Date of Submission to Coordination Unit:
April 17, 2013
A. GENERAL INFORMATION
1. Activity Name
Regional Integration through Trade and Transport Corridors (TRANSTRAC) -Morocco activities
2. Requestor Information
Name: Mr Nizar BARAKA
Title: Minister of Economy and Finance
Organization and Address: Ministry of Economy and Finance
Mohammed V Avenue, Chellah, Rabat
Telephone: + (212) 5 37 76 06 61
Email: [email protected]
3. Recipient Entity
Name: Mr. Khalid Cherkaoui
Title: Director of Transport Strategy, Programs and
Coordination
Organization and Address: Ministry of Equipment and Transport
Telephone: +(212) (0) 660154663
Email: [email protected]
4. ISA SC Representative
Name: Julien SERRE
Title: FEMIP Trust Fund Manager
Organization and Address: European Investment Bank
100 Boulevard Konrad Adenauer Luxembourg L 2950
Telephone: +(52) 621 339 175
Email: [email protected]
5. Type of Execution (check the applicable box)
√
Type
Country-Execution
√
Joint Country/ISA-Execution
Endorsements
Attach written endorsement
from designated ISA
Attach written endorsement
from designated ISA
Justification
Due to its regional dimension and approach,
which includes three other countries in addition
to Morocco, the need for an ISA to execute in
coordination with the national authorities is
essential.
EIB will carry out procurement and financial
management. It will also coordinate between
the four targeted countries. EIB will leverage its
capacity and experience in financing transport
projects and supporting their preparation. EIB
will also use if relevant its participation in the
Arab Financing Facility for Infrastructure.
The country will be responsible for
local
coordination and monitoring and evaluation as
well as relevant capacity building activities.
To ensure country ownership, the ISA execution
will be closely coordinated with the country
activities.
ISA-Execution for Country
ISA-Execution for
Parliaments
Attach written endorsement
from designated ISA
Attach written endorsements
from designated Ministry and
ISA
The EIB’s proposed TRANSTRAC initiative aims at enhancing economic development and employment creation in the
Transition Countries by building up the transport sector capacity to identify, prioritise, prepare and implement
projects that are consistent with both national and regional objectives, and that can meet the due diligence
requirements of potential international funders and as a result help connect the region and integrate it into the global
economy, support trade, boost development and address key transport challenges. Under this initiative, it is proposed
to particularly support preparation of trade and transport corridors for Egypt, Jordan, Morocco and Tunisia (the
proposed project to be supported by MENA TF). These countries are also the members of the Agadir Agreement. The
Agreement unites the four countries of North Africa and the Middle East that are the most integrated with global
production chains. However, none of the Agadir members traded more than 3 percent of its imports and exports with
its partners to this Agreement. It is hoped that, once the trade, customs and logistics policies and reforms are
implemented in the four countries, imports and exports between them will increase. TRANSTRAC would then
contribute to increasing both intra-trade and trade beyond the borders of the Agadir partners.
EIB will also ensure that TRANSTRAC is coordinated with the LOGISMED TA proposal, promoting logistic networks
and platforms in the Mediterranean countries. In this regard, the coordination efforts will be harmonized between
LOGISMED TA and TRANSTRAC to ensure that future platforms can benefit from relevant activities in TRANSTRAC,
with the active support of the ministry of transport.
Recent studies by the IMF, World Bank, IsDB and AfDB have shown that increasing trade competitiveness in the
Middle East and North Africa region is a priority as: (i) trade facilitation and logistics bottlenecks are preventing
potential growth opportunities from being realized, and impeding the integration of MENA countries into the outside
world; (ii) increased trade will accelerate sustainable economic growth, opening up considerable opportunities of
employment.
The proposals for each of the target transition countries (Egypt, Jordan, Morocco and Tunisia) promote:
1.
2.
3.
trade facilitation
improving the transport infrastructure
improving transport and logistics services
The expected outcome would bring trade facilitation and infrastructure in the main trade corridors up to best practice
international standards. The activities of the proposals would mainly encompass:
• institutional strengthening
• public and private sector training
• preparatory studies for border crossing facilities
• preparatory studies for road, rail, port improvements
The removal of the supply chain constraints (customs, logistics hurdles, tariffs and non-tariff barriers, inadequate
infrastructure, inadequate border crossings) through the future implementation of the recommended actions would
open up additional opportunities for trade create substantial numbers of full-time jobs as well as temporary jobs in
the construction industry and related activities. The opening and facilitation of priority corridors will also support
development of less privileged regions of the four target countries.
On the basis of the recommendations of the different studies, and as confirmed with the governments, the proposed
TA project (the proposal for MENA Transition Fund support) would include three components:
A. institutional and capacity building for regional trade framework improvement;
B. preparatory studies for infrastructure improvements/investments of the priority corridors (including border
crossings);
C. project preparation, management, coordination, monitoring and evaluation.
The main focus of the proposal is on component B which prepares future investments for which the governments
would be able to quickly mobilize resources for their funding from IFIs (including the EIB). Although small in amount,
due to the limited resources under the MENA TF, component A focuses on the essential capacity building and training
for regional trade framework improvement and for defining a road safety action plan.
The detailed activities to be supported under the proposed project are tailored to each country. They are in line with
the recommendations of the different relevant studies financed or carried out by different international institutions
(EU, EIB, WB, IMF, JICA, AfDB, IsDB, etc.). These studies are further referred to in the project description section of this
proposal.
