Document of

The World Bank

FOR OFFICIAL USE ONLY

Report No. 7983-MOR

STAFF APPRAISAL REPOR1T

KINGDOM OF MOROCCO

HIGHWAY SECTOR PROJECT

JANUARY 8, 1990

Infrastructure Operations DivisionCountry Department IIEurope, Middle East and North Africa Regional Office

This document has a restricted distribution and may be used by recipients only in the performance oftheir officiai duties. Its contents may not otherwise be disclosed without World Bank authorization.

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OURRENCY EOUIVALENTSas of mid-1989

Currency unit Dirham (DH)

DH 1 - US$0.12US$1 - DH 8.3

VEICETS AND MEASURCS

Metrie System

ABBREVIATIONS AND ACRONYNS

AfDB African Development BankCNEHA National Center for Vehicle Inspection and Testing (Centre

National d'Essai et d'Homologation Automobile)CNER National Center for Pavement Evaluation and Road Research

(Centre National d'Etudes et de Recherches Routières)CNPAC National Committee for Road Safety (Comité National pour la

Prévention des Accidents de la Circulation)CPTR Road Maintenance Training Center (Centre de Perfectionnement

aux Techniques Routières)DAPF Personnel and Training Department (Direction des Affaires du

Personnel et de la Formation) within MPWDEPCT MOT Transport Studies, Planning and Coordination Department

(Direction des Etudes, de la Planification et de laCoordination des Transports)

DFP Vocational Training Department (Direction de la FormationProfessionnelle) within MOT

DRCR Roads and Traffic Department (Direction des Routes et de laCirculation Routière)

DTT LandTransportDepartment (Direction des Transports Terrestres)LPEE Material Tests and Studies Laboratory (Laboratoire Public

d'Essais et d'Etudes)MNPW Ministry of Public WorksMOI Ministry of InteriorMOT Ministry of TransportODEP Ports Authority (Office d'Exploitation des Ports)OFPPT Office of Vocational Training and Employment (Office de la

Formation Professionnelle et de la Promotion du Travail)ONCF Railways Authority (Office National des Chemins de Fer)ONT Road Transport Public Agency (Office National des Transports)PERL Public Enterprise Restructuring LoanSAL Structural Adjustment Loan

FOR OFFICL1 USE ONLY

KINGDOM OF MOROCCO

STAFF APPRAISAL REPORT

HIGHWAY SECTOR PROJECT

TABLE OF CONTENTS

Page No.

Loan and Project Summary ........................ ).................

I. THE TRANSPOR' SECTOR

A. Transport and the Economy. 1B. Transport Organization. 2C. Transport Investents. 2D. Sector Issues and Strategy. 4E. Bank Experience in the Transport Sector. 5

II. THE HIGHWAY SUBSECTOR

A. Tne Road Network ............... ..................... 6B. Road Transport Demand. 7C. Road Transport Organization. 9D. Road User Taxation. 10E. Administration .11F. Planning and Financing .12G. Human Resources .15H. Engineering and Construction .16I. Road Maintenance .17

III. THE PROJECT

A. Objectives .19B. Project Description .20C. Cost Estimates and Financing .24D. Implementation .26E. Procurement .27F. Disbursements .29G. Auiiting .30H. Environmental Impact .30

This report is based on the findings of missions to Morocco between April 1988and May 1989 composed of Messrs. Jacques Tollié (Senior Highway Engineer), andRoy Knighton (Senior Transport Econôniist). Pierre Mersier (Training Specialist)assisted with the preparation Ci the training component and Frida Johansen(Principal Transport Economist) assisted with the analysis of road user taxation.

This document has a restricted distribution and may be used by recipients only in the performanceof their official duties. Its contents may not otherwise be disclosed without World Bank authorization.

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Table of ContentsPagea No.

IV. ECONONIC EVALUATION

A. Main Benefits and Beneficiaries ....................... 30B. Pavement Rehabilitation Program ....................... 31C. Periodic Maintenance Program .......................... 31D. Bridge Reconstruction Prograr ......................... 31E. Improved Maintenance Planning Procedures .............. 32F. Freight Market Llberalization ......................... 32G. Project Risk .32

V. RECONCNATIONS. .33

LIST OF ANNEXES

1. Project Files .352. Road Maintenance Standards and Costs .373. Economic Evaluation ............ ...................... 404. Analysis of Road User Charges ..... ................... 455. Action Plan ........................................... 536. Detailed Cost Estimates ............................... 577. Road Safety ................................. 598. Human Resources Component ............................. 609. Selection of Bank-financed Components ................. 6510. Implementation Schedule ............................... 6811. Disbursement Schedule ................................. 6912. DRCR Organization Chart ............................... 7013. Review of Local Competitive Bidding ................... 71

LIST OF TABLES

Transport Sector Public Investments ....................... 3Road Network by Classification, 1988 ...................... 6Network Breakdown (km) by Pavement Width (m) ..............Vehicle Fleet ............................................. 8Traffic Development 1976-1985 ............................. 81988 Traffic Breakdown ................................... 8Traffic Structure and Aggressivity ....................... 9Road Subsector Investments ................................ 13Detailed Plala-d Expenditures (1988-1992) ................. 13Maintenance Expenditures, 1981-1987 ....................... 14Road Network Condition ..................... 17Annual Naintenance Cost Requirements ...................... 18Summary of MPW's 1990-92 Expenditure Program .............. 20Summary of Project Costs ....................... 25Financing Plan ....................... 25Procurement Table ....................... 27

Nap IBRD 21695(O4264 * To«~/Annreoem

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KINGDON OF MOROCCO

HIGHWAY SECTOR PROJECT

LOAN AND PROJECT SUHMARY

Borrower: Kingdom of Morocco

Beneficiaries: Ministry of Public Works and Ministry of Transport

Amount: US$79 million

Terms: Repayment in 20 years, including five years of grace, atthe standard variable interest rate.

Project Objectives: The proposed project would be the first new operation forthe highway sector in the past five years and wouldintroduce a broader, sectoral approach to the developmentof the highway sector and to road transport in general.The main objectives are to assist the Government inbringing sector investments in line with economicpriorities, primarily by (i) concentrating resources onthe preservation of existing roads; (ii) strengtheningche overall institutional framework by optimizing the useof funds for road resurfacing and maintenance within acompretiensive pavement management program; (iii) pursuingefficiency improvements in the road transport marketthrough gradual deregulation of the trucking industry andreiated adjustments in road user taxation and (iv)pursuing efficiency improvements in the constructionindustry in line with the Bank's efforts in the Maghrebregion. As such, the project objectives are consistentwith the Bank's overall strategy for Morocco, whichinvolves rationalization of the public investment program,liberalization of the economy, and support to resourcemobilization.

Project Description: The proposed project consists of an investment component,to be financed under the loan, supported bv a policyadjustment and institutional development component. Theinvestment comDonent would consist of a three-year sliceof the road investment and maintenance program, and theloan would be disbursed against selected expenditures, hincluding: (i) civil works for road rehabilitation (about1,000 km), and periodic maintenance (about 1,300 km of

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road resurfacing, 500 km of shoulder restoration, and5,000 km of pavemient marking), bridge reconstruction,construction of workshops and of the National Center forVehicle Inspection and Testirg (CNEHA);(ii) equipment for road maintenan-s, traffic counting,workshops, and road safety; (iii) studies for thedevelopment of transport in rural areas, studies for thewidening of narrow roads, and technical assistance andoverseas training for the strengthening of MPW and MOTand the development of a program to increase theconstruction industry efficiency. The Adjustment andInstitutional Develooment Component provides acomprehensive time-bound framevork for pursuing the keypolicy and institutional development objectives under theproject with particular reference to the organization ofthe road freight transport market, road user charges, andimprovements in road maintenance planning, in particularthrough the reallocation of responsibilities betweencentral and local governments

Benefits and Risks; Main benefits deriving from rehabiL. -ation and maintenanceprograms are reduced road user costs and savings fromprolonged life of road pavements. Main benefits derivingfrom policy and institutional measures are manifold: thethe project is expected to contribute to (i) strengtheningthe Highway Department's capability for the planning andmanagement of the road network; (ii) improving MOT'sefficiency in management of the sector; (iii) facilitatinggreater liberalization in the road transport market andreducing overall transport costs; and (iv) improving theability of local enterprises to -ope effectively andefficiently with expanding construction demand, whilesupporting the ongoing Bank initiatives for theenhancement of the construction industry in the Maghrebregion. Potential risks are those associated with thetimeframe needed to overcome long establishedinstitutional rigidities in MOT' s operational structure.The Government has shown, during project pre.paration, astrong commitment to project objectives by initiatingsubstantial actions covering road user charges. Thecareful design of the adjustment and institutionaldevelopment component, the strengthening of MOT'scapabilities, and the annual review of MOT expenditureprograms under the proposed project and under the SAL,should reduce the risk of discontinuity in MOT'scommitment.

<iii>ESTIMATED PROJECT COSTS 1/

Local Forei Total-- US$ Million Equivalent --

New constructionProvincial roads 40.9 33.4 74.3Other primary roads 16.4 13.4 29.8

RehabilitationRehabilitation of roads 97.7 97.7 195.4Rehabilitation of bridges 9.8 9.8 19.6

MaintenanceRoadworks 77.5 51.7 129.1Equipment 6.0 14.0 20.1

MOT's Road Safety ProgramCNEHA construction 0.3 0.3 0.7CNEHA equipment 3.5 1.1 1.6

Studies. Technical Assistance,Training 1.2 4.6 5.8

Miscellaneous 2.3 1.2 3.5BASE COSTS 252.5 227.3 479.8CONTINGENCIES 26.4 27.4 53.9TOTAL PROJECT COSTS 278.9 254.7 533.6

FINANCING PLANLocal Foreign Total-- US$ Million Equivalent --

Government 278.9 59.0 2/ 337.9AfDB (ongoing) -- 77.1 77.1AfDB (proposed) -- 33.0 33.0IBRD (ongoing) -- 6.6 6.6IBRD (proposed) -- 79.0 79.0TOTAL 278.9 254.7 533.6

1/ Inclusive of taxes and duties estimated at about 20%.2! Including indirect foreign exchange component.

ESTINATED SCHEDULE OF DISBURSEMENT

Bank Fiscal Year 1990 1991 1992 1 9,3 1994 1995--------------- (US$ million) --------------

Annual 0.5 12.1 23.4 20.9 14.9 7.2Cumulative 0.5 12.6 36.0 56.9 71.8 79.0

ECONOMIC RATE OF RETURN

Bank-financed road rehabilitation and periodic maintenance programs: Range from30% to 50%.

T. TUE TRANSPORT SECTOR

A. Transport and the Economv

1.01 Over the past five years, Morocco has undertaken important structuralreforms which, have succeeded in achieving a modest growth rate with lowinflation. In the recent past, the Moroccan economy has grown at an annua.average of about 3.3%, slightly more than the increase in population. Theproposed medium-term adjustment program, which is being supported by the Bank,seeks to reinvigorate the economy with a growth rate of about 5% per year. Thisprogram is based on the implementation of several policy tools including fiscalreform, trade liberalization, Public Znterprise reform, agricultural sectorderegulation, and an increase in the level and efficiency of public investmentexpenditures (para. 1.06). In effect, while taking much of the brunt of fiscaladjustment in the past, a continued reduced level in public inves-tmentexpenditures could constitute a major constraint to maintaining a high level ofeconomic growth in the ruture. The proposed project forms part of the Bank'sprogram for structural adjuscment, and would provide support to therationalization and increased efficiency of priority investments and maintenancein the highway sector.

1.02 The Moroccan transport sector plays an important role in the developmentof the economy. It provides direct support to industrial and agriculturaldevelopment, plays a key role in encouraging exports, and reducing the cost ofimports, and supports the growth of tourism. The land transport system iswell-developed and includes some 28,000 km of paved roads out of a total networkof some 58,000 km, and a railway network of about 1,800 km, of which about 970km are elertrified, and 240 km are double-track. There are nine major ports,and about 20 airports handling scheduled flights. Total interurban passengersa-,-d freight traffic are estimated at about 30 million passenger-kms and 15billion ton-kms, of which about 93% and 70% respectively are carried by roadtransport.

1.03 Although road transport dominates interurban passenger traffic, the shareof the railway is much more important in the main rail corridor betweenMarrakech, Casablanca, Rabat, and Kenitra with its extension r,orthward toTangier, and eastward to Fes and Oujda (Map IBRD 21695). These routes accountfor about one-third of interurban traffic, with the railway handling about 25%of the total (33% for freight traffic other than phosphates, and 20% forpassenger traffic). As a whole, rail passenger traffic increased at about 4%per year over the last decade, mainly as a result of the introduction of improvedpassenger services, particularly the high-speed trains between Casablanca andRabat. During the same period road traffic also increased at about 4% per year.About 3 billion ton-kms of rail traffic, or 65% of the total, represent captivephosphate traffic, which moves towards the ports of Casablanca, Jorf Lasfar, andSafi for export. The port system, like the railways, was also developed to servephosphate exports, which have stabilized in recent years at 20 million tonsannually. Total port traffic in 1988 amounted to 39 million tons, of which closeto 18 million tons were handled through the main port of Casablanca. The latterhandled exports of agricultural products as well as imports and exports ofindustrial goods, a large proportion of which is containerized.

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B. Transport Organization

1.04 The Government agencies involved in the administration of the transportsystem are: (i) the Ministry of Public Works (MPW), which is resrionsible for theconstruction and maintenance of roads and ports infrastructure through its Roadand Port Directorates; it also o'ersees cargo handling and port opsrations; (ii)the Ministry of Transport (MOT), 6aich regulates road transport, and supe:.visesthe railways, civil aviation, the state-owned bus company, and the sr:ate-ownedfreight forwarding agency; (iii) the Ministry of Fishing and the Merchant Marinewhich supervises shipping; and (iv) the Ministry of Interior as the supervisingbody for local authorities, which are increasingly involved in the planning andmaintenance of local road networks.

1.05 Given the large number of agencies involved in the management of thesector, there is sometimes an overlap of responsibilities between differentagencies. This is particularly true in the ports sector, where both ODEP (thestate-owned port operator) and MPW have responsibilities for planning portinfrastructure and for overseeing port operations. A port reorganization iscurrent'y underway (para. 1.09). Similar complications can be expected in thefuture with increasing decentralization and the mobilization of resources at thelocal authority level following the recent introduction of a value-added tax.This has recently lead to a proposal for the reallocation of responsibilitiesfor the road network between MPW and local authorities (para. 2.03). In parallelto increasing decentral,zation, there is also a move to introduce more autonomyfor public enterprises in the transport sector. The financial restruct tring ofa number of public enterprises and the implementation of "contrats-progiLammes",clearly defining the respective responsibilities of Government and theenterprises, are part of an ongoing Bank supported Public EnterprisesRestructuring Loan (PERL). In the transport sector, this includes a reformprogram for ONCF, the railway enterprise (para. 1.09).

C. Transport Investments

1.06 Table 1.1 shows transport sector public investments broken down intoroad, rail, sea, and air transport modes, for the current P'an as well as thetwo previous Plan periods. Total transport sector investments have beenrelatively stable in real terms over the past decade amounting to about DH 2.5billion (US$300 million) annually in 1987 prices. Generally, about one thirdof investments has been allocated to highways, one third to ports and shipping,and about 25% to railways. Although investment levels had fallen during the pastfew years due to budgetary constraints, overall expenditures in the sector arelikely to return to their former levels, in line with a need to provide thenecessary support to the adjustment process and renewed economic growth.However, this increase in investment levels will be accompanied by a shift inpriorities with much greater emphasis being given to the highway sector, whichin turn will be compensated by a sharp decrease in expenditures on ports andshipping. At the same time, and in line with the Government's policy to increasethe financial autonomy of its public enterprises, transfer of Government fundsto the railway sector have been curtailed. In all sectors priority is beinggiven to the completion of ongoing projects, and to the optimal utilization ofexisting facilities. Under a Bank Structural Adjustment Loan (SAL), which

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provides for annual reviews of a defined target investment program for the period1988-90, the Gcovernment has commicted itself to increasing allocations to thehighway sector. Details of the proposed highway investment and maintenanceprogram are given in Chapter II.

Table 1.1 Transport Sector Public InvestmentsA. Expenditures

(DH million at current prices)

Actual Actual Planned1973-1980 1981-1987 1988-1992

RoadHighways 21 1781 4133 6634 1/Lo:al roads 2/ 700 i.300 3660Road transport 2/ 220 !486 750

Subtotal 2701 5919 11044RailInfrastructure EJ 1344 2350 2044Rolling Stock .J 620 1634 2115

Subtotal 1964 3984 4159MaritimePortsInfrastructure 21 1764 4464 1625Equipment ̂ / 379 1118 1200

Subtotal 2143 5582 2825Shipping iJ 1211 450 2180

Total 3354 6032 5005à.1r

Airports and navigation aids 2/ 476 502 1657Air carrier RAM 4J 666 1581 2377

Subtotal 1142 2083 4034GRAND TOTAL 9161 18018 24242

B. Allocations in percentate

Actual Actual Planned1973-1980 1981-1987 1988-1992

Road 29.5 32.8 45.6Rail 21.4 22.1 17.2Maritime 36.6 33.5 20.6Air 12.51 .116 16.6

100.0 100.0 100.0

J Sum of the initial Plan allocation (4,950) and of the Road Fund allocation(1,684) created in December 1988.

2/ Central Government financing3/ Local Government financing

Public Enterprises financingJ Mixed financingSource; Transport Sector Public Investment Review, World Bank, December 1987,

and mission estimates.

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D. Sector Issues and Strategy

1.07 Bank dialogue with the Sovernment on general sector issues andrecommendations to solve them, concentrate on tha following:

(M) improvement in the planning of investments and their coordinationamong modes and across sectors;

(ii) better ise of the existing faci.ities and services through improvedmanagement of the public enterprises, stepped-up deregulation andgreater accountability of resources, and decentralization ofdecisions;

(iii) gradual elimination of subsidies by the Government andcross-subsidies among users through a more flexiblc tariff system.and correct pricing of resources used; and

(iv) increased budgetary allocations for the rehabilitation andmaintenance of infrastructure.

1.08 Closer intermodal coordination is needed both at the investment leveland in the provision of transport services; urban and interurban services,schedules and routes have to be hetter coordinated, and a share of the processshould be left to market forces. The Government has made substantial effortsto lmprove planning and coordination of investments in the road subsector bysubmitting mairtenance and construction progrèams to prior economic analysis(Third and Fourth Highway Projects), and further progress is expected with theclarification of the maintenance responsibilities for the whole network (para.2.03). Similarly, in the port subsector, considerable progress has been madein the analysis of long-term programs, which are based on economic investmentcriteria for project selection. In parallel with these developments, theGovernment has also recently completed a road user chargé- study with theobjectives of improving equity in the recovery of road user costs and ensuringade.uate resources for highway rehabilitation and maintenance (para. 2.14). Thekey issues at the present time relate to problems of road and rail coordination,and the need to establish a planned program of investments in the main transportcorridors as well as to the need for greater liberalization in the road transportmarket. These issues are currently being analyzed as part of a NationalTransport Master Plan Study, which is being financed under the Fourth HighwayProject. Preliminary recommendations from this study as well as recommendationson adjustments to road user charges will be pursued under the proposed projectand are included in the Action Plan (paras. 2.13 and 3.07).

