Documentof The World Bank
FOR OFFICIAL USE ONLY
Public Disclosure Authorized AA/ 32z 3-MO#t X v 3Zq~~Z 4 ° ReprtNo. 8569-MOR
STAFF APPRAtSALREPORT Public Disclosure Authorized
KINGDOM OF MOROCCO
PORT SECTORPROJECT
NOVEMBER 29, 1990 Public Disclosure Authorized Public Disclosure Authorized InfrastructureOperations Division. CountryDepartment II Europe, Middle East and North Africa Regional Office
Tbi documenthas a reshictedditdibtbn and may be usedby reints oly inh perbDYt of dek officWduts Itscontens may notothrie be diclosedwihout Wodd Bank atraga"t. KINGDOM OF MOROCCO
CURRENCYEOUIVAlENTS
(as of December 31, 1989)
Currency Unit - Dirham (DH) US$1 - DH 8.25 DH 1 - US$0.121
WEIGHTS AND MEASURES
Metric System British/USSystem
1 meter (m) - 3.28 feet (ft) 1 kilometer (km) - 0.62 miles (mi) 1 square kilometer (kn2) - 0.386 square miles (sq mi) 1 metric ton (m ton) = 0.984 long ton (lg ton)
GLOSSARY OF ABBREVIATIONS
CPA = AutonomousProfit Center (Centrede Profit Autonome) COMANAV - CompagnieMarocaine de Navigation DEP - Port OperationsDirectorate (Direction d'Exploitation Portuaire) DEPP - Directorateof Public Enterprisesand Participations ,)MM - Merchant Marine Directorate(Direction de la Marine Marchande) DP - Directorateof Ports DPCM - Directorate of the Port of Casablanca and Mohammedia EDP - ElectronicData Processing ITPA - Industrialand Trade Policy Adjustment MOF - Ministry of Finance MOT - Ministry of Transport MPW - Ministry of Public Works (Ministeredes Travaux Publics, de la FormationProfessionnelle et de la Formation des Cadres) PDPN - National Port Master Plan (Plan Directeur PortuaireNational) OCP - Office Ch6rifiendes Phosphates ODEP - Office of Port Operations (Officed'Exploitation des Ports) ONCF m National RailwayAuthority (OfficeNational des Chemins de Fer) ONE - National ElectricityBoard (Office National de l'Electricit6) ONICL - Cereals Board (Office National Interprofessionneldes Cereales et des Legumineuses) ONT Office National du Transport PERL - Public Enterprise Restructuring Loan RAPC - Regie d'Acconagedu Port de Casablanca SIPROMAR - National Commission for Simplification of Foreign Trade Procedures
(This report uses the acronyms of the French titles in those cases where the Moroccan practice is to refer to the agency In question by its acronyms).
FISCAL YEAR
January I - December 31 FOR OFFMCIALUSE ONLY KINGDOM OF MOROCCO
STAFF APPRAISALREPORT
PORT SECTORPROJECT
Table of Contents
Page No.
Loans and Project Summary...... iii
I. THE TRANSPORTSECTOR . . . . . 1
A. Transportand the Economy .1 B. TransportOrganization. 2 C. Transport Investments. 3 D. Sector Issues and Strategy. 5 E. Bank Experiencein the Transport Sector ...... 6
II. THE PORT AND MARITIME SUBSECTORS. 7
A. Port Faciiitiesand Traffic. 7 B. Maritime Transportand Shipping ...... 9 C. Trade Facilitationand Logistics ...... 10 D. Port Organization .11 E. Port Operationsand Maintenance ...... 14 F. Port Planning and InvestmentProgram ...... 17 G. Accountingand Auditing ...... 18 H. Tariffs and Cost Recovery ...... 20
III. THE PROJECT ...... 22
A. Project Origin and Objectives .22 B. Project Description .23 C. Cost Estimates.27 D. Financing Plan .28 E. Project Implementation ...... 29 F. Procurement .30 G. Disbursements .32 H. Project Monitoringand Reporting .33 I. EnvironmentalAspects .33 J. Impact on Employment.35
This report is based on the findingsof an appraisalmission to Morocco in March 1990 composed of Jean-FrancoisMaquet (SeniorPort Engineer),Pathi Ben Slimane (Financial Analyst), Roy Knighton (Senior Economist). Christian Brossard (EnvironmentSpecialist) participated in the pre-appraisalmission.
ThisDocument has a restted distributionand maybe used by reipien onlyin the peformance of their oMchtduses1X contentsmay not otherwisebe didosed wkhout WorldBank authorizatio - ii -
IV. ECONOMIC EVALUATION ...... 36
A. General .36 B. Traffic Forecasts .36 C. Economic Analysis .40 D. Project Risks .44
V. FINANCIAL EVALUATION .45
A. Past and Present Financial Performance .45 B. Future Financial Performance ...... 47
VI. AGREEMENTS REACHED AND RECOMNENDATIONS ...... 51
ANNEXES
1. Action Plan ...... 55 2. ODEP's Organization, Staffing and Training ...... 65 3. Port Investment Program: 1990-93 ...... 70 4. Projected Tariff Structure and Level ...... 76 5. Procedures and Criteria for Economic Evaluation of Subprojects . . 78 6. Detailed Program for Project Execution ...... 83 7. Review of Local Competitive Bidding Procedures ...... 89 8. Estimated Schedules of Disbursements ...... 90 9. Project Monitoring ...... 91 10. Performance Indicators and Targets ...... 94 11. Environmental Impact ...... 97 12. Economic Evaluation ...... 105 13. Past Financial Statements ...... 118 14. Assumptions and Financial Projections ...... 122 15. List of Project File Documents ...... 131
TABLES
1. Port Facilities ...... 133 2. Distribution of Traffic by Port: 1988 ...... 134 3. Division of Responsibility between DP and ODEP ...... 135 4. Productivity Data ...... 136 5. Key Elements for the Contract Plan ...... 138 6. Technical Assistance and Consulting Services ...... 139 7. Initial Allocation of the Two Bank Loans ...... 141
CHARTS
1. DP Organization Chart .. 142 2. DPCM Organization Chart .. 143 3. ODEP Headquarters Organization Chart ...... 144 4. DEPC Organization of Casablanca Port Operations Unit ...... 145
IBRD 22288 Morocco Port System IBRD 22287 Casablanca Port Layout IBRD 22286 Jorf Lasfar Port Layout IBRD 22285 Tangier Port Layout - iii -
KINGDOMOF MOROCCO
STAFF APPRAISALREPORT
PORT SECTORPROJECT
Loans and Project Summary
BORROVERS: Kingdom of Morocco, and Office d'Exploitationdes Ports (ODEP)
Kingdom of Morocco (for the loan to ODEP)
BENKFICIARIES: Ministry of Public Works (MPW), Ministry of Fisheries and Merchant Marine, and ODEP
AIOUNTS: Loan to the Kingdom of Morocco: US$33 million Loan to ODEP: US$99 million
TRlW: Both loans will be repayable in 20 years including five years of grace at the standard variable interest rate.
PRJET OBJECTIUES:. The projectwould supportGovernment's efforts to liberalize trade and promote exportsthrough increasing efficiency and financial viability of the port subsector. The main objectivesof the project are to : (a) improve operational efficiencyin the ports to cope with the growth and changing structure of foreign trade; (b) assist the Government in strengtheningthe economic viabilityof its investmentsin the port subsectorgenerally and increasingthe recoveryof infrastructure costs; and (c) encourage policies and institutional measures aiming at better planning and coordinationof port activitiesin relationto its promotion of foreign trade.
P!ROECT DESCRIPTION: The project consistsof an investmentcomponent to be financed under the two loans, and an institutional developmentcomponent addressing identifiedissues in the port sector. The investmentcomponent would finance: (a) selected subprojectsof ODEP's investmentprogram for the period 1991-1993; (b) a portion of the investment and maintenanceprogram of the Ministry of "14blicWorks (MPW) in the port sector for the period 1991-1993; and (c) constructionof a radar control tower for marine security. Selected subprojectsfor ODEP would specificallyinclude: (i) a new container terminal at Casablanca; (ii) a coal handling facility at Jorf Lasfar; (iii) improved Ro-Ro facilitiesat Tangier; (iv) equipment for port security; - iv -
and (iv) technical assistance and training. MPW'sprogram focuses entirely on rehabilitation of breakwaters and dredging. The Development Programs of the port subsector and of ODEPprovide a comprehensive time-bound framework for monitoring the key institutional development objectives under the project with particular reference to: (a) quality and efficiency of port services; (b) trade facilitation, particularly in respect of port procedures and information systems; (c) investment planning; (d) environment and safety; and (e) finance, including cost recovery and fixed assets management. BENEFITS: Port efficiency is an important element in stimulating trade. Modernization of port facilities under the country's port development program will also ensure foreign exchange savings on sea freight rates for both exports and imports. The ongoing Port Project, though limited in scope, has helped improve operational efficiency in the port of Casablanca and the management and financial viability of ODEP. Continued Bank involvement would help further improve investment planning, operational efficiency and cost recovery policies. Moreover, the project would assist in developing environmental capability and awareness in the agencies of the sector. Finally the project would contribute to marine security in heavily trafficked areas. RlISKtS: The main project risk is the uncertainty regarding future traffic levels and distribution between containerized cargoes and Ro-Ro. To minimize this risk, the new container terminal is designed to cope with both types of cargoes. Moreover, close control will be maintained on the overall port investment program through a process of anrr .' reviews. There is also some risk that delays would be encountered in the implementation of the institutional changes required in terms of trade facilitation and logistics. Although progress is now being made in improving documents and procedures related to trade flows, trade facilitation and logistics aspects will be closely monitored in the framework of the next phase of trade reforms being undertaken by the Government. It is not anticipated that slow implementation of related measures would frustrate the needed container and Ro-Ro investments proposed under the project. The risk of a possible shortfall in budgetary allocations for the program has been considerably reduced vith (i) the inclusion in the project of the essential core of the sector investment program, and (ii) the periodic reviews of the public investment program under the project. This risk affects primarily the Government component of the project. Estimated Costs: V Local Foreign Total --- US$ million- Civil Works 74.2 78.2 152.4 Equipment 24.8 37.5 62.3 Training 1.0 1.1 2.1 ConstructionSupervision 1.0 1.1 2.1 Studies 2.0 3.0 _Q50 Sub-total 103.0 120.9 223.9
Physical Contingencies 9.0 9.3 18.3 Price Contingencies 19.0 .39.
Total Project Cost " 131.0 151.0 282.e
FinancingPlan V Local Foreign Total ------_-- US$ million ------IBRD 21.1 110.9 132.0 Ongoing IBRD 4.4 4.4 Ongoing African DevelopmentBank - 5.9 5.9 ODEP 75.1 15.7 9 90.8 Government 34.41 489
Total 131.0 151.0 282.0
EstimatedDisbursements
IBRD FY 1991 1992 1993 124 1995 1996
Loan to the Kingdom of Morocco Annual 0.5 4.7 10.3 12.0 4.9 0.6 Cumulative 0.5 5.2 15.5 27.5 32.4 33.0
Loan to ODEP Annual 1.6 25.1 25.3 29.6 14.2 3.2 Cumulative 1.6 26.7 52.0 81.6 95.8 99.0
Economic Rate of Return
Overall Port InvestmentProgram: About 25% ContainerTerminal: 19% Tangier Ro-Ro Improvements: 50% Coal Handling Facility: 50X
1/ Identifiabletaxes and duties amount to US$ 79 million. Total project costs, net of taxes and duties, is about US$ 203 million equivalent.
Z/ Discussionshave been initiatedfor a Japan Ex-Im Bank contributionof US$38 million. Bilateral sources are also expected to contribute for about US$11 million.
2/ Mainly indirect foreign exchange on locallyprocured civil works. KINGDOM OF MOROCCO
PORT SECTOR PROJECT
I. THE TRANSPORT SECTOR
A. Transportand the Economy
General
1.01 Over the past six years, Morocco has undertakenimport..nt structural reforms which have succeeded in achieving a modest growth rate with low inflation. In the recent past, the Moroccan economy has grown at an annual average of about 3.3%, slightly more than the increase in population. The proposed medium-termadjustment program, which is being supportedby the Bank, seeks to reinvigoratethe economy to achievea growth rate of 4 to 5% per year. This program is based on the implementationof several policy tools including fiscal reform, trade liberalization,Public Enterprise reform, agricultural sector deregulation,and an increase in the level and efficiency of public investmentexpenditures (para. 1.06). In effect,while takingmuch of the brunt of fiscal adjustmentin the recent past, a continued reduced level in public investmentexpenditures could constitute a major constraint to maintaininga high level of economicgrowth in the future. The project is consistentwith the Bank's overall program for structuraladjustment, and will provide support for a key phase in the modernization of Morocco's ports aimed at removing bottlenecksto export growth and facilitatingcontinued growth in foreigntrade.
Transportand the Economy
1.02 The Moroccan transport sector plays an important role in the development of the economy. It provides direct support to industrial and agriculturaldevelopment, plays a key role in encouragingexports, and reducing the cost of imports, -nd supports the growth of tourism. The land transport system is well-developedand includes some 28,000 km of paved roads out of a total network of some 58,000 km, and a railway network of about 1,800 km, of which about 970 km are electrified,and 240 km are double-track. There are 11 commercialports, and about 20 airportshandling scheduled flights.
1.03 Total interurbanpassengers and freighttraffic are estimatedat about 30 million passenger-kmsand 15 billion ton-kms, of which about 93% and 70% respectivelyare carriedby road transport. Although road transport dominates interurbanpassenger traffic, the share of the railway is much more important in the main rail corridorbetween Marrakech, Casablanca, Rabat, and Kenitrawith its extension northward to Tangier, and eastward to Fes and Oujda (Map IBRD 22288). These routes account for about one-third of interurbantraffic, with the railwayhandling about 25% of the total (33% for freight traffic other than phosphates, and 20% for passenger traffic). As a whole, rail passenger traffic increasedat about 4% per year over the last decade, mainly as a result of the introductionof improvedpassenger services, particularly the high-speed trains between Casablancaand Rabat. During the same period road traffic also increasedat about 4% per year. About 3 billion ton-kms of rail traffic, or 65X of the total, representcaptive phosphate traffic,which moves towards the - 2 -
ports of Casablanca,Jorf Lasfar, and Safi for export. The port system, like the railways, was also developed to serve phosphate exports, which have stabilizedin recent years at 14 million tons annually. Total port traffic in 1988 amounted to 38 million tons of which 18 million tons were minerals,mainly exportsof phosphates,and 10 milli,ntons were liquidbulk commodi.iesof which crude oil accounted for 5 million tons. of the eleven commercialports, four ports - Casablanca,Jorf Lasfar, Safi and Mohammedia- handle about 90X of total traffic (Map IBRD 22288). The main port of Casablancahandled 17 million tons in 1988 including10 million tons of minerals as well as imports and exports of industrialgoods totallir.g3.5 million tons. About 30X of generalcargo traffic was containerizedor handled as Roll-on Roll-off traffic. Further details on the port subsectorare given in Chapter II.
B. TransportOrganization
1.04 The Government agencies involved in the administration of the transport system are: (a) the Ministry of Public Works (MPW), which is responsible for the construction and maintenance of roads and ports infrastructurethrough its Road and Port Directorates;it also oversees cargo handling and port operationswhich is the responsibilityof the Office for Port Operations (ODEP); (b) the Ministry of Transport (MOT), which regulates road transport, and supervises the railways, civil aviation, the state-ownedbus company, and the state-ownedfreight forwarding agency; (c) the Ministry of Fisheries and Merchant Marine which supervises shipping and marine security trough its Merchant Marine Directorate;and (d) the Ministry of Interior as the supervisingbody for local authorities,which are increasinglyinvolved in the planning and maintenanceof local road networks.
1.05 Given the large number of agencies involved in the management of the sector, there is sometimes an overlap of responsibilitiesbetween different aZencies. In the ports subsector,both ODEP and the Ports Directorate(DP) of MPW have responsibilitiesfor planning port infrastructureand for overseeing port operations. The project will help improve coordinationin these matters and will clarify the role of ODEP in overall port planning (para. 2.31). Similarly,with increasingdecentralization and the mobilizationof resources at the local authoritylevel followingthe recent introductionof a value-added tax, newly defined responsibilitiesare required between central and local government. This has lead to a redefinitionof responsibilitiesfor the road networkbetween MNPW and local authorities,provision for which is includedunder the recent Highway Sector Project (FY90). In parallel to increasing decentralization,there is also a move to introducemore autonomy for public enterprisesin the transportsector. The financialrestructuring of a number of public enterprisesand the implementationof contractplans clearly defining the respectiveresponsibilities of the Governmentand the enterprises,were part of the Bank supportedPublic EnterprisesRestructuring Loan (PERL). A proposed PERL II will further strengthenthe institutionalframework for the management of public enterprises. The main elements of a Contract Plan to be agreed between the Governmentand ODEP are includedin an Action Plan prepared for the purpose of facilitatingproject monitoring(para. 3.13 and Annex 1). C. TransilortInvestments
1.06 Table 1.1 shows transportsector public investmentsbroken down into road, rail, sea, and air transportmodes, for the current 1988-92 Plan as well as the two previous Plan periods. Total transportsector investmentshave been relatively stable in real terms over the past decade amounting to about DH 2.5 billion (US$300million) annually in 1987 prices. Generally, about one-thirdof investmentshave been allocatedto highways,one-third to ports and shipping,and about one-fourth to railways. Although investment levels have recentlyfallen due to budgetaryconstraints, overall expenditures in the sector are likely to return to their former levels, in line with a need to provide the necessary support to the adjustment process and renewed economic growth. However, this increase in investmentlevels will be accompaniedby a shift in prioritieswith much greater emphasisbeing given to the highway sector,which in turn will be compensated by a sharp decrease in expenditures on port infrastructure,the latter being limited to a high priority modernization program and to maintenance and rehabilitation. Since 1985, Government investmentsin port infrastructurehave declined from around DH 450 million (US$53 million) to a current level of around DH 150 million (US$18 million) annually. At the same time, and in line with the Government's policy to increase the financial autonomy of its public enterprises, the transfer of government funds to the railway sector has been limited annually to DH 200 million (US$23 million) Fz'vce1988. In all sectors, priority Is being given to the completionof ongoingprojects, and to the optimal utilizationof existing facilities. Under a Bank StructuralAdjustment Loan (SAL), agreement was reached with the Government on a target investmentprogram in the public sector for the period 1988-90. Detailsof the proposedport investmentprogram during the period 1990-93, which is in line with agreement reached ui.derthe SAL, are given in Chapter III. - 4 -
Table 1.1 TransportSector Public Investments
A. Expenditures (DH millior.at currentprices)
Actual Actual ilanned 1973-19_LO 1981-1987 1988-1992 Road Highways a 1,781 4,133 6,526 1, Local roads ' 700 1,300 3,660 Road transportf 220 486 750 Subtotal 2,701 5,919 10,936
Rail InfrastructureE 1,344 2,350 2,044 Rolling Stock F 620 1.634 2.115 Subtotal 1,964 3,984 4,159
Maritime Ports InfrastructureV 1,764 4,464 700 EquipmentV _ 379 1.118 1.600 Subtotal 2,143 5,582 2,300 Shipping ' 1.211 450 2.180 Total 3,354 6,032 4,480
Air Airports and navigationaids g 476 502 1,657 Air carrier RAM V 666 1.581 22377 Subtotal 1,142 2,083 4,034 GRAND TOTAL 9.161 18.018 23,609
B. Allocationsin oercentage
Actual Actual Planned 1973-1980 1981-1987 1988-1992
Road 29.5 32.8 46.3 Rail 21.4 22.1 17.6 Maritime 36.6 33.5 19.0 Air 2.5 17.1 100.0 100.0 100.0
I/ Sum of the initialPlan allocation(4,950) and of the Road Fund allocation (1,576)created in December 1988. 2.! Central Governmentfinancing i_ Local Governmentfinancing A/ Public Enterprisesfinancing 2/ Mixed financing
Source: TransportSector Public InvestmentReview, World Bank, December 1987, and mission estimates. D. Sector Issues and Strategy
1.07 Bank dialogue with the Government on general sector issues and recommendationsto solve them, concentrateon the following:
(a) Improvement in the planning of investments and their coordination among modes and across sectors;
(b) better use of existing facilities and services through trade facilitationand logistics,improved management of public enterprises, stepped-up deregulation,greater accountabilityof resources, and decentralizationof decisions;
(c) gradualelimination of subsidiesby the Governmentand cross-subsidies among users througha more flexibletariff system,and correctpricing of resourcesused; and
(d) increasedbudgetary allocations for the rehabilitationand waintenarnce of infrab.tructure.
1.08 In recentyears the Governmenthas made substantialefforts to improve planning and coordinationof investmentsin the road subsector by submitting maintenance and constructionprograms to prior economic analysis (Third and Fourth Highway Projects). Further progress is now expected with the clarificationof the maintenance responsibilitiesbetween central and local governmentand by building on the existingpavement managementsystem under the recent Highway Sector Project. In parallel with these developments, the Government has also recently completed a road user charge study with the objectivesof imrrovingequity in the recovery of road user costs and, through the creation of a Road Fund, ensuring adequate resources for highway rehabilitationand maintenance. Although much progress has been made in the ports subsector, the planning functions within ODEP and DP need to be strengthenedand greater coordinationis requ4.red in order to ensure that due account is taken of operational considerationsin planning infrastructure investments (para. 2.31). The project will address this issue and will also promote improved coordinationwith major ports users, particularly for bulk importsof coal.
1.09 Some of the key issues at the present time relate to the need to establish a planned program of investmentsin the main transportcorridors as well as to the need for greater liberalizationin the road transportmarket. In particular,the regulatoryframework for the road transport industry needs to be improved, in order to promote greater efficiency and to ensure freer access to the market. These issues have recently been analyzed as part-of a National Transport Master Plan Study, which was financed under the Fourth Highway Project. On the basis of the study recommendations,an action plan for road transportreform is being finalizedin the context of the Highway Sector Project and implementationwould be followed up under the proposed SAL II. Attentionis also being given to improvingintermodal linkages with a particular emphasis on streamlining documentation and procedures related to the handling/managementof Morocco's foreign trade transactions (para. 2.10). Assistance is currently being provided in this area through a UNDP Trade -6-
FacilitationProject. Complementaryanalyses would be provided in the form of a trade logistics study focusing on the movement of key export and import cargoes (para. 2.11).
1.10 Overall, government policy towards public enterprises is changing with the emphasis on reducing budget dependence, increasing managerial efficiency,and transferringsome of their operations to the private sector. In effect, the Government is now realizing that excessive control and interference in the management of the public enterprises, support for low priority or premature investments,limitations on market entry and below-cost tariffs have created distortionsin the transport market, and excessive costs to the economy. In 1985, the Government took an initial step to reduce its interventionon the road transportmarket by raising the limit of trucks under route and freightassignment control by the Office Nationaldes Transports(ONT) from 5.5 to 8 tons. Furtherprogress is now contemplatedwith a gradual change in ONT's role away from control of regulationstowards freight forwarding and the provisionof informationon the road transportmarket on an optionalbasis. In the railway subsector,the Governmentintends establishinga Contract Plan with ONCF defining respective responsibilitiesand objectives. Railway restructuringis being followedunder the Bank's PublicEnterprise Restructuring Loan (PERL) operations. In the port subsector, in 1984, the monopoly of the cargo handling company was abolished. A reorganizationstudy was carried out with Bank financingunder the Ports of Casablancaand Mohammedia Project (Loan 2657-MOR)and has made recommendationsfor decentralizationof port operations and streamlining of ODEP's organization (para. 2.20). In addition, the preparationof a Contract Plan between ODEP and the Government is currently underway and a draft Contract Plan, incorporatingearlier Bank comments,was reviewed during negotiations(para. 3.13).
E. Bank ExDperiencein the TransDortSector
1.11 The Bank has provided loans totalling US$337 million equivalent to the MoroccanGovernment from 1969 to 1990 for tl,econstruction, improvement, and rehabilitationof main roads under five highway projects, and of rural feeder roads under ten agriculturalprojects. The first port projectbecame effective in 1986 and provideda loan of US$22 million to improveinstitutions in the port subsector and help maintain infrastructurein the ports of Casablanca and Mohammedia (Loan 2657-MOR). Despiteminor problems, the project is expected to be completed in 1991. Loan covenants are generally complied with. Most technical assistance and studies financed under the project have resulted in significant improvements in port management and operational performance. Rehabilitationof civil works in the port of Casablanca is underway with some delays due to a slow procurementprocess. With those improvements,the port of Casablanca has been able to handle increasing general cargo traffic at reasonable cost and efficiency. However, wit}- the rapid development of containerizedand Ro-Ro traffic in recent years, it has now become vital to developnew handling facilitiesand modern proceduresto supportexports and to reduce costs of imported goods.
1.12 Although no railwayoperation has been financedby the Bank, ONCF was included under the Public Enterprise RestructuringLoan (PERL). The highway projects were designed to encourage investmentswith high returns to the economy,particularly maintenance and rehabilitation,and to help build uluthe staffing and organizationof the agencies responsiblefor road constructionand maintenance,and for transportcoordination. The rural roads projectshave met specific needs as part of agriculturaldevelopment packages, and were designed as transport and agriculture integrated investments. The recently approved Highway Sector Project provides support for a priority program of road rehabilitationand maintenance,the strengtheningof road maintenanceplanning in order to make best use of scarce resources,and the implementationof a sector wide action plan dealing with the regulatory framework for road transport,including road safetymatters. The ProjectPerformance Audit Reports for the First, Second, and Third Highway Projects, respectivelyLoan 642-MOR, Credit 167-MOR, Loan 955-MOR,and Loan 1830-MOR,which were designed to improve traffic conditions,highway maintenance,and transportplanning outline their successful implementation,with rates of return above appraisal estimates despite cost overruns. Loan covenantshave been generallycomplied with, but progress expected on transport planning did not materialize to the extent desirable, in particular because of split responsibilities and limited cooperationbetween MOT and MPW. Disbursementlagged considerablybehind the physic:l implementationof the projects because of shortages of local funds. The situationhas started to improvefollowing implementation of the SAL, which addressedthe budget execution issue at the country level.
II. THE PORT AND MARITIME SUBSECTORS
A. Port Facilitiesand Traffic
Port Facilities
2.01 Morocco'sport infrastructurehas been rapidly expanded to cope with increasingdemands on maritime transportand maritime activities. Until 1961 Morocco had only nine ports. It has now a total of 20 ports along its coast line of 3,500 km. There are 11 commercialports forming three main groups: a northerngroup comprisingTangier and Nador; a central group comprisingKenitra, Mohammedia,Casablanca, and Jorf Lasfar; and a southern group comprisingSafi, Agadir, Tan-Tan, Laayoune,and Dakhla (Map IBRD 22288). Agadir, Nador, and the main port, Casablanca, are well diversified. Some ports are somewhat specialized:petroleum products are handled essentiallyat Mohammedia,phosphate products at Jorf Lasfar and Safi, and passengertraffic at Tangier. Commercial ports also provide facilitiesfor the Navy. In addition, there are nine small ports devoted to fishing activitiesand pleasure navigation. These ports are: Ras Kabdana, Al Hoceima,Jebha, M'Diq, Larache, El Jadida, Essaouira,Tarfaya, and Sidi Ifni. Recently, four ports have been developed exclusively for pleasure navigation. These ports are: Asilah, Restinga,Smir, and Sables d'Or.
2.02 The 11 commercialports have a total of 150 berths with an overall length of about 21,500 meters and an average length per berth of 150 meters (Table 1). All ports use eithermobile or fixed cranes (about 160) for vertical lifting of general cargo. Specializedequipment is available for solid bulk commodities,such as minerals and cereals (nine gantry cranes). Miscellaneous - 8 -
cargo handling equipment comprises 548 tractors and forklifts, 70 loaders includingportable belt loaders, 30 grain loaders, and 29 units of container handling equipment.
2.03 Whereas requirementsfor port expansion are expected to be minimal during the period 1991-1993,adaptation of existing port facilities to modern handling techniquesis urgently needed. In effect, the major program of port infrastructure investments pursued by the Government in recent years has resulted in the provision of adequate general infrastructure. However, the rapid growth of container and roll-on roll-off traffic has increased the pressure on conventionalberths that lack sufficientyard space and adequate access to handle containersand trucks. The situationis particularlycritical at the container terminal of the port of Casablancawhere congestionplaces a considerablestrain on handling equipment. Similarly, congestion occurs at Tangier during the summermonths when a steady flow of trucks conflictswith the peak period of passenger traffic. As a result, ferries call at the Ro-Ro platforms,thus delaying Ro-Ro ships. Moroccan ports are also ill-equippedto handle and store large volumes of grain, despite a steady volume of cereals imports. In addition,a planned thermalpower plant at Jorf-Lasfarwill require the upgrading of an existing berth to handle large coal carriers. These limitations,if not corrected,would increasethe cost of foreign trade and, as such, there is considerablescope for substantialsavings in foreign exchange through appropriateinvestments in upgradingand modernizingport facilities.
2.04 The port sector investmentprogram for the period 1991-1993, to be supported by the project, will address the immediateproblems of container, roll-on roll-off (including ferries), and coal handling facilities. Grain storage facilities are to be provided at Agadir through the Cereals Board (ONICL), the enterprisewhich currentlyhandles all grain traffic. A study of future improvementsof grain storageand handling facilitieswill be part of the updating of the National Port Master Plan to be supported by the project (para. 2.31).
Traffic
2.05 Total Moroccaniimport-export port trafficwas 36 million tons in 1988, of which 15 million tons (42%) were imported and 21 million tons (58%) were exported. This total traffic volume includes about 24 million tons of solid bulk cargo, 7 million tons of liquid bulk products, and 5 million tons of generalcargo (Table 2). Four major ports handle 86% of the total import/export traffic. These are: Casablanca(42% of total traffic),Mohammedia (12%), Safi (15%), and Jorf-Lasfar(17%). While total port traffichas increasedby just over 5% per annum during the period 1983-1987, it increased by 13% in 1988 mainly as a result of a jump in export traffic. Imports increased fairly steadilyat a rate of 6 to 7% per annum over the period 1983-88,whereas exports increasedat a lower rate of just over 4% per annum. The growth of unitized traffic is quite significant. Unitized traffic has increasedby 6 to 7% per annum since the early 1980s. In 1988, container traffic at the port of Casablancapassed the 1 million tons mark--a 14% increase over 1987--whileRo- Ro trafficreached 454,000 tons--a35% increaseover 1987 traffic figures. The port of Tangier,which is second to Casablancafor unitizedcargoes handled only - 9 -
41,000 tons of container traffic in 1988. TIR I traffic at Tangier, however, peaked at 370,330 tons in 1988, an increaseof 40% over the previous year. On the other hand, cereals importshave remainedsteady at about 2 million tons per annum on average. Coal imports amount to 1 million tons, mostly through the port of Casablanca. Phosphate and mineral traffic has recently increased, reaching 19 million tons in 1988, a 14% increase over 1987. While the port of Casablanca'sshare in this traffic still exceeds 50%, the port of Jorf Lasfar is rapidly catchingup due to its specializationin bulk traffic; it handled 3.7 million tons in 1988, a 295% increaseover 1987, thus exceedingthe 3.1 million tons handled through the port of Safi.
2.06 While future traffic growth is expected to be moderate, traffic distributionamong ports and handling techniqueswill change. The development of the new port of Jorf Lasfar has already altered the distributionpattern of phosphaterelated traffic. A portion of this trafficis graduallyshifting from Casablancaand Safi to Jorf Lasfar. Grain trafficdistribution will also change as a result of the constructionof new storage facilities. General cargo volumes are expected to increaseat about 3% per annum in average over the next decade. Unitized traffic growth, however, is expected to be higher. The provision of adequate facilitiesin the ports of Casablancaand Tangier would allow unitized traffic to increasein these ports at a rate of 5% per annum and 7% per annum respectively. Barring these improvements,unitized traffic would increase at a lower rate, thus inducing increased transport costs. Further details of traffic patterns and forecastsof traffic are given in Chapter IV.
B. Maritime Transportand Shiggins
2.07 Maritime transport accounts for 98% of Morocco's volume of foreign trade. Trade with Europe dominates,reaching about 50% of total foreign trade. The trade pattern of bulk traffic is quite contrasted. Whereas 70% of coal traffic originates from Colombia, about 75% of phosphate trafficgoes to Europe. Most grain cargoes originate from USA and France. The origin and destination of Moroccan general cargo traffic is mostly Europe (66%) and North America (27%). Traffic with Europe is split between the Atlantic area (70%) and the Mediterraneanarea (30%).
2.08 Maritime shipping is largely based on two major public shipping companiesin Morocco: COMANAVand MARPHOCEAN. COMANAVoperates 20 linervessels of less than 8,000 dwt, of which it owns 15. These consist of seven container vessels, two Ro-Ro vessels, four fruit carriers,and two ferries. MARPHOCEAN, a joint venture of COMANAV, the Moroccan PhosphateOffice (OCP) and GAZOCEAN, operates 15 phosphate rock ships and chemical products carriers. Two public companies are specialized in the maritime transport of petroleum products (Petrocab) and citrus (Sofruma). There are also several Moroccan private shipping lines: Gen6rale Maritime, Navimar, Cogimade, Cotrama, UMM, Atlas Navigation, Conade, Comarit, and Limadet. These lines operate on specific trades, such as citrus products and ferries. Altogether, Moroccan shipping lines controlabout 20% of the totalvolume (33% of the totalvalue) of Moroccan freight and about 50% of general cargo traffic. A number of foreign shipping
I/ TIR: InternationalRoad Transport (TransportInternational Routier) - 10 -
lines are quite active in liner shipping in Morocco. Major ones are: O.P.D.R. (FederalRepublic of Germany),CGM and ChargeursDelmas (France),and S.I.U.S. (Italy). Accordingly, there is some degree of competition in general cargo trade. The provision of a modern containerterminal, to be financedunder the project,will furtherstimulate competition by allowinga wider range of vessels to call at the port of Casablanca.
2.09 Maritime shipping is under the control of the Ministry of Fisheries and Merchant Marine acting through the Merchant Marine Directorate (DMM). Although DMM promoteslocal shippinglines throughcargo sharingschemes, it has also promoted developmentof joint ventureswith foreignpartners. As a result, liner shipping and container services are relatively diversified and offer frequent calls by small vessels. The Moroccan merchant fleet includes 63 vessels with a total dead weight tonnage (DWT) of about 540,000. Moroccan shipowners will need prudent modernization and adaptation of their fleet, primarilythrough leasing arrangements,to keep it competitivein the changing environmentof Europe and Maghreb.
C. Trade Facilitationand Logistics
2.10 The efficiencyof shipping and port services in meeting demands of trade and industry depends on the facilitationof information flows. In particular, the conduct of customs clearance services and harmonized documentationare critical elements of trade facilitation. In Morocco, there is an urgent need to simplify,rationalize, and standardizeessential documents are proceduresinvolved in the transit of cargoes through the ports. Although the transit time of import cargoes through the port of Casablanca has been reduced, it is still more than 15 days. To correct this, the Governmenthas establisheda NationalCommission for Simplificationof ForeignTrade Procedures (SIPROMAR) under the adjustment program supported by the Bank's Second Industrial and Trade Policy Adjustment Loan (ITPA II). Until recently, the objectivesof SIPROMAR were far from being met. This should now change. In November 1989, a Customs expert was finally appointed to work full time for SIPROMAR. His activitieswill focus on four areas: (a) preparing a unified Customs declarationaligned with the UN layout key; (b) preparinga nationally aligned series of internationaltrade documents; (c) recommending specific measures to reduce dwell times in the ports, particularlyfor containersat Casablanca;and (d) promoting the adoption of internationalstandards for data elements and interchange,based on UN-ISO norms in general, and EDIFACT in particular. A draft initial customs document has already been prepared for review by all members of SIPROMAR. In addition,a study of the efficiencyof current customs inspectionpractices has just been initiated,which would also seek to identify,with the Customs CooperationCouncil, alternativemodern and efficient customs inspection procedures. Issues raised by the customs inspectionstudy are cross-sectorialin nature and thus would be addressed as part of the next phase of trade reform being undertakenby the Government. The Facilitation Project will monitor progress in applying procedural and documentary reforms, particularly through appropriate port performance indicators (para. 3.37), some of which are included in ODEP's Development Program for the project (para. 3.12). - 11 -
2.11 Improving informationflows is but one vital element in the rapidly changing internationaltradirg environment. In addition,there is an increasing need to address other elements of trade logisticsmanagement. The efficiency of the whole logistic chain is important to the competitive position of Morocco's exports and to the domestic price of imports. The Government plans to undertake a trade logistic study which would analyze costs and identify existing constraints affecting Moroccan foreign trade logistics. The study would be coordinated by the Ministry of Foreign Trade. During project preparation,the Bank assisted in preparing terms of reference for the study. The investigationswould cover typicallogistics chains affectingRo-Ro traffic, perishablegoods and import and export of containerizedgoods. The main focus of the logistics study would be on the provision of shipping and freight-forwarderservices. This would ensure complementarity with the activitiesand studieswhich have already begun under the FacilitationProject and the Highway Sector Project. The Governmenthas confirmedits intentionto launch the study under these terms of reference. The study would assist in defining appropriatemeasures to be implementedunder future trade reforms.