6. Geographic Focus
Individual country (name of country): Morocco
√
Regional or multiple countries (list countries): Under the Transport Sector Support for Transition Countries
(TRANSTRAC) initiative, the requested support from MENA TF (DPTF) is for preparation of Priority Trade and
Transport Corridors-focusing at a first stage on Egypt, Jordan, Morocco and Tunisia.
The present request concerns Morocco activities.
7. Amount Requested (USD)
Amount Requested for direct Project Activities: (Morocco activities)
(of which Amount Requested for direct ISA-Executed Project Activities):
Amount Requested for ISA Indirect Costs: 1
Total Amount Requested:
USD3,350,000
(USD2,850,000)
USD200,000
USD3,550,000
8. Expected Project Start, Closing and Final Disbursement Dates
Start Date:
September 1, 2013
(from grant
approval to the
start: preparation
of TORs, RFPs and
procurement)
Closing
Date:
September 10, 2016
End Disbursement
Date:
December 1, 2016
9. Pillar(s) to which Activity Responds
Pillar
Investing in Sustainable Growth.
This could include such topics as
innovation and technology policy,
enhancing the business environment
(including for small and medium-sized
enterprises as well as for local and foreign
investment
promotion), competition
policy, private sector development
strategies, access to finance, addressing
urban congestion and energy intensity.
1
Primary
(One only)
Secondary
(All that apply)
√
Pillar
Enhancing Economic Governance.
This could include areas such as
transparency,
anti-corruption
and
accountability policies, asset recovery,
public
financial
management
and
oversight, public sector audit and
evaluation, integrity, procurement reform,
regulatory quality and administrative
simplification, investor and consumer
protection, access to economic data and
information,
management
of
environmental and social impacts,
capacity building for local government and
decentralization, support for the Open
Government Partnership, creation of new
and innovative government agencies
related to new transitional reforms,
reform of public service delivery in the
social and infrastructure sectors, and
sound banking systems.
Primary
(One only)
Secondary
(All that apply)
√
ISA indirect costs are for grant preparation, administration, management (implementation support/supervision) including
staff time, travel, consultant costs, etc.
Inclusive Development and Job
Creation. This could include support of
policies for integrating lagging regions,
skills and labor market policies, increasing
youth employability, enhancing female
labor force participation, integrating
people with disabilities, vocational
training, pension reform, improving job
conditions and regulations, financial
inclusion, promoting equitable fiscal
policies and social safety net reform.
√
Competitiveness and Integration.
This could include such topics as logistics,
behind-the-border
regulatory
convergence,
trade
strategy
and
negotiations, planning and facilitation of
cross-border
infrastructure,
and
promoting and facilitating infrastructure
projects, particularly in the areas of urban
infrastructure, transport, trade facilitation
and private sector development.
√
B. STRATEGIC CONTEXT
10. Country and Sector Issues
Regional Context
Political uncertainty in the Arab Countries in Transition (ACT) has continued in recent months, especially as the
escalation of the conflict in Syria is creating negative regional spillovers. Several transition governments have faced
intense macroeconomic challenges over the last two years. With the exception of Libya, the ACTs’ growth in 2012 has
remained weak in light of continued policy uncertainty, regional tensions, the deteriorating global economy, and high
food and fuel commodity prices. A moderate recovery is expected in 2013. The shrinking of fiscal and reserve buffers
over the past year has left very little policy space and heightened vulnerabilities. Prompt policy action and timely and
adequate international support are essential to maintain macroeconomic stability and address long-running
structural deficiencies, to lay the foundation for inclusive growth and job creation for a young and growing
population.
The external environment has continued to deteriorate: international food and fuel prices have continued to rise and
economic activity in trading partners, both in Europe and key emerging markets, has weakened. As a consequence,
exports, which had remained relatively robust in 2011, have declined significantly, while import bills are continuing
to grow with escalating food and fuel prices.
One of the most telling economic statistics about the region is that non-oil exports of the region, the whole region, are
$365 billion, about the same as the exports of Belgium, a country of 11 (not 300 as in MENA) million people. This
region suffers from a lack of integration into the world economy. Several studies and reports highlight the need for
stronger emphasis on trade in the region. – including the Deauville Partnership Trade and FDI report in 2012. This is
of particular importance in the context of renewed calls for Deep and Comprehensive Free Trade Agreement between
Morocco, Jordan, Tunisia, Egypt and the EU.
Economic integration can contribute to delivering growth on a scale and timetable that would create enough jobs for
the rapidly growing populations in the ACT is economic integration. Statistics show that GDP per capita and exports
in the MENA region are significantly lower than the average for emerging market and developing economies. With
regard to market access, trade restrictiveness is one important problem holding back the region. It remains high
despite significant tariff reforms. Most MENA oil importers have streamlined and lowered tariffs over the past two
decades, often via trade agreements with the European Union and the United States.
Europe is a key export destination for the MENA region (exports to the European Union, as percent of total exports,
were 26% for Mashreq and 57% for Maghreb countries in 2011). Trade, particularly in the North African countries,
remains oriented mainly toward Europe, and the region has thus benefited relatively little from the high growth of
many emerging markets. Deeper trade integration with international markets could give the MENA region a
substantial economic boost. Empirical evidence suggests that increasing the region’s openness to equal that of
emerging Asia could raise annual per capita GDP growth by almost a full percentage point. MENA oil importers also
trade little with their immediate neighbors. According to IMF and other studies, given their close proximity (distance
is one of the most important determinants of trade) these countries could be exporting about 50 percent more than
they currently are. Trade within the MENA regional groups remains very low.