1.09 Overall, Government policy towards public enterprises is changing withthe emphasis on reducing budget dependence, increasing managerial efficiency,and transferring some of their opvrations to the private sector. In effect, theGovernment is now realizing that excessive control and interference in themanagement of the public enterprises, support for low priority investments,limitations on market entry and below-cost tariffs have created distortions inthe transport market, and excessive costs to the economy. In 1985, theGovernment took an initial stei to reduce its intervention on the road transport

market by raising the limit of trucks under route and freight assignment controlby the Office National des Transports (ONT) from . 5 to 8 tons. Further progressis row contemplated with a gradual change in ONT's role away from control ofregulations towards freight forwarding and the provision of information on theroad transport market on an optional basis (para. 2.13). In the port subsector,in 1984, the monopoly of the cargo handling company was abolished. Areorganization study being carried out with Bank financing under th Port ofCasablanca Project (Loan 2657-MOR) will make recommendations for decentralizationof port operations and privatization of some commercial activities. In therail.way subsector, ONCF's financial position has improved under the Bank' PublicEnterprise Restructuring Loan (PERL), and it is currently establishing a"contrat-programme" with the Government clearly defining respectiveresponsibilities and objectives.

E. Bank Experience in the Transport Sector

1.10 The Bank provided loans totalling US$258 miillion equivalent to theMoroccan Government from 1969 to 1985 for the construction, improvement, andrehabilitation of main roads under four highway projects, and of rural feederroads under ten agricultural projects. The first port project became effectivein 1986 and provides a loan of US$22 million to improve institutions in the portsubsector and help maintain infrastructure in the ports of Casablanca andMohammedia. Although no railway operation has been financed by the Bank,measures concerning ONCF were included under the Public Enterprise RestructuringLoan (PERL). The highway projects were designed to encourage investments withhlgh returns to the economty, particularly maintenance and rehabilitation, andto help build up the staffing and organization of the agencies responsible forroad construction and maintenance, and for transport coordination. The ruralroads projects have met specific needs as part of agricultural developmentpackages, and were designed as transport and agriculture integrated investments.Bank's involvement in financing these roads has encouraged the Ministry ofAgriculture and Agrarian Reform, and MPW to cooperate more closely andconsistently in determining appropriate design standards, and in makingarrangements for the maintenance of these low-volume roads. The ProjectPerformance Audit Reports for the First, Second, and Third Highway Projects,respectively Loan 642-MOR, Credit 167-MOR, Loan 955-MOR, and Loan 1830-MOR, whichwere designed to improve traffic conditions, highway maintenance, and transportplanning outline their successful irdplementation, with rates of return aboveappraisal estimates despite cost overruns. Loan covenants have been generallycomplied with, but progress expected on transport planning did not materializeto the extent desirable, in particular because oi.. split responsibilities andlimited cooperation between MOT and MPW. Disbursement lagged considerably behindthe physical implementation of the projects because of the slow processing ofpayment requests by the Government. The situation has started to improve duringthe ongoing Fourth Highway Project, and the proposed project is expected tobenefit from the implementation of the SAL, which addressed the budget executionissue at the country level.

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a, b, c above) and local authorities (category d). This redistribution is linkedto increased resource mobilization at the local level with the redistributionof the revenues of the value-added tax introduced in 1987. Since it is importantthat this new network classification be implemented as soon as possible, in orderto ensure a more appropriate allocation of resources for the road investment andmaintenance program, a time-bound framework for its approval was agreed underthe Project (para. 3.07 and Annex 5).

2.04 The detailed condition of the network was assessed under a General Studyon Road Maintenance2, financed under the Third Highway Project. The results ofthat study and recent developments regarding pavement condition are analyzed inSection I below dealin6 with road maintenance. With respect to geometriccondition, the table below shows that 83% of the paved network is undersix-meter-width.

Table 2.2 Network Breakdown (km) by Pavement Width (m2

under 4 m 4 to 6m 6 to 7m over 7 m

Primary and Secondary 1,133 10,056 2,676 1,459Tertiary 4,857 6,499 288 62Total 5.990 16.555 2.964 1.521in Z 22 61 il 6

Source: DRCR, June 1987

Currently, widening is carried out on an ad hoc basis only, in conjunction withroad rehabilitation work. The road narrowness issue is likely to becomeincreasingly important, and a systematic apprcach to road widening is warranted.The proposed project would assist DRCR in this respect (subpara. 3.09.b).

B. Road Transport Demand

2.05 The table below shows a growth rate of the total vehicle fleet over theperiod 19'0-1985 of 3.5% annually. In absolute terms, the figures have to beconsidered with caution, since they take account of vehicle scrapping roughly,by applying a flat reduction coefficient of 30% to official data from theStatistics Department of the Ministry of Plan (indeed, with the official figures,Morocco would have a relatively high level of vehicle ownership, compared toother countries at its income level: about 3' per thousand persons). Betterknowledge of the vehicle fleet is essential for maintaining a reliable roaddatabase, and the project includes technical assistance to MOT for this pur,ose(subpara. 3.09.e).

2 Etude d'Amélioration de l'Entretien Routier, BCEOM, 1984.

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Table 2.3 Vehicle Fleet

Vehicle tyoe 1980 1986 Annual growth rate (fl

Passenger cars 301,000 377,600 3.4Trucks and buses 139,500 178,400 3.7Total 440,500 556.000 3.5

Source: Annuaire Statistique du Maroc, Ministère du Plan, and MOT estimates.

2.06 Since 1976, DRCR has conducted annual nationwide traffic counts on thepaved network3. Traffic growth rates, as measured by vehicle-km traveled on thenetwork, have averaged 4.2% annually between 1976 and 1985, with a vigorous trendat the beginning of the period followed by a conjonctural stagnation between 1983and 1985. This is illustrated by the following table.

Table 2.4 Traffic Development 1976-1985(million v-km per day)

1976 1977 1978 1979 1980 1981 1982 1983 1984 198513.7 15.5 17.1 18.4 18.7 19.6 21.2 20.6 20.0 20.4

The table hereafter shows the situation in 1988, broken down into four classesof traffic. The latter is heavily concentrated on the primary network, and helpsto understand how DRCR's priorities have been set (para. 2.31).

Table 2.5 1988 Traffic Breakdown (Vehicle Mer Day)

Traffic Average daily ------------- Network -----------Class (yod) traffic Length (km) Primary Second.Tert. % v.k

less than 750 250 20,900 20% 80% 24%750 to 1,500 1,100 4,100 60% 40% 21%1,500 to 3,000 2,250 2,000 75% 25% 21%more than 3,000 4,800 1,500 90% 10% 34%Total network 28.500km Q.400 19.100km 100%

2.07 Estimates of axle loadings were made for the Road User Charges Study4 andare shown here below (details are in Annex 4).

3 The most recent report (Circulation Routière, Résultats 1988) is in theProject File (Annex 1).

4 Etude de la Fiscalité Routière, DRCR, Juin 1988.

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Table 2.6 Traffic Structure and Aggressivity (Standard Axle: 8.2t)

Vehicle type Pass car Pick-up Light truck Heavy truck Trailer Bus

Aver. composition 48.9% 13.1% 24.2% 6.9% 4.1% 2.8%Equivalent Standard(8.2t) axle -- -- 0.19 1.70 3.36 0.39

The spectrum of axle loading is not accurate, because no recent survey dataexist. Better knowledge of traffic aggressivity is essential for proper pavementdesign, equitable road user taxation, and enforcement of legal vehicle weightrestrictions. For this purpose, the project incluces replacement and additionalcounting and w'ighing equipment (subpara. 3.11.b).

2.08 With respect to road safety, thc5 number of road accidents is still acause for serious concern in Morocco. As shown in Annex 7, there have been inrecent years at least 24,000 to 28,000 accidents per year, and 2,000 to 2,300persons were killed. The death rate in relation to the amount of traffic is atleast double that in several countries of Southern Europe. Several branches ofGovernment are involved in the road prevention system, the main ones being MPW,MOT, and MOI. A National Committee for Road Safety (CNPAC) has been set up tocoordinate and impulse activities of the various departments. The *:esults ofthis organization can be considered globally as positive, since the number offatalities has been decreasing since 1977 (Annex 7, Table B). However, the trendhas been worsening since 1984, with a slight increase in the rate of fatalitiesper amount of traffic. Continuous efforts are therefore needed to improve thesituation.

2.09 Efforts have been made to improve the reporting of accidents.Statiscical analysis of the causes is now available and of good quality (theProject File contains the 1987 Road Safety Report), allowing CNPAC to identifyappropriate preventive measures with respect to (i) road users, (ii) vehiclesand (iii) infrastructures. Regarding the road users, informative campaigns inthe media and strengthening of enforcement operations have been organized, butthe action is a long-ternm one. Regarding vehicles, there is a need to strengthenthe technical inspection centers system, and Bank assistance for this purposewould be included in the project (subpara. 3.08.d and Annex 9, para. 6).Finally, action on infrastructure is a constant concern of MPW, which is incharge of the road safety data base, and the Bank is contributing to this throughimprovements in the road condition and equipment.

C. Road Transport Organization

2.10 Interurban bus and truck services are operated mainly by small privatecompanies or cooperatives. Buses are licensed as to routes and servicefrequencies, and apply fares which are set by the Ministry of Transport. TheGovernment also operates a nationwide bus company - CTM/LN -, which accounts forabout 10% of the public road passenger market. The trucking industry is entirelyin private hands with the Office National des Transports (ONT), a public agency,acting only as an intermediary for some 600 private operators or cooperatives.The market is broken down into three segments (i) private operators with trucks

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of up to 8 tons gross weight, which handle about 40% of the market; (ii)own-account operators with vehicles in excess of 8 tons gross weight, whichhandle about 36% of total traffic; and (iii) public for-hire operators, who areaffiliated with ONT and handle the remaining 24% of the road freight market.

2.11 According to regulations, private operators with vehicles of less than8 tons gross weight are authorized only to operate on own-account. However, inpractice these trucks operate for-hire transport, and the regulations are notapplied. In contrast, the operators of large for-hire trucks above 8 tons grossweight are required to use the services of ONT, which has a monopoly in freightforwarding services. ONT acts as a marketing agency, applying standard ratesand charging a 6% levy on freight rates for its services. To its members, ONTprovides overhead services that individual operators could not afford as wellas some protection for truckers in that it distributes freight according to eachcarrier's capacity. In addition, where no back-hauls are available, carriersreceive compensation paid out of further levy on freight rates, amounting to 8%of rates.

2.12 As a whole, road freight transport works reasonably well with high ratesof vehicle utilization and overall load factors for most interurban movementsof about 60%. However, the average age of vehicles is high, over 10 years forlight- and medium-sized trucks, and about seven years for semi-trailers. Thisreflects the low level of tariffs, low labor costs for maintenance, and aboveall the high customs and import duties on new vehicles. In addition, a largepercentage of long- and medium-distance freight is handled in small vehicles,and considerable savings could be achieved with a move towards larger and moreefficient trucks.

2.13 A Road Freight Market Study was carried out under the Fourth HighwayProject, and an ongoing Transport Master Plan Study is preparing an actionprogram for the road transport industry. The Master Plan Study has analyzed ascenario for deregulating the road freight market, which could reduce totaltrucking costs by as much as US$20 million per year, and thereby facilitateindustrial and agricultural growth and export trade expansion. An outline ofthe proposed program is given in Annex 5, and the main recommendations would bepursued under the Project (para. 3.07). The current scenario developed underthe study would involve a progressive deregulation of the trucking industry,including, as a first step, allowing private truckers to operate legally on afor-hire basis. Other initial measures would include greater emphasis on ONT'srole as a freight forwarder while reducing its regulatory role. Variousscenarios for more far-reaching reforms involving freer access to the industrywill be analyzed in detail by the Government upon completion of the Master PlanStudy, and these will be discussed further with the Bank during projectimplementation.

D. Road User Taxation

2.14 An analysis of road user charges was prepared by MPW during 1988 as partof the justification for establishing a Road Fund (paras. 2.20, 2.32). The RoadFund was approved by Parliament in December 1988, and revenue will now accrueto the fund primarily from a new axle tax as well as from an existing tax on fuel

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(TIC - taxe intérieure sur la consommation) and from vehicle registration fees.The revenue from these sources will cover about 40% of the total roadrehabilitation and maintenance budget, the proceeds being allocated primarilyto routine maintenance as per the Road Fund Law (Project File, Annex 1). Theresults of the analysis conducted by MPW showed that total road user revenuesfrom all sources exceed at least eightfold an optimal program of expenditureson roads, including increases in network sapacity. All vehicles provide revenuesin excess of their road use costs, ranging from about eightfold for buses totwofold for semi-trailers. The share of taxation in vehicle operating costs isrelatively even among different vehicle types ranging from 28% to 38%; thehighest being own-account trucks. However, on a ton-km basis the level of taxesdecreases with increasing truck size, a factor, which should encourage the useof larger more efficient multi-axle trucks, which in turn inflict proportioratelyless damage to the network. As a whole, road user charges in Morocco appearreasonable. However, custom duties should be reduced to encourage renewal ofthe vehicle fleet, and the tax structure could be simplified somewhat,particularly following the introduction of the new axle tax. Reductions incustoms duties are currently being introduced under the SAL. Details of the roaduser charge analysis are given in Annex 4, and an outline of recommendedadjustments to the structure of road user charges is given in the Project ActionPlan (Annex 5).

E. Administration

2.15 HPW's Roads and Traffic Department (DRCR), whose organization is shownon the attached chart, is responsible for the design, construction andmaintenance of the classified road network. The headquarters, however, dealsonly with matters of general planning, coordination, and supervision, since thedistrict offices have a large degree of autonomy in planning, contract award andadministration, and supervision of works. The field organization has beenexpanded recently and now consists of 39 provincial offices, grouped under sevenregional offices with 80 subdivisions. There is continuous contact between theheadquarters and the engineers in charge of the district offices, which allowsproblems to be identified and solved quickly.

2.16 DRCR's organization is quite adequate to deal with the road network underits authority. The main recommendations of the Road Maintenance Study5 (financedunder the Third Highway Project) dealing with organization improvements have beenput into effect (para. 2.30). Furthermore, strengthening of the economicstudies, management systems, and higher level maintenance staff has successfullytaken place under the ongoing Fourth H'ghway Project. Last, but not least,MPW/DRCR have been successful in convincing the Government about the seriousnessof the road deterioration problem and the urgency to take drastic measures (para.2.32). There is now a need to pursue the strengthening of the lower levelmaintenance staff as well as to improve the maintenance planning and structuralcondition survey capabilities of DRCR. The latter has asked the Bank to providetechnical assistance for this purpose under the proposed project (para. 3.09).

5 Etude d'Amélioration de l'Entretien Routier, op. cit.

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2.17 Three departments of MOT are dealing mainly with transport planning androad transport regulation: the Department of Transport Studies, Planning andCoordination, the Land Transport Department, and the Vocational TrainingDepartment. This organization is adequate but has to improve its efficiency bymanaging its services better and introducing new tools and techniques. MOT hasalready taken an important step in this direction with the Transp3rt SectorMaster Plan Studye, one of the main aims thereof being the increase in theplanning capabilities of MOT The Study's recommendations in this area wouldbe pursued under tie Project. Other steps planned are the strengthening of eachof the three departments above, and a particular emphasis on the transport needsof rural areas. Technical assistance for these purposes is includeA under theproposed project (subparas. 3.09.d and e).

F. Planning and Financing

2.18 A public investment review was carried out in December 1987 to discussthe Government's planned expenditures at the eve of the new 1988-1992 DevelopmentPlan. The results appear in Table 2.6.A below, which shows that three Ministriesare involved.

(a) MPW deals with the classified network and has benefitted from asharp increase in its planned budgetary allocations as from thesecond year of the Plan (1938) with additional resources earmarkedfor road maintenance (para. 2.19). The share of maintenance andrehabilitation in the MPW total has thus increased sharply from 56%in the 1981-87 period to 75% in the current Plan.

(b) Local roads are financed through decentralized Government budgetsunder supervision of MOI. Due to the transfer of new fiscalresources to them, the local communities have now much largerresources to be devoted to urban/rural roads. This raises twoquestions, first on their technical capabilities to manage suchresources, and second on the precise scope of their responsibilitiesas far as road maintenance is concerned. The answer to bothquestions may reside in a closer relationship with MPW, whoseregional services can provide adequate assistance as needed, buta prior condition is the delimitation of responsibilities throughan updated network classification (para. 2.03). The Government hasbeen working on this subject for some time, and the allocation ofthese responsibilities will be pursued under the Project (subpara.3.08.e).

(c) MOT is involved through a few public enterprises dealing withpassenger services (the CTM-LN on intercity routes and eight citybus operators for urban transport), freight assignment (ONT) (para.2.10), and road safety (CNPAC) (para. 2.08). The relatively smallamounts involved show that public ownership is limited as far asroad transport is concerned.

8 Schema Directeur National des Transports, op. cit.

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Table 2.6 Road Subsector Inystments

A. Lxe ditures Reviev(DH million at current prices)

Actual Planned X1981-1987 1988-1992 1988-1992

1. Road InfrastructureHiRhways (RP, RS, CT)Construction/Modernization 1,839 1,670Rehabilitation/Maintenance 2.294 4.964

Subtotal MPW 4,133 6,634 (60)Local roadsUrban/rural 1.300 3.660 (33)

Subtotal MOI 5,433 10,294 932. Road Transport

CarriersCTM-LN 108 230Urban bus operators 320 400

428 630 (6)Other agenciesONT (freight assignment) 28 'CNPAC (road safety) 20 18Terminals (passengers) 10 50

58 120 (1)Subtotal MOT 486 750

Total Road Subsector 5,920 11,044 100

Source: Transport Sector Investment Review, December 1987, and missionestimates.

B. Detailed Planned Exoenditures (1988-1992)(DH million in current prices)

Categories 1988 1989 1990 1991 1992 Total In %

Construction/modernization 378.9 328.3 272.3 320.0 370.0 1669.6 25.0

Rehabilitation 416.5 518.7 567.4 792.0 624.0 2918.6 44.0Maintenance 234.5 350.1 458.1 398.0 520.0 1960.8 30.0Miscellaneous 15.2 6.5 23.2 20.0 20.0 85.0 1.0TOTAL 1045.1 1203.6 1321.0 1530.0 1534.0 6634.0 100of, which:General Budget 1045.1 809.6 891.0 1100.0 1104.0 4950.0Road Fund -- 394.0 430.0 430.0 430.0 1684.0

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2.19 Road infrastructure investments are detailed in Table 2.6.3, which givesa breakdown by year and nature of expenditure: (i) new construction, (ii)rehabilitation, (iii) maintenance (routine and resealing), and (iv` miscellaneous(studies, training, technical assistance, buildings). The total amounts to DH6.6 billion for the 1988-92 period. The annual amount per km is US$5,600 ofwhich about 75% is for road maintenance, equivalent to about US$4,200 per km.These expenditures are funded by the general budget for DH 4,950 million (theinitial Plan allocation for the road subsector), and by the recently created RoadFund for DH 1,684 million (para. 2.14). The high priority accorded to roadmaintenance under this Plan is a very positive development with respect to publicinvestment rationalization.

2.20 Apart from general underfunding, highway maintenance suffered untilrecently from a low efficiency in the implementation of the investmentprograms. Defining efficiency by the ratio of actual payments ("émissions"),made in a given year on the payment authorizations ("crédits de paiement")allocated for that year, this ratio used to be in the range of 60-65%. As canbe seen from Table 2.7 below, the annual amount actually paid for maintenanceprograms averaged DH 348 million over the period 1981-1987.

