Morocco - Second Highway Project

Document of The World Bank FOR OFFICIAL USE ONLY Report No. 4019 PROJECT PERFORMANCE AUDIT REPORT MOROCCO: SECOND HIGHWAY PROJECT (LOAN 955-MOR) June 30, 1982 Operations Evaluation Department 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.  FOR OFFICIAL USE ONLY PROJECT PERFORMANCE AUDIT REPORT MOROCCO: SECOND HIGHWAY PROJECT (LOAN 955-MOR) TABLE OF CONTENTS Page No. Preface................. *. .. .............................. i Basic Data Sheet................................................. ii Highlights ............................... iv PROJECT COMPLETION REPORT I. Introduction................................................... 1 II. Project Identification, Preparation, Appraisal and Negotiations........................................... 1 III. Project Implementation.................................. 3 IV. Institutional Development............................... 10 V. Economic Evaluation................ ................... 10 VI. The Role of the Bank.................................... 12 VII. Conclusions............................. .... .......... 13 Tables 1. Actual and Appraisal Cost Estimates............ 15 2. Contract Amount and Final Costs of Casablanca-Rabat Expressway .......... . .. . ........................... 16 3. Estimated and Actual Costs of Highway Improvement Work ..... . ... . .................................... 17 4. Highway Maintenance Equipment................... 18 5. Schedule of Disbursements......... . .......... 19 6. Economic Evaluation of the Casablanca-Rabat Expressway.. ........ * ............. ...*............... 20 7a. Appraisal Data -Highway Improvements.................... 22 7b. Completion Data -Highway Improvements...... 23 7c. Economic Evaluation - Highway Improvements.............. 24 Map 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.  PROJECT PERFORMANCE AUDIT REPORT MOROCCO: SECOND HIGHWAY PROJECT (LOAN 955-MOR) PREFACE The following is a performance audit on the Second Highway Project in Morocco for which Loan 955-MOR (US$29.0 million) was made in January, 1974. The project was completed with some delay and its scope had to be reduced to accommodate cost overruns on the Casablanca-Rabat expressway, the major component of it. However, the project fully achieved its objectives and has a similarly satisfactory expost rate of return as estimated at appraisal. The Loan Account was closed in June, 1980 but disbursements continued until September, 1980 when the last disbursement was processed. The attached Project Completion Report (PCR) was prepared by the Europe, Middle East and North Africa Regional Office on the basis of information provided by the Borrower on completion, as well as that collected during normal supervision of the project. No mission was undertaken by OED staff to audit this project. The report is based on a review of the Minutes of the Executive Director's Meeting at which the project was considered, a limited review of other project documents, as well as interviews with Bank staff. On the basis of this limited review, the audit concludes that the PCR covers in a comprehensive and critical manner the issues arising from implementing the project. The audit finds no reason to question the analysis and findings contained in the PCR and, for this reason, has only summarized salient aspects in the Highlights. The draft report was sent to the Borrower for comments; however, none were received.  - ii - PROJECT PERFORMANCE AUDIT BASIC DATA SHEET MOROCCO: SECOND HIGHWAY PROJECT (LOAN 955-MOR) KEY PROJECT DATA Original Actual or Item Plan Current Estimate Total Project Cost (US$ million) 43.30 45.19La Overrun (%) - 4.4 Z- Loan Amount (US$ million) - 29.00 Disbursed - 29.00 Cancelled - - Repaid to August 31, 1981 - 3.87 Outstanding to August 31, 1981 - 23.82-/ Project Completion Date 12/76 10/80 Proportion Completed by .xpected Date (%) 100 50 Proportion of Time Overrun (%)- 133 Economic Rate of Return (%) 16/c 17/d Cumulative Estimated and Actual Disbursements (US$ million) FY74 FY75 FY76 FY77 FY78 FY79 FY80 FY81 Estimated 2.0 12.0 22.0 29.0 - - - - Actual - 1.7 8.0 16.7 21.1 25.1 28.1 29.0 Actual/Estimated (%) - 14 40 58 73 87 97 100 OTHER PROJECT DATA Item Original Plan Actual First Mention in Files 06/71 Government's Application - - Appraisal 12/72 12/72 Negotiations 06/73 10/73 Board Approval 08/73 12/73 Loan Agreement 09/73 01/74 Effectiveness 10/73 04/74 Closing Date 06/77 06/80 Borrower Kingdom of Morocco Executing Agency Ministry of Public Works & Communications1 Fiscal Year of Borrower. January 1-December 31 Follow-on Project Third Highway Project Loan Number 1830-MOR Amount (US$ million) 62.0 Loan Agreement Date May 1980  - iii - MISSION DATA Month/ No. of No. of Staff- Date of Iten Year WeeksL Persons weeks Report Preparation 09/72 1.0 1 1.0 09/72 Appraisal 12/72 2.5 4 10.4 12/72 Supervision I 06/74 1.0 1 1.0 07/74 Supervision II 09/74 2.0 2 4.0 11/74 Supervision III 09/74 1.0 2 2.0 12/74 Supervision IV 02/75 2.0 1 2.0 06/75 Supervision V 04/75 1.4 1 1.4 04/75 Supervision VI 04/75 3.2 1 3.2 06/75 Supervision VII 12/75 1.2 1 1.2 12/75 Supervision VIII 02/76 2.6 3 7.8 02/76 Supervision IX 05/76 1.9 5 9.5 07/76 Supervision X 08/76 1.2 2 2.4 09/76 Supervision XI 07/76 1.1 1 1.1 08/76 Supervision XII 04/77 0.4 1 0.4 06/77 Supervision XIII 04/78 1.2 2 2.4 06/78 Supervision XIV 11/78 0.6 1 0.6 12/78 Supervision XV 02/79 0.4 1 0.4 03/79 Supervision XVI 05/79 0.8 2 1.6 07/79 Supervision XVII 06/80 2.2 2 4.4 06/80 COUNTRY EXCHANGE RATES Name of Currency (Abbreviation) Dirham (DH) Appraisal year average (1972) US$1 = DH 3.90 Intervening years' average US$1 = DH 4.34 Completion year average US$1 = DH 3.94 /a Cost overruns made project cutbacks necessary. Figures shown are for reduced project and are thus not strictly comparable with appraisal estimates. /b Includes a negative exchange adjustment of US$1.31 million. /c Expected return for main project component. Expected returns for other items ranged from 14% to over 100%. /d Rate of Return on main project component only (60% of total expendi- tures). Lack of data prevents estimating return on other project items (PCR, para. 5.04). /e Up to 1978 when it became the Ministry of Works and National Promotion. /f Missions often dealt with more than this project. Figures shown are estimates of time spent on this project only.  - iv - PROJECT PERFORMANCE AUDIT REPORT MOROCCO: SECOND HIGHWAY PROJECT (LOAN 955-MOR) HIGHLIGHTS 1. The project was designed to assist in improving traffic conditions on several high traffic-volume roads in the country especially the road on the Casablanca-Rabat corridor where substandard sections were creating difficult traffic management and accident problems. To achieve this objective the project set out to (a) construct a paved two-lane carriageway and the earth- works for two additional lanes on 33 km of the 62 km Casablanca-Rabat express- way, (b) improve 679 km of primary and secondary roads in the country, and (c) carry out traffic management studies in the cities of Casablanca and Rabat. In addition, the project was intended to assist in improving highway mainte- nance and general transport planning in the country. To achieve these latter objectives the project Lncluded provision for (d) the purchase of highway maintenance equipment and (e) technical assistance to establish a transport planning office in the Ministry of Public Works and Communications (Appraisal Report, para. 5.01, PCR, para. 2.04). 2. The objectives with regard to the Casablanca-Rabat road were fully achieved. Traffic flows between these two cities improved considerably not only because of the works in the project were completed but because the Government carried out, with its own resources, the paving of the additional two-lane carriageway (PCR, paras. 3.04 and 6.01). Similarly, Bank staff visits confirm that traffic has also significantly improved along the primary and secondary roads upgraded under the project. However, only about 70% of the expected length for upgrading was completed. This reduction was necessary to compensate for the rather heavy cost overruns (60% in dirhams, PCR, Table 1) on the Casablanca-Rabat expressway (PCR, paras. 