Morocco - Transport sector strategy paper

Report No. 971 2-MOR Kingdom of Morocco Transport Sector Strategy Paper September 20, 1993 Infrastructure Operations Division Country Department I Middle East and North Africa Regional Office FOR OFFICIAL USE ONLY MICROGRAPHICS Report No: 9712 MOR Type: SEC Document of the Werld Bank 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.  CURRNCY FOUIVwALNTS Currency Unit * Moroccan Dirhams (DH) DH 1.00 - US$0.11 DH 9.00 * US$1.00 (As of January 1993) FISCAL YEAR January 1 - December 31 PR.INIPAL ABBRBVATIONS CAP a Certificat d'Aptitude Professionnelle CNPAC . National Committee for Traffic Accident Forecasting CTM a National Interurban Bus Company DP - Ports Directorate DRCR * Roads and Road Traffic Directorate DTT * Directorate of Overland Transport GVW a Gross vehicle weight IRU * International Road Transport Union IV a Inspecteur voyageur MOF = Ministry of Finance MOT = Miniatry of Transport MPW = Ministry of Public Works QAC = Casablanca Airport Authority ODEP * National Port Enterprise ONCF - National Railway Service ONDA 3 National Airport Service ONICL = national Cereals Board ONT a National Road Freight Transport Office PERL = Public Enterprise Restructuring Loan RAM = Royal Air Maroc RAWC = Casablanca Port Authority ro-ro a roll-on/roll-off SDNT = National Transport Master Plan Study TIR * International Road Transport vpd = vehicles per day  FOR OFFICIAL USE ONLY KINGDOM OF MOROCCQ TRANSPORT SECTOR STRATEGY PAPER Contents Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . i I. TRANSPORT IN THE ECONOMY .1... . . . . . . . . . . . . . . . . . . I A. Geographic and Economic Framework . . . . . . . . . . . . . . . 1 B. Institutions, Administration and Planning . . . . . . . . 1. . . C. Overview of the Sector .... . . . . . . . . . . . . . . . . 2 D. Recent Investment Trends . . . . . . . . . . . . . . . . . . . 6 II. SECTOR DEVELOPMENT PROGRAM ... . . . . . . . . . . . . . . . . . . 8 A. Sectoral Issues .... . . . . . . . . . . . . . . . . . . . 8 B. Investment Rationalization and Strategy . . . . . . . . . . . . 8 C. Enterprise Reform .... . . . . . . . . . . . . . . . . . . . 11 D. Rationalization of the Transport System . . . . . . . . . . . . 15 E. Environment and Safety .... . . . . . . . . . . . . . . . . 18 ANNEX 1: Transport Policy Matrix ANNEX 2: The Transport System TABLES This report was prepared by Henri Beenhakker (Principal Economist) with the assistance of Philip Cornwell, Richard Timberlake and Bassem Younes (consultants). 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.  KINGDOM OF MOROCCO TRANSPORT SECTOR STRATEGY PAPER Executive Summarv 1. For its domestic transport needs, Morocco relies on all modes of transport, including road, rail, coastal shipping and aviation. Shipping and aviation dominate international traffic, although there is a growing demand for car ferry services to Europe across the Straits of Gibraltar. Road transport is the dominant mode for both freight and passenger traffic but the railway plays a substantial role in the main urban corridor between Casablanca and Rabat and its eastward extension to Meknes and Fes. The classified road network includes some 28,000 km of paved roads and some 30,000 km of unpaved roads, the network being concentrated mainly in the areas of economic activity to the north of the Atlas Mountains. The country is also served by a 1,800-km rail network, most of which carries relatively high traffic densities ranging from 1.3 million to 5.5 million traffic units per kilometer of line. There are 11 commercial ports, of which the most important are Casablanca for commercial traffic and phosphates, Mohammedia for oil imports, Jorf Lasfar and Safi for mineral traffic, and Tangiers for roll-on/roll-off (ro-ro) traffic with Europe. There are also 15 commercial airports, of which 10 cater to tourist traffic from Europe. 2. Given the relatively broad distribution of economic activity in the northern part of the country and the dominance of Casablanca as the main commercial port, the principal transport flows are organized around these regions, where transport demand has increased steadily over the past decade at the rate of 4-5% per year. This growth is expected to continue, in line with projected increases in GDP. The main east-west corridor from Casablanca to Fes is now taking or, even greater significance with the development of trade among the Maghreb countries, while traffic on the north-south corridor linking the Rabat-Casablanca area with Tangiers and Europe is also showing substantial growth. It is in these main corridors that investments are planned for the next decade, in order to meet expected increases in passenger and commodity flows. 