntoy (j Iroccor totnl eXoort earning of h28 millicn GCnerally nxt rrO dbt FervicJng renuiremennt of leas
than r of totna -ort nnrlt In onrldered to I r tirfactoryrntio D-bt r rnJrcLct n Ir the reriod 1-(y 3on Trerent external debt including thnt wrtl(n irreently undibur-ed are hown n th fr lv tahlr
)] L v yr t n
Eternn Vtnte anc ] bntcrnrie Debt
M131 o)nr
Y aI Net Outrtnnling Debt Debt Service
(6 it 479r5 $367 J-67 452 3)6
Z616 44469 2 0 2C-
365I3 37 389
33 383 33 6 371
5-h 31 n 352 275 34121
]176 2661 32It 1977 21133 311 177 22)6 307 19 i0l74 256
1733 255
rgtternal debt rharre n rerent debt nnr rhon above do not increase ubtanti-lly over t rt 1)year- reaching a maximum of h44 millior
in J6 and decrpt- n cr - tently threoafter At the are time exportearninr r _rc extett nc-are Aring that Morocco does not inshycreswre it etrnn2 cbt t irate ubrtantially nb-vc ihat has been the core th adfiticrn dbt e roquirrentn reulting from the propo t Icon o 5 ijilion co r 7crncepr-ional term hould not have a i-nifiant affect n 1r o - ab lty to neet itv g rc-atedebt ericn rcnrib2t~e- the pros ectr of reprment of thin loan ore coniderci rearcnb)
U I -
F ot h-v C IuIJI rmt I shy
1 V amp~ rVml KI
PUC- -jrVi Jt t 1 11 nflrcj urlc 1- th )qn --P I uti u rhnrrl -1r- thr U- Tr- ry- R- -nymc nt
c2Il f n 6 1 bf r I- till 11 nfl r- n-r i n of O r--niC(Io~hi U 1 1 rr to
Tn vil ) f rvc hi tvlrll 1 (In- - n- u--n E r me rrinshycgtay F rntwir w ourc o -o- rvI ortf-V3 1 rncing of
Uf f -r rrrir- ur3r 4~ v -rin Iltrt nt ndd shyt -n t ) in- lint r b t l r -n rort- o-orco trorl-- V -P
r i 1rnd h L-torie Furcl-trin firr- thrjt US r r~ crvirrf- u~d be~
T L I1 c vt r- -ly ] -ubt fu 1 n vi pw -I -ror-co Ir of
ut1JpcO In thi rjert f it -- r- 21 npnred by d1-nr- cothcr t~han the US
2 ]P-t ofI Prr l1 on Prw- Fntrrr
Phij rrcjJ-t -11 n-t h~ -in nrwerq Prrt n rr- tc ntrshyr~A~r fi-mc 1bho und for --roern p o n
3_~~PrCT--rty
rr-vIi-n 1 h -d r the loan ragreement for Icntifitcation ef any r mIjrpt n ctri b- rt througn ut 1zatn (f xccr- prorerty
If rv c u~eAID n-mrcf u urr thi )cn - I~ut~ em avoi3ablo r rovvrirrnt -rrperty rather than nce iteni
4 Otli-r Fr- Wo--] n-Fnlc4rm
Dr mi tW- o] 14rocco- i~ajr ovr-ec -f exte rnaX
rrtan~- hrtvfb - I r ~ ant fl Fr n fole by Kv-it
Sgio F rneflit r b-en 1lmrntrd to tcfohnjip n5tnnen bi eoni~in I th u y f Fr--h tprhntcian tcacrr ind cther
~ti~r t~ ec-tnmIyrt-n Friinch Aid to Mcreco In 1065c~oc~ (P-art f-r txychnirril aItn -- j se of tl5 w1nfor bu~dget rurport f ir in rt t- $1 1ri1 icin in ennita -rojectM- n vx- rrcd
1Vw1tvnn tioI t-) Frenh rurtnnd +16 r11ion tie-I to -onyiint to orrrcr Frrmh ccilcn~For _-rrc-ratod land and rquirrmcnt
West GTrrnmnny liar agrcrcd to nrovIe ccme j27 mM22~cn 1n catital arirtanre and cromrndity lnoi7 t n OfIcon( q92 thi o totril$223 miJ lien ha actuary b-Pn cr-Itt--d under Inn ngrepment This
And a lk5 million commodity loan both) signed in 1965 All Wet Gerzaan
Ufla
-28shy
capital asnistance I vuectI to be tied to German exports Germanyhas in addition 1uvvded r tteysubbtantial technical assistance f
The IBRP hah rade four 1nns to Morocco since 1962 totaling$6) million Ofthin totnl a [175 million loan in 1965 wos fordevelopient of the gidi lit-r irrigation perimeter Other assistance by internntIcnal Iending arncie include an $11 million credit byIDA in 1C65 for rcendary diicction projects and an IFC ln and inshyvestrent of $1 1 ri jnic alo in
F tit i by [c - dncr tr dh elo snt ofMorccco rircuVt r oii +h b-]n jt-TKT r nbove n 2 )6 niliion Kuwait enn in i66 for develomyment of the Tensaout Prnm n irrnten nrooetand a $77 million Kuwait
0jl n )nnsn r(niti-nertcir
loan for extrnion of the Tadri~ Irrigation Perimeter
The following- trbe surrlnrlzes other free world arlztance (excluiin technical assistanc-) to Morocco for the years 1(62-66
($ Millions)
1 62 1cf_63 96) 19r65 19)66 Fneea 4) 5PO 64o 700 shyWet Germany 223 gu 1t 53 281 IRD 15 175 10) 175 IDA 110 IF C 1 5 7 7 7 0 I15
TOTAL 55 62 1U3 W
b Includer only lo-ng term loans and exporter credits - Includfs 25 million private capital
Eternal ansiztnnce to the Lowier Moulouya Irrigation Perimeter -nce 1060 hres been con[fined to US upport Consdiering AIDs previcus
involvement in and conmitnert to the Lower Moulouya an AID lean in P2t to be Lhi mol aprroriate source of financing for this project
LID
II
q
-29-
SECTION ITI- Y-TTYT TIMPLPTrION
A Periret-r Ad-instrrti-
Authority for irplerrentvtnn of the deveorpent prrgrn frr the LowerMoulcuya Perimeter and rs wel arth crnntinuinz mrnnrrmenertC tt r t- rrtnr V theltbi nad overationity iOfic 1cne 4
n r I e1i- i d Vit4 i Iv ~ Ct rreated i Otb (rJ rn-- of evcn inrmi-rriional offices hich reelaced the Office de Mire en Valeur Aamprlcole (OMVA) Under the OMXA and itspredecessor agencies authority for ad-inLtration cf irrigtion proJect war centralized in Rabat
Under the new regional office organization responsibility for adminshyistering ORMVAM is vested in on Adminirtrative Board of 10 members headed by the Minister of Agriculture and Agrarian Reform as chairman All ether board members (other than the Chairman and a representative of theInterministerial Economic Ccrmittee) represent agencies or activities inthe region of the r-eriret-r whic comprises parts of two provinces Localretresentatives on the Board inc]-de the governors of the two provincesOujda and Nador the presidents -f the two provincial asembtes and of the two provincial chambers of agriculture as well as the perimeter Director
The responsibilities of thie Administrative Board include review of theecys program establishment of its organizational structure developshynt -)f its annual budget and establishment of rates and conditions of
Siyfent for water and other services provided in the perimeter
The Director of OP4VAI-I is dbarged with the responsibility for executionPthe vclicies established by the Administrative Board end administration of oil ORMVAM functions This responsibility includes selection of staffn pserating perrcnnel acting s officia ORNIVAM representative in all ntztinns with -tate and othbr public or private bodies and the
f of funds within limit Indivated by the Ministers f Financetent rn fricultural and Agrarian Reorm
Perimeter Oranizatlon
ORVAM oreanizatlonal structure consists of a directnrate five maj-r rvlces or d-vsicns and one separate bureau Two services qei Administratif et Comptabl- and Service du Yatrial are conshycor - th adminisration and lcgistical support of ORMVAM operationshi1e the remainirg three services rind the separate bureau are Involved in t-hni al matters associated with agrcultural developrent Each ervice has one or more subordinate bureaus Fei-ce Chiefs and thehead 0 rch bure-u report directly to the ORMVAM4 Director
-~F7E MEw-
-30shy
2 Perimeter 01ttffnr
OPIVAM orgttnlrntlon treture calls for 557 positions of whichI L or 7 Mlled n were nher 29 1567 37 of the 71 Postshytion vacancies reported 1ern the high and middle levels Foreign(chiefly Euronean) technclan occupy I)of the 16 high level positionsthat ere filled at thfit tire
Whil OPM ut in th- lcng run lor to Mercecos oducational yster to prvidr tn crrf-nn2 to ratisfy current rdurojectd rcshyquirement th currnt high and mlddle level vacancies rrouire uersonnelwith oxt nive nrior rxericnce To fll this preent need it will be necessary for CRIVAM to continue its program of recruiting foreigntechnicians until ruch tire ns graduates of Moroccan educational programsacquire the necesnry exrerience The managerent assistance componentof thin pro~ject ]e-rribed In the Project analysis will to some extentalleviate OFIWAMs high level personnel requirements
3 Inw1 ernetation Sehedu]
Months Implementation Action
1 0 Sign Loan Agrcement
2 2 C-tiify conditions precedent and Y4tiate procedures for selection of US firm for management contract
2 Negotiation of extension of advisory Engineering Services
h 4 Contract (Hydrotechnic) Negotiation of Managerment Contract
5 60Cmpletion of Project
C Waivers
Sect ion 7 rf AID Regulation 7 provides in substance that theUnited State ill not finance direct costs of construction work performedby third cc-ur y nationals unless the total co-tn of the project withvhich thr ennrtrumticn w(r is asEcciated donot exceed $2On)O orafter excluding national of the country in vhich the site of constructionis located and Dersons vho nave resided therein uninterruptedly for morethan three years imrnedJately prior to any determination under Regulation 7at leant 0 of all uernons who work under the contract at the site of conbulltruction are United States citizens or the employment of third countrynationals is necessary to avoid excerrive corts to the United States
3
31
Section 2175 authr-ri th Regional Anitant Administratorto waive the nrovinions of Sectionthat it is 2073 if he dcterriner in any coneimportant te the nationrn intercrt of the United Stutes tofinance the direct eots of construction work performed by third country
nationals
A prviou1y r ic i c t tht for thr ct Tartthe -r c ct b- 1jeuj out r -cnorbr f cnrtructioncontracts with Morcccrr contrctnr an in the i-t Uowfevvr itentirely psnible that there may b- roe contractn with cntructlonfirms partly owned by third country nntionaln and that ruch firjs anwell as the surely Moroccan-owrned firms may enloy third country niationalsIn such canes a difficult rrobic-i iould arise in meeting the terms ofRegulation 7 since an a practical matter Aericans are not reaonablyavailable for ermployn ont by such contrnetorn and our previcus experiencewith the Naunsseur Ccnv(r-ion project thatin Morocco has indicatedAmerican contractors would not be interested in bidding cn small conshytracts in that country
It in therefore recommended that the Annitant Adinitratordetermine rursuant to Section 2q75 of Regulation 7 to waive theapplication of Regulation 7 to thic iroject since the project 411 conshytribute to the attainrent of US foreign policy objectiver and the cbJe-tives of the Foreign Arsistnnce Program
LITI L USE
LfI~~5xA~us
lit
4 A J A 45 4 k
t A S T
S(3
I A444ilA~~l~)
7 -74
tAM= D
SECTOR 27
10000
t Co0Na includez25 cgtri oncFcttlrvI ncy I8s ~ ~ C t C- Includes 50 constriJcltiotrgrc
2000 60
IU
0
z
bull cosYsA shy----- i
600L _
400
200
0 5 I0 15 20
INTEREST RATE
I ~ 7 J7777
ANIAampX C
PROJECT DESCRn1 rOll
The project com)onents to te undertaken on the MIoulouya Irrigation Project over the next five years contists of the following
C(n1rtion of the rrLin casuals and bianch canbls to provide the suource of waler to the sctors be developed in theto TriffBou Areg and Zebra areas This construction will include the necessarystructures such as reulators highway bridges aqueducts water intake
and discharge structures etc
2 Iand Txeloommerit which includes engineering land consolishyt and iuvtllng lard preparation (subsoiling ripping destoning etc) and installation of water distribution canals (secondary tertiary and quurtunary) and drainage collector ditches for the Triffa main covering 24000 acres in sctors 8 9 10 16 20 21 23 24 25A 2513 27 and 28 Lou Areg Central covering 16250 acres in sectors Dltirough D2B and G1 thru-4h G313 i0u Areg Remainder covering 15000 acres in s-ctors D3 through D7 and GA through (6 Zebra Collective covering 45)0 acres in sectors 3 4 5 rind 6 and Zebra Rer-iinder covering 14250 acres in sectors 1 2 and 7 through 10 and th remainder of sectors 34 and 5 The total land to be developed is about 74000 acres
3 Canalization of the Oued Zeluan and nued Sidi-Amar in the Bou Areg Plain consisting of strairltening englarging and regularizing of these streams to carry the flood waters to the sea Drainage interceptor canals are to be constructed parallel to the sea in the Bou Areg Plain In the Triffa Plain the Oued Riada main drain will be deepened and enlarged and secondary drains will be excavated to provide for drainageof the Madagh area This will include the construction of bridges and culverts and other related work
4 Major Commorn Works will consist of
a Clearing of the Mo-1ouya riverbed downstream of the Mechra KLila barn caused roy flood dariwe and the installation of a set of stop logs for maintenance of pillway gate-
b Design supervision and construction of repairs to the ]elt Lank dead head tunel
c Conctruction and establishment of sib-division Offices and installations for farmer support such as CMVand farm stables
1 C
-2shy
5 Manavmtnt It ha been proposed that a US management firm be ewployed by th- C4 to manage and operate the entire Bou Areg area Such manageent -iuld encomparn all activities from the initial concept to final irIrp igricultural production Such activities would Include resp r-ibilsect -or supervnsion of engtneering and constriction of primary
S- Jry r complete developfnent of land training n in g tinul irription practicen preparation of market
t - r1t- (ot--rnu trplusmnining of a Moroccan cadre to take over h v--it Bou Areg dreara P the
At this writing the n-pt of turning over to a private UZSfirm execushyresponsibl]ity I h management of the establilrment and initial
op-ration of irr1gati the Bou Arog area has been only broadly de iiitd by the GCJO It Intended that proposals will be invited from a r -onable ntnber of f|ed US firms that a selection will be made an-n 7 them and a more do iled and cornprehenrive definition of the rer6 -Ps to be performed be eztabliched at that time It haa been
stimated that the t- of ruch a contract will be about $2 mir- n In any event the -ts of this contract other engineering arvl s to be provided undt n extension of the Ilydrotechnic contract and ether US corts will not ed the proposed $5 mllaion developzont Jean fr the project
The cle 3ifications duties ant 1ncnslbilities of the management personnel ill ha-- to be clearly defined i agreed to by the GCM Perimeter Directo- and other GOM Agencies luding arrangements for the necessary gistic support
Svxlale Docu-
1
4
LD ED 0ICIAL
-IAIDshy
A1trX D
C6JCK LIST OF STATUTORY CRITERIA
(Development Loan Fund)
1 FAA 0102 Extent to which U3 cormodities and services are furnished consistent with improving the US balance of payments See Sections II-C II-F
2 AA sect2O]ihi lanner in which loan wil promote countrys economic develo shy rit emphasizing help for long-range plans and programs designed to developeconomic tesourcos and increase productive capacities See Section I-D
i FAA sectT] h)(IL Information and conclusion on availability of financincfrom other free-world sources including private sources within the United States See Section II-F
FAA sect20l( )2 Information and conclusion on activitys economic and technical soundness including the capacity of the recipient country to reshypay the loan at a reasonable rate of interest See Sections II-B II-D and II-E
5 FAA 1201(h)( Information and conclusion on existence of reasonable promise activity will contribute to developrmnt of economic resources or increase of productive capacities See Sectiona II-B and II-D
_92_(b 4Information and conclusion on activitys relationship toothor development activities and its contribution to realizable longshyrange objectives See Sections I-D and I-E
The following abbreviations are und FAA - Foroirn Assistance Act of 1961 as amerded by the Foreign Asaistaice
Act of 1967 App - Foreign Assistance and Polated Agencies Appropriations Act 1968
AFEVCDF 1066
L1
-2shy
7 FAA f12O1(b)(5)_ Countrys self-help masures including institution of Foreign Assistance Act investment pliaranty programs Investment Guaranty
bull Agreement signed with Morocco 331o6l See Sections I-D and II-EI
_A ))(6) Information and conclusion on possible effects on US econowy with soecial refererne to areas of substantial -labor surplusSee Section II-F
9 FAA q201 (h)() Information and conclusion on the dagree to which thA country iv wiki- progress toward respect for the rule of law freedom of expression and of the press and recognition~yf the importance of individual freedom initiative and private enterprise
10 FAA -1201(b)(8) Information and conclusion on the degree to which the country is taking steps to improve its c]Laato for private investment See Sccton II-E
31 FAA R LbJi Inforrat-on and conclusion on whether or not the activityto b financed will contribute to the achievement of self-sustaining growthSee Sections I-D and II-B
12 FAA fi2Ol(bj Inforruation and conclusion on reasonalbe prospects of reshypayment See Section II-E
13 FAA fl20JL() Info-ation on applicability of the twenty country ceil4ng2
14 FAA fl201 L Information and coclusion on legality (under laws of the country end the US) and reasonableness of lending and ralendinr terms Loan will be on minimum termspermitted under FAA These are deemed reasonable see Sectioam Evidence will be renuired from the GGM as to the legality of the loan agreemnt
1 E 2 Information and conclusion on availability of an applicationFAA together with sufficient information and assurances to indicate reasonably that funds will be used in an economcally and technically sound manner See Sections I-A II-B and II-D Application received Janury 15 1968
16 FAA fl201(fL If a project inforntion and conclusion whether it will promote the economic developapent of the requesting country taking into account the countrys human and material resource requiremnts and the reshylationship between the ultimate objes6ives of the project and the countrys overall economic development See Sections I-D and II-B
17 FAAJ 20ij(J If a project information and conclusion whether it cifishycally provides for appropriate participation by private enterprise 8ce Sections YI-C and 114
I- FAA i22(a) Total amount of money under loan which is going directly to private enterprise is going to intermediate credit institutions or other borrowers for use by private enterprise is being used to finance imports
rfro private sources or is otherwise beirg used to finance procurementsfrcm private souwces See Sections II-C and II-2
9 FAA 207 Infosation on the emphasis placed en
(a) encouraging development of economic political and social institushytins No apparent relationship
(b) nelC-help in mectingthe countrys food nredo Project Vill conshytribute to production of food for lccal consumptioa
(c) in-proving availability in the country of evucated trained manpower Project will contribute to the deicloginext of trained manpower as one of the functions of the management contract (Soe Annex C para 5)
(d) prcgrams aimed at -malnutrition disease eradi atDn slum clearanceWater purification sewage disposal health education naternal and child care(includin fimrily pJnrning)) -nd cthcr public health ausistarice See
(c) other develoment activities including industrial development free
labor unions cooperatives tnd voluntary agencie transn)rtatin and ccshymwquication nrStczn capubiliTies for economic planning and public adlinisshytration arban develo-mment and modernization of laws to feilltate econcnicdevelopjen- GO- intends encourage develo vient of cooperat yes particularlyin the Left Pank areas Project will also develop capabiLi ics for cconoaicplanning and public a6~inistration (Annex C para 5) Other not applicable
20 Information on the extent to which the r-untry is
(a) cttcmting to increase food production and food sto a-e anddistribution felitics This project is one evidence of Moroccos efforts in this direction See also Section I-D and I-E
b) creating- a favorable climate for foreign and dmestic iri-ate enterprise and invcstrrment The GCM has recently reduced profits twes anrannounced a ten year guarantee against tax increases See Section II-E-2
(c) increasing the role of the neonle in the developnental procecsNo apparent relationship to this project
(d) allocating expenditures to development rather than to unn-cessarymilitary purpoes or intervention in other free countries affair See Sections I-D and Ii-
(e) willing --nribute funds to the project or program Th iOMhas already dcvo o-sidcrable resources to the project It has badieted13 million for th i oulouya for i7 See Section I-C
(If) making economic zocial and political refo ns such as taxc coliecshytion iYprovcmenLs and chan es in land tenure a Royal Comm ision has been appointed to make recomendation on land tenure probleras in the Lower I oulouya
(g) responding to the economic political and social concerns of its people and showing a determination to take volf-help wcasuren See Sections I-D and II-E
IT
-ovi~cd l v r 13 1968
- 4 - LDffIED OFFICIAL USE
21 FAA Inforn ation about multilateral assistance being Iurnished to t e country and whether the loan will encourage recgional development prog-rams The I1D has eztablihcd a Consultative Group for Morocco which rvicws the GOM development program anui prgress See Section II-F-4 for infoaation on othtr donor assistance to Morocco
22 A Extent to which the loan will contribute to the objective of ass ring naximu par icipation in the task of econonic dovelop--ent on the pL-t 0 _he people of the developing countries through the encouragement of cocr-tic private and local govenmental inLitutious o apparent
relationship
23 F _-_Dta_ Infor-ation and corissions whether loan will oncourageeffor s of t1e country to (a) increase tie flow of international trade (b) fostcr private initiative and comptition (c) encourage development and usceo co opratives credit unions and savingss and loan associations (d) disourgo monopolistic practices (c) improvo technical efficiency of industry ariculture and commerce (f) strenSthn free labor unions This project is cxpected to increase technical efficiency oi-agriculture
2_ C-1L lnforzrition and conclusion on how the loan will encourage US privte trade and investment abroad and how it uill encourage private US participation in foreign assistance prograas (incluiing use of private trade channels and the services of US private enterprise) See Section II-
25 VA-+_ Conclusion and supporting information on compliance with tho Co resional policy that engineering and professional servicos of US fir-ms and their affiliates are to bo used in connection with capital project3 to the nixinua extent consistent with the national interest US engineerirn and innsgcment services will be financed tnder this loan
2$ Inforamtion and ccnclusions who+her loan will pormit American rx-l] business to participate equitably in the furnishing of goods and
z orvices by To be satisfied in Loan Agreementfinanced it
27 - t(a App I18 Complianco with restriction of co -zodity procureshy o UsMS except as otherwise determined by the Picsicent and subject to ttu--- rcortir require r-nts Procurement will - liumited to the US for
reiabnrs nts and to ioocco and other free world countries 1-or US-cwne(d rhu disburseacnts
23 -i Comiance with bulk cozodity procurement restriction topriecc no l-ho han the nkarkot price prevailing in tho US at tia of
bull puchas Not applicable
29 FA Cozpliance with requirement that matrin insurance be purchased on commceities if the participating country discri-inates and that insurance be placed in the US To be satisfied in Loan Agreement
30 IA 6(a) Information at to the utilization of excers personal property in lieu of procurement of new items Will be required ai appropriate under terns of Lean Agreement
f
1 77--7 -77-77-777
31 FAA 61](a)(_) information and conclusion on availability of enginoering i financial and other plans nccx sary to carry out tho assittance and of a
reasonably firm cstimate of the cost of the assistanco to the United States
See Section II-D
32-ecessaryFAA t611(a)_(2) legislative action r6quired within recipient country and ibasis Cor reasonable anticipation such action will be completed in time to pormit orderly accompli-hirtnt of purposes of loan See Section I-A
33 n _AA161nJ0] If water or water-relatod land resource construcshy
tion project or program information and conclusion on a benefit-cost comshy
putation See Section II-B
3 4 VAA 611(c) Compliance with requirement that contracts for construction be let on comp-ctitive basis to mamum extent practicable To be satisfied
in Loan Agreement
If a loan for a project of $1 million or more certificatin35 FAA _61l(r) by the principal AID officer in the country as to the capability of the
country (both financirl and human resources) to effectively maintain and
utilize the project taking into account other US-financed projects (Such
certification is to be pproved by the Administrator aL the time the loan
is authorized) In process of being obtained
36 FAsgJ2 _6_h Appropriate steps that have b-en taken to assure that to the miaximum extent possible the country is contributing local currencies to net th-2 cost of contractural and other services and foreign currencies o- icd by tho US are utilized to meet the cost of contractual and other services The GU-M is contributing over $30 million to compleXton of this project Excess US-use dirhams will be used for eligible project costs other than US goods and services
37 FAA p619 Compliance with requirement that assistance to newly independent countries be furnished through multilateral organizations or plans to maxishymum extent appropriate Not deemed appropriate in view of previous AID financing and ccoiitment to the project See Sections I-A and I-D
38 FAA sect620(a) AcnO7a n3]7(b) Compliance with prohibitions
against assistance to Cuba ard any countr (a) which furnishes assistance to Cuba or failed to take appropriate steps by February 14 1964 to prevent ships or aircraft unier its registry from carrying equipment materials or supplies from or to Cuba or (b) which sells furnishes or permits any ships under its registry fr-om carrying items of primary atrategic signifishycance or itcms of economic assistance Morocco is not-known to be in Violation of these sections
39 FAA q620GL_ If assistance to the government of a country existence of determination it is not controlled by the international Communist movement The Secretary of State so determined on October 11 191
40 FAA 620(c) If assistance to the government of a country existonce of Indebtedness to a US citizen for goods or services furnished or ordered whore ouch citizen has exhaustod available legal romodiesor where the debt
i - ow - -- _---- --shy
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is not denied or ontested by such government or the indebtedness arises under an unconditional guararty of payrrent given by such govornmunt No such indebtedness is known to exist
41 FA _(a2LdL If assisitance for any productive enterprise which will corashypote with US enterprise existence of agreement by the recipient country to prevent export to the US of more than 20 of the enterprises annual production during the life of the loan Not applicable
42 FA4 - 16Q_0_ A If assistance to the government of a country extent to which it (including government agenies or ruhdivisions) has after January 1 1962 taken steps o repudiate or nullify cuatracts or taken any action which has the effect of nationalizing expropriating or otherwise seizingownership or control ofprcpertv of US citizens or entities beneficially owned by them without taking appropriate stops to discha i ge its obligations No such steps cr actions are-known to have been taken by the GOM
43 FAA~L AjPj_10_9 Compliance with assistance toQ0 prohibitions against any Comunst codntry ozocco is not considered to be a cocinrunist country
44 FAA - 620(gJ Corliance with prohibition against use of assistonce to comp satc owners for expropriated or nationalized property To be satisfied in Loan Agreement
45 F AA 8620(h Compliance with regulations and procedures adopted to inshysure against ue of assistance in a manner hich contrary to the best inshyterests of the US promotes or assists the foreign aid projects or activities of the Communist-bloc countries To be satisfied in Loan Agreement
46 FAA 06-O(j)_ Exitence of determiration that the country is engaging in or preparing for aggressive military efforts No such determination has been made
L_62_O Information47 FAA on representation of the country at any intershynational confererce when that representation includes the planning of activishyties involving insurrection or subversion against the US or countries recoiving US assistance No such representition is known to have A occarrect
8 FAA 62JJ Existence of a determination that the country has permitted or failed to prevent destruction of US property by mob action or has failed to take steps to prevent a recurrence and-to pay compensation NO such destruction is known to have tak-n place
49 PAA l620(k) If construction of productive enterprise where eggregate value of assistanc to be furnished by US will exceed $1OO million identification of Gtntutoryauthority Not npplicable
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U 6 50 _Af( QCinsidoration which has been given to denlying assistance X to thu government of a country which after December 31 1966 has failed to
- institto the investnint guaranty program for the spcific risks of inconshy
vertibility and expropriation or confiscation Satisfied See No 7 above
S51S J lj Compliance with-prohibitions-againstn as~istance to countries which traffic or permittraffickingwith North Vietnam Morocco is not known to be in violation
52 E_-L620(_L If country has seized or imposed any penalty or sanction against vn US fishing vessel on account of its fishing activities in
intcrnationul waters information on the consideiation which has been given to excludirg the country from assistance No such situation is known to exist
53 FAA FA r) UAR restriction Not applicable620(p 9117
54 FAA R620tl) Existence of default undhr any Foreign Assistance Act loan to the country No such default exists
55 F ) C-nsider tion of whether co ntry is devoting unnecessary percentage of buKet for military purposes or use of foreign exchange for milita-y equipment
56 FAA 62o(t) Proibition on aid if country has severed diplomatic relations with US unless agreements have been negotiated after resumpshytion Diplomatic r(lations have not been severed
57 FAA 9620(u) Statur of the country on delinquent UN obligations Morocco is not known to be dlinquent on its UN~obligation
58 FAA R636(i) Prohibition on financing non-US manufactured motor vehicles Will be satisfied in Loan Agreement and Implementation Letter
59 App 102 Compliance with requirement that payments in excess of $25000 for architectural and en Jneering services on any one project be reported to Congress Such reports will be made
60 App R1O4 Compliance with bar against funds to pay pensions etc for military personnel Such payments will not be eligible for financing under th Loan Agreement
61 App 9106 If country attr ipts to create distinctions because of their race or religion among Americans in granting personal or commercial access or other rights otherwise avaVIfable to US citizens generally application which will be made in negotit ttons of contrary principles as expressed by Congress Morocco is not ku IDhave made any such attempts
iInD OFFIIt t USE
0k
OFFICIAL USE 62 AIwp Rii Compliance with existing requfremets for security clearance
of personnel Will be satisfied in Loan Agreement and Implementation Letter
63 App R1l2 Compliance with requirement for approval of cortractors and contract terms for capital projects Will be satisfied in Loan Agreement
clJ164 Aup Cmpliance with bar nRainst use of funds to Tay assessments etc of US meiber Such payments will not be eligible for financing under the Loan Agreemunt
6 Anp P115 Ccmpliance with regulations on employment of US and local personnel for funds obligated after April 30 1961 (Regulation 7) See Section III-C
66 Aim Vietnam iron and steel restrictions Not applicable
67 p l9 If a country other than Greece Turkey Iran Israel Republicof China Phillipines or Korea reduction in assistance by amounts spent for the purchase of sophisticated military equipment
68 Anp fi4O1 Compliance with bar against use of funds for publicity or proshypagjanda purposes within US not heretofore authorized by Congress Such use of funds will not be eligible for financing under the Loan Agreement
Morocco is a traditional Islamic monarchy with a constitution The conshystitution was implemented followaing a popular referendum in 1962 National regional and professional elective bodies including a parliament were established by universal suffrage under the constitution in 1963 The parliament was suspended in 1961 in a State of Exception because of its inability to agree on measures with adequate urgency to meet the prevailingecononde imperatives In July 1967 the King appointed a Prime Minister to direct a Cabinet of appointed technicians
The constitutional framework nevertheless remains intact in Morocco and nationwide popular elections for some of the professional chambers were held in August and September 1966 The press is relatively free in Morocco and the right of diLsent prevails provided that such dissent does not violate the prohibition against political attacks on the instishytution of the monarchy or the person of the monarch
LI Under the revised US AID Policy for Africa agreed to in November 1966 Morocco is designated a development emphasis country entitled to receive continuing support on a country basis as part of a multilaterally coorshydinated countrj program Morocco was subsequently included in Presidential Determination 67-14 (January 5 1967) I
LIM=TE OFFICIAL USE~i
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DEPQbi) STATE AGENCY FOR INERNATIONAL DEVELOPMENT
WASHINGTON DC 052
CAPITAL ASSISTANCE LOA11 AUTHORIZATION
Provided from Develoroent Loan Funds Morocco Second Lower Moulouya Irrigation Loan
Pursuant to the authority vested in the Assistant Administrator for Africa of the Agency for International Development
AI)by the Foreign Assistance Act of 1961 as amended theIAct) and the delegations of authority issued thereunder I
have received and t-en into consideration a certification from the Director of USAIDMorocco as to the financial and human resources capability of Morocco to effectively utilize the Lower Moulouya Irrigation Project taking into account among other things the
maintenance and utilization of projects in Morocco previously financed or assisted by the United States and I hereby authorize the establishshyment of a loan pursuant to Part I Chapter 2 Title I the Development Loan Fund to the Government of the Kingdom of Morocco (Borrower) of not to exceed five million dollars ($5000000) to assist in financing the fore] gn exchange and local currency costs of goods and services for the third phase of the Lower Moulouya Irrigation Project subject to the foLlowing terms and conditions
1 Interest Rate and Terms of Repayment Borrower shall repay the loan to AID in forty (40) years including a grace period not to exceed ten (10) years Borrower shall pay interest on the unrepaid principal and any interest accrued thereon at the rate of (a) two percent (2) per annum during the grace period and (b) two and
one-half percent (2-12) per annum thereafter
2 Currency of Pepayment Repayment of the loan and paymenu of interest shall be made in United States dollars
- t- n t - - - shy
3 Other Terms and Conditions amp(a)Goods and Services financed under the loan
shall have their source and origin in
(i) the United States if disbursements therefor are made in United States dollars or
(ii) any country in the free world including Morocco if disbursements therefor are made in Moroccan currency
(b) AID Regulation 7 shall not apply to construction -work financed under the loan because as detailed in Section IIIC of Capital Assistance Paper No P 667 it is important to the national interest of the United States that the direct costs of construction work performed by third-country nationals be financed out of funds made available by the Act
(a) Such other terms and conditions as AID may deem advisable
Assistant Administrator for Africa
Date
~~~~~~~~~~~~~~~~~~ - q v
7
ioriginally begun under the Spnnihh rgime Work was resumed by the GOM under a contract concluded in late 1959 Major difficlilties with the tunnel structure have been known for some time On comTletion of a series of studies of the problems involved the GOM nvited bids inNovember (767 on a pronrosed contract for the correction of structural-defects i-he tunv It Jn bnticiiated that this contract will be finarced _y the GO fr wn recurees
The Bou Arcg area which lie to the Northwest of the Zebra andalong the Mediterranean Coast will ]ikewise be affected by the delay in passage of water through the Left Bank Dead Head Tunnel The BouArr- - - ontplnn s~re 31000 acres of irrlgablf lrnd While the elttent n lr nni - ytr running from the northwest portion of t -h 11 shy h1s argely been completedneither i of the other irrishygation works required h~iv- - ver n --rt of the d-zign studies for thin area ha- u t L
The bulk of the DLF I-an of $23 million of hiehity over $20 million had been disburd as of the end (f wvmrber- 107 was (or is being) utilized for cn~tructinn of the cehrnKastoragedam and of the Bou Areg Tunnel and the Bcu Areg High Line Canal Sraller amounts were utilized for advisory engineering services providedby a US firm design services and construction of some of the main canal drainage rnd distr1rmtion woks The balance of the loan is expected to be disbursed before the end of this year for reimrburseshyent of the costs of contrEcts already completed or presently under way
The GOM has in addition exp-nded an estimated $13 million since the beginning of 1960 about $3 million of which represents the cost of hydroelectric installatiuns at the Mochra-Klila Dam and on the Bou AregHigh Line Canv1 About million vas expondet on reconstruction and the bn2nc Tprerents entimated costs of operation and maintenace of completedworks The DLF Joan of 1960 war intended to assist in financing a -r second phase of project works in the Mculouya Perimeter As indicated nbive the works ndrtakn in his phase (apErt from the repair of thn Left Bank Depd Head TunnE a jrrng to a close
In view of the Izeable rpuirces devct0-I tc thp Mculouya over a rither long reriod of ytrs--by the Spaninh French ar-I MroccanGovernments prior to l6O and th qC-M and AID frox 31960 to l2--to achieve the installation of the bulk of the major installations required for water ntorare and rranzmi-ion it Ia been conzidered that at this next stage of drvelcp eat of the erimeter the principalfocus of attention should be on t1ose works which will offer the
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-7shygreatest and most rapid returns on ndd1tio resources required fortheir comyletion In the Interest of rbtainir an asrrrent ofr It fr the crnletion of the reirainder of the Troject AIDri ained rvienof the Stanford Revar(h Institute to rrenarea tuy i th orrn nrd returns for the vnriou rcrtions of theroject for h h i rr h beern pJanncd but not cnrrpleted
the he hat the completion of
the reynainintz ork-requivd(which P-nti fird Ip following Sectorsray up on tn iI thejwwould appear to offer the optimum coabination of hirhi nremental investmentard early comption
No of Apror To P- riuirred
Triffa Main 317 Triffa Sector 27 Triffa Sector 28 Zebra Collective 1500 Zebra Remainder 14250 Bou Are Central 16250 Bou Areg Remainder
TCtAI)
- Includes cre 8000 aeri o being equipped
If the above is to be accomplished over the next five years asenvisioned by the GOM the schedule would imply the bringing under irrishygation of around 1500) acres per year This is around two or three-times the GO hi torical rate of dvelopment of irrigation in theMoulouya over ast seven years While the GOM has recently reorshyganized its e cnt structure to permit greater local autonomy inf1 e ranagemo- rrigation perimeters and has recently accorded avery high -- -r to acceleration of developnent of the V 1 ouya inparticu t -vident that given the manpower constrai ts involvedin the Mr n operation the- above target way well be it- ible of achievenrnt
The GOM hM itself recognized the elements of thl -- I i lindhas in dizcuss ins with USATDRabat requested considersti- -f hfinancing by AID of the dollar costs of a management crht with oUS -irri to take or c(vnpletely the management unctions fror thi
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5 r-y rd t final tng of ire aration for ther-rT ir cvf ni r r imy - rz--rt ha recently beenr-t) l i w t e rr - tht - I afid if exToected to ubrit hit writt(-n r-rt jr DC Aii preliminary impressions baled on a 9Ite nErerti(n indi-ate thit a -rt1fartorj repair con bemade in c)nIdprnbly le- t n-ne for lfan -than previously conshytemplnted
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Z~bra Collectlv-
Thin 1 on ara ofrXPr-ctively ond tribal land that will be divjded and allotted tr J-ted tribal -b-hrc who will become soleowncr3 A Pirpe rart ti Tniran -aratirn and developent hasalready bern co-plet] 2pani levelirg r-mains to be done as well ae conztruct c~n of b-tcn dnd drina- works
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T ectinr f th- rrainler of bra will requiret- rd i i w -J n rrd h c and engishyrnr nw d t i f -tritst t n and dlarn -rk
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At indicatnd In the- tdl iv 11 - rnt it~ocotof the rxojroct are t hi~-hor tnan the ic60) 1orccasts Th y tarc Ah-wever 1hchr by cnr murth~cul~ averllsv( a igiificqntjsCfect t~cn the bt-ric lfer-7t I-tio n- rigill lly rc~r~t
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elevated area requirin iat-r to be puiiped to the irrigated land with both highr capital costs (about 1 million) and higher oreration and maintenance costs (150 Dirham per hcttare via-a-vir 100 Dihams perhevtare for the grnvity irrifrted ares) The ony work presenl-ly cotiishypleted in the Triff Hih Ser-ic Area is the preliminary engineering stirUes Cimi-ir to th Tr Pa r thu TrIffa ]Igh Service areawill reiir an ex I uvnt ricd bfore agricultural proshyduction cn be initlat-2i
The above considerations reiult in the following revised ranking of priorities
Project Area 1FY (M Priority
Triffa Main 21 I Sector 27 8 I Sector 28 9 I Bou Areg Central 6 II Bou Areg Rerainders 6 II Zebra Collective 5 II Zebra Remtd nders 5 II Triffa Ent 6 III Triffa High ervice 5 III
SRI 11ed a ccst contingency f7actor of 25 and a cumulative costescLlatior factor of 3I per annum These factors appear excessivelyhigh in th( light of (1) project experience to date and (2) the fact that from his roint the technical rirks involved arre of a much lower orl- r f 1h thnse inhtrent in the major works Just comshy1 I intion nrd contingency factor of 15 has there-
S chtiMnte- Itlizcd in this rarer The ii n-ttr costs the to ) ject (in n]ace of factors
i by )I nrt 11 thIrhe nf th nJter atve I[cwver rrtnrecr-y factor euld Increase the IPE ] hi ra]y th- IIRF fcr the TrIfa Sector 27 ansnunirg a
oct crortlr7crncy A can be seen as the conAngency I thf cc curve rrv to the right and inter ects the
ur h h 4r- rnr rate of return)
C Finreirifg inr
Cot o the prJect wor fmcentntgenent nnd engin-erinm advisoryrvices for the proued t rd tsge of the Mmlouya Project are
ctirt a Crollows
nF3r AVAILArBILE COPY
Best Av DlableD
7 17 shy
(In Millions Of Dollars)
Righi Pank
Trffa Main 34 poundSt (r 27 08 S ctor 6 0Q
51 Left ank
7bra Collective 12bra Remainde r- 54 Tou Areg Central 74 Lou Areg Remaluders 68 heft Bank Dcad Head Tunnel 30
238 Services
Management 20 Advisory Engineerin 05
25 SUB TOTAL 37
Escalation amp Contingencies 15 47
TOTAL 361
It is proposed that the AID Development Loan for this stage of the Moulouya ProJet be limited to $5 million an amount which would be sufficient te reet the cost of any US goods and services required for the works to oe undertaken Thus the loan would finance the dollar costs of manrement and engineering advisory services to be provided by US firms erstimated at $25 million The balance would be available to meet any ther US cofts that might arise for constructicn cuipment and nateria]
The balnnmc of funds required would be provided by the GOM from its own budgetary resources including as appropriate agreed allocations of the counfryj-uie dirham proceeds of US surplus agricultural programs in Morocco
To a l-ge extent construction works In the Mou]ouya (other than the Bou Ar- Tunnel and Mechra Klila Dam) have taken place under a largenumber of roll contracts with Moroccan firms It is anticipated that this will ontinue to be the pratice in the forthcoming development stage Th iit is evident that the great bulk of project cests in this next stage will be local costs
-E5 -
In the event that not all of av l able fuInd- under the loan are required for TKI eo It i ouied that any remaininrn balance be utilized for the payment lo -ovalccztn f the project This would be aceoomplirhe by utili7irn th- h r vroceeds of the loan to purehare US-use dirhsmn (frcr th U Oi-irrirg Officer) which would be utili ed to rrimbure th fc u a t local - nditurrs
Thi arranrit 3ir ila ) fstV utilitd In the - of the D-e l-INAieret Loar tJr U Atrrert SinceYr usii Conv rf i cn therc loans are rcpiviible in dollars nd rince Morocco in a n-ar excess local currency couintry the fert ) f e transaction in tc provide a means for obtaining ccnvrrrs cn a-cr th life of the loan of otherwire inconvertibie U5 holding irhrs hich are in exces of its localrequireme t
In 1967 over 15 million dirhams (abceut $3 million) of PL 480
Section l04(g) loan fun cre in msgreement with the CON allocated for the financing of various contractr reloting to projects in the Moulouya It in anticipited tht ndditional allocations will be made out of the local currency proceed generated from current and antishycipated US 7urplu agricultural rmodity programs in Morocco
It has been proposed that the dirham equivalent of $45 million of the proceeds of the October F67 rurplus agricultural commodity Sales Agreement be allocated for a Section Cb(g) loan for the Mulouya In nadition it is estimated that a $]35 million (in$ioz1ble dirhshyequlviJent) woull be available from 7uprl]eental surplun agrIcultura con -ity rales programs under Titlo I an-d Title IV in calendar 196F for allocation for loans for development projects in Morocco These two amounts combined would provide about 6 of the G014 resources reshyquired for the project over the next five years On thic basis there would appear to be rcasonble propect tht the GO should be in a rorition to provide cver the S e year rriod of the project the addishytional resources renuired for itF ccmpletion
Tt I contemplatd that na additlonal US dollar financing of the Moulouya byon-l the $ iilon rorosed herein will be provided for tl cplei n ef h M _11-nuya rince the bringing under irrigation of th- 11O0Y ies include] in the propore] project will substantlally cornIete the works criginally conwtemplated hen h DLF loan was authorshyized in 106 The remainler zf the workr h(- be within the capabilit3 of the GOM to complete with It- o-n resourcec
MT M T M
-16shy
) Technical Anily ir
The Moulouya Rivr which is cre of tne largest in Morocco originatesin the idll Atans
Moulouya and which oztend scuthward
Kediterrancn l re
t rre
Pr
ard n
flows rrpr
orre 25) mriles northeast thr Agorinn border
to the
In- agricitui 1 in li j i nt( iljr r Th- rst rind most
t 2 1ir i t i h- i n th rwrht born of thshy-- e 31nmiler frem the Mediterranean
Lea To tho wet cf the Tiffa and nn th- left bank( of the Moulouya isthe Zebra nlain 14wiuntain rv-arate the Zebra frcm th -ea and fron theBou Art-r i-ll]zain which - ctI nrrthwe(st of the Zebra The Bou Areg a coital phtain sclte 19 mils lorg and h miles wide separated fr-nthe n-a by a Ihow sa2t water lagoon Southwest of the Zebra is theGireb plain which hun land ruitable for irrigation in its routheasternportion The Gareb i at a higher elevation than the three other plainsard if ultimately irr-gatcd vould require pumping fro the lower level Zebra conv(yance system
Water from the Noulouya River is stored brhind the Mechra Klila Dam whichwas coniletd with fjiancri rc AID loan (3-A-2 (DLF Lcan l6)Water ir rclca ed downstr(a (1bcut c) miles) to the Mechra Homadi reFrshyvoir and d]iversion dcim in1h-r divert-d to th right oad left bankcunals About 75 kilometer (1 miles) of the Triffu (right bank) maingravity ciral hay ben copletd und consderable cr) has been carri-dout in the Tri on) distr Iution and drainage netw rks land levelngend other farm iwnrovwments About 37 kilometers (22 wiles) of the Zebra(left bank) main gravi-ty canal and the tunnel 6 miles (101()7 JIrenrTrcters) betxeen the Zebra area end the Bou Areg area have been comrneted
The GOM illrrfo m certqin -rk nr-Aded fcr develormnt of the gravityir~zgata yt-- for n 71-) acres over the next five yarr Thiscffort vi2 be eonern rait-r urcr the develo-ment cf areas thot providethe great-rt ecnnomic returrs nnd the developnent of a cadre of Iorocearperornel adequ tly tran-yi in the an2gerent of the project SeeAnnex C for further Irojcl details
e- enmL Ev1ation
Mt Infratrueturr The --trnal highway co-munication network i t arid rfi Isirm nf re- i n-ote siler in-1 shy
uzeather raved rc
____________________TAM
- t 7shy
Other communlca 1 i i t ih Lh arr-- inlude the nrninlineof the Oujda-Fe--C- t h~rh l e0tnnd to AlgeriaSpanish enclove rt the 1 fir idto cmmercial airport at Oujda andNador with regular national onI int rnational ervice5s
Th verirtr 1 u ~Ath r nr r t crocd by 60 kvJ i i i u rrd t 5( kr It na ortr kk f~ditcrl rower1(Qp x I -y yrar) -o n d hr rritIronr
at the Mechra-Yplusmnilj l inm fnd the Bou Areff contral poter Statin The townare connected to ranrh cther and th2 r-rt of Mcrocco by telerhone andtelegraph 1 ner
b Sol Soil rvey 7rd land ]a-ifctons have been completed i-nthe Mcloulva rer eter oanntrantbi- with French firmr u-ing Frenchmethods The Trifa -1n wr initialy rraped at a cealeof 150000with certain area ub entiy rer-aLd at 15000 110000 or 120000dependin I nn the cor1cjeity of YJ rattcrns The Zebra plain has beenmapped at a reale cf 20O00 nod th- Bou Areg plain at a scale Df 150OO On thp baf Yr nf ther urvy th cla sified the soilsGC hain terms of r-uitnbility for irrigation as follows
Land Ciaifcation (Aere)
CasrI amp IT Class III Clans IV Totas Triffa Plain 17000 29[00 22725 99625Zebra Plain CbO 1275 4050 211425Bou Areg Plain 75)00 l6qo 3 0 3067)Gareb Plain 13 05 10 70 0
Inclurez 1750 acres for lfigh Service Area
The findings thi indicate that ( i) arriratry 5of the area in thefour rlain- i suited to irrigation (Clare I anl II) (ii) more than3 ir suitabr bt with one Or mcre imrtat~ons Irro=ed by underrablefeatur-s such an to wrafhy oil characteristJcn trnine- r restrltedbull rio (CIar TIV) and (iij) ls than 2 of th- area in only margina)lysuited for irrinticn(Class TV) In ther7e lattrr ardrn only rmi-intrnsive orop rotations blUponsblhe
The oi nicn f the Cn-lting Envneer (1ydrctechrJ) th respect to) therd carrffjn n that hfle 3 Bureau for P ltr0tion -tandards werirt ernoy-d te rlasnificatinn ir aceurat- and n rrti with3and rlaced in r d rLrnble categories more
uere thnn right ha bern the caseUS tandardr folIced The clasifatinn ha 0a been reviewed andfound to be atifactory by the USPA tayr Hoever r areas of complcxroil Ttternr hch to date have only been ru-d to a oale of 150))rome reraTpin tray be necesary as a banis fcr rrerarnZ
- g~T PRAvVLAFJLE EOPv
final designs of irrigation and drztinne- rystems parcellization into farms and planning of land preparation measures In addition considering the high average salt ccntent of ater frcm he c ilouya hiver a rorm of systematic leachin- will be reqirer- to f ree-rt aculation of salts in the soilsparticularly in h ebra Crt in will nlso1e plain ureas require nitrogenphosphorus crd possibly other nutrient to obtain satisfactory yields
c Water On the basis of studies by the GCM which have been reviewed bythe Consultirr Fnr ncri and the U au of 1ccoi-ation it is thecorclusion of A tt (i) the q lity of water in the Lower Houlouya
is below averpge bvt crp rble to thtof certain rivers in the US whichisotnteLoh~uoybrve successfully been usc for irrif ton for periods cxeccdin 100 yearsOj5) there is clearly a sufficient a )unt of i ter to irrif-ate the 128010
bullcrer to be served in the [rlcentIty ar n3 Addi-tional s-tudioser (c requilrecj dcter-Inc if adeqiuate water is a- ilable for irrigationof 376QGO vc rc
The only signifcant urce of vp y fOr irrigation water in the perimeteris the oulouya Vi~cr io jc n1 is 1re ntly being irrigated from wells most Iround water i - - 1 Alouya contains dissoived salts which i xr Lrn - hvriny reak flowto iJOx PIn iuting [cricd of c n ccntraticn is 750 ppm On Thi- basis of USDA Salinity Lot) atory criteria fte v ater is class 03-SI (hl-h salinity-low a-alinity) Vile water is thus of mediocre qualityit is ccmrarable to that of river successfully used for irrigation in the US (eg the Lower Colorado Rier) and poses no serious problems to irrir-ation in the Moulouya perir( cfr provided the W4 adheres to recorrmended programs for meeting leaching reoairements
With ref-pect to the 128000 acr project the demand for water reasured at the Mechra Hoadi diversion dair is estizated at about 575 million cubic meters per year as follows
remand for Wter
Peak Flow Annual Total (August) (m 3 million)
Agrieulture (176000 acres) 337 m3s 806 Municipal amp Industrial Consumption 8m3 23
Total 4 uy62123000 acres to be irrigateA by Gravity 255 m3s 575
(The e dpeak requirzents of 345 s compares with a 35 m3 s design
capacity of the main canal at the diversion dam including 18 m3 s for the Right Bank and 17 m3 s fcc the Left Bank)
I
- 19 -
This estimate is based on probaole rainfall cropping patterns plant requirements evapo-transpiration and other expected losses of irrigashytion water The estimate is believed by the Consulting Engineer to be reasonable but subject to refinement on the basis of tests to be carried out on a continuing basis
The annual average availability of wuter from the Moulouya river is estirated at 1100 million mn or about double the estimated requirement for the gravity areas
Estimated Availability of Water
Twelve Year Annual Average for Moulouya River 3 m3 second 1100 million m3year
Maximum inflow Observed 8000 m3second(1963) 3h00 million m3 (1962-63)
Miniwum inflow Observed 1 msecond (1951) 532 million m3 (1956-57)
On this basis it appears that there should be ample water available for irrigation of the gravity area as the water availability obtained from twelve years observation exceeds the requirements in all but the 1956-57 season shown above Prior to the development of land with purped service areas (the Gare-b and the Triffa ig h Service) a review and analysis of the river hydrology should be unidertaken to assess the availability and regulashytion of the river flows
d Studies Entincering and Construction The overall irrigation scheme outlined by the 1uM defirs the ajor features and th( magnitude of the work to be accomplished to attain the ultimate goal
This scheme is being carried olut in phases over a long time period The present phase encorpasses the development planned within the priorities indicated by the Stanford Research Institute (SRI) study for the gravity irrigation system
The studies for land classifliration have been completed for the gravity irrigation system in the Triffa Bou Areg and Zebra plains by French firms and were considered reasonably accurate by the Consulting Engineer Land consolidation and parcellinrg has been completed by 0MET in the Bou Areg Central area the Zebra Collctive and Zebra Remainder sectors 7 thru 10 Land consolidation and pareeLlni ar( needed for Triffa sectors 27 and 28 Bou Areg Rematnder arid Z(bra Rerrirder sectors I and 2 The engineering designs for the Triffa main sector 27 and 28 and the Zebra Collective have been or are being completed by the G0M forces The engineering design for the Cefntral Bou Areg and Zebra Remainder sectors 7 tnru 10 has been or in being connpeted uy Hydrotechnic Engineering design will be required or the 1ou Are remainder sectors D-3 thru D-7 and Q4 thru G-6 and Zebra Rer ainler sectors 1 and 2 The engineering designfor the Dead Ilead Thnnel has been undertaken by SCET who have preshypared anid issued an Avant Projet for bid invitations for construction
14 M)j6Fj Cshy
-20-
This firm will also undcrtnk- uu-orviston of construction The engineer ing not yet performed can be aea ished by GOM forces andor private engineering firms
Construction of the extension to the rrain irrigation and drainage canals Jand preparation rector cinl ani drninaive ditches will be performed unllr cntact t) 1 cc rt~r~iet m)t hi in the ene of the
r-abilit tion of the L2tL Pz- Dd iarl Trnc t
e Cronning Patterns The existing erning pattern in the Moulcuya including botnirrigatcd and dry farm ingincludes grain forage citrus vegetables olives grapes and 6 small amount of leciduous fruits and nuts Of the roughly 2140Cy) acres of agricultural production in the Moulouya about 177000 acres are in field crops 24)) in vegetables 16Y)O in citrus 15000 in grrrcs 540Y) in forage crops 1700 in olives and 15)0 in other fruits and nuts
Taking into consideration rast and present trends in plantings as well as agronomic and price and marketing factrrs the following projection of cropping patterns has been developed for the Lower Moulouya
PROJECTED POPPTG PATTFRNS T1 HE LOWER MOULOUYA
(In per cent of total irrigated area)
Left Bank and Triffa High Serice
Triffa Sector - Sectcr rriffa Class Class Class
crop Main 27 28 East I amp II III IV
Citrus 40 60 10 10 10 Vegetables 15 10 15 1) 20 10
Crtton 15 20 10
Fcragpr 10 20 25 30 4o 30
heat 10 6 20 25 20 35 4o
Grip 25 24 35 15 Dy beans 5 10
Sunflower 10 olives 5 0
100 10) 100 100) 1i 1052i 100
a Incltdes double cropping
- - r- euro --- 7
~7~TF~Wr~e~ALUSE
-21 -
The projected cropping pattern for the Bou Areg plain includes cottonLJrirdg the frrt Five yearnejtinted 1r of the Class I)fand
the project jitwould be grown on nnII landn Tht renresert only 960etrravres) ectz ri)cr)e area The cotton acr~a e ry increasep 2ceafter live years if ritisfactory drainage conditionshyrre achieved in the Bou Arev
cotton grown i 1xonp tarx- Trdltionally Morocco export its-Jr- cron an irr IJ hort cble to rmeett Cotton the reuirrents
r the oroccan 2pinningr mills The croppni-attrn of the Triffa East (about 180n acres) Js projectedt Tnrlude 15- (about 27 acres) in cotton It is likely that becausef ihe limited extnt of Class I and II lands in the Triffa Eas cotton not increase beyond that percentage
1t i evident that the amount of irrigated cotton that is likely to bein ther-n Moulouya is minimal even assuming that local drainage condi-T nare i asuitable
f Technical Sundnv--s The AID Project Engineer hps reviewed ii) thedat and ajor construction performed to date onronct and finds the technical requirements this long-ranRe phasedsufficiently defineoto ccntinue the project on an orderly schedule The estimates of cost of prsirct facilities have been determin-d by SRI from average va)ues oftrit cots obtained frorr reviously ntiarded contracts and from etniled( -s-nand analysis prepared by the iHydrotechnic Enginering fir oft-o tyieal sectors located in the Bou Areg area The costs for the arc ent contract have bcen estimated by the USAID It is consideredthat the depree of engijeering planning undertaken and the deterrrinitonr to the US Goverrment are adequate to meet the applicable requireshySt- n Section 611 of thie Foreign Asistance Act
7717gt
1 --shy
-22-
E Financial Status of Borrower
1 The Moroccan Economy
Grrwth of MorocLcts GDP in real term averaged about 24 per yearin 1(4 and lr li Per capita DP In 1C 5 wan anproximotely t162 A (er Irr-ht in (6 resu]trd n a drcrcne of slightly nver in GDP which tlh vpulatior grc~vth avrring 3P4 per year rnrsJted in a decline of -r ornita GDP In 16 ii brut $154 A recnd droughtcccijrred In C67 but i not expeetid to have the severe effects of the 165 drought Crop forecasts for the first nine months of 1967 indicate a 4 increase in real GDP above the 1966 level This is also the economic grcrdth rate estimated by the IBRD for the pezxA 1965-70
Moroccos economy is heavily dependent upon the agricultural sector thich has averaged about 15 growth per annum However growth of the mal modern segment of Moroccos agricultural sector has inshy-reased at the rate of about 7 per annum
In 96 the International Banik for Reconstruction and Development (IBRD) preented a number of recommendationr denigrned to increase Moroccos economic growth rate On the bacis of these recomfndations the G004 proceeded with planning the necesrary program to increase investment levels fr- the i 63-65 level of 11 of GNP to 1r of GNP and stimulate the rate of economic growth from 2 to an average of over )4 annually for the five years 66-70 In addJtion the GC4 has taken measures to curb the population grovth rat while placing increased emphasis on raising production of both dryland (wheat) and Irrigated agriculture
2 Investment and Savinms
The level of total gross investment has remaind at aboit 11 of GNP for vera year althugh the percentnoe declined slightly in 165 Under the GO Three Yea5 Plan 1965-67 the gross investment t-3rget woz ret at DH 3 billion- Actual invev-tment expenditures for the three yearpeirod reached about DH 46 billion of which the Governshyment ezxenditure amounted to DH 1 billion a against DH 21 billion budgeted Thin may have beeo partly de to the GOMs deliberate ausshyterity pollcy under the hIF rtbJli7tion prci1rnr but more probably it van duxe to the shortage of trained cadres to -lan and execute projects
In the private cectcr conziderable inounts of ravings may be hoarded due to lack of project attractive t- inventors The lvl of private investment has been runnihg at about 51 of GNP thrrugh 195 The 0014 4 incentive to private instors hnr cut profit taxes from 4320 to V and announced a tpn year guarantc-e against tax increases
]L- $ = DH 506
777=-77- NQ
r y 7k1- T e - W lk In
j - 1) 7k- - _
- 23-
Loan are avaiiable to )rivlite irve-tcrn freo th 3JfIDiN s rctr special funda to prcmote touricm devc firvcnt
Under the 1r86-1972 plan abut to br irtntt level are to be accelerated considerably reaching A of GNP liv ]970 Mor(- Irlyir haviiy on foreign 1 to aciuw cc higher lve1
3 Central Government FinancP
The Moroccan money supply which had Incrrased ify 76 per cent in 2965 remained virtually unchanged in 966 The first half of 1967 witnessed a 5 Ter cent increase in the money supply Te major part of thi increase as concentrated in June and July uhen the supply reached V14 0j lion Currency In circulation expanded rapidly in June and July
nnl factrrn being reinforced by commodity hcnrding related to the 1ide~l Et crisis Demand deposits did not show their normal decline nthe first half of 1967 Deposits with commercial banks declined nlightly while deposits with the Treabury increased as public and semi public agencies contisued their transfers from the banking system to the Treasury The increase in money supply in the first half of (7 ran I raced to tho nzon1 sonal increase in net foreign assets not c y the custcirry rlelir In claims on the private sector Clsirl (n the erivate sector declined slighty until May 1967 but Increased hr-gb June and Jily due primarily to additional financing of textile stocks ClbiJ ante Government rose by 10 per cent in the first half of 967 the in central brnk claims on the GovernmentI being rmainly offset by larger deposits with the Treasury
Ordinary budgetary revenues which incrurted by 5 rcr ent in 1566 tre cxrcted t-) increase by 7 per cent in 1( to DII 21 billion DeampDite a derea3e in agricultural tax reccipt r- fror diret taxes rose by 10 ppr cent in 1966 and a 2 increas estinated for S67 due to tric or controls on income declarationr d an accelerashytion of tax cller ns Owing mainly to a relaxation of the import
program in late 1 5 and a concomitant increase in tariffs on certain ccnonter goods customs reneipts increased by 21 per cent in 1966 Although budgetary estimates call for s decline of 3 per cent in customs receipts in 1S67 it is likely that actual receipts will be considerably larger in view of the import liberalizatidn measures intro)duced subseshyquent to the estimates Receipts from indirect taxes state monopolies and other serces are expected to be 11 iv- cent Ipher in 1967 owing to increased profit on -ugar sabr-i and L r(m the newly created Office do Ccrmercalisaticn - d-tation (OCE)
Recurrent ordinary buiL e(enditures increased by 34 per cent in 1966 ar-i are expected to increase by an additional 7 per cent in 1567 reachin- D1122 billion Although wage and salary scales in the public
Banque Nationale pour le Developement Economique
TT~~- - I777
2 Cf
sector have1bec z h t - rrvirI urli 11i g 14-6 -nd PO becnue rX toi Ijt e f (]r o n 4
ill tile ic urrnnye andr)not i on dnd Publi ht rentrn -yr-otn lno IncreasedOthrr t ill- t il r ne by ) vr cert in J6(
i ninlyrt -br h Inc-l
( Ihe ( t r- rl t ip t t C itur f T)h 21h iilli n
is (( ItI t lt r c0 a- r n n o I- c t b It ihstnl id vv ih n t r-t have hn(er - en 1t2
(IM ii ture( T f fu traordJ nary budrzct exshypend ituren a r y -t c ~ i vi -iscz Portal Checking sy-stcsul)rrcing t (I ltIt Ct -- ind creirn shy
nnet The f r er tnc I hha ccrc ed from a htih of DH 5-7 millIJn in _ 5 millIn r C46 F cr ats foi ]7 place Cro n w I 1(DI)J79 ill ni DDn etlc fi nancing has alo u 1) 5 p (- I3A27 iIliun to an entirnted DH 1142 million
1 14V ) I nv 1 ri n nI(c1 franc n is 77-ected to be ol t y ncrewed bcrrowing fr-ir t he Cestra 9ank which hud been held at mcdert vols iln 165 nnd 1a66 Under the 1TFtaiby agreement of October 16 the qob) agreed to taBe a3] rocrrnary meurer to maintain as table curoonry rPnt inl th nr1d-elrto th b a ent of the ePrncriynnd a vnbl- hn1incc X nvroent P rt artt to t rt fien of tho Ccntin- Honk rstz (erct are nct t r itr June 30 Y-ke 7 lov l b th n Diif ) mill] (n tlcnber -c P thai I o illin usit I ])ecthr 31I62 (GC bc w t
C B1rtrp - vt DH 12 iri 1i nor ]S67 or DH 6S ij lionEan tisated (r fo than the aproved crd it expanwim
Thitrd ordivary nil extraordnnry buThTt deficit of DII 7-19 millI n fcrecat Fr 1 67 in exnected to be fnanced by not freign
tan reof DII )75 mi~l in nt recurity 12ue 1 T111I vlion a - nt ry tiat Po n Che )ir d-nC i 73 r5 Pn
riI is u h i a vti v mrr nrr-e jssIof fvr is id a erital The vnfsa revcred in 1d6 when lnrger r nyrentn eEecially on food itcmo an n -lewdoun in
igo ra a deficit of $1 millcn ProjectiOnz-vt rvultvd in ror 17 r~ieat inrrerned importsonly partially ccnrennate by addshytsa t frnreirn r ntil rrceiprs ard mprrvement in the nervices account will reult -n et of aprroximately $)20million As rhoim in the following tabl -r tion for l33 and 169 how overall deficits of
14 and m] ivi_y$i It
rqVV t1 4~
C)rgt
---
1 -)I+-IRF1
1ROCCO - rTANC OF PAYME 1qrt - 169]_ 5
6rfi0 1 1C(8lr67 i r(o
)xrurt 2t L( I L-5
Trade Bnlance 11 15 - 75 shy - 75
rviee- ret - 7 - 5) -35 -23 -2
J]-i of Good rnd Service- - 3 - 65 -II - ti - (5
Trn-Ifr Pr ynts (nt) P 21 33 37 33
on-cntnry Carital (not) 92 64 6 6 5
Err-rs nnd Ov rrion- (not) - 23 -2 1 3
eranl Bannic __ - _3 -_ 3 - 1i4
Atrh thert ircjected reficitn are of the nnme order of 1 nishytude a7 thcr incurred in the period i66 the Situatlcn i findarentallydifferent both in rerprct to the source of the deficits and in rer-ect to the meat0Y gtr m etin7tecr In the f rrer caive M5recco uffered
_frcrr a very h-vy cutfc of Drivtes cuitv fo-ivr with a shar) decline In forein nt exerditures in Morocco In the iatter case th projected deficits r- rcre a functicn or accelerated crcwth risingdebt ervieiiw tri tho abnrcn of forv eeble additiens foreign reshybull ourcs nere7ory 4( r2Vm rAf finmncting To nect the def-cits during the reriol 161 61h MWreco ob1id to drw down rorcin exchange reserves of over $]c milicn The snrti tpv of financing is no longerpozslble ince no or-res- ruch reserve- Even ifMorocco yr
mn nina r rve_ ore (]rrfii on to th r-ixirun etnt enribe nnd the [iI tnfldy i- un M-r-r e i32 till relA re nt rnt 15 millicnj1itionn ftr ign as- e n 1 6 beyond hat r recnently fcreeeshyable with ver nri- nry Officilr in In i6 reserves are cotImnted Pt 72million c hih crn V 3 million i caly required for currency coy r
Foreign InJebtrdne n of th GOM Mnroccos external rtnte ard rutlie enterprie dett amounted to
$r) millivn in lr6 Debt vervcirig rpynents for (66 trtaled about
$5) rillion g-eement approved in October 3(67
I- -- Ishy
37 millin or arprcxitrrntoy (j Iroccor totnl eXoort earning of h28 millicn GCnerally nxt rrO dbt FervicJng renuiremennt of leas
than r of totna -ort nnrlt In onrldered to I r tirfactoryrntio D-bt r rnJrcLct n Ir the reriod 1-(y 3on Trerent external debt including thnt wrtl(n irreently undibur-ed are hown n th fr lv tahlr
)] L v yr t n
Eternn Vtnte anc ] bntcrnrie Debt
M131 o)nr
Y aI Net Outrtnnling Debt Debt Service
(6 it 479r5 $367 J-67 452 3)6
Z616 44469 2 0 2C-
365I3 37 389
33 383 33 6 371
5-h 31 n 352 275 34121
]176 2661 32It 1977 21133 311 177 22)6 307 19 i0l74 256
1733 255
rgtternal debt rharre n rerent debt nnr rhon above do not increase ubtanti-lly over t rt 1)year- reaching a maximum of h44 millior
in J6 and decrpt- n cr - tently threoafter At the are time exportearninr r _rc extett nc-are Aring that Morocco does not inshycreswre it etrnn2 cbt t irate ubrtantially nb-vc ihat has been the core th adfiticrn dbt e roquirrentn reulting from the propo t Icon o 5 ijilion co r 7crncepr-ional term hould not have a i-nifiant affect n 1r o - ab lty to neet itv g rc-atedebt ericn rcnrib2t~e- the pros ectr of reprment of thin loan ore coniderci rearcnb)
U I -
F ot h-v C IuIJI rmt I shy
1 V amp~ rVml KI
PUC- -jrVi Jt t 1 11 nflrcj urlc 1- th )qn --P I uti u rhnrrl -1r- thr U- Tr- ry- R- -nymc nt
c2Il f n 6 1 bf r I- till 11 nfl r- n-r i n of O r--niC(Io~hi U 1 1 rr to
Tn vil ) f rvc hi tvlrll 1 (In- - n- u--n E r me rrinshycgtay F rntwir w ourc o -o- rvI ortf-V3 1 rncing of
Uf f -r rrrir- ur3r 4~ v -rin Iltrt nt ndd shyt -n t ) in- lint r b t l r -n rort- o-orco trorl-- V -P
r i 1rnd h L-torie Furcl-trin firr- thrjt US r r~ crvirrf- u~d be~
T L I1 c vt r- -ly ] -ubt fu 1 n vi pw -I -ror-co Ir of
ut1JpcO In thi rjert f it -- r- 21 npnred by d1-nr- cothcr t~han the US
2 ]P-t ofI Prr l1 on Prw- Fntrrr
Phij rrcjJ-t -11 n-t h~ -in nrwerq Prrt n rr- tc ntrshyr~A~r fi-mc 1bho und for --roern p o n
3_~~PrCT--rty
rr-vIi-n 1 h -d r the loan ragreement for Icntifitcation ef any r mIjrpt n ctri b- rt througn ut 1zatn (f xccr- prorerty
If rv c u~eAID n-mrcf u urr thi )cn - I~ut~ em avoi3ablo r rovvrirrnt -rrperty rather than nce iteni
4 Otli-r Fr- Wo--] n-Fnlc4rm
Dr mi tW- o] 14rocco- i~ajr ovr-ec -f exte rnaX
rrtan~- hrtvfb - I r ~ ant fl Fr n fole by Kv-it
Sgio F rneflit r b-en 1lmrntrd to tcfohnjip n5tnnen bi eoni~in I th u y f Fr--h tprhntcian tcacrr ind cther
~ti~r t~ ec-tnmIyrt-n Friinch Aid to Mcreco In 1065c~oc~ (P-art f-r txychnirril aItn -- j se of tl5 w1nfor bu~dget rurport f ir in rt t- $1 1ri1 icin in ennita -rojectM- n vx- rrcd
1Vw1tvnn tioI t-) Frenh rurtnnd +16 r11ion tie-I to -onyiint to orrrcr Frrmh ccilcn~For _-rrc-ratod land and rquirrmcnt
West GTrrnmnny liar agrcrcd to nrovIe ccme j27 mM22~cn 1n catital arirtanre and cromrndity lnoi7 t n OfIcon( q92 thi o totril$223 miJ lien ha actuary b-Pn cr-Itt--d under Inn ngrepment This
And a lk5 million commodity loan both) signed in 1965 All Wet Gerzaan
Ufla
-28shy
capital asnistance I vuectI to be tied to German exports Germanyhas in addition 1uvvded r tteysubbtantial technical assistance f
The IBRP hah rade four 1nns to Morocco since 1962 totaling$6) million Ofthin totnl a [175 million loan in 1965 wos fordevelopient of the gidi lit-r irrigation perimeter Other assistance by internntIcnal Iending arncie include an $11 million credit byIDA in 1C65 for rcendary diicction projects and an IFC ln and inshyvestrent of $1 1 ri jnic alo in
F tit i by [c - dncr tr dh elo snt ofMorccco rircuVt r oii +h b-]n jt-TKT r nbove n 2 )6 niliion Kuwait enn in i66 for develomyment of the Tensaout Prnm n irrnten nrooetand a $77 million Kuwait
0jl n )nnsn r(niti-nertcir
loan for extrnion of the Tadri~ Irrigation Perimeter
The following- trbe surrlnrlzes other free world arlztance (excluiin technical assistanc-) to Morocco for the years 1(62-66
($ Millions)
1 62 1cf_63 96) 19r65 19)66 Fneea 4) 5PO 64o 700 shyWet Germany 223 gu 1t 53 281 IRD 15 175 10) 175 IDA 110 IF C 1 5 7 7 7 0 I15
TOTAL 55 62 1U3 W
b Includer only lo-ng term loans and exporter credits - Includfs 25 million private capital
Eternal ansiztnnce to the Lowier Moulouya Irrigation Perimeter -nce 1060 hres been con[fined to US upport Consdiering AIDs previcus
involvement in and conmitnert to the Lower Moulouya an AID lean in P2t to be Lhi mol aprroriate source of financing for this project
LID
II
q
-29-
SECTION ITI- Y-TTYT TIMPLPTrION
A Periret-r Ad-instrrti-
Authority for irplerrentvtnn of the deveorpent prrgrn frr the LowerMoulcuya Perimeter and rs wel arth crnntinuinz mrnnrrmenertC tt r t- rrtnr V theltbi nad overationity iOfic 1cne 4
n r I e1i- i d Vit4 i Iv ~ Ct rreated i Otb (rJ rn-- of evcn inrmi-rriional offices hich reelaced the Office de Mire en Valeur Aamprlcole (OMVA) Under the OMXA and itspredecessor agencies authority for ad-inLtration cf irrigtion proJect war centralized in Rabat
Under the new regional office organization responsibility for adminshyistering ORMVAM is vested in on Adminirtrative Board of 10 members headed by the Minister of Agriculture and Agrarian Reform as chairman All ether board members (other than the Chairman and a representative of theInterministerial Economic Ccrmittee) represent agencies or activities inthe region of the r-eriret-r whic comprises parts of two provinces Localretresentatives on the Board inc]-de the governors of the two provincesOujda and Nador the presidents -f the two provincial asembtes and of the two provincial chambers of agriculture as well as the perimeter Director
The responsibilities of thie Administrative Board include review of theecys program establishment of its organizational structure developshynt -)f its annual budget and establishment of rates and conditions of
Siyfent for water and other services provided in the perimeter
The Director of OP4VAI-I is dbarged with the responsibility for executionPthe vclicies established by the Administrative Board end administration of oil ORMVAM functions This responsibility includes selection of staffn pserating perrcnnel acting s officia ORNIVAM representative in all ntztinns with -tate and othbr public or private bodies and the
f of funds within limit Indivated by the Ministers f Financetent rn fricultural and Agrarian Reorm
Perimeter Oranizatlon
ORVAM oreanizatlonal structure consists of a directnrate five maj-r rvlces or d-vsicns and one separate bureau Two services qei Administratif et Comptabl- and Service du Yatrial are conshycor - th adminisration and lcgistical support of ORMVAM operationshi1e the remainirg three services rind the separate bureau are Involved in t-hni al matters associated with agrcultural developrent Each ervice has one or more subordinate bureaus Fei-ce Chiefs and thehead 0 rch bure-u report directly to the ORMVAM4 Director
-~F7E MEw-
-30shy
2 Perimeter 01ttffnr
OPIVAM orgttnlrntlon treture calls for 557 positions of whichI L or 7 Mlled n were nher 29 1567 37 of the 71 Postshytion vacancies reported 1ern the high and middle levels Foreign(chiefly Euronean) technclan occupy I)of the 16 high level positionsthat ere filled at thfit tire
Whil OPM ut in th- lcng run lor to Mercecos oducational yster to prvidr tn crrf-nn2 to ratisfy current rdurojectd rcshyquirement th currnt high and mlddle level vacancies rrouire uersonnelwith oxt nive nrior rxericnce To fll this preent need it will be necessary for CRIVAM to continue its program of recruiting foreigntechnicians until ruch tire ns graduates of Moroccan educational programsacquire the necesnry exrerience The managerent assistance componentof thin pro~ject ]e-rribed In the Project analysis will to some extentalleviate OFIWAMs high level personnel requirements
3 Inw1 ernetation Sehedu]
Months Implementation Action
1 0 Sign Loan Agrcement
2 2 C-tiify conditions precedent and Y4tiate procedures for selection of US firm for management contract
2 Negotiation of extension of advisory Engineering Services
h 4 Contract (Hydrotechnic) Negotiation of Managerment Contract
5 60Cmpletion of Project
C Waivers
Sect ion 7 rf AID Regulation 7 provides in substance that theUnited State ill not finance direct costs of construction work performedby third cc-ur y nationals unless the total co-tn of the project withvhich thr ennrtrumticn w(r is asEcciated donot exceed $2On)O orafter excluding national of the country in vhich the site of constructionis located and Dersons vho nave resided therein uninterruptedly for morethan three years imrnedJately prior to any determination under Regulation 7at leant 0 of all uernons who work under the contract at the site of conbulltruction are United States citizens or the employment of third countrynationals is necessary to avoid excerrive corts to the United States
3
31
Section 2175 authr-ri th Regional Anitant Administratorto waive the nrovinions of Sectionthat it is 2073 if he dcterriner in any coneimportant te the nationrn intercrt of the United Stutes tofinance the direct eots of construction work performed by third country
nationals
A prviou1y r ic i c t tht for thr ct Tartthe -r c ct b- 1jeuj out r -cnorbr f cnrtructioncontracts with Morcccrr contrctnr an in the i-t Uowfevvr itentirely psnible that there may b- roe contractn with cntructlonfirms partly owned by third country nntionaln and that ruch firjs anwell as the surely Moroccan-owrned firms may enloy third country niationalsIn such canes a difficult rrobic-i iould arise in meeting the terms ofRegulation 7 since an a practical matter Aericans are not reaonablyavailable for ermployn ont by such contrnetorn and our previcus experiencewith the Naunsseur Ccnv(r-ion project thatin Morocco has indicatedAmerican contractors would not be interested in bidding cn small conshytracts in that country
It in therefore recommended that the Annitant Adinitratordetermine rursuant to Section 2q75 of Regulation 7 to waive theapplication of Regulation 7 to thic iroject since the project 411 conshytribute to the attainrent of US foreign policy objectiver and the cbJe-tives of the Foreign Arsistnnce Program
LITI L USE
LfI~~5xA~us
lit
4 A J A 45 4 k
t A S T
S(3
I A444ilA~~l~)
7 -74
tAM= D
SECTOR 27
10000
t Co0Na includez25 cgtri oncFcttlrvI ncy I8s ~ ~ C t C- Includes 50 constriJcltiotrgrc
2000 60
IU
0
z
bull cosYsA shy----- i
600L _
400
200
0 5 I0 15 20
INTEREST RATE
I ~ 7 J7777
ANIAampX C
PROJECT DESCRn1 rOll
The project com)onents to te undertaken on the MIoulouya Irrigation Project over the next five years contists of the following
C(n1rtion of the rrLin casuals and bianch canbls to provide the suource of waler to the sctors be developed in theto TriffBou Areg and Zebra areas This construction will include the necessarystructures such as reulators highway bridges aqueducts water intake
and discharge structures etc
2 Iand Txeloommerit which includes engineering land consolishyt and iuvtllng lard preparation (subsoiling ripping destoning etc) and installation of water distribution canals (secondary tertiary and quurtunary) and drainage collector ditches for the Triffa main covering 24000 acres in sctors 8 9 10 16 20 21 23 24 25A 2513 27 and 28 Lou Areg Central covering 16250 acres in sectors Dltirough D2B and G1 thru-4h G313 i0u Areg Remainder covering 15000 acres in s-ctors D3 through D7 and GA through (6 Zebra Collective covering 45)0 acres in sectors 3 4 5 rind 6 and Zebra Rer-iinder covering 14250 acres in sectors 1 2 and 7 through 10 and th remainder of sectors 34 and 5 The total land to be developed is about 74000 acres
3 Canalization of the Oued Zeluan and nued Sidi-Amar in the Bou Areg Plain consisting of strairltening englarging and regularizing of these streams to carry the flood waters to the sea Drainage interceptor canals are to be constructed parallel to the sea in the Bou Areg Plain In the Triffa Plain the Oued Riada main drain will be deepened and enlarged and secondary drains will be excavated to provide for drainageof the Madagh area This will include the construction of bridges and culverts and other related work
4 Major Commorn Works will consist of
a Clearing of the Mo-1ouya riverbed downstream of the Mechra KLila barn caused roy flood dariwe and the installation of a set of stop logs for maintenance of pillway gate-
b Design supervision and construction of repairs to the ]elt Lank dead head tunel
c Conctruction and establishment of sib-division Offices and installations for farmer support such as CMVand farm stables
1 C
-2shy
5 Manavmtnt It ha been proposed that a US management firm be ewployed by th- C4 to manage and operate the entire Bou Areg area Such manageent -iuld encomparn all activities from the initial concept to final irIrp igricultural production Such activities would Include resp r-ibilsect -or supervnsion of engtneering and constriction of primary
S- Jry r complete developfnent of land training n in g tinul irription practicen preparation of market
t - r1t- (ot--rnu trplusmnining of a Moroccan cadre to take over h v--it Bou Areg dreara P the
At this writing the n-pt of turning over to a private UZSfirm execushyresponsibl]ity I h management of the establilrment and initial
op-ration of irr1gati the Bou Arog area has been only broadly de iiitd by the GCJO It Intended that proposals will be invited from a r -onable ntnber of f|ed US firms that a selection will be made an-n 7 them and a more do iled and cornprehenrive definition of the rer6 -Ps to be performed be eztabliched at that time It haa been
stimated that the t- of ruch a contract will be about $2 mir- n In any event the -ts of this contract other engineering arvl s to be provided undt n extension of the Ilydrotechnic contract and ether US corts will not ed the proposed $5 mllaion developzont Jean fr the project
The cle 3ifications duties ant 1ncnslbilities of the management personnel ill ha-- to be clearly defined i agreed to by the GCM Perimeter Directo- and other GOM Agencies luding arrangements for the necessary gistic support
Svxlale Docu-
1
4
LD ED 0ICIAL
-IAIDshy
A1trX D
C6JCK LIST OF STATUTORY CRITERIA
(Development Loan Fund)
1 FAA 0102 Extent to which U3 cormodities and services are furnished consistent with improving the US balance of payments See Sections II-C II-F
2 AA sect2O]ihi lanner in which loan wil promote countrys economic develo shy rit emphasizing help for long-range plans and programs designed to developeconomic tesourcos and increase productive capacities See Section I-D
i FAA sectT] h)(IL Information and conclusion on availability of financincfrom other free-world sources including private sources within the United States See Section II-F
FAA sect20l( )2 Information and conclusion on activitys economic and technical soundness including the capacity of the recipient country to reshypay the loan at a reasonable rate of interest See Sections II-B II-D and II-E
5 FAA 1201(h)( Information and conclusion on existence of reasonable promise activity will contribute to developrmnt of economic resources or increase of productive capacities See Sectiona II-B and II-D
_92_(b 4Information and conclusion on activitys relationship toothor development activities and its contribution to realizable longshyrange objectives See Sections I-D and I-E
The following abbreviations are und FAA - Foroirn Assistance Act of 1961 as amerded by the Foreign Asaistaice
Act of 1967 App - Foreign Assistance and Polated Agencies Appropriations Act 1968
AFEVCDF 1066
L1
-2shy
7 FAA f12O1(b)(5)_ Countrys self-help masures including institution of Foreign Assistance Act investment pliaranty programs Investment Guaranty
bull Agreement signed with Morocco 331o6l See Sections I-D and II-EI
_A ))(6) Information and conclusion on possible effects on US econowy with soecial refererne to areas of substantial -labor surplusSee Section II-F
9 FAA q201 (h)() Information and conclusion on the dagree to which thA country iv wiki- progress toward respect for the rule of law freedom of expression and of the press and recognition~yf the importance of individual freedom initiative and private enterprise
10 FAA -1201(b)(8) Information and conclusion on the degree to which the country is taking steps to improve its c]Laato for private investment See Sccton II-E
31 FAA R LbJi Inforrat-on and conclusion on whether or not the activityto b financed will contribute to the achievement of self-sustaining growthSee Sections I-D and II-B
12 FAA fi2Ol(bj Inforruation and conclusion on reasonalbe prospects of reshypayment See Section II-E
13 FAA fl20JL() Info-ation on applicability of the twenty country ceil4ng2
14 FAA fl201 L Information and coclusion on legality (under laws of the country end the US) and reasonableness of lending and ralendinr terms Loan will be on minimum termspermitted under FAA These are deemed reasonable see Sectioam Evidence will be renuired from the GGM as to the legality of the loan agreemnt
1 E 2 Information and conclusion on availability of an applicationFAA together with sufficient information and assurances to indicate reasonably that funds will be used in an economcally and technically sound manner See Sections I-A II-B and II-D Application received Janury 15 1968
16 FAA fl201(fL If a project inforntion and conclusion whether it will promote the economic developapent of the requesting country taking into account the countrys human and material resource requiremnts and the reshylationship between the ultimate objes6ives of the project and the countrys overall economic development See Sections I-D and II-B
17 FAAJ 20ij(J If a project information and conclusion whether it cifishycally provides for appropriate participation by private enterprise 8ce Sections YI-C and 114
I- FAA i22(a) Total amount of money under loan which is going directly to private enterprise is going to intermediate credit institutions or other borrowers for use by private enterprise is being used to finance imports
rfro private sources or is otherwise beirg used to finance procurementsfrcm private souwces See Sections II-C and II-2
9 FAA 207 Infosation on the emphasis placed en
(a) encouraging development of economic political and social institushytins No apparent relationship
(b) nelC-help in mectingthe countrys food nredo Project Vill conshytribute to production of food for lccal consumptioa
(c) in-proving availability in the country of evucated trained manpower Project will contribute to the deicloginext of trained manpower as one of the functions of the management contract (Soe Annex C para 5)
(d) prcgrams aimed at -malnutrition disease eradi atDn slum clearanceWater purification sewage disposal health education naternal and child care(includin fimrily pJnrning)) -nd cthcr public health ausistarice See
(c) other develoment activities including industrial development free
labor unions cooperatives tnd voluntary agencie transn)rtatin and ccshymwquication nrStczn capubiliTies for economic planning and public adlinisshytration arban develo-mment and modernization of laws to feilltate econcnicdevelopjen- GO- intends encourage develo vient of cooperat yes particularlyin the Left Pank areas Project will also develop capabiLi ics for cconoaicplanning and public a6~inistration (Annex C para 5) Other not applicable
20 Information on the extent to which the r-untry is
(a) cttcmting to increase food production and food sto a-e anddistribution felitics This project is one evidence of Moroccos efforts in this direction See also Section I-D and I-E
b) creating- a favorable climate for foreign and dmestic iri-ate enterprise and invcstrrment The GCM has recently reduced profits twes anrannounced a ten year guarantee against tax increases See Section II-E-2
(c) increasing the role of the neonle in the developnental procecsNo apparent relationship to this project
(d) allocating expenditures to development rather than to unn-cessarymilitary purpoes or intervention in other free countries affair See Sections I-D and Ii-
(e) willing --nribute funds to the project or program Th iOMhas already dcvo o-sidcrable resources to the project It has badieted13 million for th i oulouya for i7 See Section I-C
(If) making economic zocial and political refo ns such as taxc coliecshytion iYprovcmenLs and chan es in land tenure a Royal Comm ision has been appointed to make recomendation on land tenure probleras in the Lower I oulouya
(g) responding to the economic political and social concerns of its people and showing a determination to take volf-help wcasuren See Sections I-D and II-E
IT
-ovi~cd l v r 13 1968
- 4 - LDffIED OFFICIAL USE
21 FAA Inforn ation about multilateral assistance being Iurnished to t e country and whether the loan will encourage recgional development prog-rams The I1D has eztablihcd a Consultative Group for Morocco which rvicws the GOM development program anui prgress See Section II-F-4 for infoaation on othtr donor assistance to Morocco
22 A Extent to which the loan will contribute to the objective of ass ring naximu par icipation in the task of econonic dovelop--ent on the pL-t 0 _he people of the developing countries through the encouragement of cocr-tic private and local govenmental inLitutious o apparent
relationship
23 F _-_Dta_ Infor-ation and corissions whether loan will oncourageeffor s of t1e country to (a) increase tie flow of international trade (b) fostcr private initiative and comptition (c) encourage development and usceo co opratives credit unions and savingss and loan associations (d) disourgo monopolistic practices (c) improvo technical efficiency of industry ariculture and commerce (f) strenSthn free labor unions This project is cxpected to increase technical efficiency oi-agriculture
2_ C-1L lnforzrition and conclusion on how the loan will encourage US privte trade and investment abroad and how it uill encourage private US participation in foreign assistance prograas (incluiing use of private trade channels and the services of US private enterprise) See Section II-
25 VA-+_ Conclusion and supporting information on compliance with tho Co resional policy that engineering and professional servicos of US fir-ms and their affiliates are to bo used in connection with capital project3 to the nixinua extent consistent with the national interest US engineerirn and innsgcment services will be financed tnder this loan
2$ Inforamtion and ccnclusions who+her loan will pormit American rx-l] business to participate equitably in the furnishing of goods and
z orvices by To be satisfied in Loan Agreementfinanced it
27 - t(a App I18 Complianco with restriction of co -zodity procureshy o UsMS except as otherwise determined by the Picsicent and subject to ttu--- rcortir require r-nts Procurement will - liumited to the US for
reiabnrs nts and to ioocco and other free world countries 1-or US-cwne(d rhu disburseacnts
23 -i Comiance with bulk cozodity procurement restriction topriecc no l-ho han the nkarkot price prevailing in tho US at tia of
bull puchas Not applicable
29 FA Cozpliance with requirement that matrin insurance be purchased on commceities if the participating country discri-inates and that insurance be placed in the US To be satisfied in Loan Agreement
30 IA 6(a) Information at to the utilization of excers personal property in lieu of procurement of new items Will be required ai appropriate under terns of Lean Agreement
f
1 77--7 -77-77-777
31 FAA 61](a)(_) information and conclusion on availability of enginoering i financial and other plans nccx sary to carry out tho assittance and of a
reasonably firm cstimate of the cost of the assistanco to the United States
See Section II-D
32-ecessaryFAA t611(a)_(2) legislative action r6quired within recipient country and ibasis Cor reasonable anticipation such action will be completed in time to pormit orderly accompli-hirtnt of purposes of loan See Section I-A
33 n _AA161nJ0] If water or water-relatod land resource construcshy
tion project or program information and conclusion on a benefit-cost comshy
putation See Section II-B
3 4 VAA 611(c) Compliance with requirement that contracts for construction be let on comp-ctitive basis to mamum extent practicable To be satisfied
in Loan Agreement
If a loan for a project of $1 million or more certificatin35 FAA _61l(r) by the principal AID officer in the country as to the capability of the
country (both financirl and human resources) to effectively maintain and
utilize the project taking into account other US-financed projects (Such
certification is to be pproved by the Administrator aL the time the loan
is authorized) In process of being obtained
36 FAsgJ2 _6_h Appropriate steps that have b-en taken to assure that to the miaximum extent possible the country is contributing local currencies to net th-2 cost of contractural and other services and foreign currencies o- icd by tho US are utilized to meet the cost of contractual and other services The GU-M is contributing over $30 million to compleXton of this project Excess US-use dirhams will be used for eligible project costs other than US goods and services
37 FAA p619 Compliance with requirement that assistance to newly independent countries be furnished through multilateral organizations or plans to maxishymum extent appropriate Not deemed appropriate in view of previous AID financing and ccoiitment to the project See Sections I-A and I-D
38 FAA sect620(a) AcnO7a n3]7(b) Compliance with prohibitions
against assistance to Cuba ard any countr (a) which furnishes assistance to Cuba or failed to take appropriate steps by February 14 1964 to prevent ships or aircraft unier its registry from carrying equipment materials or supplies from or to Cuba or (b) which sells furnishes or permits any ships under its registry fr-om carrying items of primary atrategic signifishycance or itcms of economic assistance Morocco is not-known to be in Violation of these sections
39 FAA q620GL_ If assistance to the government of a country existence of determination it is not controlled by the international Communist movement The Secretary of State so determined on October 11 191
40 FAA 620(c) If assistance to the government of a country existonce of Indebtedness to a US citizen for goods or services furnished or ordered whore ouch citizen has exhaustod available legal romodiesor where the debt
i - ow - -- _---- --shy
- --
-6shy
is not denied or ontested by such government or the indebtedness arises under an unconditional guararty of payrrent given by such govornmunt No such indebtedness is known to exist
41 FA _(a2LdL If assisitance for any productive enterprise which will corashypote with US enterprise existence of agreement by the recipient country to prevent export to the US of more than 20 of the enterprises annual production during the life of the loan Not applicable
42 FA4 - 16Q_0_ A If assistance to the government of a country extent to which it (including government agenies or ruhdivisions) has after January 1 1962 taken steps o repudiate or nullify cuatracts or taken any action which has the effect of nationalizing expropriating or otherwise seizingownership or control ofprcpertv of US citizens or entities beneficially owned by them without taking appropriate stops to discha i ge its obligations No such steps cr actions are-known to have been taken by the GOM
43 FAA~L AjPj_10_9 Compliance with assistance toQ0 prohibitions against any Comunst codntry ozocco is not considered to be a cocinrunist country
44 FAA - 620(gJ Corliance with prohibition against use of assistonce to comp satc owners for expropriated or nationalized property To be satisfied in Loan Agreement
45 F AA 8620(h Compliance with regulations and procedures adopted to inshysure against ue of assistance in a manner hich contrary to the best inshyterests of the US promotes or assists the foreign aid projects or activities of the Communist-bloc countries To be satisfied in Loan Agreement
46 FAA 06-O(j)_ Exitence of determiration that the country is engaging in or preparing for aggressive military efforts No such determination has been made
L_62_O Information47 FAA on representation of the country at any intershynational confererce when that representation includes the planning of activishyties involving insurrection or subversion against the US or countries recoiving US assistance No such representition is known to have A occarrect
8 FAA 62JJ Existence of a determination that the country has permitted or failed to prevent destruction of US property by mob action or has failed to take steps to prevent a recurrence and-to pay compensation NO such destruction is known to have tak-n place
49 PAA l620(k) If construction of productive enterprise where eggregate value of assistanc to be furnished by US will exceed $1OO million identification of Gtntutoryauthority Not npplicable
i-xQ2MZZ=
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U 6 50 _Af( QCinsidoration which has been given to denlying assistance X to thu government of a country which after December 31 1966 has failed to
- institto the investnint guaranty program for the spcific risks of inconshy
vertibility and expropriation or confiscation Satisfied See No 7 above
S51S J lj Compliance with-prohibitions-againstn as~istance to countries which traffic or permittraffickingwith North Vietnam Morocco is not known to be in violation
52 E_-L620(_L If country has seized or imposed any penalty or sanction against vn US fishing vessel on account of its fishing activities in
intcrnationul waters information on the consideiation which has been given to excludirg the country from assistance No such situation is known to exist
53 FAA FA r) UAR restriction Not applicable620(p 9117
54 FAA R620tl) Existence of default undhr any Foreign Assistance Act loan to the country No such default exists
55 F ) C-nsider tion of whether co ntry is devoting unnecessary percentage of buKet for military purposes or use of foreign exchange for milita-y equipment
56 FAA 62o(t) Proibition on aid if country has severed diplomatic relations with US unless agreements have been negotiated after resumpshytion Diplomatic r(lations have not been severed
57 FAA 9620(u) Statur of the country on delinquent UN obligations Morocco is not known to be dlinquent on its UN~obligation
58 FAA R636(i) Prohibition on financing non-US manufactured motor vehicles Will be satisfied in Loan Agreement and Implementation Letter
59 App 102 Compliance with requirement that payments in excess of $25000 for architectural and en Jneering services on any one project be reported to Congress Such reports will be made
60 App R1O4 Compliance with bar against funds to pay pensions etc for military personnel Such payments will not be eligible for financing under th Loan Agreement
61 App 9106 If country attr ipts to create distinctions because of their race or religion among Americans in granting personal or commercial access or other rights otherwise avaVIfable to US citizens generally application which will be made in negotit ttons of contrary principles as expressed by Congress Morocco is not ku IDhave made any such attempts
iInD OFFIIt t USE
0k
OFFICIAL USE 62 AIwp Rii Compliance with existing requfremets for security clearance
of personnel Will be satisfied in Loan Agreement and Implementation Letter
63 App R1l2 Compliance with requirement for approval of cortractors and contract terms for capital projects Will be satisfied in Loan Agreement
clJ164 Aup Cmpliance with bar nRainst use of funds to Tay assessments etc of US meiber Such payments will not be eligible for financing under the Loan Agreemunt
6 Anp P115 Ccmpliance with regulations on employment of US and local personnel for funds obligated after April 30 1961 (Regulation 7) See Section III-C
66 Aim Vietnam iron and steel restrictions Not applicable
67 p l9 If a country other than Greece Turkey Iran Israel Republicof China Phillipines or Korea reduction in assistance by amounts spent for the purchase of sophisticated military equipment
68 Anp fi4O1 Compliance with bar against use of funds for publicity or proshypagjanda purposes within US not heretofore authorized by Congress Such use of funds will not be eligible for financing under the Loan Agreement
Morocco is a traditional Islamic monarchy with a constitution The conshystitution was implemented followaing a popular referendum in 1962 National regional and professional elective bodies including a parliament were established by universal suffrage under the constitution in 1963 The parliament was suspended in 1961 in a State of Exception because of its inability to agree on measures with adequate urgency to meet the prevailingecononde imperatives In July 1967 the King appointed a Prime Minister to direct a Cabinet of appointed technicians
The constitutional framework nevertheless remains intact in Morocco and nationwide popular elections for some of the professional chambers were held in August and September 1966 The press is relatively free in Morocco and the right of diLsent prevails provided that such dissent does not violate the prohibition against political attacks on the instishytution of the monarchy or the person of the monarch
LI Under the revised US AID Policy for Africa agreed to in November 1966 Morocco is designated a development emphasis country entitled to receive continuing support on a country basis as part of a multilaterally coorshydinated countrj program Morocco was subsequently included in Presidential Determination 67-14 (January 5 1967) I
LIM=TE OFFICIAL USE~i
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DEPQbi) STATE AGENCY FOR INERNATIONAL DEVELOPMENT
WASHINGTON DC 052
CAPITAL ASSISTANCE LOA11 AUTHORIZATION
Provided from Develoroent Loan Funds Morocco Second Lower Moulouya Irrigation Loan
Pursuant to the authority vested in the Assistant Administrator for Africa of the Agency for International Development
AI)by the Foreign Assistance Act of 1961 as amended theIAct) and the delegations of authority issued thereunder I
have received and t-en into consideration a certification from the Director of USAIDMorocco as to the financial and human resources capability of Morocco to effectively utilize the Lower Moulouya Irrigation Project taking into account among other things the
maintenance and utilization of projects in Morocco previously financed or assisted by the United States and I hereby authorize the establishshyment of a loan pursuant to Part I Chapter 2 Title I the Development Loan Fund to the Government of the Kingdom of Morocco (Borrower) of not to exceed five million dollars ($5000000) to assist in financing the fore] gn exchange and local currency costs of goods and services for the third phase of the Lower Moulouya Irrigation Project subject to the foLlowing terms and conditions
1 Interest Rate and Terms of Repayment Borrower shall repay the loan to AID in forty (40) years including a grace period not to exceed ten (10) years Borrower shall pay interest on the unrepaid principal and any interest accrued thereon at the rate of (a) two percent (2) per annum during the grace period and (b) two and
one-half percent (2-12) per annum thereafter
2 Currency of Pepayment Repayment of the loan and paymenu of interest shall be made in United States dollars
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3 Other Terms and Conditions amp(a)Goods and Services financed under the loan
shall have their source and origin in
(i) the United States if disbursements therefor are made in United States dollars or
(ii) any country in the free world including Morocco if disbursements therefor are made in Moroccan currency
(b) AID Regulation 7 shall not apply to construction -work financed under the loan because as detailed in Section IIIC of Capital Assistance Paper No P 667 it is important to the national interest of the United States that the direct costs of construction work performed by third-country nationals be financed out of funds made available by the Act
(a) Such other terms and conditions as AID may deem advisable
Assistant Administrator for Africa
Date
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7
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-7shygreatest and most rapid returns on ndd1tio resources required fortheir comyletion In the Interest of rbtainir an asrrrent ofr It fr the crnletion of the reirainder of the Troject AIDri ained rvienof the Stanford Revar(h Institute to rrenarea tuy i th orrn nrd returns for the vnriou rcrtions of theroject for h h i rr h beern pJanncd but not cnrrpleted
the he hat the completion of
the reynainintz ork-requivd(which P-nti fird Ip following Sectorsray up on tn iI thejwwould appear to offer the optimum coabination of hirhi nremental investmentard early comption
No of Apror To P- riuirred
Triffa Main 317 Triffa Sector 27 Triffa Sector 28 Zebra Collective 1500 Zebra Remainder 14250 Bou Are Central 16250 Bou Areg Remainder
TCtAI)
- Includes cre 8000 aeri o being equipped
If the above is to be accomplished over the next five years asenvisioned by the GOM the schedule would imply the bringing under irrishygation of around 1500) acres per year This is around two or three-times the GO hi torical rate of dvelopment of irrigation in theMoulouya over ast seven years While the GOM has recently reorshyganized its e cnt structure to permit greater local autonomy inf1 e ranagemo- rrigation perimeters and has recently accorded avery high -- -r to acceleration of developnent of the V 1 ouya inparticu t -vident that given the manpower constrai ts involvedin the Mr n operation the- above target way well be it- ible of achievenrnt
The GOM hM itself recognized the elements of thl -- I i lindhas in dizcuss ins with USATDRabat requested considersti- -f hfinancing by AID of the dollar costs of a management crht with oUS -irri to take or c(vnpletely the management unctions fror thi
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b Th - urJrtaen rn the jleft Bank under the proshyposed thir i-e of the rojc-t are i follows
- Left Pnnk Dvd H-d Tunn]
5 r-y rd t final tng of ire aration for ther-rT ir cvf ni r r imy - rz--rt ha recently beenr-t) l i w t e rr - tht - I afid if exToected to ubrit hit writt(-n r-rt jr DC Aii preliminary impressions baled on a 9Ite nErerti(n indi-ate thit a -rt1fartorj repair con bemade in c)nIdprnbly le- t n-ne for lfan -than previously conshytemplnted
The early ccmrt-tnn nf thi work in lmnortanit nine IL c t Ft th avai-bility of pr~ct wrte for the entire Left Brnk
Z~bra Collectlv-
Thin 1 on ara ofrXPr-ctively ond tribal land that will be divjded and allotted tr J-ted tribal -b-hrc who will become soleowncr3 A Pirpe rart ti Tniran -aratirn and developent hasalready bern co-plet] 2pani levelirg r-mains to be done as well ae conztruct c~n of b-tcn dnd drina- works
7eDo i F--vino-
The northrrn ecti n tht rmrainder of th Zebra will requirethe extnzi-n cf thct Train 4]h will be ccrrleted with financingccmmritted under Phase II of fth tr-Ject Land preparation and levelingwill be required anlnp with h ntruct n of distribution and drainagebullir r]
T ectinr f th- rrainler of bra will requiret- rd i i w -J n rrd h c and engishyrnr nw d t i f -tritst t n and dlarn -rk
Piu A rp
foeuro rginprng im hhve b- 7cr)Pletcd fcr the irrigationthe Bou Are- Fr the o-t rt hu- I cf the
of rcquired construction
of main carrl Rnraljor dr- nRe worx z develoFerit and cronstruction of zbldiary li tribution -r irnge y--r rrrairns to I undertaken
Th P- Arrg Tunnel wr orml td in 267 and construptcn sunder way on Ih-Yin Canal rrired tL nvcy water the suthrnf e of Areg ervie ra
I h z-uir-i intluding the -rtablishshyn -F r rnity rvice andIn fit Th rlulrem-rntr for
o1 th I- P Crk t the- RhL et) I n air aly Ii- ted
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F~~ntur~ nrl i tu Cct (wicFenture _to 11( Ettinate JI6 ) to 0j67 im-rtpatv 7-t 1
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Wt r 2torvge 1 95 1)6and Pegulation
Right ank 137 31 10 79
L-ft Bank 25 87 n6 143 239
Far- De ]crl 0 )5 1 b I26
S I M O ALA1 348 356
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1 dv1 ment cot
rFT-r AVAILABLE COPY
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4
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At indicatnd In the- tdl iv 11 - rnt it~ocotof the rxojroct are t hi~-hor tnan the ic60) 1orccasts Th y tarc Ah-wever 1hchr by cnr murth~cul~ averllsv( a igiificqntjsCfect t~cn the bt-ric lfer-7t I-tio n- rigill lly rc~r~t
V I ) u O21he 1)+ -J iv )ir(t In h jiv kinvnft bed tado in Lh Tnwr Liynnui vni cif hrrlt rnr 7cst- wrr uniershytaen ic r ii -tQ j ta the Aurpo3vt o 02thl rirarnkinr of r- Ln t -Ir ca th cenm I rr1 urn 1e11 frrn n ow
j r t- t ol I n iii i I~- ih 1n t ~r n 1 1t f Vt 1r r Jf U -c~Pi t o ce
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~hi Trifi - tnz r -n~ irlrpmi rritt of r tur-~~~rb th ri B u Ar- I t r i 1Y h- nof~ Fa-uA flnricir-z I- T-1-rv igtn t ih-b r
CL ir ra r I th- ityterjThd t ) rah)rt nry to rItihi cofltrictjcn l~n- rvlfAi i-)t arvi r rf fgtrrn h
n n mt rJ z-n fl -V7~1 thin at-1 h rrroxv ytv7 v -I t
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elevated area requirin iat-r to be puiiped to the irrigated land with both highr capital costs (about 1 million) and higher oreration and maintenance costs (150 Dirham per hcttare via-a-vir 100 Dihams perhevtare for the grnvity irrifrted ares) The ony work presenl-ly cotiishypleted in the Triff Hih Ser-ic Area is the preliminary engineering stirUes Cimi-ir to th Tr Pa r thu TrIffa ]Igh Service areawill reiir an ex I uvnt ricd bfore agricultural proshyduction cn be initlat-2i
The above considerations reiult in the following revised ranking of priorities
Project Area 1FY (M Priority
Triffa Main 21 I Sector 27 8 I Sector 28 9 I Bou Areg Central 6 II Bou Areg Rerainders 6 II Zebra Collective 5 II Zebra Remtd nders 5 II Triffa Ent 6 III Triffa High ervice 5 III
SRI 11ed a ccst contingency f7actor of 25 and a cumulative costescLlatior factor of 3I per annum These factors appear excessivelyhigh in th( light of (1) project experience to date and (2) the fact that from his roint the technical rirks involved arre of a much lower orl- r f 1h thnse inhtrent in the major works Just comshy1 I intion nrd contingency factor of 15 has there-
S chtiMnte- Itlizcd in this rarer The ii n-ttr costs the to ) ject (in n]ace of factors
i by )I nrt 11 thIrhe nf th nJter atve I[cwver rrtnrecr-y factor euld Increase the IPE ] hi ra]y th- IIRF fcr the TrIfa Sector 27 ansnunirg a
oct crortlr7crncy A can be seen as the conAngency I thf cc curve rrv to the right and inter ects the
ur h h 4r- rnr rate of return)
C Finreirifg inr
Cot o the prJect wor fmcentntgenent nnd engin-erinm advisoryrvices for the proued t rd tsge of the Mmlouya Project are
ctirt a Crollows
nF3r AVAILArBILE COPY
Best Av DlableD
7 17 shy
(In Millions Of Dollars)
Righi Pank
Trffa Main 34 poundSt (r 27 08 S ctor 6 0Q
51 Left ank
7bra Collective 12bra Remainde r- 54 Tou Areg Central 74 Lou Areg Remaluders 68 heft Bank Dcad Head Tunnel 30
238 Services
Management 20 Advisory Engineerin 05
25 SUB TOTAL 37
Escalation amp Contingencies 15 47
TOTAL 361
It is proposed that the AID Development Loan for this stage of the Moulouya ProJet be limited to $5 million an amount which would be sufficient te reet the cost of any US goods and services required for the works to oe undertaken Thus the loan would finance the dollar costs of manrement and engineering advisory services to be provided by US firms erstimated at $25 million The balance would be available to meet any ther US cofts that might arise for constructicn cuipment and nateria]
The balnnmc of funds required would be provided by the GOM from its own budgetary resources including as appropriate agreed allocations of the counfryj-uie dirham proceeds of US surplus agricultural programs in Morocco
To a l-ge extent construction works In the Mou]ouya (other than the Bou Ar- Tunnel and Mechra Klila Dam) have taken place under a largenumber of roll contracts with Moroccan firms It is anticipated that this will ontinue to be the pratice in the forthcoming development stage Th iit is evident that the great bulk of project cests in this next stage will be local costs
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In the event that not all of av l able fuInd- under the loan are required for TKI eo It i ouied that any remaininrn balance be utilized for the payment lo -ovalccztn f the project This would be aceoomplirhe by utili7irn th- h r vroceeds of the loan to purehare US-use dirhsmn (frcr th U Oi-irrirg Officer) which would be utili ed to rrimbure th fc u a t local - nditurrs
Thi arranrit 3ir ila ) fstV utilitd In the - of the D-e l-INAieret Loar tJr U Atrrert SinceYr usii Conv rf i cn therc loans are rcpiviible in dollars nd rince Morocco in a n-ar excess local currency couintry the fert ) f e transaction in tc provide a means for obtaining ccnvrrrs cn a-cr th life of the loan of otherwire inconvertibie U5 holding irhrs hich are in exces of its localrequireme t
In 1967 over 15 million dirhams (abceut $3 million) of PL 480
Section l04(g) loan fun cre in msgreement with the CON allocated for the financing of various contractr reloting to projects in the Moulouya It in anticipited tht ndditional allocations will be made out of the local currency proceed generated from current and antishycipated US 7urplu agricultural rmodity programs in Morocco
It has been proposed that the dirham equivalent of $45 million of the proceeds of the October F67 rurplus agricultural commodity Sales Agreement be allocated for a Section Cb(g) loan for the Mulouya In nadition it is estimated that a $]35 million (in$ioz1ble dirhshyequlviJent) woull be available from 7uprl]eental surplun agrIcultura con -ity rales programs under Titlo I an-d Title IV in calendar 196F for allocation for loans for development projects in Morocco These two amounts combined would provide about 6 of the G014 resources reshyquired for the project over the next five years On thic basis there would appear to be rcasonble propect tht the GO should be in a rorition to provide cver the S e year rriod of the project the addishytional resources renuired for itF ccmpletion
Tt I contemplatd that na additlonal US dollar financing of the Moulouya byon-l the $ iilon rorosed herein will be provided for tl cplei n ef h M _11-nuya rince the bringing under irrigation of th- 11O0Y ies include] in the propore] project will substantlally cornIete the works criginally conwtemplated hen h DLF loan was authorshyized in 106 The remainler zf the workr h(- be within the capabilit3 of the GOM to complete with It- o-n resourcec
MT M T M
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) Technical Anily ir
The Moulouya Rivr which is cre of tne largest in Morocco originatesin the idll Atans
Moulouya and which oztend scuthward
Kediterrancn l re
t rre
Pr
ard n
flows rrpr
orre 25) mriles northeast thr Agorinn border
to the
In- agricitui 1 in li j i nt( iljr r Th- rst rind most
t 2 1ir i t i h- i n th rwrht born of thshy-- e 31nmiler frem the Mediterranean
Lea To tho wet cf the Tiffa and nn th- left bank( of the Moulouya isthe Zebra nlain 14wiuntain rv-arate the Zebra frcm th -ea and fron theBou Art-r i-ll]zain which - ctI nrrthwe(st of the Zebra The Bou Areg a coital phtain sclte 19 mils lorg and h miles wide separated fr-nthe n-a by a Ihow sa2t water lagoon Southwest of the Zebra is theGireb plain which hun land ruitable for irrigation in its routheasternportion The Gareb i at a higher elevation than the three other plainsard if ultimately irr-gatcd vould require pumping fro the lower level Zebra conv(yance system
Water from the Noulouya River is stored brhind the Mechra Klila Dam whichwas coniletd with fjiancri rc AID loan (3-A-2 (DLF Lcan l6)Water ir rclca ed downstr(a (1bcut c) miles) to the Mechra Homadi reFrshyvoir and d]iversion dcim in1h-r divert-d to th right oad left bankcunals About 75 kilometer (1 miles) of the Triffu (right bank) maingravity ciral hay ben copletd und consderable cr) has been carri-dout in the Tri on) distr Iution and drainage netw rks land levelngend other farm iwnrovwments About 37 kilometers (22 wiles) of the Zebra(left bank) main gravi-ty canal and the tunnel 6 miles (101()7 JIrenrTrcters) betxeen the Zebra area end the Bou Areg area have been comrneted
The GOM illrrfo m certqin -rk nr-Aded fcr develormnt of the gravityir~zgata yt-- for n 71-) acres over the next five yarr Thiscffort vi2 be eonern rait-r urcr the develo-ment cf areas thot providethe great-rt ecnnomic returrs nnd the developnent of a cadre of Iorocearperornel adequ tly tran-yi in the an2gerent of the project SeeAnnex C for further Irojcl details
e- enmL Ev1ation
Mt Infratrueturr The --trnal highway co-munication network i t arid rfi Isirm nf re- i n-ote siler in-1 shy
uzeather raved rc
____________________TAM
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Other communlca 1 i i t ih Lh arr-- inlude the nrninlineof the Oujda-Fe--C- t h~rh l e0tnnd to AlgeriaSpanish enclove rt the 1 fir idto cmmercial airport at Oujda andNador with regular national onI int rnational ervice5s
Th verirtr 1 u ~Ath r nr r t crocd by 60 kvJ i i i u rrd t 5( kr It na ortr kk f~ditcrl rower1(Qp x I -y yrar) -o n d hr rritIronr
at the Mechra-Yplusmnilj l inm fnd the Bou Areff contral poter Statin The townare connected to ranrh cther and th2 r-rt of Mcrocco by telerhone andtelegraph 1 ner
b Sol Soil rvey 7rd land ]a-ifctons have been completed i-nthe Mcloulva rer eter oanntrantbi- with French firmr u-ing Frenchmethods The Trifa -1n wr initialy rraped at a cealeof 150000with certain area ub entiy rer-aLd at 15000 110000 or 120000dependin I nn the cor1cjeity of YJ rattcrns The Zebra plain has beenmapped at a reale cf 20O00 nod th- Bou Areg plain at a scale Df 150OO On thp baf Yr nf ther urvy th cla sified the soilsGC hain terms of r-uitnbility for irrigation as follows
Land Ciaifcation (Aere)
CasrI amp IT Class III Clans IV Totas Triffa Plain 17000 29[00 22725 99625Zebra Plain CbO 1275 4050 211425Bou Areg Plain 75)00 l6qo 3 0 3067)Gareb Plain 13 05 10 70 0
Inclurez 1750 acres for lfigh Service Area
The findings thi indicate that ( i) arriratry 5of the area in thefour rlain- i suited to irrigation (Clare I anl II) (ii) more than3 ir suitabr bt with one Or mcre imrtat~ons Irro=ed by underrablefeatur-s such an to wrafhy oil characteristJcn trnine- r restrltedbull rio (CIar TIV) and (iij) ls than 2 of th- area in only margina)lysuited for irrinticn(Class TV) In ther7e lattrr ardrn only rmi-intrnsive orop rotations blUponsblhe
The oi nicn f the Cn-lting Envneer (1ydrctechrJ) th respect to) therd carrffjn n that hfle 3 Bureau for P ltr0tion -tandards werirt ernoy-d te rlasnificatinn ir aceurat- and n rrti with3and rlaced in r d rLrnble categories more
uere thnn right ha bern the caseUS tandardr folIced The clasifatinn ha 0a been reviewed andfound to be atifactory by the USPA tayr Hoever r areas of complcxroil Ttternr hch to date have only been ru-d to a oale of 150))rome reraTpin tray be necesary as a banis fcr rrerarnZ
- g~T PRAvVLAFJLE EOPv
final designs of irrigation and drztinne- rystems parcellization into farms and planning of land preparation measures In addition considering the high average salt ccntent of ater frcm he c ilouya hiver a rorm of systematic leachin- will be reqirer- to f ree-rt aculation of salts in the soilsparticularly in h ebra Crt in will nlso1e plain ureas require nitrogenphosphorus crd possibly other nutrient to obtain satisfactory yields
c Water On the basis of studies by the GCM which have been reviewed bythe Consultirr Fnr ncri and the U au of 1ccoi-ation it is thecorclusion of A tt (i) the q lity of water in the Lower Houlouya
is below averpge bvt crp rble to thtof certain rivers in the US whichisotnteLoh~uoybrve successfully been usc for irrif ton for periods cxeccdin 100 yearsOj5) there is clearly a sufficient a )unt of i ter to irrif-ate the 128010
bullcrer to be served in the [rlcentIty ar n3 Addi-tional s-tudioser (c requilrecj dcter-Inc if adeqiuate water is a- ilable for irrigationof 376QGO vc rc
The only signifcant urce of vp y fOr irrigation water in the perimeteris the oulouya Vi~cr io jc n1 is 1re ntly being irrigated from wells most Iround water i - - 1 Alouya contains dissoived salts which i xr Lrn - hvriny reak flowto iJOx PIn iuting [cricd of c n ccntraticn is 750 ppm On Thi- basis of USDA Salinity Lot) atory criteria fte v ater is class 03-SI (hl-h salinity-low a-alinity) Vile water is thus of mediocre qualityit is ccmrarable to that of river successfully used for irrigation in the US (eg the Lower Colorado Rier) and poses no serious problems to irrir-ation in the Moulouya perir( cfr provided the W4 adheres to recorrmended programs for meeting leaching reoairements
With ref-pect to the 128000 acr project the demand for water reasured at the Mechra Hoadi diversion dair is estizated at about 575 million cubic meters per year as follows
remand for Wter
Peak Flow Annual Total (August) (m 3 million)
Agrieulture (176000 acres) 337 m3s 806 Municipal amp Industrial Consumption 8m3 23
Total 4 uy62123000 acres to be irrigateA by Gravity 255 m3s 575
(The e dpeak requirzents of 345 s compares with a 35 m3 s design
capacity of the main canal at the diversion dam including 18 m3 s for the Right Bank and 17 m3 s fcc the Left Bank)
I
- 19 -
This estimate is based on probaole rainfall cropping patterns plant requirements evapo-transpiration and other expected losses of irrigashytion water The estimate is believed by the Consulting Engineer to be reasonable but subject to refinement on the basis of tests to be carried out on a continuing basis
The annual average availability of wuter from the Moulouya river is estirated at 1100 million mn or about double the estimated requirement for the gravity areas
Estimated Availability of Water
Twelve Year Annual Average for Moulouya River 3 m3 second 1100 million m3year
Maximum inflow Observed 8000 m3second(1963) 3h00 million m3 (1962-63)
Miniwum inflow Observed 1 msecond (1951) 532 million m3 (1956-57)
On this basis it appears that there should be ample water available for irrigation of the gravity area as the water availability obtained from twelve years observation exceeds the requirements in all but the 1956-57 season shown above Prior to the development of land with purped service areas (the Gare-b and the Triffa ig h Service) a review and analysis of the river hydrology should be unidertaken to assess the availability and regulashytion of the river flows
d Studies Entincering and Construction The overall irrigation scheme outlined by the 1uM defirs the ajor features and th( magnitude of the work to be accomplished to attain the ultimate goal
This scheme is being carried olut in phases over a long time period The present phase encorpasses the development planned within the priorities indicated by the Stanford Research Institute (SRI) study for the gravity irrigation system
The studies for land classifliration have been completed for the gravity irrigation system in the Triffa Bou Areg and Zebra plains by French firms and were considered reasonably accurate by the Consulting Engineer Land consolidation and parcellinrg has been completed by 0MET in the Bou Areg Central area the Zebra Collctive and Zebra Remainder sectors 7 thru 10 Land consolidation and pareeLlni ar( needed for Triffa sectors 27 and 28 Bou Areg Rematnder arid Z(bra Rerrirder sectors I and 2 The engineering designs for the Triffa main sector 27 and 28 and the Zebra Collective have been or are being completed by the G0M forces The engineering design for the Cefntral Bou Areg and Zebra Remainder sectors 7 tnru 10 has been or in being connpeted uy Hydrotechnic Engineering design will be required or the 1ou Are remainder sectors D-3 thru D-7 and Q4 thru G-6 and Zebra Rer ainler sectors 1 and 2 The engineering designfor the Dead Ilead Thnnel has been undertaken by SCET who have preshypared anid issued an Avant Projet for bid invitations for construction
14 M)j6Fj Cshy
-20-
This firm will also undcrtnk- uu-orviston of construction The engineer ing not yet performed can be aea ished by GOM forces andor private engineering firms
Construction of the extension to the rrain irrigation and drainage canals Jand preparation rector cinl ani drninaive ditches will be performed unllr cntact t) 1 cc rt~r~iet m)t hi in the ene of the
r-abilit tion of the L2tL Pz- Dd iarl Trnc t
e Cronning Patterns The existing erning pattern in the Moulcuya including botnirrigatcd and dry farm ingincludes grain forage citrus vegetables olives grapes and 6 small amount of leciduous fruits and nuts Of the roughly 2140Cy) acres of agricultural production in the Moulouya about 177000 acres are in field crops 24)) in vegetables 16Y)O in citrus 15000 in grrrcs 540Y) in forage crops 1700 in olives and 15)0 in other fruits and nuts
Taking into consideration rast and present trends in plantings as well as agronomic and price and marketing factrrs the following projection of cropping patterns has been developed for the Lower Moulouya
PROJECTED POPPTG PATTFRNS T1 HE LOWER MOULOUYA
(In per cent of total irrigated area)
Left Bank and Triffa High Serice
Triffa Sector - Sectcr rriffa Class Class Class
crop Main 27 28 East I amp II III IV
Citrus 40 60 10 10 10 Vegetables 15 10 15 1) 20 10
Crtton 15 20 10
Fcragpr 10 20 25 30 4o 30
heat 10 6 20 25 20 35 4o
Grip 25 24 35 15 Dy beans 5 10
Sunflower 10 olives 5 0
100 10) 100 100) 1i 1052i 100
a Incltdes double cropping
- - r- euro --- 7
~7~TF~Wr~e~ALUSE
-21 -
The projected cropping pattern for the Bou Areg plain includes cottonLJrirdg the frrt Five yearnejtinted 1r of the Class I)fand
the project jitwould be grown on nnII landn Tht renresert only 960etrravres) ectz ri)cr)e area The cotton acr~a e ry increasep 2ceafter live years if ritisfactory drainage conditionshyrre achieved in the Bou Arev
cotton grown i 1xonp tarx- Trdltionally Morocco export its-Jr- cron an irr IJ hort cble to rmeett Cotton the reuirrents
r the oroccan 2pinningr mills The croppni-attrn of the Triffa East (about 180n acres) Js projectedt Tnrlude 15- (about 27 acres) in cotton It is likely that becausef ihe limited extnt of Class I and II lands in the Triffa Eas cotton not increase beyond that percentage
1t i evident that the amount of irrigated cotton that is likely to bein ther-n Moulouya is minimal even assuming that local drainage condi-T nare i asuitable
f Technical Sundnv--s The AID Project Engineer hps reviewed ii) thedat and ajor construction performed to date onronct and finds the technical requirements this long-ranRe phasedsufficiently defineoto ccntinue the project on an orderly schedule The estimates of cost of prsirct facilities have been determin-d by SRI from average va)ues oftrit cots obtained frorr reviously ntiarded contracts and from etniled( -s-nand analysis prepared by the iHydrotechnic Enginering fir oft-o tyieal sectors located in the Bou Areg area The costs for the arc ent contract have bcen estimated by the USAID It is consideredthat the depree of engijeering planning undertaken and the deterrrinitonr to the US Goverrment are adequate to meet the applicable requireshySt- n Section 611 of thie Foreign Asistance Act
7717gt
1 --shy
-22-
E Financial Status of Borrower
1 The Moroccan Economy
Grrwth of MorocLcts GDP in real term averaged about 24 per yearin 1(4 and lr li Per capita DP In 1C 5 wan anproximotely t162 A (er Irr-ht in (6 resu]trd n a drcrcne of slightly nver in GDP which tlh vpulatior grc~vth avrring 3P4 per year rnrsJted in a decline of -r ornita GDP In 16 ii brut $154 A recnd droughtcccijrred In C67 but i not expeetid to have the severe effects of the 165 drought Crop forecasts for the first nine months of 1967 indicate a 4 increase in real GDP above the 1966 level This is also the economic grcrdth rate estimated by the IBRD for the pezxA 1965-70
Moroccos economy is heavily dependent upon the agricultural sector thich has averaged about 15 growth per annum However growth of the mal modern segment of Moroccos agricultural sector has inshy-reased at the rate of about 7 per annum
In 96 the International Banik for Reconstruction and Development (IBRD) preented a number of recommendationr denigrned to increase Moroccos economic growth rate On the bacis of these recomfndations the G004 proceeded with planning the necesrary program to increase investment levels fr- the i 63-65 level of 11 of GNP to 1r of GNP and stimulate the rate of economic growth from 2 to an average of over )4 annually for the five years 66-70 In addJtion the GC4 has taken measures to curb the population grovth rat while placing increased emphasis on raising production of both dryland (wheat) and Irrigated agriculture
2 Investment and Savinms
The level of total gross investment has remaind at aboit 11 of GNP for vera year althugh the percentnoe declined slightly in 165 Under the GO Three Yea5 Plan 1965-67 the gross investment t-3rget woz ret at DH 3 billion- Actual invev-tment expenditures for the three yearpeirod reached about DH 46 billion of which the Governshyment ezxenditure amounted to DH 1 billion a against DH 21 billion budgeted Thin may have beeo partly de to the GOMs deliberate ausshyterity pollcy under the hIF rtbJli7tion prci1rnr but more probably it van duxe to the shortage of trained cadres to -lan and execute projects
In the private cectcr conziderable inounts of ravings may be hoarded due to lack of project attractive t- inventors The lvl of private investment has been runnihg at about 51 of GNP thrrugh 195 The 0014 4 incentive to private instors hnr cut profit taxes from 4320 to V and announced a tpn year guarantc-e against tax increases
]L- $ = DH 506
777=-77- NQ
r y 7k1- T e - W lk In
j - 1) 7k- - _
- 23-
Loan are avaiiable to )rivlite irve-tcrn freo th 3JfIDiN s rctr special funda to prcmote touricm devc firvcnt
Under the 1r86-1972 plan abut to br irtntt level are to be accelerated considerably reaching A of GNP liv ]970 Mor(- Irlyir haviiy on foreign 1 to aciuw cc higher lve1
3 Central Government FinancP
The Moroccan money supply which had Incrrased ify 76 per cent in 2965 remained virtually unchanged in 966 The first half of 1967 witnessed a 5 Ter cent increase in the money supply Te major part of thi increase as concentrated in June and July uhen the supply reached V14 0j lion Currency In circulation expanded rapidly in June and July
nnl factrrn being reinforced by commodity hcnrding related to the 1ide~l Et crisis Demand deposits did not show their normal decline nthe first half of 1967 Deposits with commercial banks declined nlightly while deposits with the Treabury increased as public and semi public agencies contisued their transfers from the banking system to the Treasury The increase in money supply in the first half of (7 ran I raced to tho nzon1 sonal increase in net foreign assets not c y the custcirry rlelir In claims on the private sector Clsirl (n the erivate sector declined slighty until May 1967 but Increased hr-gb June and Jily due primarily to additional financing of textile stocks ClbiJ ante Government rose by 10 per cent in the first half of 967 the in central brnk claims on the GovernmentI being rmainly offset by larger deposits with the Treasury
Ordinary budgetary revenues which incrurted by 5 rcr ent in 1566 tre cxrcted t-) increase by 7 per cent in 1( to DII 21 billion DeampDite a derea3e in agricultural tax reccipt r- fror diret taxes rose by 10 ppr cent in 1966 and a 2 increas estinated for S67 due to tric or controls on income declarationr d an accelerashytion of tax cller ns Owing mainly to a relaxation of the import
program in late 1 5 and a concomitant increase in tariffs on certain ccnonter goods customs reneipts increased by 21 per cent in 1966 Although budgetary estimates call for s decline of 3 per cent in customs receipts in 1S67 it is likely that actual receipts will be considerably larger in view of the import liberalizatidn measures intro)duced subseshyquent to the estimates Receipts from indirect taxes state monopolies and other serces are expected to be 11 iv- cent Ipher in 1967 owing to increased profit on -ugar sabr-i and L r(m the newly created Office do Ccrmercalisaticn - d-tation (OCE)
Recurrent ordinary buiL e(enditures increased by 34 per cent in 1966 ar-i are expected to increase by an additional 7 per cent in 1567 reachin- D1122 billion Although wage and salary scales in the public
Banque Nationale pour le Developement Economique
TT~~- - I777
2 Cf
sector have1bec z h t - rrvirI urli 11i g 14-6 -nd PO becnue rX toi Ijt e f (]r o n 4
ill tile ic urrnnye andr)not i on dnd Publi ht rentrn -yr-otn lno IncreasedOthrr t ill- t il r ne by ) vr cert in J6(
i ninlyrt -br h Inc-l
( Ihe ( t r- rl t ip t t C itur f T)h 21h iilli n
is (( ItI t lt r c0 a- r n n o I- c t b It ihstnl id vv ih n t r-t have hn(er - en 1t2
(IM ii ture( T f fu traordJ nary budrzct exshypend ituren a r y -t c ~ i vi -iscz Portal Checking sy-stcsul)rrcing t (I ltIt Ct -- ind creirn shy
nnet The f r er tnc I hha ccrc ed from a htih of DH 5-7 millIJn in _ 5 millIn r C46 F cr ats foi ]7 place Cro n w I 1(DI)J79 ill ni DDn etlc fi nancing has alo u 1) 5 p (- I3A27 iIliun to an entirnted DH 1142 million
1 14V ) I nv 1 ri n nI(c1 franc n is 77-ected to be ol t y ncrewed bcrrowing fr-ir t he Cestra 9ank which hud been held at mcdert vols iln 165 nnd 1a66 Under the 1TFtaiby agreement of October 16 the qob) agreed to taBe a3] rocrrnary meurer to maintain as table curoonry rPnt inl th nr1d-elrto th b a ent of the ePrncriynnd a vnbl- hn1incc X nvroent P rt artt to t rt fien of tho Ccntin- Honk rstz (erct are nct t r itr June 30 Y-ke 7 lov l b th n Diif ) mill] (n tlcnber -c P thai I o illin usit I ])ecthr 31I62 (GC bc w t
C B1rtrp - vt DH 12 iri 1i nor ]S67 or DH 6S ij lionEan tisated (r fo than the aproved crd it expanwim
Thitrd ordivary nil extraordnnry buThTt deficit of DII 7-19 millI n fcrecat Fr 1 67 in exnected to be fnanced by not freign
tan reof DII )75 mi~l in nt recurity 12ue 1 T111I vlion a - nt ry tiat Po n Che )ir d-nC i 73 r5 Pn
riI is u h i a vti v mrr nrr-e jssIof fvr is id a erital The vnfsa revcred in 1d6 when lnrger r nyrentn eEecially on food itcmo an n -lewdoun in
igo ra a deficit of $1 millcn ProjectiOnz-vt rvultvd in ror 17 r~ieat inrrerned importsonly partially ccnrennate by addshytsa t frnreirn r ntil rrceiprs ard mprrvement in the nervices account will reult -n et of aprroximately $)20million As rhoim in the following tabl -r tion for l33 and 169 how overall deficits of
14 and m] ivi_y$i It
rqVV t1 4~
C)rgt
---
1 -)I+-IRF1
1ROCCO - rTANC OF PAYME 1qrt - 169]_ 5
6rfi0 1 1C(8lr67 i r(o
)xrurt 2t L( I L-5
Trade Bnlance 11 15 - 75 shy - 75
rviee- ret - 7 - 5) -35 -23 -2
J]-i of Good rnd Service- - 3 - 65 -II - ti - (5
Trn-Ifr Pr ynts (nt) P 21 33 37 33
on-cntnry Carital (not) 92 64 6 6 5
Err-rs nnd Ov rrion- (not) - 23 -2 1 3
eranl Bannic __ - _3 -_ 3 - 1i4
Atrh thert ircjected reficitn are of the nnme order of 1 nishytude a7 thcr incurred in the period i66 the Situatlcn i findarentallydifferent both in rerprct to the source of the deficits and in rer-ect to the meat0Y gtr m etin7tecr In the f rrer caive M5recco uffered
_frcrr a very h-vy cutfc of Drivtes cuitv fo-ivr with a shar) decline In forein nt exerditures in Morocco In the iatter case th projected deficits r- rcre a functicn or accelerated crcwth risingdebt ervieiiw tri tho abnrcn of forv eeble additiens foreign reshybull ourcs nere7ory 4( r2Vm rAf finmncting To nect the def-cits during the reriol 161 61h MWreco ob1id to drw down rorcin exchange reserves of over $]c milicn The snrti tpv of financing is no longerpozslble ince no or-res- ruch reserve- Even ifMorocco yr
mn nina r rve_ ore (]rrfii on to th r-ixirun etnt enribe nnd the [iI tnfldy i- un M-r-r e i32 till relA re nt rnt 15 millicnj1itionn ftr ign as- e n 1 6 beyond hat r recnently fcreeeshyable with ver nri- nry Officilr in In i6 reserves are cotImnted Pt 72million c hih crn V 3 million i caly required for currency coy r
Foreign InJebtrdne n of th GOM Mnroccos external rtnte ard rutlie enterprie dett amounted to
$r) millivn in lr6 Debt vervcirig rpynents for (66 trtaled about
$5) rillion g-eement approved in October 3(67
I- -- Ishy
37 millin or arprcxitrrntoy (j Iroccor totnl eXoort earning of h28 millicn GCnerally nxt rrO dbt FervicJng renuiremennt of leas
than r of totna -ort nnrlt In onrldered to I r tirfactoryrntio D-bt r rnJrcLct n Ir the reriod 1-(y 3on Trerent external debt including thnt wrtl(n irreently undibur-ed are hown n th fr lv tahlr
)] L v yr t n
Eternn Vtnte anc ] bntcrnrie Debt
M131 o)nr
Y aI Net Outrtnnling Debt Debt Service
(6 it 479r5 $367 J-67 452 3)6
Z616 44469 2 0 2C-
365I3 37 389
33 383 33 6 371
5-h 31 n 352 275 34121
]176 2661 32It 1977 21133 311 177 22)6 307 19 i0l74 256
1733 255
rgtternal debt rharre n rerent debt nnr rhon above do not increase ubtanti-lly over t rt 1)year- reaching a maximum of h44 millior
in J6 and decrpt- n cr - tently threoafter At the are time exportearninr r _rc extett nc-are Aring that Morocco does not inshycreswre it etrnn2 cbt t irate ubrtantially nb-vc ihat has been the core th adfiticrn dbt e roquirrentn reulting from the propo t Icon o 5 ijilion co r 7crncepr-ional term hould not have a i-nifiant affect n 1r o - ab lty to neet itv g rc-atedebt ericn rcnrib2t~e- the pros ectr of reprment of thin loan ore coniderci rearcnb)
U I -
F ot h-v C IuIJI rmt I shy
1 V amp~ rVml KI
PUC- -jrVi Jt t 1 11 nflrcj urlc 1- th )qn --P I uti u rhnrrl -1r- thr U- Tr- ry- R- -nymc nt
c2Il f n 6 1 bf r I- till 11 nfl r- n-r i n of O r--niC(Io~hi U 1 1 rr to
Tn vil ) f rvc hi tvlrll 1 (In- - n- u--n E r me rrinshycgtay F rntwir w ourc o -o- rvI ortf-V3 1 rncing of
Uf f -r rrrir- ur3r 4~ v -rin Iltrt nt ndd shyt -n t ) in- lint r b t l r -n rort- o-orco trorl-- V -P
r i 1rnd h L-torie Furcl-trin firr- thrjt US r r~ crvirrf- u~d be~
T L I1 c vt r- -ly ] -ubt fu 1 n vi pw -I -ror-co Ir of
ut1JpcO In thi rjert f it -- r- 21 npnred by d1-nr- cothcr t~han the US
2 ]P-t ofI Prr l1 on Prw- Fntrrr
Phij rrcjJ-t -11 n-t h~ -in nrwerq Prrt n rr- tc ntrshyr~A~r fi-mc 1bho und for --roern p o n
3_~~PrCT--rty
rr-vIi-n 1 h -d r the loan ragreement for Icntifitcation ef any r mIjrpt n ctri b- rt througn ut 1zatn (f xccr- prorerty
If rv c u~eAID n-mrcf u urr thi )cn - I~ut~ em avoi3ablo r rovvrirrnt -rrperty rather than nce iteni
4 Otli-r Fr- Wo--] n-Fnlc4rm
Dr mi tW- o] 14rocco- i~ajr ovr-ec -f exte rnaX
rrtan~- hrtvfb - I r ~ ant fl Fr n fole by Kv-it
Sgio F rneflit r b-en 1lmrntrd to tcfohnjip n5tnnen bi eoni~in I th u y f Fr--h tprhntcian tcacrr ind cther
~ti~r t~ ec-tnmIyrt-n Friinch Aid to Mcreco In 1065c~oc~ (P-art f-r txychnirril aItn -- j se of tl5 w1nfor bu~dget rurport f ir in rt t- $1 1ri1 icin in ennita -rojectM- n vx- rrcd
1Vw1tvnn tioI t-) Frenh rurtnnd +16 r11ion tie-I to -onyiint to orrrcr Frrmh ccilcn~For _-rrc-ratod land and rquirrmcnt
West GTrrnmnny liar agrcrcd to nrovIe ccme j27 mM22~cn 1n catital arirtanre and cromrndity lnoi7 t n OfIcon( q92 thi o totril$223 miJ lien ha actuary b-Pn cr-Itt--d under Inn ngrepment This
And a lk5 million commodity loan both) signed in 1965 All Wet Gerzaan
Ufla
-28shy
capital asnistance I vuectI to be tied to German exports Germanyhas in addition 1uvvded r tteysubbtantial technical assistance f
The IBRP hah rade four 1nns to Morocco since 1962 totaling$6) million Ofthin totnl a [175 million loan in 1965 wos fordevelopient of the gidi lit-r irrigation perimeter Other assistance by internntIcnal Iending arncie include an $11 million credit byIDA in 1C65 for rcendary diicction projects and an IFC ln and inshyvestrent of $1 1 ri jnic alo in
F tit i by [c - dncr tr dh elo snt ofMorccco rircuVt r oii +h b-]n jt-TKT r nbove n 2 )6 niliion Kuwait enn in i66 for develomyment of the Tensaout Prnm n irrnten nrooetand a $77 million Kuwait
0jl n )nnsn r(niti-nertcir
loan for extrnion of the Tadri~ Irrigation Perimeter
The following- trbe surrlnrlzes other free world arlztance (excluiin technical assistanc-) to Morocco for the years 1(62-66
($ Millions)
1 62 1cf_63 96) 19r65 19)66 Fneea 4) 5PO 64o 700 shyWet Germany 223 gu 1t 53 281 IRD 15 175 10) 175 IDA 110 IF C 1 5 7 7 7 0 I15
TOTAL 55 62 1U3 W
b Includer only lo-ng term loans and exporter credits - Includfs 25 million private capital
Eternal ansiztnnce to the Lowier Moulouya Irrigation Perimeter -nce 1060 hres been con[fined to US upport Consdiering AIDs previcus
involvement in and conmitnert to the Lower Moulouya an AID lean in P2t to be Lhi mol aprroriate source of financing for this project
LID
II
q
-29-
SECTION ITI- Y-TTYT TIMPLPTrION
A Periret-r Ad-instrrti-
Authority for irplerrentvtnn of the deveorpent prrgrn frr the LowerMoulcuya Perimeter and rs wel arth crnntinuinz mrnnrrmenertC tt r t- rrtnr V theltbi nad overationity iOfic 1cne 4
n r I e1i- i d Vit4 i Iv ~ Ct rreated i Otb (rJ rn-- of evcn inrmi-rriional offices hich reelaced the Office de Mire en Valeur Aamprlcole (OMVA) Under the OMXA and itspredecessor agencies authority for ad-inLtration cf irrigtion proJect war centralized in Rabat
Under the new regional office organization responsibility for adminshyistering ORMVAM is vested in on Adminirtrative Board of 10 members headed by the Minister of Agriculture and Agrarian Reform as chairman All ether board members (other than the Chairman and a representative of theInterministerial Economic Ccrmittee) represent agencies or activities inthe region of the r-eriret-r whic comprises parts of two provinces Localretresentatives on the Board inc]-de the governors of the two provincesOujda and Nador the presidents -f the two provincial asembtes and of the two provincial chambers of agriculture as well as the perimeter Director
The responsibilities of thie Administrative Board include review of theecys program establishment of its organizational structure developshynt -)f its annual budget and establishment of rates and conditions of
Siyfent for water and other services provided in the perimeter
The Director of OP4VAI-I is dbarged with the responsibility for executionPthe vclicies established by the Administrative Board end administration of oil ORMVAM functions This responsibility includes selection of staffn pserating perrcnnel acting s officia ORNIVAM representative in all ntztinns with -tate and othbr public or private bodies and the
f of funds within limit Indivated by the Ministers f Financetent rn fricultural and Agrarian Reorm
Perimeter Oranizatlon
ORVAM oreanizatlonal structure consists of a directnrate five maj-r rvlces or d-vsicns and one separate bureau Two services qei Administratif et Comptabl- and Service du Yatrial are conshycor - th adminisration and lcgistical support of ORMVAM operationshi1e the remainirg three services rind the separate bureau are Involved in t-hni al matters associated with agrcultural developrent Each ervice has one or more subordinate bureaus Fei-ce Chiefs and thehead 0 rch bure-u report directly to the ORMVAM4 Director
-~F7E MEw-
-30shy
2 Perimeter 01ttffnr
OPIVAM orgttnlrntlon treture calls for 557 positions of whichI L or 7 Mlled n were nher 29 1567 37 of the 71 Postshytion vacancies reported 1ern the high and middle levels Foreign(chiefly Euronean) technclan occupy I)of the 16 high level positionsthat ere filled at thfit tire
Whil OPM ut in th- lcng run lor to Mercecos oducational yster to prvidr tn crrf-nn2 to ratisfy current rdurojectd rcshyquirement th currnt high and mlddle level vacancies rrouire uersonnelwith oxt nive nrior rxericnce To fll this preent need it will be necessary for CRIVAM to continue its program of recruiting foreigntechnicians until ruch tire ns graduates of Moroccan educational programsacquire the necesnry exrerience The managerent assistance componentof thin pro~ject ]e-rribed In the Project analysis will to some extentalleviate OFIWAMs high level personnel requirements
3 Inw1 ernetation Sehedu]
Months Implementation Action
1 0 Sign Loan Agrcement
2 2 C-tiify conditions precedent and Y4tiate procedures for selection of US firm for management contract
2 Negotiation of extension of advisory Engineering Services
h 4 Contract (Hydrotechnic) Negotiation of Managerment Contract
5 60Cmpletion of Project
C Waivers
Sect ion 7 rf AID Regulation 7 provides in substance that theUnited State ill not finance direct costs of construction work performedby third cc-ur y nationals unless the total co-tn of the project withvhich thr ennrtrumticn w(r is asEcciated donot exceed $2On)O orafter excluding national of the country in vhich the site of constructionis located and Dersons vho nave resided therein uninterruptedly for morethan three years imrnedJately prior to any determination under Regulation 7at leant 0 of all uernons who work under the contract at the site of conbulltruction are United States citizens or the employment of third countrynationals is necessary to avoid excerrive corts to the United States
3
31
Section 2175 authr-ri th Regional Anitant Administratorto waive the nrovinions of Sectionthat it is 2073 if he dcterriner in any coneimportant te the nationrn intercrt of the United Stutes tofinance the direct eots of construction work performed by third country
nationals
A prviou1y r ic i c t tht for thr ct Tartthe -r c ct b- 1jeuj out r -cnorbr f cnrtructioncontracts with Morcccrr contrctnr an in the i-t Uowfevvr itentirely psnible that there may b- roe contractn with cntructlonfirms partly owned by third country nntionaln and that ruch firjs anwell as the surely Moroccan-owrned firms may enloy third country niationalsIn such canes a difficult rrobic-i iould arise in meeting the terms ofRegulation 7 since an a practical matter Aericans are not reaonablyavailable for ermployn ont by such contrnetorn and our previcus experiencewith the Naunsseur Ccnv(r-ion project thatin Morocco has indicatedAmerican contractors would not be interested in bidding cn small conshytracts in that country
It in therefore recommended that the Annitant Adinitratordetermine rursuant to Section 2q75 of Regulation 7 to waive theapplication of Regulation 7 to thic iroject since the project 411 conshytribute to the attainrent of US foreign policy objectiver and the cbJe-tives of the Foreign Arsistnnce Program
LITI L USE
LfI~~5xA~us
lit
4 A J A 45 4 k
t A S T
S(3
I A444ilA~~l~)
7 -74
tAM= D
SECTOR 27
10000
t Co0Na includez25 cgtri oncFcttlrvI ncy I8s ~ ~ C t C- Includes 50 constriJcltiotrgrc
2000 60
IU
0
z
bull cosYsA shy----- i
600L _
400
200
0 5 I0 15 20
INTEREST RATE
I ~ 7 J7777
ANIAampX C
PROJECT DESCRn1 rOll
The project com)onents to te undertaken on the MIoulouya Irrigation Project over the next five years contists of the following
C(n1rtion of the rrLin casuals and bianch canbls to provide the suource of waler to the sctors be developed in theto TriffBou Areg and Zebra areas This construction will include the necessarystructures such as reulators highway bridges aqueducts water intake
and discharge structures etc
2 Iand Txeloommerit which includes engineering land consolishyt and iuvtllng lard preparation (subsoiling ripping destoning etc) and installation of water distribution canals (secondary tertiary and quurtunary) and drainage collector ditches for the Triffa main covering 24000 acres in sctors 8 9 10 16 20 21 23 24 25A 2513 27 and 28 Lou Areg Central covering 16250 acres in sectors Dltirough D2B and G1 thru-4h G313 i0u Areg Remainder covering 15000 acres in s-ctors D3 through D7 and GA through (6 Zebra Collective covering 45)0 acres in sectors 3 4 5 rind 6 and Zebra Rer-iinder covering 14250 acres in sectors 1 2 and 7 through 10 and th remainder of sectors 34 and 5 The total land to be developed is about 74000 acres
3 Canalization of the Oued Zeluan and nued Sidi-Amar in the Bou Areg Plain consisting of strairltening englarging and regularizing of these streams to carry the flood waters to the sea Drainage interceptor canals are to be constructed parallel to the sea in the Bou Areg Plain In the Triffa Plain the Oued Riada main drain will be deepened and enlarged and secondary drains will be excavated to provide for drainageof the Madagh area This will include the construction of bridges and culverts and other related work
4 Major Commorn Works will consist of
a Clearing of the Mo-1ouya riverbed downstream of the Mechra KLila barn caused roy flood dariwe and the installation of a set of stop logs for maintenance of pillway gate-
b Design supervision and construction of repairs to the ]elt Lank dead head tunel
c Conctruction and establishment of sib-division Offices and installations for farmer support such as CMVand farm stables
1 C
-2shy
5 Manavmtnt It ha been proposed that a US management firm be ewployed by th- C4 to manage and operate the entire Bou Areg area Such manageent -iuld encomparn all activities from the initial concept to final irIrp igricultural production Such activities would Include resp r-ibilsect -or supervnsion of engtneering and constriction of primary
S- Jry r complete developfnent of land training n in g tinul irription practicen preparation of market
t - r1t- (ot--rnu trplusmnining of a Moroccan cadre to take over h v--it Bou Areg dreara P the
At this writing the n-pt of turning over to a private UZSfirm execushyresponsibl]ity I h management of the establilrment and initial
op-ration of irr1gati the Bou Arog area has been only broadly de iiitd by the GCJO It Intended that proposals will be invited from a r -onable ntnber of f|ed US firms that a selection will be made an-n 7 them and a more do iled and cornprehenrive definition of the rer6 -Ps to be performed be eztabliched at that time It haa been
stimated that the t- of ruch a contract will be about $2 mir- n In any event the -ts of this contract other engineering arvl s to be provided undt n extension of the Ilydrotechnic contract and ether US corts will not ed the proposed $5 mllaion developzont Jean fr the project
The cle 3ifications duties ant 1ncnslbilities of the management personnel ill ha-- to be clearly defined i agreed to by the GCM Perimeter Directo- and other GOM Agencies luding arrangements for the necessary gistic support
Svxlale Docu-
1
4
LD ED 0ICIAL
-IAIDshy
A1trX D
C6JCK LIST OF STATUTORY CRITERIA
(Development Loan Fund)
1 FAA 0102 Extent to which U3 cormodities and services are furnished consistent with improving the US balance of payments See Sections II-C II-F
2 AA sect2O]ihi lanner in which loan wil promote countrys economic develo shy rit emphasizing help for long-range plans and programs designed to developeconomic tesourcos and increase productive capacities See Section I-D
i FAA sectT] h)(IL Information and conclusion on availability of financincfrom other free-world sources including private sources within the United States See Section II-F
FAA sect20l( )2 Information and conclusion on activitys economic and technical soundness including the capacity of the recipient country to reshypay the loan at a reasonable rate of interest See Sections II-B II-D and II-E
5 FAA 1201(h)( Information and conclusion on existence of reasonable promise activity will contribute to developrmnt of economic resources or increase of productive capacities See Sectiona II-B and II-D
_92_(b 4Information and conclusion on activitys relationship toothor development activities and its contribution to realizable longshyrange objectives See Sections I-D and I-E
The following abbreviations are und FAA - Foroirn Assistance Act of 1961 as amerded by the Foreign Asaistaice
Act of 1967 App - Foreign Assistance and Polated Agencies Appropriations Act 1968
AFEVCDF 1066
L1
-2shy
7 FAA f12O1(b)(5)_ Countrys self-help masures including institution of Foreign Assistance Act investment pliaranty programs Investment Guaranty
bull Agreement signed with Morocco 331o6l See Sections I-D and II-EI
_A ))(6) Information and conclusion on possible effects on US econowy with soecial refererne to areas of substantial -labor surplusSee Section II-F
9 FAA q201 (h)() Information and conclusion on the dagree to which thA country iv wiki- progress toward respect for the rule of law freedom of expression and of the press and recognition~yf the importance of individual freedom initiative and private enterprise
10 FAA -1201(b)(8) Information and conclusion on the degree to which the country is taking steps to improve its c]Laato for private investment See Sccton II-E
31 FAA R LbJi Inforrat-on and conclusion on whether or not the activityto b financed will contribute to the achievement of self-sustaining growthSee Sections I-D and II-B
12 FAA fi2Ol(bj Inforruation and conclusion on reasonalbe prospects of reshypayment See Section II-E
13 FAA fl20JL() Info-ation on applicability of the twenty country ceil4ng2
14 FAA fl201 L Information and coclusion on legality (under laws of the country end the US) and reasonableness of lending and ralendinr terms Loan will be on minimum termspermitted under FAA These are deemed reasonable see Sectioam Evidence will be renuired from the GGM as to the legality of the loan agreemnt
1 E 2 Information and conclusion on availability of an applicationFAA together with sufficient information and assurances to indicate reasonably that funds will be used in an economcally and technically sound manner See Sections I-A II-B and II-D Application received Janury 15 1968
16 FAA fl201(fL If a project inforntion and conclusion whether it will promote the economic developapent of the requesting country taking into account the countrys human and material resource requiremnts and the reshylationship between the ultimate objes6ives of the project and the countrys overall economic development See Sections I-D and II-B
17 FAAJ 20ij(J If a project information and conclusion whether it cifishycally provides for appropriate participation by private enterprise 8ce Sections YI-C and 114
I- FAA i22(a) Total amount of money under loan which is going directly to private enterprise is going to intermediate credit institutions or other borrowers for use by private enterprise is being used to finance imports
rfro private sources or is otherwise beirg used to finance procurementsfrcm private souwces See Sections II-C and II-2
9 FAA 207 Infosation on the emphasis placed en
(a) encouraging development of economic political and social institushytins No apparent relationship
(b) nelC-help in mectingthe countrys food nredo Project Vill conshytribute to production of food for lccal consumptioa
(c) in-proving availability in the country of evucated trained manpower Project will contribute to the deicloginext of trained manpower as one of the functions of the management contract (Soe Annex C para 5)
(d) prcgrams aimed at -malnutrition disease eradi atDn slum clearanceWater purification sewage disposal health education naternal and child care(includin fimrily pJnrning)) -nd cthcr public health ausistarice See
(c) other develoment activities including industrial development free
labor unions cooperatives tnd voluntary agencie transn)rtatin and ccshymwquication nrStczn capubiliTies for economic planning and public adlinisshytration arban develo-mment and modernization of laws to feilltate econcnicdevelopjen- GO- intends encourage develo vient of cooperat yes particularlyin the Left Pank areas Project will also develop capabiLi ics for cconoaicplanning and public a6~inistration (Annex C para 5) Other not applicable
20 Information on the extent to which the r-untry is
(a) cttcmting to increase food production and food sto a-e anddistribution felitics This project is one evidence of Moroccos efforts in this direction See also Section I-D and I-E
b) creating- a favorable climate for foreign and dmestic iri-ate enterprise and invcstrrment The GCM has recently reduced profits twes anrannounced a ten year guarantee against tax increases See Section II-E-2
(c) increasing the role of the neonle in the developnental procecsNo apparent relationship to this project
(d) allocating expenditures to development rather than to unn-cessarymilitary purpoes or intervention in other free countries affair See Sections I-D and Ii-
(e) willing --nribute funds to the project or program Th iOMhas already dcvo o-sidcrable resources to the project It has badieted13 million for th i oulouya for i7 See Section I-C
(If) making economic zocial and political refo ns such as taxc coliecshytion iYprovcmenLs and chan es in land tenure a Royal Comm ision has been appointed to make recomendation on land tenure probleras in the Lower I oulouya
(g) responding to the economic political and social concerns of its people and showing a determination to take volf-help wcasuren See Sections I-D and II-E
IT
-ovi~cd l v r 13 1968
- 4 - LDffIED OFFICIAL USE
21 FAA Inforn ation about multilateral assistance being Iurnished to t e country and whether the loan will encourage recgional development prog-rams The I1D has eztablihcd a Consultative Group for Morocco which rvicws the GOM development program anui prgress See Section II-F-4 for infoaation on othtr donor assistance to Morocco
22 A Extent to which the loan will contribute to the objective of ass ring naximu par icipation in the task of econonic dovelop--ent on the pL-t 0 _he people of the developing countries through the encouragement of cocr-tic private and local govenmental inLitutious o apparent
relationship
23 F _-_Dta_ Infor-ation and corissions whether loan will oncourageeffor s of t1e country to (a) increase tie flow of international trade (b) fostcr private initiative and comptition (c) encourage development and usceo co opratives credit unions and savingss and loan associations (d) disourgo monopolistic practices (c) improvo technical efficiency of industry ariculture and commerce (f) strenSthn free labor unions This project is cxpected to increase technical efficiency oi-agriculture
2_ C-1L lnforzrition and conclusion on how the loan will encourage US privte trade and investment abroad and how it uill encourage private US participation in foreign assistance prograas (incluiing use of private trade channels and the services of US private enterprise) See Section II-
25 VA-+_ Conclusion and supporting information on compliance with tho Co resional policy that engineering and professional servicos of US fir-ms and their affiliates are to bo used in connection with capital project3 to the nixinua extent consistent with the national interest US engineerirn and innsgcment services will be financed tnder this loan
2$ Inforamtion and ccnclusions who+her loan will pormit American rx-l] business to participate equitably in the furnishing of goods and
z orvices by To be satisfied in Loan Agreementfinanced it
27 - t(a App I18 Complianco with restriction of co -zodity procureshy o UsMS except as otherwise determined by the Picsicent and subject to ttu--- rcortir require r-nts Procurement will - liumited to the US for
reiabnrs nts and to ioocco and other free world countries 1-or US-cwne(d rhu disburseacnts
23 -i Comiance with bulk cozodity procurement restriction topriecc no l-ho han the nkarkot price prevailing in tho US at tia of
bull puchas Not applicable
29 FA Cozpliance with requirement that matrin insurance be purchased on commceities if the participating country discri-inates and that insurance be placed in the US To be satisfied in Loan Agreement
30 IA 6(a) Information at to the utilization of excers personal property in lieu of procurement of new items Will be required ai appropriate under terns of Lean Agreement
f
1 77--7 -77-77-777
31 FAA 61](a)(_) information and conclusion on availability of enginoering i financial and other plans nccx sary to carry out tho assittance and of a
reasonably firm cstimate of the cost of the assistanco to the United States
See Section II-D
32-ecessaryFAA t611(a)_(2) legislative action r6quired within recipient country and ibasis Cor reasonable anticipation such action will be completed in time to pormit orderly accompli-hirtnt of purposes of loan See Section I-A
33 n _AA161nJ0] If water or water-relatod land resource construcshy
tion project or program information and conclusion on a benefit-cost comshy
putation See Section II-B
3 4 VAA 611(c) Compliance with requirement that contracts for construction be let on comp-ctitive basis to mamum extent practicable To be satisfied
in Loan Agreement
If a loan for a project of $1 million or more certificatin35 FAA _61l(r) by the principal AID officer in the country as to the capability of the
country (both financirl and human resources) to effectively maintain and
utilize the project taking into account other US-financed projects (Such
certification is to be pproved by the Administrator aL the time the loan
is authorized) In process of being obtained
36 FAsgJ2 _6_h Appropriate steps that have b-en taken to assure that to the miaximum extent possible the country is contributing local currencies to net th-2 cost of contractural and other services and foreign currencies o- icd by tho US are utilized to meet the cost of contractual and other services The GU-M is contributing over $30 million to compleXton of this project Excess US-use dirhams will be used for eligible project costs other than US goods and services
37 FAA p619 Compliance with requirement that assistance to newly independent countries be furnished through multilateral organizations or plans to maxishymum extent appropriate Not deemed appropriate in view of previous AID financing and ccoiitment to the project See Sections I-A and I-D
38 FAA sect620(a) AcnO7a n3]7(b) Compliance with prohibitions
against assistance to Cuba ard any countr (a) which furnishes assistance to Cuba or failed to take appropriate steps by February 14 1964 to prevent ships or aircraft unier its registry from carrying equipment materials or supplies from or to Cuba or (b) which sells furnishes or permits any ships under its registry fr-om carrying items of primary atrategic signifishycance or itcms of economic assistance Morocco is not-known to be in Violation of these sections
39 FAA q620GL_ If assistance to the government of a country existence of determination it is not controlled by the international Communist movement The Secretary of State so determined on October 11 191
40 FAA 620(c) If assistance to the government of a country existonce of Indebtedness to a US citizen for goods or services furnished or ordered whore ouch citizen has exhaustod available legal romodiesor where the debt
i - ow - -- _---- --shy
- --
-6shy
is not denied or ontested by such government or the indebtedness arises under an unconditional guararty of payrrent given by such govornmunt No such indebtedness is known to exist
41 FA _(a2LdL If assisitance for any productive enterprise which will corashypote with US enterprise existence of agreement by the recipient country to prevent export to the US of more than 20 of the enterprises annual production during the life of the loan Not applicable
42 FA4 - 16Q_0_ A If assistance to the government of a country extent to which it (including government agenies or ruhdivisions) has after January 1 1962 taken steps o repudiate or nullify cuatracts or taken any action which has the effect of nationalizing expropriating or otherwise seizingownership or control ofprcpertv of US citizens or entities beneficially owned by them without taking appropriate stops to discha i ge its obligations No such steps cr actions are-known to have been taken by the GOM
43 FAA~L AjPj_10_9 Compliance with assistance toQ0 prohibitions against any Comunst codntry ozocco is not considered to be a cocinrunist country
44 FAA - 620(gJ Corliance with prohibition against use of assistonce to comp satc owners for expropriated or nationalized property To be satisfied in Loan Agreement
45 F AA 8620(h Compliance with regulations and procedures adopted to inshysure against ue of assistance in a manner hich contrary to the best inshyterests of the US promotes or assists the foreign aid projects or activities of the Communist-bloc countries To be satisfied in Loan Agreement
46 FAA 06-O(j)_ Exitence of determiration that the country is engaging in or preparing for aggressive military efforts No such determination has been made
L_62_O Information47 FAA on representation of the country at any intershynational confererce when that representation includes the planning of activishyties involving insurrection or subversion against the US or countries recoiving US assistance No such representition is known to have A occarrect
8 FAA 62JJ Existence of a determination that the country has permitted or failed to prevent destruction of US property by mob action or has failed to take steps to prevent a recurrence and-to pay compensation NO such destruction is known to have tak-n place
49 PAA l620(k) If construction of productive enterprise where eggregate value of assistanc to be furnished by US will exceed $1OO million identification of Gtntutoryauthority Not npplicable
i-xQ2MZZ=
1 shy
U 6 50 _Af( QCinsidoration which has been given to denlying assistance X to thu government of a country which after December 31 1966 has failed to
- institto the investnint guaranty program for the spcific risks of inconshy
vertibility and expropriation or confiscation Satisfied See No 7 above
S51S J lj Compliance with-prohibitions-againstn as~istance to countries which traffic or permittraffickingwith North Vietnam Morocco is not known to be in violation
52 E_-L620(_L If country has seized or imposed any penalty or sanction against vn US fishing vessel on account of its fishing activities in
intcrnationul waters information on the consideiation which has been given to excludirg the country from assistance No such situation is known to exist
53 FAA FA r) UAR restriction Not applicable620(p 9117
54 FAA R620tl) Existence of default undhr any Foreign Assistance Act loan to the country No such default exists
55 F ) C-nsider tion of whether co ntry is devoting unnecessary percentage of buKet for military purposes or use of foreign exchange for milita-y equipment
56 FAA 62o(t) Proibition on aid if country has severed diplomatic relations with US unless agreements have been negotiated after resumpshytion Diplomatic r(lations have not been severed
57 FAA 9620(u) Statur of the country on delinquent UN obligations Morocco is not known to be dlinquent on its UN~obligation
58 FAA R636(i) Prohibition on financing non-US manufactured motor vehicles Will be satisfied in Loan Agreement and Implementation Letter
59 App 102 Compliance with requirement that payments in excess of $25000 for architectural and en Jneering services on any one project be reported to Congress Such reports will be made
60 App R1O4 Compliance with bar against funds to pay pensions etc for military personnel Such payments will not be eligible for financing under th Loan Agreement
61 App 9106 If country attr ipts to create distinctions because of their race or religion among Americans in granting personal or commercial access or other rights otherwise avaVIfable to US citizens generally application which will be made in negotit ttons of contrary principles as expressed by Congress Morocco is not ku IDhave made any such attempts
iInD OFFIIt t USE
0k
OFFICIAL USE 62 AIwp Rii Compliance with existing requfremets for security clearance
of personnel Will be satisfied in Loan Agreement and Implementation Letter
63 App R1l2 Compliance with requirement for approval of cortractors and contract terms for capital projects Will be satisfied in Loan Agreement
clJ164 Aup Cmpliance with bar nRainst use of funds to Tay assessments etc of US meiber Such payments will not be eligible for financing under the Loan Agreemunt
6 Anp P115 Ccmpliance with regulations on employment of US and local personnel for funds obligated after April 30 1961 (Regulation 7) See Section III-C
66 Aim Vietnam iron and steel restrictions Not applicable
67 p l9 If a country other than Greece Turkey Iran Israel Republicof China Phillipines or Korea reduction in assistance by amounts spent for the purchase of sophisticated military equipment
68 Anp fi4O1 Compliance with bar against use of funds for publicity or proshypagjanda purposes within US not heretofore authorized by Congress Such use of funds will not be eligible for financing under the Loan Agreement
Morocco is a traditional Islamic monarchy with a constitution The conshystitution was implemented followaing a popular referendum in 1962 National regional and professional elective bodies including a parliament were established by universal suffrage under the constitution in 1963 The parliament was suspended in 1961 in a State of Exception because of its inability to agree on measures with adequate urgency to meet the prevailingecononde imperatives In July 1967 the King appointed a Prime Minister to direct a Cabinet of appointed technicians
The constitutional framework nevertheless remains intact in Morocco and nationwide popular elections for some of the professional chambers were held in August and September 1966 The press is relatively free in Morocco and the right of diLsent prevails provided that such dissent does not violate the prohibition against political attacks on the instishytution of the monarchy or the person of the monarch
LI Under the revised US AID Policy for Africa agreed to in November 1966 Morocco is designated a development emphasis country entitled to receive continuing support on a country basis as part of a multilaterally coorshydinated countrj program Morocco was subsequently included in Presidential Determination 67-14 (January 5 1967) I
LIM=TE OFFICIAL USE~i
- l go
bull ~ -
f
DEPQbi) STATE AGENCY FOR INERNATIONAL DEVELOPMENT
WASHINGTON DC 052
CAPITAL ASSISTANCE LOA11 AUTHORIZATION
Provided from Develoroent Loan Funds Morocco Second Lower Moulouya Irrigation Loan
Pursuant to the authority vested in the Assistant Administrator for Africa of the Agency for International Development
AI)by the Foreign Assistance Act of 1961 as amended theIAct) and the delegations of authority issued thereunder I
have received and t-en into consideration a certification from the Director of USAIDMorocco as to the financial and human resources capability of Morocco to effectively utilize the Lower Moulouya Irrigation Project taking into account among other things the
maintenance and utilization of projects in Morocco previously financed or assisted by the United States and I hereby authorize the establishshyment of a loan pursuant to Part I Chapter 2 Title I the Development Loan Fund to the Government of the Kingdom of Morocco (Borrower) of not to exceed five million dollars ($5000000) to assist in financing the fore] gn exchange and local currency costs of goods and services for the third phase of the Lower Moulouya Irrigation Project subject to the foLlowing terms and conditions
1 Interest Rate and Terms of Repayment Borrower shall repay the loan to AID in forty (40) years including a grace period not to exceed ten (10) years Borrower shall pay interest on the unrepaid principal and any interest accrued thereon at the rate of (a) two percent (2) per annum during the grace period and (b) two and
one-half percent (2-12) per annum thereafter
2 Currency of Pepayment Repayment of the loan and paymenu of interest shall be made in United States dollars
- t- n t - - - shy
3 Other Terms and Conditions amp(a)Goods and Services financed under the loan
shall have their source and origin in
(i) the United States if disbursements therefor are made in United States dollars or
(ii) any country in the free world including Morocco if disbursements therefor are made in Moroccan currency
(b) AID Regulation 7 shall not apply to construction -work financed under the loan because as detailed in Section IIIC of Capital Assistance Paper No P 667 it is important to the national interest of the United States that the direct costs of construction work performed by third-country nationals be financed out of funds made available by the Act
(a) Such other terms and conditions as AID may deem advisable
Assistant Administrator for Africa
Date
~~~~~~~~~~~~~~~~~~ - q v
7
I(2rrU ~ r~c n rfthr Pcu tArc7 rev
tn nt i in r7 tht r rc t ructJ cn c ii ent11rniCQ
~ I fnr C r -- i J roJuc nat J tul ht bu-dom~
iLw-r ~~~r nih tVJ 1 nr c r
~~~~~~~-u)nI L hyrn1 onshy9 f~~ -In 1 ~ c~2~~r
y Z ftI ~it~ r nd r -n o
i jn a I in - 1 f f ri i any A rpn )~ t-h-- wo
- in rfrf n -j t31 f tihn u-c
mr~ ~ir~~ -n th Rirht ~ h
~~ 1-w r r js intod ut to i t
in ~ ~ ~ ~ 2n jj~ rin~ra
~r c~t~r ~ nj 29 and
7 - -Vnrl-t rtw tir- lj rt4 itn
A r-rt CA f r fo
I r~t~rc4P -rj i t-rJi ry irt -i fir1 rati vv wcn
viab1e ^c
b Th - urJrtaen rn the jleft Bank under the proshyposed thir i-e of the rojc-t are i follows
- Left Pnnk Dvd H-d Tunn]
5 r-y rd t final tng of ire aration for ther-rT ir cvf ni r r imy - rz--rt ha recently beenr-t) l i w t e rr - tht - I afid if exToected to ubrit hit writt(-n r-rt jr DC Aii preliminary impressions baled on a 9Ite nErerti(n indi-ate thit a -rt1fartorj repair con bemade in c)nIdprnbly le- t n-ne for lfan -than previously conshytemplnted
The early ccmrt-tnn nf thi work in lmnortanit nine IL c t Ft th avai-bility of pr~ct wrte for the entire Left Brnk
Z~bra Collectlv-
Thin 1 on ara ofrXPr-ctively ond tribal land that will be divjded and allotted tr J-ted tribal -b-hrc who will become soleowncr3 A Pirpe rart ti Tniran -aratirn and developent hasalready bern co-plet] 2pani levelirg r-mains to be done as well ae conztruct c~n of b-tcn dnd drina- works
7eDo i F--vino-
The northrrn ecti n tht rmrainder of th Zebra will requirethe extnzi-n cf thct Train 4]h will be ccrrleted with financingccmmritted under Phase II of fth tr-Ject Land preparation and levelingwill be required anlnp with h ntruct n of distribution and drainagebullir r]
T ectinr f th- rrainler of bra will requiret- rd i i w -J n rrd h c and engishyrnr nw d t i f -tritst t n and dlarn -rk
Piu A rp
foeuro rginprng im hhve b- 7cr)Pletcd fcr the irrigationthe Bou Are- Fr the o-t rt hu- I cf the
of rcquired construction
of main carrl Rnraljor dr- nRe worx z develoFerit and cronstruction of zbldiary li tribution -r irnge y--r rrrairns to I undertaken
Th P- Arrg Tunnel wr orml td in 267 and construptcn sunder way on Ih-Yin Canal rrired tL nvcy water the suthrnf e of Areg ervie ra
I h z-uir-i intluding the -rtablishshyn -F r rnity rvice andIn fit Th rlulrem-rntr for
o1 th I- P Crk t the- RhL et) I n air aly Ii- ted
ADoci AvaIILD
At th ti i t h ---n-Ir z of I h- rlI -htt- of ro ct bull n7 j r ii I v rtcognizu thnt th
riftkI~ - 11 I t o
4[ )Li-I lnt 11 L - th jPt it vlC_t to be centr
ltt o ( I ir i the dran
Irj q ir over -vn n ut b n Irtrge part to tin tr-ualy rvr i h - ion f MWchra KlI]a torRgor r to up t- Vi Ifgtt iil hjCh yiil-
-both th- c 3t
nz I C iA r _- Li i--I TurPne
Th i t j t i r+ctd to r iL t
oi i C E - (or Ti _f Fx n nl bull ter f t rt Ioi I t - vtvitv
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Wt r 2torvge 1 95 1)6and Pegulation
Right ank 137 31 10 79
L-ft Bank 25 87 n6 143 239
Far- De ]crl 0 )5 1 b I26
S I M O ALA1 348 356
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At indicatnd In the- tdl iv 11 - rnt it~ocotof the rxojroct are t hi~-hor tnan the ic60) 1orccasts Th y tarc Ah-wever 1hchr by cnr murth~cul~ averllsv( a igiificqntjsCfect t~cn the bt-ric lfer-7t I-tio n- rigill lly rc~r~t
V I ) u O21he 1)+ -J iv )ir(t In h jiv kinvnft bed tado in Lh Tnwr Liynnui vni cif hrrlt rnr 7cst- wrr uniershytaen ic r ii -tQ j ta the Aurpo3vt o 02thl rirarnkinr of r- Ln t -Ir ca th cenm I rr1 urn 1e11 frrn n ow
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elevated area requirin iat-r to be puiiped to the irrigated land with both highr capital costs (about 1 million) and higher oreration and maintenance costs (150 Dirham per hcttare via-a-vir 100 Dihams perhevtare for the grnvity irrifrted ares) The ony work presenl-ly cotiishypleted in the Triff Hih Ser-ic Area is the preliminary engineering stirUes Cimi-ir to th Tr Pa r thu TrIffa ]Igh Service areawill reiir an ex I uvnt ricd bfore agricultural proshyduction cn be initlat-2i
The above considerations reiult in the following revised ranking of priorities
Project Area 1FY (M Priority
Triffa Main 21 I Sector 27 8 I Sector 28 9 I Bou Areg Central 6 II Bou Areg Rerainders 6 II Zebra Collective 5 II Zebra Remtd nders 5 II Triffa Ent 6 III Triffa High ervice 5 III
SRI 11ed a ccst contingency f7actor of 25 and a cumulative costescLlatior factor of 3I per annum These factors appear excessivelyhigh in th( light of (1) project experience to date and (2) the fact that from his roint the technical rirks involved arre of a much lower orl- r f 1h thnse inhtrent in the major works Just comshy1 I intion nrd contingency factor of 15 has there-
S chtiMnte- Itlizcd in this rarer The ii n-ttr costs the to ) ject (in n]ace of factors
i by )I nrt 11 thIrhe nf th nJter atve I[cwver rrtnrecr-y factor euld Increase the IPE ] hi ra]y th- IIRF fcr the TrIfa Sector 27 ansnunirg a
oct crortlr7crncy A can be seen as the conAngency I thf cc curve rrv to the right and inter ects the
ur h h 4r- rnr rate of return)
C Finreirifg inr
Cot o the prJect wor fmcentntgenent nnd engin-erinm advisoryrvices for the proued t rd tsge of the Mmlouya Project are
ctirt a Crollows
nF3r AVAILArBILE COPY
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(In Millions Of Dollars)
Righi Pank
Trffa Main 34 poundSt (r 27 08 S ctor 6 0Q
51 Left ank
7bra Collective 12bra Remainde r- 54 Tou Areg Central 74 Lou Areg Remaluders 68 heft Bank Dcad Head Tunnel 30
238 Services
Management 20 Advisory Engineerin 05
25 SUB TOTAL 37
Escalation amp Contingencies 15 47
TOTAL 361
It is proposed that the AID Development Loan for this stage of the Moulouya ProJet be limited to $5 million an amount which would be sufficient te reet the cost of any US goods and services required for the works to oe undertaken Thus the loan would finance the dollar costs of manrement and engineering advisory services to be provided by US firms erstimated at $25 million The balance would be available to meet any ther US cofts that might arise for constructicn cuipment and nateria]
The balnnmc of funds required would be provided by the GOM from its own budgetary resources including as appropriate agreed allocations of the counfryj-uie dirham proceeds of US surplus agricultural programs in Morocco
To a l-ge extent construction works In the Mou]ouya (other than the Bou Ar- Tunnel and Mechra Klila Dam) have taken place under a largenumber of roll contracts with Moroccan firms It is anticipated that this will ontinue to be the pratice in the forthcoming development stage Th iit is evident that the great bulk of project cests in this next stage will be local costs
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In the event that not all of av l able fuInd- under the loan are required for TKI eo It i ouied that any remaininrn balance be utilized for the payment lo -ovalccztn f the project This would be aceoomplirhe by utili7irn th- h r vroceeds of the loan to purehare US-use dirhsmn (frcr th U Oi-irrirg Officer) which would be utili ed to rrimbure th fc u a t local - nditurrs
Thi arranrit 3ir ila ) fstV utilitd In the - of the D-e l-INAieret Loar tJr U Atrrert SinceYr usii Conv rf i cn therc loans are rcpiviible in dollars nd rince Morocco in a n-ar excess local currency couintry the fert ) f e transaction in tc provide a means for obtaining ccnvrrrs cn a-cr th life of the loan of otherwire inconvertibie U5 holding irhrs hich are in exces of its localrequireme t
In 1967 over 15 million dirhams (abceut $3 million) of PL 480
Section l04(g) loan fun cre in msgreement with the CON allocated for the financing of various contractr reloting to projects in the Moulouya It in anticipited tht ndditional allocations will be made out of the local currency proceed generated from current and antishycipated US 7urplu agricultural rmodity programs in Morocco
It has been proposed that the dirham equivalent of $45 million of the proceeds of the October F67 rurplus agricultural commodity Sales Agreement be allocated for a Section Cb(g) loan for the Mulouya In nadition it is estimated that a $]35 million (in$ioz1ble dirhshyequlviJent) woull be available from 7uprl]eental surplun agrIcultura con -ity rales programs under Titlo I an-d Title IV in calendar 196F for allocation for loans for development projects in Morocco These two amounts combined would provide about 6 of the G014 resources reshyquired for the project over the next five years On thic basis there would appear to be rcasonble propect tht the GO should be in a rorition to provide cver the S e year rriod of the project the addishytional resources renuired for itF ccmpletion
Tt I contemplatd that na additlonal US dollar financing of the Moulouya byon-l the $ iilon rorosed herein will be provided for tl cplei n ef h M _11-nuya rince the bringing under irrigation of th- 11O0Y ies include] in the propore] project will substantlally cornIete the works criginally conwtemplated hen h DLF loan was authorshyized in 106 The remainler zf the workr h(- be within the capabilit3 of the GOM to complete with It- o-n resourcec
MT M T M
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) Technical Anily ir
The Moulouya Rivr which is cre of tne largest in Morocco originatesin the idll Atans
Moulouya and which oztend scuthward
Kediterrancn l re
t rre
Pr
ard n
flows rrpr
orre 25) mriles northeast thr Agorinn border
to the
In- agricitui 1 in li j i nt( iljr r Th- rst rind most
t 2 1ir i t i h- i n th rwrht born of thshy-- e 31nmiler frem the Mediterranean
Lea To tho wet cf the Tiffa and nn th- left bank( of the Moulouya isthe Zebra nlain 14wiuntain rv-arate the Zebra frcm th -ea and fron theBou Art-r i-ll]zain which - ctI nrrthwe(st of the Zebra The Bou Areg a coital phtain sclte 19 mils lorg and h miles wide separated fr-nthe n-a by a Ihow sa2t water lagoon Southwest of the Zebra is theGireb plain which hun land ruitable for irrigation in its routheasternportion The Gareb i at a higher elevation than the three other plainsard if ultimately irr-gatcd vould require pumping fro the lower level Zebra conv(yance system
Water from the Noulouya River is stored brhind the Mechra Klila Dam whichwas coniletd with fjiancri rc AID loan (3-A-2 (DLF Lcan l6)Water ir rclca ed downstr(a (1bcut c) miles) to the Mechra Homadi reFrshyvoir and d]iversion dcim in1h-r divert-d to th right oad left bankcunals About 75 kilometer (1 miles) of the Triffu (right bank) maingravity ciral hay ben copletd und consderable cr) has been carri-dout in the Tri on) distr Iution and drainage netw rks land levelngend other farm iwnrovwments About 37 kilometers (22 wiles) of the Zebra(left bank) main gravi-ty canal and the tunnel 6 miles (101()7 JIrenrTrcters) betxeen the Zebra area end the Bou Areg area have been comrneted
The GOM illrrfo m certqin -rk nr-Aded fcr develormnt of the gravityir~zgata yt-- for n 71-) acres over the next five yarr Thiscffort vi2 be eonern rait-r urcr the develo-ment cf areas thot providethe great-rt ecnnomic returrs nnd the developnent of a cadre of Iorocearperornel adequ tly tran-yi in the an2gerent of the project SeeAnnex C for further Irojcl details
e- enmL Ev1ation
Mt Infratrueturr The --trnal highway co-munication network i t arid rfi Isirm nf re- i n-ote siler in-1 shy
uzeather raved rc
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Other communlca 1 i i t ih Lh arr-- inlude the nrninlineof the Oujda-Fe--C- t h~rh l e0tnnd to AlgeriaSpanish enclove rt the 1 fir idto cmmercial airport at Oujda andNador with regular national onI int rnational ervice5s
Th verirtr 1 u ~Ath r nr r t crocd by 60 kvJ i i i u rrd t 5( kr It na ortr kk f~ditcrl rower1(Qp x I -y yrar) -o n d hr rritIronr
at the Mechra-Yplusmnilj l inm fnd the Bou Areff contral poter Statin The townare connected to ranrh cther and th2 r-rt of Mcrocco by telerhone andtelegraph 1 ner
b Sol Soil rvey 7rd land ]a-ifctons have been completed i-nthe Mcloulva rer eter oanntrantbi- with French firmr u-ing Frenchmethods The Trifa -1n wr initialy rraped at a cealeof 150000with certain area ub entiy rer-aLd at 15000 110000 or 120000dependin I nn the cor1cjeity of YJ rattcrns The Zebra plain has beenmapped at a reale cf 20O00 nod th- Bou Areg plain at a scale Df 150OO On thp baf Yr nf ther urvy th cla sified the soilsGC hain terms of r-uitnbility for irrigation as follows
Land Ciaifcation (Aere)
CasrI amp IT Class III Clans IV Totas Triffa Plain 17000 29[00 22725 99625Zebra Plain CbO 1275 4050 211425Bou Areg Plain 75)00 l6qo 3 0 3067)Gareb Plain 13 05 10 70 0
Inclurez 1750 acres for lfigh Service Area
The findings thi indicate that ( i) arriratry 5of the area in thefour rlain- i suited to irrigation (Clare I anl II) (ii) more than3 ir suitabr bt with one Or mcre imrtat~ons Irro=ed by underrablefeatur-s such an to wrafhy oil characteristJcn trnine- r restrltedbull rio (CIar TIV) and (iij) ls than 2 of th- area in only margina)lysuited for irrinticn(Class TV) In ther7e lattrr ardrn only rmi-intrnsive orop rotations blUponsblhe
The oi nicn f the Cn-lting Envneer (1ydrctechrJ) th respect to) therd carrffjn n that hfle 3 Bureau for P ltr0tion -tandards werirt ernoy-d te rlasnificatinn ir aceurat- and n rrti with3and rlaced in r d rLrnble categories more
uere thnn right ha bern the caseUS tandardr folIced The clasifatinn ha 0a been reviewed andfound to be atifactory by the USPA tayr Hoever r areas of complcxroil Ttternr hch to date have only been ru-d to a oale of 150))rome reraTpin tray be necesary as a banis fcr rrerarnZ
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final designs of irrigation and drztinne- rystems parcellization into farms and planning of land preparation measures In addition considering the high average salt ccntent of ater frcm he c ilouya hiver a rorm of systematic leachin- will be reqirer- to f ree-rt aculation of salts in the soilsparticularly in h ebra Crt in will nlso1e plain ureas require nitrogenphosphorus crd possibly other nutrient to obtain satisfactory yields
c Water On the basis of studies by the GCM which have been reviewed bythe Consultirr Fnr ncri and the U au of 1ccoi-ation it is thecorclusion of A tt (i) the q lity of water in the Lower Houlouya
is below averpge bvt crp rble to thtof certain rivers in the US whichisotnteLoh~uoybrve successfully been usc for irrif ton for periods cxeccdin 100 yearsOj5) there is clearly a sufficient a )unt of i ter to irrif-ate the 128010
bullcrer to be served in the [rlcentIty ar n3 Addi-tional s-tudioser (c requilrecj dcter-Inc if adeqiuate water is a- ilable for irrigationof 376QGO vc rc
The only signifcant urce of vp y fOr irrigation water in the perimeteris the oulouya Vi~cr io jc n1 is 1re ntly being irrigated from wells most Iround water i - - 1 Alouya contains dissoived salts which i xr Lrn - hvriny reak flowto iJOx PIn iuting [cricd of c n ccntraticn is 750 ppm On Thi- basis of USDA Salinity Lot) atory criteria fte v ater is class 03-SI (hl-h salinity-low a-alinity) Vile water is thus of mediocre qualityit is ccmrarable to that of river successfully used for irrigation in the US (eg the Lower Colorado Rier) and poses no serious problems to irrir-ation in the Moulouya perir( cfr provided the W4 adheres to recorrmended programs for meeting leaching reoairements
With ref-pect to the 128000 acr project the demand for water reasured at the Mechra Hoadi diversion dair is estizated at about 575 million cubic meters per year as follows
remand for Wter
Peak Flow Annual Total (August) (m 3 million)
Agrieulture (176000 acres) 337 m3s 806 Municipal amp Industrial Consumption 8m3 23
Total 4 uy62123000 acres to be irrigateA by Gravity 255 m3s 575
(The e dpeak requirzents of 345 s compares with a 35 m3 s design
capacity of the main canal at the diversion dam including 18 m3 s for the Right Bank and 17 m3 s fcc the Left Bank)
I
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This estimate is based on probaole rainfall cropping patterns plant requirements evapo-transpiration and other expected losses of irrigashytion water The estimate is believed by the Consulting Engineer to be reasonable but subject to refinement on the basis of tests to be carried out on a continuing basis
The annual average availability of wuter from the Moulouya river is estirated at 1100 million mn or about double the estimated requirement for the gravity areas
Estimated Availability of Water
Twelve Year Annual Average for Moulouya River 3 m3 second 1100 million m3year
Maximum inflow Observed 8000 m3second(1963) 3h00 million m3 (1962-63)
Miniwum inflow Observed 1 msecond (1951) 532 million m3 (1956-57)
On this basis it appears that there should be ample water available for irrigation of the gravity area as the water availability obtained from twelve years observation exceeds the requirements in all but the 1956-57 season shown above Prior to the development of land with purped service areas (the Gare-b and the Triffa ig h Service) a review and analysis of the river hydrology should be unidertaken to assess the availability and regulashytion of the river flows
d Studies Entincering and Construction The overall irrigation scheme outlined by the 1uM defirs the ajor features and th( magnitude of the work to be accomplished to attain the ultimate goal
This scheme is being carried olut in phases over a long time period The present phase encorpasses the development planned within the priorities indicated by the Stanford Research Institute (SRI) study for the gravity irrigation system
The studies for land classifliration have been completed for the gravity irrigation system in the Triffa Bou Areg and Zebra plains by French firms and were considered reasonably accurate by the Consulting Engineer Land consolidation and parcellinrg has been completed by 0MET in the Bou Areg Central area the Zebra Collctive and Zebra Remainder sectors 7 thru 10 Land consolidation and pareeLlni ar( needed for Triffa sectors 27 and 28 Bou Areg Rematnder arid Z(bra Rerrirder sectors I and 2 The engineering designs for the Triffa main sector 27 and 28 and the Zebra Collective have been or are being completed by the G0M forces The engineering design for the Cefntral Bou Areg and Zebra Remainder sectors 7 tnru 10 has been or in being connpeted uy Hydrotechnic Engineering design will be required or the 1ou Are remainder sectors D-3 thru D-7 and Q4 thru G-6 and Zebra Rer ainler sectors 1 and 2 The engineering designfor the Dead Ilead Thnnel has been undertaken by SCET who have preshypared anid issued an Avant Projet for bid invitations for construction
14 M)j6Fj Cshy
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This firm will also undcrtnk- uu-orviston of construction The engineer ing not yet performed can be aea ished by GOM forces andor private engineering firms
Construction of the extension to the rrain irrigation and drainage canals Jand preparation rector cinl ani drninaive ditches will be performed unllr cntact t) 1 cc rt~r~iet m)t hi in the ene of the
r-abilit tion of the L2tL Pz- Dd iarl Trnc t
e Cronning Patterns The existing erning pattern in the Moulcuya including botnirrigatcd and dry farm ingincludes grain forage citrus vegetables olives grapes and 6 small amount of leciduous fruits and nuts Of the roughly 2140Cy) acres of agricultural production in the Moulouya about 177000 acres are in field crops 24)) in vegetables 16Y)O in citrus 15000 in grrrcs 540Y) in forage crops 1700 in olives and 15)0 in other fruits and nuts
Taking into consideration rast and present trends in plantings as well as agronomic and price and marketing factrrs the following projection of cropping patterns has been developed for the Lower Moulouya
PROJECTED POPPTG PATTFRNS T1 HE LOWER MOULOUYA
(In per cent of total irrigated area)
Left Bank and Triffa High Serice
Triffa Sector - Sectcr rriffa Class Class Class
crop Main 27 28 East I amp II III IV
Citrus 40 60 10 10 10 Vegetables 15 10 15 1) 20 10
Crtton 15 20 10
Fcragpr 10 20 25 30 4o 30
heat 10 6 20 25 20 35 4o
Grip 25 24 35 15 Dy beans 5 10
Sunflower 10 olives 5 0
100 10) 100 100) 1i 1052i 100
a Incltdes double cropping
- - r- euro --- 7
~7~TF~Wr~e~ALUSE
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The projected cropping pattern for the Bou Areg plain includes cottonLJrirdg the frrt Five yearnejtinted 1r of the Class I)fand
the project jitwould be grown on nnII landn Tht renresert only 960etrravres) ectz ri)cr)e area The cotton acr~a e ry increasep 2ceafter live years if ritisfactory drainage conditionshyrre achieved in the Bou Arev
cotton grown i 1xonp tarx- Trdltionally Morocco export its-Jr- cron an irr IJ hort cble to rmeett Cotton the reuirrents
r the oroccan 2pinningr mills The croppni-attrn of the Triffa East (about 180n acres) Js projectedt Tnrlude 15- (about 27 acres) in cotton It is likely that becausef ihe limited extnt of Class I and II lands in the Triffa Eas cotton not increase beyond that percentage
1t i evident that the amount of irrigated cotton that is likely to bein ther-n Moulouya is minimal even assuming that local drainage condi-T nare i asuitable
f Technical Sundnv--s The AID Project Engineer hps reviewed ii) thedat and ajor construction performed to date onronct and finds the technical requirements this long-ranRe phasedsufficiently defineoto ccntinue the project on an orderly schedule The estimates of cost of prsirct facilities have been determin-d by SRI from average va)ues oftrit cots obtained frorr reviously ntiarded contracts and from etniled( -s-nand analysis prepared by the iHydrotechnic Enginering fir oft-o tyieal sectors located in the Bou Areg area The costs for the arc ent contract have bcen estimated by the USAID It is consideredthat the depree of engijeering planning undertaken and the deterrrinitonr to the US Goverrment are adequate to meet the applicable requireshySt- n Section 611 of thie Foreign Asistance Act
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E Financial Status of Borrower
1 The Moroccan Economy
Grrwth of MorocLcts GDP in real term averaged about 24 per yearin 1(4 and lr li Per capita DP In 1C 5 wan anproximotely t162 A (er Irr-ht in (6 resu]trd n a drcrcne of slightly nver in GDP which tlh vpulatior grc~vth avrring 3P4 per year rnrsJted in a decline of -r ornita GDP In 16 ii brut $154 A recnd droughtcccijrred In C67 but i not expeetid to have the severe effects of the 165 drought Crop forecasts for the first nine months of 1967 indicate a 4 increase in real GDP above the 1966 level This is also the economic grcrdth rate estimated by the IBRD for the pezxA 1965-70
Moroccos economy is heavily dependent upon the agricultural sector thich has averaged about 15 growth per annum However growth of the mal modern segment of Moroccos agricultural sector has inshy-reased at the rate of about 7 per annum
