PROGRAM INFORMATION DOCUMENT (PID) APPRAISAL STAGE Report No.: AB6220 Operation Name. P GOVERNMENT OF MOROCCO Kingdom of Morocco Morocco

Transcription

1 Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized PROGRAM INFORMATION DOCUMENT (PID) APPRAISAL STAGE Report No.: AB6220 Operation Name Urban Transport Sector DPL Region MIDDLE EAST AND NORTH AFRICA Sector General transportation sector (100%) Project ID Borrower(s) Implementing Agency P GOVERNMENT OF MOROCCO Kingdom of Morocco Morocco Date PID Prepared December 1, 2010 Date of Appraisal December 13, 2010 Authorization Date of Board Approval March 3, Country and Sector Background Ministry of Economy and Finance and Ministry of Interior Ministry of Economy and Finance Rabat Morocco Tel: ( ) Fax: ( ) Ministry of Interior Rabat Morocco Tel: ( ) Fax: (212537) In recent years, Morocco has carried out sound macroeconomic policies and continued to sustain the momentum of structural reforms. As a result, economic growth has been high averaging 5.1 percent over , almost twice the average rate of the 1990s (2.8 percent). The good growth performance has allowed GDP per capita to almost double over the last decade to reach US$2,890 in Furthermore, sound fiscal policies has led to the consolidation of public finances, allowing the budget to run surpluses in 2007 and 2008 (averaging 0.3 percent of GDP) and to withstand well in 2009 the impact of the global crisis, with a manageable budget deficit of 2.2 percent of GDP. The Government has also adopted a prudent debt strategy and central government debt has steadily declined to 46.9 percent of GDP in 2009 from 62 percent in In addition, the monetary authorities have pursued appropriate monetary policy geared toward maintaining low and stable inflation (an average of 2.2 percent since 2005) and enhanced financial sector supervision. Furthermore, the country has sought to deepen its integration into the world economy through the signing of many Free Trade Agreements (FTAs) and with the recent Advanced Status awarded by the EU. Overall, these efforts have led to a stable macroeconomic stance, stronger public finances, and a sound financial sector. The growth of cities and the accompanying social and economic changes are essential features of Morocco s current development process. The urban population is 17.7 million today (about 55% of the total population) and it is projected to grow to 27 million in 2025 (70%). At the same time, the spatial structure of the cities is changing much. With the relocation of many economic activities outside the city centers, the population s legitimate demand for lower density residential areas, and the greater autonomy of younger households, Moroccan cities are spreading rapidly. This, together with the increase in motorization and societal changes such as women s growing participation in labor markets, has had drastic consequences on the demand for urban transport. For example, trip rates have increased from about 1.6 per person and per day to 2.9 in Casablanca between 1975 and 2004 (a total of 10.5 million

2 daily trips in 2004 compared to 3.3 million in 1975). Trips have also become much longer. This has put enormous pressure on the urban transport systems of Morocco s main cities. Existing systems are not well suited, however, to handle rapidly increasing demand. Morocco s urban transport sector is characterized by major institutional, regulatory, and operational weaknesses, a shortage of human resources, and a lack of long term strategic vision at the local level. As a result, public transport systems perform poorly and are not responsive to the changing demands of the population. The road infrastructure and the management of traffic are also lagging behind, and congestion is increasing fast, particularly in Casablanca, the economic capital, where it is now perceived as a threat to the city s competitiveness and economic growth prospects. Air quality has deteriorated sharply, in great part due to transport, and some key social needs are not adequately addressed. Improving urban transport has become a key priority for Morocco s central and local governments. The Central Government has thus embarked on a broad program of reforms aimed at systematically addressing sector issues, particularly the structural issues that are at the core of the current inefficiencies. This program focuses on three main goals: (i) improving the sector s governance; (ii) enhancing the efficiency and increasing the supply of urban transport services and infrastructure; and (iii) improving the sector s environmental and social sustainability. This program was designed with support from the Bank, which, at Government s request, has been involved in the sector since 2006 through an in-depth relationship focused on technical support, assistance in capacity building, and transferring best practices and lessons of experience from other middle income countries. In this context, the Government has requested the Bank to provide a Development Policy Loan (DPL) to support the implementation of the reforms program. 2. Operation Objectives The proposed DPL has been designed to provide budget and technical support for the implementation of the Government s program for the reform of the urban transport sector. Its higher-level objective is to improve the efficiency of urban transport in large cities, ultimately promoting economic growth, social development, and quality of life in a sustainable way for Morocco s urban citizens. The proposed DPL has been developed with the Government in close coordination with its comprehensive reform program so as to provide full ownership of process, actions and outcomes, and ensure that it is anchored in a satisfactory medium term change framework. It is focused on (i) actions which address essential structural weaknesses in the sector particularly in its institutional framework, (ii) key implementation measures, particularly in the country s two largest urban areas, Casablanca and Rabat-Sale-Temara, and (iii) the clarification and adoption of strategies in a key new subject, the accessibility of persons with reduced mobility. The prior actions envisaged for the DPL are summarized below: Improving the governance of the urban transport sector Operationalization of the Casablanca urban transport planning and management agency. Establishment of the National Commission on Urban Transport (CNDU). Operationalization of the Urban Transport Division of the Ministry of Interior s General Directorate of Local Governments (DGCL). Implementation of a training program for a core group of managers in the urban transport field. Improving the efficiency and increasing the supply of urban transport services and infrastructure 2