3.07 and 3.18). The PCR suggests (para. 6.01) that it might have been preferable, from an overall transport planning point of view, for the Government to have completed the primary and secondary roads rather than use its scarce resources to pave the second carriageway of the Casablanca-Rabat expressway. The audit agrees with this view on the grounds that, judging from appraisal forecasts, the rates of return on investments in secondary roads seem to have been higher than the 17% obtained on the expressway (PCR, para. 5.02). It is unfortunate, however, that lack of information does not allow an estimate to be made of the rates of return on completion of the secondary road improvements (PCR, para. 5.04). The audit fully agrees with the PCR's recommendation (para. 5.05) that these information requirements should be foreseen at appraisal, and that arrange- ments should be made to collect the data, if necessary through special pro- visions under the project. The audit notes that since the early 1970s, when this project was approved, performance monitoring has become a permanent feature of most Bank Group projects. - v - 3. The audit agrees that completion of the traffic management studies in Casablanca and Rabat were an important contribution of the project, par- ticularly because the Moroccan authorities had not included these studies in their plans (PCR, para. 6.02). However, the audit regrets along with the PCR (para. 3.13) that only a few of the recommendations were implemented by the Government. As the PCR notes, two facts seem to have contributed to this outcome: first, that the Bank did not follow up the studies with an urban project designed to assist in implementing the recommendations, and second, that the studies did not contain specific advice on how to implement the measures. For these reasons, much of the problems of dispersing traffic at the Casablanca end of the expressway still persist, and as time has passed, the information on which the recommendations were based has become obsolete (PCR, para. 3.13). 4. The project made provision for the purchase of a significant amount of highway maintenance equipment. However, as a result of changed priorities on equipment needs brought about by a consultants' study, as well as due to increased prices, the number of items bought under the project was signifi- cantly less than expected at appraisal. Nevertheless, about the same monetary amount was finally procured (PCR, para. 3.08). The Government complied expeditiously with a Loan covenant requiring it to create a Central Equipment Division within the Ministry of Works to manage the use of all maintenance plant and equipment, including that procured under the project. This arrange- ment has worked satisfactorily (PCR, paras. 3.25, 4.02 and 6.03). 5. The project also made provision for technical assistance in the establishment of a transport planning office. As a result, a small group was established in the Ministry of Public Works and Communications, and later transferred to the Ministry of Transport. However, the group has been pre- vented from performing the important task of coordinating investments in all modes of transport because of split responsibilities between the Ministries (PCR, paras. 3.14, 3.15 and 4.01). While the Ministry of Works is responsible for roads, that of Transport is responsible for investments in the other modes. The consequence is that poor coordination exists between, for in- stance, road and rail investments on the Casablanca-Rabat corridor. 6. Bank Group procurement guidelines were not always followed by the Government and bid evaluations and contract awards were, more often than not, post-approved rather than pre-approved by the Bank (PCR, paras. 3.07, 3.09 and 3.10). However, there is no evidence of misprocurement. The audit agrees with the PCR (para. 3.26), that thresholds for pre-approval were set too low (US$200,000 for civil works and US$20,000 for equipment). As pointed out by the PCR, it is unlikely that adverse effects would have resulted from significantly increasing the thresholds, perhaps well beyond those used in the Third Highway Project (initially US$100,000 for civil works and equipment but later increased to US$500,000 for civil works). It is more likely that efficiency improvements could have resulted in the saving of both Bank and Moroccan staff time (PCR, para. 3.26). Similarly, the requirement to follow international competitive bidding for all civil works contracts seems to have - vi - put an unnecessary additional burden on the Borrower (PCR, para. 7.03). Many minor improvements and some of the main construction contracts could probably have been procured as effectively by means of local competitive bidding. The audit agrees with the PCR that discretion ought to be used in deciding which type of competitive bidding best suits the circumstances. 7. Finally, the audit notes that, as was the case under the First Project (PPAR 1565, April 1977), disbursements lagged considerably behind the physical implementation of the project (PCR, para. 3.28). The main reason seems to be the persistent slow processing of withdrawal requests by the Ministry of Finance.  MOROCCO SECOND HIGHWAY PROJECT - LOAN 955-MOR PROJECT COMPLETION REPORT I. INTRODUCTION 1.01 The reasonably well developed transport system of Morocco includes about 55,000 km of roads, of which 25,000 km are paved, 1,760 km of railways, six major ports and eight major airports. Investment in the transport sector was expanded in 1975 when the price of phosphate, one of the major sources of government revenues, increased almost fivefold from preceding years. However, the phosphate price dropped in 1976 and 1977, and most projects had to be cut. Since then, investments in the transport sector, particularly in roads, have been made under a strict austerity program. 1.02 The Bank involvement in the road subsector began in 1969 with a combined Loan 642-MOR/Credit 167-MOR, totaling US$14.6 million, to finance the First Highway Project. In addition to the Second Highway Project, which is the object of this Project Completion Report, a Third Highway Project is being carried out with financing under Loan 1830-MOR (May 1980, US$62 million). Finally, the Government and the Bank have started preliminary discussions on a proposed Fourth Highway Project whose appraisal is tentatively scheduled for ApriL/May 1982. 1.03 The First Highway Project, which included improvement and construc- tion of road sections, the purchase of maintenance equipment and spare parts, and a transport survey of the Atlantic coastal zone from Agadir to Tangiers, was substantially completed on time by end-1973. The closing date, however, was postponed from February 28, 1974, to December 31, 1975, because of slow withdrawals from the Loan/Credit accounts. A Project Performance Audit Report (PPAR), issued in April 1977, found that the project (i) was implemented with minor difficulties, (ii) had small cost overruns, and (iii) had rates of return higher than expected. The PPAR concluded that the outcome of the project was favorable, especially considering that this was the Bank's first undertaking in the highwav subsector. II. PROJECT IDENTIFICATION, PREPARATION, APPRAISAL AND NEGOTIATIONS 2.01 The major component of the project, the construction of part of the Casablanca-Rabat expressway, together with another new highway between Kenitra and Larache, were identified by the transport survey financed under the First Highway Project (para. 1.03). The feasibility studies and the detailed engineering for these two roads were added during project execution since it - 2 - appeared that sufficient funds were available under the Loan/Credit. The detailed engineering, however, was not financed from the Loan/Credit because the expected surplus, which had been allocated to this task, ;s later wined out by the change in exchange rates which took place in Decemoer oi,. T.e Government, however, following the Bank's agreement to allocate the estimated surplus to the engineering studies, had signed contracts with consultants. The studies were prefinanced by the Government and subsequently retroactively financing under the Second Highway Project. 