D. Port Organization
2.12 In December 1984, the Governmentcarried out a reorganizationof the port sector. The prominentfeature of the new organizationwas to transfer all commercialport activitiesfrom the civil service to an autonomousenterprise. However, MPN retainedoverall responsibilityfor port administration,planning, construction,maintenance, dredging as well as safety of port operations. Since 1985, MPW dischargesits responsibilitiesthrough the Ports Directorate(DP) in Rabat and the Office for Port Operations(ODEP). DP is under the civil service. DP is in charge of port planning and port policies. It also oversees port investmentprograms, coordinatesnon-commercial port activities,and regulates port operations(para. 2.14). ODEP is a financiallyautonomous enterprise with an industrialand commercialcharacter which took over cargo handling from the former R6gie d'Acconage du Port de Casablanca (RAPC). Its responsibilities encompass a wide spectrum of port operations,especially cargo handling, and maintenance (para. 2.18). A Technical Committeeof each port, chaired by the local port representativeof the MPW is consultedon all matters connectedwith port operationsand maintenance. Representativesof local administrationsand users participatein the Technical Committees.
2.13 So far, the new sector organizationhas substantiallyachieved its objectives. These were: (a) to raise port efficiency;(b) to reduce subsidies; and (c) to restore the financial viability of the sector. First, most performanceindicators for port operationsare markedly better than before 1985 (para. 2.23). Second, although the Government still finances dredging and breakwater maintenance,maintenance of port facilities has improved without increasingthe financialburden on the budget (para. 5.11). However, current plans foresee that ODEP will be responsiblein the future for the construction and maintenanceof port infrastructure,except for breakwatersand jettieswhich will remain the responsibility of the Government, along with maintenance dredging. Transfer of fixed assets (except breakwaters, jetties and other infrastructurebelonging to public property) to ODEP will take place before December 31, 1991. These provisionsare included in ODEP's DevelopmentProgram (para. 3.12) and are to be reflected in the Contract Plan (para. 3.13). - 12 -
Finally, ODEP's financial performance is satisfactory (para. 5.01). As a result, ODEP is able to finance the constructionof the new container terminal with no Governmentfunding. The division of responsibilitybetween DP and ODEP is further detailed in the followingparagraphs, and in Table 3. The role of the private sector is discussed in para. 2.21.
Ports Directorate
2.14. The PortsDirectorate (DP) is in charge of maintenanceof breakwaters, dredging,and all harbor master functions:control and safety of ship movements, berth allocation,coordination of users toward maximizingport productivity, goods security, and leasing of port facilities to users. DP also plans investments in new port infrastructure,m-stly breakwaters and quays. DP carries its maintenanceresponsibilities either with its own staff, or through contractingout , e.g. for dredging. DP dischargesits activitiesthrough local representativesof MPW at the port level. However, at Casablanca,the local representativeof MPW is a directorate,the Casablanca and Mohammedia Port Directorate(DPCM{). This special status is warrantedby the size and importance of the port of Casablanca and the proximity of the specialized oil port of Mohammedia (para. 2.17).
2.15. DP's current organizationis shown on Chart No. 1. DP has four departments:operations, engineering, studies and planning,and lighthousesand beacons. While DP staff is of good quality, it should play a more active role in setting port development priorities, coordinating port planning and controllingenvironmental impacts. The projectwill help strengthenDP in this regard through the updating of the National Ports Plan (para. 2.31) and an environmentalstudy (para. 3.40).
2.16. The local representativesof MPW and DPCM have the following responsibilities:security of ships and goods movements, maintenance of the breakwatersand control towers,and dredging. They also have a supervisoryrole over the other entities licensed to operate in ths ports areas, in particular: (a) ODEP; (b) the towage companies;(c) the pilots stations; (d) the grain silo operator,ONICL, which l-ases areas for its facilities;(e) OCP, the phosphate exportingenterprise, operating berths or piers which are leased on a long-term basis; and (f) the customs office which operates under the control of the Ministry of Finance.
2.17. The current organizationof DPCM is shown on Chart No. 2. DPCM has four Departments: administrative services, engineering, Casablanca port operations,and Mohammediaport operations. Overall, its staffing is adequate and of good quality. The ongoingport project provides support to trainingand technicalassistance of DPCM staff in port operationsand port safety. This has helped strengthenthe departmentof port operationsin the areas of supervision of cargo handling and port safety. Fellowshipsand training to be provided under the projectwill help raise the awarenessand skills of DPCM staff in the area of environmentalprotection. - 13 -
ODEP
2.18 ODEP's principal functionsare:
(a) to operate the following 11 commercial ports: Casablanca and Mohammedia, Agadir, Dakhla, Jorf Lasfar, Kenitra, LaAyoune, Nador, Safi, Tangier, and Tan-Tan;
(b) to handle cargo without exercising a monopoly; concessionary arrangementswith other entities includingprivate operators can be made by the Government;
(c) to maintain all port infrastructureexcept for: breakwaters and dredging which is done by the Ports Directorate; and other infrastructureoperated by specializedusers such as the phosphates operator,OCP, and the grain silo operator,ONICL;
(d) to collect revenues from cargo-handlingtariffs as well as the port dues; and
(e) to undertake, at Government's request, and for its account: (i) constructionof new port infrastructurewith proven financial viability, such as the oil berths at Mohammedia and the future containerterminal at Casablanca;(ii) maintenanceand repair of port facilitiesin the ports of Al Hoceima, El-Jadidaand Essaouira;and (iii) maintenance and repair of lighthouses and beacons in ports operated by ODEP.
2.19 ODEP is managed by a Board of Directors with a strong ministerial representation. The Board, chairedby the Minister of Public Works, on behalf of the Prime Minister, includes representativesfrom nine other ministries, customs, DP, and DPCM. Users, such as ship operators,freight forwardersand prominent shippers, are also representedby six directorshaving the right to vote. The Board meets twice a year; between sessions,authority is delegated to the Management Committee,which meets once a month, and to the General Manager of ODEP, who is appointedby the Government. The ManagementCommittee is chairedby the SecretaryGeneral of MPW. It includesrepresentatives of the Ministriesof Finance, Interior,Merchant Marine, Commerce,and Industry.
2.20 ODEP's present organizationis generallyvery satisfactory,and no major changes are required. ODEP was reorganizedin October 1987 followinga reorganizationstudy which was financed under the Ports of Casablanca and MohammediaProject. ODEP has officesand personnelon duty in each of the ports where it operates,but its headquartersare located at Casablanca. Decisions on policy matters including planning, pricing, personnel management and procurement,and supervisionof both finances and operationsare carried out from headquarters. Local Port OperationsDirectorates (DEPs) are responsible for the day-to-dayplanning and executionof port operations. The result is a clear delineationof responsibilities. Chart No. 3 shows the organizationof ODEP's headquarters. Chart No. 4 shows the organization of the DEP of Casablanca. Further details on ODEP's organization,staffing and training are given in Anmex 2. - 14 -
2.21 An area for future action is the role of the private sector.Although there is no de lure monopoly limiting private sector participation in port activities, such participation remains modest. Only a few activities are performed by private companies: pilotage and towage at Casablanca and Jorf Lasfar; line handling at Safi; stevedoringon board the ships at Casablanca, Agadir, Tangier,Safi, and Nador; and cargo handlingand warehousingat Kenitra. Although the Governmentis willing to increaseprivate sector participationin port activities,previous attempts to do so have met with little success. On the contrary, users have asked ODEP to take over from the private sector in a few instances,such as cargo handling at Kenitra. This is because the users see the positive results of ODEP's efforts to modernize port equipment and maintain port facilities. On the other hand, private port operators are of small size. Accordingly,they contributeonly marginallyto port investment.
2.22 In fact, the case for privatizationis relativelyweak as long as ODEP remains efficientlymanaged and financiallysound. Still, a few positive steps could be taken to foster participation of dynamic and efficient private companies in port operations. First, ODEP should concentrate its investments in activities that fit in with its mandate, thus refraining from excessive diversification. Second, the Government and ODEP should aim at progressively eliminatingprice distortions,direct subsidies,and cross-subsidizationamong ports and between activities. Finally, the Government should identify which activities could most benefit from an increasedparticipation of the private sector. For these activities,the Governmentand ODEP should define performance targetsand investmentcriteria for private companiesto avoid granting special privileges. While no specific action plan regardingprivatization is deemed necessary at this stage, the situationwill be revisitedperiodically during project implementationin the light of ODEP's actual performance.
E. Port Operationsand Naintenance port Operations
2.23 Port operationshave substantiallyimproved over the past five years, but there remainsa need to hasten cargo documentationand clearanceprocedures (paras 2.10 and 2.25). Technical assistance financed under the Ports of Casablancaand MohammediaProject helped streamlinegeneral cargo and container terminal operations. Although divided responsibilitiesbetween cargo handling on board the ship and on shore still prevail, better coordination of port operators has contributed to increasing productivity. There are several instancesof significantimprovements: in 1988,palletized fruits and vegetables reached 152 metric tons per gang per shift of eight hours; packaged woods reached 154 metric tons per gang per shift; steel products reached 572 metric tons per gang per shift. Overall, the average productivityper gang per shift has increasedby 44.5% at Casablancaover 1984 figures. Similarly, average productivitygains at other ports over the period 1984-1988 range from 12% at Safi to 40% at Nador. Table 4 give more details on productivityfigures.
2.24 On the other hand, handling of containers and grain still needs improvement. Containerhandling productivity reaches 14 boxes per hour per ship for imports and 9 boxes per hour per ship for exports. ODEP is currently - 15 -
renewing its run-down fleet of yard equipmentand one ship-to-shorecontainer gantry crane has also been ordered. While provision of modern and reliable equipment is likely to boost productivity, it will not cure the problems resulting from the scarcity and inadequacyof storage areas. The construction of a modern containerterminal at Casablanca,to be financedunder the project, will provide adequate facilitiesto cope with the growing flow of containers. Productivityfigures for grain handling range from 254 to 320 metric tons per gang per shift. Productivitywould be four to five times higher with modern handling equipmentand adequatestorage facilities. ONICL plans to erect a silo and modern grain handling equipmentat Agadir, with bilateral financing. The new facilitieswould be put in operation in 1993. A previous plan to erect similar facility at Tangier has been shelved because ONICL sees a decreasing need for cereals imports throughTangier.
2.25 Provision of modern equipment and constructionof a new container terminalwill not sufficeto bring containeroperations up to Europeans£ondards of performance. Simplificationof Customs documentsand proceduresre,ires a parallel effort in the port itself. ODEP plans to use the ongoing Port Project to finance a Port Expert to assist SIPROMAR in its work, particularlyas far as port information systems and procedures are concerned. ODEP also plans to appoint a short-termcomputer expert. The computer expert's task would be to help ODEP commission the SIPOR project (computerizedmanagement information system)and to integratethe data elements requirementsof EDIFACT norms in the ongoing computerization process. This would eventually facilitate data interchangebetween Customs, ODEP, and port users. At negotiations,assurances were obtained that ODEP would, as part of its DevelopmentProgram (para. 3.12): (a) complete a study of the incidenceand causes of delays in the transit of containersthrough the port of Casablancaby Maroh 31, 1991; (b) simplify trade proceduresand do_umentationrelated to its activitiesby October 31, 1991; and (c) take measures to ensure that its computerizedinformation system (SIPOR) interface effectively with the computer systems of the Moroccan customs authorities(SADOC) by the end of 1991 and with port users' computerizedsystems by the end of 1992.
2.26 Additional gains in port productivity are also possible through institutionalimprovements and training. First, the constructionof a modern containerterminal provides a uniqui opportunityto establisha single operator for its operations. In additionto being responsiblefor all containerhandling operationson the containerberth and in its stacking area, the single operator would be responsible for the provision and maintenance of the needed mobile containerhandling equipment. Second, actual performanceindicators for ca.go handling productivity should be compared to targets in addition to being compared to previous achievements. ODEP has establisheda comprehensiveset of performance indicatorswhich serve to monitor progress. A further step would be to monitor gaps between current achievementsand targets. The targetswould be established,and periodicallyrevised, after review of similaroperations in the most performingports. Third, there is a need to update and develop port regulations in parallel with the ongoing modernization of port facilities. Finally, ODEP's efforts to train port staff should be intensified. ODEP's DevelopmentProgram includes measures to monitor operations against defined targets and to prepare the future organizationof the new cortainer terminal - 16 -
(para. 3.12). In addition,the projectwould finance technicalassi&xance and training to address these needs.
For Mintenance
2.27 While port infrastructuremaintenance is generallysatisfactory, there is currentlya backlog of breakwaterrehabilitation and dredging. In the past, infrastructure maintenance was neglected, particularly in the port of Casablanca. Since January 1985, ODEP has been responsiblefor maintenanceof port infrastructure,except -or breakwatersand dredging. ODEP is currently implementinga comprehensiveprogram of rehabilitationof port infrastructure. This includes roads, storage areas, water supply, transit sheds, drainage,and electrical systems. Funding for this program comes from ODEP's own resources and Bank financingunder the ongoing Port Project. However, more needs to be done to rehabilitatebreakwaters and to cope with the dredging requirementsin continuationof the programscurrently supported by the African DevelopmentBank (AfDB) and the Bank. The project will include a component to that effect (para. 3.09). Dredging and equipmentmaintenance are further discussedin the followingparagraphs.
2.28 Dredging work is particularlycritical for continued access to the ports by the larger vessels. The existing backlog of needed dredging has resulted from deferredmaintenance dredging in several ports. It is estimated that annual maintenancedredging will amount to k.5 million me by 1992. DRAPOR, a wholly-ownedsubsidiary of ODEP, carries out dredging in all ports on behalf of the Government. While DRAPOR charges less than private companies,it cannot renew its equipment from its own resources. In fact, the Government provides most of the equipmentused since it can obtain better financial conditionsfor its acquisi.-ion.Overall, DRAPOR's equipment is adequate. No major acquisition is required,at least in the near term. However, there has been little effort to determinethe true cost of dredging and to pass these costs on to the users and beneficiaries. DRAPOR organizes dredging operations in a distorted cost framework, thus resorting to a low number of working hours for the dredges. Hence, there is a need for optimizingthe operationand deploymentof DRAPOR's fleet, and determiningthe cost of maintenancedredging. At negotiations,it was agreed that ODEP woule carry out a study to strengthen the maintenance dredging operationsand furnish its resultsto the Bank for review and comments by December 31, 1991. Thereafter,ODEP would implement the recommendations based on this study as agraed with the Bank.
2.29 Mainten.rce of cargo handling equipmentis adequatelycarried out by ODE2'sworkshops, supported by privatecompanies. Qualifiedstaff and effective use of computers have contributedto improving the quality and efficiency of equipmentmaintenanee. Equipmentdemand availabilityratios range from 94X for forklift trucks tn 99.6% for cranes at Casablanca, which is satisfactory. Still, OEP w-nts to further rationalizeequipment management and maintenance. This is no given .he size of the fleet and the importanceof its efficient deploymen To this effect, ODEP is currently developing a maintenance managementprogram includingorganization, performance indicators and targets, strategy and policies,and maintenanceprocedures. ODEP also strives to renew its equipment in a timely fashion. The project will assist ODEP in optimizing and financing its equipmentinvestment plan. - 17 -
2.30 The Loan Agreementfor the ongoing Port Project (Loan 2657-MOR)calls for ODEP to prepare a report for Bank review at the end of each calendar year on maintenanceworks carried out during the year and their costs, as well as works scheduled for each of the following calendar year. Although this requirement has been only partially fulfilled, maintenance management has gradually improved. Further progress on maintenance management will be monitoredunder the project through the normal supervisionmechanism.
P. Port Plannina and InvestmentProgram
Port Planning
2.31 Port planning needs to be strengthenedand better coordinated. The recent port reorganizationhas weakened the port sector'scapability to prepare a coherent and comprehensiveports developmentplan. The principalreason for this is the insufficientcoordination among the agencieswhich are responsible for differentparts of the planning process. Theoretically,DP is ultimately responsible for coordinatingoverall port investmentplanning. In practice, however, DP tends to focus on basic infrastructureneeds and long-termplans with little operational analysis. In 1983, DP completed a 20-year National Port Master Plan (PDPN) to define port investment needs. The PDPN was partially updated in 1985 and 1987. On the other hand, ODEP prepares five-year rolling detailed port investment plans focusing on programs of immediate practical improvementsfor the use of existing facilities. ODEP's plans make little reference, if any, to the PDPN. Moreover, ODEP is not yet equipped with the specializedskills required for detailed port planning. As a result, medium- term planning of specificprojects is being neglected. There is a need for a total planningapproach by which all planningactivities -- rehabilitation,master planning and port operations and management review--are carried out concurrently,with the objectiveof achievingthe full potentialof the existing ports before resorting to the addition of new berths and related facilities. To improvethe planningprocess, the project includesa study to update the PDPN giving special emphasis to its linkageswith medium-termplans and operational analysis at the level of each port. While the study will be under the responsibilityof DP, close cooperationwith ODEP will be required. Training would also be provided to ODEP staff to strengthen ODEP's port planning capability.
InvestmentProgram
2.32 Since the creation of ODEP in 1985, its investmentshave varied from DH 300 million (US$35million) to over DH 400 million (US$47million) annually, with the main focus on modernizationof facilitiesand the rehabilitationof storage areas and warehouses. During the same period, investments in port infrastructurehave ranged from around DH 450 million (US$53million) to over DH 600 million (US$71million) annually. This high level of investmentin basic infrastructurewas accounted for by the completion of the new port of Jorf Lasfar in 1985 and by the constructionof new berth facilitiesat Agadir during the period 1984-1988. However, the Agadir port extensionwas financed through extra-budgetarysources amounting to about DH 850 million (US$ 100 million) during the period 1985-1988. As such, port infrastructureinvestments financed - 18 -
under the generalbudget averaged about DH 250 million (US$29million) annually during the period 1985-1988. This level of investment is now expected to decrease substantiallyand will be limitedoverall to about DH 190 million (US$23 million) throughthe end of the current 1988-1992Plan. Similarly,expenditures by ODEP are unlikely to exceed DH 450 million (US$55 million) annually during the same period, a level which would be in line with expected revenues, requirementsfor debt servicing,revaluation of the maintenancefee (para.2.45) and the limits placed on future tariff increases. As a whole, this program reflects the currentemphasis given to the modernizationof the port s^-tor and to the rehabilitationand maintenanceof existing infrastructure. The overall port investmentprogram for the period 1990-1993is discussedin Chapter III and further details are given in Annex 3.
G. Accountingand Auditing
Ports Directorate
2.33 DP keeps separate accounts which follow the Government system of budget accounting. In the general budget, the accounts are broken down into chapters and articles for recurrentexpenditures, and lines and subsectionsfor capital expenditureswith no organic link between revenues and expenses. The budget is approved by the parliamentand its execution is closely controlled. DP keeps two separate accounts for commitmentsand for payments,which at end of year show similaramounts, because outstanding commitments and relatedcredits are cancelledin accordancewith Gvernment practice. Only unused credits for capftal expenditurescan be carried over with the approval of the Ministry of Finance (MOF). Accountingfor the payroll is kept at ministeriallevel.
2.34 The Director of DP can commit funds within a DH 30,000 limit; above this limit the FinancialController's clearance is required. Funds are w'thdrawn based on applicationssubmitted by the directorand disbursedby the Treasurer's representatives. The Ministry of Finance and the Cours des Comptes are responsiblefor auditing these accounts. While this system is commonlyused in public accounting, it does not produce appropriate information for assets management. Data are recorded on a monthly basis at their historical value without referenceto total cost and without applicationof any depreciation.
ODEP
2.35 ODEP followsaccounting rules applicableto all public enterprisesin Morocco. A new nationalaccounting chart has been publishedbut it has not been yet approved by parliament. The current system is decentralizedand fully computerizedin all DEPs. The accountingsystem is kept in line with current rules derived from the French chart of accounts,dated 1957. It includes two sub-systems, manager's and budget accounts, kept at the port level and consolidatedat ODEP's financialdepartment. The accountingsystem has improved over the last years, but still shows weaknessesin analyticalpotential, cost accountingand budgeting,which will be addressedby ODEP's financialdepartment assisted by consultantsas appropriate. Further improvementwill result from the implementationof the computerizedmanagement system SIPOR. A subcomponent of SIPOR, the COFI project, which deals with accounting consolidation and integrationof sub-systems,is expectedto be fully implementedwithin two years. - 19 -
2.36 The methodology for revaluation of government financed assets transferredte ODEP Las been reviewed with the Bank and is satisfactory. The Government financed assets to be carried in ODEP books will show depreciation and additions. Assets remainingwith the Government,revalued from time to time as appropriate,will serve as a basis to calculatethe fee that ODEP will pay to the Government for their use (para. 2.45).
2.37 The current budget follows a standard classificationby chapter, article and paragraph. The capital budget lists expenses by article and paragraphswhich are integratedin a rolling five-yearplan. Draft budgets are preparedby each port managerand reviewedat Headquarters,based on the general corporatestrategy and governmentalguidance regardingport policy and overall economic development. The draft consolidated budget is reviewed by the Management Committee (para. 2.19). The final budget is submittedannually to ODEP's Board for approval.
2.38 The General Manager has extensive power to execute the budget and commit funds, sutject to the clearance by the Financial Controller for expenditures above DH 100,000 (US$12,000). The Financial Controller is permanentlyassigned to ODEP by the Ministryof Financeto ensure that government legislationis fully enforced,especially concerning bidding and salarypolicies; the FinancialController also has authorityto reallocatefunds betweenarticles, whereas their allocation between chapters must be authorized at ministerial level. The principleof a priori controlis very constrainingin accomplishing day to day management,while a posterioricontrol based on an approved budget executionwould be more efficient. The interventionof the FinancialController at each step of the managementprocess makes the day to day financialmanagement very cumbersomeand constitutesa major bottleneck in ODEP's management. Aware of this situation, the Government and its public enterprisesare increasingly using contract plans as a vehicle to improve the control procedures. The new principlewill involvea posterioricontrol based on budget executionand review of expenselimits requiring clearance of the FinancialController. Consequently, budget preparationmust be rationalizedto ensure that authorized spending is fully justified economicallyand financially. Technical assistance under the projectwill provideadditional expertise to strengthenand streamlinebudgeting system implementedrecently under the first project, to set an internal audit function(para. 2.39) recommendedby the organizationalstudy, and to ensure that investmentspending is financiallyjustified.
2.39 The internal audit department at managerial level has not yet been establisheddue to difficultiesin hiring appropriatehigh level staff. The internal audit unit currently in charge of auditing accounting systems and relatedprocedures is attached to the financialdepartment. Its main objectives are to ascertain consistency and accuracy of financial data provided and financialstatements presented to ODEP management. Internal audit is oriented towardscontrol of financialdata and proceduresat DEP level, includingbilling and collectionsof port dues, operatingexpenses, capital expenditures,payroll and wages and liquidity management. ODEP's management plans to set up an internalaudit departmentand to hire appropriatehigh level staff by the end of FY91. The internalaudit departmentwill be attachedto ODEP GeneralManager and will focus on: (a) implementationand updating of the oveiall organization - 20 -
principles,str,. ture and procedures;(b) budget execution;(c) human resources management;ar (d) control of overall financial equilibriumat ODEP's level. These activitieswill be monitoredduring project implementation.
2.40 Each pox,:produces monthly financial statements showing management accounts and budget execution. The accountsare consolidatedat the end of each year and submittedto the board for approval. ODEP accounts have been audited by an independentlocal auditorsince its creationin 1985. The first two audits were limited to identifying deficiencies in the accounting systems and procedures. ODEP's managementhas succeededin solvingsome of the deficiencies identifiedby its auditors. Despite ODEP's commitmentand improvementof its accounts,the 1987, 1988 and 1989 audit reportsdid not give a clean opinion on ODEP's financialstatements for the followingreasons: (a) lack of consistency in accounting principles, bad debts write-off and provision policy for uncollectibleaccounts receivable; (b) lack of informationon the previousRAPC's accounts in ODEP's books; (c) absence of lenders'confirmation of the status of the ongoing loans; (d) absence of informationon a contract that ODEP manages on behalf of the Government; and (e) restriction in the scope of auditors investigation. Items (a) and (c) above have been tackled by ODEP's financial departmentand should be resolved during fiscal year 1990. Items (b) and (d) above will be includedin the terms of the proposed ContractPlan. Discussions between the Ministry of Finance and ODEP to solve these two problems are currentlygoing on. Regardingthe scope of auditors'investigations, new terms of reference have been proposed to ODEP to review the auditor's contract for FY 1990 and thereafter. The auditors' comments on ODEP financial statements have been taken into considerationih the financialanalysis in ChapterV.
2.41 At negotiations,it was agreed that ODEP and the Government would maintain appropriateaccounts, including separate project accounts and would have their accounts and financialstatements audited on the basis of appropriate terms of reference by independentauditors acceptable to the Bank, and that audit reportswould be submittedto the Bank not later than six months following the end of each fiscal year.
H. Tariffs and Cost Recovery
2.42 Current port tariffs,which were modified in August 1985 and September 1987, have enabled ODEP to reach an overall financialbalance and generate a positive operating income over i.heperiod 1985-1989. However, the tariff structure is still inadequate and few tariffs are cost based. Actually, substantial cross-subsidies occur between port activities and traffics (para. 2.43). Conscious of this situation,ODEP has developed a new pricing policy aiming at four main objectivesnamely: (a) overallfinancial equilibrium at sector level; (b) balanced financialperformance in each port; (c) balanced financialperformance for each activity, or group of activities and traffic; and (d) uniformrates to be applied to all ports. Objective (d) is a short-term objective to be kept while every effort is made to reduce the costs of loss-makingactivities. In the longerterm, the other three objectiveswill take precedence. - 21 -
2.43 In order to set up the appropriatetariff structureto meet the above objectives,provisions were made in Loan 2657-MOR for a tariff study which has been substantiallycompleted. The main findingsof the tariff study show that: (a) the port of Casablancaand more recently,Tangier are making profits which compensatefor losses incurred in other ports; (b) port dues on and services to ships are undercharged;they are subsidizedby port dues on goods and cargo handling charges; (c) some commodities,in particularore and phosphate,do not cover their costs; (d) the ad-valorem portion of charges on goods is proportionallytoo large, blurring the relationbetween cost and service; and (e) containerizedgoods are sometimespenalized when compared to conventionally packed goods. The study recommends a simplified,more cost-relatedtariff structureand level, to be implementedprogressively, starting in 1990. The new tariff structure, which will be introduced in early 1991, involves a simplificationof tariffsfor containerhandling as well as an increasein port dues on ships. The financial forecast in ChapterV makes allowance for such adjustments. ODEP is currently testing the proposed tariff to determine its impact on ODEP activitiesand on users of port facilities. ODEP has developed in selected ports a double accounting system to record simultaneouslythe proceeds of the existing tariff and those which result from the new tariff. If required, appropriateamendments will be introducedbefore generalizingthe tariffs to the other regional ports, which is expected before the end of September 1991 (para. 5.08). Details of the projected tariff structure and level, particularlyfor containerand Ro-Ro traffic are in Annex 4.
2.44 Although the tariff study covers a large spectrumof ODEP activities, further investigationsare needed to establish: (a) appropriatefees for use of fishingports facilities;(b) chargesto privateport operators;and (c) a tariff applicable to coastal traffic. Consultantscould also be requested to assist ODEP in analyzingthe results of the test runs referred to above. In addition, ODEP will need to improve: (a) investmentplanning; (b) accounting for fixed assets; and (c) cost accounting and budgetary systems. The project makes provisiornfor consultingservices to assist ODEP in this regard.
2.45 Cost recovery of Governmentinvestments is based on a fee paid to the Governmentby ODEP and currently evaluated at about DH 45 million per annum. The current port dues which are paid by the port users have to generate sufficient revenues to pay the fee. By linking the fee to the value of Governmentassets used, non economicport expansionis discouraged. The fee has been revised,particularly in view of the transferof assets from the Government to ODEP (para. 2.13). Its computationis based on fixed assets which will remain in the public domain. The fee should c.mpensatethe Governmentfor ODEP's share of expenditureson rehabilitationand maintenanceof the assets remainingwith the Government. Accordingly,ODEP should improveits assets accountingsystems by preparinga revaluationof its fixed assets outside the existing accounting system. This would cover: (a) Government-ownedassets in various ports valued at their historicaland currentvalues; and (b) maintenanceand rehabilitation costs of the said assets. The system will apportion the expenditureson rehabilitationand maintenanceamong the various users in an equitablemanner. These measuresare includedin ODEP's DevelopmentProgram and are to be reflected in the Contract Plan (para. 3.13). - 22 -
III. THE PROJECT
A. Proiect Origin and Objectives
3.01 In 1985, the Bank had originally identified a possible transport sector operation covering all transportmodes. However, in late 1987 it was realized that the preparation of a sector operationwould take considerably longer then originally anticipated,given the time needed to (a) develop an integratedstrategy for the sector; (b) begin implementationof some policy actions; and (c) reach a conclusionon some of the key investmentsunder the 1988-1992Plan. In the meantime,the railwayenterprise, ONCF, had been included in the PERL (FY87) and the Governmentrequested continued assistancewith its priorityprogram of road rehabilitationand maintenancewhich culminatedin the recentlyapproved Highway Sector Project (FY90). Subsequently,in early 1989, the Governmentand ODEP showed interest in Bank involvementin a port project focusing on the constructionof a new containerterminal to relieve congestion of the existingfacilities at Casablanca. Given the recentlyimproved capability of the agenciesinvolved in the port subsector,the Bank suggestedthat a broader approach wfouldbe warranted. Accordingly,discussions opened in February 1989 on the prospectsfor a port sector project, oriented toward rehabilitationand modernizationof the commercialport system, which would also address broader issues in the port subsector.
3.02 While the project takes a broad perspective on the interdependent issues in the transport sector, it confines its support to those actions and investmentsthat are within the purview of the Ministry in charge of ports (MPWN) and the administration in charge of marine security (DMM). It includes institutionalDevelopment Programs providing the framework for an investment component. The DevelopmentPrograms will support the strengtheningof ODEP and Port Administrationinitiated under the Ports of Casablanca and Mohammedia Project,covering investment planning, cost recoveryand assetsvaluation, trade facilitationand port procedures,port operations,and environmentalaspects (para. 3.12). The loans will finance selected and appraisedcomponents of the port subsector'spluriannual investment and maintenanceprogram during the period 1991-1993.
3.03 The project forms an integralpart of the Bank's strategy to support Government'sefforts to liberalizetrade and to promoteexports. Port efficiency is an importantelement in stimulatingtrade. Assistancein the country'sport investmentprogram will ensure foreignexchange savings on sea freightrates for both exports and imports. The project also supports the country's current economic policies with specific emphasis on increasing public enterprise efficiency,rationalizing public investmentprograms and facilitatingtrade. The ongoing Port Project, though limited in scope, has helped improve the operationalefficiency of the port of Casablancaand the managementand financial viability of ODEP. Continued Bank involvementwould help further improve investmentplanning, operationalefficiency and cost recovery policies in the port subsectoras a whole. - 23 -
3.04 The objectivesof the project are to:
(a) improve operationalefficiency in the potts to cope with the growth and changing structureof foreigntrade, especiallythrough provision of adequate facilities for unitized cargo;
(b) assist the Governmentin strengtheningthe economic viability of its investments in the port subsector and increasing the recovery of infrastructurecosts through inter alia appropriatechanges in port tariffs; and
(c) encourage policies and institutional measures aiming at better planning and coordination of port activities in relation with Governmentefforts to promote foreign trade.
B. Proiect Description
3.05 The project includes the following:
(a) ODEP's investmentprogram covering the period 1991-1993,subject to annual updating;
(b) Government'sport investment and maintenance program covering the period 1991-1993,subject to annual updating;and
(c) appropriateinstitutional measures to addressselected sectoral issues concerning port planning, preparation and implementationof sub- projects,cost recovery,port operationsand management,environmental protection,and trade facilitation.
3.06 During negotiations,agreement was obtained from the Governmentand ODEP on the project objectivesand description.
ODEP InvestmentProgram
3.07 Evaluationof ODEP's estimatedfeasible expenditure levels from 1990 through 1993 is central to definingODEP's investmentprogram. During project preparation,ODEP and the Bank confirmedthat annual expenditurelevels of about DH 450 million (US$55 million equivalent)throughout the period are feasibleand realistic. This takes into accountODEP's previous work programsimplementation, NOFF'sviews on the current level of port dues and the need to reevaluate the fee paid by ODEP to the Government. On this basis, ODEP establisheda priority program which provides an adequate framework to project the financing requirements. At negotiations,ODEP agreed to furnish its annual investment program to the Bank by September30 of each year for review and comments, and to implementa finalizedprogram taking into considerationBank comments.
3.08 Table 3.1 below summarizesthe expectedcapital expendituresbudgeted by ODEP for 1990 and estimated for 1991-1993. A more detailed breakdown is given in Table 1 of Annex 3. Any subprojectconcerning commercial ports under this program would be a potential candidate for Bank financing. Specific subprojectsto be financedunder the project will be identifiedon the basis of - 24 -
agreed upon criteria and procedures for selection and implementation (para. 3.11). At appraisal, it was established that the following major subprojectwould be eligible for Bank financingunder the loan to ODEP: a new container terminal at Casablanca,including the provision of equipment. The followingwould, subject to detailedappraisal demonstrating their economicand technical justification,also be suitable candidates for financing under the Loan: (a) a coal handlingfacility at Jorf Lasfar; (b) improvedRo-Ro facilities at Tangier; and (c) technicalassistance and training.
Table 3.1: ODEP's Rolling Plan of Capital Expenditures1990-1993 (DH million)
Total 1990 1991 1992 1993 1990-93 DUm USSm ODEP
Infrastructure 85 300 235 255 875 106 Equipment 145 45 90 235 515 62 Other Programs 5 20 20 5 50 6 Studies/Training 20 15 20 55 7
Total Base Costs 235 385 360 515 1,495 181 Contingencies 21 65 86 144 316 38
Total 256 450 446 1.811 25919
GovernmentPort Investmentand MaintenanceProp-ram
3.09 Government investments in the port subsector include planned expendituresby MPW on infrastructurerehabilitation and maintenanceand by DNM for the provision of vessel traffic services along the Moroccan coast. The Government port investmentprogram for the period 1990-1993 is presented in Tables 2 and 3 of Annex 3, and summarized in Table 3.2 hereafter. Planned expendituresunder the program are estimated at about DH 190 million (US$23 million) annually, representinga substantial60X reduction over expenditures during the period 1981-1987 which was associated with expansion of port infrastructure (para. 2.32). The proposed program focuses entirely on rehabilitation of breakwaters, dredging and marine security. Appropriate maintenance of breakwaters is critical to the operation of Moroccan ports, particularlybecause of the exposure of the Atlantic coast to powerful storms. MPW's breakwaterrehabilitation program is designed to reduce the backlog that has accumulatedover the years. The projectwill provide financingfor priority subprojectsof this program. In addition, financingwould be provided for a time slice of dredging in Moroccan ports, subject to a satisfactoryreview of operationaland environmentalaspects of dredging (para. 3.11). An addition subprojectconsisting of providinga radar control tower on the Moroccan coast will assist navigation and its safety in the heavily trafficked area at the junction of the Atlantic Ocean and the MediterraneanSea. The control tower will providevessel traffic servicesfacilitating an efficientmaritime traffic flow to and from Moroccan ports. The cost is estimated at DH 108 million (US$13million). At negotiations,the Government agreed to furnish its port - 25 -
subsectorinvestment program to the Bank by September30 of each year for review and comments, and to implementa finalized program taking into consideration Bank comments.
Table 3.2: GovernmentPort Investmentand MaintenanceProgram 1990-1993 (DH million) Total 1990 1991 1992 1993 1990-93 DP - DPCM D_Hm USSm
Casablanca-Mohammedia 13 8 18 36 75 9 Other Brkw. Rehab. 30 35 47 59 171 21 Dredging 44 36 54 37 171 21 Other Programs 66 35 45 69 215 26 Studies/Training 2 10 5 6 23 3 Total DP-DPCM 155 124 169 207 655 80
3NMM Infrastructure - - 9 18 27 3 Equipmeat - _ 5 57 62 8 Total DMM 0 0 14 75 89 11
Total Base Costs 155 124 183 282 744 91 Contingencies 14 21 43 79 157 19
Total 169 145 226 361 901 110
Subi,roiectsEligible for Bank Financing
3.10 The Bank loans will finance subprojectsrelated to: (a) civil works for eligible subprojects;and (b) purchase of coal handling, computer, radar, and telecommunicationsequipment. In addition,the Bank will financeequipment relatedto the containerterminal and to the environmentand trainingcomponents as well as studies and technicalassistance in supportof subsectorobjectives.