Country Context
Over the past decade, Morocco’s overall sound macroeconomic policies helped deliver solid growth, low inflation, and
poverty reduction, despite continued high youth unemployment. This extended period of sound economic
performance has been recently challenged by a worsening of the external environment and a below-average harvest,
even though the nonagricultural GDP growth remained robust and inflation low. Against this backdrop, the
authorities’ economic strategy is built appropriately on fiscal consolidation, structural reforms and prudent monetary
and financial policies.
The IMF’s Precautionary and Liquidity Line (PLL), which the authorities continued to treat as precautionary, has
provided Morocco with an insurance against external risks and supported the authorities’ economic strategy. The
authorities’ fiscal strategy, including the 2013 budget, is in line with their commitment to maintain fiscal
sustainability and support external adjustment. As part of this strategy, it was important to move ahead with the
reforms of the general subsidy system and the pension system and to better target social protection. Fiscal space
preservation is important to support higher and more inclusive growth.
Efforts to strengthen competitiveness and better equip the economy to respond to external shocks are a priority. The
planned fiscal consolidation and structural reforms, such as those to improve the business climate and professional
training, will help underpin external sustainability.
Over the past decade, substantial progress has been made in improving social indicators. However, sustained further
efforts are still needed to increase growth and make it more inclusive, notably by boosting employment, in particular
of the youth and reducing income inequalities.
IFIs’ commitment to upgrading transport infrastructure in Morocco is strong and sustained. As far as EIB is
concerned, since 2002 it has provided over €1,7 billion in financing for transport supporting 15,500 km of
roads, the Casablanca-Rabat highway, Rabat outer road, Berrechid/Béni Mellal and most recently a €240
million loan towards financing the new motorway between El Jadida and Safi. It also supported Tanger
Med Port (€200 millions).
Logistics and Trade Context and Key Issues
The Maghreb countries rank fairly average in the Logistics Performance Index (LPI)’s international scale, in
comparison not only with developed countries but also intermediate and, notably, emerging countries in other
regions. Such challenges will be partly addressed by the LOGISMED TA project. This international comparison
nevertheless shows positive evolutions. Firstly, Morocco is globally one of the countries which improved most its
performance between 207 and 2012 (scoring 3.08 in 2012 against 2.38 in 2007, and moving from rank 94 over 150
countries in 2007 to rank 50 over 155 countries in 2012), which in spite of the imprecision of this type of comparator,
seems to reflect real evolutions.
Morocco and the EU have progressively implemented the terms of the Morocco-EU Association Agreement which
entered into force in March 2000. Customs duties on capital freight exported to Morocco have been abolished since
2000, while duties on raw materials, spare parts and products without equivalent on local markets have been totally
abolished in 2003. Customs duties on freight imported into Morocco and having a local equivalent have been
progressively abolished since 2003 (less than 10 percent per annum).
With regard to the liberalization of transport services, the agreement stipulates simply that the agreement council will,
as soon as the agreement enters into force, examine the international maritime transport sector with a view to
recommending the most appropriate liberalization measures. There is no explicit exclusion of categories of services.
The agreement defines also the goals of cooperation in the area of transport: a) the restructuring and modernization
of road, rail, port and air infrastructure of common interest in relation to the major trans-European communication
routes; b) the establishment and application of operating standards comparable to those in use in the European
Community; c) the renovation of technical equipment in accordance with EC standards, more particularly with regard
to multimodal transport, containerization and transshipment; d) the progressive improvement of multimodal transit
and transit by sea, of the management of ports and airports, of traffic by sea, air and rail.
Morocco, like Tunisia, has also developed an inter-sectoral trade facilitation approach from the perspective of the
performance of logistics chains (trade logistics). This approach, which is based on the World Bank's facilitation
assessment toolkit, leads to an examination from all angles of the issues and opportunities by looking at
infrastructure, logistics services, and facilitation procedures. The diagnostic helped raise awareness among the
different private and public actors, and constitutes a basis for more reforms and improvement.
In terms of customs computerization, Morocco recently (2010) moved from the historical SADOC system to BADR
which allows for the advanced computerization of all customs operations, while Tunisia changed from SINDA to a
“Tunisian” version of ASYCUDA World.
Morocco, like Tunisia, is party to TIR (international road transport convention), especially for its imports and exports
by trailer. TIR supports therefore a major part of the expansion of the Maghreb manufacturing sector.
Transport Sector Context and Key Issues
Background
Transportation activities in Morocco provide about 10% of jobs for the urban working population, account for 15% of
the state’s budgetary expenditures and absorb some 16% of the national energy consumption. The transport sector is
considered by the Government as a critical area to promote economic growth and development throughout the
country. Indeed, providing year-round access to isolated rural populations through rural roads is necessary to ensure
an even development of the country, while modernizing Morocco’s major infrastructure (ports, airports, highways,
railways) should lead to better integration of the country in the global economy and foster growth through increased
trade (notably with the European Union). Development of urban transport is also a key to the main cities’
competitiveness and the inclusion of the urban poor in economic and social life.