2.02 The appraisal was carried out in November/December 1972 by Bank staff of the Highways Division and Special Projects Department which defined the urban component. Processing of the project, however, was delayed because of the Government's indecision about the content of the project. Initially, the Government indicated that construction of the Casablanca-Rabat expressway, part of which was included in the project at appraisal, might eventually be excluded from the 1973-1977 plan. When this issue was resolved with the inclusion of the expressway in August 1973, the Government indicated that the same problem existed with regard to two other project components--the urban studies of Casablanca and Rabat, and the technical assistance to create a small transport planning office. Finally, a telex of September 5, 1973 con- veyed the Government's agreement on all project components but wished that a large part of project be financed under IDA funds. The Prime Minister then officially requested IDA financing, but the Bank indicated that there were no funds available. 2.03 Loan negotiations took place in Washington from October 1-5, 1973 and did not present any problem of substance. One major point of discussion, although not directly associated with project components, regarded deregula- tion of the transport sector, which had been recommended in the transport survey financed under the First Highway Project (para. 1.03). This issue was first raised during appraisal, when the Bank began discussions on the Govern- ment's policy aimed at total control of public services while restricting private services. Although deregulation was a sensitive political issue, the Government had started its own studies of the question and agreed to discuss the results with the Bank. During negotiations the Moroccan delegation agreed that the present organization of the transport industry was not satisfactory and indicated that one of the Government's objectives was to make it more efficient. The delegation added that, in addition to the studies already carried out, an in-depth analysis of administrative and social aspects was required. These studies were being carried out and a colloquium would be held in March 1974, to which all elements of the trucking industry and railways would be invited. These steps would indicate a strategy for improving the performance of the industry. The Bank was expected to be given an opportunity to discuss the results of the colloquium with the Government. Progress in this sensitive area has been slow. Both the ongoing Third Project (Loan 1830-MOR, FY80) and the Sector Memo (October 1980) address the matter which will be pursued in the proposed Fourth Project. 2.04 The Board approved a loan of US$29 million to the Government of Morocco on December 4, 1973. The project comprised: - 3 - (a) the construction of two lanes of the uncompleted part (33 km) of Primary Road 36 (RP36), elsewhere referred to in this report as the Casablanca-Rabat expressway; (b) the improvement of 679 km of 17 primary and secondary roads; (c) the purchase of highway maintenance equipment; (d) the carrying out of traffic studies in the cities of Casablanca and Rabat; (e) the establishment of a transport planning office in the Ministry of Public Works and Communicationa/ (MPWC); a nd (f) the execution of detailed engineering for the Casablanca- Rabat expressway and the Kenitra-Larache road. The project cost, as estimated at appraisal, is shown in Table I which also shows the project's final cost. The foreign exchange component of US$29 million was to be financed under the Loan. The project was expected to start in January 1974 and be completed by December 31, 1976. III. PROJECT IMPLEMENTATION Effectiveness and Start-Up 3.01 The Loan Agreement was signed January 11, 1974. The target date for Loan effectiveness, for which there were no special conditions, was set at March 18, 1974, but.the Loan was declared effective on May 21, 1974, because of Government delay in submitting the required legal opinion. The Government, however, began project scart-up before this date with (i) the prequalification of contractors for the Casablanca-Rabat expressway, which-took place on February 12, 1974, and (ii) the submission for the Bank approval of a list of highway maintenance equipment to be purchased. Construction of Part of the Casablanca-Rabat Expressway 3.02 Construction works were divided into three lots. major structures (Lot IA), and construction of the road (Lot 2A and Lot 3A). Lots 2A and 3A included the earthworks for the second two-lane carriageway intended to be 1/ The Transport Planning Office was designated part of the Ministry of Transport when the latter was set up in 1977. built a few years later, as indicated by the feasibility study.i/ Of 17 prequalified contractors, only three submitted bids by May 27, 1974, for Lot lA and two each for Lot 2A and Lot 3A. The total of the three lowest evaluated bids amounted to DH 120 million while the AppraisaL Report's estimate was DH 56.5 million. A Government updated estimate, made shortly before bidding to take into account price inflation since appraisal, put the total cost at DH 80 million. The Government decided that the offers were excessive and requested new offers from the lowest bidder of each lot, but only the bid for Lot 1A was significantly reduced. The Government, therefore, proposed, and the Bank agreed, to (i) award the contract for Lot IA to a Moroccan-French joint venture for an amount of about DH 16.5 million, (ii) reject all bids for the two other lots, and (iii) invite 12 of the original 17 prequalified contractors to submit new bids for these two lots. 3.03 The Government opened the new bids on November 20, 1974, and pro- posed to award the contract for Lots 2A and 3A for an amount of about DH 64.5 million to a domestic joint-venture which was the lowest evaluated bidder. The total amount of contracts was therefore DH 81 million, 43 percent more than appraisal estimate, but bitumen for road surfacing and some minor elements such as fencing, service exits, guard-rails, and road signs were not included. Bitumen was procured separately from the semi-public company SEBLIMA which had the monopoly of selling oil-derivate products in Morocco, and the ancillary works were carried out later when it became apparent that sufficient funds were available in the Loan account. By the time construction and finishing works were completed in October 1980, the total cost was DH 111.5 million--60 percent more than appraisal estimate including contin- gencies (Table 2). In terms of US dollars, however, the overrun was 44 percent higher than the appraisal estimate due to the increase in dollar parity over the project period. Tne increase in cost of the expressway construction was offset by a reduction in cost of other project components (Table 1). 3.04 The Government decided in 1976 to proceed with construction of the second carriageway when income from phosphate rose suddenly in 1974-75 and removed the earlier financial constraint. The contract was awarded to the same contractor who was constructing the Bank-financed carriageway and works proceeded rougnly in parallel. The second carriageway was entirely financed by the Government with its own sources. The Bank was not officially informed and played no part in the supervision of the second contract. 3.05 Execution of works lasted much longer than envisaged. Lot IA was completed in 34 months instead of contracted 24 months, and Lots 2A and 3A tooK 57 months instead of 36 months. Works were completed in October 1980, one month after the contractual period for an addendum to the contract for Lots 2A and 3A. Because of these delays, the Loan Closing Date, originally set at June 30, 1977, had to be postponed four times. Finally, the Loan was 1/ In addition, financial constraints precluded the full inclusion of the second carriageway in the first stage. - 5 - closed on June 30, 1980, but the Bank agreed to accept withdrawal requests for disbursements until end-July. Actually, the last disbursement totally withdrawing the Loan took place on September 2, 1980. 