Morocco - Second Water Supply Project

Document of The World Bank FOR OFFICIAL USE ONLY FILE COPY Report No. 2410a-MOR KINGDOM OF MOROCCO STAFF APPRAISAL REPORT OF THE SECOND WATER SUPPLY PROJECT May 18, 1979 Water Supply and Sewerage Division Europe, Middle East and North Africa Regional Office This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  CURRENCY EQUIVALENTS (as of November 11, 1978) Currency Unit - Moroccan Dirham (DH) - 100 centimes US$1.00 - DH 3.82 DH - US$0.26 DH 1,000,000 - US$261,780 MEASURES AND EQUIVALENTS 1 millimeter (mm) - 0.04 inches (in) 1 meter (m) - 3.28 feet (ft) 1 kilometer (km) - 0.62 miles (mi) 1 square meter (m2) - 10.8 square feet (sq. ft.) 1 hectare (ha)(10,000 m2) - 2.47 acres (ac) 1 square kilometer (km2) - 0.386 square miles (sq. mi.) 1 liter (1) - 0.264 US gallons (gal) 1 cubic meter (m3) - 35.3 cubic feet (cu ft.) - 264 US gallons (gal) 1 cubic kilometer (km3) - 264,000 million US gallons 1 cubic meter per second (m3/sec.) - 22.8 million US gallons per day (Mgd) or 35.4 cubic feet per second (cusecs) liters per capita per day (lpcd) - 0.264 US gallons per capita per day liters per second (1/sec.) - 15.8 US gallons per minute PRINCIPAL ABBREVIATIONS AND ACRONYMS USED AfDB - African Development Bank FEC - Fonds d'Equipement Communal IAURIF - Institut d'Amenagement et d'Urbanisme d'Ile de France NGM - Niveau Geometrique Marocain ONE - Office National de l'Electricite ONEP - Office National de l'Eau Potable RAD - Regie Autonome Intercommunale de Distribution d'Eau et d'Electricite de Casablanca RAK - Regie Autonome Intercommunale de Distribution d'Eau et d'Electricite de Kenitra RED - Regie Autonome Intercommunale de Distribution d'Eau et d'Electricite de Rabat-Sale SAFEGE - Societe Anonyme Francaise d'Etudes et de Gestion, Paris SMD - Societe Marocaine de Distribution d'Eau, de Gaz et d'Electricite, Rabat FISCAL YEAR January 1 - December 31  FOR OFFICIAL USE ONLY KINGDOM OF MOROCCO STAFF APPRAISAL REPORT SECOND WATER SUPPLY PROJECT Table of Contents Page No. I. THE WATER SUPPLY AND SEWERAGE SECTOR ....................... 1 General .................................................... 1 Water Resources ............................................ 1 Sewerage Subsector ....... ...................... . 2 Sector Organization .................................... 2 Service Level ............................................. . 3 Health Aspects .................................... 4 Sector Program and Priorities .............................. 4 Performance in Previous Bank Lending ........................ 5 Bank's Objective for the Sector ..... .............. 7 II. THE PROJECT AREA ...... ....................... .............. 8 Background ...................... ................................ 8 Water Resources .......................... 8 Production, Distribution .................................. . 9 Urban Poor ................................................. 10 Population Forecasts ....................... il Forecast of Demand ...... ............... .................... 12 III. THE PROJECT. ...........14 Project's Objective .................. ...... ................ 14 Scope of the Project .................... ................... 14 Project Components .................... ..................... 16 Alternative Solutions ........................................ 18 Cost Estimates ............................................. 19 Project Financing .......................................... 21 Project Implementation ..................................... 23 Land Acquisition ........................................... 25 Work on Force Account ............. ......................... 25 Procurement ................................................ 25 Disbursements .............................................. 26 Advance Contracting and Retroactive Financing ....... ....... 28 Environmental Aspects ...................................... 29 Monitoring System .......................................... 29 This report was prepared and written by Messrs. Johanngeorg Renkewitz and Johan van Beuzekom. This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be discosed without Worid Bank authorization.  - ii - Paxe No. IV. THE OFFICE NATIONALE DE L'EAU POTABLE (ONEP) ............... 30 Introduction ............................................... 30 Background ................................................. 30 Past Performance ........................................... 30 Organization and Management ................................ 31 Personnel and Training ...... ............................... 32 Accounting System ....... ....................... ............ 32 Billing and Collection ..................................... 33 Taxes ...................................................... 34 Audit and Insurance ........................................ 34 V. FINANCIAL ANALYSIS ........................................ 35 Background ................................................. 35 Past and Present Position .................................. 35 Tariffs, Rate of Return ...... .............................. 36 Financing Plan .............................................. 38 Future Finances ............................................ 40 VI. JUSTIFICATION ........................ ...................... 41 Least Cost Solution ....... ................................. 41 Institution Building ....................................... 41 Impact on the Urban Poor ...... ........................ ..... 41 Economic Analysis ....... ................................... 42 Risks ........................................... 42 VII. AGREEMENTS REACHED AND RECOMMlENDATIONS ............................................... 43-  iii LIST OF ANNEXES Annex No. 1. Terms of Reference for a Water Resource Study and Preparatory Investigations for Greater Agadir 2. Summary of Project Costs and Annual Project Investments 3. Project Implementation Schedule and PERT diagrams 4. Monitoring Indicators 5. Teras of Reference for Optimizing the Treatment Process at the Bou Regreg Treatment Plant 6. Bulk and Retail Water Tariffs 7. Terms of Reference for Review of Water Production and Distribution Costs of the Centers Managed by ONEP 8. ONEP's Financial Statements, 1975-1985: Income Statements, Cash Flow and Balance Sheets and Assumptions for Financial Forecasts 9. List of Contracts 10. Water Production and Demand Forecast for the Mid-Atlantic Coast 11. Water Production and Demand Forecast for Greater Agadir 12. Statement of Expenditure for Works on Force Account 13. Organizational Structure of ONEP 14. Selected Documents and Data Available in the Project File M