3.11 For a subproject to be eligible for financing under the loans, it will have to be technicallyfeasible, economicallyjustified and designed in accordance with appropriate safety, health and environmental standard satisfactoryto the Bank. For each subproject, an evaluation sheet will be prepared on which the key technical,design, cost, economicand tentativetender informationis summarized. Eligiblesubprojects under ODEP's investmentprogram should also have an economic rate of return of at least 12%, and a first year benefit exceeding10%, calculatedin accordancewith a methodologysatisfactory to the Bank. Details of the evaluationmethodology and the eligibilitycriteria are given in Annex 5. Bank missions will review these data and confirm eligibility for inclusion in the project. At negotiations, agreement was obtained on the procedures and criteria related to eligibilityof subprojects to be proposed for Bank financing. In addition, the execution of maintenance and rehabilitationdredging in selectedports will be subject to agreementwith the Bank on environmentallysound disposalmeasures on the basis of the findings of a specific environmentalassessment (para. 3.40). - 26 -
InstitutionalImprovements
3.12 DevelopmentProorams. To ensure smooth executionof the program and efficientmanagement of the port subsector,a Port SubsectorDevelopment Program and an ODEP Development Program have been developed respectivelywith the Government and ODEP to include key measures drawn from the Action Plan (para. 3.35 and Annex 1). The Port Subsector Development Program refers to specificmeasures in the followingareas: (a) trade facilitation;(b) investment planning;and (c) fixed assets management. ODEP's DevelopmentProgram consists of measures in the followingareas: (i) port operations,particularly on the new container terminal; (ii) trade facilitation including port procedures and informationsystems; (iii) investmentplanning; (iv) environmentand safety; (v) cost recovery; and (vi) fixed assets management. ODEP's DevelopmentProgram also refers to targets to be achieved by ODEP and indicators that can be monitored during project implementation (para. 3.37). At negotiations, assurances were obtained that the Governmentand ODEP would carry out their respectiveDevelopment Programs with due diligenceand efficiency.
3.13 Contract Plan. ODEP's good managementand sound financialsituation provide a suitablebasis for establishinga ContractPlan. Its main objectives would be to clarify goals and in2rease managerialautonomy. Table 5 includes a list of items to be covered in the Contract Plan. Some of the Contract Plan issues,particularly the one regardingthe "contr6lea priori" of expenditures will be difficult to solve on a case by case basis. Other issues, such as increasedenterprise autonomy and setting of port tariffs, require intensive consultationsbetween the parties. As a result, signatureof the ContractPlan is unlikely to occur before 1991. During appraisal,the Bank commented on a first draft preparedby ODEP. This draft has been revised in consultationwith the Directoratefor Public Enterprisesand Participations(DEPP), which is the supervisoryagency of the Ministry of Finance for contract plans. A second draft Contract Plan was reviewed by the Bank during negotiations to ensure consistencywith sector objectivesand with the reform of the public enterprises sector being supportedby PERL operations. At negotiations,it was agreed that a Contract Plan satisfactoryto the Bank would be signed by June 30, 1991.
3.14 Training Program. Training needs have been identifiedfor DP, DPCM, and ODEP. ODEP has prepared a three-year training program (1991-1993)for training of its staff (Annex 2). Training programs to be implementedlocally make the fullest use of existing vocational and technical institutionsand facilities in Morocco. In addition, the project will provide about US$2.2 million for: (a) purchase of training equipment,furniture and materials; (b) on-the-jobtraining in project supervisionto be provided by consultantswho will also assist in the supervisionof constructionof the new containerterminal at Casablanca; (c) training and fellowships abroad for port planners and managers; and (d) visiting experts to organize workshops and seminars in specializedareas (Table 6).
3.15 ConsultantServices. About 410 man-monthsof consultant'sservices are included in the project to assist DP, DPCM, and ODEP (Table 6). For ODEP, these services would include 300 man-month of assistance in the areas of: (a) detaileddesign of subprojects;(b) civil works supervision;(c) information systems; (d) maintenancedredging study; and (e) supplementarycost accounting - 27 -
studies. For the Government,about 110 man-monthof assistancewould be provided for: (i) updatingof the NationalPort Master Plan; (ii) developmentof criteria for environmentallysound disposal of dredging materials; and (iii) detailed design of subprojects. Terms of referencefor studies (b), (d), (i) and (ii) above have been draftedby the concernedagencies with Bank assistance. As in the ongoing project, consultantswill provide the required services with a mix of local (about190 man-months)and expatriatepersonnel (about 220 man-months).
C. Cost Estimates
3.16 Total capitalexpenditures for the port subsectorduring the 1991-1993 period are estimated at about DH 2,329 million equivalentto US$282 million, with a foreignexchange cost of US$151 million. The local cost componentamounts to DH 1,085 million equivalent to US$131 million, including DH 652 million equivalentto US$79 million in taxes and duties. The total project cost net of taxes is thereforeUS$203 million equivalent. Table 3.3 below shows the total projectcost in summaryform. At negotiations,the cost estimateswere confirmed by the Governmentand ODEP.
3.17 Cost estimatesfor civil works are based on unit prices for similar works in Morocco, adjusted to March 1990 level. Equipmentcosts are based on recent price experience for similar types of equipment provided by foreign manufacturers in Morocco and in Bank-financedprojects in other countries. Technicalassistance costs are based on man-monthrates for consultingservices in Morocco. They includesalaries, fees, internationaltravel, and subsistence. Duties and taxes are estimatedto amount to about 28% of total costs. Physical contingenciesof 10% have been included for civil works, except for those includedin ODEP'sprogram for which physicalcontingencies are estimatedat 15%. This is consideredappropriate coverage given the status of design work of most subprojectsand the assessed risks which include those for difficult terrain, especiallydredging in hard materials. Price contingenciesare based on local cost increasesof 6.2% in 1990, 5.6% in 1991, 5.4X in 1992, 4.4% in 1993, 4.9% in 1994, and 5.5% in 1995, and on foreign cost increasesof 4.1% in 1990, 5.3% in 1991, 5.4% in 1992, 5.4% in 1993, 5.2% in 1994, and 5.3% in 1995. The foreign exchangecomponent of the civil works has been estimatedat 50%. It assumesthat local contractorswill carry out a sizeable portion of the works, as has been the case in the ongoing Port Project. - 28 -
Table 3.3: Summary of Project Costs (base costs March 1990)
DH million USS million Local Foreign Total Local Foreign Total ODEP
Infrastructure 395 395 790 48 48 96 Equipment 148 222 370 18 27 45 Other Programs 18 27 45 2 3 5 Studies/Training 28 27 55 3 -A4 l
Subtotal ODEP 589 671 1,260 71 82 153
DP - DPCM
Casablanca-Mohammedia 36 35 71 4 4 8 Other Brkw. Rehab. 104 104 208 12 13 25 Dredging 51 76 127 6 9 15 Other Programs 29 44 73 4 5 9 Studies/Training 6 15 .21 1 2 l
SubtotalDP - DPCM 226 274 500 27 33 60
DMK 38 51 89 5 6 11
Total Base Costs 853 996 1849 103 121 224
Physical Contingencies 74 77 15i 9 9 18 Price Contingencies 158 171 329 19 21 40
Total 1.085 22329 ILl JU 218244X
D. FinancinzPlan
3.18 Table 3.4 below summarizesthe expectedfinancing sources for the port subsectordevelopment program during 1991-1993. External fundingwill include IBRD and African DevelopmentBank (AfDB). Bank financingwill amount to US$132 million, thus providingfunds covering 87X of the foreign exchangecosts of the program through 1993. Discussionsbetween the Government and Ex-Im Bank of Japan for a contributionof US$38 million to the project have been initiated. Should an agreementbetween those parties be reached in the near future on co- financing, the Bank intends to cancel an amount equivalent to Japanese participation. The Bank financingwill meet the foreign exchange costs of the selected activities,plus a small amount of local costs which will partially offset the foreign exchange cost of the non-selectedcomponents. The selected components represent about 81X of ODEP's overall program and 471 of the Governmentprogram. Ongoing loans from IBRD and AfDB will provide financingfor 71 of the foreign costs. Bilateralfinancing is being consideredfor floating equipment and the renewal requirementsfor conventionalhandling equipment. - 29 -
Should bilateral financingmaterialize, it would reduce the contributionof the Governmentand ODEP by US$3.8 million and US$6.8 million, respectively.
Table 3.4: FinancingPlan
Local Foreign Total ------US$ million ------IBRD 21.1 110.9 132.0 Ongoing IBRD - 4.4 4.4 OngoingAfrican DevelopmentBank 5.9 5.9 ODEP 75.1 15.7 1/ 90.8 Government 34.8 14.1 48.9
Total 12L. 151.0 2HIMU
Mainly indirect foreign exchange on locallyprocured civil works.
Lending Arrangements
3.19 The Bank will provide two separate loans: one to ODEP for US$99 million with guarantee by the Kingdom of Morocco, and one to the Kingdom of Morocco for US$33 million. Both loans will be made on standard Bank terms and conditionsfor Morocco: 20 years' maturity, includingfive years of grace, at a variable interest rate. Table 7 representsan initial allocationof the two Bank loans of US$99 million and US$33 million to ODEP and the Government respectively. Cross-effectivenessconditions have been introducedin both Loan Agreements in view of the integratednature of the Government'sand ODEP's activitiesunder the project.
3.20 Should the Governmentor ODEP, in the future, have to meet the port requirementswith fewer resourcesthan those presentlyforeseen, a reductionin the overall size of the program would first be made by reducing the components concerning lower priority activities, such as regional development,through postponementor scaling down of subprojects.
E. Proiect Imvlementation
3.21 Each agency will be responsiblefor implementingits own component. MPW will be responsiblefor the implementationof its componentthrough DPCM for the rehabilitationof the breakwaterof the port of Casablanca,and throughDP for rehabilitationof breakwatersin ports other than Casablancaand Mohammedia, dredgingworks, master plan studies,environmental assessment for dredging,and related institutionbuilding. ODEP will be responsiblefor the executionof its program. The Ministry of Fisheries and Merchant Marine will be responsible through DMM for the implementationof the marine security componentconsisting of a radar control tower and relatedvessel traffic services.
3.22 Design work is substantiallycompleted for one major component,i.e. the new containerterminal at Casablanca. Local consultantsare preparingthe bidding documents. Prequalificationof civil contractorshas been completed. Bids for the container terminal have been invited; they are due early 1991. - 30 -
Final engineeringof other subprojectswill be prepared by qualifiedengineers of ODEP, DPCM, and DP, assisted, as appropriate,by independent engineering consultantsacceptable to the Bank under agreed terms of reference. Technical assistancewill also be provided to ODEP for supervisionof constructionof the new container terminal at Casablanca. Such technicalassistance will include training of ODEP counterpartstaff to enable ODEP to efficientlysupervise all other cubprojects. Specificationsare alreadyavailable for containerhandling equipment. Experiencedconsultants are carrying out a detailed study of the radar control tower.
3.23 The project implementationperiod is expected to be about four years. A detailed prograu for project executionhas been prepared (Annex 6). During negotiations,ODEP and the Governmentconfirmed the programfor projectexecution and the project implementationschedule attached thereto.
F. Procurement
3.24 General. A General ProcuremencNotice for the Projecthas been issued on October 31, 1989. It will be updatedperiodically. Procurementfor the Bank financed componentsof the project will be as follows:
Table 3.5: ProcurementMethods V
Project Elements ICB LCB Other Total ------US$ million V-
1. Civil Works 148 50 198 (85) (4) (89)
2. Cargo-handlingequipment 44 S 49 (26) (0) (26)
3. Miscellaneousequipment 13 11 24 (7) (1) (8) 4. ConsultantServices for Training/technicalassistance 11' 11 (9) (9) Total 205 50 27 282 (118) (4) (10) (132)
1/ Amount in brackets show the allocationsfrom the proceeds of the Bank loans / Costs include estimatedcontingencies lJ/ Includes amounts for items expected to be financedby bilateral sources •i/ Limited internationalbidding or internationalshopping i. Employmentof consultants
3.25 Civil Works. Three separate civil works contractswill be awarded after ICB to prequalifiedfirms for the containerterminal at Casablanca,the coal terminal at Jorf Lasfar, and the Ro-Ro terminal at Tangier. However, - 31 -
dredging works in Moroccan ports and miscellaneousrehabilitation subprojects are scatteredthroughout the country,are of smallmagnitude, and are therefore unlikely to attract foreign bidders. Nevertheless,contracts for civil works estimated to cost US$2 million or more will be awarded on the basis of ICB in accordancewith Bank guidelinesfor procurement. Contractsestimated to cost less than US$2 million will be awardedfollowing LCB proceduressatisfactory to the Bank, which are, in any case, open to foreignbidders.
3.26 Eguipment. Container handling equipment, coal handling equipment, radar equipment,and packages of equipment iith a combinedvalue of US$1 million or more, totalling US$57 million, will be procured through ICB in accordance with Bank guidelines. For procurementof goods through ICB, local suppliers will be allowed a margin of preferenceequal to the existing rate of customs duty applicable to non-exempt importers or 15X of the cost-insurance-freight (c.i.f.)price, whicheveris lower. Miscellaneousitems of equipmentestimated to cost less than US$1 million, but more than US$100,000,or packages having a combined cost between these thresholds, will be purchased through limited internationalbidding on the basis of comparisonof bids invited from at least five qualifiedsuppliers. For contractsestimated to cost less than US$100,000, procurementwill be throughshopping involving at least three quotationsobtained from foreignor local suppliers,subject to an aggregatevalue not exceedingUS$1 million per loan. Conventionalcargo handling equipment (US$5 million), and floating equipment (US$10 millior.)are expected to be financed by bilateral sources and procured under their own procedures.
3.27 ConsultingServices. Consultingservices for training,studies, final design of subprojects,and supervisionof constructior.,amount to approximately US$ll million. These services will be provided by either consultingfirms or individualexperts, both selected in accordancewith the Bank's Guidelines for the Use of Consultants. The qualificationand experienceof consulting firms and individualexperts, as well as termsof referenceand conditionsof contract, should be satisfactoryto the Bank.
3.28 Prior Review. The Bank will conduct a prior review of the first set of bidding documentsfor civil works and equipmentto ensure that a satisfactory procurementprocess will be followed. Thereafter,a US$1 million thresholdfor civil works, and a US$600,000threshold for equipment,will be applied for prior review, resultingin a coverage of about 90% of the contracts. Contractsthat are not subject to prior review will be subject to random post review by the Bank after contract award. The Bank will have the right to reject the financing of any contractfor which agreed-uponbidding procedures have not been followed. The consultants' terms of reference, their suitability for the specific assignmentand the draft contract for all assignmentswill be subject to prior review and approvalby the Bank.
3.29 LCB Procedures. AlthoughMoroccan competitivebidding proceduresare generally acceptableto the Bank, a few proceduresare inconsistentwith Bank procurementpolicy. These proceduresand proposalsto improvethem are detailed in Annex 7. During negotiations,the Bank explainedto the Governmentand ODEP the proceduresrequired to be compatiblewith the Bank's objectivesof ensuring economy, efficiency,and overall project soundness. - 32 -
3.30 During negotiations, all the above procurement arrangements were agreed upon with the Governmentand ODEP.
G. Disbursements
3.31 Disbursementsof the two Bank loans will be made on the following basis:
(a) civil works: 64X of total expenditures;
(b) equipment: 100lof foreign expendituresor ex-factory cost, and 70X of localexpenditures for items procured locally;
(c) consultingservices and training: 100% of total expenditures.
3.32 Advance procurementof the civilworks for the new containerterminal at Casablancais in progress. Retroactivefinancing up to a total of US$5.0 million is recommendedfor paymentsmade by ODEP after July 31, 1990, but before the date of loan signature. This will allow an early start on some critical projectitems consistingof the new containerterminal and consultants'services.
3.33 A Special Account, covering all categories of disbursementfor the loan to the Kingdom of Morocco, will be establishedon terms and conditions acceptableto the Bank. The authorizedallocation will be US$2 million (four- month average of eligible expenditures). Disbursementrequests will be fully documented except for expendituresunder contracts valued below US$100,000 equivalent, which will be made on the basis of certified statement of expenditures (SOEs). The Government and ODEP will retain supporting documentationfor at least one year after the audit for the year in which the last disbursementfrom the loan account is made. This documentationwill be made availableto Bank staff during supervisionas well as independentauditors acceptableto the Bank. The annual audits of the projectaccounts will include a separateopinion on the disbursementsmade under the SOE procedure. Agreement was obtained, during negotiations,on the establishmentand operation of the SpecialAccount, and on satisfactoryprocedures for disbursementsunder SOEs.
3.34 The closing date of the Bank Loans will be June 30, 1996. In the past, it has taken an average of seven years to complete disbursementof loans or credits to Morocco (all sectors),and transportproject in the EMENA region have taken equally long. In the case of the ongoing Port Project, the disbursementperiod is likely to be five and half years. There is no standard Bank disbursementcurve for a projectbased on a three-yearinvestment program. This appraisalsets a disbursementperiod of five years on the basis of the time frame of the program (1991-1993)and the arrangementsfor projectmonitoring and supervision. The estimateddisbursement schedules for the two loans are given in Annex 8.They are based on the assumption that the loans would become effectiveby March 31, 1991. - 33 -
H. ProjectMonitoring and Reporting
3.35 The project will be supervisedand monitoredby the Bank through the normal supervisionmechanism, and through provision of regular reports to the Bank on all phases of the project. The Bank has prepared a monitoring tool in the form of a detailed time-boundAction Plan which will serve as an indicative referencefor Bank supervisionmissions (Annex 1). Key actions drawn from the Action Plan were agreed at negotiationsand are included in the Loan Documents and in the DevelopmentPrograms (para. 3.12). Projectsupervision will require about 50 staff-weeksover the four years of project implementation. The basic staff requiredwill includea port engineer,a financialanalyst, an environment specialist, and an economist. The Government and ODEP will prepare: (a) quarterly reports to the Bank on project implementationand expenditures together with key indicators for monitoring progress made in pursuing the objectivesof the project; (b) semiannualreports on financialand operational results of port operations and on selected port performance data; and (c) a project completionreport to be submittedto the Bank within six months of the closing date of their respectiveloans. The format, content and schedule of reports was confirmed at negotiations. Annex 9 provides details concerning project monitoring.
3.36 MPW and ODEP will meet at least annuallywith the Bank to: (a) assess the status of the project and the progress of institutionaldevelopments using the agreed DevelopmentPrograms, targets and monitoringindicators established under the project (para. 3.37); (b) discuss and resolve outstandingissues and implementation problems; and (c) review the pluriannual investment and maintenanceprogram for the port subsector,particularly for ODEP (paras 3.07 and 3.09).
PerformanceIndicators. Targets and Monitoring
3.37 ODEP's DevelopmentProgram provides targets and monitoringperformance indicators. Accordingly,ODEP has establishedselected productivity targets of key activitiesbased upon a detailed analysisof currentport operations. ODEP will also continueto monitoroperational indicators relating to the qualityand efficiency of the maintenance operations. ODEP's project coordinatorwill include in the semiannualreports a set of comparativedata, showing the actual values of the monitoringindicators compared to targets. Performanceindicators and targets are presented in Annex 10.
I. EnvironmentalAsnects
3.38 The project is not subject to the provisions of OD 4.00, Annex A "EnvironmentalAssessment" as the IEPS was issued prior to October 15, 1989. Environmentalissues were assessedby Bank technicalspecialists in the course of project pre-appraisaland potential impactswere identified. Based on this assessment,an analysis of its potential environmentalimpact will be carried out and the necessary measures will be taken against any possible negative environmentaleffects. Potentialimpacts likely to result from the project are related to the following: (a) excavation of fill and disposal of dredging materialsassociated with the constructionof a containerterminal at Casablanca; (b) disposalof dredgingmaterials associated with maintenanceand rehabilitation - 34 -
dredging in Moroccan ports; and (c) dust releaseduring handling and storage of dry bulk cargoes. These impacts are discussed briefly in the following paragraphsand covered in greater detail in Annex 11.
3.39 Constructionof the new containerterminal at Casablancainvolves the followingquantities of materialsto be moved: 3 million m3 of fill to be placed within the boundariesof the existingport, 0.75 millionm 3 of soft materialsand about 50,000 m3 of hard materialsto be dredged from the port area. The impact of heavy truck traffic associatedwith fill work could be mitigated through providing a portion of the required volumes through dredging of the sea bed. ODEP is currently investigatingappropriate souices of sand in areas where no significantdamage to marine ecologyis to be expected. Concerningthe dredging work, analyses of sediments have been carried out to identify any toxic or hazardous materials and define appropriate measures for their disposal in compliance with the London Dumping Convention. These measures show that the toxicityof the sedimentsis generallywell under criticallevels. Accordingly, disposalover a selectedsite in deep open-wateris acceptable. The authorized site will be imposed on the contractor for civil works through adequate provisions in the bidding documents.
3.40 The maintenanceand rehabilitationdredging program is a longer-term operation for which an environmentalassessment is deemed appropriate. The annual volume of maintenancedredging in Moroccan ports is about 3 million i 3, consistingmostly of sand, and a limitedamount of mud (50,000in), s-atteredall along the coast. The environmentalassessment will be prepared by DP with the assistanceof a local laboratoryand internationalconsultants as appropriate. This environmental assessment will focus on the following analyses: (a) determinationof the extent and potential impact of contaminationof sediments to be dredged from the ports; (b) characterizationof all the sediments in the ports where pollutioneffects could be potentiallyserious; (c) identification of measures likely to eliminatethe sources of the contaminants;(d) selection of disposal methods; and (e) recommendationof long term monitoring procedures of the dredgingand disposalsystems. The detail and sophisticationof analysis and recommendedmitigative measures should be commensuratewith the potential impact in each particularport. Accordingly,it was confirmed,at negotiations, that the environmentalassessment would cover the ports of Agadir, Kenitra, Larache, and Safi. It was also agreed that the environmentstudy would be completedby December 31, 1991 and that maintenanceand rehabilitationdredging activities in the selected ports would be carried out in accordance with the recommendationsagreed with the Bank on the basis of the results of the study.
3.41 The problem of reducing dust release is typically associated with activitiesinvolving bulk handling of coal and cereals. Controllingcereal dust in silos is particularlyimportant to prevent the danger of explosion. These problems and specific environmentalimpacts of other activitieswill be dealt with during the design of the facilitiesinvolved. Assuranceswere obtaftaed, at negotiations,that all facilities to be financed as subprojectswould be designedin accordancewith environmentalhealth and safety standardsacceptable to the Bank. This requirementwill be made part of the consultants'terms of referencefor any design study. - 35 -
3.42 In addition to the above environmentalanalyses, the project will provide technical assistance and training to Government and ODEP staff to strengthenenvironmental capabilities and raise environmentalawareness in the port subsector. ODEP has already undertaken a number of actions to improve employee health and safety of operations. Safety studies carried out in the major ports have analyzed the risks of port operationsand identifiedmeasures to increase safety. ODEP is currentlydeveloping training programs for port employeesin accident avoidance and handling proceduresfor hazardous cargoes. The storage facilitiesfor hazardous cargoes in the port of Casablancawill be upgradedunder the project. Furthermore,ODEP's Development Program (para. 3.12) identifiesactions aiming at: (a) defining additional investmentswhich would be required for compliance with internationalconventions in Moroccan ports regardingthe preventionof pollutionand the collectionof ship generatedsewage and garbage; and (b) establishing environment standards for port users, particularlyfuture waterfront industries. These actionswill contributeto the positiveimpacts which will result from the project. Moreover,the new container terminalwill reduce movements of both vessels and vehicles in relative terms, which in turn will reduce water and air pollution as well as urban traffic congestion. Increasedcontainerization will also reduce the risk of spillage, spoilage,and fire.
J. Impact on Employment
3.43 Although the developmentof modern cargo handling techniquesreduces the need for labor in ports, no major problem is foreseen in this area, particularlyas containerizationand Ro-Ro traffic are alreadywell developed. ODEP's prudent personnel policy has already anticipatedthe reduction of the work force. More than 20% of ODEP staff are due to retire in the next five years. In addition,ODEP is currentlypreparing a study for estimatingfuture staff requirements. The situation of employment in ODEP will be reviewed periodicallyby Bank supervisionmissions. This will allow early identification of problems if a change of external conditions were to negatively affect employmentin the port subsector. - 36 -
IV. ECONOMICEVALUATION
A. General
4.01 The project provides for a continuation of Morocco's port modernizationprogram with the main emphasis on improvedhandling for unitized cargoes and for bulk imports of coal. As the project is concerned primarily with containerand roll-on roll-off traffic, the focus of the traffic analysis is on general cargo traffic and the impact of unitizationon this traffic. A specific economic evaluationhas been undertakenfor the key items of the port investmentprogram, namely the new containerterminal at Casablanca,improvements to roll-on roll-off facilitiesin Tangier, and the coal berth at Jorf Lasfar. An economic evaluationhas also been undertakenfor the cereals silo which will is plannedby ONICL at Agadir. These priority items represent close to 60X of the totalport investmentprogram while a further20% representsthe completion of ongoingprojects. Of ODEP's program, the key items which have been evaluated representover 70% of the total. The Governmentprogram, which representsabout 30% of the overall investmentprogram, is concernedmainly with the maintenance of existing facilitiesand with marine security,as such no specific economic evaluationhas been made. However, the overall feasibilityof the program has been reviewed,the main componentsfocussing on the ports of Casablanca,Tangier, and Agadir. Other items of the investmentprogram will be evaluated during implementationof the project according to criteria agreed with the Bank (para. 3.11). In this respect, particular attentionwill be given by ODEP to establishingthe needs for renewal of conventionalhandling equipmentwhich is the single most importantitem after the priority componentslisted above. An outlineof the generalmethodology and criteria to be used in the evaluationof the program componentsis given in Annex 5.
B. Traffic Forecasts
Recent Trends
4.02 Total traffichandled by Moroccan ports has increasedfrom 29 million tons in 1983 to 36 million tortsin 1988 of which 19 million tons were exports of phosphates,phosphoric acid and other minerals,while 12 million tons were importsof bulk traffic includingcrude oil (5 million tons), coal (1.1 million tons), cereals (1.9 million tons) and sulphur (2.9 million tons). Exports of phosphates and related traffic have generally been on the order of 17 to 18 million tons per year although this traffic increasedto 19 million tons in 1988. However, phosphateexports subsequentlydeclined in 1989 due to the loss of a single major market. The contract is being re-establishedin 1990. Bulk imports are mainly oil products which increasedfrom 4.4 million tons in 1983 to 5.2 million tons in 1988 and cerealstraffic which has ranged between 1.5 and 2.1 million tons since 1983. Importsof coal began to reach significr.ntlevels in the mid 1980s, with the conversionin 1986 of the coal-firedMohammedia power plant, the latter now requiringsome 800,000 tons annuallyout of a total import volume of about 1 million tons. General cargo traffic has increased from 3.6 million tons in 1983 to 4 milliontons in 1987 and 4.8 million tons in 1988. The substantial20% increasein trafficin 1988, which affectedboth importsand - 37 -
exports,reflected the Government'srecent effortstowards trade liberalization and to unusuallyhigh demand for fruits and vegetablesin Western Europe.
Table 4.1: Growth of Foreign Trade: 1983-88 (thousandtons) Growth Rate % 1983 1985 1987 1988 1983-87 1983-88 Imports Oil products 4,379 5,233 5,049 5,197 3.6 3.5 Coal 244 451 1,059 1,051 44.3 33.9 Sulphur 1,349 1,469 2,093 2,925 11.6 16.7 Cereals 1,858 2,042 2,065 1,515 2.7 -4.0 Other bulk 698 788 829 906 4.4 5.4 General cargo 2.084 2.437 2.617 3.063 5.9 8.0 Sub-total 10,612 12,420 13,712 14,657 6.6 6.6
Exoports Phosphates 13,976 14,790 13,060 14,260 -1.7 0.4 Other bulk 3,125 3,415 3,609 5,240 3.7 10.9 General cargo 1.455 1.351 1,.454 l.754 0.0 3.8 Sub-total 18,556 19,556 18,123 21,254 -0.6 2.8
Total 29168 35.911
Source: Office des Changes
General Cargo/UnitizedTraffic
4.03 Although imports of capital and intermediategoods rose steadily between 1983 and 1987 at about 5.5% per year, this traffic jumped by 17X in 1988, partly as a result of pent-up demand following the Government'strade liberalizationprogram. However, the growth of imports of unitizablecargoes followeda more regular pattern of between 7% and 8% per year between 1983 and 1988. During the same period, exports of manufacturedgoods declined by some 4% per year in tonnage terms, this declinebeing offset by continuedgrowth in exports of fruits and vegetablesand particularlyby a substantial40% increase in this traffic to Western Europe in 1988 V.
2/ In value terms, exports of manufacturedgoods have increased at about 12% per year since 1983. - 38 -
Table 4.2: Growth of General Cargo: 1983-88 (thousandtons)
Growth Rate X 1983 1985 1987 1988 1293-87 1983-88
Imports
Non-Unitizable1,024 1,142 1,180 1,450 3.6 7.2 Unitizable 1.060 1.295 1.437 1.613 7.9 8.8 Sub-total 2,084 2,437 2,617 3,063 5.6 7.8
Exports
Fruits & Veg. 662 717 762 1,116 3.6 11.0 Non-Unitizable 63 61 81 90 6.5 7.3 Unitizable 730 _ 573 _ 611 548 A.4 -5.5 Sub-total 1,455 1,351 1,454 1,754 0.0 3.8
Total I=53 IM 4071 4.817 IA 64
Source: Office des Changes
4.04 In the longer term, it is expected that the growth of general cargo importswill be attenuatedsomewhat, a rate of 3.5X per year being retained for the period 1987-2000. However, for unitizable cargo imports, which are essentiallycapital goods, a growth rate of about 4X per year is expected. For exportsof generalcargo traffic,a modest growth rate of around 2% per year is forecastuntil the year 2000. A higher rate of increase,at least in the medium and longer term, is unlikely in view of the increasingdifficulties Morocco is expected to experiencein placing its products in the EEC market. Compared to 1988 traffic levels, these forecasts imply growth rates for unitizablecargo importsof 3.5Z per year and for unitizableexports of 2.6X per year up to the year 2000. Detailed forecastsby type of commodity are given in Table 1 in Amaex 12.
4.05 With a recent growth rate of about 71 per year, unitized cargoeshave increasedat a higher rate than for general cargo traffic as a whole. Currently about 601 of unitizablecargo in Moroccanports is handled in containersor Ro- Ro trailers, this figure being about 651 for Casablanca, and about 801 for Tangier. Based on an analysis of the degree of unitization for various categoriesof traffic, Table 4.3 shows forecasts of unitized traffic for the ports of Casablancaand Tangier in 1994 and 2000. These forecastsimply growth rates for unitized cargoes of just over 51 per year for Casablancaand 71 per year for Tangier. In the absence of improved facilities,much lower growth rates would be expected,probably around 2.51 per year at Casablanca,and 51 per year at Tangier. With the planned improvementsin facilitiesat Casablanca,the number of containers handled would increase from 94,000 TEU in 1987 to 190,000TEU in the year 2000, while the number of Ro-Ro trailerswould increase - 39 -
from 10,000 units to 14,000units. Furtherdetails of these forecastsare given in Annex 12.
Table 4.3: Forecastsof Unitized Traffic (thousandtons)
Annual rate 1987 1994 2000 _ A. General Cargo
Total General Cargo g 3,309 4,000 4,890 3.1X Unitizable 2,048 2,590 3,172 3.8X
B. Unitized Traffic Forecasts- Casablanca a) With Project Unitizable 1,538 1,938 2,370 3.4X Unitized 1,007 1,443 1,924 5.11 X 65X 731 811 Total residual 1,543 1,710 1,961 1.91 b) Without Project Unitizable 1,538 1,938 2,370 3.41 Unitized 1,007 1,230 1,400 2.61 X 651 641 591 Total residual 1,543 1,923 2,485 3.81
C. Unitized Traffic Forecasts - Tangier a) With Project Unitizable 189 300 444 6.81 Unitized 150 255 400 6.9X X 791 851 901 Total residual 69 115 171 7.21 b) Without Project Unitizable 189 300 444 6.8X Unitized 150 200 300 5.51 % 791 671 681 Total residual 69 130 230 9.7X
L/ Excludingfruits and vegetables.
Other Traffic
4.06 Forecastsof coal trafficdepend on the policy adoptedby the National ElectricityBoard (ONE) for the future thermal power plant at Jorf Lasfar and the relative costs of coal and fuel oil. Where freight costs can be reduced, coal appears a viable alternativeto energy sources such as gas and imported oil. Accordingto ONE, the power plant would need imports of about 1.5 million - 40 -
tons beginning in 1995. To this would be added some 800,000 tons of coal for the Mohammedia power plant which are currently imported through the port of Casablancaand carriedby road to Mohammedia. As a result,the trafficestimates which have been used for the economicand financialanalyses of the proposedcoal handling berth at Jorf Lasfar assume imports of 1.5 million tons in 1995 increasingto 2.3 million tons in 2000.
4.07 Morocco has been a net importer of cereals since 1971 and over the past decade importshave averagedjust over 2 million tons (Annex 12, Table 2). Only 60X of the traffic is handled through port silos, namely about 1 million tons at Casablancaand 200,000 tons at Safi, the remainderof the trafficbeing spread among the ports of Tangier, Agadir, Jorf Lasfar, and Nador. Local productionof cereals is generallyaround 5 million tons annuallyalthough this increasedin 1988 to an all time high of 7.5 million tons, partly as a result of good weather and partly through efforts made during the 1980s to liberalize the sector and increase producer prices. As a re'sult,imports fell to 1.5 million tons in 1988 and will probably remain at a low level in 1989. However, with a population growth rate of about 2.6X per year, increased production is unlikely to offset the deficit in cereals supply. Imports of cerealsare thereforeexpected to continue in the range of 1.5 co 2 million tons annually.
C. EconomicAnalysis
General
4.08 The main benefits accruing to port users resulting from improved containerhandling facilitiesand servicesare savings in ship waiting time, in ship service time and reductionsin overallcargo handlingcosts. These savings are ultimately passed to producers and consumers in the form of lower freight rates. The project will have a marked effect on cargo handling productivity due to improvedefficiency in handlingcontainer traffic as well as substantially higher productivityon cargoesotherwise handled as generalcargo. This improved cargohandling productivity translates into reducedship waitingand ship service times. The provisionof improvedberth facilitiesat Jorf Lasfar for bulk coal importswill ensureaccess to large 80,000 ton bulk carriersbringing substantial savings in sea freight rates. Similar freight rate savingswill accrue to the cereals silo to be constructedat Agadir as well as savings in berth handling costs. Other benefits such as net reductionsin cargo losses for general cargo and for cereals traffic, savings in packaging costs and other reductions in distribution costs have not been assessed. Moreover, the implicationsfor Morocco's export trade of not continuing to improve facilities for unitized traffic cannot be realistically assessed.With many consigneesnow insisting or.containerized goods, Morocco would start to lose some of its export markets in the absence of an ongoing program of port modernization and trade facilitation.
ContainerTerminal
4.09 On the basis of the forecast distributionof general cargo traffic among containers,Ro-Ro trailersand conventionalgeneral cargo for the with and without project scenarios (Annex 12, Table 3), an economic evaluationhas been - 41 -
undertakenof the proposed improvementsto containerhandling facilitiesin the port of Casablanca. Detailsof the evaluationare given in ProjectFile Document No. C.1 and a summary is provided in Annex 12. Tables 5 and 6 in Annex 12 show the calculationof benefits in the key years of the benefit stream,i.e. in 1994 and 2000, as well as the completecost/benefit stream during a 20-yearevaluation period. Benefitshave been held constant from the year 2000 which is considered to be the capacity of the new berth facilities provided under the project. Investmentcosts are estimated in the first phase during the period 1991-93 at DH 462 million net-of-taxof which DH 109 million is for equipment. The first phase involves the creation of two berths with a length of 350 meters and a 20-hectarestorage area. Provisionof equipmentincludes two gantry cranes,one mobile crane and s xpportingyard equipmentbased on the use of straddlecarriers. A second phase of infrastructuredevelopment involving the paving of an additional 10 h of storage area is scheduledfor 1997 at a net-of-taxcost of DH 26 million. Provision is made in the cost stream for additional equipment to handle traffic up to the year 2000 as well as for appropriaterenewal of equipmentand for residual values on civil works.
4.10 Four major categoriesof benefits have been estimatedas follows:
(a) Ship ServiceTime. Savings in ship service time will follow from the increase in throughputwith the improved facilitiesprovided under the project. For container traffic the throughputwill range from 2,300 tons to 4,500 tons per day according to type of container vessel, 2,000 tons to 2,300 tons for Ro-Ro vessels and around 500 tons for conventionalgeneral cargo vessels. For the latter, throughput would normally increase to around 700 tons per day in the year 2000. Details of the distributionof traffic by ship type, the associated cargo handling rates, and estimatesof ship service time in the with and without project scenarios are given in Annex 12. Total ship service time benefits are estimated in 1994 at about DH 12 million (US$1.5million).
(b) ShiR Waiting Time. Savings in ship waiting time will also accrue primarily from reduced congestion for conventional general cargo traffic as two, and ultimatelythree, of the existing general cargo berths would have to be assigned to containertraffic in the without project scenario. Ship waiting time is estimated as a function of total ship service time, taking into account the number of berths availableand the relatedberth occupancyrate. Details are given in Annex 12. Total ship waiting time benefits are estimated at DH 24 million (US$2.8million) in 1994.
(c) Cargo Handling Costs. Savings in cargo handling costs will result from improvementsin efficiencyfor containerand Ro-Ro trafficin the with project scenario. Savingswill also occur from reducedhandling costs on estimatedincremental unitized cargo, the latter representing traffic which in the absence of improvements to the container terminal, would remain as conventionalbreak-bulk traffic. These savings are estimatedat DH 9 per ton for Lo-Lo containersand DH 1.5 per ton for Ro-Ro containersand trailers,while the handling cost for conventionalgeneral cargo is estimatedat DH 120 per ton. Details - 42 -
of these costs, which exclude equipment depreciation,are given in Annex 12. Total cargo handling costs savings are estimated at DH 26 million (US$3.2million) in 1994.