3. Interurban bus services are provided by small private companies or cooperatives and by a public nationwide bus enterprise - National Interurban Bus Company (CTM) - which accounts for about 10% of the market. Altnough trucking is entirely in private hands, the National Office of Transport (ONT), a public enterprise, acts as mandatory intermediary for some 1,300 operators belonging to private companies and cooperatives with trucks above 8 tons gross vehicle weight (GVW). This sector of the market accounts for about 32% of total traffic, while private operators with trucks of up to and including 8 tons GVW, who are outside ONT control, account for 35%, and large own-account operator.s represent about 33%. Thus it is possible that a large proportion of long and medium-distance freight is being handled by small vehicles at considerable cost to the economy, when large trucks would be more economical. This possibility will be investigated during completion of the National Transport Master Plan (SDNT), which serves as the basis for development of an action plan. Vehicle fleet renewal is also an issue reflecting high import duties for transport equipment. 4. Rail traffic has increased steadily in recent years and the National railway service (ONCF), plays a significant role in the movement o'c interurban  -ii- passenger and freight traffic and in mineral traffic for export. ONCF carries some 5.7 billion ton-km of freight traffic annually, of which 70% is accounted for by movements of phosphate rock from the interior mines to the ports. Passenger traffic is around 2 billion passenger-km per year with about 15% accounted for by high-speed services currently provided on the 90-km route between Casablanca and Rabat. ONCF operates at a high level of efficiency, its performance indicators comparing more than favorably with those of advanced European railways. However, ONCF's overall performance suffers from a lack of transparency in its relationships with the Government, particularly concerning responsibilities for infrastructure investments, compensation for public service obligations, and cost recovery on phosphate traffic. 5. Following a reorganization of the port sector in 1985, the port system is operated in an efficient manner, with revenues yielding a substantial surplus over operating costs. The National Port Enterprise (ODEP), a public enterprise, operates 11 commercial ports, of which four - Casablanca, Jorf Lasfar, Safi and Mohammedia - account for some 90% of total traffic. The main commercial port is Casablanca, which handled 17 million tons in 1988, including 10 million tons of mineral products and 3.5 million tons of general cargo. Containerization and roll-on/roll-off technology have penetrated a large share of the general cargo market, and over 65% of unitizable cargo through the port of Casablanca is already containerized. At Tangiers, over 80% of the cargo is unitized, mainly in roll-on/roll-off trailers. Rapid increases in high-value unitized goods have resulted in substantial investments being committed to the creation of container terminal facilities in Casablanca, and investments are planned for the installation of roll-on/roll-off facilities in Tangiers. Attention is also being given to the development of facilities for bulk traffic, particularly coal imports. However, Morocco still suffers from insufficient capacity to handle an annual volume of 1.5-2 million tons of cereal imports, although there are now plans to construct a new silo in the port of Agadir. 6. International maritime and air services operate within the framework of bilateral agreements and international meetings governing rates and market access. A trade logistics and facilitation study is currently being undertaken by the Government with a view to delineating issues related to commodity distribution systems and to drawing up an appropriate plan of action. Sector Investments 7. While minimal investments were made in transport during the 1960s, economic growth during the 1970s resulted in increased demands on the network and an increase in the transport investment program. Over the past decade, investments in transport have increased about 40% in real terms, from an annual average of DH 2.5 billion (US$360 million) during 1981-87 to about DH 4.7 billion (US$560 million) during the 1988-92 Plan. During the early 1980s, emphasis was mainly on the development of port infrastructure, rehabilitation of the road network, and construction of an expressway between Casablanca and Rabat. More recently, civil aviation, particu'larly the procurement of aircraft, has seen major increases in line with the growth of tourism. The share of the road sector has also continued to increase as a result of the need to rehabilitate the primary network. In contrast, the share of railway investment has decreased in recent years following government action to reduce its support for investments  -iii- in railway infrastructure. This weakening of government support comes at a time when capacity constraints are being felt on key sections of the railway network. Sector Issues 8. These are four main areas in the transport sector on which the Government needs to focus its attention:l/ a) investment rationalization; b) public enterprise reform; c) rationalization of the transport system; and d) environmental and safety aspects of transport programs. 