Key issues in the sector
Urban transport infrastructure and services in the country’s main urban centers are underdeveloped. The low quality of
urban transport is a major issue in Morocco. In the 1980s, Morocco pioneered the restructuring of public transport
services in most large cities by contracting out urban bus services to the private sector. Because the right institutional
and regulatory framework was not in place, the experience has not yielded the expected results. In addition, traffic
congestion is now a major concern in the large cities, especially Casablanca and Rabat-Sale as a result of a massive use
of private vehicles and taxis, as well as poor planning and traffic management. The root of the urban transport
problem is in the fragmentation of the institutional setup and the low level of general competence in the sector. Major
public investments are also necessary to keep up with growth in traffic and public transport demand.
The country’s trunk road system is deteriorating, due to inadequate maintenance. Morocco’s road system comprises
about 57,000 kilometers of classified roads (national, regional and provincial), a large percentage (80%) of which is
paved. Through the successful first and second National Program of Rural Roads (NPRR 1 and 2), the Government has
been able to significantly increase the level of rural accessibility and to ensure year-round access of isolated
population to basic infrastructure and social services. The Government has also given great priority and resources to
the development of its 1,500 Km motorways network. In the meantime, the country’s primary road system has been
deteriorating at a steady pace, creating high land transport costs and increasing traffic accidents and fatalities.
Reforms in key transport activities have made significant progress, although critical inefficiencies still persist. In the past
few years, the Government has launched several key institutional and legal reforms aiming at promoting trade
logistics and competitiveness. The railway sector has been restructured, which made it possible for the National
Railway Public Company (ONCF) to remain profitable and to be transformed into a public shareholding company.
Recently, however, uncertainties on phosphate traffic in the medium term, by far ONCF’s main traffic, have put the
future of profitable freight transport activities in question and may result in Government stepping in if and when this
traffic is significantly affected.
In the port sector, a new law was enacted in December 2005 and provided for a separation of the ownership of port
infrastructure and public roles from commercial activities. Development of a new port facility in Tangier, Tanger
Mediterranée, is underway (first phase already completed) with concessions granted to private companies to operate
the container terminals, although the ambitions of the second phase has been reduced due to the impact of the
economic crisis on maritime transport. Liberalization of air transport was initiated in early 2004 and moved a step
further with the signing of the open-sky agreement with the European Union in late 2006.
Although these reforms already had a significant impact on the overall efficiency of transport services throughout the
country, important bottlenecks still remain in some key areas: the interurban passenger transport system is still
characterized by a restrictive authorization regime that generates rents, encourages fraudulent activities, and
perpetuates low quality services.
Climate change. Morocco’s transport sector is not a major emitter of CO2 by comparison to other countries at a
similar level of GDP. This is due to many factors including the positive taxation of gasoline, low subsidies on diesel,
relatively low motorization, and compact urban development. Yet, car ownership is encouraged by Government and
developing fast, and a recent study by the World Bank on energy efficiency in the transport sector has shown that
significant reduction of fuel consumption and CO2 emissions could be achieved. Another study on adaptation of the
transport sector to climate change has also shown that, despite the high level of engineering expertise in the sector
and significant efforts of the past, much could still be done to increase the resilience of the transport sector to
catastrophic climatic events.
Recommendations to address the issues
To address the above issues, the international financing institutions made the following main recommendations: (i)
develop and implement a National Program of Road Rehabilitation and Modernization to clear the backlog of road
maintenance and improve the characteristics and level of service of the main classified roads; (ii) implement the new
National Strategy for Urban Transport; (iii) improve the quality of road freight services in view notably of facilitating
trade and regional integration; (iv) mobilize private sector, promote competition in handling operations and
strengthen regulation to improve efficiency in all commercial ports; (v) in railways continue implementation of the
reform agenda and sector strengthening, and expand transport capacity in support of international trade through
ports; and (vi) foster energy efficiency by a combination of regulatory, fiscal, and other incentive measures as well as
better information and training of transport users and enterprises.
A transport infrastructure program, if quickly implemented, which Morocco can do, would stimulate the national
economy, support job creation, and lessen the impact of the slow European economic recovery.
Government program
The Government of Morocco is placing a high priority on the on-going National Program of Rural Roads. It is also
giving much importance to motorway development. Another goal of the Government is to greatly improve urban
transport management, efficiency, and environmental performance, and, to that effect, together with the
municipalities, it is promoting institutional and regulatory changes as well as investments in services and
infrastructure. Liberalization of the transport sector has been on the Government’s agenda for the past few years, as
evidenced by a handling concession in the Casablanca airport, the improved concessioning of bus services in several
large cities, the concession of the container terminals in the port of Tanger-Méditerranée, and the port reform
separating service delivery from infrastructure. Finally, the Government acknowledges the need to modernize
logistics in order to foster trade. Lately, the Government has adopted a very large long-term program for development
of high speed passenger train services and the construction of the first line between Tangiers and Kenitra will start
soon.
11. Alignment with Transition Fund Objective
The Deauville Partnership Report on Trade and Foreign Direct Investment highlights that: “tackling costs associated
with inefficient trade facilitation and logistics and weak access to trade finance and remittances is central to further
integration of Partnership countries, both regionally and globally”. The costs of “connectivity” are often fixed, and as a
result they disproportionately affect small firms, farmers, and the poor, severely limiting their participation in trade
and investment. Reducing the costs associated with moving goods along international supply chains, whether these
costs are measured in terms of time, money, or reliability, is a core element of a trade and FDI agenda. One of the three
Deauville Partnership priorities is to: modernize trade facilitation services by enhancing the performance of trade
corridors, whether air, sea, or land; improving markets for logistics services; increasing the efficiency of border
management, including customs; and facilitating the cross-border movement of service suppliers.