(;) Cargo Handling Costs in Foreign Ports. Savings in cargo handling costs will also accrue from foreign ports through reduced handling rates applied to the estimated incrementalunitized traffic in the with project scenario. The unit cost saving for this traffic is estimated at DH 50 per ton and the total benefits are estimated at DH 11 million (US$1.3million) in 1994 (Annex 12).
4.11 A portion of the above benefits would not accrue to the Moroccan economyand would remainwith foreign shippinglines and shipping agents. Given that about half of Morocco's general cargo maritime traffic is carried out in Moroccan vessels, it is estimatedthat about 75% of the savings in ship service and ship waiting will ultimatelyaccrue to the Moroccan economy, both d.rectly and through reductions in freight rates. For savings in cargo handling costs, it is assumed that the full savings on handling costs in Moroccan ports will accrue to the Moroccaneconomy while only half of the savingsfrom foreign ports will be reflected in reduced freight rates. On this basis, total benefits in 1994 are estimatedat DH 59 million (US$7.2million) and DH 134 million (US$16.2 million) in the year 2000. The estimatedER is about 19% with ship service time accountingfor 16% of benefits, ship waiting time 30% and handling cost savings 54%. The first year benefit (FYB) is in excess of 10%.
TanrgierRo-Ro Improvements
4.12 A preliminaryanalysis has been undertaken of the requirementsfor additional Ro-Ro facilities in the port of Tangier. Based on forecasts of unitized trafficwhich are expected to increase from the current level of about 150,000 tons to 255,000 tons in 1994 and 400,000 in 2000, two additionalRo-Ro ramps would be required in 1994 along with an additionalstorage area of about three hectares. These facilitieswould increasethe efficiencyof cargo handling and provide savings in ship service and ship waiting time. Based on a preliminarycost estimate of DH 50 million (US$6 million), the estimatedER is over 50%. However several technical alternativesneed to be examined before detailedpreparation can begin. These alternativesare currentlybeing examined as part of an ongoing study for the port of Tangier. Detailed feasibility studies,prepared according to agreed proceduresand criteria,will be presented to the Bank by the end of 1990 and the proposed improvementswill be considered for financingunder the project.
Coal Handline Facility
4.13 The existing berth facilitiesin the port of Jorf Lasfar, completed in the mid-1980s,would only be able to handle bulk coal carriersof up to about 40,000 tons. However,by extendingan existingberth by 50 meters and deepening the berth to 15.5 meters, bulk coal carriers of up to 80,000 tons could be handled with substantial savings ir.sea freight rates. The cost of these modificationsis estimated at DH 110 million (US$13.3 million). However, in order to guaranteea rapid turnaroundof the 80,000 ton bulk carriers and hence a reasonablelevel of sea freightsavings, it will be necessaryto providehigher - 43 -
rated unloading equipment than the equipment previously envisaged. This equipmentwould require an overall rating of 2,000 tons per hour and would cost about DH 130 million (US$15.8 million) as opposed to DH 100 million (US$12.1 million) for the lower-ratedequipment.
4.14 The expected savings in sea freight rates are estimated to be about US$3.50 per ton which on an annual traffic of 1.5 million tons of coal in 1994 increasingto about 2.3 million tons in 2000 will provide an incrementalrate of return over a 20-year period of about 50%. Various alternativescenarios have been conducted to test the sensitivity of the results to the traffic forecasts. For instance, with coal imports of 1.5 million tons in 1994 increasingto 2.3 million tons in 2000, but ceasing completely thereafter,the berth facilitywould still provide an ER of about 20%. Similarly,the facility would still show an ER of about 10% with coal exports of only one million tons annually during a 20-yearperiod, which would correspond to the current needs.
Cereals Silo
4.15 The constructionof a cerealssilo which is plannedby ONICL in a new extensionat the port of Agadir would representthe first major investmentfor cereals import traffic in over a decade. The silo at Agadir at cost of about DH 120 million (US$14.5million) would have a capacityof 50,000 tons and would be able to accommodatethe large 60,000 ton bulk carriers. Annual throughput would ultimatelyrise to about 500,000 tons, an increase of some 280,000 tons over the existing traffic. The main benefits would be savings in sea freight rates estimatedat about US$ 8 per ton, handlingcost savingson existingtraffic and traffic divertedfrom Jorf Lasfar, and distributioncost savings on part of the traffic diverted from Jorf Lasfar and Safi. The estimatedER is about 35%, although it should be noted that the ER would be lower if the apportionedcosts for the recentlycompleted berth infrastructureare included in the evaluation. Details of the evaluationare given in Annex 12.
4.16 The constructionof a silo at Agadir would provide modern facilities for about one third of Morocco's cereals imports. The next step in the modernizationof cereals handling would be to provide improved facilitiesfor the remainderof the cereals traffic,particularly that part using the port of Casablanca. With access possible for only medium-sizedvessels at Casablanca, and with relatedcongestion problems, the provisionof a new silo either in the deepwaterport of Mohammediaor at Jorf Lasfar is being considered. The project provides for a the preparation of a medium term plan for port subsector developmentwhich will includethe study of future improvementsto grain storage and handling facilitiesin Moroccan ports (para. 2.04).
Summary of Evaluation
4.17 The componentsof the port investmentprogram evaluatedabove show ERs ranging from about 20% for the Casablancacontainer terminal to over 30% for investments in bulk facilities such as coal and cereals traffic. As these investmentsrepresent over half of the total port investmentprogram and as the remainderof the program is relatedessentially to rehabilitationand maintenance of existing infrastructureand to renewal of conventionalhandling equipment, the overall ER for the port investmentprogram is likely to be around 25%. - 44 -
4.18 The proposedport investmentprogram will generatesubstantial savings in foreign exchange primarily through reductions in sea freight rates applied to Morocco's foreign trade. For the containerport program, these savings are estimated at DH 50 million (US$6 million) in 1994 and DH 110 million (US$13 million) in the year 2000. Similar savings will accrue to the investmentsin coal and cerealshandling facilities,the estimatedsavings in foreignexchange being around DH 25 million (US$3 million) and DH 50 million (US$6 million), respectivelyin 1994 and 2000. Overall,the port investmentprogram will provide annual foreignexchange savings of at least DH 130 million (US$16million) during the 1993-97Plan, increasingthereafter as the full impact of the program is felt on foreign trade flows.
D. Project Risks
4.19 Forecast traffic levels constitutethe main risk for the viabilityof the port investmentprogram. Conservativeestimates have been used for the analysisand design of the proposedcontainer terminal in the port of Casablanca. These forecastsimply an increase in unitized cargoes in the port of Casablanca of just over 5% per year throughthe year 2000 compared to a growth rate in the recent past of about 7% per year. Moreover, the design of the new terminal providessufficient flexibility to accommodatehigher increasesin trafficshould these materializein the short-to-mediumterm. Traffic volumeswill be closely monitored and should growth exceed the current forecasts,additional equipment can be provided at relatively short notice. There is also considerable flexibilityin the phased implementationof the terminal'scivil works, as the need for a second phase of storageareas can always be advanced if warrantedby trafficgrowth. There is also some risk that the Governmentmay lack commitment to the institutional changes required in terms of trade facilitation and logistics. While progress is now being made in improving documents and proceduresrelated to trade flows, trade facilitationand logisticaspects will be closelymonitored in the frameworkof the next phase of trade reformsbeing undertakenby the Government. However, slow implementationof related measures will not detract from the importanceof undertakingthe proposed containerand Ro-Ro investmentsunder the project.
4.20 There is a somewhat greater risk related to the forecasts for coal traffic,particularly as the latter depend on the policy adoptedby ONE for the power plants. However, to the extent that ONE will benefit from a part of the sea freight savingsbrought about by the proposedJorf Lasfar coal terminal,the use of coal-firedplants for generatingelectricity is likely to far outweigh the advantages of other energy sources such as oil and gas. However, even without the increase in coal trafficwhich is expectedwith the developmentof the Jorf Lasfar power plant, the proposed coal handling facilitywould still be justified even if it only handled the existing level of coal imports, particularlythose required for the Mohammediapower plant. - 45 -
V. FINANCIALEVALUATION
A. Past and Present FinancialPerformance
5.01 The financial performance of ODEP during the period 1985-1989 has been satisfactory,as shown in ODEP's summaryconsolidated financial statements in the following Tables 5.1, 5.2, and 5.3, and detailed in Annex 13. ODEP's working ratio is about 70% and the operatingratio is about 90%. Its operating income has improved from DH 61 million in 1985 to DH 76 million in 1989. Similarly, its rate of return on revalued fixed assets in operation has been satisfactory(para. 5.04).
Table 5.1: ODEP - Income Statementsfor 1985-1989 (in current DU million)
1985 1986 1987 1988 1989
Total Revenues 590 684 772 916 957 Working Expenses 407 524 538 592 642 Depreciation/Provisions 122 126 j171 243 239 Operating Income 61 34 63 81 76
Interest 11 20 34 27 36 Non OperatingExpenses _43 4 23 24 55 Income before Taxes 7 10 6 30 -15
Income after Taxes _| Ratios Working Ratio (%) 69 77 70 65 67 OperatingRatio (X) 90 95 92 91 92 Operating Inc/Rev.(%) 10 5 8 9 8
5.02 Operatingrevenues consistof cargo handling (about 65%) wharfage and port dues (about 27%). The two componentsincreased respectively from DH 373 million in 1985 to DH 509 million in 1989 correspondingto an average increase of 8% per year, and from DH 101 million to DH 223 million or an increaseof 20% per year. During the period under review,overall revenuesincreased by 12% per year reflectinga combinationof tariff increasesimplemented in late 1987 and increasesin traffic of about 7% per year.
5.03 Salaries and wages, and maintenancerepresent ODEP's major expenses. They increasedfrom DH 334 million in 1985 to DH 415 million in 1989 or 5% per year. These expenses decreased from 63% of total revenues in 1985 to 51% in 1989. However, considering the nature and composition of its assets, ODEP charges a relativelyhigh depreciationrate on its fixed assets--about12% of gross fixed assets base on average compared to an average of about 7% applied in the financialforecasts. - 46 -
Table 5.2: ODEP - Balance Sheet for 1985-1989 (in current DH million)
1985 186 1987 1988 1989
Net Fixed Assets in Operation 547 490 885 859 940 Other Assets 120 260 320 471 621 Currents Assets 480 480 361 449 447 Cash 129 112 __51 38 go
Total Assets a.M 1.342 I61 1AL7 £2U8
Equity 730 787 833 879 958 Long Term Debt (L.T.D.) 144 94 293 382 413 Current Liabilities 305 433 461 521 676 Short Term Debt 97 28 , Q30 35 41
Total Equity & Liab. 7 4 21Z 1,617 2088
Ratios Current Ratio 1.5 1.3 0.8 0.9 0.7 CollectionRatio 112 111 101 54 54 L. T. D./(Equity.+L.T.D.) 24.8 13.5 27.9 32.2 32.2 Rate of Return on Net 13.3 12.1 11.3 10.6 8.8 Fixed Assets Rate of Return on Net 13.3 11.5 10.0 9.1 7.2 Revalued Fixed Assets
Table 5.3: ODEP - Sources& ApDlicationof Funds for 1985-1989 (in current DH million)
1985 1986 1987 1988 1989
Total Cash Generation 115 136 189 231 188 Working Capital(+/-) -175 128 147 -28 -156 Debt Service -23 .57 -53 -56 -70 Net Cash Generation -83 207 283 147 274
Equity Variation 727 54 45 27 110 Borrowings 252 -86 219 125 72 Available Funds 896 175 547 299 456
Capital Expenditures 767 192 608 311 414 Cash Increase (Dec.) 129 (17) (61) (12) 42
,Ratio Debt Service Ratio (1) 4.9 5.9 2.6 4.2
5.04 Financialratios indicatethat ODEP meets its obligationsunder Loan Agreement 2657-MOR. Rates of return on unrevalued fixe-dassets in operation - 47 -
range between 13.3X and 8.8X. Based on revaluednet fixed assets, the rates of return range between13.3X and 7.22, which is still satisfactorycompared to the required 7.5X. ODEP's debt service coverage ratio has been around 3.0, far beyond the 1.4 target set under the ongoing project. The debt/equityratio and the ratio of debt to total capitalizationrange respectivelybetween 292 and 482, and 252 and 322; both are expected to increase due to new borrowing for investmentfinancing but the ratio of debt to total capitalizationwill be kept within the acceptablelimit of less than 502.
B. Future FinancialPerformance
Overall FinancialProiections
5.05 Financialprojections assume that, with the exception of breakwaters and jetties, port infrastructurecurrently in the public domain will be transferredto ODEP as equity (para. 2.13) and that ODEP will continue to pay the fee to the Governmentfor using port infrastructureremaining in the public domain, based on ODEP's share of the corresponding total revalued assets (para. 2.45). The projections also assume the implementationof a revised tariff structure from 1991 (para. 2.43) and take into account the auditor's recommendations(para. 2.40).
5.06 ODEP's financialforecasts are summarizedbelow in Tables 5.4, 5.5, and 5.6 and detailed in Annex 14. Annex 14 also includes the assumptionsmade for financialprojections. Table 5.4 below shows that profitabilityof ODEP's o-perationswill remain satisfactory. Its working and operatingratios steadily improve from 672 in 1989 to 60% in 1995 and from 92X in 1989 to 852 in 1995 respectively, reflecting traffic trends in the coming years and the implementationof new tariff policy. Salaries and wages, maintenance and depreciationrepresent the major operating expenses. Salaries level reflect ODEP's willingne3sto improvestaff efficiuncy. Salary expenses will decrease from 262 of operating revenues in 1989 to 192 in 1995 as a result of the retirementof 1,000 staff during the forecastperiod and a prudent recruitment policy. The average salary is expectedto increaseat the local inflationrate. Depreciationincreases steadily due to transfer of public proper:y to ODEP and duieto ODEP's greater involvementin financingbasic infrastructuresuch as the container terminal. The 72 average depreciationis appropriateand reflects ODEP's assets structure. - 48 -
Table 5.4: ODEP - Income Statementsfor 1990-1995 (in current DH million)
1990 1991 1922 1993 1994 1995
Total Revenues 969 1,074 1,176 1,281 1,326 1,376 Working Expenses 652 724 780 777 817 837 Depreciation/Provisions 185 2Z 23I 269 31 333 OperatingIncome 132 143 159 235 208 206
Interest 22 22 23 30 47 70
Income before Taxes 117 123 137 208 167 140
Income after Taxes J8 1t -6-29
Working Ratio X 67 67 66 61 62 61 OperatingRatio Z 86 87 86 82 84 85 Operating Income/RevenuesX 14 13 14 18 16 15
Table 5.5: ODEP - Balance Shee for 1990-1995 (in current DH million)
1990 1991 1992 1993 1994 1995
Net Fixed Assets 908 950 1,252 1,462 1,737 2,045 Other Assets 554 658 837 922 957 639 CurrentsAssets 395 450 454 352 310 332 Cash 55 17 31 92 83 _ 63
Total Assets 1.912IA 2,O J 2.2 1AQ8 37079
Equity 982 1,024 1,324 1,406 1,474 1,519 Long Term Debt (L.T.D.) 488 627 765 940 1,072 1,118 Current Liabilities 397 380 445 443 444 348 Short Term Debt 45 44 . 40 39 97 94
Total Equity & Liab. 1.912 Q 7 2.5 a038079
CurrentRatio 1.02 1.10 1.00 0.92 0.73 0.90 Debt/Debt& Equity % 33 38 37 40 42 42 Rate of Return on Net Fix. Ass.9.6 10.4 10.0 11.6 9.4 8.6 Rate of Return on Revalued 7.8 8.5 7.0 9.4 7.5 6.4 Fixed Assets - 49 -
Table 5.6: ODEP - Sources& AiRlicationof Funds for 1990-1995 (in current DH million)
1990 1991 1992 1993 1994 1995
Internal Cash Generation 217 223 253 311 343 371 Working Capital(+/-) 226 72 -61 -100 -42 118 Debt Service -83 -97 -104 -108 -118 -185 Net Cash Generation -91 53 211 304 268 68
Equity Variation -35 -4 248 5 5 8 Borrowings 119 183 178 214 229 140 Available Funds -7 232 636 523 502 216
Capital Expenditures 18 270 623 462 511 236 Cash Increase (Dec.) (25) (38) 14 61 (9) (20)
Debt Service Ratio 0.0 1.5 2.9 3.5 2.1 1.4
5.07 The forecasts show that a 7% rate of return and a debt service coverage ratio of at least 1.5 can be achieved provided that current plans to establisha new tariff structurebeginning of 1991 for port dues on ships and mid-year 1991 for container handling charges are implemented (para. 2.43). However, a sensitivityanalysis shows that the rate of return is particularly sensitiveto trafficfluctuations (Annex 14). Therefore,the financialsituation will be closely monitored during project implementation. In addition,current estimatesshow th.t a tariff increasemay be required in 1992 and 1995 in order to maintain a satisfactoryrate of return. The rate of return is based on net fixed assets in operationrevalued from time to time using the inflationrate of the forecast period. ODEP should also maintain a satisfactoryfinancial performanceas measuredby a debt/equityratio of less than 50X, and a positive currentratio; it should also maintainan acceptableinternal net cash generation of at least 40% for its developmentprogram.
5.08 At negotiations,it was agreed that ODEP would: (a) implementthe new tariff structurefor port dues related to containerhandling and Ro-Ro traffic by September 30, 1991; (b) achieve an annual rate of return on its revalued assets in operationof at least 71 per year; and (c) maintain a debt service ratio of not less than 1.5.
ContainerTerminal and Coal Handling Facilities
5.09 The financialviability of the Casablancacontainer terminal and coal handling facilitiesin Jorf Lasfar has been assessedbased on a rate of return on fixed assets in operationfor the containerterminal and cost recovery for coal handling facilities. The financialforecasts are summarizedrespectively in tables 5.7 and 5.8 and detailed in Annex 14. Assuming the new container tariff will be effectivein mid-1991 and traffic growth of unitized goods of 5X a year, additionaltariff adjustmentfor local inflationrate beginning in 1995 will maintain for the container terminal a rate of return on revalued fixed assets in operation during 1994-1999 of 91. Container terminal financial performancewill be monitoredduring the project (see Action Plan, Annex 1). - 50 -
Table 5.7: ContainerTerminal - Income Statementsfor 1993-1999 (in currentDH million)
Income Accounts 1993 1994 1995 1996 1997 1998 1999
Total Revenues 155 169 152 213 232 257 281 Working Expenses 23 32 37 40 38 42 43 Depreciation 12 23 29 32 32 37 37 Interest 28 37 39 36 33 30 40
Net Income 55 47 52 63 77 89 96 Net Income (Revalued) 52 42 47 57 72 82 87
Net Fixed Assets 296 552 842 1,047 1,134 1,227 1,336 Rate of Return % 26.7 14.3 10.2 8.9 9.3 9.1 9.6
5.10 The coal handling facility at Jorf Lasfar will be built for ONE in order to supply coal to its proposed power plant at rate of 1.5 million tons a year. ODEP will enter into an agreementwith ONE which will govern recovery of the investmentcost, operatingexpenses and financialcharges. The average fee that ONE will pay to ODEP is based on the long run average cost which is expected to be about US$ 3.4 per ton. The financialviability could be further increased by transferringcoal imports currentlyhandled through Casablancato the new facility at Jorf Lasfar. At negotiations,it was agreed that ODEP would not begin procurementof the coal terminal until an agreement,satisfactory to the Bank, has been concludedwith ONE.
Table 5.8: Coal facility - Income Statements:1994-2000 (in current DH million)
Income Accounts 1994 1995 1996 1997 1998 1999 2000
Total Revenues 13 36 43 44 44 44 44
Working Expenses 3 14 16 16 16 16 16 Depreciation 2 9 11 12 12 12 12 Interest 7 13 16 16 16 16 16 Net Income 0 0 0 0 0 0 0
Import (milliontons) 0.75 0.75 1.5 1.5 1.5 1.5 1.5 Revenue/ton (DH) 17.1 48.4 28.4 29.2 29.2 29.1 29.1 Revenue/ton ($) 2.0 5.7 3.3 3.4 3.4 3.4 3.4
Overall Impact of the Projecton the GovernmentBudget
5.11 Table 5.9 below summarizesexpected income in the port sector from 1990 to 1995. Overall, the situationis satisfactorybecause of the positive net contributionof the sector to the nationalbudget. Moreover,indirect taxes earned by the Governmenton port activitiesare not taken into account, thus underestimating the real revenues earned by the Government through sector activities. - 51 -
Table 5.9: Income in the Port Sector (in current DH million)
1990 1991 1992 1993 1994 1995
Govern. Revenues 88 161 175 226 203 _163 From ODEP 81 154 168 219 196 156 Others 7 7 7 7 7 7
Govern. Expenses 67 67 77 86 87 85 Operations 41 41 41 41 41 41 Debt Service 26 26 36 45 46 44
Net Inc. from/Op 21 94 98 140 116 77 Sector Net Inc. 79 141 151 216 178 114 Government 21 94 99 139 116 77 ODEP 58 47 52 77 62 37
5.12. Over the forecastperiod, sector net income amounts to DH 879 million of which DH 546 million represent net revenue to the Government budget. Compared to the Governmentinvestments in the sector,net revenue to the budget will represent 63X of the investments in the 1991-1993 period and 841 of investmentsin the 1991-1995period.
VI. AGREEMENTSREACHED AND RECOMMENDATIONS
6.01. During loan negotiations, the Bank and the Borrowers agreed on the project objectives and description (para. 3.06), and auditing requirements (para. 2.41), and confirmedthe program for projectexecution (para. 3.23), and the project monitoringand reportingprocedures (para. 3.35).
6.02. During loan negotiations,assurances were obtainedfrom the Government on the followingpoints of particularsignificance:
(a) transmissionof the Governmentport subsector'sinvestment programs to the Bank by September30 of each year for review and comments and implementationof a finalizedprogram taking into considerationBank comments (para. 3.09);
(b) proceduresand criteria related to eligibilityof subprojectsto be proposed for Bank financing (para. 3.11);
(c) carrying out of the Port Subsector Development Program with due diligenceand efficiency(para. 3.12);
(d) signatureof a Contract Plan between ODEP and the Governmentby June 30, 1991 (para. 3.13); - 52 -
(e) completion of an environmental assessment of maintenance and rehabilitationdredging in four selectedports by December 31, 1991, and implementationof dredging activities in the selected ports in accordancewith the recommendationsagreed with the Bank on the basis of the results of the study (para. 3.40); and
(f) design of all facilitiesto be financedas subprojectsin accordance with environmentalhealth and safety standardsacceptable to the Bank (para. 3.41).
6.03. During loan negotiations,assurances were also obtained from ODEP on the followingpoint of particularsignificance:
(a) completion of a dredging study by December 31, 1991, and implementationof the recommendationsbased on this study as agreed with the Bank (para. 2.28);
(b) transmissionof ODEP's investmentprograms to the Bank by September30 of each year for review and commentsand implementationof a finalized program taking into considerationBank comments (para. 3.07);
(c) proceduresand criteria related to eligibilityof subprojectsto be proposed for Bank financing (para. 3.11);
(d) carrying out of ODEP's Development Program with due diligence and efficiency(para. 3.12);
(e) signatureof a Contract Plan between ODEP and the Governmentby June 30, 1991 (para. 3.13);
(f) design of all facilitiesto be financed as subprojectsin accordance with environmentalhealth and safety standardsacceptable to the Bank (para. 3.41);
(g) appropriatemeasures to be taken by ODEP to: (i) implement the new tariff structurefor port dues related to containerhandling and Ro- Ro traffic by September 30, 1991; (ii) achieve an annual rate of return on its revalued assets in operation of at least 7X; and (iii) maintaina debt serviceratio of not less than 1.5 (para.5.08); and
(h) conclusionof an agreement,satisfactory to the Bank, between ODEP and ONE before beginningprocurement of the coal terminal at Jorf Lasfar (para. 5.10).
6.04. Retroactivefinancing of up to a total of US$5.0 million should be provided for payments, incurredby ODEP under the project after July 31, 1990 for engineeringservices, civil works for the Casablancacontainer terminal, technicalassistance and training (para. 3.32). - 53 -
6.05 With the agreements on the above, the project provides a suitable basis for a Bank loan of 1;S$99million to be made to ODE? with the Guaranteeof the Governmentof Morocco and a Bank loan of US$33 million to the Governmentof Morocco. The loans would have a repaymentperiod of 20 years, includinga grace period of five years, at the standardvariable interest rate. - 55 -
Annex Page 1 of 10
KINGDOMOF MOROCCO
STAFF APPRAISAL REPORT
DRT SECTORPROJECT
Actiou Plan KINGDOMOF MOROCCO
PORMSeCTOr PROJECT cston FLan
ACTIVITIES PRESETSITUATIO OBJECTIVES ACTIONSto OE TAKEN "WM I8M
A. WMUT? OF URlEI Establish internatfonal standards E_ 3 LATIOUS for Moroccan ports. Ensure hish quality of service and improve external relations
(a) Port Operations Recent actions have brought Reach productivity levels Monitor physical performance ODEP, Anumal review substantlat improvements in cc-parable to efficient foreign indicators compared to targets and ulthSank productivity but ship service ports (see Amex 10) analyze reasons for variation time and cargo dwell time need to be iwproved, particularly for containers
Red4ce cargo d&tlI time, Collect and analyze data on dwell ODEP particularly for containers in time for contalners at Casablanca. arch 31t 199t Casablanca Identify and implement measures to reduce dwell time
Encourage development of Maintain list of activities open to Governnet ODEP selected effieient private prfvatesector. Establishguidelines sector activities in port oper- for participation in port sector ations
(b) Trade Facilitati0n ODEPparticipates in the work Ensure that port procedures are Uith assistanceof short-termexpert, COEP of the National Commission for adapted to requirements of simplify trade procedures and October 31, 1991 Trade Simplification and action foreign trade documentatfon related to ODEP, in has been initiated under UNDP Line with improvements to customs project. ODEPhas started data procedures and doucments exchange with foreign ports.
0al 0 Action Plan
ACTIVITIES PRESENTSITUATION OBJECTIVES ACTIONSTO BE TAKEN RESPONSIBILITYI TIMING
QUALITYOF SERVICE ELTEN3ALRELATIONS Trade Facilitation (continued) ODEP When SIPOR and SADOC are Ensure optimal exploitation of with assistance of data processing 1991 installed good communications SIPOR and SADOC and full experts, establish efficient and by December31. and cooperation vith user facilitfes for easy linkage to rapid interface between SIPOR and systems will be essential to commercial systems SADoCsystems and ensure facilities port efficiency for similar links to other retevant systems. Implement use of EDIFACT interchangestandards and check qualityof commondata capture
contacts with ODEP1991-93 Cc) Marketing and Marketing activities to be Improve contacts with users Strengthen marketing Conmmnications furtherdeveloped at ODEP users (shippinglines and agents) with objective of improving operations and forecasting traffic
Trainingin marketing techniques ODEP1991 -4 In early years, ODEP's efforts Focus improvedcommunications Continueaction initiatedby ODEP ODEP - Users - focussed on internal Andmarketing actions on port particularly: port user matnl, port Shippingagents comnunications usersrather thangeneral pubkic brochurefor truck drivers,traffic 1991 signs withinport areas
Developexternal links giving Establishsystems providingquick ODEP priority to existing and accessto data by users End 1991 potentialcommercial partners of Foreign (d) Multimodal Action by ODEP to improve its Develop coordinated action The logisticsstudy will focus on Ministry Transportand Trade operationsis only part of a programforiimprovementintrade three logistic chains affecting Ro- Trade Logistics wider program involvingother logisticsmanagement. Ensure Ro traffic, perishablegoods and links in the transport chain. complementarity between import .and export of containerized Reform program for road logisticsstudy and facilitation goods transport currently being activities/studiesfotlowed up prepared by Ministry of by SIPROMAR Transport. Study taunchedon international road freight traffic. A studywill identify and analyzeexisting constraints affecting Moroccanforeign trade togistics 0 Action Plan
CTIVITIES PRESENTSITUATION 08JECTIVES eCTIONS TO BE TAKEN RESPONSIBILITYI TIMING
B. JUTM IOt OF Pursue implementationof most Strengthencapabilities to identify 1U llETHODSTO appropriate techniques for newrequirements and to adopt to new OiEETtWUICti6 handling port traffic developments TRAFFIC sEIS
(a) Growth of Project includes construction Ensureappropriateorganization Prepare organization of new terminal ODEP Containerization of a new Casablanca container of rw terminal thereby and define key performance targets by December 31. 1992 terminal. Implementation encouraging maximum efficiency supported by institutional measures designed to make best Devetop for atl cormercial ports a ODEP use of facilities for container monitoring system for container and and Ro-Ro traffic Ro-Ro traffic
(b) Sulk Traffic Modern bulk handling methods Promote development of modern An analysis of cereals storage and DP need to be further developed in hand inc methods for cereal handling in Moroccan ports will be 1991 - 92 Moroccan ports. particularly for traffic included in the Ports Master Plan cereals tratfic Study (see E(a) below) Study will identify further silo needs and required institutional measures for their implementation and operation
(c) Maintenance Eauiarent: ODEP maintenance Optimize equipment fleet given Monitor ratios for availability ODEP Management function is fairly well performance and quality utilizationandefficiency. Prepare developed, spare part supply objectivs a rolling investment plan for need to be improved equipment
Infrastructure: ongoing Sustain the benefits of recent Prepare an anmual maintenance plan ODEP rehabilitation effort (financed rehabilitation programs for infrastructure identifying by ODEP and the 8ank) objectives and costs
Dredgina: maintenance dredging Optimize operation and cost of Establish a modernization plan for ODEP - DRAPOR financed by the Government and maintenance dredging in Moroccan dredging operation Including by December 31, 1991 performed by a fully owned ports organization, size, composition and subsidiary of ODEP deployment of dredging fleet, and costs
(d) Telecoucnications Rapid development of Efficient use of modern Prepare with assistance from ODEP telecommunications in teleconnmmication methods to consultants a Master Plan for June 1991 international trade, enhance support given by port Telecomunications related to ODEP Review with Sank ea particularly in relation to port sector to development of needs taking into account user needs December 1991 operations, requires ODEP to Morocco's foreign trade and the cost effectiveness of define strategy in this area measures proposed o Action Plan
ACTIVITIES PRESENTSITUATION OBJECTIVES ACTIONSTO DE TAKEN RESPONSIBILITTYI TIMING
C. ORaIZATIONAm IProve services to users and Establish structures and adapt NAhhTEN increase productivity through managementtools to ODEP'sgeneral inprovedorganization rd ademrn objectives managementmethods
(a) Organization ODEP Introduced a new Ensure appropri ate Adept maintenanceand environment ODEP1991 administrative technical and organizationaL structures by functions to changing needs and to financial organization in 1988. providing flexibility in requirements identified by ongoing This organization is nowfirmly adjusting to needsof sector studies estab ished and witl be integrated into the SIPORdata processing network Cb) Data Processing Implelentation of a data Facilitate use of port Complete installation of system ODEP SIPOR processing system-SIPOR- began facilities and improveODEP s taking Into account the needto: before in Jamuary 1988. ODEPhas productivity i) test the system before full December31, 1992 undertakena mid-term review of operation and the systemto enablecorrections ii ensure compatibility with the and changesto be made Custom SADOCsystem and user needs within the introduction of EDIFACT I standards
tc) Procurement Thevolume of CDEP*sinvestments Ensurethat ODEP'sprocurement Establish standard formats to ODEP require a rationalization of proceduresmeet obJectives for facilitate preparation of bidding December1991 procurementprocedures econmy and efficiency documents Improve quality of bid evaluation ODEP through use of ODEP internal December1991 guidel ines for selection criteria end preparation of evaluatian reports
* 4 0 Action Plan
AC71VITIES PRESENTSITUATION OBJECTIVES ACTIONSTO BE TAKEN RESPONSIBILITY/
9. NU n Readyavailability of qualified Plan human resourcesmanagement, tB@Mii!t staffsuited to sectorneeds providemotivation to staff and encourageloyatty to enterprise
(a) manpowerPlarning Humanresources managementis Provide ODEPwith means to Pursue implementation of ODEP- Consultant well developed. In 1989, ODEP prepareand implement a manpower recommendatIonsfrom masterplan for 1991 prepared a master plan for plan adaptedto its development humanresources employmentand humanresources strategy Reviewannuatly with Bank impact of ODEP ODEP'sprogram on employment (b) Training Weltstructured training program Intensifyand adapttraining Developa trainingprogram for each ODEP is being implementedthrough effort to ODEP'sneeds port Annually Port Training Center (CFP). ODEP has prepareda pluriannual Reviewtraining program annually with ODEP trainingprogram Bankwith view to updating needs for by December31 ofeach financing underproject yearstarting 1991
0c 0
XI!0
Ch, Action Plan
ATIVITIES PRESENTSITUATLON OBEcrTvIEs ACTIONSTO OE TAKEN RESPONSIBILItrI TIIG
E. PLANINGA Ernsure balanced development of Improve plaming capabilitiesin the Df]lUXwEft port sector in order to meet sector and define a development needs of economyby optimizing strategy taking into account investment decisions white at enirotmental aspects sametime meeting ervirormental concems
(a) Investment Ptaming Preparation and ipplementation Ensure coordination betueen With assistance of consultants update uP of projects to be improved investments in infrastructure ports mester plan according to terms Review with Sank and equipment in the port sector of reference agreed with the Bank before Deceber 31, 1991
Investment programduring period Availability of a modern Provide Bank with five year rolling ODEP- oriwtnment 1990-93 should be limited iaqnningsystem with appropriate plan and anmual budgets for port Befora Septefber 30 overatl to following levels: cr4t.eria for project evaluation sector. Provide Sank with termsof of each year from 1991 DP-DPCM ON 700 million reference for technical studies of ODEP ON 1,800 million eligible sub-components
(b) Project Management Improve coordination between Implementa project monitoring system ODEP - Goverrnent and Monitoring plaming, programming and implementation of projects
(c) Envitronmnt and Major efforts made to improve Iprove capacity to prevent and Procure appropriate equipment ODEP Safety safety for passenger and cargo fight accidents included in the project, undertake 1992 traffic training in each port and provIde information to port users
Project includes dredging, rock Limit impact of project on Specific measures to be inplemented COEP dredging and earthworks. marine envirorment during construction 1991 - 93 Specific provisions included in bidding documents
Maintenance dredging is Application of international Undertake a study in four ports to OP currently urdertaken without any agreements to limit negative define : Completion of study particular reference to impact impact of dredging i) a methodology for testing and and review of the on marine environment analyzing dredging samples results with the Bank ii) status of selected sites for by December 31. 1991 disposal of dredging materials, and Implementation of iii) specific measures to limit appropriate measures e pollutiondue to dredging based on thisreview X Action Plan
CTIVhtIES PRESETSITUATION OBJECTIVES ACTIONSTO BE TAKEN RESPONSIBILITYI
PLMIN; N
Envirosuent and Safety (continued) Procedwre for removal of wastes Appicertfon of international EstablIsh additional Investments ODEP from shfps to be established agreements (Narpol) required In Noroecan ports by Oecember31 1992
Water quality In port of lmprove quality of water in Identify measures and investments to ODEP Casablanca affected by existing Norocean ports rem0ve waste water currenty Owecenter31t 1992 urban and Industrfal waste water emptying directly Into ports
No specfic provisions to limit Limit pollution risk by port Analtyze air andwater pollution risks COEP potential pollution risk from users in Moroccanports andset appropriate Study completed future industrial plants standards to be met Decemter 31 1992
0'a
0 Action Plan
OBJECTIVES ACTIONSTO BE TAKEN RESPONSIBILIT7Y ACTIVItlES PRESENTSITUATtON TIMING
F. FINANCIALASPECTS implement study ODEP- NPW study was financed Objectives are to reach cost Test, adapt and (a) Tariffs A tariff Prepare and sepvember 30, 1991 under the previous project recovery by activity and recommendations. appropriate lesislation (Loan 2657-NOR) ultimatelybyport. Limitcross implement subsidies and simplify tariffs Ccmplementary study for tariffs ODEP related to conventional general 1992 cargo, fishing ports, etc. lapact on improved productivity
agreementgoverning cost ODEP - ONE ODEP plans to invest in coal Ensure the recovery of the Conclude an between ODEP and ONE. Before beginning handling facilities at Jorf investment cost, operating recovery to be satisfactory to the procurement Lasfar expenses and financial charges Agreement Bank
fixed assets. Transfer net ODEP Certain investments in public ODEP to be responsible for Revalue (b) Fixed Assets assets (except breakwaters and by Deceaber 31. 1991 domain madeavailable to ODEPin infrastructure costs including fixed and other infrastructure 1984 have already been renered maintenance and renewal of jetties to pubtlic property) toODEP by ODEP assets transferred from public belonging domain Include provision in contract plan to be implemented from 1991
iwplement a system, DP Pubtic accounting does not Use assets valuation to: Develop and the public accounting system December31, 1991 produce adequate infoemation for (i) record and capture previous outside assets managementat the level and new assets; and (ii) def ine of DP the share of assets between users for calculatingthe fees ODEP- Goverrennt Developa tariff system enablinn Undertake revaluationof fixedassets December31, 1991 full cost recovery. Ability to outside existing accounting system by estimate real financial return and make provisions for renewal. On investments procedures and define the ODEP Goverunent Users fee to be limited to Ensure appropriate pricing Establish of infrastructure assets to be December31, 1991 breakwaters ard jetties policy with ODEP being share of allocated to oOEP (contract plan) responsibte for a share d infrastructure costs Action Plan
ACTIVITIES RPIESENTSITUATION OBJECTIVES ACTIONSTO BE TAKEN RESfSISILITY1
FIMClAIM (contimed)
(c) Financial Control Financial control is too rfigd Implement a system of g Mod{fy legislation sccordingly ODEP- "EPP materiori control (Contract plan)
Internal audit is limited to an Ensure full internal audit Estabilsh procedures for ODEP accounting audit I) audit of menagementand budgetary June 30, 1991 proceures ii) accounting audit of financial statements Establish and staff an internal audit ODEP department Deraeber 31, 1991 td) Budgetary Process A new budgetary process to be Availability of budgetary system Estabtish performance indicators and ODEP implemented in line with new which facilitates planning and system for evaluating differences December31. 1991 organizatfon monitoring of expenditures and between actual expenditures and nalyses of results planned budgets
(a) FinancfalManagement Procedures have been defined and Modernf2ed financial management Accelerate implementation of data SDEP system being implemented of ODEP processing systems Deemuber31, 1991 0% progressively
Budgetary accountfng is in place Improve budgetary procedures ODEP December31. 1991
Cost accounting is to be further Adapt cost accounting to needs Estabtish cost accounting system SOEP developed of usme data propessing integrated with other information December31 1991 system and planning and systems budgetary procedures
(f) financialObjectiv. The financial objectives are: a rate of return on total revalued ODEP fixed assets of at least 7X FT 1990-1995 - a rate of return on revalued fixed SDEP assets of a t least 9X for the new FY 1994-2000 container terminal in Casablanca - a debt service coverage ratio of CDEP at least 1.5 FT 1990-1999 - 65 -
Annex 2 Page 1 of 5
KIkGDOM OF NOROCCO STAFF APPRAISALREPORT
PORT SECTOR PROJECT
ODEP's Organization.Staffing and Training
General
1. The Office for Port Operations (ODEP) was establishedon January 1, 1985 as a state-ownedcommercial and industrialenterprise, with financialand administrativeautonomy, under the tutelage of the Ministry of Public Works (MPW). ODEP took over cargo handling from the Regie d'Acconage du Port de Casablanca (RAPC) and assumed some maintenance responsibilitiespreviously assigned to the regional Port Directorates.