9. At this time of budgetary constraints, there is an ever- increasing need to rationalize the transport investment program and to define a high priority program to support continued economic growth and the development of export trade. Particular attention reeds to be given to expansion of the rehabilitation and maintenance program for the principal primary roads, the upgrading of some 6,000 km of secondary and tertiary routes, as well as the maintenance of some 30,000 km of unpaved tertiary roads. Studies to prepare such a program have been launched with Bank assistance. Similarly, the Bank is assisting ONCF in the preparation of a major preinvestment study for the period 1994-97, which is expected to establish preinvestment priorities and to identify a program designed to tackle the backlog in track renewal and rehabilitation which has been accumulating over the years. Although the major port investment needs in terms of container traffic are being met by the current ports program, little has been done to provide appropriate facilities for cereal handling, resulting in substantial foreign exchange losses on sea freight rates and handling charges. Attention also needs to be focused on the rapid growth of ferry traffic at Tangiers and the inadequate berth and storage facilities currently available for this traffic. These issues need to be brought into focus during the current updating of the Ports Master Plan Study. 10. Assistance with public enterprise reform was initiated in 1987 with the Bank's First Public Enterprise Restructuring Loan (PERL). Since that time, support has also been provided through investment lending. The reform and financial restructuring of the public enterprises are now an integral part of the adjustment process, the main objectives being to increase operational efficiency, reduce the public sector deficit, and provide services which support economic growth. This approach places the institutional framework at the center of the reform process, this process being spelled out in the form of a performance contract defining the respective responsibilities of both parties. Performance contracts in the transport sector have been successfully implemented for Royal Air Maroc (RAM) and the port enterprise, ODEP. A railway performance contract is now under preparation and is expected to include a clear definition of responsibilities for infrastructure investments, compensation payments for social I/ The main issues and a proposed action plan are sunmarized in Annex 1.  - iv- f.re reductions, and a revised rate for phosphate transport to provide recovery af long-run marginal costs. 11. In its initial conclusions, following its analysis of the options available for resolving the problems of road freight transport, the SNDT suggests the following measures for its rationalization: (a) legalization of transport for hire by operators with trucks of up to and including 8 tons GVW; this would offer greater security and establish a more sound basis for operation of these vehicles; (b) rationalization of the sector through the establishment of specific criteria for access to the transport market and a review of the possibilities for eliminating tariff controls on transport for hire operations; reinforcement of ONT's commercial activities; concentration of resources on technical inspections (vehicle safety) and enforcement of the laws; improvements in the vocational training offered to operators, culminatlng in the award of a Certificat d'aptiture professionnelle (CAP); and (c) promotion of vehicle fleet renewal and development of the sector through changes in the system of taxation, reducing taxes on the purchase of new vehicles and (as far as possible) transferring the burden of those taxes to operating expenses. 12. Increasing attention uieeds to be given to the environmental ar.d safety aspects of transport programs. Systematic studies are now being implemented in the port sector concerning dredging programs, and new guidelines are being prepared for the vehicle inspection program. Support for both of these programs is being provided by ongoing Bank sector projects.  I. TRANSPORT IN THE ECONOMY A. Geographic and Economic Framework 1.01 Over the past six years, Morocco has undertakca important structural reforms and has achieved a modest economic growth rate with low inflation. During this period, the economy grew at an annual rate of about 3.3%, slightly faster than the increase in population The medium term program seeks to reinvigorate the economy and to achieve a growth rate of 4-5% per year. The reform program is based largely on trade rationalization, increased public enterprise efficiency, and price incentives in t-he agricultural sector. In parallel, a major program of social development is being implemented. While the recovery process has been outstanding, the fall in tourism revenues in the wake of the Gulf crisis was a severe blow. It is essential that Morocco continue its reform process and make full use of its comparative advantages. 