Table 2.7 Maintenance Expenditures. 1981-1987(Actual payments, DH million current)

1981 1982 1983 1984 1985 1986 1987 Average294 618 432 127 155 256 553 348

This average level is very low by any standard (the 1984 Road Maintenance Studyrecommended about the double in 1983 prices). Furthermore, the erratic characterof the annual allocations together with delays in payment caused severedisrup_ions vithin the construction industry (para. 2.28). The Road Fund isexpected to be the answer for more stability in resources. The countrywidebudget implementation issue is being addressed under the SAL, which calls forseveral measures to improve and expedite execution of the investment programs,such as the progressive reduction of payment arrears, carrying over of unusedcommitments, improvement of the payment efficiency ratio, etc. The investmentsproposed under the present project are included in the Target Investment Program(TIP) of the SAL, meaning that the highway investment program would be reviewedannually, jointly by the Government and the Bank, and the efficiency ratio,expected to increase to 70% as from 1990, would be monitored as well.

2.21 Monitoring of the priority to be accorded to road maintenance in thecurrent Plan would be done through the SAL's TIF (para. 2.20) and the specificmonitoring requirements under the project (para. 3.20). In addition, closerelationships with other donors active in the field will be pursued, in orderto ensure coherence in the objectives and complementarity in the means. Thisis especially true with the African Development Bank in view of its activelending program in the sector (para. 3.04).

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G. Human Resources

Ministry of Public Vorks

2.22 DRCR's staff comprises about 5,900 employees, including 377 managementpersonnel; 1,813 technical employees for highway construction, maintenance andrehabilitation; 1,730 technical employees for equipment operations andmaintenance; and 1,980 administrative employees (Table 1 in Annex 8). MPW, whichis in charge of coordinating Vocational Training and Staff Training all over thecountry, is fully equipped in terms of pre-employment facilities for the publicworks sector, with one engineering school (Hassania), four technician centers(Agadir, Marrakech, Rabat, Oujda) and a large network of Vocational TrainingCenters and Institutes of Applied Technology vithin the Office of VocationalTraining and Employment (OFPPT). The Personnel and Training Department (DAPF)organizes systematic continuing training for engineers in project analysis,economics, technical matters and management and for technicians throughsensitization seminars. However, about 60X of the operational manpower lacksskills in highway maintenance and rehabilitation techniques. Thus, technicalcontinuing training needs to be organized on a systematic basis for the entirestaff.

2.23 The existing MPW training institutions provide basic preemploymenttraining only. Moreover, they lack adequate and qualified trainers to providethe specific road maintenance and rehabilitation specialized training programsneeded by DRCR (Table 2 in Annex 8). MPW has a center in Casablanca, whichtrains about 120 drivers and mechanics every year. However, since the existingcenter is too small, old, and not conver.iently located, MPW is implementing atraining and retraining system to upgrade its technical staff in highwaymaintenance and rehabilitation, by ising facilities existing in the country (MPWand OFPPT training centers). Design, objectives, training programs, andfinancial needs have been determined on the basis of a study completed in 1984.The first training program (Annex 8) vill concern about 300 trainees, andfacilities are being upgraded with Government and international financing (AfDB).The project will finance the technical assistance needed to finalize theprograms, train the trainers, and make the system operational (subpara. 3.09.c).

Ministrv of Transport

2.24 MOT ensures the training of its staff in charge of road transport on aninformal basis, on-the-job, using bilateral assistance, and training abroad.In order to introduce a computerized management of the driver licensing, vehicleregistration, and transport agreement services, the MOT Vocational TrainingService (DFP) intends to organize training for selected officers in charge ofthese functions. The project will finance the technical assistance needed: (i)to help setting up the computerized system; (ii) to train, on-the-job, theofficers in charge; and (iii) to provide specialized training abroad for theseofficers (subpara. 3.09.e).

2.25 MOT is establishing a National Center for Vehicle Inspection and Testing(CNEHA) (para. 3.12), which will require six technicians. The project willfinance the tecbnical assistance needed to help establish CNEHA and to train the

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technical staff in a similar center abroad. The MOT, Transport Studies,Planning, and Coordination Department (DEPCT) also intends to improve theefficiency of its techniques. This requires that the technicians in charge betrained in the use of computers for transport planning and coordination. Theproject will finance the training, partly on-the-job with the help ofconsultants, and partly abroad in similar services (subpara. 3.09.e).

H. EnRineering and Construction

2.26 DRCR's Studies Division is responsible for preparing major highwayprojects. The division's staff is well-qualified and adequate computerfacilities are available. Two autonomous agencies complement DRCR's engineeringcapability: first, the National Center for Pavement Evaluation and Road Research(CNER), a public agency in charge of pavement design analyses, structuralcondition surveys, and related applied research; second, the semi-public materialtests and studies laboratory (LPEE), which can carrf out all soil and materialtests required for civil works as well as engineering studies. Both agencies'staff have acquired experience by preparing all road strengthening studies forthe earlier Bank financed highway projects. However, CNER needs some technicalassistance to train its staff to more advanced tools and techniques, and thiswill be provided under the proposed project.

2.27 The design standards used by DRCR are satisfactory. Geometric standardsare based on a design speed chosen in function of traffic, terrain, and naturecf the road. Pavement design is also satisfactory and is based on a catalogueof pavement structures, updated from time to time. The Highways Design andMaintenance Standards Model (HDM III) has been introduced and is expected to beused more largely for highway investment analysis in lieu of simpler in-housemodels.

2.28 Morocco has a well-developed contracting industry, with several localfirms fully up to international contracting standards. Construction works arenormally carried out under unit price contract awarded after competitive bidding,and contract prices are competitive. Small- to medium-size contracts (US$2 to10 million) are usually won by Moroccan contractors, except in the case of bridgeconstruction contracts, where foreign competitior. is more successful. Theprofession gathe;s a modern sector of 1,300 enterprises (of which less than lOXwork in the road sector), and an informal sector of about 8,300 smallenterprises. The former is organized through the Federation of Building andCivil Engineering Contractors (Fédération Nationale du Bâtiment et des TravauxPublics), which has over 700 members classified according to their capacity,experience, and skills, and is working towards a mandatory classification of thewhole profession. The construction industry expanded vigorously in the 1970'sin parallel with the strong investment policy of the Government, but since theearly 1980's have suffered from (i) low and unstable level of public expendituresand (ii) substantial delays in payments. This situation is expected to be easedvith (a) the current growth-oriented macroeconomic program, (b) better planningof works by MPW and (c) stronger payment discipline from the Ministry of Finance(para. 2.20). Furthermore, the industry's performance could be significantlyimptoved by providing construction enterprises and consulting firms operatingin the sector with updated information on the demand for their services, by

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increasing the local availability of basic construction materials such as graveland sand whose mining is subject to environmental controls, by enhancingtechnological transfer, and by developing effective standardization, qualitycontrol and certification practices (para. 3.10).

2.29 The supervision of construction is carried out by DRCR regional staff,assisted by LPEE for the necessary soils and materials' tests. LPEE alsoundertakes some specialized parts of the supervision, if the technical staff ina given region is unable to fulfill all tasks. For major road construction, DRCRestablishes a special supervision office with engineers and other specialistspermanently assigned to the supervision of the road. The combined capabilityof DRCR and LPEE in supervising road construction is adequate to deal withcontracts as large as those included in the project.

I. Road Maintenance

2.30 The 1984 Road Maintenance Study financed under the Third Highway Projectprovided for a detailed assessment of the road network and the maintenance stafffacilities, equipment, and materials. Its main recommendations regardingmaintenance organization and staff training have since been implemented, eitherunder the Fourth Highway Project (staffing and equipment of maintenance crews,establishment of workshops as autonomous equipment maintenance centers,acquisition of road maintenance equipment), or under the 1988 African DevelopmentBank's Transport Sector Loan (construction of a training center, development ofa bridge management system). However, with respect to the financial needs formaintenance works, not only the Study's recommendations were not followed, butvorse, the maintenance allocations were reduced in absolute terms due to thestringent budgetary constraints that prevailed during the years 1981-1986. Thishas made the funding i.ssue one of the main road maintenance issues, but thesituation is improving with the earmarking of part of the needed funds (paras.2.19, 2.20, 2.32).

2.31 The road network condition is part of the database maintained byDRCR/CNER by means of visual inspections and structural surveys. The table belowshows the condition in 1983 and 1988 as assessed and forecast by the RoadMaintenance Study, together with the actual 1988 condition.

Table 2.8 RoadN etwork Condition(in %)

----- Good ------- ----- Fair ------- ------ Bad ------A/ Ai hi/ -/ a/ h/ i/ A/ h/ Network

1983 1988 1988 1983 1988 1988 1983 1988 1988 lm,k)Primary 33 51 36 39 31 36 28 18 28 9,400Secondary 14 31 16 46 40 52 40 28 32 6,250Tertiary 14 35 13 46 43 27 40 22 60 12.850Total 28,500

j, Assessed (1983) and forecast (1988) by the Road Maintenance Study.hi Actual (CNER and mission estimates).

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Far from the sharp improvement, which had been expected, the current situationas compared with the 1983 one presents only a slight improvement for the primaryand secondary roads, and a worsening for the tertiary roads condition. This isthe result of (i) the zevere underfunding of road maintenance for the past sixyears (para. 2.20), and (ii) the subsequent retrenchement strategy of DRCR, whichconcentrated the scarce res;ources on the most trafficked main roads.

2.32 The consequences of this situation were highlighted in 1987 by MPW interms of (i) worsening of road condition, with more than 50% of the network inbad condition within f ive years; (ii) increase in maintenance backlog, since moreroads will have to be strengthened or reconstructed, with higher prices thannormal periodic maintenance; and (iii) increase in vehicle operating costs: theadditional amounts involved are, in oider of magnitude, four times the size ofthe maintenance requirements, with a higher forei i exchange component.Eventually the Government was convinced of the need for more stable resourcesfor road maintenance, and the legislature passed a law in December 1988 creatinga Road Maintenance Fund. The official documents related to the Road Fund arein the Project Files, and the fund design is discussed in para. 2.14. The fundhas been operational since January 1, 1989 and will provide resources (to comefrom existing as well as new transport taxes) to cover all routine maintenanceand part of periodie resealing operations.

2.33 DRCR's maintenance programas are based on norms and criteria that specifythe design and the frequency of strengthening and resealing as vell as of thediverse routine maintenance operations. These standards with the associatedceosts are shown in Annex 2. Although DRCR currently ranks the components of itsvarious annual programs using a road user costs approach, the optimality of thisnormative approach is yet to be demonstrated, and technical assistance for thispurpose is included under the project (subpara. 3.09.a). However, these normshave been very useful in the vreparation of the maintenance program, and it isinteresting to compare the financial effort required by their application withthe existing budget allocations. The financial requirements are summarizedbelow.

Table 2.9 Annual Maintenance Cost Requirements

Traffic class Length Maintenance Costs (KDH/km/vear) 1988 prices(y.d) (km) Rehabilitation Resealing Routine Total

under 750 20,900 12,9 6,4 7,7 27,0750 to 1,500 4,100 23,9 6,8 8,8 39,51,500 to 3,000 2,000 39,4 14,6 9,3 63,3over 3,000 1,500 63,0 30,8 13,5 107,3Total costs(DH million/year) 541 â 236 1014

The maintenance budget for the 1988-92 Plan is DH 4,964 million (including theRoad Fund), or DH 993 million per year. Thus due to the Road Fund, the plannedmaintenance budget would essentially meet the requirements, although someadjustments may be necessary to offset the effects of inflation.

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2.34 In view of the mairtenance underfunding that has existed for severalyears, the requ.rements mentioned in para. 2.33 above have, of course, not beenmet during the past period, and a serious backlog has accrued. Table 2.8 aboveshows the accumulation of roads in bad condition in the actual 1988 situation.Most of these roads now need rehabilitation before regular maintenance can beapplied. DRCR's strategy to catch up wi.h the existing backlog is to give moreemphasis to strengthening/rehabilitation activities than would have been neededunder normal circumstances by applying the maintenance standards above. Table2.6.B shows that the total devoted to these activities in the 1988-92 Planamounts to about DH 2,920 millior., or abc'it 60% of the total maintenanceallocations. With this amount, about 6,000 km would Le rehabilitated,representing a periodicity of 7.5 years for the medium to high traffic network(more than 750 vpd), as compared with the general norm of once every 15 yearsfor this kind of operation. There is also a serious backlog in the repair ofshould!rs and in road marking. The proposed project will provide support in allthese areas to help meet part of the backlog (para. 3.04).

III. THE PROJECT

A. Oblectives

3.01 The project is based on the objectives for tLe transport sector definedin the 1988-92 Development Plan, which are to (i) improve efficiency to meetdemand at the lowest possible cost; (ii) rationalize transport investments andoptimize the use of limited funds for maintenance; (iii) establish cost-basedtariffs and a realistic policy for recovery of road user charges; and (iv)strengthen planning and implementation capabilities. The Bank is supporting thisapproach through its ongoing dialogue with the Government, and the proposedproject is in line with these objectives, building on institutional capabilitiesachieved to date.

3.02 The proposed project would be the first Bank operation for the highwaysector in the past f ive years. In line with the increasing competence ofexecuting agenicies in Morocco to plan and implement sector-wide investmentprograms, and with the need for emphasis on sectoral policy and institutionalissues, the proposed project would also be the first highway sector project,introducing a much broader approach to the development of the sector. Itincludes an Action Plan for policy adjustment and institutional improvement,providing the framework for an investment component to be financed under theloan, with the following specific objectives:

(a) assist the Government in its efforts to bring sector investmentsin line with economic priorities, and to concentratz its ressourceson the preservation of existing roads;

(b) strengthen the overall institutional framework by improving theintegration of road resurfacing and maintenance planning within acomprehensive pavement management program; and

(c) pursue the development of a realistic zoad user taxation policy,

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and assist in the deregulation of the road transport market.

(d) pursue efficiency improvements in the construction industry in linewith the Bank's efforts in the Maghreb region.

B. Project Dascription

3.03 The proposed project is composed of two elements:

(a) MPWes 1990-92 highway investment and maintenance program (para. 3.04);

(b) policy adjustment and institutional development measures concerningbth, MOT and MPW (paras. 3.07 to 3.09).

The proposed Bank loan would finance selected components of aach elementmentioned above (para. 3.12). During negotiations, Government agreementconcerning project objectives and description was obtained (para. 5.02).

Road Investment and Mainte...ance Program

3.04 The 1990-92 road investment and maintenance program is presented in TableA of Annex 6, and summarized in Table 3.1 herebelow. This program covers thelast three years of the current Plan 1988-92 (para. 2.19), and rightly focuseson maintenance of the network: new construction accounts for only 22% of thetotal, and rehabilitation and maintenance for 77%. The maintenance effort willbe raised to meet the needs of the r.etwork as defined by the Road MaintenanceStudy and subsequent studies carried out by DRCR. Part of this program isalready financed by external sources, sucb as the African Development Bank(AfDB), which is very active in the sector (para. 2.21), and IBRD. The mainrationale for IBRD's continued intervention is to help the Goverament reduce thebacklog accumulated during the recent period of ecoaomic stringency. Areas whereserious backlog exists include road and bridge rehabilitation, resurfacing,shoulder restoration, and pavement marking (para. 2.34).

3.05 As shown in Table 3.1, two items make up the new construction workprogram:

(a) provincial roads: these are secondary, and mainly tertiary roadsin selected areas for the development of agriculture and/or tourism.Part of these roads are being financed under the Fourth HighwayProject;

(b) other primary roads: these are mainly roads built for regionaldevelopment purposes; regarding the Rabat-Casablanca expressway(financed under the Fourth Highway Project), this item is beingcompleted.

These items have been responsible for most of the addition to the paved networkduring the past few years (para. 2.02), but with diminishing importance onaverage. Thus, if the new construction ratio averages 25% over the period1988-92 (Table 2.6.B), this ratio is only 22% for the period 1990-92.

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Table 3.1: Summarv of MPW's 1990-92 Expenditure Program(in current DH million)

--- Program 1990-92 ---- --- Total 1990-1992 ---1990 1991 1992 in MDH in MSS in X

New construction, 272.3 320.0 370.0 962.3 116.0 22.0%of whichProvincial roads 179.8 242.0 266.0 687.8 82.9Other primary roads 92.5 78.0 104.0 274.5 33.1

Rehabilitation, 567.4 792.0 624.0 1983.4 239.0 45.2%of whichRoads 488.3 742.0 574.0 1804.3 217.4Bridges 79.1 50.0 50.0 179.1 21.6

Maintenance, 458.1 398.0 520.0 1376.1 165.8 31.4%of whichRoadwor?s 381.5 350.0 460.0 1191.5 143.6Equipment 76.6 48.0 60.0 184.6 22.2

Studies. Tec -.ical 14.6 8.0 8.0 30.6 3.7 .7%Assistance. and TrainingMiscellaneoua 8.5 12.0 12.0 32.5 3.9 .7%

TOTAL EXPENDITURES 1321.0 1530.0 1534.0 4385.0 528.3 100%

Sources: DRCR and mission estimates.

3.06 The pluriannual program of studies, technical assistance, and trainingincludes (i) most of the consulting services provided for under ongoing IBRDprojects (training and technical assistance to DRCR, provincial roads study,etc.), and AfDB projects (development and implementation of a bridge managementsystem, etc.), and (ii) additional needs (development and implementation of apavement management system, training of maintenance crews under the new RoadMaintenance Training Center, etc.), which would be partly financed under theproposed project.

Sector Policy and Institutional Developgment Measures

3.07 As part of the dialogue between the Government and the Bank on thedevelopment of the sector, MPW and MOT have identified a series of actionsdirected at resolving the major issues mentioned in this report. These issueswere identified mainly through studies financed under the Third and FourthHighway Projects and experience gained through implementation of these projects.Evidence of commitment to resolving these issues has already been shown throughtha preparation of the road user charges study with assistance from the Bank,which contributed inter alia to (i) the establishment of the Road Fund in January1989, and (ii) a modification of the annual vehicle road tax calling for the samerate regardless of vehicle age.

3.08 The main actions contemplated in sector policy include adjustments in

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the road user charges system to ensure adequate coverage of road use costs, r-

reduction of overall transport costs through further liberalization of the roadfreight market, and improvement in resource allocation for the road sectorthrough reallocation of responsibilities over the entire network. Actions tobe pursued under the Project to attain these objectives are outlined in Annex5 and include:

(a) completion of the National Transport Master Plan Study anddevelopment, on the basis of this study and the Bank's comments,of an action plan to address (i) the ageing of vehicle fleet (para.2.14); (ii) the status of private operators (less than 8 ton grossvehicle weight), and (iii) ONT's role in the overall freighttransport system as a freight forwarder (paras. 2.10 to 2.13);

(b) analysis of the impact of the price differential between diesel andgasoline fuels (para. 2.14);

(c) strengthening of the role of Government in road safety matters, suchas vehicle inspection and vehicle overloading (paras. 2.08, 2.09);and

(d) implementation of the new road network reclassification (para.2.03).

3.09 The main actions envisaged in institutional efficiency acijustments tobe pursued under the Project include improvements in MPW's and MOT's sectormanagerial and planning capabilities, road maintenance management, and personneltraining. To attain these improvements:

<a) DRCR would develop optimal road maintenance strategies and pursuethe development of a pavement management system, building onachievements to date, and would strengthen CNER, the national centerfor road studies and research (para. 2.26);

(b) DRCR would develop and start implementing a rational policy for thewidening of narrow roads;

(c) DRCR would implement a training and retraining system in highwaymaintenance and rehabilitation (para. 2.23);

(d) MOT would improve the planning and organization of transport inrural areas, together with MPW and MOI; and

(e) MOT would strengthen internal capacities in transport planning andefficiency in road transport management and safety (paras. 2.24,2.25).