3 Restructuring of bus services for the agglomeration of Rabat-Sale-Temara. Restructuring of bus services for the agglomeration of Casablanca. Issue of a regulation defining the selection process for public service concessionaires in accordance with Law 54.05, and the main stipulations of the concession contracts. Adoption of eligibility criteria for State funding of urban transport investment projects. Improving the environmental and social sustainability of urban transport Completion of the restructuring of vehicle inspection centers. Adoption of an action plan to improve the accessibility to urban transport of persons with limited mobility and organization of a national seminar to raise awareness and disseminate the action plan. 3. Rationale for Bank Involvement The proposed DPL is outlined in the FY10-13 CPS discussed by the Board in January The CPS is designed to help the Government achieve its medium term priority objectives in a flexible and responsive way. It is organized around three main pillars. The first concentrates on activities that encourage growth, competitiveness and employment, including fostering macro-economic stability and promoting private sector development as engine of growth. The second pillar supports the improvement in access to, and quality of, public services, including the development of institutions and management systems. The third pillar aims at ensuring that Morocco s development can be sustainable and addresses natural resources and climate change challenges. In addition, the CPS places a strong emphasis on the governance agenda which is to be mainstreamed across the Bank program. The CPS refers to the proposed Urban Transport DPL and indicates that it would contribute to these three strategic pillars by: (i) reducing transport costs and improving the mobility of people and goods, therefore improving competitiveness, and creating the proper framework for employment and growth stimulating investments; (ii) improving the quality and efficiency of urban transport services, particularly through more effective institutions; and (iii) improving sustainable development and mitigating GHG emissions. The proposed DPL would also contribute to important cross cutting reforms such as local governments development, governance, and public private partnerships. 4. Financing Source: ($million) Borrower 0 International Bank for Reconstruction and Development (preliminary) 130 Total 130 3

4 5. Institutional and Implementation Arrangements As the ministerial department in charge of monitoring and supporting the activities of the local governments in Morocco, the Ministry of Interior has the overall leadership for the formulation of the Government program for urban transport and follow-up of its implementation. It has been and will continue to be the focal point for this DPL and will have the responsibility for monitoring progress. Within this overall context, the newly created CNDU will play an important role to help coordinate the strategies and activities of the various ministries involved in the urban transport sector and to provide a high level technical forum where the progress of the reform program will be assessed and corrective actions will be reviewed. The CNDU includes representatives from the key concerned ministries. The detailed technical implementation of the reforms and follow up of the actions already undertaken as part of this DPL will be done by the units who have the related expertise such as the Directorates of the Ministry of Interior in charge of State-owned companies and Concessions, and Training. The newly created urban transport division within the Ministry of Interior will provide for the day-to-day coordination and the overall monitoring of the reforms. This division will also act as the technical secretariat of the CNDU. Supervision missions will allow the Bank to continue providing policy advice and technical support to the departments and units involved in the implementation of the sector s reform program. Bank staff will focus on the impact outcomes of the DPL program and the adjustments that may be needed to enhance the Government program. 6. Poverty and Social Impacts and Environment Aspects Poverty and Social Impacts A Poverty and Social Impact Analysis was carried out to assess the potential social impacts of this operation. The PSIA concluded that the reforms supported by the DPL are largely positive for marginalized population of urban centers. In particular, low revenue groups in peri-urban areas in need of efficient and cost contained public transport services, as well as individuals with accessibility needs stand to benefit from the reforms. The key negative impact of the reform concern job losses deriving from restructuring of bus systems in Rabat and Casablanca, which entails the discontinuation of private bus operators services following the transfer of bus operations to a single operator in each city. The problem was more acute in Rabat, where roughly 630 people were concerned, due to limited job opportunities within and outside the sector, as well as a relatively hasty restructuring process which offered little adjustment time to potentially affected individuals. In Casablanca, the problem was less acute due to a strong labor market and more job opportunities, as well as a more gradual restructuring process. Morocco has systems in place to address job losses due to restructuring processes similar to the one at hand. According to Morocco s legislation, open ended labor contracts can be terminated by the employer against retrenchments payments (indemnités), calculated based on the workers years of service (art. 52 of the labor code). In cases of undue or unjustified job termination (art 41), workers are entitled to compensatory payments (article 55). Workers have the right to sue and seek compensation in the courts when their rights are infringed. Additionally, Morocco has active employment dedicated agencies delivering professional re-training and re-skilling programs to jobless workers subject to retrenchments following sector restructuring. Both the National Agency for the Employment and Skills Promotion (ANAPEC) and the Office for Professional Training and Labor Promotion (OFPPT) deliver reconversion and re-insertion training programs with the goal of facilitating the match between supply and demand in the job market. 4