In 96 the International Banik for Reconstruction and Development (IBRD) preented a number of recommendationr denigrned to increase Moroccos economic growth rate On the bacis of these recomfndations the G004 proceeded with planning the necesrary program to increase investment levels fr- the i 63-65 level of 11 of GNP to 1r of GNP and stimulate the rate of economic growth from 2 to an average of over )4 annually for the five years 66-70 In addJtion the GC4 has taken measures to curb the population grovth rat while placing increased emphasis on raising production of both dryland (wheat) and Irrigated agriculture
2 Investment and Savinms
The level of total gross investment has remaind at aboit 11 of GNP for vera year althugh the percentnoe declined slightly in 165 Under the GO Three Yea5 Plan 1965-67 the gross investment t-3rget woz ret at DH 3 billion- Actual invev-tment expenditures for the three yearpeirod reached about DH 46 billion of which the Governshyment ezxenditure amounted to DH 1 billion a against DH 21 billion budgeted Thin may have beeo partly de to the GOMs deliberate ausshyterity pollcy under the hIF rtbJli7tion prci1rnr but more probably it van duxe to the shortage of trained cadres to -lan and execute projects
In the private cectcr conziderable inounts of ravings may be hoarded due to lack of project attractive t- inventors The lvl of private investment has been runnihg at about 51 of GNP thrrugh 195 The 0014 4 incentive to private instors hnr cut profit taxes from 4320 to V and announced a tpn year guarantc-e against tax increases
]L- $ = DH 506
777=-77- NQ
r y 7k1- T e - W lk In
j - 1) 7k- - _
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Loan are avaiiable to )rivlite irve-tcrn freo th 3JfIDiN s rctr special funda to prcmote touricm devc firvcnt
Under the 1r86-1972 plan abut to br irtntt level are to be accelerated considerably reaching A of GNP liv ]970 Mor(- Irlyir haviiy on foreign 1 to aciuw cc higher lve1
3 Central Government FinancP
The Moroccan money supply which had Incrrased ify 76 per cent in 2965 remained virtually unchanged in 966 The first half of 1967 witnessed a 5 Ter cent increase in the money supply Te major part of thi increase as concentrated in June and July uhen the supply reached V14 0j lion Currency In circulation expanded rapidly in June and July
nnl factrrn being reinforced by commodity hcnrding related to the 1ide~l Et crisis Demand deposits did not show their normal decline nthe first half of 1967 Deposits with commercial banks declined nlightly while deposits with the Treabury increased as public and semi public agencies contisued their transfers from the banking system to the Treasury The increase in money supply in the first half of (7 ran I raced to tho nzon1 sonal increase in net foreign assets not c y the custcirry rlelir In claims on the private sector Clsirl (n the erivate sector declined slighty until May 1967 but Increased hr-gb June and Jily due primarily to additional financing of textile stocks ClbiJ ante Government rose by 10 per cent in the first half of 967 the in central brnk claims on the GovernmentI being rmainly offset by larger deposits with the Treasury
Ordinary budgetary revenues which incrurted by 5 rcr ent in 1566 tre cxrcted t-) increase by 7 per cent in 1( to DII 21 billion DeampDite a derea3e in agricultural tax reccipt r- fror diret taxes rose by 10 ppr cent in 1966 and a 2 increas estinated for S67 due to tric or controls on income declarationr d an accelerashytion of tax cller ns Owing mainly to a relaxation of the import
program in late 1 5 and a concomitant increase in tariffs on certain ccnonter goods customs reneipts increased by 21 per cent in 1966 Although budgetary estimates call for s decline of 3 per cent in customs receipts in 1S67 it is likely that actual receipts will be considerably larger in view of the import liberalizatidn measures intro)duced subseshyquent to the estimates Receipts from indirect taxes state monopolies and other serces are expected to be 11 iv- cent Ipher in 1967 owing to increased profit on -ugar sabr-i and L r(m the newly created Office do Ccrmercalisaticn - d-tation (OCE)
Recurrent ordinary buiL e(enditures increased by 34 per cent in 1966 ar-i are expected to increase by an additional 7 per cent in 1567 reachin- D1122 billion Although wage and salary scales in the public
Banque Nationale pour le Developement Economique
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2 Cf
sector have1bec z h t - rrvirI urli 11i g 14-6 -nd PO becnue rX toi Ijt e f (]r o n 4
ill tile ic urrnnye andr)not i on dnd Publi ht rentrn -yr-otn lno IncreasedOthrr t ill- t il r ne by ) vr cert in J6(
i ninlyrt -br h Inc-l
( Ihe ( t r- rl t ip t t C itur f T)h 21h iilli n
is (( ItI t lt r c0 a- r n n o I- c t b It ihstnl id vv ih n t r-t have hn(er - en 1t2
(IM ii ture( T f fu traordJ nary budrzct exshypend ituren a r y -t c ~ i vi -iscz Portal Checking sy-stcsul)rrcing t (I ltIt Ct -- ind creirn shy
nnet The f r er tnc I hha ccrc ed from a htih of DH 5-7 millIJn in _ 5 millIn r C46 F cr ats foi ]7 place Cro n w I 1(DI)J79 ill ni DDn etlc fi nancing has alo u 1) 5 p (- I3A27 iIliun to an entirnted DH 1142 million
1 14V ) I nv 1 ri n nI(c1 franc n is 77-ected to be ol t y ncrewed bcrrowing fr-ir t he Cestra 9ank which hud been held at mcdert vols iln 165 nnd 1a66 Under the 1TFtaiby agreement of October 16 the qob) agreed to taBe a3] rocrrnary meurer to maintain as table curoonry rPnt inl th nr1d-elrto th b a ent of the ePrncriynnd a vnbl- hn1incc X nvroent P rt artt to t rt fien of tho Ccntin- Honk rstz (erct are nct t r itr June 30 Y-ke 7 lov l b th n Diif ) mill] (n tlcnber -c P thai I o illin usit I ])ecthr 31I62 (GC bc w t
C B1rtrp - vt DH 12 iri 1i nor ]S67 or DH 6S ij lionEan tisated (r fo than the aproved crd it expanwim
Thitrd ordivary nil extraordnnry buThTt deficit of DII 7-19 millI n fcrecat Fr 1 67 in exnected to be fnanced by not freign
tan reof DII )75 mi~l in nt recurity 12ue 1 T111I vlion a - nt ry tiat Po n Che )ir d-nC i 73 r5 Pn
riI is u h i a vti v mrr nrr-e jssIof fvr is id a erital The vnfsa revcred in 1d6 when lnrger r nyrentn eEecially on food itcmo an n -lewdoun in
igo ra a deficit of $1 millcn ProjectiOnz-vt rvultvd in ror 17 r~ieat inrrerned importsonly partially ccnrennate by addshytsa t frnreirn r ntil rrceiprs ard mprrvement in the nervices account will reult -n et of aprroximately $)20million As rhoim in the following tabl -r tion for l33 and 169 how overall deficits of
14 and m] ivi_y$i It
rqVV t1 4~
C)rgt
---
1 -)I+-IRF1
1ROCCO - rTANC OF PAYME 1qrt - 169]_ 5
6rfi0 1 1C(8lr67 i r(o
)xrurt 2t L( I L-5
Trade Bnlance 11 15 - 75 shy - 75
rviee- ret - 7 - 5) -35 -23 -2
J]-i of Good rnd Service- - 3 - 65 -II - ti - (5
Trn-Ifr Pr ynts (nt) P 21 33 37 33
on-cntnry Carital (not) 92 64 6 6 5
Err-rs nnd Ov rrion- (not) - 23 -2 1 3
eranl Bannic __ - _3 -_ 3 - 1i4
Atrh thert ircjected reficitn are of the nnme order of 1 nishytude a7 thcr incurred in the period i66 the Situatlcn i findarentallydifferent both in rerprct to the source of the deficits and in rer-ect to the meat0Y gtr m etin7tecr In the f rrer caive M5recco uffered
_frcrr a very h-vy cutfc of Drivtes cuitv fo-ivr with a shar) decline In forein nt exerditures in Morocco In the iatter case th projected deficits r- rcre a functicn or accelerated crcwth risingdebt ervieiiw tri tho abnrcn of forv eeble additiens foreign reshybull ourcs nere7ory 4( r2Vm rAf finmncting To nect the def-cits during the reriol 161 61h MWreco ob1id to drw down rorcin exchange reserves of over $]c milicn The snrti tpv of financing is no longerpozslble ince no or-res- ruch reserve- Even ifMorocco yr
mn nina r rve_ ore (]rrfii on to th r-ixirun etnt enribe nnd the [iI tnfldy i- un M-r-r e i32 till relA re nt rnt 15 millicnj1itionn ftr ign as- e n 1 6 beyond hat r recnently fcreeeshyable with ver nri- nry Officilr in In i6 reserves are cotImnted Pt 72million c hih crn V 3 million i caly required for currency coy r
Foreign InJebtrdne n of th GOM Mnroccos external rtnte ard rutlie enterprie dett amounted to
$r) millivn in lr6 Debt vervcirig rpynents for (66 trtaled about
$5) rillion g-eement approved in October 3(67
I- -- Ishy
37 millin or arprcxitrrntoy (j Iroccor totnl eXoort earning of h28 millicn GCnerally nxt rrO dbt FervicJng renuiremennt of leas
than r of totna -ort nnrlt In onrldered to I r tirfactoryrntio D-bt r rnJrcLct n Ir the reriod 1-(y 3on Trerent external debt including thnt wrtl(n irreently undibur-ed are hown n th fr lv tahlr
)] L v yr t n
Eternn Vtnte anc ] bntcrnrie Debt
M131 o)nr
Y aI Net Outrtnnling Debt Debt Service
(6 it 479r5 $367 J-67 452 3)6
Z616 44469 2 0 2C-
365I3 37 389
33 383 33 6 371
5-h 31 n 352 275 34121
]176 2661 32It 1977 21133 311 177 22)6 307 19 i0l74 256
1733 255
rgtternal debt rharre n rerent debt nnr rhon above do not increase ubtanti-lly over t rt 1)year- reaching a maximum of h44 millior
in J6 and decrpt- n cr - tently threoafter At the are time exportearninr r _rc extett nc-are Aring that Morocco does not inshycreswre it etrnn2 cbt t irate ubrtantially nb-vc ihat has been the core th adfiticrn dbt e roquirrentn reulting from the propo t Icon o 5 ijilion co r 7crncepr-ional term hould not have a i-nifiant affect n 1r o - ab lty to neet itv g rc-atedebt ericn rcnrib2t~e- the pros ectr of reprment of thin loan ore coniderci rearcnb)
U I -
F ot h-v C IuIJI rmt I shy
1 V amp~ rVml KI
PUC- -jrVi Jt t 1 11 nflrcj urlc 1- th )qn --P I uti u rhnrrl -1r- thr U- Tr- ry- R- -nymc nt
c2Il f n 6 1 bf r I- till 11 nfl r- n-r i n of O r--niC(Io~hi U 1 1 rr to
Tn vil ) f rvc hi tvlrll 1 (In- - n- u--n E r me rrinshycgtay F rntwir w ourc o -o- rvI ortf-V3 1 rncing of
Uf f -r rrrir- ur3r 4~ v -rin Iltrt nt ndd shyt -n t ) in- lint r b t l r -n rort- o-orco trorl-- V -P
r i 1rnd h L-torie Furcl-trin firr- thrjt US r r~ crvirrf- u~d be~
T L I1 c vt r- -ly ] -ubt fu 1 n vi pw -I -ror-co Ir of
ut1JpcO In thi rjert f it -- r- 21 npnred by d1-nr- cothcr t~han the US
2 ]P-t ofI Prr l1 on Prw- Fntrrr
Phij rrcjJ-t -11 n-t h~ -in nrwerq Prrt n rr- tc ntrshyr~A~r fi-mc 1bho und for --roern p o n
3_~~PrCT--rty
rr-vIi-n 1 h -d r the loan ragreement for Icntifitcation ef any r mIjrpt n ctri b- rt througn ut 1zatn (f xccr- prorerty
If rv c u~eAID n-mrcf u urr thi )cn - I~ut~ em avoi3ablo r rovvrirrnt -rrperty rather than nce iteni
4 Otli-r Fr- Wo--] n-Fnlc4rm
Dr mi tW- o] 14rocco- i~ajr ovr-ec -f exte rnaX
rrtan~- hrtvfb - I r ~ ant fl Fr n fole by Kv-it
Sgio F rneflit r b-en 1lmrntrd to tcfohnjip n5tnnen bi eoni~in I th u y f Fr--h tprhntcian tcacrr ind cther
~ti~r t~ ec-tnmIyrt-n Friinch Aid to Mcreco In 1065c~oc~ (P-art f-r txychnirril aItn -- j se of tl5 w1nfor bu~dget rurport f ir in rt t- $1 1ri1 icin in ennita -rojectM- n vx- rrcd
1Vw1tvnn tioI t-) Frenh rurtnnd +16 r11ion tie-I to -onyiint to orrrcr Frrmh ccilcn~For _-rrc-ratod land and rquirrmcnt
West GTrrnmnny liar agrcrcd to nrovIe ccme j27 mM22~cn 1n catital arirtanre and cromrndity lnoi7 t n OfIcon( q92 thi o totril$223 miJ lien ha actuary b-Pn cr-Itt--d under Inn ngrepment This
And a lk5 million commodity loan both) signed in 1965 All Wet Gerzaan
Ufla
-28shy
capital asnistance I vuectI to be tied to German exports Germanyhas in addition 1uvvded r tteysubbtantial technical assistance f
The IBRP hah rade four 1nns to Morocco since 1962 totaling$6) million Ofthin totnl a [175 million loan in 1965 wos fordevelopient of the gidi lit-r irrigation perimeter Other assistance by internntIcnal Iending arncie include an $11 million credit byIDA in 1C65 for rcendary diicction projects and an IFC ln and inshyvestrent of $1 1 ri jnic alo in
F tit i by [c - dncr tr dh elo snt ofMorccco rircuVt r oii +h b-]n jt-TKT r nbove n 2 )6 niliion Kuwait enn in i66 for develomyment of the Tensaout Prnm n irrnten nrooetand a $77 million Kuwait
0jl n )nnsn r(niti-nertcir
loan for extrnion of the Tadri~ Irrigation Perimeter
The following- trbe surrlnrlzes other free world arlztance (excluiin technical assistanc-) to Morocco for the years 1(62-66
($ Millions)
1 62 1cf_63 96) 19r65 19)66 Fneea 4) 5PO 64o 700 shyWet Germany 223 gu 1t 53 281 IRD 15 175 10) 175 IDA 110 IF C 1 5 7 7 7 0 I15
TOTAL 55 62 1U3 W
b Includer only lo-ng term loans and exporter credits - Includfs 25 million private capital
Eternal ansiztnnce to the Lowier Moulouya Irrigation Perimeter -nce 1060 hres been con[fined to US upport Consdiering AIDs previcus
involvement in and conmitnert to the Lower Moulouya an AID lean in P2t to be Lhi mol aprroriate source of financing for this project
LID
II
q
-29-
SECTION ITI- Y-TTYT TIMPLPTrION
A Periret-r Ad-instrrti-
Authority for irplerrentvtnn of the deveorpent prrgrn frr the LowerMoulcuya Perimeter and rs wel arth crnntinuinz mrnnrrmenertC tt r t- rrtnr V theltbi nad overationity iOfic 1cne 4
n r I e1i- i d Vit4 i Iv ~ Ct rreated i Otb (rJ rn-- of evcn inrmi-rriional offices hich reelaced the Office de Mire en Valeur Aamprlcole (OMVA) Under the OMXA and itspredecessor agencies authority for ad-inLtration cf irrigtion proJect war centralized in Rabat
Under the new regional office organization responsibility for adminshyistering ORMVAM is vested in on Adminirtrative Board of 10 members headed by the Minister of Agriculture and Agrarian Reform as chairman All ether board members (other than the Chairman and a representative of theInterministerial Economic Ccrmittee) represent agencies or activities inthe region of the r-eriret-r whic comprises parts of two provinces Localretresentatives on the Board inc]-de the governors of the two provincesOujda and Nador the presidents -f the two provincial asembtes and of the two provincial chambers of agriculture as well as the perimeter Director
The responsibilities of thie Administrative Board include review of theecys program establishment of its organizational structure developshynt -)f its annual budget and establishment of rates and conditions of
Siyfent for water and other services provided in the perimeter
The Director of OP4VAI-I is dbarged with the responsibility for executionPthe vclicies established by the Administrative Board end administration of oil ORMVAM functions This responsibility includes selection of staffn pserating perrcnnel acting s officia ORNIVAM representative in all ntztinns with -tate and othbr public or private bodies and the
f of funds within limit Indivated by the Ministers f Financetent rn fricultural and Agrarian Reorm
Perimeter Oranizatlon
ORVAM oreanizatlonal structure consists of a directnrate five maj-r rvlces or d-vsicns and one separate bureau Two services qei Administratif et Comptabl- and Service du Yatrial are conshycor - th adminisration and lcgistical support of ORMVAM operationshi1e the remainirg three services rind the separate bureau are Involved in t-hni al matters associated with agrcultural developrent Each ervice has one or more subordinate bureaus Fei-ce Chiefs and thehead 0 rch bure-u report directly to the ORMVAM4 Director
-~F7E MEw-
-30shy
2 Perimeter 01ttffnr
OPIVAM orgttnlrntlon treture calls for 557 positions of whichI L or 7 Mlled n were nher 29 1567 37 of the 71 Postshytion vacancies reported 1ern the high and middle levels Foreign(chiefly Euronean) technclan occupy I)of the 16 high level positionsthat ere filled at thfit tire
Whil OPM ut in th- lcng run lor to Mercecos oducational yster to prvidr tn crrf-nn2 to ratisfy current rdurojectd rcshyquirement th currnt high and mlddle level vacancies rrouire uersonnelwith oxt nive nrior rxericnce To fll this preent need it will be necessary for CRIVAM to continue its program of recruiting foreigntechnicians until ruch tire ns graduates of Moroccan educational programsacquire the necesnry exrerience The managerent assistance componentof thin pro~ject ]e-rribed In the Project analysis will to some extentalleviate OFIWAMs high level personnel requirements
3 Inw1 ernetation Sehedu]
Months Implementation Action
1 0 Sign Loan Agrcement
2 2 C-tiify conditions precedent and Y4tiate procedures for selection of US firm for management contract
2 Negotiation of extension of advisory Engineering Services
h 4 Contract (Hydrotechnic) Negotiation of Managerment Contract
5 60Cmpletion of Project
C Waivers
Sect ion 7 rf AID Regulation 7 provides in substance that theUnited State ill not finance direct costs of construction work performedby third cc-ur y nationals unless the total co-tn of the project withvhich thr ennrtrumticn w(r is asEcciated donot exceed $2On)O orafter excluding national of the country in vhich the site of constructionis located and Dersons vho nave resided therein uninterruptedly for morethan three years imrnedJately prior to any determination under Regulation 7at leant 0 of all uernons who work under the contract at the site of conbulltruction are United States citizens or the employment of third countrynationals is necessary to avoid excerrive corts to the United States
3
31
Section 2175 authr-ri th Regional Anitant Administratorto waive the nrovinions of Sectionthat it is 2073 if he dcterriner in any coneimportant te the nationrn intercrt of the United Stutes tofinance the direct eots of construction work performed by third country
nationals
A prviou1y r ic i c t tht for thr ct Tartthe -r c ct b- 1jeuj out r -cnorbr f cnrtructioncontracts with Morcccrr contrctnr an in the i-t Uowfevvr itentirely psnible that there may b- roe contractn with cntructlonfirms partly owned by third country nntionaln and that ruch firjs anwell as the surely Moroccan-owrned firms may enloy third country niationalsIn such canes a difficult rrobic-i iould arise in meeting the terms ofRegulation 7 since an a practical matter Aericans are not reaonablyavailable for ermployn ont by such contrnetorn and our previcus experiencewith the Naunsseur Ccnv(r-ion project thatin Morocco has indicatedAmerican contractors would not be interested in bidding cn small conshytracts in that country
It in therefore recommended that the Annitant Adinitratordetermine rursuant to Section 2q75 of Regulation 7 to waive theapplication of Regulation 7 to thic iroject since the project 411 conshytribute to the attainrent of US foreign policy objectiver and the cbJe-tives of the Foreign Arsistnnce Program
LITI L USE
LfI~~5xA~us
lit
4 A J A 45 4 k
t A S T
S(3
I A444ilA~~l~)
7 -74
tAM= D
SECTOR 27
10000
t Co0Na includez25 cgtri oncFcttlrvI ncy I8s ~ ~ C t C- Includes 50 constriJcltiotrgrc
2000 60
IU
0
z
bull cosYsA shy----- i
600L _
400
200
0 5 I0 15 20
INTEREST RATE
I ~ 7 J7777
ANIAampX C
PROJECT DESCRn1 rOll
The project com)onents to te undertaken on the MIoulouya Irrigation Project over the next five years contists of the following
C(n1rtion of the rrLin casuals and bianch canbls to provide the suource of waler to the sctors be developed in theto TriffBou Areg and Zebra areas This construction will include the necessarystructures such as reulators highway bridges aqueducts water intake
and discharge structures etc
2 Iand Txeloommerit which includes engineering land consolishyt and iuvtllng lard preparation (subsoiling ripping destoning etc) and installation of water distribution canals (secondary tertiary and quurtunary) and drainage collector ditches for the Triffa main covering 24000 acres in sctors 8 9 10 16 20 21 23 24 25A 2513 27 and 28 Lou Areg Central covering 16250 acres in sectors Dltirough D2B and G1 thru-4h G313 i0u Areg Remainder covering 15000 acres in s-ctors D3 through D7 and GA through (6 Zebra Collective covering 45)0 acres in sectors 3 4 5 rind 6 and Zebra Rer-iinder covering 14250 acres in sectors 1 2 and 7 through 10 and th remainder of sectors 34 and 5 The total land to be developed is about 74000 acres
3 Canalization of the Oued Zeluan and nued Sidi-Amar in the Bou Areg Plain consisting of strairltening englarging and regularizing of these streams to carry the flood waters to the sea Drainage interceptor canals are to be constructed parallel to the sea in the Bou Areg Plain In the Triffa Plain the Oued Riada main drain will be deepened and enlarged and secondary drains will be excavated to provide for drainageof the Madagh area This will include the construction of bridges and culverts and other related work
4 Major Commorn Works will consist of
a Clearing of the Mo-1ouya riverbed downstream of the Mechra KLila barn caused roy flood dariwe and the installation of a set of stop logs for maintenance of pillway gate-
b Design supervision and construction of repairs to the ]elt Lank dead head tunel
c Conctruction and establishment of sib-division Offices and installations for farmer support such as CMVand farm stables
1 C
-2shy
5 Manavmtnt It ha been proposed that a US management firm be ewployed by th- C4 to manage and operate the entire Bou Areg area Such manageent -iuld encomparn all activities from the initial concept to final irIrp igricultural production Such activities would Include resp r-ibilsect -or supervnsion of engtneering and constriction of primary
S- Jry r complete developfnent of land training n in g tinul irription practicen preparation of market
t - r1t- (ot--rnu trplusmnining of a Moroccan cadre to take over h v--it Bou Areg dreara P the
At this writing the n-pt of turning over to a private UZSfirm execushyresponsibl]ity I h management of the establilrment and initial
op-ration of irr1gati the Bou Arog area has been only broadly de iiitd by the GCJO It Intended that proposals will be invited from a r -onable ntnber of f|ed US firms that a selection will be made an-n 7 them and a more do iled and cornprehenrive definition of the rer6 -Ps to be performed be eztabliched at that time It haa been
stimated that the t- of ruch a contract will be about $2 mir- n In any event the -ts of this contract other engineering arvl s to be provided undt n extension of the Ilydrotechnic contract and ether US corts will not ed the proposed $5 mllaion developzont Jean fr the project
The cle 3ifications duties ant 1ncnslbilities of the management personnel ill ha-- to be clearly defined i agreed to by the GCM Perimeter Directo- and other GOM Agencies luding arrangements for the necessary gistic support
Svxlale Docu-
1
4
LD ED 0ICIAL
-IAIDshy
A1trX D
C6JCK LIST OF STATUTORY CRITERIA
(Development Loan Fund)
1 FAA 0102 Extent to which U3 cormodities and services are furnished consistent with improving the US balance of payments See Sections II-C II-F
2 AA sect2O]ihi lanner in which loan wil promote countrys economic develo shy rit emphasizing help for long-range plans and programs designed to developeconomic tesourcos and increase productive capacities See Section I-D
i FAA sectT] h)(IL Information and conclusion on availability of financincfrom other free-world sources including private sources within the United States See Section II-F
FAA sect20l( )2 Information and conclusion on activitys economic and technical soundness including the capacity of the recipient country to reshypay the loan at a reasonable rate of interest See Sections II-B II-D and II-E
5 FAA 1201(h)( Information and conclusion on existence of reasonable promise activity will contribute to developrmnt of economic resources or increase of productive capacities See Sectiona II-B and II-D
_92_(b 4Information and conclusion on activitys relationship toothor development activities and its contribution to realizable longshyrange objectives See Sections I-D and I-E
The following abbreviations are und FAA - Foroirn Assistance Act of 1961 as amerded by the Foreign Asaistaice
Act of 1967 App - Foreign Assistance and Polated Agencies Appropriations Act 1968
AFEVCDF 1066
L1
-2shy
7 FAA f12O1(b)(5)_ Countrys self-help masures including institution of Foreign Assistance Act investment pliaranty programs Investment Guaranty
bull Agreement signed with Morocco 331o6l See Sections I-D and II-EI
_A ))(6) Information and conclusion on possible effects on US econowy with soecial refererne to areas of substantial -labor surplusSee Section II-F
9 FAA q201 (h)() Information and conclusion on the dagree to which thA country iv wiki- progress toward respect for the rule of law freedom of expression and of the press and recognition~yf the importance of individual freedom initiative and private enterprise
10 FAA -1201(b)(8) Information and conclusion on the degree to which the country is taking steps to improve its c]Laato for private investment See Sccton II-E
31 FAA R LbJi Inforrat-on and conclusion on whether or not the activityto b financed will contribute to the achievement of self-sustaining growthSee Sections I-D and II-B
12 FAA fi2Ol(bj Inforruation and conclusion on reasonalbe prospects of reshypayment See Section II-E
13 FAA fl20JL() Info-ation on applicability of the twenty country ceil4ng2
14 FAA fl201 L Information and coclusion on legality (under laws of the country end the US) and reasonableness of lending and ralendinr terms Loan will be on minimum termspermitted under FAA These are deemed reasonable see Sectioam Evidence will be renuired from the GGM as to the legality of the loan agreemnt
1 E 2 Information and conclusion on availability of an applicationFAA together with sufficient information and assurances to indicate reasonably that funds will be used in an economcally and technically sound manner See Sections I-A II-B and II-D Application received Janury 15 1968
16 FAA fl201(fL If a project inforntion and conclusion whether it will promote the economic developapent of the requesting country taking into account the countrys human and material resource requiremnts and the reshylationship between the ultimate objes6ives of the project and the countrys overall economic development See Sections I-D and II-B
17 FAAJ 20ij(J If a project information and conclusion whether it cifishycally provides for appropriate participation by private enterprise 8ce Sections YI-C and 114
I- FAA i22(a) Total amount of money under loan which is going directly to private enterprise is going to intermediate credit institutions or other borrowers for use by private enterprise is being used to finance imports
rfro private sources or is otherwise beirg used to finance procurementsfrcm private souwces See Sections II-C and II-2
9 FAA 207 Infosation on the emphasis placed en
(a) encouraging development of economic political and social institushytins No apparent relationship
(b) nelC-help in mectingthe countrys food nredo Project Vill conshytribute to production of food for lccal consumptioa
(c) in-proving availability in the country of evucated trained manpower Project will contribute to the deicloginext of trained manpower as one of the functions of the management contract (Soe Annex C para 5)
(d) prcgrams aimed at -malnutrition disease eradi atDn slum clearanceWater purification sewage disposal health education naternal and child care(includin fimrily pJnrning)) -nd cthcr public health ausistarice See
(c) other develoment activities including industrial development free
labor unions cooperatives tnd voluntary agencie transn)rtatin and ccshymwquication nrStczn capubiliTies for economic planning and public adlinisshytration arban develo-mment and modernization of laws to feilltate econcnicdevelopjen- GO- intends encourage develo vient of cooperat yes particularlyin the Left Pank areas Project will also develop capabiLi ics for cconoaicplanning and public a6~inistration (Annex C para 5) Other not applicable
20 Information on the extent to which the r-untry is
(a) cttcmting to increase food production and food sto a-e anddistribution felitics This project is one evidence of Moroccos efforts in this direction See also Section I-D and I-E
b) creating- a favorable climate for foreign and dmestic iri-ate enterprise and invcstrrment The GCM has recently reduced profits twes anrannounced a ten year guarantee against tax increases See Section II-E-2
(c) increasing the role of the neonle in the developnental procecsNo apparent relationship to this project
(d) allocating expenditures to development rather than to unn-cessarymilitary purpoes or intervention in other free countries affair See Sections I-D and Ii-
(e) willing --nribute funds to the project or program Th iOMhas already dcvo o-sidcrable resources to the project It has badieted13 million for th i oulouya for i7 See Section I-C
(If) making economic zocial and political refo ns such as taxc coliecshytion iYprovcmenLs and chan es in land tenure a Royal Comm ision has been appointed to make recomendation on land tenure probleras in the Lower I oulouya
(g) responding to the economic political and social concerns of its people and showing a determination to take volf-help wcasuren See Sections I-D and II-E
IT
-ovi~cd l v r 13 1968
- 4 - LDffIED OFFICIAL USE
21 FAA Inforn ation about multilateral assistance being Iurnished to t e country and whether the loan will encourage recgional development prog-rams The I1D has eztablihcd a Consultative Group for Morocco which rvicws the GOM development program anui prgress See Section II-F-4 for infoaation on othtr donor assistance to Morocco
22 A Extent to which the loan will contribute to the objective of ass ring naximu par icipation in the task of econonic dovelop--ent on the pL-t 0 _he people of the developing countries through the encouragement of cocr-tic private and local govenmental inLitutious o apparent
relationship
23 F _-_Dta_ Infor-ation and corissions whether loan will oncourageeffor s of t1e country to (a) increase tie flow of international trade (b) fostcr private initiative and comptition (c) encourage development and usceo co opratives credit unions and savingss and loan associations (d) disourgo monopolistic practices (c) improvo technical efficiency of industry ariculture and commerce (f) strenSthn free labor unions This project is cxpected to increase technical efficiency oi-agriculture
2_ C-1L lnforzrition and conclusion on how the loan will encourage US privte trade and investment abroad and how it uill encourage private US participation in foreign assistance prograas (incluiing use of private trade channels and the services of US private enterprise) See Section II-
25 VA-+_ Conclusion and supporting information on compliance with tho Co resional policy that engineering and professional servicos of US fir-ms and their affiliates are to bo used in connection with capital project3 to the nixinua extent consistent with the national interest US engineerirn and innsgcment services will be financed tnder this loan
2$ Inforamtion and ccnclusions who+her loan will pormit American rx-l] business to participate equitably in the furnishing of goods and
z orvices by To be satisfied in Loan Agreementfinanced it
27 - t(a App I18 Complianco with restriction of co -zodity procureshy o UsMS except as otherwise determined by the Picsicent and subject to ttu--- rcortir require r-nts Procurement will - liumited to the US for
reiabnrs nts and to ioocco and other free world countries 1-or US-cwne(d rhu disburseacnts
23 -i Comiance with bulk cozodity procurement restriction topriecc no l-ho han the nkarkot price prevailing in tho US at tia of
bull puchas Not applicable
29 FA Cozpliance with requirement that matrin insurance be purchased on commceities if the participating country discri-inates and that insurance be placed in the US To be satisfied in Loan Agreement
30 IA 6(a) Information at to the utilization of excers personal property in lieu of procurement of new items Will be required ai appropriate under terns of Lean Agreement
f
1 77--7 -77-77-777
31 FAA 61](a)(_) information and conclusion on availability of enginoering i financial and other plans nccx sary to carry out tho assittance and of a
reasonably firm cstimate of the cost of the assistanco to the United States
See Section II-D
32-ecessaryFAA t611(a)_(2) legislative action r6quired within recipient country and ibasis Cor reasonable anticipation such action will be completed in time to pormit orderly accompli-hirtnt of purposes of loan See Section I-A
33 n _AA161nJ0] If water or water-relatod land resource construcshy
tion project or program information and conclusion on a benefit-cost comshy
putation See Section II-B
3 4 VAA 611(c) Compliance with requirement that contracts for construction be let on comp-ctitive basis to mamum extent practicable To be satisfied
in Loan Agreement
If a loan for a project of $1 million or more certificatin35 FAA _61l(r) by the principal AID officer in the country as to the capability of the
country (both financirl and human resources) to effectively maintain and
utilize the project taking into account other US-financed projects (Such
certification is to be pproved by the Administrator aL the time the loan
is authorized) In process of being obtained
36 FAsgJ2 _6_h Appropriate steps that have b-en taken to assure that to the miaximum extent possible the country is contributing local currencies to net th-2 cost of contractural and other services and foreign currencies o- icd by tho US are utilized to meet the cost of contractual and other services The GU-M is contributing over $30 million to compleXton of this project Excess US-use dirhams will be used for eligible project costs other than US goods and services
37 FAA p619 Compliance with requirement that assistance to newly independent countries be furnished through multilateral organizations or plans to maxishymum extent appropriate Not deemed appropriate in view of previous AID financing and ccoiitment to the project See Sections I-A and I-D
38 FAA sect620(a) AcnO7a n3]7(b) Compliance with prohibitions
against assistance to Cuba ard any countr (a) which furnishes assistance to Cuba or failed to take appropriate steps by February 14 1964 to prevent ships or aircraft unier its registry from carrying equipment materials or supplies from or to Cuba or (b) which sells furnishes or permits any ships under its registry fr-om carrying items of primary atrategic signifishycance or itcms of economic assistance Morocco is not-known to be in Violation of these sections
39 FAA q620GL_ If assistance to the government of a country existence of determination it is not controlled by the international Communist movement The Secretary of State so determined on October 11 191
40 FAA 620(c) If assistance to the government of a country existonce of Indebtedness to a US citizen for goods or services furnished or ordered whore ouch citizen has exhaustod available legal romodiesor where the debt
i - ow - -- _---- --shy
- --
-6shy
is not denied or ontested by such government or the indebtedness arises under an unconditional guararty of payrrent given by such govornmunt No such indebtedness is known to exist
41 FA _(a2LdL If assisitance for any productive enterprise which will corashypote with US enterprise existence of agreement by the recipient country to prevent export to the US of more than 20 of the enterprises annual production during the life of the loan Not applicable
42 FA4 - 16Q_0_ A If assistance to the government of a country extent to which it (including government agenies or ruhdivisions) has after January 1 1962 taken steps o repudiate or nullify cuatracts or taken any action which has the effect of nationalizing expropriating or otherwise seizingownership or control ofprcpertv of US citizens or entities beneficially owned by them without taking appropriate stops to discha i ge its obligations No such steps cr actions are-known to have been taken by the GOM
43 FAA~L AjPj_10_9 Compliance with assistance toQ0 prohibitions against any Comunst codntry ozocco is not considered to be a cocinrunist country
44 FAA - 620(gJ Corliance with prohibition against use of assistonce to comp satc owners for expropriated or nationalized property To be satisfied in Loan Agreement
45 F AA 8620(h Compliance with regulations and procedures adopted to inshysure against ue of assistance in a manner hich contrary to the best inshyterests of the US promotes or assists the foreign aid projects or activities of the Communist-bloc countries To be satisfied in Loan Agreement
46 FAA 06-O(j)_ Exitence of determiration that the country is engaging in or preparing for aggressive military efforts No such determination has been made
L_62_O Information47 FAA on representation of the country at any intershynational confererce when that representation includes the planning of activishyties involving insurrection or subversion against the US or countries recoiving US assistance No such representition is known to have A occarrect
8 FAA 62JJ Existence of a determination that the country has permitted or failed to prevent destruction of US property by mob action or has failed to take steps to prevent a recurrence and-to pay compensation NO such destruction is known to have tak-n place
49 PAA l620(k) If construction of productive enterprise where eggregate value of assistanc to be furnished by US will exceed $1OO million identification of Gtntutoryauthority Not npplicable
i-xQ2MZZ=
1 shy
U 6 50 _Af( QCinsidoration which has been given to denlying assistance X to thu government of a country which after December 31 1966 has failed to
- institto the investnint guaranty program for the spcific risks of inconshy
vertibility and expropriation or confiscation Satisfied See No 7 above
S51S J lj Compliance with-prohibitions-againstn as~istance to countries which traffic or permittraffickingwith North Vietnam Morocco is not known to be in violation
52 E_-L620(_L If country has seized or imposed any penalty or sanction against vn US fishing vessel on account of its fishing activities in
intcrnationul waters information on the consideiation which has been given to excludirg the country from assistance No such situation is known to exist
53 FAA FA r) UAR restriction Not applicable620(p 9117
54 FAA R620tl) Existence of default undhr any Foreign Assistance Act loan to the country No such default exists
55 F ) C-nsider tion of whether co ntry is devoting unnecessary percentage of buKet for military purposes or use of foreign exchange for milita-y equipment
56 FAA 62o(t) Proibition on aid if country has severed diplomatic relations with US unless agreements have been negotiated after resumpshytion Diplomatic r(lations have not been severed
57 FAA 9620(u) Statur of the country on delinquent UN obligations Morocco is not known to be dlinquent on its UN~obligation
58 FAA R636(i) Prohibition on financing non-US manufactured motor vehicles Will be satisfied in Loan Agreement and Implementation Letter
59 App 102 Compliance with requirement that payments in excess of $25000 for architectural and en Jneering services on any one project be reported to Congress Such reports will be made
60 App R1O4 Compliance with bar against funds to pay pensions etc for military personnel Such payments will not be eligible for financing under th Loan Agreement
61 App 9106 If country attr ipts to create distinctions because of their race or religion among Americans in granting personal or commercial access or other rights otherwise avaVIfable to US citizens generally application which will be made in negotit ttons of contrary principles as expressed by Congress Morocco is not ku IDhave made any such attempts
iInD OFFIIt t USE
0k
OFFICIAL USE 62 AIwp Rii Compliance with existing requfremets for security clearance
of personnel Will be satisfied in Loan Agreement and Implementation Letter
63 App R1l2 Compliance with requirement for approval of cortractors and contract terms for capital projects Will be satisfied in Loan Agreement
clJ164 Aup Cmpliance with bar nRainst use of funds to Tay assessments etc of US meiber Such payments will not be eligible for financing under the Loan Agreemunt
6 Anp P115 Ccmpliance with regulations on employment of US and local personnel for funds obligated after April 30 1961 (Regulation 7) See Section III-C
66 Aim Vietnam iron and steel restrictions Not applicable
67 p l9 If a country other than Greece Turkey Iran Israel Republicof China Phillipines or Korea reduction in assistance by amounts spent for the purchase of sophisticated military equipment
68 Anp fi4O1 Compliance with bar against use of funds for publicity or proshypagjanda purposes within US not heretofore authorized by Congress Such use of funds will not be eligible for financing under the Loan Agreement
Morocco is a traditional Islamic monarchy with a constitution The conshystitution was implemented followaing a popular referendum in 1962 National regional and professional elective bodies including a parliament were established by universal suffrage under the constitution in 1963 The parliament was suspended in 1961 in a State of Exception because of its inability to agree on measures with adequate urgency to meet the prevailingecononde imperatives In July 1967 the King appointed a Prime Minister to direct a Cabinet of appointed technicians
The constitutional framework nevertheless remains intact in Morocco and nationwide popular elections for some of the professional chambers were held in August and September 1966 The press is relatively free in Morocco and the right of diLsent prevails provided that such dissent does not violate the prohibition against political attacks on the instishytution of the monarchy or the person of the monarch
LI Under the revised US AID Policy for Africa agreed to in November 1966 Morocco is designated a development emphasis country entitled to receive continuing support on a country basis as part of a multilaterally coorshydinated countrj program Morocco was subsequently included in Presidential Determination 67-14 (January 5 1967) I
LIM=TE OFFICIAL USE~i
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bull ~ -
f
DEPQbi) STATE AGENCY FOR INERNATIONAL DEVELOPMENT
WASHINGTON DC 052
CAPITAL ASSISTANCE LOA11 AUTHORIZATION
Provided from Develoroent Loan Funds Morocco Second Lower Moulouya Irrigation Loan
Pursuant to the authority vested in the Assistant Administrator for Africa of the Agency for International Development
AI)by the Foreign Assistance Act of 1961 as amended theIAct) and the delegations of authority issued thereunder I
have received and t-en into consideration a certification from the Director of USAIDMorocco as to the financial and human resources capability of Morocco to effectively utilize the Lower Moulouya Irrigation Project taking into account among other things the
maintenance and utilization of projects in Morocco previously financed or assisted by the United States and I hereby authorize the establishshyment of a loan pursuant to Part I Chapter 2 Title I the Development Loan Fund to the Government of the Kingdom of Morocco (Borrower) of not to exceed five million dollars ($5000000) to assist in financing the fore] gn exchange and local currency costs of goods and services for the third phase of the Lower Moulouya Irrigation Project subject to the foLlowing terms and conditions
1 Interest Rate and Terms of Repayment Borrower shall repay the loan to AID in forty (40) years including a grace period not to exceed ten (10) years Borrower shall pay interest on the unrepaid principal and any interest accrued thereon at the rate of (a) two percent (2) per annum during the grace period and (b) two and
one-half percent (2-12) per annum thereafter
2 Currency of Pepayment Repayment of the loan and paymenu of interest shall be made in United States dollars
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3 Other Terms and Conditions amp(a)Goods and Services financed under the loan
shall have their source and origin in
(i) the United States if disbursements therefor are made in United States dollars or
(ii) any country in the free world including Morocco if disbursements therefor are made in Moroccan currency
(b) AID Regulation 7 shall not apply to construction -work financed under the loan because as detailed in Section IIIC of Capital Assistance Paper No P 667 it is important to the national interest of the United States that the direct costs of construction work performed by third-country nationals be financed out of funds made available by the Act
(a) Such other terms and conditions as AID may deem advisable
Assistant Administrator for Africa
Date
~~~~~~~~~~~~~~~~~~ - q v
7
b Th - urJrtaen rn the jleft Bank under the proshyposed thir i-e of the rojc-t are i follows
- Left Pnnk Dvd H-d Tunn]
5 r-y rd t final tng of ire aration for ther-rT ir cvf ni r r imy - rz--rt ha recently beenr-t) l i w t e rr - tht - I afid if exToected to ubrit hit writt(-n r-rt jr DC Aii preliminary impressions baled on a 9Ite nErerti(n indi-ate thit a -rt1fartorj repair con bemade in c)nIdprnbly le- t n-ne for lfan -than previously conshytemplnted
The early ccmrt-tnn nf thi work in lmnortanit nine IL c t Ft th avai-bility of pr~ct wrte for the entire Left Brnk
Z~bra Collectlv-
Thin 1 on ara ofrXPr-ctively ond tribal land that will be divjded and allotted tr J-ted tribal -b-hrc who will become soleowncr3 A Pirpe rart ti Tniran -aratirn and developent hasalready bern co-plet] 2pani levelirg r-mains to be done as well ae conztruct c~n of b-tcn dnd drina- works
7eDo i F--vino-
The northrrn ecti n tht rmrainder of th Zebra will requirethe extnzi-n cf thct Train 4]h will be ccrrleted with financingccmmritted under Phase II of fth tr-Ject Land preparation and levelingwill be required anlnp with h ntruct n of distribution and drainagebullir r]
T ectinr f th- rrainler of bra will requiret- rd i i w -J n rrd h c and engishyrnr nw d t i f -tritst t n and dlarn -rk
Piu A rp
foeuro rginprng im hhve b- 7cr)Pletcd fcr the irrigationthe Bou Are- Fr the o-t rt hu- I cf the
of rcquired construction
of main carrl Rnraljor dr- nRe worx z develoFerit and cronstruction of zbldiary li tribution -r irnge y--r rrrairns to I undertaken
Th P- Arrg Tunnel wr orml td in 267 and construptcn sunder way on Ih-Yin Canal rrired tL nvcy water the suthrnf e of Areg ervie ra
I h z-uir-i intluding the -rtablishshyn -F r rnity rvice andIn fit Th rlulrem-rntr for
o1 th I- P Crk t the- RhL et) I n air aly Ii- ted
ADoci AvaIILD
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BEST AVAILABL~E COPY
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]~)TJE o - VTry VTkATTOh PROr E Ii CLIO Itrii)
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F~~ntur~ nrl i tu Cct (wicFenture _to 11( Ettinate JI6 ) to 0j67 im-rtpatv 7-t 1
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Wt r 2torvge 1 95 1)6and Pegulation
Right ank 137 31 10 79
L-ft Bank 25 87 n6 143 239
Far- De ]crl 0 )5 1 b I26
S I M O ALA1 348 356
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1 dv1 ment cot
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4
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At indicatnd In the- tdl iv 11 - rnt it~ocotof the rxojroct are t hi~-hor tnan the ic60) 1orccasts Th y tarc Ah-wever 1hchr by cnr murth~cul~ averllsv( a igiificqntjsCfect t~cn the bt-ric lfer-7t I-tio n- rigill lly rc~r~t
V I ) u O21he 1)+ -J iv )ir(t In h jiv kinvnft bed tado in Lh Tnwr Liynnui vni cif hrrlt rnr 7cst- wrr uniershytaen ic r ii -tQ j ta the Aurpo3vt o 02thl rirarnkinr of r- Ln t -Ir ca th cenm I rr1 urn 1e11 frrn n ow
j r t- t ol I n iii i I~- ih 1n t ~r n 1 1t f Vt 1r r Jf U -c~Pi t o ce
iflIel~ P-- t c conts
P-ItAropa TPR
Pn r 21
Sector
~hi Trifi - tnz r -n~ irlrpmi rritt of r tur-~~~rb th ri B u Ar- I t r i 1Y h- nof~ Fa-uA flnricir-z I- T-1-rv igtn t ih-b r
CL ir ra r I th- ityterjThd t ) rah)rt nry to rItihi cofltrictjcn l~n- rvlfAi i-)t arvi r rf fgtrrn h
n n mt rJ z-n fl -V7~1 thin at-1 h rrroxv ytv7 v -I t
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elevated area requirin iat-r to be puiiped to the irrigated land with both highr capital costs (about 1 million) and higher oreration and maintenance costs (150 Dirham per hcttare via-a-vir 100 Dihams perhevtare for the grnvity irrifrted ares) The ony work presenl-ly cotiishypleted in the Triff Hih Ser-ic Area is the preliminary engineering stirUes Cimi-ir to th Tr Pa r thu TrIffa ]Igh Service areawill reiir an ex I uvnt ricd bfore agricultural proshyduction cn be initlat-2i
The above considerations reiult in the following revised ranking of priorities
Project Area 1FY (M Priority
Triffa Main 21 I Sector 27 8 I Sector 28 9 I Bou Areg Central 6 II Bou Areg Rerainders 6 II Zebra Collective 5 II Zebra Remtd nders 5 II Triffa Ent 6 III Triffa High ervice 5 III
SRI 11ed a ccst contingency f7actor of 25 and a cumulative costescLlatior factor of 3I per annum These factors appear excessivelyhigh in th( light of (1) project experience to date and (2) the fact that from his roint the technical rirks involved arre of a much lower orl- r f 1h thnse inhtrent in the major works Just comshy1 I intion nrd contingency factor of 15 has there-
S chtiMnte- Itlizcd in this rarer The ii n-ttr costs the to ) ject (in n]ace of factors
i by )I nrt 11 thIrhe nf th nJter atve I[cwver rrtnrecr-y factor euld Increase the IPE ] hi ra]y th- IIRF fcr the TrIfa Sector 27 ansnunirg a
oct crortlr7crncy A can be seen as the conAngency I thf cc curve rrv to the right and inter ects the
ur h h 4r- rnr rate of return)
C Finreirifg inr
Cot o the prJect wor fmcentntgenent nnd engin-erinm advisoryrvices for the proued t rd tsge of the Mmlouya Project are
ctirt a Crollows
nF3r AVAILArBILE COPY
Best Av DlableD
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(In Millions Of Dollars)
Righi Pank
Trffa Main 34 poundSt (r 27 08 S ctor 6 0Q
51 Left ank
7bra Collective 12bra Remainde r- 54 Tou Areg Central 74 Lou Areg Remaluders 68 heft Bank Dcad Head Tunnel 30
238 Services
Management 20 Advisory Engineerin 05
25 SUB TOTAL 37
Escalation amp Contingencies 15 47
TOTAL 361
It is proposed that the AID Development Loan for this stage of the Moulouya ProJet be limited to $5 million an amount which would be sufficient te reet the cost of any US goods and services required for the works to oe undertaken Thus the loan would finance the dollar costs of manrement and engineering advisory services to be provided by US firms erstimated at $25 million The balance would be available to meet any ther US cofts that might arise for constructicn cuipment and nateria]
The balnnmc of funds required would be provided by the GOM from its own budgetary resources including as appropriate agreed allocations of the counfryj-uie dirham proceeds of US surplus agricultural programs in Morocco
To a l-ge extent construction works In the Mou]ouya (other than the Bou Ar- Tunnel and Mechra Klila Dam) have taken place under a largenumber of roll contracts with Moroccan firms It is anticipated that this will ontinue to be the pratice in the forthcoming development stage Th iit is evident that the great bulk of project cests in this next stage will be local costs
-E5 -
In the event that not all of av l able fuInd- under the loan are required for TKI eo It i ouied that any remaininrn balance be utilized for the payment lo -ovalccztn f the project This would be aceoomplirhe by utili7irn th- h r vroceeds of the loan to purehare US-use dirhsmn (frcr th U Oi-irrirg Officer) which would be utili ed to rrimbure th fc u a t local - nditurrs
Thi arranrit 3ir ila ) fstV utilitd In the - of the D-e l-INAieret Loar tJr U Atrrert SinceYr usii Conv rf i cn therc loans are rcpiviible in dollars nd rince Morocco in a n-ar excess local currency couintry the fert ) f e transaction in tc provide a means for obtaining ccnvrrrs cn a-cr th life of the loan of otherwire inconvertibie U5 holding irhrs hich are in exces of its localrequireme t
In 1967 over 15 million dirhams (abceut $3 million) of PL 480
Section l04(g) loan fun cre in msgreement with the CON allocated for the financing of various contractr reloting to projects in the Moulouya It in anticipited tht ndditional allocations will be made out of the local currency proceed generated from current and antishycipated US 7urplu agricultural rmodity programs in Morocco
It has been proposed that the dirham equivalent of $45 million of the proceeds of the October F67 rurplus agricultural commodity Sales Agreement be allocated for a Section Cb(g) loan for the Mulouya In nadition it is estimated that a $]35 million (in$ioz1ble dirhshyequlviJent) woull be available from 7uprl]eental surplun agrIcultura con -ity rales programs under Titlo I an-d Title IV in calendar 196F for allocation for loans for development projects in Morocco These two amounts combined would provide about 6 of the G014 resources reshyquired for the project over the next five years On thic basis there would appear to be rcasonble propect tht the GO should be in a rorition to provide cver the S e year rriod of the project the addishytional resources renuired for itF ccmpletion
Tt I contemplatd that na additlonal US dollar financing of the Moulouya byon-l the $ iilon rorosed herein will be provided for tl cplei n ef h M _11-nuya rince the bringing under irrigation of th- 11O0Y ies include] in the propore] project will substantlally cornIete the works criginally conwtemplated hen h DLF loan was authorshyized in 106 The remainler zf the workr h(- be within the capabilit3 of the GOM to complete with It- o-n resourcec
MT M T M
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) Technical Anily ir
The Moulouya Rivr which is cre of tne largest in Morocco originatesin the idll Atans
Moulouya and which oztend scuthward
Kediterrancn l re
t rre
Pr
ard n
flows rrpr
orre 25) mriles northeast thr Agorinn border
to the
In- agricitui 1 in li j i nt( iljr r Th- rst rind most
t 2 1ir i t i h- i n th rwrht born of thshy-- e 31nmiler frem the Mediterranean
Lea To tho wet cf the Tiffa and nn th- left bank( of the Moulouya isthe Zebra nlain 14wiuntain rv-arate the Zebra frcm th -ea and fron theBou Art-r i-ll]zain which - ctI nrrthwe(st of the Zebra The Bou Areg a coital phtain sclte 19 mils lorg and h miles wide separated fr-nthe n-a by a Ihow sa2t water lagoon Southwest of the Zebra is theGireb plain which hun land ruitable for irrigation in its routheasternportion The Gareb i at a higher elevation than the three other plainsard if ultimately irr-gatcd vould require pumping fro the lower level Zebra conv(yance system
Water from the Noulouya River is stored brhind the Mechra Klila Dam whichwas coniletd with fjiancri rc AID loan (3-A-2 (DLF Lcan l6)Water ir rclca ed downstr(a (1bcut c) miles) to the Mechra Homadi reFrshyvoir and d]iversion dcim in1h-r divert-d to th right oad left bankcunals About 75 kilometer (1 miles) of the Triffu (right bank) maingravity ciral hay ben copletd und consderable cr) has been carri-dout in the Tri on) distr Iution and drainage netw rks land levelngend other farm iwnrovwments About 37 kilometers (22 wiles) of the Zebra(left bank) main gravi-ty canal and the tunnel 6 miles (101()7 JIrenrTrcters) betxeen the Zebra area end the Bou Areg area have been comrneted
The GOM illrrfo m certqin -rk nr-Aded fcr develormnt of the gravityir~zgata yt-- for n 71-) acres over the next five yarr Thiscffort vi2 be eonern rait-r urcr the develo-ment cf areas thot providethe great-rt ecnnomic returrs nnd the developnent of a cadre of Iorocearperornel adequ tly tran-yi in the an2gerent of the project SeeAnnex C for further Irojcl details
e- enmL Ev1ation
Mt Infratrueturr The --trnal highway co-munication network i t arid rfi Isirm nf re- i n-ote siler in-1 shy
uzeather raved rc
____________________TAM
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Other communlca 1 i i t ih Lh arr-- inlude the nrninlineof the Oujda-Fe--C- t h~rh l e0tnnd to AlgeriaSpanish enclove rt the 1 fir idto cmmercial airport at Oujda andNador with regular national onI int rnational ervice5s
Th verirtr 1 u ~Ath r nr r t crocd by 60 kvJ i i i u rrd t 5( kr It na ortr kk f~ditcrl rower1(Qp x I -y yrar) -o n d hr rritIronr
at the Mechra-Yplusmnilj l inm fnd the Bou Areff contral poter Statin The townare connected to ranrh cther and th2 r-rt of Mcrocco by telerhone andtelegraph 1 ner
b Sol Soil rvey 7rd land ]a-ifctons have been completed i-nthe Mcloulva rer eter oanntrantbi- with French firmr u-ing Frenchmethods The Trifa -1n wr initialy rraped at a cealeof 150000with certain area ub entiy rer-aLd at 15000 110000 or 120000dependin I nn the cor1cjeity of YJ rattcrns The Zebra plain has beenmapped at a reale cf 20O00 nod th- Bou Areg plain at a scale Df 150OO On thp baf Yr nf ther urvy th cla sified the soilsGC hain terms of r-uitnbility for irrigation as follows
Land Ciaifcation (Aere)
CasrI amp IT Class III Clans IV Totas Triffa Plain 17000 29[00 22725 99625Zebra Plain CbO 1275 4050 211425Bou Areg Plain 75)00 l6qo 3 0 3067)Gareb Plain 13 05 10 70 0
Inclurez 1750 acres for lfigh Service Area
The findings thi indicate that ( i) arriratry 5of the area in thefour rlain- i suited to irrigation (Clare I anl II) (ii) more than3 ir suitabr bt with one Or mcre imrtat~ons Irro=ed by underrablefeatur-s such an to wrafhy oil characteristJcn trnine- r restrltedbull rio (CIar TIV) and (iij) ls than 2 of th- area in only margina)lysuited for irrinticn(Class TV) In ther7e lattrr ardrn only rmi-intrnsive orop rotations blUponsblhe
The oi nicn f the Cn-lting Envneer (1ydrctechrJ) th respect to) therd carrffjn n that hfle 3 Bureau for P ltr0tion -tandards werirt ernoy-d te rlasnificatinn ir aceurat- and n rrti with3and rlaced in r d rLrnble categories more
uere thnn right ha bern the caseUS tandardr folIced The clasifatinn ha 0a been reviewed andfound to be atifactory by the USPA tayr Hoever r areas of complcxroil Ttternr hch to date have only been ru-d to a oale of 150))rome reraTpin tray be necesary as a banis fcr rrerarnZ
- g~T PRAvVLAFJLE EOPv
final designs of irrigation and drztinne- rystems parcellization into farms and planning of land preparation measures In addition considering the high average salt ccntent of ater frcm he c ilouya hiver a rorm of systematic leachin- will be reqirer- to f ree-rt aculation of salts in the soilsparticularly in h ebra Crt in will nlso1e plain ureas require nitrogenphosphorus crd possibly other nutrient to obtain satisfactory yields
c Water On the basis of studies by the GCM which have been reviewed bythe Consultirr Fnr ncri and the U au of 1ccoi-ation it is thecorclusion of A tt (i) the q lity of water in the Lower Houlouya
is below averpge bvt crp rble to thtof certain rivers in the US whichisotnteLoh~uoybrve successfully been usc for irrif ton for periods cxeccdin 100 yearsOj5) there is clearly a sufficient a )unt of i ter to irrif-ate the 128010
bullcrer to be served in the [rlcentIty ar n3 Addi-tional s-tudioser (c requilrecj dcter-Inc if adeqiuate water is a- ilable for irrigationof 376QGO vc rc
The only signifcant urce of vp y fOr irrigation water in the perimeteris the oulouya Vi~cr io jc n1 is 1re ntly being irrigated from wells most Iround water i - - 1 Alouya contains dissoived salts which i xr Lrn - hvriny reak flowto iJOx PIn iuting [cricd of c n ccntraticn is 750 ppm On Thi- basis of USDA Salinity Lot) atory criteria fte v ater is class 03-SI (hl-h salinity-low a-alinity) Vile water is thus of mediocre qualityit is ccmrarable to that of river successfully used for irrigation in the US (eg the Lower Colorado Rier) and poses no serious problems to irrir-ation in the Moulouya perir( cfr provided the W4 adheres to recorrmended programs for meeting leaching reoairements
With ref-pect to the 128000 acr project the demand for water reasured at the Mechra Hoadi diversion dair is estizated at about 575 million cubic meters per year as follows
remand for Wter
Peak Flow Annual Total (August) (m 3 million)
Agrieulture (176000 acres) 337 m3s 806 Municipal amp Industrial Consumption 8m3 23
Total 4 uy62123000 acres to be irrigateA by Gravity 255 m3s 575
(The e dpeak requirzents of 345 s compares with a 35 m3 s design
capacity of the main canal at the diversion dam including 18 m3 s for the Right Bank and 17 m3 s fcc the Left Bank)
I
- 19 -
This estimate is based on probaole rainfall cropping patterns plant requirements evapo-transpiration and other expected losses of irrigashytion water The estimate is believed by the Consulting Engineer to be reasonable but subject to refinement on the basis of tests to be carried out on a continuing basis
The annual average availability of wuter from the Moulouya river is estirated at 1100 million mn or about double the estimated requirement for the gravity areas
Estimated Availability of Water
Twelve Year Annual Average for Moulouya River 3 m3 second 1100 million m3year
Maximum inflow Observed 8000 m3second(1963) 3h00 million m3 (1962-63)
Miniwum inflow Observed 1 msecond (1951) 532 million m3 (1956-57)
On this basis it appears that there should be ample water available for irrigation of the gravity area as the water availability obtained from twelve years observation exceeds the requirements in all but the 1956-57 season shown above Prior to the development of land with purped service areas (the Gare-b and the Triffa ig h Service) a review and analysis of the river hydrology should be unidertaken to assess the availability and regulashytion of the river flows
d Studies Entincering and Construction The overall irrigation scheme outlined by the 1uM defirs the ajor features and th( magnitude of the work to be accomplished to attain the ultimate goal
This scheme is being carried olut in phases over a long time period The present phase encorpasses the development planned within the priorities indicated by the Stanford Research Institute (SRI) study for the gravity irrigation system
The studies for land classifliration have been completed for the gravity irrigation system in the Triffa Bou Areg and Zebra plains by French firms and were considered reasonably accurate by the Consulting Engineer Land consolidation and parcellinrg has been completed by 0MET in the Bou Areg Central area the Zebra Collctive and Zebra Remainder sectors 7 thru 10 Land consolidation and pareeLlni ar( needed for Triffa sectors 27 and 28 Bou Areg Rematnder arid Z(bra Rerrirder sectors I and 2 The engineering designs for the Triffa main sector 27 and 28 and the Zebra Collective have been or are being completed by the G0M forces The engineering design for the Cefntral Bou Areg and Zebra Remainder sectors 7 tnru 10 has been or in being connpeted uy Hydrotechnic Engineering design will be required or the 1ou Are remainder sectors D-3 thru D-7 and Q4 thru G-6 and Zebra Rer ainler sectors 1 and 2 The engineering designfor the Dead Ilead Thnnel has been undertaken by SCET who have preshypared anid issued an Avant Projet for bid invitations for construction
14 M)j6Fj Cshy
-20-
This firm will also undcrtnk- uu-orviston of construction The engineer ing not yet performed can be aea ished by GOM forces andor private engineering firms
Construction of the extension to the rrain irrigation and drainage canals Jand preparation rector cinl ani drninaive ditches will be performed unllr cntact t) 1 cc rt~r~iet m)t hi in the ene of the
r-abilit tion of the L2tL Pz- Dd iarl Trnc t
e Cronning Patterns The existing erning pattern in the Moulcuya including botnirrigatcd and dry farm ingincludes grain forage citrus vegetables olives grapes and 6 small amount of leciduous fruits and nuts Of the roughly 2140Cy) acres of agricultural production in the Moulouya about 177000 acres are in field crops 24)) in vegetables 16Y)O in citrus 15000 in grrrcs 540Y) in forage crops 1700 in olives and 15)0 in other fruits and nuts
Taking into consideration rast and present trends in plantings as well as agronomic and price and marketing factrrs the following projection of cropping patterns has been developed for the Lower Moulouya
PROJECTED POPPTG PATTFRNS T1 HE LOWER MOULOUYA
(In per cent of total irrigated area)
Left Bank and Triffa High Serice
Triffa Sector - Sectcr rriffa Class Class Class
crop Main 27 28 East I amp II III IV
Citrus 40 60 10 10 10 Vegetables 15 10 15 1) 20 10
Crtton 15 20 10
Fcragpr 10 20 25 30 4o 30
heat 10 6 20 25 20 35 4o
Grip 25 24 35 15 Dy beans 5 10
Sunflower 10 olives 5 0
100 10) 100 100) 1i 1052i 100
a Incltdes double cropping
- - r- euro --- 7
~7~TF~Wr~e~ALUSE
-21 -
The projected cropping pattern for the Bou Areg plain includes cottonLJrirdg the frrt Five yearnejtinted 1r of the Class I)fand
the project jitwould be grown on nnII landn Tht renresert only 960etrravres) ectz ri)cr)e area The cotton acr~a e ry increasep 2ceafter live years if ritisfactory drainage conditionshyrre achieved in the Bou Arev
cotton grown i 1xonp tarx- Trdltionally Morocco export its-Jr- cron an irr IJ hort cble to rmeett Cotton the reuirrents
r the oroccan 2pinningr mills The croppni-attrn of the Triffa East (about 180n acres) Js projectedt Tnrlude 15- (about 27 acres) in cotton It is likely that becausef ihe limited extnt of Class I and II lands in the Triffa Eas cotton not increase beyond that percentage
1t i evident that the amount of irrigated cotton that is likely to bein ther-n Moulouya is minimal even assuming that local drainage condi-T nare i asuitable
f Technical Sundnv--s The AID Project Engineer hps reviewed ii) thedat and ajor construction performed to date onronct and finds the technical requirements this long-ranRe phasedsufficiently defineoto ccntinue the project on an orderly schedule The estimates of cost of prsirct facilities have been determin-d by SRI from average va)ues oftrit cots obtained frorr reviously ntiarded contracts and from etniled( -s-nand analysis prepared by the iHydrotechnic Enginering fir oft-o tyieal sectors located in the Bou Areg area The costs for the arc ent contract have bcen estimated by the USAID It is consideredthat the depree of engijeering planning undertaken and the deterrrinitonr to the US Goverrment are adequate to meet the applicable requireshySt- n Section 611 of thie Foreign Asistance Act
7717gt
1 --shy
-22-
E Financial Status of Borrower
1 The Moroccan Economy
Grrwth of MorocLcts GDP in real term averaged about 24 per yearin 1(4 and lr li Per capita DP In 1C 5 wan anproximotely t162 A (er Irr-ht in (6 resu]trd n a drcrcne of slightly nver in GDP which tlh vpulatior grc~vth avrring 3P4 per year rnrsJted in a decline of -r ornita GDP In 16 ii brut $154 A recnd droughtcccijrred In C67 but i not expeetid to have the severe effects of the 165 drought Crop forecasts for the first nine months of 1967 indicate a 4 increase in real GDP above the 1966 level This is also the economic grcrdth rate estimated by the IBRD for the pezxA 1965-70
Moroccos economy is heavily dependent upon the agricultural sector thich has averaged about 15 growth per annum However growth of the mal modern segment of Moroccos agricultural sector has inshy-reased at the rate of about 7 per annum
In 96 the International Banik for Reconstruction and Development (IBRD) preented a number of recommendationr denigrned to increase Moroccos economic growth rate On the bacis of these recomfndations the G004 proceeded with planning the necesrary program to increase investment levels fr- the i 63-65 level of 11 of GNP to 1r of GNP and stimulate the rate of economic growth from 2 to an average of over )4 annually for the five years 66-70 In addJtion the GC4 has taken measures to curb the population grovth rat while placing increased emphasis on raising production of both dryland (wheat) and Irrigated agriculture
2 Investment and Savinms
The level of total gross investment has remaind at aboit 11 of GNP for vera year althugh the percentnoe declined slightly in 165 Under the GO Three Yea5 Plan 1965-67 the gross investment t-3rget woz ret at DH 3 billion- Actual invev-tment expenditures for the three yearpeirod reached about DH 46 billion of which the Governshyment ezxenditure amounted to DH 1 billion a against DH 21 billion budgeted Thin may have beeo partly de to the GOMs deliberate ausshyterity pollcy under the hIF rtbJli7tion prci1rnr but more probably it van duxe to the shortage of trained cadres to -lan and execute projects
In the private cectcr conziderable inounts of ravings may be hoarded due to lack of project attractive t- inventors The lvl of private investment has been runnihg at about 51 of GNP thrrugh 195 The 0014 4 incentive to private instors hnr cut profit taxes from 4320 to V and announced a tpn year guarantc-e against tax increases
]L- $ = DH 506
777=-77- NQ
r y 7k1- T e - W lk In
j - 1) 7k- - _
- 23-
Loan are avaiiable to )rivlite irve-tcrn freo th 3JfIDiN s rctr special funda to prcmote touricm devc firvcnt
Under the 1r86-1972 plan abut to br irtntt level are to be accelerated considerably reaching A of GNP liv ]970 Mor(- Irlyir haviiy on foreign 1 to aciuw cc higher lve1
3 Central Government FinancP
The Moroccan money supply which had Incrrased ify 76 per cent in 2965 remained virtually unchanged in 966 The first half of 1967 witnessed a 5 Ter cent increase in the money supply Te major part of thi increase as concentrated in June and July uhen the supply reached V14 0j lion Currency In circulation expanded rapidly in June and July
nnl factrrn being reinforced by commodity hcnrding related to the 1ide~l Et crisis Demand deposits did not show their normal decline nthe first half of 1967 Deposits with commercial banks declined nlightly while deposits with the Treabury increased as public and semi public agencies contisued their transfers from the banking system to the Treasury The increase in money supply in the first half of (7 ran I raced to tho nzon1 sonal increase in net foreign assets not c y the custcirry rlelir In claims on the private sector Clsirl (n the erivate sector declined slighty until May 1967 but Increased hr-gb June and Jily due primarily to additional financing of textile stocks ClbiJ ante Government rose by 10 per cent in the first half of 967 the in central brnk claims on the GovernmentI being rmainly offset by larger deposits with the Treasury
Ordinary budgetary revenues which incrurted by 5 rcr ent in 1566 tre cxrcted t-) increase by 7 per cent in 1( to DII 21 billion DeampDite a derea3e in agricultural tax reccipt r- fror diret taxes rose by 10 ppr cent in 1966 and a 2 increas estinated for S67 due to tric or controls on income declarationr d an accelerashytion of tax cller ns Owing mainly to a relaxation of the import
program in late 1 5 and a concomitant increase in tariffs on certain ccnonter goods customs reneipts increased by 21 per cent in 1966 Although budgetary estimates call for s decline of 3 per cent in customs receipts in 1S67 it is likely that actual receipts will be considerably larger in view of the import liberalizatidn measures intro)duced subseshyquent to the estimates Receipts from indirect taxes state monopolies and other serces are expected to be 11 iv- cent Ipher in 1967 owing to increased profit on -ugar sabr-i and L r(m the newly created Office do Ccrmercalisaticn - d-tation (OCE)
Recurrent ordinary buiL e(enditures increased by 34 per cent in 1966 ar-i are expected to increase by an additional 7 per cent in 1567 reachin- D1122 billion Although wage and salary scales in the public
Banque Nationale pour le Developement Economique
TT~~- - I777
2 Cf
sector have1bec z h t - rrvirI urli 11i g 14-6 -nd PO becnue rX toi Ijt e f (]r o n 4
ill tile ic urrnnye andr)not i on dnd Publi ht rentrn -yr-otn lno IncreasedOthrr t ill- t il r ne by ) vr cert in J6(
i ninlyrt -br h Inc-l
( Ihe ( t r- rl t ip t t C itur f T)h 21h iilli n
is (( ItI t lt r c0 a- r n n o I- c t b It ihstnl id vv ih n t r-t have hn(er - en 1t2
(IM ii ture( T f fu traordJ nary budrzct exshypend ituren a r y -t c ~ i vi -iscz Portal Checking sy-stcsul)rrcing t (I ltIt Ct -- ind creirn shy
nnet The f r er tnc I hha ccrc ed from a htih of DH 5-7 millIJn in _ 5 millIn r C46 F cr ats foi ]7 place Cro n w I 1(DI)J79 ill ni DDn etlc fi nancing has alo u 1) 5 p (- I3A27 iIliun to an entirnted DH 1142 million
1 14V ) I nv 1 ri n nI(c1 franc n is 77-ected to be ol t y ncrewed bcrrowing fr-ir t he Cestra 9ank which hud been held at mcdert vols iln 165 nnd 1a66 Under the 1TFtaiby agreement of October 16 the qob) agreed to taBe a3] rocrrnary meurer to maintain as table curoonry rPnt inl th nr1d-elrto th b a ent of the ePrncriynnd a vnbl- hn1incc X nvroent P rt artt to t rt fien of tho Ccntin- Honk rstz (erct are nct t r itr June 30 Y-ke 7 lov l b th n Diif ) mill] (n tlcnber -c P thai I o illin usit I ])ecthr 31I62 (GC bc w t
C B1rtrp - vt DH 12 iri 1i nor ]S67 or DH 6S ij lionEan tisated (r fo than the aproved crd it expanwim
Thitrd ordivary nil extraordnnry buThTt deficit of DII 7-19 millI n fcrecat Fr 1 67 in exnected to be fnanced by not freign
tan reof DII )75 mi~l in nt recurity 12ue 1 T111I vlion a - nt ry tiat Po n Che )ir d-nC i 73 r5 Pn
riI is u h i a vti v mrr nrr-e jssIof fvr is id a erital The vnfsa revcred in 1d6 when lnrger r nyrentn eEecially on food itcmo an n -lewdoun in
igo ra a deficit of $1 millcn ProjectiOnz-vt rvultvd in ror 17 r~ieat inrrerned importsonly partially ccnrennate by addshytsa t frnreirn r ntil rrceiprs ard mprrvement in the nervices account will reult -n et of aprroximately $)20million As rhoim in the following tabl -r tion for l33 and 169 how overall deficits of
14 and m] ivi_y$i It
rqVV t1 4~
C)rgt
---
1 -)I+-IRF1
1ROCCO - rTANC OF PAYME 1qrt - 169]_ 5
6rfi0 1 1C(8lr67 i r(o
)xrurt 2t L( I L-5
Trade Bnlance 11 15 - 75 shy - 75
rviee- ret - 7 - 5) -35 -23 -2
J]-i of Good rnd Service- - 3 - 65 -II - ti - (5
Trn-Ifr Pr ynts (nt) P 21 33 37 33
on-cntnry Carital (not) 92 64 6 6 5
Err-rs nnd Ov rrion- (not) - 23 -2 1 3
eranl Bannic __ - _3 -_ 3 - 1i4
Atrh thert ircjected reficitn are of the nnme order of 1 nishytude a7 thcr incurred in the period i66 the Situatlcn i findarentallydifferent both in rerprct to the source of the deficits and in rer-ect to the meat0Y gtr m etin7tecr In the f rrer caive M5recco uffered
_frcrr a very h-vy cutfc of Drivtes cuitv fo-ivr with a shar) decline In forein nt exerditures in Morocco In the iatter case th projected deficits r- rcre a functicn or accelerated crcwth risingdebt ervieiiw tri tho abnrcn of forv eeble additiens foreign reshybull ourcs nere7ory 4( r2Vm rAf finmncting To nect the def-cits during the reriol 161 61h MWreco ob1id to drw down rorcin exchange reserves of over $]c milicn The snrti tpv of financing is no longerpozslble ince no or-res- ruch reserve- Even ifMorocco yr
mn nina r rve_ ore (]rrfii on to th r-ixirun etnt enribe nnd the [iI tnfldy i- un M-r-r e i32 till relA re nt rnt 15 millicnj1itionn ftr ign as- e n 1 6 beyond hat r recnently fcreeeshyable with ver nri- nry Officilr in In i6 reserves are cotImnted Pt 72million c hih crn V 3 million i caly required for currency coy r
Foreign InJebtrdne n of th GOM Mnroccos external rtnte ard rutlie enterprie dett amounted to
$r) millivn in lr6 Debt vervcirig rpynents for (66 trtaled about
$5) rillion g-eement approved in October 3(67
I- -- Ishy
37 millin or arprcxitrrntoy (j Iroccor totnl eXoort earning of h28 millicn GCnerally nxt rrO dbt FervicJng renuiremennt of leas
than r of totna -ort nnrlt In onrldered to I r tirfactoryrntio D-bt r rnJrcLct n Ir the reriod 1-(y 3on Trerent external debt including thnt wrtl(n irreently undibur-ed are hown n th fr lv tahlr
)] L v yr t n
Eternn Vtnte anc ] bntcrnrie Debt
M131 o)nr
Y aI Net Outrtnnling Debt Debt Service
(6 it 479r5 $367 J-67 452 3)6
Z616 44469 2 0 2C-
365I3 37 389
33 383 33 6 371
5-h 31 n 352 275 34121
]176 2661 32It 1977 21133 311 177 22)6 307 19 i0l74 256
1733 255
rgtternal debt rharre n rerent debt nnr rhon above do not increase ubtanti-lly over t rt 1)year- reaching a maximum of h44 millior
in J6 and decrpt- n cr - tently threoafter At the are time exportearninr r _rc extett nc-are Aring that Morocco does not inshycreswre it etrnn2 cbt t irate ubrtantially nb-vc ihat has been the core th adfiticrn dbt e roquirrentn reulting from the propo t Icon o 5 ijilion co r 7crncepr-ional term hould not have a i-nifiant affect n 1r o - ab lty to neet itv g rc-atedebt ericn rcnrib2t~e- the pros ectr of reprment of thin loan ore coniderci rearcnb)
U I -
F ot h-v C IuIJI rmt I shy
1 V amp~ rVml KI
PUC- -jrVi Jt t 1 11 nflrcj urlc 1- th )qn --P I uti u rhnrrl -1r- thr U- Tr- ry- R- -nymc nt
c2Il f n 6 1 bf r I- till 11 nfl r- n-r i n of O r--niC(Io~hi U 1 1 rr to
Tn vil ) f rvc hi tvlrll 1 (In- - n- u--n E r me rrinshycgtay F rntwir w ourc o -o- rvI ortf-V3 1 rncing of
Uf f -r rrrir- ur3r 4~ v -rin Iltrt nt ndd shyt -n t ) in- lint r b t l r -n rort- o-orco trorl-- V -P
r i 1rnd h L-torie Furcl-trin firr- thrjt US r r~ crvirrf- u~d be~
T L I1 c vt r- -ly ] -ubt fu 1 n vi pw -I -ror-co Ir of
ut1JpcO In thi rjert f it -- r- 21 npnred by d1-nr- cothcr t~han the US
2 ]P-t ofI Prr l1 on Prw- Fntrrr
Phij rrcjJ-t -11 n-t h~ -in nrwerq Prrt n rr- tc ntrshyr~A~r fi-mc 1bho und for --roern p o n
3_~~PrCT--rty
rr-vIi-n 1 h -d r the loan ragreement for Icntifitcation ef any r mIjrpt n ctri b- rt througn ut 1zatn (f xccr- prorerty
If rv c u~eAID n-mrcf u urr thi )cn - I~ut~ em avoi3ablo r rovvrirrnt -rrperty rather than nce iteni
4 Otli-r Fr- Wo--] n-Fnlc4rm
Dr mi tW- o] 14rocco- i~ajr ovr-ec -f exte rnaX
rrtan~- hrtvfb - I r ~ ant fl Fr n fole by Kv-it
Sgio F rneflit r b-en 1lmrntrd to tcfohnjip n5tnnen bi eoni~in I th u y f Fr--h tprhntcian tcacrr ind cther
~ti~r t~ ec-tnmIyrt-n Friinch Aid to Mcreco In 1065c~oc~ (P-art f-r txychnirril aItn -- j se of tl5 w1nfor bu~dget rurport f ir in rt t- $1 1ri1 icin in ennita -rojectM- n vx- rrcd
1Vw1tvnn tioI t-) Frenh rurtnnd +16 r11ion tie-I to -onyiint to orrrcr Frrmh ccilcn~For _-rrc-ratod land and rquirrmcnt
West GTrrnmnny liar agrcrcd to nrovIe ccme j27 mM22~cn 1n catital arirtanre and cromrndity lnoi7 t n OfIcon( q92 thi o totril$223 miJ lien ha actuary b-Pn cr-Itt--d under Inn ngrepment This
And a lk5 million commodity loan both) signed in 1965 All Wet Gerzaan
Ufla
-28shy
capital asnistance I vuectI to be tied to German exports Germanyhas in addition 1uvvded r tteysubbtantial technical assistance f
The IBRP hah rade four 1nns to Morocco since 1962 totaling$6) million Ofthin totnl a [175 million loan in 1965 wos fordevelopient of the gidi lit-r irrigation perimeter Other assistance by internntIcnal Iending arncie include an $11 million credit byIDA in 1C65 for rcendary diicction projects and an IFC ln and inshyvestrent of $1 1 ri jnic alo in
F tit i by [c - dncr tr dh elo snt ofMorccco rircuVt r oii +h b-]n jt-TKT r nbove n 2 )6 niliion Kuwait enn in i66 for develomyment of the Tensaout Prnm n irrnten nrooetand a $77 million Kuwait
0jl n )nnsn r(niti-nertcir
loan for extrnion of the Tadri~ Irrigation Perimeter
The following- trbe surrlnrlzes other free world arlztance (excluiin technical assistanc-) to Morocco for the years 1(62-66
($ Millions)
1 62 1cf_63 96) 19r65 19)66 Fneea 4) 5PO 64o 700 shyWet Germany 223 gu 1t 53 281 IRD 15 175 10) 175 IDA 110 IF C 1 5 7 7 7 0 I15
TOTAL 55 62 1U3 W
b Includer only lo-ng term loans and exporter credits - Includfs 25 million private capital
Eternal ansiztnnce to the Lowier Moulouya Irrigation Perimeter -nce 1060 hres been con[fined to US upport Consdiering AIDs previcus
involvement in and conmitnert to the Lower Moulouya an AID lean in P2t to be Lhi mol aprroriate source of financing for this project
LID
II
q
-29-
SECTION ITI- Y-TTYT TIMPLPTrION
A Periret-r Ad-instrrti-
Authority for irplerrentvtnn of the deveorpent prrgrn frr the LowerMoulcuya Perimeter and rs wel arth crnntinuinz mrnnrrmenertC tt r t- rrtnr V theltbi nad overationity iOfic 1cne 4
n r I e1i- i d Vit4 i Iv ~ Ct rreated i Otb (rJ rn-- of evcn inrmi-rriional offices hich reelaced the Office de Mire en Valeur Aamprlcole (OMVA) Under the OMXA and itspredecessor agencies authority for ad-inLtration cf irrigtion proJect war centralized in Rabat
Under the new regional office organization responsibility for adminshyistering ORMVAM is vested in on Adminirtrative Board of 10 members headed by the Minister of Agriculture and Agrarian Reform as chairman All ether board members (other than the Chairman and a representative of theInterministerial Economic Ccrmittee) represent agencies or activities inthe region of the r-eriret-r whic comprises parts of two provinces Localretresentatives on the Board inc]-de the governors of the two provincesOujda and Nador the presidents -f the two provincial asembtes and of the two provincial chambers of agriculture as well as the perimeter Director
The responsibilities of thie Administrative Board include review of theecys program establishment of its organizational structure developshynt -)f its annual budget and establishment of rates and conditions of
Siyfent for water and other services provided in the perimeter
The Director of OP4VAI-I is dbarged with the responsibility for executionPthe vclicies established by the Administrative Board end administration of oil ORMVAM functions This responsibility includes selection of staffn pserating perrcnnel acting s officia ORNIVAM representative in all ntztinns with -tate and othbr public or private bodies and the
f of funds within limit Indivated by the Ministers f Financetent rn fricultural and Agrarian Reorm
Perimeter Oranizatlon
ORVAM oreanizatlonal structure consists of a directnrate five maj-r rvlces or d-vsicns and one separate bureau Two services qei Administratif et Comptabl- and Service du Yatrial are conshycor - th adminisration and lcgistical support of ORMVAM operationshi1e the remainirg three services rind the separate bureau are Involved in t-hni al matters associated with agrcultural developrent Each ervice has one or more subordinate bureaus Fei-ce Chiefs and thehead 0 rch bure-u report directly to the ORMVAM4 Director
-~F7E MEw-
-30shy
2 Perimeter 01ttffnr
OPIVAM orgttnlrntlon treture calls for 557 positions of whichI L or 7 Mlled n were nher 29 1567 37 of the 71 Postshytion vacancies reported 1ern the high and middle levels Foreign(chiefly Euronean) technclan occupy I)of the 16 high level positionsthat ere filled at thfit tire
Whil OPM ut in th- lcng run lor to Mercecos oducational yster to prvidr tn crrf-nn2 to ratisfy current rdurojectd rcshyquirement th currnt high and mlddle level vacancies rrouire uersonnelwith oxt nive nrior rxericnce To fll this preent need it will be necessary for CRIVAM to continue its program of recruiting foreigntechnicians until ruch tire ns graduates of Moroccan educational programsacquire the necesnry exrerience The managerent assistance componentof thin pro~ject ]e-rribed In the Project analysis will to some extentalleviate OFIWAMs high level personnel requirements
3 Inw1 ernetation Sehedu]
Months Implementation Action
1 0 Sign Loan Agrcement
2 2 C-tiify conditions precedent and Y4tiate procedures for selection of US firm for management contract
2 Negotiation of extension of advisory Engineering Services
h 4 Contract (Hydrotechnic) Negotiation of Managerment Contract
5 60Cmpletion of Project
C Waivers
Sect ion 7 rf AID Regulation 7 provides in substance that theUnited State ill not finance direct costs of construction work performedby third cc-ur y nationals unless the total co-tn of the project withvhich thr ennrtrumticn w(r is asEcciated donot exceed $2On)O orafter excluding national of the country in vhich the site of constructionis located and Dersons vho nave resided therein uninterruptedly for morethan three years imrnedJately prior to any determination under Regulation 7at leant 0 of all uernons who work under the contract at the site of conbulltruction are United States citizens or the employment of third countrynationals is necessary to avoid excerrive corts to the United States
3
31
Section 2175 authr-ri th Regional Anitant Administratorto waive the nrovinions of Sectionthat it is 2073 if he dcterriner in any coneimportant te the nationrn intercrt of the United Stutes tofinance the direct eots of construction work performed by third country
nationals
A prviou1y r ic i c t tht for thr ct Tartthe -r c ct b- 1jeuj out r -cnorbr f cnrtructioncontracts with Morcccrr contrctnr an in the i-t Uowfevvr itentirely psnible that there may b- roe contractn with cntructlonfirms partly owned by third country nntionaln and that ruch firjs anwell as the surely Moroccan-owrned firms may enloy third country niationalsIn such canes a difficult rrobic-i iould arise in meeting the terms ofRegulation 7 since an a practical matter Aericans are not reaonablyavailable for ermployn ont by such contrnetorn and our previcus experiencewith the Naunsseur Ccnv(r-ion project thatin Morocco has indicatedAmerican contractors would not be interested in bidding cn small conshytracts in that country
It in therefore recommended that the Annitant Adinitratordetermine rursuant to Section 2q75 of Regulation 7 to waive theapplication of Regulation 7 to thic iroject since the project 411 conshytribute to the attainrent of US foreign policy objectiver and the cbJe-tives of the Foreign Arsistnnce Program
LITI L USE
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INTEREST RATE
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ANIAampX C
PROJECT DESCRn1 rOll
The project com)onents to te undertaken on the MIoulouya Irrigation Project over the next five years contists of the following
C(n1rtion of the rrLin casuals and bianch canbls to provide the suource of waler to the sctors be developed in theto TriffBou Areg and Zebra areas This construction will include the necessarystructures such as reulators highway bridges aqueducts water intake
and discharge structures etc
2 Iand Txeloommerit which includes engineering land consolishyt and iuvtllng lard preparation (subsoiling ripping destoning etc) and installation of water distribution canals (secondary tertiary and quurtunary) and drainage collector ditches for the Triffa main covering 24000 acres in sctors 8 9 10 16 20 21 23 24 25A 2513 27 and 28 Lou Areg Central covering 16250 acres in sectors Dltirough D2B and G1 thru-4h G313 i0u Areg Remainder covering 15000 acres in s-ctors D3 through D7 and GA through (6 Zebra Collective covering 45)0 acres in sectors 3 4 5 rind 6 and Zebra Rer-iinder covering 14250 acres in sectors 1 2 and 7 through 10 and th remainder of sectors 34 and 5 The total land to be developed is about 74000 acres
3 Canalization of the Oued Zeluan and nued Sidi-Amar in the Bou Areg Plain consisting of strairltening englarging and regularizing of these streams to carry the flood waters to the sea Drainage interceptor canals are to be constructed parallel to the sea in the Bou Areg Plain In the Triffa Plain the Oued Riada main drain will be deepened and enlarged and secondary drains will be excavated to provide for drainageof the Madagh area This will include the construction of bridges and culverts and other related work
4 Major Commorn Works will consist of
a Clearing of the Mo-1ouya riverbed downstream of the Mechra KLila barn caused roy flood dariwe and the installation of a set of stop logs for maintenance of pillway gate-
b Design supervision and construction of repairs to the ]elt Lank dead head tunel
c Conctruction and establishment of sib-division Offices and installations for farmer support such as CMVand farm stables
1 C
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5 Manavmtnt It ha been proposed that a US management firm be ewployed by th- C4 to manage and operate the entire Bou Areg area Such manageent -iuld encomparn all activities from the initial concept to final irIrp igricultural production Such activities would Include resp r-ibilsect -or supervnsion of engtneering and constriction of primary
S- Jry r complete developfnent of land training n in g tinul irription practicen preparation of market
t - r1t- (ot--rnu trplusmnining of a Moroccan cadre to take over h v--it Bou Areg dreara P the
At this writing the n-pt of turning over to a private UZSfirm execushyresponsibl]ity I h management of the establilrment and initial
op-ration of irr1gati the Bou Arog area has been only broadly de iiitd by the GCJO It Intended that proposals will be invited from a r -onable ntnber of f|ed US firms that a selection will be made an-n 7 them and a more do iled and cornprehenrive definition of the rer6 -Ps to be performed be eztabliched at that time It haa been
stimated that the t- of ruch a contract will be about $2 mir- n In any event the -ts of this contract other engineering arvl s to be provided undt n extension of the Ilydrotechnic contract and ether US corts will not ed the proposed $5 mllaion developzont Jean fr the project
The cle 3ifications duties ant 1ncnslbilities of the management personnel ill ha-- to be clearly defined i agreed to by the GCM Perimeter Directo- and other GOM Agencies luding arrangements for the necessary gistic support
Svxlale Docu-
1
4
LD ED 0ICIAL
-IAIDshy
A1trX D
C6JCK LIST OF STATUTORY CRITERIA
(Development Loan Fund)
1 FAA 0102 Extent to which U3 cormodities and services are furnished consistent with improving the US balance of payments See Sections II-C II-F
2 AA sect2O]ihi lanner in which loan wil promote countrys economic develo shy rit emphasizing help for long-range plans and programs designed to developeconomic tesourcos and increase productive capacities See Section I-D
i FAA sectT] h)(IL Information and conclusion on availability of financincfrom other free-world sources including private sources within the United States See Section II-F
FAA sect20l( )2 Information and conclusion on activitys economic and technical soundness including the capacity of the recipient country to reshypay the loan at a reasonable rate of interest See Sections II-B II-D and II-E
5 FAA 1201(h)( Information and conclusion on existence of reasonable promise activity will contribute to developrmnt of economic resources or increase of productive capacities See Sectiona II-B and II-D
_92_(b 4Information and conclusion on activitys relationship toothor development activities and its contribution to realizable longshyrange objectives See Sections I-D and I-E
The following abbreviations are und FAA - Foroirn Assistance Act of 1961 as amerded by the Foreign Asaistaice
Act of 1967 App - Foreign Assistance and Polated Agencies Appropriations Act 1968
AFEVCDF 1066
L1
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7 FAA f12O1(b)(5)_ Countrys self-help masures including institution of Foreign Assistance Act investment pliaranty programs Investment Guaranty
bull Agreement signed with Morocco 331o6l See Sections I-D and II-EI
_A ))(6) Information and conclusion on possible effects on US econowy with soecial refererne to areas of substantial -labor surplusSee Section II-F
9 FAA q201 (h)() Information and conclusion on the dagree to which thA country iv wiki- progress toward respect for the rule of law freedom of expression and of the press and recognition~yf the importance of individual freedom initiative and private enterprise
10 FAA -1201(b)(8) Information and conclusion on the degree to which the country is taking steps to improve its c]Laato for private investment See Sccton II-E
31 FAA R LbJi Inforrat-on and conclusion on whether or not the activityto b financed will contribute to the achievement of self-sustaining growthSee Sections I-D and II-B
12 FAA fi2Ol(bj Inforruation and conclusion on reasonalbe prospects of reshypayment See Section II-E
13 FAA fl20JL() Info-ation on applicability of the twenty country ceil4ng2
14 FAA fl201 L Information and coclusion on legality (under laws of the country end the US) and reasonableness of lending and ralendinr terms Loan will be on minimum termspermitted under FAA These are deemed reasonable see Sectioam Evidence will be renuired from the GGM as to the legality of the loan agreemnt
1 E 2 Information and conclusion on availability of an applicationFAA together with sufficient information and assurances to indicate reasonably that funds will be used in an economcally and technically sound manner See Sections I-A II-B and II-D Application received Janury 15 1968
16 FAA fl201(fL If a project inforntion and conclusion whether it will promote the economic developapent of the requesting country taking into account the countrys human and material resource requiremnts and the reshylationship between the ultimate objes6ives of the project and the countrys overall economic development See Sections I-D and II-B
17 FAAJ 20ij(J If a project information and conclusion whether it cifishycally provides for appropriate participation by private enterprise 8ce Sections YI-C and 114
I- FAA i22(a) Total amount of money under loan which is going directly to private enterprise is going to intermediate credit institutions or other borrowers for use by private enterprise is being used to finance imports
rfro private sources or is otherwise beirg used to finance procurementsfrcm private souwces See Sections II-C and II-2
9 FAA 207 Infosation on the emphasis placed en
(a) encouraging development of economic political and social institushytins No apparent relationship
(b) nelC-help in mectingthe countrys food nredo Project Vill conshytribute to production of food for lccal consumptioa
(c) in-proving availability in the country of evucated trained manpower Project will contribute to the deicloginext of trained manpower as one of the functions of the management contract (Soe Annex C para 5)
(d) prcgrams aimed at -malnutrition disease eradi atDn slum clearanceWater purification sewage disposal health education naternal and child care(includin fimrily pJnrning)) -nd cthcr public health ausistarice See
(c) other develoment activities including industrial development free
labor unions cooperatives tnd voluntary agencie transn)rtatin and ccshymwquication nrStczn capubiliTies for economic planning and public adlinisshytration arban develo-mment and modernization of laws to feilltate econcnicdevelopjen- GO- intends encourage develo vient of cooperat yes particularlyin the Left Pank areas Project will also develop capabiLi ics for cconoaicplanning and public a6~inistration (Annex C para 5) Other not applicable
20 Information on the extent to which the r-untry is
(a) cttcmting to increase food production and food sto a-e anddistribution felitics This project is one evidence of Moroccos efforts in this direction See also Section I-D and I-E
b) creating- a favorable climate for foreign and dmestic iri-ate enterprise and invcstrrment The GCM has recently reduced profits twes anrannounced a ten year guarantee against tax increases See Section II-E-2
(c) increasing the role of the neonle in the developnental procecsNo apparent relationship to this project
(d) allocating expenditures to development rather than to unn-cessarymilitary purpoes or intervention in other free countries affair See Sections I-D and Ii-
(e) willing --nribute funds to the project or program Th iOMhas already dcvo o-sidcrable resources to the project It has badieted13 million for th i oulouya for i7 See Section I-C
(If) making economic zocial and political refo ns such as taxc coliecshytion iYprovcmenLs and chan es in land tenure a Royal Comm ision has been appointed to make recomendation on land tenure probleras in the Lower I oulouya
(g) responding to the economic political and social concerns of its people and showing a determination to take volf-help wcasuren See Sections I-D and II-E
IT
-ovi~cd l v r 13 1968
- 4 - LDffIED OFFICIAL USE
21 FAA Inforn ation about multilateral assistance being Iurnished to t e country and whether the loan will encourage recgional development prog-rams The I1D has eztablihcd a Consultative Group for Morocco which rvicws the GOM development program anui prgress See Section II-F-4 for infoaation on othtr donor assistance to Morocco
22 A Extent to which the loan will contribute to the objective of ass ring naximu par icipation in the task of econonic dovelop--ent on the pL-t 0 _he people of the developing countries through the encouragement of cocr-tic private and local govenmental inLitutious o apparent
relationship
23 F _-_Dta_ Infor-ation and corissions whether loan will oncourageeffor s of t1e country to (a) increase tie flow of international trade (b) fostcr private initiative and comptition (c) encourage development and usceo co opratives credit unions and savingss and loan associations (d) disourgo monopolistic practices (c) improvo technical efficiency of industry ariculture and commerce (f) strenSthn free labor unions This project is cxpected to increase technical efficiency oi-agriculture
2_ C-1L lnforzrition and conclusion on how the loan will encourage US privte trade and investment abroad and how it uill encourage private US participation in foreign assistance prograas (incluiing use of private trade channels and the services of US private enterprise) See Section II-
25 VA-+_ Conclusion and supporting information on compliance with tho Co resional policy that engineering and professional servicos of US fir-ms and their affiliates are to bo used in connection with capital project3 to the nixinua extent consistent with the national interest US engineerirn and innsgcment services will be financed tnder this loan
2$ Inforamtion and ccnclusions who+her loan will pormit American rx-l] business to participate equitably in the furnishing of goods and
z orvices by To be satisfied in Loan Agreementfinanced it
27 - t(a App I18 Complianco with restriction of co -zodity procureshy o UsMS except as otherwise determined by the Picsicent and subject to ttu--- rcortir require r-nts Procurement will - liumited to the US for
reiabnrs nts and to ioocco and other free world countries 1-or US-cwne(d rhu disburseacnts
23 -i Comiance with bulk cozodity procurement restriction topriecc no l-ho han the nkarkot price prevailing in tho US at tia of
bull puchas Not applicable
29 FA Cozpliance with requirement that matrin insurance be purchased on commceities if the participating country discri-inates and that insurance be placed in the US To be satisfied in Loan Agreement
30 IA 6(a) Information at to the utilization of excers personal property in lieu of procurement of new items Will be required ai appropriate under terns of Lean Agreement
f
1 77--7 -77-77-777
31 FAA 61](a)(_) information and conclusion on availability of enginoering i financial and other plans nccx sary to carry out tho assittance and of a
reasonably firm cstimate of the cost of the assistanco to the United States
See Section II-D
32-ecessaryFAA t611(a)_(2) legislative action r6quired within recipient country and ibasis Cor reasonable anticipation such action will be completed in time to pormit orderly accompli-hirtnt of purposes of loan See Section I-A
33 n _AA161nJ0] If water or water-relatod land resource construcshy
tion project or program information and conclusion on a benefit-cost comshy
putation See Section II-B
3 4 VAA 611(c) Compliance with requirement that contracts for construction be let on comp-ctitive basis to mamum extent practicable To be satisfied
in Loan Agreement
If a loan for a project of $1 million or more certificatin35 FAA _61l(r) by the principal AID officer in the country as to the capability of the
country (both financirl and human resources) to effectively maintain and
utilize the project taking into account other US-financed projects (Such
certification is to be pproved by the Administrator aL the time the loan
is authorized) In process of being obtained
36 FAsgJ2 _6_h Appropriate steps that have b-en taken to assure that to the miaximum extent possible the country is contributing local currencies to net th-2 cost of contractural and other services and foreign currencies o- icd by tho US are utilized to meet the cost of contractual and other services The GU-M is contributing over $30 million to compleXton of this project Excess US-use dirhams will be used for eligible project costs other than US goods and services
37 FAA p619 Compliance with requirement that assistance to newly independent countries be furnished through multilateral organizations or plans to maxishymum extent appropriate Not deemed appropriate in view of previous AID financing and ccoiitment to the project See Sections I-A and I-D
38 FAA sect620(a) AcnO7a n3]7(b) Compliance with prohibitions
against assistance to Cuba ard any countr (a) which furnishes assistance to Cuba or failed to take appropriate steps by February 14 1964 to prevent ships or aircraft unier its registry from carrying equipment materials or supplies from or to Cuba or (b) which sells furnishes or permits any ships under its registry fr-om carrying items of primary atrategic signifishycance or itcms of economic assistance Morocco is not-known to be in Violation of these sections
39 FAA q620GL_ If assistance to the government of a country existence of determination it is not controlled by the international Communist movement The Secretary of State so determined on October 11 191
40 FAA 620(c) If assistance to the government of a country existonce of Indebtedness to a US citizen for goods or services furnished or ordered whore ouch citizen has exhaustod available legal romodiesor where the debt
i - ow - -- _---- --shy
- --
-6shy
is not denied or ontested by such government or the indebtedness arises under an unconditional guararty of payrrent given by such govornmunt No such indebtedness is known to exist
41 FA _(a2LdL If assisitance for any productive enterprise which will corashypote with US enterprise existence of agreement by the recipient country to prevent export to the US of more than 20 of the enterprises annual production during the life of the loan Not applicable
42 FA4 - 16Q_0_ A If assistance to the government of a country extent to which it (including government agenies or ruhdivisions) has after January 1 1962 taken steps o repudiate or nullify cuatracts or taken any action which has the effect of nationalizing expropriating or otherwise seizingownership or control ofprcpertv of US citizens or entities beneficially owned by them without taking appropriate stops to discha i ge its obligations No such steps cr actions are-known to have been taken by the GOM
43 FAA~L AjPj_10_9 Compliance with assistance toQ0 prohibitions against any Comunst codntry ozocco is not considered to be a cocinrunist country
44 FAA - 620(gJ Corliance with prohibition against use of assistonce to comp satc owners for expropriated or nationalized property To be satisfied in Loan Agreement
45 F AA 8620(h Compliance with regulations and procedures adopted to inshysure against ue of assistance in a manner hich contrary to the best inshyterests of the US promotes or assists the foreign aid projects or activities of the Communist-bloc countries To be satisfied in Loan Agreement
46 FAA 06-O(j)_ Exitence of determiration that the country is engaging in or preparing for aggressive military efforts No such determination has been made
L_62_O Information47 FAA on representation of the country at any intershynational confererce when that representation includes the planning of activishyties involving insurrection or subversion against the US or countries recoiving US assistance No such representition is known to have A occarrect
8 FAA 62JJ Existence of a determination that the country has permitted or failed to prevent destruction of US property by mob action or has failed to take steps to prevent a recurrence and-to pay compensation NO such destruction is known to have tak-n place
49 PAA l620(k) If construction of productive enterprise where eggregate value of assistanc to be furnished by US will exceed $1OO million identification of Gtntutoryauthority Not npplicable
i-xQ2MZZ=
1 shy
U 6 50 _Af( QCinsidoration which has been given to denlying assistance X to thu government of a country which after December 31 1966 has failed to
- institto the investnint guaranty program for the spcific risks of inconshy
vertibility and expropriation or confiscation Satisfied See No 7 above
S51S J lj Compliance with-prohibitions-againstn as~istance to countries which traffic or permittraffickingwith North Vietnam Morocco is not known to be in violation
52 E_-L620(_L If country has seized or imposed any penalty or sanction against vn US fishing vessel on account of its fishing activities in
intcrnationul waters information on the consideiation which has been given to excludirg the country from assistance No such situation is known to exist
53 FAA FA r) UAR restriction Not applicable620(p 9117
54 FAA R620tl) Existence of default undhr any Foreign Assistance Act loan to the country No such default exists
55 F ) C-nsider tion of whether co ntry is devoting unnecessary percentage of buKet for military purposes or use of foreign exchange for milita-y equipment
56 FAA 62o(t) Proibition on aid if country has severed diplomatic relations with US unless agreements have been negotiated after resumpshytion Diplomatic r(lations have not been severed
57 FAA 9620(u) Statur of the country on delinquent UN obligations Morocco is not known to be dlinquent on its UN~obligation
58 FAA R636(i) Prohibition on financing non-US manufactured motor vehicles Will be satisfied in Loan Agreement and Implementation Letter
59 App 102 Compliance with requirement that payments in excess of $25000 for architectural and en Jneering services on any one project be reported to Congress Such reports will be made
60 App R1O4 Compliance with bar against funds to pay pensions etc for military personnel Such payments will not be eligible for financing under th Loan Agreement
61 App 9106 If country attr ipts to create distinctions because of their race or religion among Americans in granting personal or commercial access or other rights otherwise avaVIfable to US citizens generally application which will be made in negotit ttons of contrary principles as expressed by Congress Morocco is not ku IDhave made any such attempts
iInD OFFIIt t USE
0k
OFFICIAL USE 62 AIwp Rii Compliance with existing requfremets for security clearance
of personnel Will be satisfied in Loan Agreement and Implementation Letter
63 App R1l2 Compliance with requirement for approval of cortractors and contract terms for capital projects Will be satisfied in Loan Agreement
clJ164 Aup Cmpliance with bar nRainst use of funds to Tay assessments etc of US meiber Such payments will not be eligible for financing under the Loan Agreemunt
6 Anp P115 Ccmpliance with regulations on employment of US and local personnel for funds obligated after April 30 1961 (Regulation 7) See Section III-C
66 Aim Vietnam iron and steel restrictions Not applicable
67 p l9 If a country other than Greece Turkey Iran Israel Republicof China Phillipines or Korea reduction in assistance by amounts spent for the purchase of sophisticated military equipment
68 Anp fi4O1 Compliance with bar against use of funds for publicity or proshypagjanda purposes within US not heretofore authorized by Congress Such use of funds will not be eligible for financing under the Loan Agreement
Morocco is a traditional Islamic monarchy with a constitution The conshystitution was implemented followaing a popular referendum in 1962 National regional and professional elective bodies including a parliament were established by universal suffrage under the constitution in 1963 The parliament was suspended in 1961 in a State of Exception because of its inability to agree on measures with adequate urgency to meet the prevailingecononde imperatives In July 1967 the King appointed a Prime Minister to direct a Cabinet of appointed technicians
The constitutional framework nevertheless remains intact in Morocco and nationwide popular elections for some of the professional chambers were held in August and September 1966 The press is relatively free in Morocco and the right of diLsent prevails provided that such dissent does not violate the prohibition against political attacks on the instishytution of the monarchy or the person of the monarch
LI Under the revised US AID Policy for Africa agreed to in November 1966 Morocco is designated a development emphasis country entitled to receive continuing support on a country basis as part of a multilaterally coorshydinated countrj program Morocco was subsequently included in Presidential Determination 67-14 (January 5 1967) I
LIM=TE OFFICIAL USE~i
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DEPQbi) STATE AGENCY FOR INERNATIONAL DEVELOPMENT
WASHINGTON DC 052
CAPITAL ASSISTANCE LOA11 AUTHORIZATION
Provided from Develoroent Loan Funds Morocco Second Lower Moulouya Irrigation Loan
Pursuant to the authority vested in the Assistant Administrator for Africa of the Agency for International Development
AI)by the Foreign Assistance Act of 1961 as amended theIAct) and the delegations of authority issued thereunder I
have received and t-en into consideration a certification from the Director of USAIDMorocco as to the financial and human resources capability of Morocco to effectively utilize the Lower Moulouya Irrigation Project taking into account among other things the
maintenance and utilization of projects in Morocco previously financed or assisted by the United States and I hereby authorize the establishshyment of a loan pursuant to Part I Chapter 2 Title I the Development Loan Fund to the Government of the Kingdom of Morocco (Borrower) of not to exceed five million dollars ($5000000) to assist in financing the fore] gn exchange and local currency costs of goods and services for the third phase of the Lower Moulouya Irrigation Project subject to the foLlowing terms and conditions
1 Interest Rate and Terms of Repayment Borrower shall repay the loan to AID in forty (40) years including a grace period not to exceed ten (10) years Borrower shall pay interest on the unrepaid principal and any interest accrued thereon at the rate of (a) two percent (2) per annum during the grace period and (b) two and
one-half percent (2-12) per annum thereafter
2 Currency of Pepayment Repayment of the loan and paymenu of interest shall be made in United States dollars
- t- n t - - - shy
3 Other Terms and Conditions amp(a)Goods and Services financed under the loan
shall have their source and origin in
(i) the United States if disbursements therefor are made in United States dollars or
(ii) any country in the free world including Morocco if disbursements therefor are made in Moroccan currency
(b) AID Regulation 7 shall not apply to construction -work financed under the loan because as detailed in Section IIIC of Capital Assistance Paper No P 667 it is important to the national interest of the United States that the direct costs of construction work performed by third-country nationals be financed out of funds made available by the Act
(a) Such other terms and conditions as AID may deem advisable
Assistant Administrator for Africa
Date
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elevated area requirin iat-r to be puiiped to the irrigated land with both highr capital costs (about 1 million) and higher oreration and maintenance costs (150 Dirham per hcttare via-a-vir 100 Dihams perhevtare for the grnvity irrifrted ares) The ony work presenl-ly cotiishypleted in the Triff Hih Ser-ic Area is the preliminary engineering stirUes Cimi-ir to th Tr Pa r thu TrIffa ]Igh Service areawill reiir an ex I uvnt ricd bfore agricultural proshyduction cn be initlat-2i
The above considerations reiult in the following revised ranking of priorities
Project Area 1FY (M Priority
Triffa Main 21 I Sector 27 8 I Sector 28 9 I Bou Areg Central 6 II Bou Areg Rerainders 6 II Zebra Collective 5 II Zebra Remtd nders 5 II Triffa Ent 6 III Triffa High ervice 5 III
SRI 11ed a ccst contingency f7actor of 25 and a cumulative costescLlatior factor of 3I per annum These factors appear excessivelyhigh in th( light of (1) project experience to date and (2) the fact that from his roint the technical rirks involved arre of a much lower orl- r f 1h thnse inhtrent in the major works Just comshy1 I intion nrd contingency factor of 15 has there-
S chtiMnte- Itlizcd in this rarer The ii n-ttr costs the to ) ject (in n]ace of factors
i by )I nrt 11 thIrhe nf th nJter atve I[cwver rrtnrecr-y factor euld Increase the IPE ] hi ra]y th- IIRF fcr the TrIfa Sector 27 ansnunirg a
oct crortlr7crncy A can be seen as the conAngency I thf cc curve rrv to the right and inter ects the
ur h h 4r- rnr rate of return)
C Finreirifg inr
Cot o the prJect wor fmcentntgenent nnd engin-erinm advisoryrvices for the proued t rd tsge of the Mmlouya Project are
ctirt a Crollows
nF3r AVAILArBILE COPY
Best Av DlableD
7 17 shy
(In Millions Of Dollars)
Righi Pank
Trffa Main 34 poundSt (r 27 08 S ctor 6 0Q
51 Left ank
7bra Collective 12bra Remainde r- 54 Tou Areg Central 74 Lou Areg Remaluders 68 heft Bank Dcad Head Tunnel 30
238 Services
Management 20 Advisory Engineerin 05
25 SUB TOTAL 37
Escalation amp Contingencies 15 47
TOTAL 361
It is proposed that the AID Development Loan for this stage of the Moulouya ProJet be limited to $5 million an amount which would be sufficient te reet the cost of any US goods and services required for the works to oe undertaken Thus the loan would finance the dollar costs of manrement and engineering advisory services to be provided by US firms erstimated at $25 million The balance would be available to meet any ther US cofts that might arise for constructicn cuipment and nateria]
The balnnmc of funds required would be provided by the GOM from its own budgetary resources including as appropriate agreed allocations of the counfryj-uie dirham proceeds of US surplus agricultural programs in Morocco
To a l-ge extent construction works In the Mou]ouya (other than the Bou Ar- Tunnel and Mechra Klila Dam) have taken place under a largenumber of roll contracts with Moroccan firms It is anticipated that this will ontinue to be the pratice in the forthcoming development stage Th iit is evident that the great bulk of project cests in this next stage will be local costs
-E5 -
In the event that not all of av l able fuInd- under the loan are required for TKI eo It i ouied that any remaininrn balance be utilized for the payment lo -ovalccztn f the project This would be aceoomplirhe by utili7irn th- h r vroceeds of the loan to purehare US-use dirhsmn (frcr th U Oi-irrirg Officer) which would be utili ed to rrimbure th fc u a t local - nditurrs
Thi arranrit 3ir ila ) fstV utilitd In the - of the D-e l-INAieret Loar tJr U Atrrert SinceYr usii Conv rf i cn therc loans are rcpiviible in dollars nd rince Morocco in a n-ar excess local currency couintry the fert ) f e transaction in tc provide a means for obtaining ccnvrrrs cn a-cr th life of the loan of otherwire inconvertibie U5 holding irhrs hich are in exces of its localrequireme t
In 1967 over 15 million dirhams (abceut $3 million) of PL 480
Section l04(g) loan fun cre in msgreement with the CON allocated for the financing of various contractr reloting to projects in the Moulouya It in anticipited tht ndditional allocations will be made out of the local currency proceed generated from current and antishycipated US 7urplu agricultural rmodity programs in Morocco
It has been proposed that the dirham equivalent of $45 million of the proceeds of the October F67 rurplus agricultural commodity Sales Agreement be allocated for a Section Cb(g) loan for the Mulouya In nadition it is estimated that a $]35 million (in$ioz1ble dirhshyequlviJent) woull be available from 7uprl]eental surplun agrIcultura con -ity rales programs under Titlo I an-d Title IV in calendar 196F for allocation for loans for development projects in Morocco These two amounts combined would provide about 6 of the G014 resources reshyquired for the project over the next five years On thic basis there would appear to be rcasonble propect tht the GO should be in a rorition to provide cver the S e year rriod of the project the addishytional resources renuired for itF ccmpletion
Tt I contemplatd that na additlonal US dollar financing of the Moulouya byon-l the $ iilon rorosed herein will be provided for tl cplei n ef h M _11-nuya rince the bringing under irrigation of th- 11O0Y ies include] in the propore] project will substantlally cornIete the works criginally conwtemplated hen h DLF loan was authorshyized in 106 The remainler zf the workr h(- be within the capabilit3 of the GOM to complete with It- o-n resourcec
MT M T M
-16shy
) Technical Anily ir
The Moulouya Rivr which is cre of tne largest in Morocco originatesin the idll Atans
Moulouya and which oztend scuthward
Kediterrancn l re
t rre
Pr
ard n
flows rrpr
orre 25) mriles northeast thr Agorinn border
to the
In- agricitui 1 in li j i nt( iljr r Th- rst rind most
t 2 1ir i t i h- i n th rwrht born of thshy-- e 31nmiler frem the Mediterranean
Lea To tho wet cf the Tiffa and nn th- left bank( of the Moulouya isthe Zebra nlain 14wiuntain rv-arate the Zebra frcm th -ea and fron theBou Art-r i-ll]zain which - ctI nrrthwe(st of the Zebra The Bou Areg a coital phtain sclte 19 mils lorg and h miles wide separated fr-nthe n-a by a Ihow sa2t water lagoon Southwest of the Zebra is theGireb plain which hun land ruitable for irrigation in its routheasternportion The Gareb i at a higher elevation than the three other plainsard if ultimately irr-gatcd vould require pumping fro the lower level Zebra conv(yance system
Water from the Noulouya River is stored brhind the Mechra Klila Dam whichwas coniletd with fjiancri rc AID loan (3-A-2 (DLF Lcan l6)Water ir rclca ed downstr(a (1bcut c) miles) to the Mechra Homadi reFrshyvoir and d]iversion dcim in1h-r divert-d to th right oad left bankcunals About 75 kilometer (1 miles) of the Triffu (right bank) maingravity ciral hay ben copletd und consderable cr) has been carri-dout in the Tri on) distr Iution and drainage netw rks land levelngend other farm iwnrovwments About 37 kilometers (22 wiles) of the Zebra(left bank) main gravi-ty canal and the tunnel 6 miles (101()7 JIrenrTrcters) betxeen the Zebra area end the Bou Areg area have been comrneted
The GOM illrrfo m certqin -rk nr-Aded fcr develormnt of the gravityir~zgata yt-- for n 71-) acres over the next five yarr Thiscffort vi2 be eonern rait-r urcr the develo-ment cf areas thot providethe great-rt ecnnomic returrs nnd the developnent of a cadre of Iorocearperornel adequ tly tran-yi in the an2gerent of the project SeeAnnex C for further Irojcl details
e- enmL Ev1ation
Mt Infratrueturr The --trnal highway co-munication network i t arid rfi Isirm nf re- i n-ote siler in-1 shy
uzeather raved rc
____________________TAM
- t 7shy
Other communlca 1 i i t ih Lh arr-- inlude the nrninlineof the Oujda-Fe--C- t h~rh l e0tnnd to AlgeriaSpanish enclove rt the 1 fir idto cmmercial airport at Oujda andNador with regular national onI int rnational ervice5s
Th verirtr 1 u ~Ath r nr r t crocd by 60 kvJ i i i u rrd t 5( kr It na ortr kk f~ditcrl rower1(Qp x I -y yrar) -o n d hr rritIronr
at the Mechra-Yplusmnilj l inm fnd the Bou Areff contral poter Statin The townare connected to ranrh cther and th2 r-rt of Mcrocco by telerhone andtelegraph 1 ner
b Sol Soil rvey 7rd land ]a-ifctons have been completed i-nthe Mcloulva rer eter oanntrantbi- with French firmr u-ing Frenchmethods The Trifa -1n wr initialy rraped at a cealeof 150000with certain area ub entiy rer-aLd at 15000 110000 or 120000dependin I nn the cor1cjeity of YJ rattcrns The Zebra plain has beenmapped at a reale cf 20O00 nod th- Bou Areg plain at a scale Df 150OO On thp baf Yr nf ther urvy th cla sified the soilsGC hain terms of r-uitnbility for irrigation as follows
Land Ciaifcation (Aere)
CasrI amp IT Class III Clans IV Totas Triffa Plain 17000 29[00 22725 99625Zebra Plain CbO 1275 4050 211425Bou Areg Plain 75)00 l6qo 3 0 3067)Gareb Plain 13 05 10 70 0
Inclurez 1750 acres for lfigh Service Area
The findings thi indicate that ( i) arriratry 5of the area in thefour rlain- i suited to irrigation (Clare I anl II) (ii) more than3 ir suitabr bt with one Or mcre imrtat~ons Irro=ed by underrablefeatur-s such an to wrafhy oil characteristJcn trnine- r restrltedbull rio (CIar TIV) and (iij) ls than 2 of th- area in only margina)lysuited for irrinticn(Class TV) In ther7e lattrr ardrn only rmi-intrnsive orop rotations blUponsblhe
The oi nicn f the Cn-lting Envneer (1ydrctechrJ) th respect to) therd carrffjn n that hfle 3 Bureau for P ltr0tion -tandards werirt ernoy-d te rlasnificatinn ir aceurat- and n rrti with3and rlaced in r d rLrnble categories more
uere thnn right ha bern the caseUS tandardr folIced The clasifatinn ha 0a been reviewed andfound to be atifactory by the USPA tayr Hoever r areas of complcxroil Ttternr hch to date have only been ru-d to a oale of 150))rome reraTpin tray be necesary as a banis fcr rrerarnZ
- g~T PRAvVLAFJLE EOPv
final designs of irrigation and drztinne- rystems parcellization into farms and planning of land preparation measures In addition considering the high average salt ccntent of ater frcm he c ilouya hiver a rorm of systematic leachin- will be reqirer- to f ree-rt aculation of salts in the soilsparticularly in h ebra Crt in will nlso1e plain ureas require nitrogenphosphorus crd possibly other nutrient to obtain satisfactory yields
c Water On the basis of studies by the GCM which have been reviewed bythe Consultirr Fnr ncri and the U au of 1ccoi-ation it is thecorclusion of A tt (i) the q lity of water in the Lower Houlouya
is below averpge bvt crp rble to thtof certain rivers in the US whichisotnteLoh~uoybrve successfully been usc for irrif ton for periods cxeccdin 100 yearsOj5) there is clearly a sufficient a )unt of i ter to irrif-ate the 128010
bullcrer to be served in the [rlcentIty ar n3 Addi-tional s-tudioser (c requilrecj dcter-Inc if adeqiuate water is a- ilable for irrigationof 376QGO vc rc
The only signifcant urce of vp y fOr irrigation water in the perimeteris the oulouya Vi~cr io jc n1 is 1re ntly being irrigated from wells most Iround water i - - 1 Alouya contains dissoived salts which i xr Lrn - hvriny reak flowto iJOx PIn iuting [cricd of c n ccntraticn is 750 ppm On Thi- basis of USDA Salinity Lot) atory criteria fte v ater is class 03-SI (hl-h salinity-low a-alinity) Vile water is thus of mediocre qualityit is ccmrarable to that of river successfully used for irrigation in the US (eg the Lower Colorado Rier) and poses no serious problems to irrir-ation in the Moulouya perir( cfr provided the W4 adheres to recorrmended programs for meeting leaching reoairements
With ref-pect to the 128000 acr project the demand for water reasured at the Mechra Hoadi diversion dair is estizated at about 575 million cubic meters per year as follows
remand for Wter
Peak Flow Annual Total (August) (m 3 million)
Agrieulture (176000 acres) 337 m3s 806 Municipal amp Industrial Consumption 8m3 23
Total 4 uy62123000 acres to be irrigateA by Gravity 255 m3s 575
(The e dpeak requirzents of 345 s compares with a 35 m3 s design
capacity of the main canal at the diversion dam including 18 m3 s for the Right Bank and 17 m3 s fcc the Left Bank)
I
- 19 -
This estimate is based on probaole rainfall cropping patterns plant requirements evapo-transpiration and other expected losses of irrigashytion water The estimate is believed by the Consulting Engineer to be reasonable but subject to refinement on the basis of tests to be carried out on a continuing basis
The annual average availability of wuter from the Moulouya river is estirated at 1100 million mn or about double the estimated requirement for the gravity areas
Estimated Availability of Water
Twelve Year Annual Average for Moulouya River 3 m3 second 1100 million m3year
Maximum inflow Observed 8000 m3second(1963) 3h00 million m3 (1962-63)
Miniwum inflow Observed 1 msecond (1951) 532 million m3 (1956-57)
On this basis it appears that there should be ample water available for irrigation of the gravity area as the water availability obtained from twelve years observation exceeds the requirements in all but the 1956-57 season shown above Prior to the development of land with purped service areas (the Gare-b and the Triffa ig h Service) a review and analysis of the river hydrology should be unidertaken to assess the availability and regulashytion of the river flows
d Studies Entincering and Construction The overall irrigation scheme outlined by the 1uM defirs the ajor features and th( magnitude of the work to be accomplished to attain the ultimate goal
This scheme is being carried olut in phases over a long time period The present phase encorpasses the development planned within the priorities indicated by the Stanford Research Institute (SRI) study for the gravity irrigation system
The studies for land classifliration have been completed for the gravity irrigation system in the Triffa Bou Areg and Zebra plains by French firms and were considered reasonably accurate by the Consulting Engineer Land consolidation and parcellinrg has been completed by 0MET in the Bou Areg Central area the Zebra Collctive and Zebra Remainder sectors 7 thru 10 Land consolidation and pareeLlni ar( needed for Triffa sectors 27 and 28 Bou Areg Rematnder arid Z(bra Rerrirder sectors I and 2 The engineering designs for the Triffa main sector 27 and 28 and the Zebra Collective have been or are being completed by the G0M forces The engineering design for the Cefntral Bou Areg and Zebra Remainder sectors 7 tnru 10 has been or in being connpeted uy Hydrotechnic Engineering design will be required or the 1ou Are remainder sectors D-3 thru D-7 and Q4 thru G-6 and Zebra Rer ainler sectors 1 and 2 The engineering designfor the Dead Ilead Thnnel has been undertaken by SCET who have preshypared anid issued an Avant Projet for bid invitations for construction
14 M)j6Fj Cshy
-20-
This firm will also undcrtnk- uu-orviston of construction The engineer ing not yet performed can be aea ished by GOM forces andor private engineering firms
Construction of the extension to the rrain irrigation and drainage canals Jand preparation rector cinl ani drninaive ditches will be performed unllr cntact t) 1 cc rt~r~iet m)t hi in the ene of the
r-abilit tion of the L2tL Pz- Dd iarl Trnc t
e Cronning Patterns The existing erning pattern in the Moulcuya including botnirrigatcd and dry farm ingincludes grain forage citrus vegetables olives grapes and 6 small amount of leciduous fruits and nuts Of the roughly 2140Cy) acres of agricultural production in the Moulouya about 177000 acres are in field crops 24)) in vegetables 16Y)O in citrus 15000 in grrrcs 540Y) in forage crops 1700 in olives and 15)0 in other fruits and nuts
Taking into consideration rast and present trends in plantings as well as agronomic and price and marketing factrrs the following projection of cropping patterns has been developed for the Lower Moulouya
PROJECTED POPPTG PATTFRNS T1 HE LOWER MOULOUYA
(In per cent of total irrigated area)
Left Bank and Triffa High Serice
Triffa Sector - Sectcr rriffa Class Class Class
crop Main 27 28 East I amp II III IV
Citrus 40 60 10 10 10 Vegetables 15 10 15 1) 20 10
Crtton 15 20 10
Fcragpr 10 20 25 30 4o 30
heat 10 6 20 25 20 35 4o
Grip 25 24 35 15 Dy beans 5 10
Sunflower 10 olives 5 0
100 10) 100 100) 1i 1052i 100
a Incltdes double cropping
- - r- euro --- 7
~7~TF~Wr~e~ALUSE
-21 -
The projected cropping pattern for the Bou Areg plain includes cottonLJrirdg the frrt Five yearnejtinted 1r of the Class I)fand
the project jitwould be grown on nnII landn Tht renresert only 960etrravres) ectz ri)cr)e area The cotton acr~a e ry increasep 2ceafter live years if ritisfactory drainage conditionshyrre achieved in the Bou Arev
cotton grown i 1xonp tarx- Trdltionally Morocco export its-Jr- cron an irr IJ hort cble to rmeett Cotton the reuirrents
r the oroccan 2pinningr mills The croppni-attrn of the Triffa East (about 180n acres) Js projectedt Tnrlude 15- (about 27 acres) in cotton It is likely that becausef ihe limited extnt of Class I and II lands in the Triffa Eas cotton not increase beyond that percentage
1t i evident that the amount of irrigated cotton that is likely to bein ther-n Moulouya is minimal even assuming that local drainage condi-T nare i asuitable
f Technical Sundnv--s The AID Project Engineer hps reviewed ii) thedat and ajor construction performed to date onronct and finds the technical requirements this long-ranRe phasedsufficiently defineoto ccntinue the project on an orderly schedule The estimates of cost of prsirct facilities have been determin-d by SRI from average va)ues oftrit cots obtained frorr reviously ntiarded contracts and from etniled( -s-nand analysis prepared by the iHydrotechnic Enginering fir oft-o tyieal sectors located in the Bou Areg area The costs for the arc ent contract have bcen estimated by the USAID It is consideredthat the depree of engijeering planning undertaken and the deterrrinitonr to the US Goverrment are adequate to meet the applicable requireshySt- n Section 611 of thie Foreign Asistance Act
7717gt
1 --shy
-22-
E Financial Status of Borrower
1 The Moroccan Economy
Grrwth of MorocLcts GDP in real term averaged about 24 per yearin 1(4 and lr li Per capita DP In 1C 5 wan anproximotely t162 A (er Irr-ht in (6 resu]trd n a drcrcne of slightly nver in GDP which tlh vpulatior grc~vth avrring 3P4 per year rnrsJted in a decline of -r ornita GDP In 16 ii brut $154 A recnd droughtcccijrred In C67 but i not expeetid to have the severe effects of the 165 drought Crop forecasts for the first nine months of 1967 indicate a 4 increase in real GDP above the 1966 level This is also the economic grcrdth rate estimated by the IBRD for the pezxA 1965-70
Moroccos economy is heavily dependent upon the agricultural sector thich has averaged about 15 growth per annum However growth of the mal modern segment of Moroccos agricultural sector has inshy-reased at the rate of about 7 per annum
In 96 the International Banik for Reconstruction and Development (IBRD) preented a number of recommendationr denigrned to increase Moroccos economic growth rate On the bacis of these recomfndations the G004 proceeded with planning the necesrary program to increase investment levels fr- the i 63-65 level of 11 of GNP to 1r of GNP and stimulate the rate of economic growth from 2 to an average of over )4 annually for the five years 66-70 In addJtion the GC4 has taken measures to curb the population grovth rat while placing increased emphasis on raising production of both dryland (wheat) and Irrigated agriculture
2 Investment and Savinms
The level of total gross investment has remaind at aboit 11 of GNP for vera year althugh the percentnoe declined slightly in 165 Under the GO Three Yea5 Plan 1965-67 the gross investment t-3rget woz ret at DH 3 billion- Actual invev-tment expenditures for the three yearpeirod reached about DH 46 billion of which the Governshyment ezxenditure amounted to DH 1 billion a against DH 21 billion budgeted Thin may have beeo partly de to the GOMs deliberate ausshyterity pollcy under the hIF rtbJli7tion prci1rnr but more probably it van duxe to the shortage of trained cadres to -lan and execute projects
In the private cectcr conziderable inounts of ravings may be hoarded due to lack of project attractive t- inventors The lvl of private investment has been runnihg at about 51 of GNP thrrugh 195 The 0014 4 incentive to private instors hnr cut profit taxes from 4320 to V and announced a tpn year guarantc-e against tax increases
]L- $ = DH 506
777=-77- NQ
r y 7k1- T e - W lk In
j - 1) 7k- - _
- 23-
Loan are avaiiable to )rivlite irve-tcrn freo th 3JfIDiN s rctr special funda to prcmote touricm devc firvcnt
Under the 1r86-1972 plan abut to br irtntt level are to be accelerated considerably reaching A of GNP liv ]970 Mor(- Irlyir haviiy on foreign 1 to aciuw cc higher lve1
3 Central Government FinancP
The Moroccan money supply which had Incrrased ify 76 per cent in 2965 remained virtually unchanged in 966 The first half of 1967 witnessed a 5 Ter cent increase in the money supply Te major part of thi increase as concentrated in June and July uhen the supply reached V14 0j lion Currency In circulation expanded rapidly in June and July
nnl factrrn being reinforced by commodity hcnrding related to the 1ide~l Et crisis Demand deposits did not show their normal decline nthe first half of 1967 Deposits with commercial banks declined nlightly while deposits with the Treabury increased as public and semi public agencies contisued their transfers from the banking system to the Treasury The increase in money supply in the first half of (7 ran I raced to tho nzon1 sonal increase in net foreign assets not c y the custcirry rlelir In claims on the private sector Clsirl (n the erivate sector declined slighty until May 1967 but Increased hr-gb June and Jily due primarily to additional financing of textile stocks ClbiJ ante Government rose by 10 per cent in the first half of 967 the in central brnk claims on the GovernmentI being rmainly offset by larger deposits with the Treasury
Ordinary budgetary revenues which incrurted by 5 rcr ent in 1566 tre cxrcted t-) increase by 7 per cent in 1( to DII 21 billion DeampDite a derea3e in agricultural tax reccipt r- fror diret taxes rose by 10 ppr cent in 1966 and a 2 increas estinated for S67 due to tric or controls on income declarationr d an accelerashytion of tax cller ns Owing mainly to a relaxation of the import
program in late 1 5 and a concomitant increase in tariffs on certain ccnonter goods customs reneipts increased by 21 per cent in 1966 Although budgetary estimates call for s decline of 3 per cent in customs receipts in 1S67 it is likely that actual receipts will be considerably larger in view of the import liberalizatidn measures intro)duced subseshyquent to the estimates Receipts from indirect taxes state monopolies and other serces are expected to be 11 iv- cent Ipher in 1967 owing to increased profit on -ugar sabr-i and L r(m the newly created Office do Ccrmercalisaticn - d-tation (OCE)
Recurrent ordinary buiL e(enditures increased by 34 per cent in 1966 ar-i are expected to increase by an additional 7 per cent in 1567 reachin- D1122 billion Although wage and salary scales in the public
Banque Nationale pour le Developement Economique
TT~~- - I777
2 Cf
sector have1bec z h t - rrvirI urli 11i g 14-6 -nd PO becnue rX toi Ijt e f (]r o n 4
ill tile ic urrnnye andr)not i on dnd Publi ht rentrn -yr-otn lno IncreasedOthrr t ill- t il r ne by ) vr cert in J6(
i ninlyrt -br h Inc-l
( Ihe ( t r- rl t ip t t C itur f T)h 21h iilli n
is (( ItI t lt r c0 a- r n n o I- c t b It ihstnl id vv ih n t r-t have hn(er - en 1t2
(IM ii ture( T f fu traordJ nary budrzct exshypend ituren a r y -t c ~ i vi -iscz Portal Checking sy-stcsul)rrcing t (I ltIt Ct -- ind creirn shy
nnet The f r er tnc I hha ccrc ed from a htih of DH 5-7 millIJn in _ 5 millIn r C46 F cr ats foi ]7 place Cro n w I 1(DI)J79 ill ni DDn etlc fi nancing has alo u 1) 5 p (- I3A27 iIliun to an entirnted DH 1142 million
1 14V ) I nv 1 ri n nI(c1 franc n is 77-ected to be ol t y ncrewed bcrrowing fr-ir t he Cestra 9ank which hud been held at mcdert vols iln 165 nnd 1a66 Under the 1TFtaiby agreement of October 16 the qob) agreed to taBe a3] rocrrnary meurer to maintain as table curoonry rPnt inl th nr1d-elrto th b a ent of the ePrncriynnd a vnbl- hn1incc X nvroent P rt artt to t rt fien of tho Ccntin- Honk rstz (erct are nct t r itr June 30 Y-ke 7 lov l b th n Diif ) mill] (n tlcnber -c P thai I o illin usit I ])ecthr 31I62 (GC bc w t
C B1rtrp - vt DH 12 iri 1i nor ]S67 or DH 6S ij lionEan tisated (r fo than the aproved crd it expanwim
Thitrd ordivary nil extraordnnry buThTt deficit of DII 7-19 millI n fcrecat Fr 1 67 in exnected to be fnanced by not freign
tan reof DII )75 mi~l in nt recurity 12ue 1 T111I vlion a - nt ry tiat Po n Che )ir d-nC i 73 r5 Pn
riI is u h i a vti v mrr nrr-e jssIof fvr is id a erital The vnfsa revcred in 1d6 when lnrger r nyrentn eEecially on food itcmo an n -lewdoun in
igo ra a deficit of $1 millcn ProjectiOnz-vt rvultvd in ror 17 r~ieat inrrerned importsonly partially ccnrennate by addshytsa t frnreirn r ntil rrceiprs ard mprrvement in the nervices account will reult -n et of aprroximately $)20million As rhoim in the following tabl -r tion for l33 and 169 how overall deficits of
14 and m] ivi_y$i It
rqVV t1 4~
C)rgt
---
1 -)I+-IRF1
1ROCCO - rTANC OF PAYME 1qrt - 169]_ 5
6rfi0 1 1C(8lr67 i r(o
)xrurt 2t L( I L-5
Trade Bnlance 11 15 - 75 shy - 75
rviee- ret - 7 - 5) -35 -23 -2
J]-i of Good rnd Service- - 3 - 65 -II - ti - (5
Trn-Ifr Pr ynts (nt) P 21 33 37 33
on-cntnry Carital (not) 92 64 6 6 5
Err-rs nnd Ov rrion- (not) - 23 -2 1 3
eranl Bannic __ - _3 -_ 3 - 1i4
Atrh thert ircjected reficitn are of the nnme order of 1 nishytude a7 thcr incurred in the period i66 the Situatlcn i findarentallydifferent both in rerprct to the source of the deficits and in rer-ect to the meat0Y gtr m etin7tecr In the f rrer caive M5recco uffered
_frcrr a very h-vy cutfc of Drivtes cuitv fo-ivr with a shar) decline In forein nt exerditures in Morocco In the iatter case th projected deficits r- rcre a functicn or accelerated crcwth risingdebt ervieiiw tri tho abnrcn of forv eeble additiens foreign reshybull ourcs nere7ory 4( r2Vm rAf finmncting To nect the def-cits during the reriol 161 61h MWreco ob1id to drw down rorcin exchange reserves of over $]c milicn The snrti tpv of financing is no longerpozslble ince no or-res- ruch reserve- Even ifMorocco yr
mn nina r rve_ ore (]rrfii on to th r-ixirun etnt enribe nnd the [iI tnfldy i- un M-r-r e i32 till relA re nt rnt 15 millicnj1itionn ftr ign as- e n 1 6 beyond hat r recnently fcreeeshyable with ver nri- nry Officilr in In i6 reserves are cotImnted Pt 72million c hih crn V 3 million i caly required for currency coy r
Foreign InJebtrdne n of th GOM Mnroccos external rtnte ard rutlie enterprie dett amounted to
$r) millivn in lr6 Debt vervcirig rpynents for (66 trtaled about
$5) rillion g-eement approved in October 3(67
I- -- Ishy
37 millin or arprcxitrrntoy (j Iroccor totnl eXoort earning of h28 millicn GCnerally nxt rrO dbt FervicJng renuiremennt of leas
than r of totna -ort nnrlt In onrldered to I r tirfactoryrntio D-bt r rnJrcLct n Ir the reriod 1-(y 3on Trerent external debt including thnt wrtl(n irreently undibur-ed are hown n th fr lv tahlr
)] L v yr t n
Eternn Vtnte anc ] bntcrnrie Debt
M131 o)nr
Y aI Net Outrtnnling Debt Debt Service
(6 it 479r5 $367 J-67 452 3)6
Z616 44469 2 0 2C-
365I3 37 389
33 383 33 6 371
5-h 31 n 352 275 34121
]176 2661 32It 1977 21133 311 177 22)6 307 19 i0l74 256
1733 255
rgtternal debt rharre n rerent debt nnr rhon above do not increase ubtanti-lly over t rt 1)year- reaching a maximum of h44 millior
in J6 and decrpt- n cr - tently threoafter At the are time exportearninr r _rc extett nc-are Aring that Morocco does not inshycreswre it etrnn2 cbt t irate ubrtantially nb-vc ihat has been the core th adfiticrn dbt e roquirrentn reulting from the propo t Icon o 5 ijilion co r 7crncepr-ional term hould not have a i-nifiant affect n 1r o - ab lty to neet itv g rc-atedebt ericn rcnrib2t~e- the pros ectr of reprment of thin loan ore coniderci rearcnb)
U I -
F ot h-v C IuIJI rmt I shy
1 V amp~ rVml KI
PUC- -jrVi Jt t 1 11 nflrcj urlc 1- th )qn --P I uti u rhnrrl -1r- thr U- Tr- ry- R- -nymc nt
c2Il f n 6 1 bf r I- till 11 nfl r- n-r i n of O r--niC(Io~hi U 1 1 rr to
Tn vil ) f rvc hi tvlrll 1 (In- - n- u--n E r me rrinshycgtay F rntwir w ourc o -o- rvI ortf-V3 1 rncing of
Uf f -r rrrir- ur3r 4~ v -rin Iltrt nt ndd shyt -n t ) in- lint r b t l r -n rort- o-orco trorl-- V -P
r i 1rnd h L-torie Furcl-trin firr- thrjt US r r~ crvirrf- u~d be~
T L I1 c vt r- -ly ] -ubt fu 1 n vi pw -I -ror-co Ir of
ut1JpcO In thi rjert f it -- r- 21 npnred by d1-nr- cothcr t~han the US
2 ]P-t ofI Prr l1 on Prw- Fntrrr
Phij rrcjJ-t -11 n-t h~ -in nrwerq Prrt n rr- tc ntrshyr~A~r fi-mc 1bho und for --roern p o n
3_~~PrCT--rty
rr-vIi-n 1 h -d r the loan ragreement for Icntifitcation ef any r mIjrpt n ctri b- rt througn ut 1zatn (f xccr- prorerty
If rv c u~eAID n-mrcf u urr thi )cn - I~ut~ em avoi3ablo r rovvrirrnt -rrperty rather than nce iteni
4 Otli-r Fr- Wo--] n-Fnlc4rm
Dr mi tW- o] 14rocco- i~ajr ovr-ec -f exte rnaX
rrtan~- hrtvfb - I r ~ ant fl Fr n fole by Kv-it
Sgio F rneflit r b-en 1lmrntrd to tcfohnjip n5tnnen bi eoni~in I th u y f Fr--h tprhntcian tcacrr ind cther
~ti~r t~ ec-tnmIyrt-n Friinch Aid to Mcreco In 1065c~oc~ (P-art f-r txychnirril aItn -- j se of tl5 w1nfor bu~dget rurport f ir in rt t- $1 1ri1 icin in ennita -rojectM- n vx- rrcd
1Vw1tvnn tioI t-) Frenh rurtnnd +16 r11ion tie-I to -onyiint to orrrcr Frrmh ccilcn~For _-rrc-ratod land and rquirrmcnt
West GTrrnmnny liar agrcrcd to nrovIe ccme j27 mM22~cn 1n catital arirtanre and cromrndity lnoi7 t n OfIcon( q92 thi o totril$223 miJ lien ha actuary b-Pn cr-Itt--d under Inn ngrepment This
And a lk5 million commodity loan both) signed in 1965 All Wet Gerzaan
Ufla
-28shy
capital asnistance I vuectI to be tied to German exports Germanyhas in addition 1uvvded r tteysubbtantial technical assistance f
The IBRP hah rade four 1nns to Morocco since 1962 totaling$6) million Ofthin totnl a [175 million loan in 1965 wos fordevelopient of the gidi lit-r irrigation perimeter Other assistance by internntIcnal Iending arncie include an $11 million credit byIDA in 1C65 for rcendary diicction projects and an IFC ln and inshyvestrent of $1 1 ri jnic alo in
F tit i by [c - dncr tr dh elo snt ofMorccco rircuVt r oii +h b-]n jt-TKT r nbove n 2 )6 niliion Kuwait enn in i66 for develomyment of the Tensaout Prnm n irrnten nrooetand a $77 million Kuwait
0jl n )nnsn r(niti-nertcir
loan for extrnion of the Tadri~ Irrigation Perimeter
The following- trbe surrlnrlzes other free world arlztance (excluiin technical assistanc-) to Morocco for the years 1(62-66
($ Millions)
1 62 1cf_63 96) 19r65 19)66 Fneea 4) 5PO 64o 700 shyWet Germany 223 gu 1t 53 281 IRD 15 175 10) 175 IDA 110 IF C 1 5 7 7 7 0 I15
TOTAL 55 62 1U3 W
b Includer only lo-ng term loans and exporter credits - Includfs 25 million private capital
Eternal ansiztnnce to the Lowier Moulouya Irrigation Perimeter -nce 1060 hres been con[fined to US upport Consdiering AIDs previcus
involvement in and conmitnert to the Lower Moulouya an AID lean in P2t to be Lhi mol aprroriate source of financing for this project
LID
II
q
-29-
SECTION ITI- Y-TTYT TIMPLPTrION
A Periret-r Ad-instrrti-
Authority for irplerrentvtnn of the deveorpent prrgrn frr the LowerMoulcuya Perimeter and rs wel arth crnntinuinz mrnnrrmenertC tt r t- rrtnr V theltbi nad overationity iOfic 1cne 4
n r I e1i- i d Vit4 i Iv ~ Ct rreated i Otb (rJ rn-- of evcn inrmi-rriional offices hich reelaced the Office de Mire en Valeur Aamprlcole (OMVA) Under the OMXA and itspredecessor agencies authority for ad-inLtration cf irrigtion proJect war centralized in Rabat
Under the new regional office organization responsibility for adminshyistering ORMVAM is vested in on Adminirtrative Board of 10 members headed by the Minister of Agriculture and Agrarian Reform as chairman All ether board members (other than the Chairman and a representative of theInterministerial Economic Ccrmittee) represent agencies or activities inthe region of the r-eriret-r whic comprises parts of two provinces Localretresentatives on the Board inc]-de the governors of the two provincesOujda and Nador the presidents -f the two provincial asembtes and of the two provincial chambers of agriculture as well as the perimeter Director
The responsibilities of thie Administrative Board include review of theecys program establishment of its organizational structure developshynt -)f its annual budget and establishment of rates and conditions of
Siyfent for water and other services provided in the perimeter
The Director of OP4VAI-I is dbarged with the responsibility for executionPthe vclicies established by the Administrative Board end administration of oil ORMVAM functions This responsibility includes selection of staffn pserating perrcnnel acting s officia ORNIVAM representative in all ntztinns with -tate and othbr public or private bodies and the
f of funds within limit Indivated by the Ministers f Financetent rn fricultural and Agrarian Reorm
Perimeter Oranizatlon
ORVAM oreanizatlonal structure consists of a directnrate five maj-r rvlces or d-vsicns and one separate bureau Two services qei Administratif et Comptabl- and Service du Yatrial are conshycor - th adminisration and lcgistical support of ORMVAM operationshi1e the remainirg three services rind the separate bureau are Involved in t-hni al matters associated with agrcultural developrent Each ervice has one or more subordinate bureaus Fei-ce Chiefs and thehead 0 rch bure-u report directly to the ORMVAM4 Director
-~F7E MEw-
-30shy
2 Perimeter 01ttffnr
OPIVAM orgttnlrntlon treture calls for 557 positions of whichI L or 7 Mlled n were nher 29 1567 37 of the 71 Postshytion vacancies reported 1ern the high and middle levels Foreign(chiefly Euronean) technclan occupy I)of the 16 high level positionsthat ere filled at thfit tire
Whil OPM ut in th- lcng run lor to Mercecos oducational yster to prvidr tn crrf-nn2 to ratisfy current rdurojectd rcshyquirement th currnt high and mlddle level vacancies rrouire uersonnelwith oxt nive nrior rxericnce To fll this preent need it will be necessary for CRIVAM to continue its program of recruiting foreigntechnicians until ruch tire ns graduates of Moroccan educational programsacquire the necesnry exrerience The managerent assistance componentof thin pro~ject ]e-rribed In the Project analysis will to some extentalleviate OFIWAMs high level personnel requirements
3 Inw1 ernetation Sehedu]
Months Implementation Action
1 0 Sign Loan Agrcement
2 2 C-tiify conditions precedent and Y4tiate procedures for selection of US firm for management contract
2 Negotiation of extension of advisory Engineering Services
h 4 Contract (Hydrotechnic) Negotiation of Managerment Contract
5 60Cmpletion of Project
C Waivers
Sect ion 7 rf AID Regulation 7 provides in substance that theUnited State ill not finance direct costs of construction work performedby third cc-ur y nationals unless the total co-tn of the project withvhich thr ennrtrumticn w(r is asEcciated donot exceed $2On)O orafter excluding national of the country in vhich the site of constructionis located and Dersons vho nave resided therein uninterruptedly for morethan three years imrnedJately prior to any determination under Regulation 7at leant 0 of all uernons who work under the contract at the site of conbulltruction are United States citizens or the employment of third countrynationals is necessary to avoid excerrive corts to the United States
3
31
Section 2175 authr-ri th Regional Anitant Administratorto waive the nrovinions of Sectionthat it is 2073 if he dcterriner in any coneimportant te the nationrn intercrt of the United Stutes tofinance the direct eots of construction work performed by third country
nationals
A prviou1y r ic i c t tht for thr ct Tartthe -r c ct b- 1jeuj out r -cnorbr f cnrtructioncontracts with Morcccrr contrctnr an in the i-t Uowfevvr itentirely psnible that there may b- roe contractn with cntructlonfirms partly owned by third country nntionaln and that ruch firjs anwell as the surely Moroccan-owrned firms may enloy third country niationalsIn such canes a difficult rrobic-i iould arise in meeting the terms ofRegulation 7 since an a practical matter Aericans are not reaonablyavailable for ermployn ont by such contrnetorn and our previcus experiencewith the Naunsseur Ccnv(r-ion project thatin Morocco has indicatedAmerican contractors would not be interested in bidding cn small conshytracts in that country
It in therefore recommended that the Annitant Adinitratordetermine rursuant to Section 2q75 of Regulation 7 to waive theapplication of Regulation 7 to thic iroject since the project 411 conshytribute to the attainrent of US foreign policy objectiver and the cbJe-tives of the Foreign Arsistnnce Program
LITI L USE
LfI~~5xA~us
lit
4 A J A 45 4 k
t A S T
S(3
I A444ilA~~l~)
7 -74
tAM= D
SECTOR 27
10000
t Co0Na includez25 cgtri oncFcttlrvI ncy I8s ~ ~ C t C- Includes 50 constriJcltiotrgrc
2000 60
IU
0
z
bull cosYsA shy----- i
600L _
400
200
0 5 I0 15 20
INTEREST RATE
I ~ 7 J7777
ANIAampX C
PROJECT DESCRn1 rOll
The project com)onents to te undertaken on the MIoulouya Irrigation Project over the next five years contists of the following
C(n1rtion of the rrLin casuals and bianch canbls to provide the suource of waler to the sctors be developed in theto TriffBou Areg and Zebra areas This construction will include the necessarystructures such as reulators highway bridges aqueducts water intake
and discharge structures etc
2 Iand Txeloommerit which includes engineering land consolishyt and iuvtllng lard preparation (subsoiling ripping destoning etc) and installation of water distribution canals (secondary tertiary and quurtunary) and drainage collector ditches for the Triffa main covering 24000 acres in sctors 8 9 10 16 20 21 23 24 25A 2513 27 and 28 Lou Areg Central covering 16250 acres in sectors Dltirough D2B and G1 thru-4h G313 i0u Areg Remainder covering 15000 acres in s-ctors D3 through D7 and GA through (6 Zebra Collective covering 45)0 acres in sectors 3 4 5 rind 6 and Zebra Rer-iinder covering 14250 acres in sectors 1 2 and 7 through 10 and th remainder of sectors 34 and 5 The total land to be developed is about 74000 acres
3 Canalization of the Oued Zeluan and nued Sidi-Amar in the Bou Areg Plain consisting of strairltening englarging and regularizing of these streams to carry the flood waters to the sea Drainage interceptor canals are to be constructed parallel to the sea in the Bou Areg Plain In the Triffa Plain the Oued Riada main drain will be deepened and enlarged and secondary drains will be excavated to provide for drainageof the Madagh area This will include the construction of bridges and culverts and other related work
4 Major Commorn Works will consist of
a Clearing of the Mo-1ouya riverbed downstream of the Mechra KLila barn caused roy flood dariwe and the installation of a set of stop logs for maintenance of pillway gate-
b Design supervision and construction of repairs to the ]elt Lank dead head tunel
c Conctruction and establishment of sib-division Offices and installations for farmer support such as CMVand farm stables
1 C
-2shy
5 Manavmtnt It ha been proposed that a US management firm be ewployed by th- C4 to manage and operate the entire Bou Areg area Such manageent -iuld encomparn all activities from the initial concept to final irIrp igricultural production Such activities would Include resp r-ibilsect -or supervnsion of engtneering and constriction of primary
S- Jry r complete developfnent of land training n in g tinul irription practicen preparation of market
t - r1t- (ot--rnu trplusmnining of a Moroccan cadre to take over h v--it Bou Areg dreara P the
At this writing the n-pt of turning over to a private UZSfirm execushyresponsibl]ity I h management of the establilrment and initial
op-ration of irr1gati the Bou Arog area has been only broadly de iiitd by the GCJO It Intended that proposals will be invited from a r -onable ntnber of f|ed US firms that a selection will be made an-n 7 them and a more do iled and cornprehenrive definition of the rer6 -Ps to be performed be eztabliched at that time It haa been
stimated that the t- of ruch a contract will be about $2 mir- n In any event the -ts of this contract other engineering arvl s to be provided undt n extension of the Ilydrotechnic contract and ether US corts will not ed the proposed $5 mllaion developzont Jean fr the project
The cle 3ifications duties ant 1ncnslbilities of the management personnel ill ha-- to be clearly defined i agreed to by the GCM Perimeter Directo- and other GOM Agencies luding arrangements for the necessary gistic support
Svxlale Docu-
1
4
LD ED 0ICIAL
-IAIDshy
A1trX D
C6JCK LIST OF STATUTORY CRITERIA
(Development Loan Fund)
1 FAA 0102 Extent to which U3 cormodities and services are furnished consistent with improving the US balance of payments See Sections II-C II-F
2 AA sect2O]ihi lanner in which loan wil promote countrys economic develo shy rit emphasizing help for long-range plans and programs designed to developeconomic tesourcos and increase productive capacities See Section I-D
i FAA sectT] h)(IL Information and conclusion on availability of financincfrom other free-world sources including private sources within the United States See Section II-F
FAA sect20l( )2 Information and conclusion on activitys economic and technical soundness including the capacity of the recipient country to reshypay the loan at a reasonable rate of interest See Sections II-B II-D and II-E
5 FAA 1201(h)( Information and conclusion on existence of reasonable promise activity will contribute to developrmnt of economic resources or increase of productive capacities See Sectiona II-B and II-D
_92_(b 4Information and conclusion on activitys relationship toothor development activities and its contribution to realizable longshyrange objectives See Sections I-D and I-E
The following abbreviations are und FAA - Foroirn Assistance Act of 1961 as amerded by the Foreign Asaistaice
Act of 1967 App - Foreign Assistance and Polated Agencies Appropriations Act 1968
AFEVCDF 1066
L1
-2shy
7 FAA f12O1(b)(5)_ Countrys self-help masures including institution of Foreign Assistance Act investment pliaranty programs Investment Guaranty
bull Agreement signed with Morocco 331o6l See Sections I-D and II-EI
_A ))(6) Information and conclusion on possible effects on US econowy with soecial refererne to areas of substantial -labor surplusSee Section II-F
9 FAA q201 (h)() Information and conclusion on the dagree to which thA country iv wiki- progress toward respect for the rule of law freedom of expression and of the press and recognition~yf the importance of individual freedom initiative and private enterprise
10 FAA -1201(b)(8) Information and conclusion on the degree to which the country is taking steps to improve its c]Laato for private investment See Sccton II-E
31 FAA R LbJi Inforrat-on and conclusion on whether or not the activityto b financed will contribute to the achievement of self-sustaining growthSee Sections I-D and II-B
12 FAA fi2Ol(bj Inforruation and conclusion on reasonalbe prospects of reshypayment See Section II-E
13 FAA fl20JL() Info-ation on applicability of the twenty country ceil4ng2
14 FAA fl201 L Information and coclusion on legality (under laws of the country end the US) and reasonableness of lending and ralendinr terms Loan will be on minimum termspermitted under FAA These are deemed reasonable see Sectioam Evidence will be renuired from the GGM as to the legality of the loan agreemnt
1 E 2 Information and conclusion on availability of an applicationFAA together with sufficient information and assurances to indicate reasonably that funds will be used in an economcally and technically sound manner See Sections I-A II-B and II-D Application received Janury 15 1968
16 FAA fl201(fL If a project inforntion and conclusion whether it will promote the economic developapent of the requesting country taking into account the countrys human and material resource requiremnts and the reshylationship between the ultimate objes6ives of the project and the countrys overall economic development See Sections I-D and II-B
17 FAAJ 20ij(J If a project information and conclusion whether it cifishycally provides for appropriate participation by private enterprise 8ce Sections YI-C and 114
I- FAA i22(a) Total amount of money under loan which is going directly to private enterprise is going to intermediate credit institutions or other borrowers for use by private enterprise is being used to finance imports
rfro private sources or is otherwise beirg used to finance procurementsfrcm private souwces See Sections II-C and II-2
9 FAA 207 Infosation on the emphasis placed en
(a) encouraging development of economic political and social institushytins No apparent relationship
(b) nelC-help in mectingthe countrys food nredo Project Vill conshytribute to production of food for lccal consumptioa
(c) in-proving availability in the country of evucated trained manpower Project will contribute to the deicloginext of trained manpower as one of the functions of the management contract (Soe Annex C para 5)
(d) prcgrams aimed at -malnutrition disease eradi atDn slum clearanceWater purification sewage disposal health education naternal and child care(includin fimrily pJnrning)) -nd cthcr public health ausistarice See
(c) other develoment activities including industrial development free
labor unions cooperatives tnd voluntary agencie transn)rtatin and ccshymwquication nrStczn capubiliTies for economic planning and public adlinisshytration arban develo-mment and modernization of laws to feilltate econcnicdevelopjen- GO- intends encourage develo vient of cooperat yes particularlyin the Left Pank areas Project will also develop capabiLi ics for cconoaicplanning and public a6~inistration (Annex C para 5) Other not applicable
20 Information on the extent to which the r-untry is
(a) cttcmting to increase food production and food sto a-e anddistribution felitics This project is one evidence of Moroccos efforts in this direction See also Section I-D and I-E
b) creating- a favorable climate for foreign and dmestic iri-ate enterprise and invcstrrment The GCM has recently reduced profits twes anrannounced a ten year guarantee against tax increases See Section II-E-2
(c) increasing the role of the neonle in the developnental procecsNo apparent relationship to this project
(d) allocating expenditures to development rather than to unn-cessarymilitary purpoes or intervention in other free countries affair See Sections I-D and Ii-
(e) willing --nribute funds to the project or program Th iOMhas already dcvo o-sidcrable resources to the project It has badieted13 million for th i oulouya for i7 See Section I-C
(If) making economic zocial and political refo ns such as taxc coliecshytion iYprovcmenLs and chan es in land tenure a Royal Comm ision has been appointed to make recomendation on land tenure probleras in the Lower I oulouya
(g) responding to the economic political and social concerns of its people and showing a determination to take volf-help wcasuren See Sections I-D and II-E
IT
-ovi~cd l v r 13 1968
- 4 - LDffIED OFFICIAL USE
21 FAA Inforn ation about multilateral assistance being Iurnished to t e country and whether the loan will encourage recgional development prog-rams The I1D has eztablihcd a Consultative Group for Morocco which rvicws the GOM development program anui prgress See Section II-F-4 for infoaation on othtr donor assistance to Morocco
22 A Extent to which the loan will contribute to the objective of ass ring naximu par icipation in the task of econonic dovelop--ent on the pL-t 0 _he people of the developing countries through the encouragement of cocr-tic private and local govenmental inLitutious o apparent
relationship
23 F _-_Dta_ Infor-ation and corissions whether loan will oncourageeffor s of t1e country to (a) increase tie flow of international trade (b) fostcr private initiative and comptition (c) encourage development and usceo co opratives credit unions and savingss and loan associations (d) disourgo monopolistic practices (c) improvo technical efficiency of industry ariculture and commerce (f) strenSthn free labor unions This project is cxpected to increase technical efficiency oi-agriculture
2_ C-1L lnforzrition and conclusion on how the loan will encourage US privte trade and investment abroad and how it uill encourage private US participation in foreign assistance prograas (incluiing use of private trade channels and the services of US private enterprise) See Section II-
25 VA-+_ Conclusion and supporting information on compliance with tho Co resional policy that engineering and professional servicos of US fir-ms and their affiliates are to bo used in connection with capital project3 to the nixinua extent consistent with the national interest US engineerirn and innsgcment services will be financed tnder this loan
2$ Inforamtion and ccnclusions who+her loan will pormit American rx-l] business to participate equitably in the furnishing of goods and
z orvices by To be satisfied in Loan Agreementfinanced it
27 - t(a App I18 Complianco with restriction of co -zodity procureshy o UsMS except as otherwise determined by the Picsicent and subject to ttu--- rcortir require r-nts Procurement will - liumited to the US for
reiabnrs nts and to ioocco and other free world countries 1-or US-cwne(d rhu disburseacnts
23 -i Comiance with bulk cozodity procurement restriction topriecc no l-ho han the nkarkot price prevailing in tho US at tia of
bull puchas Not applicable
29 FA Cozpliance with requirement that matrin insurance be purchased on commceities if the participating country discri-inates and that insurance be placed in the US To be satisfied in Loan Agreement
30 IA 6(a) Information at to the utilization of excers personal property in lieu of procurement of new items Will be required ai appropriate under terns of Lean Agreement
f
1 77--7 -77-77-777
31 FAA 61](a)(_) information and conclusion on availability of enginoering i financial and other plans nccx sary to carry out tho assittance and of a
reasonably firm cstimate of the cost of the assistanco to the United States
See Section II-D
32-ecessaryFAA t611(a)_(2) legislative action r6quired within recipient country and ibasis Cor reasonable anticipation such action will be completed in time to pormit orderly accompli-hirtnt of purposes of loan See Section I-A
33 n _AA161nJ0] If water or water-relatod land resource construcshy
tion project or program information and conclusion on a benefit-cost comshy
putation See Section II-B
3 4 VAA 611(c) Compliance with requirement that contracts for construction be let on comp-ctitive basis to mamum extent practicable To be satisfied
in Loan Agreement
If a loan for a project of $1 million or more certificatin35 FAA _61l(r) by the principal AID officer in the country as to the capability of the
country (both financirl and human resources) to effectively maintain and
utilize the project taking into account other US-financed projects (Such
certification is to be pproved by the Administrator aL the time the loan
is authorized) In process of being obtained
36 FAsgJ2 _6_h Appropriate steps that have b-en taken to assure that to the miaximum extent possible the country is contributing local currencies to net th-2 cost of contractural and other services and foreign currencies o- icd by tho US are utilized to meet the cost of contractual and other services The GU-M is contributing over $30 million to compleXton of this project Excess US-use dirhams will be used for eligible project costs other than US goods and services
37 FAA p619 Compliance with requirement that assistance to newly independent countries be furnished through multilateral organizations or plans to maxishymum extent appropriate Not deemed appropriate in view of previous AID financing and ccoiitment to the project See Sections I-A and I-D
38 FAA sect620(a) AcnO7a n3]7(b) Compliance with prohibitions
against assistance to Cuba ard any countr (a) which furnishes assistance to Cuba or failed to take appropriate steps by February 14 1964 to prevent ships or aircraft unier its registry from carrying equipment materials or supplies from or to Cuba or (b) which sells furnishes or permits any ships under its registry fr-om carrying items of primary atrategic signifishycance or itcms of economic assistance Morocco is not-known to be in Violation of these sections
39 FAA q620GL_ If assistance to the government of a country existence of determination it is not controlled by the international Communist movement The Secretary of State so determined on October 11 191
40 FAA 620(c) If assistance to the government of a country existonce of Indebtedness to a US citizen for goods or services furnished or ordered whore ouch citizen has exhaustod available legal romodiesor where the debt
i - ow - -- _---- --shy
- --
-6shy
is not denied or ontested by such government or the indebtedness arises under an unconditional guararty of payrrent given by such govornmunt No such indebtedness is known to exist
41 FA _(a2LdL If assisitance for any productive enterprise which will corashypote with US enterprise existence of agreement by the recipient country to prevent export to the US of more than 20 of the enterprises annual production during the life of the loan Not applicable
42 FA4 - 16Q_0_ A If assistance to the government of a country extent to which it (including government agenies or ruhdivisions) has after January 1 1962 taken steps o repudiate or nullify cuatracts or taken any action which has the effect of nationalizing expropriating or otherwise seizingownership or control ofprcpertv of US citizens or entities beneficially owned by them without taking appropriate stops to discha i ge its obligations No such steps cr actions are-known to have been taken by the GOM
43 FAA~L AjPj_10_9 Compliance with assistance toQ0 prohibitions against any Comunst codntry ozocco is not considered to be a cocinrunist country
44 FAA - 620(gJ Corliance with prohibition against use of assistonce to comp satc owners for expropriated or nationalized property To be satisfied in Loan Agreement
45 F AA 8620(h Compliance with regulations and procedures adopted to inshysure against ue of assistance in a manner hich contrary to the best inshyterests of the US promotes or assists the foreign aid projects or activities of the Communist-bloc countries To be satisfied in Loan Agreement
46 FAA 06-O(j)_ Exitence of determiration that the country is engaging in or preparing for aggressive military efforts No such determination has been made
L_62_O Information47 FAA on representation of the country at any intershynational confererce when that representation includes the planning of activishyties involving insurrection or subversion against the US or countries recoiving US assistance No such representition is known to have A occarrect
8 FAA 62JJ Existence of a determination that the country has permitted or failed to prevent destruction of US property by mob action or has failed to take steps to prevent a recurrence and-to pay compensation NO such destruction is known to have tak-n place
49 PAA l620(k) If construction of productive enterprise where eggregate value of assistanc to be furnished by US will exceed $1OO million identification of Gtntutoryauthority Not npplicable
i-xQ2MZZ=
1 shy
U 6 50 _Af( QCinsidoration which has been given to denlying assistance X to thu government of a country which after December 31 1966 has failed to
- institto the investnint guaranty program for the spcific risks of inconshy
vertibility and expropriation or confiscation Satisfied See No 7 above
S51S J lj Compliance with-prohibitions-againstn as~istance to countries which traffic or permittraffickingwith North Vietnam Morocco is not known to be in violation
52 E_-L620(_L If country has seized or imposed any penalty or sanction against vn US fishing vessel on account of its fishing activities in
intcrnationul waters information on the consideiation which has been given to excludirg the country from assistance No such situation is known to exist
53 FAA FA r) UAR restriction Not applicable620(p 9117
54 FAA R620tl) Existence of default undhr any Foreign Assistance Act loan to the country No such default exists
55 F ) C-nsider tion of whether co ntry is devoting unnecessary percentage of buKet for military purposes or use of foreign exchange for milita-y equipment
56 FAA 62o(t) Proibition on aid if country has severed diplomatic relations with US unless agreements have been negotiated after resumpshytion Diplomatic r(lations have not been severed
57 FAA 9620(u) Statur of the country on delinquent UN obligations Morocco is not known to be dlinquent on its UN~obligation
58 FAA R636(i) Prohibition on financing non-US manufactured motor vehicles Will be satisfied in Loan Agreement and Implementation Letter
59 App 102 Compliance with requirement that payments in excess of $25000 for architectural and en Jneering services on any one project be reported to Congress Such reports will be made
60 App R1O4 Compliance with bar against funds to pay pensions etc for military personnel Such payments will not be eligible for financing under th Loan Agreement
61 App 9106 If country attr ipts to create distinctions because of their race or religion among Americans in granting personal or commercial access or other rights otherwise avaVIfable to US citizens generally application which will be made in negotit ttons of contrary principles as expressed by Congress Morocco is not ku IDhave made any such attempts
iInD OFFIIt t USE
0k
OFFICIAL USE 62 AIwp Rii Compliance with existing requfremets for security clearance
of personnel Will be satisfied in Loan Agreement and Implementation Letter
63 App R1l2 Compliance with requirement for approval of cortractors and contract terms for capital projects Will be satisfied in Loan Agreement
clJ164 Aup Cmpliance with bar nRainst use of funds to Tay assessments etc of US meiber Such payments will not be eligible for financing under the Loan Agreemunt
6 Anp P115 Ccmpliance with regulations on employment of US and local personnel for funds obligated after April 30 1961 (Regulation 7) See Section III-C
66 Aim Vietnam iron and steel restrictions Not applicable
67 p l9 If a country other than Greece Turkey Iran Israel Republicof China Phillipines or Korea reduction in assistance by amounts spent for the purchase of sophisticated military equipment
68 Anp fi4O1 Compliance with bar against use of funds for publicity or proshypagjanda purposes within US not heretofore authorized by Congress Such use of funds will not be eligible for financing under the Loan Agreement
Morocco is a traditional Islamic monarchy with a constitution The conshystitution was implemented followaing a popular referendum in 1962 National regional and professional elective bodies including a parliament were established by universal suffrage under the constitution in 1963 The parliament was suspended in 1961 in a State of Exception because of its inability to agree on measures with adequate urgency to meet the prevailingecononde imperatives In July 1967 the King appointed a Prime Minister to direct a Cabinet of appointed technicians
The constitutional framework nevertheless remains intact in Morocco and nationwide popular elections for some of the professional chambers were held in August and September 1966 The press is relatively free in Morocco and the right of diLsent prevails provided that such dissent does not violate the prohibition against political attacks on the instishytution of the monarchy or the person of the monarch
LI Under the revised US AID Policy for Africa agreed to in November 1966 Morocco is designated a development emphasis country entitled to receive continuing support on a country basis as part of a multilaterally coorshydinated countrj program Morocco was subsequently included in Presidential Determination 67-14 (January 5 1967) I
LIM=TE OFFICIAL USE~i
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bull ~ -
f
DEPQbi) STATE AGENCY FOR INERNATIONAL DEVELOPMENT
WASHINGTON DC 052
CAPITAL ASSISTANCE LOA11 AUTHORIZATION
Provided from Develoroent Loan Funds Morocco Second Lower Moulouya Irrigation Loan
Pursuant to the authority vested in the Assistant Administrator for Africa of the Agency for International Development
AI)by the Foreign Assistance Act of 1961 as amended theIAct) and the delegations of authority issued thereunder I
have received and t-en into consideration a certification from the Director of USAIDMorocco as to the financial and human resources capability of Morocco to effectively utilize the Lower Moulouya Irrigation Project taking into account among other things the
maintenance and utilization of projects in Morocco previously financed or assisted by the United States and I hereby authorize the establishshyment of a loan pursuant to Part I Chapter 2 Title I the Development Loan Fund to the Government of the Kingdom of Morocco (Borrower) of not to exceed five million dollars ($5000000) to assist in financing the fore] gn exchange and local currency costs of goods and services for the third phase of the Lower Moulouya Irrigation Project subject to the foLlowing terms and conditions
1 Interest Rate and Terms of Repayment Borrower shall repay the loan to AID in forty (40) years including a grace period not to exceed ten (10) years Borrower shall pay interest on the unrepaid principal and any interest accrued thereon at the rate of (a) two percent (2) per annum during the grace period and (b) two and
one-half percent (2-12) per annum thereafter
2 Currency of Pepayment Repayment of the loan and paymenu of interest shall be made in United States dollars
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3 Other Terms and Conditions amp(a)Goods and Services financed under the loan
shall have their source and origin in
(i) the United States if disbursements therefor are made in United States dollars or
(ii) any country in the free world including Morocco if disbursements therefor are made in Moroccan currency
(b) AID Regulation 7 shall not apply to construction -work financed under the loan because as detailed in Section IIIC of Capital Assistance Paper No P 667 it is important to the national interest of the United States that the direct costs of construction work performed by third-country nationals be financed out of funds made available by the Act
(a) Such other terms and conditions as AID may deem advisable
Assistant Administrator for Africa
Date
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7
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]~)TJE o - VTry VTkATTOh PROr E Ii CLIO Itrii)
Civ tri)( l n
i1Ce I - l ir -r IT P ~f ir - Inshy
F~~ntur~ nrl i tu Cct (wicFenture _to 11( Ettinate JI6 ) to 0j67 im-rtpatv 7-t 1
t
Wt r 2torvge 1 95 1)6and Pegulation
Right ank 137 31 10 79
L-ft Bank 25 87 n6 143 239
Far- De ]crl 0 )5 1 b I26
S I M O ALA1 348 356
Adi ticria C shy- 2
IanqnL PA~t~sr (I
I~~~0 5
Enc n arid t5 shy
( nt 5-7
r) I-
itint rZ rn the orJgiia I contrac tNr
- lrl it t rt Ii P Isyht BanksAMviicry zi c1e izIi 1 I In the costs of the various project
1 dv1 ment cot
rFT-r AVAILABLE COPY
ocz r
4
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At indicatnd In the- tdl iv 11 - rnt it~ocotof the rxojroct are t hi~-hor tnan the ic60) 1orccasts Th y tarc Ah-wever 1hchr by cnr murth~cul~ averllsv( a igiificqntjsCfect t~cn the bt-ric lfer-7t I-tio n- rigill lly rc~r~t
V I ) u O21he 1)+ -J iv )ir(t In h jiv kinvnft bed tado in Lh Tnwr Liynnui vni cif hrrlt rnr 7cst- wrr uniershytaen ic r ii -tQ j ta the Aurpo3vt o 02thl rirarnkinr of r- Ln t -Ir ca th cenm I rr1 urn 1e11 frrn n ow
j r t- t ol I n iii i I~- ih 1n t ~r n 1 1t f Vt 1r r Jf U -c~Pi t o ce
iflIel~ P-- t c conts
P-ItAropa TPR
Pn r 21
Sector
~hi Trifi - tnz r -n~ irlrpmi rritt of r tur-~~~rb th ri B u Ar- I t r i 1Y h- nof~ Fa-uA flnricir-z I- T-1-rv igtn t ih-b r
CL ir ra r I th- ityterjThd t ) rah)rt nry to rItihi cofltrictjcn l~n- rvlfAi i-)t arvi r rf fgtrrn h
n n mt rJ z-n fl -V7~1 thin at-1 h rrroxv ytv7 v -I t
f--yI rtn ha not e T
Ct 0
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elevated area requirin iat-r to be puiiped to the irrigated land with both highr capital costs (about 1 million) and higher oreration and maintenance costs (150 Dirham per hcttare via-a-vir 100 Dihams perhevtare for the grnvity irrifrted ares) The ony work presenl-ly cotiishypleted in the Triff Hih Ser-ic Area is the preliminary engineering stirUes Cimi-ir to th Tr Pa r thu TrIffa ]Igh Service areawill reiir an ex I uvnt ricd bfore agricultural proshyduction cn be initlat-2i
The above considerations reiult in the following revised ranking of priorities
Project Area 1FY (M Priority
Triffa Main 21 I Sector 27 8 I Sector 28 9 I Bou Areg Central 6 II Bou Areg Rerainders 6 II Zebra Collective 5 II Zebra Remtd nders 5 II Triffa Ent 6 III Triffa High ervice 5 III
SRI 11ed a ccst contingency f7actor of 25 and a cumulative costescLlatior factor of 3I per annum These factors appear excessivelyhigh in th( light of (1) project experience to date and (2) the fact that from his roint the technical rirks involved arre of a much lower orl- r f 1h thnse inhtrent in the major works Just comshy1 I intion nrd contingency factor of 15 has there-
S chtiMnte- Itlizcd in this rarer The ii n-ttr costs the to ) ject (in n]ace of factors
i by )I nrt 11 thIrhe nf th nJter atve I[cwver rrtnrecr-y factor euld Increase the IPE ] hi ra]y th- IIRF fcr the TrIfa Sector 27 ansnunirg a
oct crortlr7crncy A can be seen as the conAngency I thf cc curve rrv to the right and inter ects the
ur h h 4r- rnr rate of return)
C Finreirifg inr
Cot o the prJect wor fmcentntgenent nnd engin-erinm advisoryrvices for the proued t rd tsge of the Mmlouya Project are
ctirt a Crollows
nF3r AVAILArBILE COPY
Best Av DlableD
7 17 shy
(In Millions Of Dollars)
Righi Pank
Trffa Main 34 poundSt (r 27 08 S ctor 6 0Q
51 Left ank
7bra Collective 12bra Remainde r- 54 Tou Areg Central 74 Lou Areg Remaluders 68 heft Bank Dcad Head Tunnel 30
238 Services
Management 20 Advisory Engineerin 05
25 SUB TOTAL 37
Escalation amp Contingencies 15 47
TOTAL 361
It is proposed that the AID Development Loan for this stage of the Moulouya ProJet be limited to $5 million an amount which would be sufficient te reet the cost of any US goods and services required for the works to oe undertaken Thus the loan would finance the dollar costs of manrement and engineering advisory services to be provided by US firms erstimated at $25 million The balance would be available to meet any ther US cofts that might arise for constructicn cuipment and nateria]
The balnnmc of funds required would be provided by the GOM from its own budgetary resources including as appropriate agreed allocations of the counfryj-uie dirham proceeds of US surplus agricultural programs in Morocco
To a l-ge extent construction works In the Mou]ouya (other than the Bou Ar- Tunnel and Mechra Klila Dam) have taken place under a largenumber of roll contracts with Moroccan firms It is anticipated that this will ontinue to be the pratice in the forthcoming development stage Th iit is evident that the great bulk of project cests in this next stage will be local costs
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In the event that not all of av l able fuInd- under the loan are required for TKI eo It i ouied that any remaininrn balance be utilized for the payment lo -ovalccztn f the project This would be aceoomplirhe by utili7irn th- h r vroceeds of the loan to purehare US-use dirhsmn (frcr th U Oi-irrirg Officer) which would be utili ed to rrimbure th fc u a t local - nditurrs
Thi arranrit 3ir ila ) fstV utilitd In the - of the D-e l-INAieret Loar tJr U Atrrert SinceYr usii Conv rf i cn therc loans are rcpiviible in dollars nd rince Morocco in a n-ar excess local currency couintry the fert ) f e transaction in tc provide a means for obtaining ccnvrrrs cn a-cr th life of the loan of otherwire inconvertibie U5 holding irhrs hich are in exces of its localrequireme t
In 1967 over 15 million dirhams (abceut $3 million) of PL 480
Section l04(g) loan fun cre in msgreement with the CON allocated for the financing of various contractr reloting to projects in the Moulouya It in anticipited tht ndditional allocations will be made out of the local currency proceed generated from current and antishycipated US 7urplu agricultural rmodity programs in Morocco
It has been proposed that the dirham equivalent of $45 million of the proceeds of the October F67 rurplus agricultural commodity Sales Agreement be allocated for a Section Cb(g) loan for the Mulouya In nadition it is estimated that a $]35 million (in$ioz1ble dirhshyequlviJent) woull be available from 7uprl]eental surplun agrIcultura con -ity rales programs under Titlo I an-d Title IV in calendar 196F for allocation for loans for development projects in Morocco These two amounts combined would provide about 6 of the G014 resources reshyquired for the project over the next five years On thic basis there would appear to be rcasonble propect tht the GO should be in a rorition to provide cver the S e year rriod of the project the addishytional resources renuired for itF ccmpletion
Tt I contemplatd that na additlonal US dollar financing of the Moulouya byon-l the $ iilon rorosed herein will be provided for tl cplei n ef h M _11-nuya rince the bringing under irrigation of th- 11O0Y ies include] in the propore] project will substantlally cornIete the works criginally conwtemplated hen h DLF loan was authorshyized in 106 The remainler zf the workr h(- be within the capabilit3 of the GOM to complete with It- o-n resourcec
MT M T M
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) Technical Anily ir
The Moulouya Rivr which is cre of tne largest in Morocco originatesin the idll Atans
Moulouya and which oztend scuthward
Kediterrancn l re
t rre
Pr
ard n
flows rrpr
orre 25) mriles northeast thr Agorinn border
to the
In- agricitui 1 in li j i nt( iljr r Th- rst rind most
t 2 1ir i t i h- i n th rwrht born of thshy-- e 31nmiler frem the Mediterranean
Lea To tho wet cf the Tiffa and nn th- left bank( of the Moulouya isthe Zebra nlain 14wiuntain rv-arate the Zebra frcm th -ea and fron theBou Art-r i-ll]zain which - ctI nrrthwe(st of the Zebra The Bou Areg a coital phtain sclte 19 mils lorg and h miles wide separated fr-nthe n-a by a Ihow sa2t water lagoon Southwest of the Zebra is theGireb plain which hun land ruitable for irrigation in its routheasternportion The Gareb i at a higher elevation than the three other plainsard if ultimately irr-gatcd vould require pumping fro the lower level Zebra conv(yance system
Water from the Noulouya River is stored brhind the Mechra Klila Dam whichwas coniletd with fjiancri rc AID loan (3-A-2 (DLF Lcan l6)Water ir rclca ed downstr(a (1bcut c) miles) to the Mechra Homadi reFrshyvoir and d]iversion dcim in1h-r divert-d to th right oad left bankcunals About 75 kilometer (1 miles) of the Triffu (right bank) maingravity ciral hay ben copletd und consderable cr) has been carri-dout in the Tri on) distr Iution and drainage netw rks land levelngend other farm iwnrovwments About 37 kilometers (22 wiles) of the Zebra(left bank) main gravi-ty canal and the tunnel 6 miles (101()7 JIrenrTrcters) betxeen the Zebra area end the Bou Areg area have been comrneted
The GOM illrrfo m certqin -rk nr-Aded fcr develormnt of the gravityir~zgata yt-- for n 71-) acres over the next five yarr Thiscffort vi2 be eonern rait-r urcr the develo-ment cf areas thot providethe great-rt ecnnomic returrs nnd the developnent of a cadre of Iorocearperornel adequ tly tran-yi in the an2gerent of the project SeeAnnex C for further Irojcl details
e- enmL Ev1ation
Mt Infratrueturr The --trnal highway co-munication network i t arid rfi Isirm nf re- i n-ote siler in-1 shy
uzeather raved rc
____________________TAM
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Other communlca 1 i i t ih Lh arr-- inlude the nrninlineof the Oujda-Fe--C- t h~rh l e0tnnd to AlgeriaSpanish enclove rt the 1 fir idto cmmercial airport at Oujda andNador with regular national onI int rnational ervice5s
Th verirtr 1 u ~Ath r nr r t crocd by 60 kvJ i i i u rrd t 5( kr It na ortr kk f~ditcrl rower1(Qp x I -y yrar) -o n d hr rritIronr
at the Mechra-Yplusmnilj l inm fnd the Bou Areff contral poter Statin The townare connected to ranrh cther and th2 r-rt of Mcrocco by telerhone andtelegraph 1 ner
b Sol Soil rvey 7rd land ]a-ifctons have been completed i-nthe Mcloulva rer eter oanntrantbi- with French firmr u-ing Frenchmethods The Trifa -1n wr initialy rraped at a cealeof 150000with certain area ub entiy rer-aLd at 15000 110000 or 120000dependin I nn the cor1cjeity of YJ rattcrns The Zebra plain has beenmapped at a reale cf 20O00 nod th- Bou Areg plain at a scale Df 150OO On thp baf Yr nf ther urvy th cla sified the soilsGC hain terms of r-uitnbility for irrigation as follows
Land Ciaifcation (Aere)
CasrI amp IT Class III Clans IV Totas Triffa Plain 17000 29[00 22725 99625Zebra Plain CbO 1275 4050 211425Bou Areg Plain 75)00 l6qo 3 0 3067)Gareb Plain 13 05 10 70 0
Inclurez 1750 acres for lfigh Service Area
The findings thi indicate that ( i) arriratry 5of the area in thefour rlain- i suited to irrigation (Clare I anl II) (ii) more than3 ir suitabr bt with one Or mcre imrtat~ons Irro=ed by underrablefeatur-s such an to wrafhy oil characteristJcn trnine- r restrltedbull rio (CIar TIV) and (iij) ls than 2 of th- area in only margina)lysuited for irrinticn(Class TV) In ther7e lattrr ardrn only rmi-intrnsive orop rotations blUponsblhe
The oi nicn f the Cn-lting Envneer (1ydrctechrJ) th respect to) therd carrffjn n that hfle 3 Bureau for P ltr0tion -tandards werirt ernoy-d te rlasnificatinn ir aceurat- and n rrti with3and rlaced in r d rLrnble categories more
uere thnn right ha bern the caseUS tandardr folIced The clasifatinn ha 0a been reviewed andfound to be atifactory by the USPA tayr Hoever r areas of complcxroil Ttternr hch to date have only been ru-d to a oale of 150))rome reraTpin tray be necesary as a banis fcr rrerarnZ
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final designs of irrigation and drztinne- rystems parcellization into farms and planning of land preparation measures In addition considering the high average salt ccntent of ater frcm he c ilouya hiver a rorm of systematic leachin- will be reqirer- to f ree-rt aculation of salts in the soilsparticularly in h ebra Crt in will nlso1e plain ureas require nitrogenphosphorus crd possibly other nutrient to obtain satisfactory yields
c Water On the basis of studies by the GCM which have been reviewed bythe Consultirr Fnr ncri and the U au of 1ccoi-ation it is thecorclusion of A tt (i) the q lity of water in the Lower Houlouya
is below averpge bvt crp rble to thtof certain rivers in the US whichisotnteLoh~uoybrve successfully been usc for irrif ton for periods cxeccdin 100 yearsOj5) there is clearly a sufficient a )unt of i ter to irrif-ate the 128010
bullcrer to be served in the [rlcentIty ar n3 Addi-tional s-tudioser (c requilrecj dcter-Inc if adeqiuate water is a- ilable for irrigationof 376QGO vc rc
The only signifcant urce of vp y fOr irrigation water in the perimeteris the oulouya Vi~cr io jc n1 is 1re ntly being irrigated from wells most Iround water i - - 1 Alouya contains dissoived salts which i xr Lrn - hvriny reak flowto iJOx PIn iuting [cricd of c n ccntraticn is 750 ppm On Thi- basis of USDA Salinity Lot) atory criteria fte v ater is class 03-SI (hl-h salinity-low a-alinity) Vile water is thus of mediocre qualityit is ccmrarable to that of river successfully used for irrigation in the US (eg the Lower Colorado Rier) and poses no serious problems to irrir-ation in the Moulouya perir( cfr provided the W4 adheres to recorrmended programs for meeting leaching reoairements
With ref-pect to the 128000 acr project the demand for water reasured at the Mechra Hoadi diversion dair is estizated at about 575 million cubic meters per year as follows
remand for Wter
Peak Flow Annual Total (August) (m 3 million)
Agrieulture (176000 acres) 337 m3s 806 Municipal amp Industrial Consumption 8m3 23
Total 4 uy62123000 acres to be irrigateA by Gravity 255 m3s 575
(The e dpeak requirzents of 345 s compares with a 35 m3 s design
capacity of the main canal at the diversion dam including 18 m3 s for the Right Bank and 17 m3 s fcc the Left Bank)
I
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This estimate is based on probaole rainfall cropping patterns plant requirements evapo-transpiration and other expected losses of irrigashytion water The estimate is believed by the Consulting Engineer to be reasonable but subject to refinement on the basis of tests to be carried out on a continuing basis
The annual average availability of wuter from the Moulouya river is estirated at 1100 million mn or about double the estimated requirement for the gravity areas
Estimated Availability of Water
Twelve Year Annual Average for Moulouya River 3 m3 second 1100 million m3year
Maximum inflow Observed 8000 m3second(1963) 3h00 million m3 (1962-63)
Miniwum inflow Observed 1 msecond (1951) 532 million m3 (1956-57)
On this basis it appears that there should be ample water available for irrigation of the gravity area as the water availability obtained from twelve years observation exceeds the requirements in all but the 1956-57 season shown above Prior to the development of land with purped service areas (the Gare-b and the Triffa ig h Service) a review and analysis of the river hydrology should be unidertaken to assess the availability and regulashytion of the river flows
d Studies Entincering and Construction The overall irrigation scheme outlined by the 1uM defirs the ajor features and th( magnitude of the work to be accomplished to attain the ultimate goal
This scheme is being carried olut in phases over a long time period The present phase encorpasses the development planned within the priorities indicated by the Stanford Research Institute (SRI) study for the gravity irrigation system
The studies for land classifliration have been completed for the gravity irrigation system in the Triffa Bou Areg and Zebra plains by French firms and were considered reasonably accurate by the Consulting Engineer Land consolidation and parcellinrg has been completed by 0MET in the Bou Areg Central area the Zebra Collctive and Zebra Remainder sectors 7 thru 10 Land consolidation and pareeLlni ar( needed for Triffa sectors 27 and 28 Bou Areg Rematnder arid Z(bra Rerrirder sectors I and 2 The engineering designs for the Triffa main sector 27 and 28 and the Zebra Collective have been or are being completed by the G0M forces The engineering design for the Cefntral Bou Areg and Zebra Remainder sectors 7 tnru 10 has been or in being connpeted uy Hydrotechnic Engineering design will be required or the 1ou Are remainder sectors D-3 thru D-7 and Q4 thru G-6 and Zebra Rer ainler sectors 1 and 2 The engineering designfor the Dead Ilead Thnnel has been undertaken by SCET who have preshypared anid issued an Avant Projet for bid invitations for construction
14 M)j6Fj Cshy
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This firm will also undcrtnk- uu-orviston of construction The engineer ing not yet performed can be aea ished by GOM forces andor private engineering firms
Construction of the extension to the rrain irrigation and drainage canals Jand preparation rector cinl ani drninaive ditches will be performed unllr cntact t) 1 cc rt~r~iet m)t hi in the ene of the
r-abilit tion of the L2tL Pz- Dd iarl Trnc t
e Cronning Patterns The existing erning pattern in the Moulcuya including botnirrigatcd and dry farm ingincludes grain forage citrus vegetables olives grapes and 6 small amount of leciduous fruits and nuts Of the roughly 2140Cy) acres of agricultural production in the Moulouya about 177000 acres are in field crops 24)) in vegetables 16Y)O in citrus 15000 in grrrcs 540Y) in forage crops 1700 in olives and 15)0 in other fruits and nuts
Taking into consideration rast and present trends in plantings as well as agronomic and price and marketing factrrs the following projection of cropping patterns has been developed for the Lower Moulouya
PROJECTED POPPTG PATTFRNS T1 HE LOWER MOULOUYA
(In per cent of total irrigated area)
Left Bank and Triffa High Serice
Triffa Sector - Sectcr rriffa Class Class Class
crop Main 27 28 East I amp II III IV
Citrus 40 60 10 10 10 Vegetables 15 10 15 1) 20 10
Crtton 15 20 10
Fcragpr 10 20 25 30 4o 30
heat 10 6 20 25 20 35 4o
Grip 25 24 35 15 Dy beans 5 10
Sunflower 10 olives 5 0
100 10) 100 100) 1i 1052i 100
a Incltdes double cropping
- - r- euro --- 7
~7~TF~Wr~e~ALUSE
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The projected cropping pattern for the Bou Areg plain includes cottonLJrirdg the frrt Five yearnejtinted 1r of the Class I)fand
the project jitwould be grown on nnII landn Tht renresert only 960etrravres) ectz ri)cr)e area The cotton acr~a e ry increasep 2ceafter live years if ritisfactory drainage conditionshyrre achieved in the Bou Arev
cotton grown i 1xonp tarx- Trdltionally Morocco export its-Jr- cron an irr IJ hort cble to rmeett Cotton the reuirrents
r the oroccan 2pinningr mills The croppni-attrn of the Triffa East (about 180n acres) Js projectedt Tnrlude 15- (about 27 acres) in cotton It is likely that becausef ihe limited extnt of Class I and II lands in the Triffa Eas cotton not increase beyond that percentage
1t i evident that the amount of irrigated cotton that is likely to bein ther-n Moulouya is minimal even assuming that local drainage condi-T nare i asuitable
f Technical Sundnv--s The AID Project Engineer hps reviewed ii) thedat and ajor construction performed to date onronct and finds the technical requirements this long-ranRe phasedsufficiently defineoto ccntinue the project on an orderly schedule The estimates of cost of prsirct facilities have been determin-d by SRI from average va)ues oftrit cots obtained frorr reviously ntiarded contracts and from etniled( -s-nand analysis prepared by the iHydrotechnic Enginering fir oft-o tyieal sectors located in the Bou Areg area The costs for the arc ent contract have bcen estimated by the USAID It is consideredthat the depree of engijeering planning undertaken and the deterrrinitonr to the US Goverrment are adequate to meet the applicable requireshySt- n Section 611 of thie Foreign Asistance Act
7717gt
1 --shy
-22-
E Financial Status of Borrower
1 The Moroccan Economy
Grrwth of MorocLcts GDP in real term averaged about 24 per yearin 1(4 and lr li Per capita DP In 1C 5 wan anproximotely t162 A (er Irr-ht in (6 resu]trd n a drcrcne of slightly nver in GDP which tlh vpulatior grc~vth avrring 3P4 per year rnrsJted in a decline of -r ornita GDP In 16 ii brut $154 A recnd droughtcccijrred In C67 but i not expeetid to have the severe effects of the 165 drought Crop forecasts for the first nine months of 1967 indicate a 4 increase in real GDP above the 1966 level This is also the economic grcrdth rate estimated by the IBRD for the pezxA 1965-70
Moroccos economy is heavily dependent upon the agricultural sector thich has averaged about 15 growth per annum However growth of the mal modern segment of Moroccos agricultural sector has inshy-reased at the rate of about 7 per annum
In 96 the International Banik for Reconstruction and Development (IBRD) preented a number of recommendationr denigrned to increase Moroccos economic growth rate On the bacis of these recomfndations the G004 proceeded with planning the necesrary program to increase investment levels fr- the i 63-65 level of 11 of GNP to 1r of GNP and stimulate the rate of economic growth from 2 to an average of over )4 annually for the five years 66-70 In addJtion the GC4 has taken measures to curb the population grovth rat while placing increased emphasis on raising production of both dryland (wheat) and Irrigated agriculture
2 Investment and Savinms
The level of total gross investment has remaind at aboit 11 of GNP for vera year althugh the percentnoe declined slightly in 165 Under the GO Three Yea5 Plan 1965-67 the gross investment t-3rget woz ret at DH 3 billion- Actual invev-tment expenditures for the three yearpeirod reached about DH 46 billion of which the Governshyment ezxenditure amounted to DH 1 billion a against DH 21 billion budgeted Thin may have beeo partly de to the GOMs deliberate ausshyterity pollcy under the hIF rtbJli7tion prci1rnr but more probably it van duxe to the shortage of trained cadres to -lan and execute projects