3.06 A variety of factors contributed to these delays, in addition to the time spent in retendering. Construction of the expressway was held up for about one year in 1976-77 because of protracted expropriation procedures to acquire areas containing the only suitable construction materials. Also, one of the bridges had to be lengthened to reduce the risk of flood damage. In 1978, the death of the owner of one of the contracting firms in the joint- venture delayed construction by about one further year while issues connected with the firm's obligations were resolved. In addition, a sharp drop in phosphate prices caused a scarcity of Government funds from 1977 to 1979 with a corresponding shortage of funds to cover the local cost of the first carriageway and the total cost of the second contract. This probably contri- buted to a slowing down in the pace of construction. Tne Roads Department (RD) exercised full responsibility for supervision. Improvement of Primary ani Secondary Roads 3.07 Improvement of primary and secondary roads comprising pavement strengthening, minor realignments and widening, all engineered by the MPWC field divisions, was carried out between August 1974 and January 1978 with a one-year delay over the time estimated at appraisal. Works were divided into 27 lots and sub-lots and only domestic contractors submitted bids (Table 3). About 480 km of road sections were improved instead of 679 km included in the Loan Agreement, a 29 percent reduction in length. The Government with Bank concurrence reduced the anount of these works to compensate for the large cost overrun which incurred in construction of the Casablanca-Rabat expressway (para. 3.03). The Procurement Annex to the Loan Agreement provided that the Government should have obtained the Bank's agreement in advance for procure- ment of civil works expected to cost the equivalent of US$200,000 or more. This procedure was not invariably followed by the Government and most of the bid evaluations and contract awards were post-approved, albeit with no apparent mishandling of the situation. Purchase of Highway Maintenance Equipment 3.08 A detailed list of highway maintenance equipment, as defined in the appraisal report on the information then available, was agreed for purchase under the Loan. However, a subsequent study of road maintenance carried out in 1973 by consultants under Government financing, found that some equipment items, not included in the list, had higher priority. Accordingly, in May 1974, the Government requested and the Bank agreed to a modified list of equipment. Table 4 shows the equipment list agreed at negotiations and the equipment purchased. 3.09 Information and prequalification invitations on the 'first purchase of equipment were publicized in the Moroccan press in September 1973, prior to negotiations. Thereafter the Bank received only a bid evaluation report and - 6 - copies of signed contracts in October 1974, despite interim requests for information. Although this process was not in conformity with the Loan Agreement which required the Government to follow Bank guidelines for all contracts above $20,000, the contracts were accepted by the Bank since there was no evidence of misprocurement or an unsatisfactory outcome. 3.10 The second purchase of equipment started in October 1974 and followed Bank guidelines through receipt of bids. However, although the Bank requested the Government to submit the bid evaluation and contract proposals before award, such documents did not materialize at that time. The contracts were post-approved by the Bank after signature and following close review of the process and awards by a supervision mission. Traffic Studies in Casablanca and Rabat 3.11 The Urban Projects Department, which was envisaging providing tech- nical and financial assistance to the urban sector in Morocco, including urban transport, supervised this project component. In agreement with the Government, the terms of reference for the studies, which originally referred mainly to traffic dispersal problems connected with the construction of the Casablanca-Rabat expressway, were extended to include traffic management and transport development plans for the two cities. Also, an addendum to the two contracts for these studies was made later concerning the definition of a project economic evaluation framework. 3.12 The traffic plans of both cities recommended detailed improvement to all aspects of traffic, and indicated that public transport was the most cost- effective. The studies also recommended investment schemes with cost esti- mates indicating priorities. The transport plans, based on the expected development of the two cities, led the Moroccan authorities to assign first priority to improvement of public transportation according to the policy adopted for the traffic plans. 3.13 The preparation of the traffic and transport plans, however, was not followed by a program of works to be implemented promptly and only a few measures were actually executed on a piece-meal basis. The main shortcoming of the reports was that, while technically sound, they did not address the institutional questions of how the recommended program should be implemented. The fact that the Bank did not pursue the preparation of an urban transport project, or a transport component of an urban development project, in 1976-77, may have contributed to the lack of concerted follow-up. The Bank and Government resumed their dialogue on a possible urban transport project late in 1980, by which time much of the data on which the studies' recommendations are based had become obsolete and needed updating. The Establishment of a Transport Planning Office 3.14 At the Government's request, the Bank prepared terms of reference for technical assistance to establish a small transport planning office in the Ministry of Public Works and Communications as early as 1972. However, this - 7 - technical assistance did not materialize at that time because the Government was limiting the number of experts to those which could be supplied by France on a bilateral basis. The technical assistance was then included in the project, and in June 1975, the Government sent the Bank a list of consultants and a copy of the invitation letter for comments. After agreeing to exclude a consultant whom the Bank did not find suitable for the services requested, the Government selected a consultant to which the Bank agreed in April 1976. The consultant fielded a team of three experts who provided their services from August 1976 to about the end of 1978 for a total of about 40 man-months. 3.15 As a result of the efforts of the Government and the technical assistance, a transport planning office was created within the Ministry of Public Works and Communications. The office was organized in three sections-- planning, costs and tariffs, and traffic data collection--and surveyed costs and traffic in all transport modes. By the time the technical assistance was phased out, a small Morcccan section had been established capable of conti- nuing the analysis of transport data and preparing sectorial studies in part- nership with staff of the modal agencies. Detailed Engineering for the Casablanca-Rabat Expressway and the Kenitra-Larache Highway 3.16 These studies had been prefinanced by the Government during the carrying out of the First Highway Project in preparation of the Second Highway Project (para. 2.01). The foreign exchange component of their cost (about US$0.9 million) was reimbursed under the loan. Implementation Schedule 3.17 As mentioned before and shown in Table 2, execution of the major component--the construction of Phase A of the Casablanca-Rabat expressway-- experienced considerable delays. The Government started implementing the project expeditiously, but several factors delayed its implementation, includ- ing retendering of the expressway works and the lack of domestic funds (para. 3.06). 