1.02 Morocco has a population of about 27 million and occupies an area of some 459,000 km2, excluding the Western Sahara. Much of the population, and most of the main urban centers, are located to the north of the Atlas Mountains, which stretch across the country from the south-west to the north-east. In recent years, the national population has increased at 2.6% per year, lut the rate of increase of the urban population has been much higher - around 3.7% per year. As a result, the rate of urbanization increased from around 30% in 1970 to 46% in 1991. Although the coastal citie, of Casablanca (population 3 million) and Raba;-Sale (population 1 million) have historically dominated the urban hierarchy, there is now a more balanced pattern of urban development, with some 15 cities with populations of over 100,000. The major urban centers in the interior include Fes (700,000) and Meknes (450,000) in the east, Marrakech (600,000) in the south, and Tangiers (400,000) in the north. Urban growth is currently centered in these medium-sized cities. 1.03 Tth. population distribution associated with the main areas of economic activity, and the relative complementarity existing between the main regions in terms of economic output, have contributed to high levels of transport demand within the country. The main passenger and commodity flows are concentrated in the corridor linking Casablanca and Rabat, with extensions eastward towards Meknes and Fes, and nc.thward to Tangiers. Marrakech and Agadir in the south also generate sulstantial traffic flows to and from the central and northern areas. Many of these movements are centered on Casablanca, the country's main port, which handles over 75% of Morocco's general cargo foreign trade and nearly 90% of container and roll-on/roll-off (ro-ro) traffic. Superimposed on these movements are exports of phosphates and phosphate derivatives, which are carried by rail from the central and south-centrai parts of the country to the ports of Casablanca, Jorf Lasfar and Safi. B. Institutions. Administration and Planning 1.04 The government agencies involved in the administration of the transport system are: (a) the Ministry of Public Works (MPW), which is responsible for the construction and maintenance of roads and port irfrastructure through its Road and Port Directorates; it also oversees cargo handling and port operations carried out by the National port enterprise (ODEP); (b) the Ministry of Transport (MOT), responsible for the regulation and coordination of road, rail  -2- and air transport through the Directorate of Overland Transport, the Directorate of Air Administratior., and the Directcrate of Transport Studies, Planning and Coordirnation. It also oversees public enterprises such as National Railway Service (ONCF), National Road Freight Transport Office (ONT), National Airport Service (ONDA), National Interurban Bus Company (CTM), Royal Air Maroc (RAM), ard the National Committee for Traffic Accident Forecasting (CNPCA); (c) the Ministry of Fisheries and Merchant Marine, which supeivisos the national shipping line (COMANAV) and provides maritime security through its Directorate of Merchant Marine; and (d) the Ministry of Interior, which supervises the local authorities as they become more and more involved in the planning and maintenance of local roads. 1.05 Given the large number of agencies involved in the management of the sector, there is sometimes an overlap of responsibilities between the different agencies. In the ports subsector, both ODEP and the Ports Directorate (DP) of MPW have responsibilities for planning port infrastructure and for overseeing port operations. With increasing decentralization and the -obilization of resources at the loca'l authority level (including the introduction of a value added tax), it became necessary to allocate new responsibilities to both central and local government. This has led to a redistribution of responsibilities concerning the road network between MPW and the local authorities. In parallel with increasing decentralization, there are moves to introduce more autonomy for public enterprises in the transport sector. The wovernment has decided to privatize CTM. The financial restructuring of a number of public enterprises and the preparation of performance contracts, clearly defining the respective responsibilities of the Government and of the enterprises, ar- being pursued by the Ministry of Finance (MOF). Performance contracts have been established with the national &irline, RAM and port enterprise, ODEP, while a performance contract for the ra't%--ys ONCF is in course of preparation. 