In the private cectcr conziderable inounts of ravings may be hoarded due to lack of project attractive t- inventors The lvl of private investment has been runnihg at about 51 of GNP thrrugh 195 The 0014 4 incentive to private instors hnr cut profit taxes from 4320 to V and announced a tpn year guarantc-e against tax increases
]L- $ = DH 506
777=-77- NQ
r y 7k1- T e - W lk In
j - 1) 7k- - _
- 23-
Loan are avaiiable to )rivlite irve-tcrn freo th 3JfIDiN s rctr special funda to prcmote touricm devc firvcnt
Under the 1r86-1972 plan abut to br irtntt level are to be accelerated considerably reaching A of GNP liv ]970 Mor(- Irlyir haviiy on foreign 1 to aciuw cc higher lve1
3 Central Government FinancP
The Moroccan money supply which had Incrrased ify 76 per cent in 2965 remained virtually unchanged in 966 The first half of 1967 witnessed a 5 Ter cent increase in the money supply Te major part of thi increase as concentrated in June and July uhen the supply reached V14 0j lion Currency In circulation expanded rapidly in June and July
nnl factrrn being reinforced by commodity hcnrding related to the 1ide~l Et crisis Demand deposits did not show their normal decline nthe first half of 1967 Deposits with commercial banks declined nlightly while deposits with the Treabury increased as public and semi public agencies contisued their transfers from the banking system to the Treasury The increase in money supply in the first half of (7 ran I raced to tho nzon1 sonal increase in net foreign assets not c y the custcirry rlelir In claims on the private sector Clsirl (n the erivate sector declined slighty until May 1967 but Increased hr-gb June and Jily due primarily to additional financing of textile stocks ClbiJ ante Government rose by 10 per cent in the first half of 967 the in central brnk claims on the GovernmentI being rmainly offset by larger deposits with the Treasury
Ordinary budgetary revenues which incrurted by 5 rcr ent in 1566 tre cxrcted t-) increase by 7 per cent in 1( to DII 21 billion DeampDite a derea3e in agricultural tax reccipt r- fror diret taxes rose by 10 ppr cent in 1966 and a 2 increas estinated for S67 due to tric or controls on income declarationr d an accelerashytion of tax cller ns Owing mainly to a relaxation of the import
program in late 1 5 and a concomitant increase in tariffs on certain ccnonter goods customs reneipts increased by 21 per cent in 1966 Although budgetary estimates call for s decline of 3 per cent in customs receipts in 1S67 it is likely that actual receipts will be considerably larger in view of the import liberalizatidn measures intro)duced subseshyquent to the estimates Receipts from indirect taxes state monopolies and other serces are expected to be 11 iv- cent Ipher in 1967 owing to increased profit on -ugar sabr-i and L r(m the newly created Office do Ccrmercalisaticn - d-tation (OCE)
Recurrent ordinary buiL e(enditures increased by 34 per cent in 1966 ar-i are expected to increase by an additional 7 per cent in 1567 reachin- D1122 billion Although wage and salary scales in the public
Banque Nationale pour le Developement Economique
TT~~- - I777
2 Cf
sector have1bec z h t - rrvirI urli 11i g 14-6 -nd PO becnue rX toi Ijt e f (]r o n 4
ill tile ic urrnnye andr)not i on dnd Publi ht rentrn -yr-otn lno IncreasedOthrr t ill- t il r ne by ) vr cert in J6(
i ninlyrt -br h Inc-l
( Ihe ( t r- rl t ip t t C itur f T)h 21h iilli n
is (( ItI t lt r c0 a- r n n o I- c t b It ihstnl id vv ih n t r-t have hn(er - en 1t2
(IM ii ture( T f fu traordJ nary budrzct exshypend ituren a r y -t c ~ i vi -iscz Portal Checking sy-stcsul)rrcing t (I ltIt Ct -- ind creirn shy
nnet The f r er tnc I hha ccrc ed from a htih of DH 5-7 millIJn in _ 5 millIn r C46 F cr ats foi ]7 place Cro n w I 1(DI)J79 ill ni DDn etlc fi nancing has alo u 1) 5 p (- I3A27 iIliun to an entirnted DH 1142 million
1 14V ) I nv 1 ri n nI(c1 franc n is 77-ected to be ol t y ncrewed bcrrowing fr-ir t he Cestra 9ank which hud been held at mcdert vols iln 165 nnd 1a66 Under the 1TFtaiby agreement of October 16 the qob) agreed to taBe a3] rocrrnary meurer to maintain as table curoonry rPnt inl th nr1d-elrto th b a ent of the ePrncriynnd a vnbl- hn1incc X nvroent P rt artt to t rt fien of tho Ccntin- Honk rstz (erct are nct t r itr June 30 Y-ke 7 lov l b th n Diif ) mill] (n tlcnber -c P thai I o illin usit I ])ecthr 31I62 (GC bc w t
C B1rtrp - vt DH 12 iri 1i nor ]S67 or DH 6S ij lionEan tisated (r fo than the aproved crd it expanwim
Thitrd ordivary nil extraordnnry buThTt deficit of DII 7-19 millI n fcrecat Fr 1 67 in exnected to be fnanced by not freign
tan reof DII )75 mi~l in nt recurity 12ue 1 T111I vlion a - nt ry tiat Po n Che )ir d-nC i 73 r5 Pn
riI is u h i a vti v mrr nrr-e jssIof fvr is id a erital The vnfsa revcred in 1d6 when lnrger r nyrentn eEecially on food itcmo an n -lewdoun in
igo ra a deficit of $1 millcn ProjectiOnz-vt rvultvd in ror 17 r~ieat inrrerned importsonly partially ccnrennate by addshytsa t frnreirn r ntil rrceiprs ard mprrvement in the nervices account will reult -n et of aprroximately $)20million As rhoim in the following tabl -r tion for l33 and 169 how overall deficits of
14 and m] ivi_y$i It
rqVV t1 4~
C)rgt
---
1 -)I+-IRF1
1ROCCO - rTANC OF PAYME 1qrt - 169]_ 5
6rfi0 1 1C(8lr67 i r(o
)xrurt 2t L( I L-5
Trade Bnlance 11 15 - 75 shy - 75
rviee- ret - 7 - 5) -35 -23 -2
J]-i of Good rnd Service- - 3 - 65 -II - ti - (5
Trn-Ifr Pr ynts (nt) P 21 33 37 33
on-cntnry Carital (not) 92 64 6 6 5
Err-rs nnd Ov rrion- (not) - 23 -2 1 3
eranl Bannic __ - _3 -_ 3 - 1i4
Atrh thert ircjected reficitn are of the nnme order of 1 nishytude a7 thcr incurred in the period i66 the Situatlcn i findarentallydifferent both in rerprct to the source of the deficits and in rer-ect to the meat0Y gtr m etin7tecr In the f rrer caive M5recco uffered
_frcrr a very h-vy cutfc of Drivtes cuitv fo-ivr with a shar) decline In forein nt exerditures in Morocco In the iatter case th projected deficits r- rcre a functicn or accelerated crcwth risingdebt ervieiiw tri tho abnrcn of forv eeble additiens foreign reshybull ourcs nere7ory 4( r2Vm rAf finmncting To nect the def-cits during the reriol 161 61h MWreco ob1id to drw down rorcin exchange reserves of over $]c milicn The snrti tpv of financing is no longerpozslble ince no or-res- ruch reserve- Even ifMorocco yr
mn nina r rve_ ore (]rrfii on to th r-ixirun etnt enribe nnd the [iI tnfldy i- un M-r-r e i32 till relA re nt rnt 15 millicnj1itionn ftr ign as- e n 1 6 beyond hat r recnently fcreeeshyable with ver nri- nry Officilr in In i6 reserves are cotImnted Pt 72million c hih crn V 3 million i caly required for currency coy r
Foreign InJebtrdne n of th GOM Mnroccos external rtnte ard rutlie enterprie dett amounted to
$r) millivn in lr6 Debt vervcirig rpynents for (66 trtaled about
$5) rillion g-eement approved in October 3(67
I- -- Ishy
37 millin or arprcxitrrntoy (j Iroccor totnl eXoort earning of h28 millicn GCnerally nxt rrO dbt FervicJng renuiremennt of leas
than r of totna -ort nnrlt In onrldered to I r tirfactoryrntio D-bt r rnJrcLct n Ir the reriod 1-(y 3on Trerent external debt including thnt wrtl(n irreently undibur-ed are hown n th fr lv tahlr
)] L v yr t n
Eternn Vtnte anc ] bntcrnrie Debt
M131 o)nr
Y aI Net Outrtnnling Debt Debt Service
(6 it 479r5 $367 J-67 452 3)6
Z616 44469 2 0 2C-
365I3 37 389
33 383 33 6 371
5-h 31 n 352 275 34121
]176 2661 32It 1977 21133 311 177 22)6 307 19 i0l74 256
1733 255
rgtternal debt rharre n rerent debt nnr rhon above do not increase ubtanti-lly over t rt 1)year- reaching a maximum of h44 millior
in J6 and decrpt- n cr - tently threoafter At the are time exportearninr r _rc extett nc-are Aring that Morocco does not inshycreswre it etrnn2 cbt t irate ubrtantially nb-vc ihat has been the core th adfiticrn dbt e roquirrentn reulting from the propo t Icon o 5 ijilion co r 7crncepr-ional term hould not have a i-nifiant affect n 1r o - ab lty to neet itv g rc-atedebt ericn rcnrib2t~e- the pros ectr of reprment of thin loan ore coniderci rearcnb)
U I -
F ot h-v C IuIJI rmt I shy
1 V amp~ rVml KI
PUC- -jrVi Jt t 1 11 nflrcj urlc 1- th )qn --P I uti u rhnrrl -1r- thr U- Tr- ry- R- -nymc nt
c2Il f n 6 1 bf r I- till 11 nfl r- n-r i n of O r--niC(Io~hi U 1 1 rr to
Tn vil ) f rvc hi tvlrll 1 (In- - n- u--n E r me rrinshycgtay F rntwir w ourc o -o- rvI ortf-V3 1 rncing of
Uf f -r rrrir- ur3r 4~ v -rin Iltrt nt ndd shyt -n t ) in- lint r b t l r -n rort- o-orco trorl-- V -P
r i 1rnd h L-torie Furcl-trin firr- thrjt US r r~ crvirrf- u~d be~
T L I1 c vt r- -ly ] -ubt fu 1 n vi pw -I -ror-co Ir of
ut1JpcO In thi rjert f it -- r- 21 npnred by d1-nr- cothcr t~han the US
2 ]P-t ofI Prr l1 on Prw- Fntrrr
Phij rrcjJ-t -11 n-t h~ -in nrwerq Prrt n rr- tc ntrshyr~A~r fi-mc 1bho und for --roern p o n
3_~~PrCT--rty
rr-vIi-n 1 h -d r the loan ragreement for Icntifitcation ef any r mIjrpt n ctri b- rt througn ut 1zatn (f xccr- prorerty
If rv c u~eAID n-mrcf u urr thi )cn - I~ut~ em avoi3ablo r rovvrirrnt -rrperty rather than nce iteni
4 Otli-r Fr- Wo--] n-Fnlc4rm
Dr mi tW- o] 14rocco- i~ajr ovr-ec -f exte rnaX
rrtan~- hrtvfb - I r ~ ant fl Fr n fole by Kv-it
Sgio F rneflit r b-en 1lmrntrd to tcfohnjip n5tnnen bi eoni~in I th u y f Fr--h tprhntcian tcacrr ind cther
~ti~r t~ ec-tnmIyrt-n Friinch Aid to Mcreco In 1065c~oc~ (P-art f-r txychnirril aItn -- j se of tl5 w1nfor bu~dget rurport f ir in rt t- $1 1ri1 icin in ennita -rojectM- n vx- rrcd
1Vw1tvnn tioI t-) Frenh rurtnnd +16 r11ion tie-I to -onyiint to orrrcr Frrmh ccilcn~For _-rrc-ratod land and rquirrmcnt
West GTrrnmnny liar agrcrcd to nrovIe ccme j27 mM22~cn 1n catital arirtanre and cromrndity lnoi7 t n OfIcon( q92 thi o totril$223 miJ lien ha actuary b-Pn cr-Itt--d under Inn ngrepment This
And a lk5 million commodity loan both) signed in 1965 All Wet Gerzaan
Ufla
-28shy
capital asnistance I vuectI to be tied to German exports Germanyhas in addition 1uvvded r tteysubbtantial technical assistance f
The IBRP hah rade four 1nns to Morocco since 1962 totaling$6) million Ofthin totnl a [175 million loan in 1965 wos fordevelopient of the gidi lit-r irrigation perimeter Other assistance by internntIcnal Iending arncie include an $11 million credit byIDA in 1C65 for rcendary diicction projects and an IFC ln and inshyvestrent of $1 1 ri jnic alo in
F tit i by [c - dncr tr dh elo snt ofMorccco rircuVt r oii +h b-]n jt-TKT r nbove n 2 )6 niliion Kuwait enn in i66 for develomyment of the Tensaout Prnm n irrnten nrooetand a $77 million Kuwait
0jl n )nnsn r(niti-nertcir
loan for extrnion of the Tadri~ Irrigation Perimeter
The following- trbe surrlnrlzes other free world arlztance (excluiin technical assistanc-) to Morocco for the years 1(62-66
($ Millions)
1 62 1cf_63 96) 19r65 19)66 Fneea 4) 5PO 64o 700 shyWet Germany 223 gu 1t 53 281 IRD 15 175 10) 175 IDA 110 IF C 1 5 7 7 7 0 I15
TOTAL 55 62 1U3 W
b Includer only lo-ng term loans and exporter credits - Includfs 25 million private capital
Eternal ansiztnnce to the Lowier Moulouya Irrigation Perimeter -nce 1060 hres been con[fined to US upport Consdiering AIDs previcus
involvement in and conmitnert to the Lower Moulouya an AID lean in P2t to be Lhi mol aprroriate source of financing for this project
LID
II
q
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SECTION ITI- Y-TTYT TIMPLPTrION
A Periret-r Ad-instrrti-
Authority for irplerrentvtnn of the deveorpent prrgrn frr the LowerMoulcuya Perimeter and rs wel arth crnntinuinz mrnnrrmenertC tt r t- rrtnr V theltbi nad overationity iOfic 1cne 4
n r I e1i- i d Vit4 i Iv ~ Ct rreated i Otb (rJ rn-- of evcn inrmi-rriional offices hich reelaced the Office de Mire en Valeur Aamprlcole (OMVA) Under the OMXA and itspredecessor agencies authority for ad-inLtration cf irrigtion proJect war centralized in Rabat
Under the new regional office organization responsibility for adminshyistering ORMVAM is vested in on Adminirtrative Board of 10 members headed by the Minister of Agriculture and Agrarian Reform as chairman All ether board members (other than the Chairman and a representative of theInterministerial Economic Ccrmittee) represent agencies or activities inthe region of the r-eriret-r whic comprises parts of two provinces Localretresentatives on the Board inc]-de the governors of the two provincesOujda and Nador the presidents -f the two provincial asembtes and of the two provincial chambers of agriculture as well as the perimeter Director
The responsibilities of thie Administrative Board include review of theecys program establishment of its organizational structure developshynt -)f its annual budget and establishment of rates and conditions of
Siyfent for water and other services provided in the perimeter
The Director of OP4VAI-I is dbarged with the responsibility for executionPthe vclicies established by the Administrative Board end administration of oil ORMVAM functions This responsibility includes selection of staffn pserating perrcnnel acting s officia ORNIVAM representative in all ntztinns with -tate and othbr public or private bodies and the
f of funds within limit Indivated by the Ministers f Financetent rn fricultural and Agrarian Reorm
Perimeter Oranizatlon
ORVAM oreanizatlonal structure consists of a directnrate five maj-r rvlces or d-vsicns and one separate bureau Two services qei Administratif et Comptabl- and Service du Yatrial are conshycor - th adminisration and lcgistical support of ORMVAM operationshi1e the remainirg three services rind the separate bureau are Involved in t-hni al matters associated with agrcultural developrent Each ervice has one or more subordinate bureaus Fei-ce Chiefs and thehead 0 rch bure-u report directly to the ORMVAM4 Director
-~F7E MEw-
-30shy
2 Perimeter 01ttffnr
OPIVAM orgttnlrntlon treture calls for 557 positions of whichI L or 7 Mlled n were nher 29 1567 37 of the 71 Postshytion vacancies reported 1ern the high and middle levels Foreign(chiefly Euronean) technclan occupy I)of the 16 high level positionsthat ere filled at thfit tire
Whil OPM ut in th- lcng run lor to Mercecos oducational yster to prvidr tn crrf-nn2 to ratisfy current rdurojectd rcshyquirement th currnt high and mlddle level vacancies rrouire uersonnelwith oxt nive nrior rxericnce To fll this preent need it will be necessary for CRIVAM to continue its program of recruiting foreigntechnicians until ruch tire ns graduates of Moroccan educational programsacquire the necesnry exrerience The managerent assistance componentof thin pro~ject ]e-rribed In the Project analysis will to some extentalleviate OFIWAMs high level personnel requirements
3 Inw1 ernetation Sehedu]
Months Implementation Action
1 0 Sign Loan Agrcement
2 2 C-tiify conditions precedent and Y4tiate procedures for selection of US firm for management contract
2 Negotiation of extension of advisory Engineering Services
h 4 Contract (Hydrotechnic) Negotiation of Managerment Contract
5 60Cmpletion of Project
C Waivers
Sect ion 7 rf AID Regulation 7 provides in substance that theUnited State ill not finance direct costs of construction work performedby third cc-ur y nationals unless the total co-tn of the project withvhich thr ennrtrumticn w(r is asEcciated donot exceed $2On)O orafter excluding national of the country in vhich the site of constructionis located and Dersons vho nave resided therein uninterruptedly for morethan three years imrnedJately prior to any determination under Regulation 7at leant 0 of all uernons who work under the contract at the site of conbulltruction are United States citizens or the employment of third countrynationals is necessary to avoid excerrive corts to the United States
3
31
Section 2175 authr-ri th Regional Anitant Administratorto waive the nrovinions of Sectionthat it is 2073 if he dcterriner in any coneimportant te the nationrn intercrt of the United Stutes tofinance the direct eots of construction work performed by third country
nationals
A prviou1y r ic i c t tht for thr ct Tartthe -r c ct b- 1jeuj out r -cnorbr f cnrtructioncontracts with Morcccrr contrctnr an in the i-t Uowfevvr itentirely psnible that there may b- roe contractn with cntructlonfirms partly owned by third country nntionaln and that ruch firjs anwell as the surely Moroccan-owrned firms may enloy third country niationalsIn such canes a difficult rrobic-i iould arise in meeting the terms ofRegulation 7 since an a practical matter Aericans are not reaonablyavailable for ermployn ont by such contrnetorn and our previcus experiencewith the Naunsseur Ccnv(r-ion project thatin Morocco has indicatedAmerican contractors would not be interested in bidding cn small conshytracts in that country
It in therefore recommended that the Annitant Adinitratordetermine rursuant to Section 2q75 of Regulation 7 to waive theapplication of Regulation 7 to thic iroject since the project 411 conshytribute to the attainrent of US foreign policy objectiver and the cbJe-tives of the Foreign Arsistnnce Program
LITI L USE
LfI~~5xA~us
lit
4 A J A 45 4 k
t A S T
S(3
I A444ilA~~l~)
7 -74
tAM= D
SECTOR 27
10000
t Co0Na includez25 cgtri oncFcttlrvI ncy I8s ~ ~ C t C- Includes 50 constriJcltiotrgrc
2000 60
IU
0
z
bull cosYsA shy----- i
600L _
400
200
0 5 I0 15 20
INTEREST RATE
I ~ 7 J7777
ANIAampX C
PROJECT DESCRn1 rOll
The project com)onents to te undertaken on the MIoulouya Irrigation Project over the next five years contists of the following
C(n1rtion of the rrLin casuals and bianch canbls to provide the suource of waler to the sctors be developed in theto TriffBou Areg and Zebra areas This construction will include the necessarystructures such as reulators highway bridges aqueducts water intake
and discharge structures etc
2 Iand Txeloommerit which includes engineering land consolishyt and iuvtllng lard preparation (subsoiling ripping destoning etc) and installation of water distribution canals (secondary tertiary and quurtunary) and drainage collector ditches for the Triffa main covering 24000 acres in sctors 8 9 10 16 20 21 23 24 25A 2513 27 and 28 Lou Areg Central covering 16250 acres in sectors Dltirough D2B and G1 thru-4h G313 i0u Areg Remainder covering 15000 acres in s-ctors D3 through D7 and GA through (6 Zebra Collective covering 45)0 acres in sectors 3 4 5 rind 6 and Zebra Rer-iinder covering 14250 acres in sectors 1 2 and 7 through 10 and th remainder of sectors 34 and 5 The total land to be developed is about 74000 acres
3 Canalization of the Oued Zeluan and nued Sidi-Amar in the Bou Areg Plain consisting of strairltening englarging and regularizing of these streams to carry the flood waters to the sea Drainage interceptor canals are to be constructed parallel to the sea in the Bou Areg Plain In the Triffa Plain the Oued Riada main drain will be deepened and enlarged and secondary drains will be excavated to provide for drainageof the Madagh area This will include the construction of bridges and culverts and other related work
4 Major Commorn Works will consist of
a Clearing of the Mo-1ouya riverbed downstream of the Mechra KLila barn caused roy flood dariwe and the installation of a set of stop logs for maintenance of pillway gate-
b Design supervision and construction of repairs to the ]elt Lank dead head tunel
c Conctruction and establishment of sib-division Offices and installations for farmer support such as CMVand farm stables
1 C
-2shy
5 Manavmtnt It ha been proposed that a US management firm be ewployed by th- C4 to manage and operate the entire Bou Areg area Such manageent -iuld encomparn all activities from the initial concept to final irIrp igricultural production Such activities would Include resp r-ibilsect -or supervnsion of engtneering and constriction of primary
S- Jry r complete developfnent of land training n in g tinul irription practicen preparation of market
t - r1t- (ot--rnu trplusmnining of a Moroccan cadre to take over h v--it Bou Areg dreara P the
At this writing the n-pt of turning over to a private UZSfirm execushyresponsibl]ity I h management of the establilrment and initial
op-ration of irr1gati the Bou Arog area has been only broadly de iiitd by the GCJO It Intended that proposals will be invited from a r -onable ntnber of f|ed US firms that a selection will be made an-n 7 them and a more do iled and cornprehenrive definition of the rer6 -Ps to be performed be eztabliched at that time It haa been
stimated that the t- of ruch a contract will be about $2 mir- n In any event the -ts of this contract other engineering arvl s to be provided undt n extension of the Ilydrotechnic contract and ether US corts will not ed the proposed $5 mllaion developzont Jean fr the project
The cle 3ifications duties ant 1ncnslbilities of the management personnel ill ha-- to be clearly defined i agreed to by the GCM Perimeter Directo- and other GOM Agencies luding arrangements for the necessary gistic support
Svxlale Docu-
1
4
LD ED 0ICIAL
-IAIDshy
A1trX D
C6JCK LIST OF STATUTORY CRITERIA
(Development Loan Fund)
1 FAA 0102 Extent to which U3 cormodities and services are furnished consistent with improving the US balance of payments See Sections II-C II-F
2 AA sect2O]ihi lanner in which loan wil promote countrys economic develo shy rit emphasizing help for long-range plans and programs designed to developeconomic tesourcos and increase productive capacities See Section I-D
i FAA sectT] h)(IL Information and conclusion on availability of financincfrom other free-world sources including private sources within the United States See Section II-F
FAA sect20l( )2 Information and conclusion on activitys economic and technical soundness including the capacity of the recipient country to reshypay the loan at a reasonable rate of interest See Sections II-B II-D and II-E
5 FAA 1201(h)( Information and conclusion on existence of reasonable promise activity will contribute to developrmnt of economic resources or increase of productive capacities See Sectiona II-B and II-D
_92_(b 4Information and conclusion on activitys relationship toothor development activities and its contribution to realizable longshyrange objectives See Sections I-D and I-E
The following abbreviations are und FAA - Foroirn Assistance Act of 1961 as amerded by the Foreign Asaistaice
Act of 1967 App - Foreign Assistance and Polated Agencies Appropriations Act 1968
AFEVCDF 1066
L1
-2shy
7 FAA f12O1(b)(5)_ Countrys self-help masures including institution of Foreign Assistance Act investment pliaranty programs Investment Guaranty
bull Agreement signed with Morocco 331o6l See Sections I-D and II-EI
_A ))(6) Information and conclusion on possible effects on US econowy with soecial refererne to areas of substantial -labor surplusSee Section II-F
9 FAA q201 (h)() Information and conclusion on the dagree to which thA country iv wiki- progress toward respect for the rule of law freedom of expression and of the press and recognition~yf the importance of individual freedom initiative and private enterprise
10 FAA -1201(b)(8) Information and conclusion on the degree to which the country is taking steps to improve its c]Laato for private investment See Sccton II-E
31 FAA R LbJi Inforrat-on and conclusion on whether or not the activityto b financed will contribute to the achievement of self-sustaining growthSee Sections I-D and II-B
12 FAA fi2Ol(bj Inforruation and conclusion on reasonalbe prospects of reshypayment See Section II-E
13 FAA fl20JL() Info-ation on applicability of the twenty country ceil4ng2
14 FAA fl201 L Information and coclusion on legality (under laws of the country end the US) and reasonableness of lending and ralendinr terms Loan will be on minimum termspermitted under FAA These are deemed reasonable see Sectioam Evidence will be renuired from the GGM as to the legality of the loan agreemnt
1 E 2 Information and conclusion on availability of an applicationFAA together with sufficient information and assurances to indicate reasonably that funds will be used in an economcally and technically sound manner See Sections I-A II-B and II-D Application received Janury 15 1968
16 FAA fl201(fL If a project inforntion and conclusion whether it will promote the economic developapent of the requesting country taking into account the countrys human and material resource requiremnts and the reshylationship between the ultimate objes6ives of the project and the countrys overall economic development See Sections I-D and II-B
17 FAAJ 20ij(J If a project information and conclusion whether it cifishycally provides for appropriate participation by private enterprise 8ce Sections YI-C and 114
I- FAA i22(a) Total amount of money under loan which is going directly to private enterprise is going to intermediate credit institutions or other borrowers for use by private enterprise is being used to finance imports
rfro private sources or is otherwise beirg used to finance procurementsfrcm private souwces See Sections II-C and II-2
9 FAA 207 Infosation on the emphasis placed en
(a) encouraging development of economic political and social institushytins No apparent relationship
(b) nelC-help in mectingthe countrys food nredo Project Vill conshytribute to production of food for lccal consumptioa
(c) in-proving availability in the country of evucated trained manpower Project will contribute to the deicloginext of trained manpower as one of the functions of the management contract (Soe Annex C para 5)
(d) prcgrams aimed at -malnutrition disease eradi atDn slum clearanceWater purification sewage disposal health education naternal and child care(includin fimrily pJnrning)) -nd cthcr public health ausistarice See
(c) other develoment activities including industrial development free
labor unions cooperatives tnd voluntary agencie transn)rtatin and ccshymwquication nrStczn capubiliTies for economic planning and public adlinisshytration arban develo-mment and modernization of laws to feilltate econcnicdevelopjen- GO- intends encourage develo vient of cooperat yes particularlyin the Left Pank areas Project will also develop capabiLi ics for cconoaicplanning and public a6~inistration (Annex C para 5) Other not applicable
20 Information on the extent to which the r-untry is
(a) cttcmting to increase food production and food sto a-e anddistribution felitics This project is one evidence of Moroccos efforts in this direction See also Section I-D and I-E
b) creating- a favorable climate for foreign and dmestic iri-ate enterprise and invcstrrment The GCM has recently reduced profits twes anrannounced a ten year guarantee against tax increases See Section II-E-2
(c) increasing the role of the neonle in the developnental procecsNo apparent relationship to this project
(d) allocating expenditures to development rather than to unn-cessarymilitary purpoes or intervention in other free countries affair See Sections I-D and Ii-
(e) willing --nribute funds to the project or program Th iOMhas already dcvo o-sidcrable resources to the project It has badieted13 million for th i oulouya for i7 See Section I-C
(If) making economic zocial and political refo ns such as taxc coliecshytion iYprovcmenLs and chan es in land tenure a Royal Comm ision has been appointed to make recomendation on land tenure probleras in the Lower I oulouya
(g) responding to the economic political and social concerns of its people and showing a determination to take volf-help wcasuren See Sections I-D and II-E
IT
-ovi~cd l v r 13 1968
- 4 - LDffIED OFFICIAL USE
21 FAA Inforn ation about multilateral assistance being Iurnished to t e country and whether the loan will encourage recgional development prog-rams The I1D has eztablihcd a Consultative Group for Morocco which rvicws the GOM development program anui prgress See Section II-F-4 for infoaation on othtr donor assistance to Morocco
22 A Extent to which the loan will contribute to the objective of ass ring naximu par icipation in the task of econonic dovelop--ent on the pL-t 0 _he people of the developing countries through the encouragement of cocr-tic private and local govenmental inLitutious o apparent
relationship
23 F _-_Dta_ Infor-ation and corissions whether loan will oncourageeffor s of t1e country to (a) increase tie flow of international trade (b) fostcr private initiative and comptition (c) encourage development and usceo co opratives credit unions and savingss and loan associations (d) disourgo monopolistic practices (c) improvo technical efficiency of industry ariculture and commerce (f) strenSthn free labor unions This project is cxpected to increase technical efficiency oi-agriculture
2_ C-1L lnforzrition and conclusion on how the loan will encourage US privte trade and investment abroad and how it uill encourage private US participation in foreign assistance prograas (incluiing use of private trade channels and the services of US private enterprise) See Section II-
25 VA-+_ Conclusion and supporting information on compliance with tho Co resional policy that engineering and professional servicos of US fir-ms and their affiliates are to bo used in connection with capital project3 to the nixinua extent consistent with the national interest US engineerirn and innsgcment services will be financed tnder this loan
2$ Inforamtion and ccnclusions who+her loan will pormit American rx-l] business to participate equitably in the furnishing of goods and
z orvices by To be satisfied in Loan Agreementfinanced it
27 - t(a App I18 Complianco with restriction of co -zodity procureshy o UsMS except as otherwise determined by the Picsicent and subject to ttu--- rcortir require r-nts Procurement will - liumited to the US for
reiabnrs nts and to ioocco and other free world countries 1-or US-cwne(d rhu disburseacnts
23 -i Comiance with bulk cozodity procurement restriction topriecc no l-ho han the nkarkot price prevailing in tho US at tia of
bull puchas Not applicable
29 FA Cozpliance with requirement that matrin insurance be purchased on commceities if the participating country discri-inates and that insurance be placed in the US To be satisfied in Loan Agreement
30 IA 6(a) Information at to the utilization of excers personal property in lieu of procurement of new items Will be required ai appropriate under terns of Lean Agreement
f
1 77--7 -77-77-777
31 FAA 61](a)(_) information and conclusion on availability of enginoering i financial and other plans nccx sary to carry out tho assittance and of a
reasonably firm cstimate of the cost of the assistanco to the United States
See Section II-D
32-ecessaryFAA t611(a)_(2) legislative action r6quired within recipient country and ibasis Cor reasonable anticipation such action will be completed in time to pormit orderly accompli-hirtnt of purposes of loan See Section I-A
33 n _AA161nJ0] If water or water-relatod land resource construcshy
tion project or program information and conclusion on a benefit-cost comshy
putation See Section II-B
3 4 VAA 611(c) Compliance with requirement that contracts for construction be let on comp-ctitive basis to mamum extent practicable To be satisfied
in Loan Agreement
If a loan for a project of $1 million or more certificatin35 FAA _61l(r) by the principal AID officer in the country as to the capability of the
country (both financirl and human resources) to effectively maintain and
utilize the project taking into account other US-financed projects (Such
certification is to be pproved by the Administrator aL the time the loan
is authorized) In process of being obtained
36 FAsgJ2 _6_h Appropriate steps that have b-en taken to assure that to the miaximum extent possible the country is contributing local currencies to net th-2 cost of contractural and other services and foreign currencies o- icd by tho US are utilized to meet the cost of contractual and other services The GU-M is contributing over $30 million to compleXton of this project Excess US-use dirhams will be used for eligible project costs other than US goods and services
37 FAA p619 Compliance with requirement that assistance to newly independent countries be furnished through multilateral organizations or plans to maxishymum extent appropriate Not deemed appropriate in view of previous AID financing and ccoiitment to the project See Sections I-A and I-D
38 FAA sect620(a) AcnO7a n3]7(b) Compliance with prohibitions
against assistance to Cuba ard any countr (a) which furnishes assistance to Cuba or failed to take appropriate steps by February 14 1964 to prevent ships or aircraft unier its registry from carrying equipment materials or supplies from or to Cuba or (b) which sells furnishes or permits any ships under its registry fr-om carrying items of primary atrategic signifishycance or itcms of economic assistance Morocco is not-known to be in Violation of these sections
39 FAA q620GL_ If assistance to the government of a country existence of determination it is not controlled by the international Communist movement The Secretary of State so determined on October 11 191
40 FAA 620(c) If assistance to the government of a country existonce of Indebtedness to a US citizen for goods or services furnished or ordered whore ouch citizen has exhaustod available legal romodiesor where the debt
i - ow - -- _---- --shy
- --
-6shy
is not denied or ontested by such government or the indebtedness arises under an unconditional guararty of payrrent given by such govornmunt No such indebtedness is known to exist
41 FA _(a2LdL If assisitance for any productive enterprise which will corashypote with US enterprise existence of agreement by the recipient country to prevent export to the US of more than 20 of the enterprises annual production during the life of the loan Not applicable
42 FA4 - 16Q_0_ A If assistance to the government of a country extent to which it (including government agenies or ruhdivisions) has after January 1 1962 taken steps o repudiate or nullify cuatracts or taken any action which has the effect of nationalizing expropriating or otherwise seizingownership or control ofprcpertv of US citizens or entities beneficially owned by them without taking appropriate stops to discha i ge its obligations No such steps cr actions are-known to have been taken by the GOM
43 FAA~L AjPj_10_9 Compliance with assistance toQ0 prohibitions against any Comunst codntry ozocco is not considered to be a cocinrunist country
44 FAA - 620(gJ Corliance with prohibition against use of assistonce to comp satc owners for expropriated or nationalized property To be satisfied in Loan Agreement
45 F AA 8620(h Compliance with regulations and procedures adopted to inshysure against ue of assistance in a manner hich contrary to the best inshyterests of the US promotes or assists the foreign aid projects or activities of the Communist-bloc countries To be satisfied in Loan Agreement
46 FAA 06-O(j)_ Exitence of determiration that the country is engaging in or preparing for aggressive military efforts No such determination has been made
L_62_O Information47 FAA on representation of the country at any intershynational confererce when that representation includes the planning of activishyties involving insurrection or subversion against the US or countries recoiving US assistance No such representition is known to have A occarrect
8 FAA 62JJ Existence of a determination that the country has permitted or failed to prevent destruction of US property by mob action or has failed to take steps to prevent a recurrence and-to pay compensation NO such destruction is known to have tak-n place
49 PAA l620(k) If construction of productive enterprise where eggregate value of assistanc to be furnished by US will exceed $1OO million identification of Gtntutoryauthority Not npplicable
i-xQ2MZZ=
1 shy
U 6 50 _Af( QCinsidoration which has been given to denlying assistance X to thu government of a country which after December 31 1966 has failed to
- institto the investnint guaranty program for the spcific risks of inconshy
vertibility and expropriation or confiscation Satisfied See No 7 above
S51S J lj Compliance with-prohibitions-againstn as~istance to countries which traffic or permittraffickingwith North Vietnam Morocco is not known to be in violation
52 E_-L620(_L If country has seized or imposed any penalty or sanction against vn US fishing vessel on account of its fishing activities in
intcrnationul waters information on the consideiation which has been given to excludirg the country from assistance No such situation is known to exist
53 FAA FA r) UAR restriction Not applicable620(p 9117
54 FAA R620tl) Existence of default undhr any Foreign Assistance Act loan to the country No such default exists
55 F ) C-nsider tion of whether co ntry is devoting unnecessary percentage of buKet for military purposes or use of foreign exchange for milita-y equipment
56 FAA 62o(t) Proibition on aid if country has severed diplomatic relations with US unless agreements have been negotiated after resumpshytion Diplomatic r(lations have not been severed
57 FAA 9620(u) Statur of the country on delinquent UN obligations Morocco is not known to be dlinquent on its UN~obligation
58 FAA R636(i) Prohibition on financing non-US manufactured motor vehicles Will be satisfied in Loan Agreement and Implementation Letter
59 App 102 Compliance with requirement that payments in excess of $25000 for architectural and en Jneering services on any one project be reported to Congress Such reports will be made
60 App R1O4 Compliance with bar against funds to pay pensions etc for military personnel Such payments will not be eligible for financing under th Loan Agreement
61 App 9106 If country attr ipts to create distinctions because of their race or religion among Americans in granting personal or commercial access or other rights otherwise avaVIfable to US citizens generally application which will be made in negotit ttons of contrary principles as expressed by Congress Morocco is not ku IDhave made any such attempts
iInD OFFIIt t USE
0k
OFFICIAL USE 62 AIwp Rii Compliance with existing requfremets for security clearance
of personnel Will be satisfied in Loan Agreement and Implementation Letter
63 App R1l2 Compliance with requirement for approval of cortractors and contract terms for capital projects Will be satisfied in Loan Agreement
clJ164 Aup Cmpliance with bar nRainst use of funds to Tay assessments etc of US meiber Such payments will not be eligible for financing under the Loan Agreemunt
6 Anp P115 Ccmpliance with regulations on employment of US and local personnel for funds obligated after April 30 1961 (Regulation 7) See Section III-C
66 Aim Vietnam iron and steel restrictions Not applicable
67 p l9 If a country other than Greece Turkey Iran Israel Republicof China Phillipines or Korea reduction in assistance by amounts spent for the purchase of sophisticated military equipment
68 Anp fi4O1 Compliance with bar against use of funds for publicity or proshypagjanda purposes within US not heretofore authorized by Congress Such use of funds will not be eligible for financing under the Loan Agreement
Morocco is a traditional Islamic monarchy with a constitution The conshystitution was implemented followaing a popular referendum in 1962 National regional and professional elective bodies including a parliament were established by universal suffrage under the constitution in 1963 The parliament was suspended in 1961 in a State of Exception because of its inability to agree on measures with adequate urgency to meet the prevailingecononde imperatives In July 1967 the King appointed a Prime Minister to direct a Cabinet of appointed technicians
The constitutional framework nevertheless remains intact in Morocco and nationwide popular elections for some of the professional chambers were held in August and September 1966 The press is relatively free in Morocco and the right of diLsent prevails provided that such dissent does not violate the prohibition against political attacks on the instishytution of the monarchy or the person of the monarch
LI Under the revised US AID Policy for Africa agreed to in November 1966 Morocco is designated a development emphasis country entitled to receive continuing support on a country basis as part of a multilaterally coorshydinated countrj program Morocco was subsequently included in Presidential Determination 67-14 (January 5 1967) I
LIM=TE OFFICIAL USE~i
- l go
bull ~ -
f
DEPQbi) STATE AGENCY FOR INERNATIONAL DEVELOPMENT
WASHINGTON DC 052
CAPITAL ASSISTANCE LOA11 AUTHORIZATION
Provided from Develoroent Loan Funds Morocco Second Lower Moulouya Irrigation Loan
Pursuant to the authority vested in the Assistant Administrator for Africa of the Agency for International Development
AI)by the Foreign Assistance Act of 1961 as amended theIAct) and the delegations of authority issued thereunder I
have received and t-en into consideration a certification from the Director of USAIDMorocco as to the financial and human resources capability of Morocco to effectively utilize the Lower Moulouya Irrigation Project taking into account among other things the
maintenance and utilization of projects in Morocco previously financed or assisted by the United States and I hereby authorize the establishshyment of a loan pursuant to Part I Chapter 2 Title I the Development Loan Fund to the Government of the Kingdom of Morocco (Borrower) of not to exceed five million dollars ($5000000) to assist in financing the fore] gn exchange and local currency costs of goods and services for the third phase of the Lower Moulouya Irrigation Project subject to the foLlowing terms and conditions
1 Interest Rate and Terms of Repayment Borrower shall repay the loan to AID in forty (40) years including a grace period not to exceed ten (10) years Borrower shall pay interest on the unrepaid principal and any interest accrued thereon at the rate of (a) two percent (2) per annum during the grace period and (b) two and
one-half percent (2-12) per annum thereafter
2 Currency of Pepayment Repayment of the loan and paymenu of interest shall be made in United States dollars
- t- n t - - - shy
3 Other Terms and Conditions amp(a)Goods and Services financed under the loan
shall have their source and origin in
(i) the United States if disbursements therefor are made in United States dollars or
(ii) any country in the free world including Morocco if disbursements therefor are made in Moroccan currency
(b) AID Regulation 7 shall not apply to construction -work financed under the loan because as detailed in Section IIIC of Capital Assistance Paper No P 667 it is important to the national interest of the United States that the direct costs of construction work performed by third-country nationals be financed out of funds made available by the Act
(a) Such other terms and conditions as AID may deem advisable
Assistant Administrator for Africa
Date
~~~~~~~~~~~~~~~~~~ - q v
7
4
-12-
At indicatnd In the- tdl iv 11 - rnt it~ocotof the rxojroct are t hi~-hor tnan the ic60) 1orccasts Th y tarc Ah-wever 1hchr by cnr murth~cul~ averllsv( a igiificqntjsCfect t~cn the bt-ric lfer-7t I-tio n- rigill lly rc~r~t
V I ) u O21he 1)+ -J iv )ir(t In h jiv kinvnft bed tado in Lh Tnwr Liynnui vni cif hrrlt rnr 7cst- wrr uniershytaen ic r ii -tQ j ta the Aurpo3vt o 02thl rirarnkinr of r- Ln t -Ir ca th cenm I rr1 urn 1e11 frrn n ow
j r t- t ol I n iii i I~- ih 1n t ~r n 1 1t f Vt 1r r Jf U -c~Pi t o ce
iflIel~ P-- t c conts
P-ItAropa TPR
Pn r 21
Sector
~hi Trifi - tnz r -n~ irlrpmi rritt of r tur-~~~rb th ri B u Ar- I t r i 1Y h- nof~ Fa-uA flnricir-z I- T-1-rv igtn t ih-b r
CL ir ra r I th- ityterjThd t ) rah)rt nry to rItihi cofltrictjcn l~n- rvlfAi i-)t arvi r rf fgtrrn h
n n mt rJ z-n fl -V7~1 thin at-1 h rrroxv ytv7 v -I t
f--yI rtn ha not e T
Ct 0
0~~ Iv
-13shy
elevated area requirin iat-r to be puiiped to the irrigated land with both highr capital costs (about 1 million) and higher oreration and maintenance costs (150 Dirham per hcttare via-a-vir 100 Dihams perhevtare for the grnvity irrifrted ares) The ony work presenl-ly cotiishypleted in the Triff Hih Ser-ic Area is the preliminary engineering stirUes Cimi-ir to th Tr Pa r thu TrIffa ]Igh Service areawill reiir an ex I uvnt ricd bfore agricultural proshyduction cn be initlat-2i
The above considerations reiult in the following revised ranking of priorities
Project Area 1FY (M Priority
Triffa Main 21 I Sector 27 8 I Sector 28 9 I Bou Areg Central 6 II Bou Areg Rerainders 6 II Zebra Collective 5 II Zebra Remtd nders 5 II Triffa Ent 6 III Triffa High ervice 5 III
SRI 11ed a ccst contingency f7actor of 25 and a cumulative costescLlatior factor of 3I per annum These factors appear excessivelyhigh in th( light of (1) project experience to date and (2) the fact that from his roint the technical rirks involved arre of a much lower orl- r f 1h thnse inhtrent in the major works Just comshy1 I intion nrd contingency factor of 15 has there-
S chtiMnte- Itlizcd in this rarer The ii n-ttr costs the to ) ject (in n]ace of factors
i by )I nrt 11 thIrhe nf th nJter atve I[cwver rrtnrecr-y factor euld Increase the IPE ] hi ra]y th- IIRF fcr the TrIfa Sector 27 ansnunirg a
oct crortlr7crncy A can be seen as the conAngency I thf cc curve rrv to the right and inter ects the
ur h h 4r- rnr rate of return)
C Finreirifg inr
Cot o the prJect wor fmcentntgenent nnd engin-erinm advisoryrvices for the proued t rd tsge of the Mmlouya Project are
ctirt a Crollows
nF3r AVAILArBILE COPY
Best Av DlableD
7 17 shy
(In Millions Of Dollars)
Righi Pank
Trffa Main 34 poundSt (r 27 08 S ctor 6 0Q
51 Left ank
7bra Collective 12bra Remainde r- 54 Tou Areg Central 74 Lou Areg Remaluders 68 heft Bank Dcad Head Tunnel 30
238 Services
Management 20 Advisory Engineerin 05
25 SUB TOTAL 37
Escalation amp Contingencies 15 47
TOTAL 361
It is proposed that the AID Development Loan for this stage of the Moulouya ProJet be limited to $5 million an amount which would be sufficient te reet the cost of any US goods and services required for the works to oe undertaken Thus the loan would finance the dollar costs of manrement and engineering advisory services to be provided by US firms erstimated at $25 million The balance would be available to meet any ther US cofts that might arise for constructicn cuipment and nateria]
The balnnmc of funds required would be provided by the GOM from its own budgetary resources including as appropriate agreed allocations of the counfryj-uie dirham proceeds of US surplus agricultural programs in Morocco
To a l-ge extent construction works In the Mou]ouya (other than the Bou Ar- Tunnel and Mechra Klila Dam) have taken place under a largenumber of roll contracts with Moroccan firms It is anticipated that this will ontinue to be the pratice in the forthcoming development stage Th iit is evident that the great bulk of project cests in this next stage will be local costs
-E5 -
In the event that not all of av l able fuInd- under the loan are required for TKI eo It i ouied that any remaininrn balance be utilized for the payment lo -ovalccztn f the project This would be aceoomplirhe by utili7irn th- h r vroceeds of the loan to purehare US-use dirhsmn (frcr th U Oi-irrirg Officer) which would be utili ed to rrimbure th fc u a t local - nditurrs
Thi arranrit 3ir ila ) fstV utilitd In the - of the D-e l-INAieret Loar tJr U Atrrert SinceYr usii Conv rf i cn therc loans are rcpiviible in dollars nd rince Morocco in a n-ar excess local currency couintry the fert ) f e transaction in tc provide a means for obtaining ccnvrrrs cn a-cr th life of the loan of otherwire inconvertibie U5 holding irhrs hich are in exces of its localrequireme t
In 1967 over 15 million dirhams (abceut $3 million) of PL 480
Section l04(g) loan fun cre in msgreement with the CON allocated for the financing of various contractr reloting to projects in the Moulouya It in anticipited tht ndditional allocations will be made out of the local currency proceed generated from current and antishycipated US 7urplu agricultural rmodity programs in Morocco
It has been proposed that the dirham equivalent of $45 million of the proceeds of the October F67 rurplus agricultural commodity Sales Agreement be allocated for a Section Cb(g) loan for the Mulouya In nadition it is estimated that a $]35 million (in$ioz1ble dirhshyequlviJent) woull be available from 7uprl]eental surplun agrIcultura con -ity rales programs under Titlo I an-d Title IV in calendar 196F for allocation for loans for development projects in Morocco These two amounts combined would provide about 6 of the G014 resources reshyquired for the project over the next five years On thic basis there would appear to be rcasonble propect tht the GO should be in a rorition to provide cver the S e year rriod of the project the addishytional resources renuired for itF ccmpletion
Tt I contemplatd that na additlonal US dollar financing of the Moulouya byon-l the $ iilon rorosed herein will be provided for tl cplei n ef h M _11-nuya rince the bringing under irrigation of th- 11O0Y ies include] in the propore] project will substantlally cornIete the works criginally conwtemplated hen h DLF loan was authorshyized in 106 The remainler zf the workr h(- be within the capabilit3 of the GOM to complete with It- o-n resourcec
MT M T M
-16shy
) Technical Anily ir
The Moulouya Rivr which is cre of tne largest in Morocco originatesin the idll Atans
Moulouya and which oztend scuthward
Kediterrancn l re
t rre
Pr
ard n
flows rrpr
orre 25) mriles northeast thr Agorinn border
to the
In- agricitui 1 in li j i nt( iljr r Th- rst rind most
t 2 1ir i t i h- i n th rwrht born of thshy-- e 31nmiler frem the Mediterranean
Lea To tho wet cf the Tiffa and nn th- left bank( of the Moulouya isthe Zebra nlain 14wiuntain rv-arate the Zebra frcm th -ea and fron theBou Art-r i-ll]zain which - ctI nrrthwe(st of the Zebra The Bou Areg a coital phtain sclte 19 mils lorg and h miles wide separated fr-nthe n-a by a Ihow sa2t water lagoon Southwest of the Zebra is theGireb plain which hun land ruitable for irrigation in its routheasternportion The Gareb i at a higher elevation than the three other plainsard if ultimately irr-gatcd vould require pumping fro the lower level Zebra conv(yance system
Water from the Noulouya River is stored brhind the Mechra Klila Dam whichwas coniletd with fjiancri rc AID loan (3-A-2 (DLF Lcan l6)Water ir rclca ed downstr(a (1bcut c) miles) to the Mechra Homadi reFrshyvoir and d]iversion dcim in1h-r divert-d to th right oad left bankcunals About 75 kilometer (1 miles) of the Triffu (right bank) maingravity ciral hay ben copletd und consderable cr) has been carri-dout in the Tri on) distr Iution and drainage netw rks land levelngend other farm iwnrovwments About 37 kilometers (22 wiles) of the Zebra(left bank) main gravi-ty canal and the tunnel 6 miles (101()7 JIrenrTrcters) betxeen the Zebra area end the Bou Areg area have been comrneted
The GOM illrrfo m certqin -rk nr-Aded fcr develormnt of the gravityir~zgata yt-- for n 71-) acres over the next five yarr Thiscffort vi2 be eonern rait-r urcr the develo-ment cf areas thot providethe great-rt ecnnomic returrs nnd the developnent of a cadre of Iorocearperornel adequ tly tran-yi in the an2gerent of the project SeeAnnex C for further Irojcl details
e- enmL Ev1ation
Mt Infratrueturr The --trnal highway co-munication network i t arid rfi Isirm nf re- i n-ote siler in-1 shy
uzeather raved rc
____________________TAM
- t 7shy
Other communlca 1 i i t ih Lh arr-- inlude the nrninlineof the Oujda-Fe--C- t h~rh l e0tnnd to AlgeriaSpanish enclove rt the 1 fir idto cmmercial airport at Oujda andNador with regular national onI int rnational ervice5s
Th verirtr 1 u ~Ath r nr r t crocd by 60 kvJ i i i u rrd t 5( kr It na ortr kk f~ditcrl rower1(Qp x I -y yrar) -o n d hr rritIronr
at the Mechra-Yplusmnilj l inm fnd the Bou Areff contral poter Statin The townare connected to ranrh cther and th2 r-rt of Mcrocco by telerhone andtelegraph 1 ner
b Sol Soil rvey 7rd land ]a-ifctons have been completed i-nthe Mcloulva rer eter oanntrantbi- with French firmr u-ing Frenchmethods The Trifa -1n wr initialy rraped at a cealeof 150000with certain area ub entiy rer-aLd at 15000 110000 or 120000dependin I nn the cor1cjeity of YJ rattcrns The Zebra plain has beenmapped at a reale cf 20O00 nod th- Bou Areg plain at a scale Df 150OO On thp baf Yr nf ther urvy th cla sified the soilsGC hain terms of r-uitnbility for irrigation as follows
Land Ciaifcation (Aere)
CasrI amp IT Class III Clans IV Totas Triffa Plain 17000 29[00 22725 99625Zebra Plain CbO 1275 4050 211425Bou Areg Plain 75)00 l6qo 3 0 3067)Gareb Plain 13 05 10 70 0
Inclurez 1750 acres for lfigh Service Area
The findings thi indicate that ( i) arriratry 5of the area in thefour rlain- i suited to irrigation (Clare I anl II) (ii) more than3 ir suitabr bt with one Or mcre imrtat~ons Irro=ed by underrablefeatur-s such an to wrafhy oil characteristJcn trnine- r restrltedbull rio (CIar TIV) and (iij) ls than 2 of th- area in only margina)lysuited for irrinticn(Class TV) In ther7e lattrr ardrn only rmi-intrnsive orop rotations blUponsblhe
The oi nicn f the Cn-lting Envneer (1ydrctechrJ) th respect to) therd carrffjn n that hfle 3 Bureau for P ltr0tion -tandards werirt ernoy-d te rlasnificatinn ir aceurat- and n rrti with3and rlaced in r d rLrnble categories more
uere thnn right ha bern the caseUS tandardr folIced The clasifatinn ha 0a been reviewed andfound to be atifactory by the USPA tayr Hoever r areas of complcxroil Ttternr hch to date have only been ru-d to a oale of 150))rome reraTpin tray be necesary as a banis fcr rrerarnZ
- g~T PRAvVLAFJLE EOPv
final designs of irrigation and drztinne- rystems parcellization into farms and planning of land preparation measures In addition considering the high average salt ccntent of ater frcm he c ilouya hiver a rorm of systematic leachin- will be reqirer- to f ree-rt aculation of salts in the soilsparticularly in h ebra Crt in will nlso1e plain ureas require nitrogenphosphorus crd possibly other nutrient to obtain satisfactory yields
c Water On the basis of studies by the GCM which have been reviewed bythe Consultirr Fnr ncri and the U au of 1ccoi-ation it is thecorclusion of A tt (i) the q lity of water in the Lower Houlouya
is below averpge bvt crp rble to thtof certain rivers in the US whichisotnteLoh~uoybrve successfully been usc for irrif ton for periods cxeccdin 100 yearsOj5) there is clearly a sufficient a )unt of i ter to irrif-ate the 128010
bullcrer to be served in the [rlcentIty ar n3 Addi-tional s-tudioser (c requilrecj dcter-Inc if adeqiuate water is a- ilable for irrigationof 376QGO vc rc
The only signifcant urce of vp y fOr irrigation water in the perimeteris the oulouya Vi~cr io jc n1 is 1re ntly being irrigated from wells most Iround water i - - 1 Alouya contains dissoived salts which i xr Lrn - hvriny reak flowto iJOx PIn iuting [cricd of c n ccntraticn is 750 ppm On Thi- basis of USDA Salinity Lot) atory criteria fte v ater is class 03-SI (hl-h salinity-low a-alinity) Vile water is thus of mediocre qualityit is ccmrarable to that of river successfully used for irrigation in the US (eg the Lower Colorado Rier) and poses no serious problems to irrir-ation in the Moulouya perir( cfr provided the W4 adheres to recorrmended programs for meeting leaching reoairements
With ref-pect to the 128000 acr project the demand for water reasured at the Mechra Hoadi diversion dair is estizated at about 575 million cubic meters per year as follows
remand for Wter
Peak Flow Annual Total (August) (m 3 million)
Agrieulture (176000 acres) 337 m3s 806 Municipal amp Industrial Consumption 8m3 23
Total 4 uy62123000 acres to be irrigateA by Gravity 255 m3s 575
(The e dpeak requirzents of 345 s compares with a 35 m3 s design
capacity of the main canal at the diversion dam including 18 m3 s for the Right Bank and 17 m3 s fcc the Left Bank)
I
- 19 -
This estimate is based on probaole rainfall cropping patterns plant requirements evapo-transpiration and other expected losses of irrigashytion water The estimate is believed by the Consulting Engineer to be reasonable but subject to refinement on the basis of tests to be carried out on a continuing basis
The annual average availability of wuter from the Moulouya river is estirated at 1100 million mn or about double the estimated requirement for the gravity areas
Estimated Availability of Water
Twelve Year Annual Average for Moulouya River 3 m3 second 1100 million m3year
Maximum inflow Observed 8000 m3second(1963) 3h00 million m3 (1962-63)
Miniwum inflow Observed 1 msecond (1951) 532 million m3 (1956-57)
On this basis it appears that there should be ample water available for irrigation of the gravity area as the water availability obtained from twelve years observation exceeds the requirements in all but the 1956-57 season shown above Prior to the development of land with purped service areas (the Gare-b and the Triffa ig h Service) a review and analysis of the river hydrology should be unidertaken to assess the availability and regulashytion of the river flows
d Studies Entincering and Construction The overall irrigation scheme outlined by the 1uM defirs the ajor features and th( magnitude of the work to be accomplished to attain the ultimate goal
This scheme is being carried olut in phases over a long time period The present phase encorpasses the development planned within the priorities indicated by the Stanford Research Institute (SRI) study for the gravity irrigation system
The studies for land classifliration have been completed for the gravity irrigation system in the Triffa Bou Areg and Zebra plains by French firms and were considered reasonably accurate by the Consulting Engineer Land consolidation and parcellinrg has been completed by 0MET in the Bou Areg Central area the Zebra Collctive and Zebra Remainder sectors 7 thru 10 Land consolidation and pareeLlni ar( needed for Triffa sectors 27 and 28 Bou Areg Rematnder arid Z(bra Rerrirder sectors I and 2 The engineering designs for the Triffa main sector 27 and 28 and the Zebra Collective have been or are being completed by the G0M forces The engineering design for the Cefntral Bou Areg and Zebra Remainder sectors 7 tnru 10 has been or in being connpeted uy Hydrotechnic Engineering design will be required or the 1ou Are remainder sectors D-3 thru D-7 and Q4 thru G-6 and Zebra Rer ainler sectors 1 and 2 The engineering designfor the Dead Ilead Thnnel has been undertaken by SCET who have preshypared anid issued an Avant Projet for bid invitations for construction
14 M)j6Fj Cshy
-20-
This firm will also undcrtnk- uu-orviston of construction The engineer ing not yet performed can be aea ished by GOM forces andor private engineering firms
Construction of the extension to the rrain irrigation and drainage canals Jand preparation rector cinl ani drninaive ditches will be performed unllr cntact t) 1 cc rt~r~iet m)t hi in the ene of the
r-abilit tion of the L2tL Pz- Dd iarl Trnc t
e Cronning Patterns The existing erning pattern in the Moulcuya including botnirrigatcd and dry farm ingincludes grain forage citrus vegetables olives grapes and 6 small amount of leciduous fruits and nuts Of the roughly 2140Cy) acres of agricultural production in the Moulouya about 177000 acres are in field crops 24)) in vegetables 16Y)O in citrus 15000 in grrrcs 540Y) in forage crops 1700 in olives and 15)0 in other fruits and nuts
Taking into consideration rast and present trends in plantings as well as agronomic and price and marketing factrrs the following projection of cropping patterns has been developed for the Lower Moulouya
PROJECTED POPPTG PATTFRNS T1 HE LOWER MOULOUYA
(In per cent of total irrigated area)
Left Bank and Triffa High Serice
Triffa Sector - Sectcr rriffa Class Class Class
crop Main 27 28 East I amp II III IV
Citrus 40 60 10 10 10 Vegetables 15 10 15 1) 20 10
Crtton 15 20 10
Fcragpr 10 20 25 30 4o 30
heat 10 6 20 25 20 35 4o
Grip 25 24 35 15 Dy beans 5 10
Sunflower 10 olives 5 0
100 10) 100 100) 1i 1052i 100
a Incltdes double cropping
- - r- euro --- 7
~7~TF~Wr~e~ALUSE
-21 -
The projected cropping pattern for the Bou Areg plain includes cottonLJrirdg the frrt Five yearnejtinted 1r of the Class I)fand
the project jitwould be grown on nnII landn Tht renresert only 960etrravres) ectz ri)cr)e area The cotton acr~a e ry increasep 2ceafter live years if ritisfactory drainage conditionshyrre achieved in the Bou Arev
cotton grown i 1xonp tarx- Trdltionally Morocco export its-Jr- cron an irr IJ hort cble to rmeett Cotton the reuirrents
r the oroccan 2pinningr mills The croppni-attrn of the Triffa East (about 180n acres) Js projectedt Tnrlude 15- (about 27 acres) in cotton It is likely that becausef ihe limited extnt of Class I and II lands in the Triffa Eas cotton not increase beyond that percentage
1t i evident that the amount of irrigated cotton that is likely to bein ther-n Moulouya is minimal even assuming that local drainage condi-T nare i asuitable
f Technical Sundnv--s The AID Project Engineer hps reviewed ii) thedat and ajor construction performed to date onronct and finds the technical requirements this long-ranRe phasedsufficiently defineoto ccntinue the project on an orderly schedule The estimates of cost of prsirct facilities have been determin-d by SRI from average va)ues oftrit cots obtained frorr reviously ntiarded contracts and from etniled( -s-nand analysis prepared by the iHydrotechnic Enginering fir oft-o tyieal sectors located in the Bou Areg area The costs for the arc ent contract have bcen estimated by the USAID It is consideredthat the depree of engijeering planning undertaken and the deterrrinitonr to the US Goverrment are adequate to meet the applicable requireshySt- n Section 611 of thie Foreign Asistance Act
7717gt
1 --shy
-22-
E Financial Status of Borrower
1 The Moroccan Economy
Grrwth of MorocLcts GDP in real term averaged about 24 per yearin 1(4 and lr li Per capita DP In 1C 5 wan anproximotely t162 A (er Irr-ht in (6 resu]trd n a drcrcne of slightly nver in GDP which tlh vpulatior grc~vth avrring 3P4 per year rnrsJted in a decline of -r ornita GDP In 16 ii brut $154 A recnd droughtcccijrred In C67 but i not expeetid to have the severe effects of the 165 drought Crop forecasts for the first nine months of 1967 indicate a 4 increase in real GDP above the 1966 level This is also the economic grcrdth rate estimated by the IBRD for the pezxA 1965-70
Moroccos economy is heavily dependent upon the agricultural sector thich has averaged about 15 growth per annum However growth of the mal modern segment of Moroccos agricultural sector has inshy-reased at the rate of about 7 per annum
In 96 the International Banik for Reconstruction and Development (IBRD) preented a number of recommendationr denigrned to increase Moroccos economic growth rate On the bacis of these recomfndations the G004 proceeded with planning the necesrary program to increase investment levels fr- the i 63-65 level of 11 of GNP to 1r of GNP and stimulate the rate of economic growth from 2 to an average of over )4 annually for the five years 66-70 In addJtion the GC4 has taken measures to curb the population grovth rat while placing increased emphasis on raising production of both dryland (wheat) and Irrigated agriculture
2 Investment and Savinms
The level of total gross investment has remaind at aboit 11 of GNP for vera year althugh the percentnoe declined slightly in 165 Under the GO Three Yea5 Plan 1965-67 the gross investment t-3rget woz ret at DH 3 billion- Actual invev-tment expenditures for the three yearpeirod reached about DH 46 billion of which the Governshyment ezxenditure amounted to DH 1 billion a against DH 21 billion budgeted Thin may have beeo partly de to the GOMs deliberate ausshyterity pollcy under the hIF rtbJli7tion prci1rnr but more probably it van duxe to the shortage of trained cadres to -lan and execute projects
In the private cectcr conziderable inounts of ravings may be hoarded due to lack of project attractive t- inventors The lvl of private investment has been runnihg at about 51 of GNP thrrugh 195 The 0014 4 incentive to private instors hnr cut profit taxes from 4320 to V and announced a tpn year guarantc-e against tax increases
]L- $ = DH 506
777=-77- NQ
r y 7k1- T e - W lk In
j - 1) 7k- - _
- 23-
Loan are avaiiable to )rivlite irve-tcrn freo th 3JfIDiN s rctr special funda to prcmote touricm devc firvcnt
Under the 1r86-1972 plan abut to br irtntt level are to be accelerated considerably reaching A of GNP liv ]970 Mor(- Irlyir haviiy on foreign 1 to aciuw cc higher lve1
3 Central Government FinancP
The Moroccan money supply which had Incrrased ify 76 per cent in 2965 remained virtually unchanged in 966 The first half of 1967 witnessed a 5 Ter cent increase in the money supply Te major part of thi increase as concentrated in June and July uhen the supply reached V14 0j lion Currency In circulation expanded rapidly in June and July
nnl factrrn being reinforced by commodity hcnrding related to the 1ide~l Et crisis Demand deposits did not show their normal decline nthe first half of 1967 Deposits with commercial banks declined nlightly while deposits with the Treabury increased as public and semi public agencies contisued their transfers from the banking system to the Treasury The increase in money supply in the first half of (7 ran I raced to tho nzon1 sonal increase in net foreign assets not c y the custcirry rlelir In claims on the private sector Clsirl (n the erivate sector declined slighty until May 1967 but Increased hr-gb June and Jily due primarily to additional financing of textile stocks ClbiJ ante Government rose by 10 per cent in the first half of 967 the in central brnk claims on the GovernmentI being rmainly offset by larger deposits with the Treasury
Ordinary budgetary revenues which incrurted by 5 rcr ent in 1566 tre cxrcted t-) increase by 7 per cent in 1( to DII 21 billion DeampDite a derea3e in agricultural tax reccipt r- fror diret taxes rose by 10 ppr cent in 1966 and a 2 increas estinated for S67 due to tric or controls on income declarationr d an accelerashytion of tax cller ns Owing mainly to a relaxation of the import
program in late 1 5 and a concomitant increase in tariffs on certain ccnonter goods customs reneipts increased by 21 per cent in 1966 Although budgetary estimates call for s decline of 3 per cent in customs receipts in 1S67 it is likely that actual receipts will be considerably larger in view of the import liberalizatidn measures intro)duced subseshyquent to the estimates Receipts from indirect taxes state monopolies and other serces are expected to be 11 iv- cent Ipher in 1967 owing to increased profit on -ugar sabr-i and L r(m the newly created Office do Ccrmercalisaticn - d-tation (OCE)
Recurrent ordinary buiL e(enditures increased by 34 per cent in 1966 ar-i are expected to increase by an additional 7 per cent in 1567 reachin- D1122 billion Although wage and salary scales in the public
Banque Nationale pour le Developement Economique
TT~~- - I777
2 Cf
sector have1bec z h t - rrvirI urli 11i g 14-6 -nd PO becnue rX toi Ijt e f (]r o n 4
ill tile ic urrnnye andr)not i on dnd Publi ht rentrn -yr-otn lno IncreasedOthrr t ill- t il r ne by ) vr cert in J6(
i ninlyrt -br h Inc-l
( Ihe ( t r- rl t ip t t C itur f T)h 21h iilli n
is (( ItI t lt r c0 a- r n n o I- c t b It ihstnl id vv ih n t r-t have hn(er - en 1t2
(IM ii ture( T f fu traordJ nary budrzct exshypend ituren a r y -t c ~ i vi -iscz Portal Checking sy-stcsul)rrcing t (I ltIt Ct -- ind creirn shy
nnet The f r er tnc I hha ccrc ed from a htih of DH 5-7 millIJn in _ 5 millIn r C46 F cr ats foi ]7 place Cro n w I 1(DI)J79 ill ni DDn etlc fi nancing has alo u 1) 5 p (- I3A27 iIliun to an entirnted DH 1142 million
1 14V ) I nv 1 ri n nI(c1 franc n is 77-ected to be ol t y ncrewed bcrrowing fr-ir t he Cestra 9ank which hud been held at mcdert vols iln 165 nnd 1a66 Under the 1TFtaiby agreement of October 16 the qob) agreed to taBe a3] rocrrnary meurer to maintain as table curoonry rPnt inl th nr1d-elrto th b a ent of the ePrncriynnd a vnbl- hn1incc X nvroent P rt artt to t rt fien of tho Ccntin- Honk rstz (erct are nct t r itr June 30 Y-ke 7 lov l b th n Diif ) mill] (n tlcnber -c P thai I o illin usit I ])ecthr 31I62 (GC bc w t
C B1rtrp - vt DH 12 iri 1i nor ]S67 or DH 6S ij lionEan tisated (r fo than the aproved crd it expanwim
Thitrd ordivary nil extraordnnry buThTt deficit of DII 7-19 millI n fcrecat Fr 1 67 in exnected to be fnanced by not freign
tan reof DII )75 mi~l in nt recurity 12ue 1 T111I vlion a - nt ry tiat Po n Che )ir d-nC i 73 r5 Pn
riI is u h i a vti v mrr nrr-e jssIof fvr is id a erital The vnfsa revcred in 1d6 when lnrger r nyrentn eEecially on food itcmo an n -lewdoun in
igo ra a deficit of $1 millcn ProjectiOnz-vt rvultvd in ror 17 r~ieat inrrerned importsonly partially ccnrennate by addshytsa t frnreirn r ntil rrceiprs ard mprrvement in the nervices account will reult -n et of aprroximately $)20million As rhoim in the following tabl -r tion for l33 and 169 how overall deficits of
14 and m] ivi_y$i It
rqVV t1 4~
C)rgt
---
1 -)I+-IRF1
1ROCCO - rTANC OF PAYME 1qrt - 169]_ 5
6rfi0 1 1C(8lr67 i r(o
)xrurt 2t L( I L-5
Trade Bnlance 11 15 - 75 shy - 75
rviee- ret - 7 - 5) -35 -23 -2
J]-i of Good rnd Service- - 3 - 65 -II - ti - (5
Trn-Ifr Pr ynts (nt) P 21 33 37 33
on-cntnry Carital (not) 92 64 6 6 5
Err-rs nnd Ov rrion- (not) - 23 -2 1 3
eranl Bannic __ - _3 -_ 3 - 1i4
Atrh thert ircjected reficitn are of the nnme order of 1 nishytude a7 thcr incurred in the period i66 the Situatlcn i findarentallydifferent both in rerprct to the source of the deficits and in rer-ect to the meat0Y gtr m etin7tecr In the f rrer caive M5recco uffered
_frcrr a very h-vy cutfc of Drivtes cuitv fo-ivr with a shar) decline In forein nt exerditures in Morocco In the iatter case th projected deficits r- rcre a functicn or accelerated crcwth risingdebt ervieiiw tri tho abnrcn of forv eeble additiens foreign reshybull ourcs nere7ory 4( r2Vm rAf finmncting To nect the def-cits during the reriol 161 61h MWreco ob1id to drw down rorcin exchange reserves of over $]c milicn The snrti tpv of financing is no longerpozslble ince no or-res- ruch reserve- Even ifMorocco yr
mn nina r rve_ ore (]rrfii on to th r-ixirun etnt enribe nnd the [iI tnfldy i- un M-r-r e i32 till relA re nt rnt 15 millicnj1itionn ftr ign as- e n 1 6 beyond hat r recnently fcreeeshyable with ver nri- nry Officilr in In i6 reserves are cotImnted Pt 72million c hih crn V 3 million i caly required for currency coy r
Foreign InJebtrdne n of th GOM Mnroccos external rtnte ard rutlie enterprie dett amounted to
$r) millivn in lr6 Debt vervcirig rpynents for (66 trtaled about
$5) rillion g-eement approved in October 3(67
I- -- Ishy
37 millin or arprcxitrrntoy (j Iroccor totnl eXoort earning of h28 millicn GCnerally nxt rrO dbt FervicJng renuiremennt of leas
than r of totna -ort nnrlt In onrldered to I r tirfactoryrntio D-bt r rnJrcLct n Ir the reriod 1-(y 3on Trerent external debt including thnt wrtl(n irreently undibur-ed are hown n th fr lv tahlr
)] L v yr t n
Eternn Vtnte anc ] bntcrnrie Debt
M131 o)nr
Y aI Net Outrtnnling Debt Debt Service
(6 it 479r5 $367 J-67 452 3)6
Z616 44469 2 0 2C-
365I3 37 389
33 383 33 6 371
5-h 31 n 352 275 34121
]176 2661 32It 1977 21133 311 177 22)6 307 19 i0l74 256
1733 255
rgtternal debt rharre n rerent debt nnr rhon above do not increase ubtanti-lly over t rt 1)year- reaching a maximum of h44 millior
in J6 and decrpt- n cr - tently threoafter At the are time exportearninr r _rc extett nc-are Aring that Morocco does not inshycreswre it etrnn2 cbt t irate ubrtantially nb-vc ihat has been the core th adfiticrn dbt e roquirrentn reulting from the propo t Icon o 5 ijilion co r 7crncepr-ional term hould not have a i-nifiant affect n 1r o - ab lty to neet itv g rc-atedebt ericn rcnrib2t~e- the pros ectr of reprment of thin loan ore coniderci rearcnb)
U I -
F ot h-v C IuIJI rmt I shy
1 V amp~ rVml KI
PUC- -jrVi Jt t 1 11 nflrcj urlc 1- th )qn --P I uti u rhnrrl -1r- thr U- Tr- ry- R- -nymc nt
c2Il f n 6 1 bf r I- till 11 nfl r- n-r i n of O r--niC(Io~hi U 1 1 rr to
Tn vil ) f rvc hi tvlrll 1 (In- - n- u--n E r me rrinshycgtay F rntwir w ourc o -o- rvI ortf-V3 1 rncing of
Uf f -r rrrir- ur3r 4~ v -rin Iltrt nt ndd shyt -n t ) in- lint r b t l r -n rort- o-orco trorl-- V -P
r i 1rnd h L-torie Furcl-trin firr- thrjt US r r~ crvirrf- u~d be~
T L I1 c vt r- -ly ] -ubt fu 1 n vi pw -I -ror-co Ir of
ut1JpcO In thi rjert f it -- r- 21 npnred by d1-nr- cothcr t~han the US
2 ]P-t ofI Prr l1 on Prw- Fntrrr
Phij rrcjJ-t -11 n-t h~ -in nrwerq Prrt n rr- tc ntrshyr~A~r fi-mc 1bho und for --roern p o n
3_~~PrCT--rty
rr-vIi-n 1 h -d r the loan ragreement for Icntifitcation ef any r mIjrpt n ctri b- rt througn ut 1zatn (f xccr- prorerty
If rv c u~eAID n-mrcf u urr thi )cn - I~ut~ em avoi3ablo r rovvrirrnt -rrperty rather than nce iteni
4 Otli-r Fr- Wo--] n-Fnlc4rm
Dr mi tW- o] 14rocco- i~ajr ovr-ec -f exte rnaX
rrtan~- hrtvfb - I r ~ ant fl Fr n fole by Kv-it
Sgio F rneflit r b-en 1lmrntrd to tcfohnjip n5tnnen bi eoni~in I th u y f Fr--h tprhntcian tcacrr ind cther
~ti~r t~ ec-tnmIyrt-n Friinch Aid to Mcreco In 1065c~oc~ (P-art f-r txychnirril aItn -- j se of tl5 w1nfor bu~dget rurport f ir in rt t- $1 1ri1 icin in ennita -rojectM- n vx- rrcd
1Vw1tvnn tioI t-) Frenh rurtnnd +16 r11ion tie-I to -onyiint to orrrcr Frrmh ccilcn~For _-rrc-ratod land and rquirrmcnt
West GTrrnmnny liar agrcrcd to nrovIe ccme j27 mM22~cn 1n catital arirtanre and cromrndity lnoi7 t n OfIcon( q92 thi o totril$223 miJ lien ha actuary b-Pn cr-Itt--d under Inn ngrepment This
And a lk5 million commodity loan both) signed in 1965 All Wet Gerzaan
Ufla
-28shy
capital asnistance I vuectI to be tied to German exports Germanyhas in addition 1uvvded r tteysubbtantial technical assistance f
The IBRP hah rade four 1nns to Morocco since 1962 totaling$6) million Ofthin totnl a [175 million loan in 1965 wos fordevelopient of the gidi lit-r irrigation perimeter Other assistance by internntIcnal Iending arncie include an $11 million credit byIDA in 1C65 for rcendary diicction projects and an IFC ln and inshyvestrent of $1 1 ri jnic alo in
F tit i by [c - dncr tr dh elo snt ofMorccco rircuVt r oii +h b-]n jt-TKT r nbove n 2 )6 niliion Kuwait enn in i66 for develomyment of the Tensaout Prnm n irrnten nrooetand a $77 million Kuwait
0jl n )nnsn r(niti-nertcir
loan for extrnion of the Tadri~ Irrigation Perimeter
The following- trbe surrlnrlzes other free world arlztance (excluiin technical assistanc-) to Morocco for the years 1(62-66
($ Millions)
1 62 1cf_63 96) 19r65 19)66 Fneea 4) 5PO 64o 700 shyWet Germany 223 gu 1t 53 281 IRD 15 175 10) 175 IDA 110 IF C 1 5 7 7 7 0 I15
TOTAL 55 62 1U3 W
b Includer only lo-ng term loans and exporter credits - Includfs 25 million private capital
Eternal ansiztnnce to the Lowier Moulouya Irrigation Perimeter -nce 1060 hres been con[fined to US upport Consdiering AIDs previcus
involvement in and conmitnert to the Lower Moulouya an AID lean in P2t to be Lhi mol aprroriate source of financing for this project
LID
II
q
-29-
SECTION ITI- Y-TTYT TIMPLPTrION
A Periret-r Ad-instrrti-
Authority for irplerrentvtnn of the deveorpent prrgrn frr the LowerMoulcuya Perimeter and rs wel arth crnntinuinz mrnnrrmenertC tt r t- rrtnr V theltbi nad overationity iOfic 1cne 4
n r I e1i- i d Vit4 i Iv ~ Ct rreated i Otb (rJ rn-- of evcn inrmi-rriional offices hich reelaced the Office de Mire en Valeur Aamprlcole (OMVA) Under the OMXA and itspredecessor agencies authority for ad-inLtration cf irrigtion proJect war centralized in Rabat
Under the new regional office organization responsibility for adminshyistering ORMVAM is vested in on Adminirtrative Board of 10 members headed by the Minister of Agriculture and Agrarian Reform as chairman All ether board members (other than the Chairman and a representative of theInterministerial Economic Ccrmittee) represent agencies or activities inthe region of the r-eriret-r whic comprises parts of two provinces Localretresentatives on the Board inc]-de the governors of the two provincesOujda and Nador the presidents -f the two provincial asembtes and of the two provincial chambers of agriculture as well as the perimeter Director
The responsibilities of thie Administrative Board include review of theecys program establishment of its organizational structure developshynt -)f its annual budget and establishment of rates and conditions of
Siyfent for water and other services provided in the perimeter
The Director of OP4VAI-I is dbarged with the responsibility for executionPthe vclicies established by the Administrative Board end administration of oil ORMVAM functions This responsibility includes selection of staffn pserating perrcnnel acting s officia ORNIVAM representative in all ntztinns with -tate and othbr public or private bodies and the
f of funds within limit Indivated by the Ministers f Financetent rn fricultural and Agrarian Reorm
Perimeter Oranizatlon
ORVAM oreanizatlonal structure consists of a directnrate five maj-r rvlces or d-vsicns and one separate bureau Two services qei Administratif et Comptabl- and Service du Yatrial are conshycor - th adminisration and lcgistical support of ORMVAM operationshi1e the remainirg three services rind the separate bureau are Involved in t-hni al matters associated with agrcultural developrent Each ervice has one or more subordinate bureaus Fei-ce Chiefs and thehead 0 rch bure-u report directly to the ORMVAM4 Director
-~F7E MEw-
-30shy
2 Perimeter 01ttffnr
OPIVAM orgttnlrntlon treture calls for 557 positions of whichI L or 7 Mlled n were nher 29 1567 37 of the 71 Postshytion vacancies reported 1ern the high and middle levels Foreign(chiefly Euronean) technclan occupy I)of the 16 high level positionsthat ere filled at thfit tire
Whil OPM ut in th- lcng run lor to Mercecos oducational yster to prvidr tn crrf-nn2 to ratisfy current rdurojectd rcshyquirement th currnt high and mlddle level vacancies rrouire uersonnelwith oxt nive nrior rxericnce To fll this preent need it will be necessary for CRIVAM to continue its program of recruiting foreigntechnicians until ruch tire ns graduates of Moroccan educational programsacquire the necesnry exrerience The managerent assistance componentof thin pro~ject ]e-rribed In the Project analysis will to some extentalleviate OFIWAMs high level personnel requirements
3 Inw1 ernetation Sehedu]
Months Implementation Action
1 0 Sign Loan Agrcement
2 2 C-tiify conditions precedent and Y4tiate procedures for selection of US firm for management contract
2 Negotiation of extension of advisory Engineering Services
h 4 Contract (Hydrotechnic) Negotiation of Managerment Contract
5 60Cmpletion of Project
C Waivers
Sect ion 7 rf AID Regulation 7 provides in substance that theUnited State ill not finance direct costs of construction work performedby third cc-ur y nationals unless the total co-tn of the project withvhich thr ennrtrumticn w(r is asEcciated donot exceed $2On)O orafter excluding national of the country in vhich the site of constructionis located and Dersons vho nave resided therein uninterruptedly for morethan three years imrnedJately prior to any determination under Regulation 7at leant 0 of all uernons who work under the contract at the site of conbulltruction are United States citizens or the employment of third countrynationals is necessary to avoid excerrive corts to the United States
3
31
Section 2175 authr-ri th Regional Anitant Administratorto waive the nrovinions of Sectionthat it is 2073 if he dcterriner in any coneimportant te the nationrn intercrt of the United Stutes tofinance the direct eots of construction work performed by third country
nationals
A prviou1y r ic i c t tht for thr ct Tartthe -r c ct b- 1jeuj out r -cnorbr f cnrtructioncontracts with Morcccrr contrctnr an in the i-t Uowfevvr itentirely psnible that there may b- roe contractn with cntructlonfirms partly owned by third country nntionaln and that ruch firjs anwell as the surely Moroccan-owrned firms may enloy third country niationalsIn such canes a difficult rrobic-i iould arise in meeting the terms ofRegulation 7 since an a practical matter Aericans are not reaonablyavailable for ermployn ont by such contrnetorn and our previcus experiencewith the Naunsseur Ccnv(r-ion project thatin Morocco has indicatedAmerican contractors would not be interested in bidding cn small conshytracts in that country
It in therefore recommended that the Annitant Adinitratordetermine rursuant to Section 2q75 of Regulation 7 to waive theapplication of Regulation 7 to thic iroject since the project 411 conshytribute to the attainrent of US foreign policy objectiver and the cbJe-tives of the Foreign Arsistnnce Program
LITI L USE
LfI~~5xA~us
lit
4 A J A 45 4 k
t A S T
S(3
I A444ilA~~l~)
7 -74
tAM= D
SECTOR 27
10000
t Co0Na includez25 cgtri oncFcttlrvI ncy I8s ~ ~ C t C- Includes 50 constriJcltiotrgrc
2000 60
IU
0
z
bull cosYsA shy----- i
600L _
400
200
0 5 I0 15 20
INTEREST RATE
I ~ 7 J7777
ANIAampX C
PROJECT DESCRn1 rOll
The project com)onents to te undertaken on the MIoulouya Irrigation Project over the next five years contists of the following
C(n1rtion of the rrLin casuals and bianch canbls to provide the suource of waler to the sctors be developed in theto TriffBou Areg and Zebra areas This construction will include the necessarystructures such as reulators highway bridges aqueducts water intake
and discharge structures etc
2 Iand Txeloommerit which includes engineering land consolishyt and iuvtllng lard preparation (subsoiling ripping destoning etc) and installation of water distribution canals (secondary tertiary and quurtunary) and drainage collector ditches for the Triffa main covering 24000 acres in sctors 8 9 10 16 20 21 23 24 25A 2513 27 and 28 Lou Areg Central covering 16250 acres in sectors Dltirough D2B and G1 thru-4h G313 i0u Areg Remainder covering 15000 acres in s-ctors D3 through D7 and GA through (6 Zebra Collective covering 45)0 acres in sectors 3 4 5 rind 6 and Zebra Rer-iinder covering 14250 acres in sectors 1 2 and 7 through 10 and th remainder of sectors 34 and 5 The total land to be developed is about 74000 acres
3 Canalization of the Oued Zeluan and nued Sidi-Amar in the Bou Areg Plain consisting of strairltening englarging and regularizing of these streams to carry the flood waters to the sea Drainage interceptor canals are to be constructed parallel to the sea in the Bou Areg Plain In the Triffa Plain the Oued Riada main drain will be deepened and enlarged and secondary drains will be excavated to provide for drainageof the Madagh area This will include the construction of bridges and culverts and other related work
4 Major Commorn Works will consist of
a Clearing of the Mo-1ouya riverbed downstream of the Mechra KLila barn caused roy flood dariwe and the installation of a set of stop logs for maintenance of pillway gate-
b Design supervision and construction of repairs to the ]elt Lank dead head tunel
c Conctruction and establishment of sib-division Offices and installations for farmer support such as CMVand farm stables
1 C
-2shy
5 Manavmtnt It ha been proposed that a US management firm be ewployed by th- C4 to manage and operate the entire Bou Areg area Such manageent -iuld encomparn all activities from the initial concept to final irIrp igricultural production Such activities would Include resp r-ibilsect -or supervnsion of engtneering and constriction of primary
S- Jry r complete developfnent of land training n in g tinul irription practicen preparation of market
t - r1t- (ot--rnu trplusmnining of a Moroccan cadre to take over h v--it Bou Areg dreara P the
At this writing the n-pt of turning over to a private UZSfirm execushyresponsibl]ity I h management of the establilrment and initial
op-ration of irr1gati the Bou Arog area has been only broadly de iiitd by the GCJO It Intended that proposals will be invited from a r -onable ntnber of f|ed US firms that a selection will be made an-n 7 them and a more do iled and cornprehenrive definition of the rer6 -Ps to be performed be eztabliched at that time It haa been
stimated that the t- of ruch a contract will be about $2 mir- n In any event the -ts of this contract other engineering arvl s to be provided undt n extension of the Ilydrotechnic contract and ether US corts will not ed the proposed $5 mllaion developzont Jean fr the project
The cle 3ifications duties ant 1ncnslbilities of the management personnel ill ha-- to be clearly defined i agreed to by the GCM Perimeter Directo- and other GOM Agencies luding arrangements for the necessary gistic support
Svxlale Docu-
1
4
LD ED 0ICIAL
-IAIDshy
A1trX D
C6JCK LIST OF STATUTORY CRITERIA
(Development Loan Fund)
1 FAA 0102 Extent to which U3 cormodities and services are furnished consistent with improving the US balance of payments See Sections II-C II-F
2 AA sect2O]ihi lanner in which loan wil promote countrys economic develo shy rit emphasizing help for long-range plans and programs designed to developeconomic tesourcos and increase productive capacities See Section I-D
i FAA sectT] h)(IL Information and conclusion on availability of financincfrom other free-world sources including private sources within the United States See Section II-F
FAA sect20l( )2 Information and conclusion on activitys economic and technical soundness including the capacity of the recipient country to reshypay the loan at a reasonable rate of interest See Sections II-B II-D and II-E
5 FAA 1201(h)( Information and conclusion on existence of reasonable promise activity will contribute to developrmnt of economic resources or increase of productive capacities See Sectiona II-B and II-D
_92_(b 4Information and conclusion on activitys relationship toothor development activities and its contribution to realizable longshyrange objectives See Sections I-D and I-E
The following abbreviations are und FAA - Foroirn Assistance Act of 1961 as amerded by the Foreign Asaistaice
Act of 1967 App - Foreign Assistance and Polated Agencies Appropriations Act 1968
AFEVCDF 1066
L1
-2shy
7 FAA f12O1(b)(5)_ Countrys self-help masures including institution of Foreign Assistance Act investment pliaranty programs Investment Guaranty
bull Agreement signed with Morocco 331o6l See Sections I-D and II-EI
_A ))(6) Information and conclusion on possible effects on US econowy with soecial refererne to areas of substantial -labor surplusSee Section II-F
9 FAA q201 (h)() Information and conclusion on the dagree to which thA country iv wiki- progress toward respect for the rule of law freedom of expression and of the press and recognition~yf the importance of individual freedom initiative and private enterprise
10 FAA -1201(b)(8) Information and conclusion on the degree to which the country is taking steps to improve its c]Laato for private investment See Sccton II-E
31 FAA R LbJi Inforrat-on and conclusion on whether or not the activityto b financed will contribute to the achievement of self-sustaining growthSee Sections I-D and II-B
12 FAA fi2Ol(bj Inforruation and conclusion on reasonalbe prospects of reshypayment See Section II-E
13 FAA fl20JL() Info-ation on applicability of the twenty country ceil4ng2
14 FAA fl201 L Information and coclusion on legality (under laws of the country end the US) and reasonableness of lending and ralendinr terms Loan will be on minimum termspermitted under FAA These are deemed reasonable see Sectioam Evidence will be renuired from the GGM as to the legality of the loan agreemnt
1 E 2 Information and conclusion on availability of an applicationFAA together with sufficient information and assurances to indicate reasonably that funds will be used in an economcally and technically sound manner See Sections I-A II-B and II-D Application received Janury 15 1968
16 FAA fl201(fL If a project inforntion and conclusion whether it will promote the economic developapent of the requesting country taking into account the countrys human and material resource requiremnts and the reshylationship between the ultimate objes6ives of the project and the countrys overall economic development See Sections I-D and II-B
17 FAAJ 20ij(J If a project information and conclusion whether it cifishycally provides for appropriate participation by private enterprise 8ce Sections YI-C and 114
I- FAA i22(a) Total amount of money under loan which is going directly to private enterprise is going to intermediate credit institutions or other borrowers for use by private enterprise is being used to finance imports
rfro private sources or is otherwise beirg used to finance procurementsfrcm private souwces See Sections II-C and II-2
9 FAA 207 Infosation on the emphasis placed en
(a) encouraging development of economic political and social institushytins No apparent relationship
(b) nelC-help in mectingthe countrys food nredo Project Vill conshytribute to production of food for lccal consumptioa
(c) in-proving availability in the country of evucated trained manpower Project will contribute to the deicloginext of trained manpower as one of the functions of the management contract (Soe Annex C para 5)
(d) prcgrams aimed at -malnutrition disease eradi atDn slum clearanceWater purification sewage disposal health education naternal and child care(includin fimrily pJnrning)) -nd cthcr public health ausistarice See
(c) other develoment activities including industrial development free
labor unions cooperatives tnd voluntary agencie transn)rtatin and ccshymwquication nrStczn capubiliTies for economic planning and public adlinisshytration arban develo-mment and modernization of laws to feilltate econcnicdevelopjen- GO- intends encourage develo vient of cooperat yes particularlyin the Left Pank areas Project will also develop capabiLi ics for cconoaicplanning and public a6~inistration (Annex C para 5) Other not applicable
20 Information on the extent to which the r-untry is
(a) cttcmting to increase food production and food sto a-e anddistribution felitics This project is one evidence of Moroccos efforts in this direction See also Section I-D and I-E
b) creating- a favorable climate for foreign and dmestic iri-ate enterprise and invcstrrment The GCM has recently reduced profits twes anrannounced a ten year guarantee against tax increases See Section II-E-2
(c) increasing the role of the neonle in the developnental procecsNo apparent relationship to this project
(d) allocating expenditures to development rather than to unn-cessarymilitary purpoes or intervention in other free countries affair See Sections I-D and Ii-
(e) willing --nribute funds to the project or program Th iOMhas already dcvo o-sidcrable resources to the project It has badieted13 million for th i oulouya for i7 See Section I-C
(If) making economic zocial and political refo ns such as taxc coliecshytion iYprovcmenLs and chan es in land tenure a Royal Comm ision has been appointed to make recomendation on land tenure probleras in the Lower I oulouya
(g) responding to the economic political and social concerns of its people and showing a determination to take volf-help wcasuren See Sections I-D and II-E
IT
-ovi~cd l v r 13 1968
- 4 - LDffIED OFFICIAL USE
21 FAA Inforn ation about multilateral assistance being Iurnished to t e country and whether the loan will encourage recgional development prog-rams The I1D has eztablihcd a Consultative Group for Morocco which rvicws the GOM development program anui prgress See Section II-F-4 for infoaation on othtr donor assistance to Morocco
22 A Extent to which the loan will contribute to the objective of ass ring naximu par icipation in the task of econonic dovelop--ent on the pL-t 0 _he people of the developing countries through the encouragement of cocr-tic private and local govenmental inLitutious o apparent
relationship
23 F _-_Dta_ Infor-ation and corissions whether loan will oncourageeffor s of t1e country to (a) increase tie flow of international trade (b) fostcr private initiative and comptition (c) encourage development and usceo co opratives credit unions and savingss and loan associations (d) disourgo monopolistic practices (c) improvo technical efficiency of industry ariculture and commerce (f) strenSthn free labor unions This project is cxpected to increase technical efficiency oi-agriculture
2_ C-1L lnforzrition and conclusion on how the loan will encourage US privte trade and investment abroad and how it uill encourage private US participation in foreign assistance prograas (incluiing use of private trade channels and the services of US private enterprise) See Section II-
25 VA-+_ Conclusion and supporting information on compliance with tho Co resional policy that engineering and professional servicos of US fir-ms and their affiliates are to bo used in connection with capital project3 to the nixinua extent consistent with the national interest US engineerirn and innsgcment services will be financed tnder this loan
2$ Inforamtion and ccnclusions who+her loan will pormit American rx-l] business to participate equitably in the furnishing of goods and
z orvices by To be satisfied in Loan Agreementfinanced it
27 - t(a App I18 Complianco with restriction of co -zodity procureshy o UsMS except as otherwise determined by the Picsicent and subject to ttu--- rcortir require r-nts Procurement will - liumited to the US for
reiabnrs nts and to ioocco and other free world countries 1-or US-cwne(d rhu disburseacnts
23 -i Comiance with bulk cozodity procurement restriction topriecc no l-ho han the nkarkot price prevailing in tho US at tia of
bull puchas Not applicable
29 FA Cozpliance with requirement that matrin insurance be purchased on commceities if the participating country discri-inates and that insurance be placed in the US To be satisfied in Loan Agreement
30 IA 6(a) Information at to the utilization of excers personal property in lieu of procurement of new items Will be required ai appropriate under terns of Lean Agreement
f
1 77--7 -77-77-777
31 FAA 61](a)(_) information and conclusion on availability of enginoering i financial and other plans nccx sary to carry out tho assittance and of a
reasonably firm cstimate of the cost of the assistanco to the United States
See Section II-D
32-ecessaryFAA t611(a)_(2) legislative action r6quired within recipient country and ibasis Cor reasonable anticipation such action will be completed in time to pormit orderly accompli-hirtnt of purposes of loan See Section I-A
33 n _AA161nJ0] If water or water-relatod land resource construcshy
tion project or program information and conclusion on a benefit-cost comshy
putation See Section II-B
3 4 VAA 611(c) Compliance with requirement that contracts for construction be let on comp-ctitive basis to mamum extent practicable To be satisfied
in Loan Agreement
If a loan for a project of $1 million or more certificatin35 FAA _61l(r) by the principal AID officer in the country as to the capability of the
country (both financirl and human resources) to effectively maintain and
utilize the project taking into account other US-financed projects (Such
certification is to be pproved by the Administrator aL the time the loan
is authorized) In process of being obtained
36 FAsgJ2 _6_h Appropriate steps that have b-en taken to assure that to the miaximum extent possible the country is contributing local currencies to net th-2 cost of contractural and other services and foreign currencies o- icd by tho US are utilized to meet the cost of contractual and other services The GU-M is contributing over $30 million to compleXton of this project Excess US-use dirhams will be used for eligible project costs other than US goods and services
37 FAA p619 Compliance with requirement that assistance to newly independent countries be furnished through multilateral organizations or plans to maxishymum extent appropriate Not deemed appropriate in view of previous AID financing and ccoiitment to the project See Sections I-A and I-D
38 FAA sect620(a) AcnO7a n3]7(b) Compliance with prohibitions
against assistance to Cuba ard any countr (a) which furnishes assistance to Cuba or failed to take appropriate steps by February 14 1964 to prevent ships or aircraft unier its registry from carrying equipment materials or supplies from or to Cuba or (b) which sells furnishes or permits any ships under its registry fr-om carrying items of primary atrategic signifishycance or itcms of economic assistance Morocco is not-known to be in Violation of these sections
39 FAA q620GL_ If assistance to the government of a country existence of determination it is not controlled by the international Communist movement The Secretary of State so determined on October 11 191
40 FAA 620(c) If assistance to the government of a country existonce of Indebtedness to a US citizen for goods or services furnished or ordered whore ouch citizen has exhaustod available legal romodiesor where the debt
i - ow - -- _---- --shy
- --
-6shy
is not denied or ontested by such government or the indebtedness arises under an unconditional guararty of payrrent given by such govornmunt No such indebtedness is known to exist
41 FA _(a2LdL If assisitance for any productive enterprise which will corashypote with US enterprise existence of agreement by the recipient country to prevent export to the US of more than 20 of the enterprises annual production during the life of the loan Not applicable
42 FA4 - 16Q_0_ A If assistance to the government of a country extent to which it (including government agenies or ruhdivisions) has after January 1 1962 taken steps o repudiate or nullify cuatracts or taken any action which has the effect of nationalizing expropriating or otherwise seizingownership or control ofprcpertv of US citizens or entities beneficially owned by them without taking appropriate stops to discha i ge its obligations No such steps cr actions are-known to have been taken by the GOM
43 FAA~L AjPj_10_9 Compliance with assistance toQ0 prohibitions against any Comunst codntry ozocco is not considered to be a cocinrunist country
44 FAA - 620(gJ Corliance with prohibition against use of assistonce to comp satc owners for expropriated or nationalized property To be satisfied in Loan Agreement
45 F AA 8620(h Compliance with regulations and procedures adopted to inshysure against ue of assistance in a manner hich contrary to the best inshyterests of the US promotes or assists the foreign aid projects or activities of the Communist-bloc countries To be satisfied in Loan Agreement
46 FAA 06-O(j)_ Exitence of determiration that the country is engaging in or preparing for aggressive military efforts No such determination has been made
L_62_O Information47 FAA on representation of the country at any intershynational confererce when that representation includes the planning of activishyties involving insurrection or subversion against the US or countries recoiving US assistance No such representition is known to have A occarrect
8 FAA 62JJ Existence of a determination that the country has permitted or failed to prevent destruction of US property by mob action or has failed to take steps to prevent a recurrence and-to pay compensation NO such destruction is known to have tak-n place
49 PAA l620(k) If construction of productive enterprise where eggregate value of assistanc to be furnished by US will exceed $1OO million identification of Gtntutoryauthority Not npplicable
i-xQ2MZZ=
1 shy
U 6 50 _Af( QCinsidoration which has been given to denlying assistance X to thu government of a country which after December 31 1966 has failed to
- institto the investnint guaranty program for the spcific risks of inconshy
vertibility and expropriation or confiscation Satisfied See No 7 above
S51S J lj Compliance with-prohibitions-againstn as~istance to countries which traffic or permittraffickingwith North Vietnam Morocco is not known to be in violation
52 E_-L620(_L If country has seized or imposed any penalty or sanction against vn US fishing vessel on account of its fishing activities in
intcrnationul waters information on the consideiation which has been given to excludirg the country from assistance No such situation is known to exist
53 FAA FA r) UAR restriction Not applicable620(p 9117
54 FAA R620tl) Existence of default undhr any Foreign Assistance Act loan to the country No such default exists
55 F ) C-nsider tion of whether co ntry is devoting unnecessary percentage of buKet for military purposes or use of foreign exchange for milita-y equipment
56 FAA 62o(t) Proibition on aid if country has severed diplomatic relations with US unless agreements have been negotiated after resumpshytion Diplomatic r(lations have not been severed
57 FAA 9620(u) Statur of the country on delinquent UN obligations Morocco is not known to be dlinquent on its UN~obligation
58 FAA R636(i) Prohibition on financing non-US manufactured motor vehicles Will be satisfied in Loan Agreement and Implementation Letter
59 App 102 Compliance with requirement that payments in excess of $25000 for architectural and en Jneering services on any one project be reported to Congress Such reports will be made
60 App R1O4 Compliance with bar against funds to pay pensions etc for military personnel Such payments will not be eligible for financing under th Loan Agreement
61 App 9106 If country attr ipts to create distinctions because of their race or religion among Americans in granting personal or commercial access or other rights otherwise avaVIfable to US citizens generally application which will be made in negotit ttons of contrary principles as expressed by Congress Morocco is not ku IDhave made any such attempts
iInD OFFIIt t USE
0k
OFFICIAL USE 62 AIwp Rii Compliance with existing requfremets for security clearance
of personnel Will be satisfied in Loan Agreement and Implementation Letter
63 App R1l2 Compliance with requirement for approval of cortractors and contract terms for capital projects Will be satisfied in Loan Agreement
clJ164 Aup Cmpliance with bar nRainst use of funds to Tay assessments etc of US meiber Such payments will not be eligible for financing under the Loan Agreemunt
6 Anp P115 Ccmpliance with regulations on employment of US and local personnel for funds obligated after April 30 1961 (Regulation 7) See Section III-C
66 Aim Vietnam iron and steel restrictions Not applicable
67 p l9 If a country other than Greece Turkey Iran Israel Republicof China Phillipines or Korea reduction in assistance by amounts spent for the purchase of sophisticated military equipment
68 Anp fi4O1 Compliance with bar against use of funds for publicity or proshypagjanda purposes within US not heretofore authorized by Congress Such use of funds will not be eligible for financing under the Loan Agreement
Morocco is a traditional Islamic monarchy with a constitution The conshystitution was implemented followaing a popular referendum in 1962 National regional and professional elective bodies including a parliament were established by universal suffrage under the constitution in 1963 The parliament was suspended in 1961 in a State of Exception because of its inability to agree on measures with adequate urgency to meet the prevailingecononde imperatives In July 1967 the King appointed a Prime Minister to direct a Cabinet of appointed technicians
The constitutional framework nevertheless remains intact in Morocco and nationwide popular elections for some of the professional chambers were held in August and September 1966 The press is relatively free in Morocco and the right of diLsent prevails provided that such dissent does not violate the prohibition against political attacks on the instishytution of the monarchy or the person of the monarch
LI Under the revised US AID Policy for Africa agreed to in November 1966 Morocco is designated a development emphasis country entitled to receive continuing support on a country basis as part of a multilaterally coorshydinated countrj program Morocco was subsequently included in Presidential Determination 67-14 (January 5 1967) I
LIM=TE OFFICIAL USE~i
- l go
bull ~ -
f
DEPQbi) STATE AGENCY FOR INERNATIONAL DEVELOPMENT
WASHINGTON DC 052
CAPITAL ASSISTANCE LOA11 AUTHORIZATION
Provided from Develoroent Loan Funds Morocco Second Lower Moulouya Irrigation Loan
Pursuant to the authority vested in the Assistant Administrator for Africa of the Agency for International Development
AI)by the Foreign Assistance Act of 1961 as amended theIAct) and the delegations of authority issued thereunder I
have received and t-en into consideration a certification from the Director of USAIDMorocco as to the financial and human resources capability of Morocco to effectively utilize the Lower Moulouya Irrigation Project taking into account among other things the
maintenance and utilization of projects in Morocco previously financed or assisted by the United States and I hereby authorize the establishshyment of a loan pursuant to Part I Chapter 2 Title I the Development Loan Fund to the Government of the Kingdom of Morocco (Borrower) of not to exceed five million dollars ($5000000) to assist in financing the fore] gn exchange and local currency costs of goods and services for the third phase of the Lower Moulouya Irrigation Project subject to the foLlowing terms and conditions
1 Interest Rate and Terms of Repayment Borrower shall repay the loan to AID in forty (40) years including a grace period not to exceed ten (10) years Borrower shall pay interest on the unrepaid principal and any interest accrued thereon at the rate of (a) two percent (2) per annum during the grace period and (b) two and
one-half percent (2-12) per annum thereafter
2 Currency of Pepayment Repayment of the loan and paymenu of interest shall be made in United States dollars
- t- n t - - - shy
3 Other Terms and Conditions amp(a)Goods and Services financed under the loan
shall have their source and origin in
(i) the United States if disbursements therefor are made in United States dollars or
(ii) any country in the free world including Morocco if disbursements therefor are made in Moroccan currency
(b) AID Regulation 7 shall not apply to construction -work financed under the loan because as detailed in Section IIIC of Capital Assistance Paper No P 667 it is important to the national interest of the United States that the direct costs of construction work performed by third-country nationals be financed out of funds made available by the Act
(a) Such other terms and conditions as AID may deem advisable
Assistant Administrator for Africa
Date
~~~~~~~~~~~~~~~~~~ - q v
7
-13shy
elevated area requirin iat-r to be puiiped to the irrigated land with both highr capital costs (about 1 million) and higher oreration and maintenance costs (150 Dirham per hcttare via-a-vir 100 Dihams perhevtare for the grnvity irrifrted ares) The ony work presenl-ly cotiishypleted in the Triff Hih Ser-ic Area is the preliminary engineering stirUes Cimi-ir to th Tr Pa r thu TrIffa ]Igh Service areawill reiir an ex I uvnt ricd bfore agricultural proshyduction cn be initlat-2i
The above considerations reiult in the following revised ranking of priorities
Project Area 1FY (M Priority
Triffa Main 21 I Sector 27 8 I Sector 28 9 I Bou Areg Central 6 II Bou Areg Rerainders 6 II Zebra Collective 5 II Zebra Remtd nders 5 II Triffa Ent 6 III Triffa High ervice 5 III
SRI 11ed a ccst contingency f7actor of 25 and a cumulative costescLlatior factor of 3I per annum These factors appear excessivelyhigh in th( light of (1) project experience to date and (2) the fact that from his roint the technical rirks involved arre of a much lower orl- r f 1h thnse inhtrent in the major works Just comshy1 I intion nrd contingency factor of 15 has there-
S chtiMnte- Itlizcd in this rarer The ii n-ttr costs the to ) ject (in n]ace of factors
i by )I nrt 11 thIrhe nf th nJter atve I[cwver rrtnrecr-y factor euld Increase the IPE ] hi ra]y th- IIRF fcr the TrIfa Sector 27 ansnunirg a
oct crortlr7crncy A can be seen as the conAngency I thf cc curve rrv to the right and inter ects the
ur h h 4r- rnr rate of return)
C Finreirifg inr
Cot o the prJect wor fmcentntgenent nnd engin-erinm advisoryrvices for the proued t rd tsge of the Mmlouya Project are
ctirt a Crollows
nF3r AVAILArBILE COPY
Best Av DlableD
7 17 shy
(In Millions Of Dollars)
Righi Pank
Trffa Main 34 poundSt (r 27 08 S ctor 6 0Q
51 Left ank
7bra Collective 12bra Remainde r- 54 Tou Areg Central 74 Lou Areg Remaluders 68 heft Bank Dcad Head Tunnel 30
238 Services
Management 20 Advisory Engineerin 05
25 SUB TOTAL 37
Escalation amp Contingencies 15 47
TOTAL 361
It is proposed that the AID Development Loan for this stage of the Moulouya ProJet be limited to $5 million an amount which would be sufficient te reet the cost of any US goods and services required for the works to oe undertaken Thus the loan would finance the dollar costs of manrement and engineering advisory services to be provided by US firms erstimated at $25 million The balance would be available to meet any ther US cofts that might arise for constructicn cuipment and nateria]
The balnnmc of funds required would be provided by the GOM from its own budgetary resources including as appropriate agreed allocations of the counfryj-uie dirham proceeds of US surplus agricultural programs in Morocco
To a l-ge extent construction works In the Mou]ouya (other than the Bou Ar- Tunnel and Mechra Klila Dam) have taken place under a largenumber of roll contracts with Moroccan firms It is anticipated that this will ontinue to be the pratice in the forthcoming development stage Th iit is evident that the great bulk of project cests in this next stage will be local costs
-E5 -
In the event that not all of av l able fuInd- under the loan are required for TKI eo It i ouied that any remaininrn balance be utilized for the payment lo -ovalccztn f the project This would be aceoomplirhe by utili7irn th- h r vroceeds of the loan to purehare US-use dirhsmn (frcr th U Oi-irrirg Officer) which would be utili ed to rrimbure th fc u a t local - nditurrs
Thi arranrit 3ir ila ) fstV utilitd In the - of the D-e l-INAieret Loar tJr U Atrrert SinceYr usii Conv rf i cn therc loans are rcpiviible in dollars nd rince Morocco in a n-ar excess local currency couintry the fert ) f e transaction in tc provide a means for obtaining ccnvrrrs cn a-cr th life of the loan of otherwire inconvertibie U5 holding irhrs hich are in exces of its localrequireme t
In 1967 over 15 million dirhams (abceut $3 million) of PL 480
Section l04(g) loan fun cre in msgreement with the CON allocated for the financing of various contractr reloting to projects in the Moulouya It in anticipited tht ndditional allocations will be made out of the local currency proceed generated from current and antishycipated US 7urplu agricultural rmodity programs in Morocco
It has been proposed that the dirham equivalent of $45 million of the proceeds of the October F67 rurplus agricultural commodity Sales Agreement be allocated for a Section Cb(g) loan for the Mulouya In nadition it is estimated that a $]35 million (in$ioz1ble dirhshyequlviJent) woull be available from 7uprl]eental surplun agrIcultura con -ity rales programs under Titlo I an-d Title IV in calendar 196F for allocation for loans for development projects in Morocco These two amounts combined would provide about 6 of the G014 resources reshyquired for the project over the next five years On thic basis there would appear to be rcasonble propect tht the GO should be in a rorition to provide cver the S e year rriod of the project the addishytional resources renuired for itF ccmpletion
Tt I contemplatd that na additlonal US dollar financing of the Moulouya byon-l the $ iilon rorosed herein will be provided for tl cplei n ef h M _11-nuya rince the bringing under irrigation of th- 11O0Y ies include] in the propore] project will substantlally cornIete the works criginally conwtemplated hen h DLF loan was authorshyized in 106 The remainler zf the workr h(- be within the capabilit3 of the GOM to complete with It- o-n resourcec
MT M T M
-16shy
) Technical Anily ir
The Moulouya Rivr which is cre of tne largest in Morocco originatesin the idll Atans
Moulouya and which oztend scuthward
Kediterrancn l re
t rre
Pr
ard n
flows rrpr
orre 25) mriles northeast thr Agorinn border
to the
In- agricitui 1 in li j i nt( iljr r Th- rst rind most
t 2 1ir i t i h- i n th rwrht born of thshy-- e 31nmiler frem the Mediterranean
Lea To tho wet cf the Tiffa and nn th- left bank( of the Moulouya isthe Zebra nlain 14wiuntain rv-arate the Zebra frcm th -ea and fron theBou Art-r i-ll]zain which - ctI nrrthwe(st of the Zebra The Bou Areg a coital phtain sclte 19 mils lorg and h miles wide separated fr-nthe n-a by a Ihow sa2t water lagoon Southwest of the Zebra is theGireb plain which hun land ruitable for irrigation in its routheasternportion The Gareb i at a higher elevation than the three other plainsard if ultimately irr-gatcd vould require pumping fro the lower level Zebra conv(yance system
Water from the Noulouya River is stored brhind the Mechra Klila Dam whichwas coniletd with fjiancri rc AID loan (3-A-2 (DLF Lcan l6)Water ir rclca ed downstr(a (1bcut c) miles) to the Mechra Homadi reFrshyvoir and d]iversion dcim in1h-r divert-d to th right oad left bankcunals About 75 kilometer (1 miles) of the Triffu (right bank) maingravity ciral hay ben copletd und consderable cr) has been carri-dout in the Tri on) distr Iution and drainage netw rks land levelngend other farm iwnrovwments About 37 kilometers (22 wiles) of the Zebra(left bank) main gravi-ty canal and the tunnel 6 miles (101()7 JIrenrTrcters) betxeen the Zebra area end the Bou Areg area have been comrneted
The GOM illrrfo m certqin -rk nr-Aded fcr develormnt of the gravityir~zgata yt-- for n 71-) acres over the next five yarr Thiscffort vi2 be eonern rait-r urcr the develo-ment cf areas thot providethe great-rt ecnnomic returrs nnd the developnent of a cadre of Iorocearperornel adequ tly tran-yi in the an2gerent of the project SeeAnnex C for further Irojcl details
e- enmL Ev1ation
Mt Infratrueturr The --trnal highway co-munication network i t arid rfi Isirm nf re- i n-ote siler in-1 shy
uzeather raved rc
____________________TAM
- t 7shy
Other communlca 1 i i t ih Lh arr-- inlude the nrninlineof the Oujda-Fe--C- t h~rh l e0tnnd to AlgeriaSpanish enclove rt the 1 fir idto cmmercial airport at Oujda andNador with regular national onI int rnational ervice5s
Th verirtr 1 u ~Ath r nr r t crocd by 60 kvJ i i i u rrd t 5( kr It na ortr kk f~ditcrl rower1(Qp x I -y yrar) -o n d hr rritIronr
at the Mechra-Yplusmnilj l inm fnd the Bou Areff contral poter Statin The townare connected to ranrh cther and th2 r-rt of Mcrocco by telerhone andtelegraph 1 ner
b Sol Soil rvey 7rd land ]a-ifctons have been completed i-nthe Mcloulva rer eter oanntrantbi- with French firmr u-ing Frenchmethods The Trifa -1n wr initialy rraped at a cealeof 150000with certain area ub entiy rer-aLd at 15000 110000 or 120000dependin I nn the cor1cjeity of YJ rattcrns The Zebra plain has beenmapped at a reale cf 20O00 nod th- Bou Areg plain at a scale Df 150OO On thp baf Yr nf ther urvy th cla sified the soilsGC hain terms of r-uitnbility for irrigation as follows
Land Ciaifcation (Aere)
CasrI amp IT Class III Clans IV Totas Triffa Plain 17000 29[00 22725 99625Zebra Plain CbO 1275 4050 211425Bou Areg Plain 75)00 l6qo 3 0 3067)Gareb Plain 13 05 10 70 0
Inclurez 1750 acres for lfigh Service Area
The findings thi indicate that ( i) arriratry 5of the area in thefour rlain- i suited to irrigation (Clare I anl II) (ii) more than3 ir suitabr bt with one Or mcre imrtat~ons Irro=ed by underrablefeatur-s such an to wrafhy oil characteristJcn trnine- r restrltedbull rio (CIar TIV) and (iij) ls than 2 of th- area in only margina)lysuited for irrinticn(Class TV) In ther7e lattrr ardrn only rmi-intrnsive orop rotations blUponsblhe
The oi nicn f the Cn-lting Envneer (1ydrctechrJ) th respect to) therd carrffjn n that hfle 3 Bureau for P ltr0tion -tandards werirt ernoy-d te rlasnificatinn ir aceurat- and n rrti with3and rlaced in r d rLrnble categories more
uere thnn right ha bern the caseUS tandardr folIced The clasifatinn ha 0a been reviewed andfound to be atifactory by the USPA tayr Hoever r areas of complcxroil Ttternr hch to date have only been ru-d to a oale of 150))rome reraTpin tray be necesary as a banis fcr rrerarnZ
- g~T PRAvVLAFJLE EOPv
final designs of irrigation and drztinne- rystems parcellization into farms and planning of land preparation measures In addition considering the high average salt ccntent of ater frcm he c ilouya hiver a rorm of systematic leachin- will be reqirer- to f ree-rt aculation of salts in the soilsparticularly in h ebra Crt in will nlso1e plain ureas require nitrogenphosphorus crd possibly other nutrient to obtain satisfactory yields
c Water On the basis of studies by the GCM which have been reviewed bythe Consultirr Fnr ncri and the U au of 1ccoi-ation it is thecorclusion of A tt (i) the q lity of water in the Lower Houlouya
is below averpge bvt crp rble to thtof certain rivers in the US whichisotnteLoh~uoybrve successfully been usc for irrif ton for periods cxeccdin 100 yearsOj5) there is clearly a sufficient a )unt of i ter to irrif-ate the 128010
bullcrer to be served in the [rlcentIty ar n3 Addi-tional s-tudioser (c requilrecj dcter-Inc if adeqiuate water is a- ilable for irrigationof 376QGO vc rc
The only signifcant urce of vp y fOr irrigation water in the perimeteris the oulouya Vi~cr io jc n1 is 1re ntly being irrigated from wells most Iround water i - - 1 Alouya contains dissoived salts which i xr Lrn - hvriny reak flowto iJOx PIn iuting [cricd of c n ccntraticn is 750 ppm On Thi- basis of USDA Salinity Lot) atory criteria fte v ater is class 03-SI (hl-h salinity-low a-alinity) Vile water is thus of mediocre qualityit is ccmrarable to that of river successfully used for irrigation in the US (eg the Lower Colorado Rier) and poses no serious problems to irrir-ation in the Moulouya perir( cfr provided the W4 adheres to recorrmended programs for meeting leaching reoairements
With ref-pect to the 128000 acr project the demand for water reasured at the Mechra Hoadi diversion dair is estizated at about 575 million cubic meters per year as follows
remand for Wter
Peak Flow Annual Total (August) (m 3 million)
Agrieulture (176000 acres) 337 m3s 806 Municipal amp Industrial Consumption 8m3 23
Total 4 uy62123000 acres to be irrigateA by Gravity 255 m3s 575
(The e dpeak requirzents of 345 s compares with a 35 m3 s design
capacity of the main canal at the diversion dam including 18 m3 s for the Right Bank and 17 m3 s fcc the Left Bank)
I
- 19 -
This estimate is based on probaole rainfall cropping patterns plant requirements evapo-transpiration and other expected losses of irrigashytion water The estimate is believed by the Consulting Engineer to be reasonable but subject to refinement on the basis of tests to be carried out on a continuing basis
The annual average availability of wuter from the Moulouya river is estirated at 1100 million mn or about double the estimated requirement for the gravity areas
Estimated Availability of Water
Twelve Year Annual Average for Moulouya River 3 m3 second 1100 million m3year
Maximum inflow Observed 8000 m3second(1963) 3h00 million m3 (1962-63)
Miniwum inflow Observed 1 msecond (1951) 532 million m3 (1956-57)
On this basis it appears that there should be ample water available for irrigation of the gravity area as the water availability obtained from twelve years observation exceeds the requirements in all but the 1956-57 season shown above Prior to the development of land with purped service areas (the Gare-b and the Triffa ig h Service) a review and analysis of the river hydrology should be unidertaken to assess the availability and regulashytion of the river flows
d Studies Entincering and Construction The overall irrigation scheme outlined by the 1uM defirs the ajor features and th( magnitude of the work to be accomplished to attain the ultimate goal
This scheme is being carried olut in phases over a long time period The present phase encorpasses the development planned within the priorities indicated by the Stanford Research Institute (SRI) study for the gravity irrigation system
The studies for land classifliration have been completed for the gravity irrigation system in the Triffa Bou Areg and Zebra plains by French firms and were considered reasonably accurate by the Consulting Engineer Land consolidation and parcellinrg has been completed by 0MET in the Bou Areg Central area the Zebra Collctive and Zebra Remainder sectors 7 thru 10 Land consolidation and pareeLlni ar( needed for Triffa sectors 27 and 28 Bou Areg Rematnder arid Z(bra Rerrirder sectors I and 2 The engineering designs for the Triffa main sector 27 and 28 and the Zebra Collective have been or are being completed by the G0M forces The engineering design for the Cefntral Bou Areg and Zebra Remainder sectors 7 tnru 10 has been or in being connpeted uy Hydrotechnic Engineering design will be required or the 1ou Are remainder sectors D-3 thru D-7 and Q4 thru G-6 and Zebra Rer ainler sectors 1 and 2 The engineering designfor the Dead Ilead Thnnel has been undertaken by SCET who have preshypared anid issued an Avant Projet for bid invitations for construction
14 M)j6Fj Cshy
-20-
This firm will also undcrtnk- uu-orviston of construction The engineer ing not yet performed can be aea ished by GOM forces andor private engineering firms
Construction of the extension to the rrain irrigation and drainage canals Jand preparation rector cinl ani drninaive ditches will be performed unllr cntact t) 1 cc rt~r~iet m)t hi in the ene of the
r-abilit tion of the L2tL Pz- Dd iarl Trnc t
e Cronning Patterns The existing erning pattern in the Moulcuya including botnirrigatcd and dry farm ingincludes grain forage citrus vegetables olives grapes and 6 small amount of leciduous fruits and nuts Of the roughly 2140Cy) acres of agricultural production in the Moulouya about 177000 acres are in field crops 24)) in vegetables 16Y)O in citrus 15000 in grrrcs 540Y) in forage crops 1700 in olives and 15)0 in other fruits and nuts
Taking into consideration rast and present trends in plantings as well as agronomic and price and marketing factrrs the following projection of cropping patterns has been developed for the Lower Moulouya
PROJECTED POPPTG PATTFRNS T1 HE LOWER MOULOUYA
(In per cent of total irrigated area)
Left Bank and Triffa High Serice
Triffa Sector - Sectcr rriffa Class Class Class
crop Main 27 28 East I amp II III IV
Citrus 40 60 10 10 10 Vegetables 15 10 15 1) 20 10
Crtton 15 20 10
Fcragpr 10 20 25 30 4o 30
heat 10 6 20 25 20 35 4o
Grip 25 24 35 15 Dy beans 5 10
Sunflower 10 olives 5 0
100 10) 100 100) 1i 1052i 100
a Incltdes double cropping
- - r- euro --- 7
~7~TF~Wr~e~ALUSE
-21 -
The projected cropping pattern for the Bou Areg plain includes cottonLJrirdg the frrt Five yearnejtinted 1r of the Class I)fand
the project jitwould be grown on nnII landn Tht renresert only 960etrravres) ectz ri)cr)e area The cotton acr~a e ry increasep 2ceafter live years if ritisfactory drainage conditionshyrre achieved in the Bou Arev
cotton grown i 1xonp tarx- Trdltionally Morocco export its-Jr- cron an irr IJ hort cble to rmeett Cotton the reuirrents
r the oroccan 2pinningr mills The croppni-attrn of the Triffa East (about 180n acres) Js projectedt Tnrlude 15- (about 27 acres) in cotton It is likely that becausef ihe limited extnt of Class I and II lands in the Triffa Eas cotton not increase beyond that percentage
1t i evident that the amount of irrigated cotton that is likely to bein ther-n Moulouya is minimal even assuming that local drainage condi-T nare i asuitable
f Technical Sundnv--s The AID Project Engineer hps reviewed ii) thedat and ajor construction performed to date onronct and finds the technical requirements this long-ranRe phasedsufficiently defineoto ccntinue the project on an orderly schedule The estimates of cost of prsirct facilities have been determin-d by SRI from average va)ues oftrit cots obtained frorr reviously ntiarded contracts and from etniled( -s-nand analysis prepared by the iHydrotechnic Enginering fir oft-o tyieal sectors located in the Bou Areg area The costs for the arc ent contract have bcen estimated by the USAID It is consideredthat the depree of engijeering planning undertaken and the deterrrinitonr to the US Goverrment are adequate to meet the applicable requireshySt- n Section 611 of thie Foreign Asistance Act
7717gt
1 --shy
-22-
E Financial Status of Borrower
1 The Moroccan Economy
Grrwth of MorocLcts GDP in real term averaged about 24 per yearin 1(4 and lr li Per capita DP In 1C 5 wan anproximotely t162 A (er Irr-ht in (6 resu]trd n a drcrcne of slightly nver in GDP which tlh vpulatior grc~vth avrring 3P4 per year rnrsJted in a decline of -r ornita GDP In 16 ii brut $154 A recnd droughtcccijrred In C67 but i not expeetid to have the severe effects of the 165 drought Crop forecasts for the first nine months of 1967 indicate a 4 increase in real GDP above the 1966 level This is also the economic grcrdth rate estimated by the IBRD for the pezxA 1965-70
Moroccos economy is heavily dependent upon the agricultural sector thich has averaged about 15 growth per annum However growth of the mal modern segment of Moroccos agricultural sector has inshy-reased at the rate of about 7 per annum
In 96 the International Banik for Reconstruction and Development (IBRD) preented a number of recommendationr denigrned to increase Moroccos economic growth rate On the bacis of these recomfndations the G004 proceeded with planning the necesrary program to increase investment levels fr- the i 63-65 level of 11 of GNP to 1r of GNP and stimulate the rate of economic growth from 2 to an average of over )4 annually for the five years 66-70 In addJtion the GC4 has taken measures to curb the population grovth rat while placing increased emphasis on raising production of both dryland (wheat) and Irrigated agriculture
2 Investment and Savinms
The level of total gross investment has remaind at aboit 11 of GNP for vera year althugh the percentnoe declined slightly in 165 Under the GO Three Yea5 Plan 1965-67 the gross investment t-3rget woz ret at DH 3 billion- Actual invev-tment expenditures for the three yearpeirod reached about DH 46 billion of which the Governshyment ezxenditure amounted to DH 1 billion a against DH 21 billion budgeted Thin may have beeo partly de to the GOMs deliberate ausshyterity pollcy under the hIF rtbJli7tion prci1rnr but more probably it van duxe to the shortage of trained cadres to -lan and execute projects
In the private cectcr conziderable inounts of ravings may be hoarded due to lack of project attractive t- inventors The lvl of private investment has been runnihg at about 51 of GNP thrrugh 195 The 0014 4 incentive to private instors hnr cut profit taxes from 4320 to V and announced a tpn year guarantc-e against tax increases
]L- $ = DH 506
777=-77- NQ
r y 7k1- T e - W lk In
j - 1) 7k- - _
- 23-
Loan are avaiiable to )rivlite irve-tcrn freo th 3JfIDiN s rctr special funda to prcmote touricm devc firvcnt
Under the 1r86-1972 plan abut to br irtntt level are to be accelerated considerably reaching A of GNP liv ]970 Mor(- Irlyir haviiy on foreign 1 to aciuw cc higher lve1
3 Central Government FinancP
The Moroccan money supply which had Incrrased ify 76 per cent in 2965 remained virtually unchanged in 966 The first half of 1967 witnessed a 5 Ter cent increase in the money supply Te major part of thi increase as concentrated in June and July uhen the supply reached V14 0j lion Currency In circulation expanded rapidly in June and July
nnl factrrn being reinforced by commodity hcnrding related to the 1ide~l Et crisis Demand deposits did not show their normal decline nthe first half of 1967 Deposits with commercial banks declined nlightly while deposits with the Treabury increased as public and semi public agencies contisued their transfers from the banking system to the Treasury The increase in money supply in the first half of (7 ran I raced to tho nzon1 sonal increase in net foreign assets not c y the custcirry rlelir In claims on the private sector Clsirl (n the erivate sector declined slighty until May 1967 but Increased hr-gb June and Jily due primarily to additional financing of textile stocks ClbiJ ante Government rose by 10 per cent in the first half of 967 the in central brnk claims on the GovernmentI being rmainly offset by larger deposits with the Treasury
Ordinary budgetary revenues which incrurted by 5 rcr ent in 1566 tre cxrcted t-) increase by 7 per cent in 1( to DII 21 billion DeampDite a derea3e in agricultural tax reccipt r- fror diret taxes rose by 10 ppr cent in 1966 and a 2 increas estinated for S67 due to tric or controls on income declarationr d an accelerashytion of tax cller ns Owing mainly to a relaxation of the import
program in late 1 5 and a concomitant increase in tariffs on certain ccnonter goods customs reneipts increased by 21 per cent in 1966 Although budgetary estimates call for s decline of 3 per cent in customs receipts in 1S67 it is likely that actual receipts will be considerably larger in view of the import liberalizatidn measures intro)duced subseshyquent to the estimates Receipts from indirect taxes state monopolies and other serces are expected to be 11 iv- cent Ipher in 1967 owing to increased profit on -ugar sabr-i and L r(m the newly created Office do Ccrmercalisaticn - d-tation (OCE)
Recurrent ordinary buiL e(enditures increased by 34 per cent in 1966 ar-i are expected to increase by an additional 7 per cent in 1567 reachin- D1122 billion Although wage and salary scales in the public
Banque Nationale pour le Developement Economique
TT~~- - I777
2 Cf
sector have1bec z h t - rrvirI urli 11i g 14-6 -nd PO becnue rX toi Ijt e f (]r o n 4
ill tile ic urrnnye andr)not i on dnd Publi ht rentrn -yr-otn lno IncreasedOthrr t ill- t il r ne by ) vr cert in J6(
i ninlyrt -br h Inc-l
( Ihe ( t r- rl t ip t t C itur f T)h 21h iilli n
is (( ItI t lt r c0 a- r n n o I- c t b It ihstnl id vv ih n t r-t have hn(er - en 1t2
(IM ii ture( T f fu traordJ nary budrzct exshypend ituren a r y -t c ~ i vi -iscz Portal Checking sy-stcsul)rrcing t (I ltIt Ct -- ind creirn shy
nnet The f r er tnc I hha ccrc ed from a htih of DH 5-7 millIJn in _ 5 millIn r C46 F cr ats foi ]7 place Cro n w I 1(DI)J79 ill ni DDn etlc fi nancing has alo u 1) 5 p (- I3A27 iIliun to an entirnted DH 1142 million
1 14V ) I nv 1 ri n nI(c1 franc n is 77-ected to be ol t y ncrewed bcrrowing fr-ir t he Cestra 9ank which hud been held at mcdert vols iln 165 nnd 1a66 Under the 1TFtaiby agreement of October 16 the qob) agreed to taBe a3] rocrrnary meurer to maintain as table curoonry rPnt inl th nr1d-elrto th b a ent of the ePrncriynnd a vnbl- hn1incc X nvroent P rt artt to t rt fien of tho Ccntin- Honk rstz (erct are nct t r itr June 30 Y-ke 7 lov l b th n Diif ) mill] (n tlcnber -c P thai I o illin usit I ])ecthr 31I62 (GC bc w t
C B1rtrp - vt DH 12 iri 1i nor ]S67 or DH 6S ij lionEan tisated (r fo than the aproved crd it expanwim
Thitrd ordivary nil extraordnnry buThTt deficit of DII 7-19 millI n fcrecat Fr 1 67 in exnected to be fnanced by not freign
tan reof DII )75 mi~l in nt recurity 12ue 1 T111I vlion a - nt ry tiat Po n Che )ir d-nC i 73 r5 Pn
riI is u h i a vti v mrr nrr-e jssIof fvr is id a erital The vnfsa revcred in 1d6 when lnrger r nyrentn eEecially on food itcmo an n -lewdoun in
igo ra a deficit of $1 millcn ProjectiOnz-vt rvultvd in ror 17 r~ieat inrrerned importsonly partially ccnrennate by addshytsa t frnreirn r ntil rrceiprs ard mprrvement in the nervices account will reult -n et of aprroximately $)20million As rhoim in the following tabl -r tion for l33 and 169 how overall deficits of
14 and m] ivi_y$i It
rqVV t1 4~
C)rgt
---
1 -)I+-IRF1
1ROCCO - rTANC OF PAYME 1qrt - 169]_ 5
6rfi0 1 1C(8lr67 i r(o
)xrurt 2t L( I L-5
Trade Bnlance 11 15 - 75 shy - 75
rviee- ret - 7 - 5) -35 -23 -2
J]-i of Good rnd Service- - 3 - 65 -II - ti - (5
Trn-Ifr Pr ynts (nt) P 21 33 37 33
on-cntnry Carital (not) 92 64 6 6 5
Err-rs nnd Ov rrion- (not) - 23 -2 1 3
eranl Bannic __ - _3 -_ 3 - 1i4
Atrh thert ircjected reficitn are of the nnme order of 1 nishytude a7 thcr incurred in the period i66 the Situatlcn i findarentallydifferent both in rerprct to the source of the deficits and in rer-ect to the meat0Y gtr m etin7tecr In the f rrer caive M5recco uffered
_frcrr a very h-vy cutfc of Drivtes cuitv fo-ivr with a shar) decline In forein nt exerditures in Morocco In the iatter case th projected deficits r- rcre a functicn or accelerated crcwth risingdebt ervieiiw tri tho abnrcn of forv eeble additiens foreign reshybull ourcs nere7ory 4( r2Vm rAf finmncting To nect the def-cits during the reriol 161 61h MWreco ob1id to drw down rorcin exchange reserves of over $]c milicn The snrti tpv of financing is no longerpozslble ince no or-res- ruch reserve- Even ifMorocco yr
mn nina r rve_ ore (]rrfii on to th r-ixirun etnt enribe nnd the [iI tnfldy i- un M-r-r e i32 till relA re nt rnt 15 millicnj1itionn ftr ign as- e n 1 6 beyond hat r recnently fcreeeshyable with ver nri- nry Officilr in In i6 reserves are cotImnted Pt 72million c hih crn V 3 million i caly required for currency coy r
Foreign InJebtrdne n of th GOM Mnroccos external rtnte ard rutlie enterprie dett amounted to
$r) millivn in lr6 Debt vervcirig rpynents for (66 trtaled about
$5) rillion g-eement approved in October 3(67
I- -- Ishy
37 millin or arprcxitrrntoy (j Iroccor totnl eXoort earning of h28 millicn GCnerally nxt rrO dbt FervicJng renuiremennt of leas
than r of totna -ort nnrlt In onrldered to I r tirfactoryrntio D-bt r rnJrcLct n Ir the reriod 1-(y 3on Trerent external debt including thnt wrtl(n irreently undibur-ed are hown n th fr lv tahlr
)] L v yr t n
Eternn Vtnte anc ] bntcrnrie Debt
M131 o)nr
Y aI Net Outrtnnling Debt Debt Service
(6 it 479r5 $367 J-67 452 3)6
Z616 44469 2 0 2C-
365I3 37 389
33 383 33 6 371
5-h 31 n 352 275 34121
]176 2661 32It 1977 21133 311 177 22)6 307 19 i0l74 256
1733 255
rgtternal debt rharre n rerent debt nnr rhon above do not increase ubtanti-lly over t rt 1)year- reaching a maximum of h44 millior
in J6 and decrpt- n cr - tently threoafter At the are time exportearninr r _rc extett nc-are Aring that Morocco does not inshycreswre it etrnn2 cbt t irate ubrtantially nb-vc ihat has been the core th adfiticrn dbt e roquirrentn reulting from the propo t Icon o 5 ijilion co r 7crncepr-ional term hould not have a i-nifiant affect n 1r o - ab lty to neet itv g rc-atedebt ericn rcnrib2t~e- the pros ectr of reprment of thin loan ore coniderci rearcnb)
U I -
F ot h-v C IuIJI rmt I shy
1 V amp~ rVml KI
PUC- -jrVi Jt t 1 11 nflrcj urlc 1- th )qn --P I uti u rhnrrl -1r- thr U- Tr- ry- R- -nymc nt
c2Il f n 6 1 bf r I- till 11 nfl r- n-r i n of O r--niC(Io~hi U 1 1 rr to
Tn vil ) f rvc hi tvlrll 1 (In- - n- u--n E r me rrinshycgtay F rntwir w ourc o -o- rvI ortf-V3 1 rncing of
Uf f -r rrrir- ur3r 4~ v -rin Iltrt nt ndd shyt -n t ) in- lint r b t l r -n rort- o-orco trorl-- V -P
r i 1rnd h L-torie Furcl-trin firr- thrjt US r r~ crvirrf- u~d be~
T L I1 c vt r- -ly ] -ubt fu 1 n vi pw -I -ror-co Ir of
ut1JpcO In thi rjert f it -- r- 21 npnred by d1-nr- cothcr t~han the US
2 ]P-t ofI Prr l1 on Prw- Fntrrr
Phij rrcjJ-t -11 n-t h~ -in nrwerq Prrt n rr- tc ntrshyr~A~r fi-mc 1bho und for --roern p o n
3_~~PrCT--rty
rr-vIi-n 1 h -d r the loan ragreement for Icntifitcation ef any r mIjrpt n ctri b- rt througn ut 1zatn (f xccr- prorerty
If rv c u~eAID n-mrcf u urr thi )cn - I~ut~ em avoi3ablo r rovvrirrnt -rrperty rather than nce iteni
4 Otli-r Fr- Wo--] n-Fnlc4rm
Dr mi tW- o] 14rocco- i~ajr ovr-ec -f exte rnaX
rrtan~- hrtvfb - I r ~ ant fl Fr n fole by Kv-it
Sgio F rneflit r b-en 1lmrntrd to tcfohnjip n5tnnen bi eoni~in I th u y f Fr--h tprhntcian tcacrr ind cther
~ti~r t~ ec-tnmIyrt-n Friinch Aid to Mcreco In 1065c~oc~ (P-art f-r txychnirril aItn -- j se of tl5 w1nfor bu~dget rurport f ir in rt t- $1 1ri1 icin in ennita -rojectM- n vx- rrcd
1Vw1tvnn tioI t-) Frenh rurtnnd +16 r11ion tie-I to -onyiint to orrrcr Frrmh ccilcn~For _-rrc-ratod land and rquirrmcnt
West GTrrnmnny liar agrcrcd to nrovIe ccme j27 mM22~cn 1n catital arirtanre and cromrndity lnoi7 t n OfIcon( q92 thi o totril$223 miJ lien ha actuary b-Pn cr-Itt--d under Inn ngrepment This
And a lk5 million commodity loan both) signed in 1965 All Wet Gerzaan
Ufla
-28shy
capital asnistance I vuectI to be tied to German exports Germanyhas in addition 1uvvded r tteysubbtantial technical assistance f
The IBRP hah rade four 1nns to Morocco since 1962 totaling$6) million Ofthin totnl a [175 million loan in 1965 wos fordevelopient of the gidi lit-r irrigation perimeter Other assistance by internntIcnal Iending arncie include an $11 million credit byIDA in 1C65 for rcendary diicction projects and an IFC ln and inshyvestrent of $1 1 ri jnic alo in
F tit i by [c - dncr tr dh elo snt ofMorccco rircuVt r oii +h b-]n jt-TKT r nbove n 2 )6 niliion Kuwait enn in i66 for develomyment of the Tensaout Prnm n irrnten nrooetand a $77 million Kuwait
0jl n )nnsn r(niti-nertcir
loan for extrnion of the Tadri~ Irrigation Perimeter
The following- trbe surrlnrlzes other free world arlztance (excluiin technical assistanc-) to Morocco for the years 1(62-66
($ Millions)
1 62 1cf_63 96) 19r65 19)66 Fneea 4) 5PO 64o 700 shyWet Germany 223 gu 1t 53 281 IRD 15 175 10) 175 IDA 110 IF C 1 5 7 7 7 0 I15
TOTAL 55 62 1U3 W
b Includer only lo-ng term loans and exporter credits - Includfs 25 million private capital
Eternal ansiztnnce to the Lowier Moulouya Irrigation Perimeter -nce 1060 hres been con[fined to US upport Consdiering AIDs previcus
involvement in and conmitnert to the Lower Moulouya an AID lean in P2t to be Lhi mol aprroriate source of financing for this project
LID
II
q
-29-
SECTION ITI- Y-TTYT TIMPLPTrION
A Periret-r Ad-instrrti-
Authority for irplerrentvtnn of the deveorpent prrgrn frr the LowerMoulcuya Perimeter and rs wel arth crnntinuinz mrnnrrmenertC tt r t- rrtnr V theltbi nad overationity iOfic 1cne 4
n r I e1i- i d Vit4 i Iv ~ Ct rreated i Otb (rJ rn-- of evcn inrmi-rriional offices hich reelaced the Office de Mire en Valeur Aamprlcole (OMVA) Under the OMXA and itspredecessor agencies authority for ad-inLtration cf irrigtion proJect war centralized in Rabat
Under the new regional office organization responsibility for adminshyistering ORMVAM is vested in on Adminirtrative Board of 10 members headed by the Minister of Agriculture and Agrarian Reform as chairman All ether board members (other than the Chairman and a representative of theInterministerial Economic Ccrmittee) represent agencies or activities inthe region of the r-eriret-r whic comprises parts of two provinces Localretresentatives on the Board inc]-de the governors of the two provincesOujda and Nador the presidents -f the two provincial asembtes and of the two provincial chambers of agriculture as well as the perimeter Director
The responsibilities of thie Administrative Board include review of theecys program establishment of its organizational structure developshynt -)f its annual budget and establishment of rates and conditions of
Siyfent for water and other services provided in the perimeter
The Director of OP4VAI-I is dbarged with the responsibility for executionPthe vclicies established by the Administrative Board end administration of oil ORMVAM functions This responsibility includes selection of staffn pserating perrcnnel acting s officia ORNIVAM representative in all ntztinns with -tate and othbr public or private bodies and the
f of funds within limit Indivated by the Ministers f Financetent rn fricultural and Agrarian Reorm
Perimeter Oranizatlon
ORVAM oreanizatlonal structure consists of a directnrate five maj-r rvlces or d-vsicns and one separate bureau Two services qei Administratif et Comptabl- and Service du Yatrial are conshycor - th adminisration and lcgistical support of ORMVAM operationshi1e the remainirg three services rind the separate bureau are Involved in t-hni al matters associated with agrcultural developrent Each ervice has one or more subordinate bureaus Fei-ce Chiefs and thehead 0 rch bure-u report directly to the ORMVAM4 Director
-~F7E MEw-
-30shy
2 Perimeter 01ttffnr
OPIVAM orgttnlrntlon treture calls for 557 positions of whichI L or 7 Mlled n were nher 29 1567 37 of the 71 Postshytion vacancies reported 1ern the high and middle levels Foreign(chiefly Euronean) technclan occupy I)of the 16 high level positionsthat ere filled at thfit tire
Whil OPM ut in th- lcng run lor to Mercecos oducational yster to prvidr tn crrf-nn2 to ratisfy current rdurojectd rcshyquirement th currnt high and mlddle level vacancies rrouire uersonnelwith oxt nive nrior rxericnce To fll this preent need it will be necessary for CRIVAM to continue its program of recruiting foreigntechnicians until ruch tire ns graduates of Moroccan educational programsacquire the necesnry exrerience The managerent assistance componentof thin pro~ject ]e-rribed In the Project analysis will to some extentalleviate OFIWAMs high level personnel requirements
3 Inw1 ernetation Sehedu]
Months Implementation Action
1 0 Sign Loan Agrcement
2 2 C-tiify conditions precedent and Y4tiate procedures for selection of US firm for management contract
2 Negotiation of extension of advisory Engineering Services
h 4 Contract (Hydrotechnic) Negotiation of Managerment Contract
5 60Cmpletion of Project
C Waivers
Sect ion 7 rf AID Regulation 7 provides in substance that theUnited State ill not finance direct costs of construction work performedby third cc-ur y nationals unless the total co-tn of the project withvhich thr ennrtrumticn w(r is asEcciated donot exceed $2On)O orafter excluding national of the country in vhich the site of constructionis located and Dersons vho nave resided therein uninterruptedly for morethan three years imrnedJately prior to any determination under Regulation 7at leant 0 of all uernons who work under the contract at the site of conbulltruction are United States citizens or the employment of third countrynationals is necessary to avoid excerrive corts to the United States
3
31
Section 2175 authr-ri th Regional Anitant Administratorto waive the nrovinions of Sectionthat it is 2073 if he dcterriner in any coneimportant te the nationrn intercrt of the United Stutes tofinance the direct eots of construction work performed by third country
nationals
A prviou1y r ic i c t tht for thr ct Tartthe -r c ct b- 1jeuj out r -cnorbr f cnrtructioncontracts with Morcccrr contrctnr an in the i-t Uowfevvr itentirely psnible that there may b- roe contractn with cntructlonfirms partly owned by third country nntionaln and that ruch firjs anwell as the surely Moroccan-owrned firms may enloy third country niationalsIn such canes a difficult rrobic-i iould arise in meeting the terms ofRegulation 7 since an a practical matter Aericans are not reaonablyavailable for ermployn ont by such contrnetorn and our previcus experiencewith the Naunsseur Ccnv(r-ion project thatin Morocco has indicatedAmerican contractors would not be interested in bidding cn small conshytracts in that country
It in therefore recommended that the Annitant Adinitratordetermine rursuant to Section 2q75 of Regulation 7 to waive theapplication of Regulation 7 to thic iroject since the project 411 conshytribute to the attainrent of US foreign policy objectiver and the cbJe-tives of the Foreign Arsistnnce Program
LITI L USE
LfI~~5xA~us
lit
4 A J A 45 4 k
t A S T
S(3
I A444ilA~~l~)
7 -74
tAM= D
SECTOR 27
10000
t Co0Na includez25 cgtri oncFcttlrvI ncy I8s ~ ~ C t C- Includes 50 constriJcltiotrgrc
2000 60
IU
0
z
bull cosYsA shy----- i
600L _
400
200
0 5 I0 15 20
INTEREST RATE
I ~ 7 J7777
ANIAampX C
PROJECT DESCRn1 rOll
The project com)onents to te undertaken on the MIoulouya Irrigation Project over the next five years contists of the following
C(n1rtion of the rrLin casuals and bianch canbls to provide the suource of waler to the sctors be developed in theto TriffBou Areg and Zebra areas This construction will include the necessarystructures such as reulators highway bridges aqueducts water intake
and discharge structures etc
2 Iand Txeloommerit which includes engineering land consolishyt and iuvtllng lard preparation (subsoiling ripping destoning etc) and installation of water distribution canals (secondary tertiary and quurtunary) and drainage collector ditches for the Triffa main covering 24000 acres in sctors 8 9 10 16 20 21 23 24 25A 2513 27 and 28 Lou Areg Central covering 16250 acres in sectors Dltirough D2B and G1 thru-4h G313 i0u Areg Remainder covering 15000 acres in s-ctors D3 through D7 and GA through (6 Zebra Collective covering 45)0 acres in sectors 3 4 5 rind 6 and Zebra Rer-iinder covering 14250 acres in sectors 1 2 and 7 through 10 and th remainder of sectors 34 and 5 The total land to be developed is about 74000 acres
3 Canalization of the Oued Zeluan and nued Sidi-Amar in the Bou Areg Plain consisting of strairltening englarging and regularizing of these streams to carry the flood waters to the sea Drainage interceptor canals are to be constructed parallel to the sea in the Bou Areg Plain In the Triffa Plain the Oued Riada main drain will be deepened and enlarged and secondary drains will be excavated to provide for drainageof the Madagh area This will include the construction of bridges and culverts and other related work
4 Major Commorn Works will consist of
a Clearing of the Mo-1ouya riverbed downstream of the Mechra KLila barn caused roy flood dariwe and the installation of a set of stop logs for maintenance of pillway gate-
b Design supervision and construction of repairs to the ]elt Lank dead head tunel
c Conctruction and establishment of sib-division Offices and installations for farmer support such as CMVand farm stables
1 C
-2shy
5 Manavmtnt It ha been proposed that a US management firm be ewployed by th- C4 to manage and operate the entire Bou Areg area Such manageent -iuld encomparn all activities from the initial concept to final irIrp igricultural production Such activities would Include resp r-ibilsect -or supervnsion of engtneering and constriction of primary
S- Jry r complete developfnent of land training n in g tinul irription practicen preparation of market
t - r1t- (ot--rnu trplusmnining of a Moroccan cadre to take over h v--it Bou Areg dreara P the
At this writing the n-pt of turning over to a private UZSfirm execushyresponsibl]ity I h management of the establilrment and initial
op-ration of irr1gati the Bou Arog area has been only broadly de iiitd by the GCJO It Intended that proposals will be invited from a r -onable ntnber of f|ed US firms that a selection will be made an-n 7 them and a more do iled and cornprehenrive definition of the rer6 -Ps to be performed be eztabliched at that time It haa been
stimated that the t- of ruch a contract will be about $2 mir- n In any event the -ts of this contract other engineering arvl s to be provided undt n extension of the Ilydrotechnic contract and ether US corts will not ed the proposed $5 mllaion developzont Jean fr the project
The cle 3ifications duties ant 1ncnslbilities of the management personnel ill ha-- to be clearly defined i agreed to by the GCM Perimeter Directo- and other GOM Agencies luding arrangements for the necessary gistic support
Svxlale Docu-
1
4
LD ED 0ICIAL
-IAIDshy
A1trX D
C6JCK LIST OF STATUTORY CRITERIA
(Development Loan Fund)
1 FAA 0102 Extent to which U3 cormodities and services are furnished consistent with improving the US balance of payments See Sections II-C II-F
2 AA sect2O]ihi lanner in which loan wil promote countrys economic develo shy rit emphasizing help for long-range plans and programs designed to developeconomic tesourcos and increase productive capacities See Section I-D
i FAA sectT] h)(IL Information and conclusion on availability of financincfrom other free-world sources including private sources within the United States See Section II-F
FAA sect20l( )2 Information and conclusion on activitys economic and technical soundness including the capacity of the recipient country to reshypay the loan at a reasonable rate of interest See Sections II-B II-D and II-E
5 FAA 1201(h)( Information and conclusion on existence of reasonable promise activity will contribute to developrmnt of economic resources or increase of productive capacities See Sectiona II-B and II-D
_92_(b 4Information and conclusion on activitys relationship toothor development activities and its contribution to realizable longshyrange objectives See Sections I-D and I-E
The following abbreviations are und FAA - Foroirn Assistance Act of 1961 as amerded by the Foreign Asaistaice
Act of 1967 App - Foreign Assistance and Polated Agencies Appropriations Act 1968
AFEVCDF 1066
L1
-2shy
7 FAA f12O1(b)(5)_ Countrys self-help masures including institution of Foreign Assistance Act investment pliaranty programs Investment Guaranty
bull Agreement signed with Morocco 331o6l See Sections I-D and II-EI
_A ))(6) Information and conclusion on possible effects on US econowy with soecial refererne to areas of substantial -labor surplusSee Section II-F
9 FAA q201 (h)() Information and conclusion on the dagree to which thA country iv wiki- progress toward respect for the rule of law freedom of expression and of the press and recognition~yf the importance of individual freedom initiative and private enterprise
10 FAA -1201(b)(8) Information and conclusion on the degree to which the country is taking steps to improve its c]Laato for private investment See Sccton II-E
31 FAA R LbJi Inforrat-on and conclusion on whether or not the activityto b financed will contribute to the achievement of self-sustaining growthSee Sections I-D and II-B
12 FAA fi2Ol(bj Inforruation and conclusion on reasonalbe prospects of reshypayment See Section II-E
13 FAA fl20JL() Info-ation on applicability of the twenty country ceil4ng2
14 FAA fl201 L Information and coclusion on legality (under laws of the country end the US) and reasonableness of lending and ralendinr terms Loan will be on minimum termspermitted under FAA These are deemed reasonable see Sectioam Evidence will be renuired from the GGM as to the legality of the loan agreemnt
1 E 2 Information and conclusion on availability of an applicationFAA together with sufficient information and assurances to indicate reasonably that funds will be used in an economcally and technically sound manner See Sections I-A II-B and II-D Application received Janury 15 1968
16 FAA fl201(fL If a project inforntion and conclusion whether it will promote the economic developapent of the requesting country taking into account the countrys human and material resource requiremnts and the reshylationship between the ultimate objes6ives of the project and the countrys overall economic development See Sections I-D and II-B
17 FAAJ 20ij(J If a project information and conclusion whether it cifishycally provides for appropriate participation by private enterprise 8ce Sections YI-C and 114
I- FAA i22(a) Total amount of money under loan which is going directly to private enterprise is going to intermediate credit institutions or other borrowers for use by private enterprise is being used to finance imports
rfro private sources or is otherwise beirg used to finance procurementsfrcm private souwces See Sections II-C and II-2
9 FAA 207 Infosation on the emphasis placed en
(a) encouraging development of economic political and social institushytins No apparent relationship
(b) nelC-help in mectingthe countrys food nredo Project Vill conshytribute to production of food for lccal consumptioa
(c) in-proving availability in the country of evucated trained manpower Project will contribute to the deicloginext of trained manpower as one of the functions of the management contract (Soe Annex C para 5)
(d) prcgrams aimed at -malnutrition disease eradi atDn slum clearanceWater purification sewage disposal health education naternal and child care(includin fimrily pJnrning)) -nd cthcr public health ausistarice See
(c) other develoment activities including industrial development free
labor unions cooperatives tnd voluntary agencie transn)rtatin and ccshymwquication nrStczn capubiliTies for economic planning and public adlinisshytration arban develo-mment and modernization of laws to feilltate econcnicdevelopjen- GO- intends encourage develo vient of cooperat yes particularlyin the Left Pank areas Project will also develop capabiLi ics for cconoaicplanning and public a6~inistration (Annex C para 5) Other not applicable
20 Information on the extent to which the r-untry is
(a) cttcmting to increase food production and food sto a-e anddistribution felitics This project is one evidence of Moroccos efforts in this direction See also Section I-D and I-E
b) creating- a favorable climate for foreign and dmestic iri-ate enterprise and invcstrrment The GCM has recently reduced profits twes anrannounced a ten year guarantee against tax increases See Section II-E-2
(c) increasing the role of the neonle in the developnental procecsNo apparent relationship to this project
(d) allocating expenditures to development rather than to unn-cessarymilitary purpoes or intervention in other free countries affair See Sections I-D and Ii-
(e) willing --nribute funds to the project or program Th iOMhas already dcvo o-sidcrable resources to the project It has badieted13 million for th i oulouya for i7 See Section I-C
(If) making economic zocial and political refo ns such as taxc coliecshytion iYprovcmenLs and chan es in land tenure a Royal Comm ision has been appointed to make recomendation on land tenure probleras in the Lower I oulouya
(g) responding to the economic political and social concerns of its people and showing a determination to take volf-help wcasuren See Sections I-D and II-E
IT
-ovi~cd l v r 13 1968
- 4 - LDffIED OFFICIAL USE
21 FAA Inforn ation about multilateral assistance being Iurnished to t e country and whether the loan will encourage recgional development prog-rams The I1D has eztablihcd a Consultative Group for Morocco which rvicws the GOM development program anui prgress See Section II-F-4 for infoaation on othtr donor assistance to Morocco
22 A Extent to which the loan will contribute to the objective of ass ring naximu par icipation in the task of econonic dovelop--ent on the pL-t 0 _he people of the developing countries through the encouragement of cocr-tic private and local govenmental inLitutious o apparent
relationship
23 F _-_Dta_ Infor-ation and corissions whether loan will oncourageeffor s of t1e country to (a) increase tie flow of international trade (b) fostcr private initiative and comptition (c) encourage development and usceo co opratives credit unions and savingss and loan associations (d) disourgo monopolistic practices (c) improvo technical efficiency of industry ariculture and commerce (f) strenSthn free labor unions This project is cxpected to increase technical efficiency oi-agriculture
2_ C-1L lnforzrition and conclusion on how the loan will encourage US privte trade and investment abroad and how it uill encourage private US participation in foreign assistance prograas (incluiing use of private trade channels and the services of US private enterprise) See Section II-
25 VA-+_ Conclusion and supporting information on compliance with tho Co resional policy that engineering and professional servicos of US fir-ms and their affiliates are to bo used in connection with capital project3 to the nixinua extent consistent with the national interest US engineerirn and innsgcment services will be financed tnder this loan
2$ Inforamtion and ccnclusions who+her loan will pormit American rx-l] business to participate equitably in the furnishing of goods and
z orvices by To be satisfied in Loan Agreementfinanced it
27 - t(a App I18 Complianco with restriction of co -zodity procureshy o UsMS except as otherwise determined by the Picsicent and subject to ttu--- rcortir require r-nts Procurement will - liumited to the US for
reiabnrs nts and to ioocco and other free world countries 1-or US-cwne(d rhu disburseacnts
23 -i Comiance with bulk cozodity procurement restriction topriecc no l-ho han the nkarkot price prevailing in tho US at tia of
bull puchas Not applicable
29 FA Cozpliance with requirement that matrin insurance be purchased on commceities if the participating country discri-inates and that insurance be placed in the US To be satisfied in Loan Agreement
30 IA 6(a) Information at to the utilization of excers personal property in lieu of procurement of new items Will be required ai appropriate under terns of Lean Agreement
f
1 77--7 -77-77-777
31 FAA 61](a)(_) information and conclusion on availability of enginoering i financial and other plans nccx sary to carry out tho assittance and of a
reasonably firm cstimate of the cost of the assistanco to the United States
See Section II-D
32-ecessaryFAA t611(a)_(2) legislative action r6quired within recipient country and ibasis Cor reasonable anticipation such action will be completed in time to pormit orderly accompli-hirtnt of purposes of loan See Section I-A
33 n _AA161nJ0] If water or water-relatod land resource construcshy
tion project or program information and conclusion on a benefit-cost comshy
putation See Section II-B
3 4 VAA 611(c) Compliance with requirement that contracts for construction be let on comp-ctitive basis to mamum extent practicable To be satisfied
in Loan Agreement
If a loan for a project of $1 million or more certificatin35 FAA _61l(r) by the principal AID officer in the country as to the capability of the
country (both financirl and human resources) to effectively maintain and
utilize the project taking into account other US-financed projects (Such
certification is to be pproved by the Administrator aL the time the loan
is authorized) In process of being obtained
36 FAsgJ2 _6_h Appropriate steps that have b-en taken to assure that to the miaximum extent possible the country is contributing local currencies to net th-2 cost of contractural and other services and foreign currencies o- icd by tho US are utilized to meet the cost of contractual and other services The GU-M is contributing over $30 million to compleXton of this project Excess US-use dirhams will be used for eligible project costs other than US goods and services
37 FAA p619 Compliance with requirement that assistance to newly independent countries be furnished through multilateral organizations or plans to maxishymum extent appropriate Not deemed appropriate in view of previous AID financing and ccoiitment to the project See Sections I-A and I-D
38 FAA sect620(a) AcnO7a n3]7(b) Compliance with prohibitions
against assistance to Cuba ard any countr (a) which furnishes assistance to Cuba or failed to take appropriate steps by February 14 1964 to prevent ships or aircraft unier its registry from carrying equipment materials or supplies from or to Cuba or (b) which sells furnishes or permits any ships under its registry fr-om carrying items of primary atrategic signifishycance or itcms of economic assistance Morocco is not-known to be in Violation of these sections
39 FAA q620GL_ If assistance to the government of a country existence of determination it is not controlled by the international Communist movement The Secretary of State so determined on October 11 191
40 FAA 620(c) If assistance to the government of a country existonce of Indebtedness to a US citizen for goods or services furnished or ordered whore ouch citizen has exhaustod available legal romodiesor where the debt
i - ow - -- _---- --shy
- --
-6shy
is not denied or ontested by such government or the indebtedness arises under an unconditional guararty of payrrent given by such govornmunt No such indebtedness is known to exist
41 FA _(a2LdL If assisitance for any productive enterprise which will corashypote with US enterprise existence of agreement by the recipient country to prevent export to the US of more than 20 of the enterprises annual production during the life of the loan Not applicable
42 FA4 - 16Q_0_ A If assistance to the government of a country extent to which it (including government agenies or ruhdivisions) has after January 1 1962 taken steps o repudiate or nullify cuatracts or taken any action which has the effect of nationalizing expropriating or otherwise seizingownership or control ofprcpertv of US citizens or entities beneficially owned by them without taking appropriate stops to discha i ge its obligations No such steps cr actions are-known to have been taken by the GOM
43 FAA~L AjPj_10_9 Compliance with assistance toQ0 prohibitions against any Comunst codntry ozocco is not considered to be a cocinrunist country
44 FAA - 620(gJ Corliance with prohibition against use of assistonce to comp satc owners for expropriated or nationalized property To be satisfied in Loan Agreement
45 F AA 8620(h Compliance with regulations and procedures adopted to inshysure against ue of assistance in a manner hich contrary to the best inshyterests of the US promotes or assists the foreign aid projects or activities of the Communist-bloc countries To be satisfied in Loan Agreement
46 FAA 06-O(j)_ Exitence of determiration that the country is engaging in or preparing for aggressive military efforts No such determination has been made
L_62_O Information47 FAA on representation of the country at any intershynational confererce when that representation includes the planning of activishyties involving insurrection or subversion against the US or countries recoiving US assistance No such representition is known to have A occarrect
8 FAA 62JJ Existence of a determination that the country has permitted or failed to prevent destruction of US property by mob action or has failed to take steps to prevent a recurrence and-to pay compensation NO such destruction is known to have tak-n place
49 PAA l620(k) If construction of productive enterprise where eggregate value of assistanc to be furnished by US will exceed $1OO million identification of Gtntutoryauthority Not npplicable
i-xQ2MZZ=
1 shy
U 6 50 _Af( QCinsidoration which has been given to denlying assistance X to thu government of a country which after December 31 1966 has failed to
- institto the investnint guaranty program for the spcific risks of inconshy
vertibility and expropriation or confiscation Satisfied See No 7 above
S51S J lj Compliance with-prohibitions-againstn as~istance to countries which traffic or permittraffickingwith North Vietnam Morocco is not known to be in violation
52 E_-L620(_L If country has seized or imposed any penalty or sanction against vn US fishing vessel on account of its fishing activities in
intcrnationul waters information on the consideiation which has been given to excludirg the country from assistance No such situation is known to exist
53 FAA FA r) UAR restriction Not applicable620(p 9117
54 FAA R620tl) Existence of default undhr any Foreign Assistance Act loan to the country No such default exists
55 F ) C-nsider tion of whether co ntry is devoting unnecessary percentage of buKet for military purposes or use of foreign exchange for milita-y equipment
56 FAA 62o(t) Proibition on aid if country has severed diplomatic relations with US unless agreements have been negotiated after resumpshytion Diplomatic r(lations have not been severed
57 FAA 9620(u) Statur of the country on delinquent UN obligations Morocco is not known to be dlinquent on its UN~obligation
58 FAA R636(i) Prohibition on financing non-US manufactured motor vehicles Will be satisfied in Loan Agreement and Implementation Letter
59 App 102 Compliance with requirement that payments in excess of $25000 for architectural and en Jneering services on any one project be reported to Congress Such reports will be made
60 App R1O4 Compliance with bar against funds to pay pensions etc for military personnel Such payments will not be eligible for financing under th Loan Agreement
61 App 9106 If country attr ipts to create distinctions because of their race or religion among Americans in granting personal or commercial access or other rights otherwise avaVIfable to US citizens generally application which will be made in negotit ttons of contrary principles as expressed by Congress Morocco is not ku IDhave made any such attempts
iInD OFFIIt t USE
0k
OFFICIAL USE 62 AIwp Rii Compliance with existing requfremets for security clearance
of personnel Will be satisfied in Loan Agreement and Implementation Letter
63 App R1l2 Compliance with requirement for approval of cortractors and contract terms for capital projects Will be satisfied in Loan Agreement
clJ164 Aup Cmpliance with bar nRainst use of funds to Tay assessments etc of US meiber Such payments will not be eligible for financing under the Loan Agreemunt
6 Anp P115 Ccmpliance with regulations on employment of US and local personnel for funds obligated after April 30 1961 (Regulation 7) See Section III-C
66 Aim Vietnam iron and steel restrictions Not applicable
67 p l9 If a country other than Greece Turkey Iran Israel Republicof China Phillipines or Korea reduction in assistance by amounts spent for the purchase of sophisticated military equipment
68 Anp fi4O1 Compliance with bar against use of funds for publicity or proshypagjanda purposes within US not heretofore authorized by Congress Such use of funds will not be eligible for financing under the Loan Agreement
Morocco is a traditional Islamic monarchy with a constitution The conshystitution was implemented followaing a popular referendum in 1962 National regional and professional elective bodies including a parliament were established by universal suffrage under the constitution in 1963 The parliament was suspended in 1961 in a State of Exception because of its inability to agree on measures with adequate urgency to meet the prevailingecononde imperatives In July 1967 the King appointed a Prime Minister to direct a Cabinet of appointed technicians
The constitutional framework nevertheless remains intact in Morocco and nationwide popular elections for some of the professional chambers were held in August and September 1966 The press is relatively free in Morocco and the right of diLsent prevails provided that such dissent does not violate the prohibition against political attacks on the instishytution of the monarchy or the person of the monarch
LI Under the revised US AID Policy for Africa agreed to in November 1966 Morocco is designated a development emphasis country entitled to receive continuing support on a country basis as part of a multilaterally coorshydinated countrj program Morocco was subsequently included in Presidential Determination 67-14 (January 5 1967) I
LIM=TE OFFICIAL USE~i
- l go
bull ~ -
f
DEPQbi) STATE AGENCY FOR INERNATIONAL DEVELOPMENT
WASHINGTON DC 052
CAPITAL ASSISTANCE LOA11 AUTHORIZATION
Provided from Develoroent Loan Funds Morocco Second Lower Moulouya Irrigation Loan
Pursuant to the authority vested in the Assistant Administrator for Africa of the Agency for International Development
AI)by the Foreign Assistance Act of 1961 as amended theIAct) and the delegations of authority issued thereunder I
have received and t-en into consideration a certification from the Director of USAIDMorocco as to the financial and human resources capability of Morocco to effectively utilize the Lower Moulouya Irrigation Project taking into account among other things the
maintenance and utilization of projects in Morocco previously financed or assisted by the United States and I hereby authorize the establishshyment of a loan pursuant to Part I Chapter 2 Title I the Development Loan Fund to the Government of the Kingdom of Morocco (Borrower) of not to exceed five million dollars ($5000000) to assist in financing the fore] gn exchange and local currency costs of goods and services for the third phase of the Lower Moulouya Irrigation Project subject to the foLlowing terms and conditions
1 Interest Rate and Terms of Repayment Borrower shall repay the loan to AID in forty (40) years including a grace period not to exceed ten (10) years Borrower shall pay interest on the unrepaid principal and any interest accrued thereon at the rate of (a) two percent (2) per annum during the grace period and (b) two and
one-half percent (2-12) per annum thereafter
2 Currency of Pepayment Repayment of the loan and paymenu of interest shall be made in United States dollars
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3 Other Terms and Conditions amp(a)Goods and Services financed under the loan
shall have their source and origin in
(i) the United States if disbursements therefor are made in United States dollars or
(ii) any country in the free world including Morocco if disbursements therefor are made in Moroccan currency
(b) AID Regulation 7 shall not apply to construction -work financed under the loan because as detailed in Section IIIC of Capital Assistance Paper No P 667 it is important to the national interest of the United States that the direct costs of construction work performed by third-country nationals be financed out of funds made available by the Act
(a) Such other terms and conditions as AID may deem advisable
Assistant Administrator for Africa
Date
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7
7 17 shy
(In Millions Of Dollars)
Righi Pank
Trffa Main 34 poundSt (r 27 08 S ctor 6 0Q
51 Left ank
7bra Collective 12bra Remainde r- 54 Tou Areg Central 74 Lou Areg Remaluders 68 heft Bank Dcad Head Tunnel 30
238 Services
Management 20 Advisory Engineerin 05
25 SUB TOTAL 37
Escalation amp Contingencies 15 47
TOTAL 361
It is proposed that the AID Development Loan for this stage of the Moulouya ProJet be limited to $5 million an amount which would be sufficient te reet the cost of any US goods and services required for the works to oe undertaken Thus the loan would finance the dollar costs of manrement and engineering advisory services to be provided by US firms erstimated at $25 million The balance would be available to meet any ther US cofts that might arise for constructicn cuipment and nateria]
The balnnmc of funds required would be provided by the GOM from its own budgetary resources including as appropriate agreed allocations of the counfryj-uie dirham proceeds of US surplus agricultural programs in Morocco
To a l-ge extent construction works In the Mou]ouya (other than the Bou Ar- Tunnel and Mechra Klila Dam) have taken place under a largenumber of roll contracts with Moroccan firms It is anticipated that this will ontinue to be the pratice in the forthcoming development stage Th iit is evident that the great bulk of project cests in this next stage will be local costs
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In the event that not all of av l able fuInd- under the loan are required for TKI eo It i ouied that any remaininrn balance be utilized for the payment lo -ovalccztn f the project This would be aceoomplirhe by utili7irn th- h r vroceeds of the loan to purehare US-use dirhsmn (frcr th U Oi-irrirg Officer) which would be utili ed to rrimbure th fc u a t local - nditurrs
Thi arranrit 3ir ila ) fstV utilitd In the - of the D-e l-INAieret Loar tJr U Atrrert SinceYr usii Conv rf i cn therc loans are rcpiviible in dollars nd rince Morocco in a n-ar excess local currency couintry the fert ) f e transaction in tc provide a means for obtaining ccnvrrrs cn a-cr th life of the loan of otherwire inconvertibie U5 holding irhrs hich are in exces of its localrequireme t
In 1967 over 15 million dirhams (abceut $3 million) of PL 480
Section l04(g) loan fun cre in msgreement with the CON allocated for the financing of various contractr reloting to projects in the Moulouya It in anticipited tht ndditional allocations will be made out of the local currency proceed generated from current and antishycipated US 7urplu agricultural rmodity programs in Morocco
It has been proposed that the dirham equivalent of $45 million of the proceeds of the October F67 rurplus agricultural commodity Sales Agreement be allocated for a Section Cb(g) loan for the Mulouya In nadition it is estimated that a $]35 million (in$ioz1ble dirhshyequlviJent) woull be available from 7uprl]eental surplun agrIcultura con -ity rales programs under Titlo I an-d Title IV in calendar 196F for allocation for loans for development projects in Morocco These two amounts combined would provide about 6 of the G014 resources reshyquired for the project over the next five years On thic basis there would appear to be rcasonble propect tht the GO should be in a rorition to provide cver the S e year rriod of the project the addishytional resources renuired for itF ccmpletion
Tt I contemplatd that na additlonal US dollar financing of the Moulouya byon-l the $ iilon rorosed herein will be provided for tl cplei n ef h M _11-nuya rince the bringing under irrigation of th- 11O0Y ies include] in the propore] project will substantlally cornIete the works criginally conwtemplated hen h DLF loan was authorshyized in 106 The remainler zf the workr h(- be within the capabilit3 of the GOM to complete with It- o-n resourcec
MT M T M
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) Technical Anily ir
The Moulouya Rivr which is cre of tne largest in Morocco originatesin the idll Atans
Moulouya and which oztend scuthward
Kediterrancn l re
t rre
Pr
ard n
flows rrpr
orre 25) mriles northeast thr Agorinn border
to the
In- agricitui 1 in li j i nt( iljr r Th- rst rind most
t 2 1ir i t i h- i n th rwrht born of thshy-- e 31nmiler frem the Mediterranean
Lea To tho wet cf the Tiffa and nn th- left bank( of the Moulouya isthe Zebra nlain 14wiuntain rv-arate the Zebra frcm th -ea and fron theBou Art-r i-ll]zain which - ctI nrrthwe(st of the Zebra The Bou Areg a coital phtain sclte 19 mils lorg and h miles wide separated fr-nthe n-a by a Ihow sa2t water lagoon Southwest of the Zebra is theGireb plain which hun land ruitable for irrigation in its routheasternportion The Gareb i at a higher elevation than the three other plainsard if ultimately irr-gatcd vould require pumping fro the lower level Zebra conv(yance system
Water from the Noulouya River is stored brhind the Mechra Klila Dam whichwas coniletd with fjiancri rc AID loan (3-A-2 (DLF Lcan l6)Water ir rclca ed downstr(a (1bcut c) miles) to the Mechra Homadi reFrshyvoir and d]iversion dcim in1h-r divert-d to th right oad left bankcunals About 75 kilometer (1 miles) of the Triffu (right bank) maingravity ciral hay ben copletd und consderable cr) has been carri-dout in the Tri on) distr Iution and drainage netw rks land levelngend other farm iwnrovwments About 37 kilometers (22 wiles) of the Zebra(left bank) main gravi-ty canal and the tunnel 6 miles (101()7 JIrenrTrcters) betxeen the Zebra area end the Bou Areg area have been comrneted
The GOM illrrfo m certqin -rk nr-Aded fcr develormnt of the gravityir~zgata yt-- for n 71-) acres over the next five yarr Thiscffort vi2 be eonern rait-r urcr the develo-ment cf areas thot providethe great-rt ecnnomic returrs nnd the developnent of a cadre of Iorocearperornel adequ tly tran-yi in the an2gerent of the project SeeAnnex C for further Irojcl details
e- enmL Ev1ation
Mt Infratrueturr The --trnal highway co-munication network i t arid rfi Isirm nf re- i n-ote siler in-1 shy
uzeather raved rc
____________________TAM
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Other communlca 1 i i t ih Lh arr-- inlude the nrninlineof the Oujda-Fe--C- t h~rh l e0tnnd to AlgeriaSpanish enclove rt the 1 fir idto cmmercial airport at Oujda andNador with regular national onI int rnational ervice5s
Th verirtr 1 u ~Ath r nr r t crocd by 60 kvJ i i i u rrd t 5( kr It na ortr kk f~ditcrl rower1(Qp x I -y yrar) -o n d hr rritIronr
at the Mechra-Yplusmnilj l inm fnd the Bou Areff contral poter Statin The townare connected to ranrh cther and th2 r-rt of Mcrocco by telerhone andtelegraph 1 ner
b Sol Soil rvey 7rd land ]a-ifctons have been completed i-nthe Mcloulva rer eter oanntrantbi- with French firmr u-ing Frenchmethods The Trifa -1n wr initialy rraped at a cealeof 150000with certain area ub entiy rer-aLd at 15000 110000 or 120000dependin I nn the cor1cjeity of YJ rattcrns The Zebra plain has beenmapped at a reale cf 20O00 nod th- Bou Areg plain at a scale Df 150OO On thp baf Yr nf ther urvy th cla sified the soilsGC hain terms of r-uitnbility for irrigation as follows
Land Ciaifcation (Aere)
CasrI amp IT Class III Clans IV Totas Triffa Plain 17000 29[00 22725 99625Zebra Plain CbO 1275 4050 211425Bou Areg Plain 75)00 l6qo 3 0 3067)Gareb Plain 13 05 10 70 0
Inclurez 1750 acres for lfigh Service Area
The findings thi indicate that ( i) arriratry 5of the area in thefour rlain- i suited to irrigation (Clare I anl II) (ii) more than3 ir suitabr bt with one Or mcre imrtat~ons Irro=ed by underrablefeatur-s such an to wrafhy oil characteristJcn trnine- r restrltedbull rio (CIar TIV) and (iij) ls than 2 of th- area in only margina)lysuited for irrinticn(Class TV) In ther7e lattrr ardrn only rmi-intrnsive orop rotations blUponsblhe
The oi nicn f the Cn-lting Envneer (1ydrctechrJ) th respect to) therd carrffjn n that hfle 3 Bureau for P ltr0tion -tandards werirt ernoy-d te rlasnificatinn ir aceurat- and n rrti with3and rlaced in r d rLrnble categories more
uere thnn right ha bern the caseUS tandardr folIced The clasifatinn ha 0a been reviewed andfound to be atifactory by the USPA tayr Hoever r areas of complcxroil Ttternr hch to date have only been ru-d to a oale of 150))rome reraTpin tray be necesary as a banis fcr rrerarnZ
- g~T PRAvVLAFJLE EOPv
final designs of irrigation and drztinne- rystems parcellization into farms and planning of land preparation measures In addition considering the high average salt ccntent of ater frcm he c ilouya hiver a rorm of systematic leachin- will be reqirer- to f ree-rt aculation of salts in the soilsparticularly in h ebra Crt in will nlso1e plain ureas require nitrogenphosphorus crd possibly other nutrient to obtain satisfactory yields
c Water On the basis of studies by the GCM which have been reviewed bythe Consultirr Fnr ncri and the U au of 1ccoi-ation it is thecorclusion of A tt (i) the q lity of water in the Lower Houlouya
is below averpge bvt crp rble to thtof certain rivers in the US whichisotnteLoh~uoybrve successfully been usc for irrif ton for periods cxeccdin 100 yearsOj5) there is clearly a sufficient a )unt of i ter to irrif-ate the 128010
bullcrer to be served in the [rlcentIty ar n3 Addi-tional s-tudioser (c requilrecj dcter-Inc if adeqiuate water is a- ilable for irrigationof 376QGO vc rc
The only signifcant urce of vp y fOr irrigation water in the perimeteris the oulouya Vi~cr io jc n1 is 1re ntly being irrigated from wells most Iround water i - - 1 Alouya contains dissoived salts which i xr Lrn - hvriny reak flowto iJOx PIn iuting [cricd of c n ccntraticn is 750 ppm On Thi- basis of USDA Salinity Lot) atory criteria fte v ater is class 03-SI (hl-h salinity-low a-alinity) Vile water is thus of mediocre qualityit is ccmrarable to that of river successfully used for irrigation in the US (eg the Lower Colorado Rier) and poses no serious problems to irrir-ation in the Moulouya perir( cfr provided the W4 adheres to recorrmended programs for meeting leaching reoairements
With ref-pect to the 128000 acr project the demand for water reasured at the Mechra Hoadi diversion dair is estizated at about 575 million cubic meters per year as follows
remand for Wter
Peak Flow Annual Total (August) (m 3 million)
Agrieulture (176000 acres) 337 m3s 806 Municipal amp Industrial Consumption 8m3 23
Total 4 uy62123000 acres to be irrigateA by Gravity 255 m3s 575
(The e dpeak requirzents of 345 s compares with a 35 m3 s design
capacity of the main canal at the diversion dam including 18 m3 s for the Right Bank and 17 m3 s fcc the Left Bank)
I
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This estimate is based on probaole rainfall cropping patterns plant requirements evapo-transpiration and other expected losses of irrigashytion water The estimate is believed by the Consulting Engineer to be reasonable but subject to refinement on the basis of tests to be carried out on a continuing basis
The annual average availability of wuter from the Moulouya river is estirated at 1100 million mn or about double the estimated requirement for the gravity areas
Estimated Availability of Water
Twelve Year Annual Average for Moulouya River 3 m3 second 1100 million m3year
Maximum inflow Observed 8000 m3second(1963) 3h00 million m3 (1962-63)
Miniwum inflow Observed 1 msecond (1951) 532 million m3 (1956-57)
On this basis it appears that there should be ample water available for irrigation of the gravity area as the water availability obtained from twelve years observation exceeds the requirements in all but the 1956-57 season shown above Prior to the development of land with purped service areas (the Gare-b and the Triffa ig h Service) a review and analysis of the river hydrology should be unidertaken to assess the availability and regulashytion of the river flows
d Studies Entincering and Construction The overall irrigation scheme outlined by the 1uM defirs the ajor features and th( magnitude of the work to be accomplished to attain the ultimate goal
This scheme is being carried olut in phases over a long time period The present phase encorpasses the development planned within the priorities indicated by the Stanford Research Institute (SRI) study for the gravity irrigation system
The studies for land classifliration have been completed for the gravity irrigation system in the Triffa Bou Areg and Zebra plains by French firms and were considered reasonably accurate by the Consulting Engineer Land consolidation and parcellinrg has been completed by 0MET in the Bou Areg Central area the Zebra Collctive and Zebra Remainder sectors 7 thru 10 Land consolidation and pareeLlni ar( needed for Triffa sectors 27 and 28 Bou Areg Rematnder arid Z(bra Rerrirder sectors I and 2 The engineering designs for the Triffa main sector 27 and 28 and the Zebra Collective have been or are being completed by the G0M forces The engineering design for the Cefntral Bou Areg and Zebra Remainder sectors 7 tnru 10 has been or in being connpeted uy Hydrotechnic Engineering design will be required or the 1ou Are remainder sectors D-3 thru D-7 and Q4 thru G-6 and Zebra Rer ainler sectors 1 and 2 The engineering designfor the Dead Ilead Thnnel has been undertaken by SCET who have preshypared anid issued an Avant Projet for bid invitations for construction
14 M)j6Fj Cshy
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This firm will also undcrtnk- uu-orviston of construction The engineer ing not yet performed can be aea ished by GOM forces andor private engineering firms
Construction of the extension to the rrain irrigation and drainage canals Jand preparation rector cinl ani drninaive ditches will be performed unllr cntact t) 1 cc rt~r~iet m)t hi in the ene of the
r-abilit tion of the L2tL Pz- Dd iarl Trnc t
e Cronning Patterns The existing erning pattern in the Moulcuya including botnirrigatcd and dry farm ingincludes grain forage citrus vegetables olives grapes and 6 small amount of leciduous fruits and nuts Of the roughly 2140Cy) acres of agricultural production in the Moulouya about 177000 acres are in field crops 24)) in vegetables 16Y)O in citrus 15000 in grrrcs 540Y) in forage crops 1700 in olives and 15)0 in other fruits and nuts
Taking into consideration rast and present trends in plantings as well as agronomic and price and marketing factrrs the following projection of cropping patterns has been developed for the Lower Moulouya
PROJECTED POPPTG PATTFRNS T1 HE LOWER MOULOUYA
(In per cent of total irrigated area)
Left Bank and Triffa High Serice
Triffa Sector - Sectcr rriffa Class Class Class
crop Main 27 28 East I amp II III IV
Citrus 40 60 10 10 10 Vegetables 15 10 15 1) 20 10
Crtton 15 20 10
Fcragpr 10 20 25 30 4o 30
heat 10 6 20 25 20 35 4o
Grip 25 24 35 15 Dy beans 5 10
Sunflower 10 olives 5 0
100 10) 100 100) 1i 1052i 100
a Incltdes double cropping
- - r- euro --- 7
~7~TF~Wr~e~ALUSE
-21 -
The projected cropping pattern for the Bou Areg plain includes cottonLJrirdg the frrt Five yearnejtinted 1r of the Class I)fand
the project jitwould be grown on nnII landn Tht renresert only 960etrravres) ectz ri)cr)e area The cotton acr~a e ry increasep 2ceafter live years if ritisfactory drainage conditionshyrre achieved in the Bou Arev
cotton grown i 1xonp tarx- Trdltionally Morocco export its-Jr- cron an irr IJ hort cble to rmeett Cotton the reuirrents
r the oroccan 2pinningr mills The croppni-attrn of the Triffa East (about 180n acres) Js projectedt Tnrlude 15- (about 27 acres) in cotton It is likely that becausef ihe limited extnt of Class I and II lands in the Triffa Eas cotton not increase beyond that percentage
1t i evident that the amount of irrigated cotton that is likely to bein ther-n Moulouya is minimal even assuming that local drainage condi-T nare i asuitable
f Technical Sundnv--s The AID Project Engineer hps reviewed ii) thedat and ajor construction performed to date onronct and finds the technical requirements this long-ranRe phasedsufficiently defineoto ccntinue the project on an orderly schedule The estimates of cost of prsirct facilities have been determin-d by SRI from average va)ues oftrit cots obtained frorr reviously ntiarded contracts and from etniled( -s-nand analysis prepared by the iHydrotechnic Enginering fir oft-o tyieal sectors located in the Bou Areg area The costs for the arc ent contract have bcen estimated by the USAID It is consideredthat the depree of engijeering planning undertaken and the deterrrinitonr to the US Goverrment are adequate to meet the applicable requireshySt- n Section 611 of thie Foreign Asistance Act
7717gt
1 --shy
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E Financial Status of Borrower
1 The Moroccan Economy
Grrwth of MorocLcts GDP in real term averaged about 24 per yearin 1(4 and lr li Per capita DP In 1C 5 wan anproximotely t162 A (er Irr-ht in (6 resu]trd n a drcrcne of slightly nver in GDP which tlh vpulatior grc~vth avrring 3P4 per year rnrsJted in a decline of -r ornita GDP In 16 ii brut $154 A recnd droughtcccijrred In C67 but i not expeetid to have the severe effects of the 165 drought Crop forecasts for the first nine months of 1967 indicate a 4 increase in real GDP above the 1966 level This is also the economic grcrdth rate estimated by the IBRD for the pezxA 1965-70
Moroccos economy is heavily dependent upon the agricultural sector thich has averaged about 15 growth per annum However growth of the mal modern segment of Moroccos agricultural sector has inshy-reased at the rate of about 7 per annum
In 96 the International Banik for Reconstruction and Development (IBRD) preented a number of recommendationr denigrned to increase Moroccos economic growth rate On the bacis of these recomfndations the G004 proceeded with planning the necesrary program to increase investment levels fr- the i 63-65 level of 11 of GNP to 1r of GNP and stimulate the rate of economic growth from 2 to an average of over )4 annually for the five years 66-70 In addJtion the GC4 has taken measures to curb the population grovth rat while placing increased emphasis on raising production of both dryland (wheat) and Irrigated agriculture
2 Investment and Savinms
The level of total gross investment has remaind at aboit 11 of GNP for vera year althugh the percentnoe declined slightly in 165 Under the GO Three Yea5 Plan 1965-67 the gross investment t-3rget woz ret at DH 3 billion- Actual invev-tment expenditures for the three yearpeirod reached about DH 46 billion of which the Governshyment ezxenditure amounted to DH 1 billion a against DH 21 billion budgeted Thin may have beeo partly de to the GOMs deliberate ausshyterity pollcy under the hIF rtbJli7tion prci1rnr but more probably it van duxe to the shortage of trained cadres to -lan and execute projects
In the private cectcr conziderable inounts of ravings may be hoarded due to lack of project attractive t- inventors The lvl of private investment has been runnihg at about 51 of GNP thrrugh 195 The 0014 4 incentive to private instors hnr cut profit taxes from 4320 to V and announced a tpn year guarantc-e against tax increases
]L- $ = DH 506
777=-77- NQ
r y 7k1- T e - W lk In
j - 1) 7k- - _
- 23-
Loan are avaiiable to )rivlite irve-tcrn freo th 3JfIDiN s rctr special funda to prcmote touricm devc firvcnt
Under the 1r86-1972 plan abut to br irtntt level are to be accelerated considerably reaching A of GNP liv ]970 Mor(- Irlyir haviiy on foreign 1 to aciuw cc higher lve1
3 Central Government FinancP
The Moroccan money supply which had Incrrased ify 76 per cent in 2965 remained virtually unchanged in 966 The first half of 1967 witnessed a 5 Ter cent increase in the money supply Te major part of thi increase as concentrated in June and July uhen the supply reached V14 0j lion Currency In circulation expanded rapidly in June and July
nnl factrrn being reinforced by commodity hcnrding related to the 1ide~l Et crisis Demand deposits did not show their normal decline nthe first half of 1967 Deposits with commercial banks declined nlightly while deposits with the Treabury increased as public and semi public agencies contisued their transfers from the banking system to the Treasury The increase in money supply in the first half of (7 ran I raced to tho nzon1 sonal increase in net foreign assets not c y the custcirry rlelir In claims on the private sector Clsirl (n the erivate sector declined slighty until May 1967 but Increased hr-gb June and Jily due primarily to additional financing of textile stocks ClbiJ ante Government rose by 10 per cent in the first half of 967 the in central brnk claims on the GovernmentI being rmainly offset by larger deposits with the Treasury
Ordinary budgetary revenues which incrurted by 5 rcr ent in 1566 tre cxrcted t-) increase by 7 per cent in 1( to DII 21 billion DeampDite a derea3e in agricultural tax reccipt r- fror diret taxes rose by 10 ppr cent in 1966 and a 2 increas estinated for S67 due to tric or controls on income declarationr d an accelerashytion of tax cller ns Owing mainly to a relaxation of the import
program in late 1 5 and a concomitant increase in tariffs on certain ccnonter goods customs reneipts increased by 21 per cent in 1966 Although budgetary estimates call for s decline of 3 per cent in customs receipts in 1S67 it is likely that actual receipts will be considerably larger in view of the import liberalizatidn measures intro)duced subseshyquent to the estimates Receipts from indirect taxes state monopolies and other serces are expected to be 11 iv- cent Ipher in 1967 owing to increased profit on -ugar sabr-i and L r(m the newly created Office do Ccrmercalisaticn - d-tation (OCE)
Recurrent ordinary buiL e(enditures increased by 34 per cent in 1966 ar-i are expected to increase by an additional 7 per cent in 1567 reachin- D1122 billion Although wage and salary scales in the public
Banque Nationale pour le Developement Economique
TT~~- - I777
2 Cf
sector have1bec z h t - rrvirI urli 11i g 14-6 -nd PO becnue rX toi Ijt e f (]r o n 4
ill tile ic urrnnye andr)not i on dnd Publi ht rentrn -yr-otn lno IncreasedOthrr t ill- t il r ne by ) vr cert in J6(
i ninlyrt -br h Inc-l
( Ihe ( t r- rl t ip t t C itur f T)h 21h iilli n
is (( ItI t lt r c0 a- r n n o I- c t b It ihstnl id vv ih n t r-t have hn(er - en 1t2
(IM ii ture( T f fu traordJ nary budrzct exshypend ituren a r y -t c ~ i vi -iscz Portal Checking sy-stcsul)rrcing t (I ltIt Ct -- ind creirn shy
nnet The f r er tnc I hha ccrc ed from a htih of DH 5-7 millIJn in _ 5 millIn r C46 F cr ats foi ]7 place Cro n w I 1(DI)J79 ill ni DDn etlc fi nancing has alo u 1) 5 p (- I3A27 iIliun to an entirnted DH 1142 million
1 14V ) I nv 1 ri n nI(c1 franc n is 77-ected to be ol t y ncrewed bcrrowing fr-ir t he Cestra 9ank which hud been held at mcdert vols iln 165 nnd 1a66 Under the 1TFtaiby agreement of October 16 the qob) agreed to taBe a3] rocrrnary meurer to maintain as table curoonry rPnt inl th nr1d-elrto th b a ent of the ePrncriynnd a vnbl- hn1incc X nvroent P rt artt to t rt fien of tho Ccntin- Honk rstz (erct are nct t r itr June 30 Y-ke 7 lov l b th n Diif ) mill] (n tlcnber -c P thai I o illin usit I ])ecthr 31I62 (GC bc w t
C B1rtrp - vt DH 12 iri 1i nor ]S67 or DH 6S ij lionEan tisated (r fo than the aproved crd it expanwim
Thitrd ordivary nil extraordnnry buThTt deficit of DII 7-19 millI n fcrecat Fr 1 67 in exnected to be fnanced by not freign
tan reof DII )75 mi~l in nt recurity 12ue 1 T111I vlion a - nt ry tiat Po n Che )ir d-nC i 73 r5 Pn
riI is u h i a vti v mrr nrr-e jssIof fvr is id a erital The vnfsa revcred in 1d6 when lnrger r nyrentn eEecially on food itcmo an n -lewdoun in
igo ra a deficit of $1 millcn ProjectiOnz-vt rvultvd in ror 17 r~ieat inrrerned importsonly partially ccnrennate by addshytsa t frnreirn r ntil rrceiprs ard mprrvement in the nervices account will reult -n et of aprroximately $)20million As rhoim in the following tabl -r tion for l33 and 169 how overall deficits of
14 and m] ivi_y$i It
rqVV t1 4~
C)rgt
---
1 -)I+-IRF1
1ROCCO - rTANC OF PAYME 1qrt - 169]_ 5
6rfi0 1 1C(8lr67 i r(o
)xrurt 2t L( I L-5
Trade Bnlance 11 15 - 75 shy - 75
rviee- ret - 7 - 5) -35 -23 -2
J]-i of Good rnd Service- - 3 - 65 -II - ti - (5
Trn-Ifr Pr ynts (nt) P 21 33 37 33
on-cntnry Carital (not) 92 64 6 6 5
Err-rs nnd Ov rrion- (not) - 23 -2 1 3
eranl Bannic __ - _3 -_ 3 - 1i4
Atrh thert ircjected reficitn are of the nnme order of 1 nishytude a7 thcr incurred in the period i66 the Situatlcn i findarentallydifferent both in rerprct to the source of the deficits and in rer-ect to the meat0Y gtr m etin7tecr In the f rrer caive M5recco uffered
_frcrr a very h-vy cutfc of Drivtes cuitv fo-ivr with a shar) decline In forein nt exerditures in Morocco In the iatter case th projected deficits r- rcre a functicn or accelerated crcwth risingdebt ervieiiw tri tho abnrcn of forv eeble additiens foreign reshybull ourcs nere7ory 4( r2Vm rAf finmncting To nect the def-cits during the reriol 161 61h MWreco ob1id to drw down rorcin exchange reserves of over $]c milicn The snrti tpv of financing is no longerpozslble ince no or-res- ruch reserve- Even ifMorocco yr
mn nina r rve_ ore (]rrfii on to th r-ixirun etnt enribe nnd the [iI tnfldy i- un M-r-r e i32 till relA re nt rnt 15 millicnj1itionn ftr ign as- e n 1 6 beyond hat r recnently fcreeeshyable with ver nri- nry Officilr in In i6 reserves are cotImnted Pt 72million c hih crn V 3 million i caly required for currency coy r
Foreign InJebtrdne n of th GOM Mnroccos external rtnte ard rutlie enterprie dett amounted to
$r) millivn in lr6 Debt vervcirig rpynents for (66 trtaled about
$5) rillion g-eement approved in October 3(67
I- -- Ishy
37 millin or arprcxitrrntoy (j Iroccor totnl eXoort earning of h28 millicn GCnerally nxt rrO dbt FervicJng renuiremennt of leas
than r of totna -ort nnrlt In onrldered to I r tirfactoryrntio D-bt r rnJrcLct n Ir the reriod 1-(y 3on Trerent external debt including thnt wrtl(n irreently undibur-ed are hown n th fr lv tahlr