5 For both cities, the Bank has explored, together with the Government, local authorities, and labor market agencies, potential mitigation options. In Rabat, the authorities have resorted to a gamut of measures ranging from including staff re-hiring clauses in the contract of the new operator, to a Social Aid package targeting those not benefiting from rehiring. In Casablanca, local authorities, together with the ANAPEC are devising a training program which will provide re-skilling and labor demand-offer matching services to job seekers. Environment Aspects Over the last decade, Morocco has achieved significant progress in developing its institutional and legal framework in the area of environmental protection. The State Secretariat (in charge of Water and Environment), within the Ministry of Mines, Energy, Water and Environment (MMEWE), has become a full-fledged environmental administration. Morocco has also developed a comprehensive environmental strategy in 2005, the National Environmental and Sustainable Development Strategy, with four main priorities: water protection, waste reduction and its management, water quality improvement and soil protection. In addition, the Government has enacted in 2003 Law No defining the requirements for Environmental Impact Assessments (EIAs) and creating a national committee within the MMEWE for the review and oversight of EIAs. Furthermore, the Government Council recently enacted two decrees related to the establishment of the national and regional EIA committees as well as a decree for public consultation and disclosure. Additional measures are also being taken to support the strengthening of the Moroccan environmental institutions and legal systems, with the support of various donors and international development agencies, notably GTZ. All these developments contribute to reinforcing the environmental protection framework in Morocco, both at national and local level, and installing the necessary legal and institutional capacity to manage the environmental impacts of the proposed urban transport reforms. An assessment of the potential environmental impacts of the reforms under the proposed DPL was conducted in early 2010 and concluded that these reforms will have significant positive effects on the environment and very little negative effects. By nature, the reforms will mainly have positive impacts on the environment and health as a result of the development of the necessary institutional and regulatory framework for the proper management of urban transport, which will enhance the efficiency of urban transport services and infrastructure, reduce congestion, and therefore improve air quality in major cities. These positive impacts, moderate to high, include a reduction in GHG emissions, and an improvement of air quality as a result of the decrease of those pollutants emissions with negative health impacts (sulfur dioxide, nitrogen oxides, particulate matter, carbon monoxide, total hydrocarbons and ozone). It is estimated that the DPL measures would reduce GHG emissions by about 400,000 Tons/year. These reductions will primarily result from the implementation of the vehicle inspection centers reforms (GHG emissions reduction of about 350,000 Tons/year) and the restructuring of bus operations in Rabat and Casablanca (GHG emissions reduction of about 50,000 Tons/year). Vehicle inspection centers reforms will improve the quality and regularity of vehicle inspections, which will in turn lead to an improved maintenance and operations of the existing vehicle fleet in Morocco, and an improved quality of imported vehicles. Meanwhile, the restructuring of bus services will improve buses quality and operations, and therefore improve their energy efficiency. While the reforms will have some negative environmental impacts, these are likely to be moderate to low, and are mostly associated with those indirect activities that would complement the DPL measures, such as urban infrastructure investments and works. Nevertheless, the existing legal and institutional framework for environmental protection, both at national and local level, provides enough assurance that potential negative impacts will be properly mitigated. Moreover, the Government has shown its 5

6 commitment to reinforce environmental protection, and its urban transport strategy includes actions to further improve the management of environmental impacts through the strengthening of local and national capacities to undertake EIAs and implement EMPs in the sector. 7. Contact point Contact: Jean-Charles Crochet Title: Senior Transport Economist Tel: (202) Fax: (202) For more information contact: The InfoShop The World Bank 1818 H Street, NW Washington, D.C Telephone: (202) Fax: (202) pic@worldbank.org Web: 6