The proposed project aligns well with the objective of the Transition Fund in terms of Competitiveness and
Integration as it covers planning and facilitation of cross-border infrastructure, and promoting and facilitating
infrastructure projects, particularly in the areas of transport, trade facilitation and private sector development. The
project aligns also with Investing in Sustainable Growth as it enhances the business environment (including for
small and medium-sized enterprises as well as for local and foreign investment promotion), competition policy and
private sector development (exporters, freight forwarders, manufacturing industry, etc.). Through the capacity
building for regional trade framework improvement and road safety action plan, the proposed project aligns also well
with Enhancing Economic Governance. Through facilitating trade and transport services which supports increased
economic activity and job creation at different levels (manufacturing, agriculture, rural development, industrial
activities, services, etc.), the project aligns well with Inclusive Development and Job Creation.
In terms of inclusiveness, equity and sustainability the DP report underlines that to be sustainable, the political
economy of trade and FDI requires that the benefits of integration, which are often concentrated in the large cities and
among the more privileged sectors of the population, be shared as widely as possible across regions and people. Trade
and FDI are more than simple exchanges of material goods and services: they have to do with people and their norms
and values. To be sustainable, the political economy of trade and FDI needs to recognize the possible tensions
between those societal policies. One of the Deauville Partnership priorities is to develop regional policies to connect
lagging and remote regions, promote internal trade, and help poor people in these areas connect to the places where
opportunities are concentrated.
12. Alignment with Country’s National Strategy
Country Action Plan under the Deauville Partnership “Moroccan Plan for the Deauville Partnership”. Morocco aims
at achieving growth of 6 percent per year to reduce unemployment, eradicate poverty and improve economic and
social welfare. Morocco’s expectations from the Deauville partnership are: (i) short-term support to preserve and
consolidate the macro-economic framework including direct budgetary support, in particular to mitigate impact of
higher subsidization costs and deterioration of external balance through the establishment of compensatory facilities
and creation of stabilization fund; (ii) medium and long-term support to bolster growth and further job creation
through different forms of financing and technical assistance; (iii) support implemented through a new approach
insuring efficiency by aligning donor intervention to country systems and harmonizing donor intervention to avoid
duplication of tasks, reporting and procedure.
At the trade level, the Deauville Partnership should contribute to removing obstacles to increase trade and promote
measures to ensure trade facilitation and participate in the restoration and consolidation of external balances and
development in general. Morocco seeks the removal of tariff and non-tariff barriers to fully take advantage of existing
FTAs. For industrial goods: trade is restricted by rules of origin and restrictive standards. Agricultural trade is
hampered by quantitative and qualitative limitations (quotas, schedule, pricing regimes to entry and non-tariff
barriers such as sanitary and phyto-sanitary standards). Trade in services is hampered by inadequate recognition of
qualifications and skills and in the movement of labor.
The proposed project aligns well with the country’s national strategy. Increasing trade competitiveness in the Middle
East and North Africa region is a priority. Trade facilitation and logistics bottlenecks are preventing potential growth
opportunities from being realized, and impeding the integration of MENA countries into the global economy.
Increased trade will accelerate sustainable economic growth, opening up considerable opportunities of employment.
The trading process involves many different actors and numerous procedures. Strengthening the private sector
involved in the trading process, such as freight forwarders, customs brokers and trucking companies, will further
enhance economic growth and create jobs. Benefits from increased trade get transferred on to consumers as reduced
transportation and transaction costs decrease the prices of the final products. The World Bank recent regional trade
facilitation and infrastructure studies for Mashreq and Maghreb countries identified obstacles to trade in three
dimensions: (i) trade facilitation; (ii) transport infrastructure, and (iii) transport and logistics services. A corridor
approach enables attention to be focused on the areas that account for most of the trade of a country, ensuring that
the measures implemented make sense in terms of international trade. Recent studies, such as the World Bank Trade
Facilitation and Infrastructure for Maghreb Countries and the MENA Trade and Foreign Direct Investment Report for
the Deauville Partnership, show that investing in trade and infrastructure helps accelerate sustainable growth, create
jobs, strengthen governance framework and increase economic and social inclusion. These studies showed also that in
the short-run every US$1 billion invested in infrastructure has the potential of generating up to 110,000
infrastructure-related jobs in the oil-importing countries, 26,000 jobs in the GCC economies, and 49,000 jobs in the
developing oil exporting countries.
C. PROJECT DESCRIPTION
13. Project Objective
Project development objectives. The objective of the proposed project is to promote (through focusing on
conducting studies and training) reduction of trade and transport barriers along the priority trade corridors of the
country and in related border crossings.
The objective will be achieved through preparation of needed improvements of the country’s main trade corridors,
particularly transport infrastructure, border crossings and accesses to those crossings.
The ultimate outcome once the investments are put in place will be more efficient and fluid logistics chains enabling
increased realization of the country’s and region’s trade potential and reduced transaction costs. The project will thus
contribute to the ultimate goal, which is to facilitate increased global trade of the country and the sub-region, and
through this to make a significant contribution to increased employment and regional and global integration while
supporting also development of less privileged regions of the country.