3.10 In addition to the above sector policy and institutional developmentactions, MPW plans to facilitate the operations of the national constructionindustry (para. 2.28). A long-range program, whose implementation would spreadover the next Five-year Plan, has been prepared by MM and includes the following

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(Project File, Annex 1):

(a) improvement of MPW's knowledge of the construction industry sector,in particular with respect to its production capacities,intermediate consumptions, sub-contracting practices, employmentissues, and informal sector activities;

(b) development of measures for promoting the supply of local materialsefficiently and economically with particular attention to quarryproducts whose mining is constrained by environmental concerns;

(c) promotion of the establishment of a documentation and informationcenter on the construction industry, its activities and technicaldevelopments to be used by public administrators, developers,entrepreneurs, and experts in consulting;

(d) expansion of the research and testing activities of the LaboratoirePublic d'Essais et d'Etudes and assessment of the interest ofstrengthening its regional offices to better meet the local needsof contractors, enterprises and consulting firms; and

(e) streamlining of the present functions and enhancing of the activityof MPW in the regulatory and standardization fields, respectively.This includes better adapting regulation and norms to localgeographic, geological, climatological and sociologicalsituations.

A timetable of those studies to be included in the Project would be prepared byMPW by June 30, 1990.

3.11 Details of the various actions are ineluded in Annex 5. Duringnegotiations, agreement was reached with the Government that the adjustment andinstitutional reform component would be carried out in accordance with animplementation program acceptable to the Bank. The program consists of themeasures to be taken as outlined in the Action Plan. Agreement was also reachedthat progress in its implementation would be reviewed by September 30 of eachyear and appropriate adjustments made taking into account the Bank's comments(para. 5.02).

Items financed under the Proposed ProJect

3.12 The Loan would finance the following components of the 1990-92 program(Annex 9):

(a) Civil Work.. This component would include: (i) rehabilitation ofabout 1,000 km of roads; (ii) resurfacing of some 1,300 km of roads;(iii) shoulder restoration on about 500 km of roads; (iv) pavementmarking on some 5,000 km of roads; (v) reconstruction of about sevenbridges; (vi) construction of workshops facilities, and (vii)construction of the National Center for Vehicle Inspection andTesting (CNEHA, described in Project File, Annex 1).

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(b) Eguipment. This component would include (i) road maintenanceequipment; (ii) traffic counting equipment; (iii) workshopequipment; and (iv) road safety equipment.

(c) Consulting Services. This component would include the studies andtechnical assistance required to implement the Action Program,namely (i) study into the widening of narrow roads, and technicalassistance to DRCR/CNER, (ii) study into the development oftransport in rural areas, and technical assistance to MOT, and (iii)studies to enhance the construction industry performance.

(d) Overseas training. This component would include scholarships abroadfor (i) MPW , and (ii) MOT.

C. Cost Estimates and Financint

Prolect Cost Estimates

3.13 Table 3.2 hereafter shows the total project cost in summary form, whileTable B of Annex 6 provides a more detailed brealcdown of costs. The totalcapital cost is estimated at US$533.6 million equivalent, including a foreignexchange component equivalent to US$254.7 million, and a local cost componentof US$278.9 million equivalent, including US$107.1 million in taxes and duties.The total project cost net-of-taxes is therefore US$426.5 million equivalent.

3.14 Estimates for civil works are based on unit prices for recent contractsin Morocco, adjusted to mid-1989 level. The cost of road maintenance and trafficequipment is based on recent purchase prices of similar equipment. The technicalassistance cost estimates are based on recent rates for consulting services inMorocco. Contingencies have been allowed only for price escalation, and arebased on annual rates for local inflation of 5% until project completion and forforeign inflation of 7.2% in 1990, and 4.4% thereafter. Overail, thesecontingencies represent 11% of base costs. Foreign exchange components havebeen calculated for each project item. For civil works, the breakdown betweenforeign and local components (the local including taxes) was calculated for eachmajor item in the bill of quantities, assuming that most of the contracts wouldbe awarded to Moroccan contractors. The latter assumption is based on recentcontracts awards.

3.15 Project financing would come from different quarters. Governmentappropriations amount to DH 2,805.1 million, or 63% of the total project cost.46% of Government appropriations (or DH 1,290 million) are expected fromearmarked funds (para. 2.14). External funding includes IBRD and AfDB loans,whose total (ongoing and proposed) amount to US$195.7 million, or 46% of thetotal project cost net-of-taxes. The proposed IBRD loan of US$79 million wouldrepresent 18.5% of total net-of-tax cost. AfDB has confirmed its interest inproviding parallel cofinancing in the amount of US$33 million, representing afurther 7.7% of total project costs. Of the total foreign exchange cost,estimated at US$254.7 million, 33% would be met from existing loans, 31% fromthe proposed IBRD loan, and 13% from the proposed AfDB loan. During

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negotiations, the expenditure and financing plans were confirmed by theGovernnment (para. 5.01).

Table 3.2 Summary of Project Costs 1/(mid-1989 price value)

A. Expenditure

Local Foreign Total Local Foreign Total X foreignComponents in DH million in USS million exchange

New constructionProvincial roads 339.1 277.4 616.5 40.9 33.4 74.3 45Other primary roads 135.9 111.2 247.0 16.4 13.4 29.8 45

Rehabili,tationRehab. of roads 810.9 810.9 1621.7 97.7 97.7 195.4 50Rehab. of bridges 81.3 81.3 162.5 9.8 9.8 19.6 50KaintenanceRoadworks 643.1 428.7 1071.8 77.5 51.7 129.1 40Equipment 50.0 116.6 166.5 6.0 14.0 20.1 70MOT's road safety prograCNEHA construction 2.8 2.8 5.5 0.3 0.3 0.7 50CNEHA equipment 4.1 9.5 13.5 0.5 1.1 1.6 70Studies. TechnicalAssistance. Training 9.6 38.3 47.9 1.2 4.6 5.8 80Miscellaneous 19.0 10.2 29.2 2.3 1.2 3.5 35BASE COSTS 2095.5 1886.7 3982.2 252.5 227.3 479.8CONTINGENCIES 2/ 219.4 227.6 447.0 26.4 27.4 53.9TOTAL PROJECT COSTS 2314.9 2114.3 4429.2 278.9 254.7 533.6 l.

B. Financing Plan

Total Total(DH million) (US$ million)

Government, of which 2805.1 337.9Road Fund 1290.0 155.4General Budget 1515.1 182.5

AfDB (ongoing) 639.9 77.1AfDB (proposed) 273.9 33.0IBRD (ongoing) 54.6 6.6IBRD (proposed) 655.7 79.0TOTAL FINANCING 4429.2 533.6

./ Total project cost is the sum of MPW's road expenditure programs and MOT'ssector programs (details in Annex 6, Table B).

2/ Contingencies allowed for price escalation as follows: for local costs, 5.0%over the whole project period; for foreign costs, 7.2% in 1990, and 4.4%thereafter.

J/ Identifiable taxes and duties are about US$107.1 million equivalent, and thetotal project cost, net-of-taxes, is US$426.5 million equivalent.

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3.16 The proceeds of the Bank loan would be disbursed against selected itemsthat would contribute to (i) reducing the backlog in road rehabilitation andmaintenance (para. 3.04), and (ii) implementing the Action Plan (paras. 3.08,3.09, 3.10). These items are described in para. 3.12, and in Annex 9.

D. Implementation

3.17 The Borrower will be the Kingdom of Morocco. DRCR will be the executingagency for the MPW components, and DEPCT and DTT for the MOT components. Theproject is expected to become effective in May 1990. In principle it is possibleto complete the project by mid-1993, but a margin of a further six-month periodis advisable to allow for unforeseen delays, taking the completion date toDecember 31, 1993. The loan closing date is scheduled for December 31, 1994,providing a full year after project completion to allow the Government time tosubmit final withdrawals applications.

3.18 Civil works to be financed under the Loan have been the subject offeasibility studies carried out by DRCR (Chapter IV). Final engineering of thefirst year rehabilitation program is being carried out by DRCR and LPEE. Forthe following years, DRCR would submit the technical and economic evaluation cfrehabilitation subprojects for the Bank's review, according to the samemethodology, criteria, and procedures as applied for the first year program.Assurances to this effect were obtained at negotiations (para. 5.02). The finaldesign for the bridge program would be ready by mid of 1990. Draft terms ofreference for the main consulting services have been prepared and reviewd by theBank and will be finalized according to the timetable in the Action Plan. Theimplementation schedule is shown in Annex 10, and was confirmed with theGovernment during negotiations (para. 5.01).

3.19 Witl1 regard to project monitoring, the Government would prepare bi-annualreports to the Bank providing: the progress of execution of Bank-financedactivities; the status of disbursement requests and of withdrawals from theSpecial Account, and the schedule of estimated withdrawals of the proceeds ofthe loan.

3.20 Furthermore, in order to monitor progress of MPW's and MOT's program andrelated Action Plan, the Government would at least semi-annually meet withrepresentatives of the Bank, and would provide information in accordance withthe following scope and schedule:

(a) By March 31 of each year, MPWV, MOT, and the Bank would review:

- compliance with the Action Plan during previous year,

- expenditure levels in the implementation of the investment andmaintenance program during the previous year, and sources offunding, including Government and financing under the loan;

- planned expenditure levels for the coming year by majorcategory of expenditure, including details of the financingplan;

2,

- composition and statue of act &.vities to be financed under theloan including the various steps for preparation orimplementation.

(b) By September 30 of each year, MRW and hOT would provide informationon:

- proposed update of actions and targets included in the ActionPlan;

- proposed update of the pluriannual expenditure program infinancial and physical terms, and proposed "Loi de Finances";

- status of selection and execution of Bank financed activities.

Assurances were obtained during negotiations that the Government would(a) furnish to the Bank by September 30 of each yea- for its review theGovernment's proposed annual investment program and related financing plan forthe following year, and (b) thereafter finalize the road investment programtaking into accour,t the Bank's comments, and take all measures to ensure itsprompt implementation (para. 5.02).

E. Pro!urement

3.21 Procurement of the project components would be as follows:

Table 3.4 P&q=urement Table(US$ million)

Procurement Method 1/ TotalProject Element lu LC Other Cost

1. Civil worksNew road construction 116.0 2. 116.0Road rehabilitation 38.0 70.0 250.0 2/ 358.0and maintenance (19.0) (45.0) (64.0)

Bridges 8.5 13.1 2/ 21.6(4.8) (4.8)

Buildings 1.6 1.6(1.0) (1.0)

2. Equipment 5.1 1.4 i/ 17.5 2/ 24.0(2.2) (1.0) (3.2)

3. Technical Assistanceand Training 8.0 §/ 8.0

(6.0) (6.0)Miscellaneous --4.4 4.4

Total Cost 51.6 §/ 73.0 409.0 533.6(26.0) (47.0) (6.0) (79.0)

1/ Figures in parentheses indicate Bank loan proceeds.2/ For local financing folloving local procurement procedures.J Includes amounts for items financed by AfDB and procured under their own

procedures.i/ Local shoppingl/ Employment of consultants.§J Includes items financed under ongoing Fourth Highvay Project.

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3.22 Regarding civil works, the value of individual road rehabilitationcontracts would vary between US$0.2 and US$3.5 million, while contracts forperiodic maintenance would vary between US$0.05 and US$2.4 million. Accordingto their bidding capacity, contractors would be able to submit bids for more thanone contract in bid packages. However, the civilworks activities are scatteredthroughout the country, constrain,ng their being packaged to attract foreigncompetition. Moreover, the experience under the last two highway loansdemonstrates that foreign contractors have limited interest in participating inbids for even larger contracts. Nevertheless, they have succeeded in obtaininga few contracts. Therefore, most contracts are expected to be won by localcontractors. However, contracts for civil works estimated to cost US$2.0 millionor more, would be awarded through ICB in accordance with Bank's guidelines forproecurement. Contracts estimated to cost less than US$2.0 million up to anaggregate not to exceed US$70 million would be awarded following LCB proceduressatisfactory to the Bank (para. 3.25). Bidders for bridge reconstruction willhave to be prequalifiad.

3.23 Procurement of bitumen will be done under the roadworks contracts, andbidders will be permitted either to make their owri arrangements for theprocurement of bitumen to meet their needs, or to request the Government tosupply bitumen at the bulk rate at which it is purchasing to meet its needs.Under the above arrangements the cost of bitumen included in the bid price willbe eligible for disbursement from the loan proceeds.

3.24 Regarding equipment, the threshold above which contracts would be awardedunder ICB, is US$100,000. Domestically manufactured goods procured under ICBwill be allowed a 15 percent preference margin or the import duty applicable tonon-exempt importers, whichever is lower, in the comparison of bids. Goodscontracts below US$100,000 would be procured through shopping procedures basedon comparison of not less than three price quotations, subject to an aggregatevalue not exceeding US$1 million.

3.25 Local competitive bidding procedures were reviewed during projectpreparation, and found generally acceptable to the Bank. There are, however,a few procedures which are inconsistent with Bank procurement guidelines andothers which require clarification. These procedures and proposals to improvethem are detailed in Annex 13. During negotiations, agreement was reachedregarding the adoption of procedures acceptable to the Bank.

3.26 Consulting services and technical assistance will be provided by eitherconsulting firms short-listed, or individual experts selected by each executingagency. The qualifications and experience of the consulting firms or individualexperts selected by the Government, as well as the terms and conditions ofcontract, should be satisfactory to the Bank.

3.27 Contrects or bidding packages would be submitted for prior review inaccordance with the following thresholds:

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Contracts, whose cost la expectedProject Item to exceed the equivalent of

(a) All civil works except bridges US$1,000,000(b) Bridge reconstruction US$ 500,000(c) Equipment US$ 200,000

The above thresholds would lead to prior review of contracts or bidding packagescovering about 80X of the total contract amount for the bridges, 60-80X for theother civil works (depending on the extent to which they are grouped), and 80Xfor the equipment. The lower threshold for bridges is advisable because of theirgreater technical complexity than the other civil works. The first biddingdocument for each category would be submitted for Bank review. For subsequentdocuments only the changes, if any, would be submitted for the Bank's clearance.

3.28 Durirg negotiations, all the above procurement arrangements were ag.iCd.upon with the Government (para. 5.02).

F. Drburnements

3.29 The Bank would disburse on the following basis:

(a) Civil Works: 64X of total expenditures;(b) Equipment: 100X of foreign expenditure, 100X of local

expenditures (ex-factory cost), and70X of local expenditures foritems procured locally;

(c) Consulting Services: 802 of total expenditures;(d) Overseas training: 100X of total expenditures.

3.30 In the past it has taken an average of seven years to completedisbursement of loans or credits to Morocco (all sectors), and transport projectsin the EMENA Region have taken equally long. In the case of the Fourth HighwayProject, the disbursement period will have been six years. This appraisal setsa disbursement period of 5 1/4 years on the basis of (i) the very nature of theproject (1990-92 sector program), and (ii) extensive discussions with the projectauthorities regarding the causes of delay on earlier projects. Specifically.,(i) this project will benefit from improvements expected under the SAL in budgetprocessing and implementation (para. 2.20); (ii) measures have been taken tospeed up the processing of withdrawal applications within the Government, and(iii) DRCR has now a good record in the management of Special Account togetherwith the Ministry of Finance. The corresponding estimated disbursement scheduleis shown in Annex 11.

3.31 A Special Account, covering all categories of disbursement, may beestablished by the Government on terme and conditions acceptable to the Bankfor this loan. The authorized allocation would be US$5,000,000, approximatingan estimated four months disbursement. During negotiations the conditions forthe establishment of such an account vere g&ga8n upon (para. 5.02). Statementof expenditures would be used for contracte valued at US$100,000 or less.

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G. kuditAng

3.32 Independent auditors, aceptable to the Bank, will prepare annual auditreports covering project related activities. Separate reports covering theSpecial Account and the Statements of Expenditure will be prepared. The reportswill be submitted to the Bank not later than six months after the end of thefiscal year. These arrangements were agreed during negotiations (para. 5.02).

M. Environmental Impact

3.33 The works to be carried out under the project will not detrimentallyaffect the environment. The road works will not require the demolition of anypermanent housing, but will enhance the reliability of access to markets,schools, and medical services, and thus improve the rural environment. Anotherpositive achi%vement will be the decrease in air pollution caused by vehicle use,to be expected from the establishment of the National Center for VehicleInspection and Testing that will take care inter-alia of the pollution standardsenforcement (Annex 9, para. 6). Traffic safety would also be improved throughbetter road condition, monitoring, and enforcement.

IV. ECONOMIC EVALUATION

A. Main Benefits and Beneficiaries

4.01 The proposed road pavement strengthening program and periodic maintenanceprogram will enable the fullest use to be made of the existing primary andsecondary road network. Investments in new roads represent only 13% in the totalprogram and are mainly concerned with roads constriicted for regional developmentpurposes (para. 3.05). Because of their small part in the program, no specificevaluation has been undertaken for this component. As a result of its focus onkey routes linking important urban centers, industries, and major agriculturalareas, the rehabilitation and maintenance program will provide substantialbenefits to a wide variety of road users. The main financial benefits of boththe paveannt strengthening and maintenance programs will be in reduced transportcosts, wlich result from improved driving surfaces. Additional benefits aresavings Lrom avoiding higher maintenance costs, which would ultimately berequired to keep roads in passable condition and prevent even greater increasesin transport costs. In addition, the proposed technical assistance willconsiderably strengthen DRCR's capability for the planning and management of theroad network. Similarly, the provision of technical assistance, studies andtraining to the Ministry of Transport will help to improve overall managementin the transport sector and will increase general operational efficiency in thesector. Furthermore, implementation of the Action Plan involving minoradjustments to road user charges and greater liberalization in the road transportmarket will help remove piesent distortions and reduce overall transport costs.Finally, enhancement of the construction industry operations would speed up theexecution, and contribute to reduce the costs, of public as well as privateinvestment programs.

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B. Pavement Rehabilitatlon Program

4.02 The proposed project would finance about 1,000 km of pavementrehabilitation/strengthening during the period 1990-92 or about 25% of the totalprogram. Feasibility studies have been completed for a long list of about 1,300km of roads using a computer program. From this list, a tentative three-yearprogram totalling 1,000 km has been selected as well as a first-year priorityprogram covering some 280 km of roads. The overall program includes heavilytrafficked roads throughout the country including important sections of the RP1,RP3, RP4 and RPl9 in the vicinity of Meknes, Fes ar.d Oujda in the northern partof the country and the RP40 and RP 32 lînking the port of Agadir with theinterior in the sout.ern part of the country (Map IBRD 21695). Traffic on theseroads in 1986 ranged from 500 vpd to over 4,000 vpd with an average of about1,800 vpd, heavy vehicles accounting for about 15% of total traffic. Trafficis assumed to continue increasing in line with the expected develoment of theeconomy at about 4% per year. However, the viability of the pavementstrengthening program is not sensitive to traffic growth as all sections arejustified on the basis of initial traffic.

4.03 Pavement design and the economic analysis cover a fifteen-year period.User benefits from pavement strengthening derive from the difference in vehicleoperating costs on (a) poor road surface throughout the fifteen-year evaluationperiod and (b) an initially excellent surface progressively deteriorating to apoor surface. The deterioration assumptions used are based on those of the HDMmodel, and the vehicle operating costs were derived using the HDM subprogram.Savings of the additional maintenance, which would be needed if the road werenot rehabilitated, have also beeiî estimated. Using these assumptions, the ERsfor tie tentative 1,000/km program range from 20% to over 100% with wverallaverage of about 50%. Details of the economic evaluation are given in Annex 3.