Organization
2. Technical assistance, supported by the Ports of Casablanca and Mohammedia Project (Loan 2657-MOR), assisted ODEP's in carrying out a reorganizationstudy to establish an appropriateorganization. The study was implementedwith an extensive participationof ODEP's staff, thus building up commitment. The basic principleof the new organizationis decentralizationof operationalaction. At the central level, the DirectionGenerale (DG) defines strategy and decides on policy matters. It also consolidatesand controls actionsand resultsof local Port OperationsDirectorates (DEPs). At the level of each port, the DEPs are responsiblefor managing operations. Each DEP has a number of Autonomous Production Centers (CPA) and functional services. The CPAs are organized to manage the operations of homogenous geographical or functionalsections. The result is a clear delineation of responsibilities between the three levels: (a) CPAs are in charge of physical operations; (b) DEPs, as profit centers,are responsiblefor budget execution;and (c) DG plays the role of a holding company, providing guidance to and integrationof the DEPs. The organizationat ODEP's headquarters is given on Chart No. 3 and further discussedbelow (para. 7). The organizationof the DEP of Casablanca is given on Chart No. 4 and further discussedbelow (para. 8).
3. Severalsteps in implementingthe new organizationhave been cleared, e.g monitoring systems, CPA accounts, accountingprocedures, port management information system project (SIPOR). Further action will be required to consolidateand sustain the positive results of the study. In particular,ODEP will need to validate the organizationalprocesses, update the organizational scheme and procedures on a permanent basis, ascertain coherence between procedures,and get DEPs permanentlyinvolved in the process. ODEP has also to make sure that the SIPOR project takes into accountusers needs, integration and cross referencebetween sub-componentsof the system, organizationfindings and recommendations,definition of adequate equipment and setting up of an - 66 -
Annex 2 Page 2 of 5 appropriatetraining program. Above actionswill be carried out by ODEP staff with the assistanceof short term missions of consultantsas appropriate.
ODEP Headguarters
4. The Board. The compositionof the Board is establishedby decree. Although the users and providers of logistics services are representedat the Board, there is still a strong ministerial representation. While the Prime Minister is formally the chairman of the Board, in practice, he permanently delegatesthe chairmanshipto the Minister of Public Works (MPW). Members of the Board are the Ministers of Public Works, Finarces, Interior, Commerce and Industry,Economic Affairs, Merchant Marine and Fisheries,Agriculture, Energy and Mines, Employment,and Transports. Two representativesof ODEP staff are appointed to the Board by the Prime Minister. Users are representedby the Chairman of: (a) the Federationof Chambers of Commerce and Industry; (b) the Federation of the Chambers of Agriculture; and (c) the General Economic Confederation. Port relatedactivities are representedby the Chairman of: (a) the Central Shipowners Committee; (b) the Association of Maritime Agents, Consignees and Stevedores; and (c) the Freight Forwarders Association. In addition,the Prime Ministermay appointmembers who qualifyas having competence in port activities. Other memberswith no right to vote are: the Wali of Greater Casablanca, the Secretary General of MPW, the Directors of relevant Central Agencies (Ports Directorate,Customs, DPCM).
5. The Board meets twice a year; betweensessions, authority is delegated to the ManagementCommittee, which meets once a month, and to the GeneralManager of ODEP. However, the Board decidesabout approvalof the accountingstatements, budget, statute of personnel,and tariffs. The ManagementCommittee is chaired by the SecretaryGeneral of MPW. It includesrepresentatives of the Ministries of Finance, Interior, Merchant Marine, Commerce and Industry. The General Manager (GM) of ODEP is appointedby the Government,he attends and reports at the meetings of the Board and the ManagementCommittee.
6. The Technical Committees. In each port, a Technical Committee, chaired by the regional Director of MPW, is consultedon all matters connected with port operations and maintenance. The Technical Committeemeets at least four times a year. The members of the TechnicalCommittees are representative of local administrations (Province, municipality, customs, ODEP, Maritime Affairs), and users (Chamberof Commerce and Industry,Chamber of Agriculture, Associationof Maritime Agents, ar.'Freight ForwardersAssociation).
7. Headquarters employs about 90 professional staff assigned to 8 departmentsand 4 missions (Chart3). The missions are the following:Secretary of the Board and the TechnicalCommittees, Central Services, Audit and Management Control, Risk Management. The departments are the following: Development, Finance, Human Resources, Organizationand Information Systems, Engineering (civil works and equipment), Legal, Social Affairs, ar '.egionalPorts Coordination. Eight local DEPs are establishedin the main c, rcial ports and report to the GeneralManager. Small ports are operatedby small units reporting to DEPs or directly to the regional ports department. - 67 -
AnnexA2 Page 3 of 5
ODEP in the Port of Casablanca
8. ODEP operating unit in the port of Casablanca (DEPC) has a more developedorganization than the other DEPs given the size and importanceof the port. DEPC had about 2,600 staff at the end of 1989, distributedamong ten departments(Chart 4). There are five operationaldepartments (cargo handling, civil works, equipment,fish market, and ship repair yard) and five functional departments (marketing and forecasting, finance and accounting, management informationand EDP, legal, and human resources). The cargo handling department is subdividedin six AutonomousProduction Centers (CPAs). These are: container terminal,conventional general cargo berths, citrus fruit terminal,ore and oil terminal, backup areas, Ro-Ro terminal. Further adjustments to DEPC's organizationwill involve generalizationof CPAs to all activities.
Staffing
9. ODEP had a total staff of 4,675 at the end of 1989. Of the total staff, 335 are management staff with university degrees and 2,807 are skilled workers and technicians with appropriate training in port activities taken either locally or abroad. The average age of staff is between 42 and 43 years. More than 20% of staff is older than 55 years and will retire within the next 5 years. However, the management staff is younger with an average age between 35 and 36 years. Permanentdock workers' age structuve is bipolar with 40% of staff being under 40 and 58X of staff over 45. While the average employee has been 15 years with the port enterprisemore than 60% of high level staff has been hired within the last five years. ODEP also hires casual labor in an amount of about 240,000man-days.
10. ODEP managementdevotes a great deal of attentionto human resources. Actually, good human resourcesmanagement is crucial for ODEP's success, given its dimension and ambitious objectives of improving port efficiency and productivity. ODEP has developedseveral actions related to manpower issues. First, a new chart and rules for staff management dealing with recruitment, career developmentand remunerationhas been progressivelyimplemented. Second, a safety study has been carried out in several ports to analyze risks and hazards in port facilities and operations. As a result, a policy is being implementedto improve working conditions and safety at work, first-aid and social centersare establishedin the major ports. Finally,an ongoingmanpower planning study is aiming at evaluatingmanpower requirementsfor the future. The study covers the followingaspects: (a) identificationand definitionof the current activitiesand related employment;(b) impact of ODEP's developmenton employment;and (c) diagnosticand analysis of the gaps between employmentand human resourcesin terms of quality and quantity.
Training
11. ODEP is fully aware of the importanceof training. The Port Training Center (CFP)was establishedat Casablancain 1984 with the assistanceof UNCTAD to develop the TRAINMARprogram. The CFP is open to administrationsand private - 68 -
Annex 2 Page 4 of 5 firms. Since 1985, the CFP has accomplishedseveral goals: updating port operationcourses to fit into the new sector organizationand needs; updating statistics courses and data gathering in port operations; organizing five courses on: port operations;international transit operations, improvementof port throughput, management and compilation of port statistics, and port maintenance; organizing the first TRAINMAR seminar on container terminal management in Morocco; and introducingnew courses for rescue squads, engine drivers,maintenance technician, and securitystaff. In addition,seminars have been held on the followingtopics: investment planning and selection,scientific approachesto decision making, preparationof a data processingmaster plan, design of a managementinformation system, equipment management and procurement, and overallODEP management. The CFP has also organizedworkshops on safety at work in ports.
12. ODEP's objectiveis to train its entire staff through the CFP for an average of ten days every two years. Every newly recruiteddock worker is to be trained in the CFP. This entails committing about 5X of wage costs to training. In 1989, training involvedmore than 1,000 staff (21X of total staff) spending an average of 10 days each in training. Nearly 50% of training was carriedout in the CFP. A greater effortwas devotedto higher level staff, 261 of which received training abroad with an average duration of 16 days. Future needs for training high level staff have been discussedwith ODEP and will be supportedby the project. The followingtable gives ODEP's three-yeartraining program for high level staff. - 69 -
Annex 2 Page 5 of 5
Breakdownof TrainingRequirements
Topics Number of Staff 1991 1992 1993 Human resourcesmanagement
Courses abroad 4 4 4
Planningmethods
Courses abroad 1 1 1 Seminar in Morocco 25 - -
ProjectManagement
Courses abroad 3 3 3 Seminar in Morocco 25 - -
EnvironmentalProtection
Preventionand control of oil-relatedpollution Courses abroad 2 2 2
Preventionand control of fire Seminar in Morocco - 25 -
Commercialand Marketing
Courses abroad 4 4 2 Seminar in Morocco - 25 -
Cost accountingand finance
Courses abroad 4 4 2
Group training in port operations technicalvisits abroad 20 20 20
Total 88 88 34 - 70 -
Annex 3 Page 1 of 3
KINGDOM OF MOROCCO
STAFF APPRAISALREPORT
PORT SECTOR PROJECT
Port InvestmentProgram: 1990-93
I. Introduction
1. The core port investmentprogram during the period 1990-93 is expected to amount to about DH 2.2 billion (US$265million) of which ODEP would account for DR 1.5 billion (US$180million), DP-DPCM for DR 650 million (US$75 million) and DMM for DH 90 million (US$ll million). Taking into accotut physical and price contingencies,the overall program is likely to reach DH 2.3 billion (US$280million) in current prices. In addition,ONICL is expected to invest some DH 120 million (US$14.5million) in two cereals silos. Emphasis is being given to the modernizationand rehabilitationof port facilities in order to meet increasingdemand for unitized cargoes and for bulk traffic. Details of the program are shown in Tables 1 to 3 for ODEP, DP and DPCM respectively. The followingsummarizes the contentof the investmentprogram (all costs are given in 1989 prices).
II. ODER Program
Container Terminal Tnfrastructure
2. In order to meet the increasing demands for container traffic, growing at 7X per year since 1983, a new containerterminal is planned in the port of Casablanca to the north of the existing phosphate/coal handling facility. The project involvesthe constructionof two berths over a length of 350 meters with a depth of 12 meters and the creation of a 20 hectare storage area. An additional10 hectare storagearea is plannedbefore the year 2000 and the berth facilities can be extended in the longer term. In establishingthe proposed scheme, several alternativeswere analyzed includinga 400 meter berth as well as varying dimensionsfor the relatedstorage area. In addition,in view of the need to undertakerock dredging,a minimum cost approachwas adopted in locating the site of the new berth which minimizes the combined costs of rock dredging and earthworks. The cost of the infrastructureis estimated at DH 465 million (US$56 million).
ContainerHandling Equipment
3. ODEP is currently renewing its fleet of straddle carriers in use at the existing container terminalin Casablanca (Mole Tarik). This involves the purchase of nine straddle carriers at a cost of DH 50 million (US$6 million). An order has also been placed for a new containergantry crane for use on the - 71 -
Annex 3 Page 2 of 3 existing terminal for which payment is covered under the 1989 budget. Two mobile cranes are also being procured at a cost of DH 50 million (US$6 million) under the 1990 Budget, one of which is for the port of Tangier. Further renewal and expansion of equipment is planned during the period 1991-93 involvingthe purchase of two gantry cranes, four straddle carriers and 19 tractor-trailer units, this equipmentbeing planned for use on the new terminal. The cost is estimatedat DH 175 million (US$ 21 million).
Road Bridge - Gate Four
4. A four-lanebridge is planned over the main railway line at Gate Four in order to improve general access to the port. The proposed bridge will also service the new containerterminal located just to the north of the bridge. The estimatedcost is DH 20 million (US$2.4million) and financingis being provided partly under the ongoing Bank port project.
Coal Berth - Jorf Lasfar
5. Improvementsare planned to an existing berth in the port of Jorf Lasfar in order to provide a 15.5 meter depth which is required by 80,00 ton bulk coal carriers. The project involves extending the berth seaward by 50 meters in addition to constructinga new quay wall to a depth of 15.5 meters. The cost is estimated at DR 110 million (USS 13.3 million). Two high-rated 1,000 ton/hourunloaders will also be providedat a total cost of DH 130 million (US$15.8million).
Renewal ConventionalHandling Equipment
6. About DH 60 million (US$7.3million) is allocatedfor the renewal of conventionalcargo handling equipment. No increase in capacity is expected to be required as this type of traffic will not increase substantiallyin the future. Financing for conventional handling equipment is expected to be provided mainly throughbilateral sources.
Tangiers Ro-Ro Terminal
7. DH 50 million (US$6 million) is foreseenfor improvementsto the port of Tangiers includingprovision of two additionalRo-Ro ramps and extensionof related storage areas.
Other InfrastructureInvestments
8. About DH 200 million (US$24 million) is allocated to miscellaneous infrastructureinvestments including DH 40 million (US$4.8 million) for the completion of paving works and superstructureat the port of Agadir and DH 30 million (US$3.6million) for infrastructureworks related to the ongoing restructuringof the port of Safi. Some DH 30 million (US$3.6_illion) is allocatedto the improvementof fishingport facilities,particularly at Agadir, Nador, Tangier and Casablanca. Part of this program is expected to attract Japanese concessionaryfinancing. Roughly DH 20 million (US$2.4million) is - 72 -
Annex 3 Page 3 of 3
allocatedto the developmentof facilitiesfor pleasure craft, particularlyfor an ongoing development in the port of Agadir, while DH 10 million (US$1.2million) is allocated for the development of port industrial sites mainly at Jorf Lasfar.
MiscellaneousSupRort Investments
9. A total of DH 85 million (US$10.3million) is allocated for a number of miscellaneousexpenditures including data processing,training, studies and investmentsin port security.
III. DP-DPCN Program
BreakwaterRehabilitation
10. DH 51 million (US$6.2million) is allocated to breakwater rehabilitation in the port of Casablanca in addition to DH 24 million (US$2.9million) allocated to an ongoing maintenanceprogram for the ports of Casablanca and Mohammedia. A further DH 171 million (US$20.7million) is allocatedto rehabilitationof breakwatersin other ports includingan ongoing program of DH 83 million (US$10 million) for the ports of Safi, El Jadida and Essaouirafinanced by the African DevelopmentBank (AfDB). The remainderof the program includes breakwaterrehabilitation for Tangiers and Agadir.
Dredging
11. Expenditures on maintenance dredging average between DH 35 and 40 million (US$4.2to 4.8 million) annually and are concentratedon the eleven main ports. Part of this program has recentlybeen financed by the AfDB.
Other DP-DPCM Investments
12. DH 67 million (US$8.1million) is allocatedto various infrastructure projectsscattered over the Moroccan ports. Some DH 80 million (US$9.7million) is allocated to equipment for port security, dredging and environmental protection. About DH 23 million (US$2.8million) is allocated to studies and training.
IV. DMK
Radar Control Tower
13. Investmentsare planned by DM14in a radar control tower with a total estimated cost of DH 89 million (US$10.8million). The tower would provide vessel traffic services to enhance marine security and facilitate efficient maritime trafficbetween Spain and Moroccoon the Moroccan side. This equipment is part of a worldwide effort to provide modern and efficient vessel traffic services in heavily traffickedareas. - 73 -
Annex 3 Table 1
KINGDOM OF MOROCCO
STAFF APPRAISAL REPORT
PORT SECTOR PROJECT
ODEP InvestmentProgram: 1990-1993 (DH million 1989 prices)
1990 1991 12 1993 total TARGETEDCOMPONENTS
Infrastructure
Container Terminal - 190 150 125 465 Tangier - - 20 30 50 Jorf Lasfar - - 30 80 110
Eouipment
Gantry Cranes - - - 130 130 Straddle Carriers - - 30 - 30 Tractors/Trailers - - - 15 15 Coal Unloaders - - 50 80 130
Miscellaneous
Data Processing - 5 5 - 15 Port Security - 5 5 5 15 Assistance/Studies/Training 20_ 15 20 55
Sub Total - 220 305 485 1010
OTHERPROGRAMS
Road Bridge (Gate Four) - 20 - - 20 Warehouses-Casablanca 25 25 - - 50 Agadir 10 10 10 10 40 Safi 10 20 - - 30 Fishing Ports/Tourism/Misc. 40 35 25 10 110 Equipment 125 20 10 10 165 Tugboats-Mohammedia 25 25 - - 50 IndustrialZones - - 10 - 10
Ship Repair - 10 _ _ 10
Sub Total 235 165 55 30 485
GeneralTotal 1 38E Q 1L.49 - 74 -
Annex 3 Table 2
KINGDOM OF MOROCCO
STAFF APPRAISAL REPORT
PORT SECTOR PROJECT
Ports Directorate(DP) InvestmentProgram: 1990-1993 (DH millions 1989 prices)
ONGOING 1990 1991 1993 Total
Breakwaters(AfDB) 20 35 28 - 83 Dredging (AfDB) 4 6 15 - 25 Port Security (AfDB) 6 6 - 12 Other Breakwaters 10 - - - 10 Other Dredging 40 16 7 2 65 Other Infrastructures 40 - - - 40 Miscellaneous 16 I 16
Sub-total 136 63 50 2 251
PLANNED
Targeted Components
Dredging - 11 32 31 74 Tangier Breakwater - - 6 39 45 AgadirBreakwater - - 4 8 12 OtherBreakwaters - - 9 12 21 Port Security (Equipment) - - 3 2 5 Studies-Training - 7 3 2 12
Sub-total - 18 57 94 169
Other Programs
Const. Infrastructures - 17 29 21 67 Dredging Equipment - - 5 39 44 Miscellaneous - 10 3 - 13
Sub-total - 27 37 60 124
Total DP 136 18 144 156 - 75 -
Annex 3 Table 3
KINGDOMOF MOROCCO
STAFF PPRAISAL REPORT
PORT SECTORPROJECT
DPCM Investment Program: 1990-1993 (DH millions 1989 prices)
ONGOING 1990 1991 3 Toal
Breakwaters 13 5 - 18 Miscellaneous 4 2 - - 6 Studies 2 - - -
Sub-total 19 7 - - 26
PLANMED
Targeted Coumonents
Casablanca Breakwater - 3 14 34 51 Dredging 3 4 7 Studies Training - 3 2 4 9 Environment - 2 3
Sub-total - 9 17 44 70
Other Programs
MohammediaBreakwater - - 4 2 6 Miscellaneous - - 4 9
Sub-total - - 8 7 15
Total DPCM .2 in
Investment Progrxa DMN (MarineSecurity): 1990-1993 (DH millions 1989 prices)
Radar Control Tower
Civil Works - - 9 18 27 Equipment 5 57 62
Total DM1 - - 15 - 76 -
Annex 4 Page 1 of 2
KINGDOM OF MOROCCO
STAFF APPRAISALREPORT
PORT SECTOR PROJECT
ProjectedTariff Structureand Level
Port dues on ships(PDS)
1. Port dues on ships will be expressedin ECU (Europeancurrency unit) but payable in DH. This transfersthe foreign exchange risk to users and is being presently opposed by the national shipping companies. PDS will be assessed on volume (instead as presently on GRT) with higher bracket on large vessels. This will essentiallyaffect ships under foreign flag. PDS will be reduced for vessels with frequent calls, a substantialadvantage for national shipping companies.
Ad-valorem tax
2. The tax will be maintainedas presently at 0.2% per 10 day-periodof storagebut applied for a maximum of three 10 day-periodsof storage (excluding containersand trailers).
Containersand trailers
3. Tariffswill be assessedon unit (containersor trailers)and no more on tonnage. The change is to be applied progressivelyover a period of three years. The ad-valorem tax will be reduced to 0.2% on containersfor only one 10 day-period of storage, and 0.1% on trailers for only one 10 day-periodof storage. Handling chargeswill be raised to compensatefor the reductionof the ad-valoremportion. A discountwill be applied to export traffic.
Level of tariffs for containersand trailers
4. After the three year period of progressiveimplementation, handling chargeswill be as follows in DH per unit: 1991 1993 Import Export Import Exort (i) containers full 20' 812 622 1057 805 40' 952 743 1221 944 empty 20' 225 225 250 250 40' 393 393 400 400
(ii) RO-RO Tir 1278 958 1136 852 cont. full 20' 832 634 740 564 40' 961 942 855 660 empty 20' 225 225 200 200 40' 393 393 350 350 - 77 -
Page 2 of 2
5. Whilea comparisonbetween tariffs applied in differentports is often difficult,particularly vhen part of the chargeis ad-valorembased, there are clear indications that the proposed tariffs compare favorably with those applied in the origin destination portsof Morocco's trading partners. - 78 -
Annex 5 Page 1 of 3
KINGDOM OF MOROCCO
STAFF APPRAISALREPORT
PORT SECTOR PROJECT
Proceduresand Criteria for Economic Evaluationof Subproiects
I. Introduction
1. This annex provides background informationon the general approach used in the preparationof sub-projectsand the eligibilitycriteria for their inclusionin the project.
II. EvaluationMethodology
2. The generalapproach and proceduresdescribed below have been employed in the preparation of all sub-projectson which implementationwould begin during the first 12 to 18 months of the project. The same methodologywill be used for the preparationof sub-projectsfor inclusion in subsequentyears of the investmentprogram. All costs would be estimatednet-of-tax and net cost streams would be developed taking into account the alternative investment scenarios consideredand relatedmaintenance costs. The followingillustrates the kinds of benefits to be consideredwithin a range of types of investment.
New Berth Facilities
3. The economic effects of the constructionof new beith facilitiesare similar,regardless of the type of trafficconsidered. Generally,these effects involveshifts in the distributionof traffic towardsmore efficientship-types which are made possible by the new facilities,with correspondingchanges in cargo handling rates and the number of trips required for a given traffic. Although the daily ship costs involvedin the use of such vessels may be higher, these are offset by the greater productivityinvolved. Savings in sea freight rates may thereforeconstitute the major benefits for certain types of traffic, particularlybulk commodities. In the case of unitized cargoes, the provision of new facilitieswill involvemore rapid penetrationof unitizablecargoes with substantialincreases in cargo handling rates for traffic otherwisehandled as break-bulkcargo. As such, the principalbenefits of a new container/Ro-Roport facility are substantialreductions in shio service time. In addition, there may be savings in ship waiting time as a result of avoided congestionfollowing the improvementof the facilities. Ship waiting time is estimatedas a function of ship service time using empiricalcurves which take into account the number of berths available and assume a Poisson distribution for the arrival of vessels. Details of the methodologyare given in ProjectFile DocumentNo. C.1. Additional benefits include savings in handling costs which will apply to traffic otherwisehandled as break-bulk cargo. Savings in handling costs may also apply to existingunitized trafficdue to better organizationand operating conditionson a new terminal. This generalapproach has been used in evaluating the new Casablancacontainer terminalas describedin Annex 12. - 79 - Annex S Page 2 of 3
Rehabilitationof Storage Areas facilities are 4. The economic effects of rehabilitationof existing the degree of impact. similar to those describedabove but they may differ in productivityof port Such improvementswill certainly have an effect on the service time. In handling equipment which in turn has an impact on shin of such equipmentmay be addition,the life expectancyand/or maintenancecosts Savings in eguipment lower in the absence of well-maintainedstorage areas. costs would thereforeconstitute an additionalbenefit.
ReRlacementof ConventionalHandline Eouioment be justified using a 5. The renewal of cargo handling equipment can ages, productivity similar approach to that described above. As equipment more practical approach declines and shig servicetime is affected. However, a renewal and for is required for establishingthe requirementsfor equipment forecastsfor various additionalequipment capacity based on realistictraffic equipment availability categories of traffic and taking into account existing criteria need to be cargo handling rates. Within this framework,threshold and of down-time, age defined for each type of equipment in respect to percentage problem would be of equipment and maintenance costs. An approach to this developedas part of the project.
Dredging Works is necessary for 6. Generally, no specific economic evaluation necessary in order maintenancedredging operations as these works are considered a particularport. maintain access for the types of vessels currentlyusing to size of vessels would Should these works not be undertaken,then the average Ship waiting time decrease therebycontributing to higher sea freight charges. Capital dredging is also occur in the absence of dredging operations. may and as such the included as part of a specific port improvementscheme usually of the scheme as costs and benefits are includedin a wider economic evaluation a whole. III. EligibilityCriteria under the loans, it 7. For a sub-projectto be eligible for financing eligibility criteria. would have to meet well defined technical and economic on which the key For each sub-project,an evaluation sheet would be prepared tender information is technical, design, cost, economic and tentative terminal is shown in summarized. An example for the Casablanca container Table 1. Bank would require the 8. Before approvinga particularsub-project, the following: - 80 -
Annex S Page 3 of 3
(a) for sub-projects related to new construction, irprovement and rehabilitationof port infrastructure:(i) at the preliminarystage, a basic data sheet for each subprojectsubstantially similar to the sample includedin Table 1; (ii) during the design stage, quarterly progress reports of ongoing design activities under a format satisfactory to the Bank; and (iii) at the final stage, upon completion of detail engineering,an updated basic data sheet if changed during the design phase of the subprojectand the schedule of executionshowing the sequence of tenderingand construction;
(b) for purchase of cargo-handlingequipment: (i) at the preliminary stage, for each port where equipmentis to be purchaseda basic data sheet for each equipment package substantially similar to the sample included in Table 1; and (ii) at the final stage, upon finalization of requirementsand technicalspecifications, an updatedbasic data sheet if changed,and the scheduleof executionshowing the sequence of tenderingand delivery;
(c) for purchase of equipmentother than cargo-handlingequipment, the list, type and estimated value of the equipment, schedule of execution, and the justificationin relation to the requirements; and
(d) for studies and technicalassistance, detailed terms of reference, manpower requirements, cost estimates and schedule of implementation.
9. Eligible sub-projectswould have an economic rate of return of at least 12X, and a first year benefit exceeding10, calculatedin accordancewith the methodologydescribed above. - 81 -
AnnexS Table 1 Page 1 of 2 KINGDOM OF MOROCCO
STAFF APPRAISALREPORT
PORT SECTOR PROM=CT
Summary Data Sheet for Tydical Sub-Project
CasablancaContainer Terminal
1. Basic Data
New container terminal located in area to north-east of existing phosphate/coalhandling berth. First phase involves provision of two berths totalling350 meters in length and creation of a 20 hectare storage area. An additional10 hectare storagearea would be provided in 1997. These facilities provide adequate capacity up to year 2000. Provision of container handling equipment including two quayside gantry cranes, four straddle carriers and 19 tractor-trailerunits. This excludes ongoing renewal and extension of straddle carrier fleet involvingprocurement of nine units in 1990. The new terminalwould continue to operatealongside the existingterminal (Mole Tarik).
2. Economic Impact
Projectwill relieve congestionin port of Casablancaand enable unitized traffic (containerand Ro-Ro) to continue increasing. Projectbenefits include savings in ship service and ship waiting time through more efficienthandling for container/Ro-Rotraffic and for trafficwhich would otherwisebe handled as break-bulk general cargo. Equipment operating costs would also be reduced through a better organization of terminal operations. A large portion of benefits would be felt in terms of savings in foreign exchange.
3. bpecialWorks
Location of terminal took into account minimization of costs of rock- dredging and earthwork fill.
4. Cost Estimates
Infrastructure: DH 465 million Equipment: DH 175 million
5. Traffic Forecasts ('000 tons)
Actual With Project_ W/o Proiect 1987 1994 2000 1994 2
Container 695 1039 1443 849 966 Ro-Ro 312 404 481 381 434 General Cargo 1543 1710 1961 1923 2485 - 82 -
Annex 5 Table 1 Page 2 of 2
6. Cargo Handling Rates and Costs (averages)
Rates Tons/day ith Project W/o Proiect 1994 1994 2000
Container/Ro-Ro 3,000 3,200 2,100 2,100 Conventional 600 700 600 700
Handling Costs DH/ton With Project WXo Project
Container 41 50 Ro-Ro 6 7.5 Conventional 120 120
Handling costs foreigngorts DH/ton
130 (unitizedcargo) 180 (generalcargo)
Ship waiting Time Savings
1994: 20X of general cargo ship service time 2000: 50X of general cargo ship service time
7. ShiR Costs (typicalvalues)
Containership $ 6,500 Ro-Ro ship $ 6,000 Conventionalship $ 4,500
8. Economic Return
Based on 20 year project life with benefits constant from year 2000:
FYB > 101 ER -19
9. Tnde*r
TentativeTender Date: October 1990 CompletionTime: 40 months Budget allocations: 1991 DH 190 million 1992 DP.180 million 1993 DH 270 million - 83 -
Annex 6 Page 1 of 6
KINGDOM OF MOROCCO
STAFF APPRAISALREPORT
PORT SECTOR PROJECT
Detailed Program for Project Execution
1. Executionof the Governmentpart of the projectwill primarilybe the responsibilityof the Ministry of Public Works (MPW), through the Directorate of the Port of Casablancaand Mohammedia (DPCM) for the rehabilitationof the breakwaterof the port of Casablanca,and through the Ports Directorate(DP) for rehabilitationof breakwatersin ports other than Casablancaand Mohammedia, dredgingworks, NationalPort Master Plan studies,environmental assessment for dredging, and related institutionbuilding. In addition, the Ministry of Fisheries and Merchant Marine will be responsible for the marine security component through the Merchant Marine Directorate (DMK). ODEP will be responsiblefor the execution of its investmentprogrim. ODEP would also be responsible for managing the consultants contract for the dredging study. Although this study is not part of ODEP's program proper, ODEP has the staff and facilitieswhich would be required to make the best use of the consultants input. Each agency would be responsible for implementationand monitoring progress, includingthe preparationof quarterlyprogress reports for IBRD and the Government. The agencies will follow the steps and time frame of the DevelopmentPrograms and comply with the physical targets for the project given in the implementationschedules of this Annex. ODEP will be responsiblefor monitoring performance indicators,and ensuring compliancewith targets, for cargo handling productivityand equipmentmanagement (Annex 10).
2. For each subprojectto be proposed for Bank financing,the individual agencies would prepare an evaluationsheet on which the key technical,design, cost, economic and tentative tender informationis summarized (Annex 5). The Bank missions will review thesedata and confirm eligibilityfor Bank financing. The individualagencies would prepare, advertise,tender, and award contracts, subject to review with the Bank. The time allowedfor preparationof bids would be at least 60 days for contractshaving an estimatedvalue of US$5.0 million equivalent or more, and not less than 45 days for smaller contracts for InternationalCompetitive Bidding (ICB) and not less than 30 days for Local CompetitiveBidding (LCB). After completionof the contract.ngprocess, the individualagencies would send to the Bank: (a) an updatedevaluation sheet; (b) a copy of the tender documents; (c) the evaluation report showing the award decision and its rationala;and (d) the signed contract. For contractsvalued at US$100,000 or less, for which disbursements are made on the basis of Statements of Expenditure,the contracts will not be sent to the Bank for review, but instead would be kept on file by the individual agencies for inspectionand review by Bank staff during supervisionmissions. - 84 -
Annex 6 Page 2 of 6
CasablancaContainer Terminal
3. Civil Works. Bids have been invited from prequalifiedbidders. Environmentalprotection measures are included in the bidding documentsas well as additionalinformation on geotechnicalconditions and analyses of sediments and rocks to be dredged. Bids are due mid-January1991. Executionof the works should take about two years under normal circumstances. However, rock dredging and difficultsoil conditionsmay cause unexpecteddelays of about six to eight months.
4. Equipment. ODEP staff is experiencedin the procurementof container handling equipmentsimilar to that included in the project. The specifications will be prepared following the Bank Guidelines and taking into account the latest developmentsin technology. Manufacture,transport and erection on site should take about 24 months for the gantry cranes and 12 months for the straddle carriers.
5. ConsultingServices. ODEP will appointa foreignconsultant to assist in evaluatingthe bids and finalizingthe civil works contract. Civil works supervisionwill be done by ODEP staff assistedby consultants. Local expertise is availablein Morocco given the number of large port projects which have been executed during the previous years. Accordingly,ODEP will be able to recruit most of the requiredpersonnel locally. Consultantsassistance will focus on: (a) settingup appropriateprocedures and methods for supervision;(b) checking drawings and calculations;and (c) providing backup support and short term expert assistancefor specificaspects.
Jorf Lasfar Coal Terminal
6. DP will prepare the bidding documents for civil works with the assistance of a specialized consulting firm. The consulting firm will be required in its terms of reference to cover environmental aspects during construction. ODEP will prepare the bidding documents for equipmentwith the assistanceof a consultant for drafting the technical specifications. ODEP should appoint a specializedconsultant to look into the environmentalaspects of the operationof the facility,particularly dust control and compatibility with neighboring facilities. The timetable for this subproject should be consistent with the estimated completion date of the power plant to be constructedby the National ElectricityBoard. This should not be a problem since the execution of the port component of this project should take about three years, includingdesign and procurement,i.e. two years less than for the power plant.
Tangier Ro-Ro Facilities
7. ODEP is currentlypreparing a master plan for operationsat the port of Tangier. Further studies to be financedunder the project will be required for the detail design of this subproject. Executionof civil works should start at the end of 1992 and would take about a year to complete. - 85 -
Annex 6 Page 3 of 6
BreakwatersRehabilitation
8. DP has ample experiencein preparing this type of project with the assistanceof consultants. Design studiesare alreadyavailable for the Tangier breakwater. Bidding documentsare being preparedby the consultantswhich were responsiblefor the design. DP has a portfolioof subprojectsat a preliminary or detailed design stage. DP will employ consultantsas appropriatefor the final design and preparationof bidding documentsrelated to other subprojects. In particular,minor rehabilitationsubprojects will be prepared by DP staff.
9. DPCM will be responsiblefor the rehabilitationof the Casablanca breakwater. Surveys and soundings are underway under the ongoing Ports of Casablancaand MohammediaProject to provide technicaldata to be included in the bidding documents.
Marine Security Eguipment
10. This component relates primarily to the constructionof a control tower to monitor circulation of ships in the vicinity of the straits of Gibraltar. Detailed design studies are underway with the assistance of specializedforeign consultant. Detailed design will be reviewed by the Bank before preparationof the bidding documents.
Dredginz in Moroccan Ports
11. Dredging t, be financed under the project should start only after an environmentalassessment at four ports has been carried out satisfactorilyand the results discussed with the Bank. ODEP will also undertake a study to strengthenthe maintenanceoperations of DRAPOR. Terms of reference for both studies are available in the Project File Documents Nos. B.10 and B.8 respectively. The environmentalassessment is discussed in Annex 11. The dredging study is discussedbelow.
Dredging Study
12. The objectivesof the dredgingstudy are to: (a) optimize the dredging fleet taking into accountport needs, equipmentproductivity of each equipment, and operatingconditions; (b) improvedredging techniqueswith appropriateuse of modern technology; (c) increase productivity through improved equipment availability and better planning of maIntenance operations; (d) establish indicatorsfor monitoringtechnical and financialperformance; (e) develophuman resourcesmanagement; and (f) prepare a developmentplan for a ten-yearperiod includinga feasibilitystudy of the proposed investmentand/or measures. Terms of referencehave been preparedby ODEP with the assistanceof a foreign expert. ODEP will be the contractingagency for this study. Accordingly,ODEP will provide the consultantswith adequate facilitiesand technical support. The results of the study should be available for review with the Bank by December 31, 1991. - 86 -
Annex 6 Page 4 of 6
National Ports Master Plan (PDPN).