14. Project Components
The priority trade and transport corridors and the activities identified under the recent IMF, WB, AfDB, Euro-Med
studies, which are national priorities with a regional dimension, are: (i) the North-South (N1) corridor connecting
Tangiers (the gateway to Europe) to the main ports along the Atlantic coast and opening the way to connect Western
Africa; (ii) the Trans-Maghreb corridor, expressway connecting the Arab Maghreb countries, with a missing link at
the border with Algeria; (iii) the East-South corridor from Oujda bypassing the mountains in the east through
Errachidia and Zagora to Guelmime on the west coast, and connecting in the future Morocco and Algeria through
transversal corridors. This corridor would also support the economic and social development of national regions
lagging behind in the country.
The proposed TA project (the proposal for MENA Transition Fund support) includes three components. These are: (a)
Institutional and capacity building for regional trade framework improvement; (b) preparatory studies for
infrastructure improvements of the priority corridors; (c) project preparation, management, coordination, monitoring
and evaluation. The activities to be supported under the proposed project are in line with the recommendations of the
Euro-Med transport program, the IMF study on trade and regional integration, the Deauville Partnership Report on
Trade and Foreign Direct Investment and the World Bank Regional Study on Trade Facilitation and Infrastructure for
Maghreb Countries. They are national priorities for the government with a regional dimension.
Component A: Institutional and capacity building for regional trade framework improvement (US$0.25 million).
This component focuses on the essential capacity building and training for regional trade framework improvement. It
includes the following specific activities.
1.
2.
TA to Ministry of Equipment and Transport (US$0.1 million): training of all transport agencies in different
PPP aspects and techniques, with study tours and exchange of experiences;
Ministry of Equipment and Transport (US$0.15 million): road safety is a major issue in the country in general,
and a source of delays and dis-functioning of the trade corridors in particular. This sub-component will
support preparation of a road safety assessment and a plan of practical and implementable actions that would
eventually be later on supported by IFIs. The sub-component is to be coordinated with the EU supported
regional road safety action plan and the work being done by Morocco Road Safety Committee.
The PPP TA to Ministry of Equipment and Transport will be executed by the authorities.
Component B: Preparatory studies for infrastructure improvements of the priority corridors (US$2.7 million)
and multi-modal transport network This component would support preparation (as needed) of feasibility studies,
detailed design and tender documents, environmental and social impact assessments for the priority trade and
transport corridors and Maghreb multi-modal transport network.
1. Direction des Routes, DR. Preparation of the missing link of Morocco-Algeria motorway. These activities
are already being taken care of by the government with the support of other financing agencies. No funding is
needed at this stage from the DPTF.
2. Direction des Routes, DR, (US$0.9million): Preliminary study of the East-South corridor, the proposed TA
will finance analysis of itinerary options, transversal corridors to Algeria and the border crossings needed,
and pre-feasibility of itinerary selected. The E-S corridor will support connectivity of poorer areas of the
country and will support regional connectivity between Morocco and Algeria.
3.
Logistics Agency (US$0.9million): Preparation of logistics center: the proposed TA will support
preparation of economic and detailed technical studies (detailed design and tender documents) for a priority
logistics center as defined by the national strategy presently underway.
4.
Ports Directorate (US$0.9million): Preparation of selected activities for the extension of Agadir port.
This will improve international and regional trade, reduce transport costs, and enhance integration of
Morocco into the global economy. The proposed TA will support economic and technical pre-feasibility study
for the extension of the existing port or construction of a new trade port (at Agadir).
Component C: Project Preparation, Management, Coordination, Monitoring and Evaluation (US$0.4 million). The
proposed TA will support a project management unit (PMU) for management activities associated with project
coordination and implementation, including capacity building.
The PMU will also be in charge of implementing a comprehensive monitoring and evaluation (M&E) system with the
assistance of the ISA. The PMU will be located at the Ministry of Transport (under the Planning Directorate).
This component will be country-executed in close coordination with the ISA.
15. Key Indicators Linked to Objectives
1. About 30 transport staff (from different sub-sectors) trained in PPP aspects and techniques;
2. Studies completed: (i) priority logistic center defined and technical studies for it completed; (ii) priority EastSouth corridor(s), including border crossings, defined and technical studies completed; (iii) pre-feasibility study
for extension of Agadir port completed; (iv) road safety action plan completed.
D. IMPLEMENTATION
16. Partnership Arrangements (if applicable)
The World Bank has recently completed a Regional Trade Facilitation and Infrastructure Study for Maghreb
Countries, which identified the needed policies, reforms, investments and institutional strengthening to facilitate
increased trade among the countries, support regional integration among the countries and more integration of the
countries into the global economy. The Arab Maghreb Union (AMU) is following up with a number of funding agencies
on the recommendations of the study. The project will coordinate with the AMU and the other IFIs for
complementarity and convergence of the actions to be supported.
The project (through EIB and the PMCU) will also be closely coordinated with other initiatives, particularly with JICA
(on the transport strategy regarding the trade and transport corridors), as well as with the EU Neighborhood Program
Management and Support in the Transport Sector, the Euro-Med Regional Transport Action Plan for the
Mediterranean Region (including the road safety regional program), the LogisMed Soft Project DPTF for Morocco,
Tunisia and Egypt, and the Euro-Med-Priority Transport Infrastructure Projects in the Mediterranean countries.