1.06 Apart from routine activities, MOT is concerned mainly with the regulation of public road freight operations through ONT and the management of airports through ONDA. ONCF, supported by MOT, is in process of clarifying its complex financial set-up. Coordination at the level of road and rail infrastructure development needs to be improved, an issue that will require close monitoring as capacity constraints begin to affect transport facilities in the coming decade. Coordination issues of this nature are ultimately left to the final decision of the Prime Minister. In early 1988, MOT started work on a National Transport Master Plan Study (SDNT) with the objective of defining an action plan for the sector and an investment program for the period 1993-97. This study fell behind schedule, and has now been overtaken by recent events, in particular the launching of a number of subsectoral preinvestment studies. The reasons why the study was not completed on time were its complexity and the insufficient time allotted to it. MOT is awaiting its completion in order to start preparing an action program. C. Overview of the Sector 1.07 The Moroccan transport sector accounted for just under 7% of GDP in 1990, compared to only 4% a decade earlier. The sector currently employs over 140,000 persons, representing some 2.4% of the working population. The overland transport system is well developed and includes some 58,000 km of classified  -3. roads and a railway network of about 1,800 km, of which 970 km are electrified and 240 km are double-track. There are 11 commercial ports and 15 airports handling scheduled flights. Road transport carries by far the largest share of passenger traffic, accounting for about 90% (19.1 billion passenger-km per year) of total interurban passenger traffic (estimated at 21.4 billion passenger-km per year); road transport also accounts for 43% of total freight transport, estimated at 11 billion ton-km per year (70% excluding phosphate traffic). However, the market share of the railway is much more important in the main rail corridor between Marrakech, Casablanca, Rabat and Kenitra and the extension eastward to Fes and Oujda and northward to Tangiers. Over half of total interurban traffic takes place in this extended corridor, with the railway handling about 20% of passenger traffic and 50% of freight traffic. About 4 billion ton-km of rail traffic, or 70% of the total, relate to captive phosphate traffic en route to the ports of Jorf Lasfar, Casablanca and Safi for export. 1.08 Both road and rail traffic have increased fairly steadily over the past decade at a rate of 4-5 % per annum. In fact, the railway has increased its share of interurban passenger traffic from a low 6% in 1977 to around 10% at the present time, mainly as a result of improved services, in particular the fast trains between Casablanca and Rabat. Total port traffic reached 36 million tons in 1988 and is composed of 24 million tons of solid bulk cargo, 7 million tons of liquid bulk, and 5 million tons of general cargo, of which about 30% is unitized (containers or ro-ro). Total port traffic increased by over 5% per year during the period 1983-87, but jumped by 13% in 1988 as a result of increases in export traffic. This growth has increased the need to further develop container and ro-ro facilities and to provide facilities for bulk imports of coal and cereals. Road Infrastructure 1.09 Morocco's road network comprises about 58,000 km of classified roads, of which 28,000 km are paved. The paved network includes some 9,000 km of primary roads, which carry traffic volumes ranging from about 750 to over 5,000 vpd, with an overall average of 1,500 vpd. The network is concentrated mainly in the area to the north of the Atlas Mountains, the south being served by a limited network of key primary routes linking the main population centers. The quality of the network is uneven; there are only 1,500 km of primary routes with pavement widths of at least 7 meters; much of the network is substandard and inadequate for the volumes of traffic carried. About 60% of the paved network (some 16,000 km) have pavement widths of less than 6 meters, while about 20% (about 6,000 km) have widths of less than 4 meters. In addition, there are some 30,000 km of unpaved classified roads which have received little maintenance in recent years. The network also includes a 90 km expressway between Casablanca and Rabat, completed in 1987. Road Transport 1.10 Interurban bus and truck services are operated mainly by private companies and cooperatives. Bus routes and service frequencies are regulated; fares are subject to a maximum established by a committee headed by the Prime Minister and based on MOT's recommendations. Although all trucks are owned by the private sector, ONT acts as mandatory intermediary for some 1,300 pri.vete  -4- operators and cooperatives offering for-hire services. The market is split into three segments: (a) operators with trucks of up to and including 8 tons gross vehicle weight (GVW), which carry about 35% of freight nationwide; (b) own- account operators, with vehicles in excess of 8 tons gross vehicle weight (GWW), which handle about 33% of interurban road freight traffic; and (c) public carriers with trucks of over 8 tons GVW, affiliated with ONT, wnich handle the remaining 32% of the road freight market. 