C. Periodic Maintenance Proaram

4.04 The evaluation of the periodic maintenance programs has been ur;dertakenin a similar manner to the pavement strengthening program. Feasibility studieshave been completed for a long list of road sections provided by the ProvincialPublic Works Directorates (DPTP). In all, some 1,600 km of road sections havebeen analyzed, from which a tentative priority program covering some 1,300 kmhas been selected representing about 40% of the total program. Traffic on theseroads are lower than on the sections for pavement strengthex±ing and are generallyin the range of 500 vpd to 2,500 vpd. The ERs of the tentative three yearprogram range from 24% to 90% with an average ER of about 30%. Details of theeconomie evaluation are given in Annex 3.

D. Bridge Reconstruction Program

4.05 The proposed project would continue with a modest program of bridgereconstruction, which was initiated under the Fourth Highway Project. The latterdefined a uniform methodology for determining priorities among different bridges,and the same methodology has been applied for the extension of the program. Thisinvolves classifying bridges according to width restrictions, weight limitacionsand poor alignments. The anaiysis shows that bridges with weight limitationsare the most costly in terms of transport expenditures and, therefore, have the

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highest rates of return. The additional costs are caused by diversion of trafficto larger routes or the carriage of goods in smaller capacity trucks. Atappraisal, a tatal of five bridges had been assessed, the two most importantbeing located on the main north-south RP30 41, south of Agadir. Traffic volumeson the routes served by the bridges range from about 1,l.00 vpd on secondary roadsto about 3,500 vpd ot; the RP 30 near Agadir. The amount of traffic diversionvaries from case to case and according to vehicle type, but the proportion rangesfrom 20% to 60% of total traffic, the proportion being higher for heavy vehicles.In all five cases, the estimated ER exceeds 40%.

i. Improved Haintenance Planning Procedures

4.06 The proposed project includes technical assistance to help improve DRCR'scapability to optimize its road rehabilitation and maintenance programs. Usinga road data base established by CNER, data on vehicle operating costs and roadmaintenance units prices would be combined to develop a simple pavementmanagement system. A start has already been made with such system for theeconomlc cvaluation and ranking of the program financed under the proposedproject. Using appropriate micro-computer technology, a planning system wouldbe developed, which will ensure the effective utilization of funds on pavementmaintenance. Based on updated information, the indicative three-year programidentified under the proposed project would be reviewed using the managementsystem and the system extended to cover all of the primary and secondary netvork.This would result in greater reductions in transport costs over the road networkthan would be achieved with maintenance programs established on a more ad hocbasis.

F. Freih-t Market Liberalization

4.07 It is expected that a gradual liberalization of the road freighttransport market will result in improved efficiency and a substantial saving inroad transport costs. The National Transport Master Plan Study has analyzed apossible scenario which provides for a progressive increase in gross vehicleweights, mainly through easier entry conditions into the road transport market.It is estimated that this scenario could result in annual savings of about 5%of total road freight transport costs, equivalent to about US$20 million. Othermeasures, such as emphasizing ONT s role as a forwarding agent while reducingits regulatory role should brîng further saving3 but these are difficult toquantify.

G. rroJect Risk

4.08 In order for the effectiveness of road maintenance operations to beincreased as m.ch as possible, early recruitment of assistance to DRCR is ofgreat importance. In view of the high priority given by the Government to thepavement strengthening and maintenance program, the institutional objective ofdeveloping DRCR's capacity to fulfill its role with regard to technical qualitycontrol of roadwork and road maintenance should be fully attainable. Once fullystaffed and functioning, the maintenance planning and monitoring units wouldserve to assure continuing, long-term efforts to fully attain project goals.Secondly, with the recent creation of the Road Fund, whose operation would beclosely monitored under the project, DRCR is less likely to suffer severe

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budgetary shortages for the road maintenance program bs in the past. Moreover,the annual reviews of the road investment and maintenance program under theproposed project and under the SAL should mitigate possible shortages in localfunds.

4.09 Benefits expected from increased road transport liberalization andimproved road user charges design will accrue only in relation with MOT'scommitmen¶: to implement the Action Plan. The careful design of this Action Plan,the strengthening of MO's planning and management capabilities under theproject, and the annual reviews of MOT expenditures under the proposed projectand under the SAL, should reduce the risk of discontinuity in MOT's comiaitment.

V. RECOMMENDATIONS

5.01 During lonn negotiations, the Government confirmed the following:

(a) the project cost estimates (para. 3.15);

(b) the outline terms of reference for the consultant services (para.3.18); and

(c) the implementation schedule (para. 3.18).

5.02 During loan negotiations, Government agreement was obtained on thefollowing:

(a) the project objectives and description (paras. 3.02, 3.03);

(b) Government will carry out the adjustment and institutional reformcomponent of the Project in accordance with an implementationprogram acceptable to the Bank (paras. 3.07 - 3.11);

<c) Government will furnish its proposed annual road investment planto the Bank by September 30 of each year and thereafter finalizeit, taking into account the Bank's comments and take measures toensure its prompt implementation (para. 3.20);

(d) DRCR will, by September 30 of each year, submit the technical andeconomic evaluation of rehabilitation activities proposed for thefollowing year for the Bank's review according to the samemethodology, criteria, and procedures as applied for the first yearprogram (para. 3.18);

(e) procurement arrangements (para. 3.28);

(f) Government may establish a Special Account of US$5,000,000 on termsacceptable to the Bank (para. 3.31);

(g) independent auditors will prepare annual audit reports coveringproject related activ'ties with separate reports for the Special

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Account and the Statements of Expenditure. The reports will besubmitted to the Bank not later than six months after the end ofthe fiscal year (para. 3.32).

5.03 Subject to the above conditions, the project is suitable for a Bank loanof US$79 million equivalent to the Kingdom of Morocco for a 20-year termincluding a five-year grace period.

'I

- 35 -ANNEX Page 1 of 2

KINGDON OF MOROCCO

STAFF APPRAISAL REPORT

HIGHWAY SECTOR PROJECT

RELATED DOCUMENTS AND DATA AVAILABLE IN THE PROJECT FILE

A. General Reports and Studies on the Sector

1. Transport Sector Public Investment Review, World Bank, December 1987.2. Provincial Roads Study (Etudes des Routes Secondaires et Tertiaires),

SETEC-CID, 1988.3. New Road Network Classification, draft Government decree, 1985.4. Road Maintenance Study (Amélioration de l'Entretien Routier), BCEOM, 1984.5. Road Traffic Surveys (Comptage routier: (i) Réseau de base, (ii) Réseau

secondaire et (iii) Rapport annuel), DRCR, 1987 data.6. Road Taxation Study (Etuide de la Fiscalité Routière), DRCR, 1988.7. Road User Charges Study, "Quick Methodology", World Bank, December 1987.8. Road Safety Report (Recueil d'Accidents de la Circulation Routière), DRCR,

1987.9. Road Freight Market Study (Etude du Marché des Transports de Marchandises),

Team-Louis Berger, 1987.10. Establishment of the Road Fund: (i) Technical Note, DRCR, 1988; and (ii)

Loi de Finances 1988.

B. General Reports and Studies relating to the Project

11. Road Rehabilitation and Maintenance Feasibility Study (Identification etEvaluation d'un Programme de Travaux Routier), DRCR, January 1989.

12. Bridge Reconstruction Feasibility Study (Composante Ouvrage d'Art,Evaluation économique), DRCR, March 1989.

13. National Center for Vehicle Inspection and Testing (CNEHA) FeasibilityStudy, LPEE, October/November 1985.

14. Note on Road Safety, MOT/DEPCT, February 1989.15. TOR Maintenance Strategies Study, DRCR, March 1989.16. TOR Narrow Roads Widening Study, DRCR, March 1989.17. TOR Rural Roads Transport Study, MOT/DEPCT/IBRD, March 1989.18. TOR Pavement Management System, DRCR/CNER, February 1989.19. Provincial Roads Study (op.cit.), Phase 2, Volume 2.5, Road Works Cost

Estimates (Etude de Composition des Coûts des Travaux Routiers), SETEC-CID,November 1988.

20. Training Institutions in Morocco (Environnement formatif existant), IBRD,March 1989.

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ANNEX 1Page 2 of 2

21. Shoulder Repair Requirements (Programme Accotements), DRCR, March/1989.

22. Pavement Marking Requirements (Programme de Signalisation horizontale),DRCR, March 1989.

23. Workshop Requirements (Parcs régionaux), DRCR, March 1989.24. Road Maintenance Vehicle Requirements (Véhicules de Transport du Personnel

d'Entretien Routier), DRCR, March 1989.25. Traffic Equipment Requirements (Acquisition de Matériel de Comptage),

DRCR, March 1989.26. Pavement Strengthening Design (Manuel de Renforcement des Chaussées

Revêtues), LPEE-CERIT, February 1988.27. Draft report on construction industry efficiency improvements (Projet de

relance du secteur BTP), MPW, June 1989.

- 37 -ANNEX 2Page 1 of 3

KINGDON OF MOROCCO

STAFF APPRAISAL REPORT

HIGHWAY SECTOR PROJECT

ROAD MAINTENANCE: STANDARDS AND COSTS

1. Maintenance standards define the nature, quantity and frequency ofvorks needed to keep the network in satisfactory and stable condition. Theworks are broken down into routine maintenance, patching, pavement marking,resurfacing, ard strengthening. Standards for these activities have beenderived from the 1984 Road Maintenance Study, financed under the Third HighwayProject and adjusted from time to time. Further refinements are expected fromproposed improvements to the existing pavement management system andelaboration of maintenance strategies.

2. Routine maintenance is generally carried out by force account andinclude ditch and structure clearing, grading of shoulders, rood signaling andsnow clearing. The amount of work to be carried out is independent from thetraffic level, and the unit cost per km is as follows (1984 costs updated tomid-1986 level):

Routine maintenance: Materials, equipment 4,350 DR/kmLabor 2,590 DH/kmTotal 6,940 DH/km

3. Patching is carried out by force account on the basis of 1.5% ofthe pavement area for roads in poor condition. For roads in fair and goodconditions, the amounts needed are respectively one half and one fourth ofthat needed for roads in poor condition. Unit costs per meter of road widthare:

Patching: Bitumen 135 DH/km per meter wideAggregates 45 DB/km per meter wideCrew 285 DH/km per meter wideTotal (for road in poor condition) 465 DH/km per meter wide

4. Pavement marking is generally contracted out, with the followingstandards:

Traffic < 750 750 - 3,000 > 3,000

Marking none centerline centerline + sides10 cm 15 cm

Frequency -- 6 years 4 years

- 38 -AU 2-38- ~~~ANNEX 2

Page 2 of 3

5. Pavement resurfacing and strengthening are carried out by contract.For trafics below 3,000 vpd, the usual resurfacing technique is resealing(with single or double surface treatment), %hile for higher traffics premixoverlays are used. Pavement strengthening is designed for a 15-year periodusing a methodology which provides for about 20 different design structures.Each structure corresponds to a combination of traffic level, type of soil,and climat*. A "catalogue of design structures" la used together with a"manual for pavement strengthening" (Project files, Annex 1). The cost ofeach structure is computed using a general formula:

C = a W + b

where: C = cost in DO/km per meter of pavement widtha, b = structure parametersW = pavement width

6. The table herebelow summarizes maintenance standards and costs on thefollowing assumptions:

Traffic (vpd) < 750 750 - 1,500 1,500 - 3,000 > 3,000

Pavement width (m) 4 6 6 7Shoulder width (m) 2 x 2 2 x 2 2 x 2 2 x 2.5

- 39 - ANNEX 2Page 3 of 3

Road Maintenaee Standards and Costs

A. Routine Patching and Marklng

Financial Costs (KDh/km)

MarkingRoutine Frequency

Traffic Maintenance Patching Marking (yeara)

< 750 6.8 0.9 0.0 -

750 1,500 6.8 1.3 4.4 61,500 - 3,000 6.8 1.8 4.4 6

> 3,û00 6.8 2.3 17.7 4

Economic Costs (KDh/km)

MarkingRoutine Frequency

Traffic Maintenance Patching Marking (years)

< 750 5.9 0.8 0.0 -

750 - 1,500 5.9 1.1 3.8 61,500 - 3,000 5.9 1.5 3.8 6

> 3.000 5.9 1.9 15.4 4

B. Resurfacing

Frequency Cost KDh/km --Traffic (years) Financial Economic

< 750 10 63.5 44.8750 - 1,500 10 68.2 47.3

1,500 - 3,000 8 117.0 80.7> 3,000 7 215.6 138.7

E`C. S

Frequency - Cost KDh/km --Traffic (years) Financial Economic

< 150 15 193.9 136.0750 - 1,500 15 358.8 254.j

1,500 - 3,000 15 591.3 389.4> 3,000 15 944.9 614.6

- 40 -

Page 1 of 2

KINGDOM OF MOROCCO

STAFF APPRAISAL REPORT

HIGHWAY SECTOR PROJECT

ECONOMIC EVALUATION

I. Introduction

1. This annex provides details of the approach used lu the preparation andeconomic evaluation of the pavement strengthening and periodic maintenanceprograms. Preparation was undertaken by DRCR working in close collaborationwith Bank missions. Background data and working papers are available in theProject File and are listed in Annex 1.

2. Road rehabilitation programs are prepared by DRCR on the basis of detailedproposals initiated by the Provincial Directorates (DPTP). Technical studiesare generally prepared by consultants or by regional design staff assisted bythe CNER. DRCR now wishes to strengthen its capabilities to plan and preparethese programs using a simple pavement management system. The basic methodologyhas been used in the evaluation of the project and would be incorporated intothe planning system. Details of the methodology are given in Project File.

II. Nethodology

3. Pavement strengthening and overlays are designed for a 15-year periodusing a methodology which provides for 20 different design structures. Eachstructure corresponds to a combination of traffic level, pavement structure,type of soil and climate. The pavement design used is described in Annex 2.

4. User benefits from pavement strengthening derive from the differencebetween vehicle operating costs on a poor road surface throughout the 15-yearevaluation period (without project scenario) and on an initially excellentsurface progressively returning to a poor surface condition during the pavementlife (vith project scenario). It is assumed that new overlays provide a surfaceroughness equivalent to about 2,000 mm/km. The road surface, with or withoutthe overlay, would gradually deteriorate roughly in proportion to cumulatedtraffic. A maximum level of deterioation is assumed corresponding to roughnessmeasurement of 6,000 mm/km. For periodic maintenance, no overall improvementis assumed ln surface roughness following resealing of the surface but pavementdeterioration is temporarily halted for a period of five years.

5. Pavement deterioration has been measured using a Bump Integrator on some1,300 km of roads proposed for pavement strengthening and some 430 km of roadsproposed for periodic maintenance. This represents all of the 61 sections inthe long list of roads proposed for pavement strengthering and about 271 km ofthe 1,600 km in the long list of sections proposed f r periodic maintenance.

- 41 -

Page 2 of 2

A visual appreciation of surface condition was made for the remainder of the roadsections and these were translated into roughness measurements. The scale usedis:

Good 2,000 mm/kmFair 3,000 mm/kmPoor 4,500 mm/km

6. Pavement deterioration is reflected in higher vehicle operating costs.The latter have been established using the roughness/vehicle operating costrelationship of the Road Deterioration and Maintenance Sub-Model of the Bank'sHighway Design and Maintenance Standards Hodel, Version 3 (HDM 3). Six standardvehicle types were used and vehicle operating cost data were established for arange of roughness from 2,000 to 6,000 mm/km. The basic data and the vehicleoperating cost estimates are shown in Table 1 in June 1988 prices.

7. To maintain roads in serviceable condition, maintenance effort and costincrease in line with the progressive deterioration of the road pavement.Estimates have been made of savings in maintenance expenditures which wouldfollow from the proposed pavement strengthening or resealing operations.Maintenance costs are broken down intn routine maintenance, such a ditch andstructure clearing and grading of shoulders, and patching operations whichinclude the costs of bitumen, aggregates and 'abor.

III. Resu1 ,

8. Table 2 shows the results of the application of the above methodology tosections proposed for the three-year program of pavement strengthening and Table3 to sections proposed for the first year resealing program. The methodology,including the selection of an appropriate pavement design structure, is appliedto each kilometer of road and the results cumulated for a given road section.0f the 1,300 km of road sections proposed for pavement strengthening, 1,067/kmwere selected for the three-year program. The ERs on this priority program rangefrom 20% to over 100% with an overall average of about 50%. Of the 1,600/kmproposed for resealing operations, 1,320/km vere retained for the three-yearprogram with ERs ranging from 24% to 90% and an overall average of about 30%.A high priority first year program has been selected and design and biddingdocuments prepared for early tendering. The remaining roads would be re-examinedbased on updated inventory and traffic information during project implementation.Future planning will a'so benefit from proposed refinements to the existingpavement management system.

KINGOM OF MOROCCO

STAFF APPRAISAL REPORT

HIGHWAY SECTOR PROJECT

Vehicle Characteristies and Oaeratina Costs(Dirhams - June 1988 prices)

Passenger Light Neavy SemiCar Van Truck Truck Irailers Bus

FINANCIAL COSTS

New Vehicle (cost/vehicle) 100.556.00 135S509.00 297,624.00 571,574.00 848,378.00 780,094.00Tires (cost/tire) 470.00 630.00 1.380.00 4.130.00 3,510.00 3 560.00Maint. Labor (cost/labor-H) 41.60 37.10 37.10 37.10 37.10 37.10Crew Time (cost/crew-H) 14.00 52.59 40.54 50.02 68.06 80.44Passenger Oelay (cost/pass-M) .00 .00 .00 .00 .00 .00Cargo Delay (cost/veh-H) .00 .00 .00 .00 .00 .00Annual Overhead Costs (total) 2,101.00 3,785.00 9,925.00 47,537.00 105,562.00 143,305.00

Fuel & Lubricants (cost/liter) Petrol = 5.98 Diesel Fuel 3.45 Engine 011 = 16.00

ECONOI COSTS

New Vehicle (cost/vehicle) 68.877.00 94.260.00 219.340.00 415,180.00 615,410.00 567.500.00Tires (cost/tire) 365.00 485.00 1.060.00 31195.00 2,710.00 2.750.00Maint. Labor (cost/labor-K) 41.60 37.10 37.10 37.10 * 37.10 37.10Crew Time (cost/crew-H) 14.00 1.85 40.00 49.38 67.52 79.82Passenger Delay (cost/pass-H> .00 .00 .00 .00 .00 .00Cargo Delay (cost/veh-H) .00 .00 .00 .00 .00 .00Annual Overhead Costs (total) 1,603.00 2.520.00 7.835.00 27,202.00 51.876.00 f3,780.00Ariual Interest Rate M%) 15.00 15.00 15.00 15.00 15.00 15.00

Fuel & Lubricants (cost/liter) Petrol = 1.63 Diesel Fuel 1.46 Engine Oil 6.80

VEHICLE UTILIZATION

No. of Passengers/Vehicle .0 .0 .0 .0 .0 .0Annual Hours Oriven 150. 270. 555. 780. 1,290. 1,140.Annual Kilometers Oriven 12,000. 20,000. 35.000. 50,000. 80,000. 75,000.Vehicle Service Life (Years) 10. 10. 11. 11. 11. 10.