3.18 Execution of highway improvements was substantially completed on schedule, excluding a few sections which were completed within a one year's delay. However, only about 70 percent of road sections included in the Loan Agreement were improved (para. 3.07). 3.19 The studies on traffic and transport plans for the cities of Casablanca and Rabat, al.though expanded in scope (para. 3.11), were completed satisfactorily in 1976 according to the appraisal implementation schedule. 3.20 As already mentioned (para 3.14), technical assistance for the establishment of the transport planning office was initially delayed because the Government expected that some bilateral assistance would be provided by France. Subsequently, the exchange of correspondence on the exclusion of a - 8 - consultant from the short list caused a further delay of several months, and finally, the Government was slow in making a final choice. In total, 19 months elapsed between the time the Government formally began the procurement process and the signing of a contract (October 1974-April 1976). Costs 3.21 The total cost of the project, as estimated at appraisal, was DH 168.9 million, or US$43.3 million at the rate of exchange of US$1 = DH 3.9 prevailing at that time. Actual expenditures amounted to DH 196.4 million, or about 16 percent higher (Table 1). However, in terms of US dollars, the total cost of the project increased only by about 4 percent because of the increase of the dollar parity during project execution. Table 1 shows that the there would have been a greater cost overrun if the scope of the other project items had not been reduced with regard to the appraisal estimate in order to accom- modate the cost overrun on the expressway. Performance of Consultants 3.22 Both the urban traffic consultants' and the transport planning con- sultants performed satisfactorily and their output was beneficial. In fact, a number of Moroccan technicians, who were appointed as counterparts, were able to improve their skills and are continuing the work initiated with the consultants. Performance of Contractors 3.23 All contractors for civil works were Moroccan, except a French contractor who was in joint-venture with a Moroccan firm to construct the major bridges of the Casablanca-Rabat expressway. Their performance was generally satisfactory. Performance of the Borrower 3.24 The Government closely supervised the implementation of the project. In addition to its administrative tasks, the Government (a) prepared bidding documents for all project items, except the Casablanca-Rabat expressway, the documents for which were prepared by consultants, and (b) supervised all the civil works. The Government performed satisfactorily with regard to construc- tion supervision and the studies. With regard to the technical assistance for the transport planning office, however, the Government was rather slow in finalizing the consultants's contract (para. 3.20). 3.25 The Government's performance in observing the covenants included in the Loan Agreement was mixed. The Government (a) maintained adequate records of operations and expenditures regarding the project; (b) maintained the pri- mary road network adequately, but did not do so with regard to the secondary network and even less on the tertiary road network; (c) operated and main- tained adequately its highway equipment, but equipment renewal was not fully - 9 - carried out; and (d) introduced a cost accounting system (Loan Agreement, Section 4.03). Tne Government continued to improve the collecting and record- ing of information for pLanning concerning roads (Ibidem, Section 4.04), but it did not fully enforce limitations on size and weight of vehicles (Ibidem, Section 4.05) mostly because of lack of appropriate equipment. These actions should be improved and/or initiated under the Third Highway Project, which provides for the purchase of pavement evaluation equipment, and mobile and fixed weigh scales. The Government sent the evaluation of proposals and proposed contract award for the urban studies by December 12, L974, instead of July 1, 1974 (Iidem, Section 3.02,(b)). A Central Equipment Division which was specified under Secti'on 3.08 of the Loan Agreement was established in January 1974, anead of schedule. 3.26 Throughout project implementation, and despite frequent urgings from the Bank, the full Bank procurement procedures were not invariably followed. In particular, the low thresholds of t200,000 for civil works and t20,000 for equipment, above which full BanK pre-review was required, were not scrupu- lously observed. Close post-award monitoring under the Second Project and tighter control exercised under the ongoing Third Project indicate that no deleterious effects are Likely to result from higher thresholds; to the contrary, they would be more cost-effective in time and staff resources, both Bank and Moroccan (see para. 7.03). 3.27 As a result of experience on procurement under the Second Project, the Bank has taken a mucia firmer line under the ongoing Third Project (Loan 1830-MOR, FY80), in whica the thresholds are $500,000 for civil works and $100,000 for equipment. In almost all cases the Government now seeks the Bank's prior approval before awarding contracts. The six-year gap (1974-80) between the two projects, during which tne Governent has probably come to better understand and accept Bank requirements, may have contributed to this record. Disbursements 3.28 Because of the delay of almost four years in project completion, actual disbursements cannot be meaningfully compared with the disbursement schedule estimated at appraisal. Government withdrawal requests for reim- bursement were always lagging considerably behind physical implementation and actual expenditures made from the Government budget. This problem existed already under the First Highway Project, though on a larger scale, and was due to slow Government procedures; it was discussed during negotiations when the Director of Budget of the Ministry of Finance promised to look into the matter and try to improve the situation. Table 5 shows actual disbursements against appraisal estimate and subsequent estimates. New estimates were attempted during project execution, but until September 1976 they were made on the assumption that the project would be completed on schedule (i.e. end-1976 with disbursement until mid-1977). Additional disbursement estimates were made in December 1978 and July 1979, with the latter showing disbursements to be com- pleted by December 31, 1979. Actually, the last disbursement took place on September 2, 1980, after the Loan closing date (June 30, 1980). - 10 - IV. INSTITUTIONAL DEVELOPMENT 4.01 Although the Second Highway Project was mainly a road construction/ improvement project, the technical assistance to help establish a transport planning office (TPO) provided on-the-job training for several Moroccan specialized staff, and consolidated the TPO's role as coordinator of studies and policy discussion in those branches of the transport sector that come under the Ministry of Transport. This was noted in the Performance Audit Report for tne First Highway Project (Ibidem, para. L1). One drawback is that TPO is unable to play any role in formulating highway investment plans, a major component of the transport sector investment budget, as these remain the responsibility of the Ministry of Public Works. 