1.11 Taken as a whole, road freight transport wo-ks reasonably well, with high rates of vehicle utilization and overall load factors of about 60% for most interurban movements. For category (a) and (b) vehicles (para. 1.10), the average age is high and on the rise: over 10 years for light- and medium-sized trucks, and about 8 years for semi-trailers; for category (c) vehicles, the average age Is 7 years. This reflects the low level of tariffs, low maintenance labor costs, and, above all, the high customs and import duties on new vehicles. A large percentage of long- and medium-distance freight is handled by small vehicles, whereas considerable savings could be achieved through the use of larger and more efficient trucks. This skew in traffic distribution reflects the fact that public operators of heavy trucks of over 8 tons GVW are obliged tc use the services of ONT, which has the monopoly on road freight services. ONT acts as a marketing agency, charging a reference (maximum) tariff, to which it applies preferential rates depending on consignment size, trip frequency, trip distance, road conditions, and fuel differential; the rates applied vary between 3% and 6% depending on the product transported. To compensate its members for empty back- hauls, ONT receives an additional one percent. Possible rationalization of the system has been discussed for a number of years but little progress has been made. Railways 1.12 Railwav services are provided by ONCF, which is under h.h administration and jurisdiction of MOT. ONCF operates about 1,000 trains per week over its 1,800 km network, the services being evenly divided between passenger and freight services, e,.cl'iding phosphates. Average traffic density exceeds 4 million traffic units per route kilometer, higher than that of the main European railways. ONCF has a fleet of some 240 locomotives, 370 passenger cars and over 10,000 freight cars, which are kept in good condition thanks to adequate maintenance facilities. Availability and productivity of locomotives and rolling stock are good compared with Western European levels and have gradually been improved over the years. Average availability is 83Z for electric locomotives, 85% for main line diesels, 75 to 80% for passenger coaches and 95% for freight stock. ONCF has a total staff of about 13,000, including 600 managerial staff. Productivity is high (590,000 traffic units per employee)2 and training programs continue to emphasize the introduction of modern methods of management and operation. In recent years, ONCF has introduced improved cost accounting and management information systems and is now in a position to formulate improved pricing and management pclicies. The transport of phosphate rock from the mines in the interior to the ports, where it is exported, accoints for about 70% of the 2/ Traffic unit = passenger-km and ton-km coembined  -5- 5.7 billion ton-km of freight traffic and provides 40% of ONCF's revenue. Passenger traffic amounts to about 2 billion passenger-km per year, including fast passenger trains between Casablanca and Rabat. Dassenger trains operate at high occupancy ratios, on the order of 85% for most trains. Although fares would have to be increased to cover operating costs and long-run marginal costs, the quality of service provided on high grade trains has improved considerably and much of this traffic is probably inelastic to gradual changes in fares. forts and Maritime Trans..r_t 1.13 Morocco's port infrastructure has expanded rapidly to cope witn increas'ng demands for maritime transport and related activities. Eleven commercial ports form three main groups: a northern group comprising Tangiers and Nador; a central group comprising Kenitra, Mohammedia, Casablanca and Jorf Lasfar; and a southern group comprising Safi, Agadir, Tan-Tan, LaAyoune and Daklila. Agadir, Nador, and the main port, Casablanca, are well diversified. Other ports are somewhat specialized: petroleum products are essentially handled at Mohammedia, phosphate products at Jorf Lasfar and Safi, and passenger traffic at Tangiers. The 11 ports have a total of 150 berths, with an overall length of about 21,500 meters and an average length per berth of 150 meters. All ports use either mobile or fixed cranes (about 160) for vertical lifting of general cargo. Specialized equipment is available for solid bulk commodities, such as mineral products and cereals (nine gantry cranes). During the 1980s, there was a major expansion in port infrastructure but there is now an urgent need to adapt these facilities to the latest develnpments in handling techniques, such as container and ro-ro technology, and to meet the demand for bulk imports of coal and cereals. 1.14 The port system, like sh. .ailways, was developed to handle phosphate exports, which have stabilized in recent years at 14 million tons anrually. Total port traffic in 1988 amounted to 38 million tons, of which 18 million tons were mineral products, mainly pbosphate exports, and 10 million tons were liquid bulk commodities, of which crude oil accounted for 5 million tons. Of the eleven commercial ports, four - Casablanca, Jorf Lasfar, Safi and Mohammedia - handle about 90X of total traffic. The main port of Casablanca handled 17 million tons in 1988, including 10 million tons of mineral products, and imports and exports of industrial goods totaling 3.5 million tons. About 30% of general cargo traffic was containerized or handled as ro-ro traffic. 