Preparation of the missing link of Morocco-Algeria motorway is already being taken care of by the government with
the support of other financing agencies (particularly IsDB). No funding is needed at this stage from the MENA TF. The
PMCU and EIB will closely follow up on the progress of preparation of this important corridor.
17. Coordination with Country-led Mechanism/Donor Implemented Activities
The proposed project under the EIB Transport Sector Support for Transition Countries (TRANSTRAC) initiative will
be closely coordinated, for optimized complementarity, with the Euro-Med Transport Program and its Regional
Transport Action Plan for the Mediterranean for 2007–2013. The Ministry of Transport is also the coordinator for the
Euro-Med program and will ensure this complementarity as well as with the LogisMed TA project recently approved
(with EIB as ISA, and focusing on logistics services and setting up a regional logistics observatory).
Bridging the gap between identification of trans-Mediterranean transport networks and project implementation is yet
to be filled, therefore that existing opportunities for funding by certain partners (such as in the context of EU’s TransEuropean Transport network (TEN-T), with the EIB’s FEMIP (Facility for Euro-Mediterranean Investment and
Partnership) and through other IFIs can be leveraged.
The European Commission (EC) Communication on transport cooperation in the EU neighbouring regions invites the
EC and the IFIs to support the neighbouring countries in developing transport strategies and, predominantly, help
them to identify priority infrastructure projects and prepare project proposals. The Communication calls for
establishment of mature and sound priority projects pipeline with a long-term outlook of extending the TransEuropean Transport network (TEN-T) beyond the EU’s border and connect the countries in the region by building the
Trans-Mediterranean Transport Network.
The Euro-Med Transport Working Group on Infrastructure, to which EIB actively participated, agreed on further steps
to implement both the regulatory reform and all related actions of the Regional Transport Action Plan for the
Mediterranean for 2007–2013. The dialogue built with the Mediterranean partner countries resulted in a list of
corridors/programmes/ projects that now needs to be rationalized and prioritized before being brought forward. The
work will be further taken up by the EU Neighbourhood Programme Management and Support in the Transport
Sector to ensure progression and coordination in this area. As noted by recent reports, Transition Countries continue
to actively participate in the various EC regional transport programmes and working groups and remained involved
after the Arab Spring in the establishment of the future Trans-Mediterranean Transport Network.
The investments identified under the proposed TA project, and which will be prepared under the project, would later
on be submitted for eventual financing by IFIs. The proposed project will help the government in its coordination with
IFIs for effective development impact of eventual IFI investment projects in trade and transport, and in mobilizing
quick increased financing for these investment projects as a number of priority trade and transport corridors would
be ready for financing.
18. Institutional and Implementation Arrangements
The project will be joint EIB-Government executed. All procurement activities, financial management and
disbursement will be executed by the EIB according to its procedures and guidelines. This is in line with EIB’s
practices for regional approaches and TA projects with regional dimension. The country will be responsible for
contracts management, local coordination and monitoring and evaluation. This arrangement will ensure country
ownership while benefiting from EIB expertise in regional approaches (such as FEMIP). The EIB will ensure
coordination of the regional dimension. The four targeted transition countries (Egypt, Jordan, Morocco and Tunisia)
agree and are comfortable with this procedure. The four countries are benefiting from a number of FEMIP TA grants
executed by the EIB and coordinated by the countries.
A project management and coordination unit (PMCU) will be set at the Ministry of Equipment and Transport under
the Director of Transport Strategy, Programs and Coordination, and will be responsible for: (i) overall coordination of
the project activities with the different ministries, entities and departments involved in the project; (ii) monitoring
and evaluation of indicators and overall progress; (iii) continuous follow up and periodic reporting on progress; (iv)
liaison and coordination with the EIB. The PMCU will be headed by a project coordinator who will be selected
competitively, and will include an assistant. The coordinator and the assistant will be financed by the project. The
Ministry will provide a counterpart to the project coordinator as well as another assistant, and will host the PMCU
with related expenses. The Director of Transport Strategy, Programs and Coordination of the Ministry of Equipment
and Transport is also the coordinator of the Euro-Med transport program.
Each ministry, entity and department involved in the project will designate a focal point (FP) who will coordinate
closely with the PMCU the activities of the concerned ministry, entity or department. The PMCU and the FP will assist
in the preparation of TORs for the different studies and training activities in the selection process of the consultants
and in managing and following up on the progress of the different activities.
A Steering Committee (SC) might need to be set up, comprising representatives of the ministries, entities and
departments involved in the project. The SC will provide oversight and guidance during project progress and will
assist in ensuring smooth implementation of the project activities. The PMCU will call for the SC meetings and will
prepare the necessary documentation and reports for the meetings.
The EIB is the Implementing Support Agency. It will assist in designing an appropriate monitoring and evaluation
system as well as an appropriate reporting format. The EIB will carry out regular supervision and implementation
support missions to ascertain the quality of the different consultants work, ensure overall adequate progress and
closely monitor the achievement of the objectives. The EIB will also attend the Steering Committee meetings for
specific studies under this proposal as may be needed. The EIB will ensure coordination of the regional dimension and
approach of the project.
19. Monitoring and Evaluation of Results
At the project start, EIB will assist the PMCU and MoET in establishing the necessary monitoring and evaluation
“M&E” framework for the project. Baseline data will be provided by the Focal Points (FPs), and exact yearly targets
will be revised six months after the start of project implementation.