)] L v yr t n
Eternn Vtnte anc ] bntcrnrie Debt
M131 o)nr
Y aI Net Outrtnnling Debt Debt Service
(6 it 479r5 $367 J-67 452 3)6
Z616 44469 2 0 2C-
365I3 37 389
33 383 33 6 371
5-h 31 n 352 275 34121
]176 2661 32It 1977 21133 311 177 22)6 307 19 i0l74 256
1733 255
rgtternal debt rharre n rerent debt nnr rhon above do not increase ubtanti-lly over t rt 1)year- reaching a maximum of h44 millior
in J6 and decrpt- n cr - tently threoafter At the are time exportearninr r _rc extett nc-are Aring that Morocco does not inshycreswre it etrnn2 cbt t irate ubrtantially nb-vc ihat has been the core th adfiticrn dbt e roquirrentn reulting from the propo t Icon o 5 ijilion co r 7crncepr-ional term hould not have a i-nifiant affect n 1r o - ab lty to neet itv g rc-atedebt ericn rcnrib2t~e- the pros ectr of reprment of thin loan ore coniderci rearcnb)
U I -
F ot h-v C IuIJI rmt I shy
1 V amp~ rVml KI
PUC- -jrVi Jt t 1 11 nflrcj urlc 1- th )qn --P I uti u rhnrrl -1r- thr U- Tr- ry- R- -nymc nt
c2Il f n 6 1 bf r I- till 11 nfl r- n-r i n of O r--niC(Io~hi U 1 1 rr to
Tn vil ) f rvc hi tvlrll 1 (In- - n- u--n E r me rrinshycgtay F rntwir w ourc o -o- rvI ortf-V3 1 rncing of
Uf f -r rrrir- ur3r 4~ v -rin Iltrt nt ndd shyt -n t ) in- lint r b t l r -n rort- o-orco trorl-- V -P
r i 1rnd h L-torie Furcl-trin firr- thrjt US r r~ crvirrf- u~d be~
T L I1 c vt r- -ly ] -ubt fu 1 n vi pw -I -ror-co Ir of
ut1JpcO In thi rjert f it -- r- 21 npnred by d1-nr- cothcr t~han the US
2 ]P-t ofI Prr l1 on Prw- Fntrrr
Phij rrcjJ-t -11 n-t h~ -in nrwerq Prrt n rr- tc ntrshyr~A~r fi-mc 1bho und for --roern p o n
3_~~PrCT--rty
rr-vIi-n 1 h -d r the loan ragreement for Icntifitcation ef any r mIjrpt n ctri b- rt througn ut 1zatn (f xccr- prorerty
If rv c u~eAID n-mrcf u urr thi )cn - I~ut~ em avoi3ablo r rovvrirrnt -rrperty rather than nce iteni
4 Otli-r Fr- Wo--] n-Fnlc4rm
Dr mi tW- o] 14rocco- i~ajr ovr-ec -f exte rnaX
rrtan~- hrtvfb - I r ~ ant fl Fr n fole by Kv-it
Sgio F rneflit r b-en 1lmrntrd to tcfohnjip n5tnnen bi eoni~in I th u y f Fr--h tprhntcian tcacrr ind cther
~ti~r t~ ec-tnmIyrt-n Friinch Aid to Mcreco In 1065c~oc~ (P-art f-r txychnirril aItn -- j se of tl5 w1nfor bu~dget rurport f ir in rt t- $1 1ri1 icin in ennita -rojectM- n vx- rrcd
1Vw1tvnn tioI t-) Frenh rurtnnd +16 r11ion tie-I to -onyiint to orrrcr Frrmh ccilcn~For _-rrc-ratod land and rquirrmcnt
West GTrrnmnny liar agrcrcd to nrovIe ccme j27 mM22~cn 1n catital arirtanre and cromrndity lnoi7 t n OfIcon( q92 thi o totril$223 miJ lien ha actuary b-Pn cr-Itt--d under Inn ngrepment This
And a lk5 million commodity loan both) signed in 1965 All Wet Gerzaan
Ufla
-28shy
capital asnistance I vuectI to be tied to German exports Germanyhas in addition 1uvvded r tteysubbtantial technical assistance f
The IBRP hah rade four 1nns to Morocco since 1962 totaling$6) million Ofthin totnl a [175 million loan in 1965 wos fordevelopient of the gidi lit-r irrigation perimeter Other assistance by internntIcnal Iending arncie include an $11 million credit byIDA in 1C65 for rcendary diicction projects and an IFC ln and inshyvestrent of $1 1 ri jnic alo in
F tit i by [c - dncr tr dh elo snt ofMorccco rircuVt r oii +h b-]n jt-TKT r nbove n 2 )6 niliion Kuwait enn in i66 for develomyment of the Tensaout Prnm n irrnten nrooetand a $77 million Kuwait
0jl n )nnsn r(niti-nertcir
loan for extrnion of the Tadri~ Irrigation Perimeter
The following- trbe surrlnrlzes other free world arlztance (excluiin technical assistanc-) to Morocco for the years 1(62-66
($ Millions)
1 62 1cf_63 96) 19r65 19)66 Fneea 4) 5PO 64o 700 shyWet Germany 223 gu 1t 53 281 IRD 15 175 10) 175 IDA 110 IF C 1 5 7 7 7 0 I15
TOTAL 55 62 1U3 W
b Includer only lo-ng term loans and exporter credits - Includfs 25 million private capital
Eternal ansiztnnce to the Lowier Moulouya Irrigation Perimeter -nce 1060 hres been con[fined to US upport Consdiering AIDs previcus
involvement in and conmitnert to the Lower Moulouya an AID lean in P2t to be Lhi mol aprroriate source of financing for this project
LID
II
q
-29-
SECTION ITI- Y-TTYT TIMPLPTrION
A Periret-r Ad-instrrti-
Authority for irplerrentvtnn of the deveorpent prrgrn frr the LowerMoulcuya Perimeter and rs wel arth crnntinuinz mrnnrrmenertC tt r t- rrtnr V theltbi nad overationity iOfic 1cne 4
n r I e1i- i d Vit4 i Iv ~ Ct rreated i Otb (rJ rn-- of evcn inrmi-rriional offices hich reelaced the Office de Mire en Valeur Aamprlcole (OMVA) Under the OMXA and itspredecessor agencies authority for ad-inLtration cf irrigtion proJect war centralized in Rabat
Under the new regional office organization responsibility for adminshyistering ORMVAM is vested in on Adminirtrative Board of 10 members headed by the Minister of Agriculture and Agrarian Reform as chairman All ether board members (other than the Chairman and a representative of theInterministerial Economic Ccrmittee) represent agencies or activities inthe region of the r-eriret-r whic comprises parts of two provinces Localretresentatives on the Board inc]-de the governors of the two provincesOujda and Nador the presidents -f the two provincial asembtes and of the two provincial chambers of agriculture as well as the perimeter Director
The responsibilities of thie Administrative Board include review of theecys program establishment of its organizational structure developshynt -)f its annual budget and establishment of rates and conditions of
Siyfent for water and other services provided in the perimeter
The Director of OP4VAI-I is dbarged with the responsibility for executionPthe vclicies established by the Administrative Board end administration of oil ORMVAM functions This responsibility includes selection of staffn pserating perrcnnel acting s officia ORNIVAM representative in all ntztinns with -tate and othbr public or private bodies and the
f of funds within limit Indivated by the Ministers f Financetent rn fricultural and Agrarian Reorm
Perimeter Oranizatlon
ORVAM oreanizatlonal structure consists of a directnrate five maj-r rvlces or d-vsicns and one separate bureau Two services qei Administratif et Comptabl- and Service du Yatrial are conshycor - th adminisration and lcgistical support of ORMVAM operationshi1e the remainirg three services rind the separate bureau are Involved in t-hni al matters associated with agrcultural developrent Each ervice has one or more subordinate bureaus Fei-ce Chiefs and thehead 0 rch bure-u report directly to the ORMVAM4 Director
-~F7E MEw-
-30shy
2 Perimeter 01ttffnr
OPIVAM orgttnlrntlon treture calls for 557 positions of whichI L or 7 Mlled n were nher 29 1567 37 of the 71 Postshytion vacancies reported 1ern the high and middle levels Foreign(chiefly Euronean) technclan occupy I)of the 16 high level positionsthat ere filled at thfit tire
Whil OPM ut in th- lcng run lor to Mercecos oducational yster to prvidr tn crrf-nn2 to ratisfy current rdurojectd rcshyquirement th currnt high and mlddle level vacancies rrouire uersonnelwith oxt nive nrior rxericnce To fll this preent need it will be necessary for CRIVAM to continue its program of recruiting foreigntechnicians until ruch tire ns graduates of Moroccan educational programsacquire the necesnry exrerience The managerent assistance componentof thin pro~ject ]e-rribed In the Project analysis will to some extentalleviate OFIWAMs high level personnel requirements
3 Inw1 ernetation Sehedu]
Months Implementation Action
1 0 Sign Loan Agrcement
2 2 C-tiify conditions precedent and Y4tiate procedures for selection of US firm for management contract
2 Negotiation of extension of advisory Engineering Services
h 4 Contract (Hydrotechnic) Negotiation of Managerment Contract
5 60Cmpletion of Project
C Waivers
Sect ion 7 rf AID Regulation 7 provides in substance that theUnited State ill not finance direct costs of construction work performedby third cc-ur y nationals unless the total co-tn of the project withvhich thr ennrtrumticn w(r is asEcciated donot exceed $2On)O orafter excluding national of the country in vhich the site of constructionis located and Dersons vho nave resided therein uninterruptedly for morethan three years imrnedJately prior to any determination under Regulation 7at leant 0 of all uernons who work under the contract at the site of conbulltruction are United States citizens or the employment of third countrynationals is necessary to avoid excerrive corts to the United States
3
31
Section 2175 authr-ri th Regional Anitant Administratorto waive the nrovinions of Sectionthat it is 2073 if he dcterriner in any coneimportant te the nationrn intercrt of the United Stutes tofinance the direct eots of construction work performed by third country
nationals
A prviou1y r ic i c t tht for thr ct Tartthe -r c ct b- 1jeuj out r -cnorbr f cnrtructioncontracts with Morcccrr contrctnr an in the i-t Uowfevvr itentirely psnible that there may b- roe contractn with cntructlonfirms partly owned by third country nntionaln and that ruch firjs anwell as the surely Moroccan-owrned firms may enloy third country niationalsIn such canes a difficult rrobic-i iould arise in meeting the terms ofRegulation 7 since an a practical matter Aericans are not reaonablyavailable for ermployn ont by such contrnetorn and our previcus experiencewith the Naunsseur Ccnv(r-ion project thatin Morocco has indicatedAmerican contractors would not be interested in bidding cn small conshytracts in that country
It in therefore recommended that the Annitant Adinitratordetermine rursuant to Section 2q75 of Regulation 7 to waive theapplication of Regulation 7 to thic iroject since the project 411 conshytribute to the attainrent of US foreign policy objectiver and the cbJe-tives of the Foreign Arsistnnce Program
LITI L USE
LfI~~5xA~us
lit
4 A J A 45 4 k
t A S T
S(3
I A444ilA~~l~)
7 -74
tAM= D
SECTOR 27
10000
t Co0Na includez25 cgtri oncFcttlrvI ncy I8s ~ ~ C t C- Includes 50 constriJcltiotrgrc
2000 60
IU
0
z
bull cosYsA shy----- i
600L _
400
200
0 5 I0 15 20
INTEREST RATE
I ~ 7 J7777
ANIAampX C
PROJECT DESCRn1 rOll
The project com)onents to te undertaken on the MIoulouya Irrigation Project over the next five years contists of the following
C(n1rtion of the rrLin casuals and bianch canbls to provide the suource of waler to the sctors be developed in theto TriffBou Areg and Zebra areas This construction will include the necessarystructures such as reulators highway bridges aqueducts water intake
and discharge structures etc
2 Iand Txeloommerit which includes engineering land consolishyt and iuvtllng lard preparation (subsoiling ripping destoning etc) and installation of water distribution canals (secondary tertiary and quurtunary) and drainage collector ditches for the Triffa main covering 24000 acres in sctors 8 9 10 16 20 21 23 24 25A 2513 27 and 28 Lou Areg Central covering 16250 acres in sectors Dltirough D2B and G1 thru-4h G313 i0u Areg Remainder covering 15000 acres in s-ctors D3 through D7 and GA through (6 Zebra Collective covering 45)0 acres in sectors 3 4 5 rind 6 and Zebra Rer-iinder covering 14250 acres in sectors 1 2 and 7 through 10 and th remainder of sectors 34 and 5 The total land to be developed is about 74000 acres
3 Canalization of the Oued Zeluan and nued Sidi-Amar in the Bou Areg Plain consisting of strairltening englarging and regularizing of these streams to carry the flood waters to the sea Drainage interceptor canals are to be constructed parallel to the sea in the Bou Areg Plain In the Triffa Plain the Oued Riada main drain will be deepened and enlarged and secondary drains will be excavated to provide for drainageof the Madagh area This will include the construction of bridges and culverts and other related work
4 Major Commorn Works will consist of
a Clearing of the Mo-1ouya riverbed downstream of the Mechra KLila barn caused roy flood dariwe and the installation of a set of stop logs for maintenance of pillway gate-
b Design supervision and construction of repairs to the ]elt Lank dead head tunel
c Conctruction and establishment of sib-division Offices and installations for farmer support such as CMVand farm stables
1 C
-2shy
5 Manavmtnt It ha been proposed that a US management firm be ewployed by th- C4 to manage and operate the entire Bou Areg area Such manageent -iuld encomparn all activities from the initial concept to final irIrp igricultural production Such activities would Include resp r-ibilsect -or supervnsion of engtneering and constriction of primary
S- Jry r complete developfnent of land training n in g tinul irription practicen preparation of market
t - r1t- (ot--rnu trplusmnining of a Moroccan cadre to take over h v--it Bou Areg dreara P the
At this writing the n-pt of turning over to a private UZSfirm execushyresponsibl]ity I h management of the establilrment and initial
op-ration of irr1gati the Bou Arog area has been only broadly de iiitd by the GCJO It Intended that proposals will be invited from a r -onable ntnber of f|ed US firms that a selection will be made an-n 7 them and a more do iled and cornprehenrive definition of the rer6 -Ps to be performed be eztabliched at that time It haa been
stimated that the t- of ruch a contract will be about $2 mir- n In any event the -ts of this contract other engineering arvl s to be provided undt n extension of the Ilydrotechnic contract and ether US corts will not ed the proposed $5 mllaion developzont Jean fr the project
The cle 3ifications duties ant 1ncnslbilities of the management personnel ill ha-- to be clearly defined i agreed to by the GCM Perimeter Directo- and other GOM Agencies luding arrangements for the necessary gistic support
Svxlale Docu-
1
4
LD ED 0ICIAL
-IAIDshy
A1trX D
C6JCK LIST OF STATUTORY CRITERIA
(Development Loan Fund)
1 FAA 0102 Extent to which U3 cormodities and services are furnished consistent with improving the US balance of payments See Sections II-C II-F
2 AA sect2O]ihi lanner in which loan wil promote countrys economic develo shy rit emphasizing help for long-range plans and programs designed to developeconomic tesourcos and increase productive capacities See Section I-D
i FAA sectT] h)(IL Information and conclusion on availability of financincfrom other free-world sources including private sources within the United States See Section II-F
FAA sect20l( )2 Information and conclusion on activitys economic and technical soundness including the capacity of the recipient country to reshypay the loan at a reasonable rate of interest See Sections II-B II-D and II-E
5 FAA 1201(h)( Information and conclusion on existence of reasonable promise activity will contribute to developrmnt of economic resources or increase of productive capacities See Sectiona II-B and II-D
_92_(b 4Information and conclusion on activitys relationship toothor development activities and its contribution to realizable longshyrange objectives See Sections I-D and I-E
The following abbreviations are und FAA - Foroirn Assistance Act of 1961 as amerded by the Foreign Asaistaice
Act of 1967 App - Foreign Assistance and Polated Agencies Appropriations Act 1968
AFEVCDF 1066
L1
-2shy
7 FAA f12O1(b)(5)_ Countrys self-help masures including institution of Foreign Assistance Act investment pliaranty programs Investment Guaranty
bull Agreement signed with Morocco 331o6l See Sections I-D and II-EI
_A ))(6) Information and conclusion on possible effects on US econowy with soecial refererne to areas of substantial -labor surplusSee Section II-F
9 FAA q201 (h)() Information and conclusion on the dagree to which thA country iv wiki- progress toward respect for the rule of law freedom of expression and of the press and recognition~yf the importance of individual freedom initiative and private enterprise
10 FAA -1201(b)(8) Information and conclusion on the degree to which the country is taking steps to improve its c]Laato for private investment See Sccton II-E
31 FAA R LbJi Inforrat-on and conclusion on whether or not the activityto b financed will contribute to the achievement of self-sustaining growthSee Sections I-D and II-B
12 FAA fi2Ol(bj Inforruation and conclusion on reasonalbe prospects of reshypayment See Section II-E
13 FAA fl20JL() Info-ation on applicability of the twenty country ceil4ng2
14 FAA fl201 L Information and coclusion on legality (under laws of the country end the US) and reasonableness of lending and ralendinr terms Loan will be on minimum termspermitted under FAA These are deemed reasonable see Sectioam Evidence will be renuired from the GGM as to the legality of the loan agreemnt
1 E 2 Information and conclusion on availability of an applicationFAA together with sufficient information and assurances to indicate reasonably that funds will be used in an economcally and technically sound manner See Sections I-A II-B and II-D Application received Janury 15 1968
16 FAA fl201(fL If a project inforntion and conclusion whether it will promote the economic developapent of the requesting country taking into account the countrys human and material resource requiremnts and the reshylationship between the ultimate objes6ives of the project and the countrys overall economic development See Sections I-D and II-B
17 FAAJ 20ij(J If a project information and conclusion whether it cifishycally provides for appropriate participation by private enterprise 8ce Sections YI-C and 114
I- FAA i22(a) Total amount of money under loan which is going directly to private enterprise is going to intermediate credit institutions or other borrowers for use by private enterprise is being used to finance imports
rfro private sources or is otherwise beirg used to finance procurementsfrcm private souwces See Sections II-C and II-2
9 FAA 207 Infosation on the emphasis placed en
(a) encouraging development of economic political and social institushytins No apparent relationship
(b) nelC-help in mectingthe countrys food nredo Project Vill conshytribute to production of food for lccal consumptioa
(c) in-proving availability in the country of evucated trained manpower Project will contribute to the deicloginext of trained manpower as one of the functions of the management contract (Soe Annex C para 5)
(d) prcgrams aimed at -malnutrition disease eradi atDn slum clearanceWater purification sewage disposal health education naternal and child care(includin fimrily pJnrning)) -nd cthcr public health ausistarice See
(c) other develoment activities including industrial development free
labor unions cooperatives tnd voluntary agencie transn)rtatin and ccshymwquication nrStczn capubiliTies for economic planning and public adlinisshytration arban develo-mment and modernization of laws to feilltate econcnicdevelopjen- GO- intends encourage develo vient of cooperat yes particularlyin the Left Pank areas Project will also develop capabiLi ics for cconoaicplanning and public a6~inistration (Annex C para 5) Other not applicable
20 Information on the extent to which the r-untry is
(a) cttcmting to increase food production and food sto a-e anddistribution felitics This project is one evidence of Moroccos efforts in this direction See also Section I-D and I-E
b) creating- a favorable climate for foreign and dmestic iri-ate enterprise and invcstrrment The GCM has recently reduced profits twes anrannounced a ten year guarantee against tax increases See Section II-E-2
(c) increasing the role of the neonle in the developnental procecsNo apparent relationship to this project
(d) allocating expenditures to development rather than to unn-cessarymilitary purpoes or intervention in other free countries affair See Sections I-D and Ii-
(e) willing --nribute funds to the project or program Th iOMhas already dcvo o-sidcrable resources to the project It has badieted13 million for th i oulouya for i7 See Section I-C
(If) making economic zocial and political refo ns such as taxc coliecshytion iYprovcmenLs and chan es in land tenure a Royal Comm ision has been appointed to make recomendation on land tenure probleras in the Lower I oulouya
(g) responding to the economic political and social concerns of its people and showing a determination to take volf-help wcasuren See Sections I-D and II-E
IT
-ovi~cd l v r 13 1968
- 4 - LDffIED OFFICIAL USE
21 FAA Inforn ation about multilateral assistance being Iurnished to t e country and whether the loan will encourage recgional development prog-rams The I1D has eztablihcd a Consultative Group for Morocco which rvicws the GOM development program anui prgress See Section II-F-4 for infoaation on othtr donor assistance to Morocco
22 A Extent to which the loan will contribute to the objective of ass ring naximu par icipation in the task of econonic dovelop--ent on the pL-t 0 _he people of the developing countries through the encouragement of cocr-tic private and local govenmental inLitutious o apparent
relationship
23 F _-_Dta_ Infor-ation and corissions whether loan will oncourageeffor s of t1e country to (a) increase tie flow of international trade (b) fostcr private initiative and comptition (c) encourage development and usceo co opratives credit unions and savingss and loan associations (d) disourgo monopolistic practices (c) improvo technical efficiency of industry ariculture and commerce (f) strenSthn free labor unions This project is cxpected to increase technical efficiency oi-agriculture
2_ C-1L lnforzrition and conclusion on how the loan will encourage US privte trade and investment abroad and how it uill encourage private US participation in foreign assistance prograas (incluiing use of private trade channels and the services of US private enterprise) See Section II-
25 VA-+_ Conclusion and supporting information on compliance with tho Co resional policy that engineering and professional servicos of US fir-ms and their affiliates are to bo used in connection with capital project3 to the nixinua extent consistent with the national interest US engineerirn and innsgcment services will be financed tnder this loan
2$ Inforamtion and ccnclusions who+her loan will pormit American rx-l] business to participate equitably in the furnishing of goods and
z orvices by To be satisfied in Loan Agreementfinanced it
27 - t(a App I18 Complianco with restriction of co -zodity procureshy o UsMS except as otherwise determined by the Picsicent and subject to ttu--- rcortir require r-nts Procurement will - liumited to the US for
reiabnrs nts and to ioocco and other free world countries 1-or US-cwne(d rhu disburseacnts
23 -i Comiance with bulk cozodity procurement restriction topriecc no l-ho han the nkarkot price prevailing in tho US at tia of
bull puchas Not applicable
29 FA Cozpliance with requirement that matrin insurance be purchased on commceities if the participating country discri-inates and that insurance be placed in the US To be satisfied in Loan Agreement
30 IA 6(a) Information at to the utilization of excers personal property in lieu of procurement of new items Will be required ai appropriate under terns of Lean Agreement
f
1 77--7 -77-77-777
31 FAA 61](a)(_) information and conclusion on availability of enginoering i financial and other plans nccx sary to carry out tho assittance and of a
reasonably firm cstimate of the cost of the assistanco to the United States
See Section II-D
32-ecessaryFAA t611(a)_(2) legislative action r6quired within recipient country and ibasis Cor reasonable anticipation such action will be completed in time to pormit orderly accompli-hirtnt of purposes of loan See Section I-A
33 n _AA161nJ0] If water or water-relatod land resource construcshy
tion project or program information and conclusion on a benefit-cost comshy
putation See Section II-B
3 4 VAA 611(c) Compliance with requirement that contracts for construction be let on comp-ctitive basis to mamum extent practicable To be satisfied
in Loan Agreement
If a loan for a project of $1 million or more certificatin35 FAA _61l(r) by the principal AID officer in the country as to the capability of the
country (both financirl and human resources) to effectively maintain and
utilize the project taking into account other US-financed projects (Such
certification is to be pproved by the Administrator aL the time the loan
is authorized) In process of being obtained
36 FAsgJ2 _6_h Appropriate steps that have b-en taken to assure that to the miaximum extent possible the country is contributing local currencies to net th-2 cost of contractural and other services and foreign currencies o- icd by tho US are utilized to meet the cost of contractual and other services The GU-M is contributing over $30 million to compleXton of this project Excess US-use dirhams will be used for eligible project costs other than US goods and services
37 FAA p619 Compliance with requirement that assistance to newly independent countries be furnished through multilateral organizations or plans to maxishymum extent appropriate Not deemed appropriate in view of previous AID financing and ccoiitment to the project See Sections I-A and I-D
38 FAA sect620(a) AcnO7a n3]7(b) Compliance with prohibitions
against assistance to Cuba ard any countr (a) which furnishes assistance to Cuba or failed to take appropriate steps by February 14 1964 to prevent ships or aircraft unier its registry from carrying equipment materials or supplies from or to Cuba or (b) which sells furnishes or permits any ships under its registry fr-om carrying items of primary atrategic signifishycance or itcms of economic assistance Morocco is not-known to be in Violation of these sections
39 FAA q620GL_ If assistance to the government of a country existence of determination it is not controlled by the international Communist movement The Secretary of State so determined on October 11 191
40 FAA 620(c) If assistance to the government of a country existonce of Indebtedness to a US citizen for goods or services furnished or ordered whore ouch citizen has exhaustod available legal romodiesor where the debt
i - ow - -- _---- --shy
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is not denied or ontested by such government or the indebtedness arises under an unconditional guararty of payrrent given by such govornmunt No such indebtedness is known to exist
41 FA _(a2LdL If assisitance for any productive enterprise which will corashypote with US enterprise existence of agreement by the recipient country to prevent export to the US of more than 20 of the enterprises annual production during the life of the loan Not applicable
42 FA4 - 16Q_0_ A If assistance to the government of a country extent to which it (including government agenies or ruhdivisions) has after January 1 1962 taken steps o repudiate or nullify cuatracts or taken any action which has the effect of nationalizing expropriating or otherwise seizingownership or control ofprcpertv of US citizens or entities beneficially owned by them without taking appropriate stops to discha i ge its obligations No such steps cr actions are-known to have been taken by the GOM
43 FAA~L AjPj_10_9 Compliance with assistance toQ0 prohibitions against any Comunst codntry ozocco is not considered to be a cocinrunist country
44 FAA - 620(gJ Corliance with prohibition against use of assistonce to comp satc owners for expropriated or nationalized property To be satisfied in Loan Agreement
45 F AA 8620(h Compliance with regulations and procedures adopted to inshysure against ue of assistance in a manner hich contrary to the best inshyterests of the US promotes or assists the foreign aid projects or activities of the Communist-bloc countries To be satisfied in Loan Agreement
46 FAA 06-O(j)_ Exitence of determiration that the country is engaging in or preparing for aggressive military efforts No such determination has been made
L_62_O Information47 FAA on representation of the country at any intershynational confererce when that representation includes the planning of activishyties involving insurrection or subversion against the US or countries recoiving US assistance No such representition is known to have A occarrect
8 FAA 62JJ Existence of a determination that the country has permitted or failed to prevent destruction of US property by mob action or has failed to take steps to prevent a recurrence and-to pay compensation NO such destruction is known to have tak-n place
49 PAA l620(k) If construction of productive enterprise where eggregate value of assistanc to be furnished by US will exceed $1OO million identification of Gtntutoryauthority Not npplicable
i-xQ2MZZ=
1 shy
U 6 50 _Af( QCinsidoration which has been given to denlying assistance X to thu government of a country which after December 31 1966 has failed to
- institto the investnint guaranty program for the spcific risks of inconshy
vertibility and expropriation or confiscation Satisfied See No 7 above
S51S J lj Compliance with-prohibitions-againstn as~istance to countries which traffic or permittraffickingwith North Vietnam Morocco is not known to be in violation
52 E_-L620(_L If country has seized or imposed any penalty or sanction against vn US fishing vessel on account of its fishing activities in
intcrnationul waters information on the consideiation which has been given to excludirg the country from assistance No such situation is known to exist
53 FAA FA r) UAR restriction Not applicable620(p 9117
54 FAA R620tl) Existence of default undhr any Foreign Assistance Act loan to the country No such default exists
55 F ) C-nsider tion of whether co ntry is devoting unnecessary percentage of buKet for military purposes or use of foreign exchange for milita-y equipment
56 FAA 62o(t) Proibition on aid if country has severed diplomatic relations with US unless agreements have been negotiated after resumpshytion Diplomatic r(lations have not been severed
57 FAA 9620(u) Statur of the country on delinquent UN obligations Morocco is not known to be dlinquent on its UN~obligation
58 FAA R636(i) Prohibition on financing non-US manufactured motor vehicles Will be satisfied in Loan Agreement and Implementation Letter
59 App 102 Compliance with requirement that payments in excess of $25000 for architectural and en Jneering services on any one project be reported to Congress Such reports will be made
60 App R1O4 Compliance with bar against funds to pay pensions etc for military personnel Such payments will not be eligible for financing under th Loan Agreement
61 App 9106 If country attr ipts to create distinctions because of their race or religion among Americans in granting personal or commercial access or other rights otherwise avaVIfable to US citizens generally application which will be made in negotit ttons of contrary principles as expressed by Congress Morocco is not ku IDhave made any such attempts
iInD OFFIIt t USE
0k
OFFICIAL USE 62 AIwp Rii Compliance with existing requfremets for security clearance
of personnel Will be satisfied in Loan Agreement and Implementation Letter
63 App R1l2 Compliance with requirement for approval of cortractors and contract terms for capital projects Will be satisfied in Loan Agreement
clJ164 Aup Cmpliance with bar nRainst use of funds to Tay assessments etc of US meiber Such payments will not be eligible for financing under the Loan Agreemunt
6 Anp P115 Ccmpliance with regulations on employment of US and local personnel for funds obligated after April 30 1961 (Regulation 7) See Section III-C
66 Aim Vietnam iron and steel restrictions Not applicable
67 p l9 If a country other than Greece Turkey Iran Israel Republicof China Phillipines or Korea reduction in assistance by amounts spent for the purchase of sophisticated military equipment
68 Anp fi4O1 Compliance with bar against use of funds for publicity or proshypagjanda purposes within US not heretofore authorized by Congress Such use of funds will not be eligible for financing under the Loan Agreement
Morocco is a traditional Islamic monarchy with a constitution The conshystitution was implemented followaing a popular referendum in 1962 National regional and professional elective bodies including a parliament were established by universal suffrage under the constitution in 1963 The parliament was suspended in 1961 in a State of Exception because of its inability to agree on measures with adequate urgency to meet the prevailingecononde imperatives In July 1967 the King appointed a Prime Minister to direct a Cabinet of appointed technicians
The constitutional framework nevertheless remains intact in Morocco and nationwide popular elections for some of the professional chambers were held in August and September 1966 The press is relatively free in Morocco and the right of diLsent prevails provided that such dissent does not violate the prohibition against political attacks on the instishytution of the monarchy or the person of the monarch
LI Under the revised US AID Policy for Africa agreed to in November 1966 Morocco is designated a development emphasis country entitled to receive continuing support on a country basis as part of a multilaterally coorshydinated countrj program Morocco was subsequently included in Presidential Determination 67-14 (January 5 1967) I
LIM=TE OFFICIAL USE~i
- l go
bull ~ -
f
DEPQbi) STATE AGENCY FOR INERNATIONAL DEVELOPMENT
WASHINGTON DC 052
CAPITAL ASSISTANCE LOA11 AUTHORIZATION
Provided from Develoroent Loan Funds Morocco Second Lower Moulouya Irrigation Loan
Pursuant to the authority vested in the Assistant Administrator for Africa of the Agency for International Development
AI)by the Foreign Assistance Act of 1961 as amended theIAct) and the delegations of authority issued thereunder I
have received and t-en into consideration a certification from the Director of USAIDMorocco as to the financial and human resources capability of Morocco to effectively utilize the Lower Moulouya Irrigation Project taking into account among other things the
maintenance and utilization of projects in Morocco previously financed or assisted by the United States and I hereby authorize the establishshyment of a loan pursuant to Part I Chapter 2 Title I the Development Loan Fund to the Government of the Kingdom of Morocco (Borrower) of not to exceed five million dollars ($5000000) to assist in financing the fore] gn exchange and local currency costs of goods and services for the third phase of the Lower Moulouya Irrigation Project subject to the foLlowing terms and conditions
1 Interest Rate and Terms of Repayment Borrower shall repay the loan to AID in forty (40) years including a grace period not to exceed ten (10) years Borrower shall pay interest on the unrepaid principal and any interest accrued thereon at the rate of (a) two percent (2) per annum during the grace period and (b) two and
one-half percent (2-12) per annum thereafter
2 Currency of Pepayment Repayment of the loan and paymenu of interest shall be made in United States dollars
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3 Other Terms and Conditions amp(a)Goods and Services financed under the loan
shall have their source and origin in
(i) the United States if disbursements therefor are made in United States dollars or
(ii) any country in the free world including Morocco if disbursements therefor are made in Moroccan currency
(b) AID Regulation 7 shall not apply to construction -work financed under the loan because as detailed in Section IIIC of Capital Assistance Paper No P 667 it is important to the national interest of the United States that the direct costs of construction work performed by third-country nationals be financed out of funds made available by the Act
(a) Such other terms and conditions as AID may deem advisable
Assistant Administrator for Africa
Date
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7
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In the event that not all of av l able fuInd- under the loan are required for TKI eo It i ouied that any remaininrn balance be utilized for the payment lo -ovalccztn f the project This would be aceoomplirhe by utili7irn th- h r vroceeds of the loan to purehare US-use dirhsmn (frcr th U Oi-irrirg Officer) which would be utili ed to rrimbure th fc u a t local - nditurrs
Thi arranrit 3ir ila ) fstV utilitd In the - of the D-e l-INAieret Loar tJr U Atrrert SinceYr usii Conv rf i cn therc loans are rcpiviible in dollars nd rince Morocco in a n-ar excess local currency couintry the fert ) f e transaction in tc provide a means for obtaining ccnvrrrs cn a-cr th life of the loan of otherwire inconvertibie U5 holding irhrs hich are in exces of its localrequireme t
In 1967 over 15 million dirhams (abceut $3 million) of PL 480
Section l04(g) loan fun cre in msgreement with the CON allocated for the financing of various contractr reloting to projects in the Moulouya It in anticipited tht ndditional allocations will be made out of the local currency proceed generated from current and antishycipated US 7urplu agricultural rmodity programs in Morocco
It has been proposed that the dirham equivalent of $45 million of the proceeds of the October F67 rurplus agricultural commodity Sales Agreement be allocated for a Section Cb(g) loan for the Mulouya In nadition it is estimated that a $]35 million (in$ioz1ble dirhshyequlviJent) woull be available from 7uprl]eental surplun agrIcultura con -ity rales programs under Titlo I an-d Title IV in calendar 196F for allocation for loans for development projects in Morocco These two amounts combined would provide about 6 of the G014 resources reshyquired for the project over the next five years On thic basis there would appear to be rcasonble propect tht the GO should be in a rorition to provide cver the S e year rriod of the project the addishytional resources renuired for itF ccmpletion
Tt I contemplatd that na additlonal US dollar financing of the Moulouya byon-l the $ iilon rorosed herein will be provided for tl cplei n ef h M _11-nuya rince the bringing under irrigation of th- 11O0Y ies include] in the propore] project will substantlally cornIete the works criginally conwtemplated hen h DLF loan was authorshyized in 106 The remainler zf the workr h(- be within the capabilit3 of the GOM to complete with It- o-n resourcec
MT M T M
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) Technical Anily ir
The Moulouya Rivr which is cre of tne largest in Morocco originatesin the idll Atans
Moulouya and which oztend scuthward
Kediterrancn l re
t rre
Pr
ard n
flows rrpr
orre 25) mriles northeast thr Agorinn border
to the
In- agricitui 1 in li j i nt( iljr r Th- rst rind most
t 2 1ir i t i h- i n th rwrht born of thshy-- e 31nmiler frem the Mediterranean
Lea To tho wet cf the Tiffa and nn th- left bank( of the Moulouya isthe Zebra nlain 14wiuntain rv-arate the Zebra frcm th -ea and fron theBou Art-r i-ll]zain which - ctI nrrthwe(st of the Zebra The Bou Areg a coital phtain sclte 19 mils lorg and h miles wide separated fr-nthe n-a by a Ihow sa2t water lagoon Southwest of the Zebra is theGireb plain which hun land ruitable for irrigation in its routheasternportion The Gareb i at a higher elevation than the three other plainsard if ultimately irr-gatcd vould require pumping fro the lower level Zebra conv(yance system
Water from the Noulouya River is stored brhind the Mechra Klila Dam whichwas coniletd with fjiancri rc AID loan (3-A-2 (DLF Lcan l6)Water ir rclca ed downstr(a (1bcut c) miles) to the Mechra Homadi reFrshyvoir and d]iversion dcim in1h-r divert-d to th right oad left bankcunals About 75 kilometer (1 miles) of the Triffu (right bank) maingravity ciral hay ben copletd und consderable cr) has been carri-dout in the Tri on) distr Iution and drainage netw rks land levelngend other farm iwnrovwments About 37 kilometers (22 wiles) of the Zebra(left bank) main gravi-ty canal and the tunnel 6 miles (101()7 JIrenrTrcters) betxeen the Zebra area end the Bou Areg area have been comrneted
The GOM illrrfo m certqin -rk nr-Aded fcr develormnt of the gravityir~zgata yt-- for n 71-) acres over the next five yarr Thiscffort vi2 be eonern rait-r urcr the develo-ment cf areas thot providethe great-rt ecnnomic returrs nnd the developnent of a cadre of Iorocearperornel adequ tly tran-yi in the an2gerent of the project SeeAnnex C for further Irojcl details
e- enmL Ev1ation
Mt Infratrueturr The --trnal highway co-munication network i t arid rfi Isirm nf re- i n-ote siler in-1 shy
uzeather raved rc
____________________TAM
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Other communlca 1 i i t ih Lh arr-- inlude the nrninlineof the Oujda-Fe--C- t h~rh l e0tnnd to AlgeriaSpanish enclove rt the 1 fir idto cmmercial airport at Oujda andNador with regular national onI int rnational ervice5s
Th verirtr 1 u ~Ath r nr r t crocd by 60 kvJ i i i u rrd t 5( kr It na ortr kk f~ditcrl rower1(Qp x I -y yrar) -o n d hr rritIronr
at the Mechra-Yplusmnilj l inm fnd the Bou Areff contral poter Statin The townare connected to ranrh cther and th2 r-rt of Mcrocco by telerhone andtelegraph 1 ner
b Sol Soil rvey 7rd land ]a-ifctons have been completed i-nthe Mcloulva rer eter oanntrantbi- with French firmr u-ing Frenchmethods The Trifa -1n wr initialy rraped at a cealeof 150000with certain area ub entiy rer-aLd at 15000 110000 or 120000dependin I nn the cor1cjeity of YJ rattcrns The Zebra plain has beenmapped at a reale cf 20O00 nod th- Bou Areg plain at a scale Df 150OO On thp baf Yr nf ther urvy th cla sified the soilsGC hain terms of r-uitnbility for irrigation as follows
Land Ciaifcation (Aere)
CasrI amp IT Class III Clans IV Totas Triffa Plain 17000 29[00 22725 99625Zebra Plain CbO 1275 4050 211425Bou Areg Plain 75)00 l6qo 3 0 3067)Gareb Plain 13 05 10 70 0
Inclurez 1750 acres for lfigh Service Area
The findings thi indicate that ( i) arriratry 5of the area in thefour rlain- i suited to irrigation (Clare I anl II) (ii) more than3 ir suitabr bt with one Or mcre imrtat~ons Irro=ed by underrablefeatur-s such an to wrafhy oil characteristJcn trnine- r restrltedbull rio (CIar TIV) and (iij) ls than 2 of th- area in only margina)lysuited for irrinticn(Class TV) In ther7e lattrr ardrn only rmi-intrnsive orop rotations blUponsblhe
The oi nicn f the Cn-lting Envneer (1ydrctechrJ) th respect to) therd carrffjn n that hfle 3 Bureau for P ltr0tion -tandards werirt ernoy-d te rlasnificatinn ir aceurat- and n rrti with3and rlaced in r d rLrnble categories more
uere thnn right ha bern the caseUS tandardr folIced The clasifatinn ha 0a been reviewed andfound to be atifactory by the USPA tayr Hoever r areas of complcxroil Ttternr hch to date have only been ru-d to a oale of 150))rome reraTpin tray be necesary as a banis fcr rrerarnZ
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final designs of irrigation and drztinne- rystems parcellization into farms and planning of land preparation measures In addition considering the high average salt ccntent of ater frcm he c ilouya hiver a rorm of systematic leachin- will be reqirer- to f ree-rt aculation of salts in the soilsparticularly in h ebra Crt in will nlso1e plain ureas require nitrogenphosphorus crd possibly other nutrient to obtain satisfactory yields
c Water On the basis of studies by the GCM which have been reviewed bythe Consultirr Fnr ncri and the U au of 1ccoi-ation it is thecorclusion of A tt (i) the q lity of water in the Lower Houlouya
is below averpge bvt crp rble to thtof certain rivers in the US whichisotnteLoh~uoybrve successfully been usc for irrif ton for periods cxeccdin 100 yearsOj5) there is clearly a sufficient a )unt of i ter to irrif-ate the 128010
bullcrer to be served in the [rlcentIty ar n3 Addi-tional s-tudioser (c requilrecj dcter-Inc if adeqiuate water is a- ilable for irrigationof 376QGO vc rc
The only signifcant urce of vp y fOr irrigation water in the perimeteris the oulouya Vi~cr io jc n1 is 1re ntly being irrigated from wells most Iround water i - - 1 Alouya contains dissoived salts which i xr Lrn - hvriny reak flowto iJOx PIn iuting [cricd of c n ccntraticn is 750 ppm On Thi- basis of USDA Salinity Lot) atory criteria fte v ater is class 03-SI (hl-h salinity-low a-alinity) Vile water is thus of mediocre qualityit is ccmrarable to that of river successfully used for irrigation in the US (eg the Lower Colorado Rier) and poses no serious problems to irrir-ation in the Moulouya perir( cfr provided the W4 adheres to recorrmended programs for meeting leaching reoairements
With ref-pect to the 128000 acr project the demand for water reasured at the Mechra Hoadi diversion dair is estizated at about 575 million cubic meters per year as follows
remand for Wter
Peak Flow Annual Total (August) (m 3 million)
Agrieulture (176000 acres) 337 m3s 806 Municipal amp Industrial Consumption 8m3 23
Total 4 uy62123000 acres to be irrigateA by Gravity 255 m3s 575
(The e dpeak requirzents of 345 s compares with a 35 m3 s design
capacity of the main canal at the diversion dam including 18 m3 s for the Right Bank and 17 m3 s fcc the Left Bank)
I
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This estimate is based on probaole rainfall cropping patterns plant requirements evapo-transpiration and other expected losses of irrigashytion water The estimate is believed by the Consulting Engineer to be reasonable but subject to refinement on the basis of tests to be carried out on a continuing basis
The annual average availability of wuter from the Moulouya river is estirated at 1100 million mn or about double the estimated requirement for the gravity areas
Estimated Availability of Water
Twelve Year Annual Average for Moulouya River 3 m3 second 1100 million m3year
Maximum inflow Observed 8000 m3second(1963) 3h00 million m3 (1962-63)
Miniwum inflow Observed 1 msecond (1951) 532 million m3 (1956-57)
On this basis it appears that there should be ample water available for irrigation of the gravity area as the water availability obtained from twelve years observation exceeds the requirements in all but the 1956-57 season shown above Prior to the development of land with purped service areas (the Gare-b and the Triffa ig h Service) a review and analysis of the river hydrology should be unidertaken to assess the availability and regulashytion of the river flows
d Studies Entincering and Construction The overall irrigation scheme outlined by the 1uM defirs the ajor features and th( magnitude of the work to be accomplished to attain the ultimate goal
This scheme is being carried olut in phases over a long time period The present phase encorpasses the development planned within the priorities indicated by the Stanford Research Institute (SRI) study for the gravity irrigation system
The studies for land classifliration have been completed for the gravity irrigation system in the Triffa Bou Areg and Zebra plains by French firms and were considered reasonably accurate by the Consulting Engineer Land consolidation and parcellinrg has been completed by 0MET in the Bou Areg Central area the Zebra Collctive and Zebra Remainder sectors 7 thru 10 Land consolidation and pareeLlni ar( needed for Triffa sectors 27 and 28 Bou Areg Rematnder arid Z(bra Rerrirder sectors I and 2 The engineering designs for the Triffa main sector 27 and 28 and the Zebra Collective have been or are being completed by the G0M forces The engineering design for the Cefntral Bou Areg and Zebra Remainder sectors 7 tnru 10 has been or in being connpeted uy Hydrotechnic Engineering design will be required or the 1ou Are remainder sectors D-3 thru D-7 and Q4 thru G-6 and Zebra Rer ainler sectors 1 and 2 The engineering designfor the Dead Ilead Thnnel has been undertaken by SCET who have preshypared anid issued an Avant Projet for bid invitations for construction
14 M)j6Fj Cshy
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This firm will also undcrtnk- uu-orviston of construction The engineer ing not yet performed can be aea ished by GOM forces andor private engineering firms
Construction of the extension to the rrain irrigation and drainage canals Jand preparation rector cinl ani drninaive ditches will be performed unllr cntact t) 1 cc rt~r~iet m)t hi in the ene of the
r-abilit tion of the L2tL Pz- Dd iarl Trnc t
e Cronning Patterns The existing erning pattern in the Moulcuya including botnirrigatcd and dry farm ingincludes grain forage citrus vegetables olives grapes and 6 small amount of leciduous fruits and nuts Of the roughly 2140Cy) acres of agricultural production in the Moulouya about 177000 acres are in field crops 24)) in vegetables 16Y)O in citrus 15000 in grrrcs 540Y) in forage crops 1700 in olives and 15)0 in other fruits and nuts
Taking into consideration rast and present trends in plantings as well as agronomic and price and marketing factrrs the following projection of cropping patterns has been developed for the Lower Moulouya
PROJECTED POPPTG PATTFRNS T1 HE LOWER MOULOUYA
(In per cent of total irrigated area)
Left Bank and Triffa High Serice
Triffa Sector - Sectcr rriffa Class Class Class
crop Main 27 28 East I amp II III IV
Citrus 40 60 10 10 10 Vegetables 15 10 15 1) 20 10
Crtton 15 20 10
Fcragpr 10 20 25 30 4o 30
heat 10 6 20 25 20 35 4o
Grip 25 24 35 15 Dy beans 5 10
Sunflower 10 olives 5 0
100 10) 100 100) 1i 1052i 100
a Incltdes double cropping
- - r- euro --- 7
~7~TF~Wr~e~ALUSE
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The projected cropping pattern for the Bou Areg plain includes cottonLJrirdg the frrt Five yearnejtinted 1r of the Class I)fand
the project jitwould be grown on nnII landn Tht renresert only 960etrravres) ectz ri)cr)e area The cotton acr~a e ry increasep 2ceafter live years if ritisfactory drainage conditionshyrre achieved in the Bou Arev
cotton grown i 1xonp tarx- Trdltionally Morocco export its-Jr- cron an irr IJ hort cble to rmeett Cotton the reuirrents
r the oroccan 2pinningr mills The croppni-attrn of the Triffa East (about 180n acres) Js projectedt Tnrlude 15- (about 27 acres) in cotton It is likely that becausef ihe limited extnt of Class I and II lands in the Triffa Eas cotton not increase beyond that percentage
1t i evident that the amount of irrigated cotton that is likely to bein ther-n Moulouya is minimal even assuming that local drainage condi-T nare i asuitable
f Technical Sundnv--s The AID Project Engineer hps reviewed ii) thedat and ajor construction performed to date onronct and finds the technical requirements this long-ranRe phasedsufficiently defineoto ccntinue the project on an orderly schedule The estimates of cost of prsirct facilities have been determin-d by SRI from average va)ues oftrit cots obtained frorr reviously ntiarded contracts and from etniled( -s-nand analysis prepared by the iHydrotechnic Enginering fir oft-o tyieal sectors located in the Bou Areg area The costs for the arc ent contract have bcen estimated by the USAID It is consideredthat the depree of engijeering planning undertaken and the deterrrinitonr to the US Goverrment are adequate to meet the applicable requireshySt- n Section 611 of thie Foreign Asistance Act
7717gt
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E Financial Status of Borrower
1 The Moroccan Economy
Grrwth of MorocLcts GDP in real term averaged about 24 per yearin 1(4 and lr li Per capita DP In 1C 5 wan anproximotely t162 A (er Irr-ht in (6 resu]trd n a drcrcne of slightly nver in GDP which tlh vpulatior grc~vth avrring 3P4 per year rnrsJted in a decline of -r ornita GDP In 16 ii brut $154 A recnd droughtcccijrred In C67 but i not expeetid to have the severe effects of the 165 drought Crop forecasts for the first nine months of 1967 indicate a 4 increase in real GDP above the 1966 level This is also the economic grcrdth rate estimated by the IBRD for the pezxA 1965-70
Moroccos economy is heavily dependent upon the agricultural sector thich has averaged about 15 growth per annum However growth of the mal modern segment of Moroccos agricultural sector has inshy-reased at the rate of about 7 per annum
In 96 the International Banik for Reconstruction and Development (IBRD) preented a number of recommendationr denigrned to increase Moroccos economic growth rate On the bacis of these recomfndations the G004 proceeded with planning the necesrary program to increase investment levels fr- the i 63-65 level of 11 of GNP to 1r of GNP and stimulate the rate of economic growth from 2 to an average of over )4 annually for the five years 66-70 In addJtion the GC4 has taken measures to curb the population grovth rat while placing increased emphasis on raising production of both dryland (wheat) and Irrigated agriculture
2 Investment and Savinms
The level of total gross investment has remaind at aboit 11 of GNP for vera year althugh the percentnoe declined slightly in 165 Under the GO Three Yea5 Plan 1965-67 the gross investment t-3rget woz ret at DH 3 billion- Actual invev-tment expenditures for the three yearpeirod reached about DH 46 billion of which the Governshyment ezxenditure amounted to DH 1 billion a against DH 21 billion budgeted Thin may have beeo partly de to the GOMs deliberate ausshyterity pollcy under the hIF rtbJli7tion prci1rnr but more probably it van duxe to the shortage of trained cadres to -lan and execute projects
In the private cectcr conziderable inounts of ravings may be hoarded due to lack of project attractive t- inventors The lvl of private investment has been runnihg at about 51 of GNP thrrugh 195 The 0014 4 incentive to private instors hnr cut profit taxes from 4320 to V and announced a tpn year guarantc-e against tax increases
]L- $ = DH 506
777=-77- NQ
r y 7k1- T e - W lk In
j - 1) 7k- - _
- 23-
Loan are avaiiable to )rivlite irve-tcrn freo th 3JfIDiN s rctr special funda to prcmote touricm devc firvcnt
Under the 1r86-1972 plan abut to br irtntt level are to be accelerated considerably reaching A of GNP liv ]970 Mor(- Irlyir haviiy on foreign 1 to aciuw cc higher lve1
3 Central Government FinancP
The Moroccan money supply which had Incrrased ify 76 per cent in 2965 remained virtually unchanged in 966 The first half of 1967 witnessed a 5 Ter cent increase in the money supply Te major part of thi increase as concentrated in June and July uhen the supply reached V14 0j lion Currency In circulation expanded rapidly in June and July
nnl factrrn being reinforced by commodity hcnrding related to the 1ide~l Et crisis Demand deposits did not show their normal decline nthe first half of 1967 Deposits with commercial banks declined nlightly while deposits with the Treabury increased as public and semi public agencies contisued their transfers from the banking system to the Treasury The increase in money supply in the first half of (7 ran I raced to tho nzon1 sonal increase in net foreign assets not c y the custcirry rlelir In claims on the private sector Clsirl (n the erivate sector declined slighty until May 1967 but Increased hr-gb June and Jily due primarily to additional financing of textile stocks ClbiJ ante Government rose by 10 per cent in the first half of 967 the in central brnk claims on the GovernmentI being rmainly offset by larger deposits with the Treasury
Ordinary budgetary revenues which incrurted by 5 rcr ent in 1566 tre cxrcted t-) increase by 7 per cent in 1( to DII 21 billion DeampDite a derea3e in agricultural tax reccipt r- fror diret taxes rose by 10 ppr cent in 1966 and a 2 increas estinated for S67 due to tric or controls on income declarationr d an accelerashytion of tax cller ns Owing mainly to a relaxation of the import
program in late 1 5 and a concomitant increase in tariffs on certain ccnonter goods customs reneipts increased by 21 per cent in 1966 Although budgetary estimates call for s decline of 3 per cent in customs receipts in 1S67 it is likely that actual receipts will be considerably larger in view of the import liberalizatidn measures intro)duced subseshyquent to the estimates Receipts from indirect taxes state monopolies and other serces are expected to be 11 iv- cent Ipher in 1967 owing to increased profit on -ugar sabr-i and L r(m the newly created Office do Ccrmercalisaticn - d-tation (OCE)
Recurrent ordinary buiL e(enditures increased by 34 per cent in 1966 ar-i are expected to increase by an additional 7 per cent in 1567 reachin- D1122 billion Although wage and salary scales in the public
Banque Nationale pour le Developement Economique
TT~~- - I777
2 Cf
sector have1bec z h t - rrvirI urli 11i g 14-6 -nd PO becnue rX toi Ijt e f (]r o n 4
ill tile ic urrnnye andr)not i on dnd Publi ht rentrn -yr-otn lno IncreasedOthrr t ill- t il r ne by ) vr cert in J6(
i ninlyrt -br h Inc-l
( Ihe ( t r- rl t ip t t C itur f T)h 21h iilli n
is (( ItI t lt r c0 a- r n n o I- c t b It ihstnl id vv ih n t r-t have hn(er - en 1t2
(IM ii ture( T f fu traordJ nary budrzct exshypend ituren a r y -t c ~ i vi -iscz Portal Checking sy-stcsul)rrcing t (I ltIt Ct -- ind creirn shy
nnet The f r er tnc I hha ccrc ed from a htih of DH 5-7 millIJn in _ 5 millIn r C46 F cr ats foi ]7 place Cro n w I 1(DI)J79 ill ni DDn etlc fi nancing has alo u 1) 5 p (- I3A27 iIliun to an entirnted DH 1142 million
1 14V ) I nv 1 ri n nI(c1 franc n is 77-ected to be ol t y ncrewed bcrrowing fr-ir t he Cestra 9ank which hud been held at mcdert vols iln 165 nnd 1a66 Under the 1TFtaiby agreement of October 16 the qob) agreed to taBe a3] rocrrnary meurer to maintain as table curoonry rPnt inl th nr1d-elrto th b a ent of the ePrncriynnd a vnbl- hn1incc X nvroent P rt artt to t rt fien of tho Ccntin- Honk rstz (erct are nct t r itr June 30 Y-ke 7 lov l b th n Diif ) mill] (n tlcnber -c P thai I o illin usit I ])ecthr 31I62 (GC bc w t
C B1rtrp - vt DH 12 iri 1i nor ]S67 or DH 6S ij lionEan tisated (r fo than the aproved crd it expanwim
Thitrd ordivary nil extraordnnry buThTt deficit of DII 7-19 millI n fcrecat Fr 1 67 in exnected to be fnanced by not freign
tan reof DII )75 mi~l in nt recurity 12ue 1 T111I vlion a - nt ry tiat Po n Che )ir d-nC i 73 r5 Pn
riI is u h i a vti v mrr nrr-e jssIof fvr is id a erital The vnfsa revcred in 1d6 when lnrger r nyrentn eEecially on food itcmo an n -lewdoun in
igo ra a deficit of $1 millcn ProjectiOnz-vt rvultvd in ror 17 r~ieat inrrerned importsonly partially ccnrennate by addshytsa t frnreirn r ntil rrceiprs ard mprrvement in the nervices account will reult -n et of aprroximately $)20million As rhoim in the following tabl -r tion for l33 and 169 how overall deficits of
14 and m] ivi_y$i It
rqVV t1 4~
C)rgt
---
1 -)I+-IRF1
1ROCCO - rTANC OF PAYME 1qrt - 169]_ 5
6rfi0 1 1C(8lr67 i r(o
)xrurt 2t L( I L-5
Trade Bnlance 11 15 - 75 shy - 75
rviee- ret - 7 - 5) -35 -23 -2
J]-i of Good rnd Service- - 3 - 65 -II - ti - (5
Trn-Ifr Pr ynts (nt) P 21 33 37 33
on-cntnry Carital (not) 92 64 6 6 5
Err-rs nnd Ov rrion- (not) - 23 -2 1 3
eranl Bannic __ - _3 -_ 3 - 1i4
Atrh thert ircjected reficitn are of the nnme order of 1 nishytude a7 thcr incurred in the period i66 the Situatlcn i findarentallydifferent both in rerprct to the source of the deficits and in rer-ect to the meat0Y gtr m etin7tecr In the f rrer caive M5recco uffered
_frcrr a very h-vy cutfc of Drivtes cuitv fo-ivr with a shar) decline In forein nt exerditures in Morocco In the iatter case th projected deficits r- rcre a functicn or accelerated crcwth risingdebt ervieiiw tri tho abnrcn of forv eeble additiens foreign reshybull ourcs nere7ory 4( r2Vm rAf finmncting To nect the def-cits during the reriol 161 61h MWreco ob1id to drw down rorcin exchange reserves of over $]c milicn The snrti tpv of financing is no longerpozslble ince no or-res- ruch reserve- Even ifMorocco yr
mn nina r rve_ ore (]rrfii on to th r-ixirun etnt enribe nnd the [iI tnfldy i- un M-r-r e i32 till relA re nt rnt 15 millicnj1itionn ftr ign as- e n 1 6 beyond hat r recnently fcreeeshyable with ver nri- nry Officilr in In i6 reserves are cotImnted Pt 72million c hih crn V 3 million i caly required for currency coy r
Foreign InJebtrdne n of th GOM Mnroccos external rtnte ard rutlie enterprie dett amounted to
$r) millivn in lr6 Debt vervcirig rpynents for (66 trtaled about
$5) rillion g-eement approved in October 3(67
I- -- Ishy
37 millin or arprcxitrrntoy (j Iroccor totnl eXoort earning of h28 millicn GCnerally nxt rrO dbt FervicJng renuiremennt of leas
than r of totna -ort nnrlt In onrldered to I r tirfactoryrntio D-bt r rnJrcLct n Ir the reriod 1-(y 3on Trerent external debt including thnt wrtl(n irreently undibur-ed are hown n th fr lv tahlr
)] L v yr t n
Eternn Vtnte anc ] bntcrnrie Debt
M131 o)nr
Y aI Net Outrtnnling Debt Debt Service
(6 it 479r5 $367 J-67 452 3)6
Z616 44469 2 0 2C-
365I3 37 389
33 383 33 6 371
5-h 31 n 352 275 34121
]176 2661 32It 1977 21133 311 177 22)6 307 19 i0l74 256
1733 255
rgtternal debt rharre n rerent debt nnr rhon above do not increase ubtanti-lly over t rt 1)year- reaching a maximum of h44 millior
in J6 and decrpt- n cr - tently threoafter At the are time exportearninr r _rc extett nc-are Aring that Morocco does not inshycreswre it etrnn2 cbt t irate ubrtantially nb-vc ihat has been the core th adfiticrn dbt e roquirrentn reulting from the propo t Icon o 5 ijilion co r 7crncepr-ional term hould not have a i-nifiant affect n 1r o - ab lty to neet itv g rc-atedebt ericn rcnrib2t~e- the pros ectr of reprment of thin loan ore coniderci rearcnb)
U I -
F ot h-v C IuIJI rmt I shy
1 V amp~ rVml KI
PUC- -jrVi Jt t 1 11 nflrcj urlc 1- th )qn --P I uti u rhnrrl -1r- thr U- Tr- ry- R- -nymc nt
c2Il f n 6 1 bf r I- till 11 nfl r- n-r i n of O r--niC(Io~hi U 1 1 rr to
Tn vil ) f rvc hi tvlrll 1 (In- - n- u--n E r me rrinshycgtay F rntwir w ourc o -o- rvI ortf-V3 1 rncing of
Uf f -r rrrir- ur3r 4~ v -rin Iltrt nt ndd shyt -n t ) in- lint r b t l r -n rort- o-orco trorl-- V -P
r i 1rnd h L-torie Furcl-trin firr- thrjt US r r~ crvirrf- u~d be~
T L I1 c vt r- -ly ] -ubt fu 1 n vi pw -I -ror-co Ir of
ut1JpcO In thi rjert f it -- r- 21 npnred by d1-nr- cothcr t~han the US
2 ]P-t ofI Prr l1 on Prw- Fntrrr
Phij rrcjJ-t -11 n-t h~ -in nrwerq Prrt n rr- tc ntrshyr~A~r fi-mc 1bho und for --roern p o n
3_~~PrCT--rty
rr-vIi-n 1 h -d r the loan ragreement for Icntifitcation ef any r mIjrpt n ctri b- rt througn ut 1zatn (f xccr- prorerty
If rv c u~eAID n-mrcf u urr thi )cn - I~ut~ em avoi3ablo r rovvrirrnt -rrperty rather than nce iteni
4 Otli-r Fr- Wo--] n-Fnlc4rm
Dr mi tW- o] 14rocco- i~ajr ovr-ec -f exte rnaX
rrtan~- hrtvfb - I r ~ ant fl Fr n fole by Kv-it
Sgio F rneflit r b-en 1lmrntrd to tcfohnjip n5tnnen bi eoni~in I th u y f Fr--h tprhntcian tcacrr ind cther
~ti~r t~ ec-tnmIyrt-n Friinch Aid to Mcreco In 1065c~oc~ (P-art f-r txychnirril aItn -- j se of tl5 w1nfor bu~dget rurport f ir in rt t- $1 1ri1 icin in ennita -rojectM- n vx- rrcd
1Vw1tvnn tioI t-) Frenh rurtnnd +16 r11ion tie-I to -onyiint to orrrcr Frrmh ccilcn~For _-rrc-ratod land and rquirrmcnt
West GTrrnmnny liar agrcrcd to nrovIe ccme j27 mM22~cn 1n catital arirtanre and cromrndity lnoi7 t n OfIcon( q92 thi o totril$223 miJ lien ha actuary b-Pn cr-Itt--d under Inn ngrepment This
And a lk5 million commodity loan both) signed in 1965 All Wet Gerzaan
Ufla
-28shy
capital asnistance I vuectI to be tied to German exports Germanyhas in addition 1uvvded r tteysubbtantial technical assistance f
The IBRP hah rade four 1nns to Morocco since 1962 totaling$6) million Ofthin totnl a [175 million loan in 1965 wos fordevelopient of the gidi lit-r irrigation perimeter Other assistance by internntIcnal Iending arncie include an $11 million credit byIDA in 1C65 for rcendary diicction projects and an IFC ln and inshyvestrent of $1 1 ri jnic alo in
F tit i by [c - dncr tr dh elo snt ofMorccco rircuVt r oii +h b-]n jt-TKT r nbove n 2 )6 niliion Kuwait enn in i66 for develomyment of the Tensaout Prnm n irrnten nrooetand a $77 million Kuwait
0jl n )nnsn r(niti-nertcir
loan for extrnion of the Tadri~ Irrigation Perimeter
The following- trbe surrlnrlzes other free world arlztance (excluiin technical assistanc-) to Morocco for the years 1(62-66
($ Millions)
1 62 1cf_63 96) 19r65 19)66 Fneea 4) 5PO 64o 700 shyWet Germany 223 gu 1t 53 281 IRD 15 175 10) 175 IDA 110 IF C 1 5 7 7 7 0 I15
TOTAL 55 62 1U3 W
b Includer only lo-ng term loans and exporter credits - Includfs 25 million private capital
Eternal ansiztnnce to the Lowier Moulouya Irrigation Perimeter -nce 1060 hres been con[fined to US upport Consdiering AIDs previcus
involvement in and conmitnert to the Lower Moulouya an AID lean in P2t to be Lhi mol aprroriate source of financing for this project
LID
II
q
-29-
SECTION ITI- Y-TTYT TIMPLPTrION
A Periret-r Ad-instrrti-
Authority for irplerrentvtnn of the deveorpent prrgrn frr the LowerMoulcuya Perimeter and rs wel arth crnntinuinz mrnnrrmenertC tt r t- rrtnr V theltbi nad overationity iOfic 1cne 4
n r I e1i- i d Vit4 i Iv ~ Ct rreated i Otb (rJ rn-- of evcn inrmi-rriional offices hich reelaced the Office de Mire en Valeur Aamprlcole (OMVA) Under the OMXA and itspredecessor agencies authority for ad-inLtration cf irrigtion proJect war centralized in Rabat
Under the new regional office organization responsibility for adminshyistering ORMVAM is vested in on Adminirtrative Board of 10 members headed by the Minister of Agriculture and Agrarian Reform as chairman All ether board members (other than the Chairman and a representative of theInterministerial Economic Ccrmittee) represent agencies or activities inthe region of the r-eriret-r whic comprises parts of two provinces Localretresentatives on the Board inc]-de the governors of the two provincesOujda and Nador the presidents -f the two provincial asembtes and of the two provincial chambers of agriculture as well as the perimeter Director
The responsibilities of thie Administrative Board include review of theecys program establishment of its organizational structure developshynt -)f its annual budget and establishment of rates and conditions of
Siyfent for water and other services provided in the perimeter
The Director of OP4VAI-I is dbarged with the responsibility for executionPthe vclicies established by the Administrative Board end administration of oil ORMVAM functions This responsibility includes selection of staffn pserating perrcnnel acting s officia ORNIVAM representative in all ntztinns with -tate and othbr public or private bodies and the
f of funds within limit Indivated by the Ministers f Financetent rn fricultural and Agrarian Reorm
Perimeter Oranizatlon
ORVAM oreanizatlonal structure consists of a directnrate five maj-r rvlces or d-vsicns and one separate bureau Two services qei Administratif et Comptabl- and Service du Yatrial are conshycor - th adminisration and lcgistical support of ORMVAM operationshi1e the remainirg three services rind the separate bureau are Involved in t-hni al matters associated with agrcultural developrent Each ervice has one or more subordinate bureaus Fei-ce Chiefs and thehead 0 rch bure-u report directly to the ORMVAM4 Director
-~F7E MEw-
-30shy
2 Perimeter 01ttffnr
OPIVAM orgttnlrntlon treture calls for 557 positions of whichI L or 7 Mlled n were nher 29 1567 37 of the 71 Postshytion vacancies reported 1ern the high and middle levels Foreign(chiefly Euronean) technclan occupy I)of the 16 high level positionsthat ere filled at thfit tire
Whil OPM ut in th- lcng run lor to Mercecos oducational yster to prvidr tn crrf-nn2 to ratisfy current rdurojectd rcshyquirement th currnt high and mlddle level vacancies rrouire uersonnelwith oxt nive nrior rxericnce To fll this preent need it will be necessary for CRIVAM to continue its program of recruiting foreigntechnicians until ruch tire ns graduates of Moroccan educational programsacquire the necesnry exrerience The managerent assistance componentof thin pro~ject ]e-rribed In the Project analysis will to some extentalleviate OFIWAMs high level personnel requirements
3 Inw1 ernetation Sehedu]
Months Implementation Action
1 0 Sign Loan Agrcement
2 2 C-tiify conditions precedent and Y4tiate procedures for selection of US firm for management contract
2 Negotiation of extension of advisory Engineering Services
h 4 Contract (Hydrotechnic) Negotiation of Managerment Contract
5 60Cmpletion of Project
C Waivers
Sect ion 7 rf AID Regulation 7 provides in substance that theUnited State ill not finance direct costs of construction work performedby third cc-ur y nationals unless the total co-tn of the project withvhich thr ennrtrumticn w(r is asEcciated donot exceed $2On)O orafter excluding national of the country in vhich the site of constructionis located and Dersons vho nave resided therein uninterruptedly for morethan three years imrnedJately prior to any determination under Regulation 7at leant 0 of all uernons who work under the contract at the site of conbulltruction are United States citizens or the employment of third countrynationals is necessary to avoid excerrive corts to the United States
3
31
Section 2175 authr-ri th Regional Anitant Administratorto waive the nrovinions of Sectionthat it is 2073 if he dcterriner in any coneimportant te the nationrn intercrt of the United Stutes tofinance the direct eots of construction work performed by third country
nationals
A prviou1y r ic i c t tht for thr ct Tartthe -r c ct b- 1jeuj out r -cnorbr f cnrtructioncontracts with Morcccrr contrctnr an in the i-t Uowfevvr itentirely psnible that there may b- roe contractn with cntructlonfirms partly owned by third country nntionaln and that ruch firjs anwell as the surely Moroccan-owrned firms may enloy third country niationalsIn such canes a difficult rrobic-i iould arise in meeting the terms ofRegulation 7 since an a practical matter Aericans are not reaonablyavailable for ermployn ont by such contrnetorn and our previcus experiencewith the Naunsseur Ccnv(r-ion project thatin Morocco has indicatedAmerican contractors would not be interested in bidding cn small conshytracts in that country
It in therefore recommended that the Annitant Adinitratordetermine rursuant to Section 2q75 of Regulation 7 to waive theapplication of Regulation 7 to thic iroject since the project 411 conshytribute to the attainrent of US foreign policy objectiver and the cbJe-tives of the Foreign Arsistnnce Program
LITI L USE
LfI~~5xA~us
lit
4 A J A 45 4 k
t A S T
S(3
I A444ilA~~l~)
7 -74
tAM= D
SECTOR 27
10000
t Co0Na includez25 cgtri oncFcttlrvI ncy I8s ~ ~ C t C- Includes 50 constriJcltiotrgrc
2000 60
IU
0
z
bull cosYsA shy----- i
600L _
400
200
0 5 I0 15 20
INTEREST RATE
I ~ 7 J7777
ANIAampX C
PROJECT DESCRn1 rOll
The project com)onents to te undertaken on the MIoulouya Irrigation Project over the next five years contists of the following
C(n1rtion of the rrLin casuals and bianch canbls to provide the suource of waler to the sctors be developed in theto TriffBou Areg and Zebra areas This construction will include the necessarystructures such as reulators highway bridges aqueducts water intake
and discharge structures etc
2 Iand Txeloommerit which includes engineering land consolishyt and iuvtllng lard preparation (subsoiling ripping destoning etc) and installation of water distribution canals (secondary tertiary and quurtunary) and drainage collector ditches for the Triffa main covering 24000 acres in sctors 8 9 10 16 20 21 23 24 25A 2513 27 and 28 Lou Areg Central covering 16250 acres in sectors Dltirough D2B and G1 thru-4h G313 i0u Areg Remainder covering 15000 acres in s-ctors D3 through D7 and GA through (6 Zebra Collective covering 45)0 acres in sectors 3 4 5 rind 6 and Zebra Rer-iinder covering 14250 acres in sectors 1 2 and 7 through 10 and th remainder of sectors 34 and 5 The total land to be developed is about 74000 acres
3 Canalization of the Oued Zeluan and nued Sidi-Amar in the Bou Areg Plain consisting of strairltening englarging and regularizing of these streams to carry the flood waters to the sea Drainage interceptor canals are to be constructed parallel to the sea in the Bou Areg Plain In the Triffa Plain the Oued Riada main drain will be deepened and enlarged and secondary drains will be excavated to provide for drainageof the Madagh area This will include the construction of bridges and culverts and other related work
4 Major Commorn Works will consist of
a Clearing of the Mo-1ouya riverbed downstream of the Mechra KLila barn caused roy flood dariwe and the installation of a set of stop logs for maintenance of pillway gate-
b Design supervision and construction of repairs to the ]elt Lank dead head tunel
c Conctruction and establishment of sib-division Offices and installations for farmer support such as CMVand farm stables
1 C
-2shy
5 Manavmtnt It ha been proposed that a US management firm be ewployed by th- C4 to manage and operate the entire Bou Areg area Such manageent -iuld encomparn all activities from the initial concept to final irIrp igricultural production Such activities would Include resp r-ibilsect -or supervnsion of engtneering and constriction of primary
S- Jry r complete developfnent of land training n in g tinul irription practicen preparation of market
t - r1t- (ot--rnu trplusmnining of a Moroccan cadre to take over h v--it Bou Areg dreara P the
At this writing the n-pt of turning over to a private UZSfirm execushyresponsibl]ity I h management of the establilrment and initial
op-ration of irr1gati the Bou Arog area has been only broadly de iiitd by the GCJO It Intended that proposals will be invited from a r -onable ntnber of f|ed US firms that a selection will be made an-n 7 them and a more do iled and cornprehenrive definition of the rer6 -Ps to be performed be eztabliched at that time It haa been
stimated that the t- of ruch a contract will be about $2 mir- n In any event the -ts of this contract other engineering arvl s to be provided undt n extension of the Ilydrotechnic contract and ether US corts will not ed the proposed $5 mllaion developzont Jean fr the project
The cle 3ifications duties ant 1ncnslbilities of the management personnel ill ha-- to be clearly defined i agreed to by the GCM Perimeter Directo- and other GOM Agencies luding arrangements for the necessary gistic support
Svxlale Docu-
1
4
LD ED 0ICIAL
-IAIDshy
A1trX D
C6JCK LIST OF STATUTORY CRITERIA
(Development Loan Fund)
1 FAA 0102 Extent to which U3 cormodities and services are furnished consistent with improving the US balance of payments See Sections II-C II-F
2 AA sect2O]ihi lanner in which loan wil promote countrys economic develo shy rit emphasizing help for long-range plans and programs designed to developeconomic tesourcos and increase productive capacities See Section I-D
i FAA sectT] h)(IL Information and conclusion on availability of financincfrom other free-world sources including private sources within the United States See Section II-F
FAA sect20l( )2 Information and conclusion on activitys economic and technical soundness including the capacity of the recipient country to reshypay the loan at a reasonable rate of interest See Sections II-B II-D and II-E
5 FAA 1201(h)( Information and conclusion on existence of reasonable promise activity will contribute to developrmnt of economic resources or increase of productive capacities See Sectiona II-B and II-D
_92_(b 4Information and conclusion on activitys relationship toothor development activities and its contribution to realizable longshyrange objectives See Sections I-D and I-E
The following abbreviations are und FAA - Foroirn Assistance Act of 1961 as amerded by the Foreign Asaistaice
Act of 1967 App - Foreign Assistance and Polated Agencies Appropriations Act 1968
AFEVCDF 1066
L1
-2shy
7 FAA f12O1(b)(5)_ Countrys self-help masures including institution of Foreign Assistance Act investment pliaranty programs Investment Guaranty
bull Agreement signed with Morocco 331o6l See Sections I-D and II-EI
_A ))(6) Information and conclusion on possible effects on US econowy with soecial refererne to areas of substantial -labor surplusSee Section II-F
9 FAA q201 (h)() Information and conclusion on the dagree to which thA country iv wiki- progress toward respect for the rule of law freedom of expression and of the press and recognition~yf the importance of individual freedom initiative and private enterprise
10 FAA -1201(b)(8) Information and conclusion on the degree to which the country is taking steps to improve its c]Laato for private investment See Sccton II-E
31 FAA R LbJi Inforrat-on and conclusion on whether or not the activityto b financed will contribute to the achievement of self-sustaining growthSee Sections I-D and II-B
12 FAA fi2Ol(bj Inforruation and conclusion on reasonalbe prospects of reshypayment See Section II-E
13 FAA fl20JL() Info-ation on applicability of the twenty country ceil4ng2
14 FAA fl201 L Information and coclusion on legality (under laws of the country end the US) and reasonableness of lending and ralendinr terms Loan will be on minimum termspermitted under FAA These are deemed reasonable see Sectioam Evidence will be renuired from the GGM as to the legality of the loan agreemnt
1 E 2 Information and conclusion on availability of an applicationFAA together with sufficient information and assurances to indicate reasonably that funds will be used in an economcally and technically sound manner See Sections I-A II-B and II-D Application received Janury 15 1968
16 FAA fl201(fL If a project inforntion and conclusion whether it will promote the economic developapent of the requesting country taking into account the countrys human and material resource requiremnts and the reshylationship between the ultimate objes6ives of the project and the countrys overall economic development See Sections I-D and II-B
17 FAAJ 20ij(J If a project information and conclusion whether it cifishycally provides for appropriate participation by private enterprise 8ce Sections YI-C and 114
I- FAA i22(a) Total amount of money under loan which is going directly to private enterprise is going to intermediate credit institutions or other borrowers for use by private enterprise is being used to finance imports
rfro private sources or is otherwise beirg used to finance procurementsfrcm private souwces See Sections II-C and II-2
9 FAA 207 Infosation on the emphasis placed en
(a) encouraging development of economic political and social institushytins No apparent relationship
(b) nelC-help in mectingthe countrys food nredo Project Vill conshytribute to production of food for lccal consumptioa
(c) in-proving availability in the country of evucated trained manpower Project will contribute to the deicloginext of trained manpower as one of the functions of the management contract (Soe Annex C para 5)
(d) prcgrams aimed at -malnutrition disease eradi atDn slum clearanceWater purification sewage disposal health education naternal and child care(includin fimrily pJnrning)) -nd cthcr public health ausistarice See
(c) other develoment activities including industrial development free
labor unions cooperatives tnd voluntary agencie transn)rtatin and ccshymwquication nrStczn capubiliTies for economic planning and public adlinisshytration arban develo-mment and modernization of laws to feilltate econcnicdevelopjen- GO- intends encourage develo vient of cooperat yes particularlyin the Left Pank areas Project will also develop capabiLi ics for cconoaicplanning and public a6~inistration (Annex C para 5) Other not applicable
20 Information on the extent to which the r-untry is
(a) cttcmting to increase food production and food sto a-e anddistribution felitics This project is one evidence of Moroccos efforts in this direction See also Section I-D and I-E
b) creating- a favorable climate for foreign and dmestic iri-ate enterprise and invcstrrment The GCM has recently reduced profits twes anrannounced a ten year guarantee against tax increases See Section II-E-2
(c) increasing the role of the neonle in the developnental procecsNo apparent relationship to this project
(d) allocating expenditures to development rather than to unn-cessarymilitary purpoes or intervention in other free countries affair See Sections I-D and Ii-
(e) willing --nribute funds to the project or program Th iOMhas already dcvo o-sidcrable resources to the project It has badieted13 million for th i oulouya for i7 See Section I-C
(If) making economic zocial and political refo ns such as taxc coliecshytion iYprovcmenLs and chan es in land tenure a Royal Comm ision has been appointed to make recomendation on land tenure probleras in the Lower I oulouya
(g) responding to the economic political and social concerns of its people and showing a determination to take volf-help wcasuren See Sections I-D and II-E
IT
-ovi~cd l v r 13 1968
- 4 - LDffIED OFFICIAL USE
21 FAA Inforn ation about multilateral assistance being Iurnished to t e country and whether the loan will encourage recgional development prog-rams The I1D has eztablihcd a Consultative Group for Morocco which rvicws the GOM development program anui prgress See Section II-F-4 for infoaation on othtr donor assistance to Morocco
22 A Extent to which the loan will contribute to the objective of ass ring naximu par icipation in the task of econonic dovelop--ent on the pL-t 0 _he people of the developing countries through the encouragement of cocr-tic private and local govenmental inLitutious o apparent
relationship
23 F _-_Dta_ Infor-ation and corissions whether loan will oncourageeffor s of t1e country to (a) increase tie flow of international trade (b) fostcr private initiative and comptition (c) encourage development and usceo co opratives credit unions and savingss and loan associations (d) disourgo monopolistic practices (c) improvo technical efficiency of industry ariculture and commerce (f) strenSthn free labor unions This project is cxpected to increase technical efficiency oi-agriculture
2_ C-1L lnforzrition and conclusion on how the loan will encourage US privte trade and investment abroad and how it uill encourage private US participation in foreign assistance prograas (incluiing use of private trade channels and the services of US private enterprise) See Section II-
25 VA-+_ Conclusion and supporting information on compliance with tho Co resional policy that engineering and professional servicos of US fir-ms and their affiliates are to bo used in connection with capital project3 to the nixinua extent consistent with the national interest US engineerirn and innsgcment services will be financed tnder this loan
2$ Inforamtion and ccnclusions who+her loan will pormit American rx-l] business to participate equitably in the furnishing of goods and
z orvices by To be satisfied in Loan Agreementfinanced it
27 - t(a App I18 Complianco with restriction of co -zodity procureshy o UsMS except as otherwise determined by the Picsicent and subject to ttu--- rcortir require r-nts Procurement will - liumited to the US for
reiabnrs nts and to ioocco and other free world countries 1-or US-cwne(d rhu disburseacnts
23 -i Comiance with bulk cozodity procurement restriction topriecc no l-ho han the nkarkot price prevailing in tho US at tia of
bull puchas Not applicable
29 FA Cozpliance with requirement that matrin insurance be purchased on commceities if the participating country discri-inates and that insurance be placed in the US To be satisfied in Loan Agreement
30 IA 6(a) Information at to the utilization of excers personal property in lieu of procurement of new items Will be required ai appropriate under terns of Lean Agreement
f
1 77--7 -77-77-777
31 FAA 61](a)(_) information and conclusion on availability of enginoering i financial and other plans nccx sary to carry out tho assittance and of a
reasonably firm cstimate of the cost of the assistanco to the United States
See Section II-D
32-ecessaryFAA t611(a)_(2) legislative action r6quired within recipient country and ibasis Cor reasonable anticipation such action will be completed in time to pormit orderly accompli-hirtnt of purposes of loan See Section I-A
33 n _AA161nJ0] If water or water-relatod land resource construcshy
tion project or program information and conclusion on a benefit-cost comshy
putation See Section II-B
3 4 VAA 611(c) Compliance with requirement that contracts for construction be let on comp-ctitive basis to mamum extent practicable To be satisfied
in Loan Agreement
If a loan for a project of $1 million or more certificatin35 FAA _61l(r) by the principal AID officer in the country as to the capability of the
country (both financirl and human resources) to effectively maintain and
utilize the project taking into account other US-financed projects (Such
certification is to be pproved by the Administrator aL the time the loan
is authorized) In process of being obtained
36 FAsgJ2 _6_h Appropriate steps that have b-en taken to assure that to the miaximum extent possible the country is contributing local currencies to net th-2 cost of contractural and other services and foreign currencies o- icd by tho US are utilized to meet the cost of contractual and other services The GU-M is contributing over $30 million to compleXton of this project Excess US-use dirhams will be used for eligible project costs other than US goods and services
37 FAA p619 Compliance with requirement that assistance to newly independent countries be furnished through multilateral organizations or plans to maxishymum extent appropriate Not deemed appropriate in view of previous AID financing and ccoiitment to the project See Sections I-A and I-D
38 FAA sect620(a) AcnO7a n3]7(b) Compliance with prohibitions
against assistance to Cuba ard any countr (a) which furnishes assistance to Cuba or failed to take appropriate steps by February 14 1964 to prevent ships or aircraft unier its registry from carrying equipment materials or supplies from or to Cuba or (b) which sells furnishes or permits any ships under its registry fr-om carrying items of primary atrategic signifishycance or itcms of economic assistance Morocco is not-known to be in Violation of these sections
39 FAA q620GL_ If assistance to the government of a country existence of determination it is not controlled by the international Communist movement The Secretary of State so determined on October 11 191
40 FAA 620(c) If assistance to the government of a country existonce of Indebtedness to a US citizen for goods or services furnished or ordered whore ouch citizen has exhaustod available legal romodiesor where the debt
i - ow - -- _---- --shy
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is not denied or ontested by such government or the indebtedness arises under an unconditional guararty of payrrent given by such govornmunt No such indebtedness is known to exist
41 FA _(a2LdL If assisitance for any productive enterprise which will corashypote with US enterprise existence of agreement by the recipient country to prevent export to the US of more than 20 of the enterprises annual production during the life of the loan Not applicable
42 FA4 - 16Q_0_ A If assistance to the government of a country extent to which it (including government agenies or ruhdivisions) has after January 1 1962 taken steps o repudiate or nullify cuatracts or taken any action which has the effect of nationalizing expropriating or otherwise seizingownership or control ofprcpertv of US citizens or entities beneficially owned by them without taking appropriate stops to discha i ge its obligations No such steps cr actions are-known to have been taken by the GOM
43 FAA~L AjPj_10_9 Compliance with assistance toQ0 prohibitions against any Comunst codntry ozocco is not considered to be a cocinrunist country
44 FAA - 620(gJ Corliance with prohibition against use of assistonce to comp satc owners for expropriated or nationalized property To be satisfied in Loan Agreement
45 F AA 8620(h Compliance with regulations and procedures adopted to inshysure against ue of assistance in a manner hich contrary to the best inshyterests of the US promotes or assists the foreign aid projects or activities of the Communist-bloc countries To be satisfied in Loan Agreement
46 FAA 06-O(j)_ Exitence of determiration that the country is engaging in or preparing for aggressive military efforts No such determination has been made
L_62_O Information47 FAA on representation of the country at any intershynational confererce when that representation includes the planning of activishyties involving insurrection or subversion against the US or countries recoiving US assistance No such representition is known to have A occarrect
8 FAA 62JJ Existence of a determination that the country has permitted or failed to prevent destruction of US property by mob action or has failed to take steps to prevent a recurrence and-to pay compensation NO such destruction is known to have tak-n place
49 PAA l620(k) If construction of productive enterprise where eggregate value of assistanc to be furnished by US will exceed $1OO million identification of Gtntutoryauthority Not npplicable
i-xQ2MZZ=
1 shy
U 6 50 _Af( QCinsidoration which has been given to denlying assistance X to thu government of a country which after December 31 1966 has failed to
- institto the investnint guaranty program for the spcific risks of inconshy
vertibility and expropriation or confiscation Satisfied See No 7 above
S51S J lj Compliance with-prohibitions-againstn as~istance to countries which traffic or permittraffickingwith North Vietnam Morocco is not known to be in violation
52 E_-L620(_L If country has seized or imposed any penalty or sanction against vn US fishing vessel on account of its fishing activities in
intcrnationul waters information on the consideiation which has been given to excludirg the country from assistance No such situation is known to exist
53 FAA FA r) UAR restriction Not applicable620(p 9117
54 FAA R620tl) Existence of default undhr any Foreign Assistance Act loan to the country No such default exists
55 F ) C-nsider tion of whether co ntry is devoting unnecessary percentage of buKet for military purposes or use of foreign exchange for milita-y equipment
56 FAA 62o(t) Proibition on aid if country has severed diplomatic relations with US unless agreements have been negotiated after resumpshytion Diplomatic r(lations have not been severed
57 FAA 9620(u) Statur of the country on delinquent UN obligations Morocco is not known to be dlinquent on its UN~obligation
58 FAA R636(i) Prohibition on financing non-US manufactured motor vehicles Will be satisfied in Loan Agreement and Implementation Letter
59 App 102 Compliance with requirement that payments in excess of $25000 for architectural and en Jneering services on any one project be reported to Congress Such reports will be made
60 App R1O4 Compliance with bar against funds to pay pensions etc for military personnel Such payments will not be eligible for financing under th Loan Agreement
61 App 9106 If country attr ipts to create distinctions because of their race or religion among Americans in granting personal or commercial access or other rights otherwise avaVIfable to US citizens generally application which will be made in negotit ttons of contrary principles as expressed by Congress Morocco is not ku IDhave made any such attempts
iInD OFFIIt t USE
0k
OFFICIAL USE 62 AIwp Rii Compliance with existing requfremets for security clearance
of personnel Will be satisfied in Loan Agreement and Implementation Letter
63 App R1l2 Compliance with requirement for approval of cortractors and contract terms for capital projects Will be satisfied in Loan Agreement
clJ164 Aup Cmpliance with bar nRainst use of funds to Tay assessments etc of US meiber Such payments will not be eligible for financing under the Loan Agreemunt
6 Anp P115 Ccmpliance with regulations on employment of US and local personnel for funds obligated after April 30 1961 (Regulation 7) See Section III-C
66 Aim Vietnam iron and steel restrictions Not applicable
67 p l9 If a country other than Greece Turkey Iran Israel Republicof China Phillipines or Korea reduction in assistance by amounts spent for the purchase of sophisticated military equipment
68 Anp fi4O1 Compliance with bar against use of funds for publicity or proshypagjanda purposes within US not heretofore authorized by Congress Such use of funds will not be eligible for financing under the Loan Agreement
Morocco is a traditional Islamic monarchy with a constitution The conshystitution was implemented followaing a popular referendum in 1962 National regional and professional elective bodies including a parliament were established by universal suffrage under the constitution in 1963 The parliament was suspended in 1961 in a State of Exception because of its inability to agree on measures with adequate urgency to meet the prevailingecononde imperatives In July 1967 the King appointed a Prime Minister to direct a Cabinet of appointed technicians
The constitutional framework nevertheless remains intact in Morocco and nationwide popular elections for some of the professional chambers were held in August and September 1966 The press is relatively free in Morocco and the right of diLsent prevails provided that such dissent does not violate the prohibition against political attacks on the instishytution of the monarchy or the person of the monarch
LI Under the revised US AID Policy for Africa agreed to in November 1966 Morocco is designated a development emphasis country entitled to receive continuing support on a country basis as part of a multilaterally coorshydinated countrj program Morocco was subsequently included in Presidential Determination 67-14 (January 5 1967) I
LIM=TE OFFICIAL USE~i
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bull ~ -
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DEPQbi) STATE AGENCY FOR INERNATIONAL DEVELOPMENT
WASHINGTON DC 052
CAPITAL ASSISTANCE LOA11 AUTHORIZATION
Provided from Develoroent Loan Funds Morocco Second Lower Moulouya Irrigation Loan
Pursuant to the authority vested in the Assistant Administrator for Africa of the Agency for International Development
AI)by the Foreign Assistance Act of 1961 as amended theIAct) and the delegations of authority issued thereunder I
have received and t-en into consideration a certification from the Director of USAIDMorocco as to the financial and human resources capability of Morocco to effectively utilize the Lower Moulouya Irrigation Project taking into account among other things the
maintenance and utilization of projects in Morocco previously financed or assisted by the United States and I hereby authorize the establishshyment of a loan pursuant to Part I Chapter 2 Title I the Development Loan Fund to the Government of the Kingdom of Morocco (Borrower) of not to exceed five million dollars ($5000000) to assist in financing the fore] gn exchange and local currency costs of goods and services for the third phase of the Lower Moulouya Irrigation Project subject to the foLlowing terms and conditions
1 Interest Rate and Terms of Repayment Borrower shall repay the loan to AID in forty (40) years including a grace period not to exceed ten (10) years Borrower shall pay interest on the unrepaid principal and any interest accrued thereon at the rate of (a) two percent (2) per annum during the grace period and (b) two and
one-half percent (2-12) per annum thereafter
2 Currency of Pepayment Repayment of the loan and paymenu of interest shall be made in United States dollars
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3 Other Terms and Conditions amp(a)Goods and Services financed under the loan
shall have their source and origin in
(i) the United States if disbursements therefor are made in United States dollars or
(ii) any country in the free world including Morocco if disbursements therefor are made in Moroccan currency
(b) AID Regulation 7 shall not apply to construction -work financed under the loan because as detailed in Section IIIC of Capital Assistance Paper No P 667 it is important to the national interest of the United States that the direct costs of construction work performed by third-country nationals be financed out of funds made available by the Act
(a) Such other terms and conditions as AID may deem advisable
Assistant Administrator for Africa
Date
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) Technical Anily ir
The Moulouya Rivr which is cre of tne largest in Morocco originatesin the idll Atans
Moulouya and which oztend scuthward
Kediterrancn l re
t rre
Pr
ard n
flows rrpr
orre 25) mriles northeast thr Agorinn border
to the
In- agricitui 1 in li j i nt( iljr r Th- rst rind most
t 2 1ir i t i h- i n th rwrht born of thshy-- e 31nmiler frem the Mediterranean
Lea To tho wet cf the Tiffa and nn th- left bank( of the Moulouya isthe Zebra nlain 14wiuntain rv-arate the Zebra frcm th -ea and fron theBou Art-r i-ll]zain which - ctI nrrthwe(st of the Zebra The Bou Areg a coital phtain sclte 19 mils lorg and h miles wide separated fr-nthe n-a by a Ihow sa2t water lagoon Southwest of the Zebra is theGireb plain which hun land ruitable for irrigation in its routheasternportion The Gareb i at a higher elevation than the three other plainsard if ultimately irr-gatcd vould require pumping fro the lower level Zebra conv(yance system
Water from the Noulouya River is stored brhind the Mechra Klila Dam whichwas coniletd with fjiancri rc AID loan (3-A-2 (DLF Lcan l6)Water ir rclca ed downstr(a (1bcut c) miles) to the Mechra Homadi reFrshyvoir and d]iversion dcim in1h-r divert-d to th right oad left bankcunals About 75 kilometer (1 miles) of the Triffu (right bank) maingravity ciral hay ben copletd und consderable cr) has been carri-dout in the Tri on) distr Iution and drainage netw rks land levelngend other farm iwnrovwments About 37 kilometers (22 wiles) of the Zebra(left bank) main gravi-ty canal and the tunnel 6 miles (101()7 JIrenrTrcters) betxeen the Zebra area end the Bou Areg area have been comrneted
The GOM illrrfo m certqin -rk nr-Aded fcr develormnt of the gravityir~zgata yt-- for n 71-) acres over the next five yarr Thiscffort vi2 be eonern rait-r urcr the develo-ment cf areas thot providethe great-rt ecnnomic returrs nnd the developnent of a cadre of Iorocearperornel adequ tly tran-yi in the an2gerent of the project SeeAnnex C for further Irojcl details
e- enmL Ev1ation
Mt Infratrueturr The --trnal highway co-munication network i t arid rfi Isirm nf re- i n-ote siler in-1 shy
uzeather raved rc
____________________TAM
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Other communlca 1 i i t ih Lh arr-- inlude the nrninlineof the Oujda-Fe--C- t h~rh l e0tnnd to AlgeriaSpanish enclove rt the 1 fir idto cmmercial airport at Oujda andNador with regular national onI int rnational ervice5s
Th verirtr 1 u ~Ath r nr r t crocd by 60 kvJ i i i u rrd t 5( kr It na ortr kk f~ditcrl rower1(Qp x I -y yrar) -o n d hr rritIronr
at the Mechra-Yplusmnilj l inm fnd the Bou Areff contral poter Statin The townare connected to ranrh cther and th2 r-rt of Mcrocco by telerhone andtelegraph 1 ner
b Sol Soil rvey 7rd land ]a-ifctons have been completed i-nthe Mcloulva rer eter oanntrantbi- with French firmr u-ing Frenchmethods The Trifa -1n wr initialy rraped at a cealeof 150000with certain area ub entiy rer-aLd at 15000 110000 or 120000dependin I nn the cor1cjeity of YJ rattcrns The Zebra plain has beenmapped at a reale cf 20O00 nod th- Bou Areg plain at a scale Df 150OO On thp baf Yr nf ther urvy th cla sified the soilsGC hain terms of r-uitnbility for irrigation as follows
Land Ciaifcation (Aere)
CasrI amp IT Class III Clans IV Totas Triffa Plain 17000 29[00 22725 99625Zebra Plain CbO 1275 4050 211425Bou Areg Plain 75)00 l6qo 3 0 3067)Gareb Plain 13 05 10 70 0
Inclurez 1750 acres for lfigh Service Area
The findings thi indicate that ( i) arriratry 5of the area in thefour rlain- i suited to irrigation (Clare I anl II) (ii) more than3 ir suitabr bt with one Or mcre imrtat~ons Irro=ed by underrablefeatur-s such an to wrafhy oil characteristJcn trnine- r restrltedbull rio (CIar TIV) and (iij) ls than 2 of th- area in only margina)lysuited for irrinticn(Class TV) In ther7e lattrr ardrn only rmi-intrnsive orop rotations blUponsblhe
The oi nicn f the Cn-lting Envneer (1ydrctechrJ) th respect to) therd carrffjn n that hfle 3 Bureau for P ltr0tion -tandards werirt ernoy-d te rlasnificatinn ir aceurat- and n rrti with3and rlaced in r d rLrnble categories more
uere thnn right ha bern the caseUS tandardr folIced The clasifatinn ha 0a been reviewed andfound to be atifactory by the USPA tayr Hoever r areas of complcxroil Ttternr hch to date have only been ru-d to a oale of 150))rome reraTpin tray be necesary as a banis fcr rrerarnZ
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final designs of irrigation and drztinne- rystems parcellization into farms and planning of land preparation measures In addition considering the high average salt ccntent of ater frcm he c ilouya hiver a rorm of systematic leachin- will be reqirer- to f ree-rt aculation of salts in the soilsparticularly in h ebra Crt in will nlso1e plain ureas require nitrogenphosphorus crd possibly other nutrient to obtain satisfactory yields
c Water On the basis of studies by the GCM which have been reviewed bythe Consultirr Fnr ncri and the U au of 1ccoi-ation it is thecorclusion of A tt (i) the q lity of water in the Lower Houlouya
is below averpge bvt crp rble to thtof certain rivers in the US whichisotnteLoh~uoybrve successfully been usc for irrif ton for periods cxeccdin 100 yearsOj5) there is clearly a sufficient a )unt of i ter to irrif-ate the 128010
bullcrer to be served in the [rlcentIty ar n3 Addi-tional s-tudioser (c requilrecj dcter-Inc if adeqiuate water is a- ilable for irrigationof 376QGO vc rc
The only signifcant urce of vp y fOr irrigation water in the perimeteris the oulouya Vi~cr io jc n1 is 1re ntly being irrigated from wells most Iround water i - - 1 Alouya contains dissoived salts which i xr Lrn - hvriny reak flowto iJOx PIn iuting [cricd of c n ccntraticn is 750 ppm On Thi- basis of USDA Salinity Lot) atory criteria fte v ater is class 03-SI (hl-h salinity-low a-alinity) Vile water is thus of mediocre qualityit is ccmrarable to that of river successfully used for irrigation in the US (eg the Lower Colorado Rier) and poses no serious problems to irrir-ation in the Moulouya perir( cfr provided the W4 adheres to recorrmended programs for meeting leaching reoairements
With ref-pect to the 128000 acr project the demand for water reasured at the Mechra Hoadi diversion dair is estizated at about 575 million cubic meters per year as follows
remand for Wter
Peak Flow Annual Total (August) (m 3 million)
Agrieulture (176000 acres) 337 m3s 806 Municipal amp Industrial Consumption 8m3 23
Total 4 uy62123000 acres to be irrigateA by Gravity 255 m3s 575
(The e dpeak requirzents of 345 s compares with a 35 m3 s design
capacity of the main canal at the diversion dam including 18 m3 s for the Right Bank and 17 m3 s fcc the Left Bank)
I
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This estimate is based on probaole rainfall cropping patterns plant requirements evapo-transpiration and other expected losses of irrigashytion water The estimate is believed by the Consulting Engineer to be reasonable but subject to refinement on the basis of tests to be carried out on a continuing basis
The annual average availability of wuter from the Moulouya river is estirated at 1100 million mn or about double the estimated requirement for the gravity areas
Estimated Availability of Water
Twelve Year Annual Average for Moulouya River 3 m3 second 1100 million m3year
Maximum inflow Observed 8000 m3second(1963) 3h00 million m3 (1962-63)
Miniwum inflow Observed 1 msecond (1951) 532 million m3 (1956-57)
On this basis it appears that there should be ample water available for irrigation of the gravity area as the water availability obtained from twelve years observation exceeds the requirements in all but the 1956-57 season shown above Prior to the development of land with purped service areas (the Gare-b and the Triffa ig h Service) a review and analysis of the river hydrology should be unidertaken to assess the availability and regulashytion of the river flows
d Studies Entincering and Construction The overall irrigation scheme outlined by the 1uM defirs the ajor features and th( magnitude of the work to be accomplished to attain the ultimate goal
This scheme is being carried olut in phases over a long time period The present phase encorpasses the development planned within the priorities indicated by the Stanford Research Institute (SRI) study for the gravity irrigation system
The studies for land classifliration have been completed for the gravity irrigation system in the Triffa Bou Areg and Zebra plains by French firms and were considered reasonably accurate by the Consulting Engineer Land consolidation and parcellinrg has been completed by 0MET in the Bou Areg Central area the Zebra Collctive and Zebra Remainder sectors 7 thru 10 Land consolidation and pareeLlni ar( needed for Triffa sectors 27 and 28 Bou Areg Rematnder arid Z(bra Rerrirder sectors I and 2 The engineering designs for the Triffa main sector 27 and 28 and the Zebra Collective have been or are being completed by the G0M forces The engineering design for the Cefntral Bou Areg and Zebra Remainder sectors 7 tnru 10 has been or in being connpeted uy Hydrotechnic Engineering design will be required or the 1ou Are remainder sectors D-3 thru D-7 and Q4 thru G-6 and Zebra Rer ainler sectors 1 and 2 The engineering designfor the Dead Ilead Thnnel has been undertaken by SCET who have preshypared anid issued an Avant Projet for bid invitations for construction
14 M)j6Fj Cshy
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This firm will also undcrtnk- uu-orviston of construction The engineer ing not yet performed can be aea ished by GOM forces andor private engineering firms
Construction of the extension to the rrain irrigation and drainage canals Jand preparation rector cinl ani drninaive ditches will be performed unllr cntact t) 1 cc rt~r~iet m)t hi in the ene of the
r-abilit tion of the L2tL Pz- Dd iarl Trnc t
e Cronning Patterns The existing erning pattern in the Moulcuya including botnirrigatcd and dry farm ingincludes grain forage citrus vegetables olives grapes and 6 small amount of leciduous fruits and nuts Of the roughly 2140Cy) acres of agricultural production in the Moulouya about 177000 acres are in field crops 24)) in vegetables 16Y)O in citrus 15000 in grrrcs 540Y) in forage crops 1700 in olives and 15)0 in other fruits and nuts
Taking into consideration rast and present trends in plantings as well as agronomic and price and marketing factrrs the following projection of cropping patterns has been developed for the Lower Moulouya
PROJECTED POPPTG PATTFRNS T1 HE LOWER MOULOUYA
(In per cent of total irrigated area)
Left Bank and Triffa High Serice
Triffa Sector - Sectcr rriffa Class Class Class
crop Main 27 28 East I amp II III IV
Citrus 40 60 10 10 10 Vegetables 15 10 15 1) 20 10
Crtton 15 20 10
Fcragpr 10 20 25 30 4o 30
heat 10 6 20 25 20 35 4o
Grip 25 24 35 15 Dy beans 5 10
Sunflower 10 olives 5 0
100 10) 100 100) 1i 1052i 100
a Incltdes double cropping
- - r- euro --- 7
~7~TF~Wr~e~ALUSE
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The projected cropping pattern for the Bou Areg plain includes cottonLJrirdg the frrt Five yearnejtinted 1r of the Class I)fand
the project jitwould be grown on nnII landn Tht renresert only 960etrravres) ectz ri)cr)e area The cotton acr~a e ry increasep 2ceafter live years if ritisfactory drainage conditionshyrre achieved in the Bou Arev
cotton grown i 1xonp tarx- Trdltionally Morocco export its-Jr- cron an irr IJ hort cble to rmeett Cotton the reuirrents
r the oroccan 2pinningr mills The croppni-attrn of the Triffa East (about 180n acres) Js projectedt Tnrlude 15- (about 27 acres) in cotton It is likely that becausef ihe limited extnt of Class I and II lands in the Triffa Eas cotton not increase beyond that percentage
1t i evident that the amount of irrigated cotton that is likely to bein ther-n Moulouya is minimal even assuming that local drainage condi-T nare i asuitable
f Technical Sundnv--s The AID Project Engineer hps reviewed ii) thedat and ajor construction performed to date onronct and finds the technical requirements this long-ranRe phasedsufficiently defineoto ccntinue the project on an orderly schedule The estimates of cost of prsirct facilities have been determin-d by SRI from average va)ues oftrit cots obtained frorr reviously ntiarded contracts and from etniled( -s-nand analysis prepared by the iHydrotechnic Enginering fir oft-o tyieal sectors located in the Bou Areg area The costs for the arc ent contract have bcen estimated by the USAID It is consideredthat the depree of engijeering planning undertaken and the deterrrinitonr to the US Goverrment are adequate to meet the applicable requireshySt- n Section 611 of thie Foreign Asistance Act
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E Financial Status of Borrower
1 The Moroccan Economy
Grrwth of MorocLcts GDP in real term averaged about 24 per yearin 1(4 and lr li Per capita DP In 1C 5 wan anproximotely t162 A (er Irr-ht in (6 resu]trd n a drcrcne of slightly nver in GDP which tlh vpulatior grc~vth avrring 3P4 per year rnrsJted in a decline of -r ornita GDP In 16 ii brut $154 A recnd droughtcccijrred In C67 but i not expeetid to have the severe effects of the 165 drought Crop forecasts for the first nine months of 1967 indicate a 4 increase in real GDP above the 1966 level This is also the economic grcrdth rate estimated by the IBRD for the pezxA 1965-70
Moroccos economy is heavily dependent upon the agricultural sector thich has averaged about 15 growth per annum However growth of the mal modern segment of Moroccos agricultural sector has inshy-reased at the rate of about 7 per annum
In 96 the International Banik for Reconstruction and Development (IBRD) preented a number of recommendationr denigrned to increase Moroccos economic growth rate On the bacis of these recomfndations the G004 proceeded with planning the necesrary program to increase investment levels fr- the i 63-65 level of 11 of GNP to 1r of GNP and stimulate the rate of economic growth from 2 to an average of over )4 annually for the five years 66-70 In addJtion the GC4 has taken measures to curb the population grovth rat while placing increased emphasis on raising production of both dryland (wheat) and Irrigated agriculture
2 Investment and Savinms
The level of total gross investment has remaind at aboit 11 of GNP for vera year althugh the percentnoe declined slightly in 165 Under the GO Three Yea5 Plan 1965-67 the gross investment t-3rget woz ret at DH 3 billion- Actual invev-tment expenditures for the three yearpeirod reached about DH 46 billion of which the Governshyment ezxenditure amounted to DH 1 billion a against DH 21 billion budgeted Thin may have beeo partly de to the GOMs deliberate ausshyterity pollcy under the hIF rtbJli7tion prci1rnr but more probably it van duxe to the shortage of trained cadres to -lan and execute projects
In the private cectcr conziderable inounts of ravings may be hoarded due to lack of project attractive t- inventors The lvl of private investment has been runnihg at about 51 of GNP thrrugh 195 The 0014 4 incentive to private instors hnr cut profit taxes from 4320 to V and announced a tpn year guarantc-e against tax increases
]L- $ = DH 506
777=-77- NQ
r y 7k1- T e - W lk In
j - 1) 7k- - _
- 23-
Loan are avaiiable to )rivlite irve-tcrn freo th 3JfIDiN s rctr special funda to prcmote touricm devc firvcnt
Under the 1r86-1972 plan abut to br irtntt level are to be accelerated considerably reaching A of GNP liv ]970 Mor(- Irlyir haviiy on foreign 1 to aciuw cc higher lve1
3 Central Government FinancP
The Moroccan money supply which had Incrrased ify 76 per cent in 2965 remained virtually unchanged in 966 The first half of 1967 witnessed a 5 Ter cent increase in the money supply Te major part of thi increase as concentrated in June and July uhen the supply reached V14 0j lion Currency In circulation expanded rapidly in June and July
nnl factrrn being reinforced by commodity hcnrding related to the 1ide~l Et crisis Demand deposits did not show their normal decline nthe first half of 1967 Deposits with commercial banks declined nlightly while deposits with the Treabury increased as public and semi public agencies contisued their transfers from the banking system to the Treasury The increase in money supply in the first half of (7 ran I raced to tho nzon1 sonal increase in net foreign assets not c y the custcirry rlelir In claims on the private sector Clsirl (n the erivate sector declined slighty until May 1967 but Increased hr-gb June and Jily due primarily to additional financing of textile stocks ClbiJ ante Government rose by 10 per cent in the first half of 967 the in central brnk claims on the GovernmentI being rmainly offset by larger deposits with the Treasury
Ordinary budgetary revenues which incrurted by 5 rcr ent in 1566 tre cxrcted t-) increase by 7 per cent in 1( to DII 21 billion DeampDite a derea3e in agricultural tax reccipt r- fror diret taxes rose by 10 ppr cent in 1966 and a 2 increas estinated for S67 due to tric or controls on income declarationr d an accelerashytion of tax cller ns Owing mainly to a relaxation of the import
program in late 1 5 and a concomitant increase in tariffs on certain ccnonter goods customs reneipts increased by 21 per cent in 1966 Although budgetary estimates call for s decline of 3 per cent in customs receipts in 1S67 it is likely that actual receipts will be considerably larger in view of the import liberalizatidn measures intro)duced subseshyquent to the estimates Receipts from indirect taxes state monopolies and other serces are expected to be 11 iv- cent Ipher in 1967 owing to increased profit on -ugar sabr-i and L r(m the newly created Office do Ccrmercalisaticn - d-tation (OCE)
Recurrent ordinary buiL e(enditures increased by 34 per cent in 1966 ar-i are expected to increase by an additional 7 per cent in 1567 reachin- D1122 billion Although wage and salary scales in the public
Banque Nationale pour le Developement Economique
TT~~- - I777
2 Cf
sector have1bec z h t - rrvirI urli 11i g 14-6 -nd PO becnue rX toi Ijt e f (]r o n 4
ill tile ic urrnnye andr)not i on dnd Publi ht rentrn -yr-otn lno IncreasedOthrr t ill- t il r ne by ) vr cert in J6(
i ninlyrt -br h Inc-l
( Ihe ( t r- rl t ip t t C itur f T)h 21h iilli n
is (( ItI t lt r c0 a- r n n o I- c t b It ihstnl id vv ih n t r-t have hn(er - en 1t2
(IM ii ture( T f fu traordJ nary budrzct exshypend ituren a r y -t c ~ i vi -iscz Portal Checking sy-stcsul)rrcing t (I ltIt Ct -- ind creirn shy
nnet The f r er tnc I hha ccrc ed from a htih of DH 5-7 millIJn in _ 5 millIn r C46 F cr ats foi ]7 place Cro n w I 1(DI)J79 ill ni DDn etlc fi nancing has alo u 1) 5 p (- I3A27 iIliun to an entirnted DH 1142 million
1 14V ) I nv 1 ri n nI(c1 franc n is 77-ected to be ol t y ncrewed bcrrowing fr-ir t he Cestra 9ank which hud been held at mcdert vols iln 165 nnd 1a66 Under the 1TFtaiby agreement of October 16 the qob) agreed to taBe a3] rocrrnary meurer to maintain as table curoonry rPnt inl th nr1d-elrto th b a ent of the ePrncriynnd a vnbl- hn1incc X nvroent P rt artt to t rt fien of tho Ccntin- Honk rstz (erct are nct t r itr June 30 Y-ke 7 lov l b th n Diif ) mill] (n tlcnber -c P thai I o illin usit I ])ecthr 31I62 (GC bc w t
C B1rtrp - vt DH 12 iri 1i nor ]S67 or DH 6S ij lionEan tisated (r fo than the aproved crd it expanwim
Thitrd ordivary nil extraordnnry buThTt deficit of DII 7-19 millI n fcrecat Fr 1 67 in exnected to be fnanced by not freign
tan reof DII )75 mi~l in nt recurity 12ue 1 T111I vlion a - nt ry tiat Po n Che )ir d-nC i 73 r5 Pn
riI is u h i a vti v mrr nrr-e jssIof fvr is id a erital The vnfsa revcred in 1d6 when lnrger r nyrentn eEecially on food itcmo an n -lewdoun in
igo ra a deficit of $1 millcn ProjectiOnz-vt rvultvd in ror 17 r~ieat inrrerned importsonly partially ccnrennate by addshytsa t frnreirn r ntil rrceiprs ard mprrvement in the nervices account will reult -n et of aprroximately $)20million As rhoim in the following tabl -r tion for l33 and 169 how overall deficits of
14 and m] ivi_y$i It
rqVV t1 4~
C)rgt
---
1 -)I+-IRF1
1ROCCO - rTANC OF PAYME 1qrt - 169]_ 5
6rfi0 1 1C(8lr67 i r(o
)xrurt 2t L( I L-5
Trade Bnlance 11 15 - 75 shy - 75
rviee- ret - 7 - 5) -35 -23 -2
J]-i of Good rnd Service- - 3 - 65 -II - ti - (5
Trn-Ifr Pr ynts (nt) P 21 33 37 33
on-cntnry Carital (not) 92 64 6 6 5
Err-rs nnd Ov rrion- (not) - 23 -2 1 3
eranl Bannic __ - _3 -_ 3 - 1i4
Atrh thert ircjected reficitn are of the nnme order of 1 nishytude a7 thcr incurred in the period i66 the Situatlcn i findarentallydifferent both in rerprct to the source of the deficits and in rer-ect to the meat0Y gtr m etin7tecr In the f rrer caive M5recco uffered
_frcrr a very h-vy cutfc of Drivtes cuitv fo-ivr with a shar) decline In forein nt exerditures in Morocco In the iatter case th projected deficits r- rcre a functicn or accelerated crcwth risingdebt ervieiiw tri tho abnrcn of forv eeble additiens foreign reshybull ourcs nere7ory 4( r2Vm rAf finmncting To nect the def-cits during the reriol 161 61h MWreco ob1id to drw down rorcin exchange reserves of over $]c milicn The snrti tpv of financing is no longerpozslble ince no or-res- ruch reserve- Even ifMorocco yr
mn nina r rve_ ore (]rrfii on to th r-ixirun etnt enribe nnd the [iI tnfldy i- un M-r-r e i32 till relA re nt rnt 15 millicnj1itionn ftr ign as- e n 1 6 beyond hat r recnently fcreeeshyable with ver nri- nry Officilr in In i6 reserves are cotImnted Pt 72million c hih crn V 3 million i caly required for currency coy r
Foreign InJebtrdne n of th GOM Mnroccos external rtnte ard rutlie enterprie dett amounted to
$r) millivn in lr6 Debt vervcirig rpynents for (66 trtaled about
$5) rillion g-eement approved in October 3(67
I- -- Ishy
37 millin or arprcxitrrntoy (j Iroccor totnl eXoort earning of h28 millicn GCnerally nxt rrO dbt FervicJng renuiremennt of leas
than r of totna -ort nnrlt In onrldered to I r tirfactoryrntio D-bt r rnJrcLct n Ir the reriod 1-(y 3on Trerent external debt including thnt wrtl(n irreently undibur-ed are hown n th fr lv tahlr
)] L v yr t n
Eternn Vtnte anc ] bntcrnrie Debt
M131 o)nr
Y aI Net Outrtnnling Debt Debt Service
(6 it 479r5 $367 J-67 452 3)6
Z616 44469 2 0 2C-
365I3 37 389
33 383 33 6 371
5-h 31 n 352 275 34121
]176 2661 32It 1977 21133 311 177 22)6 307 19 i0l74 256
1733 255
rgtternal debt rharre n rerent debt nnr rhon above do not increase ubtanti-lly over t rt 1)year- reaching a maximum of h44 millior
in J6 and decrpt- n cr - tently threoafter At the are time exportearninr r _rc extett nc-are Aring that Morocco does not inshycreswre it etrnn2 cbt t irate ubrtantially nb-vc ihat has been the core th adfiticrn dbt e roquirrentn reulting from the propo t Icon o 5 ijilion co r 7crncepr-ional term hould not have a i-nifiant affect n 1r o - ab lty to neet itv g rc-atedebt ericn rcnrib2t~e- the pros ectr of reprment of thin loan ore coniderci rearcnb)
U I -
F ot h-v C IuIJI rmt I shy
1 V amp~ rVml KI
PUC- -jrVi Jt t 1 11 nflrcj urlc 1- th )qn --P I uti u rhnrrl -1r- thr U- Tr- ry- R- -nymc nt
c2Il f n 6 1 bf r I- till 11 nfl r- n-r i n of O r--niC(Io~hi U 1 1 rr to
Tn vil ) f rvc hi tvlrll 1 (In- - n- u--n E r me rrinshycgtay F rntwir w ourc o -o- rvI ortf-V3 1 rncing of
Uf f -r rrrir- ur3r 4~ v -rin Iltrt nt ndd shyt -n t ) in- lint r b t l r -n rort- o-orco trorl-- V -P
r i 1rnd h L-torie Furcl-trin firr- thrjt US r r~ crvirrf- u~d be~
T L I1 c vt r- -ly ] -ubt fu 1 n vi pw -I -ror-co Ir of
ut1JpcO In thi rjert f it -- r- 21 npnred by d1-nr- cothcr t~han the US
2 ]P-t ofI Prr l1 on Prw- Fntrrr
Phij rrcjJ-t -11 n-t h~ -in nrwerq Prrt n rr- tc ntrshyr~A~r fi-mc 1bho und for --roern p o n
3_~~PrCT--rty
rr-vIi-n 1 h -d r the loan ragreement for Icntifitcation ef any r mIjrpt n ctri b- rt througn ut 1zatn (f xccr- prorerty
If rv c u~eAID n-mrcf u urr thi )cn - I~ut~ em avoi3ablo r rovvrirrnt -rrperty rather than nce iteni
4 Otli-r Fr- Wo--] n-Fnlc4rm
Dr mi tW- o] 14rocco- i~ajr ovr-ec -f exte rnaX
rrtan~- hrtvfb - I r ~ ant fl Fr n fole by Kv-it
Sgio F rneflit r b-en 1lmrntrd to tcfohnjip n5tnnen bi eoni~in I th u y f Fr--h tprhntcian tcacrr ind cther
~ti~r t~ ec-tnmIyrt-n Friinch Aid to Mcreco In 1065c~oc~ (P-art f-r txychnirril aItn -- j se of tl5 w1nfor bu~dget rurport f ir in rt t- $1 1ri1 icin in ennita -rojectM- n vx- rrcd
1Vw1tvnn tioI t-) Frenh rurtnnd +16 r11ion tie-I to -onyiint to orrrcr Frrmh ccilcn~For _-rrc-ratod land and rquirrmcnt
West GTrrnmnny liar agrcrcd to nrovIe ccme j27 mM22~cn 1n catital arirtanre and cromrndity lnoi7 t n OfIcon( q92 thi o totril$223 miJ lien ha actuary b-Pn cr-Itt--d under Inn ngrepment This
And a lk5 million commodity loan both) signed in 1965 All Wet Gerzaan
Ufla
-28shy
capital asnistance I vuectI to be tied to German exports Germanyhas in addition 1uvvded r tteysubbtantial technical assistance f
The IBRP hah rade four 1nns to Morocco since 1962 totaling$6) million Ofthin totnl a [175 million loan in 1965 wos fordevelopient of the gidi lit-r irrigation perimeter Other assistance by internntIcnal Iending arncie include an $11 million credit byIDA in 1C65 for rcendary diicction projects and an IFC ln and inshyvestrent of $1 1 ri jnic alo in
F tit i by [c - dncr tr dh elo snt ofMorccco rircuVt r oii +h b-]n jt-TKT r nbove n 2 )6 niliion Kuwait enn in i66 for develomyment of the Tensaout Prnm n irrnten nrooetand a $77 million Kuwait
0jl n )nnsn r(niti-nertcir
loan for extrnion of the Tadri~ Irrigation Perimeter
The following- trbe surrlnrlzes other free world arlztance (excluiin technical assistanc-) to Morocco for the years 1(62-66
($ Millions)
1 62 1cf_63 96) 19r65 19)66 Fneea 4) 5PO 64o 700 shyWet Germany 223 gu 1t 53 281 IRD 15 175 10) 175 IDA 110 IF C 1 5 7 7 7 0 I15
TOTAL 55 62 1U3 W
b Includer only lo-ng term loans and exporter credits - Includfs 25 million private capital
Eternal ansiztnnce to the Lowier Moulouya Irrigation Perimeter -nce 1060 hres been con[fined to US upport Consdiering AIDs previcus
involvement in and conmitnert to the Lower Moulouya an AID lean in P2t to be Lhi mol aprroriate source of financing for this project
LID
II
q
-29-
SECTION ITI- Y-TTYT TIMPLPTrION
A Periret-r Ad-instrrti-
Authority for irplerrentvtnn of the deveorpent prrgrn frr the LowerMoulcuya Perimeter and rs wel arth crnntinuinz mrnnrrmenertC tt r t- rrtnr V theltbi nad overationity iOfic 1cne 4
n r I e1i- i d Vit4 i Iv ~ Ct rreated i Otb (rJ rn-- of evcn inrmi-rriional offices hich reelaced the Office de Mire en Valeur Aamprlcole (OMVA) Under the OMXA and itspredecessor agencies authority for ad-inLtration cf irrigtion proJect war centralized in Rabat
Under the new regional office organization responsibility for adminshyistering ORMVAM is vested in on Adminirtrative Board of 10 members headed by the Minister of Agriculture and Agrarian Reform as chairman All ether board members (other than the Chairman and a representative of theInterministerial Economic Ccrmittee) represent agencies or activities inthe region of the r-eriret-r whic comprises parts of two provinces Localretresentatives on the Board inc]-de the governors of the two provincesOujda and Nador the presidents -f the two provincial asembtes and of the two provincial chambers of agriculture as well as the perimeter Director
The responsibilities of thie Administrative Board include review of theecys program establishment of its organizational structure developshynt -)f its annual budget and establishment of rates and conditions of
Siyfent for water and other services provided in the perimeter
The Director of OP4VAI-I is dbarged with the responsibility for executionPthe vclicies established by the Administrative Board end administration of oil ORMVAM functions This responsibility includes selection of staffn pserating perrcnnel acting s officia ORNIVAM representative in all ntztinns with -tate and othbr public or private bodies and the
f of funds within limit Indivated by the Ministers f Financetent rn fricultural and Agrarian Reorm
Perimeter Oranizatlon
ORVAM oreanizatlonal structure consists of a directnrate five maj-r rvlces or d-vsicns and one separate bureau Two services qei Administratif et Comptabl- and Service du Yatrial are conshycor - th adminisration and lcgistical support of ORMVAM operationshi1e the remainirg three services rind the separate bureau are Involved in t-hni al matters associated with agrcultural developrent Each ervice has one or more subordinate bureaus Fei-ce Chiefs and thehead 0 rch bure-u report directly to the ORMVAM4 Director
-~F7E MEw-
-30shy
2 Perimeter 01ttffnr
OPIVAM orgttnlrntlon treture calls for 557 positions of whichI L or 7 Mlled n were nher 29 1567 37 of the 71 Postshytion vacancies reported 1ern the high and middle levels Foreign(chiefly Euronean) technclan occupy I)of the 16 high level positionsthat ere filled at thfit tire
Whil OPM ut in th- lcng run lor to Mercecos oducational yster to prvidr tn crrf-nn2 to ratisfy current rdurojectd rcshyquirement th currnt high and mlddle level vacancies rrouire uersonnelwith oxt nive nrior rxericnce To fll this preent need it will be necessary for CRIVAM to continue its program of recruiting foreigntechnicians until ruch tire ns graduates of Moroccan educational programsacquire the necesnry exrerience The managerent assistance componentof thin pro~ject ]e-rribed In the Project analysis will to some extentalleviate OFIWAMs high level personnel requirements
3 Inw1 ernetation Sehedu]
Months Implementation Action
1 0 Sign Loan Agrcement
2 2 C-tiify conditions precedent and Y4tiate procedures for selection of US firm for management contract
2 Negotiation of extension of advisory Engineering Services
h 4 Contract (Hydrotechnic) Negotiation of Managerment Contract
5 60Cmpletion of Project
C Waivers
Sect ion 7 rf AID Regulation 7 provides in substance that theUnited State ill not finance direct costs of construction work performedby third cc-ur y nationals unless the total co-tn of the project withvhich thr ennrtrumticn w(r is asEcciated donot exceed $2On)O orafter excluding national of the country in vhich the site of constructionis located and Dersons vho nave resided therein uninterruptedly for morethan three years imrnedJately prior to any determination under Regulation 7at leant 0 of all uernons who work under the contract at the site of conbulltruction are United States citizens or the employment of third countrynationals is necessary to avoid excerrive corts to the United States
3
31
Section 2175 authr-ri th Regional Anitant Administratorto waive the nrovinions of Sectionthat it is 2073 if he dcterriner in any coneimportant te the nationrn intercrt of the United Stutes tofinance the direct eots of construction work performed by third country
nationals
A prviou1y r ic i c t tht for thr ct Tartthe -r c ct b- 1jeuj out r -cnorbr f cnrtructioncontracts with Morcccrr contrctnr an in the i-t Uowfevvr itentirely psnible that there may b- roe contractn with cntructlonfirms partly owned by third country nntionaln and that ruch firjs anwell as the surely Moroccan-owrned firms may enloy third country niationalsIn such canes a difficult rrobic-i iould arise in meeting the terms ofRegulation 7 since an a practical matter Aericans are not reaonablyavailable for ermployn ont by such contrnetorn and our previcus experiencewith the Naunsseur Ccnv(r-ion project thatin Morocco has indicatedAmerican contractors would not be interested in bidding cn small conshytracts in that country
It in therefore recommended that the Annitant Adinitratordetermine rursuant to Section 2q75 of Regulation 7 to waive theapplication of Regulation 7 to thic iroject since the project 411 conshytribute to the attainrent of US foreign policy objectiver and the cbJe-tives of the Foreign Arsistnnce Program
LITI L USE
LfI~~5xA~us
lit
4 A J A 45 4 k
t A S T
S(3
I A444ilA~~l~)
7 -74
tAM= D
SECTOR 27
10000
t Co0Na includez25 cgtri oncFcttlrvI ncy I8s ~ ~ C t C- Includes 50 constriJcltiotrgrc
2000 60
IU
0
z
bull cosYsA shy----- i
600L _
400
200
0 5 I0 15 20
INTEREST RATE
I ~ 7 J7777
ANIAampX C
PROJECT DESCRn1 rOll
The project com)onents to te undertaken on the MIoulouya Irrigation Project over the next five years contists of the following
C(n1rtion of the rrLin casuals and bianch canbls to provide the suource of waler to the sctors be developed in theto TriffBou Areg and Zebra areas This construction will include the necessarystructures such as reulators highway bridges aqueducts water intake
and discharge structures etc
2 Iand Txeloommerit which includes engineering land consolishyt and iuvtllng lard preparation (subsoiling ripping destoning etc) and installation of water distribution canals (secondary tertiary and quurtunary) and drainage collector ditches for the Triffa main covering 24000 acres in sctors 8 9 10 16 20 21 23 24 25A 2513 27 and 28 Lou Areg Central covering 16250 acres in sectors Dltirough D2B and G1 thru-4h G313 i0u Areg Remainder covering 15000 acres in s-ctors D3 through D7 and GA through (6 Zebra Collective covering 45)0 acres in sectors 3 4 5 rind 6 and Zebra Rer-iinder covering 14250 acres in sectors 1 2 and 7 through 10 and th remainder of sectors 34 and 5 The total land to be developed is about 74000 acres
3 Canalization of the Oued Zeluan and nued Sidi-Amar in the Bou Areg Plain consisting of strairltening englarging and regularizing of these streams to carry the flood waters to the sea Drainage interceptor canals are to be constructed parallel to the sea in the Bou Areg Plain In the Triffa Plain the Oued Riada main drain will be deepened and enlarged and secondary drains will be excavated to provide for drainageof the Madagh area This will include the construction of bridges and culverts and other related work
4 Major Commorn Works will consist of
a Clearing of the Mo-1ouya riverbed downstream of the Mechra KLila barn caused roy flood dariwe and the installation of a set of stop logs for maintenance of pillway gate-
b Design supervision and construction of repairs to the ]elt Lank dead head tunel
c Conctruction and establishment of sib-division Offices and installations for farmer support such as CMVand farm stables
1 C
-2shy
5 Manavmtnt It ha been proposed that a US management firm be ewployed by th- C4 to manage and operate the entire Bou Areg area Such manageent -iuld encomparn all activities from the initial concept to final irIrp igricultural production Such activities would Include resp r-ibilsect -or supervnsion of engtneering and constriction of primary
S- Jry r complete developfnent of land training n in g tinul irription practicen preparation of market
t - r1t- (ot--rnu trplusmnining of a Moroccan cadre to take over h v--it Bou Areg dreara P the
At this writing the n-pt of turning over to a private UZSfirm execushyresponsibl]ity I h management of the establilrment and initial
op-ration of irr1gati the Bou Arog area has been only broadly de iiitd by the GCJO It Intended that proposals will be invited from a r -onable ntnber of f|ed US firms that a selection will be made an-n 7 them and a more do iled and cornprehenrive definition of the rer6 -Ps to be performed be eztabliched at that time It haa been
stimated that the t- of ruch a contract will be about $2 mir- n In any event the -ts of this contract other engineering arvl s to be provided undt n extension of the Ilydrotechnic contract and ether US corts will not ed the proposed $5 mllaion developzont Jean fr the project
The cle 3ifications duties ant 1ncnslbilities of the management personnel ill ha-- to be clearly defined i agreed to by the GCM Perimeter Directo- and other GOM Agencies luding arrangements for the necessary gistic support
Svxlale Docu-
1
4
LD ED 0ICIAL
-IAIDshy
A1trX D
C6JCK LIST OF STATUTORY CRITERIA
(Development Loan Fund)
1 FAA 0102 Extent to which U3 cormodities and services are furnished consistent with improving the US balance of payments See Sections II-C II-F
2 AA sect2O]ihi lanner in which loan wil promote countrys economic develo shy rit emphasizing help for long-range plans and programs designed to developeconomic tesourcos and increase productive capacities See Section I-D
i FAA sectT] h)(IL Information and conclusion on availability of financincfrom other free-world sources including private sources within the United States See Section II-F
FAA sect20l( )2 Information and conclusion on activitys economic and technical soundness including the capacity of the recipient country to reshypay the loan at a reasonable rate of interest See Sections II-B II-D and II-E
5 FAA 1201(h)( Information and conclusion on existence of reasonable promise activity will contribute to developrmnt of economic resources or increase of productive capacities See Sectiona II-B and II-D
_92_(b 4Information and conclusion on activitys relationship toothor development activities and its contribution to realizable longshyrange objectives See Sections I-D and I-E
The following abbreviations are und FAA - Foroirn Assistance Act of 1961 as amerded by the Foreign Asaistaice
Act of 1967 App - Foreign Assistance and Polated Agencies Appropriations Act 1968
AFEVCDF 1066
L1
-2shy
7 FAA f12O1(b)(5)_ Countrys self-help masures including institution of Foreign Assistance Act investment pliaranty programs Investment Guaranty
bull Agreement signed with Morocco 331o6l See Sections I-D and II-EI
_A ))(6) Information and conclusion on possible effects on US econowy with soecial refererne to areas of substantial -labor surplusSee Section II-F
9 FAA q201 (h)() Information and conclusion on the dagree to which thA country iv wiki- progress toward respect for the rule of law freedom of expression and of the press and recognition~yf the importance of individual freedom initiative and private enterprise
10 FAA -1201(b)(8) Information and conclusion on the degree to which the country is taking steps to improve its c]Laato for private investment See Sccton II-E
31 FAA R LbJi Inforrat-on and conclusion on whether or not the activityto b financed will contribute to the achievement of self-sustaining growthSee Sections I-D and II-B
12 FAA fi2Ol(bj Inforruation and conclusion on reasonalbe prospects of reshypayment See Section II-E
13 FAA fl20JL() Info-ation on applicability of the twenty country ceil4ng2
14 FAA fl201 L Information and coclusion on legality (under laws of the country end the US) and reasonableness of lending and ralendinr terms Loan will be on minimum termspermitted under FAA These are deemed reasonable see Sectioam Evidence will be renuired from the GGM as to the legality of the loan agreemnt
1 E 2 Information and conclusion on availability of an applicationFAA together with sufficient information and assurances to indicate reasonably that funds will be used in an economcally and technically sound manner See Sections I-A II-B and II-D Application received Janury 15 1968
16 FAA fl201(fL If a project inforntion and conclusion whether it will promote the economic developapent of the requesting country taking into account the countrys human and material resource requiremnts and the reshylationship between the ultimate objes6ives of the project and the countrys overall economic development See Sections I-D and II-B
17 FAAJ 20ij(J If a project information and conclusion whether it cifishycally provides for appropriate participation by private enterprise 8ce Sections YI-C and 114
I- FAA i22(a) Total amount of money under loan which is going directly to private enterprise is going to intermediate credit institutions or other borrowers for use by private enterprise is being used to finance imports
rfro private sources or is otherwise beirg used to finance procurementsfrcm private souwces See Sections II-C and II-2
9 FAA 207 Infosation on the emphasis placed en
(a) encouraging development of economic political and social institushytins No apparent relationship
(b) nelC-help in mectingthe countrys food nredo Project Vill conshytribute to production of food for lccal consumptioa
(c) in-proving availability in the country of evucated trained manpower Project will contribute to the deicloginext of trained manpower as one of the functions of the management contract (Soe Annex C para 5)
(d) prcgrams aimed at -malnutrition disease eradi atDn slum clearanceWater purification sewage disposal health education naternal and child care(includin fimrily pJnrning)) -nd cthcr public health ausistarice See
(c) other develoment activities including industrial development free
labor unions cooperatives tnd voluntary agencie transn)rtatin and ccshymwquication nrStczn capubiliTies for economic planning and public adlinisshytration arban develo-mment and modernization of laws to feilltate econcnicdevelopjen- GO- intends encourage develo vient of cooperat yes particularlyin the Left Pank areas Project will also develop capabiLi ics for cconoaicplanning and public a6~inistration (Annex C para 5) Other not applicable
20 Information on the extent to which the r-untry is
(a) cttcmting to increase food production and food sto a-e anddistribution felitics This project is one evidence of Moroccos efforts in this direction See also Section I-D and I-E
b) creating- a favorable climate for foreign and dmestic iri-ate enterprise and invcstrrment The GCM has recently reduced profits twes anrannounced a ten year guarantee against tax increases See Section II-E-2
(c) increasing the role of the neonle in the developnental procecsNo apparent relationship to this project
(d) allocating expenditures to development rather than to unn-cessarymilitary purpoes or intervention in other free countries affair See Sections I-D and Ii-
(e) willing --nribute funds to the project or program Th iOMhas already dcvo o-sidcrable resources to the project It has badieted13 million for th i oulouya for i7 See Section I-C
(If) making economic zocial and political refo ns such as taxc coliecshytion iYprovcmenLs and chan es in land tenure a Royal Comm ision has been appointed to make recomendation on land tenure probleras in the Lower I oulouya
(g) responding to the economic political and social concerns of its people and showing a determination to take volf-help wcasuren See Sections I-D and II-E
IT
-ovi~cd l v r 13 1968
- 4 - LDffIED OFFICIAL USE
21 FAA Inforn ation about multilateral assistance being Iurnished to t e country and whether the loan will encourage recgional development prog-rams The I1D has eztablihcd a Consultative Group for Morocco which rvicws the GOM development program anui prgress See Section II-F-4 for infoaation on othtr donor assistance to Morocco
22 A Extent to which the loan will contribute to the objective of ass ring naximu par icipation in the task of econonic dovelop--ent on the pL-t 0 _he people of the developing countries through the encouragement of cocr-tic private and local govenmental inLitutious o apparent
relationship
23 F _-_Dta_ Infor-ation and corissions whether loan will oncourageeffor s of t1e country to (a) increase tie flow of international trade (b) fostcr private initiative and comptition (c) encourage development and usceo co opratives credit unions and savingss and loan associations (d) disourgo monopolistic practices (c) improvo technical efficiency of industry ariculture and commerce (f) strenSthn free labor unions This project is cxpected to increase technical efficiency oi-agriculture
2_ C-1L lnforzrition and conclusion on how the loan will encourage US privte trade and investment abroad and how it uill encourage private US participation in foreign assistance prograas (incluiing use of private trade channels and the services of US private enterprise) See Section II-
25 VA-+_ Conclusion and supporting information on compliance with tho Co resional policy that engineering and professional servicos of US fir-ms and their affiliates are to bo used in connection with capital project3 to the nixinua extent consistent with the national interest US engineerirn and innsgcment services will be financed tnder this loan
2$ Inforamtion and ccnclusions who+her loan will pormit American rx-l] business to participate equitably in the furnishing of goods and
z orvices by To be satisfied in Loan Agreementfinanced it
27 - t(a App I18 Complianco with restriction of co -zodity procureshy o UsMS except as otherwise determined by the Picsicent and subject to ttu--- rcortir require r-nts Procurement will - liumited to the US for
reiabnrs nts and to ioocco and other free world countries 1-or US-cwne(d rhu disburseacnts
23 -i Comiance with bulk cozodity procurement restriction topriecc no l-ho han the nkarkot price prevailing in tho US at tia of
bull puchas Not applicable
29 FA Cozpliance with requirement that matrin insurance be purchased on commceities if the participating country discri-inates and that insurance be placed in the US To be satisfied in Loan Agreement
30 IA 6(a) Information at to the utilization of excers personal property in lieu of procurement of new items Will be required ai appropriate under terns of Lean Agreement
f
1 77--7 -77-77-777
31 FAA 61](a)(_) information and conclusion on availability of enginoering i financial and other plans nccx sary to carry out tho assittance and of a
reasonably firm cstimate of the cost of the assistanco to the United States
See Section II-D
32-ecessaryFAA t611(a)_(2) legislative action r6quired within recipient country and ibasis Cor reasonable anticipation such action will be completed in time to pormit orderly accompli-hirtnt of purposes of loan See Section I-A
33 n _AA161nJ0] If water or water-relatod land resource construcshy
tion project or program information and conclusion on a benefit-cost comshy
putation See Section II-B
3 4 VAA 611(c) Compliance with requirement that contracts for construction be let on comp-ctitive basis to mamum extent practicable To be satisfied
in Loan Agreement
If a loan for a project of $1 million or more certificatin35 FAA _61l(r) by the principal AID officer in the country as to the capability of the
country (both financirl and human resources) to effectively maintain and
utilize the project taking into account other US-financed projects (Such
certification is to be pproved by the Administrator aL the time the loan
is authorized) In process of being obtained
36 FAsgJ2 _6_h Appropriate steps that have b-en taken to assure that to the miaximum extent possible the country is contributing local currencies to net th-2 cost of contractural and other services and foreign currencies o- icd by tho US are utilized to meet the cost of contractual and other services The GU-M is contributing over $30 million to compleXton of this project Excess US-use dirhams will be used for eligible project costs other than US goods and services
37 FAA p619 Compliance with requirement that assistance to newly independent countries be furnished through multilateral organizations or plans to maxishymum extent appropriate Not deemed appropriate in view of previous AID financing and ccoiitment to the project See Sections I-A and I-D
38 FAA sect620(a) AcnO7a n3]7(b) Compliance with prohibitions
against assistance to Cuba ard any countr (a) which furnishes assistance to Cuba or failed to take appropriate steps by February 14 1964 to prevent ships or aircraft unier its registry from carrying equipment materials or supplies from or to Cuba or (b) which sells furnishes or permits any ships under its registry fr-om carrying items of primary atrategic signifishycance or itcms of economic assistance Morocco is not-known to be in Violation of these sections
39 FAA q620GL_ If assistance to the government of a country existence of determination it is not controlled by the international Communist movement The Secretary of State so determined on October 11 191
40 FAA 620(c) If assistance to the government of a country existonce of Indebtedness to a US citizen for goods or services furnished or ordered whore ouch citizen has exhaustod available legal romodiesor where the debt
i - ow - -- _---- --shy
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is not denied or ontested by such government or the indebtedness arises under an unconditional guararty of payrrent given by such govornmunt No such indebtedness is known to exist
41 FA _(a2LdL If assisitance for any productive enterprise which will corashypote with US enterprise existence of agreement by the recipient country to prevent export to the US of more than 20 of the enterprises annual production during the life of the loan Not applicable
42 FA4 - 16Q_0_ A If assistance to the government of a country extent to which it (including government agenies or ruhdivisions) has after January 1 1962 taken steps o repudiate or nullify cuatracts or taken any action which has the effect of nationalizing expropriating or otherwise seizingownership or control ofprcpertv of US citizens or entities beneficially owned by them without taking appropriate stops to discha i ge its obligations No such steps cr actions are-known to have been taken by the GOM
43 FAA~L AjPj_10_9 Compliance with assistance toQ0 prohibitions against any Comunst codntry ozocco is not considered to be a cocinrunist country
44 FAA - 620(gJ Corliance with prohibition against use of assistonce to comp satc owners for expropriated or nationalized property To be satisfied in Loan Agreement
45 F AA 8620(h Compliance with regulations and procedures adopted to inshysure against ue of assistance in a manner hich contrary to the best inshyterests of the US promotes or assists the foreign aid projects or activities of the Communist-bloc countries To be satisfied in Loan Agreement
46 FAA 06-O(j)_ Exitence of determiration that the country is engaging in or preparing for aggressive military efforts No such determination has been made
L_62_O Information47 FAA on representation of the country at any intershynational confererce when that representation includes the planning of activishyties involving insurrection or subversion against the US or countries recoiving US assistance No such representition is known to have A occarrect
8 FAA 62JJ Existence of a determination that the country has permitted or failed to prevent destruction of US property by mob action or has failed to take steps to prevent a recurrence and-to pay compensation NO such destruction is known to have tak-n place
49 PAA l620(k) If construction of productive enterprise where eggregate value of assistanc to be furnished by US will exceed $1OO million identification of Gtntutoryauthority Not npplicable
i-xQ2MZZ=
1 shy
U 6 50 _Af( QCinsidoration which has been given to denlying assistance X to thu government of a country which after December 31 1966 has failed to
- institto the investnint guaranty program for the spcific risks of inconshy
vertibility and expropriation or confiscation Satisfied See No 7 above
S51S J lj Compliance with-prohibitions-againstn as~istance to countries which traffic or permittraffickingwith North Vietnam Morocco is not known to be in violation
52 E_-L620(_L If country has seized or imposed any penalty or sanction against vn US fishing vessel on account of its fishing activities in
intcrnationul waters information on the consideiation which has been given to excludirg the country from assistance No such situation is known to exist
53 FAA FA r) UAR restriction Not applicable620(p 9117
54 FAA R620tl) Existence of default undhr any Foreign Assistance Act loan to the country No such default exists
55 F ) C-nsider tion of whether co ntry is devoting unnecessary percentage of buKet for military purposes or use of foreign exchange for milita-y equipment
56 FAA 62o(t) Proibition on aid if country has severed diplomatic relations with US unless agreements have been negotiated after resumpshytion Diplomatic r(lations have not been severed
57 FAA 9620(u) Statur of the country on delinquent UN obligations Morocco is not known to be dlinquent on its UN~obligation
58 FAA R636(i) Prohibition on financing non-US manufactured motor vehicles Will be satisfied in Loan Agreement and Implementation Letter
59 App 102 Compliance with requirement that payments in excess of $25000 for architectural and en Jneering services on any one project be reported to Congress Such reports will be made
60 App R1O4 Compliance with bar against funds to pay pensions etc for military personnel Such payments will not be eligible for financing under th Loan Agreement
61 App 9106 If country attr ipts to create distinctions because of their race or religion among Americans in granting personal or commercial access or other rights otherwise avaVIfable to US citizens generally application which will be made in negotit ttons of contrary principles as expressed by Congress Morocco is not ku IDhave made any such attempts
iInD OFFIIt t USE
0k
OFFICIAL USE 62 AIwp Rii Compliance with existing requfremets for security clearance
of personnel Will be satisfied in Loan Agreement and Implementation Letter
63 App R1l2 Compliance with requirement for approval of cortractors and contract terms for capital projects Will be satisfied in Loan Agreement
clJ164 Aup Cmpliance with bar nRainst use of funds to Tay assessments etc of US meiber Such payments will not be eligible for financing under the Loan Agreemunt
6 Anp P115 Ccmpliance with regulations on employment of US and local personnel for funds obligated after April 30 1961 (Regulation 7) See Section III-C
66 Aim Vietnam iron and steel restrictions Not applicable
67 p l9 If a country other than Greece Turkey Iran Israel Republicof China Phillipines or Korea reduction in assistance by amounts spent for the purchase of sophisticated military equipment
68 Anp fi4O1 Compliance with bar against use of funds for publicity or proshypagjanda purposes within US not heretofore authorized by Congress Such use of funds will not be eligible for financing under the Loan Agreement
Morocco is a traditional Islamic monarchy with a constitution The conshystitution was implemented followaing a popular referendum in 1962 National regional and professional elective bodies including a parliament were established by universal suffrage under the constitution in 1963 The parliament was suspended in 1961 in a State of Exception because of its inability to agree on measures with adequate urgency to meet the prevailingecononde imperatives In July 1967 the King appointed a Prime Minister to direct a Cabinet of appointed technicians
The constitutional framework nevertheless remains intact in Morocco and nationwide popular elections for some of the professional chambers were held in August and September 1966 The press is relatively free in Morocco and the right of diLsent prevails provided that such dissent does not violate the prohibition against political attacks on the instishytution of the monarchy or the person of the monarch
LI Under the revised US AID Policy for Africa agreed to in November 1966 Morocco is designated a development emphasis country entitled to receive continuing support on a country basis as part of a multilaterally coorshydinated countrj program Morocco was subsequently included in Presidential Determination 67-14 (January 5 1967) I
LIM=TE OFFICIAL USE~i
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bull ~ -
f
DEPQbi) STATE AGENCY FOR INERNATIONAL DEVELOPMENT
WASHINGTON DC 052
CAPITAL ASSISTANCE LOA11 AUTHORIZATION
Provided from Develoroent Loan Funds Morocco Second Lower Moulouya Irrigation Loan
Pursuant to the authority vested in the Assistant Administrator for Africa of the Agency for International Development
AI)by the Foreign Assistance Act of 1961 as amended theIAct) and the delegations of authority issued thereunder I
have received and t-en into consideration a certification from the Director of USAIDMorocco as to the financial and human resources capability of Morocco to effectively utilize the Lower Moulouya Irrigation Project taking into account among other things the
maintenance and utilization of projects in Morocco previously financed or assisted by the United States and I hereby authorize the establishshyment of a loan pursuant to Part I Chapter 2 Title I the Development Loan Fund to the Government of the Kingdom of Morocco (Borrower) of not to exceed five million dollars ($5000000) to assist in financing the fore] gn exchange and local currency costs of goods and services for the third phase of the Lower Moulouya Irrigation Project subject to the foLlowing terms and conditions
1 Interest Rate and Terms of Repayment Borrower shall repay the loan to AID in forty (40) years including a grace period not to exceed ten (10) years Borrower shall pay interest on the unrepaid principal and any interest accrued thereon at the rate of (a) two percent (2) per annum during the grace period and (b) two and
one-half percent (2-12) per annum thereafter
2 Currency of Pepayment Repayment of the loan and paymenu of interest shall be made in United States dollars
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3 Other Terms and Conditions amp(a)Goods and Services financed under the loan
shall have their source and origin in
(i) the United States if disbursements therefor are made in United States dollars or
(ii) any country in the free world including Morocco if disbursements therefor are made in Moroccan currency
(b) AID Regulation 7 shall not apply to construction -work financed under the loan because as detailed in Section IIIC of Capital Assistance Paper No P 667 it is important to the national interest of the United States that the direct costs of construction work performed by third-country nationals be financed out of funds made available by the Act
(a) Such other terms and conditions as AID may deem advisable
Assistant Administrator for Africa
Date
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7
Other communlca 1 i i t ih Lh arr-- inlude the nrninlineof the Oujda-Fe--C- t h~rh l e0tnnd to AlgeriaSpanish enclove rt the 1 fir idto cmmercial airport at Oujda andNador with regular national onI int rnational ervice5s
Th verirtr 1 u ~Ath r nr r t crocd by 60 kvJ i i i u rrd t 5( kr It na ortr kk f~ditcrl rower1(Qp x I -y yrar) -o n d hr rritIronr
at the Mechra-Yplusmnilj l inm fnd the Bou Areff contral poter Statin The townare connected to ranrh cther and th2 r-rt of Mcrocco by telerhone andtelegraph 1 ner
b Sol Soil rvey 7rd land ]a-ifctons have been completed i-nthe Mcloulva rer eter oanntrantbi- with French firmr u-ing Frenchmethods The Trifa -1n wr initialy rraped at a cealeof 150000with certain area ub entiy rer-aLd at 15000 110000 or 120000dependin I nn the cor1cjeity of YJ rattcrns The Zebra plain has beenmapped at a reale cf 20O00 nod th- Bou Areg plain at a scale Df 150OO On thp baf Yr nf ther urvy th cla sified the soilsGC hain terms of r-uitnbility for irrigation as follows
Land Ciaifcation (Aere)
CasrI amp IT Class III Clans IV Totas Triffa Plain 17000 29[00 22725 99625Zebra Plain CbO 1275 4050 211425Bou Areg Plain 75)00 l6qo 3 0 3067)Gareb Plain 13 05 10 70 0
Inclurez 1750 acres for lfigh Service Area
The findings thi indicate that ( i) arriratry 5of the area in thefour rlain- i suited to irrigation (Clare I anl II) (ii) more than3 ir suitabr bt with one Or mcre imrtat~ons Irro=ed by underrablefeatur-s such an to wrafhy oil characteristJcn trnine- r restrltedbull rio (CIar TIV) and (iij) ls than 2 of th- area in only margina)lysuited for irrinticn(Class TV) In ther7e lattrr ardrn only rmi-intrnsive orop rotations blUponsblhe
The oi nicn f the Cn-lting Envneer (1ydrctechrJ) th respect to) therd carrffjn n that hfle 3 Bureau for P ltr0tion -tandards werirt ernoy-d te rlasnificatinn ir aceurat- and n rrti with3and rlaced in r d rLrnble categories more
uere thnn right ha bern the caseUS tandardr folIced The clasifatinn ha 0a been reviewed andfound to be atifactory by the USPA tayr Hoever r areas of complcxroil Ttternr hch to date have only been ru-d to a oale of 150))rome reraTpin tray be necesary as a banis fcr rrerarnZ
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final designs of irrigation and drztinne- rystems parcellization into farms and planning of land preparation measures In addition considering the high average salt ccntent of ater frcm he c ilouya hiver a rorm of systematic leachin- will be reqirer- to f ree-rt aculation of salts in the soilsparticularly in h ebra Crt in will nlso1e plain ureas require nitrogenphosphorus crd possibly other nutrient to obtain satisfactory yields
c Water On the basis of studies by the GCM which have been reviewed bythe Consultirr Fnr ncri and the U au of 1ccoi-ation it is thecorclusion of A tt (i) the q lity of water in the Lower Houlouya
is below averpge bvt crp rble to thtof certain rivers in the US whichisotnteLoh~uoybrve successfully been usc for irrif ton for periods cxeccdin 100 yearsOj5) there is clearly a sufficient a )unt of i ter to irrif-ate the 128010
bullcrer to be served in the [rlcentIty ar n3 Addi-tional s-tudioser (c requilrecj dcter-Inc if adeqiuate water is a- ilable for irrigationof 376QGO vc rc
The only signifcant urce of vp y fOr irrigation water in the perimeteris the oulouya Vi~cr io jc n1 is 1re ntly being irrigated from wells most Iround water i - - 1 Alouya contains dissoived salts which i xr Lrn - hvriny reak flowto iJOx PIn iuting [cricd of c n ccntraticn is 750 ppm On Thi- basis of USDA Salinity Lot) atory criteria fte v ater is class 03-SI (hl-h salinity-low a-alinity) Vile water is thus of mediocre qualityit is ccmrarable to that of river successfully used for irrigation in the US (eg the Lower Colorado Rier) and poses no serious problems to irrir-ation in the Moulouya perir( cfr provided the W4 adheres to recorrmended programs for meeting leaching reoairements
With ref-pect to the 128000 acr project the demand for water reasured at the Mechra Hoadi diversion dair is estizated at about 575 million cubic meters per year as follows
remand for Wter
Peak Flow Annual Total (August) (m 3 million)
Agrieulture (176000 acres) 337 m3s 806 Municipal amp Industrial Consumption 8m3 23
Total 4 uy62123000 acres to be irrigateA by Gravity 255 m3s 575
(The e dpeak requirzents of 345 s compares with a 35 m3 s design
capacity of the main canal at the diversion dam including 18 m3 s for the Right Bank and 17 m3 s fcc the Left Bank)
I
- 19 -
This estimate is based on probaole rainfall cropping patterns plant requirements evapo-transpiration and other expected losses of irrigashytion water The estimate is believed by the Consulting Engineer to be reasonable but subject to refinement on the basis of tests to be carried out on a continuing basis
The annual average availability of wuter from the Moulouya river is estirated at 1100 million mn or about double the estimated requirement for the gravity areas
Estimated Availability of Water
Twelve Year Annual Average for Moulouya River 3 m3 second 1100 million m3year
Maximum inflow Observed 8000 m3second(1963) 3h00 million m3 (1962-63)
Miniwum inflow Observed 1 msecond (1951) 532 million m3 (1956-57)
On this basis it appears that there should be ample water available for irrigation of the gravity area as the water availability obtained from twelve years observation exceeds the requirements in all but the 1956-57 season shown above Prior to the development of land with purped service areas (the Gare-b and the Triffa ig h Service) a review and analysis of the river hydrology should be unidertaken to assess the availability and regulashytion of the river flows
d Studies Entincering and Construction The overall irrigation scheme outlined by the 1uM defirs the ajor features and th( magnitude of the work to be accomplished to attain the ultimate goal
This scheme is being carried olut in phases over a long time period The present phase encorpasses the development planned within the priorities indicated by the Stanford Research Institute (SRI) study for the gravity irrigation system
The studies for land classifliration have been completed for the gravity irrigation system in the Triffa Bou Areg and Zebra plains by French firms and were considered reasonably accurate by the Consulting Engineer Land consolidation and parcellinrg has been completed by 0MET in the Bou Areg Central area the Zebra Collctive and Zebra Remainder sectors 7 thru 10 Land consolidation and pareeLlni ar( needed for Triffa sectors 27 and 28 Bou Areg Rematnder arid Z(bra Rerrirder sectors I and 2 The engineering designs for the Triffa main sector 27 and 28 and the Zebra Collective have been or are being completed by the G0M forces The engineering design for the Cefntral Bou Areg and Zebra Remainder sectors 7 tnru 10 has been or in being connpeted uy Hydrotechnic Engineering design will be required or the 1ou Are remainder sectors D-3 thru D-7 and Q4 thru G-6 and Zebra Rer ainler sectors 1 and 2 The engineering designfor the Dead Ilead Thnnel has been undertaken by SCET who have preshypared anid issued an Avant Projet for bid invitations for construction
14 M)j6Fj Cshy
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This firm will also undcrtnk- uu-orviston of construction The engineer ing not yet performed can be aea ished by GOM forces andor private engineering firms
Construction of the extension to the rrain irrigation and drainage canals Jand preparation rector cinl ani drninaive ditches will be performed unllr cntact t) 1 cc rt~r~iet m)t hi in the ene of the
r-abilit tion of the L2tL Pz- Dd iarl Trnc t
e Cronning Patterns The existing erning pattern in the Moulcuya including botnirrigatcd and dry farm ingincludes grain forage citrus vegetables olives grapes and 6 small amount of leciduous fruits and nuts Of the roughly 2140Cy) acres of agricultural production in the Moulouya about 177000 acres are in field crops 24)) in vegetables 16Y)O in citrus 15000 in grrrcs 540Y) in forage crops 1700 in olives and 15)0 in other fruits and nuts
Taking into consideration rast and present trends in plantings as well as agronomic and price and marketing factrrs the following projection of cropping patterns has been developed for the Lower Moulouya
PROJECTED POPPTG PATTFRNS T1 HE LOWER MOULOUYA
(In per cent of total irrigated area)
Left Bank and Triffa High Serice
Triffa Sector - Sectcr rriffa Class Class Class
crop Main 27 28 East I amp II III IV
Citrus 40 60 10 10 10 Vegetables 15 10 15 1) 20 10
Crtton 15 20 10
Fcragpr 10 20 25 30 4o 30
heat 10 6 20 25 20 35 4o
Grip 25 24 35 15 Dy beans 5 10
Sunflower 10 olives 5 0
100 10) 100 100) 1i 1052i 100
a Incltdes double cropping
- - r- euro --- 7
~7~TF~Wr~e~ALUSE
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The projected cropping pattern for the Bou Areg plain includes cottonLJrirdg the frrt Five yearnejtinted 1r of the Class I)fand
the project jitwould be grown on nnII landn Tht renresert only 960etrravres) ectz ri)cr)e area The cotton acr~a e ry increasep 2ceafter live years if ritisfactory drainage conditionshyrre achieved in the Bou Arev
cotton grown i 1xonp tarx- Trdltionally Morocco export its-Jr- cron an irr IJ hort cble to rmeett Cotton the reuirrents
r the oroccan 2pinningr mills The croppni-attrn of the Triffa East (about 180n acres) Js projectedt Tnrlude 15- (about 27 acres) in cotton It is likely that becausef ihe limited extnt of Class I and II lands in the Triffa Eas cotton not increase beyond that percentage
1t i evident that the amount of irrigated cotton that is likely to bein ther-n Moulouya is minimal even assuming that local drainage condi-T nare i asuitable
f Technical Sundnv--s The AID Project Engineer hps reviewed ii) thedat and ajor construction performed to date onronct and finds the technical requirements this long-ranRe phasedsufficiently defineoto ccntinue the project on an orderly schedule The estimates of cost of prsirct facilities have been determin-d by SRI from average va)ues oftrit cots obtained frorr reviously ntiarded contracts and from etniled( -s-nand analysis prepared by the iHydrotechnic Enginering fir oft-o tyieal sectors located in the Bou Areg area The costs for the arc ent contract have bcen estimated by the USAID It is consideredthat the depree of engijeering planning undertaken and the deterrrinitonr to the US Goverrment are adequate to meet the applicable requireshySt- n Section 611 of thie Foreign Asistance Act
7717gt
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E Financial Status of Borrower
1 The Moroccan Economy
Grrwth of MorocLcts GDP in real term averaged about 24 per yearin 1(4 and lr li Per capita DP In 1C 5 wan anproximotely t162 A (er Irr-ht in (6 resu]trd n a drcrcne of slightly nver in GDP which tlh vpulatior grc~vth avrring 3P4 per year rnrsJted in a decline of -r ornita GDP In 16 ii brut $154 A recnd droughtcccijrred In C67 but i not expeetid to have the severe effects of the 165 drought Crop forecasts for the first nine months of 1967 indicate a 4 increase in real GDP above the 1966 level This is also the economic grcrdth rate estimated by the IBRD for the pezxA 1965-70
Moroccos economy is heavily dependent upon the agricultural sector thich has averaged about 15 growth per annum However growth of the mal modern segment of Moroccos agricultural sector has inshy-reased at the rate of about 7 per annum
In 96 the International Banik for Reconstruction and Development (IBRD) preented a number of recommendationr denigrned to increase Moroccos economic growth rate On the bacis of these recomfndations the G004 proceeded with planning the necesrary program to increase investment levels fr- the i 63-65 level of 11 of GNP to 1r of GNP and stimulate the rate of economic growth from 2 to an average of over )4 annually for the five years 66-70 In addJtion the GC4 has taken measures to curb the population grovth rat while placing increased emphasis on raising production of both dryland (wheat) and Irrigated agriculture
2 Investment and Savinms
The level of total gross investment has remaind at aboit 11 of GNP for vera year althugh the percentnoe declined slightly in 165 Under the GO Three Yea5 Plan 1965-67 the gross investment t-3rget woz ret at DH 3 billion- Actual invev-tment expenditures for the three yearpeirod reached about DH 46 billion of which the Governshyment ezxenditure amounted to DH 1 billion a against DH 21 billion budgeted Thin may have beeo partly de to the GOMs deliberate ausshyterity pollcy under the hIF rtbJli7tion prci1rnr but more probably it van duxe to the shortage of trained cadres to -lan and execute projects
In the private cectcr conziderable inounts of ravings may be hoarded due to lack of project attractive t- inventors The lvl of private investment has been runnihg at about 51 of GNP thrrugh 195 The 0014 4 incentive to private instors hnr cut profit taxes from 4320 to V and announced a tpn year guarantc-e against tax increases
]L- $ = DH 506
777=-77- NQ
r y 7k1- T e - W lk In
j - 1) 7k- - _
- 23-
Loan are avaiiable to )rivlite irve-tcrn freo th 3JfIDiN s rctr special funda to prcmote touricm devc firvcnt
Under the 1r86-1972 plan abut to br irtntt level are to be accelerated considerably reaching A of GNP liv ]970 Mor(- Irlyir haviiy on foreign 1 to aciuw cc higher lve1
3 Central Government FinancP
The Moroccan money supply which had Incrrased ify 76 per cent in 2965 remained virtually unchanged in 966 The first half of 1967 witnessed a 5 Ter cent increase in the money supply Te major part of thi increase as concentrated in June and July uhen the supply reached V14 0j lion Currency In circulation expanded rapidly in June and July
nnl factrrn being reinforced by commodity hcnrding related to the 1ide~l Et crisis Demand deposits did not show their normal decline nthe first half of 1967 Deposits with commercial banks declined nlightly while deposits with the Treabury increased as public and semi public agencies contisued their transfers from the banking system to the Treasury The increase in money supply in the first half of (7 ran I raced to tho nzon1 sonal increase in net foreign assets not c y the custcirry rlelir In claims on the private sector Clsirl (n the erivate sector declined slighty until May 1967 but Increased hr-gb June and Jily due primarily to additional financing of textile stocks ClbiJ ante Government rose by 10 per cent in the first half of 967 the in central brnk claims on the GovernmentI being rmainly offset by larger deposits with the Treasury
Ordinary budgetary revenues which incrurted by 5 rcr ent in 1566 tre cxrcted t-) increase by 7 per cent in 1( to DII 21 billion DeampDite a derea3e in agricultural tax reccipt r- fror diret taxes rose by 10 ppr cent in 1966 and a 2 increas estinated for S67 due to tric or controls on income declarationr d an accelerashytion of tax cller ns Owing mainly to a relaxation of the import
program in late 1 5 and a concomitant increase in tariffs on certain ccnonter goods customs reneipts increased by 21 per cent in 1966 Although budgetary estimates call for s decline of 3 per cent in customs receipts in 1S67 it is likely that actual receipts will be considerably larger in view of the import liberalizatidn measures intro)duced subseshyquent to the estimates Receipts from indirect taxes state monopolies and other serces are expected to be 11 iv- cent Ipher in 1967 owing to increased profit on -ugar sabr-i and L r(m the newly created Office do Ccrmercalisaticn - d-tation (OCE)
Recurrent ordinary buiL e(enditures increased by 34 per cent in 1966 ar-i are expected to increase by an additional 7 per cent in 1567 reachin- D1122 billion Although wage and salary scales in the public
Banque Nationale pour le Developement Economique
TT~~- - I777
2 Cf
sector have1bec z h t - rrvirI urli 11i g 14-6 -nd PO becnue rX toi Ijt e f (]r o n 4
ill tile ic urrnnye andr)not i on dnd Publi ht rentrn -yr-otn lno IncreasedOthrr t ill- t il r ne by ) vr cert in J6(
i ninlyrt -br h Inc-l
( Ihe ( t r- rl t ip t t C itur f T)h 21h iilli n
is (( ItI t lt r c0 a- r n n o I- c t b It ihstnl id vv ih n t r-t have hn(er - en 1t2
(IM ii ture( T f fu traordJ nary budrzct exshypend ituren a r y -t c ~ i vi -iscz Portal Checking sy-stcsul)rrcing t (I ltIt Ct -- ind creirn shy
nnet The f r er tnc I hha ccrc ed from a htih of DH 5-7 millIJn in _ 5 millIn r C46 F cr ats foi ]7 place Cro n w I 1(DI)J79 ill ni DDn etlc fi nancing has alo u 1) 5 p (- I3A27 iIliun to an entirnted DH 1142 million
1 14V ) I nv 1 ri n nI(c1 franc n is 77-ected to be ol t y ncrewed bcrrowing fr-ir t he Cestra 9ank which hud been held at mcdert vols iln 165 nnd 1a66 Under the 1TFtaiby agreement of October 16 the qob) agreed to taBe a3] rocrrnary meurer to maintain as table curoonry rPnt inl th nr1d-elrto th b a ent of the ePrncriynnd a vnbl- hn1incc X nvroent P rt artt to t rt fien of tho Ccntin- Honk rstz (erct are nct t r itr June 30 Y-ke 7 lov l b th n Diif ) mill] (n tlcnber -c P thai I o illin usit I ])ecthr 31I62 (GC bc w t
C B1rtrp - vt DH 12 iri 1i nor ]S67 or DH 6S ij lionEan tisated (r fo than the aproved crd it expanwim
Thitrd ordivary nil extraordnnry buThTt deficit of DII 7-19 millI n fcrecat Fr 1 67 in exnected to be fnanced by not freign
tan reof DII )75 mi~l in nt recurity 12ue 1 T111I vlion a - nt ry tiat Po n Che )ir d-nC i 73 r5 Pn
riI is u h i a vti v mrr nrr-e jssIof fvr is id a erital The vnfsa revcred in 1d6 when lnrger r nyrentn eEecially on food itcmo an n -lewdoun in
igo ra a deficit of $1 millcn ProjectiOnz-vt rvultvd in ror 17 r~ieat inrrerned importsonly partially ccnrennate by addshytsa t frnreirn r ntil rrceiprs ard mprrvement in the nervices account will reult -n et of aprroximately $)20million As rhoim in the following tabl -r tion for l33 and 169 how overall deficits of
14 and m] ivi_y$i It
rqVV t1 4~
C)rgt
---
1 -)I+-IRF1
1ROCCO - rTANC OF PAYME 1qrt - 169]_ 5
6rfi0 1 1C(8lr67 i r(o
)xrurt 2t L( I L-5
Trade Bnlance 11 15 - 75 shy - 75
rviee- ret - 7 - 5) -35 -23 -2
J]-i of Good rnd Service- - 3 - 65 -II - ti - (5
Trn-Ifr Pr ynts (nt) P 21 33 37 33
on-cntnry Carital (not) 92 64 6 6 5
Err-rs nnd Ov rrion- (not) - 23 -2 1 3
eranl Bannic __ - _3 -_ 3 - 1i4
Atrh thert ircjected reficitn are of the nnme order of 1 nishytude a7 thcr incurred in the period i66 the Situatlcn i findarentallydifferent both in rerprct to the source of the deficits and in rer-ect to the meat0Y gtr m etin7tecr In the f rrer caive M5recco uffered
_frcrr a very h-vy cutfc of Drivtes cuitv fo-ivr with a shar) decline In forein nt exerditures in Morocco In the iatter case th projected deficits r- rcre a functicn or accelerated crcwth risingdebt ervieiiw tri tho abnrcn of forv eeble additiens foreign reshybull ourcs nere7ory 4( r2Vm rAf finmncting To nect the def-cits during the reriol 161 61h MWreco ob1id to drw down rorcin exchange reserves of over $]c milicn The snrti tpv of financing is no longerpozslble ince no or-res- ruch reserve- Even ifMorocco yr
mn nina r rve_ ore (]rrfii on to th r-ixirun etnt enribe nnd the [iI tnfldy i- un M-r-r e i32 till relA re nt rnt 15 millicnj1itionn ftr ign as- e n 1 6 beyond hat r recnently fcreeeshyable with ver nri- nry Officilr in In i6 reserves are cotImnted Pt 72million c hih crn V 3 million i caly required for currency coy r
Foreign InJebtrdne n of th GOM Mnroccos external rtnte ard rutlie enterprie dett amounted to
$r) millivn in lr6 Debt vervcirig rpynents for (66 trtaled about
$5) rillion g-eement approved in October 3(67
I- -- Ishy
37 millin or arprcxitrrntoy (j Iroccor totnl eXoort earning of h28 millicn GCnerally nxt rrO dbt FervicJng renuiremennt of leas
than r of totna -ort nnrlt In onrldered to I r tirfactoryrntio D-bt r rnJrcLct n Ir the reriod 1-(y 3on Trerent external debt including thnt wrtl(n irreently undibur-ed are hown n th fr lv tahlr
)] L v yr t n
Eternn Vtnte anc ] bntcrnrie Debt
M131 o)nr
Y aI Net Outrtnnling Debt Debt Service
(6 it 479r5 $367 J-67 452 3)6
Z616 44469 2 0 2C-
365I3 37 389
33 383 33 6 371
5-h 31 n 352 275 34121
]176 2661 32It 1977 21133 311 177 22)6 307 19 i0l74 256
1733 255
rgtternal debt rharre n rerent debt nnr rhon above do not increase ubtanti-lly over t rt 1)year- reaching a maximum of h44 millior
in J6 and decrpt- n cr - tently threoafter At the are time exportearninr r _rc extett nc-are Aring that Morocco does not inshycreswre it etrnn2 cbt t irate ubrtantially nb-vc ihat has been the core th adfiticrn dbt e roquirrentn reulting from the propo t Icon o 5 ijilion co r 7crncepr-ional term hould not have a i-nifiant affect n 1r o - ab lty to neet itv g rc-atedebt ericn rcnrib2t~e- the pros ectr of reprment of thin loan ore coniderci rearcnb)
U I -
F ot h-v C IuIJI rmt I shy
1 V amp~ rVml KI
PUC- -jrVi Jt t 1 11 nflrcj urlc 1- th )qn --P I uti u rhnrrl -1r- thr U- Tr- ry- R- -nymc nt
c2Il f n 6 1 bf r I- till 11 nfl r- n-r i n of O r--niC(Io~hi U 1 1 rr to
Tn vil ) f rvc hi tvlrll 1 (In- - n- u--n E r me rrinshycgtay F rntwir w ourc o -o- rvI ortf-V3 1 rncing of
Uf f -r rrrir- ur3r 4~ v -rin Iltrt nt ndd shyt -n t ) in- lint r b t l r -n rort- o-orco trorl-- V -P
r i 1rnd h L-torie Furcl-trin firr- thrjt US r r~ crvirrf- u~d be~
T L I1 c vt r- -ly ] -ubt fu 1 n vi pw -I -ror-co Ir of
ut1JpcO In thi rjert f it -- r- 21 npnred by d1-nr- cothcr t~han the US
2 ]P-t ofI Prr l1 on Prw- Fntrrr
Phij rrcjJ-t -11 n-t h~ -in nrwerq Prrt n rr- tc ntrshyr~A~r fi-mc 1bho und for --roern p o n
3_~~PrCT--rty
rr-vIi-n 1 h -d r the loan ragreement for Icntifitcation ef any r mIjrpt n ctri b- rt througn ut 1zatn (f xccr- prorerty
If rv c u~eAID n-mrcf u urr thi )cn - I~ut~ em avoi3ablo r rovvrirrnt -rrperty rather than nce iteni
4 Otli-r Fr- Wo--] n-Fnlc4rm
Dr mi tW- o] 14rocco- i~ajr ovr-ec -f exte rnaX
rrtan~- hrtvfb - I r ~ ant fl Fr n fole by Kv-it
Sgio F rneflit r b-en 1lmrntrd to tcfohnjip n5tnnen bi eoni~in I th u y f Fr--h tprhntcian tcacrr ind cther
~ti~r t~ ec-tnmIyrt-n Friinch Aid to Mcreco In 1065c~oc~ (P-art f-r txychnirril aItn -- j se of tl5 w1nfor bu~dget rurport f ir in rt t- $1 1ri1 icin in ennita -rojectM- n vx- rrcd
1Vw1tvnn tioI t-) Frenh rurtnnd +16 r11ion tie-I to -onyiint to orrrcr Frrmh ccilcn~For _-rrc-ratod land and rquirrmcnt
West GTrrnmnny liar agrcrcd to nrovIe ccme j27 mM22~cn 1n catital arirtanre and cromrndity lnoi7 t n OfIcon( q92 thi o totril$223 miJ lien ha actuary b-Pn cr-Itt--d under Inn ngrepment This
And a lk5 million commodity loan both) signed in 1965 All Wet Gerzaan
Ufla
-28shy
capital asnistance I vuectI to be tied to German exports Germanyhas in addition 1uvvded r tteysubbtantial technical assistance f
The IBRP hah rade four 1nns to Morocco since 1962 totaling$6) million Ofthin totnl a [175 million loan in 1965 wos fordevelopient of the gidi lit-r irrigation perimeter Other assistance by internntIcnal Iending arncie include an $11 million credit byIDA in 1C65 for rcendary diicction projects and an IFC ln and inshyvestrent of $1 1 ri jnic alo in
F tit i by [c - dncr tr dh elo snt ofMorccco rircuVt r oii +h b-]n jt-TKT r nbove n 2 )6 niliion Kuwait enn in i66 for develomyment of the Tensaout Prnm n irrnten nrooetand a $77 million Kuwait
0jl n )nnsn r(niti-nertcir
loan for extrnion of the Tadri~ Irrigation Perimeter
The following- trbe surrlnrlzes other free world arlztance (excluiin technical assistanc-) to Morocco for the years 1(62-66
($ Millions)
1 62 1cf_63 96) 19r65 19)66 Fneea 4) 5PO 64o 700 shyWet Germany 223 gu 1t 53 281 IRD 15 175 10) 175 IDA 110 IF C 1 5 7 7 7 0 I15
TOTAL 55 62 1U3 W
b Includer only lo-ng term loans and exporter credits - Includfs 25 million private capital
Eternal ansiztnnce to the Lowier Moulouya Irrigation Perimeter -nce 1060 hres been con[fined to US upport Consdiering AIDs previcus
involvement in and conmitnert to the Lower Moulouya an AID lean in P2t to be Lhi mol aprroriate source of financing for this project
LID
II
q
-29-
SECTION ITI- Y-TTYT TIMPLPTrION
A Periret-r Ad-instrrti-
Authority for irplerrentvtnn of the deveorpent prrgrn frr the LowerMoulcuya Perimeter and rs wel arth crnntinuinz mrnnrrmenertC tt r t- rrtnr V theltbi nad overationity iOfic 1cne 4
n r I e1i- i d Vit4 i Iv ~ Ct rreated i Otb (rJ rn-- of evcn inrmi-rriional offices hich reelaced the Office de Mire en Valeur Aamprlcole (OMVA) Under the OMXA and itspredecessor agencies authority for ad-inLtration cf irrigtion proJect war centralized in Rabat
Under the new regional office organization responsibility for adminshyistering ORMVAM is vested in on Adminirtrative Board of 10 members headed by the Minister of Agriculture and Agrarian Reform as chairman All ether board members (other than the Chairman and a representative of theInterministerial Economic Ccrmittee) represent agencies or activities inthe region of the r-eriret-r whic comprises parts of two provinces Localretresentatives on the Board inc]-de the governors of the two provincesOujda and Nador the presidents -f the two provincial asembtes and of the two provincial chambers of agriculture as well as the perimeter Director
The responsibilities of thie Administrative Board include review of theecys program establishment of its organizational structure developshynt -)f its annual budget and establishment of rates and conditions of
Siyfent for water and other services provided in the perimeter
The Director of OP4VAI-I is dbarged with the responsibility for executionPthe vclicies established by the Administrative Board end administration of oil ORMVAM functions This responsibility includes selection of staffn pserating perrcnnel acting s officia ORNIVAM representative in all ntztinns with -tate and othbr public or private bodies and the
f of funds within limit Indivated by the Ministers f Financetent rn fricultural and Agrarian Reorm
Perimeter Oranizatlon
ORVAM oreanizatlonal structure consists of a directnrate five maj-r rvlces or d-vsicns and one separate bureau Two services qei Administratif et Comptabl- and Service du Yatrial are conshycor - th adminisration and lcgistical support of ORMVAM operationshi1e the remainirg three services rind the separate bureau are Involved in t-hni al matters associated with agrcultural developrent Each ervice has one or more subordinate bureaus Fei-ce Chiefs and thehead 0 rch bure-u report directly to the ORMVAM4 Director
-~F7E MEw-
-30shy
2 Perimeter 01ttffnr
OPIVAM orgttnlrntlon treture calls for 557 positions of whichI L or 7 Mlled n were nher 29 1567 37 of the 71 Postshytion vacancies reported 1ern the high and middle levels Foreign(chiefly Euronean) technclan occupy I)of the 16 high level positionsthat ere filled at thfit tire
Whil OPM ut in th- lcng run lor to Mercecos oducational yster to prvidr tn crrf-nn2 to ratisfy current rdurojectd rcshyquirement th currnt high and mlddle level vacancies rrouire uersonnelwith oxt nive nrior rxericnce To fll this preent need it will be necessary for CRIVAM to continue its program of recruiting foreigntechnicians until ruch tire ns graduates of Moroccan educational programsacquire the necesnry exrerience The managerent assistance componentof thin pro~ject ]e-rribed In the Project analysis will to some extentalleviate OFIWAMs high level personnel requirements
3 Inw1 ernetation Sehedu]
Months Implementation Action
1 0 Sign Loan Agrcement
2 2 C-tiify conditions precedent and Y4tiate procedures for selection of US firm for management contract
2 Negotiation of extension of advisory Engineering Services
h 4 Contract (Hydrotechnic) Negotiation of Managerment Contract
5 60Cmpletion of Project
C Waivers
Sect ion 7 rf AID Regulation 7 provides in substance that theUnited State ill not finance direct costs of construction work performedby third cc-ur y nationals unless the total co-tn of the project withvhich thr ennrtrumticn w(r is asEcciated donot exceed $2On)O orafter excluding national of the country in vhich the site of constructionis located and Dersons vho nave resided therein uninterruptedly for morethan three years imrnedJately prior to any determination under Regulation 7at leant 0 of all uernons who work under the contract at the site of conbulltruction are United States citizens or the employment of third countrynationals is necessary to avoid excerrive corts to the United States
3
31
Section 2175 authr-ri th Regional Anitant Administratorto waive the nrovinions of Sectionthat it is 2073 if he dcterriner in any coneimportant te the nationrn intercrt of the United Stutes tofinance the direct eots of construction work performed by third country
nationals
A prviou1y r ic i c t tht for thr ct Tartthe -r c ct b- 1jeuj out r -cnorbr f cnrtructioncontracts with Morcccrr contrctnr an in the i-t Uowfevvr itentirely psnible that there may b- roe contractn with cntructlonfirms partly owned by third country nntionaln and that ruch firjs anwell as the surely Moroccan-owrned firms may enloy third country niationalsIn such canes a difficult rrobic-i iould arise in meeting the terms ofRegulation 7 since an a practical matter Aericans are not reaonablyavailable for ermployn ont by such contrnetorn and our previcus experiencewith the Naunsseur Ccnv(r-ion project thatin Morocco has indicatedAmerican contractors would not be interested in bidding cn small conshytracts in that country
It in therefore recommended that the Annitant Adinitratordetermine rursuant to Section 2q75 of Regulation 7 to waive theapplication of Regulation 7 to thic iroject since the project 411 conshytribute to the attainrent of US foreign policy objectiver and the cbJe-tives of the Foreign Arsistnnce Program
LITI L USE
LfI~~5xA~us
lit
4 A J A 45 4 k
t A S T
S(3
I A444ilA~~l~)
7 -74
tAM= D
SECTOR 27
10000
t Co0Na includez25 cgtri oncFcttlrvI ncy I8s ~ ~ C t C- Includes 50 constriJcltiotrgrc
2000 60
IU
0
z
bull cosYsA shy----- i
600L _
400
200
0 5 I0 15 20
INTEREST RATE
I ~ 7 J7777
ANIAampX C
PROJECT DESCRn1 rOll
The project com)onents to te undertaken on the MIoulouya Irrigation Project over the next five years contists of the following
C(n1rtion of the rrLin casuals and bianch canbls to provide the suource of waler to the sctors be developed in theto TriffBou Areg and Zebra areas This construction will include the necessarystructures such as reulators highway bridges aqueducts water intake
and discharge structures etc
2 Iand Txeloommerit which includes engineering land consolishyt and iuvtllng lard preparation (subsoiling ripping destoning etc) and installation of water distribution canals (secondary tertiary and quurtunary) and drainage collector ditches for the Triffa main covering 24000 acres in sctors 8 9 10 16 20 21 23 24 25A 2513 27 and 28 Lou Areg Central covering 16250 acres in sectors Dltirough D2B and G1 thru-4h G313 i0u Areg Remainder covering 15000 acres in s-ctors D3 through D7 and GA through (6 Zebra Collective covering 45)0 acres in sectors 3 4 5 rind 6 and Zebra Rer-iinder covering 14250 acres in sectors 1 2 and 7 through 10 and th remainder of sectors 34 and 5 The total land to be developed is about 74000 acres
3 Canalization of the Oued Zeluan and nued Sidi-Amar in the Bou Areg Plain consisting of strairltening englarging and regularizing of these streams to carry the flood waters to the sea Drainage interceptor canals are to be constructed parallel to the sea in the Bou Areg Plain In the Triffa Plain the Oued Riada main drain will be deepened and enlarged and secondary drains will be excavated to provide for drainageof the Madagh area This will include the construction of bridges and culverts and other related work
4 Major Commorn Works will consist of
a Clearing of the Mo-1ouya riverbed downstream of the Mechra KLila barn caused roy flood dariwe and the installation of a set of stop logs for maintenance of pillway gate-
b Design supervision and construction of repairs to the ]elt Lank dead head tunel
c Conctruction and establishment of sib-division Offices and installations for farmer support such as CMVand farm stables
1 C
-2shy
5 Manavmtnt It ha been proposed that a US management firm be ewployed by th- C4 to manage and operate the entire Bou Areg area Such manageent -iuld encomparn all activities from the initial concept to final irIrp igricultural production Such activities would Include resp r-ibilsect -or supervnsion of engtneering and constriction of primary
S- Jry r complete developfnent of land training n in g tinul irription practicen preparation of market
t - r1t- (ot--rnu trplusmnining of a Moroccan cadre to take over h v--it Bou Areg dreara P the
At this writing the n-pt of turning over to a private UZSfirm execushyresponsibl]ity I h management of the establilrment and initial
op-ration of irr1gati the Bou Arog area has been only broadly de iiitd by the GCJO It Intended that proposals will be invited from a r -onable ntnber of f|ed US firms that a selection will be made an-n 7 them and a more do iled and cornprehenrive definition of the rer6 -Ps to be performed be eztabliched at that time It haa been
stimated that the t- of ruch a contract will be about $2 mir- n In any event the -ts of this contract other engineering arvl s to be provided undt n extension of the Ilydrotechnic contract and ether US corts will not ed the proposed $5 mllaion developzont Jean fr the project
The cle 3ifications duties ant 1ncnslbilities of the management personnel ill ha-- to be clearly defined i agreed to by the GCM Perimeter Directo- and other GOM Agencies luding arrangements for the necessary gistic support
Svxlale Docu-
1
4
LD ED 0ICIAL
-IAIDshy
A1trX D
C6JCK LIST OF STATUTORY CRITERIA
(Development Loan Fund)
1 FAA 0102 Extent to which U3 cormodities and services are furnished consistent with improving the US balance of payments See Sections II-C II-F
2 AA sect2O]ihi lanner in which loan wil promote countrys economic develo shy rit emphasizing help for long-range plans and programs designed to developeconomic tesourcos and increase productive capacities See Section I-D
i FAA sectT] h)(IL Information and conclusion on availability of financincfrom other free-world sources including private sources within the United States See Section II-F
FAA sect20l( )2 Information and conclusion on activitys economic and technical soundness including the capacity of the recipient country to reshypay the loan at a reasonable rate of interest See Sections II-B II-D and II-E
5 FAA 1201(h)( Information and conclusion on existence of reasonable promise activity will contribute to developrmnt of economic resources or increase of productive capacities See Sectiona II-B and II-D
_92_(b 4Information and conclusion on activitys relationship toothor development activities and its contribution to realizable longshyrange objectives See Sections I-D and I-E
The following abbreviations are und FAA - Foroirn Assistance Act of 1961 as amerded by the Foreign Asaistaice
Act of 1967 App - Foreign Assistance and Polated Agencies Appropriations Act 1968
AFEVCDF 1066
L1
-2shy
7 FAA f12O1(b)(5)_ Countrys self-help masures including institution of Foreign Assistance Act investment pliaranty programs Investment Guaranty
bull Agreement signed with Morocco 331o6l See Sections I-D and II-EI
_A ))(6) Information and conclusion on possible effects on US econowy with soecial refererne to areas of substantial -labor surplusSee Section II-F
9 FAA q201 (h)() Information and conclusion on the dagree to which thA country iv wiki- progress toward respect for the rule of law freedom of expression and of the press and recognition~yf the importance of individual freedom initiative and private enterprise
10 FAA -1201(b)(8) Information and conclusion on the degree to which the country is taking steps to improve its c]Laato for private investment See Sccton II-E
31 FAA R LbJi Inforrat-on and conclusion on whether or not the activityto b financed will contribute to the achievement of self-sustaining growthSee Sections I-D and II-B
12 FAA fi2Ol(bj Inforruation and conclusion on reasonalbe prospects of reshypayment See Section II-E
13 FAA fl20JL() Info-ation on applicability of the twenty country ceil4ng2
14 FAA fl201 L Information and coclusion on legality (under laws of the country end the US) and reasonableness of lending and ralendinr terms Loan will be on minimum termspermitted under FAA These are deemed reasonable see Sectioam Evidence will be renuired from the GGM as to the legality of the loan agreemnt
1 E 2 Information and conclusion on availability of an applicationFAA together with sufficient information and assurances to indicate reasonably that funds will be used in an economcally and technically sound manner See Sections I-A II-B and II-D Application received Janury 15 1968
16 FAA fl201(fL If a project inforntion and conclusion whether it will promote the economic developapent of the requesting country taking into account the countrys human and material resource requiremnts and the reshylationship between the ultimate objes6ives of the project and the countrys overall economic development See Sections I-D and II-B
17 FAAJ 20ij(J If a project information and conclusion whether it cifishycally provides for appropriate participation by private enterprise 8ce Sections YI-C and 114
I- FAA i22(a) Total amount of money under loan which is going directly to private enterprise is going to intermediate credit institutions or other borrowers for use by private enterprise is being used to finance imports
rfro private sources or is otherwise beirg used to finance procurementsfrcm private souwces See Sections II-C and II-2
9 FAA 207 Infosation on the emphasis placed en
(a) encouraging development of economic political and social institushytins No apparent relationship
(b) nelC-help in mectingthe countrys food nredo Project Vill conshytribute to production of food for lccal consumptioa
(c) in-proving availability in the country of evucated trained manpower Project will contribute to the deicloginext of trained manpower as one of the functions of the management contract (Soe Annex C para 5)
(d) prcgrams aimed at -malnutrition disease eradi atDn slum clearanceWater purification sewage disposal health education naternal and child care(includin fimrily pJnrning)) -nd cthcr public health ausistarice See
(c) other develoment activities including industrial development free
labor unions cooperatives tnd voluntary agencie transn)rtatin and ccshymwquication nrStczn capubiliTies for economic planning and public adlinisshytration arban develo-mment and modernization of laws to feilltate econcnicdevelopjen- GO- intends encourage develo vient of cooperat yes particularlyin the Left Pank areas Project will also develop capabiLi ics for cconoaicplanning and public a6~inistration (Annex C para 5) Other not applicable
20 Information on the extent to which the r-untry is
(a) cttcmting to increase food production and food sto a-e anddistribution felitics This project is one evidence of Moroccos efforts in this direction See also Section I-D and I-E
b) creating- a favorable climate for foreign and dmestic iri-ate enterprise and invcstrrment The GCM has recently reduced profits twes anrannounced a ten year guarantee against tax increases See Section II-E-2
(c) increasing the role of the neonle in the developnental procecsNo apparent relationship to this project
(d) allocating expenditures to development rather than to unn-cessarymilitary purpoes or intervention in other free countries affair See Sections I-D and Ii-
(e) willing --nribute funds to the project or program Th iOMhas already dcvo o-sidcrable resources to the project It has badieted13 million for th i oulouya for i7 See Section I-C
(If) making economic zocial and political refo ns such as taxc coliecshytion iYprovcmenLs and chan es in land tenure a Royal Comm ision has been appointed to make recomendation on land tenure probleras in the Lower I oulouya
(g) responding to the economic political and social concerns of its people and showing a determination to take volf-help wcasuren See Sections I-D and II-E
IT
-ovi~cd l v r 13 1968
- 4 - LDffIED OFFICIAL USE
21 FAA Inforn ation about multilateral assistance being Iurnished to t e country and whether the loan will encourage recgional development prog-rams The I1D has eztablihcd a Consultative Group for Morocco which rvicws the GOM development program anui prgress See Section II-F-4 for infoaation on othtr donor assistance to Morocco
22 A Extent to which the loan will contribute to the objective of ass ring naximu par icipation in the task of econonic dovelop--ent on the pL-t 0 _he people of the developing countries through the encouragement of cocr-tic private and local govenmental inLitutious o apparent
relationship
23 F _-_Dta_ Infor-ation and corissions whether loan will oncourageeffor s of t1e country to (a) increase tie flow of international trade (b) fostcr private initiative and comptition (c) encourage development and usceo co opratives credit unions and savingss and loan associations (d) disourgo monopolistic practices (c) improvo technical efficiency of industry ariculture and commerce (f) strenSthn free labor unions This project is cxpected to increase technical efficiency oi-agriculture
2_ C-1L lnforzrition and conclusion on how the loan will encourage US privte trade and investment abroad and how it uill encourage private US participation in foreign assistance prograas (incluiing use of private trade channels and the services of US private enterprise) See Section II-
25 VA-+_ Conclusion and supporting information on compliance with tho Co resional policy that engineering and professional servicos of US fir-ms and their affiliates are to bo used in connection with capital project3 to the nixinua extent consistent with the national interest US engineerirn and innsgcment services will be financed tnder this loan