1.15 Maritime transport accounts for 98% of Morocco's volume of foreign trade, with European trade amounting to some 50% of the total. Maritime shipping is largely based on two major public shipping companies in Morocco, COMANAV, which operates liner services, and MARPHOCEAN, which operates phosphate rock ships and chemical carriers. Two public companies are specialized in the maritime transport of petroleum pzoducts (PETROCAB) and citrus (SOFRUW.4). There are also several Moroccan private shipping lines handling specific products, such as citrus, and passenger traffic. A number of foreign shipping lines are also present, hence there is some degree of competition in the general cargo transport field. Altogether, Moroccan shipping lines control about 20% of the total volume (33% of total value) of Moroccan freight and about 50% of general cargo traffic.  -6- Civil Aviation 1.16 Civil aviation plays a major role in the country's economy and more particularly in the tourism sector, one of the country's sources of roreign exchange earnings. Of the 15 airports open to domestic and international traffic, three account for about 80% of total passenger traffic: Casablanca (2,000,000), Agadir (740,000) and Marrakech (700,000). Scheduled commercial air services are provided by RAM, whose fleet comprises 28 aircraft, including 2 Boeing 747s, 2 Boeing 707s, 8 Boeing 727s, 2 Boeing 757s, 11 Boeing 737s, and 3 ATR42s. In order to replaLe older Boeing 727s and 737s, and to expand services, RAM has begun to take delivery of 10 new aircraft (737-400s and 737-500s). RAM is a profitable enterprise and, currently carries about 2 million passengers annually. However, RAM's profitability results partly from high fares, particularly for services to and from France, which it operates in pool with Air France. Other foreign carriers are also present, but their services are limited. D. Recent Investment Trends 1.17 Until the mid-1970s, few efforts were mude to expand or improve the transport system, since the facilities inherited at independence were generally adequate to handle transport demand. However, the growth of the economy during the 1970s, and the nes~d to rehabilitate existing infrastructure, required that transport sector investment be increased. Over the past decade, investments have increased about 40X in real terms, from an annual average of about DH 2.5 billion (US$360 million) during 1981-87 to an annual average of about DH 4.7 billion (US$560 million) during the 1988-92 Plan. This change in investment levels has also been accompanied by a shift in priorities among the transport subsectors. 1.18 In the early 1980s, up to one third of the total program was devoted to the development of port infrastructure, including new ports at Jorf Lasfar and Agadir. In contrast, the shars of port development during the current plan has been considerably reduced, the emphasis now being on adapting existing port facilities to new handling technologies. Priority is now being given to increased investment in road rehabilitation and maintenance, although much of the proposed increase is for local unclassified roads, following the transfer of part of the new value added tax to the local authorities. Civil aviation, particularly the procurement of aircraft, has also seen substantial increases in recent years, in line with the growth of tourism. In contrast, investment in railways has fallen in real terms since the end of the 1981-87 Plan, when the Government decided to decrease its support for railway investments, trimming its capital subsidy from DH 800 million (US$100 million) in 1987 to an annual average of DH 200 million (US$25 million) during the 1988-92 plan.  -7- Table 1.1, INVESTMENT IN THE TRANSPORT SECTOR A. Expenditure (DH millions at current prices) 1973-80 1981-87 1988-92 Roads Motorways2 1,781 4,133 6,5261 Local roads3 700 1,300 3,660 Road transport4 220 486 750 Total 2,701 5,919 10,936 Railways Infrastructure4 1,344 2,350 2,345 Rolling stock4 620 1.634 1.692 Total 1,964 3,984 4,037 Maritime Ports Infrastructure2 1,764 4,464 700 Equipment5 379 1.118 1.600 Total 2,143 5,582 2,300 Navigation5 1.211 450 2.180 Total 3,354 6,032 4,480 Aviation Airports & navigation 476 502 1,657 equipment4 666 1.581 2.377 Airline (RAM) 1.142 2.083 4.034 Total 9,161 18,018 23,487 GRAND TOTAL B. Allocations as percentage 1973-80 1981-87 1988-92 Roads 29.5 32.8 46.6 Railways 21.4 22.1 17.2 Maritime transport 36.6 33.5 19.1 Aviation 12.5 11.6 17.1 100.0 100.0 100.0 1. Initial allocation (4,950) plus allocation from Road Fumd (1,576) created in December 1988. 2. Central Government financing. 3. Local government financing. 4. Mixed financing 5. Public enterprise financing. Source: Mission estimates.  -8- II. SECTOR DEVELOPMENT PROGRAM A. Sectoral Issues 2.01 Transport and distribution costs account for a substantial share of the cost of delivered goods. This means that these services have to be competitive in order to achieve economies in the use of scarce resources, to increase market-oriented activity with a view to encouraging regional and rural development, and to enhance competitiveness in foreign markets. In short, efficiency objectives are at the core of any strategy to enhance the supporting role provided by the transport sector in the development of the economy. 