VEHICLE OPERATING COSTS (0H/km net of tax)

Average LIRoughness Flat terrain; Curvature 30n/km - Rise and Fall 5 mlkm Vehiclemm/km2,000 1.61 2.10 2.56 3.95 4.44 4.48 2.283,000 1.67 2.20 2.73 4.15 4.66 4.58 2.394.000 1.76 2.33 2.91 4.39 5.01 4.71 2.535,000 1.87 2.51 3.13 4.68 5.49 4.90 2.706,000 2.01 2.74 3.38 5.04 6.06 5.15 2.92 ..3

/1 Average traffic composition (%) 49.5 12.1 23.6 7.3 4.5 3.0 100.0

- 43 - Annex 3Table 2

KINGDOM OF MOROCCO

STAFF APPRAISAI REPORT

HIGHWAY SECTOR PROJECT

Economic Evaluation: Pavement Strenothenina

Tentative Three-Year Prooram (1990-921

Road No. Province Lenath (km) Traffic (vpd) /l Roughness (mm/km) /l Cost lDH million) KR

S 312 Taza 13.0 1.500 4,SOO 3.9 > 100P 32 Tarou$Snnt 80.0 1,200 4,500 23.9 > 100P 26 Fes 19.0 1,300 4.500 6.1 > 100P 32 Ouarzaza';e 32.0 1,200 4,500 8.1 > 100P 26 Sidi Kacem 57.0 1,300 4.500 14.5 > 100P 30 Tiznit 45.0 1.150 4.500 14.7 > 100P 26 Fes 44.0 1.300 4.500 14.1 > 100P 4 Meknes 12.4 1,000 4,500 4.6 > 100P 21 Errachidia 20.0 1,050 4,500 6.8 > 100P 22 Rabat 6.0 1.000 4,500 2.1 > 100P 6 Meknes 6.0 3.500 4.000 5.3 91P 4 Kenitra 12.6 1.900 4,500 7.0 89P 21 Errachidia 30.0 760 4,500 10.3 86P 29 Fes 14.0 1,300 4.500 3.6 84P 3 Kenitra 8.0 4.300 3,000 6.8 74P 6 Meknes 6.5 3,500 3.500 5.8 68P 9 Marrakech '5.0 1.150 3.500 S.1 68P 19 Ouida 69.0 650 3,000 19.9 67P 21 Khenifra 33.0 1.000 2,800 9.8 66P 7 El Kelaa 28.0 3,200 2,500 12.2 65P 18 Oujda 7.7 2,950 3.500 6.2 63P 26 Taounate 5.0 500 4,500 1.9 58T1302 El Jadida 10.9 450 4,500 3.5 58P 22 Khemisset 58.0 1,000 4.000 28.5 53P 4 Meknes 25.7 1,000 4,000 9.7 53S 302 Taounate 5.0 1,550 3,500 2.5 49p 10 Essaouira 18.0 1,000 3,500 6.2 43P 28 Chefchaouen 12.0 700 3,500 3.4 40P 3 Meknes 28.5 2.000 3,000 18.7 39P 24 Fes 14.2 1,650 3,000 5.5 39P 28 Sidi Kacem 18.0 900 3,500 5.4 37P 26 Taounate 18.4 500 4.000 6.7 36P 6 Sidi Kacem 8.0 2,600 3,000 6.5 31P 28 Sidi Kacem 6.0 700 3,000 1.6 31P 28 Sidi Kacem 17.0 700 3.000 5.9 29P 28 Tetouan 14.5 5,700 2,500 20.4 27P 40 Taroudannt 9.0 1.700 2,500 3.1 26P 1 Taza 14.0 3.800 2,500 17.5 25P 7 El Kelaa 8.6 2,800 2,500 3.8 25P 34 Meknes 9.0 2,000 2.500 5.9 24P 21 Tfrane 13.0 1,100 3.000 6.8 24P 20 Fes 11.0 2,300 3,000 7.8 24P 39 Nadur 11.0 3,300 2,500 10.7 23P 1 Oujda 24.0 1,200 3,500 8.4 23P 32 Ouarzazate 86.0 1,200 4,000 21,9 22P 21 Meknes 2 O5 2.QQ 2,500 6.8 22P 7 El Kelaa 14.0 2,800 2.500 10.6 21P 40 Agadir 38.0 1,700 2,500 13.0 20P 1 Ouida 24.5 1.100 3.000 8.6 20

Total 1.067.4 435.7 50

1l Trafftc and roughness data represent average values. Details for each road section broken down bykilometer are shown ln Project File Item No. 11.

- 44 - Annex 3Table 3

KINGOOM OF MOROCCO

STAFF APPRAISAL REPORT

HIGHWAY SECTOR PROJECT

Economic Evaluation: Periodlc Maintenance (Resealina)

First Year Proaram: 1990

Road No. Province Length (km) Traffic <vpdl L/ Rouchness <mm/km) /l Cost (OH million) ER

P 13 Khouribga 6.6 850 3.000 3.8 68P 3 Sidi Kacem 17.4 2.500 3.000 5.3 46P 1 Casablanca 9.1 1,600 3.000 5.2 44P 3 Kenitra 7.0 2,500 3.000 2.3 44P 3 Meknes 1.0 2,000 3.000 0.3 38S 108 Settat 0.7 1.300 3.000 0.2 37S 108 Settat 3.4 1,300 3.000 0.8 37S 108 Settat 15.7 1.300 3.000 3.6 37P 3 Meknes 2.9 2,000 3.000 1.0 3SP 31 Marrakech 24.0 1,450 4.000 7.3 33P 31 Marrakech 22.0 1,450 3,003 6.7 31P 31 Marrakech 9.0 1,450 3,000 2.7 31T1807 Azilal 19.1 500 4,500 2.7 28P 13 Beni Mellal 12.7 1.200 4.000 3.9 28P 13 Khourigba 7.0 2.200 2.500 2.1 27S 103 Settat 31.0 1.000 3,000 8.1 27T1901 Beni Mellal 5.4 500 3,500 0.9 24P 19 Oujda 14.3 6so 3.500 4.9 24

Total 208.3 61.8 30

La trafflc and roughness data represent average values. Details for each road section broken down bykilometer are shown in Project File Item No. 11.

- 45 - E4

Page 1 of 3

KINGDOM OF MOROCCO

STAFF APPRAISAL REPORT

HIGUVAY SECTOR PROJECT

Analysis of Road User Charges Y

A. Introduction

1. The Ministry of Equipment undertook vith Bank and consultant assistancea study on road user charges during 1988. The study was used as part of thejustif4cation for establishing a Road Fund. The Road Fund was approved byParliament in December 1988 and revenue will accrue to this fund from a new axletax, from part of the existing tax on fuel and from vehicle registration fees.

B. Çurrent Tax Structure

2. In this analysis road user charges relate to any indirect tax or chargelevied on the purchase and operation of motor vehicles. (Taxes aimed atgenerating general revenue as well as specific road use fees are included).These taxes can be divided into two broad groups, namely (a)/taxes on vehicleownership such as registration, licence fees, custom duties and sales tax; and(b)/taxes on use such as fuel taxes and import duties and sales taxes on spareparts and tires.

3. The structure of taxes on road users is summarized in Table 1... As inmany otlier countries, road user taxation in Morocco has been guided by theprimary objective of raising general revenue for the Government. Incomedistribution is reflected in the high level of taxes on private cars andgasoline. In addition, efficiency objectives vere at the basis of theintroduction of an axle tax which favors the use of larger multiple-axle trucksthat lover the weight per axle and thus are less damaging to roads.

4. Some of the anomalies in the present tax structure are outlined belov:

(a) A number of licence fees ("taxes de stationnement, de coordinationet de tonnage") are applied only to private and ovn-accountoperators, the most important one being the "taxe de coordination"which provides revenue to the Office National

1 The methodology used here is the Road User Charges "Ouick Methodology"prepared by Frida Johansen, January 12, 1988. (World Bank internalmemorandum).

- 46 -

Page 2 of 3

des Transports, ONT. This bias against private and own-account operators iscounteracted to a certain extent by a slightly more intensive use of thesevehicles compared to the ONT operators, and by the commission which is paid toONT by its members. With the new axle tax, the various licence fees related togross vehicle weight could be modified and the tax structure simplified.

(b) Customs and import duties are high, particularly for assembledvehicles. When combined with VAT, the average tax on alocally-assembled vehicle represents over half the vehicle price,and about 40% of the price for imported assembleu vehicles. Customsduties should be reduced on both assembled and knocked down unitsin order to encourage renewal of the vehicle fleet.

(c) Vehicle registration fees are currently lower for vehicles abovefive years old. This presumably reflects a perception that oldervehicles are used less intensively and therefore cause less roaddamage. However, there is no evidence that this is the case, andit also delays vehicle renewal.'

(d) There is a substantial difference in the price of gasoline anddiesel fuel which has caused distortions in development of thevehicle fleet (Table 1.2). Currently over half the passenger carfleet is composed of diesel-powered vehicles. Moreover, the lowprice of diesel also encourages the use of older vehicles and,therefore, inhibits reneral of the vehicle fleet. The tax marginbetween the two fuels could be gradually reduced and, in themeantime, substantially higher registration fees applied todiesel-powered passenger cars and vans to equate the charges onpassenger vehicles independently of the fuel they use.

C. Cost Recoverv from Users

5. Road use costs have been estimated based on an "optimal" road maintenancestrategy taking into account road conditions, traffic volumes and growth andthe unit costs of works. Together with capacity investments estimated at DH 700million annually, the total annual costs are estimated at about DH 1.7 billion(Table 2). Planned expenditures on the road network in the next few years areto be limited to maintenance activities and are not expected to exceed DH 1billion annually.

6. Road costs have been broken down into three groups: (a) costs relatedto road usage and which are roughly proportional to the number ofv'.cle-kilometers; they include routine maintenance and network extensions;(b) costs which reflect space usage and congestion such as capacity investmentslike widening and are related to equivalent passenger car units; and (c) costs

Since preparation of the study, annual vehicle registration fees havebeen amended and are now the same regardless of vehicle age.

- 47 -

ANNEXX 4Page 3 of 3

related to heavy vehicle aggressivity on roads wh4ich are allocated on the basisof the number of equivalent standard axles and include periodic resealing andstrengthening operations.

7. Table 2.1 shows the estimates of traffic on the Moroccan road networkmeasured according to vehicle-kilometers, equivalent standard axles andequivalent passenger car units. Table 2.2 shows the allocation of road usecosts according to these various measures of traffic, thereby deriving a costper unit of traffic (vehicle-kilometer equivalent standard axle-kilometer,equivalent passenger car-kilometer). Vehicle operating costs have been derivedusing the vehicle operating cost sub-model of the Highway Design and MaintenanceStandards Model - HDM 3. Table 2.3 shows the incidence of taxes and costs andcompares road use charges and road use costs per vehicle-kilometer.

8. The results of the analysis show that road user charges exceed roadcosts for all vehicle types, ranging from about eightfold for buses to abouttwofald for semi-trailers. Overall, road user revenues are about eight timesthe "normative or optimal" road use costs in Morocco. The share of taxes invehicle operating costs ranges from about 28% to 38% and is the highest for ownaccount truck operators. On a ton-kilometer basis, the incidence of taxdecreases with truck size which therefore encourages the use of larger trucks.

D. Road Fund

9. In January 1989, several taxes were specifically earmarked for a RoadFund in order to ensure adequate expenditures for road maintenance. These taxesinclude part of the tax on fuel formerly known as the "taxe intérieure sur laconsommation", a new axle tax and vehicle registration fees. The Road Fund isexpected to amount to about DA 400 million annually equivalent to about 40% ofplanned road maintenance expenditures. The fund would cover all needs forroutine maintenance and about 65% of periodic resealing operations. The officialdocuments related to the Road Fund are in the Project File.

E. Conclusions

10. Road users are heavily taxed and no further tax ir.creases are warranted.However, the tax structure is relatively complex and some simplification couldbe introduced that would also correct the anomalies noted in Section B. Thereduction of custom duties is already being provided for under the SAL. It isrecommended that the price differential between gasoline and diesel fuel beanalyzed in more detail as part of the Project Action Plan (Annex 5).

- 48 - Annex 4Table 1

KINGCON Ci MOROCCO Fage 1

STAFF APPRAISAL REPORT

HIGHWAY SECTOR PROJECT

Table 1.l Structure of Princloal Roid User Charces in Morocco 1988

A. Imoort Out1es. Sales and other Tgxes

Import OutielKnocked down unit3

Customs/împort fiscal dutles 22.5% Migh duties on assembled vehicles protect localAssembled un1ts vehicle lndustry. Including VAT total duties

Cars 57.51 and taxes represent about 401 of price ofVans. trucks. buses 47.S% Imported vehicles and 55% of price of locally

Spare parts 22.52 assembled veh1cles. Custom duties should beCrude oil 9.0S reduced to encourage renewal of vehîcle fleet.

Sales Ta#VAT - vans. trucks. cars < 1800 cc 19% Normal VAT rate is 191. Higher rate of 30X

- cars > 1800 cc 30S appl1es to luxury goods. VAT rate of 7' also- spare parts 19% applled to fuel wholesale prices.- tires 191

Road Fund Fuel Tax (former TIC)Gasoline - super 47 OH/Hl See Table 1.2 A. Fuel taxes constitute mostGasoline - regular 47 OH/Ml important taxes on use. Only stamp duty andDiesel 16.4 OH/Hl VAT are ad valorem. Former TIC (taxe interieu

re sur la consommation) is now allocated toStamo O.tv Fuel Tax Road Fund and accounts for about half of total

Gasoline - super 8.15 OH/Hl official taxation on gasoline and 35S onGasollne regular 7.88 OH/Hl diesel. Oue to current low world price of oilDiesel 3.84 OH/Hl actual fiscal revenues are significantly higher

(see Table 1.2 B).VAT on Fuel

Gasoline - super 38.58 OH/Hl Gap between diesel and gasoline price is tooGasoline - regular 37.18 OH/Hl great and should be reduced to encourage moreOiesel 22.05 OH/Hl balanced fleet development and use of public

transport.

B. Vehicle Reaistration Fees

Provisional Registration Fee: 150 OM/vehizle.

Recîstration Fee: There is a single registration fee which depends on vehicle size and age andnow accrues to the Road Fund:

Vehic.e Reoistration Fees (OH)

Vehicles up to 3 tgns Gross Weîaht(typical fees from range)

Horse Power < SXears > L earS2 700 4507 1150 75015 3750 225020 5000 3000

Vehlcles over 3 tons ÇGross Weiglht

50 OH/Unit of Morse Power.

Axle Tax: A new axle tax was introduced in January 1989 revenue from which accrues to the RoadFund. The tax was established in relation to the number of equivalent standard axles for eachtype of truck. and. therefore. reflects the relative damage caused by each type (see Table 2.1).

Axle Tax

Gross Vehicle Weight (kg) Tax ODH)

3.000 S.000 6505.000 9.000 1.0509.000 - 1S.000 3,60015.000 - 20.000 6.10020.000 33.000 9.400

' 33.000 10.700

Annual Road Tax t/Applies only to passenger cars and is levied according to lorsepower, age andfuel type:1, Taxes have since been modified and are now the same regardless of vehicle age.

- 49 Table 1Page 2

Horse PowerFuil L.8 11-14 L1219 L 1

< 5 years gasoline 300 500 1200 1750 2500die:-Il 600 1000 2400 3500 5000

> S years gasoline 150 250 600 875 1250diesel 300 500 1200 1750 2500

Operating L:cense Fee: This fee is paid by truckers under ONT. own-account operators and buscompanies. The amount varies according to the number and capacity of vehicles owned. The averagerate is as follows:

Heavy Trucks 800 OH/yearSemi-Trailer 1400 OH/yearBuses 1800 DH/year

"Taxe de Stationnement": This is essentially a tax which reflects congestion ln urban areas andis applied only to own account and private truck operators and bus companies. The average rate isas follows:

Light Truck 700 OH/yearHeavy Truck 1100 OH/yearSemi-Traller 1900 OH/yearBuses 2700 OH/year

"Taxe de Coordination": This tax is pald only by own-account and private truck operators. Therevenue accrues to ONT and is then transferred to the Treasury. The rate is based on grossvehicle weight and ranges from OH 481 for vehicles of 2 to 3 tons gross weight up to OH 9450 forvehicles above 34 tons gross weight.

-Taxe de Tonnage": This tax ts paid only by own-accaunt truck operators, ONT trucks and privatetrucks less than eight tons gross weight be1ng exempt. The tax is assessed according to grossvehicle weight at the rate of OH 20 per ton.

Insoection Fea: 140 OH per vehicle. Applies annually to all vehicles from new except buses whichare inspected every six months and cars which are inspected only after 10 years.

Table 1.2 Fuel Price Structure - Morocco June 1988 (ON/Hl)

A. official Price Structure

Comany Stabilizat10n Wholesale RetailRecover Road Fund StamDuty Ou D istriLutln FudM Pr1ce VAT Mark U Price

Super gasoline 404.92 47.00 14.30 18.70 66.23 551.15 38.58 15.27 605.0

Regular gasoline 367.61 47.00 15.46 17.70 85.29 531.12 37.18 14.70 583.0

Diesel 278.11 16.40 7.83 12.60 - 314.94 22.05 8.01 345.0

8. Estimated Tax Yield based on Economic Cost cf Fuel

CIF Economic Other Additional RetailCos .l Distribution Mark un Cost Road Fund Taxes /Z Tax Marain Price

Super gasoline 136.90 18.70 15.27 170.87 47.00 52.88 334.25 605.0

Regular gasoline 125.40 17.70 14.70 157.80 47.00 52.64 325.56 583.0 1

Diesel 128.50 12.60 8.01 149.11 16.40 29.88 149.10 345.0

/1 Based on following FOB prices Rotterdam (per ton)

super gasoline $183regular gasoline $168diesel $158

a VAT and stamp duty

wQ a,:

ID

Annex 4- 51 - Table 2

Page 1

KINGOOM 0F MOROCCO

STAFF APPRAISAL REPORT

HIGHWAY SECTOR PROJECT

Table 2.1 Traffic Estimates

TXpe of X of million equiv. axles eauiv. car unitsvehicle veh-km veh-km/yr Der veh. total tM) per veh £1 total (M)

car 49 3.833.8 0 0 1 3.833.8van 13 1,017.1 o o 1 1,017.1light truck 24 1.877.8 0.03 56 1.S 2,816.6heavy truck 7 547.7 0.27 148 2 1.905.4semi-trailer 4 313.0 0.57 178 3 938.9bus 3 234.7 0.062 15 2 469.4

Total 100 7,824.0 397 10.171.2

l coefficients reflect contribution of vehicles to congestion.

Table 2.2 Allocation of Costs

TIXe of work. /2 Allocation according to: Allocation according to:equlv. axles equ1v. cars veh-km equiv. axles equiv. cars veh-km

_ financial costs DHM/yr) (economic costs DHM/yrl

routine maintenance 236 205resealing 237 164strengthening 541 379adjustments 18 13widening 320 234extension 360 270

Total 778 320 614 542 234 488

equivalent vehicles 397 10,171 7.824 397 10.171 7.824(table 2.1)

OH/equtv. axle-km 1,959 1.365DH/equlv. car-km 0.031 0.023DH/veh-km 0.078 0.062

£Z Annual costs der1ved from averages over given per1ods.