2$ Inforamtion and ccnclusions who+her loan will pormit American rx-l] business to participate equitably in the furnishing of goods and
z orvices by To be satisfied in Loan Agreementfinanced it
27 - t(a App I18 Complianco with restriction of co -zodity procureshy o UsMS except as otherwise determined by the Picsicent and subject to ttu--- rcortir require r-nts Procurement will - liumited to the US for
reiabnrs nts and to ioocco and other free world countries 1-or US-cwne(d rhu disburseacnts
23 -i Comiance with bulk cozodity procurement restriction topriecc no l-ho han the nkarkot price prevailing in tho US at tia of
bull puchas Not applicable
29 FA Cozpliance with requirement that matrin insurance be purchased on commceities if the participating country discri-inates and that insurance be placed in the US To be satisfied in Loan Agreement
30 IA 6(a) Information at to the utilization of excers personal property in lieu of procurement of new items Will be required ai appropriate under terns of Lean Agreement
f
1 77--7 -77-77-777
31 FAA 61](a)(_) information and conclusion on availability of enginoering i financial and other plans nccx sary to carry out tho assittance and of a
reasonably firm cstimate of the cost of the assistanco to the United States
See Section II-D
32-ecessaryFAA t611(a)_(2) legislative action r6quired within recipient country and ibasis Cor reasonable anticipation such action will be completed in time to pormit orderly accompli-hirtnt of purposes of loan See Section I-A
33 n _AA161nJ0] If water or water-relatod land resource construcshy
tion project or program information and conclusion on a benefit-cost comshy
putation See Section II-B
3 4 VAA 611(c) Compliance with requirement that contracts for construction be let on comp-ctitive basis to mamum extent practicable To be satisfied
in Loan Agreement
If a loan for a project of $1 million or more certificatin35 FAA _61l(r) by the principal AID officer in the country as to the capability of the
country (both financirl and human resources) to effectively maintain and
utilize the project taking into account other US-financed projects (Such
certification is to be pproved by the Administrator aL the time the loan
is authorized) In process of being obtained
36 FAsgJ2 _6_h Appropriate steps that have b-en taken to assure that to the miaximum extent possible the country is contributing local currencies to net th-2 cost of contractural and other services and foreign currencies o- icd by tho US are utilized to meet the cost of contractual and other services The GU-M is contributing over $30 million to compleXton of this project Excess US-use dirhams will be used for eligible project costs other than US goods and services
37 FAA p619 Compliance with requirement that assistance to newly independent countries be furnished through multilateral organizations or plans to maxishymum extent appropriate Not deemed appropriate in view of previous AID financing and ccoiitment to the project See Sections I-A and I-D
38 FAA sect620(a) AcnO7a n3]7(b) Compliance with prohibitions
against assistance to Cuba ard any countr (a) which furnishes assistance to Cuba or failed to take appropriate steps by February 14 1964 to prevent ships or aircraft unier its registry from carrying equipment materials or supplies from or to Cuba or (b) which sells furnishes or permits any ships under its registry fr-om carrying items of primary atrategic signifishycance or itcms of economic assistance Morocco is not-known to be in Violation of these sections
39 FAA q620GL_ If assistance to the government of a country existence of determination it is not controlled by the international Communist movement The Secretary of State so determined on October 11 191
40 FAA 620(c) If assistance to the government of a country existonce of Indebtedness to a US citizen for goods or services furnished or ordered whore ouch citizen has exhaustod available legal romodiesor where the debt
i - ow - -- _---- --shy
- --
-6shy
is not denied or ontested by such government or the indebtedness arises under an unconditional guararty of payrrent given by such govornmunt No such indebtedness is known to exist
41 FA _(a2LdL If assisitance for any productive enterprise which will corashypote with US enterprise existence of agreement by the recipient country to prevent export to the US of more than 20 of the enterprises annual production during the life of the loan Not applicable
42 FA4 - 16Q_0_ A If assistance to the government of a country extent to which it (including government agenies or ruhdivisions) has after January 1 1962 taken steps o repudiate or nullify cuatracts or taken any action which has the effect of nationalizing expropriating or otherwise seizingownership or control ofprcpertv of US citizens or entities beneficially owned by them without taking appropriate stops to discha i ge its obligations No such steps cr actions are-known to have been taken by the GOM
43 FAA~L AjPj_10_9 Compliance with assistance toQ0 prohibitions against any Comunst codntry ozocco is not considered to be a cocinrunist country
44 FAA - 620(gJ Corliance with prohibition against use of assistonce to comp satc owners for expropriated or nationalized property To be satisfied in Loan Agreement
45 F AA 8620(h Compliance with regulations and procedures adopted to inshysure against ue of assistance in a manner hich contrary to the best inshyterests of the US promotes or assists the foreign aid projects or activities of the Communist-bloc countries To be satisfied in Loan Agreement
46 FAA 06-O(j)_ Exitence of determiration that the country is engaging in or preparing for aggressive military efforts No such determination has been made
L_62_O Information47 FAA on representation of the country at any intershynational confererce when that representation includes the planning of activishyties involving insurrection or subversion against the US or countries recoiving US assistance No such representition is known to have A occarrect
8 FAA 62JJ Existence of a determination that the country has permitted or failed to prevent destruction of US property by mob action or has failed to take steps to prevent a recurrence and-to pay compensation NO such destruction is known to have tak-n place
49 PAA l620(k) If construction of productive enterprise where eggregate value of assistanc to be furnished by US will exceed $1OO million identification of Gtntutoryauthority Not npplicable
i-xQ2MZZ=
1 shy
U 6 50 _Af( QCinsidoration which has been given to denlying assistance X to thu government of a country which after December 31 1966 has failed to
- institto the investnint guaranty program for the spcific risks of inconshy
vertibility and expropriation or confiscation Satisfied See No 7 above
S51S J lj Compliance with-prohibitions-againstn as~istance to countries which traffic or permittraffickingwith North Vietnam Morocco is not known to be in violation
52 E_-L620(_L If country has seized or imposed any penalty or sanction against vn US fishing vessel on account of its fishing activities in
intcrnationul waters information on the consideiation which has been given to excludirg the country from assistance No such situation is known to exist
53 FAA FA r) UAR restriction Not applicable620(p 9117
54 FAA R620tl) Existence of default undhr any Foreign Assistance Act loan to the country No such default exists
55 F ) C-nsider tion of whether co ntry is devoting unnecessary percentage of buKet for military purposes or use of foreign exchange for milita-y equipment
56 FAA 62o(t) Proibition on aid if country has severed diplomatic relations with US unless agreements have been negotiated after resumpshytion Diplomatic r(lations have not been severed
57 FAA 9620(u) Statur of the country on delinquent UN obligations Morocco is not known to be dlinquent on its UN~obligation
58 FAA R636(i) Prohibition on financing non-US manufactured motor vehicles Will be satisfied in Loan Agreement and Implementation Letter
59 App 102 Compliance with requirement that payments in excess of $25000 for architectural and en Jneering services on any one project be reported to Congress Such reports will be made
60 App R1O4 Compliance with bar against funds to pay pensions etc for military personnel Such payments will not be eligible for financing under th Loan Agreement
61 App 9106 If country attr ipts to create distinctions because of their race or religion among Americans in granting personal or commercial access or other rights otherwise avaVIfable to US citizens generally application which will be made in negotit ttons of contrary principles as expressed by Congress Morocco is not ku IDhave made any such attempts
iInD OFFIIt t USE
0k
OFFICIAL USE 62 AIwp Rii Compliance with existing requfremets for security clearance
of personnel Will be satisfied in Loan Agreement and Implementation Letter
63 App R1l2 Compliance with requirement for approval of cortractors and contract terms for capital projects Will be satisfied in Loan Agreement
clJ164 Aup Cmpliance with bar nRainst use of funds to Tay assessments etc of US meiber Such payments will not be eligible for financing under the Loan Agreemunt
6 Anp P115 Ccmpliance with regulations on employment of US and local personnel for funds obligated after April 30 1961 (Regulation 7) See Section III-C
66 Aim Vietnam iron and steel restrictions Not applicable
67 p l9 If a country other than Greece Turkey Iran Israel Republicof China Phillipines or Korea reduction in assistance by amounts spent for the purchase of sophisticated military equipment
68 Anp fi4O1 Compliance with bar against use of funds for publicity or proshypagjanda purposes within US not heretofore authorized by Congress Such use of funds will not be eligible for financing under the Loan Agreement
Morocco is a traditional Islamic monarchy with a constitution The conshystitution was implemented followaing a popular referendum in 1962 National regional and professional elective bodies including a parliament were established by universal suffrage under the constitution in 1963 The parliament was suspended in 1961 in a State of Exception because of its inability to agree on measures with adequate urgency to meet the prevailingecononde imperatives In July 1967 the King appointed a Prime Minister to direct a Cabinet of appointed technicians
The constitutional framework nevertheless remains intact in Morocco and nationwide popular elections for some of the professional chambers were held in August and September 1966 The press is relatively free in Morocco and the right of diLsent prevails provided that such dissent does not violate the prohibition against political attacks on the instishytution of the monarchy or the person of the monarch
LI Under the revised US AID Policy for Africa agreed to in November 1966 Morocco is designated a development emphasis country entitled to receive continuing support on a country basis as part of a multilaterally coorshydinated countrj program Morocco was subsequently included in Presidential Determination 67-14 (January 5 1967) I
LIM=TE OFFICIAL USE~i
- l go
bull ~ -
f
DEPQbi) STATE AGENCY FOR INERNATIONAL DEVELOPMENT
WASHINGTON DC 052
CAPITAL ASSISTANCE LOA11 AUTHORIZATION
Provided from Develoroent Loan Funds Morocco Second Lower Moulouya Irrigation Loan
Pursuant to the authority vested in the Assistant Administrator for Africa of the Agency for International Development
AI)by the Foreign Assistance Act of 1961 as amended theIAct) and the delegations of authority issued thereunder I
have received and t-en into consideration a certification from the Director of USAIDMorocco as to the financial and human resources capability of Morocco to effectively utilize the Lower Moulouya Irrigation Project taking into account among other things the
maintenance and utilization of projects in Morocco previously financed or assisted by the United States and I hereby authorize the establishshyment of a loan pursuant to Part I Chapter 2 Title I the Development Loan Fund to the Government of the Kingdom of Morocco (Borrower) of not to exceed five million dollars ($5000000) to assist in financing the fore] gn exchange and local currency costs of goods and services for the third phase of the Lower Moulouya Irrigation Project subject to the foLlowing terms and conditions
1 Interest Rate and Terms of Repayment Borrower shall repay the loan to AID in forty (40) years including a grace period not to exceed ten (10) years Borrower shall pay interest on the unrepaid principal and any interest accrued thereon at the rate of (a) two percent (2) per annum during the grace period and (b) two and
one-half percent (2-12) per annum thereafter
2 Currency of Pepayment Repayment of the loan and paymenu of interest shall be made in United States dollars
- t- n t - - - shy
3 Other Terms and Conditions amp(a)Goods and Services financed under the loan
shall have their source and origin in
(i) the United States if disbursements therefor are made in United States dollars or
(ii) any country in the free world including Morocco if disbursements therefor are made in Moroccan currency
(b) AID Regulation 7 shall not apply to construction -work financed under the loan because as detailed in Section IIIC of Capital Assistance Paper No P 667 it is important to the national interest of the United States that the direct costs of construction work performed by third-country nationals be financed out of funds made available by the Act
(a) Such other terms and conditions as AID may deem advisable
Assistant Administrator for Africa
Date
~~~~~~~~~~~~~~~~~~ - q v
7
final designs of irrigation and drztinne- rystems parcellization into farms and planning of land preparation measures In addition considering the high average salt ccntent of ater frcm he c ilouya hiver a rorm of systematic leachin- will be reqirer- to f ree-rt aculation of salts in the soilsparticularly in h ebra Crt in will nlso1e plain ureas require nitrogenphosphorus crd possibly other nutrient to obtain satisfactory yields
c Water On the basis of studies by the GCM which have been reviewed bythe Consultirr Fnr ncri and the U au of 1ccoi-ation it is thecorclusion of A tt (i) the q lity of water in the Lower Houlouya
is below averpge bvt crp rble to thtof certain rivers in the US whichisotnteLoh~uoybrve successfully been usc for irrif ton for periods cxeccdin 100 yearsOj5) there is clearly a sufficient a )unt of i ter to irrif-ate the 128010
bullcrer to be served in the [rlcentIty ar n3 Addi-tional s-tudioser (c requilrecj dcter-Inc if adeqiuate water is a- ilable for irrigationof 376QGO vc rc
The only signifcant urce of vp y fOr irrigation water in the perimeteris the oulouya Vi~cr io jc n1 is 1re ntly being irrigated from wells most Iround water i - - 1 Alouya contains dissoived salts which i xr Lrn - hvriny reak flowto iJOx PIn iuting [cricd of c n ccntraticn is 750 ppm On Thi- basis of USDA Salinity Lot) atory criteria fte v ater is class 03-SI (hl-h salinity-low a-alinity) Vile water is thus of mediocre qualityit is ccmrarable to that of river successfully used for irrigation in the US (eg the Lower Colorado Rier) and poses no serious problems to irrir-ation in the Moulouya perir( cfr provided the W4 adheres to recorrmended programs for meeting leaching reoairements
With ref-pect to the 128000 acr project the demand for water reasured at the Mechra Hoadi diversion dair is estizated at about 575 million cubic meters per year as follows
remand for Wter
Peak Flow Annual Total (August) (m 3 million)
Agrieulture (176000 acres) 337 m3s 806 Municipal amp Industrial Consumption 8m3 23
Total 4 uy62123000 acres to be irrigateA by Gravity 255 m3s 575
(The e dpeak requirzents of 345 s compares with a 35 m3 s design
capacity of the main canal at the diversion dam including 18 m3 s for the Right Bank and 17 m3 s fcc the Left Bank)
I
- 19 -
This estimate is based on probaole rainfall cropping patterns plant requirements evapo-transpiration and other expected losses of irrigashytion water The estimate is believed by the Consulting Engineer to be reasonable but subject to refinement on the basis of tests to be carried out on a continuing basis
The annual average availability of wuter from the Moulouya river is estirated at 1100 million mn or about double the estimated requirement for the gravity areas
Estimated Availability of Water
Twelve Year Annual Average for Moulouya River 3 m3 second 1100 million m3year
Maximum inflow Observed 8000 m3second(1963) 3h00 million m3 (1962-63)
Miniwum inflow Observed 1 msecond (1951) 532 million m3 (1956-57)
On this basis it appears that there should be ample water available for irrigation of the gravity area as the water availability obtained from twelve years observation exceeds the requirements in all but the 1956-57 season shown above Prior to the development of land with purped service areas (the Gare-b and the Triffa ig h Service) a review and analysis of the river hydrology should be unidertaken to assess the availability and regulashytion of the river flows
d Studies Entincering and Construction The overall irrigation scheme outlined by the 1uM defirs the ajor features and th( magnitude of the work to be accomplished to attain the ultimate goal
This scheme is being carried olut in phases over a long time period The present phase encorpasses the development planned within the priorities indicated by the Stanford Research Institute (SRI) study for the gravity irrigation system
The studies for land classifliration have been completed for the gravity irrigation system in the Triffa Bou Areg and Zebra plains by French firms and were considered reasonably accurate by the Consulting Engineer Land consolidation and parcellinrg has been completed by 0MET in the Bou Areg Central area the Zebra Collctive and Zebra Remainder sectors 7 thru 10 Land consolidation and pareeLlni ar( needed for Triffa sectors 27 and 28 Bou Areg Rematnder arid Z(bra Rerrirder sectors I and 2 The engineering designs for the Triffa main sector 27 and 28 and the Zebra Collective have been or are being completed by the G0M forces The engineering design for the Cefntral Bou Areg and Zebra Remainder sectors 7 tnru 10 has been or in being connpeted uy Hydrotechnic Engineering design will be required or the 1ou Are remainder sectors D-3 thru D-7 and Q4 thru G-6 and Zebra Rer ainler sectors 1 and 2 The engineering designfor the Dead Ilead Thnnel has been undertaken by SCET who have preshypared anid issued an Avant Projet for bid invitations for construction
14 M)j6Fj Cshy
-20-
This firm will also undcrtnk- uu-orviston of construction The engineer ing not yet performed can be aea ished by GOM forces andor private engineering firms
Construction of the extension to the rrain irrigation and drainage canals Jand preparation rector cinl ani drninaive ditches will be performed unllr cntact t) 1 cc rt~r~iet m)t hi in the ene of the
r-abilit tion of the L2tL Pz- Dd iarl Trnc t
e Cronning Patterns The existing erning pattern in the Moulcuya including botnirrigatcd and dry farm ingincludes grain forage citrus vegetables olives grapes and 6 small amount of leciduous fruits and nuts Of the roughly 2140Cy) acres of agricultural production in the Moulouya about 177000 acres are in field crops 24)) in vegetables 16Y)O in citrus 15000 in grrrcs 540Y) in forage crops 1700 in olives and 15)0 in other fruits and nuts
Taking into consideration rast and present trends in plantings as well as agronomic and price and marketing factrrs the following projection of cropping patterns has been developed for the Lower Moulouya
PROJECTED POPPTG PATTFRNS T1 HE LOWER MOULOUYA
(In per cent of total irrigated area)
Left Bank and Triffa High Serice
Triffa Sector - Sectcr rriffa Class Class Class
crop Main 27 28 East I amp II III IV
Citrus 40 60 10 10 10 Vegetables 15 10 15 1) 20 10
Crtton 15 20 10
Fcragpr 10 20 25 30 4o 30
heat 10 6 20 25 20 35 4o
Grip 25 24 35 15 Dy beans 5 10
Sunflower 10 olives 5 0
100 10) 100 100) 1i 1052i 100
a Incltdes double cropping
- - r- euro --- 7
~7~TF~Wr~e~ALUSE
-21 -
The projected cropping pattern for the Bou Areg plain includes cottonLJrirdg the frrt Five yearnejtinted 1r of the Class I)fand
the project jitwould be grown on nnII landn Tht renresert only 960etrravres) ectz ri)cr)e area The cotton acr~a e ry increasep 2ceafter live years if ritisfactory drainage conditionshyrre achieved in the Bou Arev
cotton grown i 1xonp tarx- Trdltionally Morocco export its-Jr- cron an irr IJ hort cble to rmeett Cotton the reuirrents
r the oroccan 2pinningr mills The croppni-attrn of the Triffa East (about 180n acres) Js projectedt Tnrlude 15- (about 27 acres) in cotton It is likely that becausef ihe limited extnt of Class I and II lands in the Triffa Eas cotton not increase beyond that percentage
1t i evident that the amount of irrigated cotton that is likely to bein ther-n Moulouya is minimal even assuming that local drainage condi-T nare i asuitable
f Technical Sundnv--s The AID Project Engineer hps reviewed ii) thedat and ajor construction performed to date onronct and finds the technical requirements this long-ranRe phasedsufficiently defineoto ccntinue the project on an orderly schedule The estimates of cost of prsirct facilities have been determin-d by SRI from average va)ues oftrit cots obtained frorr reviously ntiarded contracts and from etniled( -s-nand analysis prepared by the iHydrotechnic Enginering fir oft-o tyieal sectors located in the Bou Areg area The costs for the arc ent contract have bcen estimated by the USAID It is consideredthat the depree of engijeering planning undertaken and the deterrrinitonr to the US Goverrment are adequate to meet the applicable requireshySt- n Section 611 of thie Foreign Asistance Act
7717gt
1 --shy
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E Financial Status of Borrower
1 The Moroccan Economy
Grrwth of MorocLcts GDP in real term averaged about 24 per yearin 1(4 and lr li Per capita DP In 1C 5 wan anproximotely t162 A (er Irr-ht in (6 resu]trd n a drcrcne of slightly nver in GDP which tlh vpulatior grc~vth avrring 3P4 per year rnrsJted in a decline of -r ornita GDP In 16 ii brut $154 A recnd droughtcccijrred In C67 but i not expeetid to have the severe effects of the 165 drought Crop forecasts for the first nine months of 1967 indicate a 4 increase in real GDP above the 1966 level This is also the economic grcrdth rate estimated by the IBRD for the pezxA 1965-70
Moroccos economy is heavily dependent upon the agricultural sector thich has averaged about 15 growth per annum However growth of the mal modern segment of Moroccos agricultural sector has inshy-reased at the rate of about 7 per annum
In 96 the International Banik for Reconstruction and Development (IBRD) preented a number of recommendationr denigrned to increase Moroccos economic growth rate On the bacis of these recomfndations the G004 proceeded with planning the necesrary program to increase investment levels fr- the i 63-65 level of 11 of GNP to 1r of GNP and stimulate the rate of economic growth from 2 to an average of over )4 annually for the five years 66-70 In addJtion the GC4 has taken measures to curb the population grovth rat while placing increased emphasis on raising production of both dryland (wheat) and Irrigated agriculture
2 Investment and Savinms
The level of total gross investment has remaind at aboit 11 of GNP for vera year althugh the percentnoe declined slightly in 165 Under the GO Three Yea5 Plan 1965-67 the gross investment t-3rget woz ret at DH 3 billion- Actual invev-tment expenditures for the three yearpeirod reached about DH 46 billion of which the Governshyment ezxenditure amounted to DH 1 billion a against DH 21 billion budgeted Thin may have beeo partly de to the GOMs deliberate ausshyterity pollcy under the hIF rtbJli7tion prci1rnr but more probably it van duxe to the shortage of trained cadres to -lan and execute projects
In the private cectcr conziderable inounts of ravings may be hoarded due to lack of project attractive t- inventors The lvl of private investment has been runnihg at about 51 of GNP thrrugh 195 The 0014 4 incentive to private instors hnr cut profit taxes from 4320 to V and announced a tpn year guarantc-e against tax increases
]L- $ = DH 506
777=-77- NQ
r y 7k1- T e - W lk In
j - 1) 7k- - _
- 23-
Loan are avaiiable to )rivlite irve-tcrn freo th 3JfIDiN s rctr special funda to prcmote touricm devc firvcnt
Under the 1r86-1972 plan abut to br irtntt level are to be accelerated considerably reaching A of GNP liv ]970 Mor(- Irlyir haviiy on foreign 1 to aciuw cc higher lve1
3 Central Government FinancP
The Moroccan money supply which had Incrrased ify 76 per cent in 2965 remained virtually unchanged in 966 The first half of 1967 witnessed a 5 Ter cent increase in the money supply Te major part of thi increase as concentrated in June and July uhen the supply reached V14 0j lion Currency In circulation expanded rapidly in June and July
nnl factrrn being reinforced by commodity hcnrding related to the 1ide~l Et crisis Demand deposits did not show their normal decline nthe first half of 1967 Deposits with commercial banks declined nlightly while deposits with the Treabury increased as public and semi public agencies contisued their transfers from the banking system to the Treasury The increase in money supply in the first half of (7 ran I raced to tho nzon1 sonal increase in net foreign assets not c y the custcirry rlelir In claims on the private sector Clsirl (n the erivate sector declined slighty until May 1967 but Increased hr-gb June and Jily due primarily to additional financing of textile stocks ClbiJ ante Government rose by 10 per cent in the first half of 967 the in central brnk claims on the GovernmentI being rmainly offset by larger deposits with the Treasury
Ordinary budgetary revenues which incrurted by 5 rcr ent in 1566 tre cxrcted t-) increase by 7 per cent in 1( to DII 21 billion DeampDite a derea3e in agricultural tax reccipt r- fror diret taxes rose by 10 ppr cent in 1966 and a 2 increas estinated for S67 due to tric or controls on income declarationr d an accelerashytion of tax cller ns Owing mainly to a relaxation of the import
program in late 1 5 and a concomitant increase in tariffs on certain ccnonter goods customs reneipts increased by 21 per cent in 1966 Although budgetary estimates call for s decline of 3 per cent in customs receipts in 1S67 it is likely that actual receipts will be considerably larger in view of the import liberalizatidn measures intro)duced subseshyquent to the estimates Receipts from indirect taxes state monopolies and other serces are expected to be 11 iv- cent Ipher in 1967 owing to increased profit on -ugar sabr-i and L r(m the newly created Office do Ccrmercalisaticn - d-tation (OCE)
Recurrent ordinary buiL e(enditures increased by 34 per cent in 1966 ar-i are expected to increase by an additional 7 per cent in 1567 reachin- D1122 billion Although wage and salary scales in the public
Banque Nationale pour le Developement Economique
TT~~- - I777
2 Cf
sector have1bec z h t - rrvirI urli 11i g 14-6 -nd PO becnue rX toi Ijt e f (]r o n 4
ill tile ic urrnnye andr)not i on dnd Publi ht rentrn -yr-otn lno IncreasedOthrr t ill- t il r ne by ) vr cert in J6(
i ninlyrt -br h Inc-l
( Ihe ( t r- rl t ip t t C itur f T)h 21h iilli n
is (( ItI t lt r c0 a- r n n o I- c t b It ihstnl id vv ih n t r-t have hn(er - en 1t2
(IM ii ture( T f fu traordJ nary budrzct exshypend ituren a r y -t c ~ i vi -iscz Portal Checking sy-stcsul)rrcing t (I ltIt Ct -- ind creirn shy
nnet The f r er tnc I hha ccrc ed from a htih of DH 5-7 millIJn in _ 5 millIn r C46 F cr ats foi ]7 place Cro n w I 1(DI)J79 ill ni DDn etlc fi nancing has alo u 1) 5 p (- I3A27 iIliun to an entirnted DH 1142 million
1 14V ) I nv 1 ri n nI(c1 franc n is 77-ected to be ol t y ncrewed bcrrowing fr-ir t he Cestra 9ank which hud been held at mcdert vols iln 165 nnd 1a66 Under the 1TFtaiby agreement of October 16 the qob) agreed to taBe a3] rocrrnary meurer to maintain as table curoonry rPnt inl th nr1d-elrto th b a ent of the ePrncriynnd a vnbl- hn1incc X nvroent P rt artt to t rt fien of tho Ccntin- Honk rstz (erct are nct t r itr June 30 Y-ke 7 lov l b th n Diif ) mill] (n tlcnber -c P thai I o illin usit I ])ecthr 31I62 (GC bc w t
C B1rtrp - vt DH 12 iri 1i nor ]S67 or DH 6S ij lionEan tisated (r fo than the aproved crd it expanwim
Thitrd ordivary nil extraordnnry buThTt deficit of DII 7-19 millI n fcrecat Fr 1 67 in exnected to be fnanced by not freign
tan reof DII )75 mi~l in nt recurity 12ue 1 T111I vlion a - nt ry tiat Po n Che )ir d-nC i 73 r5 Pn
riI is u h i a vti v mrr nrr-e jssIof fvr is id a erital The vnfsa revcred in 1d6 when lnrger r nyrentn eEecially on food itcmo an n -lewdoun in
igo ra a deficit of $1 millcn ProjectiOnz-vt rvultvd in ror 17 r~ieat inrrerned importsonly partially ccnrennate by addshytsa t frnreirn r ntil rrceiprs ard mprrvement in the nervices account will reult -n et of aprroximately $)20million As rhoim in the following tabl -r tion for l33 and 169 how overall deficits of
14 and m] ivi_y$i It
rqVV t1 4~
C)rgt
---
1 -)I+-IRF1
1ROCCO - rTANC OF PAYME 1qrt - 169]_ 5
6rfi0 1 1C(8lr67 i r(o
)xrurt 2t L( I L-5
Trade Bnlance 11 15 - 75 shy - 75
rviee- ret - 7 - 5) -35 -23 -2
J]-i of Good rnd Service- - 3 - 65 -II - ti - (5
Trn-Ifr Pr ynts (nt) P 21 33 37 33
on-cntnry Carital (not) 92 64 6 6 5
Err-rs nnd Ov rrion- (not) - 23 -2 1 3
eranl Bannic __ - _3 -_ 3 - 1i4
Atrh thert ircjected reficitn are of the nnme order of 1 nishytude a7 thcr incurred in the period i66 the Situatlcn i findarentallydifferent both in rerprct to the source of the deficits and in rer-ect to the meat0Y gtr m etin7tecr In the f rrer caive M5recco uffered
_frcrr a very h-vy cutfc of Drivtes cuitv fo-ivr with a shar) decline In forein nt exerditures in Morocco In the iatter case th projected deficits r- rcre a functicn or accelerated crcwth risingdebt ervieiiw tri tho abnrcn of forv eeble additiens foreign reshybull ourcs nere7ory 4( r2Vm rAf finmncting To nect the def-cits during the reriol 161 61h MWreco ob1id to drw down rorcin exchange reserves of over $]c milicn The snrti tpv of financing is no longerpozslble ince no or-res- ruch reserve- Even ifMorocco yr
mn nina r rve_ ore (]rrfii on to th r-ixirun etnt enribe nnd the [iI tnfldy i- un M-r-r e i32 till relA re nt rnt 15 millicnj1itionn ftr ign as- e n 1 6 beyond hat r recnently fcreeeshyable with ver nri- nry Officilr in In i6 reserves are cotImnted Pt 72million c hih crn V 3 million i caly required for currency coy r
Foreign InJebtrdne n of th GOM Mnroccos external rtnte ard rutlie enterprie dett amounted to
$r) millivn in lr6 Debt vervcirig rpynents for (66 trtaled about
$5) rillion g-eement approved in October 3(67
I- -- Ishy
37 millin or arprcxitrrntoy (j Iroccor totnl eXoort earning of h28 millicn GCnerally nxt rrO dbt FervicJng renuiremennt of leas
than r of totna -ort nnrlt In onrldered to I r tirfactoryrntio D-bt r rnJrcLct n Ir the reriod 1-(y 3on Trerent external debt including thnt wrtl(n irreently undibur-ed are hown n th fr lv tahlr
)] L v yr t n
Eternn Vtnte anc ] bntcrnrie Debt
M131 o)nr
Y aI Net Outrtnnling Debt Debt Service
(6 it 479r5 $367 J-67 452 3)6
Z616 44469 2 0 2C-
365I3 37 389
33 383 33 6 371
5-h 31 n 352 275 34121
]176 2661 32It 1977 21133 311 177 22)6 307 19 i0l74 256
1733 255
rgtternal debt rharre n rerent debt nnr rhon above do not increase ubtanti-lly over t rt 1)year- reaching a maximum of h44 millior
in J6 and decrpt- n cr - tently threoafter At the are time exportearninr r _rc extett nc-are Aring that Morocco does not inshycreswre it etrnn2 cbt t irate ubrtantially nb-vc ihat has been the core th adfiticrn dbt e roquirrentn reulting from the propo t Icon o 5 ijilion co r 7crncepr-ional term hould not have a i-nifiant affect n 1r o - ab lty to neet itv g rc-atedebt ericn rcnrib2t~e- the pros ectr of reprment of thin loan ore coniderci rearcnb)
U I -
F ot h-v C IuIJI rmt I shy
1 V amp~ rVml KI
PUC- -jrVi Jt t 1 11 nflrcj urlc 1- th )qn --P I uti u rhnrrl -1r- thr U- Tr- ry- R- -nymc nt
c2Il f n 6 1 bf r I- till 11 nfl r- n-r i n of O r--niC(Io~hi U 1 1 rr to
Tn vil ) f rvc hi tvlrll 1 (In- - n- u--n E r me rrinshycgtay F rntwir w ourc o -o- rvI ortf-V3 1 rncing of
Uf f -r rrrir- ur3r 4~ v -rin Iltrt nt ndd shyt -n t ) in- lint r b t l r -n rort- o-orco trorl-- V -P
r i 1rnd h L-torie Furcl-trin firr- thrjt US r r~ crvirrf- u~d be~
T L I1 c vt r- -ly ] -ubt fu 1 n vi pw -I -ror-co Ir of
ut1JpcO In thi rjert f it -- r- 21 npnred by d1-nr- cothcr t~han the US
2 ]P-t ofI Prr l1 on Prw- Fntrrr
Phij rrcjJ-t -11 n-t h~ -in nrwerq Prrt n rr- tc ntrshyr~A~r fi-mc 1bho und for --roern p o n
3_~~PrCT--rty
rr-vIi-n 1 h -d r the loan ragreement for Icntifitcation ef any r mIjrpt n ctri b- rt througn ut 1zatn (f xccr- prorerty
If rv c u~eAID n-mrcf u urr thi )cn - I~ut~ em avoi3ablo r rovvrirrnt -rrperty rather than nce iteni
4 Otli-r Fr- Wo--] n-Fnlc4rm
Dr mi tW- o] 14rocco- i~ajr ovr-ec -f exte rnaX
rrtan~- hrtvfb - I r ~ ant fl Fr n fole by Kv-it
Sgio F rneflit r b-en 1lmrntrd to tcfohnjip n5tnnen bi eoni~in I th u y f Fr--h tprhntcian tcacrr ind cther
~ti~r t~ ec-tnmIyrt-n Friinch Aid to Mcreco In 1065c~oc~ (P-art f-r txychnirril aItn -- j se of tl5 w1nfor bu~dget rurport f ir in rt t- $1 1ri1 icin in ennita -rojectM- n vx- rrcd
1Vw1tvnn tioI t-) Frenh rurtnnd +16 r11ion tie-I to -onyiint to orrrcr Frrmh ccilcn~For _-rrc-ratod land and rquirrmcnt
West GTrrnmnny liar agrcrcd to nrovIe ccme j27 mM22~cn 1n catital arirtanre and cromrndity lnoi7 t n OfIcon( q92 thi o totril$223 miJ lien ha actuary b-Pn cr-Itt--d under Inn ngrepment This
And a lk5 million commodity loan both) signed in 1965 All Wet Gerzaan
Ufla
-28shy
capital asnistance I vuectI to be tied to German exports Germanyhas in addition 1uvvded r tteysubbtantial technical assistance f
The IBRP hah rade four 1nns to Morocco since 1962 totaling$6) million Ofthin totnl a [175 million loan in 1965 wos fordevelopient of the gidi lit-r irrigation perimeter Other assistance by internntIcnal Iending arncie include an $11 million credit byIDA in 1C65 for rcendary diicction projects and an IFC ln and inshyvestrent of $1 1 ri jnic alo in
F tit i by [c - dncr tr dh elo snt ofMorccco rircuVt r oii +h b-]n jt-TKT r nbove n 2 )6 niliion Kuwait enn in i66 for develomyment of the Tensaout Prnm n irrnten nrooetand a $77 million Kuwait
0jl n )nnsn r(niti-nertcir
loan for extrnion of the Tadri~ Irrigation Perimeter
The following- trbe surrlnrlzes other free world arlztance (excluiin technical assistanc-) to Morocco for the years 1(62-66
($ Millions)
1 62 1cf_63 96) 19r65 19)66 Fneea 4) 5PO 64o 700 shyWet Germany 223 gu 1t 53 281 IRD 15 175 10) 175 IDA 110 IF C 1 5 7 7 7 0 I15
TOTAL 55 62 1U3 W
b Includer only lo-ng term loans and exporter credits - Includfs 25 million private capital
Eternal ansiztnnce to the Lowier Moulouya Irrigation Perimeter -nce 1060 hres been con[fined to US upport Consdiering AIDs previcus
involvement in and conmitnert to the Lower Moulouya an AID lean in P2t to be Lhi mol aprroriate source of financing for this project
LID
II
q
-29-
SECTION ITI- Y-TTYT TIMPLPTrION
A Periret-r Ad-instrrti-
Authority for irplerrentvtnn of the deveorpent prrgrn frr the LowerMoulcuya Perimeter and rs wel arth crnntinuinz mrnnrrmenertC tt r t- rrtnr V theltbi nad overationity iOfic 1cne 4
n r I e1i- i d Vit4 i Iv ~ Ct rreated i Otb (rJ rn-- of evcn inrmi-rriional offices hich reelaced the Office de Mire en Valeur Aamprlcole (OMVA) Under the OMXA and itspredecessor agencies authority for ad-inLtration cf irrigtion proJect war centralized in Rabat
Under the new regional office organization responsibility for adminshyistering ORMVAM is vested in on Adminirtrative Board of 10 members headed by the Minister of Agriculture and Agrarian Reform as chairman All ether board members (other than the Chairman and a representative of theInterministerial Economic Ccrmittee) represent agencies or activities inthe region of the r-eriret-r whic comprises parts of two provinces Localretresentatives on the Board inc]-de the governors of the two provincesOujda and Nador the presidents -f the two provincial asembtes and of the two provincial chambers of agriculture as well as the perimeter Director
The responsibilities of thie Administrative Board include review of theecys program establishment of its organizational structure developshynt -)f its annual budget and establishment of rates and conditions of
Siyfent for water and other services provided in the perimeter
The Director of OP4VAI-I is dbarged with the responsibility for executionPthe vclicies established by the Administrative Board end administration of oil ORMVAM functions This responsibility includes selection of staffn pserating perrcnnel acting s officia ORNIVAM representative in all ntztinns with -tate and othbr public or private bodies and the
f of funds within limit Indivated by the Ministers f Financetent rn fricultural and Agrarian Reorm
Perimeter Oranizatlon
ORVAM oreanizatlonal structure consists of a directnrate five maj-r rvlces or d-vsicns and one separate bureau Two services qei Administratif et Comptabl- and Service du Yatrial are conshycor - th adminisration and lcgistical support of ORMVAM operationshi1e the remainirg three services rind the separate bureau are Involved in t-hni al matters associated with agrcultural developrent Each ervice has one or more subordinate bureaus Fei-ce Chiefs and thehead 0 rch bure-u report directly to the ORMVAM4 Director
-~F7E MEw-
-30shy
2 Perimeter 01ttffnr
OPIVAM orgttnlrntlon treture calls for 557 positions of whichI L or 7 Mlled n were nher 29 1567 37 of the 71 Postshytion vacancies reported 1ern the high and middle levels Foreign(chiefly Euronean) technclan occupy I)of the 16 high level positionsthat ere filled at thfit tire
Whil OPM ut in th- lcng run lor to Mercecos oducational yster to prvidr tn crrf-nn2 to ratisfy current rdurojectd rcshyquirement th currnt high and mlddle level vacancies rrouire uersonnelwith oxt nive nrior rxericnce To fll this preent need it will be necessary for CRIVAM to continue its program of recruiting foreigntechnicians until ruch tire ns graduates of Moroccan educational programsacquire the necesnry exrerience The managerent assistance componentof thin pro~ject ]e-rribed In the Project analysis will to some extentalleviate OFIWAMs high level personnel requirements
3 Inw1 ernetation Sehedu]
Months Implementation Action
1 0 Sign Loan Agrcement
2 2 C-tiify conditions precedent and Y4tiate procedures for selection of US firm for management contract
2 Negotiation of extension of advisory Engineering Services
h 4 Contract (Hydrotechnic) Negotiation of Managerment Contract
5 60Cmpletion of Project
C Waivers
Sect ion 7 rf AID Regulation 7 provides in substance that theUnited State ill not finance direct costs of construction work performedby third cc-ur y nationals unless the total co-tn of the project withvhich thr ennrtrumticn w(r is asEcciated donot exceed $2On)O orafter excluding national of the country in vhich the site of constructionis located and Dersons vho nave resided therein uninterruptedly for morethan three years imrnedJately prior to any determination under Regulation 7at leant 0 of all uernons who work under the contract at the site of conbulltruction are United States citizens or the employment of third countrynationals is necessary to avoid excerrive corts to the United States
3
31
Section 2175 authr-ri th Regional Anitant Administratorto waive the nrovinions of Sectionthat it is 2073 if he dcterriner in any coneimportant te the nationrn intercrt of the United Stutes tofinance the direct eots of construction work performed by third country
nationals
A prviou1y r ic i c t tht for thr ct Tartthe -r c ct b- 1jeuj out r -cnorbr f cnrtructioncontracts with Morcccrr contrctnr an in the i-t Uowfevvr itentirely psnible that there may b- roe contractn with cntructlonfirms partly owned by third country nntionaln and that ruch firjs anwell as the surely Moroccan-owrned firms may enloy third country niationalsIn such canes a difficult rrobic-i iould arise in meeting the terms ofRegulation 7 since an a practical matter Aericans are not reaonablyavailable for ermployn ont by such contrnetorn and our previcus experiencewith the Naunsseur Ccnv(r-ion project thatin Morocco has indicatedAmerican contractors would not be interested in bidding cn small conshytracts in that country
It in therefore recommended that the Annitant Adinitratordetermine rursuant to Section 2q75 of Regulation 7 to waive theapplication of Regulation 7 to thic iroject since the project 411 conshytribute to the attainrent of US foreign policy objectiver and the cbJe-tives of the Foreign Arsistnnce Program
LITI L USE
LfI~~5xA~us
lit
4 A J A 45 4 k
t A S T
S(3
I A444ilA~~l~)
7 -74
tAM= D
SECTOR 27
10000
t Co0Na includez25 cgtri oncFcttlrvI ncy I8s ~ ~ C t C- Includes 50 constriJcltiotrgrc
2000 60
IU
0
z
bull cosYsA shy----- i
600L _
400
200
0 5 I0 15 20
INTEREST RATE
I ~ 7 J7777
ANIAampX C
PROJECT DESCRn1 rOll
The project com)onents to te undertaken on the MIoulouya Irrigation Project over the next five years contists of the following
C(n1rtion of the rrLin casuals and bianch canbls to provide the suource of waler to the sctors be developed in theto TriffBou Areg and Zebra areas This construction will include the necessarystructures such as reulators highway bridges aqueducts water intake
and discharge structures etc
2 Iand Txeloommerit which includes engineering land consolishyt and iuvtllng lard preparation (subsoiling ripping destoning etc) and installation of water distribution canals (secondary tertiary and quurtunary) and drainage collector ditches for the Triffa main covering 24000 acres in sctors 8 9 10 16 20 21 23 24 25A 2513 27 and 28 Lou Areg Central covering 16250 acres in sectors Dltirough D2B and G1 thru-4h G313 i0u Areg Remainder covering 15000 acres in s-ctors D3 through D7 and GA through (6 Zebra Collective covering 45)0 acres in sectors 3 4 5 rind 6 and Zebra Rer-iinder covering 14250 acres in sectors 1 2 and 7 through 10 and th remainder of sectors 34 and 5 The total land to be developed is about 74000 acres
3 Canalization of the Oued Zeluan and nued Sidi-Amar in the Bou Areg Plain consisting of strairltening englarging and regularizing of these streams to carry the flood waters to the sea Drainage interceptor canals are to be constructed parallel to the sea in the Bou Areg Plain In the Triffa Plain the Oued Riada main drain will be deepened and enlarged and secondary drains will be excavated to provide for drainageof the Madagh area This will include the construction of bridges and culverts and other related work
4 Major Commorn Works will consist of
a Clearing of the Mo-1ouya riverbed downstream of the Mechra KLila barn caused roy flood dariwe and the installation of a set of stop logs for maintenance of pillway gate-
b Design supervision and construction of repairs to the ]elt Lank dead head tunel
c Conctruction and establishment of sib-division Offices and installations for farmer support such as CMVand farm stables
1 C
-2shy
5 Manavmtnt It ha been proposed that a US management firm be ewployed by th- C4 to manage and operate the entire Bou Areg area Such manageent -iuld encomparn all activities from the initial concept to final irIrp igricultural production Such activities would Include resp r-ibilsect -or supervnsion of engtneering and constriction of primary
S- Jry r complete developfnent of land training n in g tinul irription practicen preparation of market
t - r1t- (ot--rnu trplusmnining of a Moroccan cadre to take over h v--it Bou Areg dreara P the
At this writing the n-pt of turning over to a private UZSfirm execushyresponsibl]ity I h management of the establilrment and initial
op-ration of irr1gati the Bou Arog area has been only broadly de iiitd by the GCJO It Intended that proposals will be invited from a r -onable ntnber of f|ed US firms that a selection will be made an-n 7 them and a more do iled and cornprehenrive definition of the rer6 -Ps to be performed be eztabliched at that time It haa been
stimated that the t- of ruch a contract will be about $2 mir- n In any event the -ts of this contract other engineering arvl s to be provided undt n extension of the Ilydrotechnic contract and ether US corts will not ed the proposed $5 mllaion developzont Jean fr the project
The cle 3ifications duties ant 1ncnslbilities of the management personnel ill ha-- to be clearly defined i agreed to by the GCM Perimeter Directo- and other GOM Agencies luding arrangements for the necessary gistic support
Svxlale Docu-
1
4
LD ED 0ICIAL
-IAIDshy
A1trX D
C6JCK LIST OF STATUTORY CRITERIA
(Development Loan Fund)
1 FAA 0102 Extent to which U3 cormodities and services are furnished consistent with improving the US balance of payments See Sections II-C II-F
2 AA sect2O]ihi lanner in which loan wil promote countrys economic develo shy rit emphasizing help for long-range plans and programs designed to developeconomic tesourcos and increase productive capacities See Section I-D
i FAA sectT] h)(IL Information and conclusion on availability of financincfrom other free-world sources including private sources within the United States See Section II-F
FAA sect20l( )2 Information and conclusion on activitys economic and technical soundness including the capacity of the recipient country to reshypay the loan at a reasonable rate of interest See Sections II-B II-D and II-E
5 FAA 1201(h)( Information and conclusion on existence of reasonable promise activity will contribute to developrmnt of economic resources or increase of productive capacities See Sectiona II-B and II-D
_92_(b 4Information and conclusion on activitys relationship toothor development activities and its contribution to realizable longshyrange objectives See Sections I-D and I-E
The following abbreviations are und FAA - Foroirn Assistance Act of 1961 as amerded by the Foreign Asaistaice
Act of 1967 App - Foreign Assistance and Polated Agencies Appropriations Act 1968
AFEVCDF 1066
L1
-2shy
7 FAA f12O1(b)(5)_ Countrys self-help masures including institution of Foreign Assistance Act investment pliaranty programs Investment Guaranty
bull Agreement signed with Morocco 331o6l See Sections I-D and II-EI
_A ))(6) Information and conclusion on possible effects on US econowy with soecial refererne to areas of substantial -labor surplusSee Section II-F
9 FAA q201 (h)() Information and conclusion on the dagree to which thA country iv wiki- progress toward respect for the rule of law freedom of expression and of the press and recognition~yf the importance of individual freedom initiative and private enterprise
10 FAA -1201(b)(8) Information and conclusion on the degree to which the country is taking steps to improve its c]Laato for private investment See Sccton II-E
31 FAA R LbJi Inforrat-on and conclusion on whether or not the activityto b financed will contribute to the achievement of self-sustaining growthSee Sections I-D and II-B
12 FAA fi2Ol(bj Inforruation and conclusion on reasonalbe prospects of reshypayment See Section II-E
13 FAA fl20JL() Info-ation on applicability of the twenty country ceil4ng2
14 FAA fl201 L Information and coclusion on legality (under laws of the country end the US) and reasonableness of lending and ralendinr terms Loan will be on minimum termspermitted under FAA These are deemed reasonable see Sectioam Evidence will be renuired from the GGM as to the legality of the loan agreemnt
1 E 2 Information and conclusion on availability of an applicationFAA together with sufficient information and assurances to indicate reasonably that funds will be used in an economcally and technically sound manner See Sections I-A II-B and II-D Application received Janury 15 1968
16 FAA fl201(fL If a project inforntion and conclusion whether it will promote the economic developapent of the requesting country taking into account the countrys human and material resource requiremnts and the reshylationship between the ultimate objes6ives of the project and the countrys overall economic development See Sections I-D and II-B
17 FAAJ 20ij(J If a project information and conclusion whether it cifishycally provides for appropriate participation by private enterprise 8ce Sections YI-C and 114
I- FAA i22(a) Total amount of money under loan which is going directly to private enterprise is going to intermediate credit institutions or other borrowers for use by private enterprise is being used to finance imports
rfro private sources or is otherwise beirg used to finance procurementsfrcm private souwces See Sections II-C and II-2
9 FAA 207 Infosation on the emphasis placed en
(a) encouraging development of economic political and social institushytins No apparent relationship
(b) nelC-help in mectingthe countrys food nredo Project Vill conshytribute to production of food for lccal consumptioa
(c) in-proving availability in the country of evucated trained manpower Project will contribute to the deicloginext of trained manpower as one of the functions of the management contract (Soe Annex C para 5)
(d) prcgrams aimed at -malnutrition disease eradi atDn slum clearanceWater purification sewage disposal health education naternal and child care(includin fimrily pJnrning)) -nd cthcr public health ausistarice See
(c) other develoment activities including industrial development free
labor unions cooperatives tnd voluntary agencie transn)rtatin and ccshymwquication nrStczn capubiliTies for economic planning and public adlinisshytration arban develo-mment and modernization of laws to feilltate econcnicdevelopjen- GO- intends encourage develo vient of cooperat yes particularlyin the Left Pank areas Project will also develop capabiLi ics for cconoaicplanning and public a6~inistration (Annex C para 5) Other not applicable
20 Information on the extent to which the r-untry is
(a) cttcmting to increase food production and food sto a-e anddistribution felitics This project is one evidence of Moroccos efforts in this direction See also Section I-D and I-E
b) creating- a favorable climate for foreign and dmestic iri-ate enterprise and invcstrrment The GCM has recently reduced profits twes anrannounced a ten year guarantee against tax increases See Section II-E-2
(c) increasing the role of the neonle in the developnental procecsNo apparent relationship to this project
(d) allocating expenditures to development rather than to unn-cessarymilitary purpoes or intervention in other free countries affair See Sections I-D and Ii-
(e) willing --nribute funds to the project or program Th iOMhas already dcvo o-sidcrable resources to the project It has badieted13 million for th i oulouya for i7 See Section I-C
(If) making economic zocial and political refo ns such as taxc coliecshytion iYprovcmenLs and chan es in land tenure a Royal Comm ision has been appointed to make recomendation on land tenure probleras in the Lower I oulouya
(g) responding to the economic political and social concerns of its people and showing a determination to take volf-help wcasuren See Sections I-D and II-E
IT
-ovi~cd l v r 13 1968
- 4 - LDffIED OFFICIAL USE
21 FAA Inforn ation about multilateral assistance being Iurnished to t e country and whether the loan will encourage recgional development prog-rams The I1D has eztablihcd a Consultative Group for Morocco which rvicws the GOM development program anui prgress See Section II-F-4 for infoaation on othtr donor assistance to Morocco
22 A Extent to which the loan will contribute to the objective of ass ring naximu par icipation in the task of econonic dovelop--ent on the pL-t 0 _he people of the developing countries through the encouragement of cocr-tic private and local govenmental inLitutious o apparent
relationship
23 F _-_Dta_ Infor-ation and corissions whether loan will oncourageeffor s of t1e country to (a) increase tie flow of international trade (b) fostcr private initiative and comptition (c) encourage development and usceo co opratives credit unions and savingss and loan associations (d) disourgo monopolistic practices (c) improvo technical efficiency of industry ariculture and commerce (f) strenSthn free labor unions This project is cxpected to increase technical efficiency oi-agriculture
2_ C-1L lnforzrition and conclusion on how the loan will encourage US privte trade and investment abroad and how it uill encourage private US participation in foreign assistance prograas (incluiing use of private trade channels and the services of US private enterprise) See Section II-
25 VA-+_ Conclusion and supporting information on compliance with tho Co resional policy that engineering and professional servicos of US fir-ms and their affiliates are to bo used in connection with capital project3 to the nixinua extent consistent with the national interest US engineerirn and innsgcment services will be financed tnder this loan
2$ Inforamtion and ccnclusions who+her loan will pormit American rx-l] business to participate equitably in the furnishing of goods and
z orvices by To be satisfied in Loan Agreementfinanced it
27 - t(a App I18 Complianco with restriction of co -zodity procureshy o UsMS except as otherwise determined by the Picsicent and subject to ttu--- rcortir require r-nts Procurement will - liumited to the US for
reiabnrs nts and to ioocco and other free world countries 1-or US-cwne(d rhu disburseacnts
23 -i Comiance with bulk cozodity procurement restriction topriecc no l-ho han the nkarkot price prevailing in tho US at tia of
bull puchas Not applicable
29 FA Cozpliance with requirement that matrin insurance be purchased on commceities if the participating country discri-inates and that insurance be placed in the US To be satisfied in Loan Agreement
30 IA 6(a) Information at to the utilization of excers personal property in lieu of procurement of new items Will be required ai appropriate under terns of Lean Agreement
f
1 77--7 -77-77-777
31 FAA 61](a)(_) information and conclusion on availability of enginoering i financial and other plans nccx sary to carry out tho assittance and of a
reasonably firm cstimate of the cost of the assistanco to the United States
See Section II-D
32-ecessaryFAA t611(a)_(2) legislative action r6quired within recipient country and ibasis Cor reasonable anticipation such action will be completed in time to pormit orderly accompli-hirtnt of purposes of loan See Section I-A
33 n _AA161nJ0] If water or water-relatod land resource construcshy
tion project or program information and conclusion on a benefit-cost comshy
putation See Section II-B
3 4 VAA 611(c) Compliance with requirement that contracts for construction be let on comp-ctitive basis to mamum extent practicable To be satisfied
in Loan Agreement
If a loan for a project of $1 million or more certificatin35 FAA _61l(r) by the principal AID officer in the country as to the capability of the
country (both financirl and human resources) to effectively maintain and
utilize the project taking into account other US-financed projects (Such
certification is to be pproved by the Administrator aL the time the loan
is authorized) In process of being obtained
36 FAsgJ2 _6_h Appropriate steps that have b-en taken to assure that to the miaximum extent possible the country is contributing local currencies to net th-2 cost of contractural and other services and foreign currencies o- icd by tho US are utilized to meet the cost of contractual and other services The GU-M is contributing over $30 million to compleXton of this project Excess US-use dirhams will be used for eligible project costs other than US goods and services
37 FAA p619 Compliance with requirement that assistance to newly independent countries be furnished through multilateral organizations or plans to maxishymum extent appropriate Not deemed appropriate in view of previous AID financing and ccoiitment to the project See Sections I-A and I-D
38 FAA sect620(a) AcnO7a n3]7(b) Compliance with prohibitions
against assistance to Cuba ard any countr (a) which furnishes assistance to Cuba or failed to take appropriate steps by February 14 1964 to prevent ships or aircraft unier its registry from carrying equipment materials or supplies from or to Cuba or (b) which sells furnishes or permits any ships under its registry fr-om carrying items of primary atrategic signifishycance or itcms of economic assistance Morocco is not-known to be in Violation of these sections
39 FAA q620GL_ If assistance to the government of a country existence of determination it is not controlled by the international Communist movement The Secretary of State so determined on October 11 191
40 FAA 620(c) If assistance to the government of a country existonce of Indebtedness to a US citizen for goods or services furnished or ordered whore ouch citizen has exhaustod available legal romodiesor where the debt
i - ow - -- _---- --shy
- --
-6shy
is not denied or ontested by such government or the indebtedness arises under an unconditional guararty of payrrent given by such govornmunt No such indebtedness is known to exist
41 FA _(a2LdL If assisitance for any productive enterprise which will corashypote with US enterprise existence of agreement by the recipient country to prevent export to the US of more than 20 of the enterprises annual production during the life of the loan Not applicable
42 FA4 - 16Q_0_ A If assistance to the government of a country extent to which it (including government agenies or ruhdivisions) has after January 1 1962 taken steps o repudiate or nullify cuatracts or taken any action which has the effect of nationalizing expropriating or otherwise seizingownership or control ofprcpertv of US citizens or entities beneficially owned by them without taking appropriate stops to discha i ge its obligations No such steps cr actions are-known to have been taken by the GOM
43 FAA~L AjPj_10_9 Compliance with assistance toQ0 prohibitions against any Comunst codntry ozocco is not considered to be a cocinrunist country
44 FAA - 620(gJ Corliance with prohibition against use of assistonce to comp satc owners for expropriated or nationalized property To be satisfied in Loan Agreement
45 F AA 8620(h Compliance with regulations and procedures adopted to inshysure against ue of assistance in a manner hich contrary to the best inshyterests of the US promotes or assists the foreign aid projects or activities of the Communist-bloc countries To be satisfied in Loan Agreement
46 FAA 06-O(j)_ Exitence of determiration that the country is engaging in or preparing for aggressive military efforts No such determination has been made
L_62_O Information47 FAA on representation of the country at any intershynational confererce when that representation includes the planning of activishyties involving insurrection or subversion against the US or countries recoiving US assistance No such representition is known to have A occarrect
8 FAA 62JJ Existence of a determination that the country has permitted or failed to prevent destruction of US property by mob action or has failed to take steps to prevent a recurrence and-to pay compensation NO such destruction is known to have tak-n place
49 PAA l620(k) If construction of productive enterprise where eggregate value of assistanc to be furnished by US will exceed $1OO million identification of Gtntutoryauthority Not npplicable
i-xQ2MZZ=
1 shy
U 6 50 _Af( QCinsidoration which has been given to denlying assistance X to thu government of a country which after December 31 1966 has failed to
- institto the investnint guaranty program for the spcific risks of inconshy
vertibility and expropriation or confiscation Satisfied See No 7 above
S51S J lj Compliance with-prohibitions-againstn as~istance to countries which traffic or permittraffickingwith North Vietnam Morocco is not known to be in violation
52 E_-L620(_L If country has seized or imposed any penalty or sanction against vn US fishing vessel on account of its fishing activities in
intcrnationul waters information on the consideiation which has been given to excludirg the country from assistance No such situation is known to exist
53 FAA FA r) UAR restriction Not applicable620(p 9117
54 FAA R620tl) Existence of default undhr any Foreign Assistance Act loan to the country No such default exists
55 F ) C-nsider tion of whether co ntry is devoting unnecessary percentage of buKet for military purposes or use of foreign exchange for milita-y equipment
56 FAA 62o(t) Proibition on aid if country has severed diplomatic relations with US unless agreements have been negotiated after resumpshytion Diplomatic r(lations have not been severed
57 FAA 9620(u) Statur of the country on delinquent UN obligations Morocco is not known to be dlinquent on its UN~obligation
58 FAA R636(i) Prohibition on financing non-US manufactured motor vehicles Will be satisfied in Loan Agreement and Implementation Letter
59 App 102 Compliance with requirement that payments in excess of $25000 for architectural and en Jneering services on any one project be reported to Congress Such reports will be made
60 App R1O4 Compliance with bar against funds to pay pensions etc for military personnel Such payments will not be eligible for financing under th Loan Agreement
61 App 9106 If country attr ipts to create distinctions because of their race or religion among Americans in granting personal or commercial access or other rights otherwise avaVIfable to US citizens generally application which will be made in negotit ttons of contrary principles as expressed by Congress Morocco is not ku IDhave made any such attempts
iInD OFFIIt t USE
0k
OFFICIAL USE 62 AIwp Rii Compliance with existing requfremets for security clearance
of personnel Will be satisfied in Loan Agreement and Implementation Letter
63 App R1l2 Compliance with requirement for approval of cortractors and contract terms for capital projects Will be satisfied in Loan Agreement
clJ164 Aup Cmpliance with bar nRainst use of funds to Tay assessments etc of US meiber Such payments will not be eligible for financing under the Loan Agreemunt
6 Anp P115 Ccmpliance with regulations on employment of US and local personnel for funds obligated after April 30 1961 (Regulation 7) See Section III-C
66 Aim Vietnam iron and steel restrictions Not applicable
67 p l9 If a country other than Greece Turkey Iran Israel Republicof China Phillipines or Korea reduction in assistance by amounts spent for the purchase of sophisticated military equipment
68 Anp fi4O1 Compliance with bar against use of funds for publicity or proshypagjanda purposes within US not heretofore authorized by Congress Such use of funds will not be eligible for financing under the Loan Agreement
Morocco is a traditional Islamic monarchy with a constitution The conshystitution was implemented followaing a popular referendum in 1962 National regional and professional elective bodies including a parliament were established by universal suffrage under the constitution in 1963 The parliament was suspended in 1961 in a State of Exception because of its inability to agree on measures with adequate urgency to meet the prevailingecononde imperatives In July 1967 the King appointed a Prime Minister to direct a Cabinet of appointed technicians
The constitutional framework nevertheless remains intact in Morocco and nationwide popular elections for some of the professional chambers were held in August and September 1966 The press is relatively free in Morocco and the right of diLsent prevails provided that such dissent does not violate the prohibition against political attacks on the instishytution of the monarchy or the person of the monarch
LI Under the revised US AID Policy for Africa agreed to in November 1966 Morocco is designated a development emphasis country entitled to receive continuing support on a country basis as part of a multilaterally coorshydinated countrj program Morocco was subsequently included in Presidential Determination 67-14 (January 5 1967) I
LIM=TE OFFICIAL USE~i
- l go
bull ~ -
f
DEPQbi) STATE AGENCY FOR INERNATIONAL DEVELOPMENT
WASHINGTON DC 052
CAPITAL ASSISTANCE LOA11 AUTHORIZATION
Provided from Develoroent Loan Funds Morocco Second Lower Moulouya Irrigation Loan
Pursuant to the authority vested in the Assistant Administrator for Africa of the Agency for International Development
AI)by the Foreign Assistance Act of 1961 as amended theIAct) and the delegations of authority issued thereunder I
have received and t-en into consideration a certification from the Director of USAIDMorocco as to the financial and human resources capability of Morocco to effectively utilize the Lower Moulouya Irrigation Project taking into account among other things the
maintenance and utilization of projects in Morocco previously financed or assisted by the United States and I hereby authorize the establishshyment of a loan pursuant to Part I Chapter 2 Title I the Development Loan Fund to the Government of the Kingdom of Morocco (Borrower) of not to exceed five million dollars ($5000000) to assist in financing the fore] gn exchange and local currency costs of goods and services for the third phase of the Lower Moulouya Irrigation Project subject to the foLlowing terms and conditions
1 Interest Rate and Terms of Repayment Borrower shall repay the loan to AID in forty (40) years including a grace period not to exceed ten (10) years Borrower shall pay interest on the unrepaid principal and any interest accrued thereon at the rate of (a) two percent (2) per annum during the grace period and (b) two and
one-half percent (2-12) per annum thereafter
2 Currency of Pepayment Repayment of the loan and paymenu of interest shall be made in United States dollars
- t- n t - - - shy
3 Other Terms and Conditions amp(a)Goods and Services financed under the loan
shall have their source and origin in
(i) the United States if disbursements therefor are made in United States dollars or
(ii) any country in the free world including Morocco if disbursements therefor are made in Moroccan currency
(b) AID Regulation 7 shall not apply to construction -work financed under the loan because as detailed in Section IIIC of Capital Assistance Paper No P 667 it is important to the national interest of the United States that the direct costs of construction work performed by third-country nationals be financed out of funds made available by the Act
(a) Such other terms and conditions as AID may deem advisable
Assistant Administrator for Africa
Date
~~~~~~~~~~~~~~~~~~ - q v
7
- 19 -
This estimate is based on probaole rainfall cropping patterns plant requirements evapo-transpiration and other expected losses of irrigashytion water The estimate is believed by the Consulting Engineer to be reasonable but subject to refinement on the basis of tests to be carried out on a continuing basis
The annual average availability of wuter from the Moulouya river is estirated at 1100 million mn or about double the estimated requirement for the gravity areas
Estimated Availability of Water
Twelve Year Annual Average for Moulouya River 3 m3 second 1100 million m3year
Maximum inflow Observed 8000 m3second(1963) 3h00 million m3 (1962-63)
Miniwum inflow Observed 1 msecond (1951) 532 million m3 (1956-57)
On this basis it appears that there should be ample water available for irrigation of the gravity area as the water availability obtained from twelve years observation exceeds the requirements in all but the 1956-57 season shown above Prior to the development of land with purped service areas (the Gare-b and the Triffa ig h Service) a review and analysis of the river hydrology should be unidertaken to assess the availability and regulashytion of the river flows
d Studies Entincering and Construction The overall irrigation scheme outlined by the 1uM defirs the ajor features and th( magnitude of the work to be accomplished to attain the ultimate goal
This scheme is being carried olut in phases over a long time period The present phase encorpasses the development planned within the priorities indicated by the Stanford Research Institute (SRI) study for the gravity irrigation system
The studies for land classifliration have been completed for the gravity irrigation system in the Triffa Bou Areg and Zebra plains by French firms and were considered reasonably accurate by the Consulting Engineer Land consolidation and parcellinrg has been completed by 0MET in the Bou Areg Central area the Zebra Collctive and Zebra Remainder sectors 7 thru 10 Land consolidation and pareeLlni ar( needed for Triffa sectors 27 and 28 Bou Areg Rematnder arid Z(bra Rerrirder sectors I and 2 The engineering designs for the Triffa main sector 27 and 28 and the Zebra Collective have been or are being completed by the G0M forces The engineering design for the Cefntral Bou Areg and Zebra Remainder sectors 7 tnru 10 has been or in being connpeted uy Hydrotechnic Engineering design will be required or the 1ou Are remainder sectors D-3 thru D-7 and Q4 thru G-6 and Zebra Rer ainler sectors 1 and 2 The engineering designfor the Dead Ilead Thnnel has been undertaken by SCET who have preshypared anid issued an Avant Projet for bid invitations for construction
14 M)j6Fj Cshy
-20-
This firm will also undcrtnk- uu-orviston of construction The engineer ing not yet performed can be aea ished by GOM forces andor private engineering firms
Construction of the extension to the rrain irrigation and drainage canals Jand preparation rector cinl ani drninaive ditches will be performed unllr cntact t) 1 cc rt~r~iet m)t hi in the ene of the
r-abilit tion of the L2tL Pz- Dd iarl Trnc t
e Cronning Patterns The existing erning pattern in the Moulcuya including botnirrigatcd and dry farm ingincludes grain forage citrus vegetables olives grapes and 6 small amount of leciduous fruits and nuts Of the roughly 2140Cy) acres of agricultural production in the Moulouya about 177000 acres are in field crops 24)) in vegetables 16Y)O in citrus 15000 in grrrcs 540Y) in forage crops 1700 in olives and 15)0 in other fruits and nuts
Taking into consideration rast and present trends in plantings as well as agronomic and price and marketing factrrs the following projection of cropping patterns has been developed for the Lower Moulouya
PROJECTED POPPTG PATTFRNS T1 HE LOWER MOULOUYA
(In per cent of total irrigated area)
Left Bank and Triffa High Serice
Triffa Sector - Sectcr rriffa Class Class Class
crop Main 27 28 East I amp II III IV
Citrus 40 60 10 10 10 Vegetables 15 10 15 1) 20 10
Crtton 15 20 10
Fcragpr 10 20 25 30 4o 30
heat 10 6 20 25 20 35 4o
Grip 25 24 35 15 Dy beans 5 10
Sunflower 10 olives 5 0
100 10) 100 100) 1i 1052i 100
a Incltdes double cropping
- - r- euro --- 7
~7~TF~Wr~e~ALUSE
-21 -
The projected cropping pattern for the Bou Areg plain includes cottonLJrirdg the frrt Five yearnejtinted 1r of the Class I)fand
the project jitwould be grown on nnII landn Tht renresert only 960etrravres) ectz ri)cr)e area The cotton acr~a e ry increasep 2ceafter live years if ritisfactory drainage conditionshyrre achieved in the Bou Arev
cotton grown i 1xonp tarx- Trdltionally Morocco export its-Jr- cron an irr IJ hort cble to rmeett Cotton the reuirrents
r the oroccan 2pinningr mills The croppni-attrn of the Triffa East (about 180n acres) Js projectedt Tnrlude 15- (about 27 acres) in cotton It is likely that becausef ihe limited extnt of Class I and II lands in the Triffa Eas cotton not increase beyond that percentage
1t i evident that the amount of irrigated cotton that is likely to bein ther-n Moulouya is minimal even assuming that local drainage condi-T nare i asuitable
f Technical Sundnv--s The AID Project Engineer hps reviewed ii) thedat and ajor construction performed to date onronct and finds the technical requirements this long-ranRe phasedsufficiently defineoto ccntinue the project on an orderly schedule The estimates of cost of prsirct facilities have been determin-d by SRI from average va)ues oftrit cots obtained frorr reviously ntiarded contracts and from etniled( -s-nand analysis prepared by the iHydrotechnic Enginering fir oft-o tyieal sectors located in the Bou Areg area The costs for the arc ent contract have bcen estimated by the USAID It is consideredthat the depree of engijeering planning undertaken and the deterrrinitonr to the US Goverrment are adequate to meet the applicable requireshySt- n Section 611 of thie Foreign Asistance Act
7717gt
1 --shy
-22-
E Financial Status of Borrower
1 The Moroccan Economy
Grrwth of MorocLcts GDP in real term averaged about 24 per yearin 1(4 and lr li Per capita DP In 1C 5 wan anproximotely t162 A (er Irr-ht in (6 resu]trd n a drcrcne of slightly nver in GDP which tlh vpulatior grc~vth avrring 3P4 per year rnrsJted in a decline of -r ornita GDP In 16 ii brut $154 A recnd droughtcccijrred In C67 but i not expeetid to have the severe effects of the 165 drought Crop forecasts for the first nine months of 1967 indicate a 4 increase in real GDP above the 1966 level This is also the economic grcrdth rate estimated by the IBRD for the pezxA 1965-70
Moroccos economy is heavily dependent upon the agricultural sector thich has averaged about 15 growth per annum However growth of the mal modern segment of Moroccos agricultural sector has inshy-reased at the rate of about 7 per annum
In 96 the International Banik for Reconstruction and Development (IBRD) preented a number of recommendationr denigrned to increase Moroccos economic growth rate On the bacis of these recomfndations the G004 proceeded with planning the necesrary program to increase investment levels fr- the i 63-65 level of 11 of GNP to 1r of GNP and stimulate the rate of economic growth from 2 to an average of over )4 annually for the five years 66-70 In addJtion the GC4 has taken measures to curb the population grovth rat while placing increased emphasis on raising production of both dryland (wheat) and Irrigated agriculture
2 Investment and Savinms
The level of total gross investment has remaind at aboit 11 of GNP for vera year althugh the percentnoe declined slightly in 165 Under the GO Three Yea5 Plan 1965-67 the gross investment t-3rget woz ret at DH 3 billion- Actual invev-tment expenditures for the three yearpeirod reached about DH 46 billion of which the Governshyment ezxenditure amounted to DH 1 billion a against DH 21 billion budgeted Thin may have beeo partly de to the GOMs deliberate ausshyterity pollcy under the hIF rtbJli7tion prci1rnr but more probably it van duxe to the shortage of trained cadres to -lan and execute projects
In the private cectcr conziderable inounts of ravings may be hoarded due to lack of project attractive t- inventors The lvl of private investment has been runnihg at about 51 of GNP thrrugh 195 The 0014 4 incentive to private instors hnr cut profit taxes from 4320 to V and announced a tpn year guarantc-e against tax increases
]L- $ = DH 506
777=-77- NQ
r y 7k1- T e - W lk In
j - 1) 7k- - _
- 23-
Loan are avaiiable to )rivlite irve-tcrn freo th 3JfIDiN s rctr special funda to prcmote touricm devc firvcnt
Under the 1r86-1972 plan abut to br irtntt level are to be accelerated considerably reaching A of GNP liv ]970 Mor(- Irlyir haviiy on foreign 1 to aciuw cc higher lve1
3 Central Government FinancP
The Moroccan money supply which had Incrrased ify 76 per cent in 2965 remained virtually unchanged in 966 The first half of 1967 witnessed a 5 Ter cent increase in the money supply Te major part of thi increase as concentrated in June and July uhen the supply reached V14 0j lion Currency In circulation expanded rapidly in June and July
nnl factrrn being reinforced by commodity hcnrding related to the 1ide~l Et crisis Demand deposits did not show their normal decline nthe first half of 1967 Deposits with commercial banks declined nlightly while deposits with the Treabury increased as public and semi public agencies contisued their transfers from the banking system to the Treasury The increase in money supply in the first half of (7 ran I raced to tho nzon1 sonal increase in net foreign assets not c y the custcirry rlelir In claims on the private sector Clsirl (n the erivate sector declined slighty until May 1967 but Increased hr-gb June and Jily due primarily to additional financing of textile stocks ClbiJ ante Government rose by 10 per cent in the first half of 967 the in central brnk claims on the GovernmentI being rmainly offset by larger deposits with the Treasury
Ordinary budgetary revenues which incrurted by 5 rcr ent in 1566 tre cxrcted t-) increase by 7 per cent in 1( to DII 21 billion DeampDite a derea3e in agricultural tax reccipt r- fror diret taxes rose by 10 ppr cent in 1966 and a 2 increas estinated for S67 due to tric or controls on income declarationr d an accelerashytion of tax cller ns Owing mainly to a relaxation of the import
program in late 1 5 and a concomitant increase in tariffs on certain ccnonter goods customs reneipts increased by 21 per cent in 1966 Although budgetary estimates call for s decline of 3 per cent in customs receipts in 1S67 it is likely that actual receipts will be considerably larger in view of the import liberalizatidn measures intro)duced subseshyquent to the estimates Receipts from indirect taxes state monopolies and other serces are expected to be 11 iv- cent Ipher in 1967 owing to increased profit on -ugar sabr-i and L r(m the newly created Office do Ccrmercalisaticn - d-tation (OCE)
Recurrent ordinary buiL e(enditures increased by 34 per cent in 1966 ar-i are expected to increase by an additional 7 per cent in 1567 reachin- D1122 billion Although wage and salary scales in the public
Banque Nationale pour le Developement Economique
TT~~- - I777
2 Cf
sector have1bec z h t - rrvirI urli 11i g 14-6 -nd PO becnue rX toi Ijt e f (]r o n 4
ill tile ic urrnnye andr)not i on dnd Publi ht rentrn -yr-otn lno IncreasedOthrr t ill- t il r ne by ) vr cert in J6(
i ninlyrt -br h Inc-l
( Ihe ( t r- rl t ip t t C itur f T)h 21h iilli n
is (( ItI t lt r c0 a- r n n o I- c t b It ihstnl id vv ih n t r-t have hn(er - en 1t2
(IM ii ture( T f fu traordJ nary budrzct exshypend ituren a r y -t c ~ i vi -iscz Portal Checking sy-stcsul)rrcing t (I ltIt Ct -- ind creirn shy
nnet The f r er tnc I hha ccrc ed from a htih of DH 5-7 millIJn in _ 5 millIn r C46 F cr ats foi ]7 place Cro n w I 1(DI)J79 ill ni DDn etlc fi nancing has alo u 1) 5 p (- I3A27 iIliun to an entirnted DH 1142 million
1 14V ) I nv 1 ri n nI(c1 franc n is 77-ected to be ol t y ncrewed bcrrowing fr-ir t he Cestra 9ank which hud been held at mcdert vols iln 165 nnd 1a66 Under the 1TFtaiby agreement of October 16 the qob) agreed to taBe a3] rocrrnary meurer to maintain as table curoonry rPnt inl th nr1d-elrto th b a ent of the ePrncriynnd a vnbl- hn1incc X nvroent P rt artt to t rt fien of tho Ccntin- Honk rstz (erct are nct t r itr June 30 Y-ke 7 lov l b th n Diif ) mill] (n tlcnber -c P thai I o illin usit I ])ecthr 31I62 (GC bc w t
C B1rtrp - vt DH 12 iri 1i nor ]S67 or DH 6S ij lionEan tisated (r fo than the aproved crd it expanwim
Thitrd ordivary nil extraordnnry buThTt deficit of DII 7-19 millI n fcrecat Fr 1 67 in exnected to be fnanced by not freign
tan reof DII )75 mi~l in nt recurity 12ue 1 T111I vlion a - nt ry tiat Po n Che )ir d-nC i 73 r5 Pn
riI is u h i a vti v mrr nrr-e jssIof fvr is id a erital The vnfsa revcred in 1d6 when lnrger r nyrentn eEecially on food itcmo an n -lewdoun in
igo ra a deficit of $1 millcn ProjectiOnz-vt rvultvd in ror 17 r~ieat inrrerned importsonly partially ccnrennate by addshytsa t frnreirn r ntil rrceiprs ard mprrvement in the nervices account will reult -n et of aprroximately $)20million As rhoim in the following tabl -r tion for l33 and 169 how overall deficits of
14 and m] ivi_y$i It
rqVV t1 4~
C)rgt
---
1 -)I+-IRF1
1ROCCO - rTANC OF PAYME 1qrt - 169]_ 5
6rfi0 1 1C(8lr67 i r(o
)xrurt 2t L( I L-5
Trade Bnlance 11 15 - 75 shy - 75
rviee- ret - 7 - 5) -35 -23 -2
J]-i of Good rnd Service- - 3 - 65 -II - ti - (5
Trn-Ifr Pr ynts (nt) P 21 33 37 33
on-cntnry Carital (not) 92 64 6 6 5
Err-rs nnd Ov rrion- (not) - 23 -2 1 3
eranl Bannic __ - _3 -_ 3 - 1i4
Atrh thert ircjected reficitn are of the nnme order of 1 nishytude a7 thcr incurred in the period i66 the Situatlcn i findarentallydifferent both in rerprct to the source of the deficits and in rer-ect to the meat0Y gtr m etin7tecr In the f rrer caive M5recco uffered
_frcrr a very h-vy cutfc of Drivtes cuitv fo-ivr with a shar) decline In forein nt exerditures in Morocco In the iatter case th projected deficits r- rcre a functicn or accelerated crcwth risingdebt ervieiiw tri tho abnrcn of forv eeble additiens foreign reshybull ourcs nere7ory 4( r2Vm rAf finmncting To nect the def-cits during the reriol 161 61h MWreco ob1id to drw down rorcin exchange reserves of over $]c milicn The snrti tpv of financing is no longerpozslble ince no or-res- ruch reserve- Even ifMorocco yr
mn nina r rve_ ore (]rrfii on to th r-ixirun etnt enribe nnd the [iI tnfldy i- un M-r-r e i32 till relA re nt rnt 15 millicnj1itionn ftr ign as- e n 1 6 beyond hat r recnently fcreeeshyable with ver nri- nry Officilr in In i6 reserves are cotImnted Pt 72million c hih crn V 3 million i caly required for currency coy r
Foreign InJebtrdne n of th GOM Mnroccos external rtnte ard rutlie enterprie dett amounted to
$r) millivn in lr6 Debt vervcirig rpynents for (66 trtaled about
$5) rillion g-eement approved in October 3(67
I- -- Ishy
37 millin or arprcxitrrntoy (j Iroccor totnl eXoort earning of h28 millicn GCnerally nxt rrO dbt FervicJng renuiremennt of leas
than r of totna -ort nnrlt In onrldered to I r tirfactoryrntio D-bt r rnJrcLct n Ir the reriod 1-(y 3on Trerent external debt including thnt wrtl(n irreently undibur-ed are hown n th fr lv tahlr
)] L v yr t n
Eternn Vtnte anc ] bntcrnrie Debt
M131 o)nr
Y aI Net Outrtnnling Debt Debt Service
(6 it 479r5 $367 J-67 452 3)6
Z616 44469 2 0 2C-
365I3 37 389
33 383 33 6 371
5-h 31 n 352 275 34121
]176 2661 32It 1977 21133 311 177 22)6 307 19 i0l74 256
1733 255
rgtternal debt rharre n rerent debt nnr rhon above do not increase ubtanti-lly over t rt 1)year- reaching a maximum of h44 millior
in J6 and decrpt- n cr - tently threoafter At the are time exportearninr r _rc extett nc-are Aring that Morocco does not inshycreswre it etrnn2 cbt t irate ubrtantially nb-vc ihat has been the core th adfiticrn dbt e roquirrentn reulting from the propo t Icon o 5 ijilion co r 7crncepr-ional term hould not have a i-nifiant affect n 1r o - ab lty to neet itv g rc-atedebt ericn rcnrib2t~e- the pros ectr of reprment of thin loan ore coniderci rearcnb)
U I -
F ot h-v C IuIJI rmt I shy
1 V amp~ rVml KI
PUC- -jrVi Jt t 1 11 nflrcj urlc 1- th )qn --P I uti u rhnrrl -1r- thr U- Tr- ry- R- -nymc nt
c2Il f n 6 1 bf r I- till 11 nfl r- n-r i n of O r--niC(Io~hi U 1 1 rr to
Tn vil ) f rvc hi tvlrll 1 (In- - n- u--n E r me rrinshycgtay F rntwir w ourc o -o- rvI ortf-V3 1 rncing of
Uf f -r rrrir- ur3r 4~ v -rin Iltrt nt ndd shyt -n t ) in- lint r b t l r -n rort- o-orco trorl-- V -P
r i 1rnd h L-torie Furcl-trin firr- thrjt US r r~ crvirrf- u~d be~
T L I1 c vt r- -ly ] -ubt fu 1 n vi pw -I -ror-co Ir of
ut1JpcO In thi rjert f it -- r- 21 npnred by d1-nr- cothcr t~han the US
2 ]P-t ofI Prr l1 on Prw- Fntrrr
Phij rrcjJ-t -11 n-t h~ -in nrwerq Prrt n rr- tc ntrshyr~A~r fi-mc 1bho und for --roern p o n
3_~~PrCT--rty
rr-vIi-n 1 h -d r the loan ragreement for Icntifitcation ef any r mIjrpt n ctri b- rt througn ut 1zatn (f xccr- prorerty
If rv c u~eAID n-mrcf u urr thi )cn - I~ut~ em avoi3ablo r rovvrirrnt -rrperty rather than nce iteni
4 Otli-r Fr- Wo--] n-Fnlc4rm
Dr mi tW- o] 14rocco- i~ajr ovr-ec -f exte rnaX
rrtan~- hrtvfb - I r ~ ant fl Fr n fole by Kv-it
Sgio F rneflit r b-en 1lmrntrd to tcfohnjip n5tnnen bi eoni~in I th u y f Fr--h tprhntcian tcacrr ind cther
~ti~r t~ ec-tnmIyrt-n Friinch Aid to Mcreco In 1065c~oc~ (P-art f-r txychnirril aItn -- j se of tl5 w1nfor bu~dget rurport f ir in rt t- $1 1ri1 icin in ennita -rojectM- n vx- rrcd
1Vw1tvnn tioI t-) Frenh rurtnnd +16 r11ion tie-I to -onyiint to orrrcr Frrmh ccilcn~For _-rrc-ratod land and rquirrmcnt
West GTrrnmnny liar agrcrcd to nrovIe ccme j27 mM22~cn 1n catital arirtanre and cromrndity lnoi7 t n OfIcon( q92 thi o totril$223 miJ lien ha actuary b-Pn cr-Itt--d under Inn ngrepment This
And a lk5 million commodity loan both) signed in 1965 All Wet Gerzaan
Ufla
-28shy
capital asnistance I vuectI to be tied to German exports Germanyhas in addition 1uvvded r tteysubbtantial technical assistance f
The IBRP hah rade four 1nns to Morocco since 1962 totaling$6) million Ofthin totnl a [175 million loan in 1965 wos fordevelopient of the gidi lit-r irrigation perimeter Other assistance by internntIcnal Iending arncie include an $11 million credit byIDA in 1C65 for rcendary diicction projects and an IFC ln and inshyvestrent of $1 1 ri jnic alo in
F tit i by [c - dncr tr dh elo snt ofMorccco rircuVt r oii +h b-]n jt-TKT r nbove n 2 )6 niliion Kuwait enn in i66 for develomyment of the Tensaout Prnm n irrnten nrooetand a $77 million Kuwait
0jl n )nnsn r(niti-nertcir
loan for extrnion of the Tadri~ Irrigation Perimeter
The following- trbe surrlnrlzes other free world arlztance (excluiin technical assistanc-) to Morocco for the years 1(62-66
($ Millions)
1 62 1cf_63 96) 19r65 19)66 Fneea 4) 5PO 64o 700 shyWet Germany 223 gu 1t 53 281 IRD 15 175 10) 175 IDA 110 IF C 1 5 7 7 7 0 I15
TOTAL 55 62 1U3 W
b Includer only lo-ng term loans and exporter credits - Includfs 25 million private capital
Eternal ansiztnnce to the Lowier Moulouya Irrigation Perimeter -nce 1060 hres been con[fined to US upport Consdiering AIDs previcus
involvement in and conmitnert to the Lower Moulouya an AID lean in P2t to be Lhi mol aprroriate source of financing for this project
LID
II
q
-29-
SECTION ITI- Y-TTYT TIMPLPTrION
A Periret-r Ad-instrrti-
Authority for irplerrentvtnn of the deveorpent prrgrn frr the LowerMoulcuya Perimeter and rs wel arth crnntinuinz mrnnrrmenertC tt r t- rrtnr V theltbi nad overationity iOfic 1cne 4
n r I e1i- i d Vit4 i Iv ~ Ct rreated i Otb (rJ rn-- of evcn inrmi-rriional offices hich reelaced the Office de Mire en Valeur Aamprlcole (OMVA) Under the OMXA and itspredecessor agencies authority for ad-inLtration cf irrigtion proJect war centralized in Rabat
Under the new regional office organization responsibility for adminshyistering ORMVAM is vested in on Adminirtrative Board of 10 members headed by the Minister of Agriculture and Agrarian Reform as chairman All ether board members (other than the Chairman and a representative of theInterministerial Economic Ccrmittee) represent agencies or activities inthe region of the r-eriret-r whic comprises parts of two provinces Localretresentatives on the Board inc]-de the governors of the two provincesOujda and Nador the presidents -f the two provincial asembtes and of the two provincial chambers of agriculture as well as the perimeter Director
The responsibilities of thie Administrative Board include review of theecys program establishment of its organizational structure developshynt -)f its annual budget and establishment of rates and conditions of
Siyfent for water and other services provided in the perimeter
The Director of OP4VAI-I is dbarged with the responsibility for executionPthe vclicies established by the Administrative Board end administration of oil ORMVAM functions This responsibility includes selection of staffn pserating perrcnnel acting s officia ORNIVAM representative in all ntztinns with -tate and othbr public or private bodies and the
f of funds within limit Indivated by the Ministers f Financetent rn fricultural and Agrarian Reorm
Perimeter Oranizatlon
ORVAM oreanizatlonal structure consists of a directnrate five maj-r rvlces or d-vsicns and one separate bureau Two services qei Administratif et Comptabl- and Service du Yatrial are conshycor - th adminisration and lcgistical support of ORMVAM operationshi1e the remainirg three services rind the separate bureau are Involved in t-hni al matters associated with agrcultural developrent Each ervice has one or more subordinate bureaus Fei-ce Chiefs and thehead 0 rch bure-u report directly to the ORMVAM4 Director
-~F7E MEw-
-30shy
2 Perimeter 01ttffnr
OPIVAM orgttnlrntlon treture calls for 557 positions of whichI L or 7 Mlled n were nher 29 1567 37 of the 71 Postshytion vacancies reported 1ern the high and middle levels Foreign(chiefly Euronean) technclan occupy I)of the 16 high level positionsthat ere filled at thfit tire
Whil OPM ut in th- lcng run lor to Mercecos oducational yster to prvidr tn crrf-nn2 to ratisfy current rdurojectd rcshyquirement th currnt high and mlddle level vacancies rrouire uersonnelwith oxt nive nrior rxericnce To fll this preent need it will be necessary for CRIVAM to continue its program of recruiting foreigntechnicians until ruch tire ns graduates of Moroccan educational programsacquire the necesnry exrerience The managerent assistance componentof thin pro~ject ]e-rribed In the Project analysis will to some extentalleviate OFIWAMs high level personnel requirements
3 Inw1 ernetation Sehedu]
Months Implementation Action
1 0 Sign Loan Agrcement
2 2 C-tiify conditions precedent and Y4tiate procedures for selection of US firm for management contract
2 Negotiation of extension of advisory Engineering Services
h 4 Contract (Hydrotechnic) Negotiation of Managerment Contract
5 60Cmpletion of Project
C Waivers
Sect ion 7 rf AID Regulation 7 provides in substance that theUnited State ill not finance direct costs of construction work performedby third cc-ur y nationals unless the total co-tn of the project withvhich thr ennrtrumticn w(r is asEcciated donot exceed $2On)O orafter excluding national of the country in vhich the site of constructionis located and Dersons vho nave resided therein uninterruptedly for morethan three years imrnedJately prior to any determination under Regulation 7at leant 0 of all uernons who work under the contract at the site of conbulltruction are United States citizens or the employment of third countrynationals is necessary to avoid excerrive corts to the United States
3
31
Section 2175 authr-ri th Regional Anitant Administratorto waive the nrovinions of Sectionthat it is 2073 if he dcterriner in any coneimportant te the nationrn intercrt of the United Stutes tofinance the direct eots of construction work performed by third country
nationals
A prviou1y r ic i c t tht for thr ct Tartthe -r c ct b- 1jeuj out r -cnorbr f cnrtructioncontracts with Morcccrr contrctnr an in the i-t Uowfevvr itentirely psnible that there may b- roe contractn with cntructlonfirms partly owned by third country nntionaln and that ruch firjs anwell as the surely Moroccan-owrned firms may enloy third country niationalsIn such canes a difficult rrobic-i iould arise in meeting the terms ofRegulation 7 since an a practical matter Aericans are not reaonablyavailable for ermployn ont by such contrnetorn and our previcus experiencewith the Naunsseur Ccnv(r-ion project thatin Morocco has indicatedAmerican contractors would not be interested in bidding cn small conshytracts in that country
It in therefore recommended that the Annitant Adinitratordetermine rursuant to Section 2q75 of Regulation 7 to waive theapplication of Regulation 7 to thic iroject since the project 411 conshytribute to the attainrent of US foreign policy objectiver and the cbJe-tives of the Foreign Arsistnnce Program
LITI L USE
LfI~~5xA~us
lit
4 A J A 45 4 k
t A S T
S(3
I A444ilA~~l~)
7 -74
tAM= D
SECTOR 27
10000
t Co0Na includez25 cgtri oncFcttlrvI ncy I8s ~ ~ C t C- Includes 50 constriJcltiotrgrc
2000 60
IU
0
z
bull cosYsA shy----- i
600L _
400
200
0 5 I0 15 20
INTEREST RATE
I ~ 7 J7777
ANIAampX C
PROJECT DESCRn1 rOll
The project com)onents to te undertaken on the MIoulouya Irrigation Project over the next five years contists of the following
C(n1rtion of the rrLin casuals and bianch canbls to provide the suource of waler to the sctors be developed in theto TriffBou Areg and Zebra areas This construction will include the necessarystructures such as reulators highway bridges aqueducts water intake
and discharge structures etc
2 Iand Txeloommerit which includes engineering land consolishyt and iuvtllng lard preparation (subsoiling ripping destoning etc) and installation of water distribution canals (secondary tertiary and quurtunary) and drainage collector ditches for the Triffa main covering 24000 acres in sctors 8 9 10 16 20 21 23 24 25A 2513 27 and 28 Lou Areg Central covering 16250 acres in sectors Dltirough D2B and G1 thru-4h G313 i0u Areg Remainder covering 15000 acres in s-ctors D3 through D7 and GA through (6 Zebra Collective covering 45)0 acres in sectors 3 4 5 rind 6 and Zebra Rer-iinder covering 14250 acres in sectors 1 2 and 7 through 10 and th remainder of sectors 34 and 5 The total land to be developed is about 74000 acres
3 Canalization of the Oued Zeluan and nued Sidi-Amar in the Bou Areg Plain consisting of strairltening englarging and regularizing of these streams to carry the flood waters to the sea Drainage interceptor canals are to be constructed parallel to the sea in the Bou Areg Plain In the Triffa Plain the Oued Riada main drain will be deepened and enlarged and secondary drains will be excavated to provide for drainageof the Madagh area This will include the construction of bridges and culverts and other related work
4 Major Commorn Works will consist of
a Clearing of the Mo-1ouya riverbed downstream of the Mechra KLila barn caused roy flood dariwe and the installation of a set of stop logs for maintenance of pillway gate-
b Design supervision and construction of repairs to the ]elt Lank dead head tunel
c Conctruction and establishment of sib-division Offices and installations for farmer support such as CMVand farm stables
1 C
-2shy
5 Manavmtnt It ha been proposed that a US management firm be ewployed by th- C4 to manage and operate the entire Bou Areg area Such manageent -iuld encomparn all activities from the initial concept to final irIrp igricultural production Such activities would Include resp r-ibilsect -or supervnsion of engtneering and constriction of primary
S- Jry r complete developfnent of land training n in g tinul irription practicen preparation of market
t - r1t- (ot--rnu trplusmnining of a Moroccan cadre to take over h v--it Bou Areg dreara P the
At this writing the n-pt of turning over to a private UZSfirm execushyresponsibl]ity I h management of the establilrment and initial
op-ration of irr1gati the Bou Arog area has been only broadly de iiitd by the GCJO It Intended that proposals will be invited from a r -onable ntnber of f|ed US firms that a selection will be made an-n 7 them and a more do iled and cornprehenrive definition of the rer6 -Ps to be performed be eztabliched at that time It haa been
stimated that the t- of ruch a contract will be about $2 mir- n In any event the -ts of this contract other engineering arvl s to be provided undt n extension of the Ilydrotechnic contract and ether US corts will not ed the proposed $5 mllaion developzont Jean fr the project
The cle 3ifications duties ant 1ncnslbilities of the management personnel ill ha-- to be clearly defined i agreed to by the GCM Perimeter Directo- and other GOM Agencies luding arrangements for the necessary gistic support
Svxlale Docu-
1
4
LD ED 0ICIAL
-IAIDshy
A1trX D
C6JCK LIST OF STATUTORY CRITERIA
(Development Loan Fund)
1 FAA 0102 Extent to which U3 cormodities and services are furnished consistent with improving the US balance of payments See Sections II-C II-F
2 AA sect2O]ihi lanner in which loan wil promote countrys economic develo shy rit emphasizing help for long-range plans and programs designed to developeconomic tesourcos and increase productive capacities See Section I-D
i FAA sectT] h)(IL Information and conclusion on availability of financincfrom other free-world sources including private sources within the United States See Section II-F
FAA sect20l( )2 Information and conclusion on activitys economic and technical soundness including the capacity of the recipient country to reshypay the loan at a reasonable rate of interest See Sections II-B II-D and II-E
5 FAA 1201(h)( Information and conclusion on existence of reasonable promise activity will contribute to developrmnt of economic resources or increase of productive capacities See Sectiona II-B and II-D
_92_(b 4Information and conclusion on activitys relationship toothor development activities and its contribution to realizable longshyrange objectives See Sections I-D and I-E
The following abbreviations are und FAA - Foroirn Assistance Act of 1961 as amerded by the Foreign Asaistaice
Act of 1967 App - Foreign Assistance and Polated Agencies Appropriations Act 1968
AFEVCDF 1066
L1
-2shy
7 FAA f12O1(b)(5)_ Countrys self-help masures including institution of Foreign Assistance Act investment pliaranty programs Investment Guaranty
bull Agreement signed with Morocco 331o6l See Sections I-D and II-EI
_A ))(6) Information and conclusion on possible effects on US econowy with soecial refererne to areas of substantial -labor surplusSee Section II-F
9 FAA q201 (h)() Information and conclusion on the dagree to which thA country iv wiki- progress toward respect for the rule of law freedom of expression and of the press and recognition~yf the importance of individual freedom initiative and private enterprise
10 FAA -1201(b)(8) Information and conclusion on the degree to which the country is taking steps to improve its c]Laato for private investment See Sccton II-E
31 FAA R LbJi Inforrat-on and conclusion on whether or not the activityto b financed will contribute to the achievement of self-sustaining growthSee Sections I-D and II-B
12 FAA fi2Ol(bj Inforruation and conclusion on reasonalbe prospects of reshypayment See Section II-E
13 FAA fl20JL() Info-ation on applicability of the twenty country ceil4ng2
14 FAA fl201 L Information and coclusion on legality (under laws of the country end the US) and reasonableness of lending and ralendinr terms Loan will be on minimum termspermitted under FAA These are deemed reasonable see Sectioam Evidence will be renuired from the GGM as to the legality of the loan agreemnt
1 E 2 Information and conclusion on availability of an applicationFAA together with sufficient information and assurances to indicate reasonably that funds will be used in an economcally and technically sound manner See Sections I-A II-B and II-D Application received Janury 15 1968
16 FAA fl201(fL If a project inforntion and conclusion whether it will promote the economic developapent of the requesting country taking into account the countrys human and material resource requiremnts and the reshylationship between the ultimate objes6ives of the project and the countrys overall economic development See Sections I-D and II-B
17 FAAJ 20ij(J If a project information and conclusion whether it cifishycally provides for appropriate participation by private enterprise 8ce Sections YI-C and 114
I- FAA i22(a) Total amount of money under loan which is going directly to private enterprise is going to intermediate credit institutions or other borrowers for use by private enterprise is being used to finance imports
rfro private sources or is otherwise beirg used to finance procurementsfrcm private souwces See Sections II-C and II-2
9 FAA 207 Infosation on the emphasis placed en
(a) encouraging development of economic political and social institushytins No apparent relationship
(b) nelC-help in mectingthe countrys food nredo Project Vill conshytribute to production of food for lccal consumptioa
(c) in-proving availability in the country of evucated trained manpower Project will contribute to the deicloginext of trained manpower as one of the functions of the management contract (Soe Annex C para 5)
(d) prcgrams aimed at -malnutrition disease eradi atDn slum clearanceWater purification sewage disposal health education naternal and child care(includin fimrily pJnrning)) -nd cthcr public health ausistarice See
(c) other develoment activities including industrial development free
labor unions cooperatives tnd voluntary agencie transn)rtatin and ccshymwquication nrStczn capubiliTies for economic planning and public adlinisshytration arban develo-mment and modernization of laws to feilltate econcnicdevelopjen- GO- intends encourage develo vient of cooperat yes particularlyin the Left Pank areas Project will also develop capabiLi ics for cconoaicplanning and public a6~inistration (Annex C para 5) Other not applicable
20 Information on the extent to which the r-untry is
(a) cttcmting to increase food production and food sto a-e anddistribution felitics This project is one evidence of Moroccos efforts in this direction See also Section I-D and I-E
b) creating- a favorable climate for foreign and dmestic iri-ate enterprise and invcstrrment The GCM has recently reduced profits twes anrannounced a ten year guarantee against tax increases See Section II-E-2
(c) increasing the role of the neonle in the developnental procecsNo apparent relationship to this project
(d) allocating expenditures to development rather than to unn-cessarymilitary purpoes or intervention in other free countries affair See Sections I-D and Ii-
(e) willing --nribute funds to the project or program Th iOMhas already dcvo o-sidcrable resources to the project It has badieted13 million for th i oulouya for i7 See Section I-C
(If) making economic zocial and political refo ns such as taxc coliecshytion iYprovcmenLs and chan es in land tenure a Royal Comm ision has been appointed to make recomendation on land tenure probleras in the Lower I oulouya
(g) responding to the economic political and social concerns of its people and showing a determination to take volf-help wcasuren See Sections I-D and II-E
IT
-ovi~cd l v r 13 1968
- 4 - LDffIED OFFICIAL USE
21 FAA Inforn ation about multilateral assistance being Iurnished to t e country and whether the loan will encourage recgional development prog-rams The I1D has eztablihcd a Consultative Group for Morocco which rvicws the GOM development program anui prgress See Section II-F-4 for infoaation on othtr donor assistance to Morocco
22 A Extent to which the loan will contribute to the objective of ass ring naximu par icipation in the task of econonic dovelop--ent on the pL-t 0 _he people of the developing countries through the encouragement of cocr-tic private and local govenmental inLitutious o apparent
relationship
23 F _-_Dta_ Infor-ation and corissions whether loan will oncourageeffor s of t1e country to (a) increase tie flow of international trade (b) fostcr private initiative and comptition (c) encourage development and usceo co opratives credit unions and savingss and loan associations (d) disourgo monopolistic practices (c) improvo technical efficiency of industry ariculture and commerce (f) strenSthn free labor unions This project is cxpected to increase technical efficiency oi-agriculture
2_ C-1L lnforzrition and conclusion on how the loan will encourage US privte trade and investment abroad and how it uill encourage private US participation in foreign assistance prograas (incluiing use of private trade channels and the services of US private enterprise) See Section II-
25 VA-+_ Conclusion and supporting information on compliance with tho Co resional policy that engineering and professional servicos of US fir-ms and their affiliates are to bo used in connection with capital project3 to the nixinua extent consistent with the national interest US engineerirn and innsgcment services will be financed tnder this loan
2$ Inforamtion and ccnclusions who+her loan will pormit American rx-l] business to participate equitably in the furnishing of goods and
z orvices by To be satisfied in Loan Agreementfinanced it
27 - t(a App I18 Complianco with restriction of co -zodity procureshy o UsMS except as otherwise determined by the Picsicent and subject to ttu--- rcortir require r-nts Procurement will - liumited to the US for
reiabnrs nts and to ioocco and other free world countries 1-or US-cwne(d rhu disburseacnts
23 -i Comiance with bulk cozodity procurement restriction topriecc no l-ho han the nkarkot price prevailing in tho US at tia of
bull puchas Not applicable
29 FA Cozpliance with requirement that matrin insurance be purchased on commceities if the participating country discri-inates and that insurance be placed in the US To be satisfied in Loan Agreement
30 IA 6(a) Information at to the utilization of excers personal property in lieu of procurement of new items Will be required ai appropriate under terns of Lean Agreement
f
1 77--7 -77-77-777
31 FAA 61](a)(_) information and conclusion on availability of enginoering i financial and other plans nccx sary to carry out tho assittance and of a
reasonably firm cstimate of the cost of the assistanco to the United States
See Section II-D
32-ecessaryFAA t611(a)_(2) legislative action r6quired within recipient country and ibasis Cor reasonable anticipation such action will be completed in time to pormit orderly accompli-hirtnt of purposes of loan See Section I-A
33 n _AA161nJ0] If water or water-relatod land resource construcshy
tion project or program information and conclusion on a benefit-cost comshy
putation See Section II-B
3 4 VAA 611(c) Compliance with requirement that contracts for construction be let on comp-ctitive basis to mamum extent practicable To be satisfied
in Loan Agreement
If a loan for a project of $1 million or more certificatin35 FAA _61l(r) by the principal AID officer in the country as to the capability of the
country (both financirl and human resources) to effectively maintain and
utilize the project taking into account other US-financed projects (Such
certification is to be pproved by the Administrator aL the time the loan
is authorized) In process of being obtained
36 FAsgJ2 _6_h Appropriate steps that have b-en taken to assure that to the miaximum extent possible the country is contributing local currencies to net th-2 cost of contractural and other services and foreign currencies o- icd by tho US are utilized to meet the cost of contractual and other services The GU-M is contributing over $30 million to compleXton of this project Excess US-use dirhams will be used for eligible project costs other than US goods and services
37 FAA p619 Compliance with requirement that assistance to newly independent countries be furnished through multilateral organizations or plans to maxishymum extent appropriate Not deemed appropriate in view of previous AID financing and ccoiitment to the project See Sections I-A and I-D
38 FAA sect620(a) AcnO7a n3]7(b) Compliance with prohibitions
against assistance to Cuba ard any countr (a) which furnishes assistance to Cuba or failed to take appropriate steps by February 14 1964 to prevent ships or aircraft unier its registry from carrying equipment materials or supplies from or to Cuba or (b) which sells furnishes or permits any ships under its registry fr-om carrying items of primary atrategic signifishycance or itcms of economic assistance Morocco is not-known to be in Violation of these sections
39 FAA q620GL_ If assistance to the government of a country existence of determination it is not controlled by the international Communist movement The Secretary of State so determined on October 11 191
40 FAA 620(c) If assistance to the government of a country existonce of Indebtedness to a US citizen for goods or services furnished or ordered whore ouch citizen has exhaustod available legal romodiesor where the debt
i - ow - -- _---- --shy
- --
-6shy
is not denied or ontested by such government or the indebtedness arises under an unconditional guararty of payrrent given by such govornmunt No such indebtedness is known to exist
41 FA _(a2LdL If assisitance for any productive enterprise which will corashypote with US enterprise existence of agreement by the recipient country to prevent export to the US of more than 20 of the enterprises annual production during the life of the loan Not applicable
42 FA4 - 16Q_0_ A If assistance to the government of a country extent to which it (including government agenies or ruhdivisions) has after January 1 1962 taken steps o repudiate or nullify cuatracts or taken any action which has the effect of nationalizing expropriating or otherwise seizingownership or control ofprcpertv of US citizens or entities beneficially owned by them without taking appropriate stops to discha i ge its obligations No such steps cr actions are-known to have been taken by the GOM
43 FAA~L AjPj_10_9 Compliance with assistance toQ0 prohibitions against any Comunst codntry ozocco is not considered to be a cocinrunist country
44 FAA - 620(gJ Corliance with prohibition against use of assistonce to comp satc owners for expropriated or nationalized property To be satisfied in Loan Agreement
45 F AA 8620(h Compliance with regulations and procedures adopted to inshysure against ue of assistance in a manner hich contrary to the best inshyterests of the US promotes or assists the foreign aid projects or activities of the Communist-bloc countries To be satisfied in Loan Agreement
46 FAA 06-O(j)_ Exitence of determiration that the country is engaging in or preparing for aggressive military efforts No such determination has been made
L_62_O Information47 FAA on representation of the country at any intershynational confererce when that representation includes the planning of activishyties involving insurrection or subversion against the US or countries recoiving US assistance No such representition is known to have A occarrect
8 FAA 62JJ Existence of a determination that the country has permitted or failed to prevent destruction of US property by mob action or has failed to take steps to prevent a recurrence and-to pay compensation NO such destruction is known to have tak-n place
49 PAA l620(k) If construction of productive enterprise where eggregate value of assistanc to be furnished by US will exceed $1OO million identification of Gtntutoryauthority Not npplicable
i-xQ2MZZ=
1 shy
U 6 50 _Af( QCinsidoration which has been given to denlying assistance X to thu government of a country which after December 31 1966 has failed to
- institto the investnint guaranty program for the spcific risks of inconshy
vertibility and expropriation or confiscation Satisfied See No 7 above
S51S J lj Compliance with-prohibitions-againstn as~istance to countries which traffic or permittraffickingwith North Vietnam Morocco is not known to be in violation
52 E_-L620(_L If country has seized or imposed any penalty or sanction against vn US fishing vessel on account of its fishing activities in
intcrnationul waters information on the consideiation which has been given to excludirg the country from assistance No such situation is known to exist
53 FAA FA r) UAR restriction Not applicable620(p 9117
54 FAA R620tl) Existence of default undhr any Foreign Assistance Act loan to the country No such default exists
55 F ) C-nsider tion of whether co ntry is devoting unnecessary percentage of buKet for military purposes or use of foreign exchange for milita-y equipment
56 FAA 62o(t) Proibition on aid if country has severed diplomatic relations with US unless agreements have been negotiated after resumpshytion Diplomatic r(lations have not been severed
57 FAA 9620(u) Statur of the country on delinquent UN obligations Morocco is not known to be dlinquent on its UN~obligation
58 FAA R636(i) Prohibition on financing non-US manufactured motor vehicles Will be satisfied in Loan Agreement and Implementation Letter
59 App 102 Compliance with requirement that payments in excess of $25000 for architectural and en Jneering services on any one project be reported to Congress Such reports will be made
60 App R1O4 Compliance with bar against funds to pay pensions etc for military personnel Such payments will not be eligible for financing under th Loan Agreement
61 App 9106 If country attr ipts to create distinctions because of their race or religion among Americans in granting personal or commercial access or other rights otherwise avaVIfable to US citizens generally application which will be made in negotit ttons of contrary principles as expressed by Congress Morocco is not ku IDhave made any such attempts
iInD OFFIIt t USE
0k
OFFICIAL USE 62 AIwp Rii Compliance with existing requfremets for security clearance
of personnel Will be satisfied in Loan Agreement and Implementation Letter
63 App R1l2 Compliance with requirement for approval of cortractors and contract terms for capital projects Will be satisfied in Loan Agreement
clJ164 Aup Cmpliance with bar nRainst use of funds to Tay assessments etc of US meiber Such payments will not be eligible for financing under the Loan Agreemunt
6 Anp P115 Ccmpliance with regulations on employment of US and local personnel for funds obligated after April 30 1961 (Regulation 7) See Section III-C
66 Aim Vietnam iron and steel restrictions Not applicable
67 p l9 If a country other than Greece Turkey Iran Israel Republicof China Phillipines or Korea reduction in assistance by amounts spent for the purchase of sophisticated military equipment
68 Anp fi4O1 Compliance with bar against use of funds for publicity or proshypagjanda purposes within US not heretofore authorized by Congress Such use of funds will not be eligible for financing under the Loan Agreement
Morocco is a traditional Islamic monarchy with a constitution The conshystitution was implemented followaing a popular referendum in 1962 National regional and professional elective bodies including a parliament were established by universal suffrage under the constitution in 1963 The parliament was suspended in 1961 in a State of Exception because of its inability to agree on measures with adequate urgency to meet the prevailingecononde imperatives In July 1967 the King appointed a Prime Minister to direct a Cabinet of appointed technicians
The constitutional framework nevertheless remains intact in Morocco and nationwide popular elections for some of the professional chambers were held in August and September 1966 The press is relatively free in Morocco and the right of diLsent prevails provided that such dissent does not violate the prohibition against political attacks on the instishytution of the monarchy or the person of the monarch
LI Under the revised US AID Policy for Africa agreed to in November 1966 Morocco is designated a development emphasis country entitled to receive continuing support on a country basis as part of a multilaterally coorshydinated countrj program Morocco was subsequently included in Presidential Determination 67-14 (January 5 1967) I
LIM=TE OFFICIAL USE~i
- l go
bull ~ -
f
DEPQbi) STATE AGENCY FOR INERNATIONAL DEVELOPMENT
WASHINGTON DC 052
CAPITAL ASSISTANCE LOA11 AUTHORIZATION
Provided from Develoroent Loan Funds Morocco Second Lower Moulouya Irrigation Loan
Pursuant to the authority vested in the Assistant Administrator for Africa of the Agency for International Development
AI)by the Foreign Assistance Act of 1961 as amended theIAct) and the delegations of authority issued thereunder I
have received and t-en into consideration a certification from the Director of USAIDMorocco as to the financial and human resources capability of Morocco to effectively utilize the Lower Moulouya Irrigation Project taking into account among other things the
maintenance and utilization of projects in Morocco previously financed or assisted by the United States and I hereby authorize the establishshyment of a loan pursuant to Part I Chapter 2 Title I the Development Loan Fund to the Government of the Kingdom of Morocco (Borrower) of not to exceed five million dollars ($5000000) to assist in financing the fore] gn exchange and local currency costs of goods and services for the third phase of the Lower Moulouya Irrigation Project subject to the foLlowing terms and conditions
1 Interest Rate and Terms of Repayment Borrower shall repay the loan to AID in forty (40) years including a grace period not to exceed ten (10) years Borrower shall pay interest on the unrepaid principal and any interest accrued thereon at the rate of (a) two percent (2) per annum during the grace period and (b) two and
one-half percent (2-12) per annum thereafter
2 Currency of Pepayment Repayment of the loan and paymenu of interest shall be made in United States dollars
- t- n t - - - shy
3 Other Terms and Conditions amp(a)Goods and Services financed under the loan
shall have their source and origin in
(i) the United States if disbursements therefor are made in United States dollars or
(ii) any country in the free world including Morocco if disbursements therefor are made in Moroccan currency
(b) AID Regulation 7 shall not apply to construction -work financed under the loan because as detailed in Section IIIC of Capital Assistance Paper No P 667 it is important to the national interest of the United States that the direct costs of construction work performed by third-country nationals be financed out of funds made available by the Act
(a) Such other terms and conditions as AID may deem advisable
Assistant Administrator for Africa
Date
~~~~~~~~~~~~~~~~~~ - q v
7
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This firm will also undcrtnk- uu-orviston of construction The engineer ing not yet performed can be aea ished by GOM forces andor private engineering firms
Construction of the extension to the rrain irrigation and drainage canals Jand preparation rector cinl ani drninaive ditches will be performed unllr cntact t) 1 cc rt~r~iet m)t hi in the ene of the
r-abilit tion of the L2tL Pz- Dd iarl Trnc t
e Cronning Patterns The existing erning pattern in the Moulcuya including botnirrigatcd and dry farm ingincludes grain forage citrus vegetables olives grapes and 6 small amount of leciduous fruits and nuts Of the roughly 2140Cy) acres of agricultural production in the Moulouya about 177000 acres are in field crops 24)) in vegetables 16Y)O in citrus 15000 in grrrcs 540Y) in forage crops 1700 in olives and 15)0 in other fruits and nuts
Taking into consideration rast and present trends in plantings as well as agronomic and price and marketing factrrs the following projection of cropping patterns has been developed for the Lower Moulouya
PROJECTED POPPTG PATTFRNS T1 HE LOWER MOULOUYA
(In per cent of total irrigated area)
Left Bank and Triffa High Serice
Triffa Sector - Sectcr rriffa Class Class Class
crop Main 27 28 East I amp II III IV
Citrus 40 60 10 10 10 Vegetables 15 10 15 1) 20 10
Crtton 15 20 10
Fcragpr 10 20 25 30 4o 30
heat 10 6 20 25 20 35 4o
Grip 25 24 35 15 Dy beans 5 10
Sunflower 10 olives 5 0
100 10) 100 100) 1i 1052i 100
a Incltdes double cropping
- - r- euro --- 7
~7~TF~Wr~e~ALUSE
-21 -
The projected cropping pattern for the Bou Areg plain includes cottonLJrirdg the frrt Five yearnejtinted 1r of the Class I)fand
the project jitwould be grown on nnII landn Tht renresert only 960etrravres) ectz ri)cr)e area The cotton acr~a e ry increasep 2ceafter live years if ritisfactory drainage conditionshyrre achieved in the Bou Arev
cotton grown i 1xonp tarx- Trdltionally Morocco export its-Jr- cron an irr IJ hort cble to rmeett Cotton the reuirrents
r the oroccan 2pinningr mills The croppni-attrn of the Triffa East (about 180n acres) Js projectedt Tnrlude 15- (about 27 acres) in cotton It is likely that becausef ihe limited extnt of Class I and II lands in the Triffa Eas cotton not increase beyond that percentage
1t i evident that the amount of irrigated cotton that is likely to bein ther-n Moulouya is minimal even assuming that local drainage condi-T nare i asuitable
f Technical Sundnv--s The AID Project Engineer hps reviewed ii) thedat and ajor construction performed to date onronct and finds the technical requirements this long-ranRe phasedsufficiently defineoto ccntinue the project on an orderly schedule The estimates of cost of prsirct facilities have been determin-d by SRI from average va)ues oftrit cots obtained frorr reviously ntiarded contracts and from etniled( -s-nand analysis prepared by the iHydrotechnic Enginering fir oft-o tyieal sectors located in the Bou Areg area The costs for the arc ent contract have bcen estimated by the USAID It is consideredthat the depree of engijeering planning undertaken and the deterrrinitonr to the US Goverrment are adequate to meet the applicable requireshySt- n Section 611 of thie Foreign Asistance Act
7717gt
1 --shy
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E Financial Status of Borrower
1 The Moroccan Economy
Grrwth of MorocLcts GDP in real term averaged about 24 per yearin 1(4 and lr li Per capita DP In 1C 5 wan anproximotely t162 A (er Irr-ht in (6 resu]trd n a drcrcne of slightly nver in GDP which tlh vpulatior grc~vth avrring 3P4 per year rnrsJted in a decline of -r ornita GDP In 16 ii brut $154 A recnd droughtcccijrred In C67 but i not expeetid to have the severe effects of the 165 drought Crop forecasts for the first nine months of 1967 indicate a 4 increase in real GDP above the 1966 level This is also the economic grcrdth rate estimated by the IBRD for the pezxA 1965-70
Moroccos economy is heavily dependent upon the agricultural sector thich has averaged about 15 growth per annum However growth of the mal modern segment of Moroccos agricultural sector has inshy-reased at the rate of about 7 per annum
In 96 the International Banik for Reconstruction and Development (IBRD) preented a number of recommendationr denigrned to increase Moroccos economic growth rate On the bacis of these recomfndations the G004 proceeded with planning the necesrary program to increase investment levels fr- the i 63-65 level of 11 of GNP to 1r of GNP and stimulate the rate of economic growth from 2 to an average of over )4 annually for the five years 66-70 In addJtion the GC4 has taken measures to curb the population grovth rat while placing increased emphasis on raising production of both dryland (wheat) and Irrigated agriculture
2 Investment and Savinms
The level of total gross investment has remaind at aboit 11 of GNP for vera year althugh the percentnoe declined slightly in 165 Under the GO Three Yea5 Plan 1965-67 the gross investment t-3rget woz ret at DH 3 billion- Actual invev-tment expenditures for the three yearpeirod reached about DH 46 billion of which the Governshyment ezxenditure amounted to DH 1 billion a against DH 21 billion budgeted Thin may have beeo partly de to the GOMs deliberate ausshyterity pollcy under the hIF rtbJli7tion prci1rnr but more probably it van duxe to the shortage of trained cadres to -lan and execute projects
In the private cectcr conziderable inounts of ravings may be hoarded due to lack of project attractive t- inventors The lvl of private investment has been runnihg at about 51 of GNP thrrugh 195 The 0014 4 incentive to private instors hnr cut profit taxes from 4320 to V and announced a tpn year guarantc-e against tax increases
]L- $ = DH 506
777=-77- NQ
r y 7k1- T e - W lk In
j - 1) 7k- - _
- 23-
Loan are avaiiable to )rivlite irve-tcrn freo th 3JfIDiN s rctr special funda to prcmote touricm devc firvcnt
Under the 1r86-1972 plan abut to br irtntt level are to be accelerated considerably reaching A of GNP liv ]970 Mor(- Irlyir haviiy on foreign 1 to aciuw cc higher lve1
3 Central Government FinancP
The Moroccan money supply which had Incrrased ify 76 per cent in 2965 remained virtually unchanged in 966 The first half of 1967 witnessed a 5 Ter cent increase in the money supply Te major part of thi increase as concentrated in June and July uhen the supply reached V14 0j lion Currency In circulation expanded rapidly in June and July
nnl factrrn being reinforced by commodity hcnrding related to the 1ide~l Et crisis Demand deposits did not show their normal decline nthe first half of 1967 Deposits with commercial banks declined nlightly while deposits with the Treabury increased as public and semi public agencies contisued their transfers from the banking system to the Treasury The increase in money supply in the first half of (7 ran I raced to tho nzon1 sonal increase in net foreign assets not c y the custcirry rlelir In claims on the private sector Clsirl (n the erivate sector declined slighty until May 1967 but Increased hr-gb June and Jily due primarily to additional financing of textile stocks ClbiJ ante Government rose by 10 per cent in the first half of 967 the in central brnk claims on the GovernmentI being rmainly offset by larger deposits with the Treasury
Ordinary budgetary revenues which incrurted by 5 rcr ent in 1566 tre cxrcted t-) increase by 7 per cent in 1( to DII 21 billion DeampDite a derea3e in agricultural tax reccipt r- fror diret taxes rose by 10 ppr cent in 1966 and a 2 increas estinated for S67 due to tric or controls on income declarationr d an accelerashytion of tax cller ns Owing mainly to a relaxation of the import
program in late 1 5 and a concomitant increase in tariffs on certain ccnonter goods customs reneipts increased by 21 per cent in 1966 Although budgetary estimates call for s decline of 3 per cent in customs receipts in 1S67 it is likely that actual receipts will be considerably larger in view of the import liberalizatidn measures intro)duced subseshyquent to the estimates Receipts from indirect taxes state monopolies and other serces are expected to be 11 iv- cent Ipher in 1967 owing to increased profit on -ugar sabr-i and L r(m the newly created Office do Ccrmercalisaticn - d-tation (OCE)
Recurrent ordinary buiL e(enditures increased by 34 per cent in 1966 ar-i are expected to increase by an additional 7 per cent in 1567 reachin- D1122 billion Although wage and salary scales in the public
Banque Nationale pour le Developement Economique
TT~~- - I777
2 Cf
sector have1bec z h t - rrvirI urli 11i g 14-6 -nd PO becnue rX toi Ijt e f (]r o n 4
ill tile ic urrnnye andr)not i on dnd Publi ht rentrn -yr-otn lno IncreasedOthrr t ill- t il r ne by ) vr cert in J6(
i ninlyrt -br h Inc-l
( Ihe ( t r- rl t ip t t C itur f T)h 21h iilli n
is (( ItI t lt r c0 a- r n n o I- c t b It ihstnl id vv ih n t r-t have hn(er - en 1t2
(IM ii ture( T f fu traordJ nary budrzct exshypend ituren a r y -t c ~ i vi -iscz Portal Checking sy-stcsul)rrcing t (I ltIt Ct -- ind creirn shy
nnet The f r er tnc I hha ccrc ed from a htih of DH 5-7 millIJn in _ 5 millIn r C46 F cr ats foi ]7 place Cro n w I 1(DI)J79 ill ni DDn etlc fi nancing has alo u 1) 5 p (- I3A27 iIliun to an entirnted DH 1142 million
1 14V ) I nv 1 ri n nI(c1 franc n is 77-ected to be ol t y ncrewed bcrrowing fr-ir t he Cestra 9ank which hud been held at mcdert vols iln 165 nnd 1a66 Under the 1TFtaiby agreement of October 16 the qob) agreed to taBe a3] rocrrnary meurer to maintain as table curoonry rPnt inl th nr1d-elrto th b a ent of the ePrncriynnd a vnbl- hn1incc X nvroent P rt artt to t rt fien of tho Ccntin- Honk rstz (erct are nct t r itr June 30 Y-ke 7 lov l b th n Diif ) mill] (n tlcnber -c P thai I o illin usit I ])ecthr 31I62 (GC bc w t
C B1rtrp - vt DH 12 iri 1i nor ]S67 or DH 6S ij lionEan tisated (r fo than the aproved crd it expanwim
Thitrd ordivary nil extraordnnry buThTt deficit of DII 7-19 millI n fcrecat Fr 1 67 in exnected to be fnanced by not freign
tan reof DII )75 mi~l in nt recurity 12ue 1 T111I vlion a - nt ry tiat Po n Che )ir d-nC i 73 r5 Pn
riI is u h i a vti v mrr nrr-e jssIof fvr is id a erital The vnfsa revcred in 1d6 when lnrger r nyrentn eEecially on food itcmo an n -lewdoun in
igo ra a deficit of $1 millcn ProjectiOnz-vt rvultvd in ror 17 r~ieat inrrerned importsonly partially ccnrennate by addshytsa t frnreirn r ntil rrceiprs ard mprrvement in the nervices account will reult -n et of aprroximately $)20million As rhoim in the following tabl -r tion for l33 and 169 how overall deficits of
14 and m] ivi_y$i It
rqVV t1 4~
C)rgt
---
1 -)I+-IRF1
1ROCCO - rTANC OF PAYME 1qrt - 169]_ 5
6rfi0 1 1C(8lr67 i r(o
)xrurt 2t L( I L-5
Trade Bnlance 11 15 - 75 shy - 75
rviee- ret - 7 - 5) -35 -23 -2
J]-i of Good rnd Service- - 3 - 65 -II - ti - (5
Trn-Ifr Pr ynts (nt) P 21 33 37 33
on-cntnry Carital (not) 92 64 6 6 5
Err-rs nnd Ov rrion- (not) - 23 -2 1 3
eranl Bannic __ - _3 -_ 3 - 1i4
Atrh thert ircjected reficitn are of the nnme order of 1 nishytude a7 thcr incurred in the period i66 the Situatlcn i findarentallydifferent both in rerprct to the source of the deficits and in rer-ect to the meat0Y gtr m etin7tecr In the f rrer caive M5recco uffered
_frcrr a very h-vy cutfc of Drivtes cuitv fo-ivr with a shar) decline In forein nt exerditures in Morocco In the iatter case th projected deficits r- rcre a functicn or accelerated crcwth risingdebt ervieiiw tri tho abnrcn of forv eeble additiens foreign reshybull ourcs nere7ory 4( r2Vm rAf finmncting To nect the def-cits during the reriol 161 61h MWreco ob1id to drw down rorcin exchange reserves of over $]c milicn The snrti tpv of financing is no longerpozslble ince no or-res- ruch reserve- Even ifMorocco yr
mn nina r rve_ ore (]rrfii on to th r-ixirun etnt enribe nnd the [iI tnfldy i- un M-r-r e i32 till relA re nt rnt 15 millicnj1itionn ftr ign as- e n 1 6 beyond hat r recnently fcreeeshyable with ver nri- nry Officilr in In i6 reserves are cotImnted Pt 72million c hih crn V 3 million i caly required for currency coy r
Foreign InJebtrdne n of th GOM Mnroccos external rtnte ard rutlie enterprie dett amounted to
$r) millivn in lr6 Debt vervcirig rpynents for (66 trtaled about
$5) rillion g-eement approved in October 3(67
I- -- Ishy
37 millin or arprcxitrrntoy (j Iroccor totnl eXoort earning of h28 millicn GCnerally nxt rrO dbt FervicJng renuiremennt of leas
than r of totna -ort nnrlt In onrldered to I r tirfactoryrntio D-bt r rnJrcLct n Ir the reriod 1-(y 3on Trerent external debt including thnt wrtl(n irreently undibur-ed are hown n th fr lv tahlr
)] L v yr t n
Eternn Vtnte anc ] bntcrnrie Debt
M131 o)nr
Y aI Net Outrtnnling Debt Debt Service
(6 it 479r5 $367 J-67 452 3)6
Z616 44469 2 0 2C-
365I3 37 389
33 383 33 6 371
5-h 31 n 352 275 34121
]176 2661 32It 1977 21133 311 177 22)6 307 19 i0l74 256
1733 255
rgtternal debt rharre n rerent debt nnr rhon above do not increase ubtanti-lly over t rt 1)year- reaching a maximum of h44 millior
in J6 and decrpt- n cr - tently threoafter At the are time exportearninr r _rc extett nc-are Aring that Morocco does not inshycreswre it etrnn2 cbt t irate ubrtantially nb-vc ihat has been the core th adfiticrn dbt e roquirrentn reulting from the propo t Icon o 5 ijilion co r 7crncepr-ional term hould not have a i-nifiant affect n 1r o - ab lty to neet itv g rc-atedebt ericn rcnrib2t~e- the pros ectr of reprment of thin loan ore coniderci rearcnb)
U I -
F ot h-v C IuIJI rmt I shy
1 V amp~ rVml KI
PUC- -jrVi Jt t 1 11 nflrcj urlc 1- th )qn --P I uti u rhnrrl -1r- thr U- Tr- ry- R- -nymc nt
c2Il f n 6 1 bf r I- till 11 nfl r- n-r i n of O r--niC(Io~hi U 1 1 rr to
Tn vil ) f rvc hi tvlrll 1 (In- - n- u--n E r me rrinshycgtay F rntwir w ourc o -o- rvI ortf-V3 1 rncing of
Uf f -r rrrir- ur3r 4~ v -rin Iltrt nt ndd shyt -n t ) in- lint r b t l r -n rort- o-orco trorl-- V -P
r i 1rnd h L-torie Furcl-trin firr- thrjt US r r~ crvirrf- u~d be~
T L I1 c vt r- -ly ] -ubt fu 1 n vi pw -I -ror-co Ir of
ut1JpcO In thi rjert f it -- r- 21 npnred by d1-nr- cothcr t~han the US
2 ]P-t ofI Prr l1 on Prw- Fntrrr
Phij rrcjJ-t -11 n-t h~ -in nrwerq Prrt n rr- tc ntrshyr~A~r fi-mc 1bho und for --roern p o n
3_~~PrCT--rty
rr-vIi-n 1 h -d r the loan ragreement for Icntifitcation ef any r mIjrpt n ctri b- rt througn ut 1zatn (f xccr- prorerty
If rv c u~eAID n-mrcf u urr thi )cn - I~ut~ em avoi3ablo r rovvrirrnt -rrperty rather than nce iteni
4 Otli-r Fr- Wo--] n-Fnlc4rm
Dr mi tW- o] 14rocco- i~ajr ovr-ec -f exte rnaX
rrtan~- hrtvfb - I r ~ ant fl Fr n fole by Kv-it
Sgio F rneflit r b-en 1lmrntrd to tcfohnjip n5tnnen bi eoni~in I th u y f Fr--h tprhntcian tcacrr ind cther
~ti~r t~ ec-tnmIyrt-n Friinch Aid to Mcreco In 1065c~oc~ (P-art f-r txychnirril aItn -- j se of tl5 w1nfor bu~dget rurport f ir in rt t- $1 1ri1 icin in ennita -rojectM- n vx- rrcd
1Vw1tvnn tioI t-) Frenh rurtnnd +16 r11ion tie-I to -onyiint to orrrcr Frrmh ccilcn~For _-rrc-ratod land and rquirrmcnt
West GTrrnmnny liar agrcrcd to nrovIe ccme j27 mM22~cn 1n catital arirtanre and cromrndity lnoi7 t n OfIcon( q92 thi o totril$223 miJ lien ha actuary b-Pn cr-Itt--d under Inn ngrepment This
And a lk5 million commodity loan both) signed in 1965 All Wet Gerzaan
Ufla
-28shy
capital asnistance I vuectI to be tied to German exports Germanyhas in addition 1uvvded r tteysubbtantial technical assistance f
The IBRP hah rade four 1nns to Morocco since 1962 totaling$6) million Ofthin totnl a [175 million loan in 1965 wos fordevelopient of the gidi lit-r irrigation perimeter Other assistance by internntIcnal Iending arncie include an $11 million credit byIDA in 1C65 for rcendary diicction projects and an IFC ln and inshyvestrent of $1 1 ri jnic alo in
F tit i by [c - dncr tr dh elo snt ofMorccco rircuVt r oii +h b-]n jt-TKT r nbove n 2 )6 niliion Kuwait enn in i66 for develomyment of the Tensaout Prnm n irrnten nrooetand a $77 million Kuwait
0jl n )nnsn r(niti-nertcir
loan for extrnion of the Tadri~ Irrigation Perimeter
The following- trbe surrlnrlzes other free world arlztance (excluiin technical assistanc-) to Morocco for the years 1(62-66
($ Millions)
1 62 1cf_63 96) 19r65 19)66 Fneea 4) 5PO 64o 700 shyWet Germany 223 gu 1t 53 281 IRD 15 175 10) 175 IDA 110 IF C 1 5 7 7 7 0 I15
TOTAL 55 62 1U3 W
b Includer only lo-ng term loans and exporter credits - Includfs 25 million private capital
Eternal ansiztnnce to the Lowier Moulouya Irrigation Perimeter -nce 1060 hres been con[fined to US upport Consdiering AIDs previcus
involvement in and conmitnert to the Lower Moulouya an AID lean in P2t to be Lhi mol aprroriate source of financing for this project
LID
II
q
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SECTION ITI- Y-TTYT TIMPLPTrION
A Periret-r Ad-instrrti-
Authority for irplerrentvtnn of the deveorpent prrgrn frr the LowerMoulcuya Perimeter and rs wel arth crnntinuinz mrnnrrmenertC tt r t- rrtnr V theltbi nad overationity iOfic 1cne 4
n r I e1i- i d Vit4 i Iv ~ Ct rreated i Otb (rJ rn-- of evcn inrmi-rriional offices hich reelaced the Office de Mire en Valeur Aamprlcole (OMVA) Under the OMXA and itspredecessor agencies authority for ad-inLtration cf irrigtion proJect war centralized in Rabat
Under the new regional office organization responsibility for adminshyistering ORMVAM is vested in on Adminirtrative Board of 10 members headed by the Minister of Agriculture and Agrarian Reform as chairman All ether board members (other than the Chairman and a representative of theInterministerial Economic Ccrmittee) represent agencies or activities inthe region of the r-eriret-r whic comprises parts of two provinces Localretresentatives on the Board inc]-de the governors of the two provincesOujda and Nador the presidents -f the two provincial asembtes and of the two provincial chambers of agriculture as well as the perimeter Director
The responsibilities of thie Administrative Board include review of theecys program establishment of its organizational structure developshynt -)f its annual budget and establishment of rates and conditions of
Siyfent for water and other services provided in the perimeter
The Director of OP4VAI-I is dbarged with the responsibility for executionPthe vclicies established by the Administrative Board end administration of oil ORMVAM functions This responsibility includes selection of staffn pserating perrcnnel acting s officia ORNIVAM representative in all ntztinns with -tate and othbr public or private bodies and the
f of funds within limit Indivated by the Ministers f Financetent rn fricultural and Agrarian Reorm
Perimeter Oranizatlon
ORVAM oreanizatlonal structure consists of a directnrate five maj-r rvlces or d-vsicns and one separate bureau Two services qei Administratif et Comptabl- and Service du Yatrial are conshycor - th adminisration and lcgistical support of ORMVAM operationshi1e the remainirg three services rind the separate bureau are Involved in t-hni al matters associated with agrcultural developrent Each ervice has one or more subordinate bureaus Fei-ce Chiefs and thehead 0 rch bure-u report directly to the ORMVAM4 Director
-~F7E MEw-
-30shy
2 Perimeter 01ttffnr
OPIVAM orgttnlrntlon treture calls for 557 positions of whichI L or 7 Mlled n were nher 29 1567 37 of the 71 Postshytion vacancies reported 1ern the high and middle levels Foreign(chiefly Euronean) technclan occupy I)of the 16 high level positionsthat ere filled at thfit tire
Whil OPM ut in th- lcng run lor to Mercecos oducational yster to prvidr tn crrf-nn2 to ratisfy current rdurojectd rcshyquirement th currnt high and mlddle level vacancies rrouire uersonnelwith oxt nive nrior rxericnce To fll this preent need it will be necessary for CRIVAM to continue its program of recruiting foreigntechnicians until ruch tire ns graduates of Moroccan educational programsacquire the necesnry exrerience The managerent assistance componentof thin pro~ject ]e-rribed In the Project analysis will to some extentalleviate OFIWAMs high level personnel requirements
3 Inw1 ernetation Sehedu]
Months Implementation Action
1 0 Sign Loan Agrcement
2 2 C-tiify conditions precedent and Y4tiate procedures for selection of US firm for management contract
2 Negotiation of extension of advisory Engineering Services
h 4 Contract (Hydrotechnic) Negotiation of Managerment Contract
5 60Cmpletion of Project
C Waivers
Sect ion 7 rf AID Regulation 7 provides in substance that theUnited State ill not finance direct costs of construction work performedby third cc-ur y nationals unless the total co-tn of the project withvhich thr ennrtrumticn w(r is asEcciated donot exceed $2On)O orafter excluding national of the country in vhich the site of constructionis located and Dersons vho nave resided therein uninterruptedly for morethan three years imrnedJately prior to any determination under Regulation 7at leant 0 of all uernons who work under the contract at the site of conbulltruction are United States citizens or the employment of third countrynationals is necessary to avoid excerrive corts to the United States
3
31
Section 2175 authr-ri th Regional Anitant Administratorto waive the nrovinions of Sectionthat it is 2073 if he dcterriner in any coneimportant te the nationrn intercrt of the United Stutes tofinance the direct eots of construction work performed by third country
nationals
A prviou1y r ic i c t tht for thr ct Tartthe -r c ct b- 1jeuj out r -cnorbr f cnrtructioncontracts with Morcccrr contrctnr an in the i-t Uowfevvr itentirely psnible that there may b- roe contractn with cntructlonfirms partly owned by third country nntionaln and that ruch firjs anwell as the surely Moroccan-owrned firms may enloy third country niationalsIn such canes a difficult rrobic-i iould arise in meeting the terms ofRegulation 7 since an a practical matter Aericans are not reaonablyavailable for ermployn ont by such contrnetorn and our previcus experiencewith the Naunsseur Ccnv(r-ion project thatin Morocco has indicatedAmerican contractors would not be interested in bidding cn small conshytracts in that country
It in therefore recommended that the Annitant Adinitratordetermine rursuant to Section 2q75 of Regulation 7 to waive theapplication of Regulation 7 to thic iroject since the project 411 conshytribute to the attainrent of US foreign policy objectiver and the cbJe-tives of the Foreign Arsistnnce Program
LITI L USE
LfI~~5xA~us
lit
4 A J A 45 4 k
t A S T
S(3
I A444ilA~~l~)
7 -74
tAM= D
SECTOR 27
10000
t Co0Na includez25 cgtri oncFcttlrvI ncy I8s ~ ~ C t C- Includes 50 constriJcltiotrgrc
2000 60
IU
0
z
bull cosYsA shy----- i
600L _
400
200
0 5 I0 15 20
INTEREST RATE
I ~ 7 J7777
ANIAampX C
PROJECT DESCRn1 rOll
The project com)onents to te undertaken on the MIoulouya Irrigation Project over the next five years contists of the following
C(n1rtion of the rrLin casuals and bianch canbls to provide the suource of waler to the sctors be developed in theto TriffBou Areg and Zebra areas This construction will include the necessarystructures such as reulators highway bridges aqueducts water intake
and discharge structures etc
2 Iand Txeloommerit which includes engineering land consolishyt and iuvtllng lard preparation (subsoiling ripping destoning etc) and installation of water distribution canals (secondary tertiary and quurtunary) and drainage collector ditches for the Triffa main covering 24000 acres in sctors 8 9 10 16 20 21 23 24 25A 2513 27 and 28 Lou Areg Central covering 16250 acres in sectors Dltirough D2B and G1 thru-4h G313 i0u Areg Remainder covering 15000 acres in s-ctors D3 through D7 and GA through (6 Zebra Collective covering 45)0 acres in sectors 3 4 5 rind 6 and Zebra Rer-iinder covering 14250 acres in sectors 1 2 and 7 through 10 and th remainder of sectors 34 and 5 The total land to be developed is about 74000 acres
3 Canalization of the Oued Zeluan and nued Sidi-Amar in the Bou Areg Plain consisting of strairltening englarging and regularizing of these streams to carry the flood waters to the sea Drainage interceptor canals are to be constructed parallel to the sea in the Bou Areg Plain In the Triffa Plain the Oued Riada main drain will be deepened and enlarged and secondary drains will be excavated to provide for drainageof the Madagh area This will include the construction of bridges and culverts and other related work
4 Major Commorn Works will consist of
a Clearing of the Mo-1ouya riverbed downstream of the Mechra KLila barn caused roy flood dariwe and the installation of a set of stop logs for maintenance of pillway gate-
b Design supervision and construction of repairs to the ]elt Lank dead head tunel
c Conctruction and establishment of sib-division Offices and installations for farmer support such as CMVand farm stables
1 C
-2shy
5 Manavmtnt It ha been proposed that a US management firm be ewployed by th- C4 to manage and operate the entire Bou Areg area Such manageent -iuld encomparn all activities from the initial concept to final irIrp igricultural production Such activities would Include resp r-ibilsect -or supervnsion of engtneering and constriction of primary
S- Jry r complete developfnent of land training n in g tinul irription practicen preparation of market
t - r1t- (ot--rnu trplusmnining of a Moroccan cadre to take over h v--it Bou Areg dreara P the
At this writing the n-pt of turning over to a private UZSfirm execushyresponsibl]ity I h management of the establilrment and initial
op-ration of irr1gati the Bou Arog area has been only broadly de iiitd by the GCJO It Intended that proposals will be invited from a r -onable ntnber of f|ed US firms that a selection will be made an-n 7 them and a more do iled and cornprehenrive definition of the rer6 -Ps to be performed be eztabliched at that time It haa been
stimated that the t- of ruch a contract will be about $2 mir- n In any event the -ts of this contract other engineering arvl s to be provided undt n extension of the Ilydrotechnic contract and ether US corts will not ed the proposed $5 mllaion developzont Jean fr the project
The cle 3ifications duties ant 1ncnslbilities of the management personnel ill ha-- to be clearly defined i agreed to by the GCM Perimeter Directo- and other GOM Agencies luding arrangements for the necessary gistic support
Svxlale Docu-
1
4
LD ED 0ICIAL
-IAIDshy
A1trX D
C6JCK LIST OF STATUTORY CRITERIA
(Development Loan Fund)
1 FAA 0102 Extent to which U3 cormodities and services are furnished consistent with improving the US balance of payments See Sections II-C II-F
2 AA sect2O]ihi lanner in which loan wil promote countrys economic develo shy rit emphasizing help for long-range plans and programs designed to developeconomic tesourcos and increase productive capacities See Section I-D
i FAA sectT] h)(IL Information and conclusion on availability of financincfrom other free-world sources including private sources within the United States See Section II-F
FAA sect20l( )2 Information and conclusion on activitys economic and technical soundness including the capacity of the recipient country to reshypay the loan at a reasonable rate of interest See Sections II-B II-D and II-E
5 FAA 1201(h)( Information and conclusion on existence of reasonable promise activity will contribute to developrmnt of economic resources or increase of productive capacities See Sectiona II-B and II-D
_92_(b 4Information and conclusion on activitys relationship toothor development activities and its contribution to realizable longshyrange objectives See Sections I-D and I-E
The following abbreviations are und FAA - Foroirn Assistance Act of 1961 as amerded by the Foreign Asaistaice
Act of 1967 App - Foreign Assistance and Polated Agencies Appropriations Act 1968
AFEVCDF 1066
L1
-2shy
7 FAA f12O1(b)(5)_ Countrys self-help masures including institution of Foreign Assistance Act investment pliaranty programs Investment Guaranty
bull Agreement signed with Morocco 331o6l See Sections I-D and II-EI
_A ))(6) Information and conclusion on possible effects on US econowy with soecial refererne to areas of substantial -labor surplusSee Section II-F
9 FAA q201 (h)() Information and conclusion on the dagree to which thA country iv wiki- progress toward respect for the rule of law freedom of expression and of the press and recognition~yf the importance of individual freedom initiative and private enterprise
10 FAA -1201(b)(8) Information and conclusion on the degree to which the country is taking steps to improve its c]Laato for private investment See Sccton II-E
31 FAA R LbJi Inforrat-on and conclusion on whether or not the activityto b financed will contribute to the achievement of self-sustaining growthSee Sections I-D and II-B
12 FAA fi2Ol(bj Inforruation and conclusion on reasonalbe prospects of reshypayment See Section II-E
13 FAA fl20JL() Info-ation on applicability of the twenty country ceil4ng2
14 FAA fl201 L Information and coclusion on legality (under laws of the country end the US) and reasonableness of lending and ralendinr terms Loan will be on minimum termspermitted under FAA These are deemed reasonable see Sectioam Evidence will be renuired from the GGM as to the legality of the loan agreemnt
1 E 2 Information and conclusion on availability of an applicationFAA together with sufficient information and assurances to indicate reasonably that funds will be used in an economcally and technically sound manner See Sections I-A II-B and II-D Application received Janury 15 1968
16 FAA fl201(fL If a project inforntion and conclusion whether it will promote the economic developapent of the requesting country taking into account the countrys human and material resource requiremnts and the reshylationship between the ultimate objes6ives of the project and the countrys overall economic development See Sections I-D and II-B
17 FAAJ 20ij(J If a project information and conclusion whether it cifishycally provides for appropriate participation by private enterprise 8ce Sections YI-C and 114
I- FAA i22(a) Total amount of money under loan which is going directly to private enterprise is going to intermediate credit institutions or other borrowers for use by private enterprise is being used to finance imports
rfro private sources or is otherwise beirg used to finance procurementsfrcm private souwces See Sections II-C and II-2
9 FAA 207 Infosation on the emphasis placed en
(a) encouraging development of economic political and social institushytins No apparent relationship
(b) nelC-help in mectingthe countrys food nredo Project Vill conshytribute to production of food for lccal consumptioa
(c) in-proving availability in the country of evucated trained manpower Project will contribute to the deicloginext of trained manpower as one of the functions of the management contract (Soe Annex C para 5)
(d) prcgrams aimed at -malnutrition disease eradi atDn slum clearanceWater purification sewage disposal health education naternal and child care(includin fimrily pJnrning)) -nd cthcr public health ausistarice See
(c) other develoment activities including industrial development free
labor unions cooperatives tnd voluntary agencie transn)rtatin and ccshymwquication nrStczn capubiliTies for economic planning and public adlinisshytration arban develo-mment and modernization of laws to feilltate econcnicdevelopjen- GO- intends encourage develo vient of cooperat yes particularlyin the Left Pank areas Project will also develop capabiLi ics for cconoaicplanning and public a6~inistration (Annex C para 5) Other not applicable
20 Information on the extent to which the r-untry is
(a) cttcmting to increase food production and food sto a-e anddistribution felitics This project is one evidence of Moroccos efforts in this direction See also Section I-D and I-E
b) creating- a favorable climate for foreign and dmestic iri-ate enterprise and invcstrrment The GCM has recently reduced profits twes anrannounced a ten year guarantee against tax increases See Section II-E-2
(c) increasing the role of the neonle in the developnental procecsNo apparent relationship to this project
(d) allocating expenditures to development rather than to unn-cessarymilitary purpoes or intervention in other free countries affair See Sections I-D and Ii-
(e) willing --nribute funds to the project or program Th iOMhas already dcvo o-sidcrable resources to the project It has badieted13 million for th i oulouya for i7 See Section I-C
(If) making economic zocial and political refo ns such as taxc coliecshytion iYprovcmenLs and chan es in land tenure a Royal Comm ision has been appointed to make recomendation on land tenure probleras in the Lower I oulouya
(g) responding to the economic political and social concerns of its people and showing a determination to take volf-help wcasuren See Sections I-D and II-E
IT
-ovi~cd l v r 13 1968
- 4 - LDffIED OFFICIAL USE
21 FAA Inforn ation about multilateral assistance being Iurnished to t e country and whether the loan will encourage recgional development prog-rams The I1D has eztablihcd a Consultative Group for Morocco which rvicws the GOM development program anui prgress See Section II-F-4 for infoaation on othtr donor assistance to Morocco
22 A Extent to which the loan will contribute to the objective of ass ring naximu par icipation in the task of econonic dovelop--ent on the pL-t 0 _he people of the developing countries through the encouragement of cocr-tic private and local govenmental inLitutious o apparent
relationship
23 F _-_Dta_ Infor-ation and corissions whether loan will oncourageeffor s of t1e country to (a) increase tie flow of international trade (b) fostcr private initiative and comptition (c) encourage development and usceo co opratives credit unions and savingss and loan associations (d) disourgo monopolistic practices (c) improvo technical efficiency of industry ariculture and commerce (f) strenSthn free labor unions This project is cxpected to increase technical efficiency oi-agriculture
2_ C-1L lnforzrition and conclusion on how the loan will encourage US privte trade and investment abroad and how it uill encourage private US participation in foreign assistance prograas (incluiing use of private trade channels and the services of US private enterprise) See Section II-
25 VA-+_ Conclusion and supporting information on compliance with tho Co resional policy that engineering and professional servicos of US fir-ms and their affiliates are to bo used in connection with capital project3 to the nixinua extent consistent with the national interest US engineerirn and innsgcment services will be financed tnder this loan
2$ Inforamtion and ccnclusions who+her loan will pormit American rx-l] business to participate equitably in the furnishing of goods and
z orvices by To be satisfied in Loan Agreementfinanced it
27 - t(a App I18 Complianco with restriction of co -zodity procureshy o UsMS except as otherwise determined by the Picsicent and subject to ttu--- rcortir require r-nts Procurement will - liumited to the US for
reiabnrs nts and to ioocco and other free world countries 1-or US-cwne(d rhu disburseacnts
23 -i Comiance with bulk cozodity procurement restriction topriecc no l-ho han the nkarkot price prevailing in tho US at tia of
bull puchas Not applicable
29 FA Cozpliance with requirement that matrin insurance be purchased on commceities if the participating country discri-inates and that insurance be placed in the US To be satisfied in Loan Agreement
30 IA 6(a) Information at to the utilization of excers personal property in lieu of procurement of new items Will be required ai appropriate under terns of Lean Agreement
f
1 77--7 -77-77-777
31 FAA 61](a)(_) information and conclusion on availability of enginoering i financial and other plans nccx sary to carry out tho assittance and of a
reasonably firm cstimate of the cost of the assistanco to the United States
See Section II-D
32-ecessaryFAA t611(a)_(2) legislative action r6quired within recipient country and ibasis Cor reasonable anticipation such action will be completed in time to pormit orderly accompli-hirtnt of purposes of loan See Section I-A
33 n _AA161nJ0] If water or water-relatod land resource construcshy
tion project or program information and conclusion on a benefit-cost comshy
putation See Section II-B
3 4 VAA 611(c) Compliance with requirement that contracts for construction be let on comp-ctitive basis to mamum extent practicable To be satisfied
in Loan Agreement
If a loan for a project of $1 million or more certificatin35 FAA _61l(r) by the principal AID officer in the country as to the capability of the
country (both financirl and human resources) to effectively maintain and
utilize the project taking into account other US-financed projects (Such
certification is to be pproved by the Administrator aL the time the loan
is authorized) In process of being obtained
36 FAsgJ2 _6_h Appropriate steps that have b-en taken to assure that to the miaximum extent possible the country is contributing local currencies to net th-2 cost of contractural and other services and foreign currencies o- icd by tho US are utilized to meet the cost of contractual and other services The GU-M is contributing over $30 million to compleXton of this project Excess US-use dirhams will be used for eligible project costs other than US goods and services
37 FAA p619 Compliance with requirement that assistance to newly independent countries be furnished through multilateral organizations or plans to maxishymum extent appropriate Not deemed appropriate in view of previous AID financing and ccoiitment to the project See Sections I-A and I-D
38 FAA sect620(a) AcnO7a n3]7(b) Compliance with prohibitions
against assistance to Cuba ard any countr (a) which furnishes assistance to Cuba or failed to take appropriate steps by February 14 1964 to prevent ships or aircraft unier its registry from carrying equipment materials or supplies from or to Cuba or (b) which sells furnishes or permits any ships under its registry fr-om carrying items of primary atrategic signifishycance or itcms of economic assistance Morocco is not-known to be in Violation of these sections
39 FAA q620GL_ If assistance to the government of a country existence of determination it is not controlled by the international Communist movement The Secretary of State so determined on October 11 191
40 FAA 620(c) If assistance to the government of a country existonce of Indebtedness to a US citizen for goods or services furnished or ordered whore ouch citizen has exhaustod available legal romodiesor where the debt
i - ow - -- _---- --shy
- --
-6shy
is not denied or ontested by such government or the indebtedness arises under an unconditional guararty of payrrent given by such govornmunt No such indebtedness is known to exist
41 FA _(a2LdL If assisitance for any productive enterprise which will corashypote with US enterprise existence of agreement by the recipient country to prevent export to the US of more than 20 of the enterprises annual production during the life of the loan Not applicable
42 FA4 - 16Q_0_ A If assistance to the government of a country extent to which it (including government agenies or ruhdivisions) has after January 1 1962 taken steps o repudiate or nullify cuatracts or taken any action which has the effect of nationalizing expropriating or otherwise seizingownership or control ofprcpertv of US citizens or entities beneficially owned by them without taking appropriate stops to discha i ge its obligations No such steps cr actions are-known to have been taken by the GOM
43 FAA~L AjPj_10_9 Compliance with assistance toQ0 prohibitions against any Comunst codntry ozocco is not considered to be a cocinrunist country
44 FAA - 620(gJ Corliance with prohibition against use of assistonce to comp satc owners for expropriated or nationalized property To be satisfied in Loan Agreement
45 F AA 8620(h Compliance with regulations and procedures adopted to inshysure against ue of assistance in a manner hich contrary to the best inshyterests of the US promotes or assists the foreign aid projects or activities of the Communist-bloc countries To be satisfied in Loan Agreement
46 FAA 06-O(j)_ Exitence of determiration that the country is engaging in or preparing for aggressive military efforts No such determination has been made
L_62_O Information47 FAA on representation of the country at any intershynational confererce when that representation includes the planning of activishyties involving insurrection or subversion against the US or countries recoiving US assistance No such representition is known to have A occarrect
8 FAA 62JJ Existence of a determination that the country has permitted or failed to prevent destruction of US property by mob action or has failed to take steps to prevent a recurrence and-to pay compensation NO such destruction is known to have tak-n place
49 PAA l620(k) If construction of productive enterprise where eggregate value of assistanc to be furnished by US will exceed $1OO million identification of Gtntutoryauthority Not npplicable
i-xQ2MZZ=
1 shy
U 6 50 _Af( QCinsidoration which has been given to denlying assistance X to thu government of a country which after December 31 1966 has failed to
- institto the investnint guaranty program for the spcific risks of inconshy
vertibility and expropriation or confiscation Satisfied See No 7 above
S51S J lj Compliance with-prohibitions-againstn as~istance to countries which traffic or permittraffickingwith North Vietnam Morocco is not known to be in violation
52 E_-L620(_L If country has seized or imposed any penalty or sanction against vn US fishing vessel on account of its fishing activities in
intcrnationul waters information on the consideiation which has been given to excludirg the country from assistance No such situation is known to exist
53 FAA FA r) UAR restriction Not applicable620(p 9117
54 FAA R620tl) Existence of default undhr any Foreign Assistance Act loan to the country No such default exists
55 F ) C-nsider tion of whether co ntry is devoting unnecessary percentage of buKet for military purposes or use of foreign exchange for milita-y equipment
56 FAA 62o(t) Proibition on aid if country has severed diplomatic relations with US unless agreements have been negotiated after resumpshytion Diplomatic r(lations have not been severed
57 FAA 9620(u) Statur of the country on delinquent UN obligations Morocco is not known to be dlinquent on its UN~obligation
58 FAA R636(i) Prohibition on financing non-US manufactured motor vehicles Will be satisfied in Loan Agreement and Implementation Letter
59 App 102 Compliance with requirement that payments in excess of $25000 for architectural and en Jneering services on any one project be reported to Congress Such reports will be made
60 App R1O4 Compliance with bar against funds to pay pensions etc for military personnel Such payments will not be eligible for financing under th Loan Agreement
61 App 9106 If country attr ipts to create distinctions because of their race or religion among Americans in granting personal or commercial access or other rights otherwise avaVIfable to US citizens generally application which will be made in negotit ttons of contrary principles as expressed by Congress Morocco is not ku IDhave made any such attempts
iInD OFFIIt t USE
0k
OFFICIAL USE 62 AIwp Rii Compliance with existing requfremets for security clearance
of personnel Will be satisfied in Loan Agreement and Implementation Letter
63 App R1l2 Compliance with requirement for approval of cortractors and contract terms for capital projects Will be satisfied in Loan Agreement
clJ164 Aup Cmpliance with bar nRainst use of funds to Tay assessments etc of US meiber Such payments will not be eligible for financing under the Loan Agreemunt
6 Anp P115 Ccmpliance with regulations on employment of US and local personnel for funds obligated after April 30 1961 (Regulation 7) See Section III-C
66 Aim Vietnam iron and steel restrictions Not applicable
67 p l9 If a country other than Greece Turkey Iran Israel Republicof China Phillipines or Korea reduction in assistance by amounts spent for the purchase of sophisticated military equipment
68 Anp fi4O1 Compliance with bar against use of funds for publicity or proshypagjanda purposes within US not heretofore authorized by Congress Such use of funds will not be eligible for financing under the Loan Agreement
Morocco is a traditional Islamic monarchy with a constitution The conshystitution was implemented followaing a popular referendum in 1962 National regional and professional elective bodies including a parliament were established by universal suffrage under the constitution in 1963 The parliament was suspended in 1961 in a State of Exception because of its inability to agree on measures with adequate urgency to meet the prevailingecononde imperatives In July 1967 the King appointed a Prime Minister to direct a Cabinet of appointed technicians
The constitutional framework nevertheless remains intact in Morocco and nationwide popular elections for some of the professional chambers were held in August and September 1966 The press is relatively free in Morocco and the right of diLsent prevails provided that such dissent does not violate the prohibition against political attacks on the instishytution of the monarchy or the person of the monarch
LI Under the revised US AID Policy for Africa agreed to in November 1966 Morocco is designated a development emphasis country entitled to receive continuing support on a country basis as part of a multilaterally coorshydinated countrj program Morocco was subsequently included in Presidential Determination 67-14 (January 5 1967) I
LIM=TE OFFICIAL USE~i
- l go
bull ~ -
f
DEPQbi) STATE AGENCY FOR INERNATIONAL DEVELOPMENT
WASHINGTON DC 052
CAPITAL ASSISTANCE LOA11 AUTHORIZATION
Provided from Develoroent Loan Funds Morocco Second Lower Moulouya Irrigation Loan
Pursuant to the authority vested in the Assistant Administrator for Africa of the Agency for International Development
AI)by the Foreign Assistance Act of 1961 as amended theIAct) and the delegations of authority issued thereunder I
have received and t-en into consideration a certification from the Director of USAIDMorocco as to the financial and human resources capability of Morocco to effectively utilize the Lower Moulouya Irrigation Project taking into account among other things the
maintenance and utilization of projects in Morocco previously financed or assisted by the United States and I hereby authorize the establishshyment of a loan pursuant to Part I Chapter 2 Title I the Development Loan Fund to the Government of the Kingdom of Morocco (Borrower) of not to exceed five million dollars ($5000000) to assist in financing the fore] gn exchange and local currency costs of goods and services for the third phase of the Lower Moulouya Irrigation Project subject to the foLlowing terms and conditions
1 Interest Rate and Terms of Repayment Borrower shall repay the loan to AID in forty (40) years including a grace period not to exceed ten (10) years Borrower shall pay interest on the unrepaid principal and any interest accrued thereon at the rate of (a) two percent (2) per annum during the grace period and (b) two and
one-half percent (2-12) per annum thereafter
2 Currency of Pepayment Repayment of the loan and paymenu of interest shall be made in United States dollars
- t- n t - - - shy
3 Other Terms and Conditions amp(a)Goods and Services financed under the loan
shall have their source and origin in
(i) the United States if disbursements therefor are made in United States dollars or
(ii) any country in the free world including Morocco if disbursements therefor are made in Moroccan currency
(b) AID Regulation 7 shall not apply to construction -work financed under the loan because as detailed in Section IIIC of Capital Assistance Paper No P 667 it is important to the national interest of the United States that the direct costs of construction work performed by third-country nationals be financed out of funds made available by the Act
(a) Such other terms and conditions as AID may deem advisable
Assistant Administrator for Africa
Date
~~~~~~~~~~~~~~~~~~ - q v
7
~7~TF~Wr~e~ALUSE
-21 -
The projected cropping pattern for the Bou Areg plain includes cottonLJrirdg the frrt Five yearnejtinted 1r of the Class I)fand
the project jitwould be grown on nnII landn Tht renresert only 960etrravres) ectz ri)cr)e area The cotton acr~a e ry increasep 2ceafter live years if ritisfactory drainage conditionshyrre achieved in the Bou Arev
cotton grown i 1xonp tarx- Trdltionally Morocco export its-Jr- cron an irr IJ hort cble to rmeett Cotton the reuirrents
r the oroccan 2pinningr mills The croppni-attrn of the Triffa East (about 180n acres) Js projectedt Tnrlude 15- (about 27 acres) in cotton It is likely that becausef ihe limited extnt of Class I and II lands in the Triffa Eas cotton not increase beyond that percentage
1t i evident that the amount of irrigated cotton that is likely to bein ther-n Moulouya is minimal even assuming that local drainage condi-T nare i asuitable
f Technical Sundnv--s The AID Project Engineer hps reviewed ii) thedat and ajor construction performed to date onronct and finds the technical requirements this long-ranRe phasedsufficiently defineoto ccntinue the project on an orderly schedule The estimates of cost of prsirct facilities have been determin-d by SRI from average va)ues oftrit cots obtained frorr reviously ntiarded contracts and from etniled( -s-nand analysis prepared by the iHydrotechnic Enginering fir oft-o tyieal sectors located in the Bou Areg area The costs for the arc ent contract have bcen estimated by the USAID It is consideredthat the depree of engijeering planning undertaken and the deterrrinitonr to the US Goverrment are adequate to meet the applicable requireshySt- n Section 611 of thie Foreign Asistance Act
7717gt
1 --shy
-22-
E Financial Status of Borrower
1 The Moroccan Economy
Grrwth of MorocLcts GDP in real term averaged about 24 per yearin 1(4 and lr li Per capita DP In 1C 5 wan anproximotely t162 A (er Irr-ht in (6 resu]trd n a drcrcne of slightly nver in GDP which tlh vpulatior grc~vth avrring 3P4 per year rnrsJted in a decline of -r ornita GDP In 16 ii brut $154 A recnd droughtcccijrred In C67 but i not expeetid to have the severe effects of the 165 drought Crop forecasts for the first nine months of 1967 indicate a 4 increase in real GDP above the 1966 level This is also the economic grcrdth rate estimated by the IBRD for the pezxA 1965-70
Moroccos economy is heavily dependent upon the agricultural sector thich has averaged about 15 growth per annum However growth of the mal modern segment of Moroccos agricultural sector has inshy-reased at the rate of about 7 per annum
In 96 the International Banik for Reconstruction and Development (IBRD) preented a number of recommendationr denigrned to increase Moroccos economic growth rate On the bacis of these recomfndations the G004 proceeded with planning the necesrary program to increase investment levels fr- the i 63-65 level of 11 of GNP to 1r of GNP and stimulate the rate of economic growth from 2 to an average of over )4 annually for the five years 66-70 In addJtion the GC4 has taken measures to curb the population grovth rat while placing increased emphasis on raising production of both dryland (wheat) and Irrigated agriculture
2 Investment and Savinms
The level of total gross investment has remaind at aboit 11 of GNP for vera year althugh the percentnoe declined slightly in 165 Under the GO Three Yea5 Plan 1965-67 the gross investment t-3rget woz ret at DH 3 billion- Actual invev-tment expenditures for the three yearpeirod reached about DH 46 billion of which the Governshyment ezxenditure amounted to DH 1 billion a against DH 21 billion budgeted Thin may have beeo partly de to the GOMs deliberate ausshyterity pollcy under the hIF rtbJli7tion prci1rnr but more probably it van duxe to the shortage of trained cadres to -lan and execute projects
In the private cectcr conziderable inounts of ravings may be hoarded due to lack of project attractive t- inventors The lvl of private investment has been runnihg at about 51 of GNP thrrugh 195 The 0014 4 incentive to private instors hnr cut profit taxes from 4320 to V and announced a tpn year guarantc-e against tax increases
]L- $ = DH 506
777=-77- NQ
r y 7k1- T e - W lk In
j - 1) 7k- - _
- 23-
Loan are avaiiable to )rivlite irve-tcrn freo th 3JfIDiN s rctr special funda to prcmote touricm devc firvcnt
Under the 1r86-1972 plan abut to br irtntt level are to be accelerated considerably reaching A of GNP liv ]970 Mor(- Irlyir haviiy on foreign 1 to aciuw cc higher lve1
3 Central Government FinancP
The Moroccan money supply which had Incrrased ify 76 per cent in 2965 remained virtually unchanged in 966 The first half of 1967 witnessed a 5 Ter cent increase in the money supply Te major part of thi increase as concentrated in June and July uhen the supply reached V14 0j lion Currency In circulation expanded rapidly in June and July
nnl factrrn being reinforced by commodity hcnrding related to the 1ide~l Et crisis Demand deposits did not show their normal decline nthe first half of 1967 Deposits with commercial banks declined nlightly while deposits with the Treabury increased as public and semi public agencies contisued their transfers from the banking system to the Treasury The increase in money supply in the first half of (7 ran I raced to tho nzon1 sonal increase in net foreign assets not c y the custcirry rlelir In claims on the private sector Clsirl (n the erivate sector declined slighty until May 1967 but Increased hr-gb June and Jily due primarily to additional financing of textile stocks ClbiJ ante Government rose by 10 per cent in the first half of 967 the in central brnk claims on the GovernmentI being rmainly offset by larger deposits with the Treasury
Ordinary budgetary revenues which incrurted by 5 rcr ent in 1566 tre cxrcted t-) increase by 7 per cent in 1( to DII 21 billion DeampDite a derea3e in agricultural tax reccipt r- fror diret taxes rose by 10 ppr cent in 1966 and a 2 increas estinated for S67 due to tric or controls on income declarationr d an accelerashytion of tax cller ns Owing mainly to a relaxation of the import
program in late 1 5 and a concomitant increase in tariffs on certain ccnonter goods customs reneipts increased by 21 per cent in 1966 Although budgetary estimates call for s decline of 3 per cent in customs receipts in 1S67 it is likely that actual receipts will be considerably larger in view of the import liberalizatidn measures intro)duced subseshyquent to the estimates Receipts from indirect taxes state monopolies and other serces are expected to be 11 iv- cent Ipher in 1967 owing to increased profit on -ugar sabr-i and L r(m the newly created Office do Ccrmercalisaticn - d-tation (OCE)
Recurrent ordinary buiL e(enditures increased by 34 per cent in 1966 ar-i are expected to increase by an additional 7 per cent in 1567 reachin- D1122 billion Although wage and salary scales in the public
Banque Nationale pour le Developement Economique
TT~~- - I777
2 Cf
sector have1bec z h t - rrvirI urli 11i g 14-6 -nd PO becnue rX toi Ijt e f (]r o n 4
ill tile ic urrnnye andr)not i on dnd Publi ht rentrn -yr-otn lno IncreasedOthrr t ill- t il r ne by ) vr cert in J6(
i ninlyrt -br h Inc-l
( Ihe ( t r- rl t ip t t C itur f T)h 21h iilli n
is (( ItI t lt r c0 a- r n n o I- c t b It ihstnl id vv ih n t r-t have hn(er - en 1t2
(IM ii ture( T f fu traordJ nary budrzct exshypend ituren a r y -t c ~ i vi -iscz Portal Checking sy-stcsul)rrcing t (I ltIt Ct -- ind creirn shy
nnet The f r er tnc I hha ccrc ed from a htih of DH 5-7 millIJn in _ 5 millIn r C46 F cr ats foi ]7 place Cro n w I 1(DI)J79 ill ni DDn etlc fi nancing has alo u 1) 5 p (- I3A27 iIliun to an entirnted DH 1142 million
1 14V ) I nv 1 ri n nI(c1 franc n is 77-ected to be ol t y ncrewed bcrrowing fr-ir t he Cestra 9ank which hud been held at mcdert vols iln 165 nnd 1a66 Under the 1TFtaiby agreement of October 16 the qob) agreed to taBe a3] rocrrnary meurer to maintain as table curoonry rPnt inl th nr1d-elrto th b a ent of the ePrncriynnd a vnbl- hn1incc X nvroent P rt artt to t rt fien of tho Ccntin- Honk rstz (erct are nct t r itr June 30 Y-ke 7 lov l b th n Diif ) mill] (n tlcnber -c P thai I o illin usit I ])ecthr 31I62 (GC bc w t
C B1rtrp - vt DH 12 iri 1i nor ]S67 or DH 6S ij lionEan tisated (r fo than the aproved crd it expanwim
Thitrd ordivary nil extraordnnry buThTt deficit of DII 7-19 millI n fcrecat Fr 1 67 in exnected to be fnanced by not freign
tan reof DII )75 mi~l in nt recurity 12ue 1 T111I vlion a - nt ry tiat Po n Che )ir d-nC i 73 r5 Pn
riI is u h i a vti v mrr nrr-e jssIof fvr is id a erital The vnfsa revcred in 1d6 when lnrger r nyrentn eEecially on food itcmo an n -lewdoun in
igo ra a deficit of $1 millcn ProjectiOnz-vt rvultvd in ror 17 r~ieat inrrerned importsonly partially ccnrennate by addshytsa t frnreirn r ntil rrceiprs ard mprrvement in the nervices account will reult -n et of aprroximately $)20million As rhoim in the following tabl -r tion for l33 and 169 how overall deficits of
14 and m] ivi_y$i It
rqVV t1 4~
C)rgt
---
1 -)I+-IRF1
1ROCCO - rTANC OF PAYME 1qrt - 169]_ 5
6rfi0 1 1C(8lr67 i r(o
)xrurt 2t L( I L-5
Trade Bnlance 11 15 - 75 shy - 75
rviee- ret - 7 - 5) -35 -23 -2
J]-i of Good rnd Service- - 3 - 65 -II - ti - (5
Trn-Ifr Pr ynts (nt) P 21 33 37 33
on-cntnry Carital (not) 92 64 6 6 5
Err-rs nnd Ov rrion- (not) - 23 -2 1 3
eranl Bannic __ - _3 -_ 3 - 1i4
Atrh thert ircjected reficitn are of the nnme order of 1 nishytude a7 thcr incurred in the period i66 the Situatlcn i findarentallydifferent both in rerprct to the source of the deficits and in rer-ect to the meat0Y gtr m etin7tecr In the f rrer caive M5recco uffered
_frcrr a very h-vy cutfc of Drivtes cuitv fo-ivr with a shar) decline In forein nt exerditures in Morocco In the iatter case th projected deficits r- rcre a functicn or accelerated crcwth risingdebt ervieiiw tri tho abnrcn of forv eeble additiens foreign reshybull ourcs nere7ory 4( r2Vm rAf finmncting To nect the def-cits during the reriol 161 61h MWreco ob1id to drw down rorcin exchange reserves of over $]c milicn The snrti tpv of financing is no longerpozslble ince no or-res- ruch reserve- Even ifMorocco yr
mn nina r rve_ ore (]rrfii on to th r-ixirun etnt enribe nnd the [iI tnfldy i- un M-r-r e i32 till relA re nt rnt 15 millicnj1itionn ftr ign as- e n 1 6 beyond hat r recnently fcreeeshyable with ver nri- nry Officilr in In i6 reserves are cotImnted Pt 72million c hih crn V 3 million i caly required for currency coy r
Foreign InJebtrdne n of th GOM Mnroccos external rtnte ard rutlie enterprie dett amounted to
$r) millivn in lr6 Debt vervcirig rpynents for (66 trtaled about
$5) rillion g-eement approved in October 3(67
I- -- Ishy
37 millin or arprcxitrrntoy (j Iroccor totnl eXoort earning of h28 millicn GCnerally nxt rrO dbt FervicJng renuiremennt of leas
than r of totna -ort nnrlt In onrldered to I r tirfactoryrntio D-bt r rnJrcLct n Ir the reriod 1-(y 3on Trerent external debt including thnt wrtl(n irreently undibur-ed are hown n th fr lv tahlr
)] L v yr t n
Eternn Vtnte anc ] bntcrnrie Debt
M131 o)nr
Y aI Net Outrtnnling Debt Debt Service
(6 it 479r5 $367 J-67 452 3)6
Z616 44469 2 0 2C-
365I3 37 389
33 383 33 6 371
5-h 31 n 352 275 34121
]176 2661 32It 1977 21133 311 177 22)6 307 19 i0l74 256
1733 255
rgtternal debt rharre n rerent debt nnr rhon above do not increase ubtanti-lly over t rt 1)year- reaching a maximum of h44 millior
in J6 and decrpt- n cr - tently threoafter At the are time exportearninr r _rc extett nc-are Aring that Morocco does not inshycreswre it etrnn2 cbt t irate ubrtantially nb-vc ihat has been the core th adfiticrn dbt e roquirrentn reulting from the propo t Icon o 5 ijilion co r 7crncepr-ional term hould not have a i-nifiant affect n 1r o - ab lty to neet itv g rc-atedebt ericn rcnrib2t~e- the pros ectr of reprment of thin loan ore coniderci rearcnb)
U I -
F ot h-v C IuIJI rmt I shy
1 V amp~ rVml KI
PUC- -jrVi Jt t 1 11 nflrcj urlc 1- th )qn --P I uti u rhnrrl -1r- thr U- Tr- ry- R- -nymc nt
c2Il f n 6 1 bf r I- till 11 nfl r- n-r i n of O r--niC(Io~hi U 1 1 rr to
Tn vil ) f rvc hi tvlrll 1 (In- - n- u--n E r me rrinshycgtay F rntwir w ourc o -o- rvI ortf-V3 1 rncing of
Uf f -r rrrir- ur3r 4~ v -rin Iltrt nt ndd shyt -n t ) in- lint r b t l r -n rort- o-orco trorl-- V -P
r i 1rnd h L-torie Furcl-trin firr- thrjt US r r~ crvirrf- u~d be~
T L I1 c vt r- -ly ] -ubt fu 1 n vi pw -I -ror-co Ir of
ut1JpcO In thi rjert f it -- r- 21 npnred by d1-nr- cothcr t~han the US
2 ]P-t ofI Prr l1 on Prw- Fntrrr
Phij rrcjJ-t -11 n-t h~ -in nrwerq Prrt n rr- tc ntrshyr~A~r fi-mc 1bho und for --roern p o n
3_~~PrCT--rty
rr-vIi-n 1 h -d r the loan ragreement for Icntifitcation ef any r mIjrpt n ctri b- rt througn ut 1zatn (f xccr- prorerty
If rv c u~eAID n-mrcf u urr thi )cn - I~ut~ em avoi3ablo r rovvrirrnt -rrperty rather than nce iteni
4 Otli-r Fr- Wo--] n-Fnlc4rm
Dr mi tW- o] 14rocco- i~ajr ovr-ec -f exte rnaX
rrtan~- hrtvfb - I r ~ ant fl Fr n fole by Kv-it
Sgio F rneflit r b-en 1lmrntrd to tcfohnjip n5tnnen bi eoni~in I th u y f Fr--h tprhntcian tcacrr ind cther
~ti~r t~ ec-tnmIyrt-n Friinch Aid to Mcreco In 1065c~oc~ (P-art f-r txychnirril aItn -- j se of tl5 w1nfor bu~dget rurport f ir in rt t- $1 1ri1 icin in ennita -rojectM- n vx- rrcd
1Vw1tvnn tioI t-) Frenh rurtnnd +16 r11ion tie-I to -onyiint to orrrcr Frrmh ccilcn~For _-rrc-ratod land and rquirrmcnt
West GTrrnmnny liar agrcrcd to nrovIe ccme j27 mM22~cn 1n catital arirtanre and cromrndity lnoi7 t n OfIcon( q92 thi o totril$223 miJ lien ha actuary b-Pn cr-Itt--d under Inn ngrepment This
And a lk5 million commodity loan both) signed in 1965 All Wet Gerzaan
Ufla
-28shy
capital asnistance I vuectI to be tied to German exports Germanyhas in addition 1uvvded r tteysubbtantial technical assistance f
The IBRP hah rade four 1nns to Morocco since 1962 totaling$6) million Ofthin totnl a [175 million loan in 1965 wos fordevelopient of the gidi lit-r irrigation perimeter Other assistance by internntIcnal Iending arncie include an $11 million credit byIDA in 1C65 for rcendary diicction projects and an IFC ln and inshyvestrent of $1 1 ri jnic alo in
F tit i by [c - dncr tr dh elo snt ofMorccco rircuVt r oii +h b-]n jt-TKT r nbove n 2 )6 niliion Kuwait enn in i66 for develomyment of the Tensaout Prnm n irrnten nrooetand a $77 million Kuwait
0jl n )nnsn r(niti-nertcir
loan for extrnion of the Tadri~ Irrigation Perimeter
The following- trbe surrlnrlzes other free world arlztance (excluiin technical assistanc-) to Morocco for the years 1(62-66
($ Millions)
1 62 1cf_63 96) 19r65 19)66 Fneea 4) 5PO 64o 700 shyWet Germany 223 gu 1t 53 281 IRD 15 175 10) 175 IDA 110 IF C 1 5 7 7 7 0 I15
TOTAL 55 62 1U3 W
b Includer only lo-ng term loans and exporter credits - Includfs 25 million private capital
Eternal ansiztnnce to the Lowier Moulouya Irrigation Perimeter -nce 1060 hres been con[fined to US upport Consdiering AIDs previcus
involvement in and conmitnert to the Lower Moulouya an AID lean in P2t to be Lhi mol aprroriate source of financing for this project
LID
II
q
-29-
SECTION ITI- Y-TTYT TIMPLPTrION
A Periret-r Ad-instrrti-
Authority for irplerrentvtnn of the deveorpent prrgrn frr the LowerMoulcuya Perimeter and rs wel arth crnntinuinz mrnnrrmenertC tt r t- rrtnr V theltbi nad overationity iOfic 1cne 4
n r I e1i- i d Vit4 i Iv ~ Ct rreated i Otb (rJ rn-- of evcn inrmi-rriional offices hich reelaced the Office de Mire en Valeur Aamprlcole (OMVA) Under the OMXA and itspredecessor agencies authority for ad-inLtration cf irrigtion proJect war centralized in Rabat
Under the new regional office organization responsibility for adminshyistering ORMVAM is vested in on Adminirtrative Board of 10 members headed by the Minister of Agriculture and Agrarian Reform as chairman All ether board members (other than the Chairman and a representative of theInterministerial Economic Ccrmittee) represent agencies or activities inthe region of the r-eriret-r whic comprises parts of two provinces Localretresentatives on the Board inc]-de the governors of the two provincesOujda and Nador the presidents -f the two provincial asembtes and of the two provincial chambers of agriculture as well as the perimeter Director
The responsibilities of thie Administrative Board include review of theecys program establishment of its organizational structure developshynt -)f its annual budget and establishment of rates and conditions of
Siyfent for water and other services provided in the perimeter
The Director of OP4VAI-I is dbarged with the responsibility for executionPthe vclicies established by the Administrative Board end administration of oil ORMVAM functions This responsibility includes selection of staffn pserating perrcnnel acting s officia ORNIVAM representative in all ntztinns with -tate and othbr public or private bodies and the
f of funds within limit Indivated by the Ministers f Financetent rn fricultural and Agrarian Reorm
Perimeter Oranizatlon
ORVAM oreanizatlonal structure consists of a directnrate five maj-r rvlces or d-vsicns and one separate bureau Two services qei Administratif et Comptabl- and Service du Yatrial are conshycor - th adminisration and lcgistical support of ORMVAM operationshi1e the remainirg three services rind the separate bureau are Involved in t-hni al matters associated with agrcultural developrent Each ervice has one or more subordinate bureaus Fei-ce Chiefs and thehead 0 rch bure-u report directly to the ORMVAM4 Director
-~F7E MEw-
-30shy
2 Perimeter 01ttffnr
OPIVAM orgttnlrntlon treture calls for 557 positions of whichI L or 7 Mlled n were nher 29 1567 37 of the 71 Postshytion vacancies reported 1ern the high and middle levels Foreign(chiefly Euronean) technclan occupy I)of the 16 high level positionsthat ere filled at thfit tire
Whil OPM ut in th- lcng run lor to Mercecos oducational yster to prvidr tn crrf-nn2 to ratisfy current rdurojectd rcshyquirement th currnt high and mlddle level vacancies rrouire uersonnelwith oxt nive nrior rxericnce To fll this preent need it will be necessary for CRIVAM to continue its program of recruiting foreigntechnicians until ruch tire ns graduates of Moroccan educational programsacquire the necesnry exrerience The managerent assistance componentof thin pro~ject ]e-rribed In the Project analysis will to some extentalleviate OFIWAMs high level personnel requirements
3 Inw1 ernetation Sehedu]
Months Implementation Action
1 0 Sign Loan Agrcement
2 2 C-tiify conditions precedent and Y4tiate procedures for selection of US firm for management contract
2 Negotiation of extension of advisory Engineering Services
h 4 Contract (Hydrotechnic) Negotiation of Managerment Contract
5 60Cmpletion of Project
C Waivers
Sect ion 7 rf AID Regulation 7 provides in substance that theUnited State ill not finance direct costs of construction work performedby third cc-ur y nationals unless the total co-tn of the project withvhich thr ennrtrumticn w(r is asEcciated donot exceed $2On)O orafter excluding national of the country in vhich the site of constructionis located and Dersons vho nave resided therein uninterruptedly for morethan three years imrnedJately prior to any determination under Regulation 7at leant 0 of all uernons who work under the contract at the site of conbulltruction are United States citizens or the employment of third countrynationals is necessary to avoid excerrive corts to the United States
3
31
Section 2175 authr-ri th Regional Anitant Administratorto waive the nrovinions of Sectionthat it is 2073 if he dcterriner in any coneimportant te the nationrn intercrt of the United Stutes tofinance the direct eots of construction work performed by third country
nationals
A prviou1y r ic i c t tht for thr ct Tartthe -r c ct b- 1jeuj out r -cnorbr f cnrtructioncontracts with Morcccrr contrctnr an in the i-t Uowfevvr itentirely psnible that there may b- roe contractn with cntructlonfirms partly owned by third country nntionaln and that ruch firjs anwell as the surely Moroccan-owrned firms may enloy third country niationalsIn such canes a difficult rrobic-i iould arise in meeting the terms ofRegulation 7 since an a practical matter Aericans are not reaonablyavailable for ermployn ont by such contrnetorn and our previcus experiencewith the Naunsseur Ccnv(r-ion project thatin Morocco has indicatedAmerican contractors would not be interested in bidding cn small conshytracts in that country
It in therefore recommended that the Annitant Adinitratordetermine rursuant to Section 2q75 of Regulation 7 to waive theapplication of Regulation 7 to thic iroject since the project 411 conshytribute to the attainrent of US foreign policy objectiver and the cbJe-tives of the Foreign Arsistnnce Program
LITI L USE
LfI~~5xA~us
lit
4 A J A 45 4 k
t A S T
S(3
I A444ilA~~l~)
7 -74
tAM= D
SECTOR 27
10000
t Co0Na includez25 cgtri oncFcttlrvI ncy I8s ~ ~ C t C- Includes 50 constriJcltiotrgrc
2000 60
IU
0
z
bull cosYsA shy----- i
600L _
400
200
0 5 I0 15 20
INTEREST RATE
I ~ 7 J7777
ANIAampX C
PROJECT DESCRn1 rOll
The project com)onents to te undertaken on the MIoulouya Irrigation Project over the next five years contists of the following
C(n1rtion of the rrLin casuals and bianch canbls to provide the suource of waler to the sctors be developed in theto TriffBou Areg and Zebra areas This construction will include the necessarystructures such as reulators highway bridges aqueducts water intake
and discharge structures etc
2 Iand Txeloommerit which includes engineering land consolishyt and iuvtllng lard preparation (subsoiling ripping destoning etc) and installation of water distribution canals (secondary tertiary and quurtunary) and drainage collector ditches for the Triffa main covering 24000 acres in sctors 8 9 10 16 20 21 23 24 25A 2513 27 and 28 Lou Areg Central covering 16250 acres in sectors Dltirough D2B and G1 thru-4h G313 i0u Areg Remainder covering 15000 acres in s-ctors D3 through D7 and GA through (6 Zebra Collective covering 45)0 acres in sectors 3 4 5 rind 6 and Zebra Rer-iinder covering 14250 acres in sectors 1 2 and 7 through 10 and th remainder of sectors 34 and 5 The total land to be developed is about 74000 acres
3 Canalization of the Oued Zeluan and nued Sidi-Amar in the Bou Areg Plain consisting of strairltening englarging and regularizing of these streams to carry the flood waters to the sea Drainage interceptor canals are to be constructed parallel to the sea in the Bou Areg Plain In the Triffa Plain the Oued Riada main drain will be deepened and enlarged and secondary drains will be excavated to provide for drainageof the Madagh area This will include the construction of bridges and culverts and other related work
4 Major Commorn Works will consist of
a Clearing of the Mo-1ouya riverbed downstream of the Mechra KLila barn caused roy flood dariwe and the installation of a set of stop logs for maintenance of pillway gate-
b Design supervision and construction of repairs to the ]elt Lank dead head tunel
c Conctruction and establishment of sib-division Offices and installations for farmer support such as CMVand farm stables
1 C
-2shy
5 Manavmtnt It ha been proposed that a US management firm be ewployed by th- C4 to manage and operate the entire Bou Areg area Such manageent -iuld encomparn all activities from the initial concept to final irIrp igricultural production Such activities would Include resp r-ibilsect -or supervnsion of engtneering and constriction of primary
S- Jry r complete developfnent of land training n in g tinul irription practicen preparation of market
t - r1t- (ot--rnu trplusmnining of a Moroccan cadre to take over h v--it Bou Areg dreara P the
At this writing the n-pt of turning over to a private UZSfirm execushyresponsibl]ity I h management of the establilrment and initial
op-ration of irr1gati the Bou Arog area has been only broadly de iiitd by the GCJO It Intended that proposals will be invited from a r -onable ntnber of f|ed US firms that a selection will be made an-n 7 them and a more do iled and cornprehenrive definition of the rer6 -Ps to be performed be eztabliched at that time It haa been
stimated that the t- of ruch a contract will be about $2 mir- n In any event the -ts of this contract other engineering arvl s to be provided undt n extension of the Ilydrotechnic contract and ether US corts will not ed the proposed $5 mllaion developzont Jean fr the project
The cle 3ifications duties ant 1ncnslbilities of the management personnel ill ha-- to be clearly defined i agreed to by the GCM Perimeter Directo- and other GOM Agencies luding arrangements for the necessary gistic support
Svxlale Docu-
1
4
LD ED 0ICIAL
-IAIDshy
A1trX D
C6JCK LIST OF STATUTORY CRITERIA
(Development Loan Fund)
1 FAA 0102 Extent to which U3 cormodities and services are furnished consistent with improving the US balance of payments See Sections II-C II-F
2 AA sect2O]ihi lanner in which loan wil promote countrys economic develo shy rit emphasizing help for long-range plans and programs designed to developeconomic tesourcos and increase productive capacities See Section I-D
i FAA sectT] h)(IL Information and conclusion on availability of financincfrom other free-world sources including private sources within the United States See Section II-F
FAA sect20l( )2 Information and conclusion on activitys economic and technical soundness including the capacity of the recipient country to reshypay the loan at a reasonable rate of interest See Sections II-B II-D and II-E
5 FAA 1201(h)( Information and conclusion on existence of reasonable promise activity will contribute to developrmnt of economic resources or increase of productive capacities See Sectiona II-B and II-D
_92_(b 4Information and conclusion on activitys relationship toothor development activities and its contribution to realizable longshyrange objectives See Sections I-D and I-E
The following abbreviations are und FAA - Foroirn Assistance Act of 1961 as amerded by the Foreign Asaistaice
Act of 1967 App - Foreign Assistance and Polated Agencies Appropriations Act 1968
AFEVCDF 1066
L1
-2shy
7 FAA f12O1(b)(5)_ Countrys self-help masures including institution of Foreign Assistance Act investment pliaranty programs Investment Guaranty
bull Agreement signed with Morocco 331o6l See Sections I-D and II-EI
_A ))(6) Information and conclusion on possible effects on US econowy with soecial refererne to areas of substantial -labor surplusSee Section II-F
9 FAA q201 (h)() Information and conclusion on the dagree to which thA country iv wiki- progress toward respect for the rule of law freedom of expression and of the press and recognition~yf the importance of individual freedom initiative and private enterprise
10 FAA -1201(b)(8) Information and conclusion on the degree to which the country is taking steps to improve its c]Laato for private investment See Sccton II-E
31 FAA R LbJi Inforrat-on and conclusion on whether or not the activityto b financed will contribute to the achievement of self-sustaining growthSee Sections I-D and II-B
12 FAA fi2Ol(bj Inforruation and conclusion on reasonalbe prospects of reshypayment See Section II-E
13 FAA fl20JL() Info-ation on applicability of the twenty country ceil4ng2
14 FAA fl201 L Information and coclusion on legality (under laws of the country end the US) and reasonableness of lending and ralendinr terms Loan will be on minimum termspermitted under FAA These are deemed reasonable see Sectioam Evidence will be renuired from the GGM as to the legality of the loan agreemnt
1 E 2 Information and conclusion on availability of an applicationFAA together with sufficient information and assurances to indicate reasonably that funds will be used in an economcally and technically sound manner See Sections I-A II-B and II-D Application received Janury 15 1968
16 FAA fl201(fL If a project inforntion and conclusion whether it will promote the economic developapent of the requesting country taking into account the countrys human and material resource requiremnts and the reshylationship between the ultimate objes6ives of the project and the countrys overall economic development See Sections I-D and II-B
17 FAAJ 20ij(J If a project information and conclusion whether it cifishycally provides for appropriate participation by private enterprise 8ce Sections YI-C and 114
I- FAA i22(a) Total amount of money under loan which is going directly to private enterprise is going to intermediate credit institutions or other borrowers for use by private enterprise is being used to finance imports
rfro private sources or is otherwise beirg used to finance procurementsfrcm private souwces See Sections II-C and II-2
9 FAA 207 Infosation on the emphasis placed en
(a) encouraging development of economic political and social institushytins No apparent relationship
(b) nelC-help in mectingthe countrys food nredo Project Vill conshytribute to production of food for lccal consumptioa
(c) in-proving availability in the country of evucated trained manpower Project will contribute to the deicloginext of trained manpower as one of the functions of the management contract (Soe Annex C para 5)
(d) prcgrams aimed at -malnutrition disease eradi atDn slum clearanceWater purification sewage disposal health education naternal and child care(includin fimrily pJnrning)) -nd cthcr public health ausistarice See
(c) other develoment activities including industrial development free