13. The Bank has reviewedand commentedon terms of referenceprepared by DP for an update of the previous PDPN. Bank comments focused primarily on following points: (a) the time horizon for the plan; (b) the need for coordination between long-term plans and short-term actions; (c) the environmentalaspects to be includedin the analysis;and (d) the evaluationof the capacityof existing facilitiesincluding possible short-termimprovements. Final terms of reference are available in the Project File Document No. B.9. The duration of the study is approximately12 months. Its results should be available for the preparationof the Government five-yearplan for the period 1993-1997. - 87 -
Page 5 of 6
KINGDOM OF MOROCCO
STAFF APPRAISAL REPORT
PORT SECTOR PROJECT
PROJECT IMPLEMENTATIONSCHEDULE: ODEP
1990 1991 1992 1993 1994 Project Element and Activity 1 2 3 4 1 2 :3 4 1: 2 3 4 1 2 3 4 1 2 3 4 Board Approval * Loan Effectiveness : :
A. New ContainerTerminal : Civil Works
Prepare bidding documents :. - .--- . . Invite bids : Execution . . : :: _ i .
Buildings : : : : : : : : : : : Prepare bidding documents : : : Invite bids _ _ _ : Execution : : : : __n:: : - ::
Gantry Cranes :
Prepare bidding documents : : : Invite bids -. Manufacture and Erection : : _ _
Straddle Carrier Prepare bidding documents : : : - : Invite bids : _ - Manufacture and Erection : _ _ - B. Jorf Lasfar Coal Terminal ,
Quay: Quay ~: : : : : : : : : : : : : : : Prepare bidding documents - - _ : : : Invite bids -: Execution : : : _ _ _ Equipme: : : : : : : : : : : : : : : Eguipment;:
Prepare bidding documents : : : Invite bids : - - Manufacture and Erectionn: ,D:
C. Tangier Ro-Ro Terminal Civil Works Prepare bidding documents ; : _ ; : : : Invite bids : : : : : * : : Execution D. Dredsins Study
Prepare Terms of Reference : : Invite proposals --- Implementation
November 1990 - 88 -
Annex 6 Page 6 of 6
KINGDOM OF MOROCCO
STAFF APPRAISAL REPORT
PORT SECTOR PROJECT
PROJECT IMPLEMENTATION SCHEDULE: DP-DPCM
1990 1991 1992 1993 1994 Project Element and Activity 1 2 3 4 1: 2 3 4 1 2 3 4 1: 2 3 4 1 2 3 4
Board Approval * __ Loan Effectiveness * A. Dredging
Prepare bidding documents Invite bids - Execution . . B. Breakwater Rehabilitation :
Prepare bidding documents : * Invite bids : Execution . . .
C. Marine Security Equipment :
Prepare bidding documents : Invite proposals Manufacture and Erection : D. National Port Master Plan
Prepare Terms of Reference Invite proposals : :: : Implementation : : in:
E. Environmental Study
Prepare Terms of Reference ::: :: : : : : : : : : Invite proposals Implementation : . .
November 1990 - 89 -
Annex 7
KINGDOM OF MOROCCO
STAFF APPRAISALREPORT
PORT SECTOR PROJECT
Review of Local CompetitiveBidding Procedures
Decree Article Issue AcceRtableProcedures
(a) 2-76-479 33 Bid evaluationcommittee may No bidders should be not only seek clarifications requested nor permitted to from bidders, but may also alter his bid after bid request bidders to modify opening. theirbids afterbid opening.
(b) 209-65 1 The CCAG applies only to When reference is made to 151-66 1 civil works. Although in those decrees bidding practice the CCAG appears to documentsshould clarify what be used for goods as well as general conditionsapply to vorks, the basis on, and goodsand servicesand extent extent to which, they are to which they are applicable. applicableis unclear.
(c) 2-76-479 28 Advertisingperiod may be as Advertisingperiod shouldbe short as 15 days about 45 days, with an absoluteminimum of 30 days.
(d) 2-76-479 27-35 Bidders may either submit a Bidding documents should proposed price (offre de specify that bidders be prix) or a discount on the required to submit price price established by the offers in their bids. Government (rabais)
In some cases a tentative After publicopening of bids, designationof award is made, informationrelating to the subject to furtheranalysis. examination, clarification and evaluation of bids and recommendations concerning awards should not be disclosed to bidders or other persons not concerned with this processuntil the award of contract is announced. - 90 -
Annex
KINGDOM OF NOROCCO
STAFF APPRAISALREPORT
PORT SECTOR PROJECT
EstimatedSchedules of Disbursements
Loan to the Kingdom of Morocco
_US$milliun FYI9lFY92 Y93 FY94 FY95 Pi
Annual 0.5 4.7 10.3 12.0 4.9 0.6 Cumulative 0.5 5.2 15.5 27.5 32.4 33.2
% 2 16 47 83 98 100
Loan to ODE
USA million 91 EY92. FY93 FY94 FY95 FY96
Annual 1.6 25.1 25.3 29.6 14.2 3.2 Cumulative 1.6 26.7 52.0 81.6 95.8 ,
X 2 27 53 82 97 100 - 91 -
anlex2 Page 1 of 3
KINGDOM OF MOROCCO
STAFF APPRAISALREPORT
PORT SECTOR PROJECT
ProjectMonitoring
General
1. The Governmentand ODEP managementneed to receivecontinuous feedback on implementationand to identifyactual or potentialsuccesses and problems as early as possible to facilitatetimely adjustmentsto project implementation. Regular reports should also be provided to the Bank to permit satisfactory monitoring of project progress. To this effect, each implementingagency will prepare: (a) compreherzivequarterly progress reports covering all aspects of the project; (b) semi-annualreports on financialand operationalresults of port operationsand on selectedport performancedata; and (c) a project completion report. These reportswill be reviewedthrough the normal supervisionmechanism involving at least two supervision missions per year. In addition, the Government and ODEP would meet at least annually with the Bank to: (i) assess the status of the project and the progress of institutionaldevelopments using the agreedDevelopment Plans, targetsand monitoringindicators established under the project (Annex 1 and Annex 10); (ii) discussand resolve outstandingissues and implementationproblems; and (iii) review the pluriannual investmentand maintenanceprogram for the sector.
2. To the extent possible,reports to be sent to the Bank will be in the format selected by the project agencies for their own use in order to minimize additionalwork and avoid unnecessaryduplication of effort.
Proiect QuarterlyProgress Reports
3. Progress reports should be submitted quarterly,no later than one calendarmonth after the end of each quarter. The first report should cover the quarter ending December 1990.
4. The quarterlyreport should contain the followinginformation:
(a) General Information
(i) the pnysical progress accomplishedto date of report and during the reportingperiod;
(ii) actual or expected deviationsfrom the project implementation schedule; - 92 -
Atmex 9 Page 2 of 3
(iii) actual or expected difficultiesor delays and their effect on the implementationschedule and the actualsteps taken or planned to overcome the difficultiesand avoid delays;
(iv) expected changes in the completiondates of the project;
(v) key personnelchanges in the staff of ODEP, the consultantsand the contractors;
(vi) matters which may affect the project cost; and
(vii) any developmentactivity likely to affect the economicviability of the project components.
(b) A bar-type progress chart, based on the project implementation schedule,showing the progress in each project componentand including a planned and actual expendituregraph.
(c) A financial statement showing details of the expendituresincurred under the various componentsof the project and the withdrawalsfrom the loan and from the cofinanciersloan together with a statement showing:
(i) original cost estimates;
(ii) revised cost estimates,if any, with reasons for changes;
(iii) original estimatedexpenditures to date;
(iv) reasonsfor variationsof (iii) above from actual expenditures; and
(v) estimated expenditurefor the remainingquarters of the year.
(d) Brief statement of the status of action in each of the covenantsof the Loan Agreement.
Semi-annualReports
S. The followingreports will be prepared semi-annuallyor annually and submittedto the Bank for the annual reviews:
(a) investmentsby port
( ) previousyear expendituresfor infrastructureand equipment;and
(ii) investmentbudget for the followingyear and five year pluri- annual rollingprogram.
(b) finances and operations
(i) financialstatements and audit reports for ODEP; - 93 -
Annex 9 Page 3 of 3
(ii) financialindicators;
(iii) traffic statisticsand forecasts;and
(iv) operationalindicators.
(c) studies and training:progress made, budget and time schedule;and
(d) progress on other items of the DevelopmentProgram
Project Completion port
6. The Borrowers will prepare a Project CompletionReport (PCR), to be submitted to the Bank not later than six months after the Closing Date.
7. The primary objective of the PCR is to reinforceself-evaluation by the Borrowers and the Bank's operating departments and to facilitate disseminationof lessons learned through the project. In particular,the PCR should include an assessmentof the following:
(a) the performanceby the Borrowers and the Bank of their respective obligationsunder the Loan Agreementand whether the Bank could have been more helpful;
(b) the results that can be expected from the project, as compared with expectationsat appraisal,and whether the originalexpectations were realistic;and
(c) whether in retrospectthe project was worth doing or could have been done better.
8. For those componentsof the project for which a rate of return was estimatedduring appraisal,the PCR should contain a new estimate of the return the project is now likely to yield and analyze the reasons for physical or economic deviations. An annex with the relevant informationsupporting this analysis should be included.
9. The basic documentsto be referred to are:
(a) AppraisalReport;
(b) Loan AgreementDocuments, Supplementary Letters, etc.;
(c) SupervisionReports;
(d) Quarterly ProgressReports;
(e) Project CorrespondenceFiles; and
(f) MiscellaneousEvaluation Reports. - 94 -
Annex 10 Page 1 of 3
KINGDOM OF MOR2CCQ
STAFF APPRAISALREPORT
PORT SECTOR PROJECT
PerformanceIndicators and Targets
1. ODEP is alreadycollecting a wealth of data on port activitiesand is computing a number of operational,technical and financial indicators. The performanceindicators which are presentedbelow will be computed to assess the progress in achievingthe objectiveof improvingefficiency and productivityof port operations. For some indicators,targets to be achieved in 1991 and 1993 are provided. The actual or computed values of the indicators compared to targetswill be periodicallyprovided in the progressreports. This information and actions to be taken to remove obstaclesand increase accomplishmentswould be reviewedwith the Bank at the time of the annual review on project progress.
Cargo-Handling Productivity
2. ODEP computes gang output in tons per gang and per shift for most commodities. While this a good measure regardingthe performanceof labor, it fails to give a clear indicationof how good cargo-handlingoperations are as a system. To assess the efficiencyfrom the shipowners'viewpoint, ODEP agreed to measure ship output in tons per ship day at berth. Although targetshave been computed by taking into account the average number of gangs per ship and the L>'eragenumber of shiftsper day, actualvalues of the indicatorswill be derived from direct data collection.
Gang Output Ship Output Cargo Category T/Gang/Shift T/ShiR/DaY 1989 1989 1991 1993
Packaged timber 174 1390 1700 2000 Bark 446 3600 4300 5000 Sugar in bulk 422 1700 4000 5000 Fertilizersin bags 60 480 570 800 Citrus and produce 153 920 1200 1600 Round logs 172 1400 1700 2200 Cereals 250 1700 3000 3000 TSP in bags 360 800 2200 3000 Barytine 2100 5500 7500 9000 Sulfur 3000 6000 6000 6000 Containers(boxes) 64 130 240 320 - 95 -
Annex 10 Page 2 of 3
Use of Berthing Space
3. The Autonomous Production Center (CPA) for conventionalberths at Casablanca prepares graphs presenting the following data: traffic, berth throughput,berth utilization (hours), stoppages,cargo-handling rates, berth occupancy. These indicatorswill also be derived from data collected at the containerand Ro-Ro terminals.
ShiR Services
4. The followingindicators will be computedseparately for conventional general cargo ships, containerships, passenger ships and Ro-Ro ships, in the ports of Casablanca,Safi and Tangier:
Average Ship Waiting Time: Total time (in Hours) between arrival (at outer anchorage)andberthing of all ships of the category divided by the number of ships of the categoryberthed. Actual average for all ships calling at the port of Casablancawas 0.5 day in 1988.
Average Ship Service Time: Total time (in hours) at berth (including berthing and unberthing time) of all ships of the category divided by the number of ships of the category.
Dwell Time of Cargo and Containers
5. The dwell time of general cargo and containers at the port of Casablancawill be broken down into elementsallowing analyses of the causes of delays and determinationof necessary corrective actions. In addition, for selected transit sheds and open storage areas, the following data should be collected:
(a) tons of cargo cleared within free period;
(b) tons of cargo remaininguncleared for more than 2, 3 and 6 weeks;
(c) number of containers (TEUs) clearedwithin free period;
(d) number of full containers(TEUs) remaining uncleared for more than 1, 2 and 3 weeks; and
(e) number of empty containers (TEUs) remaininguncleared for more than 1, 2 and 3 weeks.
6. Dwell time indicators will be computed as the number of tons/TEUs- days in storage divided by total tons/TEUsstored. The average dwell time for import containersis currently19 days. The target to be achievedwould be not more than 14 days in 1991 and not more than 10 days in 1993. For other cargoes, the targets would be a reductionof dwell time of at least 25% by 1991, and at least 50X by 1993. - 96 -
Annex 10 Page 3 of 3
EquipmentManagement Indicators
7. ODEP establishestargets for key indicatorsof equipmentmaintenance. The categoriesof equipment to be monitoredunder the project will be: six-ton cranes, four-ton forklift trucks, and straddle carriers. The following indicatorsare selected:
Average number of working hours per equipment categor: Total number of workinghours of equipmentpertaining to the category dividedby the number of items in the category.
EguiRmentAvailability (Td): Total number of pieces of equipmentin working condition divided by the total number of items in the category. This indicatorshould be computed on the duration of the shift rather than at the beginning of the shift.
BreakdownIndicator (UTp: Total hours of breakdown (or maintenanceduring the working shift) divided by the sum of working hours and hours of breakdown.
8. Current base values and targets are given below for Td and Tp.
EouiRmentCategorv IndLcator 1989 1991 1993
StraddleCarriers Td 73X 80X 80X TP 6X 4X 4X
Six-ton Cranes Td 862 881 881 Tp 0.6X 0.61 0.61
Four-ton Forklift Trucks Td 811 851 88Z - 97 -
Page 1 of 8
KINGDOMOF MOROCCO
STAFF APPRAISALREPORT
PORT SECTORPROJECT
Environmental Impact
I. Introduction
1. In the areas surrounding maritime port installations environmental quality indicators, i.e., for water, air and land, are for the most Rart dependent on two main factors:
- the quality control of urban liquid effluent discharged by the generally large conurbations that border on these port areas;
- the controlled management of the various pollutants discharged by industrial plants (handling, storage, processing, manufacturing) established in the immediate vicinity of the land-sea transit point for the raw materials on u'ich these industries are based.
2. The port function proper, strictly related to the presence of the ocean-going vessels and to their loading and unloading operations, must, of course, be covered by safety measures and attention to the protection of the marine environment. However, the application of international regulations on board the vessels and the customary police measures of the Harbor Master's office do, in most situations, facilitate appropriate control over impacts directly linked to maritime transport.
3. Moroccan Port installations are highly dependent on the industrial and urban environment in their close proximity, when examined from this particular aspect of environmental protection. The willingness of the authorities to take this aspect into account is clearly evidenced by some of the special efforts they have recently made: e.g., the recent establishment of the ballast water discharge station for oil tankers at the Port of Mohammedia, which has the latest technology and is well operated. On the other hand, it must be borne in mind that a collective national effort is needed- -particularly in the area of the purification of urban and industrial effluent before it is discharged into the coastal marine environment--to monitor the protection measures that are to be introduced in the technical projects planned as part of the Port Sector Project. Their relative efficiency is directly related to the overall implementation of a general marine environment protection policy.
II. Present Situation in Moroccan Ports
4. The rapid economic development of countries in the process of industrialization and the resulting effects in terms of urban concentration and - 98 -
Anngx 11 Page 2 of 8
the adaptationof all infrastructurefacilities have, in Morocco as in all other countrieswith similar economies,been translated into priority being given to the appropriateadaptation of productioncapacities. Thus, in terms of coastal port infrastructure,several new ports have been built, while existing ports have been expandedand developed(the quay of Casablanca,the Ports of Mohammedia and Jorf Lasfar, and the doubling of the size of the Port of Agadir). At the same time the Moroccan Government, which has been involved in formulating internationalconventions on marine environmentprotection, has ratifiedvarious treaties obligatingsignatory countries to adopt national measures to guarantee the integrityof the ocean environment.
5. The Governmentstructures needed and the appropriateinternal Moroccan legislationare either already organizedor under study:
- the EnvironmentDirectoiate (Direction de l'Environnement),within the Ministry of the Interior;
- the Merchant Marine Directorate(Direction de la Marine Marchande), within the Ministry of Fisheriesand Merchant Marine, in respect of marine environment;
- the National Council on the Environment (Conseil National de 1'Environnement);and
- the draft law on marine environmentprotection and preservation(being prepared by the Government).
6. rhe threat of pollution to the Moroccan coast from the dischargeof oil in the open sea resultingfrom the accidentthat occurred to the oil tanker "KHARG V" in January 1990 has made the authoritiesand public opinion acutely aware of the economicconsequences that can be caused by serious disastersalong the coast. As a result, the Government is currently going ahead with the preparation of a program of regulatoryand technicalmeasures that should be implementedin the very near future.
Moroccan legislation
7. The draft MoroccanMaritime Code preparedby the Servicesde la Marine Marchande et des Peches (MerchantMarine and Fisheries Departments)is to be adapted and put before Parliamentfor discussion. It contains, in particular, in Volume III, a set of provisions on "Marine Environment Preservationand Protection,I application of which will bring Moroccan regulationsup to the internationallevel of Western countries. All the legal instrumentsneeded for signature and ratification of the various international conventions formulated by the International Maritime Organization (IMO) on the subject of marine environment protection are to be submitted for Government regularization proceedings. - 99 -
Annex 11 Page 3 of 8
Technicalmeasures
8. The Government has started implementationof a program for the provisionof equipmentto fightaccidental pollution from oil spillswith support measures. The program includesthe following:
- floatingbarriers to protect sensitiveareas of the coast;
- three reconnaissanceaircraft (ongoing);
- three coastal surveillance patrol boats able to take part in lifesaving efforts at sea (under construction);
- a radar control tower to provide modern and efficientvessel traffic services on the Moroccan side of the straits of Gibraltar;
- draft regulationsto governthc maritimenavigation along the Moroccan shoreline of vessels carrying hazardous materials are under study. They will provide for the str ngtheningof the resourcesof the Safety Centers responsible for checking on the condition of the vessels putting in at the ports and on their compliancewith international regulations;and
twenty Administratorsof Maritime Affairs and DeLegates from Safety Centers will be receiving long-term training in Western European countries.
9. All this is evidenceof the determinationof the Moroccan authorities to provide the country with an organizationthat is consistent with the risk level entailed in the protection of 3,600 km of shoreline, given the intensificationof maritime traffic in and out of its ports. Provisions are included in the project to develop analysis methods through environmentaland impact studies and to train technicalstaff in how to incorporateconcern for environmentalquality into technicalprojects. The following is a discussion of environmentalimpacts of the project.
III. New ContainerTerminal at the Port of Casablanca
10. The executionof the project to build a new containerterminal at the port of Casablanca will require a few precautionsduring construction. The quality of the marine environment in and around the Port of Casablanca is dependent,first and foremost,on what is dischargedby the various collection facilitiesfor untreatedurban and industrialwastes from all the conurbations of Greater Casablanca. Means of improvingthis situation are the subject of studies currently under way and plans for collection facilitiesand treatment plants have been submittedto the Bank as part of an Urban Sector Project. These are priority activities and will have a major impact in improvingthe coastal marine environmentadjacent to the port. There are still,however, two technical operationslinked to the executionof the project that call for careful action in terms of their impact on the marine environment,namely the adequate disposal - 100 -
Annex 11 Page 4 of 8
of dredging materials and the provisionof sand fill within the boundaries of the existing port.
DisRosal of Dredging Materials
11. Nautical access to the berth to be constructed (access channel, turning circle and camber of c.ntainer quay) and also the site for the berth itself will have to be cleared by dredging one layer of variable depth (1-6 la) of sand or silt-mud sedimentsprior to executingthe infrastructureworks. The estimatedvolume of materials to be dredged is 0.7 million i 3 . The physical nature and particularlythe size of the sedimentsdoes not justify the reuse of the materialas fill for the foundationsto be put in. It was decided to discard this material outside the project area.
12. The Moroccan authorities are signatories to the London Dumping Convention(LDC), dated October30-November 13, 1972, on the preventionof ocean pollutionresulting from dumpingof wastes at sea. Accordingly,this operation of dumpingthe dredgedmaterials will be subjectto techri:aland administrative proceduresfor the issue of a dumping permit (specialor general)in accordance with the provisions of the LDC, i.e.:
- the Conventionand its three Annexes (I, II and III);
- directivesfor the implementationof Annex III adopted by the Eighth ConsultativeMeeting of!Contracting Parties to the LDC held in London in 1984; and
- generaldirectives relating to the implementationof the three Annexes on the dumping of dredgedmaterial adopted by the Tenth Consultative Meeting of ContractingParties to the LDC held in London, October 13- 17, 1986.
13. The sedimentaryorigin of the materials to be dredged can, for the most part, be traced to sources outside the port area. The finest elements of these materialsare recognizedas being primarilycaused by the settlingon basin bottoms of the various effluent dumped by urban waste collectors and by the accidental discharge into the ocean of products handled in bulk during port operations (phosphates,coal). An investigationwas first made into the possibilityof landingthese productsin a permanentconfinement enclosure close to the terminal to be built. Investigationsby ODEP led to confirmationthat it would be difficultto createa dumpingarea with the necessarycapacity within a sufficientlyclose distance from the extractionsite. Envisagedfirst on the westernside of the earth foundationsfor the new secondarybreakwater, a dumping area would have to be createdby cleaning the site where there is an outcrop of bedrock. The cost of the work is consideredprohibitive.
14. The technique of dumping dredged materials in the ocean was used constantly in Casablanca during the depth maintenance campaigns, which were conductedevery five to seven years. The small volumes (annualaverage of about 50,000 m3) of such dumpingdid not have any significantimpact on a coastal site - 101 -
Anmex 1 Page 5 of 8 which was also periodically subjected to extreme ocean turbulence. During project preparation,a sediment samplingprogram was agreed upon with ODEP and LPEE (LaboratoirePublic d'Essais et d'Etudes)with a view to proceedingwith the physical, chemical and bacteriologicalidentification of the materials to be dumped. However, the weather and ocean conaditionsexperienced at the project site during the winter of 1989/90made it impossibleto carry out the sampling in accordancewith the agreed technique. There are now plans to collect samples with the use of a mechanicaldredger availableat the port. The analyses ware carried out in June 1990 and the results are available in the Project File Document No. B.7 (e). They indicate that the sediments to be dredged have toxicity level well below critical values. Accordingly,ocean dumping on a selected site is -ppropriate.
15. The following considerationsapply to site selection for ocean dumping. First, dumping should be planned for depths of at least 25 m in order to guaranteethe stabilityof the depositof dredgedspoil, avoid the expansion of the cover of the natural substratum over too vast an area and the dilution of pollutants in complex liaison with the silt. This requirementcan be met without increasingcosts excessivelybecause depths of 25 m or more are prevalent at a short distance from the head of the Moulay Youssef breakwater. Second,the contract documents for the works will include provisions concerning the site which will be granted a dumping permit.
Fill Work
16. Fill work for the constructionof the terminal and the associated works calls for 3.2 million m3 of sandy fill material. The surveys carried out on land on the use of quarry products has shown numerous constraintssuch as: hauling distance, intensityof road traffic generated,high cost. The amount of quarry products would be limitedto 800,000me and adequatemeasures would be taken to mitigate the negative impacton road traffic. The remainingfill volume (2,400,000m 3)wouldbe extracted from the sea bed. A recent operationof the same nature resulted in the local supply of sufficientaggregate to provide a volume of 1 million ma. The dredging was undertaken along a coastal strip at depths of -15 m between Casablancaand Mohammedia.
17. Government authorization will have to be issued to define the technical conditions governing the extraction, following interministerial processing organizedby the Ministers responsiblefor the Merchant Marine and the Environment. A formal requirementwill have to be imposedon the contractors to position the extractionbetween the depths of -25 m and -15 m in order to guarantee the stability of the underwater profile of the foreshore and the offshore dune bar along the coast. The thickness of materials to be dredged shouldnot exceed 2 m for the same reasons. Since ODEP was unable,before winter set in, to undertake the geotechnical exploration work needed to locate extractionsites that met these requirements,the price structurein the bidding documentsallows for variationsin the distancesfrom the extractionsite to the project site. - 102 -
Annex 11 Page 6 of 8
IV. RehabilitationDredging in Moroccan Ports
18. Although the maintenance and rehabilitationdredging program is a longer term operation for which an environmental assessment is deemed appropriate,it must be noted that Morocco does not have a serious problem in this respect compared to other more industrializednations of Northern Europe and North America. Maintainingthe nautical characteristicsof Morocco's main ports (besides Casablancaand Mohammedia)requires annual volumes of dredging of between 2.8 and 2.3 million e3 of sand and between 60,000 m3 and 100,000 mn of silts. The maintenanceneeds vary widely from one port to the other. In some ports, such as El Jadida and Essaouira, the annual volume of dredging, 10,000 in/year,is tnlikely to cause much disturbanceto the marine environment. Higher volumes of dredging are required in the case of estuary ports such as Kenitra (600,000 n3) and Larache (between 300,000 ma and 400,000 e3), and in the case of coastal ports subject to heavy littoral drift such as Safi and Agadir (between400,000 e3 and 450,000 i3). This sedimentationthus raises questions concerning the identificationof the dredged materials and the appropriate selectionof dumping sites in the offshoremarine environment.
19. With the exception cf the ports of Casablancaand Mohammedia, the ports most affected by sedimentarydeposits are not located in dense urban or industrial environments. As a result, high levels of contamination of the sedimentsto be dredged are unlikely to occur in most sites. But the concerns related to maintenancedredging are not limited to the physico-chemicalnature of the sediments. Deepeningchannels by dredgingalters water circulation. This in turn causes changes in salinity,dissolved oxygen and velocity profiles in the sectionstreated. The increasedturbidity of the water brings about a drop in light penetration,which affects all the processesof primary productionand life of the benthic, planktonicand demersalfauna. Lastly, selectionof sites for the dumping of dredged materials must be governed by strategic decision making based on the best available knowledge of the future of the materials dumped: stability, diffusion, reincorporationinto the transport movements interruptedby port works, effect on beach levels in sections experiencing erosion. Analysis of these various factors must be based on a detailed study of the environmentalconditions of the individualport site and of the coastal area in the immediatevicinity.
20. The project would support a pilot study in the form of an environmentalassessment focusing on dredging in the ports of Agadir, Kenitra, Larache and Safi. Carryingout an environmentalassessment at those sites with a variety of contexts (estuaryand coastalwith littoral drift) will provide a training opportunity for the engineers and managers of the staff of the Directorateof Ports, thus p;oviding a comprehensiveapproach to the impact of dredging activitieson sensitiveshallow coastal areas. The terms of reference for this study are available in the Project File Document No. B.10.
V. Water Ouality in the Port of Casablanca
21. The direct dumpinginto the ocean of untreatedurban effluentfrom all Morocco'slargest urban areas is a cause of concernand requiresremedial action. - 103 -
Page 7 of 8
The conditionof the Port of Casablancamust, in this respect, be brought into line with the declarationof the Tenth Meeting of the ContractingParties to the London Conventionheld in Octcber 1986. This declarationrecognized that the cause of contaminationof sediments that are to be dredged is the dumping of hazardousmaterial, into inland and coastal waterways and that these problems would continueto occur unless dumpingis more strictlycontrolled at the source. /ny program of action to control port water quality must have as its first priority the building of structuresfor the collectionand treatmentof wastes that are currentlydiscnarged into the port basins (Hansalicollector). In the fisheries sector, in particular, the elimination of collector dumping is a measure that is urgently needed to improvethe health conditionsof the sector.
22. Second, there seems to be a need for regular measurement of the parametersof the physicochemicalquality of watershedwater and of the coastal marine environmentwithin external proximityto the port protectionstructures. The systematiccollection of data over a long period is a prerequisitefor: (a) implementingsanitary suiveillanceof consumer products originating from the ocean or of sea bathing; and (b) definingthe conditionsfor the difficulttask of disposing of effluent from the purificationstations which ar- included in the plans. The Directoratefor Merchant Marine (DMM) has the ,ervicesoGf an Institut Scientifique des Peches Maritimes (ISPM), staffed by experts and equippedwith laboratoryfacilities geared to the operationof a Reseau National d'Observationdu Milieu Marin (RNO).
VI. Control of Air Pollutionfrom Dust Emissions
23. The high volume of traffic in heavy goods handled in bulk at the main ports, i.e., Casablancaand Jorf Lasfar,causes atmosphericpollution from dust emissions from phosphates and coal, which are noxious to the quality of the environmentin the immediatevicinity. In addition,cereals dust is an explosion hazard in silos. The introductionof measuresand proceduresdesigned to prevent and reduce these sources of atmospheric pollution will be part of all new projects. Adequate provisions will be included in the terms of reference of consultants in charge of design work for new cereals and coal handl.ng facilities.
24. Concerning existing facilities,a mission of consultantsat the two main ports would carry out a study with the following objectives. First, an inventory would be made of possible situations where air pollution is incompatiblewith, and hazardous to industrialactivities in the neighboring areas which are affectedby sigr.ificantlevels of these dust emissions. Priority attention should be given to the risks of contaminationof nitrate fertilizer operations from the emission of organicmaterials. Second, a review would be made of handling techniqueslikely to create situationsof instantaneousdust concentrationequal to or higher than 150 mg per nano m3 of surroundingair. For such situations,solutions have been introducedunder identical circumstances in other ports: covering of hatches, intermediatehoppers under negative pressure, covered dump trucks. - 104 -
Annex 11 Page 8 of 8
VII, Training in Maritime Environment
25. Training is required to strengthen environmental capabilitiesand raise awareness to environment issues in the port and maritime subsectors. The Moroccan InterministerialCo'uneil on the Environment,having been made aware of the conditior, f port operateQnsby the accident of the oil tanker "KHARG V," is examinii.vrious areas in which changesneed to be made as regardstechnical equipmentand staff training with a view to building up an efficientnational organizationto control marine pollution in the event of another disaster of similar proportions. DMM has already instituteda series of training co-rses for 20 managers of Centresde '.ecuriteMaritimes Commerce et Peche (Centersfor Commercialand FisheriesMaritime Safety) at similar institutionsin France.
26. Training on a simila; scale will be organized in the port sector so that marine environment concerns will be taken into account by all the departments involved. The project provides support for training of (a) two engineersof DP and DPCM; (b) three harbor officers and engineersof ODEP; and (c) 15 engineersor senior personnelon the staff of the regional ports. This trainingwill take the form of two to three-weekcourses at specializedagencies of foreign countries and ports in Europe. This should be subsequently supplementedin Morocco by organizingone or two one-week seminars in order to make this trainingavailable to a wider gro.,,pof middle managers and supervisors who are more directly involved in port operations, particularlywhere the introductionof floatingdams and skimmers is concerned. - 105 -
Annex 12 Page 1 of 7
KINGDOM OF MOROCCO
STAFF APPRAISALREPORT
PORT SECTOR PROJECT
Economic Evaluation
I. Introduction
1. This annex provides background informationon the analysis of a key sub-project in the port investment program, namely the Casablanca container terminal. It also presents the analysis of the Agadir cereals silo to be constructedby ONICL. The analysis of the container terminal in the port of Casablanca is based on a feasibility study prepared by consultants CATRAM entitled: Etudes de Factibilitd Liees a la Preparation d'un Eventuel Projet Portuaire,Janvier 1990. The study was preparedaccording to a methodologyand terms of reference provided by the Bank and was reviewed in detail by Bank preparationmissions. The study is availableas Project File Document No. B.1.
II. Traffic Forecasts
2. Based on foreigntrade statistics,Table 1 shows detailsof import and export traffic growth for major commoditygroups during the period 1983-1987. The traffic data is broken down into bulk and general cargo commodities,the latter being further broken down into unitizable and non-unitizabletraffic. Comparedto recent growth rates of around 61 per year, importtraffic is expected to increaseat more modest rates in the future of around 3X per year throughthe year 2000. However, unitizable imports,mainly intermediateand consumer type goods, will probably increaseat around 41 per year. Bulk imports,particularly oil products,coal and culphur,will continueto increasein line with population growth, namely at about 3X per year. However, importsof cerealsare likely to remain around their currentlevel of 1.5 to 2 milliontons annually,any increase in local productionbeing offset by increasesin consumptiondue to population growth. Table 2 shows trends in cereal imports, includinga breakdownby port port, from 1978 to 1988. Exports of general cargo traffic are expected to increase at about 21 per year while exports of bulk commodities, mainly phosphates,will remain at their current level.
3. With a recent growth rate of about 71 per year, unitized cargoeshave increasedat a rate which is higher than for general cargo traffic as a whole. Using 1987 data, a detailed analysishas been made of the degree of penetration of unitizablecargoes and the prospectsfor continuedincreases in the level of unitizationin the future. This level is alreadyvery high for Morocco, namely about 601 for the country as a whole as opposed to about 301 for Turkey and less than 101 for Algeria. About 651 of unitizablecargoes are unitized in the port of Casablanca and about 801 in Tangier. For unitized traffic, two forecast scenarioshave been developed, the first correspondingto continuedgrowth in container traffic, the second to a slow-down in the rate of containerization - 106 -
Annex 12 Page 2 of 7 while still maintaininggrowth in roll-onroll-off traffic. The first scenario would correspondto the developmentof new containerhandling possibilitiesin the port of Casablancaand under this scenario,unitized trafficwould increase at a rate of about 5% per year through the year 2000. The rate of unitization for the port of Casablancawould increase from 65% in 1987 to 74% in 1994 and 81% in 2000. In the without project scenario,unitized traffic would increase only at about 2.5% per year, the level of unitizationremaining constant at about 60-65%. For the port of Tangier,unitized traffic is expected to increase at 7% per year in the scenariocorresponding to the planned improvementsto this port as opposed to increases of about 5.5% per year in the without project scenario. Table 3 provides details of the forecast tonnages for the port of Casablanca,distributed between containerson containervessels, containerson Ro-Ro vessels and trailers on Ro-Ro vessels. In the with project scenario,the number of containershandled by the port of Casablancawould increasefrom 94,000 TEU in 1987 to 190,000 TEU in the year 2000, an increase of just under 6% per year. In the withoutproject scenario,the number of containersin the year 2000 would only reach 132,000 TEU and there would be a residual volume of unitizable general cargo handled by conventionalmeans, compared to the with project scenario,amounting to over 500,000 tons in the year 2000.
III. CasablancaContainer Terminal
4. Benefits fromithe container terminal development in the Port of Casablancawill accrue to port users primarilythrough the impactof the project on cargohandling rates. rhese in turn provid. reductionsin: (a) the time ships spend at berth; (b) ship waiting time; (c) cargo handling costs; and (d) cargo handlingcosts in foreignports. The analysisassumes that the existingterminal (Mole Tarik) would continue to operate as a container terminal but would specializeprimarily in Mediterraneantraffic. However, a recent 4 hectare extensionof the existing terminal on the adjacent Mole de Commercewill cease to operate after the new terminal is inaugurated. As Mediterraneantraffic is predominantlyRo-Ro traffic, the existing terminal would essentiallybecome a Ro-Ro terminal.
Ship Service Time
5. The main basis of the analysis is to estimate the time taken by ships to load and unload their cargoes in the "with project" and "without project" scenarios. Based on an analysis of the likely distribution of traffic among differenttypes of ships under these two scenariosand the cargo handling rates associated with each, estimates of ship service time are derived. These estimatesare then convertedinto total ship costs based on the hourly operating cost of vessels expected to handle the forecast traffic. The distributionof traffic in the without project scenario assumes that shipping lines will be unable to introducelarger and more efficientvessels, as increasingcongestion would result in unacceptablelevels of ship waiting time. However, in the with project scenario,there would be a gradual shift in trafficdistribution towards larger vessels for both containerand Ro-Ro traffic. The followingprovides a summaryof the ship types, ship costs, forecasttraffic distribution and related cargo handling rates: - 107 -
Annex 12 Page 3 of 7
Traffic DistributionX ShiR Type SiR Cost Cargo handlinz Rate w/proiect w/outL project (US$/day) (tons/day) with without 1994 2000 1994 2000 Container Ships
250 TEU $5,000 2,300 2,000 45 30 95 90 500 TEU $6,500 4,000 N.A. 50 60 - - 700 TEU $8,000 N.A. 2,000 - - 5 10 1600 TEU $12,000 4,500 N.A. 5 10 - -
RO-RO vessels
103 TEU+30 Tr. $4,500 N.A. 2,200 - - 50 40 150 TEU+60 Tr. $6,000 2,500 2,200 45 30 50 60 250 TEU+lOOTr.$7,500 2,500 N.A. 50 60 - - 500 TEU+370Tr.$15,000 2,500 N.A. 5 10 - -
Conventional
4000tons $4,500 600 V 600 V 100 100 100 100
1/ increasingto 700 tons per day in 2000. N.A. not applicable
6. Based on the above assumptions,estimates of ship servicetime savings in 1994 amount to US$ 1,530,000 in 1994 increasingto US$2,717,000in the year 2000. As Moroccan shipping lines handle about half of the total traffic and as part of the sea freight rate savings for foreign lines would also ultimately accrue to Morocco, 75X of total ship service time savingsare assumed to accrue to Morocco.