Table 2- 52 - Page 2

Table 2.3 Incidence of Costs and Taxes

A. Costs ner veh-km COH/veh-km) L1

Tvye of vehicle Operating Costs (VOC) Ragd Use Costs (RUC) Total VOC + RUCInctax taxes Net of tax Inctax Net of tax taxes Inctax Net of tax(1) (2) (3) (4) (5) (6) (7) (8)

Car 2.56 0.95 1.61 0.110 0.085 0.025 2.670 1.695Van 2.99 0.89 2.10 0.110 0.085 0.025 3.100 2.185Light Truck-Pr1vate 3.42 0.96 2.46 0.184 0.138 0.047 3.604 2.598Heavy Truck-Own Acct. 5.55 2.11 3.44 0.670 0.477 0.193 6.220 3.633Semi-Trailer-Own Acct. 7.02 2.66 4.36 1.289 0.909 0.380 8.309 4.740Heavy Truck-ONT 5.93 1.99 3.94 0.670 0.477 0.193 6.600 4.163Semi-Trailer-ONT 7.66 2.61 5.05 1.289 0.909 0.380 8.949 5.959Bus 6.52 2.16 4.36 0.263 0.193 0.070 6.783 4.553

É Data for commercial vehicles differ slightly from vehicle operating costs used in economtc analysis(Annex 3. Table 1).

B. Costs per ton-km (OH/ton-km)

Maximum Capacitv Actual LoadinaCap VOC VOC + RUC Load VOC VOC + RUC

(tons) (inctax) (net of tax) (tons) (inctax) (net of tax)(9) (10) (11) (12) (13) (14)

Light Truck-Private 4.50 0.76 0.58 2.20 1.56 1.18Heavy Truck-Own Acct. 12.50 0.44 0.29 6.30 0.88 0.58Sem1-Traller-Own Acct 25.00 0.28 0.19 10.60 0.66 0.45Heavy Truck-ONT 12.50 0.47 0.33 4.70 1.26 0.89Semi-Trailer-ONT 25.00 0.31 0.24 11.40 0.67 0.52

C. Contrlbutlon to Revenue

Tax% taxes ln Ratio taxes to yleld Net Revenues DH/ton-km

VJOC RUC DHRveh-k Max. caoacitv Actual Loading(2)/(1) (2)/(4) (2)-(5) (10)-(11) (13)-(14)

Car 37 8.6 0.87 -Van 30 8.1 0.81 - -Light Truck-Pr1vate 28 5.2 0.82 0.18 0.38Heavy Truck-Own Acct. 38 3.1 1.63 0.15 0.30Sem1-Traller-Own Acct. 38 2.1 1.75 0.09 0.21Heavy Truck-ONT 34 3.0 1.51 0.14 0.37Semi-Traller-ONT 34 2.0 1.70 0.07 0.15Bus 33 8.2 1.97 - -

num .uoem e Reg

EC~~~i -_ SID X Rm.ioer .Immu iAU man~uima Dic» ?I.à

I. POLICY AD3USTNT

A. orainzat.in et Rond Pzt2lù& Transuont

1. The road freight transport market iD Morocca is entirely in the hands of the private scotor, ONT enauring only a role of an intermediary for

about 600 individuel operators or cooperati les. About 24S of the market ls accounted for by operators using the services of ONT, 361 by own-account

operations and 40X by private operators outaide of ONT (less than 8 tons gross vehicle weight). According to current legislation, private operators

are limited to own-account transport. However, these regulations are not strictly enforced.

2. The productivity of truck fleets is relativeoy aood: between 60,000 and 100,000 km per vehicle per year. The load factors for interurban

movements are alsa biab, naely around 60X for the three groups of operators. However, the average aSe of the fleet ia high, namely over ten years

for light and medium trucks, and about seven years for heavy trucks. This situation reflects in part the high cost of vohicles, the low level of

tariffs, ond low vehicle maintenance costs. A reduction in cuatoms duties is currently boing introduced under the SAL, -uhich should encourage renewal

of the fleet. Iu addition, the system of road transport licenaing which is required for ONT operators, imposes a heavy cost burden on their

cperations. A further constraint is that a large proportion of long- and medium-distance freight is handled in amall vehicles, and considerable

savings would be achieved with a move towards larger and more efficient trucks.

3. Modifications to current road transport regulations should be introduced progressively. As such, the folLowing steps will be implemented: v

Measures to be taken Timetable

(e) The National Transport Master Plan Study will be completed and a - June 30, 1990

ccopy provided to the Bank.

<b) On the basis of the above study and takins into account Bank - Detailed plan o! action to be provided to Bank by

comeents, plan of action will be prepared covering reforma in the June 30, 1991.

road transport industry. Tha plan of action vill address, inter alla,

the following pointe: - Implementation of firet stage of programbe8innin8 January' l, 1992.

- Statua of private operators (les. than 8 tons grose vehicle

weigbt) vis-à-vis for-hire transport.

- ONT's role in overall freight transport system.

- The ageins of the truck fleet.

- The role of Goverumeut in road safety matters and in vehicle

inspection (see Section II B. para. 13).

1-

B. aon" bser Taxation

4. The recontly cempleted road user charses study shows thet revenues generated by road users, excoed road use costs for aIl types of vebhicles,

the ratio varyina ftro tbree to neven times for commercial vehicles. The incidence of taxes in vehicle operatina costa varies from 28Z to 38Z, this

percentage being the highest for own-account transport. on a ton-kilometer basis, the taxes decrease with increasins truck sire. As mentioned aboye,

hi p custcme dutiea discourage renewal of the vehicle fleet but these duties are now being reduced under the SAL.

5. As in many other countries, the principal objective of road user taxation in Morocco is to generate revenue for the Treasury. Incoma

distribution conaiderations are reflected in the hi p level of taxes on private cars and on gasoline. In addition, efficiency objectives are at the

basAi of the recant introduction of an aile tex, the latter favoring the une of lar8er multiple axle trucks, which have a less damaging effect on road

pavements.

6. Details of the road user charge structure snd these incidence of taxes are 8iven in Annez 4. Althougb this structure appeara sound, it is

somouhat complez end could be improved as follo,.:

Measures to be taken Timetable

Dieael-powered vebicles have increased rapidly in Morocco, snd - Terms of Raference available for Bank review June 30, 1990.

account for a high percentage of the fleet. This probably reflectsthe major difference in the price of diesel snd gasoline fuels. - Study start-up January 1, 1991.

The impact of this price differential would be analyzed andappropriate recoamendations formulated. - Study to be available for discussion by June 30, 1992.

C. REallecation et Resmoannbilities ovar the Road Setwork

7. The present road classification is old (datin8 tram 1947), and need to be updated to better match tbe current administrative and econamie

pattern of the country. A new administrative breakdown As currently beins considered by the Government with a redistribution of responsibilities for

the network between MPW eud local authorities. This redistribution is linkcd to increased resource mobilization at the local level with the recent

introduction of a value-added tax. It As important that this network classification be officialized as socn as possible in order to ensure a more

appropriate allocation of resources for the road investment sud maintenance program.

Méasures ta be taken Timetable

A decree establishing the new road classification vas prepared - June 30, 3991ln 1985 and would ba bisued.

Il. ZSIMEsnnlnDI L NN=JS

A. EfAio, Mlmnrommt vitihi n

8. MR has proven Ats capability to plan end manage the road network in the face of adverse conditions through carefully designed

rehabilitation snd maintenance programs, snd the successful haudling of the Road Fund dossier is a testimony to that. However, it may well be that

these various prosram are only sub-optimal, in that DRCR's approach is essentially normative snd the trade-off between different policies snd

techniques (say, more or lesa patching versus thin or thick overlay, versus rehabilitation) As not optimized. DRCR now feels the need for a broader

conceptuel framework, where optimal strategies could effectively be defined.

9. la the contait of a clear statement on traininS policy in Morocco, MPM's trainins prosrams have improved si,nificantly for pre-employment as

ell as vocational training. However, this bas more benefitted the hiiher level staff than the intermediate and lover level staff, a nd about 60% of

the tecbnical/operational staff still lacks skills in highway maintenance techniques. Thus, focus on training for this category oe staff is needed to

really improve labor productivity.

10. The following measures would help DRCR meet the above objectives: pi

ol

Measures to ho taken Timetable

(a) Development of a pavement management system building on achieve- - Action already started vith French bilateral cooperation;ment. to date, to provide DRCR with an improved mana8ement tool. implementation and further refinement as part of project.

- Detailed assessment and program of action to be available byMarch 31, 1991.

(b) Tocenical assistance to strengthen CNER, the national conter for - Consultants proposals to be called by June 30, 1990.road studies and research.

(c) Study into the widening of narrow roads to provide DRCR with a - Proposals to be called by June 30, 1990.rational policy thereof, and from which would emerge a priorityprogrem that could be implemented during the nezt Plan.

Cd) Study covering the maintenance and construction of classified roads - Study to be launched by June 30, 1990.within the rural network (in relation with paras. 12 and 13(c) below.

(e) The 1984 Road Maintenance Study recomeénded the creation of a road - Training action program to be established by Docember 31,maintenance training system for operators, drivers, mochanices, and 1990 and implementation to follow thereafter.creu_n. Related training facilities are being financed under theongoing AfDB Sector Loan, and there is a need now to providetechnical assistance for operating the systam and overseas trainingfor the trainers.

E. E4elffsMen fronlta withia

11. The main departmenta of MOT dealing with transport planning and road transport regulation are the Department of Transport, Studios, Planingand Coordination (DEPCT) and the Land Transport Department (DTT). This organisation is adequate but bas to improve its efficiency through bettermanagement and introduction of new tools and techniques. MDT bas already taken an important step in this direction with the Transport Sector MasterPlan Study, one of the main aima théreof beina the strengthening of MDT' capabilities in transport planning. Further stops should be taken to putinto effect this institutional strenathening.

12. Thé transport needs of rural areas is one of the main concerna of HOT, in relation with the special emphasis accorded to the development ofthe rural sector in the 1988-92 Plan. MT attempted to organize the combined transport of passengers and goods in 1985, with mixed resulta due topoor design of vehicles and of feeder roads. There is a need to review the present organization of rural services and rural infrastructure, and toprovide the governsent with recommendations on the appropriate institutional set-up: incentives (including for the identification and developsent ofspecially adapted vehicles), financing, tarification, rural road maintenance organization and funding, etc.

13. Tue following measures would help MDT méet the above objectives:

I4easures to be taken Timetable

(a) MOT'a efficiency in road transport management end safety would be - ProposaIs for DEPCT and DTT strengthening to be called byimproved through technical assistance and overseas training for the June 30, 1990;follcwing services: (i) DEPCT, in the field of modern tools andtechniques applied to econcoic analysis and transport planning; - Proposals for CNEHP. technical assistance to be called

0Mh

Heasutes to 4e taken Timetable

(ii) DTT tu assist iL the computerization of their reoistration and by June 30, 1990 (i.e., six montha before estimated

licensin8 services, in particular improve the reliability of their completion of the center). Any changes in regulations

vebicle fleet database, snd (iii) the National Center for required to improve existing safety and enviroumental

Vobicle Inmpection aud Testina (<CNEHA) to help in starting up the regulations wilL be discussod with the Bank by

conter and in improving the automobile safety sud pollution standards. December 31, 1991.

(b) It ie erpected thet from the Transport Sector Master Plan Study will - A provision for follw-up transport studies end technica2l

fnerge a series of recommendations portaining ta sector orsanization assistance la included in the project. Timetable same as

end inveatments. Those recoamondations will enable the for point I.A.3(b) obove.Action Plan to be refined (para. I.A.3 (b) above, end may load tofollos-up studies or technical assistance <0.8.. modal transportatudy in t5he corridor Tanger-Casablanca).

Cc) To meet the Governsout's coneern rogardin8 tho development of transport - Proposals to be called by June 30, 1990 (in relation with

in rural aroas, the project would finance an inatitutional 8tudy para. 10(d) above).

involving MOT, HFW as vell as MDI. The study would aim et (i)assessing the organization of rural services; (ii) defininm the needsof rural commames in terms of transport services; and (iii) makingreccemondations on the appropriate institutional Bet-up.

C. Fanloeisut of the cmastruction inds

14. NMP' la cumitted to facilitating tho operations of the national construction industry, and bas drafted a long-range program wbose

implementatlon would spread over the noxt Quinquennial Plan. This program would call for HPW to (a) improve its knowledge of the construction _i

industry, in particular with respect to Lt- production capacities, intermediate consumptions, sub-contracting practices. employment issues, end

informal sector activities; (b) develop measures for promoting the supply of local materials efficiently and oconomically. Particular attention will

be given to quarry products hbose minins is constrained by environsental eoncerns; (c) promote the establishment of a documentation snd information

center on the construction industry, its activities end technical devolopments to be used by public administrators, developers, entrepreneurs, snd

experts in consulting; (d) expand the research snd testing activities of the Laboratoire Public d'Essais et d'Etudes snd assess the interost of

strengthening its regional offices to better meet the local needs of contractors, enterprises and consulting firms; snd (e) streasline the prosent

functions snd enhance the activity of MPW in the regulatory and standardization fields, respectively. This include botter adapting regulation and

norms to local geographic, geological, climatological and sociological situations.

15. The following measure would help MPW to meet the above objectives:

- In consultation with other Goverument departments concerned and - Timetable of studies to be established by June 30. 1990.

with the construction industry at large, launch a series ofstudies designed to improve the efficiency of the constructionsector.

VI, OQ x

o ,nNi

- 57 -

8]1PI OF Table A

STAFF APBAISAL ENET

DIGUf oER PAOE

Table A: Hiniat.r of Public Norks * Pluriaimual Eruenditure and Ftzmxcia Prosr(in current B million)

Actual --- Proaram 1990-92 --- --- Total 1990-92 --1988 l/ 1989 1990 1991 1992 in MDH in MUSS in S

A. EM2enditures

New construction. 373.8 345.0 272.3 320.0 370.0 962.3 116.0 22.0Sof whichProvincitl roads 200.5 252.0 179.8 242.0 266.0 687.8 82.9Other primary roads 173.3 93.0 92.5 78.0 104.0 274.5 33.1

Rehabilitation. 416.5 498.6 567.4 792.0 624.0 1983.4 239.0 45.2Sof whichRoads 394.2 445.4 488.3 742.0 574.0 1804.3 217.4Brid8es 22.3 53.2 79.1 50.0 50.0 179.1 21.6

Maintenance, 231.5 350.3 458.1 398.0 520.0 1376.1 165.8 31.4Sof wLichRoadworks 220.5 300.0 381.5 350.0 460.0 1191.5 143.6Equipment 11.0 50.3 76.6 48.0 60.0 184.6 22.2

Studies. Technical 5.2 5.1 14.6 8.0 8.0 30.6 3.7 .7SAssistance and Trairnina

Miscellaneous 18.1 4.6 8.5 12.0 12.0 32.5 3.9 .7Z

Total exrendituxes 1.045.1 1.203,6 1.321.0 1.530.0 1.534,0 4.385.0 528.3 1001

B. Financina Sources

Government 756.7 869.0 896.9 998.3 897.8 2793.0 336.5ASDB (ongoin8) 97.8 164.8 268.0 259.7 112.2 639.9 77.1AfDB (proposed) -- -- 31.0 83.0 160.0 274.0 33.0IBRD (onSoing> 190.6 169.8 54.6 -- -- 54.6 6.6IBRD (proposed) -- -- 70.5 189.0 364.0 623.5 75.1 Z/

Total financing 1.045.1 1.203.6 1.321.0 1.530,0 1.534.0 4.385.0 528.3

1/ 1988 and 1989 shown for comparison only.2/ not including MOT components.

Sources: DRCR and mission estimates

9oea aCF C

iAJ SB Dr

Table B: Det. lkkd Ccat Entiaate. of the 1990-92 Sector Pro-rls(.14-1989 pries value>

a--- mBe Cost c -- Coetinaeces -- 1/ - Total Proiect Cost - USBS Ninn Eu'ivalent Forei1990 1991 1992 Local Foreign Total IOocal Foreign Total Local Foreign Total Local Forelan Total Erchanse

I. M411'a Road Investment and Maintenance Protram

New conatructionProvincial roads 169.7 217.9 228.8 339.1 277.4 616.5 36.8 34.5 71.3 375.8 311.9 687.8 45.3 37.6 82.9 45Other prim. roads 87.3 70.2 89.5 135.9 111.2 247.0 14.1 13.4 27.5 150.0 1Z4.5 274.5 18.1 15.0 33.1 45

RehabilitationRoads 459.8 668.2 493.7 810.9 810.9 1621.7 84.7 97.9 182.6 895.5 908.8 1804.3 107.9 109.5 217.4 50Bridges 74.5 45.0 43.0 81.3 81.3 162.5 7.6 9.0 16.5 88.8 90.3 179.1 10.7 10.9 21.6 50

HaintenanceRoadvorks 361.0 315.2 395.7 643.1 428.7 1071.8 67.6 52.1 119.7 710.7 480.8 1191.5 85.6 57.9 143.6 40E*pipient 71.7 43.2 51.6 50.0 116.6 166.5 4.8 13.3 18.1 54.8 129.9 184.6 6.6 15.6 22.2 70 1

Studies. Technical Assistance. VITrainina 13.6 7.2 6.9 5.5 22.1 27.7 0.5 2.4 2.9 6.0 24.5 30.6 0.7 3.0 3.7 80 Co

Miscellaneous 8.1 10.8 10.3 19.0 10.2 29.2 2.0 1.3 3.3 21.0 11.5 32.5 2.5 1.4 3.9 35

BASE COSTS 1245.7 1377.9 1319.4 2084.6 1858.4 3943.0 218.1 223.9 442.0 2302.8 2082.2 4385.0 277.4 250.9 528.3CONTINGERCIES 75.3 152.1 214.6 218.1 223.9 442.0TOTAL Z 1321.0 1530.0 1534.0 2302.8 2082.2 4385.0

Il. MDS'. Sector Prorsua

Construction CNE31A 1.1 1.9 2.5 2.8 2.7 5.5 0.3 0.4 0.7 3.1 3.1 6.2 0.4 0.4 0.7 50Equipuent CNE3A 2.7 4.7 6.1 4.1 9.5 13.5 0.5 1.2 1.7 4.5 10.7 15.2 0.5 1.3 1.8 70Consulting Services 3.8 6.7 8.6 3.8 15.2 19.0 0.4 2.0 2.4 4.2 17.2 21.4 0.5 2.1 2.6 80Overseas trainin8 0.2 0.4 0.5 1.2 1.2 0.2 0.2 1.4 1.4 0.2 0.2 100

BASE COSTS 7.8 13.7 17.6 10.6 28.6 39.2 1.2 3.8 5.0 11.8 32.4 44.2 1.4 3.9 5.3COTIRNGENCIES 0.5 1.6 2.9 1.2 3.8 5.0TOTAL Il 8.4 15.3 20.6 11.8 32.4 44.2

II1. Total Proiect Costa

BASE COSTS 1253.5 1391.6 1337.0 2095.2 1887.0 3982.2 219.3 227.7 447.0 2314.8 2114.4 4429.2 278.8 254.8 533.6

1/ Continaencies allowed for price escalation as follows:for local coasts, 5.01 over the wbole project period; for foreign costa, 7.2% in 1990, and 4.41 theroafter.

2/ Identifiable taxes and duties are about US$107.1 million eqyivalent, and the total project cost, net-of-taxes, is US$426.5 millionequivalent.