4.02 Another achievement of the Second Highway Project is the creation of an Equipment Division within the Roads Department. This division, although not fully developed yet, manages tne highway equipment fleet and is expected to improve road maintenance by better upkeep of the equipment. A study on improvement of the road maintenance organization, envisaged under the Tnird Highway Project, will prepare, inter alia, recommendations on how to make the Equipment Division more efficient. V. ECONOMIC EVALUATION 5.01 Tne project achieved its principal objectives, namely: (a) to improve traffic conditions on main roads as well as some secondary roads, mostly in the Atlantic corridor and in the urban areas of Casablanca and Rabat, (b) to improve highway maintenance, and (c) to assist the MPWC in strengthening transportation planning. During the period the project was being implemented fuel prices quadrupled and road traffic grew steadily, despite the fuel crisis. The completion of the major section of the Casablanca-Rabat expressway (RP36) significantly reduced the travel time and accident risk between the two cities, encouraging closer coordination between the commercial and industrial world of Casablanca and the Government minis- tries in Rabat. The localized improvements elsewhere on the main network reduced transport costs and the risk of accidents. The remaining items also contributed to the above objectives, but their contribution is less readily defined. The Casablanca-Rabat Expressway (RP36) 5.02 Data on traffic and vehicle operating costs indicate that on the section of the expressway covered by the project, the first carriageway from Ain Harrouda to Oued Cherrat, the rate of return, conservatively estimated, was about 17 percent, one percentage point above the appraisal estimate. 5.03 Traffic growth was slightly slower than forecast (6.8 percent against 8.5 percent between 1972 and 1980). On the other hand, although the - 11 - expressway was opened in sections from 1977 on, the full length was not opened until four years later than originally intended. The traffic in the year it was actually completed, 1980, was 22 percent more than in the opening year originally forecasted, 1976. The actual construction cost in 1978 prices was 110 percent higher than the appraisal estimate in 1972 prices, and the longer-than-expected con:3truction period further added to the cost in present value terms before the full benefits began accruing. But these cost increases were offset by similar inflation in vehicle operating costs and accident costs. Retaining the feasibility study's estimate that traffic diverting to the expressway would reduce its operating costs by 10-15 percent and that future traffic growth will average 7 percent per year, the economic rate of return (ER) was 17 percent (Table 6). This estimate also retains the conser- vative assumption made by the feasibility study and appraisal report that traffic speeds on the old Casablanca-Rabat road (RPl) would not deteriorate beyond 1980. However, under the more realistic assumption that congestion would have rapidly worsened, the ER would be considerably higher. Localized Road Improvements 5.04 The appraisal report presents summary tables showing rates of return on the localized road improvements and pavement strengthening ranging from 14 to over 100 percent. It is not possible, on the basis of the information available, to update these individual rates of return (Table 7). The reasons for this are; (a) at the time that this completion report was prepared, the information needed to estimate the reduction in road user costs due to the actual works was not available at a reasonable cost; (b) the appraisal report identified only approximate locations or road lengths within which selected sections would be improved; comparisons with data on actual locations and section lengths are unreliable; and (c) actual traffic data supplied by the Government vary erratic- ally with respect to the appraisal forecasts, implying that in several cases they do not refer to the same section of the given road. 5.05 The principal conclusion to be drawn in this regard is that the information needs of the completion report were not foreseen at appraisal nor during supervision. The small scale and dispersed locations of the individual works make it appropriate that the Bank allow the Borrower flexibility to modify the exact location and scope of the works after appraisal, according to the provincial engineer's best judgment. However, the central offices of the implementing agency should be required, as is now written into all loan agree- ments, to set up a monitoring system to keep track of the essential data on location, section length, traffic and the nature of the works, so that meaningful comparisons can be made between appraisal and.actual data. If the - 12 - cost of compiling such data centrally appears to exceed the foreseeable bene- fits of doing so, it may be preferable to monitor only a sample of sections, in order to document trends in civil works costs, traffic and benefits. Attention should be focussed as a priority on sections with the lowest appraisal rate of return, since it is on sections with similar characteristics (e.g. similarly low traffic or high construction cost) that remedial action can be taken in the future, if the monitoring shows up trends that would undermine the works' economic justification. 5.06 As regards the identity of project beneficiaries, no information is available to indicate any departure from what was anticipated in the appraisal report. Other Project Elements 5.07 No data were collected on road maintenance equipment down-time and utilization, by which to judge the savings afforded by the new equipment com- pared to that in use at the time of appraisal. 5.08 Nor is it possible to given any quantified measure of the impact of the technical assistance in planning and the urban studies. Their usefulness in qualitative terms has already been noted (paras 3.14-15 and 3.11-13). VI. THE ROLE OF THE BANK 6.01 The country's priorities in the road subsector were well reflected in the project's composition. The main role of the Bank during preappraisal and appraisal was to help determine, and to convince the Government of, the most profitable sequence for the construction of the Casablanca-Rabat express- way. Thus, only construction of a two-lane carriageway of 33 km at the Casablanca end was included in the project. However, in light of the improved economic picture, the Government began construction of the second two-lane carriageway under its own budget in 1976. Although the Bank could not have prevented the Government from starting the second stage, it is now apparent (with hindsight) that the short-lived economic upsurge did not warrant such further expenditure. In fact, the Government should have been urged to first complete and probably extend the improvement program. 6.02 Another important role of the Bank during the processing of the Appraisal Report was to convince the Government of the necessity of studying the traffic in the cities of Casablanca and Rabat. These studies, which were necessary because of problems foreseen in dispersing traffic from the express- way in the terminal cities, were not included in the Government plans. The Minister of Finance finally included in the Government budget the local expen- diture for the studies which thus became part of the project. 6.03 A significant contribution by the Bank to the institution building of the RD was the suggestion to create an Equipment Division (para. 4.02). - 13 - This was included as a loan covenant (Loan Agreement, Section 3.08) which set December 31, 1974 as the target date for the creation of this division. In the event the Division was established in January 1974, only a few months after negotiations, and it constituted a tangible contribution to the RD's development. 6.04 The Bank had attached much importance to the pursuit of freight deregulation as recommended in the transport survey financed under the First Highway Project. Since this was a very difficult and politically sensitive matter, the Bank decided that the best way to proceed towards freight deregu- lation was to reach agreement at negotiations on objectives and appropriate steps by the Government to be recorded in a supplemental letter. During negotiation, however, the Bank position on this issue was somewhat downgraded (para 2.03) and no supplemental letter was signed by the Government. Lack of real leverage combined with the political sensitivity inhibited Bank efforts to actively pursue this matter during project implementation. However, the matter was raised again in the context of tne Transport Sector Memorandum (yellow cover) of October 1980, and will continue to feature in the context of the proposed Fourth Highway Project (FY83). VII. CONCLUSIONS 7.01 Although the project was physically completed with about a four-year delay, its contribution to Morocco's economy is positive. The first stage of the Casablanca-Rabat expressway was satisfactorily completed, although traffic levels have been slightly lower than predicted. Recognizing the limited accuracy of the estimates, the economic return (17%) was essentially the same as that estimated at appraisal. 