labor unions cooperatives tnd voluntary agencie transn)rtatin and ccshymwquication nrStczn capubiliTies for economic planning and public adlinisshytration arban develo-mment and modernization of laws to feilltate econcnicdevelopjen- GO- intends encourage develo vient of cooperat yes particularlyin the Left Pank areas Project will also develop capabiLi ics for cconoaicplanning and public a6~inistration (Annex C para 5) Other not applicable
20 Information on the extent to which the r-untry is
(a) cttcmting to increase food production and food sto a-e anddistribution felitics This project is one evidence of Moroccos efforts in this direction See also Section I-D and I-E
b) creating- a favorable climate for foreign and dmestic iri-ate enterprise and invcstrrment The GCM has recently reduced profits twes anrannounced a ten year guarantee against tax increases See Section II-E-2
(c) increasing the role of the neonle in the developnental procecsNo apparent relationship to this project
(d) allocating expenditures to development rather than to unn-cessarymilitary purpoes or intervention in other free countries affair See Sections I-D and Ii-
(e) willing --nribute funds to the project or program Th iOMhas already dcvo o-sidcrable resources to the project It has badieted13 million for th i oulouya for i7 See Section I-C
(If) making economic zocial and political refo ns such as taxc coliecshytion iYprovcmenLs and chan es in land tenure a Royal Comm ision has been appointed to make recomendation on land tenure probleras in the Lower I oulouya
(g) responding to the economic political and social concerns of its people and showing a determination to take volf-help wcasuren See Sections I-D and II-E
IT
-ovi~cd l v r 13 1968
- 4 - LDffIED OFFICIAL USE
21 FAA Inforn ation about multilateral assistance being Iurnished to t e country and whether the loan will encourage recgional development prog-rams The I1D has eztablihcd a Consultative Group for Morocco which rvicws the GOM development program anui prgress See Section II-F-4 for infoaation on othtr donor assistance to Morocco
22 A Extent to which the loan will contribute to the objective of ass ring naximu par icipation in the task of econonic dovelop--ent on the pL-t 0 _he people of the developing countries through the encouragement of cocr-tic private and local govenmental inLitutious o apparent
relationship
23 F _-_Dta_ Infor-ation and corissions whether loan will oncourageeffor s of t1e country to (a) increase tie flow of international trade (b) fostcr private initiative and comptition (c) encourage development and usceo co opratives credit unions and savingss and loan associations (d) disourgo monopolistic practices (c) improvo technical efficiency of industry ariculture and commerce (f) strenSthn free labor unions This project is cxpected to increase technical efficiency oi-agriculture
2_ C-1L lnforzrition and conclusion on how the loan will encourage US privte trade and investment abroad and how it uill encourage private US participation in foreign assistance prograas (incluiing use of private trade channels and the services of US private enterprise) See Section II-
25 VA-+_ Conclusion and supporting information on compliance with tho Co resional policy that engineering and professional servicos of US fir-ms and their affiliates are to bo used in connection with capital project3 to the nixinua extent consistent with the national interest US engineerirn and innsgcment services will be financed tnder this loan
2$ Inforamtion and ccnclusions who+her loan will pormit American rx-l] business to participate equitably in the furnishing of goods and
z orvices by To be satisfied in Loan Agreementfinanced it
27 - t(a App I18 Complianco with restriction of co -zodity procureshy o UsMS except as otherwise determined by the Picsicent and subject to ttu--- rcortir require r-nts Procurement will - liumited to the US for
reiabnrs nts and to ioocco and other free world countries 1-or US-cwne(d rhu disburseacnts
23 -i Comiance with bulk cozodity procurement restriction topriecc no l-ho han the nkarkot price prevailing in tho US at tia of
bull puchas Not applicable
29 FA Cozpliance with requirement that matrin insurance be purchased on commceities if the participating country discri-inates and that insurance be placed in the US To be satisfied in Loan Agreement
30 IA 6(a) Information at to the utilization of excers personal property in lieu of procurement of new items Will be required ai appropriate under terns of Lean Agreement
f
1 77--7 -77-77-777
31 FAA 61](a)(_) information and conclusion on availability of enginoering i financial and other plans nccx sary to carry out tho assittance and of a
reasonably firm cstimate of the cost of the assistanco to the United States
See Section II-D
32-ecessaryFAA t611(a)_(2) legislative action r6quired within recipient country and ibasis Cor reasonable anticipation such action will be completed in time to pormit orderly accompli-hirtnt of purposes of loan See Section I-A
33 n _AA161nJ0] If water or water-relatod land resource construcshy
tion project or program information and conclusion on a benefit-cost comshy
putation See Section II-B
3 4 VAA 611(c) Compliance with requirement that contracts for construction be let on comp-ctitive basis to mamum extent practicable To be satisfied
in Loan Agreement
If a loan for a project of $1 million or more certificatin35 FAA _61l(r) by the principal AID officer in the country as to the capability of the
country (both financirl and human resources) to effectively maintain and
utilize the project taking into account other US-financed projects (Such
certification is to be pproved by the Administrator aL the time the loan
is authorized) In process of being obtained
36 FAsgJ2 _6_h Appropriate steps that have b-en taken to assure that to the miaximum extent possible the country is contributing local currencies to net th-2 cost of contractural and other services and foreign currencies o- icd by tho US are utilized to meet the cost of contractual and other services The GU-M is contributing over $30 million to compleXton of this project Excess US-use dirhams will be used for eligible project costs other than US goods and services
37 FAA p619 Compliance with requirement that assistance to newly independent countries be furnished through multilateral organizations or plans to maxishymum extent appropriate Not deemed appropriate in view of previous AID financing and ccoiitment to the project See Sections I-A and I-D
38 FAA sect620(a) AcnO7a n3]7(b) Compliance with prohibitions
against assistance to Cuba ard any countr (a) which furnishes assistance to Cuba or failed to take appropriate steps by February 14 1964 to prevent ships or aircraft unier its registry from carrying equipment materials or supplies from or to Cuba or (b) which sells furnishes or permits any ships under its registry fr-om carrying items of primary atrategic signifishycance or itcms of economic assistance Morocco is not-known to be in Violation of these sections
39 FAA q620GL_ If assistance to the government of a country existence of determination it is not controlled by the international Communist movement The Secretary of State so determined on October 11 191
40 FAA 620(c) If assistance to the government of a country existonce of Indebtedness to a US citizen for goods or services furnished or ordered whore ouch citizen has exhaustod available legal romodiesor where the debt
i - ow - -- _---- --shy
- --
-6shy
is not denied or ontested by such government or the indebtedness arises under an unconditional guararty of payrrent given by such govornmunt No such indebtedness is known to exist
41 FA _(a2LdL If assisitance for any productive enterprise which will corashypote with US enterprise existence of agreement by the recipient country to prevent export to the US of more than 20 of the enterprises annual production during the life of the loan Not applicable
42 FA4 - 16Q_0_ A If assistance to the government of a country extent to which it (including government agenies or ruhdivisions) has after January 1 1962 taken steps o repudiate or nullify cuatracts or taken any action which has the effect of nationalizing expropriating or otherwise seizingownership or control ofprcpertv of US citizens or entities beneficially owned by them without taking appropriate stops to discha i ge its obligations No such steps cr actions are-known to have been taken by the GOM
43 FAA~L AjPj_10_9 Compliance with assistance toQ0 prohibitions against any Comunst codntry ozocco is not considered to be a cocinrunist country
44 FAA - 620(gJ Corliance with prohibition against use of assistonce to comp satc owners for expropriated or nationalized property To be satisfied in Loan Agreement
45 F AA 8620(h Compliance with regulations and procedures adopted to inshysure against ue of assistance in a manner hich contrary to the best inshyterests of the US promotes or assists the foreign aid projects or activities of the Communist-bloc countries To be satisfied in Loan Agreement
46 FAA 06-O(j)_ Exitence of determiration that the country is engaging in or preparing for aggressive military efforts No such determination has been made
L_62_O Information47 FAA on representation of the country at any intershynational confererce when that representation includes the planning of activishyties involving insurrection or subversion against the US or countries recoiving US assistance No such representition is known to have A occarrect
8 FAA 62JJ Existence of a determination that the country has permitted or failed to prevent destruction of US property by mob action or has failed to take steps to prevent a recurrence and-to pay compensation NO such destruction is known to have tak-n place
49 PAA l620(k) If construction of productive enterprise where eggregate value of assistanc to be furnished by US will exceed $1OO million identification of Gtntutoryauthority Not npplicable
i-xQ2MZZ=
1 shy
U 6 50 _Af( QCinsidoration which has been given to denlying assistance X to thu government of a country which after December 31 1966 has failed to
- institto the investnint guaranty program for the spcific risks of inconshy
vertibility and expropriation or confiscation Satisfied See No 7 above
S51S J lj Compliance with-prohibitions-againstn as~istance to countries which traffic or permittraffickingwith North Vietnam Morocco is not known to be in violation
52 E_-L620(_L If country has seized or imposed any penalty or sanction against vn US fishing vessel on account of its fishing activities in
intcrnationul waters information on the consideiation which has been given to excludirg the country from assistance No such situation is known to exist
53 FAA FA r) UAR restriction Not applicable620(p 9117
54 FAA R620tl) Existence of default undhr any Foreign Assistance Act loan to the country No such default exists
55 F ) C-nsider tion of whether co ntry is devoting unnecessary percentage of buKet for military purposes or use of foreign exchange for milita-y equipment
56 FAA 62o(t) Proibition on aid if country has severed diplomatic relations with US unless agreements have been negotiated after resumpshytion Diplomatic r(lations have not been severed
57 FAA 9620(u) Statur of the country on delinquent UN obligations Morocco is not known to be dlinquent on its UN~obligation
58 FAA R636(i) Prohibition on financing non-US manufactured motor vehicles Will be satisfied in Loan Agreement and Implementation Letter
59 App 102 Compliance with requirement that payments in excess of $25000 for architectural and en Jneering services on any one project be reported to Congress Such reports will be made
60 App R1O4 Compliance with bar against funds to pay pensions etc for military personnel Such payments will not be eligible for financing under th Loan Agreement
61 App 9106 If country attr ipts to create distinctions because of their race or religion among Americans in granting personal or commercial access or other rights otherwise avaVIfable to US citizens generally application which will be made in negotit ttons of contrary principles as expressed by Congress Morocco is not ku IDhave made any such attempts
iInD OFFIIt t USE
0k
OFFICIAL USE 62 AIwp Rii Compliance with existing requfremets for security clearance
of personnel Will be satisfied in Loan Agreement and Implementation Letter
63 App R1l2 Compliance with requirement for approval of cortractors and contract terms for capital projects Will be satisfied in Loan Agreement
clJ164 Aup Cmpliance with bar nRainst use of funds to Tay assessments etc of US meiber Such payments will not be eligible for financing under the Loan Agreemunt
6 Anp P115 Ccmpliance with regulations on employment of US and local personnel for funds obligated after April 30 1961 (Regulation 7) See Section III-C
66 Aim Vietnam iron and steel restrictions Not applicable
67 p l9 If a country other than Greece Turkey Iran Israel Republicof China Phillipines or Korea reduction in assistance by amounts spent for the purchase of sophisticated military equipment
68 Anp fi4O1 Compliance with bar against use of funds for publicity or proshypagjanda purposes within US not heretofore authorized by Congress Such use of funds will not be eligible for financing under the Loan Agreement
Morocco is a traditional Islamic monarchy with a constitution The conshystitution was implemented followaing a popular referendum in 1962 National regional and professional elective bodies including a parliament were established by universal suffrage under the constitution in 1963 The parliament was suspended in 1961 in a State of Exception because of its inability to agree on measures with adequate urgency to meet the prevailingecononde imperatives In July 1967 the King appointed a Prime Minister to direct a Cabinet of appointed technicians
The constitutional framework nevertheless remains intact in Morocco and nationwide popular elections for some of the professional chambers were held in August and September 1966 The press is relatively free in Morocco and the right of diLsent prevails provided that such dissent does not violate the prohibition against political attacks on the instishytution of the monarchy or the person of the monarch
LI Under the revised US AID Policy for Africa agreed to in November 1966 Morocco is designated a development emphasis country entitled to receive continuing support on a country basis as part of a multilaterally coorshydinated countrj program Morocco was subsequently included in Presidential Determination 67-14 (January 5 1967) I
LIM=TE OFFICIAL USE~i
- l go
bull ~ -
f
DEPQbi) STATE AGENCY FOR INERNATIONAL DEVELOPMENT
WASHINGTON DC 052
CAPITAL ASSISTANCE LOA11 AUTHORIZATION
Provided from Develoroent Loan Funds Morocco Second Lower Moulouya Irrigation Loan
Pursuant to the authority vested in the Assistant Administrator for Africa of the Agency for International Development
AI)by the Foreign Assistance Act of 1961 as amended theIAct) and the delegations of authority issued thereunder I
have received and t-en into consideration a certification from the Director of USAIDMorocco as to the financial and human resources capability of Morocco to effectively utilize the Lower Moulouya Irrigation Project taking into account among other things the
maintenance and utilization of projects in Morocco previously financed or assisted by the United States and I hereby authorize the establishshyment of a loan pursuant to Part I Chapter 2 Title I the Development Loan Fund to the Government of the Kingdom of Morocco (Borrower) of not to exceed five million dollars ($5000000) to assist in financing the fore] gn exchange and local currency costs of goods and services for the third phase of the Lower Moulouya Irrigation Project subject to the foLlowing terms and conditions
1 Interest Rate and Terms of Repayment Borrower shall repay the loan to AID in forty (40) years including a grace period not to exceed ten (10) years Borrower shall pay interest on the unrepaid principal and any interest accrued thereon at the rate of (a) two percent (2) per annum during the grace period and (b) two and
one-half percent (2-12) per annum thereafter
2 Currency of Pepayment Repayment of the loan and paymenu of interest shall be made in United States dollars
- t- n t - - - shy
3 Other Terms and Conditions amp(a)Goods and Services financed under the loan
shall have their source and origin in
(i) the United States if disbursements therefor are made in United States dollars or
(ii) any country in the free world including Morocco if disbursements therefor are made in Moroccan currency
(b) AID Regulation 7 shall not apply to construction -work financed under the loan because as detailed in Section IIIC of Capital Assistance Paper No P 667 it is important to the national interest of the United States that the direct costs of construction work performed by third-country nationals be financed out of funds made available by the Act
(a) Such other terms and conditions as AID may deem advisable
Assistant Administrator for Africa
Date
~~~~~~~~~~~~~~~~~~ - q v
7
1 --shy
-22-
E Financial Status of Borrower
1 The Moroccan Economy
Grrwth of MorocLcts GDP in real term averaged about 24 per yearin 1(4 and lr li Per capita DP In 1C 5 wan anproximotely t162 A (er Irr-ht in (6 resu]trd n a drcrcne of slightly nver in GDP which tlh vpulatior grc~vth avrring 3P4 per year rnrsJted in a decline of -r ornita GDP In 16 ii brut $154 A recnd droughtcccijrred In C67 but i not expeetid to have the severe effects of the 165 drought Crop forecasts for the first nine months of 1967 indicate a 4 increase in real GDP above the 1966 level This is also the economic grcrdth rate estimated by the IBRD for the pezxA 1965-70
Moroccos economy is heavily dependent upon the agricultural sector thich has averaged about 15 growth per annum However growth of the mal modern segment of Moroccos agricultural sector has inshy-reased at the rate of about 7 per annum
In 96 the International Banik for Reconstruction and Development (IBRD) preented a number of recommendationr denigrned to increase Moroccos economic growth rate On the bacis of these recomfndations the G004 proceeded with planning the necesrary program to increase investment levels fr- the i 63-65 level of 11 of GNP to 1r of GNP and stimulate the rate of economic growth from 2 to an average of over )4 annually for the five years 66-70 In addJtion the GC4 has taken measures to curb the population grovth rat while placing increased emphasis on raising production of both dryland (wheat) and Irrigated agriculture
2 Investment and Savinms
The level of total gross investment has remaind at aboit 11 of GNP for vera year althugh the percentnoe declined slightly in 165 Under the GO Three Yea5 Plan 1965-67 the gross investment t-3rget woz ret at DH 3 billion- Actual invev-tment expenditures for the three yearpeirod reached about DH 46 billion of which the Governshyment ezxenditure amounted to DH 1 billion a against DH 21 billion budgeted Thin may have beeo partly de to the GOMs deliberate ausshyterity pollcy under the hIF rtbJli7tion prci1rnr but more probably it van duxe to the shortage of trained cadres to -lan and execute projects
In the private cectcr conziderable inounts of ravings may be hoarded due to lack of project attractive t- inventors The lvl of private investment has been runnihg at about 51 of GNP thrrugh 195 The 0014 4 incentive to private instors hnr cut profit taxes from 4320 to V and announced a tpn year guarantc-e against tax increases
]L- $ = DH 506
777=-77- NQ
r y 7k1- T e - W lk In
j - 1) 7k- - _
- 23-
Loan are avaiiable to )rivlite irve-tcrn freo th 3JfIDiN s rctr special funda to prcmote touricm devc firvcnt
Under the 1r86-1972 plan abut to br irtntt level are to be accelerated considerably reaching A of GNP liv ]970 Mor(- Irlyir haviiy on foreign 1 to aciuw cc higher lve1
3 Central Government FinancP
The Moroccan money supply which had Incrrased ify 76 per cent in 2965 remained virtually unchanged in 966 The first half of 1967 witnessed a 5 Ter cent increase in the money supply Te major part of thi increase as concentrated in June and July uhen the supply reached V14 0j lion Currency In circulation expanded rapidly in June and July
nnl factrrn being reinforced by commodity hcnrding related to the 1ide~l Et crisis Demand deposits did not show their normal decline nthe first half of 1967 Deposits with commercial banks declined nlightly while deposits with the Treabury increased as public and semi public agencies contisued their transfers from the banking system to the Treasury The increase in money supply in the first half of (7 ran I raced to tho nzon1 sonal increase in net foreign assets not c y the custcirry rlelir In claims on the private sector Clsirl (n the erivate sector declined slighty until May 1967 but Increased hr-gb June and Jily due primarily to additional financing of textile stocks ClbiJ ante Government rose by 10 per cent in the first half of 967 the in central brnk claims on the GovernmentI being rmainly offset by larger deposits with the Treasury
Ordinary budgetary revenues which incrurted by 5 rcr ent in 1566 tre cxrcted t-) increase by 7 per cent in 1( to DII 21 billion DeampDite a derea3e in agricultural tax reccipt r- fror diret taxes rose by 10 ppr cent in 1966 and a 2 increas estinated for S67 due to tric or controls on income declarationr d an accelerashytion of tax cller ns Owing mainly to a relaxation of the import
program in late 1 5 and a concomitant increase in tariffs on certain ccnonter goods customs reneipts increased by 21 per cent in 1966 Although budgetary estimates call for s decline of 3 per cent in customs receipts in 1S67 it is likely that actual receipts will be considerably larger in view of the import liberalizatidn measures intro)duced subseshyquent to the estimates Receipts from indirect taxes state monopolies and other serces are expected to be 11 iv- cent Ipher in 1967 owing to increased profit on -ugar sabr-i and L r(m the newly created Office do Ccrmercalisaticn - d-tation (OCE)
Recurrent ordinary buiL e(enditures increased by 34 per cent in 1966 ar-i are expected to increase by an additional 7 per cent in 1567 reachin- D1122 billion Although wage and salary scales in the public
Banque Nationale pour le Developement Economique
TT~~- - I777
2 Cf
sector have1bec z h t - rrvirI urli 11i g 14-6 -nd PO becnue rX toi Ijt e f (]r o n 4
ill tile ic urrnnye andr)not i on dnd Publi ht rentrn -yr-otn lno IncreasedOthrr t ill- t il r ne by ) vr cert in J6(
i ninlyrt -br h Inc-l
( Ihe ( t r- rl t ip t t C itur f T)h 21h iilli n
is (( ItI t lt r c0 a- r n n o I- c t b It ihstnl id vv ih n t r-t have hn(er - en 1t2
(IM ii ture( T f fu traordJ nary budrzct exshypend ituren a r y -t c ~ i vi -iscz Portal Checking sy-stcsul)rrcing t (I ltIt Ct -- ind creirn shy
nnet The f r er tnc I hha ccrc ed from a htih of DH 5-7 millIJn in _ 5 millIn r C46 F cr ats foi ]7 place Cro n w I 1(DI)J79 ill ni DDn etlc fi nancing has alo u 1) 5 p (- I3A27 iIliun to an entirnted DH 1142 million
1 14V ) I nv 1 ri n nI(c1 franc n is 77-ected to be ol t y ncrewed bcrrowing fr-ir t he Cestra 9ank which hud been held at mcdert vols iln 165 nnd 1a66 Under the 1TFtaiby agreement of October 16 the qob) agreed to taBe a3] rocrrnary meurer to maintain as table curoonry rPnt inl th nr1d-elrto th b a ent of the ePrncriynnd a vnbl- hn1incc X nvroent P rt artt to t rt fien of tho Ccntin- Honk rstz (erct are nct t r itr June 30 Y-ke 7 lov l b th n Diif ) mill] (n tlcnber -c P thai I o illin usit I ])ecthr 31I62 (GC bc w t
C B1rtrp - vt DH 12 iri 1i nor ]S67 or DH 6S ij lionEan tisated (r fo than the aproved crd it expanwim
Thitrd ordivary nil extraordnnry buThTt deficit of DII 7-19 millI n fcrecat Fr 1 67 in exnected to be fnanced by not freign
tan reof DII )75 mi~l in nt recurity 12ue 1 T111I vlion a - nt ry tiat Po n Che )ir d-nC i 73 r5 Pn
riI is u h i a vti v mrr nrr-e jssIof fvr is id a erital The vnfsa revcred in 1d6 when lnrger r nyrentn eEecially on food itcmo an n -lewdoun in
igo ra a deficit of $1 millcn ProjectiOnz-vt rvultvd in ror 17 r~ieat inrrerned importsonly partially ccnrennate by addshytsa t frnreirn r ntil rrceiprs ard mprrvement in the nervices account will reult -n et of aprroximately $)20million As rhoim in the following tabl -r tion for l33 and 169 how overall deficits of
14 and m] ivi_y$i It
rqVV t1 4~
C)rgt
---
1 -)I+-IRF1
1ROCCO - rTANC OF PAYME 1qrt - 169]_ 5
6rfi0 1 1C(8lr67 i r(o
)xrurt 2t L( I L-5
Trade Bnlance 11 15 - 75 shy - 75
rviee- ret - 7 - 5) -35 -23 -2
J]-i of Good rnd Service- - 3 - 65 -II - ti - (5
Trn-Ifr Pr ynts (nt) P 21 33 37 33
on-cntnry Carital (not) 92 64 6 6 5
Err-rs nnd Ov rrion- (not) - 23 -2 1 3
eranl Bannic __ - _3 -_ 3 - 1i4
Atrh thert ircjected reficitn are of the nnme order of 1 nishytude a7 thcr incurred in the period i66 the Situatlcn i findarentallydifferent both in rerprct to the source of the deficits and in rer-ect to the meat0Y gtr m etin7tecr In the f rrer caive M5recco uffered
_frcrr a very h-vy cutfc of Drivtes cuitv fo-ivr with a shar) decline In forein nt exerditures in Morocco In the iatter case th projected deficits r- rcre a functicn or accelerated crcwth risingdebt ervieiiw tri tho abnrcn of forv eeble additiens foreign reshybull ourcs nere7ory 4( r2Vm rAf finmncting To nect the def-cits during the reriol 161 61h MWreco ob1id to drw down rorcin exchange reserves of over $]c milicn The snrti tpv of financing is no longerpozslble ince no or-res- ruch reserve- Even ifMorocco yr
mn nina r rve_ ore (]rrfii on to th r-ixirun etnt enribe nnd the [iI tnfldy i- un M-r-r e i32 till relA re nt rnt 15 millicnj1itionn ftr ign as- e n 1 6 beyond hat r recnently fcreeeshyable with ver nri- nry Officilr in In i6 reserves are cotImnted Pt 72million c hih crn V 3 million i caly required for currency coy r
Foreign InJebtrdne n of th GOM Mnroccos external rtnte ard rutlie enterprie dett amounted to
$r) millivn in lr6 Debt vervcirig rpynents for (66 trtaled about
$5) rillion g-eement approved in October 3(67
I- -- Ishy
37 millin or arprcxitrrntoy (j Iroccor totnl eXoort earning of h28 millicn GCnerally nxt rrO dbt FervicJng renuiremennt of leas
than r of totna -ort nnrlt In onrldered to I r tirfactoryrntio D-bt r rnJrcLct n Ir the reriod 1-(y 3on Trerent external debt including thnt wrtl(n irreently undibur-ed are hown n th fr lv tahlr
)] L v yr t n
Eternn Vtnte anc ] bntcrnrie Debt
M131 o)nr
Y aI Net Outrtnnling Debt Debt Service
(6 it 479r5 $367 J-67 452 3)6
Z616 44469 2 0 2C-
365I3 37 389
33 383 33 6 371
5-h 31 n 352 275 34121
]176 2661 32It 1977 21133 311 177 22)6 307 19 i0l74 256
1733 255
rgtternal debt rharre n rerent debt nnr rhon above do not increase ubtanti-lly over t rt 1)year- reaching a maximum of h44 millior
in J6 and decrpt- n cr - tently threoafter At the are time exportearninr r _rc extett nc-are Aring that Morocco does not inshycreswre it etrnn2 cbt t irate ubrtantially nb-vc ihat has been the core th adfiticrn dbt e roquirrentn reulting from the propo t Icon o 5 ijilion co r 7crncepr-ional term hould not have a i-nifiant affect n 1r o - ab lty to neet itv g rc-atedebt ericn rcnrib2t~e- the pros ectr of reprment of thin loan ore coniderci rearcnb)
U I -
F ot h-v C IuIJI rmt I shy
1 V amp~ rVml KI
PUC- -jrVi Jt t 1 11 nflrcj urlc 1- th )qn --P I uti u rhnrrl -1r- thr U- Tr- ry- R- -nymc nt
c2Il f n 6 1 bf r I- till 11 nfl r- n-r i n of O r--niC(Io~hi U 1 1 rr to
Tn vil ) f rvc hi tvlrll 1 (In- - n- u--n E r me rrinshycgtay F rntwir w ourc o -o- rvI ortf-V3 1 rncing of
Uf f -r rrrir- ur3r 4~ v -rin Iltrt nt ndd shyt -n t ) in- lint r b t l r -n rort- o-orco trorl-- V -P
r i 1rnd h L-torie Furcl-trin firr- thrjt US r r~ crvirrf- u~d be~
T L I1 c vt r- -ly ] -ubt fu 1 n vi pw -I -ror-co Ir of
ut1JpcO In thi rjert f it -- r- 21 npnred by d1-nr- cothcr t~han the US
2 ]P-t ofI Prr l1 on Prw- Fntrrr
Phij rrcjJ-t -11 n-t h~ -in nrwerq Prrt n rr- tc ntrshyr~A~r fi-mc 1bho und for --roern p o n
3_~~PrCT--rty
rr-vIi-n 1 h -d r the loan ragreement for Icntifitcation ef any r mIjrpt n ctri b- rt througn ut 1zatn (f xccr- prorerty
If rv c u~eAID n-mrcf u urr thi )cn - I~ut~ em avoi3ablo r rovvrirrnt -rrperty rather than nce iteni
4 Otli-r Fr- Wo--] n-Fnlc4rm
Dr mi tW- o] 14rocco- i~ajr ovr-ec -f exte rnaX
rrtan~- hrtvfb - I r ~ ant fl Fr n fole by Kv-it
Sgio F rneflit r b-en 1lmrntrd to tcfohnjip n5tnnen bi eoni~in I th u y f Fr--h tprhntcian tcacrr ind cther
~ti~r t~ ec-tnmIyrt-n Friinch Aid to Mcreco In 1065c~oc~ (P-art f-r txychnirril aItn -- j se of tl5 w1nfor bu~dget rurport f ir in rt t- $1 1ri1 icin in ennita -rojectM- n vx- rrcd
1Vw1tvnn tioI t-) Frenh rurtnnd +16 r11ion tie-I to -onyiint to orrrcr Frrmh ccilcn~For _-rrc-ratod land and rquirrmcnt
West GTrrnmnny liar agrcrcd to nrovIe ccme j27 mM22~cn 1n catital arirtanre and cromrndity lnoi7 t n OfIcon( q92 thi o totril$223 miJ lien ha actuary b-Pn cr-Itt--d under Inn ngrepment This
And a lk5 million commodity loan both) signed in 1965 All Wet Gerzaan
Ufla
-28shy
capital asnistance I vuectI to be tied to German exports Germanyhas in addition 1uvvded r tteysubbtantial technical assistance f
The IBRP hah rade four 1nns to Morocco since 1962 totaling$6) million Ofthin totnl a [175 million loan in 1965 wos fordevelopient of the gidi lit-r irrigation perimeter Other assistance by internntIcnal Iending arncie include an $11 million credit byIDA in 1C65 for rcendary diicction projects and an IFC ln and inshyvestrent of $1 1 ri jnic alo in
F tit i by [c - dncr tr dh elo snt ofMorccco rircuVt r oii +h b-]n jt-TKT r nbove n 2 )6 niliion Kuwait enn in i66 for develomyment of the Tensaout Prnm n irrnten nrooetand a $77 million Kuwait
0jl n )nnsn r(niti-nertcir
loan for extrnion of the Tadri~ Irrigation Perimeter
The following- trbe surrlnrlzes other free world arlztance (excluiin technical assistanc-) to Morocco for the years 1(62-66
($ Millions)
1 62 1cf_63 96) 19r65 19)66 Fneea 4) 5PO 64o 700 shyWet Germany 223 gu 1t 53 281 IRD 15 175 10) 175 IDA 110 IF C 1 5 7 7 7 0 I15
TOTAL 55 62 1U3 W
b Includer only lo-ng term loans and exporter credits - Includfs 25 million private capital
Eternal ansiztnnce to the Lowier Moulouya Irrigation Perimeter -nce 1060 hres been con[fined to US upport Consdiering AIDs previcus
involvement in and conmitnert to the Lower Moulouya an AID lean in P2t to be Lhi mol aprroriate source of financing for this project
LID
II
q
-29-
SECTION ITI- Y-TTYT TIMPLPTrION
A Periret-r Ad-instrrti-
Authority for irplerrentvtnn of the deveorpent prrgrn frr the LowerMoulcuya Perimeter and rs wel arth crnntinuinz mrnnrrmenertC tt r t- rrtnr V theltbi nad overationity iOfic 1cne 4
n r I e1i- i d Vit4 i Iv ~ Ct rreated i Otb (rJ rn-- of evcn inrmi-rriional offices hich reelaced the Office de Mire en Valeur Aamprlcole (OMVA) Under the OMXA and itspredecessor agencies authority for ad-inLtration cf irrigtion proJect war centralized in Rabat
Under the new regional office organization responsibility for adminshyistering ORMVAM is vested in on Adminirtrative Board of 10 members headed by the Minister of Agriculture and Agrarian Reform as chairman All ether board members (other than the Chairman and a representative of theInterministerial Economic Ccrmittee) represent agencies or activities inthe region of the r-eriret-r whic comprises parts of two provinces Localretresentatives on the Board inc]-de the governors of the two provincesOujda and Nador the presidents -f the two provincial asembtes and of the two provincial chambers of agriculture as well as the perimeter Director
The responsibilities of thie Administrative Board include review of theecys program establishment of its organizational structure developshynt -)f its annual budget and establishment of rates and conditions of
Siyfent for water and other services provided in the perimeter
The Director of OP4VAI-I is dbarged with the responsibility for executionPthe vclicies established by the Administrative Board end administration of oil ORMVAM functions This responsibility includes selection of staffn pserating perrcnnel acting s officia ORNIVAM representative in all ntztinns with -tate and othbr public or private bodies and the
f of funds within limit Indivated by the Ministers f Financetent rn fricultural and Agrarian Reorm
Perimeter Oranizatlon
ORVAM oreanizatlonal structure consists of a directnrate five maj-r rvlces or d-vsicns and one separate bureau Two services qei Administratif et Comptabl- and Service du Yatrial are conshycor - th adminisration and lcgistical support of ORMVAM operationshi1e the remainirg three services rind the separate bureau are Involved in t-hni al matters associated with agrcultural developrent Each ervice has one or more subordinate bureaus Fei-ce Chiefs and thehead 0 rch bure-u report directly to the ORMVAM4 Director
-~F7E MEw-
-30shy
2 Perimeter 01ttffnr
OPIVAM orgttnlrntlon treture calls for 557 positions of whichI L or 7 Mlled n were nher 29 1567 37 of the 71 Postshytion vacancies reported 1ern the high and middle levels Foreign(chiefly Euronean) technclan occupy I)of the 16 high level positionsthat ere filled at thfit tire
Whil OPM ut in th- lcng run lor to Mercecos oducational yster to prvidr tn crrf-nn2 to ratisfy current rdurojectd rcshyquirement th currnt high and mlddle level vacancies rrouire uersonnelwith oxt nive nrior rxericnce To fll this preent need it will be necessary for CRIVAM to continue its program of recruiting foreigntechnicians until ruch tire ns graduates of Moroccan educational programsacquire the necesnry exrerience The managerent assistance componentof thin pro~ject ]e-rribed In the Project analysis will to some extentalleviate OFIWAMs high level personnel requirements
3 Inw1 ernetation Sehedu]
Months Implementation Action
1 0 Sign Loan Agrcement
2 2 C-tiify conditions precedent and Y4tiate procedures for selection of US firm for management contract
2 Negotiation of extension of advisory Engineering Services
h 4 Contract (Hydrotechnic) Negotiation of Managerment Contract
5 60Cmpletion of Project
C Waivers
Sect ion 7 rf AID Regulation 7 provides in substance that theUnited State ill not finance direct costs of construction work performedby third cc-ur y nationals unless the total co-tn of the project withvhich thr ennrtrumticn w(r is asEcciated donot exceed $2On)O orafter excluding national of the country in vhich the site of constructionis located and Dersons vho nave resided therein uninterruptedly for morethan three years imrnedJately prior to any determination under Regulation 7at leant 0 of all uernons who work under the contract at the site of conbulltruction are United States citizens or the employment of third countrynationals is necessary to avoid excerrive corts to the United States
3
31
Section 2175 authr-ri th Regional Anitant Administratorto waive the nrovinions of Sectionthat it is 2073 if he dcterriner in any coneimportant te the nationrn intercrt of the United Stutes tofinance the direct eots of construction work performed by third country
nationals
A prviou1y r ic i c t tht for thr ct Tartthe -r c ct b- 1jeuj out r -cnorbr f cnrtructioncontracts with Morcccrr contrctnr an in the i-t Uowfevvr itentirely psnible that there may b- roe contractn with cntructlonfirms partly owned by third country nntionaln and that ruch firjs anwell as the surely Moroccan-owrned firms may enloy third country niationalsIn such canes a difficult rrobic-i iould arise in meeting the terms ofRegulation 7 since an a practical matter Aericans are not reaonablyavailable for ermployn ont by such contrnetorn and our previcus experiencewith the Naunsseur Ccnv(r-ion project thatin Morocco has indicatedAmerican contractors would not be interested in bidding cn small conshytracts in that country
It in therefore recommended that the Annitant Adinitratordetermine rursuant to Section 2q75 of Regulation 7 to waive theapplication of Regulation 7 to thic iroject since the project 411 conshytribute to the attainrent of US foreign policy objectiver and the cbJe-tives of the Foreign Arsistnnce Program
LITI L USE
LfI~~5xA~us
lit
4 A J A 45 4 k
t A S T
S(3
I A444ilA~~l~)
7 -74
tAM= D
SECTOR 27
10000
t Co0Na includez25 cgtri oncFcttlrvI ncy I8s ~ ~ C t C- Includes 50 constriJcltiotrgrc
2000 60
IU
0
z
bull cosYsA shy----- i
600L _
400
200
0 5 I0 15 20
INTEREST RATE
I ~ 7 J7777
ANIAampX C
PROJECT DESCRn1 rOll
The project com)onents to te undertaken on the MIoulouya Irrigation Project over the next five years contists of the following
C(n1rtion of the rrLin casuals and bianch canbls to provide the suource of waler to the sctors be developed in theto TriffBou Areg and Zebra areas This construction will include the necessarystructures such as reulators highway bridges aqueducts water intake
and discharge structures etc
2 Iand Txeloommerit which includes engineering land consolishyt and iuvtllng lard preparation (subsoiling ripping destoning etc) and installation of water distribution canals (secondary tertiary and quurtunary) and drainage collector ditches for the Triffa main covering 24000 acres in sctors 8 9 10 16 20 21 23 24 25A 2513 27 and 28 Lou Areg Central covering 16250 acres in sectors Dltirough D2B and G1 thru-4h G313 i0u Areg Remainder covering 15000 acres in s-ctors D3 through D7 and GA through (6 Zebra Collective covering 45)0 acres in sectors 3 4 5 rind 6 and Zebra Rer-iinder covering 14250 acres in sectors 1 2 and 7 through 10 and th remainder of sectors 34 and 5 The total land to be developed is about 74000 acres
3 Canalization of the Oued Zeluan and nued Sidi-Amar in the Bou Areg Plain consisting of strairltening englarging and regularizing of these streams to carry the flood waters to the sea Drainage interceptor canals are to be constructed parallel to the sea in the Bou Areg Plain In the Triffa Plain the Oued Riada main drain will be deepened and enlarged and secondary drains will be excavated to provide for drainageof the Madagh area This will include the construction of bridges and culverts and other related work
4 Major Commorn Works will consist of
a Clearing of the Mo-1ouya riverbed downstream of the Mechra KLila barn caused roy flood dariwe and the installation of a set of stop logs for maintenance of pillway gate-
b Design supervision and construction of repairs to the ]elt Lank dead head tunel
c Conctruction and establishment of sib-division Offices and installations for farmer support such as CMVand farm stables
1 C
-2shy
5 Manavmtnt It ha been proposed that a US management firm be ewployed by th- C4 to manage and operate the entire Bou Areg area Such manageent -iuld encomparn all activities from the initial concept to final irIrp igricultural production Such activities would Include resp r-ibilsect -or supervnsion of engtneering and constriction of primary
S- Jry r complete developfnent of land training n in g tinul irription practicen preparation of market
t - r1t- (ot--rnu trplusmnining of a Moroccan cadre to take over h v--it Bou Areg dreara P the
At this writing the n-pt of turning over to a private UZSfirm execushyresponsibl]ity I h management of the establilrment and initial
op-ration of irr1gati the Bou Arog area has been only broadly de iiitd by the GCJO It Intended that proposals will be invited from a r -onable ntnber of f|ed US firms that a selection will be made an-n 7 them and a more do iled and cornprehenrive definition of the rer6 -Ps to be performed be eztabliched at that time It haa been
stimated that the t- of ruch a contract will be about $2 mir- n In any event the -ts of this contract other engineering arvl s to be provided undt n extension of the Ilydrotechnic contract and ether US corts will not ed the proposed $5 mllaion developzont Jean fr the project
The cle 3ifications duties ant 1ncnslbilities of the management personnel ill ha-- to be clearly defined i agreed to by the GCM Perimeter Directo- and other GOM Agencies luding arrangements for the necessary gistic support
Svxlale Docu-
1
4
LD ED 0ICIAL
-IAIDshy
A1trX D
C6JCK LIST OF STATUTORY CRITERIA
(Development Loan Fund)
1 FAA 0102 Extent to which U3 cormodities and services are furnished consistent with improving the US balance of payments See Sections II-C II-F
2 AA sect2O]ihi lanner in which loan wil promote countrys economic develo shy rit emphasizing help for long-range plans and programs designed to developeconomic tesourcos and increase productive capacities See Section I-D
i FAA sectT] h)(IL Information and conclusion on availability of financincfrom other free-world sources including private sources within the United States See Section II-F
FAA sect20l( )2 Information and conclusion on activitys economic and technical soundness including the capacity of the recipient country to reshypay the loan at a reasonable rate of interest See Sections II-B II-D and II-E
5 FAA 1201(h)( Information and conclusion on existence of reasonable promise activity will contribute to developrmnt of economic resources or increase of productive capacities See Sectiona II-B and II-D
_92_(b 4Information and conclusion on activitys relationship toothor development activities and its contribution to realizable longshyrange objectives See Sections I-D and I-E
The following abbreviations are und FAA - Foroirn Assistance Act of 1961 as amerded by the Foreign Asaistaice
Act of 1967 App - Foreign Assistance and Polated Agencies Appropriations Act 1968
AFEVCDF 1066
L1
-2shy
7 FAA f12O1(b)(5)_ Countrys self-help masures including institution of Foreign Assistance Act investment pliaranty programs Investment Guaranty
bull Agreement signed with Morocco 331o6l See Sections I-D and II-EI
_A ))(6) Information and conclusion on possible effects on US econowy with soecial refererne to areas of substantial -labor surplusSee Section II-F
9 FAA q201 (h)() Information and conclusion on the dagree to which thA country iv wiki- progress toward respect for the rule of law freedom of expression and of the press and recognition~yf the importance of individual freedom initiative and private enterprise
10 FAA -1201(b)(8) Information and conclusion on the degree to which the country is taking steps to improve its c]Laato for private investment See Sccton II-E
31 FAA R LbJi Inforrat-on and conclusion on whether or not the activityto b financed will contribute to the achievement of self-sustaining growthSee Sections I-D and II-B
12 FAA fi2Ol(bj Inforruation and conclusion on reasonalbe prospects of reshypayment See Section II-E
13 FAA fl20JL() Info-ation on applicability of the twenty country ceil4ng2
14 FAA fl201 L Information and coclusion on legality (under laws of the country end the US) and reasonableness of lending and ralendinr terms Loan will be on minimum termspermitted under FAA These are deemed reasonable see Sectioam Evidence will be renuired from the GGM as to the legality of the loan agreemnt
1 E 2 Information and conclusion on availability of an applicationFAA together with sufficient information and assurances to indicate reasonably that funds will be used in an economcally and technically sound manner See Sections I-A II-B and II-D Application received Janury 15 1968
16 FAA fl201(fL If a project inforntion and conclusion whether it will promote the economic developapent of the requesting country taking into account the countrys human and material resource requiremnts and the reshylationship between the ultimate objes6ives of the project and the countrys overall economic development See Sections I-D and II-B
17 FAAJ 20ij(J If a project information and conclusion whether it cifishycally provides for appropriate participation by private enterprise 8ce Sections YI-C and 114
I- FAA i22(a) Total amount of money under loan which is going directly to private enterprise is going to intermediate credit institutions or other borrowers for use by private enterprise is being used to finance imports
rfro private sources or is otherwise beirg used to finance procurementsfrcm private souwces See Sections II-C and II-2
9 FAA 207 Infosation on the emphasis placed en
(a) encouraging development of economic political and social institushytins No apparent relationship
(b) nelC-help in mectingthe countrys food nredo Project Vill conshytribute to production of food for lccal consumptioa
(c) in-proving availability in the country of evucated trained manpower Project will contribute to the deicloginext of trained manpower as one of the functions of the management contract (Soe Annex C para 5)
(d) prcgrams aimed at -malnutrition disease eradi atDn slum clearanceWater purification sewage disposal health education naternal and child care(includin fimrily pJnrning)) -nd cthcr public health ausistarice See
(c) other develoment activities including industrial development free
labor unions cooperatives tnd voluntary agencie transn)rtatin and ccshymwquication nrStczn capubiliTies for economic planning and public adlinisshytration arban develo-mment and modernization of laws to feilltate econcnicdevelopjen- GO- intends encourage develo vient of cooperat yes particularlyin the Left Pank areas Project will also develop capabiLi ics for cconoaicplanning and public a6~inistration (Annex C para 5) Other not applicable
20 Information on the extent to which the r-untry is
(a) cttcmting to increase food production and food sto a-e anddistribution felitics This project is one evidence of Moroccos efforts in this direction See also Section I-D and I-E
b) creating- a favorable climate for foreign and dmestic iri-ate enterprise and invcstrrment The GCM has recently reduced profits twes anrannounced a ten year guarantee against tax increases See Section II-E-2
(c) increasing the role of the neonle in the developnental procecsNo apparent relationship to this project
(d) allocating expenditures to development rather than to unn-cessarymilitary purpoes or intervention in other free countries affair See Sections I-D and Ii-
(e) willing --nribute funds to the project or program Th iOMhas already dcvo o-sidcrable resources to the project It has badieted13 million for th i oulouya for i7 See Section I-C
(If) making economic zocial and political refo ns such as taxc coliecshytion iYprovcmenLs and chan es in land tenure a Royal Comm ision has been appointed to make recomendation on land tenure probleras in the Lower I oulouya
(g) responding to the economic political and social concerns of its people and showing a determination to take volf-help wcasuren See Sections I-D and II-E
IT
-ovi~cd l v r 13 1968
- 4 - LDffIED OFFICIAL USE
21 FAA Inforn ation about multilateral assistance being Iurnished to t e country and whether the loan will encourage recgional development prog-rams The I1D has eztablihcd a Consultative Group for Morocco which rvicws the GOM development program anui prgress See Section II-F-4 for infoaation on othtr donor assistance to Morocco
22 A Extent to which the loan will contribute to the objective of ass ring naximu par icipation in the task of econonic dovelop--ent on the pL-t 0 _he people of the developing countries through the encouragement of cocr-tic private and local govenmental inLitutious o apparent
relationship
23 F _-_Dta_ Infor-ation and corissions whether loan will oncourageeffor s of t1e country to (a) increase tie flow of international trade (b) fostcr private initiative and comptition (c) encourage development and usceo co opratives credit unions and savingss and loan associations (d) disourgo monopolistic practices (c) improvo technical efficiency of industry ariculture and commerce (f) strenSthn free labor unions This project is cxpected to increase technical efficiency oi-agriculture
2_ C-1L lnforzrition and conclusion on how the loan will encourage US privte trade and investment abroad and how it uill encourage private US participation in foreign assistance prograas (incluiing use of private trade channels and the services of US private enterprise) See Section II-
25 VA-+_ Conclusion and supporting information on compliance with tho Co resional policy that engineering and professional servicos of US fir-ms and their affiliates are to bo used in connection with capital project3 to the nixinua extent consistent with the national interest US engineerirn and innsgcment services will be financed tnder this loan
2$ Inforamtion and ccnclusions who+her loan will pormit American rx-l] business to participate equitably in the furnishing of goods and
z orvices by To be satisfied in Loan Agreementfinanced it
27 - t(a App I18 Complianco with restriction of co -zodity procureshy o UsMS except as otherwise determined by the Picsicent and subject to ttu--- rcortir require r-nts Procurement will - liumited to the US for
reiabnrs nts and to ioocco and other free world countries 1-or US-cwne(d rhu disburseacnts
23 -i Comiance with bulk cozodity procurement restriction topriecc no l-ho han the nkarkot price prevailing in tho US at tia of
bull puchas Not applicable
29 FA Cozpliance with requirement that matrin insurance be purchased on commceities if the participating country discri-inates and that insurance be placed in the US To be satisfied in Loan Agreement
30 IA 6(a) Information at to the utilization of excers personal property in lieu of procurement of new items Will be required ai appropriate under terns of Lean Agreement
f
1 77--7 -77-77-777
31 FAA 61](a)(_) information and conclusion on availability of enginoering i financial and other plans nccx sary to carry out tho assittance and of a
reasonably firm cstimate of the cost of the assistanco to the United States
See Section II-D
32-ecessaryFAA t611(a)_(2) legislative action r6quired within recipient country and ibasis Cor reasonable anticipation such action will be completed in time to pormit orderly accompli-hirtnt of purposes of loan See Section I-A
33 n _AA161nJ0] If water or water-relatod land resource construcshy
tion project or program information and conclusion on a benefit-cost comshy
putation See Section II-B
3 4 VAA 611(c) Compliance with requirement that contracts for construction be let on comp-ctitive basis to mamum extent practicable To be satisfied
in Loan Agreement
If a loan for a project of $1 million or more certificatin35 FAA _61l(r) by the principal AID officer in the country as to the capability of the
country (both financirl and human resources) to effectively maintain and
utilize the project taking into account other US-financed projects (Such
certification is to be pproved by the Administrator aL the time the loan
is authorized) In process of being obtained
36 FAsgJ2 _6_h Appropriate steps that have b-en taken to assure that to the miaximum extent possible the country is contributing local currencies to net th-2 cost of contractural and other services and foreign currencies o- icd by tho US are utilized to meet the cost of contractual and other services The GU-M is contributing over $30 million to compleXton of this project Excess US-use dirhams will be used for eligible project costs other than US goods and services
37 FAA p619 Compliance with requirement that assistance to newly independent countries be furnished through multilateral organizations or plans to maxishymum extent appropriate Not deemed appropriate in view of previous AID financing and ccoiitment to the project See Sections I-A and I-D
38 FAA sect620(a) AcnO7a n3]7(b) Compliance with prohibitions
against assistance to Cuba ard any countr (a) which furnishes assistance to Cuba or failed to take appropriate steps by February 14 1964 to prevent ships or aircraft unier its registry from carrying equipment materials or supplies from or to Cuba or (b) which sells furnishes or permits any ships under its registry fr-om carrying items of primary atrategic signifishycance or itcms of economic assistance Morocco is not-known to be in Violation of these sections
39 FAA q620GL_ If assistance to the government of a country existence of determination it is not controlled by the international Communist movement The Secretary of State so determined on October 11 191
40 FAA 620(c) If assistance to the government of a country existonce of Indebtedness to a US citizen for goods or services furnished or ordered whore ouch citizen has exhaustod available legal romodiesor where the debt
i - ow - -- _---- --shy
- --
-6shy
is not denied or ontested by such government or the indebtedness arises under an unconditional guararty of payrrent given by such govornmunt No such indebtedness is known to exist
41 FA _(a2LdL If assisitance for any productive enterprise which will corashypote with US enterprise existence of agreement by the recipient country to prevent export to the US of more than 20 of the enterprises annual production during the life of the loan Not applicable
42 FA4 - 16Q_0_ A If assistance to the government of a country extent to which it (including government agenies or ruhdivisions) has after January 1 1962 taken steps o repudiate or nullify cuatracts or taken any action which has the effect of nationalizing expropriating or otherwise seizingownership or control ofprcpertv of US citizens or entities beneficially owned by them without taking appropriate stops to discha i ge its obligations No such steps cr actions are-known to have been taken by the GOM
43 FAA~L AjPj_10_9 Compliance with assistance toQ0 prohibitions against any Comunst codntry ozocco is not considered to be a cocinrunist country
44 FAA - 620(gJ Corliance with prohibition against use of assistonce to comp satc owners for expropriated or nationalized property To be satisfied in Loan Agreement
45 F AA 8620(h Compliance with regulations and procedures adopted to inshysure against ue of assistance in a manner hich contrary to the best inshyterests of the US promotes or assists the foreign aid projects or activities of the Communist-bloc countries To be satisfied in Loan Agreement
46 FAA 06-O(j)_ Exitence of determiration that the country is engaging in or preparing for aggressive military efforts No such determination has been made
L_62_O Information47 FAA on representation of the country at any intershynational confererce when that representation includes the planning of activishyties involving insurrection or subversion against the US or countries recoiving US assistance No such representition is known to have A occarrect
8 FAA 62JJ Existence of a determination that the country has permitted or failed to prevent destruction of US property by mob action or has failed to take steps to prevent a recurrence and-to pay compensation NO such destruction is known to have tak-n place
49 PAA l620(k) If construction of productive enterprise where eggregate value of assistanc to be furnished by US will exceed $1OO million identification of Gtntutoryauthority Not npplicable
i-xQ2MZZ=
1 shy
U 6 50 _Af( QCinsidoration which has been given to denlying assistance X to thu government of a country which after December 31 1966 has failed to
- institto the investnint guaranty program for the spcific risks of inconshy
vertibility and expropriation or confiscation Satisfied See No 7 above
S51S J lj Compliance with-prohibitions-againstn as~istance to countries which traffic or permittraffickingwith North Vietnam Morocco is not known to be in violation
52 E_-L620(_L If country has seized or imposed any penalty or sanction against vn US fishing vessel on account of its fishing activities in
intcrnationul waters information on the consideiation which has been given to excludirg the country from assistance No such situation is known to exist
53 FAA FA r) UAR restriction Not applicable620(p 9117
54 FAA R620tl) Existence of default undhr any Foreign Assistance Act loan to the country No such default exists
55 F ) C-nsider tion of whether co ntry is devoting unnecessary percentage of buKet for military purposes or use of foreign exchange for milita-y equipment
56 FAA 62o(t) Proibition on aid if country has severed diplomatic relations with US unless agreements have been negotiated after resumpshytion Diplomatic r(lations have not been severed
57 FAA 9620(u) Statur of the country on delinquent UN obligations Morocco is not known to be dlinquent on its UN~obligation
58 FAA R636(i) Prohibition on financing non-US manufactured motor vehicles Will be satisfied in Loan Agreement and Implementation Letter
59 App 102 Compliance with requirement that payments in excess of $25000 for architectural and en Jneering services on any one project be reported to Congress Such reports will be made
60 App R1O4 Compliance with bar against funds to pay pensions etc for military personnel Such payments will not be eligible for financing under th Loan Agreement
61 App 9106 If country attr ipts to create distinctions because of their race or religion among Americans in granting personal or commercial access or other rights otherwise avaVIfable to US citizens generally application which will be made in negotit ttons of contrary principles as expressed by Congress Morocco is not ku IDhave made any such attempts
iInD OFFIIt t USE
0k
OFFICIAL USE 62 AIwp Rii Compliance with existing requfremets for security clearance
of personnel Will be satisfied in Loan Agreement and Implementation Letter
63 App R1l2 Compliance with requirement for approval of cortractors and contract terms for capital projects Will be satisfied in Loan Agreement
clJ164 Aup Cmpliance with bar nRainst use of funds to Tay assessments etc of US meiber Such payments will not be eligible for financing under the Loan Agreemunt
6 Anp P115 Ccmpliance with regulations on employment of US and local personnel for funds obligated after April 30 1961 (Regulation 7) See Section III-C
66 Aim Vietnam iron and steel restrictions Not applicable
67 p l9 If a country other than Greece Turkey Iran Israel Republicof China Phillipines or Korea reduction in assistance by amounts spent for the purchase of sophisticated military equipment
68 Anp fi4O1 Compliance with bar against use of funds for publicity or proshypagjanda purposes within US not heretofore authorized by Congress Such use of funds will not be eligible for financing under the Loan Agreement
Morocco is a traditional Islamic monarchy with a constitution The conshystitution was implemented followaing a popular referendum in 1962 National regional and professional elective bodies including a parliament were established by universal suffrage under the constitution in 1963 The parliament was suspended in 1961 in a State of Exception because of its inability to agree on measures with adequate urgency to meet the prevailingecononde imperatives In July 1967 the King appointed a Prime Minister to direct a Cabinet of appointed technicians
The constitutional framework nevertheless remains intact in Morocco and nationwide popular elections for some of the professional chambers were held in August and September 1966 The press is relatively free in Morocco and the right of diLsent prevails provided that such dissent does not violate the prohibition against political attacks on the instishytution of the monarchy or the person of the monarch
LI Under the revised US AID Policy for Africa agreed to in November 1966 Morocco is designated a development emphasis country entitled to receive continuing support on a country basis as part of a multilaterally coorshydinated countrj program Morocco was subsequently included in Presidential Determination 67-14 (January 5 1967) I
LIM=TE OFFICIAL USE~i
- l go
bull ~ -
f
DEPQbi) STATE AGENCY FOR INERNATIONAL DEVELOPMENT
WASHINGTON DC 052
CAPITAL ASSISTANCE LOA11 AUTHORIZATION
Provided from Develoroent Loan Funds Morocco Second Lower Moulouya Irrigation Loan
Pursuant to the authority vested in the Assistant Administrator for Africa of the Agency for International Development
AI)by the Foreign Assistance Act of 1961 as amended theIAct) and the delegations of authority issued thereunder I
have received and t-en into consideration a certification from the Director of USAIDMorocco as to the financial and human resources capability of Morocco to effectively utilize the Lower Moulouya Irrigation Project taking into account among other things the
maintenance and utilization of projects in Morocco previously financed or assisted by the United States and I hereby authorize the establishshyment of a loan pursuant to Part I Chapter 2 Title I the Development Loan Fund to the Government of the Kingdom of Morocco (Borrower) of not to exceed five million dollars ($5000000) to assist in financing the fore] gn exchange and local currency costs of goods and services for the third phase of the Lower Moulouya Irrigation Project subject to the foLlowing terms and conditions
1 Interest Rate and Terms of Repayment Borrower shall repay the loan to AID in forty (40) years including a grace period not to exceed ten (10) years Borrower shall pay interest on the unrepaid principal and any interest accrued thereon at the rate of (a) two percent (2) per annum during the grace period and (b) two and
one-half percent (2-12) per annum thereafter
2 Currency of Pepayment Repayment of the loan and paymenu of interest shall be made in United States dollars
- t- n t - - - shy
3 Other Terms and Conditions amp(a)Goods and Services financed under the loan
shall have their source and origin in
(i) the United States if disbursements therefor are made in United States dollars or
(ii) any country in the free world including Morocco if disbursements therefor are made in Moroccan currency
(b) AID Regulation 7 shall not apply to construction -work financed under the loan because as detailed in Section IIIC of Capital Assistance Paper No P 667 it is important to the national interest of the United States that the direct costs of construction work performed by third-country nationals be financed out of funds made available by the Act
(a) Such other terms and conditions as AID may deem advisable
Assistant Administrator for Africa
Date
~~~~~~~~~~~~~~~~~~ - q v
7
- 23-
Loan are avaiiable to )rivlite irve-tcrn freo th 3JfIDiN s rctr special funda to prcmote touricm devc firvcnt
Under the 1r86-1972 plan abut to br irtntt level are to be accelerated considerably reaching A of GNP liv ]970 Mor(- Irlyir haviiy on foreign 1 to aciuw cc higher lve1
3 Central Government FinancP
The Moroccan money supply which had Incrrased ify 76 per cent in 2965 remained virtually unchanged in 966 The first half of 1967 witnessed a 5 Ter cent increase in the money supply Te major part of thi increase as concentrated in June and July uhen the supply reached V14 0j lion Currency In circulation expanded rapidly in June and July
nnl factrrn being reinforced by commodity hcnrding related to the 1ide~l Et crisis Demand deposits did not show their normal decline nthe first half of 1967 Deposits with commercial banks declined nlightly while deposits with the Treabury increased as public and semi public agencies contisued their transfers from the banking system to the Treasury The increase in money supply in the first half of (7 ran I raced to tho nzon1 sonal increase in net foreign assets not c y the custcirry rlelir In claims on the private sector Clsirl (n the erivate sector declined slighty until May 1967 but Increased hr-gb June and Jily due primarily to additional financing of textile stocks ClbiJ ante Government rose by 10 per cent in the first half of 967 the in central brnk claims on the GovernmentI being rmainly offset by larger deposits with the Treasury
Ordinary budgetary revenues which incrurted by 5 rcr ent in 1566 tre cxrcted t-) increase by 7 per cent in 1( to DII 21 billion DeampDite a derea3e in agricultural tax reccipt r- fror diret taxes rose by 10 ppr cent in 1966 and a 2 increas estinated for S67 due to tric or controls on income declarationr d an accelerashytion of tax cller ns Owing mainly to a relaxation of the import
program in late 1 5 and a concomitant increase in tariffs on certain ccnonter goods customs reneipts increased by 21 per cent in 1966 Although budgetary estimates call for s decline of 3 per cent in customs receipts in 1S67 it is likely that actual receipts will be considerably larger in view of the import liberalizatidn measures intro)duced subseshyquent to the estimates Receipts from indirect taxes state monopolies and other serces are expected to be 11 iv- cent Ipher in 1967 owing to increased profit on -ugar sabr-i and L r(m the newly created Office do Ccrmercalisaticn - d-tation (OCE)
Recurrent ordinary buiL e(enditures increased by 34 per cent in 1966 ar-i are expected to increase by an additional 7 per cent in 1567 reachin- D1122 billion Although wage and salary scales in the public
Banque Nationale pour le Developement Economique
TT~~- - I777
2 Cf
sector have1bec z h t - rrvirI urli 11i g 14-6 -nd PO becnue rX toi Ijt e f (]r o n 4
ill tile ic urrnnye andr)not i on dnd Publi ht rentrn -yr-otn lno IncreasedOthrr t ill- t il r ne by ) vr cert in J6(
i ninlyrt -br h Inc-l
( Ihe ( t r- rl t ip t t C itur f T)h 21h iilli n
is (( ItI t lt r c0 a- r n n o I- c t b It ihstnl id vv ih n t r-t have hn(er - en 1t2
(IM ii ture( T f fu traordJ nary budrzct exshypend ituren a r y -t c ~ i vi -iscz Portal Checking sy-stcsul)rrcing t (I ltIt Ct -- ind creirn shy
nnet The f r er tnc I hha ccrc ed from a htih of DH 5-7 millIJn in _ 5 millIn r C46 F cr ats foi ]7 place Cro n w I 1(DI)J79 ill ni DDn etlc fi nancing has alo u 1) 5 p (- I3A27 iIliun to an entirnted DH 1142 million
1 14V ) I nv 1 ri n nI(c1 franc n is 77-ected to be ol t y ncrewed bcrrowing fr-ir t he Cestra 9ank which hud been held at mcdert vols iln 165 nnd 1a66 Under the 1TFtaiby agreement of October 16 the qob) agreed to taBe a3] rocrrnary meurer to maintain as table curoonry rPnt inl th nr1d-elrto th b a ent of the ePrncriynnd a vnbl- hn1incc X nvroent P rt artt to t rt fien of tho Ccntin- Honk rstz (erct are nct t r itr June 30 Y-ke 7 lov l b th n Diif ) mill] (n tlcnber -c P thai I o illin usit I ])ecthr 31I62 (GC bc w t
C B1rtrp - vt DH 12 iri 1i nor ]S67 or DH 6S ij lionEan tisated (r fo than the aproved crd it expanwim
Thitrd ordivary nil extraordnnry buThTt deficit of DII 7-19 millI n fcrecat Fr 1 67 in exnected to be fnanced by not freign
tan reof DII )75 mi~l in nt recurity 12ue 1 T111I vlion a - nt ry tiat Po n Che )ir d-nC i 73 r5 Pn
riI is u h i a vti v mrr nrr-e jssIof fvr is id a erital The vnfsa revcred in 1d6 when lnrger r nyrentn eEecially on food itcmo an n -lewdoun in
igo ra a deficit of $1 millcn ProjectiOnz-vt rvultvd in ror 17 r~ieat inrrerned importsonly partially ccnrennate by addshytsa t frnreirn r ntil rrceiprs ard mprrvement in the nervices account will reult -n et of aprroximately $)20million As rhoim in the following tabl -r tion for l33 and 169 how overall deficits of
14 and m] ivi_y$i It
rqVV t1 4~
C)rgt
---
1 -)I+-IRF1
1ROCCO - rTANC OF PAYME 1qrt - 169]_ 5
6rfi0 1 1C(8lr67 i r(o
)xrurt 2t L( I L-5
Trade Bnlance 11 15 - 75 shy - 75
rviee- ret - 7 - 5) -35 -23 -2
J]-i of Good rnd Service- - 3 - 65 -II - ti - (5
Trn-Ifr Pr ynts (nt) P 21 33 37 33
on-cntnry Carital (not) 92 64 6 6 5
Err-rs nnd Ov rrion- (not) - 23 -2 1 3
eranl Bannic __ - _3 -_ 3 - 1i4
Atrh thert ircjected reficitn are of the nnme order of 1 nishytude a7 thcr incurred in the period i66 the Situatlcn i findarentallydifferent both in rerprct to the source of the deficits and in rer-ect to the meat0Y gtr m etin7tecr In the f rrer caive M5recco uffered
_frcrr a very h-vy cutfc of Drivtes cuitv fo-ivr with a shar) decline In forein nt exerditures in Morocco In the iatter case th projected deficits r- rcre a functicn or accelerated crcwth risingdebt ervieiiw tri tho abnrcn of forv eeble additiens foreign reshybull ourcs nere7ory 4( r2Vm rAf finmncting To nect the def-cits during the reriol 161 61h MWreco ob1id to drw down rorcin exchange reserves of over $]c milicn The snrti tpv of financing is no longerpozslble ince no or-res- ruch reserve- Even ifMorocco yr
mn nina r rve_ ore (]rrfii on to th r-ixirun etnt enribe nnd the [iI tnfldy i- un M-r-r e i32 till relA re nt rnt 15 millicnj1itionn ftr ign as- e n 1 6 beyond hat r recnently fcreeeshyable with ver nri- nry Officilr in In i6 reserves are cotImnted Pt 72million c hih crn V 3 million i caly required for currency coy r
Foreign InJebtrdne n of th GOM Mnroccos external rtnte ard rutlie enterprie dett amounted to
$r) millivn in lr6 Debt vervcirig rpynents for (66 trtaled about
$5) rillion g-eement approved in October 3(67
I- -- Ishy
37 millin or arprcxitrrntoy (j Iroccor totnl eXoort earning of h28 millicn GCnerally nxt rrO dbt FervicJng renuiremennt of leas
than r of totna -ort nnrlt In onrldered to I r tirfactoryrntio D-bt r rnJrcLct n Ir the reriod 1-(y 3on Trerent external debt including thnt wrtl(n irreently undibur-ed are hown n th fr lv tahlr
)] L v yr t n
Eternn Vtnte anc ] bntcrnrie Debt
M131 o)nr
Y aI Net Outrtnnling Debt Debt Service
(6 it 479r5 $367 J-67 452 3)6
Z616 44469 2 0 2C-
365I3 37 389
33 383 33 6 371
5-h 31 n 352 275 34121
]176 2661 32It 1977 21133 311 177 22)6 307 19 i0l74 256
1733 255
rgtternal debt rharre n rerent debt nnr rhon above do not increase ubtanti-lly over t rt 1)year- reaching a maximum of h44 millior
in J6 and decrpt- n cr - tently threoafter At the are time exportearninr r _rc extett nc-are Aring that Morocco does not inshycreswre it etrnn2 cbt t irate ubrtantially nb-vc ihat has been the core th adfiticrn dbt e roquirrentn reulting from the propo t Icon o 5 ijilion co r 7crncepr-ional term hould not have a i-nifiant affect n 1r o - ab lty to neet itv g rc-atedebt ericn rcnrib2t~e- the pros ectr of reprment of thin loan ore coniderci rearcnb)
U I -
F ot h-v C IuIJI rmt I shy
1 V amp~ rVml KI
PUC- -jrVi Jt t 1 11 nflrcj urlc 1- th )qn --P I uti u rhnrrl -1r- thr U- Tr- ry- R- -nymc nt
c2Il f n 6 1 bf r I- till 11 nfl r- n-r i n of O r--niC(Io~hi U 1 1 rr to
Tn vil ) f rvc hi tvlrll 1 (In- - n- u--n E r me rrinshycgtay F rntwir w ourc o -o- rvI ortf-V3 1 rncing of
Uf f -r rrrir- ur3r 4~ v -rin Iltrt nt ndd shyt -n t ) in- lint r b t l r -n rort- o-orco trorl-- V -P
r i 1rnd h L-torie Furcl-trin firr- thrjt US r r~ crvirrf- u~d be~
T L I1 c vt r- -ly ] -ubt fu 1 n vi pw -I -ror-co Ir of
ut1JpcO In thi rjert f it -- r- 21 npnred by d1-nr- cothcr t~han the US
2 ]P-t ofI Prr l1 on Prw- Fntrrr
Phij rrcjJ-t -11 n-t h~ -in nrwerq Prrt n rr- tc ntrshyr~A~r fi-mc 1bho und for --roern p o n
3_~~PrCT--rty
rr-vIi-n 1 h -d r the loan ragreement for Icntifitcation ef any r mIjrpt n ctri b- rt througn ut 1zatn (f xccr- prorerty
If rv c u~eAID n-mrcf u urr thi )cn - I~ut~ em avoi3ablo r rovvrirrnt -rrperty rather than nce iteni
4 Otli-r Fr- Wo--] n-Fnlc4rm
Dr mi tW- o] 14rocco- i~ajr ovr-ec -f exte rnaX
rrtan~- hrtvfb - I r ~ ant fl Fr n fole by Kv-it
Sgio F rneflit r b-en 1lmrntrd to tcfohnjip n5tnnen bi eoni~in I th u y f Fr--h tprhntcian tcacrr ind cther
~ti~r t~ ec-tnmIyrt-n Friinch Aid to Mcreco In 1065c~oc~ (P-art f-r txychnirril aItn -- j se of tl5 w1nfor bu~dget rurport f ir in rt t- $1 1ri1 icin in ennita -rojectM- n vx- rrcd
1Vw1tvnn tioI t-) Frenh rurtnnd +16 r11ion tie-I to -onyiint to orrrcr Frrmh ccilcn~For _-rrc-ratod land and rquirrmcnt
West GTrrnmnny liar agrcrcd to nrovIe ccme j27 mM22~cn 1n catital arirtanre and cromrndity lnoi7 t n OfIcon( q92 thi o totril$223 miJ lien ha actuary b-Pn cr-Itt--d under Inn ngrepment This
And a lk5 million commodity loan both) signed in 1965 All Wet Gerzaan
Ufla
-28shy
capital asnistance I vuectI to be tied to German exports Germanyhas in addition 1uvvded r tteysubbtantial technical assistance f
The IBRP hah rade four 1nns to Morocco since 1962 totaling$6) million Ofthin totnl a [175 million loan in 1965 wos fordevelopient of the gidi lit-r irrigation perimeter Other assistance by internntIcnal Iending arncie include an $11 million credit byIDA in 1C65 for rcendary diicction projects and an IFC ln and inshyvestrent of $1 1 ri jnic alo in
F tit i by [c - dncr tr dh elo snt ofMorccco rircuVt r oii +h b-]n jt-TKT r nbove n 2 )6 niliion Kuwait enn in i66 for develomyment of the Tensaout Prnm n irrnten nrooetand a $77 million Kuwait
0jl n )nnsn r(niti-nertcir
loan for extrnion of the Tadri~ Irrigation Perimeter
The following- trbe surrlnrlzes other free world arlztance (excluiin technical assistanc-) to Morocco for the years 1(62-66
($ Millions)
1 62 1cf_63 96) 19r65 19)66 Fneea 4) 5PO 64o 700 shyWet Germany 223 gu 1t 53 281 IRD 15 175 10) 175 IDA 110 IF C 1 5 7 7 7 0 I15
TOTAL 55 62 1U3 W
b Includer only lo-ng term loans and exporter credits - Includfs 25 million private capital
Eternal ansiztnnce to the Lowier Moulouya Irrigation Perimeter -nce 1060 hres been con[fined to US upport Consdiering AIDs previcus
involvement in and conmitnert to the Lower Moulouya an AID lean in P2t to be Lhi mol aprroriate source of financing for this project
LID
II
q
-29-
SECTION ITI- Y-TTYT TIMPLPTrION
A Periret-r Ad-instrrti-
Authority for irplerrentvtnn of the deveorpent prrgrn frr the LowerMoulcuya Perimeter and rs wel arth crnntinuinz mrnnrrmenertC tt r t- rrtnr V theltbi nad overationity iOfic 1cne 4
n r I e1i- i d Vit4 i Iv ~ Ct rreated i Otb (rJ rn-- of evcn inrmi-rriional offices hich reelaced the Office de Mire en Valeur Aamprlcole (OMVA) Under the OMXA and itspredecessor agencies authority for ad-inLtration cf irrigtion proJect war centralized in Rabat
Under the new regional office organization responsibility for adminshyistering ORMVAM is vested in on Adminirtrative Board of 10 members headed by the Minister of Agriculture and Agrarian Reform as chairman All ether board members (other than the Chairman and a representative of theInterministerial Economic Ccrmittee) represent agencies or activities inthe region of the r-eriret-r whic comprises parts of two provinces Localretresentatives on the Board inc]-de the governors of the two provincesOujda and Nador the presidents -f the two provincial asembtes and of the two provincial chambers of agriculture as well as the perimeter Director
The responsibilities of thie Administrative Board include review of theecys program establishment of its organizational structure developshynt -)f its annual budget and establishment of rates and conditions of
Siyfent for water and other services provided in the perimeter
The Director of OP4VAI-I is dbarged with the responsibility for executionPthe vclicies established by the Administrative Board end administration of oil ORMVAM functions This responsibility includes selection of staffn pserating perrcnnel acting s officia ORNIVAM representative in all ntztinns with -tate and othbr public or private bodies and the
f of funds within limit Indivated by the Ministers f Financetent rn fricultural and Agrarian Reorm
Perimeter Oranizatlon
ORVAM oreanizatlonal structure consists of a directnrate five maj-r rvlces or d-vsicns and one separate bureau Two services qei Administratif et Comptabl- and Service du Yatrial are conshycor - th adminisration and lcgistical support of ORMVAM operationshi1e the remainirg three services rind the separate bureau are Involved in t-hni al matters associated with agrcultural developrent Each ervice has one or more subordinate bureaus Fei-ce Chiefs and thehead 0 rch bure-u report directly to the ORMVAM4 Director
-~F7E MEw-
-30shy
2 Perimeter 01ttffnr
OPIVAM orgttnlrntlon treture calls for 557 positions of whichI L or 7 Mlled n were nher 29 1567 37 of the 71 Postshytion vacancies reported 1ern the high and middle levels Foreign(chiefly Euronean) technclan occupy I)of the 16 high level positionsthat ere filled at thfit tire
Whil OPM ut in th- lcng run lor to Mercecos oducational yster to prvidr tn crrf-nn2 to ratisfy current rdurojectd rcshyquirement th currnt high and mlddle level vacancies rrouire uersonnelwith oxt nive nrior rxericnce To fll this preent need it will be necessary for CRIVAM to continue its program of recruiting foreigntechnicians until ruch tire ns graduates of Moroccan educational programsacquire the necesnry exrerience The managerent assistance componentof thin pro~ject ]e-rribed In the Project analysis will to some extentalleviate OFIWAMs high level personnel requirements
3 Inw1 ernetation Sehedu]
Months Implementation Action
1 0 Sign Loan Agrcement
2 2 C-tiify conditions precedent and Y4tiate procedures for selection of US firm for management contract
2 Negotiation of extension of advisory Engineering Services
h 4 Contract (Hydrotechnic) Negotiation of Managerment Contract
5 60Cmpletion of Project
C Waivers
Sect ion 7 rf AID Regulation 7 provides in substance that theUnited State ill not finance direct costs of construction work performedby third cc-ur y nationals unless the total co-tn of the project withvhich thr ennrtrumticn w(r is asEcciated donot exceed $2On)O orafter excluding national of the country in vhich the site of constructionis located and Dersons vho nave resided therein uninterruptedly for morethan three years imrnedJately prior to any determination under Regulation 7at leant 0 of all uernons who work under the contract at the site of conbulltruction are United States citizens or the employment of third countrynationals is necessary to avoid excerrive corts to the United States
3
31
Section 2175 authr-ri th Regional Anitant Administratorto waive the nrovinions of Sectionthat it is 2073 if he dcterriner in any coneimportant te the nationrn intercrt of the United Stutes tofinance the direct eots of construction work performed by third country
nationals
A prviou1y r ic i c t tht for thr ct Tartthe -r c ct b- 1jeuj out r -cnorbr f cnrtructioncontracts with Morcccrr contrctnr an in the i-t Uowfevvr itentirely psnible that there may b- roe contractn with cntructlonfirms partly owned by third country nntionaln and that ruch firjs anwell as the surely Moroccan-owrned firms may enloy third country niationalsIn such canes a difficult rrobic-i iould arise in meeting the terms ofRegulation 7 since an a practical matter Aericans are not reaonablyavailable for ermployn ont by such contrnetorn and our previcus experiencewith the Naunsseur Ccnv(r-ion project thatin Morocco has indicatedAmerican contractors would not be interested in bidding cn small conshytracts in that country
It in therefore recommended that the Annitant Adinitratordetermine rursuant to Section 2q75 of Regulation 7 to waive theapplication of Regulation 7 to thic iroject since the project 411 conshytribute to the attainrent of US foreign policy objectiver and the cbJe-tives of the Foreign Arsistnnce Program
LITI L USE
LfI~~5xA~us
lit
4 A J A 45 4 k
t A S T
S(3
I A444ilA~~l~)
7 -74
tAM= D
SECTOR 27
10000
t Co0Na includez25 cgtri oncFcttlrvI ncy I8s ~ ~ C t C- Includes 50 constriJcltiotrgrc
2000 60
IU
0
z
bull cosYsA shy----- i
600L _
400
200
0 5 I0 15 20
INTEREST RATE
I ~ 7 J7777
ANIAampX C
PROJECT DESCRn1 rOll
The project com)onents to te undertaken on the MIoulouya Irrigation Project over the next five years contists of the following
C(n1rtion of the rrLin casuals and bianch canbls to provide the suource of waler to the sctors be developed in theto TriffBou Areg and Zebra areas This construction will include the necessarystructures such as reulators highway bridges aqueducts water intake
and discharge structures etc
2 Iand Txeloommerit which includes engineering land consolishyt and iuvtllng lard preparation (subsoiling ripping destoning etc) and installation of water distribution canals (secondary tertiary and quurtunary) and drainage collector ditches for the Triffa main covering 24000 acres in sctors 8 9 10 16 20 21 23 24 25A 2513 27 and 28 Lou Areg Central covering 16250 acres in sectors Dltirough D2B and G1 thru-4h G313 i0u Areg Remainder covering 15000 acres in s-ctors D3 through D7 and GA through (6 Zebra Collective covering 45)0 acres in sectors 3 4 5 rind 6 and Zebra Rer-iinder covering 14250 acres in sectors 1 2 and 7 through 10 and th remainder of sectors 34 and 5 The total land to be developed is about 74000 acres
3 Canalization of the Oued Zeluan and nued Sidi-Amar in the Bou Areg Plain consisting of strairltening englarging and regularizing of these streams to carry the flood waters to the sea Drainage interceptor canals are to be constructed parallel to the sea in the Bou Areg Plain In the Triffa Plain the Oued Riada main drain will be deepened and enlarged and secondary drains will be excavated to provide for drainageof the Madagh area This will include the construction of bridges and culverts and other related work
4 Major Commorn Works will consist of
a Clearing of the Mo-1ouya riverbed downstream of the Mechra KLila barn caused roy flood dariwe and the installation of a set of stop logs for maintenance of pillway gate-
b Design supervision and construction of repairs to the ]elt Lank dead head tunel
c Conctruction and establishment of sib-division Offices and installations for farmer support such as CMVand farm stables
1 C
-2shy
5 Manavmtnt It ha been proposed that a US management firm be ewployed by th- C4 to manage and operate the entire Bou Areg area Such manageent -iuld encomparn all activities from the initial concept to final irIrp igricultural production Such activities would Include resp r-ibilsect -or supervnsion of engtneering and constriction of primary
S- Jry r complete developfnent of land training n in g tinul irription practicen preparation of market
t - r1t- (ot--rnu trplusmnining of a Moroccan cadre to take over h v--it Bou Areg dreara P the
At this writing the n-pt of turning over to a private UZSfirm execushyresponsibl]ity I h management of the establilrment and initial
op-ration of irr1gati the Bou Arog area has been only broadly de iiitd by the GCJO It Intended that proposals will be invited from a r -onable ntnber of f|ed US firms that a selection will be made an-n 7 them and a more do iled and cornprehenrive definition of the rer6 -Ps to be performed be eztabliched at that time It haa been
stimated that the t- of ruch a contract will be about $2 mir- n In any event the -ts of this contract other engineering arvl s to be provided undt n extension of the Ilydrotechnic contract and ether US corts will not ed the proposed $5 mllaion developzont Jean fr the project
The cle 3ifications duties ant 1ncnslbilities of the management personnel ill ha-- to be clearly defined i agreed to by the GCM Perimeter Directo- and other GOM Agencies luding arrangements for the necessary gistic support
Svxlale Docu-
1
4
LD ED 0ICIAL
-IAIDshy
A1trX D
C6JCK LIST OF STATUTORY CRITERIA
(Development Loan Fund)
1 FAA 0102 Extent to which U3 cormodities and services are furnished consistent with improving the US balance of payments See Sections II-C II-F
2 AA sect2O]ihi lanner in which loan wil promote countrys economic develo shy rit emphasizing help for long-range plans and programs designed to developeconomic tesourcos and increase productive capacities See Section I-D
i FAA sectT] h)(IL Information and conclusion on availability of financincfrom other free-world sources including private sources within the United States See Section II-F
FAA sect20l( )2 Information and conclusion on activitys economic and technical soundness including the capacity of the recipient country to reshypay the loan at a reasonable rate of interest See Sections II-B II-D and II-E
5 FAA 1201(h)( Information and conclusion on existence of reasonable promise activity will contribute to developrmnt of economic resources or increase of productive capacities See Sectiona II-B and II-D
_92_(b 4Information and conclusion on activitys relationship toothor development activities and its contribution to realizable longshyrange objectives See Sections I-D and I-E
The following abbreviations are und FAA - Foroirn Assistance Act of 1961 as amerded by the Foreign Asaistaice
Act of 1967 App - Foreign Assistance and Polated Agencies Appropriations Act 1968
AFEVCDF 1066
L1
-2shy
7 FAA f12O1(b)(5)_ Countrys self-help masures including institution of Foreign Assistance Act investment pliaranty programs Investment Guaranty
bull Agreement signed with Morocco 331o6l See Sections I-D and II-EI
_A ))(6) Information and conclusion on possible effects on US econowy with soecial refererne to areas of substantial -labor surplusSee Section II-F
9 FAA q201 (h)() Information and conclusion on the dagree to which thA country iv wiki- progress toward respect for the rule of law freedom of expression and of the press and recognition~yf the importance of individual freedom initiative and private enterprise
10 FAA -1201(b)(8) Information and conclusion on the degree to which the country is taking steps to improve its c]Laato for private investment See Sccton II-E
31 FAA R LbJi Inforrat-on and conclusion on whether or not the activityto b financed will contribute to the achievement of self-sustaining growthSee Sections I-D and II-B
12 FAA fi2Ol(bj Inforruation and conclusion on reasonalbe prospects of reshypayment See Section II-E
13 FAA fl20JL() Info-ation on applicability of the twenty country ceil4ng2
14 FAA fl201 L Information and coclusion on legality (under laws of the country end the US) and reasonableness of lending and ralendinr terms Loan will be on minimum termspermitted under FAA These are deemed reasonable see Sectioam Evidence will be renuired from the GGM as to the legality of the loan agreemnt
1 E 2 Information and conclusion on availability of an applicationFAA together with sufficient information and assurances to indicate reasonably that funds will be used in an economcally and technically sound manner See Sections I-A II-B and II-D Application received Janury 15 1968
16 FAA fl201(fL If a project inforntion and conclusion whether it will promote the economic developapent of the requesting country taking into account the countrys human and material resource requiremnts and the reshylationship between the ultimate objes6ives of the project and the countrys overall economic development See Sections I-D and II-B
17 FAAJ 20ij(J If a project information and conclusion whether it cifishycally provides for appropriate participation by private enterprise 8ce Sections YI-C and 114
I- FAA i22(a) Total amount of money under loan which is going directly to private enterprise is going to intermediate credit institutions or other borrowers for use by private enterprise is being used to finance imports
rfro private sources or is otherwise beirg used to finance procurementsfrcm private souwces See Sections II-C and II-2
9 FAA 207 Infosation on the emphasis placed en
(a) encouraging development of economic political and social institushytins No apparent relationship
(b) nelC-help in mectingthe countrys food nredo Project Vill conshytribute to production of food for lccal consumptioa
(c) in-proving availability in the country of evucated trained manpower Project will contribute to the deicloginext of trained manpower as one of the functions of the management contract (Soe Annex C para 5)
(d) prcgrams aimed at -malnutrition disease eradi atDn slum clearanceWater purification sewage disposal health education naternal and child care(includin fimrily pJnrning)) -nd cthcr public health ausistarice See
(c) other develoment activities including industrial development free
labor unions cooperatives tnd voluntary agencie transn)rtatin and ccshymwquication nrStczn capubiliTies for economic planning and public adlinisshytration arban develo-mment and modernization of laws to feilltate econcnicdevelopjen- GO- intends encourage develo vient of cooperat yes particularlyin the Left Pank areas Project will also develop capabiLi ics for cconoaicplanning and public a6~inistration (Annex C para 5) Other not applicable
20 Information on the extent to which the r-untry is
(a) cttcmting to increase food production and food sto a-e anddistribution felitics This project is one evidence of Moroccos efforts in this direction See also Section I-D and I-E
b) creating- a favorable climate for foreign and dmestic iri-ate enterprise and invcstrrment The GCM has recently reduced profits twes anrannounced a ten year guarantee against tax increases See Section II-E-2
(c) increasing the role of the neonle in the developnental procecsNo apparent relationship to this project
(d) allocating expenditures to development rather than to unn-cessarymilitary purpoes or intervention in other free countries affair See Sections I-D and Ii-
(e) willing --nribute funds to the project or program Th iOMhas already dcvo o-sidcrable resources to the project It has badieted13 million for th i oulouya for i7 See Section I-C
(If) making economic zocial and political refo ns such as taxc coliecshytion iYprovcmenLs and chan es in land tenure a Royal Comm ision has been appointed to make recomendation on land tenure probleras in the Lower I oulouya
(g) responding to the economic political and social concerns of its people and showing a determination to take volf-help wcasuren See Sections I-D and II-E
IT
-ovi~cd l v r 13 1968
- 4 - LDffIED OFFICIAL USE
21 FAA Inforn ation about multilateral assistance being Iurnished to t e country and whether the loan will encourage recgional development prog-rams The I1D has eztablihcd a Consultative Group for Morocco which rvicws the GOM development program anui prgress See Section II-F-4 for infoaation on othtr donor assistance to Morocco
22 A Extent to which the loan will contribute to the objective of ass ring naximu par icipation in the task of econonic dovelop--ent on the pL-t 0 _he people of the developing countries through the encouragement of cocr-tic private and local govenmental inLitutious o apparent
relationship
23 F _-_Dta_ Infor-ation and corissions whether loan will oncourageeffor s of t1e country to (a) increase tie flow of international trade (b) fostcr private initiative and comptition (c) encourage development and usceo co opratives credit unions and savingss and loan associations (d) disourgo monopolistic practices (c) improvo technical efficiency of industry ariculture and commerce (f) strenSthn free labor unions This project is cxpected to increase technical efficiency oi-agriculture
2_ C-1L lnforzrition and conclusion on how the loan will encourage US privte trade and investment abroad and how it uill encourage private US participation in foreign assistance prograas (incluiing use of private trade channels and the services of US private enterprise) See Section II-
25 VA-+_ Conclusion and supporting information on compliance with tho Co resional policy that engineering and professional servicos of US fir-ms and their affiliates are to bo used in connection with capital project3 to the nixinua extent consistent with the national interest US engineerirn and innsgcment services will be financed tnder this loan
2$ Inforamtion and ccnclusions who+her loan will pormit American rx-l] business to participate equitably in the furnishing of goods and
z orvices by To be satisfied in Loan Agreementfinanced it
27 - t(a App I18 Complianco with restriction of co -zodity procureshy o UsMS except as otherwise determined by the Picsicent and subject to ttu--- rcortir require r-nts Procurement will - liumited to the US for
reiabnrs nts and to ioocco and other free world countries 1-or US-cwne(d rhu disburseacnts
23 -i Comiance with bulk cozodity procurement restriction topriecc no l-ho han the nkarkot price prevailing in tho US at tia of
bull puchas Not applicable
29 FA Cozpliance with requirement that matrin insurance be purchased on commceities if the participating country discri-inates and that insurance be placed in the US To be satisfied in Loan Agreement
30 IA 6(a) Information at to the utilization of excers personal property in lieu of procurement of new items Will be required ai appropriate under terns of Lean Agreement
f
1 77--7 -77-77-777
31 FAA 61](a)(_) information and conclusion on availability of enginoering i financial and other plans nccx sary to carry out tho assittance and of a
reasonably firm cstimate of the cost of the assistanco to the United States
See Section II-D
32-ecessaryFAA t611(a)_(2) legislative action r6quired within recipient country and ibasis Cor reasonable anticipation such action will be completed in time to pormit orderly accompli-hirtnt of purposes of loan See Section I-A
33 n _AA161nJ0] If water or water-relatod land resource construcshy
tion project or program information and conclusion on a benefit-cost comshy
putation See Section II-B
3 4 VAA 611(c) Compliance with requirement that contracts for construction be let on comp-ctitive basis to mamum extent practicable To be satisfied
in Loan Agreement
If a loan for a project of $1 million or more certificatin35 FAA _61l(r) by the principal AID officer in the country as to the capability of the
country (both financirl and human resources) to effectively maintain and
utilize the project taking into account other US-financed projects (Such
certification is to be pproved by the Administrator aL the time the loan
is authorized) In process of being obtained
36 FAsgJ2 _6_h Appropriate steps that have b-en taken to assure that to the miaximum extent possible the country is contributing local currencies to net th-2 cost of contractural and other services and foreign currencies o- icd by tho US are utilized to meet the cost of contractual and other services The GU-M is contributing over $30 million to compleXton of this project Excess US-use dirhams will be used for eligible project costs other than US goods and services
37 FAA p619 Compliance with requirement that assistance to newly independent countries be furnished through multilateral organizations or plans to maxishymum extent appropriate Not deemed appropriate in view of previous AID financing and ccoiitment to the project See Sections I-A and I-D
38 FAA sect620(a) AcnO7a n3]7(b) Compliance with prohibitions
against assistance to Cuba ard any countr (a) which furnishes assistance to Cuba or failed to take appropriate steps by February 14 1964 to prevent ships or aircraft unier its registry from carrying equipment materials or supplies from or to Cuba or (b) which sells furnishes or permits any ships under its registry fr-om carrying items of primary atrategic signifishycance or itcms of economic assistance Morocco is not-known to be in Violation of these sections
39 FAA q620GL_ If assistance to the government of a country existence of determination it is not controlled by the international Communist movement The Secretary of State so determined on October 11 191
40 FAA 620(c) If assistance to the government of a country existonce of Indebtedness to a US citizen for goods or services furnished or ordered whore ouch citizen has exhaustod available legal romodiesor where the debt
i - ow - -- _---- --shy
- --
-6shy
is not denied or ontested by such government or the indebtedness arises under an unconditional guararty of payrrent given by such govornmunt No such indebtedness is known to exist
41 FA _(a2LdL If assisitance for any productive enterprise which will corashypote with US enterprise existence of agreement by the recipient country to prevent export to the US of more than 20 of the enterprises annual production during the life of the loan Not applicable
42 FA4 - 16Q_0_ A If assistance to the government of a country extent to which it (including government agenies or ruhdivisions) has after January 1 1962 taken steps o repudiate or nullify cuatracts or taken any action which has the effect of nationalizing expropriating or otherwise seizingownership or control ofprcpertv of US citizens or entities beneficially owned by them without taking appropriate stops to discha i ge its obligations No such steps cr actions are-known to have been taken by the GOM
43 FAA~L AjPj_10_9 Compliance with assistance toQ0 prohibitions against any Comunst codntry ozocco is not considered to be a cocinrunist country
44 FAA - 620(gJ Corliance with prohibition against use of assistonce to comp satc owners for expropriated or nationalized property To be satisfied in Loan Agreement
45 F AA 8620(h Compliance with regulations and procedures adopted to inshysure against ue of assistance in a manner hich contrary to the best inshyterests of the US promotes or assists the foreign aid projects or activities of the Communist-bloc countries To be satisfied in Loan Agreement
46 FAA 06-O(j)_ Exitence of determiration that the country is engaging in or preparing for aggressive military efforts No such determination has been made
L_62_O Information47 FAA on representation of the country at any intershynational confererce when that representation includes the planning of activishyties involving insurrection or subversion against the US or countries recoiving US assistance No such representition is known to have A occarrect
8 FAA 62JJ Existence of a determination that the country has permitted or failed to prevent destruction of US property by mob action or has failed to take steps to prevent a recurrence and-to pay compensation NO such destruction is known to have tak-n place
49 PAA l620(k) If construction of productive enterprise where eggregate value of assistanc to be furnished by US will exceed $1OO million identification of Gtntutoryauthority Not npplicable
i-xQ2MZZ=
1 shy
U 6 50 _Af( QCinsidoration which has been given to denlying assistance X to thu government of a country which after December 31 1966 has failed to
- institto the investnint guaranty program for the spcific risks of inconshy
vertibility and expropriation or confiscation Satisfied See No 7 above
S51S J lj Compliance with-prohibitions-againstn as~istance to countries which traffic or permittraffickingwith North Vietnam Morocco is not known to be in violation
52 E_-L620(_L If country has seized or imposed any penalty or sanction against vn US fishing vessel on account of its fishing activities in
intcrnationul waters information on the consideiation which has been given to excludirg the country from assistance No such situation is known to exist
53 FAA FA r) UAR restriction Not applicable620(p 9117
54 FAA R620tl) Existence of default undhr any Foreign Assistance Act loan to the country No such default exists
55 F ) C-nsider tion of whether co ntry is devoting unnecessary percentage of buKet for military purposes or use of foreign exchange for milita-y equipment
56 FAA 62o(t) Proibition on aid if country has severed diplomatic relations with US unless agreements have been negotiated after resumpshytion Diplomatic r(lations have not been severed
57 FAA 9620(u) Statur of the country on delinquent UN obligations Morocco is not known to be dlinquent on its UN~obligation
58 FAA R636(i) Prohibition on financing non-US manufactured motor vehicles Will be satisfied in Loan Agreement and Implementation Letter
59 App 102 Compliance with requirement that payments in excess of $25000 for architectural and en Jneering services on any one project be reported to Congress Such reports will be made
60 App R1O4 Compliance with bar against funds to pay pensions etc for military personnel Such payments will not be eligible for financing under th Loan Agreement
61 App 9106 If country attr ipts to create distinctions because of their race or religion among Americans in granting personal or commercial access or other rights otherwise avaVIfable to US citizens generally application which will be made in negotit ttons of contrary principles as expressed by Congress Morocco is not ku IDhave made any such attempts
iInD OFFIIt t USE
0k
OFFICIAL USE 62 AIwp Rii Compliance with existing requfremets for security clearance
of personnel Will be satisfied in Loan Agreement and Implementation Letter
63 App R1l2 Compliance with requirement for approval of cortractors and contract terms for capital projects Will be satisfied in Loan Agreement
clJ164 Aup Cmpliance with bar nRainst use of funds to Tay assessments etc of US meiber Such payments will not be eligible for financing under the Loan Agreemunt
6 Anp P115 Ccmpliance with regulations on employment of US and local personnel for funds obligated after April 30 1961 (Regulation 7) See Section III-C
66 Aim Vietnam iron and steel restrictions Not applicable
67 p l9 If a country other than Greece Turkey Iran Israel Republicof China Phillipines or Korea reduction in assistance by amounts spent for the purchase of sophisticated military equipment
68 Anp fi4O1 Compliance with bar against use of funds for publicity or proshypagjanda purposes within US not heretofore authorized by Congress Such use of funds will not be eligible for financing under the Loan Agreement
Morocco is a traditional Islamic monarchy with a constitution The conshystitution was implemented followaing a popular referendum in 1962 National regional and professional elective bodies including a parliament were established by universal suffrage under the constitution in 1963 The parliament was suspended in 1961 in a State of Exception because of its inability to agree on measures with adequate urgency to meet the prevailingecononde imperatives In July 1967 the King appointed a Prime Minister to direct a Cabinet of appointed technicians
The constitutional framework nevertheless remains intact in Morocco and nationwide popular elections for some of the professional chambers were held in August and September 1966 The press is relatively free in Morocco and the right of diLsent prevails provided that such dissent does not violate the prohibition against political attacks on the instishytution of the monarchy or the person of the monarch
LI Under the revised US AID Policy for Africa agreed to in November 1966 Morocco is designated a development emphasis country entitled to receive continuing support on a country basis as part of a multilaterally coorshydinated countrj program Morocco was subsequently included in Presidential Determination 67-14 (January 5 1967) I
LIM=TE OFFICIAL USE~i
- l go
bull ~ -
f
DEPQbi) STATE AGENCY FOR INERNATIONAL DEVELOPMENT
WASHINGTON DC 052
CAPITAL ASSISTANCE LOA11 AUTHORIZATION
Provided from Develoroent Loan Funds Morocco Second Lower Moulouya Irrigation Loan
Pursuant to the authority vested in the Assistant Administrator for Africa of the Agency for International Development
AI)by the Foreign Assistance Act of 1961 as amended theIAct) and the delegations of authority issued thereunder I
have received and t-en into consideration a certification from the Director of USAIDMorocco as to the financial and human resources capability of Morocco to effectively utilize the Lower Moulouya Irrigation Project taking into account among other things the
maintenance and utilization of projects in Morocco previously financed or assisted by the United States and I hereby authorize the establishshyment of a loan pursuant to Part I Chapter 2 Title I the Development Loan Fund to the Government of the Kingdom of Morocco (Borrower) of not to exceed five million dollars ($5000000) to assist in financing the fore] gn exchange and local currency costs of goods and services for the third phase of the Lower Moulouya Irrigation Project subject to the foLlowing terms and conditions
1 Interest Rate and Terms of Repayment Borrower shall repay the loan to AID in forty (40) years including a grace period not to exceed ten (10) years Borrower shall pay interest on the unrepaid principal and any interest accrued thereon at the rate of (a) two percent (2) per annum during the grace period and (b) two and
one-half percent (2-12) per annum thereafter
2 Currency of Pepayment Repayment of the loan and paymenu of interest shall be made in United States dollars
- t- n t - - - shy
3 Other Terms and Conditions amp(a)Goods and Services financed under the loan
shall have their source and origin in
(i) the United States if disbursements therefor are made in United States dollars or
(ii) any country in the free world including Morocco if disbursements therefor are made in Moroccan currency
(b) AID Regulation 7 shall not apply to construction -work financed under the loan because as detailed in Section IIIC of Capital Assistance Paper No P 667 it is important to the national interest of the United States that the direct costs of construction work performed by third-country nationals be financed out of funds made available by the Act
(a) Such other terms and conditions as AID may deem advisable
Assistant Administrator for Africa
Date
~~~~~~~~~~~~~~~~~~ - q v
7
2 Cf
sector have1bec z h t - rrvirI urli 11i g 14-6 -nd PO becnue rX toi Ijt e f (]r o n 4
ill tile ic urrnnye andr)not i on dnd Publi ht rentrn -yr-otn lno IncreasedOthrr t ill- t il r ne by ) vr cert in J6(
i ninlyrt -br h Inc-l
( Ihe ( t r- rl t ip t t C itur f T)h 21h iilli n
is (( ItI t lt r c0 a- r n n o I- c t b It ihstnl id vv ih n t r-t have hn(er - en 1t2
(IM ii ture( T f fu traordJ nary budrzct exshypend ituren a r y -t c ~ i vi -iscz Portal Checking sy-stcsul)rrcing t (I ltIt Ct -- ind creirn shy
nnet The f r er tnc I hha ccrc ed from a htih of DH 5-7 millIJn in _ 5 millIn r C46 F cr ats foi ]7 place Cro n w I 1(DI)J79 ill ni DDn etlc fi nancing has alo u 1) 5 p (- I3A27 iIliun to an entirnted DH 1142 million
1 14V ) I nv 1 ri n nI(c1 franc n is 77-ected to be ol t y ncrewed bcrrowing fr-ir t he Cestra 9ank which hud been held at mcdert vols iln 165 nnd 1a66 Under the 1TFtaiby agreement of October 16 the qob) agreed to taBe a3] rocrrnary meurer to maintain as table curoonry rPnt inl th nr1d-elrto th b a ent of the ePrncriynnd a vnbl- hn1incc X nvroent P rt artt to t rt fien of tho Ccntin- Honk rstz (erct are nct t r itr June 30 Y-ke 7 lov l b th n Diif ) mill] (n tlcnber -c P thai I o illin usit I ])ecthr 31I62 (GC bc w t
C B1rtrp - vt DH 12 iri 1i nor ]S67 or DH 6S ij lionEan tisated (r fo than the aproved crd it expanwim
Thitrd ordivary nil extraordnnry buThTt deficit of DII 7-19 millI n fcrecat Fr 1 67 in exnected to be fnanced by not freign
tan reof DII )75 mi~l in nt recurity 12ue 1 T111I vlion a - nt ry tiat Po n Che )ir d-nC i 73 r5 Pn
riI is u h i a vti v mrr nrr-e jssIof fvr is id a erital The vnfsa revcred in 1d6 when lnrger r nyrentn eEecially on food itcmo an n -lewdoun in
igo ra a deficit of $1 millcn ProjectiOnz-vt rvultvd in ror 17 r~ieat inrrerned importsonly partially ccnrennate by addshytsa t frnreirn r ntil rrceiprs ard mprrvement in the nervices account will reult -n et of aprroximately $)20million As rhoim in the following tabl -r tion for l33 and 169 how overall deficits of
14 and m] ivi_y$i It
rqVV t1 4~
C)rgt
---
1 -)I+-IRF1
1ROCCO - rTANC OF PAYME 1qrt - 169]_ 5
6rfi0 1 1C(8lr67 i r(o
)xrurt 2t L( I L-5
Trade Bnlance 11 15 - 75 shy - 75
rviee- ret - 7 - 5) -35 -23 -2
J]-i of Good rnd Service- - 3 - 65 -II - ti - (5
Trn-Ifr Pr ynts (nt) P 21 33 37 33
on-cntnry Carital (not) 92 64 6 6 5
Err-rs nnd Ov rrion- (not) - 23 -2 1 3
eranl Bannic __ - _3 -_ 3 - 1i4
Atrh thert ircjected reficitn are of the nnme order of 1 nishytude a7 thcr incurred in the period i66 the Situatlcn i findarentallydifferent both in rerprct to the source of the deficits and in rer-ect to the meat0Y gtr m etin7tecr In the f rrer caive M5recco uffered
_frcrr a very h-vy cutfc of Drivtes cuitv fo-ivr with a shar) decline In forein nt exerditures in Morocco In the iatter case th projected deficits r- rcre a functicn or accelerated crcwth risingdebt ervieiiw tri tho abnrcn of forv eeble additiens foreign reshybull ourcs nere7ory 4( r2Vm rAf finmncting To nect the def-cits during the reriol 161 61h MWreco ob1id to drw down rorcin exchange reserves of over $]c milicn The snrti tpv of financing is no longerpozslble ince no or-res- ruch reserve- Even ifMorocco yr
mn nina r rve_ ore (]rrfii on to th r-ixirun etnt enribe nnd the [iI tnfldy i- un M-r-r e i32 till relA re nt rnt 15 millicnj1itionn ftr ign as- e n 1 6 beyond hat r recnently fcreeeshyable with ver nri- nry Officilr in In i6 reserves are cotImnted Pt 72million c hih crn V 3 million i caly required for currency coy r
Foreign InJebtrdne n of th GOM Mnroccos external rtnte ard rutlie enterprie dett amounted to
$r) millivn in lr6 Debt vervcirig rpynents for (66 trtaled about
$5) rillion g-eement approved in October 3(67
I- -- Ishy
37 millin or arprcxitrrntoy (j Iroccor totnl eXoort earning of h28 millicn GCnerally nxt rrO dbt FervicJng renuiremennt of leas
than r of totna -ort nnrlt In onrldered to I r tirfactoryrntio D-bt r rnJrcLct n Ir the reriod 1-(y 3on Trerent external debt including thnt wrtl(n irreently undibur-ed are hown n th fr lv tahlr
)] L v yr t n
Eternn Vtnte anc ] bntcrnrie Debt
M131 o)nr
Y aI Net Outrtnnling Debt Debt Service
(6 it 479r5 $367 J-67 452 3)6
Z616 44469 2 0 2C-
365I3 37 389
33 383 33 6 371
5-h 31 n 352 275 34121
]176 2661 32It 1977 21133 311 177 22)6 307 19 i0l74 256
1733 255
rgtternal debt rharre n rerent debt nnr rhon above do not increase ubtanti-lly over t rt 1)year- reaching a maximum of h44 millior
in J6 and decrpt- n cr - tently threoafter At the are time exportearninr r _rc extett nc-are Aring that Morocco does not inshycreswre it etrnn2 cbt t irate ubrtantially nb-vc ihat has been the core th adfiticrn dbt e roquirrentn reulting from the propo t Icon o 5 ijilion co r 7crncepr-ional term hould not have a i-nifiant affect n 1r o - ab lty to neet itv g rc-atedebt ericn rcnrib2t~e- the pros ectr of reprment of thin loan ore coniderci rearcnb)
U I -
F ot h-v C IuIJI rmt I shy
1 V amp~ rVml KI
PUC- -jrVi Jt t 1 11 nflrcj urlc 1- th )qn --P I uti u rhnrrl -1r- thr U- Tr- ry- R- -nymc nt
c2Il f n 6 1 bf r I- till 11 nfl r- n-r i n of O r--niC(Io~hi U 1 1 rr to
Tn vil ) f rvc hi tvlrll 1 (In- - n- u--n E r me rrinshycgtay F rntwir w ourc o -o- rvI ortf-V3 1 rncing of
Uf f -r rrrir- ur3r 4~ v -rin Iltrt nt ndd shyt -n t ) in- lint r b t l r -n rort- o-orco trorl-- V -P
r i 1rnd h L-torie Furcl-trin firr- thrjt US r r~ crvirrf- u~d be~
T L I1 c vt r- -ly ] -ubt fu 1 n vi pw -I -ror-co Ir of
ut1JpcO In thi rjert f it -- r- 21 npnred by d1-nr- cothcr t~han the US
2 ]P-t ofI Prr l1 on Prw- Fntrrr
Phij rrcjJ-t -11 n-t h~ -in nrwerq Prrt n rr- tc ntrshyr~A~r fi-mc 1bho und for --roern p o n
3_~~PrCT--rty
rr-vIi-n 1 h -d r the loan ragreement for Icntifitcation ef any r mIjrpt n ctri b- rt througn ut 1zatn (f xccr- prorerty
If rv c u~eAID n-mrcf u urr thi )cn - I~ut~ em avoi3ablo r rovvrirrnt -rrperty rather than nce iteni
4 Otli-r Fr- Wo--] n-Fnlc4rm
Dr mi tW- o] 14rocco- i~ajr ovr-ec -f exte rnaX
rrtan~- hrtvfb - I r ~ ant fl Fr n fole by Kv-it
Sgio F rneflit r b-en 1lmrntrd to tcfohnjip n5tnnen bi eoni~in I th u y f Fr--h tprhntcian tcacrr ind cther
~ti~r t~ ec-tnmIyrt-n Friinch Aid to Mcreco In 1065c~oc~ (P-art f-r txychnirril aItn -- j se of tl5 w1nfor bu~dget rurport f ir in rt t- $1 1ri1 icin in ennita -rojectM- n vx- rrcd
1Vw1tvnn tioI t-) Frenh rurtnnd +16 r11ion tie-I to -onyiint to orrrcr Frrmh ccilcn~For _-rrc-ratod land and rquirrmcnt
West GTrrnmnny liar agrcrcd to nrovIe ccme j27 mM22~cn 1n catital arirtanre and cromrndity lnoi7 t n OfIcon( q92 thi o totril$223 miJ lien ha actuary b-Pn cr-Itt--d under Inn ngrepment This
And a lk5 million commodity loan both) signed in 1965 All Wet Gerzaan
Ufla
-28shy
capital asnistance I vuectI to be tied to German exports Germanyhas in addition 1uvvded r tteysubbtantial technical assistance f
The IBRP hah rade four 1nns to Morocco since 1962 totaling$6) million Ofthin totnl a [175 million loan in 1965 wos fordevelopient of the gidi lit-r irrigation perimeter Other assistance by internntIcnal Iending arncie include an $11 million credit byIDA in 1C65 for rcendary diicction projects and an IFC ln and inshyvestrent of $1 1 ri jnic alo in
F tit i by [c - dncr tr dh elo snt ofMorccco rircuVt r oii +h b-]n jt-TKT r nbove n 2 )6 niliion Kuwait enn in i66 for develomyment of the Tensaout Prnm n irrnten nrooetand a $77 million Kuwait
0jl n )nnsn r(niti-nertcir
loan for extrnion of the Tadri~ Irrigation Perimeter
The following- trbe surrlnrlzes other free world arlztance (excluiin technical assistanc-) to Morocco for the years 1(62-66
($ Millions)
1 62 1cf_63 96) 19r65 19)66 Fneea 4) 5PO 64o 700 shyWet Germany 223 gu 1t 53 281 IRD 15 175 10) 175 IDA 110 IF C 1 5 7 7 7 0 I15
TOTAL 55 62 1U3 W
b Includer only lo-ng term loans and exporter credits - Includfs 25 million private capital
Eternal ansiztnnce to the Lowier Moulouya Irrigation Perimeter -nce 1060 hres been con[fined to US upport Consdiering AIDs previcus
involvement in and conmitnert to the Lower Moulouya an AID lean in P2t to be Lhi mol aprroriate source of financing for this project
LID
II
q
-29-
SECTION ITI- Y-TTYT TIMPLPTrION
A Periret-r Ad-instrrti-
Authority for irplerrentvtnn of the deveorpent prrgrn frr the LowerMoulcuya Perimeter and rs wel arth crnntinuinz mrnnrrmenertC tt r t- rrtnr V theltbi nad overationity iOfic 1cne 4
n r I e1i- i d Vit4 i Iv ~ Ct rreated i Otb (rJ rn-- of evcn inrmi-rriional offices hich reelaced the Office de Mire en Valeur Aamprlcole (OMVA) Under the OMXA and itspredecessor agencies authority for ad-inLtration cf irrigtion proJect war centralized in Rabat
Under the new regional office organization responsibility for adminshyistering ORMVAM is vested in on Adminirtrative Board of 10 members headed by the Minister of Agriculture and Agrarian Reform as chairman All ether board members (other than the Chairman and a representative of theInterministerial Economic Ccrmittee) represent agencies or activities inthe region of the r-eriret-r whic comprises parts of two provinces Localretresentatives on the Board inc]-de the governors of the two provincesOujda and Nador the presidents -f the two provincial asembtes and of the two provincial chambers of agriculture as well as the perimeter Director
The responsibilities of thie Administrative Board include review of theecys program establishment of its organizational structure developshynt -)f its annual budget and establishment of rates and conditions of
Siyfent for water and other services provided in the perimeter
The Director of OP4VAI-I is dbarged with the responsibility for executionPthe vclicies established by the Administrative Board end administration of oil ORMVAM functions This responsibility includes selection of staffn pserating perrcnnel acting s officia ORNIVAM representative in all ntztinns with -tate and othbr public or private bodies and the
f of funds within limit Indivated by the Ministers f Financetent rn fricultural and Agrarian Reorm
Perimeter Oranizatlon
ORVAM oreanizatlonal structure consists of a directnrate five maj-r rvlces or d-vsicns and one separate bureau Two services qei Administratif et Comptabl- and Service du Yatrial are conshycor - th adminisration and lcgistical support of ORMVAM operationshi1e the remainirg three services rind the separate bureau are Involved in t-hni al matters associated with agrcultural developrent Each ervice has one or more subordinate bureaus Fei-ce Chiefs and thehead 0 rch bure-u report directly to the ORMVAM4 Director
-~F7E MEw-
-30shy
2 Perimeter 01ttffnr
OPIVAM orgttnlrntlon treture calls for 557 positions of whichI L or 7 Mlled n were nher 29 1567 37 of the 71 Postshytion vacancies reported 1ern the high and middle levels Foreign(chiefly Euronean) technclan occupy I)of the 16 high level positionsthat ere filled at thfit tire
Whil OPM ut in th- lcng run lor to Mercecos oducational yster to prvidr tn crrf-nn2 to ratisfy current rdurojectd rcshyquirement th currnt high and mlddle level vacancies rrouire uersonnelwith oxt nive nrior rxericnce To fll this preent need it will be necessary for CRIVAM to continue its program of recruiting foreigntechnicians until ruch tire ns graduates of Moroccan educational programsacquire the necesnry exrerience The managerent assistance componentof thin pro~ject ]e-rribed In the Project analysis will to some extentalleviate OFIWAMs high level personnel requirements
3 Inw1 ernetation Sehedu]
Months Implementation Action
1 0 Sign Loan Agrcement
2 2 C-tiify conditions precedent and Y4tiate procedures for selection of US firm for management contract
2 Negotiation of extension of advisory Engineering Services
h 4 Contract (Hydrotechnic) Negotiation of Managerment Contract
5 60Cmpletion of Project
C Waivers
Sect ion 7 rf AID Regulation 7 provides in substance that theUnited State ill not finance direct costs of construction work performedby third cc-ur y nationals unless the total co-tn of the project withvhich thr ennrtrumticn w(r is asEcciated donot exceed $2On)O orafter excluding national of the country in vhich the site of constructionis located and Dersons vho nave resided therein uninterruptedly for morethan three years imrnedJately prior to any determination under Regulation 7at leant 0 of all uernons who work under the contract at the site of conbulltruction are United States citizens or the employment of third countrynationals is necessary to avoid excerrive corts to the United States
3
31
Section 2175 authr-ri th Regional Anitant Administratorto waive the nrovinions of Sectionthat it is 2073 if he dcterriner in any coneimportant te the nationrn intercrt of the United Stutes tofinance the direct eots of construction work performed by third country
nationals
A prviou1y r ic i c t tht for thr ct Tartthe -r c ct b- 1jeuj out r -cnorbr f cnrtructioncontracts with Morcccrr contrctnr an in the i-t Uowfevvr itentirely psnible that there may b- roe contractn with cntructlonfirms partly owned by third country nntionaln and that ruch firjs anwell as the surely Moroccan-owrned firms may enloy third country niationalsIn such canes a difficult rrobic-i iould arise in meeting the terms ofRegulation 7 since an a practical matter Aericans are not reaonablyavailable for ermployn ont by such contrnetorn and our previcus experiencewith the Naunsseur Ccnv(r-ion project thatin Morocco has indicatedAmerican contractors would not be interested in bidding cn small conshytracts in that country
It in therefore recommended that the Annitant Adinitratordetermine rursuant to Section 2q75 of Regulation 7 to waive theapplication of Regulation 7 to thic iroject since the project 411 conshytribute to the attainrent of US foreign policy objectiver and the cbJe-tives of the Foreign Arsistnnce Program
LITI L USE
LfI~~5xA~us
lit
4 A J A 45 4 k
t A S T
S(3
I A444ilA~~l~)
7 -74
tAM= D
SECTOR 27
10000
t Co0Na includez25 cgtri oncFcttlrvI ncy I8s ~ ~ C t C- Includes 50 constriJcltiotrgrc
2000 60
IU
0
z
bull cosYsA shy----- i
600L _
400
200
0 5 I0 15 20
INTEREST RATE
I ~ 7 J7777
ANIAampX C
PROJECT DESCRn1 rOll
The project com)onents to te undertaken on the MIoulouya Irrigation Project over the next five years contists of the following
C(n1rtion of the rrLin casuals and bianch canbls to provide the suource of waler to the sctors be developed in theto TriffBou Areg and Zebra areas This construction will include the necessarystructures such as reulators highway bridges aqueducts water intake
and discharge structures etc
2 Iand Txeloommerit which includes engineering land consolishyt and iuvtllng lard preparation (subsoiling ripping destoning etc) and installation of water distribution canals (secondary tertiary and quurtunary) and drainage collector ditches for the Triffa main covering 24000 acres in sctors 8 9 10 16 20 21 23 24 25A 2513 27 and 28 Lou Areg Central covering 16250 acres in sectors Dltirough D2B and G1 thru-4h G313 i0u Areg Remainder covering 15000 acres in s-ctors D3 through D7 and GA through (6 Zebra Collective covering 45)0 acres in sectors 3 4 5 rind 6 and Zebra Rer-iinder covering 14250 acres in sectors 1 2 and 7 through 10 and th remainder of sectors 34 and 5 The total land to be developed is about 74000 acres
3 Canalization of the Oued Zeluan and nued Sidi-Amar in the Bou Areg Plain consisting of strairltening englarging and regularizing of these streams to carry the flood waters to the sea Drainage interceptor canals are to be constructed parallel to the sea in the Bou Areg Plain In the Triffa Plain the Oued Riada main drain will be deepened and enlarged and secondary drains will be excavated to provide for drainageof the Madagh area This will include the construction of bridges and culverts and other related work
4 Major Commorn Works will consist of
a Clearing of the Mo-1ouya riverbed downstream of the Mechra KLila barn caused roy flood dariwe and the installation of a set of stop logs for maintenance of pillway gate-
b Design supervision and construction of repairs to the ]elt Lank dead head tunel
c Conctruction and establishment of sib-division Offices and installations for farmer support such as CMVand farm stables
1 C
-2shy
5 Manavmtnt It ha been proposed that a US management firm be ewployed by th- C4 to manage and operate the entire Bou Areg area Such manageent -iuld encomparn all activities from the initial concept to final irIrp igricultural production Such activities would Include resp r-ibilsect -or supervnsion of engtneering and constriction of primary
S- Jry r complete developfnent of land training n in g tinul irription practicen preparation of market
t - r1t- (ot--rnu trplusmnining of a Moroccan cadre to take over h v--it Bou Areg dreara P the
At this writing the n-pt of turning over to a private UZSfirm execushyresponsibl]ity I h management of the establilrment and initial
op-ration of irr1gati the Bou Arog area has been only broadly de iiitd by the GCJO It Intended that proposals will be invited from a r -onable ntnber of f|ed US firms that a selection will be made an-n 7 them and a more do iled and cornprehenrive definition of the rer6 -Ps to be performed be eztabliched at that time It haa been
stimated that the t- of ruch a contract will be about $2 mir- n In any event the -ts of this contract other engineering arvl s to be provided undt n extension of the Ilydrotechnic contract and ether US corts will not ed the proposed $5 mllaion developzont Jean fr the project
The cle 3ifications duties ant 1ncnslbilities of the management personnel ill ha-- to be clearly defined i agreed to by the GCM Perimeter Directo- and other GOM Agencies luding arrangements for the necessary gistic support
Svxlale Docu-
1
4
LD ED 0ICIAL
-IAIDshy
A1trX D
C6JCK LIST OF STATUTORY CRITERIA
(Development Loan Fund)
1 FAA 0102 Extent to which U3 cormodities and services are furnished consistent with improving the US balance of payments See Sections II-C II-F
2 AA sect2O]ihi lanner in which loan wil promote countrys economic develo shy rit emphasizing help for long-range plans and programs designed to developeconomic tesourcos and increase productive capacities See Section I-D
i FAA sectT] h)(IL Information and conclusion on availability of financincfrom other free-world sources including private sources within the United States See Section II-F
FAA sect20l( )2 Information and conclusion on activitys economic and technical soundness including the capacity of the recipient country to reshypay the loan at a reasonable rate of interest See Sections II-B II-D and II-E
5 FAA 1201(h)( Information and conclusion on existence of reasonable promise activity will contribute to developrmnt of economic resources or increase of productive capacities See Sectiona II-B and II-D
_92_(b 4Information and conclusion on activitys relationship toothor development activities and its contribution to realizable longshyrange objectives See Sections I-D and I-E
The following abbreviations are und FAA - Foroirn Assistance Act of 1961 as amerded by the Foreign Asaistaice
Act of 1967 App - Foreign Assistance and Polated Agencies Appropriations Act 1968
AFEVCDF 1066
L1
-2shy
7 FAA f12O1(b)(5)_ Countrys self-help masures including institution of Foreign Assistance Act investment pliaranty programs Investment Guaranty
bull Agreement signed with Morocco 331o6l See Sections I-D and II-EI
_A ))(6) Information and conclusion on possible effects on US econowy with soecial refererne to areas of substantial -labor surplusSee Section II-F
9 FAA q201 (h)() Information and conclusion on the dagree to which thA country iv wiki- progress toward respect for the rule of law freedom of expression and of the press and recognition~yf the importance of individual freedom initiative and private enterprise
10 FAA -1201(b)(8) Information and conclusion on the degree to which the country is taking steps to improve its c]Laato for private investment See Sccton II-E
31 FAA R LbJi Inforrat-on and conclusion on whether or not the activityto b financed will contribute to the achievement of self-sustaining growthSee Sections I-D and II-B
12 FAA fi2Ol(bj Inforruation and conclusion on reasonalbe prospects of reshypayment See Section II-E
13 FAA fl20JL() Info-ation on applicability of the twenty country ceil4ng2
14 FAA fl201 L Information and coclusion on legality (under laws of the country end the US) and reasonableness of lending and ralendinr terms Loan will be on minimum termspermitted under FAA These are deemed reasonable see Sectioam Evidence will be renuired from the GGM as to the legality of the loan agreemnt
1 E 2 Information and conclusion on availability of an applicationFAA together with sufficient information and assurances to indicate reasonably that funds will be used in an economcally and technically sound manner See Sections I-A II-B and II-D Application received Janury 15 1968
16 FAA fl201(fL If a project inforntion and conclusion whether it will promote the economic developapent of the requesting country taking into account the countrys human and material resource requiremnts and the reshylationship between the ultimate objes6ives of the project and the countrys overall economic development See Sections I-D and II-B
17 FAAJ 20ij(J If a project information and conclusion whether it cifishycally provides for appropriate participation by private enterprise 8ce Sections YI-C and 114
I- FAA i22(a) Total amount of money under loan which is going directly to private enterprise is going to intermediate credit institutions or other borrowers for use by private enterprise is being used to finance imports
rfro private sources or is otherwise beirg used to finance procurementsfrcm private souwces See Sections II-C and II-2
9 FAA 207 Infosation on the emphasis placed en
(a) encouraging development of economic political and social institushytins No apparent relationship
(b) nelC-help in mectingthe countrys food nredo Project Vill conshytribute to production of food for lccal consumptioa
(c) in-proving availability in the country of evucated trained manpower Project will contribute to the deicloginext of trained manpower as one of the functions of the management contract (Soe Annex C para 5)
(d) prcgrams aimed at -malnutrition disease eradi atDn slum clearanceWater purification sewage disposal health education naternal and child care(includin fimrily pJnrning)) -nd cthcr public health ausistarice See
(c) other develoment activities including industrial development free
labor unions cooperatives tnd voluntary agencie transn)rtatin and ccshymwquication nrStczn capubiliTies for economic planning and public adlinisshytration arban develo-mment and modernization of laws to feilltate econcnicdevelopjen- GO- intends encourage develo vient of cooperat yes particularlyin the Left Pank areas Project will also develop capabiLi ics for cconoaicplanning and public a6~inistration (Annex C para 5) Other not applicable
20 Information on the extent to which the r-untry is
(a) cttcmting to increase food production and food sto a-e anddistribution felitics This project is one evidence of Moroccos efforts in this direction See also Section I-D and I-E
b) creating- a favorable climate for foreign and dmestic iri-ate enterprise and invcstrrment The GCM has recently reduced profits twes anrannounced a ten year guarantee against tax increases See Section II-E-2
(c) increasing the role of the neonle in the developnental procecsNo apparent relationship to this project
(d) allocating expenditures to development rather than to unn-cessarymilitary purpoes or intervention in other free countries affair See Sections I-D and Ii-
(e) willing --nribute funds to the project or program Th iOMhas already dcvo o-sidcrable resources to the project It has badieted13 million for th i oulouya for i7 See Section I-C
(If) making economic zocial and political refo ns such as taxc coliecshytion iYprovcmenLs and chan es in land tenure a Royal Comm ision has been appointed to make recomendation on land tenure probleras in the Lower I oulouya
(g) responding to the economic political and social concerns of its people and showing a determination to take volf-help wcasuren See Sections I-D and II-E
IT
-ovi~cd l v r 13 1968
- 4 - LDffIED OFFICIAL USE
21 FAA Inforn ation about multilateral assistance being Iurnished to t e country and whether the loan will encourage recgional development prog-rams The I1D has eztablihcd a Consultative Group for Morocco which rvicws the GOM development program anui prgress See Section II-F-4 for infoaation on othtr donor assistance to Morocco
22 A Extent to which the loan will contribute to the objective of ass ring naximu par icipation in the task of econonic dovelop--ent on the pL-t 0 _he people of the developing countries through the encouragement of cocr-tic private and local govenmental inLitutious o apparent
relationship
23 F _-_Dta_ Infor-ation and corissions whether loan will oncourageeffor s of t1e country to (a) increase tie flow of international trade (b) fostcr private initiative and comptition (c) encourage development and usceo co opratives credit unions and savingss and loan associations (d) disourgo monopolistic practices (c) improvo technical efficiency of industry ariculture and commerce (f) strenSthn free labor unions This project is cxpected to increase technical efficiency oi-agriculture
2_ C-1L lnforzrition and conclusion on how the loan will encourage US privte trade and investment abroad and how it uill encourage private US participation in foreign assistance prograas (incluiing use of private trade channels and the services of US private enterprise) See Section II-
25 VA-+_ Conclusion and supporting information on compliance with tho Co resional policy that engineering and professional servicos of US fir-ms and their affiliates are to bo used in connection with capital project3 to the nixinua extent consistent with the national interest US engineerirn and innsgcment services will be financed tnder this loan
2$ Inforamtion and ccnclusions who+her loan will pormit American rx-l] business to participate equitably in the furnishing of goods and
z orvices by To be satisfied in Loan Agreementfinanced it
27 - t(a App I18 Complianco with restriction of co -zodity procureshy o UsMS except as otherwise determined by the Picsicent and subject to ttu--- rcortir require r-nts Procurement will - liumited to the US for
reiabnrs nts and to ioocco and other free world countries 1-or US-cwne(d rhu disburseacnts
23 -i Comiance with bulk cozodity procurement restriction topriecc no l-ho han the nkarkot price prevailing in tho US at tia of
bull puchas Not applicable
29 FA Cozpliance with requirement that matrin insurance be purchased on commceities if the participating country discri-inates and that insurance be placed in the US To be satisfied in Loan Agreement
30 IA 6(a) Information at to the utilization of excers personal property in lieu of procurement of new items Will be required ai appropriate under terns of Lean Agreement
f
1 77--7 -77-77-777
31 FAA 61](a)(_) information and conclusion on availability of enginoering i financial and other plans nccx sary to carry out tho assittance and of a
reasonably firm cstimate of the cost of the assistanco to the United States
See Section II-D
32-ecessaryFAA t611(a)_(2) legislative action r6quired within recipient country and ibasis Cor reasonable anticipation such action will be completed in time to pormit orderly accompli-hirtnt of purposes of loan See Section I-A
33 n _AA161nJ0] If water or water-relatod land resource construcshy
tion project or program information and conclusion on a benefit-cost comshy
putation See Section II-B
3 4 VAA 611(c) Compliance with requirement that contracts for construction be let on comp-ctitive basis to mamum extent practicable To be satisfied
in Loan Agreement
If a loan for a project of $1 million or more certificatin35 FAA _61l(r) by the principal AID officer in the country as to the capability of the
country (both financirl and human resources) to effectively maintain and
utilize the project taking into account other US-financed projects (Such
certification is to be pproved by the Administrator aL the time the loan
is authorized) In process of being obtained
36 FAsgJ2 _6_h Appropriate steps that have b-en taken to assure that to the miaximum extent possible the country is contributing local currencies to net th-2 cost of contractural and other services and foreign currencies o- icd by tho US are utilized to meet the cost of contractual and other services The GU-M is contributing over $30 million to compleXton of this project Excess US-use dirhams will be used for eligible project costs other than US goods and services
37 FAA p619 Compliance with requirement that assistance to newly independent countries be furnished through multilateral organizations or plans to maxishymum extent appropriate Not deemed appropriate in view of previous AID financing and ccoiitment to the project See Sections I-A and I-D
38 FAA sect620(a) AcnO7a n3]7(b) Compliance with prohibitions
against assistance to Cuba ard any countr (a) which furnishes assistance to Cuba or failed to take appropriate steps by February 14 1964 to prevent ships or aircraft unier its registry from carrying equipment materials or supplies from or to Cuba or (b) which sells furnishes or permits any ships under its registry fr-om carrying items of primary atrategic signifishycance or itcms of economic assistance Morocco is not-known to be in Violation of these sections
39 FAA q620GL_ If assistance to the government of a country existence of determination it is not controlled by the international Communist movement The Secretary of State so determined on October 11 191
40 FAA 620(c) If assistance to the government of a country existonce of Indebtedness to a US citizen for goods or services furnished or ordered whore ouch citizen has exhaustod available legal romodiesor where the debt
i - ow - -- _---- --shy
- --
-6shy
is not denied or ontested by such government or the indebtedness arises under an unconditional guararty of payrrent given by such govornmunt No such indebtedness is known to exist
41 FA _(a2LdL If assisitance for any productive enterprise which will corashypote with US enterprise existence of agreement by the recipient country to prevent export to the US of more than 20 of the enterprises annual production during the life of the loan Not applicable
42 FA4 - 16Q_0_ A If assistance to the government of a country extent to which it (including government agenies or ruhdivisions) has after January 1 1962 taken steps o repudiate or nullify cuatracts or taken any action which has the effect of nationalizing expropriating or otherwise seizingownership or control ofprcpertv of US citizens or entities beneficially owned by them without taking appropriate stops to discha i ge its obligations No such steps cr actions are-known to have been taken by the GOM
43 FAA~L AjPj_10_9 Compliance with assistance toQ0 prohibitions against any Comunst codntry ozocco is not considered to be a cocinrunist country
44 FAA - 620(gJ Corliance with prohibition against use of assistonce to comp satc owners for expropriated or nationalized property To be satisfied in Loan Agreement
45 F AA 8620(h Compliance with regulations and procedures adopted to inshysure against ue of assistance in a manner hich contrary to the best inshyterests of the US promotes or assists the foreign aid projects or activities of the Communist-bloc countries To be satisfied in Loan Agreement
46 FAA 06-O(j)_ Exitence of determiration that the country is engaging in or preparing for aggressive military efforts No such determination has been made
L_62_O Information47 FAA on representation of the country at any intershynational confererce when that representation includes the planning of activishyties involving insurrection or subversion against the US or countries recoiving US assistance No such representition is known to have A occarrect
8 FAA 62JJ Existence of a determination that the country has permitted or failed to prevent destruction of US property by mob action or has failed to take steps to prevent a recurrence and-to pay compensation NO such destruction is known to have tak-n place
49 PAA l620(k) If construction of productive enterprise where eggregate value of assistanc to be furnished by US will exceed $1OO million identification of Gtntutoryauthority Not npplicable
i-xQ2MZZ=
1 shy
U 6 50 _Af( QCinsidoration which has been given to denlying assistance X to thu government of a country which after December 31 1966 has failed to
- institto the investnint guaranty program for the spcific risks of inconshy
vertibility and expropriation or confiscation Satisfied See No 7 above
S51S J lj Compliance with-prohibitions-againstn as~istance to countries which traffic or permittraffickingwith North Vietnam Morocco is not known to be in violation
52 E_-L620(_L If country has seized or imposed any penalty or sanction against vn US fishing vessel on account of its fishing activities in
intcrnationul waters information on the consideiation which has been given to excludirg the country from assistance No such situation is known to exist
53 FAA FA r) UAR restriction Not applicable620(p 9117
54 FAA R620tl) Existence of default undhr any Foreign Assistance Act loan to the country No such default exists
55 F ) C-nsider tion of whether co ntry is devoting unnecessary percentage of buKet for military purposes or use of foreign exchange for milita-y equipment
56 FAA 62o(t) Proibition on aid if country has severed diplomatic relations with US unless agreements have been negotiated after resumpshytion Diplomatic r(lations have not been severed
57 FAA 9620(u) Statur of the country on delinquent UN obligations Morocco is not known to be dlinquent on its UN~obligation
58 FAA R636(i) Prohibition on financing non-US manufactured motor vehicles Will be satisfied in Loan Agreement and Implementation Letter
59 App 102 Compliance with requirement that payments in excess of $25000 for architectural and en Jneering services on any one project be reported to Congress Such reports will be made
60 App R1O4 Compliance with bar against funds to pay pensions etc for military personnel Such payments will not be eligible for financing under th Loan Agreement
61 App 9106 If country attr ipts to create distinctions because of their race or religion among Americans in granting personal or commercial access or other rights otherwise avaVIfable to US citizens generally application which will be made in negotit ttons of contrary principles as expressed by Congress Morocco is not ku IDhave made any such attempts
iInD OFFIIt t USE
0k
OFFICIAL USE 62 AIwp Rii Compliance with existing requfremets for security clearance
of personnel Will be satisfied in Loan Agreement and Implementation Letter
63 App R1l2 Compliance with requirement for approval of cortractors and contract terms for capital projects Will be satisfied in Loan Agreement
clJ164 Aup Cmpliance with bar nRainst use of funds to Tay assessments etc of US meiber Such payments will not be eligible for financing under the Loan Agreemunt
6 Anp P115 Ccmpliance with regulations on employment of US and local personnel for funds obligated after April 30 1961 (Regulation 7) See Section III-C
66 Aim Vietnam iron and steel restrictions Not applicable
67 p l9 If a country other than Greece Turkey Iran Israel Republicof China Phillipines or Korea reduction in assistance by amounts spent for the purchase of sophisticated military equipment
68 Anp fi4O1 Compliance with bar against use of funds for publicity or proshypagjanda purposes within US not heretofore authorized by Congress Such use of funds will not be eligible for financing under the Loan Agreement
Morocco is a traditional Islamic monarchy with a constitution The conshystitution was implemented followaing a popular referendum in 1962 National regional and professional elective bodies including a parliament were established by universal suffrage under the constitution in 1963 The parliament was suspended in 1961 in a State of Exception because of its inability to agree on measures with adequate urgency to meet the prevailingecononde imperatives In July 1967 the King appointed a Prime Minister to direct a Cabinet of appointed technicians
The constitutional framework nevertheless remains intact in Morocco and nationwide popular elections for some of the professional chambers were held in August and September 1966 The press is relatively free in Morocco and the right of diLsent prevails provided that such dissent does not violate the prohibition against political attacks on the instishytution of the monarchy or the person of the monarch
LI Under the revised US AID Policy for Africa agreed to in November 1966 Morocco is designated a development emphasis country entitled to receive continuing support on a country basis as part of a multilaterally coorshydinated countrj program Morocco was subsequently included in Presidential Determination 67-14 (January 5 1967) I
LIM=TE OFFICIAL USE~i
- l go
bull ~ -
f
DEPQbi) STATE AGENCY FOR INERNATIONAL DEVELOPMENT
WASHINGTON DC 052
CAPITAL ASSISTANCE LOA11 AUTHORIZATION
Provided from Develoroent Loan Funds Morocco Second Lower Moulouya Irrigation Loan
Pursuant to the authority vested in the Assistant Administrator for Africa of the Agency for International Development
AI)by the Foreign Assistance Act of 1961 as amended theIAct) and the delegations of authority issued thereunder I
have received and t-en into consideration a certification from the Director of USAIDMorocco as to the financial and human resources capability of Morocco to effectively utilize the Lower Moulouya Irrigation Project taking into account among other things the
maintenance and utilization of projects in Morocco previously financed or assisted by the United States and I hereby authorize the establishshyment of a loan pursuant to Part I Chapter 2 Title I the Development Loan Fund to the Government of the Kingdom of Morocco (Borrower) of not to exceed five million dollars ($5000000) to assist in financing the fore] gn exchange and local currency costs of goods and services for the third phase of the Lower Moulouya Irrigation Project subject to the foLlowing terms and conditions
1 Interest Rate and Terms of Repayment Borrower shall repay the loan to AID in forty (40) years including a grace period not to exceed ten (10) years Borrower shall pay interest on the unrepaid principal and any interest accrued thereon at the rate of (a) two percent (2) per annum during the grace period and (b) two and
one-half percent (2-12) per annum thereafter
2 Currency of Pepayment Repayment of the loan and paymenu of interest shall be made in United States dollars
- t- n t - - - shy
3 Other Terms and Conditions amp(a)Goods and Services financed under the loan
shall have their source and origin in
(i) the United States if disbursements therefor are made in United States dollars or
(ii) any country in the free world including Morocco if disbursements therefor are made in Moroccan currency
(b) AID Regulation 7 shall not apply to construction -work financed under the loan because as detailed in Section IIIC of Capital Assistance Paper No P 667 it is important to the national interest of the United States that the direct costs of construction work performed by third-country nationals be financed out of funds made available by the Act
(a) Such other terms and conditions as AID may deem advisable
Assistant Administrator for Africa
Date
~~~~~~~~~~~~~~~~~~ - q v
7
---
1 -)I+-IRF1
1ROCCO - rTANC OF PAYME 1qrt - 169]_ 5
6rfi0 1 1C(8lr67 i r(o
)xrurt 2t L( I L-5
Trade Bnlance 11 15 - 75 shy - 75
rviee- ret - 7 - 5) -35 -23 -2
J]-i of Good rnd Service- - 3 - 65 -II - ti - (5
Trn-Ifr Pr ynts (nt) P 21 33 37 33
on-cntnry Carital (not) 92 64 6 6 5
Err-rs nnd Ov rrion- (not) - 23 -2 1 3
eranl Bannic __ - _3 -_ 3 - 1i4
Atrh thert ircjected reficitn are of the nnme order of 1 nishytude a7 thcr incurred in the period i66 the Situatlcn i findarentallydifferent both in rerprct to the source of the deficits and in rer-ect to the meat0Y gtr m etin7tecr In the f rrer caive M5recco uffered
_frcrr a very h-vy cutfc of Drivtes cuitv fo-ivr with a shar) decline In forein nt exerditures in Morocco In the iatter case th projected deficits r- rcre a functicn or accelerated crcwth risingdebt ervieiiw tri tho abnrcn of forv eeble additiens foreign reshybull ourcs nere7ory 4( r2Vm rAf finmncting To nect the def-cits during the reriol 161 61h MWreco ob1id to drw down rorcin exchange reserves of over $]c milicn The snrti tpv of financing is no longerpozslble ince no or-res- ruch reserve- Even ifMorocco yr
mn nina r rve_ ore (]rrfii on to th r-ixirun etnt enribe nnd the [iI tnfldy i- un M-r-r e i32 till relA re nt rnt 15 millicnj1itionn ftr ign as- e n 1 6 beyond hat r recnently fcreeeshyable with ver nri- nry Officilr in In i6 reserves are cotImnted Pt 72million c hih crn V 3 million i caly required for currency coy r
Foreign InJebtrdne n of th GOM Mnroccos external rtnte ard rutlie enterprie dett amounted to
$r) millivn in lr6 Debt vervcirig rpynents for (66 trtaled about
$5) rillion g-eement approved in October 3(67
I- -- Ishy
37 millin or arprcxitrrntoy (j Iroccor totnl eXoort earning of h28 millicn GCnerally nxt rrO dbt FervicJng renuiremennt of leas
than r of totna -ort nnrlt In onrldered to I r tirfactoryrntio D-bt r rnJrcLct n Ir the reriod 1-(y 3on Trerent external debt including thnt wrtl(n irreently undibur-ed are hown n th fr lv tahlr
)] L v yr t n
Eternn Vtnte anc ] bntcrnrie Debt
M131 o)nr
Y aI Net Outrtnnling Debt Debt Service
(6 it 479r5 $367 J-67 452 3)6
Z616 44469 2 0 2C-
365I3 37 389
33 383 33 6 371
5-h 31 n 352 275 34121
]176 2661 32It 1977 21133 311 177 22)6 307 19 i0l74 256
1733 255
rgtternal debt rharre n rerent debt nnr rhon above do not increase ubtanti-lly over t rt 1)year- reaching a maximum of h44 millior
in J6 and decrpt- n cr - tently threoafter At the are time exportearninr r _rc extett nc-are Aring that Morocco does not inshycreswre it etrnn2 cbt t irate ubrtantially nb-vc ihat has been the core th adfiticrn dbt e roquirrentn reulting from the propo t Icon o 5 ijilion co r 7crncepr-ional term hould not have a i-nifiant affect n 1r o - ab lty to neet itv g rc-atedebt ericn rcnrib2t~e- the pros ectr of reprment of thin loan ore coniderci rearcnb)
U I -
F ot h-v C IuIJI rmt I shy
1 V amp~ rVml KI
PUC- -jrVi Jt t 1 11 nflrcj urlc 1- th )qn --P I uti u rhnrrl -1r- thr U- Tr- ry- R- -nymc nt
c2Il f n 6 1 bf r I- till 11 nfl r- n-r i n of O r--niC(Io~hi U 1 1 rr to
Tn vil ) f rvc hi tvlrll 1 (In- - n- u--n E r me rrinshycgtay F rntwir w ourc o -o- rvI ortf-V3 1 rncing of
Uf f -r rrrir- ur3r 4~ v -rin Iltrt nt ndd shyt -n t ) in- lint r b t l r -n rort- o-orco trorl-- V -P
r i 1rnd h L-torie Furcl-trin firr- thrjt US r r~ crvirrf- u~d be~
T L I1 c vt r- -ly ] -ubt fu 1 n vi pw -I -ror-co Ir of
ut1JpcO In thi rjert f it -- r- 21 npnred by d1-nr- cothcr t~han the US
2 ]P-t ofI Prr l1 on Prw- Fntrrr
Phij rrcjJ-t -11 n-t h~ -in nrwerq Prrt n rr- tc ntrshyr~A~r fi-mc 1bho und for --roern p o n
3_~~PrCT--rty
rr-vIi-n 1 h -d r the loan ragreement for Icntifitcation ef any r mIjrpt n ctri b- rt througn ut 1zatn (f xccr- prorerty
If rv c u~eAID n-mrcf u urr thi )cn - I~ut~ em avoi3ablo r rovvrirrnt -rrperty rather than nce iteni
4 Otli-r Fr- Wo--] n-Fnlc4rm
Dr mi tW- o] 14rocco- i~ajr ovr-ec -f exte rnaX
rrtan~- hrtvfb - I r ~ ant fl Fr n fole by Kv-it
Sgio F rneflit r b-en 1lmrntrd to tcfohnjip n5tnnen bi eoni~in I th u y f Fr--h tprhntcian tcacrr ind cther
~ti~r t~ ec-tnmIyrt-n Friinch Aid to Mcreco In 1065c~oc~ (P-art f-r txychnirril aItn -- j se of tl5 w1nfor bu~dget rurport f ir in rt t- $1 1ri1 icin in ennita -rojectM- n vx- rrcd
1Vw1tvnn tioI t-) Frenh rurtnnd +16 r11ion tie-I to -onyiint to orrrcr Frrmh ccilcn~For _-rrc-ratod land and rquirrmcnt
West GTrrnmnny liar agrcrcd to nrovIe ccme j27 mM22~cn 1n catital arirtanre and cromrndity lnoi7 t n OfIcon( q92 thi o totril$223 miJ lien ha actuary b-Pn cr-Itt--d under Inn ngrepment This
And a lk5 million commodity loan both) signed in 1965 All Wet Gerzaan
Ufla
-28shy
capital asnistance I vuectI to be tied to German exports Germanyhas in addition 1uvvded r tteysubbtantial technical assistance f
The IBRP hah rade four 1nns to Morocco since 1962 totaling$6) million Ofthin totnl a [175 million loan in 1965 wos fordevelopient of the gidi lit-r irrigation perimeter Other assistance by internntIcnal Iending arncie include an $11 million credit byIDA in 1C65 for rcendary diicction projects and an IFC ln and inshyvestrent of $1 1 ri jnic alo in
F tit i by [c - dncr tr dh elo snt ofMorccco rircuVt r oii +h b-]n jt-TKT r nbove n 2 )6 niliion Kuwait enn in i66 for develomyment of the Tensaout Prnm n irrnten nrooetand a $77 million Kuwait
0jl n )nnsn r(niti-nertcir
loan for extrnion of the Tadri~ Irrigation Perimeter
The following- trbe surrlnrlzes other free world arlztance (excluiin technical assistanc-) to Morocco for the years 1(62-66
($ Millions)
1 62 1cf_63 96) 19r65 19)66 Fneea 4) 5PO 64o 700 shyWet Germany 223 gu 1t 53 281 IRD 15 175 10) 175 IDA 110 IF C 1 5 7 7 7 0 I15
TOTAL 55 62 1U3 W
b Includer only lo-ng term loans and exporter credits - Includfs 25 million private capital
Eternal ansiztnnce to the Lowier Moulouya Irrigation Perimeter -nce 1060 hres been con[fined to US upport Consdiering AIDs previcus
involvement in and conmitnert to the Lower Moulouya an AID lean in P2t to be Lhi mol aprroriate source of financing for this project
LID
II
q
-29-
SECTION ITI- Y-TTYT TIMPLPTrION
A Periret-r Ad-instrrti-
Authority for irplerrentvtnn of the deveorpent prrgrn frr the LowerMoulcuya Perimeter and rs wel arth crnntinuinz mrnnrrmenertC tt r t- rrtnr V theltbi nad overationity iOfic 1cne 4
n r I e1i- i d Vit4 i Iv ~ Ct rreated i Otb (rJ rn-- of evcn inrmi-rriional offices hich reelaced the Office de Mire en Valeur Aamprlcole (OMVA) Under the OMXA and itspredecessor agencies authority for ad-inLtration cf irrigtion proJect war centralized in Rabat
Under the new regional office organization responsibility for adminshyistering ORMVAM is vested in on Adminirtrative Board of 10 members headed by the Minister of Agriculture and Agrarian Reform as chairman All ether board members (other than the Chairman and a representative of theInterministerial Economic Ccrmittee) represent agencies or activities inthe region of the r-eriret-r whic comprises parts of two provinces Localretresentatives on the Board inc]-de the governors of the two provincesOujda and Nador the presidents -f the two provincial asembtes and of the two provincial chambers of agriculture as well as the perimeter Director
The responsibilities of thie Administrative Board include review of theecys program establishment of its organizational structure developshynt -)f its annual budget and establishment of rates and conditions of
Siyfent for water and other services provided in the perimeter
The Director of OP4VAI-I is dbarged with the responsibility for executionPthe vclicies established by the Administrative Board end administration of oil ORMVAM functions This responsibility includes selection of staffn pserating perrcnnel acting s officia ORNIVAM representative in all ntztinns with -tate and othbr public or private bodies and the
f of funds within limit Indivated by the Ministers f Financetent rn fricultural and Agrarian Reorm
Perimeter Oranizatlon
ORVAM oreanizatlonal structure consists of a directnrate five maj-r rvlces or d-vsicns and one separate bureau Two services qei Administratif et Comptabl- and Service du Yatrial are conshycor - th adminisration and lcgistical support of ORMVAM operationshi1e the remainirg three services rind the separate bureau are Involved in t-hni al matters associated with agrcultural developrent Each ervice has one or more subordinate bureaus Fei-ce Chiefs and thehead 0 rch bure-u report directly to the ORMVAM4 Director
-~F7E MEw-
-30shy
2 Perimeter 01ttffnr
OPIVAM orgttnlrntlon treture calls for 557 positions of whichI L or 7 Mlled n were nher 29 1567 37 of the 71 Postshytion vacancies reported 1ern the high and middle levels Foreign(chiefly Euronean) technclan occupy I)of the 16 high level positionsthat ere filled at thfit tire
Whil OPM ut in th- lcng run lor to Mercecos oducational yster to prvidr tn crrf-nn2 to ratisfy current rdurojectd rcshyquirement th currnt high and mlddle level vacancies rrouire uersonnelwith oxt nive nrior rxericnce To fll this preent need it will be necessary for CRIVAM to continue its program of recruiting foreigntechnicians until ruch tire ns graduates of Moroccan educational programsacquire the necesnry exrerience The managerent assistance componentof thin pro~ject ]e-rribed In the Project analysis will to some extentalleviate OFIWAMs high level personnel requirements
3 Inw1 ernetation Sehedu]
Months Implementation Action
1 0 Sign Loan Agrcement
2 2 C-tiify conditions precedent and Y4tiate procedures for selection of US firm for management contract
2 Negotiation of extension of advisory Engineering Services
h 4 Contract (Hydrotechnic) Negotiation of Managerment Contract
5 60Cmpletion of Project
C Waivers
Sect ion 7 rf AID Regulation 7 provides in substance that theUnited State ill not finance direct costs of construction work performedby third cc-ur y nationals unless the total co-tn of the project withvhich thr ennrtrumticn w(r is asEcciated donot exceed $2On)O orafter excluding national of the country in vhich the site of constructionis located and Dersons vho nave resided therein uninterruptedly for morethan three years imrnedJately prior to any determination under Regulation 7at leant 0 of all uernons who work under the contract at the site of conbulltruction are United States citizens or the employment of third countrynationals is necessary to avoid excerrive corts to the United States
3
31
Section 2175 authr-ri th Regional Anitant Administratorto waive the nrovinions of Sectionthat it is 2073 if he dcterriner in any coneimportant te the nationrn intercrt of the United Stutes tofinance the direct eots of construction work performed by third country
nationals
A prviou1y r ic i c t tht for thr ct Tartthe -r c ct b- 1jeuj out r -cnorbr f cnrtructioncontracts with Morcccrr contrctnr an in the i-t Uowfevvr itentirely psnible that there may b- roe contractn with cntructlonfirms partly owned by third country nntionaln and that ruch firjs anwell as the surely Moroccan-owrned firms may enloy third country niationalsIn such canes a difficult rrobic-i iould arise in meeting the terms ofRegulation 7 since an a practical matter Aericans are not reaonablyavailable for ermployn ont by such contrnetorn and our previcus experiencewith the Naunsseur Ccnv(r-ion project thatin Morocco has indicatedAmerican contractors would not be interested in bidding cn small conshytracts in that country
It in therefore recommended that the Annitant Adinitratordetermine rursuant to Section 2q75 of Regulation 7 to waive theapplication of Regulation 7 to thic iroject since the project 411 conshytribute to the attainrent of US foreign policy objectiver and the cbJe-tives of the Foreign Arsistnnce Program
LITI L USE
LfI~~5xA~us
lit
4 A J A 45 4 k
t A S T
S(3
I A444ilA~~l~)
7 -74
tAM= D
SECTOR 27
10000
t Co0Na includez25 cgtri oncFcttlrvI ncy I8s ~ ~ C t C- Includes 50 constriJcltiotrgrc
2000 60
IU
0
z
bull cosYsA shy----- i
600L _
400
200
0 5 I0 15 20
INTEREST RATE
I ~ 7 J7777
ANIAampX C
PROJECT DESCRn1 rOll
The project com)onents to te undertaken on the MIoulouya Irrigation Project over the next five years contists of the following
C(n1rtion of the rrLin casuals and bianch canbls to provide the suource of waler to the sctors be developed in theto TriffBou Areg and Zebra areas This construction will include the necessarystructures such as reulators highway bridges aqueducts water intake
and discharge structures etc
2 Iand Txeloommerit which includes engineering land consolishyt and iuvtllng lard preparation (subsoiling ripping destoning etc) and installation of water distribution canals (secondary tertiary and quurtunary) and drainage collector ditches for the Triffa main covering 24000 acres in sctors 8 9 10 16 20 21 23 24 25A 2513 27 and 28 Lou Areg Central covering 16250 acres in sectors Dltirough D2B and G1 thru-4h G313 i0u Areg Remainder covering 15000 acres in s-ctors D3 through D7 and GA through (6 Zebra Collective covering 45)0 acres in sectors 3 4 5 rind 6 and Zebra Rer-iinder covering 14250 acres in sectors 1 2 and 7 through 10 and th remainder of sectors 34 and 5 The total land to be developed is about 74000 acres
3 Canalization of the Oued Zeluan and nued Sidi-Amar in the Bou Areg Plain consisting of strairltening englarging and regularizing of these streams to carry the flood waters to the sea Drainage interceptor canals are to be constructed parallel to the sea in the Bou Areg Plain In the Triffa Plain the Oued Riada main drain will be deepened and enlarged and secondary drains will be excavated to provide for drainageof the Madagh area This will include the construction of bridges and culverts and other related work
4 Major Commorn Works will consist of
a Clearing of the Mo-1ouya riverbed downstream of the Mechra KLila barn caused roy flood dariwe and the installation of a set of stop logs for maintenance of pillway gate-
b Design supervision and construction of repairs to the ]elt Lank dead head tunel
c Conctruction and establishment of sib-division Offices and installations for farmer support such as CMVand farm stables
1 C
-2shy
5 Manavmtnt It ha been proposed that a US management firm be ewployed by th- C4 to manage and operate the entire Bou Areg area Such manageent -iuld encomparn all activities from the initial concept to final irIrp igricultural production Such activities would Include resp r-ibilsect -or supervnsion of engtneering and constriction of primary
S- Jry r complete developfnent of land training n in g tinul irription practicen preparation of market
t - r1t- (ot--rnu trplusmnining of a Moroccan cadre to take over h v--it Bou Areg dreara P the
At this writing the n-pt of turning over to a private UZSfirm execushyresponsibl]ity I h management of the establilrment and initial
op-ration of irr1gati the Bou Arog area has been only broadly de iiitd by the GCJO It Intended that proposals will be invited from a r -onable ntnber of f|ed US firms that a selection will be made an-n 7 them and a more do iled and cornprehenrive definition of the rer6 -Ps to be performed be eztabliched at that time It haa been
stimated that the t- of ruch a contract will be about $2 mir- n In any event the -ts of this contract other engineering arvl s to be provided undt n extension of the Ilydrotechnic contract and ether US corts will not ed the proposed $5 mllaion developzont Jean fr the project
The cle 3ifications duties ant 1ncnslbilities of the management personnel ill ha-- to be clearly defined i agreed to by the GCM Perimeter Directo- and other GOM Agencies luding arrangements for the necessary gistic support
Svxlale Docu-
1
4
LD ED 0ICIAL
-IAIDshy
A1trX D
C6JCK LIST OF STATUTORY CRITERIA
(Development Loan Fund)
1 FAA 0102 Extent to which U3 cormodities and services are furnished consistent with improving the US balance of payments See Sections II-C II-F
2 AA sect2O]ihi lanner in which loan wil promote countrys economic develo shy rit emphasizing help for long-range plans and programs designed to developeconomic tesourcos and increase productive capacities See Section I-D
i FAA sectT] h)(IL Information and conclusion on availability of financincfrom other free-world sources including private sources within the United States See Section II-F
FAA sect20l( )2 Information and conclusion on activitys economic and technical soundness including the capacity of the recipient country to reshypay the loan at a reasonable rate of interest See Sections II-B II-D and II-E
5 FAA 1201(h)( Information and conclusion on existence of reasonable promise activity will contribute to developrmnt of economic resources or increase of productive capacities See Sectiona II-B and II-D
_92_(b 4Information and conclusion on activitys relationship toothor development activities and its contribution to realizable longshyrange objectives See Sections I-D and I-E
The following abbreviations are und FAA - Foroirn Assistance Act of 1961 as amerded by the Foreign Asaistaice
Act of 1967 App - Foreign Assistance and Polated Agencies Appropriations Act 1968
AFEVCDF 1066
L1
-2shy
7 FAA f12O1(b)(5)_ Countrys self-help masures including institution of Foreign Assistance Act investment pliaranty programs Investment Guaranty
bull Agreement signed with Morocco 331o6l See Sections I-D and II-EI
_A ))(6) Information and conclusion on possible effects on US econowy with soecial refererne to areas of substantial -labor surplusSee Section II-F
9 FAA q201 (h)() Information and conclusion on the dagree to which thA country iv wiki- progress toward respect for the rule of law freedom of expression and of the press and recognition~yf the importance of individual freedom initiative and private enterprise
10 FAA -1201(b)(8) Information and conclusion on the degree to which the country is taking steps to improve its c]Laato for private investment See Sccton II-E
31 FAA R LbJi Inforrat-on and conclusion on whether or not the activityto b financed will contribute to the achievement of self-sustaining growthSee Sections I-D and II-B
12 FAA fi2Ol(bj Inforruation and conclusion on reasonalbe prospects of reshypayment See Section II-E
13 FAA fl20JL() Info-ation on applicability of the twenty country ceil4ng2
14 FAA fl201 L Information and coclusion on legality (under laws of the country end the US) and reasonableness of lending and ralendinr terms Loan will be on minimum termspermitted under FAA These are deemed reasonable see Sectioam Evidence will be renuired from the GGM as to the legality of the loan agreemnt
1 E 2 Information and conclusion on availability of an applicationFAA together with sufficient information and assurances to indicate reasonably that funds will be used in an economcally and technically sound manner See Sections I-A II-B and II-D Application received Janury 15 1968
16 FAA fl201(fL If a project inforntion and conclusion whether it will promote the economic developapent of the requesting country taking into account the countrys human and material resource requiremnts and the reshylationship between the ultimate objes6ives of the project and the countrys overall economic development See Sections I-D and II-B
17 FAAJ 20ij(J If a project information and conclusion whether it cifishycally provides for appropriate participation by private enterprise 8ce Sections YI-C and 114
I- FAA i22(a) Total amount of money under loan which is going directly to private enterprise is going to intermediate credit institutions or other borrowers for use by private enterprise is being used to finance imports
rfro private sources or is otherwise beirg used to finance procurementsfrcm private souwces See Sections II-C and II-2
9 FAA 207 Infosation on the emphasis placed en
(a) encouraging development of economic political and social institushytins No apparent relationship
(b) nelC-help in mectingthe countrys food nredo Project Vill conshytribute to production of food for lccal consumptioa
(c) in-proving availability in the country of evucated trained manpower Project will contribute to the deicloginext of trained manpower as one of the functions of the management contract (Soe Annex C para 5)
(d) prcgrams aimed at -malnutrition disease eradi atDn slum clearanceWater purification sewage disposal health education naternal and child care(includin fimrily pJnrning)) -nd cthcr public health ausistarice See
(c) other develoment activities including industrial development free
labor unions cooperatives tnd voluntary agencie transn)rtatin and ccshymwquication nrStczn capubiliTies for economic planning and public adlinisshytration arban develo-mment and modernization of laws to feilltate econcnicdevelopjen- GO- intends encourage develo vient of cooperat yes particularlyin the Left Pank areas Project will also develop capabiLi ics for cconoaicplanning and public a6~inistration (Annex C para 5) Other not applicable
20 Information on the extent to which the r-untry is
(a) cttcmting to increase food production and food sto a-e anddistribution felitics This project is one evidence of Moroccos efforts in this direction See also Section I-D and I-E
b) creating- a favorable climate for foreign and dmestic iri-ate enterprise and invcstrrment The GCM has recently reduced profits twes anrannounced a ten year guarantee against tax increases See Section II-E-2
(c) increasing the role of the neonle in the developnental procecsNo apparent relationship to this project
(d) allocating expenditures to development rather than to unn-cessarymilitary purpoes or intervention in other free countries affair See Sections I-D and Ii-
(e) willing --nribute funds to the project or program Th iOMhas already dcvo o-sidcrable resources to the project It has badieted13 million for th i oulouya for i7 See Section I-C
(If) making economic zocial and political refo ns such as taxc coliecshytion iYprovcmenLs and chan es in land tenure a Royal Comm ision has been appointed to make recomendation on land tenure probleras in the Lower I oulouya
(g) responding to the economic political and social concerns of its people and showing a determination to take volf-help wcasuren See Sections I-D and II-E
IT
-ovi~cd l v r 13 1968
- 4 - LDffIED OFFICIAL USE
21 FAA Inforn ation about multilateral assistance being Iurnished to t e country and whether the loan will encourage recgional development prog-rams The I1D has eztablihcd a Consultative Group for Morocco which rvicws the GOM development program anui prgress See Section II-F-4 for infoaation on othtr donor assistance to Morocco
22 A Extent to which the loan will contribute to the objective of ass ring naximu par icipation in the task of econonic dovelop--ent on the pL-t 0 _he people of the developing countries through the encouragement of cocr-tic private and local govenmental inLitutious o apparent
relationship
23 F _-_Dta_ Infor-ation and corissions whether loan will oncourageeffor s of t1e country to (a) increase tie flow of international trade (b) fostcr private initiative and comptition (c) encourage development and usceo co opratives credit unions and savingss and loan associations (d) disourgo monopolistic practices (c) improvo technical efficiency of industry ariculture and commerce (f) strenSthn free labor unions This project is cxpected to increase technical efficiency oi-agriculture
2_ C-1L lnforzrition and conclusion on how the loan will encourage US privte trade and investment abroad and how it uill encourage private US participation in foreign assistance prograas (incluiing use of private trade channels and the services of US private enterprise) See Section II-
25 VA-+_ Conclusion and supporting information on compliance with tho Co resional policy that engineering and professional servicos of US fir-ms and their affiliates are to bo used in connection with capital project3 to the nixinua extent consistent with the national interest US engineerirn and innsgcment services will be financed tnder this loan
2$ Inforamtion and ccnclusions who+her loan will pormit American rx-l] business to participate equitably in the furnishing of goods and
z orvices by To be satisfied in Loan Agreementfinanced it
27 - t(a App I18 Complianco with restriction of co -zodity procureshy o UsMS except as otherwise determined by the Picsicent and subject to ttu--- rcortir require r-nts Procurement will - liumited to the US for
reiabnrs nts and to ioocco and other free world countries 1-or US-cwne(d rhu disburseacnts
23 -i Comiance with bulk cozodity procurement restriction topriecc no l-ho han the nkarkot price prevailing in tho US at tia of
bull puchas Not applicable
29 FA Cozpliance with requirement that matrin insurance be purchased on commceities if the participating country discri-inates and that insurance be placed in the US To be satisfied in Loan Agreement
30 IA 6(a) Information at to the utilization of excers personal property in lieu of procurement of new items Will be required ai appropriate under terns of Lean Agreement
f
1 77--7 -77-77-777
31 FAA 61](a)(_) information and conclusion on availability of enginoering i financial and other plans nccx sary to carry out tho assittance and of a
reasonably firm cstimate of the cost of the assistanco to the United States
See Section II-D
32-ecessaryFAA t611(a)_(2) legislative action r6quired within recipient country and ibasis Cor reasonable anticipation such action will be completed in time to pormit orderly accompli-hirtnt of purposes of loan See Section I-A
33 n _AA161nJ0] If water or water-relatod land resource construcshy
tion project or program information and conclusion on a benefit-cost comshy
putation See Section II-B
3 4 VAA 611(c) Compliance with requirement that contracts for construction be let on comp-ctitive basis to mamum extent practicable To be satisfied
in Loan Agreement
If a loan for a project of $1 million or more certificatin35 FAA _61l(r) by the principal AID officer in the country as to the capability of the
country (both financirl and human resources) to effectively maintain and
utilize the project taking into account other US-financed projects (Such
certification is to be pproved by the Administrator aL the time the loan
is authorized) In process of being obtained
36 FAsgJ2 _6_h Appropriate steps that have b-en taken to assure that to the miaximum extent possible the country is contributing local currencies to net th-2 cost of contractural and other services and foreign currencies o- icd by tho US are utilized to meet the cost of contractual and other services The GU-M is contributing over $30 million to compleXton of this project Excess US-use dirhams will be used for eligible project costs other than US goods and services
37 FAA p619 Compliance with requirement that assistance to newly independent countries be furnished through multilateral organizations or plans to maxishymum extent appropriate Not deemed appropriate in view of previous AID financing and ccoiitment to the project See Sections I-A and I-D
38 FAA sect620(a) AcnO7a n3]7(b) Compliance with prohibitions
against assistance to Cuba ard any countr (a) which furnishes assistance to Cuba or failed to take appropriate steps by February 14 1964 to prevent ships or aircraft unier its registry from carrying equipment materials or supplies from or to Cuba or (b) which sells furnishes or permits any ships under its registry fr-om carrying items of primary atrategic signifishycance or itcms of economic assistance Morocco is not-known to be in Violation of these sections
39 FAA q620GL_ If assistance to the government of a country existence of determination it is not controlled by the international Communist movement The Secretary of State so determined on October 11 191
40 FAA 620(c) If assistance to the government of a country existonce of Indebtedness to a US citizen for goods or services furnished or ordered whore ouch citizen has exhaustod available legal romodiesor where the debt
i - ow - -- _---- --shy
- --
-6shy
is not denied or ontested by such government or the indebtedness arises under an unconditional guararty of payrrent given by such govornmunt No such indebtedness is known to exist
41 FA _(a2LdL If assisitance for any productive enterprise which will corashypote with US enterprise existence of agreement by the recipient country to prevent export to the US of more than 20 of the enterprises annual production during the life of the loan Not applicable
42 FA4 - 16Q_0_ A If assistance to the government of a country extent to which it (including government agenies or ruhdivisions) has after January 1 1962 taken steps o repudiate or nullify cuatracts or taken any action which has the effect of nationalizing expropriating or otherwise seizingownership or control ofprcpertv of US citizens or entities beneficially owned by them without taking appropriate stops to discha i ge its obligations No such steps cr actions are-known to have been taken by the GOM
43 FAA~L AjPj_10_9 Compliance with assistance toQ0 prohibitions against any Comunst codntry ozocco is not considered to be a cocinrunist country
44 FAA - 620(gJ Corliance with prohibition against use of assistonce to comp satc owners for expropriated or nationalized property To be satisfied in Loan Agreement
45 F AA 8620(h Compliance with regulations and procedures adopted to inshysure against ue of assistance in a manner hich contrary to the best inshyterests of the US promotes or assists the foreign aid projects or activities of the Communist-bloc countries To be satisfied in Loan Agreement
46 FAA 06-O(j)_ Exitence of determiration that the country is engaging in or preparing for aggressive military efforts No such determination has been made
L_62_O Information47 FAA on representation of the country at any intershynational confererce when that representation includes the planning of activishyties involving insurrection or subversion against the US or countries recoiving US assistance No such representition is known to have A occarrect
8 FAA 62JJ Existence of a determination that the country has permitted or failed to prevent destruction of US property by mob action or has failed to take steps to prevent a recurrence and-to pay compensation NO such destruction is known to have tak-n place
49 PAA l620(k) If construction of productive enterprise where eggregate value of assistanc to be furnished by US will exceed $1OO million identification of Gtntutoryauthority Not npplicable
i-xQ2MZZ=
1 shy
U 6 50 _Af( QCinsidoration which has been given to denlying assistance X to thu government of a country which after December 31 1966 has failed to
- institto the investnint guaranty program for the spcific risks of inconshy
vertibility and expropriation or confiscation Satisfied See No 7 above
S51S J lj Compliance with-prohibitions-againstn as~istance to countries which traffic or permittraffickingwith North Vietnam Morocco is not known to be in violation
52 E_-L620(_L If country has seized or imposed any penalty or sanction against vn US fishing vessel on account of its fishing activities in
intcrnationul waters information on the consideiation which has been given to excludirg the country from assistance No such situation is known to exist
53 FAA FA r) UAR restriction Not applicable620(p 9117
54 FAA R620tl) Existence of default undhr any Foreign Assistance Act loan to the country No such default exists
55 F ) C-nsider tion of whether co ntry is devoting unnecessary percentage of buKet for military purposes or use of foreign exchange for milita-y equipment
56 FAA 62o(t) Proibition on aid if country has severed diplomatic relations with US unless agreements have been negotiated after resumpshytion Diplomatic r(lations have not been severed
57 FAA 9620(u) Statur of the country on delinquent UN obligations Morocco is not known to be dlinquent on its UN~obligation
58 FAA R636(i) Prohibition on financing non-US manufactured motor vehicles Will be satisfied in Loan Agreement and Implementation Letter
59 App 102 Compliance with requirement that payments in excess of $25000 for architectural and en Jneering services on any one project be reported to Congress Such reports will be made
60 App R1O4 Compliance with bar against funds to pay pensions etc for military personnel Such payments will not be eligible for financing under th Loan Agreement
61 App 9106 If country attr ipts to create distinctions because of their race or religion among Americans in granting personal or commercial access or other rights otherwise avaVIfable to US citizens generally application which will be made in negotit ttons of contrary principles as expressed by Congress Morocco is not ku IDhave made any such attempts
iInD OFFIIt t USE
0k
OFFICIAL USE 62 AIwp Rii Compliance with existing requfremets for security clearance
of personnel Will be satisfied in Loan Agreement and Implementation Letter
63 App R1l2 Compliance with requirement for approval of cortractors and contract terms for capital projects Will be satisfied in Loan Agreement
clJ164 Aup Cmpliance with bar nRainst use of funds to Tay assessments etc of US meiber Such payments will not be eligible for financing under the Loan Agreemunt
6 Anp P115 Ccmpliance with regulations on employment of US and local personnel for funds obligated after April 30 1961 (Regulation 7) See Section III-C
66 Aim Vietnam iron and steel restrictions Not applicable
67 p l9 If a country other than Greece Turkey Iran Israel Republicof China Phillipines or Korea reduction in assistance by amounts spent for the purchase of sophisticated military equipment
68 Anp fi4O1 Compliance with bar against use of funds for publicity or proshypagjanda purposes within US not heretofore authorized by Congress Such use of funds will not be eligible for financing under the Loan Agreement
Morocco is a traditional Islamic monarchy with a constitution The conshystitution was implemented followaing a popular referendum in 1962 National regional and professional elective bodies including a parliament were established by universal suffrage under the constitution in 1963 The parliament was suspended in 1961 in a State of Exception because of its inability to agree on measures with adequate urgency to meet the prevailingecononde imperatives In July 1967 the King appointed a Prime Minister to direct a Cabinet of appointed technicians
The constitutional framework nevertheless remains intact in Morocco and nationwide popular elections for some of the professional chambers were held in August and September 1966 The press is relatively free in Morocco and the right of diLsent prevails provided that such dissent does not violate the prohibition against political attacks on the instishytution of the monarchy or the person of the monarch
LI Under the revised US AID Policy for Africa agreed to in November 1966 Morocco is designated a development emphasis country entitled to receive continuing support on a country basis as part of a multilaterally coorshydinated countrj program Morocco was subsequently included in Presidential Determination 67-14 (January 5 1967) I
LIM=TE OFFICIAL USE~i
- l go
bull ~ -
f
DEPQbi) STATE AGENCY FOR INERNATIONAL DEVELOPMENT
WASHINGTON DC 052
CAPITAL ASSISTANCE LOA11 AUTHORIZATION
Provided from Develoroent Loan Funds Morocco Second Lower Moulouya Irrigation Loan
Pursuant to the authority vested in the Assistant Administrator for Africa of the Agency for International Development
AI)by the Foreign Assistance Act of 1961 as amended theIAct) and the delegations of authority issued thereunder I
have received and t-en into consideration a certification from the Director of USAIDMorocco as to the financial and human resources capability of Morocco to effectively utilize the Lower Moulouya Irrigation Project taking into account among other things the
maintenance and utilization of projects in Morocco previously financed or assisted by the United States and I hereby authorize the establishshyment of a loan pursuant to Part I Chapter 2 Title I the Development Loan Fund to the Government of the Kingdom of Morocco (Borrower) of not to exceed five million dollars ($5000000) to assist in financing the fore] gn exchange and local currency costs of goods and services for the third phase of the Lower Moulouya Irrigation Project subject to the foLlowing terms and conditions
1 Interest Rate and Terms of Repayment Borrower shall repay the loan to AID in forty (40) years including a grace period not to exceed ten (10) years Borrower shall pay interest on the unrepaid principal and any interest accrued thereon at the rate of (a) two percent (2) per annum during the grace period and (b) two and
one-half percent (2-12) per annum thereafter
2 Currency of Pepayment Repayment of the loan and paymenu of interest shall be made in United States dollars
- t- n t - - - shy
3 Other Terms and Conditions amp(a)Goods and Services financed under the loan
shall have their source and origin in
(i) the United States if disbursements therefor are made in United States dollars or
(ii) any country in the free world including Morocco if disbursements therefor are made in Moroccan currency
(b) AID Regulation 7 shall not apply to construction -work financed under the loan because as detailed in Section IIIC of Capital Assistance Paper No P 667 it is important to the national interest of the United States that the direct costs of construction work performed by third-country nationals be financed out of funds made available by the Act
(a) Such other terms and conditions as AID may deem advisable
Assistant Administrator for Africa
Date
~~~~~~~~~~~~~~~~~~ - q v
7
I- -- Ishy
37 millin or arprcxitrrntoy (j Iroccor totnl eXoort earning of h28 millicn GCnerally nxt rrO dbt FervicJng renuiremennt of leas
than r of totna -ort nnrlt In onrldered to I r tirfactoryrntio D-bt r rnJrcLct n Ir the reriod 1-(y 3on Trerent external debt including thnt wrtl(n irreently undibur-ed are hown n th fr lv tahlr
)] L v yr t n
Eternn Vtnte anc ] bntcrnrie Debt
M131 o)nr
Y aI Net Outrtnnling Debt Debt Service
(6 it 479r5 $367 J-67 452 3)6
Z616 44469 2 0 2C-
365I3 37 389
33 383 33 6 371
5-h 31 n 352 275 34121
]176 2661 32It 1977 21133 311 177 22)6 307 19 i0l74 256
1733 255
rgtternal debt rharre n rerent debt nnr rhon above do not increase ubtanti-lly over t rt 1)year- reaching a maximum of h44 millior
in J6 and decrpt- n cr - tently threoafter At the are time exportearninr r _rc extett nc-are Aring that Morocco does not inshycreswre it etrnn2 cbt t irate ubrtantially nb-vc ihat has been the core th adfiticrn dbt e roquirrentn reulting from the propo t Icon o 5 ijilion co r 7crncepr-ional term hould not have a i-nifiant affect n 1r o - ab lty to neet itv g rc-atedebt ericn rcnrib2t~e- the pros ectr of reprment of thin loan ore coniderci rearcnb)
U I -
F ot h-v C IuIJI rmt I shy
1 V amp~ rVml KI
PUC- -jrVi Jt t 1 11 nflrcj urlc 1- th )qn --P I uti u rhnrrl -1r- thr U- Tr- ry- R- -nymc nt
c2Il f n 6 1 bf r I- till 11 nfl r- n-r i n of O r--niC(Io~hi U 1 1 rr to
Tn vil ) f rvc hi tvlrll 1 (In- - n- u--n E r me rrinshycgtay F rntwir w ourc o -o- rvI ortf-V3 1 rncing of
Uf f -r rrrir- ur3r 4~ v -rin Iltrt nt ndd shyt -n t ) in- lint r b t l r -n rort- o-orco trorl-- V -P
r i 1rnd h L-torie Furcl-trin firr- thrjt US r r~ crvirrf- u~d be~
T L I1 c vt r- -ly ] -ubt fu 1 n vi pw -I -ror-co Ir of
ut1JpcO In thi rjert f it -- r- 21 npnred by d1-nr- cothcr t~han the US
2 ]P-t ofI Prr l1 on Prw- Fntrrr
Phij rrcjJ-t -11 n-t h~ -in nrwerq Prrt n rr- tc ntrshyr~A~r fi-mc 1bho und for --roern p o n
3_~~PrCT--rty
rr-vIi-n 1 h -d r the loan ragreement for Icntifitcation ef any r mIjrpt n ctri b- rt througn ut 1zatn (f xccr- prorerty
If rv c u~eAID n-mrcf u urr thi )cn - I~ut~ em avoi3ablo r rovvrirrnt -rrperty rather than nce iteni
4 Otli-r Fr- Wo--] n-Fnlc4rm
Dr mi tW- o] 14rocco- i~ajr ovr-ec -f exte rnaX
rrtan~- hrtvfb - I r ~ ant fl Fr n fole by Kv-it
Sgio F rneflit r b-en 1lmrntrd to tcfohnjip n5tnnen bi eoni~in I th u y f Fr--h tprhntcian tcacrr ind cther
~ti~r t~ ec-tnmIyrt-n Friinch Aid to Mcreco In 1065c~oc~ (P-art f-r txychnirril aItn -- j se of tl5 w1nfor bu~dget rurport f ir in rt t- $1 1ri1 icin in ennita -rojectM- n vx- rrcd
1Vw1tvnn tioI t-) Frenh rurtnnd +16 r11ion tie-I to -onyiint to orrrcr Frrmh ccilcn~For _-rrc-ratod land and rquirrmcnt
West GTrrnmnny liar agrcrcd to nrovIe ccme j27 mM22~cn 1n catital arirtanre and cromrndity lnoi7 t n OfIcon( q92 thi o totril$223 miJ lien ha actuary b-Pn cr-Itt--d under Inn ngrepment This
And a lk5 million commodity loan both) signed in 1965 All Wet Gerzaan
Ufla
-28shy
capital asnistance I vuectI to be tied to German exports Germanyhas in addition 1uvvded r tteysubbtantial technical assistance f
The IBRP hah rade four 1nns to Morocco since 1962 totaling$6) million Ofthin totnl a [175 million loan in 1965 wos fordevelopient of the gidi lit-r irrigation perimeter Other assistance by internntIcnal Iending arncie include an $11 million credit byIDA in 1C65 for rcendary diicction projects and an IFC ln and inshyvestrent of $1 1 ri jnic alo in
F tit i by [c - dncr tr dh elo snt ofMorccco rircuVt r oii +h b-]n jt-TKT r nbove n 2 )6 niliion Kuwait enn in i66 for develomyment of the Tensaout Prnm n irrnten nrooetand a $77 million Kuwait
0jl n )nnsn r(niti-nertcir
loan for extrnion of the Tadri~ Irrigation Perimeter
The following- trbe surrlnrlzes other free world arlztance (excluiin technical assistanc-) to Morocco for the years 1(62-66
($ Millions)
1 62 1cf_63 96) 19r65 19)66 Fneea 4) 5PO 64o 700 shyWet Germany 223 gu 1t 53 281 IRD 15 175 10) 175 IDA 110 IF C 1 5 7 7 7 0 I15
TOTAL 55 62 1U3 W
b Includer only lo-ng term loans and exporter credits - Includfs 25 million private capital
Eternal ansiztnnce to the Lowier Moulouya Irrigation Perimeter -nce 1060 hres been con[fined to US upport Consdiering AIDs previcus
involvement in and conmitnert to the Lower Moulouya an AID lean in P2t to be Lhi mol aprroriate source of financing for this project
LID
II
q
-29-
SECTION ITI- Y-TTYT TIMPLPTrION
A Periret-r Ad-instrrti-
Authority for irplerrentvtnn of the deveorpent prrgrn frr the LowerMoulcuya Perimeter and rs wel arth crnntinuinz mrnnrrmenertC tt r t- rrtnr V theltbi nad overationity iOfic 1cne 4
n r I e1i- i d Vit4 i Iv ~ Ct rreated i Otb (rJ rn-- of evcn inrmi-rriional offices hich reelaced the Office de Mire en Valeur Aamprlcole (OMVA) Under the OMXA and itspredecessor agencies authority for ad-inLtration cf irrigtion proJect war centralized in Rabat
Under the new regional office organization responsibility for adminshyistering ORMVAM is vested in on Adminirtrative Board of 10 members headed by the Minister of Agriculture and Agrarian Reform as chairman All ether board members (other than the Chairman and a representative of theInterministerial Economic Ccrmittee) represent agencies or activities inthe region of the r-eriret-r whic comprises parts of two provinces Localretresentatives on the Board inc]-de the governors of the two provincesOujda and Nador the presidents -f the two provincial asembtes and of the two provincial chambers of agriculture as well as the perimeter Director
The responsibilities of thie Administrative Board include review of theecys program establishment of its organizational structure developshynt -)f its annual budget and establishment of rates and conditions of
Siyfent for water and other services provided in the perimeter
The Director of OP4VAI-I is dbarged with the responsibility for executionPthe vclicies established by the Administrative Board end administration of oil ORMVAM functions This responsibility includes selection of staffn pserating perrcnnel acting s officia ORNIVAM representative in all ntztinns with -tate and othbr public or private bodies and the
f of funds within limit Indivated by the Ministers f Financetent rn fricultural and Agrarian Reorm
Perimeter Oranizatlon
ORVAM oreanizatlonal structure consists of a directnrate five maj-r rvlces or d-vsicns and one separate bureau Two services qei Administratif et Comptabl- and Service du Yatrial are conshycor - th adminisration and lcgistical support of ORMVAM operationshi1e the remainirg three services rind the separate bureau are Involved in t-hni al matters associated with agrcultural developrent Each ervice has one or more subordinate bureaus Fei-ce Chiefs and thehead 0 rch bure-u report directly to the ORMVAM4 Director
-~F7E MEw-
-30shy
2 Perimeter 01ttffnr
OPIVAM orgttnlrntlon treture calls for 557 positions of whichI L or 7 Mlled n were nher 29 1567 37 of the 71 Postshytion vacancies reported 1ern the high and middle levels Foreign(chiefly Euronean) technclan occupy I)of the 16 high level positionsthat ere filled at thfit tire
Whil OPM ut in th- lcng run lor to Mercecos oducational yster to prvidr tn crrf-nn2 to ratisfy current rdurojectd rcshyquirement th currnt high and mlddle level vacancies rrouire uersonnelwith oxt nive nrior rxericnce To fll this preent need it will be necessary for CRIVAM to continue its program of recruiting foreigntechnicians until ruch tire ns graduates of Moroccan educational programsacquire the necesnry exrerience The managerent assistance componentof thin pro~ject ]e-rribed In the Project analysis will to some extentalleviate OFIWAMs high level personnel requirements
3 Inw1 ernetation Sehedu]
Months Implementation Action
1 0 Sign Loan Agrcement
2 2 C-tiify conditions precedent and Y4tiate procedures for selection of US firm for management contract
2 Negotiation of extension of advisory Engineering Services
h 4 Contract (Hydrotechnic) Negotiation of Managerment Contract
5 60Cmpletion of Project
C Waivers
Sect ion 7 rf AID Regulation 7 provides in substance that theUnited State ill not finance direct costs of construction work performedby third cc-ur y nationals unless the total co-tn of the project withvhich thr ennrtrumticn w(r is asEcciated donot exceed $2On)O orafter excluding national of the country in vhich the site of constructionis located and Dersons vho nave resided therein uninterruptedly for morethan three years imrnedJately prior to any determination under Regulation 7at leant 0 of all uernons who work under the contract at the site of conbulltruction are United States citizens or the employment of third countrynationals is necessary to avoid excerrive corts to the United States
3
31
Section 2175 authr-ri th Regional Anitant Administratorto waive the nrovinions of Sectionthat it is 2073 if he dcterriner in any coneimportant te the nationrn intercrt of the United Stutes tofinance the direct eots of construction work performed by third country
nationals
A prviou1y r ic i c t tht for thr ct Tartthe -r c ct b- 1jeuj out r -cnorbr f cnrtructioncontracts with Morcccrr contrctnr an in the i-t Uowfevvr itentirely psnible that there may b- roe contractn with cntructlonfirms partly owned by third country nntionaln and that ruch firjs anwell as the surely Moroccan-owrned firms may enloy third country niationalsIn such canes a difficult rrobic-i iould arise in meeting the terms ofRegulation 7 since an a practical matter Aericans are not reaonablyavailable for ermployn ont by such contrnetorn and our previcus experiencewith the Naunsseur Ccnv(r-ion project thatin Morocco has indicatedAmerican contractors would not be interested in bidding cn small conshytracts in that country
It in therefore recommended that the Annitant Adinitratordetermine rursuant to Section 2q75 of Regulation 7 to waive theapplication of Regulation 7 to thic iroject since the project 411 conshytribute to the attainrent of US foreign policy objectiver and the cbJe-tives of the Foreign Arsistnnce Program
LITI L USE
LfI~~5xA~us
lit
4 A J A 45 4 k
t A S T
S(3
I A444ilA~~l~)
7 -74
tAM= D
SECTOR 27
10000
t Co0Na includez25 cgtri oncFcttlrvI ncy I8s ~ ~ C t C- Includes 50 constriJcltiotrgrc
2000 60
IU
0
z
bull cosYsA shy----- i
600L _
400
200
0 5 I0 15 20
INTEREST RATE
I ~ 7 J7777
ANIAampX C
PROJECT DESCRn1 rOll
The project com)onents to te undertaken on the MIoulouya Irrigation Project over the next five years contists of the following
C(n1rtion of the rrLin casuals and bianch canbls to provide the suource of waler to the sctors be developed in theto TriffBou Areg and Zebra areas This construction will include the necessarystructures such as reulators highway bridges aqueducts water intake
and discharge structures etc
2 Iand Txeloommerit which includes engineering land consolishyt and iuvtllng lard preparation (subsoiling ripping destoning etc) and installation of water distribution canals (secondary tertiary and quurtunary) and drainage collector ditches for the Triffa main covering 24000 acres in sctors 8 9 10 16 20 21 23 24 25A 2513 27 and 28 Lou Areg Central covering 16250 acres in sectors Dltirough D2B and G1 thru-4h G313 i0u Areg Remainder covering 15000 acres in s-ctors D3 through D7 and GA through (6 Zebra Collective covering 45)0 acres in sectors 3 4 5 rind 6 and Zebra Rer-iinder covering 14250 acres in sectors 1 2 and 7 through 10 and th remainder of sectors 34 and 5 The total land to be developed is about 74000 acres
3 Canalization of the Oued Zeluan and nued Sidi-Amar in the Bou Areg Plain consisting of strairltening englarging and regularizing of these streams to carry the flood waters to the sea Drainage interceptor canals are to be constructed parallel to the sea in the Bou Areg Plain In the Triffa Plain the Oued Riada main drain will be deepened and enlarged and secondary drains will be excavated to provide for drainageof the Madagh area This will include the construction of bridges and culverts and other related work
4 Major Commorn Works will consist of
a Clearing of the Mo-1ouya riverbed downstream of the Mechra KLila barn caused roy flood dariwe and the installation of a set of stop logs for maintenance of pillway gate-
b Design supervision and construction of repairs to the ]elt Lank dead head tunel
c Conctruction and establishment of sib-division Offices and installations for farmer support such as CMVand farm stables
1 C
-2shy
5 Manavmtnt It ha been proposed that a US management firm be ewployed by th- C4 to manage and operate the entire Bou Areg area Such manageent -iuld encomparn all activities from the initial concept to final irIrp igricultural production Such activities would Include resp r-ibilsect -or supervnsion of engtneering and constriction of primary
S- Jry r complete developfnent of land training n in g tinul irription practicen preparation of market
t - r1t- (ot--rnu trplusmnining of a Moroccan cadre to take over h v--it Bou Areg dreara P the
At this writing the n-pt of turning over to a private UZSfirm execushyresponsibl]ity I h management of the establilrment and initial
op-ration of irr1gati the Bou Arog area has been only broadly de iiitd by the GCJO It Intended that proposals will be invited from a r -onable ntnber of f|ed US firms that a selection will be made an-n 7 them and a more do iled and cornprehenrive definition of the rer6 -Ps to be performed be eztabliched at that time It haa been
stimated that the t- of ruch a contract will be about $2 mir- n In any event the -ts of this contract other engineering arvl s to be provided undt n extension of the Ilydrotechnic contract and ether US corts will not ed the proposed $5 mllaion developzont Jean fr the project
The cle 3ifications duties ant 1ncnslbilities of the management personnel ill ha-- to be clearly defined i agreed to by the GCM Perimeter Directo- and other GOM Agencies luding arrangements for the necessary gistic support
Svxlale Docu-
1
4
LD ED 0ICIAL
-IAIDshy
A1trX D
C6JCK LIST OF STATUTORY CRITERIA
(Development Loan Fund)
1 FAA 0102 Extent to which U3 cormodities and services are furnished consistent with improving the US balance of payments See Sections II-C II-F