ShiR Waiting Time
7. In the without project scenario,priority will be given to container and Ro-Ro traffic in order to minimizewaiting time for this traffic. In order to achieve this objective, initiallytwo and later three general cargo berths would need to be assigned to container/Ro-Rotraffic. Ship waiting time would therefore increase for conventionalgeneral cargo traffic. Estimatesof ship waiting tire for this trafficare derivedfrom empiricalcurves which relate ship waiting time as a proportionof ship service time, to the berth occupancyrate, the latter being a function of the number of berths available and the required ship service time. The followingtable summarizesthese estimates: - 108 -
Annex 12 Page 4 of 7
Ship Waiting Time
Iraffic Cargo Rates Barth Occ. Occ.Rate Waiting timeV ('^00 ton) (ton/day) (day) X
,/o Project 1994 1,923 600 3,200/13berths 821 201 2000 2,485 700 3,500/12berths >90% 502 wL Project 1994 1,710 600 2,850/15berths 631 OX 2000 1,961 700 2,800/15berths 62X OX
1/ Based on annual availabilityof 300 days 1 As a percentageof ship service time
Cargo Handling Costs
8. Savings in cargo handling costs will follow from increasedefficiency in handling containerand Ro-Ro trafficas well as from reduced handling costs on incrementalunitized cargo which would otherwisebe handled as break-bulk cargo.
9. ContainerTraffic. Containerhandling in the existing terminal (Mole Tarik) is relativelyinefficient in that six or seven movementsare requiredfor each containerbetween the quaysideand the storagearea and between the storage area and movement out of the terminal. With the current congestionin the terminal,a straddle carrier is only able to make 10 movementsper hour and the productivityof each shift is only about 60 containers(600 tons). Based on the current situation, the handling of 60 containersrequires 36 straddle carrier hours, two gangs per shift (one on board and one in the storage area) and seven hours of quayside crane. Given the improvementscurrently underway on the Mole de Commerce,efficiency should increasemarginally, with each straddle carrier handliiag60 containers in 30 hours rather than 36 hours. The cost per ton is estimatedas follows:
DP (net of depreciation)
Straddle Carrier 540/hour Quayside Crane 1,000/hour Labor (2 gangs) 6,000/shift
For 60 containersor 600 tons: DH 16,200 + 7,000 + 6,000 - DH 29,200 i.e. DH 50 per ton.
10. With the developmentof the new container terminal,containers will be handled with straddle carriers working in combinationwith tractor-trailer units. Each straddlecarrier would be accompaniedby two tractor-trailerunits. This will enable straddle carrier movements to be halved (five) for each containerwhile the output per shift will increasefrom 600 tons to 900 tons due to the use of containergantry cranes. Hence, some 90 containerscan be handled - 109 -
Annex 12 Page 5 of 7 with six hours of gantry crane, two gangs per shift and 30 hours of straddle carrier/tractor-trailercombinations. The cost per ton is estimatedas follows: DH (net of depreciation)
Straddle Carrier/two 640/hour Tractor-trailerunits Gantry crane 2,000/hour Labor (2 gangs) 6,000/shift
For 90 containersor 900 tons:
DH 19,200 + 12,000 + 6,000 - DH 37,200 i.e. DH 41 ger ton.
11. Ro-Ro Traffic. For Ro-Ro traffic,similar improvementsin efficiency will followfrom implementationof the project. At present, cargo handling rates for Ro-Ro trailers are about 2,200 tons per day for loading/unloadingand 900 tons per gang-shift in the storage areas. Based on a gang shift cost of DH 3,000, a tractor operatingcost of DH 100 per hour and required inputs of three tractors,half a gang in the storage area and a full gang on the quayside, for 900 tons of traffic the cost per ton is as follows:
DH 4,500 + 2,100 - DH 6,600 i.e. DH 7.5 per ton
In the with project scenario, Ro-Ro traffic handling rates should incre.iseto 2,500 tons per day and the productivityper gang-shift should increaseto 1,100 tons. The cost per ton, therefore,is reducedto DH 6 Rer ton.
12. General Cargo Traffic. For conventionalgeneral cargo traffic, the currentthroughput is about 75 cons per gang-shift. Two gangs are required,one on the quayside and another in the storage areas, three fork-lift trucks and a 6-ton quayside crane. The costs are as follows:
DH (net of depreciation)
Fork-lifts 70/hour Crane 400/hour Labor (2 gangs) 6,000/shift
For 75 tons, the cost is DH 6,000 + 1,500 + 2,800 - DH 10,300 or DH 140 Rer ton. However, a cost of DH 120 Der ton has been adopted for the economic analysis, in order to take into account expected improvementsin productivity.
Cargo Handling Costs in Foreign Ports
13. Through increasedunitization of general cargo traffic, the project will also provide savings in cargo handling costs in foreign ports. These savingsare based on current tariffs in representativeforeign ports, which are about DH 180 per ton for conventionalcargo, and about DH 130 per ton for containercargo. Only 501 of the correspondingbenefits are assumed to accrue to the Moroccan economy. - 110 -
Annex 12 Page 6 of 7
Project Costs
14. The project provides for a phased program of improvementsinvolving the constructionof a 350-meterquay which would be sufficient to accommodate traffic growth beyond the year 2000. However, the quay could be extended by a further150 meters in the longer term. The relatedearthworks and storageareas would be implementedin several phases, the first phase involving an area of about 20 hectares. An extension of the storageareas to provide an additional 10 hectares would be undertakenin 1997. For the economic evaluation,project costs include 50% of the cost of the road bridge proposed at Gate 4. Table 4 summarizesthe civil works costs which amount to DH 353 million net-of-tax.
15. A container gantry crane has recently been ordered by ODEP for delivery in 1990 and will be used on the existing terminal. Procurementof a mobile crane is plannedfor late 1990 and will be used on the temporaryextension of the existingterminal located on the Mole de Commerce. In the without project scenario,a furthermobile crane would be required in the medium term. With the proposednew terminal,two containergantry cranes would be procured in 1993 for operationon the new terminal. The mobile crane would also be allocatedto the new terminal. The net-of-taxunit costs used in the evaluationare DH 40 million for a gantry crane and DH 16 million for a mobile crane.
16. Requirementsfor supportingyard equipment are based on the current technologyused in the Port of Casablancawhich involves the use of straddle carriers. However, in order to provide a more efficient operation,tractor- trailer units would be used in combinationwith the straddle carriers. Of the eight existing straddle carriers,six will be retired in the next two or three years when nine new units, currently on order, are delivered. A further four straddlecarriers will be requiredin 1993 providingan overalltotal of 15 units which will be adequate to handle traffic through 1997. The straddle carriers would operatewith a total of 19 tractor-trailerunits. Becauseof the generally inefficientoperation on the existing terminal,six new straddlecarriers would be required in the withoutproject scenarioin 1993, in additionto the existing order for nine units. An additionalfour straddlecarriers and eight tractor- trailerunits would be requiredin 1997 in order to handle trafficup to the year 2000. The net-of-taxunit costs used in the evaluationare DH 4.5 million for a straddle carrier and DH 300,000 for a tractor-trailerunit.
Cost BenefitAnalysis
17. Table 5 summarizesthe calculationof ship costs and cargo handling costs in 1994 and 2000 while Table 6 shows the 20-year cost-benefitstream. Residual values have been allowed at the end of the evaluationperiod on the basic infrastructure(quay wall, earthworks and dredging). For equipment, appropriaterenewal costs have been included in the cost stream based on a 10 year life for straddlecarriers and tractor-trailerunits. Projectbenefits have been held constant from the year 2000 onwards which correspondsapproximately to the capacity of the terminal under the initial phase. The estimatedER is 19X. Even with a 20% increasein costs combinedwith a 20% decrease in benefits, the ER would still exceed 12%. - 111 -
Annex 12 Page 7 of 7
IV. Cereals Silo
General
18. At the present time, only the ports of Casablanca and Safi are equipped with cereals silos, the respectivecapaciti-i being 70,000 tons and 24,000 tons. Casablanca normally handles about 1 million tons of cereals annually and Safi about 200,000 tons, equivalentrespectively to about 50% and 10 of total imports of cereals. The remainderof the traffic - about 800,000 tons - is spread fairly evenly among four other ports, namely Agadir, Tangier, Jorf Lasfar and Nador. None of the ports are able to accommodatethe large 60,000 ton bulk cerealscarriers and hence sea freightrates are high. In fact, the ports of Casablancaand Safi, although equippedwith silos, are only able to handle ships in the range of 30,000 tons. In addition,port handling costs are high where no silos exist and there are additional distributionand ship waiting time costs associatedwith the concentrationof traffic in the port of Casablanca.
Agadir Silo
19. The investmentin the Agadir cereals silo will provide sea freight savings of about US$8 per ton on an expected annual throughput which would gtadually rise to about 500,000 tons, an increase of 280,000 tons over the current traffic. In addition,handling cost savingsof about US$2 per ton would be achieved on the existingAgadir cereals traffic of 200,000 tons per year as well as on some 200,000 tons of cereals which would otherwise transit through Jorf Lasfar. The handling cost savings representthe avoided cost of operating front-endloaders, each handling rome 30 tons per hour with a direct operating cost of DH 500 per hour. Finally,in capturingsome 180,000tons of trafficfrom Jorf Lasfar and some 100,000 tons from Safi, primarilyfor distributionin the southernpart of the country,the silo would providesavings in land distribution costs on at least half of this traffic, estimatedat about US$7 per ton. This is based on an average distance saving of about 150km and a direct truck operatingcost of US 50 cents per ton-km (DH 0.4 per ton-km). Based on these benefits and on a silo cost of about DH 90 million net-of-tax,the ER of the Agadir silo is estimated in the range of 35 to 40%. - 112 -Annex 12 Table 1 KINGDOM OF MOROCCO STAFF APPRAISAL REPORT PORT SECTORPROJECT
Growth of Foreign Trade ('000 tons)
PRODUITSIHPORTES A C SUI L GRO VRACS/HO11OGEN1S 1983 1a 198 1887 2IM Z:00 1983-87 1988-93-19-94-2000 VRACS/HOMLGENES BLE / MAIS 1858 2500 2042 1475 2085 2192 2350 2.68 1,00 1.00 SOUPRE 1349 1418 1469 1672 2003 2100 2100 11.61 0.00 0.00 PDT ENERGETIQUES 4623 4955 5684 5542 6108 7203 8970 7.21 3.00 3.00 H9ILES VEGETALES 165 172 212 238 184 220 270 2.78 3.00 3.00 SUCRES 248 283 238 297 297 365 464 4.61 3.50 3.50 ENGRAIS 285 367 338 463 348 440 579 5.12 4.00 4.00 S/TOTAL VRACS 8528 9785 9003 9687 11095 12610 14733 6.80 2.63 2.25 DIVERS BATEAUX 4 24 32 25 16 16 18 0.00 0.00 0.00
DIV ROULARTS 24 14 20 22 25 27 30 1.03 1.00 2.00 VEHICULES TOURISME 12 _90 9 10 J -6.94 1.00 2.00 S/TOTAL ROULANT 36 23 29 32 34 37 41 -1.42 1.00 2.00
BOIS GRUMES 105 128 123 119 160 214 230 11.10 5.00 1.00 FER / RAILS 385 317 128 80 96 06 96 -29.34 0.00 0.00 TOLES/FEUILLARDS 130 146 160 137 161 204 268 5.49 4.00 4.00 PATE A PAPIER 28 23 24 25 23 24 28 -4.80 1.00 2.00 LIANTS/CIMENTS 32 30 35 38 40 54 71 5.74 5.00 4.00 PROD CHINIQUES 110 113 133 130 149 7.88 BILLETTES 194 356 _J7 413 501 634 834 26.80 4.00 4.00 S/TOT NON UNITARISABLE 984 1113 1081 942 1130 1226 1527 3.52 1.37 3.18
BOIS 212 265 246 229 367 492 692 14.71 5.00 5.00 PDTS LAITIERS 30 23 24 28 27 30 37 -2.60 2.00 3.00 CAPE/THE/TABAC 38 47 42 49 54 64 79 9.18 3.00 3.00 AUTRES ALIMENTS 109 165 124 190 186 235 310 14.29 4.00 4.00 GRAINES/FRUITS 35 30 51 18 39 47 57 2.74 3.00 3.00 LAINE/COTON/FIMRES 35 31 34 38 43 81i58 5.28 5.00 5.00 PDTS BAUTS VEGETAUJX 66 65 67 75 80 101 133 4.93 4.00 4.00 FIBRES SYNTHETIQUES 25 25 26 26 30 40 53 4.66 5.00 4.00 DIV.BRUTS/MINERALE 79 74 80 76 81 110 135 0.63 3.00 3.00 PDTS CHIMIQUES 110 113 133 130 149 189 232 7.88 4.00 3.00 HAT. PLASTIQUES 61 58 73 76 81 115 162 7.35 6.00 5.00 PAPIER/CARTONS 60 84 84 78 94 112 138 11.88 3.00 3.00 FILS/FIBRES 16 18 20 20 19 25 36 4.39 5.00 5.00 PRDTS EQUIPMEMENT 109 132 198 90 80 90 103 -7.44 2.00 2.00 PDTS FINlS CONSOMMABLES 48 51 56 57 79 106 149 13.27 5.00 5.00 f0wES TERRE 27 25 37 _32 28 30 __2 0.01 1.00 1.00 S/TOT UNITARISABLE 1060 1206 1295 1212 1437 1844 2429 7.90 4.11 4.02 TOTAL DIVERS 2084 2366 2437 2211 2617 3123 4013 5.75 3.10 3.65 TOTAL GENERAL 10612 12151 12420 11898 13712 15717 18790 6.62 2.30 2.54
PRODUITS EXPORTES VRACS PHOSPHATES 13976 14951 14790 13696 13060 13060 13060 -1.68 0.00 0.00 AUTRES PDTS MINERAUX 1067 1360 1265 1016 1058 1123 1204 -0.21 1.00 1.00 ENGRAJS 807 545 776 702 705 705 705 -3.32 0.00 0.00 PLOMB 56 72 85 60 35 35 35 -11.78 0.00 0.00 ACIDE PHOSPHORIQUE 871 1088 027 1068 1409 1409 1983 12.78 0.00 5.00 PDTS ENERG/LUBRIFIANTS 324 396 362 373 402 539 758 5.54 5.00 5.00 S/TOT VRh._ 17101 18412 18205 16915 16669 16871 17745 -0.64 0.20 0.72
AGRUIMESPRIMEURS 662 670 717 757 762 858 986 3.58 2.00 2.00 DIVERS PATE / PAPIER 63 67 61 SI853 6.48 5.00 5.00 S/TOT NON UNITARISABLE 63 67 61 78 81 109 153 6.48 5.00 5.00
DEI PDTS DIVERS 46 41 43 47 67 g0 126 9.86 5.00 5.00 LEGUMESSECS 10 12 17 32 14 17 21 8.78 3.00 3.00 PDTS ALIMENTAIRES 539 403 411 396 379 379 379 -8.43 0.00 0.00 PROD BRUST AN/VEGE 63 44 52 52 52 52 52 -4.68 0.00 0.00 PRDTS FINIS EQUIR4 35 5 7 40 25 25 25 -8.07 0.00 0.00 POTS FINIS CONS 37 38 43 47 74 140 18.92 5.00 5.00 S/TOT UtITARISABLE i3i 633 573 614 611 662 743 -4.35 1.34 1.66 S/TOT DIVERS 793 700 634 692 692 771 896 -3.35 1.80 2.17 TOTAL GENERAL 18556 19782 19556 18364 18123 18500 19627 -0.59 0.34 0.85
Source: Office des Changes and mission estimates KINGDOMOF MOROCCO
STAFF APPRAISALREPORT
PORT SECTORPROJECT
CEREALS TRAFFIC BY PORT: 1978-88 L/ (tons)
TAGEG NADR AGADIR Y13ARS CASAB CNA muF JOBP T.SF
91,324 - 90,652 2,091,524 1978 1,686,728 222,820 - 118,565 - 90,456 2,050,202 1979 1,606,440 234,741 - 118,787 - 96,573 2,189,826 1980 1,733,896 240,570 - 215,771 52,845 136,657 3,485,336 1981 2,727,489 352,574 - 157,772 113,777 90,607 2,345,593 1982 1,599,501 291,724 92,212 204,650 125,280 103,549 1,959,012 1983 1,021,124 205,326 299,083 197,060 255,256 201,788 2,860,481 H 1984 1,439,256 316,704 450,417 215,339 189,768 178,424 2,171,115 ' 1985 1,279,650 214,561 93,373 141,297 172,183 186,465 1,739,771 1986 984,889 137,955 116,982 206,989 226,659 215,263 2,304,414 1987 1,199,567 265,479 190,457 176,061 283,867 220,987 1,999,727 1988 997,939 193,432 127,441
Average 186,000 195,000 171,000 2,197,000 2982-88 1,217,000 232,000 196,000
due to inclusion of coastal traffic. / Figures are slightly higher than Foreign Trade Statistics
Source: ODEP - 114 -
Annex 12 Table 3
KINGDOM OF MOROCCO
STAFT APPRAISALREPORT
PORT SECTOR PROJECT
Forecast of Unitized Traffic: Casablanca ('000 tons)
1987 1994 2000 Annual Rate
A. Without Proiect
Total Unitized Traffic 1,007 1,230 1,400 2.6X of which ContainerShips 695 849 966 2.6X Ro-Ro Containers 141 172 196 2.6X Ro-Ro Trailers 171 209 238 2.61
ConventionalTraffic Differential - 213 524
Number of ContainersFull 64,293 78,531 89,385 2.6X Empty 29,930 36,392 41,662 2.6X
Number of Trailers Full 9,511 11,617 13,222 2.6X Empty 601 728 14,058 2.6X
Total Number of Containers 94,223 114,923 132,047 2.61 Total Number of Trailers 10,111 12,343 14,058 2.61
B. With Proiect
Total Unitized Traffic 1,007 1,443 1,924 5.1% of which ContainerShips 695 1,039 1,443 5.81 Ro-Ro Containers 141 202 250 4.51 Ro-Ro Trailers 171 202 231 2.31
Number of ContainersFull 64,293 95,460 130,240 5.61 Empty 29,930 44,230 60,705 5.61
Number of Trailers Full 9,511 11,223 12,827 2.3X Empty 601 701 811 2.31
Total Number of Containers 94,223 139,698 190,945 5.61 Total Number of Trailers 10,111 11,925 13,638 2.31 - 115 A
Table 4
KINGDON OF MOROCCO
STAFF APPRAISALREPORT
PORT SECTOR PROJECT
CasablancaContainer Terminal: Civil Works Costs - Phase 1
Infrastructure Units Unit Cost(DH) Quantities Total costs (DH '000)
Mobilization 10,000,000 1 10,000 Removal of wreck - 20,000,000 1 20,000 Dredging - normal m3 30 875,000 26,250 - rock m3 600 55,000 33,000 Earthworks m3 30 4,800,000 144,000 Quaywall-12m. linear meter 140,000 350 49,000 Ro-Ro Ramp - 12,000,000 1 12,000 Access roads - 13,350,000 1 13,350 Rail Access - 22,000,000 1 22,000 Protection - 30,000,000 1 30.000
Sub-TotalInfrastructure 359,600
SuDerstructure
Paving m2 300 220,000 66,000 Drainage linear meter 1,200 2,000 2,400 Water linear meter 900 4,000 3,600 Electricitylinear meter 2,250 1,600 3,600 Buildings m2 1,500 600 900 C.F.S Station m2 1,100 16,000 17,600 Containershed m2 1,000 10,000 10,000 Enclosure linear meter 1,000 2,000 2.000
Sub-total Superstructure 106,000
Total Civil Works 465.60
Source: CATRAM Consultants KINGDOM OF MOROCCO
STAFF APPRAISAL REPORT
PORT SECTOR PROJECT
CasablancaContainer Terminal: Estimates of Ship Costs and Cargo Handling Costs: 1994 and 2000 (US$ '000)
With Project Without Project
1994 2122o4 20 Total Unitized Traffic (O0Otons) 1,443 1,924 1,230 1,400 - Containers 1,039 1,443 849 966 - Containers on Ro-Ro 202 250 172 196 I.A - Ro-Ro Trailers 202 231 209 238 ConventionalGeneral Cargo (000tons) 1,710 1,961 1,923 2,485
Ship Service Time 15,988 16,840 17,518 19,557 Ship Waiting Time (generalcargo) - - 2,885 7,990 Additional Cargo Handling Foreign Ports 1/ * 1,331 3,275 Cargo Handling Casablanca: - Containers 5,325 7,395 5,304 6,038 - Containeron Ro-Ro 152 188 161 184 - Ro-Ro Trailers 152 173 196 223 - General Cargo - - 3,195 7,860
tn
Calculated on incrementalunitized cargo otherwisehandled as conventionalgeneral cargo in without project scenario,namely 213,000 tons in 1984 and 524,000 tons in 1994. KINGDOMOF MOROCCO
STAFF APPRAISAL REPORT
PORT SECTOR PROJECT
Casablanca Container Terminal: Cost-Benefit Analysis (US$ '000)
2006 2007 2008 2009 2010 2011 2012 2013 1997 1998 1909 2000 2001 2002 2003 2004 2005 1994 2000 1991 1992 1993 1994 1905 1096
2038 2038 2038 2038 2038 2038 1889 2038 2038 2038 2038 2038 2038 2038 2038 752 1148 1296 1444 1593 1741 Ship Service 1530 2717 53 5993 5993 5993 5993 5993 5993 5993 3601 4267 5057 5993 93 5993 5993 5993 5993 2885 7990 752 2164 2564 3039 1638 Ship Wa.t1*s 1638 1638 1838 1638 1638 1638 1638 1638 1638 866 777 899 1044 1213 1410 1638 1638 1638 1638 Cargo Toreipn 1331 3275 502 6549 6549 6549 6549 6549 6549 6549 8549 6549 6549 6549 3227 3782 4336 4889 5442 5995 6549 6549 6549 CaZro Camabluaoa 3227 6549 1002 16218 16218 16218 16218 16218 16218 16218 16218 16218 16218 16218 7205 8419 9718 11127 12663 14351 16216 16218 16218
gum:~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~f-
- - -17041 Infrastructure ------3000 - - - project 1698S 14307 11177 - - - - with ------witbout pSojeot - - 178 - 2788 2qupenmt: - 3177 - - 4765 - 4785 - 2788 - 6647 - 12200 - - - 3177 with project - - - 4765 - 3177 4765 - 3177 - - 3277 - 3177 - - - 317 - - witbout project 6647 - - - -17430 - -389 ------3000 - - - Not Costs 16986 14307 18412
16218 33648 16607 16218 16218 16218 16218 16218 16218 26216 16218 7205 8419 9718 8127 12663 14351 16218 16218 16218 vat Denefits -16988 -14307 -18412
Rot Present Value at 15S - USS13 Million
UR- 192 - 118 - AnneU 13
KINGDOMOF MOROCCO
STAFF APPRAISALREPORT
ORT NECTORPROJECT
Past FinancialStatements
1. This Annex gives ODEP's detailed financialstatements for the period 1985-1989. The financialprojections for the period 1990-1995 are given in Annex 14 together with the assumptions made for presenting the tables and establishingthe financialprojections.
Income Statements
2. Despite ODEP's inheritanceof a quite difficult financial situation from the former RAPC, it has performedsatisfactorily during the period 1985- 1989.
3. Total operating revenues net of taxes increasedfrom DH 530 million in 1985 to DH 807 million in 1989, reflectingan increaseof about 7% in traffic and an increase of about 5% in tariffs in 1987. About 92% of the revenues consist of cargo h.ndling, port dues and wharfage, the remaining8% consist of minor services.
4. Total operating expenses including maintenance salaries and ,depreciation increased from DH 504 million in 1985 to DH 717 million in 1989, a 42X increaseover the period 1985-1989. Staff efficiencyimproved during the same period. While salaries represent the major operating expense along with maintenance and depreciation,they have declined from about 34% to 30% of revenues. Depreciationis in line with the current assets structure.
5. Reflecting the overall operationperformance the working ratio went down from 69% to 67% and the net operating income over revenues had been kept at about 7%.
Balance Sheets and Sources and ApDlicationof Funds
6. The financial structure of ODEP has been sound during the period. ODEP has generated sufficientcash to cover its debt service and its increase in working capital. The net cash generation covered about 36% of the total capitalexpenditure over the period 1985-1989. The BalanceSheets analysisshows that ODEP has fulfilled its financialcovenants in terms of rate of return on net fixed assets and debt service coveragewhich were 8.8% and 4.0 respectively in 1989 compared to targetsiof 7.5% and 1.4 respectively. In aedition,ODEP has improved its account receivablewhich decreasedfrom 112 to 54 days of billing in 1989, and had kept its debt ratio at about 32%. - 119 -
Anne:x 13 Table 1
KINGDOMOF MOROCCO
STAFF APPRAISALREPORT
PORT SECTORPROJECT
Income Statements (Millions DH)
198! 1°,86 1987 1988 1989 . --...... actual…...... ) REVENUES Handlirng- NT - 373.55 384.86 425.36 487.23 508.9? Servicesto Ships - NT 35.24 22.37 22.55 25.08 26.68 FishMarket - HT - 12.59 14.50 17.92 21.51 23.23 Ship-Yard- HT - 4.38 4.63 4.34 5.49 5.76 Wharfage(use of infrastructure)- HT - 100.99 151.99 167.71 217.17 222.59 Water& Electricity- HT - 3.044 7.02 13.86 17.95 17.54 Taxes 60.24 99.22 120.52 141.23 150.27 ------...... _. _._ TOTALREVENUES 590.03 684.59 772.26 915.66 957.13
WORKINGEXPENSES InventoryIncreases (decreases) -1.48 -3.10 -6.40 -9.,9 -6.10 Naterials& Maintenance 40.88 54.31 37.04 46.25 45.99 ExternalWork, Supply, Services 114.12 105.70 106.17 105.94 129.32 Transport& Traveling 1.20 2.04 2.34 1.76 3.24 AdministrativeExpenses 4.70 4.96 9.29 16.21 16.56 Interests& CommissionsCurrent Acc. 1.25 2.41 2.12 2.68 0.64 PropertyFees (royalty) 40.48 40.23 44.60 42.42 42.42
sotalWorking Expenses 201.15 206.55 195.16 205.47 232.07
AddedValue 388.88 478.04 577.10 710.19 725.06 wages 180.86 207.52 210.41 233.27 245.79 Taxes 25.19 109.73 131.98 153.37 16.44 . ._ ------...... Operat. inc. before Dep. 182.83 160.79 234.71 323.55 314.83 Depreciation 100.08 113.26 154.25 185.68 182.91 Provisions 22.09 13.19 16.72 57.82 56.58 ~~~~_._...... ------...... Operating Income 60.66 34.34 63.74 80.05 75.34 Interest 11.21 20.35 33.84 26.65 35.68 Interest Income 15.00 13.00 14.33 13.88 21.46 ...... ------...... Net OperatingIncome 64.45 26.99 U.23 67.28 61.12 NonOperating Profits 14.00 55.68 37.62 50.79 17.22 NonOperating Losses 72.24 72.86 75.24 88.65 93.92 _ _ _ _ ...... ---- ...... Net Incomebefore Taxes 6.21 9.81 6.61 29.42 -15.58 IncomeTaxes 2.97 7.76 5.55 10.27 15.80 -- -_ .. .. _._._._ ... . Net Incomeafter Taxes 3.24 2.05 1.06 19.15 -31.38
RetainedEarnings 3.24 5.29 6.35 25.50 -5.88 RATIOS WorkingRatio (X) 69.01 76.51 69.61 64.66 67.11 OperatingRatio (X) 89.72 94.98 91.75 91.26 92.13 Net Income/Revenues (Z) 0.55 0.30 0.14 2.09 -3.28 OperatingIncome/Revenues (X) 10.28 5.02 8.25 8.74 7.87 AverageDepreciation (X) 15.68 16.62 12.80 13.77 11.41 - 120 -
Annex 13 Table 2
KINGDOM OF MOROCCO
STAFF APPRAISAL REPORT
PORT SECTOR PROJECT
Balance Sheet (MillionsDH)
im 1986 198 1988 989 (…------actual- ...... - ) ASSETS Fixed Assets rganrizationExpenses 8.54 16.48 0.00 0.00 Gross FixedAssets 638.14 681.66 1204.84 1348.32 1603.07 Less: AccumlatedDepreciation 99.82 208.64 320.29 489.55 663.55 Net Fixed Assets In Operation 546.86 489.50 884.55 858.77 939.52 Assetsunder Construction 90.01 220.95 91.88 138.32 171.37 OtherAssets 30.11 39.50 228.25 333.04 449.75 ...... ---- ...... Total Met Fixed Assets 666.98 749.95 1204.68 1330.13 1560.64 Current Assets Inventories 14.35 17.46 19.45 32.25 39.29 Receivables 180.46 207.39 213.81 134.65 141.73 OtherReceivables 285.11 254.42 127.32 281.62 266.23 Cash 128.73 112.45 51.17 37.76 80.00 ~~~~...... ---- ...... TotalCurrent Assets Less Cash 479.92 479.27 360.58 448.52 47.25 Totat Current Assets 608.65 591.72 411.75 486.28 527.25 ...... ------...... TOTALASSETS 1275.63 1341.67 1616.43 1816.41 2087.89 fl... ur.. u..= su.. .. m EQUITY& LIABILITIES Capital(transfer/RAPC) U7.06 451.4 451.15 451.15 522.21 doverrmentContribution 150.82 150.82 149.93 149.58 149.58 RetainedEarning 3.25 5.29 6.35 25.51 -5.88 ------...... -- - - . - - - TotalEquity 601.13 607.57 607.43 626.24 665.91 RESERVES 129.33 179.25 225.18 252.25 291.87 LongTeom Debt PreviousLoans 109.56 88.07 239.85 376.19 413.35 NewLoans 27.95 47.34 OtherLoans 5.79 5.79 5.79 5.87 Total Lon TermDebt 143.30 93.86 292.98 382.06 413.35 CurrentLiabilities Suppliers 43.70 89.54 95.36 67.07 109.98 Payable 0.75 0.91 1.06 3.13 OtherPayable 88.47 109.30 112.75 111.68 241.54 OtherLiabilities 172.05 172.40 122.32 175.66 133.95 PropertyFees 0.00 60.4 105.06 147.48 187.90 LongTerm Naturities 96.90 28.38 29.65 35.12 41.47 Overdraft 0.00 0.00 24.64 15.72 1.92 TotalCurrent Liabilities 401.87 460.99 49Q.e4 555.86 716.76 ...... _.... . - - - - .... . TOTALEWUITY & LIABILITIES 1275.63 1341.67 Ifi6.43 1816.41 2087.89 RATIOS Current Ratio 1.51 1.28 0.84 0.87 0.75 AccotmtReceivable (on day of billing)111.63 110.57 101.05 53.67 54.05 Debt/Debt& Equity (X) 24.75 13.45 27.93 32.20 32.20 TotalFixed Aets/Total Debt (2) 133.56 162.68 165.44 158.50 157.01 Rateof Returm (M) 13.30 12.10 11.30 10.60 8.84 Debt/Equity (2) 32.88 15.54 38.75 47.49 47.49 - 121 -
Annex13 Table 3
KINGDOM OF MOROCCO
STAFF APPRAISALREPORT
PORT SECTORPROJECT
Sources & Apolicationsof Funds - (MillionsDH)
198 12ffi 1987 1988 1989 ( ...... -actual------.-----) SOURCES Incomebefore Interest 17.42 30.16 40.45 56.07 20.10 PlusDepreciation 100.08 113.26 154.25 185.68 182.91 Ninus IncoreTaxes -2.97 -7.76 -5.55 -10.27 -15.80 NinusDividends 0.00 0.00 0.00 0.00 0.00
Internat CashGeneration 114.53 135.66 189.15 231.48 187.21 LessDebt Service Amortization 11.30 36.60 20.09 29.65 33.95 Interest 11.21 20.35 33.84 26.65 35.68 increase (decrease) in WorkingCapital 174.95 -128.29 -147.27 28.39 -15S.82 Net Internal CashGeneration -82.93 207.00 282.49 146.79 273.40 Equity Variation 72.21 54.32 44.73 26.72 110.68 Borrowings 240.20 0.00 161.15 118.73 71.52 other Sources 11.30 -86.20 58.06 5.47 TOTALSOURCES 895.78 175.12 546.43 297.71 455.60 APPLICATIONS Investments 766.80 191.79 423.80 308.58 287.81 OthersAssets Variation 0.26 183.92 2.83 125.55 ------~~...... TOTALAPPLICATIONS 767.06 191.79 607.72 311.41 413.35 CashIncreas Decrease 128.7Z -16.67 -61.29 -13.70 42.24 CashBeginning of Year 0.00 128.73 112.45 51.17 37.76 CashEnd of Year 128.73 112.45 51.17 37.76 80.00 RATIOS DebtService Coverag -1.06 4.89 S.98 2.64 4.14 Capital ExpenditureX Net Internal Sources Annual -10.81 107.93 66.66 47.57 66.14 Three-yearaverage -25.95 39.64 76.29 37.38 90.60 - 122 -
Annex 14 Page 1 of 3
KINGDOM OF MOROCCO
STAFF APPRAISALREPORT
PORT SECTOR PROJECT
AssuMDtionsand FinancialProjections
Inflation
1. It is assumed that the annual local inflationrelated to the increase in consumer prices will be 6.2X in 1990, 5.61 in 1991, 5.4X in 1992, 4.4X in 1993, 4.91 in 1994 and 5.51 in 1995. Annual foreign price increases are estimatedat 4.11 in 1990, 5.31 in 1991, 5.4X in 1992, 5.41 in 1993, 5.21 in 1994 and 5.31 in 1995. The exchange rate in December 1989 was about DH 8.25 per US Dollar, It is expected that the exchangerate will remain constant thereafter.
FinancialForecasts
2. ODEP's main financialstatements, Income Statements,Balance Sheets, Sources and Application of Funds, global sector accounts are summarized in Tables 5.1 to 5.6 and Table 5.9 in Chapter 5. Detailed statementsare included in this Annex (Tables 1 to 3). Additionaltables regarding tariffs, traffic forecasts,investment plan, financingplan, depreciation,fixed assetsvaluation and calculationof port fee are availablein the ProjectFile. Summary financial projectionson the proposed new facilities(Casablanca container terminal and Jorf Lasfar coal handling facility) are presented in Tables 5.7 and 5.8 in Chapter 5. Details are given in the present Annex (Tables4 and 5).
Traffic Progections
3. Traffic data used in financialanalysis are derived from the CATRAM feasibilitystudy (ProjectFile Document No. B.1). General cargo traffic is estimatedto inc.reaseby about 31 per year throughthe year 2000. Unitized goods are forecast to increase by about 5X per year for the same period. Phosphate traffic is kept at its 1987 level from 1989 to 1991 and would increase by 11 thereafter.
Revenues
4. ODEP's revenuesare forecast on the basis of the proposed new tariff structure to be implementedfrom beginning of 1991 for port dues on ships and from March 1991 for containershandling charges. Revenues related to fishing activities in ports transferred recently to ODEP, lease of coal handling facilitiesat Jorf Lasfar and those related to the lease of facilities for pleasurecraft are not includedin the financialforecasts. The relatedrevenues would be minor part of ODEP's activityand the relatedcost recovery policy has - 123 -
Annex 14 Page 2 of 3
not yet been defined. ODEP will carry out a cost recovery study for these activitiesas part of its DevelopmentProgram.
OperationalExRenses
5. Materials and external services represent respectivelyabout 3X and 61 of gross fixed assets in operation. Maintenance cost of the existing facilitiesis estimatedat 11 of their currentvalue. Transport expenses are projectedto increaseat 31 per year and administrativeexpenses at 21 per year. Wages increase is estimatedat annual inflationrate. It is assumed that the number of employees will decrease by about 910 staff over five years, new recruitmentbeing limited to managementstaff.
Fee to be Paid by ODEP to the Government
6. ODEP will pay the Governmenta fee based on its use of infrastructure which will remain in the public domain. Governmentassets were revalued for fee calculationin 1985. Investmentscarried out by ODEP to rehabilitateand/or extend public property have been deducted from total public property. The net value of these assets at end-1991are assumed to be transferredto ODEP and will be maintainedand depreciatedaccordingly. The part of the infrastructurecosts apportionedto ODEP is assumed to be equivalentto 151 of the Governmentgross fixed assets. The aggregateamount of port fees payable to the Governmentwill be: 5% of the net revaluedGovernment assets apportionedto ODEP, 1.25X of the total governmentgross fixed assets apportionedto ODEP and annual depreciation of the said assets. The level of the fee enables the cost of dredging and maintenancework on breakwatersundertaken by the Governmentto be adequately covered.
Bad Debt
7. A provision for doubtful debts of 51 of total revenues has been used over the 1990-1995period.
DeRreciation
8. ODEP's average depreciationrate is high. It reflects fixed assets historicallycomposed mainly of equipment. This averageis expected to decrease from 12% to 71 with the investmentsentering in operation and the transfer of public property to ODEP.