7.02 The project objectives--improvement of traffic conditions on major roads and in the urban areas of Casablanca and Rabat and improvement of high- way maintenance--were achieved. In addition institutional concerns such as transport planning and equipment management received attention--albeit leaving considerable scope for further improvement. Given the circumstances pertain- ing at the time of appraisal and the satisfactory rates of return determined a posteriori, the project components were rightly chosen. The ongoing Third project which is progressing satisfactorily places greater emphasis on highway maintenance and rehabilitation. The proposed Fourth Highway Project, which will probably feature provincial roads as well as continued maintenance emphasis, should constitute a logical next step in the Bank's highway operations in Morocco. 7.03 The project's implementation clearly indicated that ICB, accompanied by prior review by the Bank of each stage in the award of contracts, implied addditional work for the RD and slower procedures that were not warranted for the small scale civil works which accounted for most of the contracts awarded Although several foreign contractors had requested to be prequalified for the construction works of the Casablanca-Rabat expressway, only three submitted a bid for Lot IA (major structures) and in joint venture with local contractors. - 1.4 - None made an offer for Lots 2A and 3A (earthworks, pavement, and minor struc- tures), although each of these lots was estimated to cost about twice as much as Lot 1A.1/ It appears that mobilization of considerable equipment and other resources which the works required, but without sufficient likelihood of follow-up works, was a factor in dissuading foreign contractors from bidding for Lots 2A and 3A. This also explains a fortiori why foreign contractors did not submit a single bid for highway improvement works which were scattered in nature and relatively small financially. Yet the Loan Agreement provided for (i) ICB with respect to all civil works, and (ii) prior examination and approval by the Bank of every step of the procurement process. The only exception allowed was that the Bank would be satisfied with retrospective review of the bid evaluation and signed contracts for civil works costing less than US$200,000 and equipment costing less than US$20,000. In the final analysis less than one third of the civil works contracts were for amounts less than US$200,000, and no contract for equipment was less than US$20,000. Clearly the thresholds need to be reviewed and raised to a reasonable level to save precious time of Moroccan and Bank staff resources in project implementation. 1/ Estimated total costs: Lot 1A - US$4.6 million, Lot 2A - US$7.3 million, Lot 3A - US$8.1 million. MOROCCO SECOND HIGHWAY PROJECT - LOAN 955-NOR PROJECT COMPLETION REPORT Actual and Appraisal Cost Estimatesi' (In parenthesis. Bank disbursements) ('000) Actual Cost ------------------ Actual ------------------ ----------- Appraisal Estimate32 ------------ as % of Local For Total Local Foreign Total Appraisal Estimate PH is DM a U DR us$ N USX DH USS D U$ I. Civil Works A. "First Phase" of 39,039 9,017 72,500 16,702 111,539 25,719 24,507 6,284 45,279 11,610 69,786 17,894 160 144 Casablanca Rabat Expressway B. Highway Improvement 21823 4,958 40,529 9,210 62,352 1 6 24 ,216 44,799 11,487 69,O42 I1,703 90 80 60,862 13,975 113,029 25,912 173,891 39,887 48,750 12,500 90,078 23,097 138,828 35,597 125 112 (25,111) II. Equipment 3,269 799 8,836 2,160 12,105 2,959 3,756 0,963 10,089 2,587 13,845 3,550 87 83 (2,160) III. Consultant's Services 2,079 470 8,318 1,879 10,397 2,349 3,264 0,837 12,932 3,316 16,197 4,153 64 57 ______ _____ ______(1,729) _______ ___ ___ ____ 66,210 15,244 130,833 29,951 196,393 45,195 55,770 14,300 113,099 29,000 168,870 43,300 116 104 (29,000) 1/ US$1 = DH 4.34 for actual costs (average during disbursement period), and US$1 - DH 3.9 for appraisal estimates. 2/ Including contingencies. MOROCCO SECOND HIGHWAY PROJECT - LOAN 955-MOR PROJECT COMPLETION REPORT Contract Amount and Final Cost of "First Phase" of Casablanca-Rabat Expressway (Dirham) Award Approval Completion Date Contract Lot Description Contract Date Date Contractual Actual Amount Final Cost 1A Major structures DR 7/74 10/15/74 12/19/74 1/77 11/77 16,492,148 21,178,799.01 2A) Roadway construction DR 11/74 12/6/74 3/10/75 4/77 12/78 66,438,713 66,158,501.56 3A) 2A) Addendum DR 11/74 n.a. 8/15/79 9/79 10/80 10,561,287 8,017,420.86 3A) - Guard-rails RA 69/77 5/25/77 6/30/77 12/77 10/80 1,601,766 1,744,072.34 - Fencing & service exits RA 71/77 5/25/77 12/20/77 6/78 4/79 3,916,328 3,469,501.62 - Vertical signals RA 70/77 5/25/77 11/4/77 4/78 10/80 520,450 548,357.60 - Horizontal signals RA 72/77 5/25/77 1/10/78 6/78 10/80 502,776 511,761.24 - Bitumen supply RA 8/75 12/22/75 11/10/75) ( 4,676,703 4,910,539.99 ) 6/77 10/77 ( - Bitumen supply RA 68/76 10/21/76 11/16/76) ( 4,525,020 4,999,974.34 Total 109,235,191 111,538,928.56 - 17 - Table 3 MOROCCO SECOND HIGHWAY PROJECT - LOAN 955-MOR PROJECT 00MPLETION REPORT Cost Estimates and Actual Cost of Highway Improvement Work (Dirham) Contract Lot Contract Distxict Roads Price Final Cost 1 42/74 Casablanca RP 7 5,914,000 6,454,471.35 2 27/74 Safi RP 8 & 12 3,700,000 3,503,341.59 3 106/74 Casablanca RS 107 9,000,000 7,927,406.95 4 24/74 Marrakech RP 7 & 10 6,400,000 7,456,646.17 5 60/74 Marrakech RP 32 (bridge) 1,050,000 1,050,000.00 6a 61/74 Agadir RP 30 2,457,000 2,566,914.92 6bis 51/75 Agadir RP 30 1,467,497 1,828,350.21 6b 52/73 Agadir RP 32 525,800 625,785.00 6c 86/73 Agadir RP 32 550,768 540,763.72 7a 16/74 Beni Mellal RP 24 1,288,320 1,512,999.59 7b 14/73 Beni Mellal RP 24 476,350 486,021.35 8a 53/74 Rabat RP 3 1,260,000 1,276,418.56 8b 55/74 Rabat RP 3 333,000 323,581.44 9 55/73 FeE RP 1 3,460,000 3,492,149.25 10a 17/75 Fes RS 302 97,500 96,912.00 10b 31/75 Fes RS 302 360,000 350,997.25 lOc 40/75 Fes RS 302 98,000 86,576.80 Od 59/75 Fes RS 302 197,000 217,345.00 Oe 65/75 Fes RS 302 585,000 518,206.97 11 64/74 Tetouan RP 2, 37 & 38 5,610,000 5,655,363.79 12 61/74 Tetouan RP 28 2,234,000 3,149,958.96 13 43/74 Meknes RP 28 1,900,000 1,638,146.67 14 71/74 Oujda RS 412 1,770,000 1,769,980.00 15a 16/74 Taza RP 1 3,000,000 2,706,998.32 15b 26/75 Taza RP 1 3,100,000 2,606,095.81 16 38/76 Taza RS 312 (bridge) 1,400,000 1,399,533.44 17 92/76 Taza RS 312 2,850,000 3,001,428.31 Total 61,081,235 62,352,443.42 MOROCCO SECOND HIGHWAY PROJECT - LOAN 955-MOR PROJECT COMPLETION REPORT Highway Maintenance Equipment Appraisal First Second Purchase Total Cost Foreign Component Type Report Purchase Requested Purchased (DH) (DH'000) (US$'000) Cars 6 - - - Light vehicles 13 - - - Pickups Small 55 - - - - "Landover" type 43 - - - - Tipper trucks 3 tons 19 - - - - 7-8 tons 54 - 42 42 3,917,424.66 OD Asphalt patching units 9 - - - Vibrating rollers 2 - 15 Front loaders 7 - - Compressors 1 - 12 - Snowploughs Over 100 HP 4 11 ) Less than 100 HP 3 - 15 15 4,020,439.43 Snowblowers Over 50 HP 2 - 10 16 2,684,763.06 Less than 50 HP 1 - - - Motorgraders - 5 10 - 1,482,523.90 Total Purchased 12,105,211.05 8,836 2,160 IA - 19 - Table 5 MOROCCO SECOND HIGHWAY PROJECT - LOAN 955-MOR PROJECT CMPLETION REPORT Schedule of Disbursements (US$ Million) Actual Total as % of IBRD Fiscal Actual Appraisal Revised Appraisal Latest Year and Quarter Total Estimate Estimates Estimate Estimate 1974 3rd - 1.3 - 