2 AA sect2O]ihi lanner in which loan wil promote countrys economic develo shy rit emphasizing help for long-range plans and programs designed to developeconomic tesourcos and increase productive capacities See Section I-D
i FAA sectT] h)(IL Information and conclusion on availability of financincfrom other free-world sources including private sources within the United States See Section II-F
FAA sect20l( )2 Information and conclusion on activitys economic and technical soundness including the capacity of the recipient country to reshypay the loan at a reasonable rate of interest See Sections II-B II-D and II-E
5 FAA 1201(h)( Information and conclusion on existence of reasonable promise activity will contribute to developrmnt of economic resources or increase of productive capacities See Sectiona II-B and II-D
_92_(b 4Information and conclusion on activitys relationship toothor development activities and its contribution to realizable longshyrange objectives See Sections I-D and I-E
The following abbreviations are und FAA - Foroirn Assistance Act of 1961 as amerded by the Foreign Asaistaice
Act of 1967 App - Foreign Assistance and Polated Agencies Appropriations Act 1968
AFEVCDF 1066
L1
-2shy
7 FAA f12O1(b)(5)_ Countrys self-help masures including institution of Foreign Assistance Act investment pliaranty programs Investment Guaranty
bull Agreement signed with Morocco 331o6l See Sections I-D and II-EI
_A ))(6) Information and conclusion on possible effects on US econowy with soecial refererne to areas of substantial -labor surplusSee Section II-F
9 FAA q201 (h)() Information and conclusion on the dagree to which thA country iv wiki- progress toward respect for the rule of law freedom of expression and of the press and recognition~yf the importance of individual freedom initiative and private enterprise
10 FAA -1201(b)(8) Information and conclusion on the degree to which the country is taking steps to improve its c]Laato for private investment See Sccton II-E
31 FAA R LbJi Inforrat-on and conclusion on whether or not the activityto b financed will contribute to the achievement of self-sustaining growthSee Sections I-D and II-B
12 FAA fi2Ol(bj Inforruation and conclusion on reasonalbe prospects of reshypayment See Section II-E
13 FAA fl20JL() Info-ation on applicability of the twenty country ceil4ng2
14 FAA fl201 L Information and coclusion on legality (under laws of the country end the US) and reasonableness of lending and ralendinr terms Loan will be on minimum termspermitted under FAA These are deemed reasonable see Sectioam Evidence will be renuired from the GGM as to the legality of the loan agreemnt
1 E 2 Information and conclusion on availability of an applicationFAA together with sufficient information and assurances to indicate reasonably that funds will be used in an economcally and technically sound manner See Sections I-A II-B and II-D Application received Janury 15 1968
16 FAA fl201(fL If a project inforntion and conclusion whether it will promote the economic developapent of the requesting country taking into account the countrys human and material resource requiremnts and the reshylationship between the ultimate objes6ives of the project and the countrys overall economic development See Sections I-D and II-B
17 FAAJ 20ij(J If a project information and conclusion whether it cifishycally provides for appropriate participation by private enterprise 8ce Sections YI-C and 114
I- FAA i22(a) Total amount of money under loan which is going directly to private enterprise is going to intermediate credit institutions or other borrowers for use by private enterprise is being used to finance imports
rfro private sources or is otherwise beirg used to finance procurementsfrcm private souwces See Sections II-C and II-2
9 FAA 207 Infosation on the emphasis placed en
(a) encouraging development of economic political and social institushytins No apparent relationship
(b) nelC-help in mectingthe countrys food nredo Project Vill conshytribute to production of food for lccal consumptioa
(c) in-proving availability in the country of evucated trained manpower Project will contribute to the deicloginext of trained manpower as one of the functions of the management contract (Soe Annex C para 5)
(d) prcgrams aimed at -malnutrition disease eradi atDn slum clearanceWater purification sewage disposal health education naternal and child care(includin fimrily pJnrning)) -nd cthcr public health ausistarice See
(c) other develoment activities including industrial development free
labor unions cooperatives tnd voluntary agencie transn)rtatin and ccshymwquication nrStczn capubiliTies for economic planning and public adlinisshytration arban develo-mment and modernization of laws to feilltate econcnicdevelopjen- GO- intends encourage develo vient of cooperat yes particularlyin the Left Pank areas Project will also develop capabiLi ics for cconoaicplanning and public a6~inistration (Annex C para 5) Other not applicable
20 Information on the extent to which the r-untry is
(a) cttcmting to increase food production and food sto a-e anddistribution felitics This project is one evidence of Moroccos efforts in this direction See also Section I-D and I-E
b) creating- a favorable climate for foreign and dmestic iri-ate enterprise and invcstrrment The GCM has recently reduced profits twes anrannounced a ten year guarantee against tax increases See Section II-E-2
(c) increasing the role of the neonle in the developnental procecsNo apparent relationship to this project
(d) allocating expenditures to development rather than to unn-cessarymilitary purpoes or intervention in other free countries affair See Sections I-D and Ii-
(e) willing --nribute funds to the project or program Th iOMhas already dcvo o-sidcrable resources to the project It has badieted13 million for th i oulouya for i7 See Section I-C
(If) making economic zocial and political refo ns such as taxc coliecshytion iYprovcmenLs and chan es in land tenure a Royal Comm ision has been appointed to make recomendation on land tenure probleras in the Lower I oulouya
(g) responding to the economic political and social concerns of its people and showing a determination to take volf-help wcasuren See Sections I-D and II-E
IT
-ovi~cd l v r 13 1968
- 4 - LDffIED OFFICIAL USE
21 FAA Inforn ation about multilateral assistance being Iurnished to t e country and whether the loan will encourage recgional development prog-rams The I1D has eztablihcd a Consultative Group for Morocco which rvicws the GOM development program anui prgress See Section II-F-4 for infoaation on othtr donor assistance to Morocco
22 A Extent to which the loan will contribute to the objective of ass ring naximu par icipation in the task of econonic dovelop--ent on the pL-t 0 _he people of the developing countries through the encouragement of cocr-tic private and local govenmental inLitutious o apparent
relationship
23 F _-_Dta_ Infor-ation and corissions whether loan will oncourageeffor s of t1e country to (a) increase tie flow of international trade (b) fostcr private initiative and comptition (c) encourage development and usceo co opratives credit unions and savingss and loan associations (d) disourgo monopolistic practices (c) improvo technical efficiency of industry ariculture and commerce (f) strenSthn free labor unions This project is cxpected to increase technical efficiency oi-agriculture
2_ C-1L lnforzrition and conclusion on how the loan will encourage US privte trade and investment abroad and how it uill encourage private US participation in foreign assistance prograas (incluiing use of private trade channels and the services of US private enterprise) See Section II-
25 VA-+_ Conclusion and supporting information on compliance with tho Co resional policy that engineering and professional servicos of US fir-ms and their affiliates are to bo used in connection with capital project3 to the nixinua extent consistent with the national interest US engineerirn and innsgcment services will be financed tnder this loan
2$ Inforamtion and ccnclusions who+her loan will pormit American rx-l] business to participate equitably in the furnishing of goods and
z orvices by To be satisfied in Loan Agreementfinanced it
27 - t(a App I18 Complianco with restriction of co -zodity procureshy o UsMS except as otherwise determined by the Picsicent and subject to ttu--- rcortir require r-nts Procurement will - liumited to the US for
reiabnrs nts and to ioocco and other free world countries 1-or US-cwne(d rhu disburseacnts
23 -i Comiance with bulk cozodity procurement restriction topriecc no l-ho han the nkarkot price prevailing in tho US at tia of
bull puchas Not applicable
29 FA Cozpliance with requirement that matrin insurance be purchased on commceities if the participating country discri-inates and that insurance be placed in the US To be satisfied in Loan Agreement
30 IA 6(a) Information at to the utilization of excers personal property in lieu of procurement of new items Will be required ai appropriate under terns of Lean Agreement
f
1 77--7 -77-77-777
31 FAA 61](a)(_) information and conclusion on availability of enginoering i financial and other plans nccx sary to carry out tho assittance and of a
reasonably firm cstimate of the cost of the assistanco to the United States
See Section II-D
32-ecessaryFAA t611(a)_(2) legislative action r6quired within recipient country and ibasis Cor reasonable anticipation such action will be completed in time to pormit orderly accompli-hirtnt of purposes of loan See Section I-A
33 n _AA161nJ0] If water or water-relatod land resource construcshy
tion project or program information and conclusion on a benefit-cost comshy
putation See Section II-B
3 4 VAA 611(c) Compliance with requirement that contracts for construction be let on comp-ctitive basis to mamum extent practicable To be satisfied
in Loan Agreement
If a loan for a project of $1 million or more certificatin35 FAA _61l(r) by the principal AID officer in the country as to the capability of the
country (both financirl and human resources) to effectively maintain and
utilize the project taking into account other US-financed projects (Such
certification is to be pproved by the Administrator aL the time the loan
is authorized) In process of being obtained
36 FAsgJ2 _6_h Appropriate steps that have b-en taken to assure that to the miaximum extent possible the country is contributing local currencies to net th-2 cost of contractural and other services and foreign currencies o- icd by tho US are utilized to meet the cost of contractual and other services The GU-M is contributing over $30 million to compleXton of this project Excess US-use dirhams will be used for eligible project costs other than US goods and services
37 FAA p619 Compliance with requirement that assistance to newly independent countries be furnished through multilateral organizations or plans to maxishymum extent appropriate Not deemed appropriate in view of previous AID financing and ccoiitment to the project See Sections I-A and I-D
38 FAA sect620(a) AcnO7a n3]7(b) Compliance with prohibitions
against assistance to Cuba ard any countr (a) which furnishes assistance to Cuba or failed to take appropriate steps by February 14 1964 to prevent ships or aircraft unier its registry from carrying equipment materials or supplies from or to Cuba or (b) which sells furnishes or permits any ships under its registry fr-om carrying items of primary atrategic signifishycance or itcms of economic assistance Morocco is not-known to be in Violation of these sections
39 FAA q620GL_ If assistance to the government of a country existence of determination it is not controlled by the international Communist movement The Secretary of State so determined on October 11 191
40 FAA 620(c) If assistance to the government of a country existonce of Indebtedness to a US citizen for goods or services furnished or ordered whore ouch citizen has exhaustod available legal romodiesor where the debt
i - ow - -- _---- --shy
- --
-6shy
is not denied or ontested by such government or the indebtedness arises under an unconditional guararty of payrrent given by such govornmunt No such indebtedness is known to exist
41 FA _(a2LdL If assisitance for any productive enterprise which will corashypote with US enterprise existence of agreement by the recipient country to prevent export to the US of more than 20 of the enterprises annual production during the life of the loan Not applicable
42 FA4 - 16Q_0_ A If assistance to the government of a country extent to which it (including government agenies or ruhdivisions) has after January 1 1962 taken steps o repudiate or nullify cuatracts or taken any action which has the effect of nationalizing expropriating or otherwise seizingownership or control ofprcpertv of US citizens or entities beneficially owned by them without taking appropriate stops to discha i ge its obligations No such steps cr actions are-known to have been taken by the GOM
43 FAA~L AjPj_10_9 Compliance with assistance toQ0 prohibitions against any Comunst codntry ozocco is not considered to be a cocinrunist country
44 FAA - 620(gJ Corliance with prohibition against use of assistonce to comp satc owners for expropriated or nationalized property To be satisfied in Loan Agreement
45 F AA 8620(h Compliance with regulations and procedures adopted to inshysure against ue of assistance in a manner hich contrary to the best inshyterests of the US promotes or assists the foreign aid projects or activities of the Communist-bloc countries To be satisfied in Loan Agreement
46 FAA 06-O(j)_ Exitence of determiration that the country is engaging in or preparing for aggressive military efforts No such determination has been made
L_62_O Information47 FAA on representation of the country at any intershynational confererce when that representation includes the planning of activishyties involving insurrection or subversion against the US or countries recoiving US assistance No such representition is known to have A occarrect
8 FAA 62JJ Existence of a determination that the country has permitted or failed to prevent destruction of US property by mob action or has failed to take steps to prevent a recurrence and-to pay compensation NO such destruction is known to have tak-n place
49 PAA l620(k) If construction of productive enterprise where eggregate value of assistanc to be furnished by US will exceed $1OO million identification of Gtntutoryauthority Not npplicable
i-xQ2MZZ=
1 shy
U 6 50 _Af( QCinsidoration which has been given to denlying assistance X to thu government of a country which after December 31 1966 has failed to
- institto the investnint guaranty program for the spcific risks of inconshy
vertibility and expropriation or confiscation Satisfied See No 7 above
S51S J lj Compliance with-prohibitions-againstn as~istance to countries which traffic or permittraffickingwith North Vietnam Morocco is not known to be in violation
52 E_-L620(_L If country has seized or imposed any penalty or sanction against vn US fishing vessel on account of its fishing activities in
intcrnationul waters information on the consideiation which has been given to excludirg the country from assistance No such situation is known to exist
53 FAA FA r) UAR restriction Not applicable620(p 9117
54 FAA R620tl) Existence of default undhr any Foreign Assistance Act loan to the country No such default exists
55 F ) C-nsider tion of whether co ntry is devoting unnecessary percentage of buKet for military purposes or use of foreign exchange for milita-y equipment
56 FAA 62o(t) Proibition on aid if country has severed diplomatic relations with US unless agreements have been negotiated after resumpshytion Diplomatic r(lations have not been severed
57 FAA 9620(u) Statur of the country on delinquent UN obligations Morocco is not known to be dlinquent on its UN~obligation
58 FAA R636(i) Prohibition on financing non-US manufactured motor vehicles Will be satisfied in Loan Agreement and Implementation Letter
59 App 102 Compliance with requirement that payments in excess of $25000 for architectural and en Jneering services on any one project be reported to Congress Such reports will be made
60 App R1O4 Compliance with bar against funds to pay pensions etc for military personnel Such payments will not be eligible for financing under th Loan Agreement
61 App 9106 If country attr ipts to create distinctions because of their race or religion among Americans in granting personal or commercial access or other rights otherwise avaVIfable to US citizens generally application which will be made in negotit ttons of contrary principles as expressed by Congress Morocco is not ku IDhave made any such attempts
iInD OFFIIt t USE
0k
OFFICIAL USE 62 AIwp Rii Compliance with existing requfremets for security clearance
of personnel Will be satisfied in Loan Agreement and Implementation Letter
63 App R1l2 Compliance with requirement for approval of cortractors and contract terms for capital projects Will be satisfied in Loan Agreement
clJ164 Aup Cmpliance with bar nRainst use of funds to Tay assessments etc of US meiber Such payments will not be eligible for financing under the Loan Agreemunt
6 Anp P115 Ccmpliance with regulations on employment of US and local personnel for funds obligated after April 30 1961 (Regulation 7) See Section III-C
66 Aim Vietnam iron and steel restrictions Not applicable
67 p l9 If a country other than Greece Turkey Iran Israel Republicof China Phillipines or Korea reduction in assistance by amounts spent for the purchase of sophisticated military equipment
68 Anp fi4O1 Compliance with bar against use of funds for publicity or proshypagjanda purposes within US not heretofore authorized by Congress Such use of funds will not be eligible for financing under the Loan Agreement
Morocco is a traditional Islamic monarchy with a constitution The conshystitution was implemented followaing a popular referendum in 1962 National regional and professional elective bodies including a parliament were established by universal suffrage under the constitution in 1963 The parliament was suspended in 1961 in a State of Exception because of its inability to agree on measures with adequate urgency to meet the prevailingecononde imperatives In July 1967 the King appointed a Prime Minister to direct a Cabinet of appointed technicians
The constitutional framework nevertheless remains intact in Morocco and nationwide popular elections for some of the professional chambers were held in August and September 1966 The press is relatively free in Morocco and the right of diLsent prevails provided that such dissent does not violate the prohibition against political attacks on the instishytution of the monarchy or the person of the monarch
LI Under the revised US AID Policy for Africa agreed to in November 1966 Morocco is designated a development emphasis country entitled to receive continuing support on a country basis as part of a multilaterally coorshydinated countrj program Morocco was subsequently included in Presidential Determination 67-14 (January 5 1967) I
LIM=TE OFFICIAL USE~i
- l go
bull ~ -
f
DEPQbi) STATE AGENCY FOR INERNATIONAL DEVELOPMENT
WASHINGTON DC 052
CAPITAL ASSISTANCE LOA11 AUTHORIZATION
Provided from Develoroent Loan Funds Morocco Second Lower Moulouya Irrigation Loan
Pursuant to the authority vested in the Assistant Administrator for Africa of the Agency for International Development
AI)by the Foreign Assistance Act of 1961 as amended theIAct) and the delegations of authority issued thereunder I
have received and t-en into consideration a certification from the Director of USAIDMorocco as to the financial and human resources capability of Morocco to effectively utilize the Lower Moulouya Irrigation Project taking into account among other things the
maintenance and utilization of projects in Morocco previously financed or assisted by the United States and I hereby authorize the establishshyment of a loan pursuant to Part I Chapter 2 Title I the Development Loan Fund to the Government of the Kingdom of Morocco (Borrower) of not to exceed five million dollars ($5000000) to assist in financing the fore] gn exchange and local currency costs of goods and services for the third phase of the Lower Moulouya Irrigation Project subject to the foLlowing terms and conditions
1 Interest Rate and Terms of Repayment Borrower shall repay the loan to AID in forty (40) years including a grace period not to exceed ten (10) years Borrower shall pay interest on the unrepaid principal and any interest accrued thereon at the rate of (a) two percent (2) per annum during the grace period and (b) two and
one-half percent (2-12) per annum thereafter
2 Currency of Pepayment Repayment of the loan and paymenu of interest shall be made in United States dollars
- t- n t - - - shy
3 Other Terms and Conditions amp(a)Goods and Services financed under the loan
shall have their source and origin in
(i) the United States if disbursements therefor are made in United States dollars or
(ii) any country in the free world including Morocco if disbursements therefor are made in Moroccan currency
(b) AID Regulation 7 shall not apply to construction -work financed under the loan because as detailed in Section IIIC of Capital Assistance Paper No P 667 it is important to the national interest of the United States that the direct costs of construction work performed by third-country nationals be financed out of funds made available by the Act
(a) Such other terms and conditions as AID may deem advisable
Assistant Administrator for Africa
Date
~~~~~~~~~~~~~~~~~~ - q v
7
F ot h-v C IuIJI rmt I shy
1 V amp~ rVml KI
PUC- -jrVi Jt t 1 11 nflrcj urlc 1- th )qn --P I uti u rhnrrl -1r- thr U- Tr- ry- R- -nymc nt
c2Il f n 6 1 bf r I- till 11 nfl r- n-r i n of O r--niC(Io~hi U 1 1 rr to
Tn vil ) f rvc hi tvlrll 1 (In- - n- u--n E r me rrinshycgtay F rntwir w ourc o -o- rvI ortf-V3 1 rncing of
Uf f -r rrrir- ur3r 4~ v -rin Iltrt nt ndd shyt -n t ) in- lint r b t l r -n rort- o-orco trorl-- V -P
r i 1rnd h L-torie Furcl-trin firr- thrjt US r r~ crvirrf- u~d be~
T L I1 c vt r- -ly ] -ubt fu 1 n vi pw -I -ror-co Ir of
ut1JpcO In thi rjert f it -- r- 21 npnred by d1-nr- cothcr t~han the US
2 ]P-t ofI Prr l1 on Prw- Fntrrr
Phij rrcjJ-t -11 n-t h~ -in nrwerq Prrt n rr- tc ntrshyr~A~r fi-mc 1bho und for --roern p o n
3_~~PrCT--rty
rr-vIi-n 1 h -d r the loan ragreement for Icntifitcation ef any r mIjrpt n ctri b- rt througn ut 1zatn (f xccr- prorerty
If rv c u~eAID n-mrcf u urr thi )cn - I~ut~ em avoi3ablo r rovvrirrnt -rrperty rather than nce iteni
4 Otli-r Fr- Wo--] n-Fnlc4rm
Dr mi tW- o] 14rocco- i~ajr ovr-ec -f exte rnaX
rrtan~- hrtvfb - I r ~ ant fl Fr n fole by Kv-it
Sgio F rneflit r b-en 1lmrntrd to tcfohnjip n5tnnen bi eoni~in I th u y f Fr--h tprhntcian tcacrr ind cther
~ti~r t~ ec-tnmIyrt-n Friinch Aid to Mcreco In 1065c~oc~ (P-art f-r txychnirril aItn -- j se of tl5 w1nfor bu~dget rurport f ir in rt t- $1 1ri1 icin in ennita -rojectM- n vx- rrcd
1Vw1tvnn tioI t-) Frenh rurtnnd +16 r11ion tie-I to -onyiint to orrrcr Frrmh ccilcn~For _-rrc-ratod land and rquirrmcnt
West GTrrnmnny liar agrcrcd to nrovIe ccme j27 mM22~cn 1n catital arirtanre and cromrndity lnoi7 t n OfIcon( q92 thi o totril$223 miJ lien ha actuary b-Pn cr-Itt--d under Inn ngrepment This
And a lk5 million commodity loan both) signed in 1965 All Wet Gerzaan
Ufla
-28shy
capital asnistance I vuectI to be tied to German exports Germanyhas in addition 1uvvded r tteysubbtantial technical assistance f
The IBRP hah rade four 1nns to Morocco since 1962 totaling$6) million Ofthin totnl a [175 million loan in 1965 wos fordevelopient of the gidi lit-r irrigation perimeter Other assistance by internntIcnal Iending arncie include an $11 million credit byIDA in 1C65 for rcendary diicction projects and an IFC ln and inshyvestrent of $1 1 ri jnic alo in
F tit i by [c - dncr tr dh elo snt ofMorccco rircuVt r oii +h b-]n jt-TKT r nbove n 2 )6 niliion Kuwait enn in i66 for develomyment of the Tensaout Prnm n irrnten nrooetand a $77 million Kuwait
0jl n )nnsn r(niti-nertcir
loan for extrnion of the Tadri~ Irrigation Perimeter
The following- trbe surrlnrlzes other free world arlztance (excluiin technical assistanc-) to Morocco for the years 1(62-66
($ Millions)
1 62 1cf_63 96) 19r65 19)66 Fneea 4) 5PO 64o 700 shyWet Germany 223 gu 1t 53 281 IRD 15 175 10) 175 IDA 110 IF C 1 5 7 7 7 0 I15
TOTAL 55 62 1U3 W
b Includer only lo-ng term loans and exporter credits - Includfs 25 million private capital
Eternal ansiztnnce to the Lowier Moulouya Irrigation Perimeter -nce 1060 hres been con[fined to US upport Consdiering AIDs previcus
involvement in and conmitnert to the Lower Moulouya an AID lean in P2t to be Lhi mol aprroriate source of financing for this project
LID
II
q
-29-
SECTION ITI- Y-TTYT TIMPLPTrION
A Periret-r Ad-instrrti-
Authority for irplerrentvtnn of the deveorpent prrgrn frr the LowerMoulcuya Perimeter and rs wel arth crnntinuinz mrnnrrmenertC tt r t- rrtnr V theltbi nad overationity iOfic 1cne 4
n r I e1i- i d Vit4 i Iv ~ Ct rreated i Otb (rJ rn-- of evcn inrmi-rriional offices hich reelaced the Office de Mire en Valeur Aamprlcole (OMVA) Under the OMXA and itspredecessor agencies authority for ad-inLtration cf irrigtion proJect war centralized in Rabat
Under the new regional office organization responsibility for adminshyistering ORMVAM is vested in on Adminirtrative Board of 10 members headed by the Minister of Agriculture and Agrarian Reform as chairman All ether board members (other than the Chairman and a representative of theInterministerial Economic Ccrmittee) represent agencies or activities inthe region of the r-eriret-r whic comprises parts of two provinces Localretresentatives on the Board inc]-de the governors of the two provincesOujda and Nador the presidents -f the two provincial asembtes and of the two provincial chambers of agriculture as well as the perimeter Director
The responsibilities of thie Administrative Board include review of theecys program establishment of its organizational structure developshynt -)f its annual budget and establishment of rates and conditions of
Siyfent for water and other services provided in the perimeter
The Director of OP4VAI-I is dbarged with the responsibility for executionPthe vclicies established by the Administrative Board end administration of oil ORMVAM functions This responsibility includes selection of staffn pserating perrcnnel acting s officia ORNIVAM representative in all ntztinns with -tate and othbr public or private bodies and the
f of funds within limit Indivated by the Ministers f Financetent rn fricultural and Agrarian Reorm
Perimeter Oranizatlon
ORVAM oreanizatlonal structure consists of a directnrate five maj-r rvlces or d-vsicns and one separate bureau Two services qei Administratif et Comptabl- and Service du Yatrial are conshycor - th adminisration and lcgistical support of ORMVAM operationshi1e the remainirg three services rind the separate bureau are Involved in t-hni al matters associated with agrcultural developrent Each ervice has one or more subordinate bureaus Fei-ce Chiefs and thehead 0 rch bure-u report directly to the ORMVAM4 Director
-~F7E MEw-
-30shy
2 Perimeter 01ttffnr
OPIVAM orgttnlrntlon treture calls for 557 positions of whichI L or 7 Mlled n were nher 29 1567 37 of the 71 Postshytion vacancies reported 1ern the high and middle levels Foreign(chiefly Euronean) technclan occupy I)of the 16 high level positionsthat ere filled at thfit tire
Whil OPM ut in th- lcng run lor to Mercecos oducational yster to prvidr tn crrf-nn2 to ratisfy current rdurojectd rcshyquirement th currnt high and mlddle level vacancies rrouire uersonnelwith oxt nive nrior rxericnce To fll this preent need it will be necessary for CRIVAM to continue its program of recruiting foreigntechnicians until ruch tire ns graduates of Moroccan educational programsacquire the necesnry exrerience The managerent assistance componentof thin pro~ject ]e-rribed In the Project analysis will to some extentalleviate OFIWAMs high level personnel requirements
3 Inw1 ernetation Sehedu]
Months Implementation Action
1 0 Sign Loan Agrcement
2 2 C-tiify conditions precedent and Y4tiate procedures for selection of US firm for management contract
2 Negotiation of extension of advisory Engineering Services
h 4 Contract (Hydrotechnic) Negotiation of Managerment Contract
5 60Cmpletion of Project
C Waivers
Sect ion 7 rf AID Regulation 7 provides in substance that theUnited State ill not finance direct costs of construction work performedby third cc-ur y nationals unless the total co-tn of the project withvhich thr ennrtrumticn w(r is asEcciated donot exceed $2On)O orafter excluding national of the country in vhich the site of constructionis located and Dersons vho nave resided therein uninterruptedly for morethan three years imrnedJately prior to any determination under Regulation 7at leant 0 of all uernons who work under the contract at the site of conbulltruction are United States citizens or the employment of third countrynationals is necessary to avoid excerrive corts to the United States
3
31
Section 2175 authr-ri th Regional Anitant Administratorto waive the nrovinions of Sectionthat it is 2073 if he dcterriner in any coneimportant te the nationrn intercrt of the United Stutes tofinance the direct eots of construction work performed by third country
nationals
A prviou1y r ic i c t tht for thr ct Tartthe -r c ct b- 1jeuj out r -cnorbr f cnrtructioncontracts with Morcccrr contrctnr an in the i-t Uowfevvr itentirely psnible that there may b- roe contractn with cntructlonfirms partly owned by third country nntionaln and that ruch firjs anwell as the surely Moroccan-owrned firms may enloy third country niationalsIn such canes a difficult rrobic-i iould arise in meeting the terms ofRegulation 7 since an a practical matter Aericans are not reaonablyavailable for ermployn ont by such contrnetorn and our previcus experiencewith the Naunsseur Ccnv(r-ion project thatin Morocco has indicatedAmerican contractors would not be interested in bidding cn small conshytracts in that country
It in therefore recommended that the Annitant Adinitratordetermine rursuant to Section 2q75 of Regulation 7 to waive theapplication of Regulation 7 to thic iroject since the project 411 conshytribute to the attainrent of US foreign policy objectiver and the cbJe-tives of the Foreign Arsistnnce Program
LITI L USE
LfI~~5xA~us
lit
4 A J A 45 4 k
t A S T
S(3
I A444ilA~~l~)
7 -74
tAM= D
SECTOR 27
10000
t Co0Na includez25 cgtri oncFcttlrvI ncy I8s ~ ~ C t C- Includes 50 constriJcltiotrgrc
2000 60
IU
0
z
bull cosYsA shy----- i
600L _
400
200
0 5 I0 15 20
INTEREST RATE
I ~ 7 J7777
ANIAampX C
PROJECT DESCRn1 rOll
The project com)onents to te undertaken on the MIoulouya Irrigation Project over the next five years contists of the following
C(n1rtion of the rrLin casuals and bianch canbls to provide the suource of waler to the sctors be developed in theto TriffBou Areg and Zebra areas This construction will include the necessarystructures such as reulators highway bridges aqueducts water intake
and discharge structures etc
2 Iand Txeloommerit which includes engineering land consolishyt and iuvtllng lard preparation (subsoiling ripping destoning etc) and installation of water distribution canals (secondary tertiary and quurtunary) and drainage collector ditches for the Triffa main covering 24000 acres in sctors 8 9 10 16 20 21 23 24 25A 2513 27 and 28 Lou Areg Central covering 16250 acres in sectors Dltirough D2B and G1 thru-4h G313 i0u Areg Remainder covering 15000 acres in s-ctors D3 through D7 and GA through (6 Zebra Collective covering 45)0 acres in sectors 3 4 5 rind 6 and Zebra Rer-iinder covering 14250 acres in sectors 1 2 and 7 through 10 and th remainder of sectors 34 and 5 The total land to be developed is about 74000 acres
3 Canalization of the Oued Zeluan and nued Sidi-Amar in the Bou Areg Plain consisting of strairltening englarging and regularizing of these streams to carry the flood waters to the sea Drainage interceptor canals are to be constructed parallel to the sea in the Bou Areg Plain In the Triffa Plain the Oued Riada main drain will be deepened and enlarged and secondary drains will be excavated to provide for drainageof the Madagh area This will include the construction of bridges and culverts and other related work
4 Major Commorn Works will consist of
a Clearing of the Mo-1ouya riverbed downstream of the Mechra KLila barn caused roy flood dariwe and the installation of a set of stop logs for maintenance of pillway gate-
b Design supervision and construction of repairs to the ]elt Lank dead head tunel
c Conctruction and establishment of sib-division Offices and installations for farmer support such as CMVand farm stables
1 C
-2shy
5 Manavmtnt It ha been proposed that a US management firm be ewployed by th- C4 to manage and operate the entire Bou Areg area Such manageent -iuld encomparn all activities from the initial concept to final irIrp igricultural production Such activities would Include resp r-ibilsect -or supervnsion of engtneering and constriction of primary
S- Jry r complete developfnent of land training n in g tinul irription practicen preparation of market
t - r1t- (ot--rnu trplusmnining of a Moroccan cadre to take over h v--it Bou Areg dreara P the
At this writing the n-pt of turning over to a private UZSfirm execushyresponsibl]ity I h management of the establilrment and initial
op-ration of irr1gati the Bou Arog area has been only broadly de iiitd by the GCJO It Intended that proposals will be invited from a r -onable ntnber of f|ed US firms that a selection will be made an-n 7 them and a more do iled and cornprehenrive definition of the rer6 -Ps to be performed be eztabliched at that time It haa been
stimated that the t- of ruch a contract will be about $2 mir- n In any event the -ts of this contract other engineering arvl s to be provided undt n extension of the Ilydrotechnic contract and ether US corts will not ed the proposed $5 mllaion developzont Jean fr the project
The cle 3ifications duties ant 1ncnslbilities of the management personnel ill ha-- to be clearly defined i agreed to by the GCM Perimeter Directo- and other GOM Agencies luding arrangements for the necessary gistic support
Svxlale Docu-
1
4
LD ED 0ICIAL
-IAIDshy
A1trX D
C6JCK LIST OF STATUTORY CRITERIA
(Development Loan Fund)
1 FAA 0102 Extent to which U3 cormodities and services are furnished consistent with improving the US balance of payments See Sections II-C II-F
2 AA sect2O]ihi lanner in which loan wil promote countrys economic develo shy rit emphasizing help for long-range plans and programs designed to developeconomic tesourcos and increase productive capacities See Section I-D
i FAA sectT] h)(IL Information and conclusion on availability of financincfrom other free-world sources including private sources within the United States See Section II-F
FAA sect20l( )2 Information and conclusion on activitys economic and technical soundness including the capacity of the recipient country to reshypay the loan at a reasonable rate of interest See Sections II-B II-D and II-E
5 FAA 1201(h)( Information and conclusion on existence of reasonable promise activity will contribute to developrmnt of economic resources or increase of productive capacities See Sectiona II-B and II-D
_92_(b 4Information and conclusion on activitys relationship toothor development activities and its contribution to realizable longshyrange objectives See Sections I-D and I-E
The following abbreviations are und FAA - Foroirn Assistance Act of 1961 as amerded by the Foreign Asaistaice
Act of 1967 App - Foreign Assistance and Polated Agencies Appropriations Act 1968
AFEVCDF 1066
L1
-2shy
7 FAA f12O1(b)(5)_ Countrys self-help masures including institution of Foreign Assistance Act investment pliaranty programs Investment Guaranty
bull Agreement signed with Morocco 331o6l See Sections I-D and II-EI
_A ))(6) Information and conclusion on possible effects on US econowy with soecial refererne to areas of substantial -labor surplusSee Section II-F
9 FAA q201 (h)() Information and conclusion on the dagree to which thA country iv wiki- progress toward respect for the rule of law freedom of expression and of the press and recognition~yf the importance of individual freedom initiative and private enterprise
10 FAA -1201(b)(8) Information and conclusion on the degree to which the country is taking steps to improve its c]Laato for private investment See Sccton II-E
31 FAA R LbJi Inforrat-on and conclusion on whether or not the activityto b financed will contribute to the achievement of self-sustaining growthSee Sections I-D and II-B
12 FAA fi2Ol(bj Inforruation and conclusion on reasonalbe prospects of reshypayment See Section II-E
13 FAA fl20JL() Info-ation on applicability of the twenty country ceil4ng2
14 FAA fl201 L Information and coclusion on legality (under laws of the country end the US) and reasonableness of lending and ralendinr terms Loan will be on minimum termspermitted under FAA These are deemed reasonable see Sectioam Evidence will be renuired from the GGM as to the legality of the loan agreemnt
1 E 2 Information and conclusion on availability of an applicationFAA together with sufficient information and assurances to indicate reasonably that funds will be used in an economcally and technically sound manner See Sections I-A II-B and II-D Application received Janury 15 1968
16 FAA fl201(fL If a project inforntion and conclusion whether it will promote the economic developapent of the requesting country taking into account the countrys human and material resource requiremnts and the reshylationship between the ultimate objes6ives of the project and the countrys overall economic development See Sections I-D and II-B
17 FAAJ 20ij(J If a project information and conclusion whether it cifishycally provides for appropriate participation by private enterprise 8ce Sections YI-C and 114
I- FAA i22(a) Total amount of money under loan which is going directly to private enterprise is going to intermediate credit institutions or other borrowers for use by private enterprise is being used to finance imports
rfro private sources or is otherwise beirg used to finance procurementsfrcm private souwces See Sections II-C and II-2
9 FAA 207 Infosation on the emphasis placed en
(a) encouraging development of economic political and social institushytins No apparent relationship
(b) nelC-help in mectingthe countrys food nredo Project Vill conshytribute to production of food for lccal consumptioa
(c) in-proving availability in the country of evucated trained manpower Project will contribute to the deicloginext of trained manpower as one of the functions of the management contract (Soe Annex C para 5)
(d) prcgrams aimed at -malnutrition disease eradi atDn slum clearanceWater purification sewage disposal health education naternal and child care(includin fimrily pJnrning)) -nd cthcr public health ausistarice See
(c) other develoment activities including industrial development free
labor unions cooperatives tnd voluntary agencie transn)rtatin and ccshymwquication nrStczn capubiliTies for economic planning and public adlinisshytration arban develo-mment and modernization of laws to feilltate econcnicdevelopjen- GO- intends encourage develo vient of cooperat yes particularlyin the Left Pank areas Project will also develop capabiLi ics for cconoaicplanning and public a6~inistration (Annex C para 5) Other not applicable
20 Information on the extent to which the r-untry is
(a) cttcmting to increase food production and food sto a-e anddistribution felitics This project is one evidence of Moroccos efforts in this direction See also Section I-D and I-E
b) creating- a favorable climate for foreign and dmestic iri-ate enterprise and invcstrrment The GCM has recently reduced profits twes anrannounced a ten year guarantee against tax increases See Section II-E-2
(c) increasing the role of the neonle in the developnental procecsNo apparent relationship to this project
(d) allocating expenditures to development rather than to unn-cessarymilitary purpoes or intervention in other free countries affair See Sections I-D and Ii-
(e) willing --nribute funds to the project or program Th iOMhas already dcvo o-sidcrable resources to the project It has badieted13 million for th i oulouya for i7 See Section I-C
(If) making economic zocial and political refo ns such as taxc coliecshytion iYprovcmenLs and chan es in land tenure a Royal Comm ision has been appointed to make recomendation on land tenure probleras in the Lower I oulouya
(g) responding to the economic political and social concerns of its people and showing a determination to take volf-help wcasuren See Sections I-D and II-E
IT
-ovi~cd l v r 13 1968
- 4 - LDffIED OFFICIAL USE
21 FAA Inforn ation about multilateral assistance being Iurnished to t e country and whether the loan will encourage recgional development prog-rams The I1D has eztablihcd a Consultative Group for Morocco which rvicws the GOM development program anui prgress See Section II-F-4 for infoaation on othtr donor assistance to Morocco
22 A Extent to which the loan will contribute to the objective of ass ring naximu par icipation in the task of econonic dovelop--ent on the pL-t 0 _he people of the developing countries through the encouragement of cocr-tic private and local govenmental inLitutious o apparent
relationship
23 F _-_Dta_ Infor-ation and corissions whether loan will oncourageeffor s of t1e country to (a) increase tie flow of international trade (b) fostcr private initiative and comptition (c) encourage development and usceo co opratives credit unions and savingss and loan associations (d) disourgo monopolistic practices (c) improvo technical efficiency of industry ariculture and commerce (f) strenSthn free labor unions This project is cxpected to increase technical efficiency oi-agriculture
2_ C-1L lnforzrition and conclusion on how the loan will encourage US privte trade and investment abroad and how it uill encourage private US participation in foreign assistance prograas (incluiing use of private trade channels and the services of US private enterprise) See Section II-
25 VA-+_ Conclusion and supporting information on compliance with tho Co resional policy that engineering and professional servicos of US fir-ms and their affiliates are to bo used in connection with capital project3 to the nixinua extent consistent with the national interest US engineerirn and innsgcment services will be financed tnder this loan
2$ Inforamtion and ccnclusions who+her loan will pormit American rx-l] business to participate equitably in the furnishing of goods and
z orvices by To be satisfied in Loan Agreementfinanced it
27 - t(a App I18 Complianco with restriction of co -zodity procureshy o UsMS except as otherwise determined by the Picsicent and subject to ttu--- rcortir require r-nts Procurement will - liumited to the US for
reiabnrs nts and to ioocco and other free world countries 1-or US-cwne(d rhu disburseacnts
23 -i Comiance with bulk cozodity procurement restriction topriecc no l-ho han the nkarkot price prevailing in tho US at tia of
bull puchas Not applicable
29 FA Cozpliance with requirement that matrin insurance be purchased on commceities if the participating country discri-inates and that insurance be placed in the US To be satisfied in Loan Agreement
30 IA 6(a) Information at to the utilization of excers personal property in lieu of procurement of new items Will be required ai appropriate under terns of Lean Agreement
f
1 77--7 -77-77-777
31 FAA 61](a)(_) information and conclusion on availability of enginoering i financial and other plans nccx sary to carry out tho assittance and of a
reasonably firm cstimate of the cost of the assistanco to the United States
See Section II-D
32-ecessaryFAA t611(a)_(2) legislative action r6quired within recipient country and ibasis Cor reasonable anticipation such action will be completed in time to pormit orderly accompli-hirtnt of purposes of loan See Section I-A
33 n _AA161nJ0] If water or water-relatod land resource construcshy
tion project or program information and conclusion on a benefit-cost comshy
putation See Section II-B
3 4 VAA 611(c) Compliance with requirement that contracts for construction be let on comp-ctitive basis to mamum extent practicable To be satisfied
in Loan Agreement
If a loan for a project of $1 million or more certificatin35 FAA _61l(r) by the principal AID officer in the country as to the capability of the
country (both financirl and human resources) to effectively maintain and
utilize the project taking into account other US-financed projects (Such
certification is to be pproved by the Administrator aL the time the loan
is authorized) In process of being obtained
36 FAsgJ2 _6_h Appropriate steps that have b-en taken to assure that to the miaximum extent possible the country is contributing local currencies to net th-2 cost of contractural and other services and foreign currencies o- icd by tho US are utilized to meet the cost of contractual and other services The GU-M is contributing over $30 million to compleXton of this project Excess US-use dirhams will be used for eligible project costs other than US goods and services
37 FAA p619 Compliance with requirement that assistance to newly independent countries be furnished through multilateral organizations or plans to maxishymum extent appropriate Not deemed appropriate in view of previous AID financing and ccoiitment to the project See Sections I-A and I-D
38 FAA sect620(a) AcnO7a n3]7(b) Compliance with prohibitions
against assistance to Cuba ard any countr (a) which furnishes assistance to Cuba or failed to take appropriate steps by February 14 1964 to prevent ships or aircraft unier its registry from carrying equipment materials or supplies from or to Cuba or (b) which sells furnishes or permits any ships under its registry fr-om carrying items of primary atrategic signifishycance or itcms of economic assistance Morocco is not-known to be in Violation of these sections
39 FAA q620GL_ If assistance to the government of a country existence of determination it is not controlled by the international Communist movement The Secretary of State so determined on October 11 191
40 FAA 620(c) If assistance to the government of a country existonce of Indebtedness to a US citizen for goods or services furnished or ordered whore ouch citizen has exhaustod available legal romodiesor where the debt
i - ow - -- _---- --shy
- --
-6shy
is not denied or ontested by such government or the indebtedness arises under an unconditional guararty of payrrent given by such govornmunt No such indebtedness is known to exist
41 FA _(a2LdL If assisitance for any productive enterprise which will corashypote with US enterprise existence of agreement by the recipient country to prevent export to the US of more than 20 of the enterprises annual production during the life of the loan Not applicable
42 FA4 - 16Q_0_ A If assistance to the government of a country extent to which it (including government agenies or ruhdivisions) has after January 1 1962 taken steps o repudiate or nullify cuatracts or taken any action which has the effect of nationalizing expropriating or otherwise seizingownership or control ofprcpertv of US citizens or entities beneficially owned by them without taking appropriate stops to discha i ge its obligations No such steps cr actions are-known to have been taken by the GOM
43 FAA~L AjPj_10_9 Compliance with assistance toQ0 prohibitions against any Comunst codntry ozocco is not considered to be a cocinrunist country
44 FAA - 620(gJ Corliance with prohibition against use of assistonce to comp satc owners for expropriated or nationalized property To be satisfied in Loan Agreement
45 F AA 8620(h Compliance with regulations and procedures adopted to inshysure against ue of assistance in a manner hich contrary to the best inshyterests of the US promotes or assists the foreign aid projects or activities of the Communist-bloc countries To be satisfied in Loan Agreement
46 FAA 06-O(j)_ Exitence of determiration that the country is engaging in or preparing for aggressive military efforts No such determination has been made
L_62_O Information47 FAA on representation of the country at any intershynational confererce when that representation includes the planning of activishyties involving insurrection or subversion against the US or countries recoiving US assistance No such representition is known to have A occarrect
8 FAA 62JJ Existence of a determination that the country has permitted or failed to prevent destruction of US property by mob action or has failed to take steps to prevent a recurrence and-to pay compensation NO such destruction is known to have tak-n place
49 PAA l620(k) If construction of productive enterprise where eggregate value of assistanc to be furnished by US will exceed $1OO million identification of Gtntutoryauthority Not npplicable
i-xQ2MZZ=
1 shy
U 6 50 _Af( QCinsidoration which has been given to denlying assistance X to thu government of a country which after December 31 1966 has failed to
- institto the investnint guaranty program for the spcific risks of inconshy
vertibility and expropriation or confiscation Satisfied See No 7 above
S51S J lj Compliance with-prohibitions-againstn as~istance to countries which traffic or permittraffickingwith North Vietnam Morocco is not known to be in violation
52 E_-L620(_L If country has seized or imposed any penalty or sanction against vn US fishing vessel on account of its fishing activities in
intcrnationul waters information on the consideiation which has been given to excludirg the country from assistance No such situation is known to exist
53 FAA FA r) UAR restriction Not applicable620(p 9117
54 FAA R620tl) Existence of default undhr any Foreign Assistance Act loan to the country No such default exists
55 F ) C-nsider tion of whether co ntry is devoting unnecessary percentage of buKet for military purposes or use of foreign exchange for milita-y equipment
56 FAA 62o(t) Proibition on aid if country has severed diplomatic relations with US unless agreements have been negotiated after resumpshytion Diplomatic r(lations have not been severed
57 FAA 9620(u) Statur of the country on delinquent UN obligations Morocco is not known to be dlinquent on its UN~obligation
58 FAA R636(i) Prohibition on financing non-US manufactured motor vehicles Will be satisfied in Loan Agreement and Implementation Letter
59 App 102 Compliance with requirement that payments in excess of $25000 for architectural and en Jneering services on any one project be reported to Congress Such reports will be made
60 App R1O4 Compliance with bar against funds to pay pensions etc for military personnel Such payments will not be eligible for financing under th Loan Agreement
61 App 9106 If country attr ipts to create distinctions because of their race or religion among Americans in granting personal or commercial access or other rights otherwise avaVIfable to US citizens generally application which will be made in negotit ttons of contrary principles as expressed by Congress Morocco is not ku IDhave made any such attempts
iInD OFFIIt t USE
0k
OFFICIAL USE 62 AIwp Rii Compliance with existing requfremets for security clearance
of personnel Will be satisfied in Loan Agreement and Implementation Letter
63 App R1l2 Compliance with requirement for approval of cortractors and contract terms for capital projects Will be satisfied in Loan Agreement
clJ164 Aup Cmpliance with bar nRainst use of funds to Tay assessments etc of US meiber Such payments will not be eligible for financing under the Loan Agreemunt
6 Anp P115 Ccmpliance with regulations on employment of US and local personnel for funds obligated after April 30 1961 (Regulation 7) See Section III-C
66 Aim Vietnam iron and steel restrictions Not applicable
67 p l9 If a country other than Greece Turkey Iran Israel Republicof China Phillipines or Korea reduction in assistance by amounts spent for the purchase of sophisticated military equipment
68 Anp fi4O1 Compliance with bar against use of funds for publicity or proshypagjanda purposes within US not heretofore authorized by Congress Such use of funds will not be eligible for financing under the Loan Agreement
Morocco is a traditional Islamic monarchy with a constitution The conshystitution was implemented followaing a popular referendum in 1962 National regional and professional elective bodies including a parliament were established by universal suffrage under the constitution in 1963 The parliament was suspended in 1961 in a State of Exception because of its inability to agree on measures with adequate urgency to meet the prevailingecononde imperatives In July 1967 the King appointed a Prime Minister to direct a Cabinet of appointed technicians
The constitutional framework nevertheless remains intact in Morocco and nationwide popular elections for some of the professional chambers were held in August and September 1966 The press is relatively free in Morocco and the right of diLsent prevails provided that such dissent does not violate the prohibition against political attacks on the instishytution of the monarchy or the person of the monarch
LI Under the revised US AID Policy for Africa agreed to in November 1966 Morocco is designated a development emphasis country entitled to receive continuing support on a country basis as part of a multilaterally coorshydinated countrj program Morocco was subsequently included in Presidential Determination 67-14 (January 5 1967) I
LIM=TE OFFICIAL USE~i
- l go
bull ~ -
f
DEPQbi) STATE AGENCY FOR INERNATIONAL DEVELOPMENT
WASHINGTON DC 052
CAPITAL ASSISTANCE LOA11 AUTHORIZATION
Provided from Develoroent Loan Funds Morocco Second Lower Moulouya Irrigation Loan
Pursuant to the authority vested in the Assistant Administrator for Africa of the Agency for International Development
AI)by the Foreign Assistance Act of 1961 as amended theIAct) and the delegations of authority issued thereunder I
have received and t-en into consideration a certification from the Director of USAIDMorocco as to the financial and human resources capability of Morocco to effectively utilize the Lower Moulouya Irrigation Project taking into account among other things the
maintenance and utilization of projects in Morocco previously financed or assisted by the United States and I hereby authorize the establishshyment of a loan pursuant to Part I Chapter 2 Title I the Development Loan Fund to the Government of the Kingdom of Morocco (Borrower) of not to exceed five million dollars ($5000000) to assist in financing the fore] gn exchange and local currency costs of goods and services for the third phase of the Lower Moulouya Irrigation Project subject to the foLlowing terms and conditions
1 Interest Rate and Terms of Repayment Borrower shall repay the loan to AID in forty (40) years including a grace period not to exceed ten (10) years Borrower shall pay interest on the unrepaid principal and any interest accrued thereon at the rate of (a) two percent (2) per annum during the grace period and (b) two and
one-half percent (2-12) per annum thereafter
2 Currency of Pepayment Repayment of the loan and paymenu of interest shall be made in United States dollars
- t- n t - - - shy
3 Other Terms and Conditions amp(a)Goods and Services financed under the loan
shall have their source and origin in
(i) the United States if disbursements therefor are made in United States dollars or
(ii) any country in the free world including Morocco if disbursements therefor are made in Moroccan currency
(b) AID Regulation 7 shall not apply to construction -work financed under the loan because as detailed in Section IIIC of Capital Assistance Paper No P 667 it is important to the national interest of the United States that the direct costs of construction work performed by third-country nationals be financed out of funds made available by the Act
(a) Such other terms and conditions as AID may deem advisable
Assistant Administrator for Africa
Date
~~~~~~~~~~~~~~~~~~ - q v
7
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capital asnistance I vuectI to be tied to German exports Germanyhas in addition 1uvvded r tteysubbtantial technical assistance f
The IBRP hah rade four 1nns to Morocco since 1962 totaling$6) million Ofthin totnl a [175 million loan in 1965 wos fordevelopient of the gidi lit-r irrigation perimeter Other assistance by internntIcnal Iending arncie include an $11 million credit byIDA in 1C65 for rcendary diicction projects and an IFC ln and inshyvestrent of $1 1 ri jnic alo in
F tit i by [c - dncr tr dh elo snt ofMorccco rircuVt r oii +h b-]n jt-TKT r nbove n 2 )6 niliion Kuwait enn in i66 for develomyment of the Tensaout Prnm n irrnten nrooetand a $77 million Kuwait
0jl n )nnsn r(niti-nertcir
loan for extrnion of the Tadri~ Irrigation Perimeter
The following- trbe surrlnrlzes other free world arlztance (excluiin technical assistanc-) to Morocco for the years 1(62-66
($ Millions)
1 62 1cf_63 96) 19r65 19)66 Fneea 4) 5PO 64o 700 shyWet Germany 223 gu 1t 53 281 IRD 15 175 10) 175 IDA 110 IF C 1 5 7 7 7 0 I15
TOTAL 55 62 1U3 W
b Includer only lo-ng term loans and exporter credits - Includfs 25 million private capital
Eternal ansiztnnce to the Lowier Moulouya Irrigation Perimeter -nce 1060 hres been con[fined to US upport Consdiering AIDs previcus
involvement in and conmitnert to the Lower Moulouya an AID lean in P2t to be Lhi mol aprroriate source of financing for this project
LID
II
q
-29-
SECTION ITI- Y-TTYT TIMPLPTrION
A Periret-r Ad-instrrti-
Authority for irplerrentvtnn of the deveorpent prrgrn frr the LowerMoulcuya Perimeter and rs wel arth crnntinuinz mrnnrrmenertC tt r t- rrtnr V theltbi nad overationity iOfic 1cne 4
n r I e1i- i d Vit4 i Iv ~ Ct rreated i Otb (rJ rn-- of evcn inrmi-rriional offices hich reelaced the Office de Mire en Valeur Aamprlcole (OMVA) Under the OMXA and itspredecessor agencies authority for ad-inLtration cf irrigtion proJect war centralized in Rabat
Under the new regional office organization responsibility for adminshyistering ORMVAM is vested in on Adminirtrative Board of 10 members headed by the Minister of Agriculture and Agrarian Reform as chairman All ether board members (other than the Chairman and a representative of theInterministerial Economic Ccrmittee) represent agencies or activities inthe region of the r-eriret-r whic comprises parts of two provinces Localretresentatives on the Board inc]-de the governors of the two provincesOujda and Nador the presidents -f the two provincial asembtes and of the two provincial chambers of agriculture as well as the perimeter Director
The responsibilities of thie Administrative Board include review of theecys program establishment of its organizational structure developshynt -)f its annual budget and establishment of rates and conditions of
Siyfent for water and other services provided in the perimeter
The Director of OP4VAI-I is dbarged with the responsibility for executionPthe vclicies established by the Administrative Board end administration of oil ORMVAM functions This responsibility includes selection of staffn pserating perrcnnel acting s officia ORNIVAM representative in all ntztinns with -tate and othbr public or private bodies and the
f of funds within limit Indivated by the Ministers f Financetent rn fricultural and Agrarian Reorm
Perimeter Oranizatlon
ORVAM oreanizatlonal structure consists of a directnrate five maj-r rvlces or d-vsicns and one separate bureau Two services qei Administratif et Comptabl- and Service du Yatrial are conshycor - th adminisration and lcgistical support of ORMVAM operationshi1e the remainirg three services rind the separate bureau are Involved in t-hni al matters associated with agrcultural developrent Each ervice has one or more subordinate bureaus Fei-ce Chiefs and thehead 0 rch bure-u report directly to the ORMVAM4 Director
-~F7E MEw-
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2 Perimeter 01ttffnr
OPIVAM orgttnlrntlon treture calls for 557 positions of whichI L or 7 Mlled n were nher 29 1567 37 of the 71 Postshytion vacancies reported 1ern the high and middle levels Foreign(chiefly Euronean) technclan occupy I)of the 16 high level positionsthat ere filled at thfit tire
Whil OPM ut in th- lcng run lor to Mercecos oducational yster to prvidr tn crrf-nn2 to ratisfy current rdurojectd rcshyquirement th currnt high and mlddle level vacancies rrouire uersonnelwith oxt nive nrior rxericnce To fll this preent need it will be necessary for CRIVAM to continue its program of recruiting foreigntechnicians until ruch tire ns graduates of Moroccan educational programsacquire the necesnry exrerience The managerent assistance componentof thin pro~ject ]e-rribed In the Project analysis will to some extentalleviate OFIWAMs high level personnel requirements
3 Inw1 ernetation Sehedu]
Months Implementation Action
1 0 Sign Loan Agrcement
2 2 C-tiify conditions precedent and Y4tiate procedures for selection of US firm for management contract
2 Negotiation of extension of advisory Engineering Services
h 4 Contract (Hydrotechnic) Negotiation of Managerment Contract
5 60Cmpletion of Project
C Waivers
Sect ion 7 rf AID Regulation 7 provides in substance that theUnited State ill not finance direct costs of construction work performedby third cc-ur y nationals unless the total co-tn of the project withvhich thr ennrtrumticn w(r is asEcciated donot exceed $2On)O orafter excluding national of the country in vhich the site of constructionis located and Dersons vho nave resided therein uninterruptedly for morethan three years imrnedJately prior to any determination under Regulation 7at leant 0 of all uernons who work under the contract at the site of conbulltruction are United States citizens or the employment of third countrynationals is necessary to avoid excerrive corts to the United States
3
31
Section 2175 authr-ri th Regional Anitant Administratorto waive the nrovinions of Sectionthat it is 2073 if he dcterriner in any coneimportant te the nationrn intercrt of the United Stutes tofinance the direct eots of construction work performed by third country
nationals
A prviou1y r ic i c t tht for thr ct Tartthe -r c ct b- 1jeuj out r -cnorbr f cnrtructioncontracts with Morcccrr contrctnr an in the i-t Uowfevvr itentirely psnible that there may b- roe contractn with cntructlonfirms partly owned by third country nntionaln and that ruch firjs anwell as the surely Moroccan-owrned firms may enloy third country niationalsIn such canes a difficult rrobic-i iould arise in meeting the terms ofRegulation 7 since an a practical matter Aericans are not reaonablyavailable for ermployn ont by such contrnetorn and our previcus experiencewith the Naunsseur Ccnv(r-ion project thatin Morocco has indicatedAmerican contractors would not be interested in bidding cn small conshytracts in that country
It in therefore recommended that the Annitant Adinitratordetermine rursuant to Section 2q75 of Regulation 7 to waive theapplication of Regulation 7 to thic iroject since the project 411 conshytribute to the attainrent of US foreign policy objectiver and the cbJe-tives of the Foreign Arsistnnce Program
LITI L USE
LfI~~5xA~us
lit
4 A J A 45 4 k
t A S T
S(3
I A444ilA~~l~)
7 -74
tAM= D
SECTOR 27
10000
t Co0Na includez25 cgtri oncFcttlrvI ncy I8s ~ ~ C t C- Includes 50 constriJcltiotrgrc
2000 60
IU
0
z
bull cosYsA shy----- i
600L _
400
200
0 5 I0 15 20
INTEREST RATE
I ~ 7 J7777
ANIAampX C
PROJECT DESCRn1 rOll
The project com)onents to te undertaken on the MIoulouya Irrigation Project over the next five years contists of the following
C(n1rtion of the rrLin casuals and bianch canbls to provide the suource of waler to the sctors be developed in theto TriffBou Areg and Zebra areas This construction will include the necessarystructures such as reulators highway bridges aqueducts water intake
and discharge structures etc
2 Iand Txeloommerit which includes engineering land consolishyt and iuvtllng lard preparation (subsoiling ripping destoning etc) and installation of water distribution canals (secondary tertiary and quurtunary) and drainage collector ditches for the Triffa main covering 24000 acres in sctors 8 9 10 16 20 21 23 24 25A 2513 27 and 28 Lou Areg Central covering 16250 acres in sectors Dltirough D2B and G1 thru-4h G313 i0u Areg Remainder covering 15000 acres in s-ctors D3 through D7 and GA through (6 Zebra Collective covering 45)0 acres in sectors 3 4 5 rind 6 and Zebra Rer-iinder covering 14250 acres in sectors 1 2 and 7 through 10 and th remainder of sectors 34 and 5 The total land to be developed is about 74000 acres
3 Canalization of the Oued Zeluan and nued Sidi-Amar in the Bou Areg Plain consisting of strairltening englarging and regularizing of these streams to carry the flood waters to the sea Drainage interceptor canals are to be constructed parallel to the sea in the Bou Areg Plain In the Triffa Plain the Oued Riada main drain will be deepened and enlarged and secondary drains will be excavated to provide for drainageof the Madagh area This will include the construction of bridges and culverts and other related work
4 Major Commorn Works will consist of
a Clearing of the Mo-1ouya riverbed downstream of the Mechra KLila barn caused roy flood dariwe and the installation of a set of stop logs for maintenance of pillway gate-
b Design supervision and construction of repairs to the ]elt Lank dead head tunel
c Conctruction and establishment of sib-division Offices and installations for farmer support such as CMVand farm stables
1 C
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5 Manavmtnt It ha been proposed that a US management firm be ewployed by th- C4 to manage and operate the entire Bou Areg area Such manageent -iuld encomparn all activities from the initial concept to final irIrp igricultural production Such activities would Include resp r-ibilsect -or supervnsion of engtneering and constriction of primary
S- Jry r complete developfnent of land training n in g tinul irription practicen preparation of market
t - r1t- (ot--rnu trplusmnining of a Moroccan cadre to take over h v--it Bou Areg dreara P the
At this writing the n-pt of turning over to a private UZSfirm execushyresponsibl]ity I h management of the establilrment and initial
op-ration of irr1gati the Bou Arog area has been only broadly de iiitd by the GCJO It Intended that proposals will be invited from a r -onable ntnber of f|ed US firms that a selection will be made an-n 7 them and a more do iled and cornprehenrive definition of the rer6 -Ps to be performed be eztabliched at that time It haa been
stimated that the t- of ruch a contract will be about $2 mir- n In any event the -ts of this contract other engineering arvl s to be provided undt n extension of the Ilydrotechnic contract and ether US corts will not ed the proposed $5 mllaion developzont Jean fr the project
The cle 3ifications duties ant 1ncnslbilities of the management personnel ill ha-- to be clearly defined i agreed to by the GCM Perimeter Directo- and other GOM Agencies luding arrangements for the necessary gistic support
Svxlale Docu-
1
4
LD ED 0ICIAL
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A1trX D
C6JCK LIST OF STATUTORY CRITERIA
(Development Loan Fund)
1 FAA 0102 Extent to which U3 cormodities and services are furnished consistent with improving the US balance of payments See Sections II-C II-F
2 AA sect2O]ihi lanner in which loan wil promote countrys economic develo shy rit emphasizing help for long-range plans and programs designed to developeconomic tesourcos and increase productive capacities See Section I-D
i FAA sectT] h)(IL Information and conclusion on availability of financincfrom other free-world sources including private sources within the United States See Section II-F
FAA sect20l( )2 Information and conclusion on activitys economic and technical soundness including the capacity of the recipient country to reshypay the loan at a reasonable rate of interest See Sections II-B II-D and II-E
5 FAA 1201(h)( Information and conclusion on existence of reasonable promise activity will contribute to developrmnt of economic resources or increase of productive capacities See Sectiona II-B and II-D
_92_(b 4Information and conclusion on activitys relationship toothor development activities and its contribution to realizable longshyrange objectives See Sections I-D and I-E
The following abbreviations are und FAA - Foroirn Assistance Act of 1961 as amerded by the Foreign Asaistaice
Act of 1967 App - Foreign Assistance and Polated Agencies Appropriations Act 1968
AFEVCDF 1066
L1
-2shy
7 FAA f12O1(b)(5)_ Countrys self-help masures including institution of Foreign Assistance Act investment pliaranty programs Investment Guaranty
bull Agreement signed with Morocco 331o6l See Sections I-D and II-EI
_A ))(6) Information and conclusion on possible effects on US econowy with soecial refererne to areas of substantial -labor surplusSee Section II-F
9 FAA q201 (h)() Information and conclusion on the dagree to which thA country iv wiki- progress toward respect for the rule of law freedom of expression and of the press and recognition~yf the importance of individual freedom initiative and private enterprise
10 FAA -1201(b)(8) Information and conclusion on the degree to which the country is taking steps to improve its c]Laato for private investment See Sccton II-E
31 FAA R LbJi Inforrat-on and conclusion on whether or not the activityto b financed will contribute to the achievement of self-sustaining growthSee Sections I-D and II-B
12 FAA fi2Ol(bj Inforruation and conclusion on reasonalbe prospects of reshypayment See Section II-E
13 FAA fl20JL() Info-ation on applicability of the twenty country ceil4ng2
14 FAA fl201 L Information and coclusion on legality (under laws of the country end the US) and reasonableness of lending and ralendinr terms Loan will be on minimum termspermitted under FAA These are deemed reasonable see Sectioam Evidence will be renuired from the GGM as to the legality of the loan agreemnt
1 E 2 Information and conclusion on availability of an applicationFAA together with sufficient information and assurances to indicate reasonably that funds will be used in an economcally and technically sound manner See Sections I-A II-B and II-D Application received Janury 15 1968
16 FAA fl201(fL If a project inforntion and conclusion whether it will promote the economic developapent of the requesting country taking into account the countrys human and material resource requiremnts and the reshylationship between the ultimate objes6ives of the project and the countrys overall economic development See Sections I-D and II-B
17 FAAJ 20ij(J If a project information and conclusion whether it cifishycally provides for appropriate participation by private enterprise 8ce Sections YI-C and 114
I- FAA i22(a) Total amount of money under loan which is going directly to private enterprise is going to intermediate credit institutions or other borrowers for use by private enterprise is being used to finance imports
rfro private sources or is otherwise beirg used to finance procurementsfrcm private souwces See Sections II-C and II-2
9 FAA 207 Infosation on the emphasis placed en
(a) encouraging development of economic political and social institushytins No apparent relationship
(b) nelC-help in mectingthe countrys food nredo Project Vill conshytribute to production of food for lccal consumptioa
(c) in-proving availability in the country of evucated trained manpower Project will contribute to the deicloginext of trained manpower as one of the functions of the management contract (Soe Annex C para 5)
(d) prcgrams aimed at -malnutrition disease eradi atDn slum clearanceWater purification sewage disposal health education naternal and child care(includin fimrily pJnrning)) -nd cthcr public health ausistarice See
(c) other develoment activities including industrial development free
labor unions cooperatives tnd voluntary agencie transn)rtatin and ccshymwquication nrStczn capubiliTies for economic planning and public adlinisshytration arban develo-mment and modernization of laws to feilltate econcnicdevelopjen- GO- intends encourage develo vient of cooperat yes particularlyin the Left Pank areas Project will also develop capabiLi ics for cconoaicplanning and public a6~inistration (Annex C para 5) Other not applicable
20 Information on the extent to which the r-untry is
(a) cttcmting to increase food production and food sto a-e anddistribution felitics This project is one evidence of Moroccos efforts in this direction See also Section I-D and I-E
b) creating- a favorable climate for foreign and dmestic iri-ate enterprise and invcstrrment The GCM has recently reduced profits twes anrannounced a ten year guarantee against tax increases See Section II-E-2
(c) increasing the role of the neonle in the developnental procecsNo apparent relationship to this project
(d) allocating expenditures to development rather than to unn-cessarymilitary purpoes or intervention in other free countries affair See Sections I-D and Ii-
(e) willing --nribute funds to the project or program Th iOMhas already dcvo o-sidcrable resources to the project It has badieted13 million for th i oulouya for i7 See Section I-C
(If) making economic zocial and political refo ns such as taxc coliecshytion iYprovcmenLs and chan es in land tenure a Royal Comm ision has been appointed to make recomendation on land tenure probleras in the Lower I oulouya
(g) responding to the economic political and social concerns of its people and showing a determination to take volf-help wcasuren See Sections I-D and II-E
IT
-ovi~cd l v r 13 1968
- 4 - LDffIED OFFICIAL USE
21 FAA Inforn ation about multilateral assistance being Iurnished to t e country and whether the loan will encourage recgional development prog-rams The I1D has eztablihcd a Consultative Group for Morocco which rvicws the GOM development program anui prgress See Section II-F-4 for infoaation on othtr donor assistance to Morocco
22 A Extent to which the loan will contribute to the objective of ass ring naximu par icipation in the task of econonic dovelop--ent on the pL-t 0 _he people of the developing countries through the encouragement of cocr-tic private and local govenmental inLitutious o apparent
relationship
23 F _-_Dta_ Infor-ation and corissions whether loan will oncourageeffor s of t1e country to (a) increase tie flow of international trade (b) fostcr private initiative and comptition (c) encourage development and usceo co opratives credit unions and savingss and loan associations (d) disourgo monopolistic practices (c) improvo technical efficiency of industry ariculture and commerce (f) strenSthn free labor unions This project is cxpected to increase technical efficiency oi-agriculture
2_ C-1L lnforzrition and conclusion on how the loan will encourage US privte trade and investment abroad and how it uill encourage private US participation in foreign assistance prograas (incluiing use of private trade channels and the services of US private enterprise) See Section II-
25 VA-+_ Conclusion and supporting information on compliance with tho Co resional policy that engineering and professional servicos of US fir-ms and their affiliates are to bo used in connection with capital project3 to the nixinua extent consistent with the national interest US engineerirn and innsgcment services will be financed tnder this loan
2$ Inforamtion and ccnclusions who+her loan will pormit American rx-l] business to participate equitably in the furnishing of goods and
z orvices by To be satisfied in Loan Agreementfinanced it
27 - t(a App I18 Complianco with restriction of co -zodity procureshy o UsMS except as otherwise determined by the Picsicent and subject to ttu--- rcortir require r-nts Procurement will - liumited to the US for
reiabnrs nts and to ioocco and other free world countries 1-or US-cwne(d rhu disburseacnts
23 -i Comiance with bulk cozodity procurement restriction topriecc no l-ho han the nkarkot price prevailing in tho US at tia of
bull puchas Not applicable
29 FA Cozpliance with requirement that matrin insurance be purchased on commceities if the participating country discri-inates and that insurance be placed in the US To be satisfied in Loan Agreement
30 IA 6(a) Information at to the utilization of excers personal property in lieu of procurement of new items Will be required ai appropriate under terns of Lean Agreement
f
1 77--7 -77-77-777
31 FAA 61](a)(_) information and conclusion on availability of enginoering i financial and other plans nccx sary to carry out tho assittance and of a
reasonably firm cstimate of the cost of the assistanco to the United States
See Section II-D
32-ecessaryFAA t611(a)_(2) legislative action r6quired within recipient country and ibasis Cor reasonable anticipation such action will be completed in time to pormit orderly accompli-hirtnt of purposes of loan See Section I-A
33 n _AA161nJ0] If water or water-relatod land resource construcshy
tion project or program information and conclusion on a benefit-cost comshy
putation See Section II-B
3 4 VAA 611(c) Compliance with requirement that contracts for construction be let on comp-ctitive basis to mamum extent practicable To be satisfied
in Loan Agreement
If a loan for a project of $1 million or more certificatin35 FAA _61l(r) by the principal AID officer in the country as to the capability of the
country (both financirl and human resources) to effectively maintain and
utilize the project taking into account other US-financed projects (Such
certification is to be pproved by the Administrator aL the time the loan
is authorized) In process of being obtained
36 FAsgJ2 _6_h Appropriate steps that have b-en taken to assure that to the miaximum extent possible the country is contributing local currencies to net th-2 cost of contractural and other services and foreign currencies o- icd by tho US are utilized to meet the cost of contractual and other services The GU-M is contributing over $30 million to compleXton of this project Excess US-use dirhams will be used for eligible project costs other than US goods and services
37 FAA p619 Compliance with requirement that assistance to newly independent countries be furnished through multilateral organizations or plans to maxishymum extent appropriate Not deemed appropriate in view of previous AID financing and ccoiitment to the project See Sections I-A and I-D
38 FAA sect620(a) AcnO7a n3]7(b) Compliance with prohibitions
against assistance to Cuba ard any countr (a) which furnishes assistance to Cuba or failed to take appropriate steps by February 14 1964 to prevent ships or aircraft unier its registry from carrying equipment materials or supplies from or to Cuba or (b) which sells furnishes or permits any ships under its registry fr-om carrying items of primary atrategic signifishycance or itcms of economic assistance Morocco is not-known to be in Violation of these sections
39 FAA q620GL_ If assistance to the government of a country existence of determination it is not controlled by the international Communist movement The Secretary of State so determined on October 11 191
40 FAA 620(c) If assistance to the government of a country existonce of Indebtedness to a US citizen for goods or services furnished or ordered whore ouch citizen has exhaustod available legal romodiesor where the debt
i - ow - -- _---- --shy
- --
-6shy
is not denied or ontested by such government or the indebtedness arises under an unconditional guararty of payrrent given by such govornmunt No such indebtedness is known to exist
41 FA _(a2LdL If assisitance for any productive enterprise which will corashypote with US enterprise existence of agreement by the recipient country to prevent export to the US of more than 20 of the enterprises annual production during the life of the loan Not applicable
42 FA4 - 16Q_0_ A If assistance to the government of a country extent to which it (including government agenies or ruhdivisions) has after January 1 1962 taken steps o repudiate or nullify cuatracts or taken any action which has the effect of nationalizing expropriating or otherwise seizingownership or control ofprcpertv of US citizens or entities beneficially owned by them without taking appropriate stops to discha i ge its obligations No such steps cr actions are-known to have been taken by the GOM
43 FAA~L AjPj_10_9 Compliance with assistance toQ0 prohibitions against any Comunst codntry ozocco is not considered to be a cocinrunist country
44 FAA - 620(gJ Corliance with prohibition against use of assistonce to comp satc owners for expropriated or nationalized property To be satisfied in Loan Agreement
45 F AA 8620(h Compliance with regulations and procedures adopted to inshysure against ue of assistance in a manner hich contrary to the best inshyterests of the US promotes or assists the foreign aid projects or activities of the Communist-bloc countries To be satisfied in Loan Agreement
46 FAA 06-O(j)_ Exitence of determiration that the country is engaging in or preparing for aggressive military efforts No such determination has been made
L_62_O Information47 FAA on representation of the country at any intershynational confererce when that representation includes the planning of activishyties involving insurrection or subversion against the US or countries recoiving US assistance No such representition is known to have A occarrect
8 FAA 62JJ Existence of a determination that the country has permitted or failed to prevent destruction of US property by mob action or has failed to take steps to prevent a recurrence and-to pay compensation NO such destruction is known to have tak-n place
49 PAA l620(k) If construction of productive enterprise where eggregate value of assistanc to be furnished by US will exceed $1OO million identification of Gtntutoryauthority Not npplicable
i-xQ2MZZ=
1 shy
U 6 50 _Af( QCinsidoration which has been given to denlying assistance X to thu government of a country which after December 31 1966 has failed to
- institto the investnint guaranty program for the spcific risks of inconshy
vertibility and expropriation or confiscation Satisfied See No 7 above
S51S J lj Compliance with-prohibitions-againstn as~istance to countries which traffic or permittraffickingwith North Vietnam Morocco is not known to be in violation
52 E_-L620(_L If country has seized or imposed any penalty or sanction against vn US fishing vessel on account of its fishing activities in
intcrnationul waters information on the consideiation which has been given to excludirg the country from assistance No such situation is known to exist
53 FAA FA r) UAR restriction Not applicable620(p 9117
54 FAA R620tl) Existence of default undhr any Foreign Assistance Act loan to the country No such default exists
55 F ) C-nsider tion of whether co ntry is devoting unnecessary percentage of buKet for military purposes or use of foreign exchange for milita-y equipment
56 FAA 62o(t) Proibition on aid if country has severed diplomatic relations with US unless agreements have been negotiated after resumpshytion Diplomatic r(lations have not been severed
57 FAA 9620(u) Statur of the country on delinquent UN obligations Morocco is not known to be dlinquent on its UN~obligation
58 FAA R636(i) Prohibition on financing non-US manufactured motor vehicles Will be satisfied in Loan Agreement and Implementation Letter
59 App 102 Compliance with requirement that payments in excess of $25000 for architectural and en Jneering services on any one project be reported to Congress Such reports will be made
60 App R1O4 Compliance with bar against funds to pay pensions etc for military personnel Such payments will not be eligible for financing under th Loan Agreement
61 App 9106 If country attr ipts to create distinctions because of their race or religion among Americans in granting personal or commercial access or other rights otherwise avaVIfable to US citizens generally application which will be made in negotit ttons of contrary principles as expressed by Congress Morocco is not ku IDhave made any such attempts
iInD OFFIIt t USE
0k
OFFICIAL USE 62 AIwp Rii Compliance with existing requfremets for security clearance
of personnel Will be satisfied in Loan Agreement and Implementation Letter
63 App R1l2 Compliance with requirement for approval of cortractors and contract terms for capital projects Will be satisfied in Loan Agreement
clJ164 Aup Cmpliance with bar nRainst use of funds to Tay assessments etc of US meiber Such payments will not be eligible for financing under the Loan Agreemunt
6 Anp P115 Ccmpliance with regulations on employment of US and local personnel for funds obligated after April 30 1961 (Regulation 7) See Section III-C
66 Aim Vietnam iron and steel restrictions Not applicable
67 p l9 If a country other than Greece Turkey Iran Israel Republicof China Phillipines or Korea reduction in assistance by amounts spent for the purchase of sophisticated military equipment
68 Anp fi4O1 Compliance with bar against use of funds for publicity or proshypagjanda purposes within US not heretofore authorized by Congress Such use of funds will not be eligible for financing under the Loan Agreement
Morocco is a traditional Islamic monarchy with a constitution The conshystitution was implemented followaing a popular referendum in 1962 National regional and professional elective bodies including a parliament were established by universal suffrage under the constitution in 1963 The parliament was suspended in 1961 in a State of Exception because of its inability to agree on measures with adequate urgency to meet the prevailingecononde imperatives In July 1967 the King appointed a Prime Minister to direct a Cabinet of appointed technicians
The constitutional framework nevertheless remains intact in Morocco and nationwide popular elections for some of the professional chambers were held in August and September 1966 The press is relatively free in Morocco and the right of diLsent prevails provided that such dissent does not violate the prohibition against political attacks on the instishytution of the monarchy or the person of the monarch
LI Under the revised US AID Policy for Africa agreed to in November 1966 Morocco is designated a development emphasis country entitled to receive continuing support on a country basis as part of a multilaterally coorshydinated countrj program Morocco was subsequently included in Presidential Determination 67-14 (January 5 1967) I
LIM=TE OFFICIAL USE~i
- l go
bull ~ -
f
DEPQbi) STATE AGENCY FOR INERNATIONAL DEVELOPMENT
WASHINGTON DC 052
CAPITAL ASSISTANCE LOA11 AUTHORIZATION
Provided from Develoroent Loan Funds Morocco Second Lower Moulouya Irrigation Loan
Pursuant to the authority vested in the Assistant Administrator for Africa of the Agency for International Development
AI)by the Foreign Assistance Act of 1961 as amended theIAct) and the delegations of authority issued thereunder I
have received and t-en into consideration a certification from the Director of USAIDMorocco as to the financial and human resources capability of Morocco to effectively utilize the Lower Moulouya Irrigation Project taking into account among other things the
maintenance and utilization of projects in Morocco previously financed or assisted by the United States and I hereby authorize the establishshyment of a loan pursuant to Part I Chapter 2 Title I the Development Loan Fund to the Government of the Kingdom of Morocco (Borrower) of not to exceed five million dollars ($5000000) to assist in financing the fore] gn exchange and local currency costs of goods and services for the third phase of the Lower Moulouya Irrigation Project subject to the foLlowing terms and conditions
1 Interest Rate and Terms of Repayment Borrower shall repay the loan to AID in forty (40) years including a grace period not to exceed ten (10) years Borrower shall pay interest on the unrepaid principal and any interest accrued thereon at the rate of (a) two percent (2) per annum during the grace period and (b) two and
one-half percent (2-12) per annum thereafter
2 Currency of Pepayment Repayment of the loan and paymenu of interest shall be made in United States dollars
- t- n t - - - shy
3 Other Terms and Conditions amp(a)Goods and Services financed under the loan
shall have their source and origin in
(i) the United States if disbursements therefor are made in United States dollars or
(ii) any country in the free world including Morocco if disbursements therefor are made in Moroccan currency
(b) AID Regulation 7 shall not apply to construction -work financed under the loan because as detailed in Section IIIC of Capital Assistance Paper No P 667 it is important to the national interest of the United States that the direct costs of construction work performed by third-country nationals be financed out of funds made available by the Act
(a) Such other terms and conditions as AID may deem advisable
Assistant Administrator for Africa
Date
~~~~~~~~~~~~~~~~~~ - q v
7
-29-
SECTION ITI- Y-TTYT TIMPLPTrION
A Periret-r Ad-instrrti-
Authority for irplerrentvtnn of the deveorpent prrgrn frr the LowerMoulcuya Perimeter and rs wel arth crnntinuinz mrnnrrmenertC tt r t- rrtnr V theltbi nad overationity iOfic 1cne 4
n r I e1i- i d Vit4 i Iv ~ Ct rreated i Otb (rJ rn-- of evcn inrmi-rriional offices hich reelaced the Office de Mire en Valeur Aamprlcole (OMVA) Under the OMXA and itspredecessor agencies authority for ad-inLtration cf irrigtion proJect war centralized in Rabat
Under the new regional office organization responsibility for adminshyistering ORMVAM is vested in on Adminirtrative Board of 10 members headed by the Minister of Agriculture and Agrarian Reform as chairman All ether board members (other than the Chairman and a representative of theInterministerial Economic Ccrmittee) represent agencies or activities inthe region of the r-eriret-r whic comprises parts of two provinces Localretresentatives on the Board inc]-de the governors of the two provincesOujda and Nador the presidents -f the two provincial asembtes and of the two provincial chambers of agriculture as well as the perimeter Director
The responsibilities of thie Administrative Board include review of theecys program establishment of its organizational structure developshynt -)f its annual budget and establishment of rates and conditions of
Siyfent for water and other services provided in the perimeter
The Director of OP4VAI-I is dbarged with the responsibility for executionPthe vclicies established by the Administrative Board end administration of oil ORMVAM functions This responsibility includes selection of staffn pserating perrcnnel acting s officia ORNIVAM representative in all ntztinns with -tate and othbr public or private bodies and the
f of funds within limit Indivated by the Ministers f Financetent rn fricultural and Agrarian Reorm
Perimeter Oranizatlon
ORVAM oreanizatlonal structure consists of a directnrate five maj-r rvlces or d-vsicns and one separate bureau Two services qei Administratif et Comptabl- and Service du Yatrial are conshycor - th adminisration and lcgistical support of ORMVAM operationshi1e the remainirg three services rind the separate bureau are Involved in t-hni al matters associated with agrcultural developrent Each ervice has one or more subordinate bureaus Fei-ce Chiefs and thehead 0 rch bure-u report directly to the ORMVAM4 Director
-~F7E MEw-
-30shy
2 Perimeter 01ttffnr
OPIVAM orgttnlrntlon treture calls for 557 positions of whichI L or 7 Mlled n were nher 29 1567 37 of the 71 Postshytion vacancies reported 1ern the high and middle levels Foreign(chiefly Euronean) technclan occupy I)of the 16 high level positionsthat ere filled at thfit tire
Whil OPM ut in th- lcng run lor to Mercecos oducational yster to prvidr tn crrf-nn2 to ratisfy current rdurojectd rcshyquirement th currnt high and mlddle level vacancies rrouire uersonnelwith oxt nive nrior rxericnce To fll this preent need it will be necessary for CRIVAM to continue its program of recruiting foreigntechnicians until ruch tire ns graduates of Moroccan educational programsacquire the necesnry exrerience The managerent assistance componentof thin pro~ject ]e-rribed In the Project analysis will to some extentalleviate OFIWAMs high level personnel requirements
3 Inw1 ernetation Sehedu]
Months Implementation Action
1 0 Sign Loan Agrcement
2 2 C-tiify conditions precedent and Y4tiate procedures for selection of US firm for management contract
2 Negotiation of extension of advisory Engineering Services
h 4 Contract (Hydrotechnic) Negotiation of Managerment Contract
5 60Cmpletion of Project
C Waivers
Sect ion 7 rf AID Regulation 7 provides in substance that theUnited State ill not finance direct costs of construction work performedby third cc-ur y nationals unless the total co-tn of the project withvhich thr ennrtrumticn w(r is asEcciated donot exceed $2On)O orafter excluding national of the country in vhich the site of constructionis located and Dersons vho nave resided therein uninterruptedly for morethan three years imrnedJately prior to any determination under Regulation 7at leant 0 of all uernons who work under the contract at the site of conbulltruction are United States citizens or the employment of third countrynationals is necessary to avoid excerrive corts to the United States
3
31
Section 2175 authr-ri th Regional Anitant Administratorto waive the nrovinions of Sectionthat it is 2073 if he dcterriner in any coneimportant te the nationrn intercrt of the United Stutes tofinance the direct eots of construction work performed by third country
nationals
A prviou1y r ic i c t tht for thr ct Tartthe -r c ct b- 1jeuj out r -cnorbr f cnrtructioncontracts with Morcccrr contrctnr an in the i-t Uowfevvr itentirely psnible that there may b- roe contractn with cntructlonfirms partly owned by third country nntionaln and that ruch firjs anwell as the surely Moroccan-owrned firms may enloy third country niationalsIn such canes a difficult rrobic-i iould arise in meeting the terms ofRegulation 7 since an a practical matter Aericans are not reaonablyavailable for ermployn ont by such contrnetorn and our previcus experiencewith the Naunsseur Ccnv(r-ion project thatin Morocco has indicatedAmerican contractors would not be interested in bidding cn small conshytracts in that country
It in therefore recommended that the Annitant Adinitratordetermine rursuant to Section 2q75 of Regulation 7 to waive theapplication of Regulation 7 to thic iroject since the project 411 conshytribute to the attainrent of US foreign policy objectiver and the cbJe-tives of the Foreign Arsistnnce Program
LITI L USE
LfI~~5xA~us
lit
4 A J A 45 4 k
t A S T
S(3
I A444ilA~~l~)
7 -74
tAM= D
SECTOR 27
10000
t Co0Na includez25 cgtri oncFcttlrvI ncy I8s ~ ~ C t C- Includes 50 constriJcltiotrgrc
2000 60
IU
0
z
bull cosYsA shy----- i
600L _
400
200
0 5 I0 15 20
INTEREST RATE
I ~ 7 J7777
ANIAampX C
PROJECT DESCRn1 rOll
The project com)onents to te undertaken on the MIoulouya Irrigation Project over the next five years contists of the following
C(n1rtion of the rrLin casuals and bianch canbls to provide the suource of waler to the sctors be developed in theto TriffBou Areg and Zebra areas This construction will include the necessarystructures such as reulators highway bridges aqueducts water intake
and discharge structures etc
2 Iand Txeloommerit which includes engineering land consolishyt and iuvtllng lard preparation (subsoiling ripping destoning etc) and installation of water distribution canals (secondary tertiary and quurtunary) and drainage collector ditches for the Triffa main covering 24000 acres in sctors 8 9 10 16 20 21 23 24 25A 2513 27 and 28 Lou Areg Central covering 16250 acres in sectors Dltirough D2B and G1 thru-4h G313 i0u Areg Remainder covering 15000 acres in s-ctors D3 through D7 and GA through (6 Zebra Collective covering 45)0 acres in sectors 3 4 5 rind 6 and Zebra Rer-iinder covering 14250 acres in sectors 1 2 and 7 through 10 and th remainder of sectors 34 and 5 The total land to be developed is about 74000 acres
3 Canalization of the Oued Zeluan and nued Sidi-Amar in the Bou Areg Plain consisting of strairltening englarging and regularizing of these streams to carry the flood waters to the sea Drainage interceptor canals are to be constructed parallel to the sea in the Bou Areg Plain In the Triffa Plain the Oued Riada main drain will be deepened and enlarged and secondary drains will be excavated to provide for drainageof the Madagh area This will include the construction of bridges and culverts and other related work
4 Major Commorn Works will consist of
a Clearing of the Mo-1ouya riverbed downstream of the Mechra KLila barn caused roy flood dariwe and the installation of a set of stop logs for maintenance of pillway gate-
b Design supervision and construction of repairs to the ]elt Lank dead head tunel
c Conctruction and establishment of sib-division Offices and installations for farmer support such as CMVand farm stables
1 C
-2shy
5 Manavmtnt It ha been proposed that a US management firm be ewployed by th- C4 to manage and operate the entire Bou Areg area Such manageent -iuld encomparn all activities from the initial concept to final irIrp igricultural production Such activities would Include resp r-ibilsect -or supervnsion of engtneering and constriction of primary
S- Jry r complete developfnent of land training n in g tinul irription practicen preparation of market
t - r1t- (ot--rnu trplusmnining of a Moroccan cadre to take over h v--it Bou Areg dreara P the
At this writing the n-pt of turning over to a private UZSfirm execushyresponsibl]ity I h management of the establilrment and initial
op-ration of irr1gati the Bou Arog area has been only broadly de iiitd by the GCJO It Intended that proposals will be invited from a r -onable ntnber of f|ed US firms that a selection will be made an-n 7 them and a more do iled and cornprehenrive definition of the rer6 -Ps to be performed be eztabliched at that time It haa been
stimated that the t- of ruch a contract will be about $2 mir- n In any event the -ts of this contract other engineering arvl s to be provided undt n extension of the Ilydrotechnic contract and ether US corts will not ed the proposed $5 mllaion developzont Jean fr the project
The cle 3ifications duties ant 1ncnslbilities of the management personnel ill ha-- to be clearly defined i agreed to by the GCM Perimeter Directo- and other GOM Agencies luding arrangements for the necessary gistic support
Svxlale Docu-
1
4
LD ED 0ICIAL
-IAIDshy
A1trX D
C6JCK LIST OF STATUTORY CRITERIA
(Development Loan Fund)
1 FAA 0102 Extent to which U3 cormodities and services are furnished consistent with improving the US balance of payments See Sections II-C II-F
2 AA sect2O]ihi lanner in which loan wil promote countrys economic develo shy rit emphasizing help for long-range plans and programs designed to developeconomic tesourcos and increase productive capacities See Section I-D
i FAA sectT] h)(IL Information and conclusion on availability of financincfrom other free-world sources including private sources within the United States See Section II-F
FAA sect20l( )2 Information and conclusion on activitys economic and technical soundness including the capacity of the recipient country to reshypay the loan at a reasonable rate of interest See Sections II-B II-D and II-E
5 FAA 1201(h)( Information and conclusion on existence of reasonable promise activity will contribute to developrmnt of economic resources or increase of productive capacities See Sectiona II-B and II-D
_92_(b 4Information and conclusion on activitys relationship toothor development activities and its contribution to realizable longshyrange objectives See Sections I-D and I-E
The following abbreviations are und FAA - Foroirn Assistance Act of 1961 as amerded by the Foreign Asaistaice
Act of 1967 App - Foreign Assistance and Polated Agencies Appropriations Act 1968
AFEVCDF 1066
L1
-2shy
7 FAA f12O1(b)(5)_ Countrys self-help masures including institution of Foreign Assistance Act investment pliaranty programs Investment Guaranty
bull Agreement signed with Morocco 331o6l See Sections I-D and II-EI
_A ))(6) Information and conclusion on possible effects on US econowy with soecial refererne to areas of substantial -labor surplusSee Section II-F
9 FAA q201 (h)() Information and conclusion on the dagree to which thA country iv wiki- progress toward respect for the rule of law freedom of expression and of the press and recognition~yf the importance of individual freedom initiative and private enterprise
10 FAA -1201(b)(8) Information and conclusion on the degree to which the country is taking steps to improve its c]Laato for private investment See Sccton II-E
31 FAA R LbJi Inforrat-on and conclusion on whether or not the activityto b financed will contribute to the achievement of self-sustaining growthSee Sections I-D and II-B
12 FAA fi2Ol(bj Inforruation and conclusion on reasonalbe prospects of reshypayment See Section II-E
13 FAA fl20JL() Info-ation on applicability of the twenty country ceil4ng2
14 FAA fl201 L Information and coclusion on legality (under laws of the country end the US) and reasonableness of lending and ralendinr terms Loan will be on minimum termspermitted under FAA These are deemed reasonable see Sectioam Evidence will be renuired from the GGM as to the legality of the loan agreemnt
1 E 2 Information and conclusion on availability of an applicationFAA together with sufficient information and assurances to indicate reasonably that funds will be used in an economcally and technically sound manner See Sections I-A II-B and II-D Application received Janury 15 1968
16 FAA fl201(fL If a project inforntion and conclusion whether it will promote the economic developapent of the requesting country taking into account the countrys human and material resource requiremnts and the reshylationship between the ultimate objes6ives of the project and the countrys overall economic development See Sections I-D and II-B
17 FAAJ 20ij(J If a project information and conclusion whether it cifishycally provides for appropriate participation by private enterprise 8ce Sections YI-C and 114
I- FAA i22(a) Total amount of money under loan which is going directly to private enterprise is going to intermediate credit institutions or other borrowers for use by private enterprise is being used to finance imports
rfro private sources or is otherwise beirg used to finance procurementsfrcm private souwces See Sections II-C and II-2
9 FAA 207 Infosation on the emphasis placed en
(a) encouraging development of economic political and social institushytins No apparent relationship
(b) nelC-help in mectingthe countrys food nredo Project Vill conshytribute to production of food for lccal consumptioa
(c) in-proving availability in the country of evucated trained manpower Project will contribute to the deicloginext of trained manpower as one of the functions of the management contract (Soe Annex C para 5)
(d) prcgrams aimed at -malnutrition disease eradi atDn slum clearanceWater purification sewage disposal health education naternal and child care(includin fimrily pJnrning)) -nd cthcr public health ausistarice See
(c) other develoment activities including industrial development free
labor unions cooperatives tnd voluntary agencie transn)rtatin and ccshymwquication nrStczn capubiliTies for economic planning and public adlinisshytration arban develo-mment and modernization of laws to feilltate econcnicdevelopjen- GO- intends encourage develo vient of cooperat yes particularlyin the Left Pank areas Project will also develop capabiLi ics for cconoaicplanning and public a6~inistration (Annex C para 5) Other not applicable
20 Information on the extent to which the r-untry is
(a) cttcmting to increase food production and food sto a-e anddistribution felitics This project is one evidence of Moroccos efforts in this direction See also Section I-D and I-E
b) creating- a favorable climate for foreign and dmestic iri-ate enterprise and invcstrrment The GCM has recently reduced profits twes anrannounced a ten year guarantee against tax increases See Section II-E-2
(c) increasing the role of the neonle in the developnental procecsNo apparent relationship to this project
(d) allocating expenditures to development rather than to unn-cessarymilitary purpoes or intervention in other free countries affair See Sections I-D and Ii-
(e) willing --nribute funds to the project or program Th iOMhas already dcvo o-sidcrable resources to the project It has badieted13 million for th i oulouya for i7 See Section I-C
(If) making economic zocial and political refo ns such as taxc coliecshytion iYprovcmenLs and chan es in land tenure a Royal Comm ision has been appointed to make recomendation on land tenure probleras in the Lower I oulouya
(g) responding to the economic political and social concerns of its people and showing a determination to take volf-help wcasuren See Sections I-D and II-E
IT
-ovi~cd l v r 13 1968
- 4 - LDffIED OFFICIAL USE
21 FAA Inforn ation about multilateral assistance being Iurnished to t e country and whether the loan will encourage recgional development prog-rams The I1D has eztablihcd a Consultative Group for Morocco which rvicws the GOM development program anui prgress See Section II-F-4 for infoaation on othtr donor assistance to Morocco
22 A Extent to which the loan will contribute to the objective of ass ring naximu par icipation in the task of econonic dovelop--ent on the pL-t 0 _he people of the developing countries through the encouragement of cocr-tic private and local govenmental inLitutious o apparent
relationship
23 F _-_Dta_ Infor-ation and corissions whether loan will oncourageeffor s of t1e country to (a) increase tie flow of international trade (b) fostcr private initiative and comptition (c) encourage development and usceo co opratives credit unions and savingss and loan associations (d) disourgo monopolistic practices (c) improvo technical efficiency of industry ariculture and commerce (f) strenSthn free labor unions This project is cxpected to increase technical efficiency oi-agriculture
2_ C-1L lnforzrition and conclusion on how the loan will encourage US privte trade and investment abroad and how it uill encourage private US participation in foreign assistance prograas (incluiing use of private trade channels and the services of US private enterprise) See Section II-
25 VA-+_ Conclusion and supporting information on compliance with tho Co resional policy that engineering and professional servicos of US fir-ms and their affiliates are to bo used in connection with capital project3 to the nixinua extent consistent with the national interest US engineerirn and innsgcment services will be financed tnder this loan
2$ Inforamtion and ccnclusions who+her loan will pormit American rx-l] business to participate equitably in the furnishing of goods and
z orvices by To be satisfied in Loan Agreementfinanced it
27 - t(a App I18 Complianco with restriction of co -zodity procureshy o UsMS except as otherwise determined by the Picsicent and subject to ttu--- rcortir require r-nts Procurement will - liumited to the US for
reiabnrs nts and to ioocco and other free world countries 1-or US-cwne(d rhu disburseacnts
23 -i Comiance with bulk cozodity procurement restriction topriecc no l-ho han the nkarkot price prevailing in tho US at tia of
bull puchas Not applicable
29 FA Cozpliance with requirement that matrin insurance be purchased on commceities if the participating country discri-inates and that insurance be placed in the US To be satisfied in Loan Agreement
30 IA 6(a) Information at to the utilization of excers personal property in lieu of procurement of new items Will be required ai appropriate under terns of Lean Agreement
f
1 77--7 -77-77-777
31 FAA 61](a)(_) information and conclusion on availability of enginoering i financial and other plans nccx sary to carry out tho assittance and of a
reasonably firm cstimate of the cost of the assistanco to the United States
See Section II-D
32-ecessaryFAA t611(a)_(2) legislative action r6quired within recipient country and ibasis Cor reasonable anticipation such action will be completed in time to pormit orderly accompli-hirtnt of purposes of loan See Section I-A
33 n _AA161nJ0] If water or water-relatod land resource construcshy
tion project or program information and conclusion on a benefit-cost comshy
putation See Section II-B
3 4 VAA 611(c) Compliance with requirement that contracts for construction be let on comp-ctitive basis to mamum extent practicable To be satisfied
in Loan Agreement
If a loan for a project of $1 million or more certificatin35 FAA _61l(r) by the principal AID officer in the country as to the capability of the
country (both financirl and human resources) to effectively maintain and
utilize the project taking into account other US-financed projects (Such
certification is to be pproved by the Administrator aL the time the loan
is authorized) In process of being obtained
36 FAsgJ2 _6_h Appropriate steps that have b-en taken to assure that to the miaximum extent possible the country is contributing local currencies to net th-2 cost of contractural and other services and foreign currencies o- icd by tho US are utilized to meet the cost of contractual and other services The GU-M is contributing over $30 million to compleXton of this project Excess US-use dirhams will be used for eligible project costs other than US goods and services
37 FAA p619 Compliance with requirement that assistance to newly independent countries be furnished through multilateral organizations or plans to maxishymum extent appropriate Not deemed appropriate in view of previous AID financing and ccoiitment to the project See Sections I-A and I-D
38 FAA sect620(a) AcnO7a n3]7(b) Compliance with prohibitions
against assistance to Cuba ard any countr (a) which furnishes assistance to Cuba or failed to take appropriate steps by February 14 1964 to prevent ships or aircraft unier its registry from carrying equipment materials or supplies from or to Cuba or (b) which sells furnishes or permits any ships under its registry fr-om carrying items of primary atrategic signifishycance or itcms of economic assistance Morocco is not-known to be in Violation of these sections
39 FAA q620GL_ If assistance to the government of a country existence of determination it is not controlled by the international Communist movement The Secretary of State so determined on October 11 191
40 FAA 620(c) If assistance to the government of a country existonce of Indebtedness to a US citizen for goods or services furnished or ordered whore ouch citizen has exhaustod available legal romodiesor where the debt
i - ow - -- _---- --shy
- --
-6shy
is not denied or ontested by such government or the indebtedness arises under an unconditional guararty of payrrent given by such govornmunt No such indebtedness is known to exist
41 FA _(a2LdL If assisitance for any productive enterprise which will corashypote with US enterprise existence of agreement by the recipient country to prevent export to the US of more than 20 of the enterprises annual production during the life of the loan Not applicable
42 FA4 - 16Q_0_ A If assistance to the government of a country extent to which it (including government agenies or ruhdivisions) has after January 1 1962 taken steps o repudiate or nullify cuatracts or taken any action which has the effect of nationalizing expropriating or otherwise seizingownership or control ofprcpertv of US citizens or entities beneficially owned by them without taking appropriate stops to discha i ge its obligations No such steps cr actions are-known to have been taken by the GOM
43 FAA~L AjPj_10_9 Compliance with assistance toQ0 prohibitions against any Comunst codntry ozocco is not considered to be a cocinrunist country
44 FAA - 620(gJ Corliance with prohibition against use of assistonce to comp satc owners for expropriated or nationalized property To be satisfied in Loan Agreement
45 F AA 8620(h Compliance with regulations and procedures adopted to inshysure against ue of assistance in a manner hich contrary to the best inshyterests of the US promotes or assists the foreign aid projects or activities of the Communist-bloc countries To be satisfied in Loan Agreement
46 FAA 06-O(j)_ Exitence of determiration that the country is engaging in or preparing for aggressive military efforts No such determination has been made
L_62_O Information47 FAA on representation of the country at any intershynational confererce when that representation includes the planning of activishyties involving insurrection or subversion against the US or countries recoiving US assistance No such representition is known to have A occarrect
8 FAA 62JJ Existence of a determination that the country has permitted or failed to prevent destruction of US property by mob action or has failed to take steps to prevent a recurrence and-to pay compensation NO such destruction is known to have tak-n place
49 PAA l620(k) If construction of productive enterprise where eggregate value of assistanc to be furnished by US will exceed $1OO million identification of Gtntutoryauthority Not npplicable
i-xQ2MZZ=
1 shy
U 6 50 _Af( QCinsidoration which has been given to denlying assistance X to thu government of a country which after December 31 1966 has failed to
- institto the investnint guaranty program for the spcific risks of inconshy
vertibility and expropriation or confiscation Satisfied See No 7 above
S51S J lj Compliance with-prohibitions-againstn as~istance to countries which traffic or permittraffickingwith North Vietnam Morocco is not known to be in violation
52 E_-L620(_L If country has seized or imposed any penalty or sanction against vn US fishing vessel on account of its fishing activities in
intcrnationul waters information on the consideiation which has been given to excludirg the country from assistance No such situation is known to exist
53 FAA FA r) UAR restriction Not applicable620(p 9117
54 FAA R620tl) Existence of default undhr any Foreign Assistance Act loan to the country No such default exists
55 F ) C-nsider tion of whether co ntry is devoting unnecessary percentage of buKet for military purposes or use of foreign exchange for milita-y equipment
56 FAA 62o(t) Proibition on aid if country has severed diplomatic relations with US unless agreements have been negotiated after resumpshytion Diplomatic r(lations have not been severed
57 FAA 9620(u) Statur of the country on delinquent UN obligations Morocco is not known to be dlinquent on its UN~obligation
58 FAA R636(i) Prohibition on financing non-US manufactured motor vehicles Will be satisfied in Loan Agreement and Implementation Letter
59 App 102 Compliance with requirement that payments in excess of $25000 for architectural and en Jneering services on any one project be reported to Congress Such reports will be made
60 App R1O4 Compliance with bar against funds to pay pensions etc for military personnel Such payments will not be eligible for financing under th Loan Agreement
61 App 9106 If country attr ipts to create distinctions because of their race or religion among Americans in granting personal or commercial access or other rights otherwise avaVIfable to US citizens generally application which will be made in negotit ttons of contrary principles as expressed by Congress Morocco is not ku IDhave made any such attempts
iInD OFFIIt t USE
0k
OFFICIAL USE 62 AIwp Rii Compliance with existing requfremets for security clearance
of personnel Will be satisfied in Loan Agreement and Implementation Letter
63 App R1l2 Compliance with requirement for approval of cortractors and contract terms for capital projects Will be satisfied in Loan Agreement
clJ164 Aup Cmpliance with bar nRainst use of funds to Tay assessments etc of US meiber Such payments will not be eligible for financing under the Loan Agreemunt
6 Anp P115 Ccmpliance with regulations on employment of US and local personnel for funds obligated after April 30 1961 (Regulation 7) See Section III-C
66 Aim Vietnam iron and steel restrictions Not applicable
67 p l9 If a country other than Greece Turkey Iran Israel Republicof China Phillipines or Korea reduction in assistance by amounts spent for the purchase of sophisticated military equipment
68 Anp fi4O1 Compliance with bar against use of funds for publicity or proshypagjanda purposes within US not heretofore authorized by Congress Such use of funds will not be eligible for financing under the Loan Agreement
Morocco is a traditional Islamic monarchy with a constitution The conshystitution was implemented followaing a popular referendum in 1962 National regional and professional elective bodies including a parliament were established by universal suffrage under the constitution in 1963 The parliament was suspended in 1961 in a State of Exception because of its inability to agree on measures with adequate urgency to meet the prevailingecononde imperatives In July 1967 the King appointed a Prime Minister to direct a Cabinet of appointed technicians
The constitutional framework nevertheless remains intact in Morocco and nationwide popular elections for some of the professional chambers were held in August and September 1966 The press is relatively free in Morocco and the right of diLsent prevails provided that such dissent does not violate the prohibition against political attacks on the instishytution of the monarchy or the person of the monarch
LI Under the revised US AID Policy for Africa agreed to in November 1966 Morocco is designated a development emphasis country entitled to receive continuing support on a country basis as part of a multilaterally coorshydinated countrj program Morocco was subsequently included in Presidential Determination 67-14 (January 5 1967) I
LIM=TE OFFICIAL USE~i
- l go
bull ~ -
f
DEPQbi) STATE AGENCY FOR INERNATIONAL DEVELOPMENT
WASHINGTON DC 052
CAPITAL ASSISTANCE LOA11 AUTHORIZATION
Provided from Develoroent Loan Funds Morocco Second Lower Moulouya Irrigation Loan
Pursuant to the authority vested in the Assistant Administrator for Africa of the Agency for International Development
AI)by the Foreign Assistance Act of 1961 as amended theIAct) and the delegations of authority issued thereunder I
have received and t-en into consideration a certification from the Director of USAIDMorocco as to the financial and human resources capability of Morocco to effectively utilize the Lower Moulouya Irrigation Project taking into account among other things the
maintenance and utilization of projects in Morocco previously financed or assisted by the United States and I hereby authorize the establishshyment of a loan pursuant to Part I Chapter 2 Title I the Development Loan Fund to the Government of the Kingdom of Morocco (Borrower) of not to exceed five million dollars ($5000000) to assist in financing the fore] gn exchange and local currency costs of goods and services for the third phase of the Lower Moulouya Irrigation Project subject to the foLlowing terms and conditions
1 Interest Rate and Terms of Repayment Borrower shall repay the loan to AID in forty (40) years including a grace period not to exceed ten (10) years Borrower shall pay interest on the unrepaid principal and any interest accrued thereon at the rate of (a) two percent (2) per annum during the grace period and (b) two and
one-half percent (2-12) per annum thereafter
2 Currency of Pepayment Repayment of the loan and paymenu of interest shall be made in United States dollars
- t- n t - - - shy
3 Other Terms and Conditions amp(a)Goods and Services financed under the loan
shall have their source and origin in
(i) the United States if disbursements therefor are made in United States dollars or
(ii) any country in the free world including Morocco if disbursements therefor are made in Moroccan currency
(b) AID Regulation 7 shall not apply to construction -work financed under the loan because as detailed in Section IIIC of Capital Assistance Paper No P 667 it is important to the national interest of the United States that the direct costs of construction work performed by third-country nationals be financed out of funds made available by the Act
(a) Such other terms and conditions as AID may deem advisable
Assistant Administrator for Africa
Date
~~~~~~~~~~~~~~~~~~ - q v
7
-30shy
2 Perimeter 01ttffnr
OPIVAM orgttnlrntlon treture calls for 557 positions of whichI L or 7 Mlled n were nher 29 1567 37 of the 71 Postshytion vacancies reported 1ern the high and middle levels Foreign(chiefly Euronean) technclan occupy I)of the 16 high level positionsthat ere filled at thfit tire
Whil OPM ut in th- lcng run lor to Mercecos oducational yster to prvidr tn crrf-nn2 to ratisfy current rdurojectd rcshyquirement th currnt high and mlddle level vacancies rrouire uersonnelwith oxt nive nrior rxericnce To fll this preent need it will be necessary for CRIVAM to continue its program of recruiting foreigntechnicians until ruch tire ns graduates of Moroccan educational programsacquire the necesnry exrerience The managerent assistance componentof thin pro~ject ]e-rribed In the Project analysis will to some extentalleviate OFIWAMs high level personnel requirements
3 Inw1 ernetation Sehedu]
Months Implementation Action
1 0 Sign Loan Agrcement
2 2 C-tiify conditions precedent and Y4tiate procedures for selection of US firm for management contract
2 Negotiation of extension of advisory Engineering Services
h 4 Contract (Hydrotechnic) Negotiation of Managerment Contract
5 60Cmpletion of Project
C Waivers
Sect ion 7 rf AID Regulation 7 provides in substance that theUnited State ill not finance direct costs of construction work performedby third cc-ur y nationals unless the total co-tn of the project withvhich thr ennrtrumticn w(r is asEcciated donot exceed $2On)O orafter excluding national of the country in vhich the site of constructionis located and Dersons vho nave resided therein uninterruptedly for morethan three years imrnedJately prior to any determination under Regulation 7at leant 0 of all uernons who work under the contract at the site of conbulltruction are United States citizens or the employment of third countrynationals is necessary to avoid excerrive corts to the United States
3
31
Section 2175 authr-ri th Regional Anitant Administratorto waive the nrovinions of Sectionthat it is 2073 if he dcterriner in any coneimportant te the nationrn intercrt of the United Stutes tofinance the direct eots of construction work performed by third country
nationals
A prviou1y r ic i c t tht for thr ct Tartthe -r c ct b- 1jeuj out r -cnorbr f cnrtructioncontracts with Morcccrr contrctnr an in the i-t Uowfevvr itentirely psnible that there may b- roe contractn with cntructlonfirms partly owned by third country nntionaln and that ruch firjs anwell as the surely Moroccan-owrned firms may enloy third country niationalsIn such canes a difficult rrobic-i iould arise in meeting the terms ofRegulation 7 since an a practical matter Aericans are not reaonablyavailable for ermployn ont by such contrnetorn and our previcus experiencewith the Naunsseur Ccnv(r-ion project thatin Morocco has indicatedAmerican contractors would not be interested in bidding cn small conshytracts in that country
It in therefore recommended that the Annitant Adinitratordetermine rursuant to Section 2q75 of Regulation 7 to waive theapplication of Regulation 7 to thic iroject since the project 411 conshytribute to the attainrent of US foreign policy objectiver and the cbJe-tives of the Foreign Arsistnnce Program
LITI L USE
LfI~~5xA~us
lit
4 A J A 45 4 k
t A S T
S(3
I A444ilA~~l~)
7 -74
tAM= D
SECTOR 27
10000
t Co0Na includez25 cgtri oncFcttlrvI ncy I8s ~ ~ C t C- Includes 50 constriJcltiotrgrc
2000 60
IU
0
z
bull cosYsA shy----- i
600L _
400
200
0 5 I0 15 20
INTEREST RATE
I ~ 7 J7777
ANIAampX C
PROJECT DESCRn1 rOll
The project com)onents to te undertaken on the MIoulouya Irrigation Project over the next five years contists of the following
C(n1rtion of the rrLin casuals and bianch canbls to provide the suource of waler to the sctors be developed in theto TriffBou Areg and Zebra areas This construction will include the necessarystructures such as reulators highway bridges aqueducts water intake
and discharge structures etc
2 Iand Txeloommerit which includes engineering land consolishyt and iuvtllng lard preparation (subsoiling ripping destoning etc) and installation of water distribution canals (secondary tertiary and quurtunary) and drainage collector ditches for the Triffa main covering 24000 acres in sctors 8 9 10 16 20 21 23 24 25A 2513 27 and 28 Lou Areg Central covering 16250 acres in sectors Dltirough D2B and G1 thru-4h G313 i0u Areg Remainder covering 15000 acres in s-ctors D3 through D7 and GA through (6 Zebra Collective covering 45)0 acres in sectors 3 4 5 rind 6 and Zebra Rer-iinder covering 14250 acres in sectors 1 2 and 7 through 10 and th remainder of sectors 34 and 5 The total land to be developed is about 74000 acres
3 Canalization of the Oued Zeluan and nued Sidi-Amar in the Bou Areg Plain consisting of strairltening englarging and regularizing of these streams to carry the flood waters to the sea Drainage interceptor canals are to be constructed parallel to the sea in the Bou Areg Plain In the Triffa Plain the Oued Riada main drain will be deepened and enlarged and secondary drains will be excavated to provide for drainageof the Madagh area This will include the construction of bridges and culverts and other related work
4 Major Commorn Works will consist of
a Clearing of the Mo-1ouya riverbed downstream of the Mechra KLila barn caused roy flood dariwe and the installation of a set of stop logs for maintenance of pillway gate-
b Design supervision and construction of repairs to the ]elt Lank dead head tunel
c Conctruction and establishment of sib-division Offices and installations for farmer support such as CMVand farm stables
1 C
-2shy
5 Manavmtnt It ha been proposed that a US management firm be ewployed by th- C4 to manage and operate the entire Bou Areg area Such manageent -iuld encomparn all activities from the initial concept to final irIrp igricultural production Such activities would Include resp r-ibilsect -or supervnsion of engtneering and constriction of primary
S- Jry r complete developfnent of land training n in g tinul irription practicen preparation of market
t - r1t- (ot--rnu trplusmnining of a Moroccan cadre to take over h v--it Bou Areg dreara P the
At this writing the n-pt of turning over to a private UZSfirm execushyresponsibl]ity I h management of the establilrment and initial
op-ration of irr1gati the Bou Arog area has been only broadly de iiitd by the GCJO It Intended that proposals will be invited from a r -onable ntnber of f|ed US firms that a selection will be made an-n 7 them and a more do iled and cornprehenrive definition of the rer6 -Ps to be performed be eztabliched at that time It haa been
stimated that the t- of ruch a contract will be about $2 mir- n In any event the -ts of this contract other engineering arvl s to be provided undt n extension of the Ilydrotechnic contract and ether US corts will not ed the proposed $5 mllaion developzont Jean fr the project
The cle 3ifications duties ant 1ncnslbilities of the management personnel ill ha-- to be clearly defined i agreed to by the GCM Perimeter Directo- and other GOM Agencies luding arrangements for the necessary gistic support
Svxlale Docu-
1
4
LD ED 0ICIAL
-IAIDshy
A1trX D
C6JCK LIST OF STATUTORY CRITERIA
(Development Loan Fund)
1 FAA 0102 Extent to which U3 cormodities and services are furnished consistent with improving the US balance of payments See Sections II-C II-F
2 AA sect2O]ihi lanner in which loan wil promote countrys economic develo shy rit emphasizing help for long-range plans and programs designed to developeconomic tesourcos and increase productive capacities See Section I-D
i FAA sectT] h)(IL Information and conclusion on availability of financincfrom other free-world sources including private sources within the United States See Section II-F
FAA sect20l( )2 Information and conclusion on activitys economic and technical soundness including the capacity of the recipient country to reshypay the loan at a reasonable rate of interest See Sections II-B II-D and II-E
5 FAA 1201(h)( Information and conclusion on existence of reasonable promise activity will contribute to developrmnt of economic resources or increase of productive capacities See Sectiona II-B and II-D
_92_(b 4Information and conclusion on activitys relationship toothor development activities and its contribution to realizable longshyrange objectives See Sections I-D and I-E
The following abbreviations are und FAA - Foroirn Assistance Act of 1961 as amerded by the Foreign Asaistaice
Act of 1967 App - Foreign Assistance and Polated Agencies Appropriations Act 1968
AFEVCDF 1066
L1
-2shy
7 FAA f12O1(b)(5)_ Countrys self-help masures including institution of Foreign Assistance Act investment pliaranty programs Investment Guaranty
bull Agreement signed with Morocco 331o6l See Sections I-D and II-EI
_A ))(6) Information and conclusion on possible effects on US econowy with soecial refererne to areas of substantial -labor surplusSee Section II-F
9 FAA q201 (h)() Information and conclusion on the dagree to which thA country iv wiki- progress toward respect for the rule of law freedom of expression and of the press and recognition~yf the importance of individual freedom initiative and private enterprise
10 FAA -1201(b)(8) Information and conclusion on the degree to which the country is taking steps to improve its c]Laato for private investment See Sccton II-E
31 FAA R LbJi Inforrat-on and conclusion on whether or not the activityto b financed will contribute to the achievement of self-sustaining growthSee Sections I-D and II-B
12 FAA fi2Ol(bj Inforruation and conclusion on reasonalbe prospects of reshypayment See Section II-E
13 FAA fl20JL() Info-ation on applicability of the twenty country ceil4ng2
14 FAA fl201 L Information and coclusion on legality (under laws of the country end the US) and reasonableness of lending and ralendinr terms Loan will be on minimum termspermitted under FAA These are deemed reasonable see Sectioam Evidence will be renuired from the GGM as to the legality of the loan agreemnt
1 E 2 Information and conclusion on availability of an applicationFAA together with sufficient information and assurances to indicate reasonably that funds will be used in an economcally and technically sound manner See Sections I-A II-B and II-D Application received Janury 15 1968
16 FAA fl201(fL If a project inforntion and conclusion whether it will promote the economic developapent of the requesting country taking into account the countrys human and material resource requiremnts and the reshylationship between the ultimate objes6ives of the project and the countrys overall economic development See Sections I-D and II-B
17 FAAJ 20ij(J If a project information and conclusion whether it cifishycally provides for appropriate participation by private enterprise 8ce Sections YI-C and 114
I- FAA i22(a) Total amount of money under loan which is going directly to private enterprise is going to intermediate credit institutions or other borrowers for use by private enterprise is being used to finance imports
rfro private sources or is otherwise beirg used to finance procurementsfrcm private souwces See Sections II-C and II-2
9 FAA 207 Infosation on the emphasis placed en
(a) encouraging development of economic political and social institushytins No apparent relationship
(b) nelC-help in mectingthe countrys food nredo Project Vill conshytribute to production of food for lccal consumptioa
(c) in-proving availability in the country of evucated trained manpower Project will contribute to the deicloginext of trained manpower as one of the functions of the management contract (Soe Annex C para 5)
(d) prcgrams aimed at -malnutrition disease eradi atDn slum clearanceWater purification sewage disposal health education naternal and child care(includin fimrily pJnrning)) -nd cthcr public health ausistarice See
(c) other develoment activities including industrial development free
labor unions cooperatives tnd voluntary agencie transn)rtatin and ccshymwquication nrStczn capubiliTies for economic planning and public adlinisshytration arban develo-mment and modernization of laws to feilltate econcnicdevelopjen- GO- intends encourage develo vient of cooperat yes particularlyin the Left Pank areas Project will also develop capabiLi ics for cconoaicplanning and public a6~inistration (Annex C para 5) Other not applicable
20 Information on the extent to which the r-untry is
(a) cttcmting to increase food production and food sto a-e anddistribution felitics This project is one evidence of Moroccos efforts in this direction See also Section I-D and I-E
b) creating- a favorable climate for foreign and dmestic iri-ate enterprise and invcstrrment The GCM has recently reduced profits twes anrannounced a ten year guarantee against tax increases See Section II-E-2
(c) increasing the role of the neonle in the developnental procecsNo apparent relationship to this project
(d) allocating expenditures to development rather than to unn-cessarymilitary purpoes or intervention in other free countries affair See Sections I-D and Ii-
(e) willing --nribute funds to the project or program Th iOMhas already dcvo o-sidcrable resources to the project It has badieted13 million for th i oulouya for i7 See Section I-C
(If) making economic zocial and political refo ns such as taxc coliecshytion iYprovcmenLs and chan es in land tenure a Royal Comm ision has been appointed to make recomendation on land tenure probleras in the Lower I oulouya
(g) responding to the economic political and social concerns of its people and showing a determination to take volf-help wcasuren See Sections I-D and II-E
IT
-ovi~cd l v r 13 1968
- 4 - LDffIED OFFICIAL USE
21 FAA Inforn ation about multilateral assistance being Iurnished to t e country and whether the loan will encourage recgional development prog-rams The I1D has eztablihcd a Consultative Group for Morocco which rvicws the GOM development program anui prgress See Section II-F-4 for infoaation on othtr donor assistance to Morocco
22 A Extent to which the loan will contribute to the objective of ass ring naximu par icipation in the task of econonic dovelop--ent on the pL-t 0 _he people of the developing countries through the encouragement of cocr-tic private and local govenmental inLitutious o apparent
relationship
23 F _-_Dta_ Infor-ation and corissions whether loan will oncourageeffor s of t1e country to (a) increase tie flow of international trade (b) fostcr private initiative and comptition (c) encourage development and usceo co opratives credit unions and savingss and loan associations (d) disourgo monopolistic practices (c) improvo technical efficiency of industry ariculture and commerce (f) strenSthn free labor unions This project is cxpected to increase technical efficiency oi-agriculture
2_ C-1L lnforzrition and conclusion on how the loan will encourage US privte trade and investment abroad and how it uill encourage private US participation in foreign assistance prograas (incluiing use of private trade channels and the services of US private enterprise) See Section II-
25 VA-+_ Conclusion and supporting information on compliance with tho Co resional policy that engineering and professional servicos of US fir-ms and their affiliates are to bo used in connection with capital project3 to the nixinua extent consistent with the national interest US engineerirn and innsgcment services will be financed tnder this loan
2$ Inforamtion and ccnclusions who+her loan will pormit American rx-l] business to participate equitably in the furnishing of goods and
z orvices by To be satisfied in Loan Agreementfinanced it
27 - t(a App I18 Complianco with restriction of co -zodity procureshy o UsMS except as otherwise determined by the Picsicent and subject to ttu--- rcortir require r-nts Procurement will - liumited to the US for
reiabnrs nts and to ioocco and other free world countries 1-or US-cwne(d rhu disburseacnts
23 -i Comiance with bulk cozodity procurement restriction topriecc no l-ho han the nkarkot price prevailing in tho US at tia of
bull puchas Not applicable
29 FA Cozpliance with requirement that matrin insurance be purchased on commceities if the participating country discri-inates and that insurance be placed in the US To be satisfied in Loan Agreement
30 IA 6(a) Information at to the utilization of excers personal property in lieu of procurement of new items Will be required ai appropriate under terns of Lean Agreement
f
1 77--7 -77-77-777
31 FAA 61](a)(_) information and conclusion on availability of enginoering i financial and other plans nccx sary to carry out tho assittance and of a
reasonably firm cstimate of the cost of the assistanco to the United States
See Section II-D
32-ecessaryFAA t611(a)_(2) legislative action r6quired within recipient country and ibasis Cor reasonable anticipation such action will be completed in time to pormit orderly accompli-hirtnt of purposes of loan See Section I-A
33 n _AA161nJ0] If water or water-relatod land resource construcshy
tion project or program information and conclusion on a benefit-cost comshy
putation See Section II-B
3 4 VAA 611(c) Compliance with requirement that contracts for construction be let on comp-ctitive basis to mamum extent practicable To be satisfied
in Loan Agreement
If a loan for a project of $1 million or more certificatin35 FAA _61l(r) by the principal AID officer in the country as to the capability of the
country (both financirl and human resources) to effectively maintain and
utilize the project taking into account other US-financed projects (Such
certification is to be pproved by the Administrator aL the time the loan
is authorized) In process of being obtained
36 FAsgJ2 _6_h Appropriate steps that have b-en taken to assure that to the miaximum extent possible the country is contributing local currencies to net th-2 cost of contractural and other services and foreign currencies o- icd by tho US are utilized to meet the cost of contractual and other services The GU-M is contributing over $30 million to compleXton of this project Excess US-use dirhams will be used for eligible project costs other than US goods and services
37 FAA p619 Compliance with requirement that assistance to newly independent countries be furnished through multilateral organizations or plans to maxishymum extent appropriate Not deemed appropriate in view of previous AID financing and ccoiitment to the project See Sections I-A and I-D
38 FAA sect620(a) AcnO7a n3]7(b) Compliance with prohibitions
against assistance to Cuba ard any countr (a) which furnishes assistance to Cuba or failed to take appropriate steps by February 14 1964 to prevent ships or aircraft unier its registry from carrying equipment materials or supplies from or to Cuba or (b) which sells furnishes or permits any ships under its registry fr-om carrying items of primary atrategic signifishycance or itcms of economic assistance Morocco is not-known to be in Violation of these sections
39 FAA q620GL_ If assistance to the government of a country existence of determination it is not controlled by the international Communist movement The Secretary of State so determined on October 11 191
40 FAA 620(c) If assistance to the government of a country existonce of Indebtedness to a US citizen for goods or services furnished or ordered whore ouch citizen has exhaustod available legal romodiesor where the debt
i - ow - -- _---- --shy
- --
-6shy
is not denied or ontested by such government or the indebtedness arises under an unconditional guararty of payrrent given by such govornmunt No such indebtedness is known to exist
41 FA _(a2LdL If assisitance for any productive enterprise which will corashypote with US enterprise existence of agreement by the recipient country to prevent export to the US of more than 20 of the enterprises annual production during the life of the loan Not applicable
42 FA4 - 16Q_0_ A If assistance to the government of a country extent to which it (including government agenies or ruhdivisions) has after January 1 1962 taken steps o repudiate or nullify cuatracts or taken any action which has the effect of nationalizing expropriating or otherwise seizingownership or control ofprcpertv of US citizens or entities beneficially owned by them without taking appropriate stops to discha i ge its obligations No such steps cr actions are-known to have been taken by the GOM
43 FAA~L AjPj_10_9 Compliance with assistance toQ0 prohibitions against any Comunst codntry ozocco is not considered to be a cocinrunist country
44 FAA - 620(gJ Corliance with prohibition against use of assistonce to comp satc owners for expropriated or nationalized property To be satisfied in Loan Agreement
45 F AA 8620(h Compliance with regulations and procedures adopted to inshysure against ue of assistance in a manner hich contrary to the best inshyterests of the US promotes or assists the foreign aid projects or activities of the Communist-bloc countries To be satisfied in Loan Agreement
46 FAA 06-O(j)_ Exitence of determiration that the country is engaging in or preparing for aggressive military efforts No such determination has been made
L_62_O Information47 FAA on representation of the country at any intershynational confererce when that representation includes the planning of activishyties involving insurrection or subversion against the US or countries recoiving US assistance No such representition is known to have A occarrect
8 FAA 62JJ Existence of a determination that the country has permitted or failed to prevent destruction of US property by mob action or has failed to take steps to prevent a recurrence and-to pay compensation NO such destruction is known to have tak-n place
49 PAA l620(k) If construction of productive enterprise where eggregate value of assistanc to be furnished by US will exceed $1OO million identification of Gtntutoryauthority Not npplicable
i-xQ2MZZ=
1 shy
U 6 50 _Af( QCinsidoration which has been given to denlying assistance X to thu government of a country which after December 31 1966 has failed to
- institto the investnint guaranty program for the spcific risks of inconshy
vertibility and expropriation or confiscation Satisfied See No 7 above
S51S J lj Compliance with-prohibitions-againstn as~istance to countries which traffic or permittraffickingwith North Vietnam Morocco is not known to be in violation
52 E_-L620(_L If country has seized or imposed any penalty or sanction against vn US fishing vessel on account of its fishing activities in
intcrnationul waters information on the consideiation which has been given to excludirg the country from assistance No such situation is known to exist
53 FAA FA r) UAR restriction Not applicable620(p 9117
54 FAA R620tl) Existence of default undhr any Foreign Assistance Act loan to the country No such default exists
55 F ) C-nsider tion of whether co ntry is devoting unnecessary percentage of buKet for military purposes or use of foreign exchange for milita-y equipment
56 FAA 62o(t) Proibition on aid if country has severed diplomatic relations with US unless agreements have been negotiated after resumpshytion Diplomatic r(lations have not been severed
57 FAA 9620(u) Statur of the country on delinquent UN obligations Morocco is not known to be dlinquent on its UN~obligation
58 FAA R636(i) Prohibition on financing non-US manufactured motor vehicles Will be satisfied in Loan Agreement and Implementation Letter
59 App 102 Compliance with requirement that payments in excess of $25000 for architectural and en Jneering services on any one project be reported to Congress Such reports will be made
60 App R1O4 Compliance with bar against funds to pay pensions etc for military personnel Such payments will not be eligible for financing under th Loan Agreement
61 App 9106 If country attr ipts to create distinctions because of their race or religion among Americans in granting personal or commercial access or other rights otherwise avaVIfable to US citizens generally application which will be made in negotit ttons of contrary principles as expressed by Congress Morocco is not ku IDhave made any such attempts
iInD OFFIIt t USE
0k
OFFICIAL USE 62 AIwp Rii Compliance with existing requfremets for security clearance
of personnel Will be satisfied in Loan Agreement and Implementation Letter
63 App R1l2 Compliance with requirement for approval of cortractors and contract terms for capital projects Will be satisfied in Loan Agreement
clJ164 Aup Cmpliance with bar nRainst use of funds to Tay assessments etc of US meiber Such payments will not be eligible for financing under the Loan Agreemunt
6 Anp P115 Ccmpliance with regulations on employment of US and local personnel for funds obligated after April 30 1961 (Regulation 7) See Section III-C
66 Aim Vietnam iron and steel restrictions Not applicable
67 p l9 If a country other than Greece Turkey Iran Israel Republicof China Phillipines or Korea reduction in assistance by amounts spent for the purchase of sophisticated military equipment
68 Anp fi4O1 Compliance with bar against use of funds for publicity or proshypagjanda purposes within US not heretofore authorized by Congress Such use of funds will not be eligible for financing under the Loan Agreement
Morocco is a traditional Islamic monarchy with a constitution The conshystitution was implemented followaing a popular referendum in 1962 National regional and professional elective bodies including a parliament were established by universal suffrage under the constitution in 1963 The parliament was suspended in 1961 in a State of Exception because of its inability to agree on measures with adequate urgency to meet the prevailingecononde imperatives In July 1967 the King appointed a Prime Minister to direct a Cabinet of appointed technicians
The constitutional framework nevertheless remains intact in Morocco and nationwide popular elections for some of the professional chambers were held in August and September 1966 The press is relatively free in Morocco and the right of diLsent prevails provided that such dissent does not violate the prohibition against political attacks on the instishytution of the monarchy or the person of the monarch
LI Under the revised US AID Policy for Africa agreed to in November 1966 Morocco is designated a development emphasis country entitled to receive continuing support on a country basis as part of a multilaterally coorshydinated countrj program Morocco was subsequently included in Presidential Determination 67-14 (January 5 1967) I
LIM=TE OFFICIAL USE~i
- l go
bull ~ -
f
DEPQbi) STATE AGENCY FOR INERNATIONAL DEVELOPMENT
WASHINGTON DC 052
CAPITAL ASSISTANCE LOA11 AUTHORIZATION
Provided from Develoroent Loan Funds Morocco Second Lower Moulouya Irrigation Loan
Pursuant to the authority vested in the Assistant Administrator for Africa of the Agency for International Development
AI)by the Foreign Assistance Act of 1961 as amended theIAct) and the delegations of authority issued thereunder I
have received and t-en into consideration a certification from the Director of USAIDMorocco as to the financial and human resources capability of Morocco to effectively utilize the Lower Moulouya Irrigation Project taking into account among other things the
maintenance and utilization of projects in Morocco previously financed or assisted by the United States and I hereby authorize the establishshyment of a loan pursuant to Part I Chapter 2 Title I the Development Loan Fund to the Government of the Kingdom of Morocco (Borrower) of not to exceed five million dollars ($5000000) to assist in financing the fore] gn exchange and local currency costs of goods and services for the third phase of the Lower Moulouya Irrigation Project subject to the foLlowing terms and conditions
1 Interest Rate and Terms of Repayment Borrower shall repay the loan to AID in forty (40) years including a grace period not to exceed ten (10) years Borrower shall pay interest on the unrepaid principal and any interest accrued thereon at the rate of (a) two percent (2) per annum during the grace period and (b) two and
one-half percent (2-12) per annum thereafter
2 Currency of Pepayment Repayment of the loan and paymenu of interest shall be made in United States dollars
- t- n t - - - shy
3 Other Terms and Conditions amp(a)Goods and Services financed under the loan
shall have their source and origin in
(i) the United States if disbursements therefor are made in United States dollars or
(ii) any country in the free world including Morocco if disbursements therefor are made in Moroccan currency
(b) AID Regulation 7 shall not apply to construction -work financed under the loan because as detailed in Section IIIC of Capital Assistance Paper No P 667 it is important to the national interest of the United States that the direct costs of construction work performed by third-country nationals be financed out of funds made available by the Act
(a) Such other terms and conditions as AID may deem advisable
Assistant Administrator for Africa
Date
~~~~~~~~~~~~~~~~~~ - q v
7
31
Section 2175 authr-ri th Regional Anitant Administratorto waive the nrovinions of Sectionthat it is 2073 if he dcterriner in any coneimportant te the nationrn intercrt of the United Stutes tofinance the direct eots of construction work performed by third country
nationals
A prviou1y r ic i c t tht for thr ct Tartthe -r c ct b- 1jeuj out r -cnorbr f cnrtructioncontracts with Morcccrr contrctnr an in the i-t Uowfevvr itentirely psnible that there may b- roe contractn with cntructlonfirms partly owned by third country nntionaln and that ruch firjs anwell as the surely Moroccan-owrned firms may enloy third country niationalsIn such canes a difficult rrobic-i iould arise in meeting the terms ofRegulation 7 since an a practical matter Aericans are not reaonablyavailable for ermployn ont by such contrnetorn and our previcus experiencewith the Naunsseur Ccnv(r-ion project thatin Morocco has indicatedAmerican contractors would not be interested in bidding cn small conshytracts in that country
It in therefore recommended that the Annitant Adinitratordetermine rursuant to Section 2q75 of Regulation 7 to waive theapplication of Regulation 7 to thic iroject since the project 411 conshytribute to the attainrent of US foreign policy objectiver and the cbJe-tives of the Foreign Arsistnnce Program
LITI L USE
LfI~~5xA~us
lit
4 A J A 45 4 k
t A S T
S(3
I A444ilA~~l~)
7 -74
tAM= D
SECTOR 27
10000
t Co0Na includez25 cgtri oncFcttlrvI ncy I8s ~ ~ C t C- Includes 50 constriJcltiotrgrc
2000 60
IU
0
z
bull cosYsA shy----- i
600L _
400
200
0 5 I0 15 20
INTEREST RATE
I ~ 7 J7777
ANIAampX C
PROJECT DESCRn1 rOll
The project com)onents to te undertaken on the MIoulouya Irrigation Project over the next five years contists of the following
C(n1rtion of the rrLin casuals and bianch canbls to provide the suource of waler to the sctors be developed in theto TriffBou Areg and Zebra areas This construction will include the necessarystructures such as reulators highway bridges aqueducts water intake
and discharge structures etc
2 Iand Txeloommerit which includes engineering land consolishyt and iuvtllng lard preparation (subsoiling ripping destoning etc) and installation of water distribution canals (secondary tertiary and quurtunary) and drainage collector ditches for the Triffa main covering 24000 acres in sctors 8 9 10 16 20 21 23 24 25A 2513 27 and 28 Lou Areg Central covering 16250 acres in sectors Dltirough D2B and G1 thru-4h G313 i0u Areg Remainder covering 15000 acres in s-ctors D3 through D7 and GA through (6 Zebra Collective covering 45)0 acres in sectors 3 4 5 rind 6 and Zebra Rer-iinder covering 14250 acres in sectors 1 2 and 7 through 10 and th remainder of sectors 34 and 5 The total land to be developed is about 74000 acres
3 Canalization of the Oued Zeluan and nued Sidi-Amar in the Bou Areg Plain consisting of strairltening englarging and regularizing of these streams to carry the flood waters to the sea Drainage interceptor canals are to be constructed parallel to the sea in the Bou Areg Plain In the Triffa Plain the Oued Riada main drain will be deepened and enlarged and secondary drains will be excavated to provide for drainageof the Madagh area This will include the construction of bridges and culverts and other related work
4 Major Commorn Works will consist of
a Clearing of the Mo-1ouya riverbed downstream of the Mechra KLila barn caused roy flood dariwe and the installation of a set of stop logs for maintenance of pillway gate-
b Design supervision and construction of repairs to the ]elt Lank dead head tunel
c Conctruction and establishment of sib-division Offices and installations for farmer support such as CMVand farm stables
1 C
-2shy
5 Manavmtnt It ha been proposed that a US management firm be ewployed by th- C4 to manage and operate the entire Bou Areg area Such manageent -iuld encomparn all activities from the initial concept to final irIrp igricultural production Such activities would Include resp r-ibilsect -or supervnsion of engtneering and constriction of primary
S- Jry r complete developfnent of land training n in g tinul irription practicen preparation of market
t - r1t- (ot--rnu trplusmnining of a Moroccan cadre to take over h v--it Bou Areg dreara P the
At this writing the n-pt of turning over to a private UZSfirm execushyresponsibl]ity I h management of the establilrment and initial
op-ration of irr1gati the Bou Arog area has been only broadly de iiitd by the GCJO It Intended that proposals will be invited from a r -onable ntnber of f|ed US firms that a selection will be made an-n 7 them and a more do iled and cornprehenrive definition of the rer6 -Ps to be performed be eztabliched at that time It haa been
stimated that the t- of ruch a contract will be about $2 mir- n In any event the -ts of this contract other engineering arvl s to be provided undt n extension of the Ilydrotechnic contract and ether US corts will not ed the proposed $5 mllaion developzont Jean fr the project
The cle 3ifications duties ant 1ncnslbilities of the management personnel ill ha-- to be clearly defined i agreed to by the GCM Perimeter Directo- and other GOM Agencies luding arrangements for the necessary gistic support
Svxlale Docu-
1
4
LD ED 0ICIAL
-IAIDshy
A1trX D
C6JCK LIST OF STATUTORY CRITERIA
(Development Loan Fund)
1 FAA 0102 Extent to which U3 cormodities and services are furnished consistent with improving the US balance of payments See Sections II-C II-F
2 AA sect2O]ihi lanner in which loan wil promote countrys economic develo shy rit emphasizing help for long-range plans and programs designed to developeconomic tesourcos and increase productive capacities See Section I-D
i FAA sectT] h)(IL Information and conclusion on availability of financincfrom other free-world sources including private sources within the United States See Section II-F
FAA sect20l( )2 Information and conclusion on activitys economic and technical soundness including the capacity of the recipient country to reshypay the loan at a reasonable rate of interest See Sections II-B II-D and II-E
5 FAA 1201(h)( Information and conclusion on existence of reasonable promise activity will contribute to developrmnt of economic resources or increase of productive capacities See Sectiona II-B and II-D
_92_(b 4Information and conclusion on activitys relationship toothor development activities and its contribution to realizable longshyrange objectives See Sections I-D and I-E
The following abbreviations are und FAA - Foroirn Assistance Act of 1961 as amerded by the Foreign Asaistaice
Act of 1967 App - Foreign Assistance and Polated Agencies Appropriations Act 1968
AFEVCDF 1066
L1
-2shy
7 FAA f12O1(b)(5)_ Countrys self-help masures including institution of Foreign Assistance Act investment pliaranty programs Investment Guaranty
bull Agreement signed with Morocco 331o6l See Sections I-D and II-EI
_A ))(6) Information and conclusion on possible effects on US econowy with soecial refererne to areas of substantial -labor surplusSee Section II-F
9 FAA q201 (h)() Information and conclusion on the dagree to which thA country iv wiki- progress toward respect for the rule of law freedom of expression and of the press and recognition~yf the importance of individual freedom initiative and private enterprise
10 FAA -1201(b)(8) Information and conclusion on the degree to which the country is taking steps to improve its c]Laato for private investment See Sccton II-E
31 FAA R LbJi Inforrat-on and conclusion on whether or not the activityto b financed will contribute to the achievement of self-sustaining growthSee Sections I-D and II-B
12 FAA fi2Ol(bj Inforruation and conclusion on reasonalbe prospects of reshypayment See Section II-E
13 FAA fl20JL() Info-ation on applicability of the twenty country ceil4ng2
14 FAA fl201 L Information and coclusion on legality (under laws of the country end the US) and reasonableness of lending and ralendinr terms Loan will be on minimum termspermitted under FAA These are deemed reasonable see Sectioam Evidence will be renuired from the GGM as to the legality of the loan agreemnt
1 E 2 Information and conclusion on availability of an applicationFAA together with sufficient information and assurances to indicate reasonably that funds will be used in an economcally and technically sound manner See Sections I-A II-B and II-D Application received Janury 15 1968
16 FAA fl201(fL If a project inforntion and conclusion whether it will promote the economic developapent of the requesting country taking into account the countrys human and material resource requiremnts and the reshylationship between the ultimate objes6ives of the project and the countrys overall economic development See Sections I-D and II-B
17 FAAJ 20ij(J If a project information and conclusion whether it cifishycally provides for appropriate participation by private enterprise 8ce Sections YI-C and 114
I- FAA i22(a) Total amount of money under loan which is going directly to private enterprise is going to intermediate credit institutions or other borrowers for use by private enterprise is being used to finance imports
rfro private sources or is otherwise beirg used to finance procurementsfrcm private souwces See Sections II-C and II-2
9 FAA 207 Infosation on the emphasis placed en
(a) encouraging development of economic political and social institushytins No apparent relationship
(b) nelC-help in mectingthe countrys food nredo Project Vill conshytribute to production of food for lccal consumptioa
(c) in-proving availability in the country of evucated trained manpower Project will contribute to the deicloginext of trained manpower as one of the functions of the management contract (Soe Annex C para 5)
(d) prcgrams aimed at -malnutrition disease eradi atDn slum clearanceWater purification sewage disposal health education naternal and child care(includin fimrily pJnrning)) -nd cthcr public health ausistarice See
(c) other develoment activities including industrial development free
labor unions cooperatives tnd voluntary agencie transn)rtatin and ccshymwquication nrStczn capubiliTies for economic planning and public adlinisshytration arban develo-mment and modernization of laws to feilltate econcnicdevelopjen- GO- intends encourage develo vient of cooperat yes particularlyin the Left Pank areas Project will also develop capabiLi ics for cconoaicplanning and public a6~inistration (Annex C para 5) Other not applicable
20 Information on the extent to which the r-untry is
(a) cttcmting to increase food production and food sto a-e anddistribution felitics This project is one evidence of Moroccos efforts in this direction See also Section I-D and I-E
b) creating- a favorable climate for foreign and dmestic iri-ate enterprise and invcstrrment The GCM has recently reduced profits twes anrannounced a ten year guarantee against tax increases See Section II-E-2
(c) increasing the role of the neonle in the developnental procecsNo apparent relationship to this project
(d) allocating expenditures to development rather than to unn-cessarymilitary purpoes or intervention in other free countries affair See Sections I-D and Ii-
(e) willing --nribute funds to the project or program Th iOMhas already dcvo o-sidcrable resources to the project It has badieted13 million for th i oulouya for i7 See Section I-C
(If) making economic zocial and political refo ns such as taxc coliecshytion iYprovcmenLs and chan es in land tenure a Royal Comm ision has been appointed to make recomendation on land tenure probleras in the Lower I oulouya
(g) responding to the economic political and social concerns of its people and showing a determination to take volf-help wcasuren See Sections I-D and II-E
IT
-ovi~cd l v r 13 1968
- 4 - LDffIED OFFICIAL USE
21 FAA Inforn ation about multilateral assistance being Iurnished to t e country and whether the loan will encourage recgional development prog-rams The I1D has eztablihcd a Consultative Group for Morocco which rvicws the GOM development program anui prgress See Section II-F-4 for infoaation on othtr donor assistance to Morocco
22 A Extent to which the loan will contribute to the objective of ass ring naximu par icipation in the task of econonic dovelop--ent on the pL-t 0 _he people of the developing countries through the encouragement of cocr-tic private and local govenmental inLitutious o apparent
relationship
23 F _-_Dta_ Infor-ation and corissions whether loan will oncourageeffor s of t1e country to (a) increase tie flow of international trade (b) fostcr private initiative and comptition (c) encourage development and usceo co opratives credit unions and savingss and loan associations (d) disourgo monopolistic practices (c) improvo technical efficiency of industry ariculture and commerce (f) strenSthn free labor unions This project is cxpected to increase technical efficiency oi-agriculture
2_ C-1L lnforzrition and conclusion on how the loan will encourage US privte trade and investment abroad and how it uill encourage private US participation in foreign assistance prograas (incluiing use of private trade channels and the services of US private enterprise) See Section II-
25 VA-+_ Conclusion and supporting information on compliance with tho Co resional policy that engineering and professional servicos of US fir-ms and their affiliates are to bo used in connection with capital project3 to the nixinua extent consistent with the national interest US engineerirn and innsgcment services will be financed tnder this loan
2$ Inforamtion and ccnclusions who+her loan will pormit American rx-l] business to participate equitably in the furnishing of goods and
z orvices by To be satisfied in Loan Agreementfinanced it
27 - t(a App I18 Complianco with restriction of co -zodity procureshy o UsMS except as otherwise determined by the Picsicent and subject to ttu--- rcortir require r-nts Procurement will - liumited to the US for
reiabnrs nts and to ioocco and other free world countries 1-or US-cwne(d rhu disburseacnts
23 -i Comiance with bulk cozodity procurement restriction topriecc no l-ho han the nkarkot price prevailing in tho US at tia of
bull puchas Not applicable
29 FA Cozpliance with requirement that matrin insurance be purchased on commceities if the participating country discri-inates and that insurance be placed in the US To be satisfied in Loan Agreement
30 IA 6(a) Information at to the utilization of excers personal property in lieu of procurement of new items Will be required ai appropriate under terns of Lean Agreement
f
1 77--7 -77-77-777
31 FAA 61](a)(_) information and conclusion on availability of enginoering i financial and other plans nccx sary to carry out tho assittance and of a
reasonably firm cstimate of the cost of the assistanco to the United States
See Section II-D
32-ecessaryFAA t611(a)_(2) legislative action r6quired within recipient country and ibasis Cor reasonable anticipation such action will be completed in time to pormit orderly accompli-hirtnt of purposes of loan See Section I-A
33 n _AA161nJ0] If water or water-relatod land resource construcshy
tion project or program information and conclusion on a benefit-cost comshy
putation See Section II-B
3 4 VAA 611(c) Compliance with requirement that contracts for construction be let on comp-ctitive basis to mamum extent practicable To be satisfied
in Loan Agreement
If a loan for a project of $1 million or more certificatin35 FAA _61l(r) by the principal AID officer in the country as to the capability of the
country (both financirl and human resources) to effectively maintain and
utilize the project taking into account other US-financed projects (Such
certification is to be pproved by the Administrator aL the time the loan
is authorized) In process of being obtained
36 FAsgJ2 _6_h Appropriate steps that have b-en taken to assure that to the miaximum extent possible the country is contributing local currencies to net th-2 cost of contractural and other services and foreign currencies o- icd by tho US are utilized to meet the cost of contractual and other services The GU-M is contributing over $30 million to compleXton of this project Excess US-use dirhams will be used for eligible project costs other than US goods and services
37 FAA p619 Compliance with requirement that assistance to newly independent countries be furnished through multilateral organizations or plans to maxishymum extent appropriate Not deemed appropriate in view of previous AID financing and ccoiitment to the project See Sections I-A and I-D
38 FAA sect620(a) AcnO7a n3]7(b) Compliance with prohibitions
against assistance to Cuba ard any countr (a) which furnishes assistance to Cuba or failed to take appropriate steps by February 14 1964 to prevent ships or aircraft unier its registry from carrying equipment materials or supplies from or to Cuba or (b) which sells furnishes or permits any ships under its registry fr-om carrying items of primary atrategic signifishycance or itcms of economic assistance Morocco is not-known to be in Violation of these sections
39 FAA q620GL_ If assistance to the government of a country existence of determination it is not controlled by the international Communist movement The Secretary of State so determined on October 11 191
40 FAA 620(c) If assistance to the government of a country existonce of Indebtedness to a US citizen for goods or services furnished or ordered whore ouch citizen has exhaustod available legal romodiesor where the debt
i - ow - -- _---- --shy
- --
-6shy
is not denied or ontested by such government or the indebtedness arises under an unconditional guararty of payrrent given by such govornmunt No such indebtedness is known to exist
41 FA _(a2LdL If assisitance for any productive enterprise which will corashypote with US enterprise existence of agreement by the recipient country to prevent export to the US of more than 20 of the enterprises annual production during the life of the loan Not applicable
42 FA4 - 16Q_0_ A If assistance to the government of a country extent to which it (including government agenies or ruhdivisions) has after January 1 1962 taken steps o repudiate or nullify cuatracts or taken any action which has the effect of nationalizing expropriating or otherwise seizingownership or control ofprcpertv of US citizens or entities beneficially owned by them without taking appropriate stops to discha i ge its obligations No such steps cr actions are-known to have been taken by the GOM
43 FAA~L AjPj_10_9 Compliance with assistance toQ0 prohibitions against any Comunst codntry ozocco is not considered to be a cocinrunist country
44 FAA - 620(gJ Corliance with prohibition against use of assistonce to comp satc owners for expropriated or nationalized property To be satisfied in Loan Agreement
45 F AA 8620(h Compliance with regulations and procedures adopted to inshysure against ue of assistance in a manner hich contrary to the best inshyterests of the US promotes or assists the foreign aid projects or activities of the Communist-bloc countries To be satisfied in Loan Agreement
46 FAA 06-O(j)_ Exitence of determiration that the country is engaging in or preparing for aggressive military efforts No such determination has been made
L_62_O Information47 FAA on representation of the country at any intershynational confererce when that representation includes the planning of activishyties involving insurrection or subversion against the US or countries recoiving US assistance No such representition is known to have A occarrect
8 FAA 62JJ Existence of a determination that the country has permitted or failed to prevent destruction of US property by mob action or has failed to take steps to prevent a recurrence and-to pay compensation NO such destruction is known to have tak-n place
49 PAA l620(k) If construction of productive enterprise where eggregate value of assistanc to be furnished by US will exceed $1OO million identification of Gtntutoryauthority Not npplicable
i-xQ2MZZ=
1 shy
U 6 50 _Af( QCinsidoration which has been given to denlying assistance X to thu government of a country which after December 31 1966 has failed to
- institto the investnint guaranty program for the spcific risks of inconshy
vertibility and expropriation or confiscation Satisfied See No 7 above
S51S J lj Compliance with-prohibitions-againstn as~istance to countries which traffic or permittraffickingwith North Vietnam Morocco is not known to be in violation
52 E_-L620(_L If country has seized or imposed any penalty or sanction against vn US fishing vessel on account of its fishing activities in
intcrnationul waters information on the consideiation which has been given to excludirg the country from assistance No such situation is known to exist
53 FAA FA r) UAR restriction Not applicable620(p 9117
54 FAA R620tl) Existence of default undhr any Foreign Assistance Act loan to the country No such default exists
55 F ) C-nsider tion of whether co ntry is devoting unnecessary percentage of buKet for military purposes or use of foreign exchange for milita-y equipment
56 FAA 62o(t) Proibition on aid if country has severed diplomatic relations with US unless agreements have been negotiated after resumpshytion Diplomatic r(lations have not been severed
57 FAA 9620(u) Statur of the country on delinquent UN obligations Morocco is not known to be dlinquent on its UN~obligation
58 FAA R636(i) Prohibition on financing non-US manufactured motor vehicles Will be satisfied in Loan Agreement and Implementation Letter
59 App 102 Compliance with requirement that payments in excess of $25000 for architectural and en Jneering services on any one project be reported to Congress Such reports will be made
60 App R1O4 Compliance with bar against funds to pay pensions etc for military personnel Such payments will not be eligible for financing under th Loan Agreement
61 App 9106 If country attr ipts to create distinctions because of their race or religion among Americans in granting personal or commercial access or other rights otherwise avaVIfable to US citizens generally application which will be made in negotit ttons of contrary principles as expressed by Congress Morocco is not ku IDhave made any such attempts
iInD OFFIIt t USE
0k
OFFICIAL USE 62 AIwp Rii Compliance with existing requfremets for security clearance
of personnel Will be satisfied in Loan Agreement and Implementation Letter
63 App R1l2 Compliance with requirement for approval of cortractors and contract terms for capital projects Will be satisfied in Loan Agreement
clJ164 Aup Cmpliance with bar nRainst use of funds to Tay assessments etc of US meiber Such payments will not be eligible for financing under the Loan Agreemunt
6 Anp P115 Ccmpliance with regulations on employment of US and local personnel for funds obligated after April 30 1961 (Regulation 7) See Section III-C
66 Aim Vietnam iron and steel restrictions Not applicable
67 p l9 If a country other than Greece Turkey Iran Israel Republicof China Phillipines or Korea reduction in assistance by amounts spent for the purchase of sophisticated military equipment
68 Anp fi4O1 Compliance with bar against use of funds for publicity or proshypagjanda purposes within US not heretofore authorized by Congress Such use of funds will not be eligible for financing under the Loan Agreement
Morocco is a traditional Islamic monarchy with a constitution The conshystitution was implemented followaing a popular referendum in 1962 National regional and professional elective bodies including a parliament were established by universal suffrage under the constitution in 1963 The parliament was suspended in 1961 in a State of Exception because of its inability to agree on measures with adequate urgency to meet the prevailingecononde imperatives In July 1967 the King appointed a Prime Minister to direct a Cabinet of appointed technicians
The constitutional framework nevertheless remains intact in Morocco and nationwide popular elections for some of the professional chambers were held in August and September 1966 The press is relatively free in Morocco and the right of diLsent prevails provided that such dissent does not violate the prohibition against political attacks on the instishytution of the monarchy or the person of the monarch
LI Under the revised US AID Policy for Africa agreed to in November 1966 Morocco is designated a development emphasis country entitled to receive continuing support on a country basis as part of a multilaterally coorshydinated countrj program Morocco was subsequently included in Presidential Determination 67-14 (January 5 1967) I
LIM=TE OFFICIAL USE~i
- l go
bull ~ -
f
DEPQbi) STATE AGENCY FOR INERNATIONAL DEVELOPMENT
WASHINGTON DC 052
CAPITAL ASSISTANCE LOA11 AUTHORIZATION
Provided from Develoroent Loan Funds Morocco Second Lower Moulouya Irrigation Loan
Pursuant to the authority vested in the Assistant Administrator for Africa of the Agency for International Development
AI)by the Foreign Assistance Act of 1961 as amended theIAct) and the delegations of authority issued thereunder I
have received and t-en into consideration a certification from the Director of USAIDMorocco as to the financial and human resources capability of Morocco to effectively utilize the Lower Moulouya Irrigation Project taking into account among other things the
maintenance and utilization of projects in Morocco previously financed or assisted by the United States and I hereby authorize the establishshyment of a loan pursuant to Part I Chapter 2 Title I the Development Loan Fund to the Government of the Kingdom of Morocco (Borrower) of not to exceed five million dollars ($5000000) to assist in financing the fore] gn exchange and local currency costs of goods and services for the third phase of the Lower Moulouya Irrigation Project subject to the foLlowing terms and conditions
1 Interest Rate and Terms of Repayment Borrower shall repay the loan to AID in forty (40) years including a grace period not to exceed ten (10) years Borrower shall pay interest on the unrepaid principal and any interest accrued thereon at the rate of (a) two percent (2) per annum during the grace period and (b) two and
one-half percent (2-12) per annum thereafter
2 Currency of Pepayment Repayment of the loan and paymenu of interest shall be made in United States dollars
- t- n t - - - shy
3 Other Terms and Conditions amp(a)Goods and Services financed under the loan
shall have their source and origin in
(i) the United States if disbursements therefor are made in United States dollars or
(ii) any country in the free world including Morocco if disbursements therefor are made in Moroccan currency
(b) AID Regulation 7 shall not apply to construction -work financed under the loan because as detailed in Section IIIC of Capital Assistance Paper No P 667 it is important to the national interest of the United States that the direct costs of construction work performed by third-country nationals be financed out of funds made available by the Act
(a) Such other terms and conditions as AID may deem advisable
Assistant Administrator for Africa
Date
~~~~~~~~~~~~~~~~~~ - q v
7
4 A J A 45 4 k
t A S T
S(3
I A444ilA~~l~)
7 -74
tAM= D
SECTOR 27
10000
t Co0Na includez25 cgtri oncFcttlrvI ncy I8s ~ ~ C t C- Includes 50 constriJcltiotrgrc
2000 60
IU
0
z
bull cosYsA shy----- i
600L _
400
200
0 5 I0 15 20
INTEREST RATE
I ~ 7 J7777
ANIAampX C
PROJECT DESCRn1 rOll
The project com)onents to te undertaken on the MIoulouya Irrigation Project over the next five years contists of the following
C(n1rtion of the rrLin casuals and bianch canbls to provide the suource of waler to the sctors be developed in theto TriffBou Areg and Zebra areas This construction will include the necessarystructures such as reulators highway bridges aqueducts water intake
and discharge structures etc
2 Iand Txeloommerit which includes engineering land consolishyt and iuvtllng lard preparation (subsoiling ripping destoning etc) and installation of water distribution canals (secondary tertiary and quurtunary) and drainage collector ditches for the Triffa main covering 24000 acres in sctors 8 9 10 16 20 21 23 24 25A 2513 27 and 28 Lou Areg Central covering 16250 acres in sectors Dltirough D2B and G1 thru-4h G313 i0u Areg Remainder covering 15000 acres in s-ctors D3 through D7 and GA through (6 Zebra Collective covering 45)0 acres in sectors 3 4 5 rind 6 and Zebra Rer-iinder covering 14250 acres in sectors 1 2 and 7 through 10 and th remainder of sectors 34 and 5 The total land to be developed is about 74000 acres
3 Canalization of the Oued Zeluan and nued Sidi-Amar in the Bou Areg Plain consisting of strairltening englarging and regularizing of these streams to carry the flood waters to the sea Drainage interceptor canals are to be constructed parallel to the sea in the Bou Areg Plain In the Triffa Plain the Oued Riada main drain will be deepened and enlarged and secondary drains will be excavated to provide for drainageof the Madagh area This will include the construction of bridges and culverts and other related work
4 Major Commorn Works will consist of
a Clearing of the Mo-1ouya riverbed downstream of the Mechra KLila barn caused roy flood dariwe and the installation of a set of stop logs for maintenance of pillway gate-
b Design supervision and construction of repairs to the ]elt Lank dead head tunel
c Conctruction and establishment of sib-division Offices and installations for farmer support such as CMVand farm stables
1 C
-2shy
5 Manavmtnt It ha been proposed that a US management firm be ewployed by th- C4 to manage and operate the entire Bou Areg area Such manageent -iuld encomparn all activities from the initial concept to final irIrp igricultural production Such activities would Include resp r-ibilsect -or supervnsion of engtneering and constriction of primary
S- Jry r complete developfnent of land training n in g tinul irription practicen preparation of market
t - r1t- (ot--rnu trplusmnining of a Moroccan cadre to take over h v--it Bou Areg dreara P the
At this writing the n-pt of turning over to a private UZSfirm execushyresponsibl]ity I h management of the establilrment and initial
op-ration of irr1gati the Bou Arog area has been only broadly de iiitd by the GCJO It Intended that proposals will be invited from a r -onable ntnber of f|ed US firms that a selection will be made an-n 7 them and a more do iled and cornprehenrive definition of the rer6 -Ps to be performed be eztabliched at that time It haa been
stimated that the t- of ruch a contract will be about $2 mir- n In any event the -ts of this contract other engineering arvl s to be provided undt n extension of the Ilydrotechnic contract and ether US corts will not ed the proposed $5 mllaion developzont Jean fr the project
The cle 3ifications duties ant 1ncnslbilities of the management personnel ill ha-- to be clearly defined i agreed to by the GCM Perimeter Directo- and other GOM Agencies luding arrangements for the necessary gistic support
Svxlale Docu-
1
4
LD ED 0ICIAL
-IAIDshy
A1trX D
C6JCK LIST OF STATUTORY CRITERIA
(Development Loan Fund)
1 FAA 0102 Extent to which U3 cormodities and services are furnished consistent with improving the US balance of payments See Sections II-C II-F
2 AA sect2O]ihi lanner in which loan wil promote countrys economic develo shy rit emphasizing help for long-range plans and programs designed to developeconomic tesourcos and increase productive capacities See Section I-D
i FAA sectT] h)(IL Information and conclusion on availability of financincfrom other free-world sources including private sources within the United States See Section II-F
FAA sect20l( )2 Information and conclusion on activitys economic and technical soundness including the capacity of the recipient country to reshypay the loan at a reasonable rate of interest See Sections II-B II-D and II-E
5 FAA 1201(h)( Information and conclusion on existence of reasonable promise activity will contribute to developrmnt of economic resources or increase of productive capacities See Sectiona II-B and II-D
_92_(b 4Information and conclusion on activitys relationship toothor development activities and its contribution to realizable longshyrange objectives See Sections I-D and I-E
The following abbreviations are und FAA - Foroirn Assistance Act of 1961 as amerded by the Foreign Asaistaice
Act of 1967 App - Foreign Assistance and Polated Agencies Appropriations Act 1968
AFEVCDF 1066
L1
-2shy
7 FAA f12O1(b)(5)_ Countrys self-help masures including institution of Foreign Assistance Act investment pliaranty programs Investment Guaranty
bull Agreement signed with Morocco 331o6l See Sections I-D and II-EI
_A ))(6) Information and conclusion on possible effects on US econowy with soecial refererne to areas of substantial -labor surplusSee Section II-F
9 FAA q201 (h)() Information and conclusion on the dagree to which thA country iv wiki- progress toward respect for the rule of law freedom of expression and of the press and recognition~yf the importance of individual freedom initiative and private enterprise
10 FAA -1201(b)(8) Information and conclusion on the degree to which the country is taking steps to improve its c]Laato for private investment See Sccton II-E
31 FAA R LbJi Inforrat-on and conclusion on whether or not the activityto b financed will contribute to the achievement of self-sustaining growthSee Sections I-D and II-B
12 FAA fi2Ol(bj Inforruation and conclusion on reasonalbe prospects of reshypayment See Section II-E
13 FAA fl20JL() Info-ation on applicability of the twenty country ceil4ng2
14 FAA fl201 L Information and coclusion on legality (under laws of the country end the US) and reasonableness of lending and ralendinr terms Loan will be on minimum termspermitted under FAA These are deemed reasonable see Sectioam Evidence will be renuired from the GGM as to the legality of the loan agreemnt
1 E 2 Information and conclusion on availability of an applicationFAA together with sufficient information and assurances to indicate reasonably that funds will be used in an economcally and technically sound manner See Sections I-A II-B and II-D Application received Janury 15 1968
16 FAA fl201(fL If a project inforntion and conclusion whether it will promote the economic developapent of the requesting country taking into account the countrys human and material resource requiremnts and the reshylationship between the ultimate objes6ives of the project and the countrys overall economic development See Sections I-D and II-B
17 FAAJ 20ij(J If a project information and conclusion whether it cifishycally provides for appropriate participation by private enterprise 8ce Sections YI-C and 114
I- FAA i22(a) Total amount of money under loan which is going directly to private enterprise is going to intermediate credit institutions or other borrowers for use by private enterprise is being used to finance imports
rfro private sources or is otherwise beirg used to finance procurementsfrcm private souwces See Sections II-C and II-2
9 FAA 207 Infosation on the emphasis placed en
(a) encouraging development of economic political and social institushytins No apparent relationship
(b) nelC-help in mectingthe countrys food nredo Project Vill conshytribute to production of food for lccal consumptioa
(c) in-proving availability in the country of evucated trained manpower Project will contribute to the deicloginext of trained manpower as one of the functions of the management contract (Soe Annex C para 5)
(d) prcgrams aimed at -malnutrition disease eradi atDn slum clearanceWater purification sewage disposal health education naternal and child care(includin fimrily pJnrning)) -nd cthcr public health ausistarice See
(c) other develoment activities including industrial development free
labor unions cooperatives tnd voluntary agencie transn)rtatin and ccshymwquication nrStczn capubiliTies for economic planning and public adlinisshytration arban develo-mment and modernization of laws to feilltate econcnicdevelopjen- GO- intends encourage develo vient of cooperat yes particularlyin the Left Pank areas Project will also develop capabiLi ics for cconoaicplanning and public a6~inistration (Annex C para 5) Other not applicable
20 Information on the extent to which the r-untry is
(a) cttcmting to increase food production and food sto a-e anddistribution felitics This project is one evidence of Moroccos efforts in this direction See also Section I-D and I-E
b) creating- a favorable climate for foreign and dmestic iri-ate enterprise and invcstrrment The GCM has recently reduced profits twes anrannounced a ten year guarantee against tax increases See Section II-E-2
(c) increasing the role of the neonle in the developnental procecsNo apparent relationship to this project
(d) allocating expenditures to development rather than to unn-cessarymilitary purpoes or intervention in other free countries affair See Sections I-D and Ii-
(e) willing --nribute funds to the project or program Th iOMhas already dcvo o-sidcrable resources to the project It has badieted13 million for th i oulouya for i7 See Section I-C
(If) making economic zocial and political refo ns such as taxc coliecshytion iYprovcmenLs and chan es in land tenure a Royal Comm ision has been appointed to make recomendation on land tenure probleras in the Lower I oulouya
(g) responding to the economic political and social concerns of its people and showing a determination to take volf-help wcasuren See Sections I-D and II-E
IT
-ovi~cd l v r 13 1968
- 4 - LDffIED OFFICIAL USE
21 FAA Inforn ation about multilateral assistance being Iurnished to t e country and whether the loan will encourage recgional development prog-rams The I1D has eztablihcd a Consultative Group for Morocco which rvicws the GOM development program anui prgress See Section II-F-4 for infoaation on othtr donor assistance to Morocco
22 A Extent to which the loan will contribute to the objective of ass ring naximu par icipation in the task of econonic dovelop--ent on the pL-t 0 _he people of the developing countries through the encouragement of cocr-tic private and local govenmental inLitutious o apparent
relationship
23 F _-_Dta_ Infor-ation and corissions whether loan will oncourageeffor s of t1e country to (a) increase tie flow of international trade (b) fostcr private initiative and comptition (c) encourage development and usceo co opratives credit unions and savingss and loan associations (d) disourgo monopolistic practices (c) improvo technical efficiency of industry ariculture and commerce (f) strenSthn free labor unions This project is cxpected to increase technical efficiency oi-agriculture
2_ C-1L lnforzrition and conclusion on how the loan will encourage US privte trade and investment abroad and how it uill encourage private US participation in foreign assistance prograas (incluiing use of private trade channels and the services of US private enterprise) See Section II-
25 VA-+_ Conclusion and supporting information on compliance with tho Co resional policy that engineering and professional servicos of US fir-ms and their affiliates are to bo used in connection with capital project3 to the nixinua extent consistent with the national interest US engineerirn and innsgcment services will be financed tnder this loan
2$ Inforamtion and ccnclusions who+her loan will pormit American rx-l] business to participate equitably in the furnishing of goods and
z orvices by To be satisfied in Loan Agreementfinanced it
27 - t(a App I18 Complianco with restriction of co -zodity procureshy o UsMS except as otherwise determined by the Picsicent and subject to ttu--- rcortir require r-nts Procurement will - liumited to the US for
reiabnrs nts and to ioocco and other free world countries 1-or US-cwne(d rhu disburseacnts
23 -i Comiance with bulk cozodity procurement restriction topriecc no l-ho han the nkarkot price prevailing in tho US at tia of
bull puchas Not applicable
29 FA Cozpliance with requirement that matrin insurance be purchased on commceities if the participating country discri-inates and that insurance be placed in the US To be satisfied in Loan Agreement
30 IA 6(a) Information at to the utilization of excers personal property in lieu of procurement of new items Will be required ai appropriate under terns of Lean Agreement
f
1 77--7 -77-77-777
31 FAA 61](a)(_) information and conclusion on availability of enginoering i financial and other plans nccx sary to carry out tho assittance and of a
reasonably firm cstimate of the cost of the assistanco to the United States
See Section II-D
32-ecessaryFAA t611(a)_(2) legislative action r6quired within recipient country and ibasis Cor reasonable anticipation such action will be completed in time to pormit orderly accompli-hirtnt of purposes of loan See Section I-A
33 n _AA161nJ0] If water or water-relatod land resource construcshy
tion project or program information and conclusion on a benefit-cost comshy
putation See Section II-B
3 4 VAA 611(c) Compliance with requirement that contracts for construction be let on comp-ctitive basis to mamum extent practicable To be satisfied
in Loan Agreement
If a loan for a project of $1 million or more certificatin35 FAA _61l(r) by the principal AID officer in the country as to the capability of the
country (both financirl and human resources) to effectively maintain and
utilize the project taking into account other US-financed projects (Such
certification is to be pproved by the Administrator aL the time the loan
is authorized) In process of being obtained
36 FAsgJ2 _6_h Appropriate steps that have b-en taken to assure that to the miaximum extent possible the country is contributing local currencies to net th-2 cost of contractural and other services and foreign currencies o- icd by tho US are utilized to meet the cost of contractual and other services The GU-M is contributing over $30 million to compleXton of this project Excess US-use dirhams will be used for eligible project costs other than US goods and services
37 FAA p619 Compliance with requirement that assistance to newly independent countries be furnished through multilateral organizations or plans to maxishymum extent appropriate Not deemed appropriate in view of previous AID financing and ccoiitment to the project See Sections I-A and I-D
38 FAA sect620(a) AcnO7a n3]7(b) Compliance with prohibitions
against assistance to Cuba ard any countr (a) which furnishes assistance to Cuba or failed to take appropriate steps by February 14 1964 to prevent ships or aircraft unier its registry from carrying equipment materials or supplies from or to Cuba or (b) which sells furnishes or permits any ships under its registry fr-om carrying items of primary atrategic signifishycance or itcms of economic assistance Morocco is not-known to be in Violation of these sections
39 FAA q620GL_ If assistance to the government of a country existence of determination it is not controlled by the international Communist movement The Secretary of State so determined on October 11 191
40 FAA 620(c) If assistance to the government of a country existonce of Indebtedness to a US citizen for goods or services furnished or ordered whore ouch citizen has exhaustod available legal romodiesor where the debt
i - ow - -- _---- --shy
- --
-6shy
is not denied or ontested by such government or the indebtedness arises under an unconditional guararty of payrrent given by such govornmunt No such indebtedness is known to exist
41 FA _(a2LdL If assisitance for any productive enterprise which will corashypote with US enterprise existence of agreement by the recipient country to prevent export to the US of more than 20 of the enterprises annual production during the life of the loan Not applicable
42 FA4 - 16Q_0_ A If assistance to the government of a country extent to which it (including government agenies or ruhdivisions) has after January 1 1962 taken steps o repudiate or nullify cuatracts or taken any action which has the effect of nationalizing expropriating or otherwise seizingownership or control ofprcpertv of US citizens or entities beneficially owned by them without taking appropriate stops to discha i ge its obligations No such steps cr actions are-known to have been taken by the GOM
43 FAA~L AjPj_10_9 Compliance with assistance toQ0 prohibitions against any Comunst codntry ozocco is not considered to be a cocinrunist country
44 FAA - 620(gJ Corliance with prohibition against use of assistonce to comp satc owners for expropriated or nationalized property To be satisfied in Loan Agreement
45 F AA 8620(h Compliance with regulations and procedures adopted to inshysure against ue of assistance in a manner hich contrary to the best inshyterests of the US promotes or assists the foreign aid projects or activities of the Communist-bloc countries To be satisfied in Loan Agreement
46 FAA 06-O(j)_ Exitence of determiration that the country is engaging in or preparing for aggressive military efforts No such determination has been made
L_62_O Information47 FAA on representation of the country at any intershynational confererce when that representation includes the planning of activishyties involving insurrection or subversion against the US or countries recoiving US assistance No such representition is known to have A occarrect
8 FAA 62JJ Existence of a determination that the country has permitted or failed to prevent destruction of US property by mob action or has failed to take steps to prevent a recurrence and-to pay compensation NO such destruction is known to have tak-n place