Interest
9. New investmentsare assumed to be financed by loans at an interest rate of about 7.51 per year with a repaymentperiod of 20 years includinga grace period of five years. Financingwill cover about 451 of the total investment program. - 124 -
&Aex 14 Page 3 of 3
Balance Sheets
10. Inventoriesare assumed to be equal to 501 or six months of materials expenses and supplies from lQ90 to 1992 and will decrease to three months thereafter. Account receivablesare assumed reduced from 4.5 months of billing in 1988 to 2.5 months in 1990 and forty five days by the end of the period. This assumes improvementsin the billing and collection system. Other receivables are forecast to amount to approximately 10X of operational expenses and investmentsfrom 1990 to 1992 and 5 thereafter. Suppliersare assumed at two months of investmentand operatingexpenses in 1990 decreasing to one month in 1993. Other payables are assumed to be one month of operatingexpenses and 51 of the total investmentand operatingexpenses after adjustmentof previousRAPC accountsand unpaid taxes and penaltiesdue to Government.
A&ssetsand Debt Revaluation
11. Revaluationmethods based on local inflationrate and or variation in exchange rates to update the value of fixed assets has been done annually to calculatethe rate of return on net fixed assets in operation. ODEP has agreed to carry out a formal inventoryand an informalrevaluation every year in order to determine tariff adjustments to meet the rate of return and debt service requirements. Foreign debt will be revalued in line with the expected changes in the US Dollar-Dirhamexchange rate.
SensitivityAnalysis
12. A sensitivityanalysis to test the financialobjectives indicates that rates of return and debt service coverage ratios are sensitive to changes in revenues as shown Table 6 of this Annex. Traffic developmentsand their impact on revenues will thereforebe closely monitored during project implementatior. with a view to maintaining an appropriatefinancial rate of return and debt service coverage ratio. - 125 -
AnnexA14 Table 1
KINGDOM OF MOROCCO
STA=F APPRAISALREPORT
PORT SECTOR PROJECT
Income Statements (MillionsDHI
MD 19I 1299 1993 1°4 1995 estim.(...... forecast------) REVENUES HNtdling - NT - 520.14 576.04 628.32 703.72 727.24 753.38 Services to Ships - NT - 26.09 26.62 28.61 29.19 29.77 30.36 Fish Narket - HT - 22.82 23.62 25.76 26.67 27.60 28.57 Ship-Yard - HT - 5.63 6.75 7.12 7.12 7.12 7.12 Wharfage & Port Dues - Kr - 224.54 254.51 282.67 293.27 305.16 317.94 Water& Electricity - NT - 18.42 19.34 20.30 21.32 22.39 23.51 Taxes 151.26 167.77 183.66 200.04 207.07 214.76 TOTALREVENUES 968.90 1074.641176.45 1281.32 1326.34 1375.64 WORKINGEXPENSES Inventory Increases(decreases) -9.66 1.37 4.26 -18.11 0.71 0.46 Materials& Maintenance 59.2S 61.99 70.50 68.57 71.39 73.25 ExtermalWork, Supply, Services 118.50 123.98 141.01 137.14 142.79 146.49 Transport& Traveling 3.34 3.44 3.54 3.65 3.76 3.87 Administrative Expenses 19.38 21.49 23.53 25.63 26.53 27.51 Interests& ComissionsCurrent Acc. 0.67 0.71 0.74 0.78 0.82 0.86 PropertyFees (royalty) 42.40 71.14 76.12 81.35 85.09 89.27 TotalWorking Expeses 233.88 284.11 319.70 299.00 331.07 341.71 AddedValue 735.02 790.53 856.75 982.32 995.26 1033.93 Wages 250.85 254.16 2S6.56 256.02 256.16 257.17 Taxes 1Z6 185.91 203.5 2216 229.45 237.98 OperatingIncome before Deprec. 316.55 350.46 396.67 504.63 509.65 S38.78 Depreciation 136.34 153.65 178.67 204.64 234.52 263.89 Provisions 48.A 53.3 58.8Z 640 66.32 68.78 OperatingIncome 131.?7 143.08 159.18 235.92 208.81 206.11 Interest 22.30 22.34 22.95 29.60 46.58 69.86 InterestInco1 e 7.18 2.74 0.85 1.53 4.59 4.13 Netoperating Income 116.66 123.48 137.08 207.86 166.83 140.37 monOperating Profits 4.19 6.41 6.92 6.68 6.43 6.19 NonOperating Losses 23.48 00.00 00.00 00.00 00.00 43.00 NetIncare before Taxes 97.36 129.89 14.00 214.53 173.26 103.56 IncomeTaxes 3894 51.96 57.60 85.81 69.31 41.42 NMtInceme after Taxes 58.42 77.93 86.40 128.72 103.96 62.14 Dividends 31.17 34.56 51.49 41.58 24.85 RetainedEarnings 52.54 99.30 151.14 228.37 290.75 328.03 RATIOS WorkingRatio (X) 67.33 67.39 66.28 60.62 61.57 60.83 OperatingRatio (X) 86.40 86.69 86.47 81.59 84.26 85.02 Net Income/Revenaes (X) 6.03 7.25 7.34 10.05 7.84 4.52 OperatingIncome/Revenues (X) 13.60 13.31 13.53 18.41 15.74 14.98 AverageDepreciation (X) 7.98 8.07 7.49 7.31 7.09 6.80 - 126
Annex 14 Table 2
KINGDOMOF MOROCCO
STAFF APPRAISAL REPORT
PORT SECTORPROJECT
Balance Sheet (Millions DH)
19° 1991 1992 1993 1994 1995 estim.t.------forecast------) ASSETS Fixed Assets GrossFixed Assets 1707.88 1903.93 2383.85 2799.23 3308.76 3880.05 Less:Accumulated Depreciation 79.8_9 953.5 t11L21 1336.85 1571.37 1835.26 NetFixed Assets in Operation 908.00 950.39 1251.64 1462.38 1737.39 2044.79 Assetsunder Construction 266.46 409.46 633.00 748.41 787.20 475.56 Other Assets 287.36 248.14 204.16 173.53 169.45 163.09 Total Net Fixed Assets 1461.82 1607.99 2088.80 2384.32 2694.04 2683.44 CurrentAssets inventories 29.63 30.99 35.25 17.14 17.85 18.31 Receivables 201.85 223.88 196.07 213.55 165.99 171.95 Other Receivables 163.44 194.80 222.82 121.56 126.56 142.45 Cash 54.76 16.94 30.59 91.88 82.59 62.73 TotalCurrent Assets Less Cash 394.92 449.67 454.15 352.26 310.20 332.71 TotalCurrent Assets 449.68 466.61 .4 414 392.79 395.45 TOTALASSETS 1911.50 2074.61 7 2828.4 3 3078 88 EQUITY& LIASILITIES Capital (transfer/RAPC) 522.21 522.21 522.21 522.21 522.21 522.21 Governmt Contribution 149.58 149.58 391.99 391.99 391.99 391.99 RetainmdEarning 2.L4 . 151.14 28.37 290.75 328.03 TotalEquity 724.33 771.091065.34 1142.58 1204.95 1242.23 RESERVES 257.25 253.38 258.53 263.91 268.67 276.98 Lon TermDebt Previousloans 374.45 342.63 314.97 288.74 266.82 248.19 Newloans 113.03 283.75 449.63 651.48 805.57 869.92 Other Loans Total Long TermDebt 487.48 626.38 764.60 940.22 1072.39 1118.11 CurrentLiabilities Suppiers 81.06 117.11 152.35 109.60 114.56 64.96 Payable Other payable 96.02 112.03 125.19 128.19 134.66 123.68 Other liabilities 59.34 79.49 91.59 124.20 109.29 69.73 Propertyfees 161.04 71.14 76.12 81.35 85.09 89.27 Longterm maturities 44.99 43.99 39.83 38.40 97.22 93.93 overdraft 0.00 0.00 0.00 °-°° - 0° 0.00 TotalCurrent Liabilities 442.45 423.76 485.07 481.74 540.81 441.56 TOTALEQUITY & LIABILITIES 1LS.5 2074.61 2s7.55 8 3 3078.88
RATIOS CurrentRatio 1.02 1.10 1.00 0.92 0.73 0.90 AccountReceivable (on day of billing) 76.04 76.04 60.83 60.83 45.63 45.63 Debt/Debt& Equity (X) 35.17 39.55 37.80 41.03 44.25 44.38 Total Fixed Assets/Totat Debt (M) 212.31 220.29 241.41 249.49 253.90 279.26 Rate of Return CX) 9.55 10.37 10.04 11.64 9.43 8.15 Debt/Equity (t) 54.25 65.44 60.76 69.58 79.37 79.78 - 127 -
Annex 14 Table 3
KINGDOM OF MOROCCO
STAFF APPRAISAL REPORT
PORT SECTOR PROJECT
Sources & Applicationsof Funds - (MillionsDHM
1 0 IM M 1293 199 199 estim.( -*------forecast------) SOURCES Incomebefore Interest 119.66 152123 166.95 244.13 219.84 173.43 Plus Depreciation 136.34 153.65 178.67 204.64 234.52 263.89 Hinus IncomeTaxes -38.94 -51.96 -57.60 -85.81 -69.31 -41.42 MinusDividends 0.00 -31.17-34.56 -51.49 -41.58 -24.85 Internal CashGeneration 217.05 222.75 253.46 311.47 343.47 371.04 LessDebt Service Amortization 41.47 44.99 43.9 39.83 38.40 97.22 Interest 41.43 51.89 59.60 67.70 79.46 87.55 Increase(decrease) in WorkingCapital 2.50 T2.45-61.00 -100.00 -42.30 118.47
Net InternalCash Generation -91.34 53.43 210.87 303.94 267.91 67.79 Equity Variation -34.62 -3.86 247.56 5.37 4.77 8.30 Borrowings 119.11 182.89 178.05 214.03 229.39 139.65
TOTALSWRCES -6.86 232.46 636.49 523.34 502.07 215.74
APPLICATIONS AssetsTakeover 242.41 Investments 180.77 309.49 424.40 492.68 515.43 241.96 OtherAssets Variations -162.39 -39.22 -43.98 -30.63 -4.08 -6.36
TOTALAPPLICATIONS 18.38 270.28 622.83 462.05 511.36 235.60 CashIncrease Decrease -25.24 -37.82 13.65 61.29 -9.29 -19.86 CashBeinning of Year 80.00 54.76 16.94 30.59 91.88 82.59 CashEnd of Year 54.76 16.94 30.59 91.88 82.59 62.73 RATIOS DebtService Coverage 0.00 1.45 2.92 3.49 2.09 1.38 Capital Expenditure2 Net Internal Sources Annual -50.53 17.26 49.69 61.69 51.98 28.02 Three-yearaverage -39.03 17.58 46.68 57.12 66.48 27.23 - 128 -
A lmbx 1.4 Table 4
KINGDOMOF MOROCCO
STAFF APPRAISALREOR
PORT SECTORPROJECT
ContainerTerminal: Income Statements- (Million DH)
INCOMESTATEMENT 1990 1991 199 19 94 1915 1921 1222
REVERUE Maintenance 31.82 99.34 133.99 140.15 146.61 162.92 180.61 199.77 220.52 242.98 Port Dues 1.97 2.83 3.22 3.34 3.47 3.83 4.23 4.66 5.14 5.68 Services 0.72 0.75 0.82 0.85 0.88 0.97 1.07 1.18 1.30 1.44 Infrastructure Fees 2.99 4.15 6.19 10.69 18.43 23.92 27.20 26.60 30.10Q .85 TOTALREVENUES 37.50 107.07 144.21 155.03 169.39 191.64 213.11 232.21 257.07 280.f5 OPERATINGEXPENSES Materials 2.67 3.57 4.79 6.89 11.29 13.17 14.38 13.07 14.94 15.18 Services 2.67 3.57 4.79 6.89 11.29 13.1? 14.38 13.07 14.94 15.18 Personnel 8.01 8.46 8.91 _.30M 9.76 10L. 10L. 11.46 12L.0 12I.
TOTALOPERATING 13.34 15.59 18.50 23.08 32.34 36.64 39.62 37.60 41.97 43.11 EXPENSES Depreciation 2.83 4.54 7.17 12.35 22.58 29.19 32.42 32.42 36.85 37.46 Interest Expense 9.05 12.60 18.77 27.68 . MA .35. 33.32 29.98 40.39 TOTAL 25.22 32.74 44.U 63.11 91.57 104.70 107.91 103.35 108.81 120.96 CorporateTaxes 4.91 29.73 39.91 36.77 31.13 34.78 42.08 51.55 59.30 64.00 Net Income 7.37 44.60 59.86 55.15 46.69 52.17 63.12 77.32 88.96 95.99 Net Income after RevaLuation 4.76 41.96 56.81 51.50 42.06 47.36 56.93 71.94 82.03 8?.46 Net Income before Interest 13.81 54.56 75.58 79.18 78.71 86.24 92.79 105.25 112.01 127.85 Accumilated Depreciation 30.20 40.79 55.25 76.40 110.56 134.94 184.96 199.83 259.00 324.66
Net FixedAssets 95.60 119.57 202.54 390.15 713.68 970.11 1124.53 1143.82 1309.67 1362.15 AverageNet Fixedassets 62.43 107.58 161.06 296.35 551.92 841.90 1047.32 1134.17 1226.74 1335.91 Rateof Return 22.13 50.71 46.93 26.71 14.26 10.24 8.86 9.28 9.13 9.57 OperatingRatio 43.12 18.81 17.80 22.86 32.42 34.35 33.81 30.16 30.66 28.68 - 129
1 4 Table 5
KINGDOMOF MOROCCO
STAFF APPRAISALREPORT
PORT SECTORPROJECT
Coal Handling Facility - (Millgon DR)
1992 a2Em am Um am I"? in 9 m ma
TOTALREVENUES 1.23 2.95 12.82 36.29 42.54 43.81 43.74 43.67 43.61 iooorts Quantity (000 tons) 0.75 0.75 1.50 1.50 1.50 1.50 1.50 Revenueper Ton (0N) 17.09 48.38 29.21 29.21 29.16 29.12 29.07 S Equivalent 2.01 5.69 3.34 3.44 3.43 3.43 3.42 OPERATINGEXPENSES Materials 0.10 0.11 1.09 5.00 5.73 5.89 5.89 5.89 5.89 Services 0.10 0.11 1.70 8.04 9.05 9.20 9.20 9.20 9.20 Personnel 0.41 0.43 0.45 0.47 0.50 0.53 0.56 0.59 0.62 Depreciation 0.41 0.43 2.24 9.33 11.34 11.96 11.96 11.96 11.96 Interest Expense 0.21 1.88 7.34 13.45 15.92 16.23 16.13 16.03 15.93 TOTAL 1.23 2.9f 12.82 36.29 42.54 43.81 43.74 43.67 43.61 - 130 -
Annex -14 Table 6
KINGDOMOF MOROCCO
STAFF APPRAISAL REPORT
PORT SECTORPROJECT
SensitivityAnalysis
1990 1991 i 1993199 22 1995
Base Case
Rate of Return 7.8 8.5 7.0 9.4 7.5 6.4 Debt Service Coverage 0.0 1.5 2.9 3.5 2.1 1.4
75% of Base Case Tariff Base Case Traffic
Rate of Return 7.8 7.7 5.6 6.1 3.9 2.6 Debt Service Coverage 0.0 1.4 2.8 3.2 1.8 1.3
75X of Base Case Tariff Constant Traffic
Rate of Return 7.8 8.3 6.7 7.6 5.6 4.5 Debt Service Coverage 0.0 1.4 2.9 3.3 2.0 1.2
Base Case Tariff ConstantTraffic
Rate of Return 7.8 7.7 5.5 7.2 4.8 3.4 Debt Service Coverage 0.0 1.4 2.8 3.3 1.9 1.2 - 131 -
Anneg 1S Page 1 of 2
KINGDOM OF MOR0CCO
STAFF APPRAISALREPORT
PORT SECTOR PROJECT
List of ProdectFile Documents
A. SelectedReDorts and StudiesRelated to the Sector
A.1. SAR Highway Sector Project,January 8, 1990 A.2. Transport Sector Public InvestmentReview, World Bank, December 1987 A.3. Etude du schema directeurNational des transports,Dar El Handasah, January 1990 A.4. Morocco Trade Expansion Program, Draft Report, World Bank, November 1989 A.S. Administrationet organisationportuaire: une experienceinteressante au Maroc, Jean Chapon,UNCTAD, June 1989
B. SelectedPeports and Studies Related to the Project
B.l. Etudes de factibilite li6es a la pr4paration d'un eventuel projet portuaire,CATRAM, January 1990 B.2. Contrat Programme Etat-ODEP 1991-1993 (second draft), ODEP, November 1990 B.3. Expertise des impacts sur l'environnementmarin, Mission Reports, ChristianBrossard, November 1989 and February 1990 B.4. ODEP's investmentPlan 1990-1994,January, 1990 B.5. Ameliorationde la qualitede service,Plan d'Actions1990-1994, ODEP, December 1989 B.6. Bidding documentsfor the constructionof the new containerterminal in the port of Casablanca,CID-BCEOM, August 1990 B.7. Technical Studies related to the CasablancaContainer Terminal (a) Etude d'agitationsur modele math6matique,LPEE, March 1990 (b) Etude de stabilit6 en canal a houle du cavalier, LPEE, February 1990 (c) Recherchede materiaux,LPEE, January 1990 (d) Etude G6otechnique,LPEE, August 1990 (e) Analyse de vase au nouveau terminal a conteneurs, LPEE, August 1990 B.8. TOR Etude des actions de modernisation,(dredging study), Soci6t6 de dragage des ports, DRAPOR, July 1990 B.9. TOR for updating the National master plan, Direction des Ports, Septe.mber1990 B.10.TOR Rehabilitation des dragages d'entretien des ports, 6tude d'environnement(environmental assessment of maintenancedredging), ChristianBrossard, February 1990 - 132 -
Annex 15 Page 2 of 2
B.ll.DraftTOR Logistic Studies and Facilitation,July 1990 B.12.Etudede tarification,Rapport de synthese,ODEP, October 1988 B.13.Etuded'organisation de l'ODEP,Rapport de synth&se,Arthur D. Little- IMEG-AuditMaroc, October 1988 B.14.Rapportsur la gestion financiere,le contr6le budgetaireet l'audit interne,Transtec, April 1989 B.15.Etude de conception d'un systeme de surveillanceet d'aide a la navigationmaritime dans le detroit de Gibraltara partir de la rive Marocaine (radar control tower and vessel traffic services),OPEFORM and als, July 1990 B.16.Missionde l'expert en op6rationportuaires pour le Projet Portuaire Casablancaet Mohammedia,Jean Platteau,August 1988 B.17.Etude du Plan National Directeur Portuaire et de l'organisationdu secteur portuaire, Sogreah-BCEOM, September 1983 and May 1985 (supplement)
C. SelectedWorking Papers
C.1. Economic evaluationof the proposed containerterminal in the port of Casablanca C.2. Statistiquesportuaires 1988-1989,ODEP C.3. ODEP's AppraisalReport, January 1990 C.4. Evaluationof ODEP's Fixed Assets, ODEP C.5. ODEP's FinancialForecast C.6. Financial Data - ODEP's consolidated financial statements for 1985-19R9 C.7. Evolutionet comparaisondes tarifs avec les ports 6trangers,ODEP C.8. Trade Facilitationand Logistics:various working papers by Bank staff and consultantsJohn Raven, JosQ Dubois and Bernard Stoven C.9. Bilan des actions de formationpour l'ann6e 1989, ODEP C.l0.Tableaude bord des ressourceshumaines, ODEP, September1989 C.11.Draft TOk Etudes prospective pour le developpement des ressources humaines (human resourcesdevelopment study), ODEP, September1989 C.12.Rendement de la manutention dans les ports marocains, ODEP, October 1989 C.13.Indicateursd'exploitation, ODEP, Kay 1989 C.14.Inventoryof Equipment,ODEP, January 1990 - 133 -
TableI
KINGDOM OF MOROCCO
STAFF APPRAISALUPORT
PORT SECTOR PROJECT
Port Facilities
---- Number of Berths------Total General Bulk Length Water Dgpth (m) Carg- Liwdn solid Total (m? HLni Max.
Casablanca 36 12 48 5.800 6 12
Nohammedia 3 2 5 600 6 22
Kenitra 11 2 13 1,230 3.5 4
Jorf Lasfar 3 9 12 1,330 5.3 15.6
Safi 5 4 9 1,460 8.5 12
Agadir 12 1 13 3,380 9
Tan Tan 4 -- 4 600 4 6
LaAyoune 1 4 5 800 7 25
Dakhla 7 -- 7 480 4.2 6.7
Tangier 14 2 16 1,750 5 12
Nador 6 9 la 2J500 5 13
Total 102 45 147 19,930
Source:MW - Ports Directorate - 134 -
Table 2
KINGDOM OF MOROCCO
STAFF APPRAISALREPORT
pORT SECTOR PROJECT
Distributionof Ttaffic by Port: 1988 V (Thousand Tons)
Port Liuid Bulk Minerals Cereals Dy BuAlkGeneral Cargo Total
Casablanca 1,558 10,305 998 361 3,502 16,724 :.ohammedia 4,865 - - 17 10 4,892 Safi 1,656 3,147 193 638 196 5,830 Jorf Lasfar 1,834 3,747 127 1,184 41 6,933 Tangiers 90 - 176 - 499 765 Nador 56 426 204 - 491 1,177 Agadir 312 225 221 26 510 1,294 Kenitra 82 47 - 7 276 412 Saharan Ports 184 144 -i 34 380
Total L4919 =559
V Includes coastal traffic
Source: ODEP - 135 - Iabl 3
KINGDOM OF MOROCCO
STAFF APPRAISAL REPORT
PORT SECTOR PROJECT
Division of Responsibilitybetween DP and ODEP
PORTS -- --> C M S A T N J TT K PORT INFRASTRUCTURE Construction 3 3 3 3 3 3 3 3 3 Breakwater Maintenance 3 3 3 3 3 3 3 3 3 Maintenance of other * * * * I * 0 * * structures Channel Maintenance* 3 3 3 3 3 3 3 3 3 WAREHOUSES AND BUILDINGS Construction * 3 I I I I I I Maintenance EOUIPMENT Investment E I U U I I U I U Major Repairs 3 * 3 | 3 * 3 3 * Routine Maintenance * * * * * 3 3 * 3 SERVICES TO SHIPS Signalling (new works) 3 3 * 3 3 3 3 3 3 Signalling (operation) * I I I I I I I U Harbor Master 3 * 3 3 3 3 3 3 3 Pilotage .11. Towage 4L11 3 3 3 1 t I Water Supply 3 * 0 3 * * * * * Dry Docks 3 O - - -
Slipways 3 3 3 * 3 3 - 3 Line Handling I 4L * * * * * E SERVICES TO CARGO Stevedoring Lr I 4 1 I I JL Cargo Handling Ashore 3 * * * * 3 3 3 41* Warehousing * * f 3 3 * * * * MISCELLANEOUS Water Supply and * * * 3 * * * * 3 ElectricityNetworks Fish Market I I I I + + + 4 $
Ferries Facilities - - * * Public Domain Management 3 I I 3 3 I U U U
3 Ports Directorate (DP) * Dredging performed by DRAPOR g ODEP subsidiary of ODEP Jr Private ** Equipment rented from ODEP + National Fisheries Board *** Warehouses rented from ODEP C-Casablanca M-Kohammedia S-Safi A-Agadir T-Tangier N-Nador J-Jorf-Lasfar K-Kenitra TT-Tan-Tan, Dakhla, Laayoune - 136 -
Table 4 Page 1 of 2
KINGDOM OF MOROCCO
STAFF APPRAISALREPORT
PQO SECTOR PROJECT
ProductivityData
1. Productivityger gang on selected items (tons per shift of 8 h)
Pot Cargo item 1984 Variation (in X)
Casablanca Citrus fruits (pallets) 99 152 53.5X Packaged woods 125 154 23.21 Steel products 185 572 209.21 Sugar in bulk 234 306 30.81 Grain in bulk 203 222 9.41 Bales 33 56 69.71 Paper products 119 215 80.71 Fertilizersin bags 55 61 10.9X Safi Sulfur 1,808 1,976 9.31 TSP in bags 219 295 34.7X Potasch 298 311 4.41 Manganese 491 464 -5.51
Iander Grain in bulk 182 211 15.91 Timber 86 111 29.11 Steel products 228 327 43.41 Paper products 137 206 50.4Z
Agadir Grain in bulk 489 386 -21.11 Citrus fruits 118 150 27.11 Logs 110 155 40.91 Packagedwood 74 109 47.31
Nador Grain 271 299 10.31 Lead 191 280 46.61 Coal 231 301 30.31 Steel products 347 397 14.41 Baryte 1,044 1,453 39.21
Source: ODEP - 137 -
aLble 4 Page 2 of 2
2. Ship Movementsby Port: 1988
Gross Registered Port Numberof Shins Tonnage(GRT)
Nador 292 1,239,590 Tangier 4,885 14,086,175 Kenitra 608 949,370 Nohammedia 654 7,204,451 Casablanca 6,220 40,129,215 Jorf Lasfar 850 10,583,984 Safi 1,069 9,296,324 Agadir 1,470 5,684,033 Saharian Ports 504 2.545.964
Total 16,552 91,719,106
3. Berth Utilizationard Occumancy:1988
Average Ship Averag2 Ship Port Waiting Time Service Time Berth Occupancy (hours) (hours) (X)
Nador 11 67 23 Tangier -- -- 36 Kenitra 14 87 35 Mohammedia 40 -- 24 Casablanca 12 -- 40-58 Jorf Lasfar 13 39 28 Safi 20 53 25-44
4. ContainerTraffic: 1988
Output per gang: 651 tons per shift, 72 TEUs per shift Output per ship: 130 TEUs per shift Berth occupancy:38X (1987) Dwell time: 22 days (import),4 days (export)
5. Average General Cargo Dwell Time: 1988
Nador 18.9 days Tangier 42.5 days Casablanca 15.3 days Jorf Lasfar 16.3 days Safi 11.1 days Agadir 18.3 days - 138 -
Table 5
KINGDOM OF MOROCCO
STAFF APP-RAISALREPORT
PORT SECTOR PROJECT
Key Elements for the Contract Plan
- Governmentport policy (strategy,objectives)
- Respective functionsand responsibilitiesof public agencies on the public domain
- Role of the private sector and conditionsof entry in port sector activities
- Investmentprogram
- Port planning with criteria relating to economic and financial 'iability of investments
- Principles of tariff setting and procedures for adjustment
- Indicators and targets for financial and personnelmanagement
- Technical indicators and targets for operationsand equipmentmanagement
- Transfer of fixed assets to ODEP
- Fee to be paid by ODEP on Government-owned infrastructure
- Financialcontrol and audit procedures
- Arrears ODEP-RAPC - 139 -
Table 6 Page 1 of 2
KINGDOM OF MOROCCO
STAFF APPRAISALREPORT
PORT SECTOR PROJECT
TechnicalAssistance and ConsultingServices
ODEP
(a) Studies Man-months
Civil works supervision 100 Subprojectspreparation 80 Dredging study 20 Data processing/software 30 Telecommunicationsmaster plan 20 Financialstudies 20 Miscellaneous 30
Total 300 Man-months
(b) Training
Courses and technicalvisits (abroad) Man-months
Technicalvisits 120 - Containers 10 - Ro-Ro 6 - Conventionalgeneral cargo 12 - Bulk terminals 6 - Equipment 24 - Other 62
Manpower resourcesmanagement 12 Port planning 3 Project management 9 Environment 6 Marketing 10 Finances 10 Port operations 20
Total 190 Man-months - 140 -
Table 6 Page 2 of 2
Seminars (Morocco) Nb of staff
Port planning 25 Project management 25 Environmentalprotection 25 Marketing 25
Total 100 staff
Ports Directorate (DP)
(a) Studies
National Port Master Plan: 30 man-months
Environmentalstudies, subprojectpreparatica: 20 man-months
(b) Training
8 man-months of courses and technicalvisits abroad
(a) Studies
Technical studies, detailed design, environment: 60 man-months
(b) Training
8 man-months of courses and technicalvisits abroad - 141 -
Table 7
KINGDOM OF MOROCCO
STAFF APPRAISALREPORT
PORT SECTOR PROJECT
Initial Allocationof the Two Bank Loans
Loan to the Kingdomtof Morocco
Categorv Amount (US$ million)
BreakwaterRehabilitation 9.9 Dredging 6.3 Marine Security 6.6 MiscellaneousEquipment 0.6 Consultingservices 2.2 Overseas training 0.2 Unallocated 7.2
Total 33.0
Loan to ODEP
Cateaory Amount (US$ million)
Civil works for Casablanca containerterminal 36.1 Tangier civil works 3.9 Jorf Lasfar civil works 8.5 ContainerHandling Equipment 12.7 Coal Handling Equipment. 9.5 Other Equipment 1.1 Consultingservices 3.9 Overseas training 2.0 Unallocated 21.3
Total 99.0 KINGDOMOF MOROCCO PORT SECTOR PROJECT Central Ports Directorate (DP) Organization Chart
DIRECTOR OF PORTS
PERSONNEL ACCOUNTINGAND PROCUREMENT REGIONALSERVICES
OPERATIONS TECHNICAL PLANDNDING ADLIGHTHOUSES DEPARTMENT DEPARTMENT AND STUDIES AND BEACON DEPARTMENT DEPARTMENT
COORDINATION______|COORDINATON| | CIVIWORKS| |ANDfSTATISTICSLIHOUE E.D.P. ||AND BEACON|
PROPT ISUPERVISION ECOOIC DREDGING
[PIC ONMIC TARIFFS ~ ~EQUIPMENT PLANNING KINGDOM OF MOROCCO PORT SECTOR PROJECT Port Directorate of Casablanca and Mohammedia (DPCM) Organization Chart
GENERAL DIRECTOR
DEPARTMENTOF DEPARTMENTOF DEPARTMENTOF CASABLANCA MOHAMMEDIA CENTRAL EQUIPMENT PORT PORT SERVICES OPERATIONS OPERATIONS
STUDIES HARBOR HARBOR DIVISION MASTER MASTER j
CIVIL PLANNING WORKS AND STUDIES OPERATIONS DIVISION DIVISION DIVISION
J MECHANICAL OPERATIONS & ELECTRICAL DIVISION jDIVISION DVSO KINGDOM OF MOROCCO PORT SECTOR PROJECT Office for Port Operations (ODEP) 1. Organization at Headquarters IMINISTRYOFI BPUBCWORKSI
TECHNICAL BOARD MANAGEMENT COMMITTEES COMMITTEE
HUMA ORANIZAIONFOM SOCIAL SECONDARY
DEVELOPMENT FINANCIAL EHUMANS & INFORMI ENGINEERING LEGAL AFFAIRS PORTS DEPARTMENT RESOURCES SYSTEMS DEPARTMENT DEPARTMENT DEPARTMENT DEPARTMENT DEPARTMENT DEPARTMENT DEPARTMENT
PORT OPERATIONS UNITS
NADOR TANGER IENITRA MOHAMMEDIA CASABLANCA JORPLASFAR SAFI AGADIR KINGDOMOF MOROCCO PORT SECTOR PROJECT Office for Port Operations (ODEP) II. Organization of Casablanca Port Operation Unit (DEPC)
rENEO.D.E.P. | GENERALMANAGER]
D.E.P.C. PORT DIRECTOR
LEGAL DIVISION UI MARKETING& DVI FORECASTS DEPARTMENT FINANCIAL& i ACCOUNTING HUMAN DIVISION RESOURCES I_ E.D.P. & DIVISION MANAGEMENT INFORMATION DIVISION
HANDLING[ § gEQUIPMENT ENGINEERING FISH MARKET SHIP REPAIR DEPARTMENT DEPARTMENT DEPARTMENT DIVISION YARD 12 8 4
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, IminTano,uta ,¢ 1 s 5{;Kelaa ,¢' s 43 PORTSU8PROJECT LOCATIONS
Mgosuna| gvv >< MAJOR ROADS SOUX^pn?Tamakht - SERCONDARY ROADS ,TVe=Afr, an (S en.,.sl.s1,; re.% Taia *^rh D , r Talma | S O L t J H . °zagora;;/x/ ~ ~~~~~~~~~~~~LOCALROADS lntd he nt aion./ IbFln / I-I-II RALROADS t2#4zhetatbn, ,m, Jff ", PROVINCECAPITALS tntrna =n tt" cetzJ¢twon / 4;Tknit <3\Tata _ _T~j,iiate @ NATIONALCAPIIAL wch beweaurtff ECONOMIC REGION BOUNDARIES -t ) . INTERNATIONALBOUNDARIES 400, - INTERNATIONAL BOUNDARY ,,. Guetmim / ,° 50 tOo IsO (approximate) 1oS / / ~~~~~~~~~~~~~~~~~~~~KILOMETERtS-NOTIE Son ot existingfall -28s outsi tbe map imagearea. ,, 'Tan-Tan _2 _i o :%'t -4-2- t2-8 4 TSgr 4 \ h .bA ;:1. U7 a I T MUiq i EIi Al,Hoxeima M O R O C C O 0 Larache Chaouen0 IeblIa 0~ K%arel YebirS PROJECT 0uAnt PORTSECTOR Souk el Arba 0 u MOROCCO PORT SYSTEM Mechra-ts raounate Sidi Kenitra * -0 m ema RABATa, MohabSae > -%J '1 MohammKedla * 6 k ( ; IRJ3 Afl~~~~~~~'motuzerKanadar OIAI JorfLasbri@adida~~~~~~~~~~~~EBen 2 )NE 74[i I \ e bga ~Buterane- A TI A N TI S 1 -Khenlfra Mide b -32- - flour ; CEN/TRALj y 0 c EA Iv dEKe sUHiTat3 0 / J- TENS/F-T; ,D Ws)Demnate ., r Goulmima Erraidla _ E Ingi$ s T W IminTarkoutO / s -Kelaa / J s ; RPORTSUBPROIFCT LOCATIONS k~~~~~~~~~~~~~~~~~~~~ndesMp I -tFRS - / _ t 5 43.§ AIR PO R TS =MAJORE ROADS -8t4 SECONDARYROADS 71,. Wor;ld5,tnk^. .JMIexclw(.'. 9- - _>Tam/A= LOCaimaLOCAL ROADS readers*nd Is ak,a-* tY (r uhe S O U T H °Zagora AJIROAD5 a,c ih.n rnrr Uonaj p,tnaoc. /--- I *) *@ C.,~eorron. Th. ronernknttono PROVINCECAPiTALS uwada,dlh.hos'ndarjea I _ / 0 Dan a~~~~~~~~~~~~~~pdi ~~~~~~~~~~~~-NATIONAL@ CAPITAL 0 _TOWNS # SpfOAND CITIES :7yajs'df;0OOlh CR /alsnzais '3Tat / -'O REGIONBOUNDARIES futhwdogrsn. /d _ ECONOMIC / - ~~~~~~~~~~~~~~~~~~~~~~~~~~~INTERNATIONAL8OUNDARIES - - / _INTERNATIONALBOUNDARY .00 Guelmim ° 50 ttt0 tS0(approximate) Soe mporItsse *Irea. 28' KILOMETERS NoaTE!: 2- - T;- iTan I 4 I ~~~~~~~~~~~~~~~~~~~~~~~a,~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~~~~2 MOROCCO PORTSECTOR PROJECT CASABLANCAPORT LAYOUT ProjectExtension I -- ProposeRoad Access 'u-,- FutureBridge at GabtNo. 4 Built-upAreas - Customs Fence 4-4- Railroads F-,L7 Port Buildirngs O' 0 ~~~~~~~~0.5 0 KILOMETERS 0stt1 Roytl Navy Harbor 0~~~~~~~~~~~~~~~~~~~~~~ ~'> No I . St, t-o~~~~~~~~~~~~Itt N MOROCCO PORTSECTOR PROJECT AIlantic Ocean JORFLASFAR PORT LAYOUT NORTH ENTRANCE Proposed Coal Berth O O Port Buildings sszt%9 Roads s00 O.C.P, WATER INTAKCE 0 ty REPAIR / O4Etf~~~~~~~~~~~~*:5, ~~~~~~~~~AREA WAREHOUSES COIO STORAGE / ~~~ at~ / P. / O os0 40 X~~~~~~~~~~~~~~~t v hw bru WOM-6de KItOMOTRSv/ t , % s , u s en dd ~~~~~~~~~~~ mtf em o n a F dc o~~~~~~~~~~~~~~~oVUaw do not wnprV on " SOUJTH k**OrW2Wc omsat ENTRANCE 0# ajudwnenon h* kWe -tsA /;~~~~~~~~~~~xeese ~ of ac:ephnce of E _ich _o axnt co~ MOROCCO . . ,. PORTSECTOR PROJECT TANGIERPORT LAYOUT ProjectExtension BREAKWATER (RO-ROFacilities) PETROLEUMBERTH Roads Railroads / [a PortBuildings ------PortBoundary -----/5 5 ~~~TERtMINI / ~ .A2j 'Ott' STAr/LOMETERS KI Thisomop hs nbep-epo,ed bz Th Worl BoA's doff eodoooely6or the x co.neciereadmr eadis eoJuorel for theinternol ow of TheWordd Bonkad i. Inrnaiofl Ihrodo Co,porabo.- Thodemo. mionred and theboundoris rhown -n this .op do nctmply. on the pa1of TheWortd Bak any terr or any shor&torrponreof ch ionds 5i t