0 - 4th - 2.0 - 0 - 1975 lst - 4.5 - 0 - 2nd - 7.0 - 0 - 3rd 0.5 9.5 0.5 5 100 4th 1.7 12.0 2.0 14 17 1976 1st 2.1 14.5 4.0 14 53 2nd 2.7 17.0 8.0 16 34 3rd 7.4 19.5 12.0 38 62 4th 8.8 22.0 16.0 40 55 1977 1st 10.3 24.0 20.0 43 52 2nd 10.7 26.0 24.0 41 45 3rd 14.3 28.0 28.0 51 51 4th 16.7 29.0 29.0 58 58 1978 1st 16.8 29.0 29.0 58 2nd 19.1 29.0 29.0 66 3rd 19.1 29.0 19.1 66 100 4th 21.1 29.0 21.5 73 98 1979 1st 21.5 29.0 23.0 74 93 2nd 21.5 29.0 26.0 74 83 3rd 23.3 29.0 27.0 80 86 4th 25.1 29.0 28.0 87 90 1980 lst 26.2 29.0 27.0 90 97 2nd 27.4 29.0 29.0 94 94 3rd 28.1 29.0 29.0 97 4th 28.1 29.0 29.0 97 1981 lst 29.0 29.0 29.0 100 The revised estimates for years 1975, 1976, 1977 and the first half of 1978 were made in September 1976. The revised estimates for the second half of 1978 and all of 1979 were made in December 1978. The revised estimates for 1980 and the first quarter of 1981 were made in July 1979. The 1978 estimate showed the loan fully disbursed in the first quarter of 1980. - 20 - TABLE 6 MOROCCO SECOND HIGHWAY PROJECT COMPLETION REPORT Economic Evaluation of Casablanca-Rabat Expresaway A. TRAFFIC Ratio Appraisal Forecast Actual Actual/ Opening Growth Opening Growth Forecast Length Year ADT Rate 1980 Year ADT Rate (%) Opening (km) (L976) (%) ADT (1980)!/ 1972-80 Year ADT Mohammedia Oued-M.Est 10.5 10,400 8.5 14,400 n.a. n.a. Moh.Est - Oued Cherrat 22.9 11,100 15,400 13,510 6.8 1.22 33.4 B. VEHICLE OPERATING COSTS 1972 1978 Ratio (Appraisal Report) (SAR of Highways III) L978/1972 (1972 Prices) (1978 Prices) 1. Average cost per ki on flat, tangent, paved road (centimes of DH): Passenger car 1.4 40.7 3.6 Trucks (25% of traffic) 61.5 L18.8 1.9 Average for all traffic (75% of benefits) 23.9 60.2 2.5 2. Vehicle Purchase Price (DH) Passenger car 5,000 23,300 4.5 5.5t truck 24,800 47,500 1.9 Tractor-trailer 99,000 221,000 2.2 3. Fuel Price Without Tax (DH/liter) Gasoline 0.33 0.80 2.4 Diesel 0.25 0.60 2.4 4. Drivers' Wages (DH/nr) 5.5t truck 2.13 19.00 8.9 Tractor-trailer 2.87 21.50 7.5 5. Avg. Reduction in Vehicle Operating Costs: 12% I/ First carriageway opened in stages: 1977 - 30%, 1978 - 42%, 1979 - 86%, 1980 - 100%. - 21 - Table 6 (Contd.) C. ACCIDENT COSTS (DH) 1972 1978 Ratio (Appraisal Report) (Roads Department) 1978/1972 Death 60,000 L50,000 2.5 Bodily injury 3,000 (11)1/ 5,500 (15)1/ 1.8 Weighted average (25% of benefits) 7,650 14,760 1.9 D. TOTAL BENEFITS in 1980: 16.3 million DR (1978 prices) Forecast growth rate of benefits (1980-2000): 7% p.a. E. CONSTRUCTION COST (DH million) Appraisal Estimate Actual (1972 Prices) (Current Prices) Financial cost 62.2 111.5 Economic cost (80% 49.7 89.2 (104.0 in 1978 prices) of financial) Construction period 2 years 6 years % completed each year 40-60 25-35-15-10-LO.5 E. ECONOMIC RATE OF RETURN (%) Appraisal : 16% Completion : 17% 1/ No. of bodily injury accidents for every death. Source: Ministry of Public Works, Roads Department, December 1978 and IBRD. - 22 - Table 7a MOROCCO SECOND HIGHWAY PROJECT COMPLETION REPORT Economic Evaluation of Highway Improvement Programs -------------------------Appraisal Data for 1972--------------------- Length Average Annual to be Economic Daily Heavy Growth 1979 ADT Economic Road No Road Iproved Cost Traffic Vehicle Rate Forecast Return I km) (DHi'000) (TAD T) T% -ADT) -T-T- -T%-)i Correcting Alignment and Widening RPI Casablanca-Rabat-Fes-Oujda 124 5,000 2,958 30 10 5,764 over 100 RP2 Rabat-Tangier 6 1,620 2,950 35 12 6,252 83 RP8 Casablanca-Agadir 1 500 2,396 30 10 4,669 18 RPIO Marrakach-Essaouira 50 3,500 466 30 10 908 35 RP24 Fes-Azrou-Marrakech 2 400 2,815 30 14 7,044 28 RP28 Meknes-Chaouen-Sebta 88 5,050 1,091 30 10 2,126 40 RP30 Agadir-Tiznit 78 3,200 1,638 35 8 2,807 over 100 RS107 Mohammedia-Mediouna 21 5,300 858 25 7 1,378 14 RS121 El-Jedida-Safi 30 1,250 989 15 15 2,631 60 RS312 Taza-RP39 9 2,500 882 30 8 1,512 17 RS412 RPI-Hani-Berkane 24 2,000 760 30 15 2,022 41 Subtotal 433 Strengthening Pavement RPI Casablanca-Rabat-Fes-Oujda 21 3,600 2,928 30 10 5,706 18 RP2 Rabat-Tangier 7 1,000 2,950 35 12 6,522 63 RP3 Kenitra-Fes 23 1,600 3,194 35 10 6,224 over 100 RP7 Casablanca-Marrakech 78 8,800 5,323 30 15 14,159 88 RP8 Casablanca-Agadir 37 3,800 2,396 30 10 4,669 100 RP24 Fes-Arsou-Marrakecn 22 2,100 1,111 30 14 2,780 43 RP32 Agadir-Ait Melloul/Taroudant 5 1,400 10,729 40 8.5 18,991 over 100 RP37 Tetuan-Larache 27 1,400 1,977 30 15 5,259 over 100 RP38 Tetuan-Tangier 11 400 2,682 20 10 5,226 over 100 RS302 Fes-Ketama 15 2,000 1,825 30 15 4,855 56 Subtotal 246 TOTAL 679 Source: Appraisal Report, Table 12 - 23 - Table 7b MOROCCO SECOND HIGHWAY PROJECT COMPLETION REPORT Economic Evaluation of Highway Improvement Program ------------------------Completion Data for 1979------------------------------ 1979 Traffic Length Economic Year ADT after Actual Growth Road No Road ITroved Cost Completed Completion-l Trucks Traffic Rate-5/ k (DH'OOO) (yrs) T Correcting Alignment and Widening RP1 Casablanca-Rabat-Fes-Oujda 69 8,805 1976 2,400 (1976) 35 2,822 6 RP2 Rabat-Tangier 6 1,4882/ 1976 2,690 35 3,171 9 RP8 Casablanca-Agadir 1 121 1974 1,189 35 2,212 17 RP10 Marrakech-Essaouira 49 7,4572 1975 1,406 45 1,555 3 RP24 Fes-Azrou-Marrakech 7 486 1976 1,602 (1976) 35 1,781 4 RP28 Meknes-Chaouen-Sebta 76 4,788 1976 1,646 35 2,794 30 RP30 Agadir-Tiznit 20 2,828 1976 2,129 35 2,005 3 RS107 Mohammedia-Mediouna 23 7,927 1976 3,686 35 3,899 3 RS121 El-Jedida-Safi - - - - - - - RS312 Taza-RP39 17 3,001 1978 2,390 35 2,390 0 RS412 RPI-Hani-Berkane 24 1,770 1976 980 35 1,099 6 RP12 Safi-RP8 28 3,382 1974 454 35 1,122 25 Subtotal 320 Strengthening Pavement RPI Casablanca-Rabat-Fes-Oujda - - - - - - - ki Z .adt-Tdugier 7 1,*11970 2,o9u 35 0,17i 9 RP3 Kenitra-Fes 20 1,600 1975 2,170 40 3,178 14 RP7 Casablanca-Marrakech 38 6,454 1976 1,945 (1976) 33 2,382 7 RP8 Casablanca-Agadir - - - - - - - RP24 Fes-Arsou-Marrakech 6 1.513 1975 1,457 35 2,871 25 RP32 Agadir-Ait Melloul/Taroudant 724/ 651 1975 8,203 27 10,029 7 RP37 Tetuan-Larache 27 2,0832 1976 1,181 35 2,769 53 RP38 Tetuan-Tangier 17 595 1976 2,354 35 2,965 12 RS302 Fes-Ketama n.a-4/ 1,270 1976 389 35 676 32 Subtotal 11) TOTAL 435 1/ Year following completion unless otherwise shown. 2/ One of several sections grouped in a construction lot; cost shown is appraisal estimate multiplied by ratio of actual lot cost to sum of appraisal estimates of all sections in lot. 3/ Includes localized repairs on other roads in vicinity. 4/ Discontinuous sections. 5/ From year after completion to 1979 (annual average). Source: Ministry of Public Works, Roads Department, December 1980 - 24 - Table 7c MOROCCO SECOND HIGHWAY PROJECT COMPLETION REPORT Economic Evaluation of Highway Improvement Program --- Actual vs. Forecast --- 1979 Actual/ Actual/ Forecast Forecast Road No Road ADT Cost per km Correcting Alignment and Widening RP1 Casablanca-Rabat-Fes-Oujda 0.51 3.20 RP2 Rabat-Tangier 0.51 1.49 RP8 Casablanca-Agadir 0.47 0.24 RP1O Marrakech-Essaouira 1.71 2.17 RP24 Fes-Azrou-Marrakech 0.25 0.35 RP28 Meknes-Chaouen-Sebta 1.31 1.11 RP30 Agadir-Tiznit 0.71 3.44 RS107 Mohammedia-Mediouna 2.83 1.37 RS121 El-Jedida-Safi - - RS312 Taza-RP39 1.58 0.64 RS412 RPl-Hani-Berkane 0.54 0.89 RP12 Safi-RP8 - - Subtotal 1.04 1.49 Strengthening Pavement RP1 Casablanca-Rabat-Fes-Oujda - - RP2 Rabat-Tangier 0.49 1.49 RP3 Kenitra-Fes 0.51 1.14 RP7 Casablanca-Marrakech 0.17 1.50 RP8 Casablanca-Agadir - RP24 Fes-Arsou-Marrakech 1.03 2.65 RP32 Agadir-Ait Melloul/Taroudant 0.53 0.03 RP37 Tetuan-Larache 0.53 1.48 RP38 Tetuan-Tangier 0.57 0.97 RS302 Fes-Ketama 0.14 - Subtotal 0.50 1.32 TOTAL 0.80 Source: Tables 7a and 7b IÖKL) I U 4,1 r-r\) E JTA(SEBTAI JUNE 1982 TANGIER I, 1, MOROCCO ETOUAN MED/TERRANEAN SEA c TRANSPORTATION INFRASTRUCTURE AL HOC IMA MELILLA Existing Roads LARACHECHECHAOIUEN Ner NADOR PRMARY AND SECONDARY ROADS AbuK m - T -- TERT ARY SOADS TUEZZANE y- Tecen SKe A d Rhar " OUIJDA TRACKS 4nu Second Highway Project G T URIRT JERADA CONSTRUCTION K I T RA RABAT -ES< IMPROVEMENT First Highway Project MEKNES KhemsserSEFROu .--...... 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