The PMCU will be responsible for the overall monitoring and evaluation with the support of the ISA according to the
framework. It will coordinate with the FPs to establish the baselines, control the quality of the work of the different
consultants, and will follow up on the yearly (and six-month) targets and monitor the achievement of the objectives.
E. PROJECT BUDGETING AND FINANCING
20. Project Financing (including ISA Direct Costs2)
Cost by Component
Transition
Fund
(USD)
Component A: Institutional and capacity building for
regional trade framework
(a) Sub-component A.1: TA to Transportation *
(b) Sub-component A.2: Road safety assessment and
action plan
Country CoFinancing
(USD)
Other CoFinancing
(USD)
Total
(USD)
100,000
150,000
100,000
150,000
* Country execution
Component B: Preparatory studies for infrastructure
improvements of the priority corridors
(c) Sub-component B.1: Preliminary study of the EastSouth corridor, analysis of itinerary options and
pre-feasibility of itinerary selected and related
border crossings
(d) Sub-component B.2: Preparation of priority
logistics center as will be defined by the national
strategy
(e) Sub-component B.3: Pre-feasibility study for
extension of Agadir port
Component 3: Project Preparation, Management,
Coordination, Monitoring and Evaluation*
* Country execution
Total Project Cost
900,000
900,000
900,000
900,000
900,000
900,000
400,000
200,000
600,000
3,350,000
200,000
3,550,000
The above costs are estimates at this stage. The Terms of Reference (TORs) of the different studies and consultants
services will be tailored, with agreement of the Government, to the available funds under the DP TF. The country cofinancing is simply an in-kind estimate of the country’s contribution to the project management and coordination.
21. Budget Breakdown of Indirect Costs Requested (USD)
Description
For grant preparation, administration and implementation
support:
Preparation,
administration, management, implementation support,
regional coordination including travel expenses,
consultants services and staff time.
Total Indirect Costs
2
Amount (USD)
25,000
25,000
150,000
200,000
ISA direct costs are those costs related to the ISA’s direct provision of technical assistance within the project.
F. Results Framework and Monitoring
Project Development Objective (PDO): The objective of the proposed project is to promote reduction of trade and transport barriers along the priority trade
corridors of the country and in related border crossings.
Cumulative Target Values**
PDO Level Results Indicators*
Indicator One:
About 30 transport staff
(from different sub-sectors:
roads, maritime transport,
railways, ports, logistics)
trained in PPP aspects and
techniques
Unit of Measure Baseline
# of
participants
0
Percentage
progress
and # of
studies
0
YR 1
0
YR2
YR3
30
Frequency
Data Source/
Methodology
Responsibility
for Data
Collection
Description
(indicator
definition etc.)
Bi-annually
Reports
PMCU and
Focal Points
Quantitative –
number of
participants
who have
successfully
completed the
training
Bi-annually
Reports
Studies
produced
PMCU, Focal
Points with
EIB input
Quality
studies
completed
and approved
PMCU and
Focal Points
Qualitativenumber of
participants
who have
Indicator Two:
Studies completed: (i)
priority logistic center
defined and technical studies
for it completed; (ii) priority
East-South corridor(s),
including border crossings,
defined and technical studies
completed; (iii) prefeasibility study for
extension of Agadir port
completed; (iv) road safety
action plan completed.
50%
100%
INTERMEDIATE RESULTS
Intermediate Result (Component One): Institutional and capacity building for regional trade framework
Sub-component A.1: TA to Transportation
Sub-component A.2: Road safety assessment and action plan
Intermediate Result indicator:
TA to Transportation:
training
# of
participants
0
0
30
Bi-annually
Reports
successfully
completed the
training.
Intermediate Result indicator:
Road safety assessment and
action plan;
Percentage
progress
and action
plan
completed
0
10
50%
100%
3 -months
Reports
PMCU, Focal
Points with
EIB input
Quality
studies and
action plans
produced and
approved
Intermediate Result (Component Two): Preparatory studies for infrastructure improvements of the priority corridors
Sub-component B.1: Preliminary study of the East-South corridor, analysis of itinerary options and pre-feasibility of itinerary selected
and related border crossings
Sub-component B.2: Preparation of priority logistics center as will be defined by the national strategy
Sub-component B.3: Pre-feasibility study for extension of Agadir port
Intermediate Result indicator
One: Analysis of itinerary
options, transversal
corridors to Algeria and the
border crossings needed,
and pre-feasibility of
itinerary selected
Intermediate Result indicator
Two: Economic and detailed
technical studies (design and
tender documents) for a
priority logistics center as
defined by the national
strategy presently underway
Intermediate Result indicator
Three: Economic and
technical pre-feasibility
study for the extension of
the existing Agadir port or
construction of a new trade
port
Percentage
progress
and studies
completed
0
10
50%
100%
3-months
Reports
PMCU, Focal
Points with
EIB input
Quality
studies
completed
and approved
Percentage
progress
and studies
completed
0
10
50%
100%
3-months
Reports
PMCU, Focal
Points with
EIB input
Quality
studies
completed
and approved
Percentage
progress
and studies
completed
0
10
50%
100%
3-months
Reports
PMCU, Focal
Points with
EIB input
Quality
studies
completed
and approved
PMCU, with
EIB input
Quality
reporting,
M&E
Intermediate Result (Component Three): Project Preparation, Management, Coordination, Monitoring and Evaluation
Intermediate Result indicator
Quality
reporting
Time based
0
33
60%
100%
3-months
Reports