Vl

4nnex_7

Page 1 of 1

KINGDON OF MOROCCO

STAFF APPRAISAL REPORT

HIGHVAY SECTOR PROJECT

Road Safetv

A. International, Comparlson(Number of fatalities per 100 million vehicle.km)

USA 2.1Sweden 2.4Netherlands 4.Italy 4.3France 4.9Jordan 10Brazil ilMorocco. between 12 and 15

B. The Case of Morocco(1977-1987)

Number of Fatalities Traffic IndexYear Accidents Injured Killed Index _(veh.km)

1977 29.625 40 155 2.659 125 1001978 27.319 3. M74 2.593 122 1101979 24.539 33.820 2.381 112 1191980 23.875 32.897 2.256 106 1201981 24.238 32.224 2.320 109 1261982 24.975 33.654 2.232 105 1371983 25.038 33.710 2.110 99 1331984 24.100 32.160 2.067 97 1291985 24.408 33.269 2.112 100 1321986 25.009 34.286 2.218 105 1201987 27.1;4 36.902 2.269 107 131

C. oM_red De12Met of Traff &ad Fatalities

g 12g0

1 D77 1907C 1070 1 eso 190S1 t #02 t120 1834 1905ff 1900 l1907

o PratuTIOe * TrGtfC

- 60 -ANNEX 8Page 1 of 5

KINODON OF MOROCCO

STAFF APPRAISAL REPORT

HIGHWAY SECTOR PROJECT

HUMAN RESCURCES COMPONENT

I. Ministrv of Public Works CMPW>

A. Roads and Traffic Department tDRCR)

This component aims at supporting the road maintenance training systembeing implemented by DRCR. The training and retraining system will allow thetraining of personnel of DRCR in the flelds of operation and maintenance of heavyequipment for public works, and of road maintenance activities.

The decision to develop and implement a training and retraining systemfollows a 1984 Road Maintenance Study, which provides the necessary elements forthe design of training programs and preparation of the bidding documents for thetechnical assistance needed to start-up training operations. The results of thestudy have been updated, in particular with regards to the existing manpower andthe proposed training programs. Tables 1 and 2 hereafter provide these updatedelements.

The Project will finance a training program for administrative personneland trainers. This will be accomplished by training seminars in Morocco, andby short training abroad in similar institutions. This component will includethe start-up of all training programs and their evaluation after three years ofoperation.

Training abroad:

Heavy equipment operation and maintenance: 12 trainees during 1.5months, total 18 man-months;Heavy equipment repair: 12 trainees during 2 months, total 24man-months;Road maintenance: 12 trainees during 2 months, total 24 man-months.

Consultants:

Heavy equipment operation and maintenance: 6 man-months;Heavy equipment repair: 18 man-months;Road maintenance: 24 man-months;Evaluation: 2 man-months.

Total for the DRCR:

Training abroad: 66 man-monthsConsultants. 50 man-months

- 61 -

Page 2 of 5

B. National Center for Pavement Evaluation and Road Research (CNERI

To ensure technical assistance to the staff in charge of structuralsurveys and studies related to road maintenance management, and as a follow-upto a previous Belgium technical assistance, the Project will finance 24man-months of consultancy.

Total for MPW: Training abroad: 66 man-monthsConsultants: 74 man-months

The training material needed for training programs will be included intechnical assistance contracts.

The terms of reference for training abroad and for consultants, as wellas the bidding documents, are E-iing pvepared by DRCR and reviewed by the Bank.They will be finalized by June 1990.

II. MINISTRY OF TRANSPORT (MOT)

A. Land Transport Department (DTT)

This component will provide technical assistance and training to:

- introduce computerized technology into services in charge of drivinglicenses, vehicle registrations and oLber transport files (inparticular agreements);

- create and start-up the National Center for Vehicle Inspection andTesting (CNEHA).

The project will finance training abroad in similar institutions forstaff in charge of the above operations, as well as consultancy to helpintroducing computerized technology in services and starting-up the CNEHA:

- introducing computerized technology in services:training abroad: total 12 man-months;

* consultants for training in Norocco: 10 man-months;

- CNEHA

training abroad: 6 staff during 2 months, total 12 man-months;* consultants to start-up CNEHA: 4 man-months.

Total for DTT: Training abroad: 24 man-monthsConsultants: 15 man-months

B. Department of Transport Studies, Planning and Coordination (DEPCT)

In order to improve the efficiency of the staff in charge of thisDepartment, the Project will finance training abroad for selected staff, seminarsin Morocco, as well as technical assistance to train staff in microcomputertechnology applied to transport operations planning:

- 62 -

Page 3 of 5

- Training abroad: 6 man-months;- Consultants: 7 man-months.

Total for MOT: - Training abroad: 30 man-months;- Consultants: 22 man-months.

The training material needed for training programs will be included intechnical assistance contracts.

The terms of reference for training abroad and for consultants, as wellas for bidding documents are being prepared by DTT and DEPCT and reviewed bythe Bank. They will be finalized by June 1990.

Table 1: DRCR WORKFORCE

Category Function Personnel

Management Head of department and assistant 154Head of office 223

Sub-total 377Road Maintenance Head of sub-division 27Personnel Head of sector 29

Responsible of unit and assistant 199Head of brigade 68Supervisor of construction site 203Drawer 63Skilled worker 648Unskilled worker 6

Sub-total 1,813 wEquipment Opera- Head of central workshop and assistant 31Eion and Mainte- Head of workshop and assistant 8nance Personnel Warehouseman and helper 102

Nechanic and helper 210Electrician and helper 25Sheet metal worker/welder and helper 47Workshop Worker 317Heavy equipment operator 222Truck operator 373Light vehicle operator 393

Sub-total 1,728Administrative Head of unit and assistant 442Personnel Secretary 115

Accountant and helper 202Typisct 340Office clerk 34

Sub-total 1,178Other overhead Skilled worker 568personnel Supply worker

Guard and "chacuch" 228Sub-total 796Grand total 5.892

I.

- 63 -ANNEX 8Page 4 of 5

Table 2: DRCR: TRAINING AND RETRAINING NEEDS

Annual RetrainingTraining Program Program

Modules Week Staff Feek Staff

Training in suRervision of road maintenance construction siteRoad maintenance 4 0.6Road maintenance equipment 1.4 0.4Construction site staff 1Organization of construction sites 2.6 1Job-related preparation 1Written and oral expression 0.4Practice period 3 0.4

13.4 600 2.4 300

Training of equiDment and truck oReratorsGeneral technology 2.6Vocational technology andtruck operation 5 1

Efficient use of heavy equipment 12 1Mathematics 1Written and oral expression 0.4Sport 1.6Job preparation 0.4

Total 23 600 2 600

Training in heavy equipment maintenanceEngines: General presentationand preventive maintenance 0.6 0.2

Kinematics chain: Generalpresentation 0.2

Equipment: Ceneral presentation,preventive recurrent maintenance,preventive ordinary maintenance,installation and removal ofequipment 2 1

Hydraulics system: Hydraulicscircuit, maintenance ofhydraulics circuits 0.4 0.2

Vehicles and other material:General presentation, mainte-nance, water pumps, compressors 0.4 0.4

Integration into DRCR regionalstructure 0.2

Total 3.8 300 1.8 600

- 64 -

ANNEX 8Page 5 of 5

DRCR: TRAINING AND RETRAINING NEEDS

Annual RetrainingTraining Program Prozram

Modules geek Staff Week Staff

Training in management of maintenance activitiesVehicles and heavy equipment 1.4 0.2Maintenance 2 0.2Fixing and repairing equipment 4 0.4Replacement of equipment 1 0.2Organization and securityon the job 1 0.2

Industrial accounting of DRCR 0.4 0.2Psychology 0.6 0.2Written and oral expression 0.2Job-related operation 0.4

11 300 1.6 200

Training iP road maintenanceOperation and road security 1 0.4Road maintena.ce 2.6 1Soil mechanics 0.4Corporate organization andmanagement 1 0.2

Public works equipment 1 0.4Psychology 0.6Written and oral expression 1Practice period in maintenance,or supervision of works(optional) 2.4 0.4

10 600 2.4 300Grand total 2,400 2,000

Note: - DRCR will organize the training program and annual retrainingprogram.

- The training program vill be staggered over a five-year period andwill require 45 full-time trainers.

- The annual retraining program will be systemized after theconclusion of the initial program, and will require about 18full-time trainers.

- The training program in equipment maintenance and equipmentoperation is intended for the same group of staff.

- The training program in road maintenance and supervision ofconstruction sites is intended for the same group of staff.

- 65 -

ANNEX 9Page 1 of 3

KINGDON 0F MOROCCO

STAFF APPRAISAL REPORT

RIIGHWAY SECTOR PROJECT

SELECTION OF BANK-FINANCED COMPONENTS

1. This annex describes the components that have been targeted under theproject for Bank financing. These components have been selocted for theircontribution to (i) reducing the backlog in road rehabilitation and maintenance,and (ii) implementing the Project Action Plan. The first-year program has beendefined for civil works, using the methodology described in Annex 3 and in theProject File (item 11); for subsequent years the same methodology would be used.The costs of the Bank-financed items are presented at the end of this annex(para. 8).

Road Rehabilitation

2. In continuation of the program implemented under the ongoing IBRD andAfDB projects, the proposed project provides for a line of credit for thestrengthening and rehabilitation of about 1,000 km of roads (base cost: DH 315million). The road sections have been selected from a list of 1,300 km for whichfeasibility studies were carried out in 1988. The technical and economic study,which has led to the final selection from this list, was made by DRCR (ProjectFiles, item 11). The major components of the work will be adding a layer ofeither asphaltic concrete, gravel topped by a wearing course of double surfacetreatment, or gravel topped by asphaltic concrete, the choice depending on thevolume of traffic. In addition, most sections will require ancillary works, suchas widening where necessary, restoring shoulders, and repairing and improvingdrainage facilities. No realigning work is envisaged.

Periodic and Routine Maintenance

3. Period maintenance of paved road works would be carried out on the basisof DRCR's established standards (Annex 2). The indicative three-year programidentified under the proposed project would be reviewed using an improvedpavement management system. Regarding resurfacing, feasibility studies have beencompleted for a long list of road sections (1,600 km) provided by the provincialsubdivisions, from which a tentative priority program covering some 1,300 hasbeen selected (one criterion for selection has been the continuity of itinerary)for a base cost of DH 255 million. A first-year program has been defined forsome 210 km (Project Files, item 11). Shoulder restoration is usually carriedout together with road rehabilitation or strengthening, but a backlog has beenidentified of about 1,000 km of roads whose pavement soundness is threatened bythe worn-out shoulders (Project Files, item 21). The project would provide for

- 66 -ANNEX 9Page 2 of 3

a line of credit covering two thirds of this backlog. With respect to pavementmarking, although the norms are modest (Annex 2), a huge backlog exists, dueagain to the priority accorded in the recent past to the essential maintenanceof the heavily trafficked road sections. A priority program covering about 5,000km has been defined (Project File, item 22), which would be financed under theproject for a total base cost, including shoulder restoration, of DH 90 million.

4. Routine maintenance activities will be intensified ta meet the standardsnecessitated by regional climate, traffic, and road condition. The proposedproject would provide financing for workshops and equipment. The globalworkshops system comprise a central workshop in Casablanca, where major overhaulswill be done on a carefully planned rotation basis, and seven regional workshopswhich will handle intermediate repairs. The Fourth Highway Project dealt withthe central and two regional (Fès, Marrakech) workshops. The proposed projectwould complete the program through (Project File, item 23) (i) construction andequipping of two workshops in Agadir and Meknès, and (ii) equipping of the lasttwo workshops in Rabat and Oujda (total base costs: DH 6 million for buildingsand DH 9 million for equipment). Regarding road maintenance equipment, most ofthe needs have been covered under previous loans (by IBRD, as well as AfDB), andthe additional equipment proposed for purchase under the project is thereforelimited to light vehicles needed to carry the maintenance crews (Project File,item 24) for a base cost of DH 23 million. The project would also financetraffic counters to allow for the renewal of worn-out and/or obsolete equipment,and to improve the coverage of the network as far as automatic counting isconcerned (Project File, item/25) for a total base cost of DH 9 million.

Reconstruction of Bridaes

5. There are some 2,000 bridges in Morocco which need adequate maintenanceand rehabilitation. A bridge management system aiming at improving theinventory, assessment and prioritization of needs, and preparation of a detailedrehabilitation program, is financed under the AfDB Transport Sector Loan. Themost urgent needs in terms of safety or width or "black spots" (due to poorbridge layouts and access ramps) have been partially dealt with in previous IBRDand AfDB loans, and the proposed project will continue this priority programwith about seven bridges to be reconstructed (Project File, item 12) for a basecost of DH 50 million.

Road Safety Program

6. As shown in Annex 7, the number of accidents had decreased in relationto the traffic. However, accidents due to mechanical defects are increasing,and this incriminates the present system of vehicle inspection. Regulationshave to be updated (for instance, passenger cars do not need to pass a mechanicalinspection before they are 10 years old), and enforced more vigorously. Theproposed project would provide financing for the construction and equipping ofa National Center for Vehicle Inspection and Testing (CNEHA), whose aims wouldbe (i) regulation and control of norms, and assistance to the private vehicleinspection centers (27 are operating presently), and (ii) industrial testing and

- 67 -ANNEX 9Page 3 of 3

homologation of vehicles and accessories, in particular those accessories builtand used locally. Technical assistance would be provided for the start-up ofthe CNEHA and for the re-examination of existing regulations regarding safetyand environment protection, with a view to make recommendations for theirimprovement and prepare draft updated legislation accordingly. A feasibilitystudy of the CNEHA was carried out by MOT in 1985 (Project File, item 13), andthe costs have been updated as follows (base costs in DH million).

CNEHA Construction Eguinment

Inspection section 2.0 3.0Homologation section 3 10.5Total 5.5 13.5

Consult4ig Services and Overseas Trainina

7. Consulting services include studies and technical assistance which,together with overseas training (Annex 8), would contribute to the enactient ofthe Project Action Plan (Annex 5). The breakdown between MPW and MOT is asfollows (base costs in DH million):

Categories Studies Technical Assistance Overseas Training

MPW 26 7 2.5MOT 17 2 1.2Total 43 9 3.7

Total Costs of the Bank-financed Items

8. The table below shows the total costs (including contingencies) of theBank-financed items:

-----------Total Subprojects Costs--------------Local Foreign Total Local Foreign Total

DH million USS million equivalentCivil WorksRoad rehabilitation 195.4 197.8 391.1 23.6 23.9 47.4Pavement resurfacing 158.1 160.1 318.3 19.1 19.3 38.4Other periodic maintenance 55.8 56.5 112.3 6.7 6.8 13.6Bridge reconstruction 31.0 31.4 62.4 3.7 3.8 7.5CNEHA construction 4.4 2.4 6.9 0.5 0.3 0.8Workshop construction 4.8 2.6 7.5 0.6 0.3 0.9

EquipmentEquipment, CNEHA, traffic,workshops 11.2 26.4 37.6 1.4 3.2 4.5

Consulting ServicesStudies, Techn. Assistance 11.7 47.5 59.2 1.4 5.7 7.1Overseas training 4.0 4.2 4.2 0.0 3.8 10.5

TOTAL COSTS 472.5 529.0 1001.5 57.0 63.8 120.9

- 68 -

KINGDOM 0F OFROOCO

STAFF APPRAISAL REPORT

HIGHWAY SECTOR PROJECT

IMPLMENSTATION SCHEDULE

CALENDMAR EAR | 1989 1990 1991 1992 1993 1994

Bank Logan

Board Presentation

Effectivennse x

Annuel Review of Sector Pro8rams x x x x x x x

Project Completion

Cloaing Date

Ministrv of Public Works

Road Worka - - - -

Bridae Reconstruction

Workshops Construction

Maintenance and Workshop Equipment - - - -- -

Pavement Manasement System_

Technical Assistance to CER

Training Systam_

Rural Ronds Maintenance Study

garrow Roade Study

Construction Industry Studios

Ministrv of Transnort

CNEHA Construction and Equipment

Follow-up Transport Master Plan - -

Rural Transport Study.

Tochnical Assistance to DTT & DEPCT -._ _ _ _ _

Tecbnical Assistance to CUNA j -

Implementation: ; Disbursement: -----------------

- 69 -

Annex il

KINGDO< OF MOROCCO

STAFF APPRAISAL REPORT

RIGHWAY SECTOR PROJECT

SCHEDULE OF ESTIMATED CUMULATIVE LOAN DISBURSEMENTS

Bank Fiscal Year Cumulative Disbursementsand Ouarters (US$ million eauivalent)

June 30, 1990 0.5

1991

September 30, 1990 1.1December 31, 1990 2.5March 31, 1991 6.7June 30, 1991 12.6

1992

September 30, 1991 18.8December 31, 1991 23.8March 31, 1992 29.5June 30, 1992 36.0

1993

September 30, 1992 42.5December 31, 1992 47.1March 31, 1993 52.0June 30, 1993 56.9

1994

September 30, 1993 61.6December 31, 1993 65.6March 31, 1994 68.6June 30, 1994 71.8

1995

September 30, 1994 74.8December 31, 1994 77.4March 31, 1995 78.6June 30, 1995 79.0

Chart Annex 12- 70-

KINODON OF MOROCCO

STAFF APPRAISAL REPORT

HIGHVAY SECTOR PROJECT

Road and Traffle Deoartment Organization

Director |

| Programs L |Road Maintenance *

Studies |_ 6 Divisions | Administration

Management | Pavem. Evaluation *|| Systems _

| 39 Provincial Offices |

"North-West" Region "Center-North" Region "South" Region

Rabat + Fes + Agadir +Chaouen Boulmane DakhlaKenitra El Hoceima GuelmimeKhemisset Taounat LayouneSidi-Kacem Taza OuarzazatTanger SmaraTetouan Tan Tan

TaroudantTataTiznit

"Center" Regtion "Oriental" Region "Ten Sift" Region

Casablanca + Oujda 4 Marrakech +Azilal Figuig El KelaaBeni Mellal Nador EssaouiraBen Slimane SafiEl JadidaSettat | "Center-South" Region

Meknes +ErrachidiaIfraneKhenifra

(+) Seat of Regional Office(*) To be strengthened under the project.

KINGOON OF M4OROCCO)

STAFF APPRAISAL REPORT

HIGHWAY SECTOR PROJECT

Review of Local ComDetitive Blddina Procedures

Decree Article Issue Acceptable Procedures

1. Unacceotable provision

(a) 2-76-479 33 Bld evaluation coiamittee mnay nlot only seek No bidder should be requested or permttted toclarification fromt bidders, but may also alter his bld after the f irit bld has beenrequest bidders to mîodify their bld after opened.bld opening.

Il. Provisions reauirina seecial mnnitorina

<b> 209-65 1 The CCAG apply only to civil works. When reference is mnade to these decrees.151-66 i Although ln practice the CCAG is also bld documentation should clarlfy whatused for goods as well as services. the general conditions apply to goods andbasis on, and oextent to which. thiey are services, and extent to which they areapplicable is unclear. The content of applicable (e.g. provisional or finalGeneral Conditions (cahier des charges) acceptance, etc.). In the longer run,is detailed ln Art. 4 of Decree 2-76-479. specific CCAG should be available.

(c> 2-76-479 28 Advertising period mnay be as short as Normal advertising period should be15 days. 45 da.ys and should not be shorter than

30 days.

(d) 2-76-479 27-35 Liniited LCB (appel d'offres restreint> is No such limited LCB is foreseen underpermitted under certain cond'itions. proposed proJect.

(e> 2-76-479 27-35 Bidders may either submit a proposed Bld documentation should specify thatprice <offre de prix>, or a discount on bidders be required to subait pricethe price established by the Government offers.(rabais).

MAP SECTION

lBRD 21695

MOROCCO

FIFTH HIGHWAY PROJECTPROJECT,

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f Notigol zot pitol _.

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