49 PAA l620(k) If construction of productive enterprise where eggregate value of assistanc to be furnished by US will exceed $1OO million identification of Gtntutoryauthority Not npplicable
i-xQ2MZZ=
1 shy
U 6 50 _Af( QCinsidoration which has been given to denlying assistance X to thu government of a country which after December 31 1966 has failed to
- institto the investnint guaranty program for the spcific risks of inconshy
vertibility and expropriation or confiscation Satisfied See No 7 above
S51S J lj Compliance with-prohibitions-againstn as~istance to countries which traffic or permittraffickingwith North Vietnam Morocco is not known to be in violation
52 E_-L620(_L If country has seized or imposed any penalty or sanction against vn US fishing vessel on account of its fishing activities in
intcrnationul waters information on the consideiation which has been given to excludirg the country from assistance No such situation is known to exist
53 FAA FA r) UAR restriction Not applicable620(p 9117
54 FAA R620tl) Existence of default undhr any Foreign Assistance Act loan to the country No such default exists
55 F ) C-nsider tion of whether co ntry is devoting unnecessary percentage of buKet for military purposes or use of foreign exchange for milita-y equipment
56 FAA 62o(t) Proibition on aid if country has severed diplomatic relations with US unless agreements have been negotiated after resumpshytion Diplomatic r(lations have not been severed
57 FAA 9620(u) Statur of the country on delinquent UN obligations Morocco is not known to be dlinquent on its UN~obligation
58 FAA R636(i) Prohibition on financing non-US manufactured motor vehicles Will be satisfied in Loan Agreement and Implementation Letter
59 App 102 Compliance with requirement that payments in excess of $25000 for architectural and en Jneering services on any one project be reported to Congress Such reports will be made
60 App R1O4 Compliance with bar against funds to pay pensions etc for military personnel Such payments will not be eligible for financing under th Loan Agreement
61 App 9106 If country attr ipts to create distinctions because of their race or religion among Americans in granting personal or commercial access or other rights otherwise avaVIfable to US citizens generally application which will be made in negotit ttons of contrary principles as expressed by Congress Morocco is not ku IDhave made any such attempts
iInD OFFIIt t USE
0k
OFFICIAL USE 62 AIwp Rii Compliance with existing requfremets for security clearance
of personnel Will be satisfied in Loan Agreement and Implementation Letter
63 App R1l2 Compliance with requirement for approval of cortractors and contract terms for capital projects Will be satisfied in Loan Agreement
clJ164 Aup Cmpliance with bar nRainst use of funds to Tay assessments etc of US meiber Such payments will not be eligible for financing under the Loan Agreemunt
6 Anp P115 Ccmpliance with regulations on employment of US and local personnel for funds obligated after April 30 1961 (Regulation 7) See Section III-C
66 Aim Vietnam iron and steel restrictions Not applicable
67 p l9 If a country other than Greece Turkey Iran Israel Republicof China Phillipines or Korea reduction in assistance by amounts spent for the purchase of sophisticated military equipment
68 Anp fi4O1 Compliance with bar against use of funds for publicity or proshypagjanda purposes within US not heretofore authorized by Congress Such use of funds will not be eligible for financing under the Loan Agreement
Morocco is a traditional Islamic monarchy with a constitution The conshystitution was implemented followaing a popular referendum in 1962 National regional and professional elective bodies including a parliament were established by universal suffrage under the constitution in 1963 The parliament was suspended in 1961 in a State of Exception because of its inability to agree on measures with adequate urgency to meet the prevailingecononde imperatives In July 1967 the King appointed a Prime Minister to direct a Cabinet of appointed technicians
The constitutional framework nevertheless remains intact in Morocco and nationwide popular elections for some of the professional chambers were held in August and September 1966 The press is relatively free in Morocco and the right of diLsent prevails provided that such dissent does not violate the prohibition against political attacks on the instishytution of the monarchy or the person of the monarch
LI Under the revised US AID Policy for Africa agreed to in November 1966 Morocco is designated a development emphasis country entitled to receive continuing support on a country basis as part of a multilaterally coorshydinated countrj program Morocco was subsequently included in Presidential Determination 67-14 (January 5 1967) I
LIM=TE OFFICIAL USE~i
- l go
bull ~ -
f
DEPQbi) STATE AGENCY FOR INERNATIONAL DEVELOPMENT
WASHINGTON DC 052
CAPITAL ASSISTANCE LOA11 AUTHORIZATION
Provided from Develoroent Loan Funds Morocco Second Lower Moulouya Irrigation Loan
Pursuant to the authority vested in the Assistant Administrator for Africa of the Agency for International Development
AI)by the Foreign Assistance Act of 1961 as amended theIAct) and the delegations of authority issued thereunder I
have received and t-en into consideration a certification from the Director of USAIDMorocco as to the financial and human resources capability of Morocco to effectively utilize the Lower Moulouya Irrigation Project taking into account among other things the
maintenance and utilization of projects in Morocco previously financed or assisted by the United States and I hereby authorize the establishshyment of a loan pursuant to Part I Chapter 2 Title I the Development Loan Fund to the Government of the Kingdom of Morocco (Borrower) of not to exceed five million dollars ($5000000) to assist in financing the fore] gn exchange and local currency costs of goods and services for the third phase of the Lower Moulouya Irrigation Project subject to the foLlowing terms and conditions
1 Interest Rate and Terms of Repayment Borrower shall repay the loan to AID in forty (40) years including a grace period not to exceed ten (10) years Borrower shall pay interest on the unrepaid principal and any interest accrued thereon at the rate of (a) two percent (2) per annum during the grace period and (b) two and
one-half percent (2-12) per annum thereafter
2 Currency of Pepayment Repayment of the loan and paymenu of interest shall be made in United States dollars
- t- n t - - - shy
3 Other Terms and Conditions amp(a)Goods and Services financed under the loan
shall have their source and origin in
(i) the United States if disbursements therefor are made in United States dollars or
(ii) any country in the free world including Morocco if disbursements therefor are made in Moroccan currency
(b) AID Regulation 7 shall not apply to construction -work financed under the loan because as detailed in Section IIIC of Capital Assistance Paper No P 667 it is important to the national interest of the United States that the direct costs of construction work performed by third-country nationals be financed out of funds made available by the Act
(a) Such other terms and conditions as AID may deem advisable
Assistant Administrator for Africa
Date
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7
tAM= D
SECTOR 27
10000
t Co0Na includez25 cgtri oncFcttlrvI ncy I8s ~ ~ C t C- Includes 50 constriJcltiotrgrc
2000 60
IU
0
z
bull cosYsA shy----- i
600L _
400
200
0 5 I0 15 20
INTEREST RATE
I ~ 7 J7777
ANIAampX C
PROJECT DESCRn1 rOll
The project com)onents to te undertaken on the MIoulouya Irrigation Project over the next five years contists of the following
C(n1rtion of the rrLin casuals and bianch canbls to provide the suource of waler to the sctors be developed in theto TriffBou Areg and Zebra areas This construction will include the necessarystructures such as reulators highway bridges aqueducts water intake
and discharge structures etc
2 Iand Txeloommerit which includes engineering land consolishyt and iuvtllng lard preparation (subsoiling ripping destoning etc) and installation of water distribution canals (secondary tertiary and quurtunary) and drainage collector ditches for the Triffa main covering 24000 acres in sctors 8 9 10 16 20 21 23 24 25A 2513 27 and 28 Lou Areg Central covering 16250 acres in sectors Dltirough D2B and G1 thru-4h G313 i0u Areg Remainder covering 15000 acres in s-ctors D3 through D7 and GA through (6 Zebra Collective covering 45)0 acres in sectors 3 4 5 rind 6 and Zebra Rer-iinder covering 14250 acres in sectors 1 2 and 7 through 10 and th remainder of sectors 34 and 5 The total land to be developed is about 74000 acres
3 Canalization of the Oued Zeluan and nued Sidi-Amar in the Bou Areg Plain consisting of strairltening englarging and regularizing of these streams to carry the flood waters to the sea Drainage interceptor canals are to be constructed parallel to the sea in the Bou Areg Plain In the Triffa Plain the Oued Riada main drain will be deepened and enlarged and secondary drains will be excavated to provide for drainageof the Madagh area This will include the construction of bridges and culverts and other related work
4 Major Commorn Works will consist of
a Clearing of the Mo-1ouya riverbed downstream of the Mechra KLila barn caused roy flood dariwe and the installation of a set of stop logs for maintenance of pillway gate-
b Design supervision and construction of repairs to the ]elt Lank dead head tunel
c Conctruction and establishment of sib-division Offices and installations for farmer support such as CMVand farm stables
1 C
-2shy
5 Manavmtnt It ha been proposed that a US management firm be ewployed by th- C4 to manage and operate the entire Bou Areg area Such manageent -iuld encomparn all activities from the initial concept to final irIrp igricultural production Such activities would Include resp r-ibilsect -or supervnsion of engtneering and constriction of primary
S- Jry r complete developfnent of land training n in g tinul irription practicen preparation of market
t - r1t- (ot--rnu trplusmnining of a Moroccan cadre to take over h v--it Bou Areg dreara P the
At this writing the n-pt of turning over to a private UZSfirm execushyresponsibl]ity I h management of the establilrment and initial
op-ration of irr1gati the Bou Arog area has been only broadly de iiitd by the GCJO It Intended that proposals will be invited from a r -onable ntnber of f|ed US firms that a selection will be made an-n 7 them and a more do iled and cornprehenrive definition of the rer6 -Ps to be performed be eztabliched at that time It haa been
stimated that the t- of ruch a contract will be about $2 mir- n In any event the -ts of this contract other engineering arvl s to be provided undt n extension of the Ilydrotechnic contract and ether US corts will not ed the proposed $5 mllaion developzont Jean fr the project
The cle 3ifications duties ant 1ncnslbilities of the management personnel ill ha-- to be clearly defined i agreed to by the GCM Perimeter Directo- and other GOM Agencies luding arrangements for the necessary gistic support
Svxlale Docu-
1
4
LD ED 0ICIAL
-IAIDshy
A1trX D
C6JCK LIST OF STATUTORY CRITERIA
(Development Loan Fund)
1 FAA 0102 Extent to which U3 cormodities and services are furnished consistent with improving the US balance of payments See Sections II-C II-F
2 AA sect2O]ihi lanner in which loan wil promote countrys economic develo shy rit emphasizing help for long-range plans and programs designed to developeconomic tesourcos and increase productive capacities See Section I-D
i FAA sectT] h)(IL Information and conclusion on availability of financincfrom other free-world sources including private sources within the United States See Section II-F
FAA sect20l( )2 Information and conclusion on activitys economic and technical soundness including the capacity of the recipient country to reshypay the loan at a reasonable rate of interest See Sections II-B II-D and II-E
5 FAA 1201(h)( Information and conclusion on existence of reasonable promise activity will contribute to developrmnt of economic resources or increase of productive capacities See Sectiona II-B and II-D
_92_(b 4Information and conclusion on activitys relationship toothor development activities and its contribution to realizable longshyrange objectives See Sections I-D and I-E
The following abbreviations are und FAA - Foroirn Assistance Act of 1961 as amerded by the Foreign Asaistaice
Act of 1967 App - Foreign Assistance and Polated Agencies Appropriations Act 1968
AFEVCDF 1066
L1
-2shy
7 FAA f12O1(b)(5)_ Countrys self-help masures including institution of Foreign Assistance Act investment pliaranty programs Investment Guaranty
bull Agreement signed with Morocco 331o6l See Sections I-D and II-EI
_A ))(6) Information and conclusion on possible effects on US econowy with soecial refererne to areas of substantial -labor surplusSee Section II-F
9 FAA q201 (h)() Information and conclusion on the dagree to which thA country iv wiki- progress toward respect for the rule of law freedom of expression and of the press and recognition~yf the importance of individual freedom initiative and private enterprise
10 FAA -1201(b)(8) Information and conclusion on the degree to which the country is taking steps to improve its c]Laato for private investment See Sccton II-E
31 FAA R LbJi Inforrat-on and conclusion on whether or not the activityto b financed will contribute to the achievement of self-sustaining growthSee Sections I-D and II-B
12 FAA fi2Ol(bj Inforruation and conclusion on reasonalbe prospects of reshypayment See Section II-E
13 FAA fl20JL() Info-ation on applicability of the twenty country ceil4ng2
14 FAA fl201 L Information and coclusion on legality (under laws of the country end the US) and reasonableness of lending and ralendinr terms Loan will be on minimum termspermitted under FAA These are deemed reasonable see Sectioam Evidence will be renuired from the GGM as to the legality of the loan agreemnt
1 E 2 Information and conclusion on availability of an applicationFAA together with sufficient information and assurances to indicate reasonably that funds will be used in an economcally and technically sound manner See Sections I-A II-B and II-D Application received Janury 15 1968
16 FAA fl201(fL If a project inforntion and conclusion whether it will promote the economic developapent of the requesting country taking into account the countrys human and material resource requiremnts and the reshylationship between the ultimate objes6ives of the project and the countrys overall economic development See Sections I-D and II-B
17 FAAJ 20ij(J If a project information and conclusion whether it cifishycally provides for appropriate participation by private enterprise 8ce Sections YI-C and 114
I- FAA i22(a) Total amount of money under loan which is going directly to private enterprise is going to intermediate credit institutions or other borrowers for use by private enterprise is being used to finance imports
rfro private sources or is otherwise beirg used to finance procurementsfrcm private souwces See Sections II-C and II-2
9 FAA 207 Infosation on the emphasis placed en
(a) encouraging development of economic political and social institushytins No apparent relationship
(b) nelC-help in mectingthe countrys food nredo Project Vill conshytribute to production of food for lccal consumptioa
(c) in-proving availability in the country of evucated trained manpower Project will contribute to the deicloginext of trained manpower as one of the functions of the management contract (Soe Annex C para 5)
(d) prcgrams aimed at -malnutrition disease eradi atDn slum clearanceWater purification sewage disposal health education naternal and child care(includin fimrily pJnrning)) -nd cthcr public health ausistarice See
(c) other develoment activities including industrial development free
labor unions cooperatives tnd voluntary agencie transn)rtatin and ccshymwquication nrStczn capubiliTies for economic planning and public adlinisshytration arban develo-mment and modernization of laws to feilltate econcnicdevelopjen- GO- intends encourage develo vient of cooperat yes particularlyin the Left Pank areas Project will also develop capabiLi ics for cconoaicplanning and public a6~inistration (Annex C para 5) Other not applicable
20 Information on the extent to which the r-untry is
(a) cttcmting to increase food production and food sto a-e anddistribution felitics This project is one evidence of Moroccos efforts in this direction See also Section I-D and I-E
b) creating- a favorable climate for foreign and dmestic iri-ate enterprise and invcstrrment The GCM has recently reduced profits twes anrannounced a ten year guarantee against tax increases See Section II-E-2
(c) increasing the role of the neonle in the developnental procecsNo apparent relationship to this project
(d) allocating expenditures to development rather than to unn-cessarymilitary purpoes or intervention in other free countries affair See Sections I-D and Ii-
(e) willing --nribute funds to the project or program Th iOMhas already dcvo o-sidcrable resources to the project It has badieted13 million for th i oulouya for i7 See Section I-C
(If) making economic zocial and political refo ns such as taxc coliecshytion iYprovcmenLs and chan es in land tenure a Royal Comm ision has been appointed to make recomendation on land tenure probleras in the Lower I oulouya
(g) responding to the economic political and social concerns of its people and showing a determination to take volf-help wcasuren See Sections I-D and II-E
IT
-ovi~cd l v r 13 1968
- 4 - LDffIED OFFICIAL USE
21 FAA Inforn ation about multilateral assistance being Iurnished to t e country and whether the loan will encourage recgional development prog-rams The I1D has eztablihcd a Consultative Group for Morocco which rvicws the GOM development program anui prgress See Section II-F-4 for infoaation on othtr donor assistance to Morocco
22 A Extent to which the loan will contribute to the objective of ass ring naximu par icipation in the task of econonic dovelop--ent on the pL-t 0 _he people of the developing countries through the encouragement of cocr-tic private and local govenmental inLitutious o apparent
relationship
23 F _-_Dta_ Infor-ation and corissions whether loan will oncourageeffor s of t1e country to (a) increase tie flow of international trade (b) fostcr private initiative and comptition (c) encourage development and usceo co opratives credit unions and savingss and loan associations (d) disourgo monopolistic practices (c) improvo technical efficiency of industry ariculture and commerce (f) strenSthn free labor unions This project is cxpected to increase technical efficiency oi-agriculture
2_ C-1L lnforzrition and conclusion on how the loan will encourage US privte trade and investment abroad and how it uill encourage private US participation in foreign assistance prograas (incluiing use of private trade channels and the services of US private enterprise) See Section II-
25 VA-+_ Conclusion and supporting information on compliance with tho Co resional policy that engineering and professional servicos of US fir-ms and their affiliates are to bo used in connection with capital project3 to the nixinua extent consistent with the national interest US engineerirn and innsgcment services will be financed tnder this loan
2$ Inforamtion and ccnclusions who+her loan will pormit American rx-l] business to participate equitably in the furnishing of goods and
z orvices by To be satisfied in Loan Agreementfinanced it
27 - t(a App I18 Complianco with restriction of co -zodity procureshy o UsMS except as otherwise determined by the Picsicent and subject to ttu--- rcortir require r-nts Procurement will - liumited to the US for
reiabnrs nts and to ioocco and other free world countries 1-or US-cwne(d rhu disburseacnts
23 -i Comiance with bulk cozodity procurement restriction topriecc no l-ho han the nkarkot price prevailing in tho US at tia of
bull puchas Not applicable
29 FA Cozpliance with requirement that matrin insurance be purchased on commceities if the participating country discri-inates and that insurance be placed in the US To be satisfied in Loan Agreement
30 IA 6(a) Information at to the utilization of excers personal property in lieu of procurement of new items Will be required ai appropriate under terns of Lean Agreement
f
1 77--7 -77-77-777
31 FAA 61](a)(_) information and conclusion on availability of enginoering i financial and other plans nccx sary to carry out tho assittance and of a
reasonably firm cstimate of the cost of the assistanco to the United States
See Section II-D
32-ecessaryFAA t611(a)_(2) legislative action r6quired within recipient country and ibasis Cor reasonable anticipation such action will be completed in time to pormit orderly accompli-hirtnt of purposes of loan See Section I-A
33 n _AA161nJ0] If water or water-relatod land resource construcshy
tion project or program information and conclusion on a benefit-cost comshy
putation See Section II-B
3 4 VAA 611(c) Compliance with requirement that contracts for construction be let on comp-ctitive basis to mamum extent practicable To be satisfied
in Loan Agreement
If a loan for a project of $1 million or more certificatin35 FAA _61l(r) by the principal AID officer in the country as to the capability of the
country (both financirl and human resources) to effectively maintain and
utilize the project taking into account other US-financed projects (Such
certification is to be pproved by the Administrator aL the time the loan
is authorized) In process of being obtained
36 FAsgJ2 _6_h Appropriate steps that have b-en taken to assure that to the miaximum extent possible the country is contributing local currencies to net th-2 cost of contractural and other services and foreign currencies o- icd by tho US are utilized to meet the cost of contractual and other services The GU-M is contributing over $30 million to compleXton of this project Excess US-use dirhams will be used for eligible project costs other than US goods and services
37 FAA p619 Compliance with requirement that assistance to newly independent countries be furnished through multilateral organizations or plans to maxishymum extent appropriate Not deemed appropriate in view of previous AID financing and ccoiitment to the project See Sections I-A and I-D
38 FAA sect620(a) AcnO7a n3]7(b) Compliance with prohibitions
against assistance to Cuba ard any countr (a) which furnishes assistance to Cuba or failed to take appropriate steps by February 14 1964 to prevent ships or aircraft unier its registry from carrying equipment materials or supplies from or to Cuba or (b) which sells furnishes or permits any ships under its registry fr-om carrying items of primary atrategic signifishycance or itcms of economic assistance Morocco is not-known to be in Violation of these sections
39 FAA q620GL_ If assistance to the government of a country existence of determination it is not controlled by the international Communist movement The Secretary of State so determined on October 11 191
40 FAA 620(c) If assistance to the government of a country existonce of Indebtedness to a US citizen for goods or services furnished or ordered whore ouch citizen has exhaustod available legal romodiesor where the debt
i - ow - -- _---- --shy
- --
-6shy
is not denied or ontested by such government or the indebtedness arises under an unconditional guararty of payrrent given by such govornmunt No such indebtedness is known to exist
41 FA _(a2LdL If assisitance for any productive enterprise which will corashypote with US enterprise existence of agreement by the recipient country to prevent export to the US of more than 20 of the enterprises annual production during the life of the loan Not applicable
42 FA4 - 16Q_0_ A If assistance to the government of a country extent to which it (including government agenies or ruhdivisions) has after January 1 1962 taken steps o repudiate or nullify cuatracts or taken any action which has the effect of nationalizing expropriating or otherwise seizingownership or control ofprcpertv of US citizens or entities beneficially owned by them without taking appropriate stops to discha i ge its obligations No such steps cr actions are-known to have been taken by the GOM
43 FAA~L AjPj_10_9 Compliance with assistance toQ0 prohibitions against any Comunst codntry ozocco is not considered to be a cocinrunist country
44 FAA - 620(gJ Corliance with prohibition against use of assistonce to comp satc owners for expropriated or nationalized property To be satisfied in Loan Agreement
45 F AA 8620(h Compliance with regulations and procedures adopted to inshysure against ue of assistance in a manner hich contrary to the best inshyterests of the US promotes or assists the foreign aid projects or activities of the Communist-bloc countries To be satisfied in Loan Agreement
46 FAA 06-O(j)_ Exitence of determiration that the country is engaging in or preparing for aggressive military efforts No such determination has been made
L_62_O Information47 FAA on representation of the country at any intershynational confererce when that representation includes the planning of activishyties involving insurrection or subversion against the US or countries recoiving US assistance No such representition is known to have A occarrect
8 FAA 62JJ Existence of a determination that the country has permitted or failed to prevent destruction of US property by mob action or has failed to take steps to prevent a recurrence and-to pay compensation NO such destruction is known to have tak-n place
49 PAA l620(k) If construction of productive enterprise where eggregate value of assistanc to be furnished by US will exceed $1OO million identification of Gtntutoryauthority Not npplicable
i-xQ2MZZ=
1 shy
U 6 50 _Af( QCinsidoration which has been given to denlying assistance X to thu government of a country which after December 31 1966 has failed to
- institto the investnint guaranty program for the spcific risks of inconshy
vertibility and expropriation or confiscation Satisfied See No 7 above
S51S J lj Compliance with-prohibitions-againstn as~istance to countries which traffic or permittraffickingwith North Vietnam Morocco is not known to be in violation
52 E_-L620(_L If country has seized or imposed any penalty or sanction against vn US fishing vessel on account of its fishing activities in
intcrnationul waters information on the consideiation which has been given to excludirg the country from assistance No such situation is known to exist
53 FAA FA r) UAR restriction Not applicable620(p 9117
54 FAA R620tl) Existence of default undhr any Foreign Assistance Act loan to the country No such default exists
55 F ) C-nsider tion of whether co ntry is devoting unnecessary percentage of buKet for military purposes or use of foreign exchange for milita-y equipment
56 FAA 62o(t) Proibition on aid if country has severed diplomatic relations with US unless agreements have been negotiated after resumpshytion Diplomatic r(lations have not been severed
57 FAA 9620(u) Statur of the country on delinquent UN obligations Morocco is not known to be dlinquent on its UN~obligation
58 FAA R636(i) Prohibition on financing non-US manufactured motor vehicles Will be satisfied in Loan Agreement and Implementation Letter
59 App 102 Compliance with requirement that payments in excess of $25000 for architectural and en Jneering services on any one project be reported to Congress Such reports will be made
60 App R1O4 Compliance with bar against funds to pay pensions etc for military personnel Such payments will not be eligible for financing under th Loan Agreement
61 App 9106 If country attr ipts to create distinctions because of their race or religion among Americans in granting personal or commercial access or other rights otherwise avaVIfable to US citizens generally application which will be made in negotit ttons of contrary principles as expressed by Congress Morocco is not ku IDhave made any such attempts
iInD OFFIIt t USE
0k
OFFICIAL USE 62 AIwp Rii Compliance with existing requfremets for security clearance
of personnel Will be satisfied in Loan Agreement and Implementation Letter
63 App R1l2 Compliance with requirement for approval of cortractors and contract terms for capital projects Will be satisfied in Loan Agreement
clJ164 Aup Cmpliance with bar nRainst use of funds to Tay assessments etc of US meiber Such payments will not be eligible for financing under the Loan Agreemunt
6 Anp P115 Ccmpliance with regulations on employment of US and local personnel for funds obligated after April 30 1961 (Regulation 7) See Section III-C
66 Aim Vietnam iron and steel restrictions Not applicable
67 p l9 If a country other than Greece Turkey Iran Israel Republicof China Phillipines or Korea reduction in assistance by amounts spent for the purchase of sophisticated military equipment
68 Anp fi4O1 Compliance with bar against use of funds for publicity or proshypagjanda purposes within US not heretofore authorized by Congress Such use of funds will not be eligible for financing under the Loan Agreement
Morocco is a traditional Islamic monarchy with a constitution The conshystitution was implemented followaing a popular referendum in 1962 National regional and professional elective bodies including a parliament were established by universal suffrage under the constitution in 1963 The parliament was suspended in 1961 in a State of Exception because of its inability to agree on measures with adequate urgency to meet the prevailingecononde imperatives In July 1967 the King appointed a Prime Minister to direct a Cabinet of appointed technicians
The constitutional framework nevertheless remains intact in Morocco and nationwide popular elections for some of the professional chambers were held in August and September 1966 The press is relatively free in Morocco and the right of diLsent prevails provided that such dissent does not violate the prohibition against political attacks on the instishytution of the monarchy or the person of the monarch
LI Under the revised US AID Policy for Africa agreed to in November 1966 Morocco is designated a development emphasis country entitled to receive continuing support on a country basis as part of a multilaterally coorshydinated countrj program Morocco was subsequently included in Presidential Determination 67-14 (January 5 1967) I
LIM=TE OFFICIAL USE~i
- l go
bull ~ -
f
DEPQbi) STATE AGENCY FOR INERNATIONAL DEVELOPMENT
WASHINGTON DC 052
CAPITAL ASSISTANCE LOA11 AUTHORIZATION
Provided from Develoroent Loan Funds Morocco Second Lower Moulouya Irrigation Loan
Pursuant to the authority vested in the Assistant Administrator for Africa of the Agency for International Development
AI)by the Foreign Assistance Act of 1961 as amended theIAct) and the delegations of authority issued thereunder I
have received and t-en into consideration a certification from the Director of USAIDMorocco as to the financial and human resources capability of Morocco to effectively utilize the Lower Moulouya Irrigation Project taking into account among other things the
maintenance and utilization of projects in Morocco previously financed or assisted by the United States and I hereby authorize the establishshyment of a loan pursuant to Part I Chapter 2 Title I the Development Loan Fund to the Government of the Kingdom of Morocco (Borrower) of not to exceed five million dollars ($5000000) to assist in financing the fore] gn exchange and local currency costs of goods and services for the third phase of the Lower Moulouya Irrigation Project subject to the foLlowing terms and conditions
1 Interest Rate and Terms of Repayment Borrower shall repay the loan to AID in forty (40) years including a grace period not to exceed ten (10) years Borrower shall pay interest on the unrepaid principal and any interest accrued thereon at the rate of (a) two percent (2) per annum during the grace period and (b) two and
one-half percent (2-12) per annum thereafter
2 Currency of Pepayment Repayment of the loan and paymenu of interest shall be made in United States dollars
- t- n t - - - shy
3 Other Terms and Conditions amp(a)Goods and Services financed under the loan
shall have their source and origin in
(i) the United States if disbursements therefor are made in United States dollars or
(ii) any country in the free world including Morocco if disbursements therefor are made in Moroccan currency
(b) AID Regulation 7 shall not apply to construction -work financed under the loan because as detailed in Section IIIC of Capital Assistance Paper No P 667 it is important to the national interest of the United States that the direct costs of construction work performed by third-country nationals be financed out of funds made available by the Act
(a) Such other terms and conditions as AID may deem advisable
Assistant Administrator for Africa
Date
~~~~~~~~~~~~~~~~~~ - q v
7
ANIAampX C
PROJECT DESCRn1 rOll
The project com)onents to te undertaken on the MIoulouya Irrigation Project over the next five years contists of the following
C(n1rtion of the rrLin casuals and bianch canbls to provide the suource of waler to the sctors be developed in theto TriffBou Areg and Zebra areas This construction will include the necessarystructures such as reulators highway bridges aqueducts water intake
and discharge structures etc
2 Iand Txeloommerit which includes engineering land consolishyt and iuvtllng lard preparation (subsoiling ripping destoning etc) and installation of water distribution canals (secondary tertiary and quurtunary) and drainage collector ditches for the Triffa main covering 24000 acres in sctors 8 9 10 16 20 21 23 24 25A 2513 27 and 28 Lou Areg Central covering 16250 acres in sectors Dltirough D2B and G1 thru-4h G313 i0u Areg Remainder covering 15000 acres in s-ctors D3 through D7 and GA through (6 Zebra Collective covering 45)0 acres in sectors 3 4 5 rind 6 and Zebra Rer-iinder covering 14250 acres in sectors 1 2 and 7 through 10 and th remainder of sectors 34 and 5 The total land to be developed is about 74000 acres
3 Canalization of the Oued Zeluan and nued Sidi-Amar in the Bou Areg Plain consisting of strairltening englarging and regularizing of these streams to carry the flood waters to the sea Drainage interceptor canals are to be constructed parallel to the sea in the Bou Areg Plain In the Triffa Plain the Oued Riada main drain will be deepened and enlarged and secondary drains will be excavated to provide for drainageof the Madagh area This will include the construction of bridges and culverts and other related work
4 Major Commorn Works will consist of
a Clearing of the Mo-1ouya riverbed downstream of the Mechra KLila barn caused roy flood dariwe and the installation of a set of stop logs for maintenance of pillway gate-
b Design supervision and construction of repairs to the ]elt Lank dead head tunel
c Conctruction and establishment of sib-division Offices and installations for farmer support such as CMVand farm stables
1 C
-2shy
5 Manavmtnt It ha been proposed that a US management firm be ewployed by th- C4 to manage and operate the entire Bou Areg area Such manageent -iuld encomparn all activities from the initial concept to final irIrp igricultural production Such activities would Include resp r-ibilsect -or supervnsion of engtneering and constriction of primary
S- Jry r complete developfnent of land training n in g tinul irription practicen preparation of market
t - r1t- (ot--rnu trplusmnining of a Moroccan cadre to take over h v--it Bou Areg dreara P the
At this writing the n-pt of turning over to a private UZSfirm execushyresponsibl]ity I h management of the establilrment and initial
op-ration of irr1gati the Bou Arog area has been only broadly de iiitd by the GCJO It Intended that proposals will be invited from a r -onable ntnber of f|ed US firms that a selection will be made an-n 7 them and a more do iled and cornprehenrive definition of the rer6 -Ps to be performed be eztabliched at that time It haa been
stimated that the t- of ruch a contract will be about $2 mir- n In any event the -ts of this contract other engineering arvl s to be provided undt n extension of the Ilydrotechnic contract and ether US corts will not ed the proposed $5 mllaion developzont Jean fr the project
The cle 3ifications duties ant 1ncnslbilities of the management personnel ill ha-- to be clearly defined i agreed to by the GCM Perimeter Directo- and other GOM Agencies luding arrangements for the necessary gistic support
Svxlale Docu-
1
4
LD ED 0ICIAL
-IAIDshy
A1trX D
C6JCK LIST OF STATUTORY CRITERIA
(Development Loan Fund)
1 FAA 0102 Extent to which U3 cormodities and services are furnished consistent with improving the US balance of payments See Sections II-C II-F
2 AA sect2O]ihi lanner in which loan wil promote countrys economic develo shy rit emphasizing help for long-range plans and programs designed to developeconomic tesourcos and increase productive capacities See Section I-D
i FAA sectT] h)(IL Information and conclusion on availability of financincfrom other free-world sources including private sources within the United States See Section II-F
FAA sect20l( )2 Information and conclusion on activitys economic and technical soundness including the capacity of the recipient country to reshypay the loan at a reasonable rate of interest See Sections II-B II-D and II-E
5 FAA 1201(h)( Information and conclusion on existence of reasonable promise activity will contribute to developrmnt of economic resources or increase of productive capacities See Sectiona II-B and II-D
_92_(b 4Information and conclusion on activitys relationship toothor development activities and its contribution to realizable longshyrange objectives See Sections I-D and I-E
The following abbreviations are und FAA - Foroirn Assistance Act of 1961 as amerded by the Foreign Asaistaice
Act of 1967 App - Foreign Assistance and Polated Agencies Appropriations Act 1968
AFEVCDF 1066
L1
-2shy
7 FAA f12O1(b)(5)_ Countrys self-help masures including institution of Foreign Assistance Act investment pliaranty programs Investment Guaranty
bull Agreement signed with Morocco 331o6l See Sections I-D and II-EI
_A ))(6) Information and conclusion on possible effects on US econowy with soecial refererne to areas of substantial -labor surplusSee Section II-F
9 FAA q201 (h)() Information and conclusion on the dagree to which thA country iv wiki- progress toward respect for the rule of law freedom of expression and of the press and recognition~yf the importance of individual freedom initiative and private enterprise
10 FAA -1201(b)(8) Information and conclusion on the degree to which the country is taking steps to improve its c]Laato for private investment See Sccton II-E
31 FAA R LbJi Inforrat-on and conclusion on whether or not the activityto b financed will contribute to the achievement of self-sustaining growthSee Sections I-D and II-B
12 FAA fi2Ol(bj Inforruation and conclusion on reasonalbe prospects of reshypayment See Section II-E
13 FAA fl20JL() Info-ation on applicability of the twenty country ceil4ng2
14 FAA fl201 L Information and coclusion on legality (under laws of the country end the US) and reasonableness of lending and ralendinr terms Loan will be on minimum termspermitted under FAA These are deemed reasonable see Sectioam Evidence will be renuired from the GGM as to the legality of the loan agreemnt
1 E 2 Information and conclusion on availability of an applicationFAA together with sufficient information and assurances to indicate reasonably that funds will be used in an economcally and technically sound manner See Sections I-A II-B and II-D Application received Janury 15 1968
16 FAA fl201(fL If a project inforntion and conclusion whether it will promote the economic developapent of the requesting country taking into account the countrys human and material resource requiremnts and the reshylationship between the ultimate objes6ives of the project and the countrys overall economic development See Sections I-D and II-B
17 FAAJ 20ij(J If a project information and conclusion whether it cifishycally provides for appropriate participation by private enterprise 8ce Sections YI-C and 114
I- FAA i22(a) Total amount of money under loan which is going directly to private enterprise is going to intermediate credit institutions or other borrowers for use by private enterprise is being used to finance imports
rfro private sources or is otherwise beirg used to finance procurementsfrcm private souwces See Sections II-C and II-2
9 FAA 207 Infosation on the emphasis placed en
(a) encouraging development of economic political and social institushytins No apparent relationship
(b) nelC-help in mectingthe countrys food nredo Project Vill conshytribute to production of food for lccal consumptioa
(c) in-proving availability in the country of evucated trained manpower Project will contribute to the deicloginext of trained manpower as one of the functions of the management contract (Soe Annex C para 5)
(d) prcgrams aimed at -malnutrition disease eradi atDn slum clearanceWater purification sewage disposal health education naternal and child care(includin fimrily pJnrning)) -nd cthcr public health ausistarice See
(c) other develoment activities including industrial development free
labor unions cooperatives tnd voluntary agencie transn)rtatin and ccshymwquication nrStczn capubiliTies for economic planning and public adlinisshytration arban develo-mment and modernization of laws to feilltate econcnicdevelopjen- GO- intends encourage develo vient of cooperat yes particularlyin the Left Pank areas Project will also develop capabiLi ics for cconoaicplanning and public a6~inistration (Annex C para 5) Other not applicable
20 Information on the extent to which the r-untry is
(a) cttcmting to increase food production and food sto a-e anddistribution felitics This project is one evidence of Moroccos efforts in this direction See also Section I-D and I-E
b) creating- a favorable climate for foreign and dmestic iri-ate enterprise and invcstrrment The GCM has recently reduced profits twes anrannounced a ten year guarantee against tax increases See Section II-E-2
(c) increasing the role of the neonle in the developnental procecsNo apparent relationship to this project
(d) allocating expenditures to development rather than to unn-cessarymilitary purpoes or intervention in other free countries affair See Sections I-D and Ii-
(e) willing --nribute funds to the project or program Th iOMhas already dcvo o-sidcrable resources to the project It has badieted13 million for th i oulouya for i7 See Section I-C
(If) making economic zocial and political refo ns such as taxc coliecshytion iYprovcmenLs and chan es in land tenure a Royal Comm ision has been appointed to make recomendation on land tenure probleras in the Lower I oulouya
(g) responding to the economic political and social concerns of its people and showing a determination to take volf-help wcasuren See Sections I-D and II-E
IT
-ovi~cd l v r 13 1968
- 4 - LDffIED OFFICIAL USE
21 FAA Inforn ation about multilateral assistance being Iurnished to t e country and whether the loan will encourage recgional development prog-rams The I1D has eztablihcd a Consultative Group for Morocco which rvicws the GOM development program anui prgress See Section II-F-4 for infoaation on othtr donor assistance to Morocco
22 A Extent to which the loan will contribute to the objective of ass ring naximu par icipation in the task of econonic dovelop--ent on the pL-t 0 _he people of the developing countries through the encouragement of cocr-tic private and local govenmental inLitutious o apparent
relationship
23 F _-_Dta_ Infor-ation and corissions whether loan will oncourageeffor s of t1e country to (a) increase tie flow of international trade (b) fostcr private initiative and comptition (c) encourage development and usceo co opratives credit unions and savingss and loan associations (d) disourgo monopolistic practices (c) improvo technical efficiency of industry ariculture and commerce (f) strenSthn free labor unions This project is cxpected to increase technical efficiency oi-agriculture
2_ C-1L lnforzrition and conclusion on how the loan will encourage US privte trade and investment abroad and how it uill encourage private US participation in foreign assistance prograas (incluiing use of private trade channels and the services of US private enterprise) See Section II-
25 VA-+_ Conclusion and supporting information on compliance with tho Co resional policy that engineering and professional servicos of US fir-ms and their affiliates are to bo used in connection with capital project3 to the nixinua extent consistent with the national interest US engineerirn and innsgcment services will be financed tnder this loan
2$ Inforamtion and ccnclusions who+her loan will pormit American rx-l] business to participate equitably in the furnishing of goods and
z orvices by To be satisfied in Loan Agreementfinanced it
27 - t(a App I18 Complianco with restriction of co -zodity procureshy o UsMS except as otherwise determined by the Picsicent and subject to ttu--- rcortir require r-nts Procurement will - liumited to the US for
reiabnrs nts and to ioocco and other free world countries 1-or US-cwne(d rhu disburseacnts
23 -i Comiance with bulk cozodity procurement restriction topriecc no l-ho han the nkarkot price prevailing in tho US at tia of
bull puchas Not applicable
29 FA Cozpliance with requirement that matrin insurance be purchased on commceities if the participating country discri-inates and that insurance be placed in the US To be satisfied in Loan Agreement
30 IA 6(a) Information at to the utilization of excers personal property in lieu of procurement of new items Will be required ai appropriate under terns of Lean Agreement
f
1 77--7 -77-77-777
31 FAA 61](a)(_) information and conclusion on availability of enginoering i financial and other plans nccx sary to carry out tho assittance and of a
reasonably firm cstimate of the cost of the assistanco to the United States
See Section II-D
32-ecessaryFAA t611(a)_(2) legislative action r6quired within recipient country and ibasis Cor reasonable anticipation such action will be completed in time to pormit orderly accompli-hirtnt of purposes of loan See Section I-A
33 n _AA161nJ0] If water or water-relatod land resource construcshy
tion project or program information and conclusion on a benefit-cost comshy
putation See Section II-B
3 4 VAA 611(c) Compliance with requirement that contracts for construction be let on comp-ctitive basis to mamum extent practicable To be satisfied
in Loan Agreement
If a loan for a project of $1 million or more certificatin35 FAA _61l(r) by the principal AID officer in the country as to the capability of the
country (both financirl and human resources) to effectively maintain and
utilize the project taking into account other US-financed projects (Such
certification is to be pproved by the Administrator aL the time the loan
is authorized) In process of being obtained
36 FAsgJ2 _6_h Appropriate steps that have b-en taken to assure that to the miaximum extent possible the country is contributing local currencies to net th-2 cost of contractural and other services and foreign currencies o- icd by tho US are utilized to meet the cost of contractual and other services The GU-M is contributing over $30 million to compleXton of this project Excess US-use dirhams will be used for eligible project costs other than US goods and services
37 FAA p619 Compliance with requirement that assistance to newly independent countries be furnished through multilateral organizations or plans to maxishymum extent appropriate Not deemed appropriate in view of previous AID financing and ccoiitment to the project See Sections I-A and I-D
38 FAA sect620(a) AcnO7a n3]7(b) Compliance with prohibitions
against assistance to Cuba ard any countr (a) which furnishes assistance to Cuba or failed to take appropriate steps by February 14 1964 to prevent ships or aircraft unier its registry from carrying equipment materials or supplies from or to Cuba or (b) which sells furnishes or permits any ships under its registry fr-om carrying items of primary atrategic signifishycance or itcms of economic assistance Morocco is not-known to be in Violation of these sections
39 FAA q620GL_ If assistance to the government of a country existence of determination it is not controlled by the international Communist movement The Secretary of State so determined on October 11 191
40 FAA 620(c) If assistance to the government of a country existonce of Indebtedness to a US citizen for goods or services furnished or ordered whore ouch citizen has exhaustod available legal romodiesor where the debt
i - ow - -- _---- --shy
- --
-6shy
is not denied or ontested by such government or the indebtedness arises under an unconditional guararty of payrrent given by such govornmunt No such indebtedness is known to exist
41 FA _(a2LdL If assisitance for any productive enterprise which will corashypote with US enterprise existence of agreement by the recipient country to prevent export to the US of more than 20 of the enterprises annual production during the life of the loan Not applicable
42 FA4 - 16Q_0_ A If assistance to the government of a country extent to which it (including government agenies or ruhdivisions) has after January 1 1962 taken steps o repudiate or nullify cuatracts or taken any action which has the effect of nationalizing expropriating or otherwise seizingownership or control ofprcpertv of US citizens or entities beneficially owned by them without taking appropriate stops to discha i ge its obligations No such steps cr actions are-known to have been taken by the GOM
43 FAA~L AjPj_10_9 Compliance with assistance toQ0 prohibitions against any Comunst codntry ozocco is not considered to be a cocinrunist country
44 FAA - 620(gJ Corliance with prohibition against use of assistonce to comp satc owners for expropriated or nationalized property To be satisfied in Loan Agreement
45 F AA 8620(h Compliance with regulations and procedures adopted to inshysure against ue of assistance in a manner hich contrary to the best inshyterests of the US promotes or assists the foreign aid projects or activities of the Communist-bloc countries To be satisfied in Loan Agreement
46 FAA 06-O(j)_ Exitence of determiration that the country is engaging in or preparing for aggressive military efforts No such determination has been made
L_62_O Information47 FAA on representation of the country at any intershynational confererce when that representation includes the planning of activishyties involving insurrection or subversion against the US or countries recoiving US assistance No such representition is known to have A occarrect
8 FAA 62JJ Existence of a determination that the country has permitted or failed to prevent destruction of US property by mob action or has failed to take steps to prevent a recurrence and-to pay compensation NO such destruction is known to have tak-n place
49 PAA l620(k) If construction of productive enterprise where eggregate value of assistanc to be furnished by US will exceed $1OO million identification of Gtntutoryauthority Not npplicable
i-xQ2MZZ=
1 shy
U 6 50 _Af( QCinsidoration which has been given to denlying assistance X to thu government of a country which after December 31 1966 has failed to
- institto the investnint guaranty program for the spcific risks of inconshy
vertibility and expropriation or confiscation Satisfied See No 7 above
S51S J lj Compliance with-prohibitions-againstn as~istance to countries which traffic or permittraffickingwith North Vietnam Morocco is not known to be in violation
52 E_-L620(_L If country has seized or imposed any penalty or sanction against vn US fishing vessel on account of its fishing activities in
intcrnationul waters information on the consideiation which has been given to excludirg the country from assistance No such situation is known to exist
53 FAA FA r) UAR restriction Not applicable620(p 9117
54 FAA R620tl) Existence of default undhr any Foreign Assistance Act loan to the country No such default exists
55 F ) C-nsider tion of whether co ntry is devoting unnecessary percentage of buKet for military purposes or use of foreign exchange for milita-y equipment
56 FAA 62o(t) Proibition on aid if country has severed diplomatic relations with US unless agreements have been negotiated after resumpshytion Diplomatic r(lations have not been severed
57 FAA 9620(u) Statur of the country on delinquent UN obligations Morocco is not known to be dlinquent on its UN~obligation
58 FAA R636(i) Prohibition on financing non-US manufactured motor vehicles Will be satisfied in Loan Agreement and Implementation Letter
59 App 102 Compliance with requirement that payments in excess of $25000 for architectural and en Jneering services on any one project be reported to Congress Such reports will be made
60 App R1O4 Compliance with bar against funds to pay pensions etc for military personnel Such payments will not be eligible for financing under th Loan Agreement
61 App 9106 If country attr ipts to create distinctions because of their race or religion among Americans in granting personal or commercial access or other rights otherwise avaVIfable to US citizens generally application which will be made in negotit ttons of contrary principles as expressed by Congress Morocco is not ku IDhave made any such attempts
iInD OFFIIt t USE
0k
OFFICIAL USE 62 AIwp Rii Compliance with existing requfremets for security clearance
of personnel Will be satisfied in Loan Agreement and Implementation Letter
63 App R1l2 Compliance with requirement for approval of cortractors and contract terms for capital projects Will be satisfied in Loan Agreement
clJ164 Aup Cmpliance with bar nRainst use of funds to Tay assessments etc of US meiber Such payments will not be eligible for financing under the Loan Agreemunt
6 Anp P115 Ccmpliance with regulations on employment of US and local personnel for funds obligated after April 30 1961 (Regulation 7) See Section III-C
66 Aim Vietnam iron and steel restrictions Not applicable
67 p l9 If a country other than Greece Turkey Iran Israel Republicof China Phillipines or Korea reduction in assistance by amounts spent for the purchase of sophisticated military equipment
68 Anp fi4O1 Compliance with bar against use of funds for publicity or proshypagjanda purposes within US not heretofore authorized by Congress Such use of funds will not be eligible for financing under the Loan Agreement
Morocco is a traditional Islamic monarchy with a constitution The conshystitution was implemented followaing a popular referendum in 1962 National regional and professional elective bodies including a parliament were established by universal suffrage under the constitution in 1963 The parliament was suspended in 1961 in a State of Exception because of its inability to agree on measures with adequate urgency to meet the prevailingecononde imperatives In July 1967 the King appointed a Prime Minister to direct a Cabinet of appointed technicians
The constitutional framework nevertheless remains intact in Morocco and nationwide popular elections for some of the professional chambers were held in August and September 1966 The press is relatively free in Morocco and the right of diLsent prevails provided that such dissent does not violate the prohibition against political attacks on the instishytution of the monarchy or the person of the monarch
LI Under the revised US AID Policy for Africa agreed to in November 1966 Morocco is designated a development emphasis country entitled to receive continuing support on a country basis as part of a multilaterally coorshydinated countrj program Morocco was subsequently included in Presidential Determination 67-14 (January 5 1967) I
LIM=TE OFFICIAL USE~i
- l go
bull ~ -
f
DEPQbi) STATE AGENCY FOR INERNATIONAL DEVELOPMENT
WASHINGTON DC 052
CAPITAL ASSISTANCE LOA11 AUTHORIZATION
Provided from Develoroent Loan Funds Morocco Second Lower Moulouya Irrigation Loan
Pursuant to the authority vested in the Assistant Administrator for Africa of the Agency for International Development
AI)by the Foreign Assistance Act of 1961 as amended theIAct) and the delegations of authority issued thereunder I
have received and t-en into consideration a certification from the Director of USAIDMorocco as to the financial and human resources capability of Morocco to effectively utilize the Lower Moulouya Irrigation Project taking into account among other things the
maintenance and utilization of projects in Morocco previously financed or assisted by the United States and I hereby authorize the establishshyment of a loan pursuant to Part I Chapter 2 Title I the Development Loan Fund to the Government of the Kingdom of Morocco (Borrower) of not to exceed five million dollars ($5000000) to assist in financing the fore] gn exchange and local currency costs of goods and services for the third phase of the Lower Moulouya Irrigation Project subject to the foLlowing terms and conditions
1 Interest Rate and Terms of Repayment Borrower shall repay the loan to AID in forty (40) years including a grace period not to exceed ten (10) years Borrower shall pay interest on the unrepaid principal and any interest accrued thereon at the rate of (a) two percent (2) per annum during the grace period and (b) two and
one-half percent (2-12) per annum thereafter
2 Currency of Pepayment Repayment of the loan and paymenu of interest shall be made in United States dollars
- t- n t - - - shy
3 Other Terms and Conditions amp(a)Goods and Services financed under the loan
shall have their source and origin in
(i) the United States if disbursements therefor are made in United States dollars or
(ii) any country in the free world including Morocco if disbursements therefor are made in Moroccan currency
(b) AID Regulation 7 shall not apply to construction -work financed under the loan because as detailed in Section IIIC of Capital Assistance Paper No P 667 it is important to the national interest of the United States that the direct costs of construction work performed by third-country nationals be financed out of funds made available by the Act
(a) Such other terms and conditions as AID may deem advisable
Assistant Administrator for Africa
Date
~~~~~~~~~~~~~~~~~~ - q v
7
-2shy
5 Manavmtnt It ha been proposed that a US management firm be ewployed by th- C4 to manage and operate the entire Bou Areg area Such manageent -iuld encomparn all activities from the initial concept to final irIrp igricultural production Such activities would Include resp r-ibilsect -or supervnsion of engtneering and constriction of primary
S- Jry r complete developfnent of land training n in g tinul irription practicen preparation of market
t - r1t- (ot--rnu trplusmnining of a Moroccan cadre to take over h v--it Bou Areg dreara P the
At this writing the n-pt of turning over to a private UZSfirm execushyresponsibl]ity I h management of the establilrment and initial
op-ration of irr1gati the Bou Arog area has been only broadly de iiitd by the GCJO It Intended that proposals will be invited from a r -onable ntnber of f|ed US firms that a selection will be made an-n 7 them and a more do iled and cornprehenrive definition of the rer6 -Ps to be performed be eztabliched at that time It haa been
stimated that the t- of ruch a contract will be about $2 mir- n In any event the -ts of this contract other engineering arvl s to be provided undt n extension of the Ilydrotechnic contract and ether US corts will not ed the proposed $5 mllaion developzont Jean fr the project
The cle 3ifications duties ant 1ncnslbilities of the management personnel ill ha-- to be clearly defined i agreed to by the GCM Perimeter Directo- and other GOM Agencies luding arrangements for the necessary gistic support
Svxlale Docu-
1
4
LD ED 0ICIAL
-IAIDshy
A1trX D
C6JCK LIST OF STATUTORY CRITERIA
(Development Loan Fund)
1 FAA 0102 Extent to which U3 cormodities and services are furnished consistent with improving the US balance of payments See Sections II-C II-F
2 AA sect2O]ihi lanner in which loan wil promote countrys economic develo shy rit emphasizing help for long-range plans and programs designed to developeconomic tesourcos and increase productive capacities See Section I-D
i FAA sectT] h)(IL Information and conclusion on availability of financincfrom other free-world sources including private sources within the United States See Section II-F
FAA sect20l( )2 Information and conclusion on activitys economic and technical soundness including the capacity of the recipient country to reshypay the loan at a reasonable rate of interest See Sections II-B II-D and II-E
5 FAA 1201(h)( Information and conclusion on existence of reasonable promise activity will contribute to developrmnt of economic resources or increase of productive capacities See Sectiona II-B and II-D
_92_(b 4Information and conclusion on activitys relationship toothor development activities and its contribution to realizable longshyrange objectives See Sections I-D and I-E
The following abbreviations are und FAA - Foroirn Assistance Act of 1961 as amerded by the Foreign Asaistaice
Act of 1967 App - Foreign Assistance and Polated Agencies Appropriations Act 1968
AFEVCDF 1066
L1
-2shy
7 FAA f12O1(b)(5)_ Countrys self-help masures including institution of Foreign Assistance Act investment pliaranty programs Investment Guaranty
bull Agreement signed with Morocco 331o6l See Sections I-D and II-EI
_A ))(6) Information and conclusion on possible effects on US econowy with soecial refererne to areas of substantial -labor surplusSee Section II-F
9 FAA q201 (h)() Information and conclusion on the dagree to which thA country iv wiki- progress toward respect for the rule of law freedom of expression and of the press and recognition~yf the importance of individual freedom initiative and private enterprise
10 FAA -1201(b)(8) Information and conclusion on the degree to which the country is taking steps to improve its c]Laato for private investment See Sccton II-E
31 FAA R LbJi Inforrat-on and conclusion on whether or not the activityto b financed will contribute to the achievement of self-sustaining growthSee Sections I-D and II-B
12 FAA fi2Ol(bj Inforruation and conclusion on reasonalbe prospects of reshypayment See Section II-E
13 FAA fl20JL() Info-ation on applicability of the twenty country ceil4ng2
14 FAA fl201 L Information and coclusion on legality (under laws of the country end the US) and reasonableness of lending and ralendinr terms Loan will be on minimum termspermitted under FAA These are deemed reasonable see Sectioam Evidence will be renuired from the GGM as to the legality of the loan agreemnt
1 E 2 Information and conclusion on availability of an applicationFAA together with sufficient information and assurances to indicate reasonably that funds will be used in an economcally and technically sound manner See Sections I-A II-B and II-D Application received Janury 15 1968
16 FAA fl201(fL If a project inforntion and conclusion whether it will promote the economic developapent of the requesting country taking into account the countrys human and material resource requiremnts and the reshylationship between the ultimate objes6ives of the project and the countrys overall economic development See Sections I-D and II-B
17 FAAJ 20ij(J If a project information and conclusion whether it cifishycally provides for appropriate participation by private enterprise 8ce Sections YI-C and 114
I- FAA i22(a) Total amount of money under loan which is going directly to private enterprise is going to intermediate credit institutions or other borrowers for use by private enterprise is being used to finance imports
rfro private sources or is otherwise beirg used to finance procurementsfrcm private souwces See Sections II-C and II-2
9 FAA 207 Infosation on the emphasis placed en
(a) encouraging development of economic political and social institushytins No apparent relationship
(b) nelC-help in mectingthe countrys food nredo Project Vill conshytribute to production of food for lccal consumptioa
(c) in-proving availability in the country of evucated trained manpower Project will contribute to the deicloginext of trained manpower as one of the functions of the management contract (Soe Annex C para 5)
(d) prcgrams aimed at -malnutrition disease eradi atDn slum clearanceWater purification sewage disposal health education naternal and child care(includin fimrily pJnrning)) -nd cthcr public health ausistarice See
(c) other develoment activities including industrial development free
labor unions cooperatives tnd voluntary agencie transn)rtatin and ccshymwquication nrStczn capubiliTies for economic planning and public adlinisshytration arban develo-mment and modernization of laws to feilltate econcnicdevelopjen- GO- intends encourage develo vient of cooperat yes particularlyin the Left Pank areas Project will also develop capabiLi ics for cconoaicplanning and public a6~inistration (Annex C para 5) Other not applicable
20 Information on the extent to which the r-untry is
(a) cttcmting to increase food production and food sto a-e anddistribution felitics This project is one evidence of Moroccos efforts in this direction See also Section I-D and I-E
b) creating- a favorable climate for foreign and dmestic iri-ate enterprise and invcstrrment The GCM has recently reduced profits twes anrannounced a ten year guarantee against tax increases See Section II-E-2
(c) increasing the role of the neonle in the developnental procecsNo apparent relationship to this project
(d) allocating expenditures to development rather than to unn-cessarymilitary purpoes or intervention in other free countries affair See Sections I-D and Ii-
(e) willing --nribute funds to the project or program Th iOMhas already dcvo o-sidcrable resources to the project It has badieted13 million for th i oulouya for i7 See Section I-C
(If) making economic zocial and political refo ns such as taxc coliecshytion iYprovcmenLs and chan es in land tenure a Royal Comm ision has been appointed to make recomendation on land tenure probleras in the Lower I oulouya
(g) responding to the economic political and social concerns of its people and showing a determination to take volf-help wcasuren See Sections I-D and II-E
IT
-ovi~cd l v r 13 1968
- 4 - LDffIED OFFICIAL USE
21 FAA Inforn ation about multilateral assistance being Iurnished to t e country and whether the loan will encourage recgional development prog-rams The I1D has eztablihcd a Consultative Group for Morocco which rvicws the GOM development program anui prgress See Section II-F-4 for infoaation on othtr donor assistance to Morocco
22 A Extent to which the loan will contribute to the objective of ass ring naximu par icipation in the task of econonic dovelop--ent on the pL-t 0 _he people of the developing countries through the encouragement of cocr-tic private and local govenmental inLitutious o apparent
relationship
23 F _-_Dta_ Infor-ation and corissions whether loan will oncourageeffor s of t1e country to (a) increase tie flow of international trade (b) fostcr private initiative and comptition (c) encourage development and usceo co opratives credit unions and savingss and loan associations (d) disourgo monopolistic practices (c) improvo technical efficiency of industry ariculture and commerce (f) strenSthn free labor unions This project is cxpected to increase technical efficiency oi-agriculture
2_ C-1L lnforzrition and conclusion on how the loan will encourage US privte trade and investment abroad and how it uill encourage private US participation in foreign assistance prograas (incluiing use of private trade channels and the services of US private enterprise) See Section II-
25 VA-+_ Conclusion and supporting information on compliance with tho Co resional policy that engineering and professional servicos of US fir-ms and their affiliates are to bo used in connection with capital project3 to the nixinua extent consistent with the national interest US engineerirn and innsgcment services will be financed tnder this loan
2$ Inforamtion and ccnclusions who+her loan will pormit American rx-l] business to participate equitably in the furnishing of goods and
z orvices by To be satisfied in Loan Agreementfinanced it
27 - t(a App I18 Complianco with restriction of co -zodity procureshy o UsMS except as otherwise determined by the Picsicent and subject to ttu--- rcortir require r-nts Procurement will - liumited to the US for
reiabnrs nts and to ioocco and other free world countries 1-or US-cwne(d rhu disburseacnts
23 -i Comiance with bulk cozodity procurement restriction topriecc no l-ho han the nkarkot price prevailing in tho US at tia of
bull puchas Not applicable
29 FA Cozpliance with requirement that matrin insurance be purchased on commceities if the participating country discri-inates and that insurance be placed in the US To be satisfied in Loan Agreement
30 IA 6(a) Information at to the utilization of excers personal property in lieu of procurement of new items Will be required ai appropriate under terns of Lean Agreement
f
1 77--7 -77-77-777
31 FAA 61](a)(_) information and conclusion on availability of enginoering i financial and other plans nccx sary to carry out tho assittance and of a
reasonably firm cstimate of the cost of the assistanco to the United States
See Section II-D
32-ecessaryFAA t611(a)_(2) legislative action r6quired within recipient country and ibasis Cor reasonable anticipation such action will be completed in time to pormit orderly accompli-hirtnt of purposes of loan See Section I-A
33 n _AA161nJ0] If water or water-relatod land resource construcshy
tion project or program information and conclusion on a benefit-cost comshy
putation See Section II-B
3 4 VAA 611(c) Compliance with requirement that contracts for construction be let on comp-ctitive basis to mamum extent practicable To be satisfied
in Loan Agreement
If a loan for a project of $1 million or more certificatin35 FAA _61l(r) by the principal AID officer in the country as to the capability of the
country (both financirl and human resources) to effectively maintain and
utilize the project taking into account other US-financed projects (Such
certification is to be pproved by the Administrator aL the time the loan
is authorized) In process of being obtained
36 FAsgJ2 _6_h Appropriate steps that have b-en taken to assure that to the miaximum extent possible the country is contributing local currencies to net th-2 cost of contractural and other services and foreign currencies o- icd by tho US are utilized to meet the cost of contractual and other services The GU-M is contributing over $30 million to compleXton of this project Excess US-use dirhams will be used for eligible project costs other than US goods and services
37 FAA p619 Compliance with requirement that assistance to newly independent countries be furnished through multilateral organizations or plans to maxishymum extent appropriate Not deemed appropriate in view of previous AID financing and ccoiitment to the project See Sections I-A and I-D
38 FAA sect620(a) AcnO7a n3]7(b) Compliance with prohibitions
against assistance to Cuba ard any countr (a) which furnishes assistance to Cuba or failed to take appropriate steps by February 14 1964 to prevent ships or aircraft unier its registry from carrying equipment materials or supplies from or to Cuba or (b) which sells furnishes or permits any ships under its registry fr-om carrying items of primary atrategic signifishycance or itcms of economic assistance Morocco is not-known to be in Violation of these sections
39 FAA q620GL_ If assistance to the government of a country existence of determination it is not controlled by the international Communist movement The Secretary of State so determined on October 11 191
40 FAA 620(c) If assistance to the government of a country existonce of Indebtedness to a US citizen for goods or services furnished or ordered whore ouch citizen has exhaustod available legal romodiesor where the debt
i - ow - -- _---- --shy
- --
-6shy
is not denied or ontested by such government or the indebtedness arises under an unconditional guararty of payrrent given by such govornmunt No such indebtedness is known to exist
41 FA _(a2LdL If assisitance for any productive enterprise which will corashypote with US enterprise existence of agreement by the recipient country to prevent export to the US of more than 20 of the enterprises annual production during the life of the loan Not applicable
42 FA4 - 16Q_0_ A If assistance to the government of a country extent to which it (including government agenies or ruhdivisions) has after January 1 1962 taken steps o repudiate or nullify cuatracts or taken any action which has the effect of nationalizing expropriating or otherwise seizingownership or control ofprcpertv of US citizens or entities beneficially owned by them without taking appropriate stops to discha i ge its obligations No such steps cr actions are-known to have been taken by the GOM
43 FAA~L AjPj_10_9 Compliance with assistance toQ0 prohibitions against any Comunst codntry ozocco is not considered to be a cocinrunist country
44 FAA - 620(gJ Corliance with prohibition against use of assistonce to comp satc owners for expropriated or nationalized property To be satisfied in Loan Agreement
45 F AA 8620(h Compliance with regulations and procedures adopted to inshysure against ue of assistance in a manner hich contrary to the best inshyterests of the US promotes or assists the foreign aid projects or activities of the Communist-bloc countries To be satisfied in Loan Agreement
46 FAA 06-O(j)_ Exitence of determiration that the country is engaging in or preparing for aggressive military efforts No such determination has been made
L_62_O Information47 FAA on representation of the country at any intershynational confererce when that representation includes the planning of activishyties involving insurrection or subversion against the US or countries recoiving US assistance No such representition is known to have A occarrect
8 FAA 62JJ Existence of a determination that the country has permitted or failed to prevent destruction of US property by mob action or has failed to take steps to prevent a recurrence and-to pay compensation NO such destruction is known to have tak-n place
49 PAA l620(k) If construction of productive enterprise where eggregate value of assistanc to be furnished by US will exceed $1OO million identification of Gtntutoryauthority Not npplicable
i-xQ2MZZ=
1 shy
U 6 50 _Af( QCinsidoration which has been given to denlying assistance X to thu government of a country which after December 31 1966 has failed to
- institto the investnint guaranty program for the spcific risks of inconshy
vertibility and expropriation or confiscation Satisfied See No 7 above
S51S J lj Compliance with-prohibitions-againstn as~istance to countries which traffic or permittraffickingwith North Vietnam Morocco is not known to be in violation
52 E_-L620(_L If country has seized or imposed any penalty or sanction against vn US fishing vessel on account of its fishing activities in
intcrnationul waters information on the consideiation which has been given to excludirg the country from assistance No such situation is known to exist
53 FAA FA r) UAR restriction Not applicable620(p 9117
54 FAA R620tl) Existence of default undhr any Foreign Assistance Act loan to the country No such default exists
55 F ) C-nsider tion of whether co ntry is devoting unnecessary percentage of buKet for military purposes or use of foreign exchange for milita-y equipment
56 FAA 62o(t) Proibition on aid if country has severed diplomatic relations with US unless agreements have been negotiated after resumpshytion Diplomatic r(lations have not been severed
57 FAA 9620(u) Statur of the country on delinquent UN obligations Morocco is not known to be dlinquent on its UN~obligation
58 FAA R636(i) Prohibition on financing non-US manufactured motor vehicles Will be satisfied in Loan Agreement and Implementation Letter
59 App 102 Compliance with requirement that payments in excess of $25000 for architectural and en Jneering services on any one project be reported to Congress Such reports will be made
60 App R1O4 Compliance with bar against funds to pay pensions etc for military personnel Such payments will not be eligible for financing under th Loan Agreement
61 App 9106 If country attr ipts to create distinctions because of their race or religion among Americans in granting personal or commercial access or other rights otherwise avaVIfable to US citizens generally application which will be made in negotit ttons of contrary principles as expressed by Congress Morocco is not ku IDhave made any such attempts
iInD OFFIIt t USE
0k
OFFICIAL USE 62 AIwp Rii Compliance with existing requfremets for security clearance
of personnel Will be satisfied in Loan Agreement and Implementation Letter
63 App R1l2 Compliance with requirement for approval of cortractors and contract terms for capital projects Will be satisfied in Loan Agreement
clJ164 Aup Cmpliance with bar nRainst use of funds to Tay assessments etc of US meiber Such payments will not be eligible for financing under the Loan Agreemunt
6 Anp P115 Ccmpliance with regulations on employment of US and local personnel for funds obligated after April 30 1961 (Regulation 7) See Section III-C
66 Aim Vietnam iron and steel restrictions Not applicable
67 p l9 If a country other than Greece Turkey Iran Israel Republicof China Phillipines or Korea reduction in assistance by amounts spent for the purchase of sophisticated military equipment
68 Anp fi4O1 Compliance with bar against use of funds for publicity or proshypagjanda purposes within US not heretofore authorized by Congress Such use of funds will not be eligible for financing under the Loan Agreement
Morocco is a traditional Islamic monarchy with a constitution The conshystitution was implemented followaing a popular referendum in 1962 National regional and professional elective bodies including a parliament were established by universal suffrage under the constitution in 1963 The parliament was suspended in 1961 in a State of Exception because of its inability to agree on measures with adequate urgency to meet the prevailingecononde imperatives In July 1967 the King appointed a Prime Minister to direct a Cabinet of appointed technicians
The constitutional framework nevertheless remains intact in Morocco and nationwide popular elections for some of the professional chambers were held in August and September 1966 The press is relatively free in Morocco and the right of diLsent prevails provided that such dissent does not violate the prohibition against political attacks on the instishytution of the monarchy or the person of the monarch
LI Under the revised US AID Policy for Africa agreed to in November 1966 Morocco is designated a development emphasis country entitled to receive continuing support on a country basis as part of a multilaterally coorshydinated countrj program Morocco was subsequently included in Presidential Determination 67-14 (January 5 1967) I
LIM=TE OFFICIAL USE~i
- l go
bull ~ -
f
DEPQbi) STATE AGENCY FOR INERNATIONAL DEVELOPMENT
WASHINGTON DC 052
CAPITAL ASSISTANCE LOA11 AUTHORIZATION
Provided from Develoroent Loan Funds Morocco Second Lower Moulouya Irrigation Loan
Pursuant to the authority vested in the Assistant Administrator for Africa of the Agency for International Development
AI)by the Foreign Assistance Act of 1961 as amended theIAct) and the delegations of authority issued thereunder I
have received and t-en into consideration a certification from the Director of USAIDMorocco as to the financial and human resources capability of Morocco to effectively utilize the Lower Moulouya Irrigation Project taking into account among other things the
maintenance and utilization of projects in Morocco previously financed or assisted by the United States and I hereby authorize the establishshyment of a loan pursuant to Part I Chapter 2 Title I the Development Loan Fund to the Government of the Kingdom of Morocco (Borrower) of not to exceed five million dollars ($5000000) to assist in financing the fore] gn exchange and local currency costs of goods and services for the third phase of the Lower Moulouya Irrigation Project subject to the foLlowing terms and conditions
1 Interest Rate and Terms of Repayment Borrower shall repay the loan to AID in forty (40) years including a grace period not to exceed ten (10) years Borrower shall pay interest on the unrepaid principal and any interest accrued thereon at the rate of (a) two percent (2) per annum during the grace period and (b) two and
one-half percent (2-12) per annum thereafter
2 Currency of Pepayment Repayment of the loan and paymenu of interest shall be made in United States dollars
- t- n t - - - shy
3 Other Terms and Conditions amp(a)Goods and Services financed under the loan
shall have their source and origin in
(i) the United States if disbursements therefor are made in United States dollars or
(ii) any country in the free world including Morocco if disbursements therefor are made in Moroccan currency
(b) AID Regulation 7 shall not apply to construction -work financed under the loan because as detailed in Section IIIC of Capital Assistance Paper No P 667 it is important to the national interest of the United States that the direct costs of construction work performed by third-country nationals be financed out of funds made available by the Act
(a) Such other terms and conditions as AID may deem advisable
Assistant Administrator for Africa
Date
~~~~~~~~~~~~~~~~~~ - q v
7
1
4
LD ED 0ICIAL
-IAIDshy
A1trX D
C6JCK LIST OF STATUTORY CRITERIA
(Development Loan Fund)
1 FAA 0102 Extent to which U3 cormodities and services are furnished consistent with improving the US balance of payments See Sections II-C II-F
2 AA sect2O]ihi lanner in which loan wil promote countrys economic develo shy rit emphasizing help for long-range plans and programs designed to developeconomic tesourcos and increase productive capacities See Section I-D
i FAA sectT] h)(IL Information and conclusion on availability of financincfrom other free-world sources including private sources within the United States See Section II-F
FAA sect20l( )2 Information and conclusion on activitys economic and technical soundness including the capacity of the recipient country to reshypay the loan at a reasonable rate of interest See Sections II-B II-D and II-E
5 FAA 1201(h)( Information and conclusion on existence of reasonable promise activity will contribute to developrmnt of economic resources or increase of productive capacities See Sectiona II-B and II-D
_92_(b 4Information and conclusion on activitys relationship toothor development activities and its contribution to realizable longshyrange objectives See Sections I-D and I-E
The following abbreviations are und FAA - Foroirn Assistance Act of 1961 as amerded by the Foreign Asaistaice
Act of 1967 App - Foreign Assistance and Polated Agencies Appropriations Act 1968
AFEVCDF 1066
L1
-2shy
7 FAA f12O1(b)(5)_ Countrys self-help masures including institution of Foreign Assistance Act investment pliaranty programs Investment Guaranty
bull Agreement signed with Morocco 331o6l See Sections I-D and II-EI
_A ))(6) Information and conclusion on possible effects on US econowy with soecial refererne to areas of substantial -labor surplusSee Section II-F
9 FAA q201 (h)() Information and conclusion on the dagree to which thA country iv wiki- progress toward respect for the rule of law freedom of expression and of the press and recognition~yf the importance of individual freedom initiative and private enterprise
10 FAA -1201(b)(8) Information and conclusion on the degree to which the country is taking steps to improve its c]Laato for private investment See Sccton II-E
31 FAA R LbJi Inforrat-on and conclusion on whether or not the activityto b financed will contribute to the achievement of self-sustaining growthSee Sections I-D and II-B
12 FAA fi2Ol(bj Inforruation and conclusion on reasonalbe prospects of reshypayment See Section II-E
13 FAA fl20JL() Info-ation on applicability of the twenty country ceil4ng2
14 FAA fl201 L Information and coclusion on legality (under laws of the country end the US) and reasonableness of lending and ralendinr terms Loan will be on minimum termspermitted under FAA These are deemed reasonable see Sectioam Evidence will be renuired from the GGM as to the legality of the loan agreemnt
1 E 2 Information and conclusion on availability of an applicationFAA together with sufficient information and assurances to indicate reasonably that funds will be used in an economcally and technically sound manner See Sections I-A II-B and II-D Application received Janury 15 1968
16 FAA fl201(fL If a project inforntion and conclusion whether it will promote the economic developapent of the requesting country taking into account the countrys human and material resource requiremnts and the reshylationship between the ultimate objes6ives of the project and the countrys overall economic development See Sections I-D and II-B
17 FAAJ 20ij(J If a project information and conclusion whether it cifishycally provides for appropriate participation by private enterprise 8ce Sections YI-C and 114
I- FAA i22(a) Total amount of money under loan which is going directly to private enterprise is going to intermediate credit institutions or other borrowers for use by private enterprise is being used to finance imports
rfro private sources or is otherwise beirg used to finance procurementsfrcm private souwces See Sections II-C and II-2
9 FAA 207 Infosation on the emphasis placed en
(a) encouraging development of economic political and social institushytins No apparent relationship
(b) nelC-help in mectingthe countrys food nredo Project Vill conshytribute to production of food for lccal consumptioa
(c) in-proving availability in the country of evucated trained manpower Project will contribute to the deicloginext of trained manpower as one of the functions of the management contract (Soe Annex C para 5)
(d) prcgrams aimed at -malnutrition disease eradi atDn slum clearanceWater purification sewage disposal health education naternal and child care(includin fimrily pJnrning)) -nd cthcr public health ausistarice See
(c) other develoment activities including industrial development free
labor unions cooperatives tnd voluntary agencie transn)rtatin and ccshymwquication nrStczn capubiliTies for economic planning and public adlinisshytration arban develo-mment and modernization of laws to feilltate econcnicdevelopjen- GO- intends encourage develo vient of cooperat yes particularlyin the Left Pank areas Project will also develop capabiLi ics for cconoaicplanning and public a6~inistration (Annex C para 5) Other not applicable
20 Information on the extent to which the r-untry is
(a) cttcmting to increase food production and food sto a-e anddistribution felitics This project is one evidence of Moroccos efforts in this direction See also Section I-D and I-E
b) creating- a favorable climate for foreign and dmestic iri-ate enterprise and invcstrrment The GCM has recently reduced profits twes anrannounced a ten year guarantee against tax increases See Section II-E-2
(c) increasing the role of the neonle in the developnental procecsNo apparent relationship to this project
(d) allocating expenditures to development rather than to unn-cessarymilitary purpoes or intervention in other free countries affair See Sections I-D and Ii-
(e) willing --nribute funds to the project or program Th iOMhas already dcvo o-sidcrable resources to the project It has badieted13 million for th i oulouya for i7 See Section I-C
(If) making economic zocial and political refo ns such as taxc coliecshytion iYprovcmenLs and chan es in land tenure a Royal Comm ision has been appointed to make recomendation on land tenure probleras in the Lower I oulouya
(g) responding to the economic political and social concerns of its people and showing a determination to take volf-help wcasuren See Sections I-D and II-E
IT
-ovi~cd l v r 13 1968
- 4 - LDffIED OFFICIAL USE
21 FAA Inforn ation about multilateral assistance being Iurnished to t e country and whether the loan will encourage recgional development prog-rams The I1D has eztablihcd a Consultative Group for Morocco which rvicws the GOM development program anui prgress See Section II-F-4 for infoaation on othtr donor assistance to Morocco
22 A Extent to which the loan will contribute to the objective of ass ring naximu par icipation in the task of econonic dovelop--ent on the pL-t 0 _he people of the developing countries through the encouragement of cocr-tic private and local govenmental inLitutious o apparent
relationship
23 F _-_Dta_ Infor-ation and corissions whether loan will oncourageeffor s of t1e country to (a) increase tie flow of international trade (b) fostcr private initiative and comptition (c) encourage development and usceo co opratives credit unions and savingss and loan associations (d) disourgo monopolistic practices (c) improvo technical efficiency of industry ariculture and commerce (f) strenSthn free labor unions This project is cxpected to increase technical efficiency oi-agriculture
2_ C-1L lnforzrition and conclusion on how the loan will encourage US privte trade and investment abroad and how it uill encourage private US participation in foreign assistance prograas (incluiing use of private trade channels and the services of US private enterprise) See Section II-
25 VA-+_ Conclusion and supporting information on compliance with tho Co resional policy that engineering and professional servicos of US fir-ms and their affiliates are to bo used in connection with capital project3 to the nixinua extent consistent with the national interest US engineerirn and innsgcment services will be financed tnder this loan
2$ Inforamtion and ccnclusions who+her loan will pormit American rx-l] business to participate equitably in the furnishing of goods and
z orvices by To be satisfied in Loan Agreementfinanced it
27 - t(a App I18 Complianco with restriction of co -zodity procureshy o UsMS except as otherwise determined by the Picsicent and subject to ttu--- rcortir require r-nts Procurement will - liumited to the US for
reiabnrs nts and to ioocco and other free world countries 1-or US-cwne(d rhu disburseacnts
23 -i Comiance with bulk cozodity procurement restriction topriecc no l-ho han the nkarkot price prevailing in tho US at tia of
bull puchas Not applicable
29 FA Cozpliance with requirement that matrin insurance be purchased on commceities if the participating country discri-inates and that insurance be placed in the US To be satisfied in Loan Agreement
30 IA 6(a) Information at to the utilization of excers personal property in lieu of procurement of new items Will be required ai appropriate under terns of Lean Agreement
f
1 77--7 -77-77-777
31 FAA 61](a)(_) information and conclusion on availability of enginoering i financial and other plans nccx sary to carry out tho assittance and of a
reasonably firm cstimate of the cost of the assistanco to the United States
See Section II-D
32-ecessaryFAA t611(a)_(2) legislative action r6quired within recipient country and ibasis Cor reasonable anticipation such action will be completed in time to pormit orderly accompli-hirtnt of purposes of loan See Section I-A
33 n _AA161nJ0] If water or water-relatod land resource construcshy
tion project or program information and conclusion on a benefit-cost comshy
putation See Section II-B
3 4 VAA 611(c) Compliance with requirement that contracts for construction be let on comp-ctitive basis to mamum extent practicable To be satisfied
in Loan Agreement
If a loan for a project of $1 million or more certificatin35 FAA _61l(r) by the principal AID officer in the country as to the capability of the
country (both financirl and human resources) to effectively maintain and
utilize the project taking into account other US-financed projects (Such
certification is to be pproved by the Administrator aL the time the loan
is authorized) In process of being obtained
36 FAsgJ2 _6_h Appropriate steps that have b-en taken to assure that to the miaximum extent possible the country is contributing local currencies to net th-2 cost of contractural and other services and foreign currencies o- icd by tho US are utilized to meet the cost of contractual and other services The GU-M is contributing over $30 million to compleXton of this project Excess US-use dirhams will be used for eligible project costs other than US goods and services
37 FAA p619 Compliance with requirement that assistance to newly independent countries be furnished through multilateral organizations or plans to maxishymum extent appropriate Not deemed appropriate in view of previous AID financing and ccoiitment to the project See Sections I-A and I-D
38 FAA sect620(a) AcnO7a n3]7(b) Compliance with prohibitions
against assistance to Cuba ard any countr (a) which furnishes assistance to Cuba or failed to take appropriate steps by February 14 1964 to prevent ships or aircraft unier its registry from carrying equipment materials or supplies from or to Cuba or (b) which sells furnishes or permits any ships under its registry fr-om carrying items of primary atrategic signifishycance or itcms of economic assistance Morocco is not-known to be in Violation of these sections
39 FAA q620GL_ If assistance to the government of a country existence of determination it is not controlled by the international Communist movement The Secretary of State so determined on October 11 191
40 FAA 620(c) If assistance to the government of a country existonce of Indebtedness to a US citizen for goods or services furnished or ordered whore ouch citizen has exhaustod available legal romodiesor where the debt
i - ow - -- _---- --shy
- --
-6shy
is not denied or ontested by such government or the indebtedness arises under an unconditional guararty of payrrent given by such govornmunt No such indebtedness is known to exist
41 FA _(a2LdL If assisitance for any productive enterprise which will corashypote with US enterprise existence of agreement by the recipient country to prevent export to the US of more than 20 of the enterprises annual production during the life of the loan Not applicable
42 FA4 - 16Q_0_ A If assistance to the government of a country extent to which it (including government agenies or ruhdivisions) has after January 1 1962 taken steps o repudiate or nullify cuatracts or taken any action which has the effect of nationalizing expropriating or otherwise seizingownership or control ofprcpertv of US citizens or entities beneficially owned by them without taking appropriate stops to discha i ge its obligations No such steps cr actions are-known to have been taken by the GOM
43 FAA~L AjPj_10_9 Compliance with assistance toQ0 prohibitions against any Comunst codntry ozocco is not considered to be a cocinrunist country
44 FAA - 620(gJ Corliance with prohibition against use of assistonce to comp satc owners for expropriated or nationalized property To be satisfied in Loan Agreement
45 F AA 8620(h Compliance with regulations and procedures adopted to inshysure against ue of assistance in a manner hich contrary to the best inshyterests of the US promotes or assists the foreign aid projects or activities of the Communist-bloc countries To be satisfied in Loan Agreement
46 FAA 06-O(j)_ Exitence of determiration that the country is engaging in or preparing for aggressive military efforts No such determination has been made
L_62_O Information47 FAA on representation of the country at any intershynational confererce when that representation includes the planning of activishyties involving insurrection or subversion against the US or countries recoiving US assistance No such representition is known to have A occarrect
8 FAA 62JJ Existence of a determination that the country has permitted or failed to prevent destruction of US property by mob action or has failed to take steps to prevent a recurrence and-to pay compensation NO such destruction is known to have tak-n place
49 PAA l620(k) If construction of productive enterprise where eggregate value of assistanc to be furnished by US will exceed $1OO million identification of Gtntutoryauthority Not npplicable
i-xQ2MZZ=
1 shy
U 6 50 _Af( QCinsidoration which has been given to denlying assistance X to thu government of a country which after December 31 1966 has failed to
- institto the investnint guaranty program for the spcific risks of inconshy
vertibility and expropriation or confiscation Satisfied See No 7 above
S51S J lj Compliance with-prohibitions-againstn as~istance to countries which traffic or permittraffickingwith North Vietnam Morocco is not known to be in violation
52 E_-L620(_L If country has seized or imposed any penalty or sanction against vn US fishing vessel on account of its fishing activities in
intcrnationul waters information on the consideiation which has been given to excludirg the country from assistance No such situation is known to exist
53 FAA FA r) UAR restriction Not applicable620(p 9117
54 FAA R620tl) Existence of default undhr any Foreign Assistance Act loan to the country No such default exists
55 F ) C-nsider tion of whether co ntry is devoting unnecessary percentage of buKet for military purposes or use of foreign exchange for milita-y equipment
56 FAA 62o(t) Proibition on aid if country has severed diplomatic relations with US unless agreements have been negotiated after resumpshytion Diplomatic r(lations have not been severed
57 FAA 9620(u) Statur of the country on delinquent UN obligations Morocco is not known to be dlinquent on its UN~obligation
58 FAA R636(i) Prohibition on financing non-US manufactured motor vehicles Will be satisfied in Loan Agreement and Implementation Letter
59 App 102 Compliance with requirement that payments in excess of $25000 for architectural and en Jneering services on any one project be reported to Congress Such reports will be made
60 App R1O4 Compliance with bar against funds to pay pensions etc for military personnel Such payments will not be eligible for financing under th Loan Agreement
61 App 9106 If country attr ipts to create distinctions because of their race or religion among Americans in granting personal or commercial access or other rights otherwise avaVIfable to US citizens generally application which will be made in negotit ttons of contrary principles as expressed by Congress Morocco is not ku IDhave made any such attempts
iInD OFFIIt t USE
0k
OFFICIAL USE 62 AIwp Rii Compliance with existing requfremets for security clearance
of personnel Will be satisfied in Loan Agreement and Implementation Letter
63 App R1l2 Compliance with requirement for approval of cortractors and contract terms for capital projects Will be satisfied in Loan Agreement
clJ164 Aup Cmpliance with bar nRainst use of funds to Tay assessments etc of US meiber Such payments will not be eligible for financing under the Loan Agreemunt
6 Anp P115 Ccmpliance with regulations on employment of US and local personnel for funds obligated after April 30 1961 (Regulation 7) See Section III-C
66 Aim Vietnam iron and steel restrictions Not applicable
67 p l9 If a country other than Greece Turkey Iran Israel Republicof China Phillipines or Korea reduction in assistance by amounts spent for the purchase of sophisticated military equipment
68 Anp fi4O1 Compliance with bar against use of funds for publicity or proshypagjanda purposes within US not heretofore authorized by Congress Such use of funds will not be eligible for financing under the Loan Agreement
Morocco is a traditional Islamic monarchy with a constitution The conshystitution was implemented followaing a popular referendum in 1962 National regional and professional elective bodies including a parliament were established by universal suffrage under the constitution in 1963 The parliament was suspended in 1961 in a State of Exception because of its inability to agree on measures with adequate urgency to meet the prevailingecononde imperatives In July 1967 the King appointed a Prime Minister to direct a Cabinet of appointed technicians
The constitutional framework nevertheless remains intact in Morocco and nationwide popular elections for some of the professional chambers were held in August and September 1966 The press is relatively free in Morocco and the right of diLsent prevails provided that such dissent does not violate the prohibition against political attacks on the instishytution of the monarchy or the person of the monarch
LI Under the revised US AID Policy for Africa agreed to in November 1966 Morocco is designated a development emphasis country entitled to receive continuing support on a country basis as part of a multilaterally coorshydinated countrj program Morocco was subsequently included in Presidential Determination 67-14 (January 5 1967) I
LIM=TE OFFICIAL USE~i
- l go
bull ~ -
f
DEPQbi) STATE AGENCY FOR INERNATIONAL DEVELOPMENT
WASHINGTON DC 052
CAPITAL ASSISTANCE LOA11 AUTHORIZATION
Provided from Develoroent Loan Funds Morocco Second Lower Moulouya Irrigation Loan
Pursuant to the authority vested in the Assistant Administrator for Africa of the Agency for International Development
AI)by the Foreign Assistance Act of 1961 as amended theIAct) and the delegations of authority issued thereunder I
have received and t-en into consideration a certification from the Director of USAIDMorocco as to the financial and human resources capability of Morocco to effectively utilize the Lower Moulouya Irrigation Project taking into account among other things the
maintenance and utilization of projects in Morocco previously financed or assisted by the United States and I hereby authorize the establishshyment of a loan pursuant to Part I Chapter 2 Title I the Development Loan Fund to the Government of the Kingdom of Morocco (Borrower) of not to exceed five million dollars ($5000000) to assist in financing the fore] gn exchange and local currency costs of goods and services for the third phase of the Lower Moulouya Irrigation Project subject to the foLlowing terms and conditions
1 Interest Rate and Terms of Repayment Borrower shall repay the loan to AID in forty (40) years including a grace period not to exceed ten (10) years Borrower shall pay interest on the unrepaid principal and any interest accrued thereon at the rate of (a) two percent (2) per annum during the grace period and (b) two and
one-half percent (2-12) per annum thereafter
2 Currency of Pepayment Repayment of the loan and paymenu of interest shall be made in United States dollars
- t- n t - - - shy
3 Other Terms and Conditions amp(a)Goods and Services financed under the loan
shall have their source and origin in
(i) the United States if disbursements therefor are made in United States dollars or
(ii) any country in the free world including Morocco if disbursements therefor are made in Moroccan currency
(b) AID Regulation 7 shall not apply to construction -work financed under the loan because as detailed in Section IIIC of Capital Assistance Paper No P 667 it is important to the national interest of the United States that the direct costs of construction work performed by third-country nationals be financed out of funds made available by the Act
(a) Such other terms and conditions as AID may deem advisable
Assistant Administrator for Africa
Date
~~~~~~~~~~~~~~~~~~ - q v
7
-2shy
7 FAA f12O1(b)(5)_ Countrys self-help masures including institution of Foreign Assistance Act investment pliaranty programs Investment Guaranty
bull Agreement signed with Morocco 331o6l See Sections I-D and II-EI
_A ))(6) Information and conclusion on possible effects on US econowy with soecial refererne to areas of substantial -labor surplusSee Section II-F
9 FAA q201 (h)() Information and conclusion on the dagree to which thA country iv wiki- progress toward respect for the rule of law freedom of expression and of the press and recognition~yf the importance of individual freedom initiative and private enterprise
10 FAA -1201(b)(8) Information and conclusion on the degree to which the country is taking steps to improve its c]Laato for private investment See Sccton II-E
31 FAA R LbJi Inforrat-on and conclusion on whether or not the activityto b financed will contribute to the achievement of self-sustaining growthSee Sections I-D and II-B
12 FAA fi2Ol(bj Inforruation and conclusion on reasonalbe prospects of reshypayment See Section II-E
13 FAA fl20JL() Info-ation on applicability of the twenty country ceil4ng2
14 FAA fl201 L Information and coclusion on legality (under laws of the country end the US) and reasonableness of lending and ralendinr terms Loan will be on minimum termspermitted under FAA These are deemed reasonable see Sectioam Evidence will be renuired from the GGM as to the legality of the loan agreemnt
1 E 2 Information and conclusion on availability of an applicationFAA together with sufficient information and assurances to indicate reasonably that funds will be used in an economcally and technically sound manner See Sections I-A II-B and II-D Application received Janury 15 1968
16 FAA fl201(fL If a project inforntion and conclusion whether it will promote the economic developapent of the requesting country taking into account the countrys human and material resource requiremnts and the reshylationship between the ultimate objes6ives of the project and the countrys overall economic development See Sections I-D and II-B
17 FAAJ 20ij(J If a project information and conclusion whether it cifishycally provides for appropriate participation by private enterprise 8ce Sections YI-C and 114
I- FAA i22(a) Total amount of money under loan which is going directly to private enterprise is going to intermediate credit institutions or other borrowers for use by private enterprise is being used to finance imports
rfro private sources or is otherwise beirg used to finance procurementsfrcm private souwces See Sections II-C and II-2
9 FAA 207 Infosation on the emphasis placed en
(a) encouraging development of economic political and social institushytins No apparent relationship
(b) nelC-help in mectingthe countrys food nredo Project Vill conshytribute to production of food for lccal consumptioa
(c) in-proving availability in the country of evucated trained manpower Project will contribute to the deicloginext of trained manpower as one of the functions of the management contract (Soe Annex C para 5)
(d) prcgrams aimed at -malnutrition disease eradi atDn slum clearanceWater purification sewage disposal health education naternal and child care(includin fimrily pJnrning)) -nd cthcr public health ausistarice See
(c) other develoment activities including industrial development free
labor unions cooperatives tnd voluntary agencie transn)rtatin and ccshymwquication nrStczn capubiliTies for economic planning and public adlinisshytration arban develo-mment and modernization of laws to feilltate econcnicdevelopjen- GO- intends encourage develo vient of cooperat yes particularlyin the Left Pank areas Project will also develop capabiLi ics for cconoaicplanning and public a6~inistration (Annex C para 5) Other not applicable
20 Information on the extent to which the r-untry is
(a) cttcmting to increase food production and food sto a-e anddistribution felitics This project is one evidence of Moroccos efforts in this direction See also Section I-D and I-E
b) creating- a favorable climate for foreign and dmestic iri-ate enterprise and invcstrrment The GCM has recently reduced profits twes anrannounced a ten year guarantee against tax increases See Section II-E-2
(c) increasing the role of the neonle in the developnental procecsNo apparent relationship to this project
(d) allocating expenditures to development rather than to unn-cessarymilitary purpoes or intervention in other free countries affair See Sections I-D and Ii-
(e) willing --nribute funds to the project or program Th iOMhas already dcvo o-sidcrable resources to the project It has badieted13 million for th i oulouya for i7 See Section I-C
(If) making economic zocial and political refo ns such as taxc coliecshytion iYprovcmenLs and chan es in land tenure a Royal Comm ision has been appointed to make recomendation on land tenure probleras in the Lower I oulouya
(g) responding to the economic political and social concerns of its people and showing a determination to take volf-help wcasuren See Sections I-D and II-E
IT
-ovi~cd l v r 13 1968
- 4 - LDffIED OFFICIAL USE
21 FAA Inforn ation about multilateral assistance being Iurnished to t e country and whether the loan will encourage recgional development prog-rams The I1D has eztablihcd a Consultative Group for Morocco which rvicws the GOM development program anui prgress See Section II-F-4 for infoaation on othtr donor assistance to Morocco
22 A Extent to which the loan will contribute to the objective of ass ring naximu par icipation in the task of econonic dovelop--ent on the pL-t 0 _he people of the developing countries through the encouragement of cocr-tic private and local govenmental inLitutious o apparent
relationship
23 F _-_Dta_ Infor-ation and corissions whether loan will oncourageeffor s of t1e country to (a) increase tie flow of international trade (b) fostcr private initiative and comptition (c) encourage development and usceo co opratives credit unions and savingss and loan associations (d) disourgo monopolistic practices (c) improvo technical efficiency of industry ariculture and commerce (f) strenSthn free labor unions This project is cxpected to increase technical efficiency oi-agriculture
2_ C-1L lnforzrition and conclusion on how the loan will encourage US privte trade and investment abroad and how it uill encourage private US participation in foreign assistance prograas (incluiing use of private trade channels and the services of US private enterprise) See Section II-
25 VA-+_ Conclusion and supporting information on compliance with tho Co resional policy that engineering and professional servicos of US fir-ms and their affiliates are to bo used in connection with capital project3 to the nixinua extent consistent with the national interest US engineerirn and innsgcment services will be financed tnder this loan
2$ Inforamtion and ccnclusions who+her loan will pormit American rx-l] business to participate equitably in the furnishing of goods and
z orvices by To be satisfied in Loan Agreementfinanced it
27 - t(a App I18 Complianco with restriction of co -zodity procureshy o UsMS except as otherwise determined by the Picsicent and subject to ttu--- rcortir require r-nts Procurement will - liumited to the US for
reiabnrs nts and to ioocco and other free world countries 1-or US-cwne(d rhu disburseacnts
23 -i Comiance with bulk cozodity procurement restriction topriecc no l-ho han the nkarkot price prevailing in tho US at tia of
bull puchas Not applicable
29 FA Cozpliance with requirement that matrin insurance be purchased on commceities if the participating country discri-inates and that insurance be placed in the US To be satisfied in Loan Agreement
30 IA 6(a) Information at to the utilization of excers personal property in lieu of procurement of new items Will be required ai appropriate under terns of Lean Agreement
f
1 77--7 -77-77-777
31 FAA 61](a)(_) information and conclusion on availability of enginoering i financial and other plans nccx sary to carry out tho assittance and of a
reasonably firm cstimate of the cost of the assistanco to the United States
See Section II-D
32-ecessaryFAA t611(a)_(2) legislative action r6quired within recipient country and ibasis Cor reasonable anticipation such action will be completed in time to pormit orderly accompli-hirtnt of purposes of loan See Section I-A
33 n _AA161nJ0] If water or water-relatod land resource construcshy
tion project or program information and conclusion on a benefit-cost comshy
putation See Section II-B
3 4 VAA 611(c) Compliance with requirement that contracts for construction be let on comp-ctitive basis to mamum extent practicable To be satisfied
in Loan Agreement
If a loan for a project of $1 million or more certificatin35 FAA _61l(r) by the principal AID officer in the country as to the capability of the
country (both financirl and human resources) to effectively maintain and
utilize the project taking into account other US-financed projects (Such
certification is to be pproved by the Administrator aL the time the loan
is authorized) In process of being obtained
36 FAsgJ2 _6_h Appropriate steps that have b-en taken to assure that to the miaximum extent possible the country is contributing local currencies to net th-2 cost of contractural and other services and foreign currencies o- icd by tho US are utilized to meet the cost of contractual and other services The GU-M is contributing over $30 million to compleXton of this project Excess US-use dirhams will be used for eligible project costs other than US goods and services
37 FAA p619 Compliance with requirement that assistance to newly independent countries be furnished through multilateral organizations or plans to maxishymum extent appropriate Not deemed appropriate in view of previous AID financing and ccoiitment to the project See Sections I-A and I-D
38 FAA sect620(a) AcnO7a n3]7(b) Compliance with prohibitions
against assistance to Cuba ard any countr (a) which furnishes assistance to Cuba or failed to take appropriate steps by February 14 1964 to prevent ships or aircraft unier its registry from carrying equipment materials or supplies from or to Cuba or (b) which sells furnishes or permits any ships under its registry fr-om carrying items of primary atrategic signifishycance or itcms of economic assistance Morocco is not-known to be in Violation of these sections
39 FAA q620GL_ If assistance to the government of a country existence of determination it is not controlled by the international Communist movement The Secretary of State so determined on October 11 191
40 FAA 620(c) If assistance to the government of a country existonce of Indebtedness to a US citizen for goods or services furnished or ordered whore ouch citizen has exhaustod available legal romodiesor where the debt
i - ow - -- _---- --shy
- --
-6shy
is not denied or ontested by such government or the indebtedness arises under an unconditional guararty of payrrent given by such govornmunt No such indebtedness is known to exist
41 FA _(a2LdL If assisitance for any productive enterprise which will corashypote with US enterprise existence of agreement by the recipient country to prevent export to the US of more than 20 of the enterprises annual production during the life of the loan Not applicable
42 FA4 - 16Q_0_ A If assistance to the government of a country extent to which it (including government agenies or ruhdivisions) has after January 1 1962 taken steps o repudiate or nullify cuatracts or taken any action which has the effect of nationalizing expropriating or otherwise seizingownership or control ofprcpertv of US citizens or entities beneficially owned by them without taking appropriate stops to discha i ge its obligations No such steps cr actions are-known to have been taken by the GOM
43 FAA~L AjPj_10_9 Compliance with assistance toQ0 prohibitions against any Comunst codntry ozocco is not considered to be a cocinrunist country
44 FAA - 620(gJ Corliance with prohibition against use of assistonce to comp satc owners for expropriated or nationalized property To be satisfied in Loan Agreement
45 F AA 8620(h Compliance with regulations and procedures adopted to inshysure against ue of assistance in a manner hich contrary to the best inshyterests of the US promotes or assists the foreign aid projects or activities of the Communist-bloc countries To be satisfied in Loan Agreement
46 FAA 06-O(j)_ Exitence of determiration that the country is engaging in or preparing for aggressive military efforts No such determination has been made
L_62_O Information47 FAA on representation of the country at any intershynational confererce when that representation includes the planning of activishyties involving insurrection or subversion against the US or countries recoiving US assistance No such representition is known to have A occarrect
8 FAA 62JJ Existence of a determination that the country has permitted or failed to prevent destruction of US property by mob action or has failed to take steps to prevent a recurrence and-to pay compensation NO such destruction is known to have tak-n place
49 PAA l620(k) If construction of productive enterprise where eggregate value of assistanc to be furnished by US will exceed $1OO million identification of Gtntutoryauthority Not npplicable
i-xQ2MZZ=
1 shy
U 6 50 _Af( QCinsidoration which has been given to denlying assistance X to thu government of a country which after December 31 1966 has failed to
- institto the investnint guaranty program for the spcific risks of inconshy
vertibility and expropriation or confiscation Satisfied See No 7 above
S51S J lj Compliance with-prohibitions-againstn as~istance to countries which traffic or permittraffickingwith North Vietnam Morocco is not known to be in violation
52 E_-L620(_L If country has seized or imposed any penalty or sanction against vn US fishing vessel on account of its fishing activities in
intcrnationul waters information on the consideiation which has been given to excludirg the country from assistance No such situation is known to exist
53 FAA FA r) UAR restriction Not applicable620(p 9117
54 FAA R620tl) Existence of default undhr any Foreign Assistance Act loan to the country No such default exists
55 F ) C-nsider tion of whether co ntry is devoting unnecessary percentage of buKet for military purposes or use of foreign exchange for milita-y equipment
56 FAA 62o(t) Proibition on aid if country has severed diplomatic relations with US unless agreements have been negotiated after resumpshytion Diplomatic r(lations have not been severed
57 FAA 9620(u) Statur of the country on delinquent UN obligations Morocco is not known to be dlinquent on its UN~obligation
58 FAA R636(i) Prohibition on financing non-US manufactured motor vehicles Will be satisfied in Loan Agreement and Implementation Letter
59 App 102 Compliance with requirement that payments in excess of $25000 for architectural and en Jneering services on any one project be reported to Congress Such reports will be made
60 App R1O4 Compliance with bar against funds to pay pensions etc for military personnel Such payments will not be eligible for financing under th Loan Agreement
61 App 9106 If country attr ipts to create distinctions because of their race or religion among Americans in granting personal or commercial access or other rights otherwise avaVIfable to US citizens generally application which will be made in negotit ttons of contrary principles as expressed by Congress Morocco is not ku IDhave made any such attempts
iInD OFFIIt t USE
0k
OFFICIAL USE 62 AIwp Rii Compliance with existing requfremets for security clearance
of personnel Will be satisfied in Loan Agreement and Implementation Letter
63 App R1l2 Compliance with requirement for approval of cortractors and contract terms for capital projects Will be satisfied in Loan Agreement
clJ164 Aup Cmpliance with bar nRainst use of funds to Tay assessments etc of US meiber Such payments will not be eligible for financing under the Loan Agreemunt
6 Anp P115 Ccmpliance with regulations on employment of US and local personnel for funds obligated after April 30 1961 (Regulation 7) See Section III-C
66 Aim Vietnam iron and steel restrictions Not applicable
67 p l9 If a country other than Greece Turkey Iran Israel Republicof China Phillipines or Korea reduction in assistance by amounts spent for the purchase of sophisticated military equipment
68 Anp fi4O1 Compliance with bar against use of funds for publicity or proshypagjanda purposes within US not heretofore authorized by Congress Such use of funds will not be eligible for financing under the Loan Agreement
Morocco is a traditional Islamic monarchy with a constitution The conshystitution was implemented followaing a popular referendum in 1962 National regional and professional elective bodies including a parliament were established by universal suffrage under the constitution in 1963 The parliament was suspended in 1961 in a State of Exception because of its inability to agree on measures with adequate urgency to meet the prevailingecononde imperatives In July 1967 the King appointed a Prime Minister to direct a Cabinet of appointed technicians
The constitutional framework nevertheless remains intact in Morocco and nationwide popular elections for some of the professional chambers were held in August and September 1966 The press is relatively free in Morocco and the right of diLsent prevails provided that such dissent does not violate the prohibition against political attacks on the instishytution of the monarchy or the person of the monarch
LI Under the revised US AID Policy for Africa agreed to in November 1966 Morocco is designated a development emphasis country entitled to receive continuing support on a country basis as part of a multilaterally coorshydinated countrj program Morocco was subsequently included in Presidential Determination 67-14 (January 5 1967) I
LIM=TE OFFICIAL USE~i
- l go
bull ~ -
f
DEPQbi) STATE AGENCY FOR INERNATIONAL DEVELOPMENT
WASHINGTON DC 052
CAPITAL ASSISTANCE LOA11 AUTHORIZATION
Provided from Develoroent Loan Funds Morocco Second Lower Moulouya Irrigation Loan
Pursuant to the authority vested in the Assistant Administrator for Africa of the Agency for International Development
AI)by the Foreign Assistance Act of 1961 as amended theIAct) and the delegations of authority issued thereunder I
have received and t-en into consideration a certification from the Director of USAIDMorocco as to the financial and human resources capability of Morocco to effectively utilize the Lower Moulouya Irrigation Project taking into account among other things the
maintenance and utilization of projects in Morocco previously financed or assisted by the United States and I hereby authorize the establishshyment of a loan pursuant to Part I Chapter 2 Title I the Development Loan Fund to the Government of the Kingdom of Morocco (Borrower) of not to exceed five million dollars ($5000000) to assist in financing the fore] gn exchange and local currency costs of goods and services for the third phase of the Lower Moulouya Irrigation Project subject to the foLlowing terms and conditions
1 Interest Rate and Terms of Repayment Borrower shall repay the loan to AID in forty (40) years including a grace period not to exceed ten (10) years Borrower shall pay interest on the unrepaid principal and any interest accrued thereon at the rate of (a) two percent (2) per annum during the grace period and (b) two and
one-half percent (2-12) per annum thereafter
2 Currency of Pepayment Repayment of the loan and paymenu of interest shall be made in United States dollars
- t- n t - - - shy
3 Other Terms and Conditions amp(a)Goods and Services financed under the loan
shall have their source and origin in
(i) the United States if disbursements therefor are made in United States dollars or
(ii) any country in the free world including Morocco if disbursements therefor are made in Moroccan currency
(b) AID Regulation 7 shall not apply to construction -work financed under the loan because as detailed in Section IIIC of Capital Assistance Paper No P 667 it is important to the national interest of the United States that the direct costs of construction work performed by third-country nationals be financed out of funds made available by the Act
(a) Such other terms and conditions as AID may deem advisable
Assistant Administrator for Africa
Date
~~~~~~~~~~~~~~~~~~ - q v
7
rfro private sources or is otherwise beirg used to finance procurementsfrcm private souwces See Sections II-C and II-2
9 FAA 207 Infosation on the emphasis placed en
(a) encouraging development of economic political and social institushytins No apparent relationship
(b) nelC-help in mectingthe countrys food nredo Project Vill conshytribute to production of food for lccal consumptioa
(c) in-proving availability in the country of evucated trained manpower Project will contribute to the deicloginext of trained manpower as one of the functions of the management contract (Soe Annex C para 5)
(d) prcgrams aimed at -malnutrition disease eradi atDn slum clearanceWater purification sewage disposal health education naternal and child care(includin fimrily pJnrning)) -nd cthcr public health ausistarice See
(c) other develoment activities including industrial development free
labor unions cooperatives tnd voluntary agencie transn)rtatin and ccshymwquication nrStczn capubiliTies for economic planning and public adlinisshytration arban develo-mment and modernization of laws to feilltate econcnicdevelopjen- GO- intends encourage develo vient of cooperat yes particularlyin the Left Pank areas Project will also develop capabiLi ics for cconoaicplanning and public a6~inistration (Annex C para 5) Other not applicable
20 Information on the extent to which the r-untry is
(a) cttcmting to increase food production and food sto a-e anddistribution felitics This project is one evidence of Moroccos efforts in this direction See also Section I-D and I-E
b) creating- a favorable climate for foreign and dmestic iri-ate enterprise and invcstrrment The GCM has recently reduced profits twes anrannounced a ten year guarantee against tax increases See Section II-E-2
(c) increasing the role of the neonle in the developnental procecsNo apparent relationship to this project
(d) allocating expenditures to development rather than to unn-cessarymilitary purpoes or intervention in other free countries affair See Sections I-D and Ii-
(e) willing --nribute funds to the project or program Th iOMhas already dcvo o-sidcrable resources to the project It has badieted13 million for th i oulouya for i7 See Section I-C
(If) making economic zocial and political refo ns such as taxc coliecshytion iYprovcmenLs and chan es in land tenure a Royal Comm ision has been appointed to make recomendation on land tenure probleras in the Lower I oulouya
(g) responding to the economic political and social concerns of its people and showing a determination to take volf-help wcasuren See Sections I-D and II-E
IT
-ovi~cd l v r 13 1968
- 4 - LDffIED OFFICIAL USE
21 FAA Inforn ation about multilateral assistance being Iurnished to t e country and whether the loan will encourage recgional development prog-rams The I1D has eztablihcd a Consultative Group for Morocco which rvicws the GOM development program anui prgress See Section II-F-4 for infoaation on othtr donor assistance to Morocco
22 A Extent to which the loan will contribute to the objective of ass ring naximu par icipation in the task of econonic dovelop--ent on the pL-t 0 _he people of the developing countries through the encouragement of cocr-tic private and local govenmental inLitutious o apparent
relationship
23 F _-_Dta_ Infor-ation and corissions whether loan will oncourageeffor s of t1e country to (a) increase tie flow of international trade (b) fostcr private initiative and comptition (c) encourage development and usceo co opratives credit unions and savingss and loan associations (d) disourgo monopolistic practices (c) improvo technical efficiency of industry ariculture and commerce (f) strenSthn free labor unions This project is cxpected to increase technical efficiency oi-agriculture
2_ C-1L lnforzrition and conclusion on how the loan will encourage US privte trade and investment abroad and how it uill encourage private US participation in foreign assistance prograas (incluiing use of private trade channels and the services of US private enterprise) See Section II-
25 VA-+_ Conclusion and supporting information on compliance with tho Co resional policy that engineering and professional servicos of US fir-ms and their affiliates are to bo used in connection with capital project3 to the nixinua extent consistent with the national interest US engineerirn and innsgcment services will be financed tnder this loan
2$ Inforamtion and ccnclusions who+her loan will pormit American rx-l] business to participate equitably in the furnishing of goods and
z orvices by To be satisfied in Loan Agreementfinanced it
27 - t(a App I18 Complianco with restriction of co -zodity procureshy o UsMS except as otherwise determined by the Picsicent and subject to ttu--- rcortir require r-nts Procurement will - liumited to the US for
reiabnrs nts and to ioocco and other free world countries 1-or US-cwne(d rhu disburseacnts
23 -i Comiance with bulk cozodity procurement restriction topriecc no l-ho han the nkarkot price prevailing in tho US at tia of
bull puchas Not applicable
29 FA Cozpliance with requirement that matrin insurance be purchased on commceities if the participating country discri-inates and that insurance be placed in the US To be satisfied in Loan Agreement
30 IA 6(a) Information at to the utilization of excers personal property in lieu of procurement of new items Will be required ai appropriate under terns of Lean Agreement
f
1 77--7 -77-77-777
31 FAA 61](a)(_) information and conclusion on availability of enginoering i financial and other plans nccx sary to carry out tho assittance and of a
reasonably firm cstimate of the cost of the assistanco to the United States
See Section II-D
32-ecessaryFAA t611(a)_(2) legislative action r6quired within recipient country and ibasis Cor reasonable anticipation such action will be completed in time to pormit orderly accompli-hirtnt of purposes of loan See Section I-A
33 n _AA161nJ0] If water or water-relatod land resource construcshy
tion project or program information and conclusion on a benefit-cost comshy
putation See Section II-B
3 4 VAA 611(c) Compliance with requirement that contracts for construction be let on comp-ctitive basis to mamum extent practicable To be satisfied
in Loan Agreement
If a loan for a project of $1 million or more certificatin35 FAA _61l(r) by the principal AID officer in the country as to the capability of the
country (both financirl and human resources) to effectively maintain and
utilize the project taking into account other US-financed projects (Such
certification is to be pproved by the Administrator aL the time the loan
is authorized) In process of being obtained
36 FAsgJ2 _6_h Appropriate steps that have b-en taken to assure that to the miaximum extent possible the country is contributing local currencies to net th-2 cost of contractural and other services and foreign currencies o- icd by tho US are utilized to meet the cost of contractual and other services The GU-M is contributing over $30 million to compleXton of this project Excess US-use dirhams will be used for eligible project costs other than US goods and services
37 FAA p619 Compliance with requirement that assistance to newly independent countries be furnished through multilateral organizations or plans to maxishymum extent appropriate Not deemed appropriate in view of previous AID financing and ccoiitment to the project See Sections I-A and I-D
38 FAA sect620(a) AcnO7a n3]7(b) Compliance with prohibitions
against assistance to Cuba ard any countr (a) which furnishes assistance to Cuba or failed to take appropriate steps by February 14 1964 to prevent ships or aircraft unier its registry from carrying equipment materials or supplies from or to Cuba or (b) which sells furnishes or permits any ships under its registry fr-om carrying items of primary atrategic signifishycance or itcms of economic assistance Morocco is not-known to be in Violation of these sections
39 FAA q620GL_ If assistance to the government of a country existence of determination it is not controlled by the international Communist movement The Secretary of State so determined on October 11 191
40 FAA 620(c) If assistance to the government of a country existonce of Indebtedness to a US citizen for goods or services furnished or ordered whore ouch citizen has exhaustod available legal romodiesor where the debt
i - ow - -- _---- --shy
- --
-6shy
is not denied or ontested by such government or the indebtedness arises under an unconditional guararty of payrrent given by such govornmunt No such indebtedness is known to exist
41 FA _(a2LdL If assisitance for any productive enterprise which will corashypote with US enterprise existence of agreement by the recipient country to prevent export to the US of more than 20 of the enterprises annual production during the life of the loan Not applicable
42 FA4 - 16Q_0_ A If assistance to the government of a country extent to which it (including government agenies or ruhdivisions) has after January 1 1962 taken steps o repudiate or nullify cuatracts or taken any action which has the effect of nationalizing expropriating or otherwise seizingownership or control ofprcpertv of US citizens or entities beneficially owned by them without taking appropriate stops to discha i ge its obligations No such steps cr actions are-known to have been taken by the GOM
43 FAA~L AjPj_10_9 Compliance with assistance toQ0 prohibitions against any Comunst codntry ozocco is not considered to be a cocinrunist country
44 FAA - 620(gJ Corliance with prohibition against use of assistonce to comp satc owners for expropriated or nationalized property To be satisfied in Loan Agreement
45 F AA 8620(h Compliance with regulations and procedures adopted to inshysure against ue of assistance in a manner hich contrary to the best inshyterests of the US promotes or assists the foreign aid projects or activities of the Communist-bloc countries To be satisfied in Loan Agreement
46 FAA 06-O(j)_ Exitence of determiration that the country is engaging in or preparing for aggressive military efforts No such determination has been made
L_62_O Information47 FAA on representation of the country at any intershynational confererce when that representation includes the planning of activishyties involving insurrection or subversion against the US or countries recoiving US assistance No such representition is known to have A occarrect
8 FAA 62JJ Existence of a determination that the country has permitted or failed to prevent destruction of US property by mob action or has failed to take steps to prevent a recurrence and-to pay compensation NO such destruction is known to have tak-n place
49 PAA l620(k) If construction of productive enterprise where eggregate value of assistanc to be furnished by US will exceed $1OO million identification of Gtntutoryauthority Not npplicable
i-xQ2MZZ=
1 shy
U 6 50 _Af( QCinsidoration which has been given to denlying assistance X to thu government of a country which after December 31 1966 has failed to
- institto the investnint guaranty program for the spcific risks of inconshy
vertibility and expropriation or confiscation Satisfied See No 7 above
S51S J lj Compliance with-prohibitions-againstn as~istance to countries which traffic or permittraffickingwith North Vietnam Morocco is not known to be in violation
52 E_-L620(_L If country has seized or imposed any penalty or sanction against vn US fishing vessel on account of its fishing activities in
intcrnationul waters information on the consideiation which has been given to excludirg the country from assistance No such situation is known to exist
53 FAA FA r) UAR restriction Not applicable620(p 9117
54 FAA R620tl) Existence of default undhr any Foreign Assistance Act loan to the country No such default exists
55 F ) C-nsider tion of whether co ntry is devoting unnecessary percentage of buKet for military purposes or use of foreign exchange for milita-y equipment
56 FAA 62o(t) Proibition on aid if country has severed diplomatic relations with US unless agreements have been negotiated after resumpshytion Diplomatic r(lations have not been severed
57 FAA 9620(u) Statur of the country on delinquent UN obligations Morocco is not known to be dlinquent on its UN~obligation
58 FAA R636(i) Prohibition on financing non-US manufactured motor vehicles Will be satisfied in Loan Agreement and Implementation Letter
59 App 102 Compliance with requirement that payments in excess of $25000 for architectural and en Jneering services on any one project be reported to Congress Such reports will be made
60 App R1O4 Compliance with bar against funds to pay pensions etc for military personnel Such payments will not be eligible for financing under th Loan Agreement
61 App 9106 If country attr ipts to create distinctions because of their race or religion among Americans in granting personal or commercial access or other rights otherwise avaVIfable to US citizens generally application which will be made in negotit ttons of contrary principles as expressed by Congress Morocco is not ku IDhave made any such attempts
iInD OFFIIt t USE
0k
OFFICIAL USE 62 AIwp Rii Compliance with existing requfremets for security clearance
of personnel Will be satisfied in Loan Agreement and Implementation Letter
63 App R1l2 Compliance with requirement for approval of cortractors and contract terms for capital projects Will be satisfied in Loan Agreement
clJ164 Aup Cmpliance with bar nRainst use of funds to Tay assessments etc of US meiber Such payments will not be eligible for financing under the Loan Agreemunt
6 Anp P115 Ccmpliance with regulations on employment of US and local personnel for funds obligated after April 30 1961 (Regulation 7) See Section III-C
66 Aim Vietnam iron and steel restrictions Not applicable
67 p l9 If a country other than Greece Turkey Iran Israel Republicof China Phillipines or Korea reduction in assistance by amounts spent for the purchase of sophisticated military equipment
68 Anp fi4O1 Compliance with bar against use of funds for publicity or proshypagjanda purposes within US not heretofore authorized by Congress Such use of funds will not be eligible for financing under the Loan Agreement
Morocco is a traditional Islamic monarchy with a constitution The conshystitution was implemented followaing a popular referendum in 1962 National regional and professional elective bodies including a parliament were established by universal suffrage under the constitution in 1963 The parliament was suspended in 1961 in a State of Exception because of its inability to agree on measures with adequate urgency to meet the prevailingecononde imperatives In July 1967 the King appointed a Prime Minister to direct a Cabinet of appointed technicians
The constitutional framework nevertheless remains intact in Morocco and nationwide popular elections for some of the professional chambers were held in August and September 1966 The press is relatively free in Morocco and the right of diLsent prevails provided that such dissent does not violate the prohibition against political attacks on the instishytution of the monarchy or the person of the monarch
LI Under the revised US AID Policy for Africa agreed to in November 1966 Morocco is designated a development emphasis country entitled to receive continuing support on a country basis as part of a multilaterally coorshydinated countrj program Morocco was subsequently included in Presidential Determination 67-14 (January 5 1967) I
LIM=TE OFFICIAL USE~i
- l go
bull ~ -
f
DEPQbi) STATE AGENCY FOR INERNATIONAL DEVELOPMENT
WASHINGTON DC 052
CAPITAL ASSISTANCE LOA11 AUTHORIZATION
Provided from Develoroent Loan Funds Morocco Second Lower Moulouya Irrigation Loan
Pursuant to the authority vested in the Assistant Administrator for Africa of the Agency for International Development
AI)by the Foreign Assistance Act of 1961 as amended theIAct) and the delegations of authority issued thereunder I
have received and t-en into consideration a certification from the Director of USAIDMorocco as to the financial and human resources capability of Morocco to effectively utilize the Lower Moulouya Irrigation Project taking into account among other things the
maintenance and utilization of projects in Morocco previously financed or assisted by the United States and I hereby authorize the establishshyment of a loan pursuant to Part I Chapter 2 Title I the Development Loan Fund to the Government of the Kingdom of Morocco (Borrower) of not to exceed five million dollars ($5000000) to assist in financing the fore] gn exchange and local currency costs of goods and services for the third phase of the Lower Moulouya Irrigation Project subject to the foLlowing terms and conditions
1 Interest Rate and Terms of Repayment Borrower shall repay the loan to AID in forty (40) years including a grace period not to exceed ten (10) years Borrower shall pay interest on the unrepaid principal and any interest accrued thereon at the rate of (a) two percent (2) per annum during the grace period and (b) two and
one-half percent (2-12) per annum thereafter
2 Currency of Pepayment Repayment of the loan and paymenu of interest shall be made in United States dollars
- t- n t - - - shy
3 Other Terms and Conditions amp(a)Goods and Services financed under the loan
shall have their source and origin in
(i) the United States if disbursements therefor are made in United States dollars or
(ii) any country in the free world including Morocco if disbursements therefor are made in Moroccan currency
(b) AID Regulation 7 shall not apply to construction -work financed under the loan because as detailed in Section IIIC of Capital Assistance Paper No P 667 it is important to the national interest of the United States that the direct costs of construction work performed by third-country nationals be financed out of funds made available by the Act
(a) Such other terms and conditions as AID may deem advisable
Assistant Administrator for Africa
Date
~~~~~~~~~~~~~~~~~~ - q v
7
IT
-ovi~cd l v r 13 1968
- 4 - LDffIED OFFICIAL USE
21 FAA Inforn ation about multilateral assistance being Iurnished to t e country and whether the loan will encourage recgional development prog-rams The I1D has eztablihcd a Consultative Group for Morocco which rvicws the GOM development program anui prgress See Section II-F-4 for infoaation on othtr donor assistance to Morocco
22 A Extent to which the loan will contribute to the objective of ass ring naximu par icipation in the task of econonic dovelop--ent on the pL-t 0 _he people of the developing countries through the encouragement of cocr-tic private and local govenmental inLitutious o apparent
relationship
23 F _-_Dta_ Infor-ation and corissions whether loan will oncourageeffor s of t1e country to (a) increase tie flow of international trade (b) fostcr private initiative and comptition (c) encourage development and usceo co opratives credit unions and savingss and loan associations (d) disourgo monopolistic practices (c) improvo technical efficiency of industry ariculture and commerce (f) strenSthn free labor unions This project is cxpected to increase technical efficiency oi-agriculture
2_ C-1L lnforzrition and conclusion on how the loan will encourage US privte trade and investment abroad and how it uill encourage private US participation in foreign assistance prograas (incluiing use of private trade channels and the services of US private enterprise) See Section II-
25 VA-+_ Conclusion and supporting information on compliance with tho Co resional policy that engineering and professional servicos of US fir-ms and their affiliates are to bo used in connection with capital project3 to the nixinua extent consistent with the national interest US engineerirn and innsgcment services will be financed tnder this loan
2$ Inforamtion and ccnclusions who+her loan will pormit American rx-l] business to participate equitably in the furnishing of goods and
z orvices by To be satisfied in Loan Agreementfinanced it
27 - t(a App I18 Complianco with restriction of co -zodity procureshy o UsMS except as otherwise determined by the Picsicent and subject to ttu--- rcortir require r-nts Procurement will - liumited to the US for
reiabnrs nts and to ioocco and other free world countries 1-or US-cwne(d rhu disburseacnts
23 -i Comiance with bulk cozodity procurement restriction topriecc no l-ho han the nkarkot price prevailing in tho US at tia of
bull puchas Not applicable
29 FA Cozpliance with requirement that matrin insurance be purchased on commceities if the participating country discri-inates and that insurance be placed in the US To be satisfied in Loan Agreement
30 IA 6(a) Information at to the utilization of excers personal property in lieu of procurement of new items Will be required ai appropriate under terns of Lean Agreement
f
1 77--7 -77-77-777
31 FAA 61](a)(_) information and conclusion on availability of enginoering i financial and other plans nccx sary to carry out tho assittance and of a
reasonably firm cstimate of the cost of the assistanco to the United States
See Section II-D
32-ecessaryFAA t611(a)_(2) legislative action r6quired within recipient country and ibasis Cor reasonable anticipation such action will be completed in time to pormit orderly accompli-hirtnt of purposes of loan See Section I-A
33 n _AA161nJ0] If water or water-relatod land resource construcshy
tion project or program information and conclusion on a benefit-cost comshy
putation See Section II-B
3 4 VAA 611(c) Compliance with requirement that contracts for construction be let on comp-ctitive basis to mamum extent practicable To be satisfied
in Loan Agreement
If a loan for a project of $1 million or more certificatin35 FAA _61l(r) by the principal AID officer in the country as to the capability of the
country (both financirl and human resources) to effectively maintain and
utilize the project taking into account other US-financed projects (Such
certification is to be pproved by the Administrator aL the time the loan
is authorized) In process of being obtained
36 FAsgJ2 _6_h Appropriate steps that have b-en taken to assure that to the miaximum extent possible the country is contributing local currencies to net th-2 cost of contractural and other services and foreign currencies o- icd by tho US are utilized to meet the cost of contractual and other services The GU-M is contributing over $30 million to compleXton of this project Excess US-use dirhams will be used for eligible project costs other than US goods and services
37 FAA p619 Compliance with requirement that assistance to newly independent countries be furnished through multilateral organizations or plans to maxishymum extent appropriate Not deemed appropriate in view of previous AID financing and ccoiitment to the project See Sections I-A and I-D
38 FAA sect620(a) AcnO7a n3]7(b) Compliance with prohibitions
against assistance to Cuba ard any countr (a) which furnishes assistance to Cuba or failed to take appropriate steps by February 14 1964 to prevent ships or aircraft unier its registry from carrying equipment materials or supplies from or to Cuba or (b) which sells furnishes or permits any ships under its registry fr-om carrying items of primary atrategic signifishycance or itcms of economic assistance Morocco is not-known to be in Violation of these sections
39 FAA q620GL_ If assistance to the government of a country existence of determination it is not controlled by the international Communist movement The Secretary of State so determined on October 11 191
40 FAA 620(c) If assistance to the government of a country existonce of Indebtedness to a US citizen for goods or services furnished or ordered whore ouch citizen has exhaustod available legal romodiesor where the debt
i - ow - -- _---- --shy
- --
-6shy
is not denied or ontested by such government or the indebtedness arises under an unconditional guararty of payrrent given by such govornmunt No such indebtedness is known to exist
41 FA _(a2LdL If assisitance for any productive enterprise which will corashypote with US enterprise existence of agreement by the recipient country to prevent export to the US of more than 20 of the enterprises annual production during the life of the loan Not applicable
42 FA4 - 16Q_0_ A If assistance to the government of a country extent to which it (including government agenies or ruhdivisions) has after January 1 1962 taken steps o repudiate or nullify cuatracts or taken any action which has the effect of nationalizing expropriating or otherwise seizingownership or control ofprcpertv of US citizens or entities beneficially owned by them without taking appropriate stops to discha i ge its obligations No such steps cr actions are-known to have been taken by the GOM
43 FAA~L AjPj_10_9 Compliance with assistance toQ0 prohibitions against any Comunst codntry ozocco is not considered to be a cocinrunist country
44 FAA - 620(gJ Corliance with prohibition against use of assistonce to comp satc owners for expropriated or nationalized property To be satisfied in Loan Agreement
45 F AA 8620(h Compliance with regulations and procedures adopted to inshysure against ue of assistance in a manner hich contrary to the best inshyterests of the US promotes or assists the foreign aid projects or activities of the Communist-bloc countries To be satisfied in Loan Agreement
46 FAA 06-O(j)_ Exitence of determiration that the country is engaging in or preparing for aggressive military efforts No such determination has been made
L_62_O Information47 FAA on representation of the country at any intershynational confererce when that representation includes the planning of activishyties involving insurrection or subversion against the US or countries recoiving US assistance No such representition is known to have A occarrect
8 FAA 62JJ Existence of a determination that the country has permitted or failed to prevent destruction of US property by mob action or has failed to take steps to prevent a recurrence and-to pay compensation NO such destruction is known to have tak-n place
49 PAA l620(k) If construction of productive enterprise where eggregate value of assistanc to be furnished by US will exceed $1OO million identification of Gtntutoryauthority Not npplicable
i-xQ2MZZ=
1 shy
U 6 50 _Af( QCinsidoration which has been given to denlying assistance X to thu government of a country which after December 31 1966 has failed to
- institto the investnint guaranty program for the spcific risks of inconshy
vertibility and expropriation or confiscation Satisfied See No 7 above
S51S J lj Compliance with-prohibitions-againstn as~istance to countries which traffic or permittraffickingwith North Vietnam Morocco is not known to be in violation
52 E_-L620(_L If country has seized or imposed any penalty or sanction against vn US fishing vessel on account of its fishing activities in
intcrnationul waters information on the consideiation which has been given to excludirg the country from assistance No such situation is known to exist
53 FAA FA r) UAR restriction Not applicable620(p 9117
54 FAA R620tl) Existence of default undhr any Foreign Assistance Act loan to the country No such default exists
55 F ) C-nsider tion of whether co ntry is devoting unnecessary percentage of buKet for military purposes or use of foreign exchange for milita-y equipment
56 FAA 62o(t) Proibition on aid if country has severed diplomatic relations with US unless agreements have been negotiated after resumpshytion Diplomatic r(lations have not been severed
57 FAA 9620(u) Statur of the country on delinquent UN obligations Morocco is not known to be dlinquent on its UN~obligation
58 FAA R636(i) Prohibition on financing non-US manufactured motor vehicles Will be satisfied in Loan Agreement and Implementation Letter
59 App 102 Compliance with requirement that payments in excess of $25000 for architectural and en Jneering services on any one project be reported to Congress Such reports will be made
60 App R1O4 Compliance with bar against funds to pay pensions etc for military personnel Such payments will not be eligible for financing under th Loan Agreement
61 App 9106 If country attr ipts to create distinctions because of their race or religion among Americans in granting personal or commercial access or other rights otherwise avaVIfable to US citizens generally application which will be made in negotit ttons of contrary principles as expressed by Congress Morocco is not ku IDhave made any such attempts
iInD OFFIIt t USE
0k
OFFICIAL USE 62 AIwp Rii Compliance with existing requfremets for security clearance
of personnel Will be satisfied in Loan Agreement and Implementation Letter
63 App R1l2 Compliance with requirement for approval of cortractors and contract terms for capital projects Will be satisfied in Loan Agreement
clJ164 Aup Cmpliance with bar nRainst use of funds to Tay assessments etc of US meiber Such payments will not be eligible for financing under the Loan Agreemunt
6 Anp P115 Ccmpliance with regulations on employment of US and local personnel for funds obligated after April 30 1961 (Regulation 7) See Section III-C
66 Aim Vietnam iron and steel restrictions Not applicable
67 p l9 If a country other than Greece Turkey Iran Israel Republicof China Phillipines or Korea reduction in assistance by amounts spent for the purchase of sophisticated military equipment
68 Anp fi4O1 Compliance with bar against use of funds for publicity or proshypagjanda purposes within US not heretofore authorized by Congress Such use of funds will not be eligible for financing under the Loan Agreement
Morocco is a traditional Islamic monarchy with a constitution The conshystitution was implemented followaing a popular referendum in 1962 National regional and professional elective bodies including a parliament were established by universal suffrage under the constitution in 1963 The parliament was suspended in 1961 in a State of Exception because of its inability to agree on measures with adequate urgency to meet the prevailingecononde imperatives In July 1967 the King appointed a Prime Minister to direct a Cabinet of appointed technicians
The constitutional framework nevertheless remains intact in Morocco and nationwide popular elections for some of the professional chambers were held in August and September 1966 The press is relatively free in Morocco and the right of diLsent prevails provided that such dissent does not violate the prohibition against political attacks on the instishytution of the monarchy or the person of the monarch
LI Under the revised US AID Policy for Africa agreed to in November 1966 Morocco is designated a development emphasis country entitled to receive continuing support on a country basis as part of a multilaterally coorshydinated countrj program Morocco was subsequently included in Presidential Determination 67-14 (January 5 1967) I
LIM=TE OFFICIAL USE~i
- l go
bull ~ -
f
DEPQbi) STATE AGENCY FOR INERNATIONAL DEVELOPMENT
WASHINGTON DC 052
CAPITAL ASSISTANCE LOA11 AUTHORIZATION
Provided from Develoroent Loan Funds Morocco Second Lower Moulouya Irrigation Loan
Pursuant to the authority vested in the Assistant Administrator for Africa of the Agency for International Development
AI)by the Foreign Assistance Act of 1961 as amended theIAct) and the delegations of authority issued thereunder I
have received and t-en into consideration a certification from the Director of USAIDMorocco as to the financial and human resources capability of Morocco to effectively utilize the Lower Moulouya Irrigation Project taking into account among other things the
maintenance and utilization of projects in Morocco previously financed or assisted by the United States and I hereby authorize the establishshyment of a loan pursuant to Part I Chapter 2 Title I the Development Loan Fund to the Government of the Kingdom of Morocco (Borrower) of not to exceed five million dollars ($5000000) to assist in financing the fore] gn exchange and local currency costs of goods and services for the third phase of the Lower Moulouya Irrigation Project subject to the foLlowing terms and conditions
1 Interest Rate and Terms of Repayment Borrower shall repay the loan to AID in forty (40) years including a grace period not to exceed ten (10) years Borrower shall pay interest on the unrepaid principal and any interest accrued thereon at the rate of (a) two percent (2) per annum during the grace period and (b) two and
one-half percent (2-12) per annum thereafter
2 Currency of Pepayment Repayment of the loan and paymenu of interest shall be made in United States dollars
- t- n t - - - shy
3 Other Terms and Conditions amp(a)Goods and Services financed under the loan
shall have their source and origin in
(i) the United States if disbursements therefor are made in United States dollars or
(ii) any country in the free world including Morocco if disbursements therefor are made in Moroccan currency
(b) AID Regulation 7 shall not apply to construction -work financed under the loan because as detailed in Section IIIC of Capital Assistance Paper No P 667 it is important to the national interest of the United States that the direct costs of construction work performed by third-country nationals be financed out of funds made available by the Act
(a) Such other terms and conditions as AID may deem advisable
Assistant Administrator for Africa
Date
~~~~~~~~~~~~~~~~~~ - q v
7
1 77--7 -77-77-777
31 FAA 61](a)(_) information and conclusion on availability of enginoering i financial and other plans nccx sary to carry out tho assittance and of a
reasonably firm cstimate of the cost of the assistanco to the United States
See Section II-D
32-ecessaryFAA t611(a)_(2) legislative action r6quired within recipient country and ibasis Cor reasonable anticipation such action will be completed in time to pormit orderly accompli-hirtnt of purposes of loan See Section I-A
33 n _AA161nJ0] If water or water-relatod land resource construcshy
tion project or program information and conclusion on a benefit-cost comshy
putation See Section II-B
3 4 VAA 611(c) Compliance with requirement that contracts for construction be let on comp-ctitive basis to mamum extent practicable To be satisfied
in Loan Agreement
If a loan for a project of $1 million or more certificatin35 FAA _61l(r) by the principal AID officer in the country as to the capability of the
country (both financirl and human resources) to effectively maintain and
utilize the project taking into account other US-financed projects (Such
certification is to be pproved by the Administrator aL the time the loan
is authorized) In process of being obtained
36 FAsgJ2 _6_h Appropriate steps that have b-en taken to assure that to the miaximum extent possible the country is contributing local currencies to net th-2 cost of contractural and other services and foreign currencies o- icd by tho US are utilized to meet the cost of contractual and other services The GU-M is contributing over $30 million to compleXton of this project Excess US-use dirhams will be used for eligible project costs other than US goods and services
37 FAA p619 Compliance with requirement that assistance to newly independent countries be furnished through multilateral organizations or plans to maxishymum extent appropriate Not deemed appropriate in view of previous AID financing and ccoiitment to the project See Sections I-A and I-D
38 FAA sect620(a) AcnO7a n3]7(b) Compliance with prohibitions
against assistance to Cuba ard any countr (a) which furnishes assistance to Cuba or failed to take appropriate steps by February 14 1964 to prevent ships or aircraft unier its registry from carrying equipment materials or supplies from or to Cuba or (b) which sells furnishes or permits any ships under its registry fr-om carrying items of primary atrategic signifishycance or itcms of economic assistance Morocco is not-known to be in Violation of these sections
39 FAA q620GL_ If assistance to the government of a country existence of determination it is not controlled by the international Communist movement The Secretary of State so determined on October 11 191
40 FAA 620(c) If assistance to the government of a country existonce of Indebtedness to a US citizen for goods or services furnished or ordered whore ouch citizen has exhaustod available legal romodiesor where the debt
i - ow - -- _---- --shy
- --
-6shy
is not denied or ontested by such government or the indebtedness arises under an unconditional guararty of payrrent given by such govornmunt No such indebtedness is known to exist
41 FA _(a2LdL If assisitance for any productive enterprise which will corashypote with US enterprise existence of agreement by the recipient country to prevent export to the US of more than 20 of the enterprises annual production during the life of the loan Not applicable
42 FA4 - 16Q_0_ A If assistance to the government of a country extent to which it (including government agenies or ruhdivisions) has after January 1 1962 taken steps o repudiate or nullify cuatracts or taken any action which has the effect of nationalizing expropriating or otherwise seizingownership or control ofprcpertv of US citizens or entities beneficially owned by them without taking appropriate stops to discha i ge its obligations No such steps cr actions are-known to have been taken by the GOM
43 FAA~L AjPj_10_9 Compliance with assistance toQ0 prohibitions against any Comunst codntry ozocco is not considered to be a cocinrunist country
44 FAA - 620(gJ Corliance with prohibition against use of assistonce to comp satc owners for expropriated or nationalized property To be satisfied in Loan Agreement
45 F AA 8620(h Compliance with regulations and procedures adopted to inshysure against ue of assistance in a manner hich contrary to the best inshyterests of the US promotes or assists the foreign aid projects or activities of the Communist-bloc countries To be satisfied in Loan Agreement
46 FAA 06-O(j)_ Exitence of determiration that the country is engaging in or preparing for aggressive military efforts No such determination has been made
L_62_O Information47 FAA on representation of the country at any intershynational confererce when that representation includes the planning of activishyties involving insurrection or subversion against the US or countries recoiving US assistance No such representition is known to have A occarrect
8 FAA 62JJ Existence of a determination that the country has permitted or failed to prevent destruction of US property by mob action or has failed to take steps to prevent a recurrence and-to pay compensation NO such destruction is known to have tak-n place
49 PAA l620(k) If construction of productive enterprise where eggregate value of assistanc to be furnished by US will exceed $1OO million identification of Gtntutoryauthority Not npplicable
i-xQ2MZZ=
1 shy
U 6 50 _Af( QCinsidoration which has been given to denlying assistance X to thu government of a country which after December 31 1966 has failed to
- institto the investnint guaranty program for the spcific risks of inconshy
vertibility and expropriation or confiscation Satisfied See No 7 above
S51S J lj Compliance with-prohibitions-againstn as~istance to countries which traffic or permittraffickingwith North Vietnam Morocco is not known to be in violation
52 E_-L620(_L If country has seized or imposed any penalty or sanction against vn US fishing vessel on account of its fishing activities in
intcrnationul waters information on the consideiation which has been given to excludirg the country from assistance No such situation is known to exist
53 FAA FA r) UAR restriction Not applicable620(p 9117
54 FAA R620tl) Existence of default undhr any Foreign Assistance Act loan to the country No such default exists
55 F ) C-nsider tion of whether co ntry is devoting unnecessary percentage of buKet for military purposes or use of foreign exchange for milita-y equipment
56 FAA 62o(t) Proibition on aid if country has severed diplomatic relations with US unless agreements have been negotiated after resumpshytion Diplomatic r(lations have not been severed
57 FAA 9620(u) Statur of the country on delinquent UN obligations Morocco is not known to be dlinquent on its UN~obligation
58 FAA R636(i) Prohibition on financing non-US manufactured motor vehicles Will be satisfied in Loan Agreement and Implementation Letter
59 App 102 Compliance with requirement that payments in excess of $25000 for architectural and en Jneering services on any one project be reported to Congress Such reports will be made
60 App R1O4 Compliance with bar against funds to pay pensions etc for military personnel Such payments will not be eligible for financing under th Loan Agreement
61 App 9106 If country attr ipts to create distinctions because of their race or religion among Americans in granting personal or commercial access or other rights otherwise avaVIfable to US citizens generally application which will be made in negotit ttons of contrary principles as expressed by Congress Morocco is not ku IDhave made any such attempts
iInD OFFIIt t USE
0k
OFFICIAL USE 62 AIwp Rii Compliance with existing requfremets for security clearance
of personnel Will be satisfied in Loan Agreement and Implementation Letter
63 App R1l2 Compliance with requirement for approval of cortractors and contract terms for capital projects Will be satisfied in Loan Agreement
clJ164 Aup Cmpliance with bar nRainst use of funds to Tay assessments etc of US meiber Such payments will not be eligible for financing under the Loan Agreemunt
6 Anp P115 Ccmpliance with regulations on employment of US and local personnel for funds obligated after April 30 1961 (Regulation 7) See Section III-C
66 Aim Vietnam iron and steel restrictions Not applicable
67 p l9 If a country other than Greece Turkey Iran Israel Republicof China Phillipines or Korea reduction in assistance by amounts spent for the purchase of sophisticated military equipment
68 Anp fi4O1 Compliance with bar against use of funds for publicity or proshypagjanda purposes within US not heretofore authorized by Congress Such use of funds will not be eligible for financing under the Loan Agreement
Morocco is a traditional Islamic monarchy with a constitution The conshystitution was implemented followaing a popular referendum in 1962 National regional and professional elective bodies including a parliament were established by universal suffrage under the constitution in 1963 The parliament was suspended in 1961 in a State of Exception because of its inability to agree on measures with adequate urgency to meet the prevailingecononde imperatives In July 1967 the King appointed a Prime Minister to direct a Cabinet of appointed technicians
The constitutional framework nevertheless remains intact in Morocco and nationwide popular elections for some of the professional chambers were held in August and September 1966 The press is relatively free in Morocco and the right of diLsent prevails provided that such dissent does not violate the prohibition against political attacks on the instishytution of the monarchy or the person of the monarch
LI Under the revised US AID Policy for Africa agreed to in November 1966 Morocco is designated a development emphasis country entitled to receive continuing support on a country basis as part of a multilaterally coorshydinated countrj program Morocco was subsequently included in Presidential Determination 67-14 (January 5 1967) I
LIM=TE OFFICIAL USE~i
- l go
bull ~ -
f
DEPQbi) STATE AGENCY FOR INERNATIONAL DEVELOPMENT
WASHINGTON DC 052
CAPITAL ASSISTANCE LOA11 AUTHORIZATION
Provided from Develoroent Loan Funds Morocco Second Lower Moulouya Irrigation Loan
Pursuant to the authority vested in the Assistant Administrator for Africa of the Agency for International Development
AI)by the Foreign Assistance Act of 1961 as amended theIAct) and the delegations of authority issued thereunder I
have received and t-en into consideration a certification from the Director of USAIDMorocco as to the financial and human resources capability of Morocco to effectively utilize the Lower Moulouya Irrigation Project taking into account among other things the
maintenance and utilization of projects in Morocco previously financed or assisted by the United States and I hereby authorize the establishshyment of a loan pursuant to Part I Chapter 2 Title I the Development Loan Fund to the Government of the Kingdom of Morocco (Borrower) of not to exceed five million dollars ($5000000) to assist in financing the fore] gn exchange and local currency costs of goods and services for the third phase of the Lower Moulouya Irrigation Project subject to the foLlowing terms and conditions
1 Interest Rate and Terms of Repayment Borrower shall repay the loan to AID in forty (40) years including a grace period not to exceed ten (10) years Borrower shall pay interest on the unrepaid principal and any interest accrued thereon at the rate of (a) two percent (2) per annum during the grace period and (b) two and
one-half percent (2-12) per annum thereafter
2 Currency of Pepayment Repayment of the loan and paymenu of interest shall be made in United States dollars
- t- n t - - - shy
3 Other Terms and Conditions amp(a)Goods and Services financed under the loan
shall have their source and origin in
(i) the United States if disbursements therefor are made in United States dollars or
(ii) any country in the free world including Morocco if disbursements therefor are made in Moroccan currency
(b) AID Regulation 7 shall not apply to construction -work financed under the loan because as detailed in Section IIIC of Capital Assistance Paper No P 667 it is important to the national interest of the United States that the direct costs of construction work performed by third-country nationals be financed out of funds made available by the Act
(a) Such other terms and conditions as AID may deem advisable
Assistant Administrator for Africa
Date
~~~~~~~~~~~~~~~~~~ - q v
7
- --
-6shy
is not denied or ontested by such government or the indebtedness arises under an unconditional guararty of payrrent given by such govornmunt No such indebtedness is known to exist
41 FA _(a2LdL If assisitance for any productive enterprise which will corashypote with US enterprise existence of agreement by the recipient country to prevent export to the US of more than 20 of the enterprises annual production during the life of the loan Not applicable
42 FA4 - 16Q_0_ A If assistance to the government of a country extent to which it (including government agenies or ruhdivisions) has after January 1 1962 taken steps o repudiate or nullify cuatracts or taken any action which has the effect of nationalizing expropriating or otherwise seizingownership or control ofprcpertv of US citizens or entities beneficially owned by them without taking appropriate stops to discha i ge its obligations No such steps cr actions are-known to have been taken by the GOM
43 FAA~L AjPj_10_9 Compliance with assistance toQ0 prohibitions against any Comunst codntry ozocco is not considered to be a cocinrunist country
44 FAA - 620(gJ Corliance with prohibition against use of assistonce to comp satc owners for expropriated or nationalized property To be satisfied in Loan Agreement
45 F AA 8620(h Compliance with regulations and procedures adopted to inshysure against ue of assistance in a manner hich contrary to the best inshyterests of the US promotes or assists the foreign aid projects or activities of the Communist-bloc countries To be satisfied in Loan Agreement
46 FAA 06-O(j)_ Exitence of determiration that the country is engaging in or preparing for aggressive military efforts No such determination has been made
L_62_O Information47 FAA on representation of the country at any intershynational confererce when that representation includes the planning of activishyties involving insurrection or subversion against the US or countries recoiving US assistance No such representition is known to have A occarrect
8 FAA 62JJ Existence of a determination that the country has permitted or failed to prevent destruction of US property by mob action or has failed to take steps to prevent a recurrence and-to pay compensation NO such destruction is known to have tak-n place
49 PAA l620(k) If construction of productive enterprise where eggregate value of assistanc to be furnished by US will exceed $1OO million identification of Gtntutoryauthority Not npplicable
i-xQ2MZZ=
1 shy
U 6 50 _Af( QCinsidoration which has been given to denlying assistance X to thu government of a country which after December 31 1966 has failed to
- institto the investnint guaranty program for the spcific risks of inconshy
vertibility and expropriation or confiscation Satisfied See No 7 above
S51S J lj Compliance with-prohibitions-againstn as~istance to countries which traffic or permittraffickingwith North Vietnam Morocco is not known to be in violation
52 E_-L620(_L If country has seized or imposed any penalty or sanction against vn US fishing vessel on account of its fishing activities in
intcrnationul waters information on the consideiation which has been given to excludirg the country from assistance No such situation is known to exist
53 FAA FA r) UAR restriction Not applicable620(p 9117
54 FAA R620tl) Existence of default undhr any Foreign Assistance Act loan to the country No such default exists
55 F ) C-nsider tion of whether co ntry is devoting unnecessary percentage of buKet for military purposes or use of foreign exchange for milita-y equipment
56 FAA 62o(t) Proibition on aid if country has severed diplomatic relations with US unless agreements have been negotiated after resumpshytion Diplomatic r(lations have not been severed
57 FAA 9620(u) Statur of the country on delinquent UN obligations Morocco is not known to be dlinquent on its UN~obligation
58 FAA R636(i) Prohibition on financing non-US manufactured motor vehicles Will be satisfied in Loan Agreement and Implementation Letter
59 App 102 Compliance with requirement that payments in excess of $25000 for architectural and en Jneering services on any one project be reported to Congress Such reports will be made
60 App R1O4 Compliance with bar against funds to pay pensions etc for military personnel Such payments will not be eligible for financing under th Loan Agreement
61 App 9106 If country attr ipts to create distinctions because of their race or religion among Americans in granting personal or commercial access or other rights otherwise avaVIfable to US citizens generally application which will be made in negotit ttons of contrary principles as expressed by Congress Morocco is not ku IDhave made any such attempts
iInD OFFIIt t USE
0k
OFFICIAL USE 62 AIwp Rii Compliance with existing requfremets for security clearance
of personnel Will be satisfied in Loan Agreement and Implementation Letter
63 App R1l2 Compliance with requirement for approval of cortractors and contract terms for capital projects Will be satisfied in Loan Agreement
clJ164 Aup Cmpliance with bar nRainst use of funds to Tay assessments etc of US meiber Such payments will not be eligible for financing under the Loan Agreemunt
6 Anp P115 Ccmpliance with regulations on employment of US and local personnel for funds obligated after April 30 1961 (Regulation 7) See Section III-C
66 Aim Vietnam iron and steel restrictions Not applicable
67 p l9 If a country other than Greece Turkey Iran Israel Republicof China Phillipines or Korea reduction in assistance by amounts spent for the purchase of sophisticated military equipment
68 Anp fi4O1 Compliance with bar against use of funds for publicity or proshypagjanda purposes within US not heretofore authorized by Congress Such use of funds will not be eligible for financing under the Loan Agreement
Morocco is a traditional Islamic monarchy with a constitution The conshystitution was implemented followaing a popular referendum in 1962 National regional and professional elective bodies including a parliament were established by universal suffrage under the constitution in 1963 The parliament was suspended in 1961 in a State of Exception because of its inability to agree on measures with adequate urgency to meet the prevailingecononde imperatives In July 1967 the King appointed a Prime Minister to direct a Cabinet of appointed technicians
The constitutional framework nevertheless remains intact in Morocco and nationwide popular elections for some of the professional chambers were held in August and September 1966 The press is relatively free in Morocco and the right of diLsent prevails provided that such dissent does not violate the prohibition against political attacks on the instishytution of the monarchy or the person of the monarch
LI Under the revised US AID Policy for Africa agreed to in November 1966 Morocco is designated a development emphasis country entitled to receive continuing support on a country basis as part of a multilaterally coorshydinated countrj program Morocco was subsequently included in Presidential Determination 67-14 (January 5 1967) I
LIM=TE OFFICIAL USE~i
- l go
bull ~ -
f
DEPQbi) STATE AGENCY FOR INERNATIONAL DEVELOPMENT
WASHINGTON DC 052
CAPITAL ASSISTANCE LOA11 AUTHORIZATION
Provided from Develoroent Loan Funds Morocco Second Lower Moulouya Irrigation Loan
Pursuant to the authority vested in the Assistant Administrator for Africa of the Agency for International Development
AI)by the Foreign Assistance Act of 1961 as amended theIAct) and the delegations of authority issued thereunder I
have received and t-en into consideration a certification from the Director of USAIDMorocco as to the financial and human resources capability of Morocco to effectively utilize the Lower Moulouya Irrigation Project taking into account among other things the
maintenance and utilization of projects in Morocco previously financed or assisted by the United States and I hereby authorize the establishshyment of a loan pursuant to Part I Chapter 2 Title I the Development Loan Fund to the Government of the Kingdom of Morocco (Borrower) of not to exceed five million dollars ($5000000) to assist in financing the fore] gn exchange and local currency costs of goods and services for the third phase of the Lower Moulouya Irrigation Project subject to the foLlowing terms and conditions
1 Interest Rate and Terms of Repayment Borrower shall repay the loan to AID in forty (40) years including a grace period not to exceed ten (10) years Borrower shall pay interest on the unrepaid principal and any interest accrued thereon at the rate of (a) two percent (2) per annum during the grace period and (b) two and
one-half percent (2-12) per annum thereafter
2 Currency of Pepayment Repayment of the loan and paymenu of interest shall be made in United States dollars
- t- n t - - - shy
3 Other Terms and Conditions amp(a)Goods and Services financed under the loan
shall have their source and origin in
(i) the United States if disbursements therefor are made in United States dollars or
(ii) any country in the free world including Morocco if disbursements therefor are made in Moroccan currency
(b) AID Regulation 7 shall not apply to construction -work financed under the loan because as detailed in Section IIIC of Capital Assistance Paper No P 667 it is important to the national interest of the United States that the direct costs of construction work performed by third-country nationals be financed out of funds made available by the Act
(a) Such other terms and conditions as AID may deem advisable
Assistant Administrator for Africa
Date
~~~~~~~~~~~~~~~~~~ - q v
7
U 6 50 _Af( QCinsidoration which has been given to denlying assistance X to thu government of a country which after December 31 1966 has failed to
- institto the investnint guaranty program for the spcific risks of inconshy
vertibility and expropriation or confiscation Satisfied See No 7 above
S51S J lj Compliance with-prohibitions-againstn as~istance to countries which traffic or permittraffickingwith North Vietnam Morocco is not known to be in violation
52 E_-L620(_L If country has seized or imposed any penalty or sanction against vn US fishing vessel on account of its fishing activities in
intcrnationul waters information on the consideiation which has been given to excludirg the country from assistance No such situation is known to exist
53 FAA FA r) UAR restriction Not applicable620(p 9117
54 FAA R620tl) Existence of default undhr any Foreign Assistance Act loan to the country No such default exists
55 F ) C-nsider tion of whether co ntry is devoting unnecessary percentage of buKet for military purposes or use of foreign exchange for milita-y equipment
56 FAA 62o(t) Proibition on aid if country has severed diplomatic relations with US unless agreements have been negotiated after resumpshytion Diplomatic r(lations have not been severed
57 FAA 9620(u) Statur of the country on delinquent UN obligations Morocco is not known to be dlinquent on its UN~obligation
58 FAA R636(i) Prohibition on financing non-US manufactured motor vehicles Will be satisfied in Loan Agreement and Implementation Letter
59 App 102 Compliance with requirement that payments in excess of $25000 for architectural and en Jneering services on any one project be reported to Congress Such reports will be made
60 App R1O4 Compliance with bar against funds to pay pensions etc for military personnel Such payments will not be eligible for financing under th Loan Agreement
61 App 9106 If country attr ipts to create distinctions because of their race or religion among Americans in granting personal or commercial access or other rights otherwise avaVIfable to US citizens generally application which will be made in negotit ttons of contrary principles as expressed by Congress Morocco is not ku IDhave made any such attempts
iInD OFFIIt t USE
0k
OFFICIAL USE 62 AIwp Rii Compliance with existing requfremets for security clearance
of personnel Will be satisfied in Loan Agreement and Implementation Letter
63 App R1l2 Compliance with requirement for approval of cortractors and contract terms for capital projects Will be satisfied in Loan Agreement
clJ164 Aup Cmpliance with bar nRainst use of funds to Tay assessments etc of US meiber Such payments will not be eligible for financing under the Loan Agreemunt
6 Anp P115 Ccmpliance with regulations on employment of US and local personnel for funds obligated after April 30 1961 (Regulation 7) See Section III-C
66 Aim Vietnam iron and steel restrictions Not applicable
67 p l9 If a country other than Greece Turkey Iran Israel Republicof China Phillipines or Korea reduction in assistance by amounts spent for the purchase of sophisticated military equipment
68 Anp fi4O1 Compliance with bar against use of funds for publicity or proshypagjanda purposes within US not heretofore authorized by Congress Such use of funds will not be eligible for financing under the Loan Agreement
Morocco is a traditional Islamic monarchy with a constitution The conshystitution was implemented followaing a popular referendum in 1962 National regional and professional elective bodies including a parliament were established by universal suffrage under the constitution in 1963 The parliament was suspended in 1961 in a State of Exception because of its inability to agree on measures with adequate urgency to meet the prevailingecononde imperatives In July 1967 the King appointed a Prime Minister to direct a Cabinet of appointed technicians
The constitutional framework nevertheless remains intact in Morocco and nationwide popular elections for some of the professional chambers were held in August and September 1966 The press is relatively free in Morocco and the right of diLsent prevails provided that such dissent does not violate the prohibition against political attacks on the instishytution of the monarchy or the person of the monarch
LI Under the revised US AID Policy for Africa agreed to in November 1966 Morocco is designated a development emphasis country entitled to receive continuing support on a country basis as part of a multilaterally coorshydinated countrj program Morocco was subsequently included in Presidential Determination 67-14 (January 5 1967) I
LIM=TE OFFICIAL USE~i
- l go
bull ~ -
f
DEPQbi) STATE AGENCY FOR INERNATIONAL DEVELOPMENT
WASHINGTON DC 052
CAPITAL ASSISTANCE LOA11 AUTHORIZATION
Provided from Develoroent Loan Funds Morocco Second Lower Moulouya Irrigation Loan
Pursuant to the authority vested in the Assistant Administrator for Africa of the Agency for International Development
AI)by the Foreign Assistance Act of 1961 as amended theIAct) and the delegations of authority issued thereunder I
have received and t-en into consideration a certification from the Director of USAIDMorocco as to the financial and human resources capability of Morocco to effectively utilize the Lower Moulouya Irrigation Project taking into account among other things the
maintenance and utilization of projects in Morocco previously financed or assisted by the United States and I hereby authorize the establishshyment of a loan pursuant to Part I Chapter 2 Title I the Development Loan Fund to the Government of the Kingdom of Morocco (Borrower) of not to exceed five million dollars ($5000000) to assist in financing the fore] gn exchange and local currency costs of goods and services for the third phase of the Lower Moulouya Irrigation Project subject to the foLlowing terms and conditions
1 Interest Rate and Terms of Repayment Borrower shall repay the loan to AID in forty (40) years including a grace period not to exceed ten (10) years Borrower shall pay interest on the unrepaid principal and any interest accrued thereon at the rate of (a) two percent (2) per annum during the grace period and (b) two and
one-half percent (2-12) per annum thereafter
2 Currency of Pepayment Repayment of the loan and paymenu of interest shall be made in United States dollars
- t- n t - - - shy
3 Other Terms and Conditions amp(a)Goods and Services financed under the loan
shall have their source and origin in
(i) the United States if disbursements therefor are made in United States dollars or
(ii) any country in the free world including Morocco if disbursements therefor are made in Moroccan currency
(b) AID Regulation 7 shall not apply to construction -work financed under the loan because as detailed in Section IIIC of Capital Assistance Paper No P 667 it is important to the national interest of the United States that the direct costs of construction work performed by third-country nationals be financed out of funds made available by the Act
(a) Such other terms and conditions as AID may deem advisable
Assistant Administrator for Africa
Date
~~~~~~~~~~~~~~~~~~ - q v
7
OFFICIAL USE 62 AIwp Rii Compliance with existing requfremets for security clearance
of personnel Will be satisfied in Loan Agreement and Implementation Letter
63 App R1l2 Compliance with requirement for approval of cortractors and contract terms for capital projects Will be satisfied in Loan Agreement
clJ164 Aup Cmpliance with bar nRainst use of funds to Tay assessments etc of US meiber Such payments will not be eligible for financing under the Loan Agreemunt
6 Anp P115 Ccmpliance with regulations on employment of US and local personnel for funds obligated after April 30 1961 (Regulation 7) See Section III-C
66 Aim Vietnam iron and steel restrictions Not applicable
67 p l9 If a country other than Greece Turkey Iran Israel Republicof China Phillipines or Korea reduction in assistance by amounts spent for the purchase of sophisticated military equipment
68 Anp fi4O1 Compliance with bar against use of funds for publicity or proshypagjanda purposes within US not heretofore authorized by Congress Such use of funds will not be eligible for financing under the Loan Agreement
Morocco is a traditional Islamic monarchy with a constitution The conshystitution was implemented followaing a popular referendum in 1962 National regional and professional elective bodies including a parliament were established by universal suffrage under the constitution in 1963 The parliament was suspended in 1961 in a State of Exception because of its inability to agree on measures with adequate urgency to meet the prevailingecononde imperatives In July 1967 the King appointed a Prime Minister to direct a Cabinet of appointed technicians
The constitutional framework nevertheless remains intact in Morocco and nationwide popular elections for some of the professional chambers were held in August and September 1966 The press is relatively free in Morocco and the right of diLsent prevails provided that such dissent does not violate the prohibition against political attacks on the instishytution of the monarchy or the person of the monarch
LI Under the revised US AID Policy for Africa agreed to in November 1966 Morocco is designated a development emphasis country entitled to receive continuing support on a country basis as part of a multilaterally coorshydinated countrj program Morocco was subsequently included in Presidential Determination 67-14 (January 5 1967) I
LIM=TE OFFICIAL USE~i
- l go
bull ~ -
f
DEPQbi) STATE AGENCY FOR INERNATIONAL DEVELOPMENT
WASHINGTON DC 052
CAPITAL ASSISTANCE LOA11 AUTHORIZATION
Provided from Develoroent Loan Funds Morocco Second Lower Moulouya Irrigation Loan
Pursuant to the authority vested in the Assistant Administrator for Africa of the Agency for International Development
AI)by the Foreign Assistance Act of 1961 as amended theIAct) and the delegations of authority issued thereunder I
have received and t-en into consideration a certification from the Director of USAIDMorocco as to the financial and human resources capability of Morocco to effectively utilize the Lower Moulouya Irrigation Project taking into account among other things the
maintenance and utilization of projects in Morocco previously financed or assisted by the United States and I hereby authorize the establishshyment of a loan pursuant to Part I Chapter 2 Title I the Development Loan Fund to the Government of the Kingdom of Morocco (Borrower) of not to exceed five million dollars ($5000000) to assist in financing the fore] gn exchange and local currency costs of goods and services for the third phase of the Lower Moulouya Irrigation Project subject to the foLlowing terms and conditions
1 Interest Rate and Terms of Repayment Borrower shall repay the loan to AID in forty (40) years including a grace period not to exceed ten (10) years Borrower shall pay interest on the unrepaid principal and any interest accrued thereon at the rate of (a) two percent (2) per annum during the grace period and (b) two and
one-half percent (2-12) per annum thereafter
2 Currency of Pepayment Repayment of the loan and paymenu of interest shall be made in United States dollars
- t- n t - - - shy
3 Other Terms and Conditions amp(a)Goods and Services financed under the loan
shall have their source and origin in
(i) the United States if disbursements therefor are made in United States dollars or
(ii) any country in the free world including Morocco if disbursements therefor are made in Moroccan currency
(b) AID Regulation 7 shall not apply to construction -work financed under the loan because as detailed in Section IIIC of Capital Assistance Paper No P 667 it is important to the national interest of the United States that the direct costs of construction work performed by third-country nationals be financed out of funds made available by the Act
(a) Such other terms and conditions as AID may deem advisable
Assistant Administrator for Africa
Date
~~~~~~~~~~~~~~~~~~ - q v
7
DEPQbi) STATE AGENCY FOR INERNATIONAL DEVELOPMENT
WASHINGTON DC 052
CAPITAL ASSISTANCE LOA11 AUTHORIZATION
Provided from Develoroent Loan Funds Morocco Second Lower Moulouya Irrigation Loan
Pursuant to the authority vested in the Assistant Administrator for Africa of the Agency for International Development
AI)by the Foreign Assistance Act of 1961 as amended theIAct) and the delegations of authority issued thereunder I
have received and t-en into consideration a certification from the Director of USAIDMorocco as to the financial and human resources capability of Morocco to effectively utilize the Lower Moulouya Irrigation Project taking into account among other things the
maintenance and utilization of projects in Morocco previously financed or assisted by the United States and I hereby authorize the establishshyment of a loan pursuant to Part I Chapter 2 Title I the Development Loan Fund to the Government of the Kingdom of Morocco (Borrower) of not to exceed five million dollars ($5000000) to assist in financing the fore] gn exchange and local currency costs of goods and services for the third phase of the Lower Moulouya Irrigation Project subject to the foLlowing terms and conditions
1 Interest Rate and Terms of Repayment Borrower shall repay the loan to AID in forty (40) years including a grace period not to exceed ten (10) years Borrower shall pay interest on the unrepaid principal and any interest accrued thereon at the rate of (a) two percent (2) per annum during the grace period and (b) two and
one-half percent (2-12) per annum thereafter
2 Currency of Pepayment Repayment of the loan and paymenu of interest shall be made in United States dollars
- t- n t - - - shy
3 Other Terms and Conditions amp(a)Goods and Services financed under the loan
shall have their source and origin in
(i) the United States if disbursements therefor are made in United States dollars or
(ii) any country in the free world including Morocco if disbursements therefor are made in Moroccan currency
(b) AID Regulation 7 shall not apply to construction -work financed under the loan because as detailed in Section IIIC of Capital Assistance Paper No P 667 it is important to the national interest of the United States that the direct costs of construction work performed by third-country nationals be financed out of funds made available by the Act
(a) Such other terms and conditions as AID may deem advisable
Assistant Administrator for Africa
Date
~~~~~~~~~~~~~~~~~~ - q v
7
3 Other Terms and Conditions amp(a)Goods and Services financed under the loan
shall have their source and origin in
(i) the United States if disbursements therefor are made in United States dollars or
(ii) any country in the free world including Morocco if disbursements therefor are made in Moroccan currency
(b) AID Regulation 7 shall not apply to construction -work financed under the loan because as detailed in Section IIIC of Capital Assistance Paper No P 667 it is important to the national interest of the United States that the direct costs of construction work performed by third-country nationals be financed out of funds made available by the Act
(a) Such other terms and conditions as AID may deem advisable
Assistant Administrator for Africa
Date
~~~~~~~~~~~~~~~~~~ - q v
7