2.02 Following is an analysis of the key issues at stake in the development of the transport sector, with proposed strategies for dealing with these issues over the medium term. The issues to be addressed are: (a) rationalization of investment program: improved coordination among subsectors, emphasis on rehabilitation and maintenance, and limiting of new investments to high priority programs designed to improve efficiency and service quality; (b) Dublic enterRrise reform: continuation of the program of public enterprise reform, emphasizing greater accountability, operational efficiency, sound pricing and cost recovery policies, and possibilities for privatization; (c) rationalization: rationalization of the transport system including improved market access, with the consequent encouragement of competition and efficiency, and improvements designed to increase the speed and efficiency of international transport services; (d) environmental imnacts: heightened attention to minimization of the environmental impacts of transport infrastructure and services, particularly those related to port development, road safety, and vehicle emissions. 2.03 These issues need to be addressed in order to upgrade the efficiency of the transport system and to reduce the sector's financial burden on the Government. B. Investment Rationalization and Strategy 2.04 With increasing constraints on resources, there is a need to rationalize the transport investment program and to apply sound economic criteria in the selection of investments for the sector. Investment levels in the transport sector have increased in recent years and have mainly reflected an emphasis on the development of new infrastructure rather than on improving and maximizing the use of existing facilities. A number of preinvestment studies have been launched with a view to preparing a sound investment strategy for the period 1994-97. As the results of these studies are not yet available, the following discussion is concerned with defining the main deficiencies in recent investment trends and establishing the main thrust of transport investment for the medium term.  -9- Road Infrastructure 2.05 In recent years, rehabilitation and maintenance of the paved road network have fallen behind schedule. Some improvements in highway funding have been made recently, following the completion of a road user charges study in 1988. This study showed that all road users were paying the full quantifiable costs of road use and enabled MPW to set up a Road Fund in early 1989. Resources from this Fund - about DH 400 million annually - cover routine maintenance requirements as well as part of the rehabilitation program. In 1989 and 1990, the Road Fund provided incremental resources over and above those allocated from the budget (about DH 800 million annually). However, budget allocations for 1991 were reduced and the program is again falling short of requirements. Moreover, the amounts budgeted relate almost entirely to the 28,000 km paved network and little attention has been given to upgrading and maintaining some 30,000 km of unpaved rural roads which also form part of the classified network. While reclassification of the network will result in a redistribution of responsibilities between central and local governments, much of the local road network will remain urder central government control, and appropriate resources need to bA allocated to the betterment and maintenance of this network. Roads and Road Traffic Directorate (DRCR) has recently initiated a study of the rural road network, including some 10,000 km of unclassified roads, with a view to establishing a sound rural road betterment and maintenance program for the period of the 1994-97 Plan. Rai lwavs 2.06 A large backlog of rehabilitation and renewal needs also developed in the railway sector during the second half of the 1980s. During the past decade, ONCF experienced growth in passenger and freight traffic of at least 4% per year, which resulted in the need for continuing investment both in modernization and rehabilitation of railway infrastructure and in equipment renewal and expansion. However, the railway suffered a substantial loss of resources in 1988 when the capital subsidy was cut from DH 800 million to DH 200 million annually. This decrease in the government transfers was to have been accompanied by the application of an agreed program of general tariff increases, compensation for social fare reductions, and a revised rate for phosphate transport. These additional resources failed to materialize and ONCF began to reduce its investments in maintenance and rehabilitation, while being obliged to maintain its commitment to new investments already committed. Investments in track renewal during the current 1988-92 Plan were spread out until 1994, providing for 40 km of renewal each year, instead of the normal rate of at least 70 km. The backlog should be cleared over the next five years. 2.07 ONCF recently launched a preinvestment study to establish its investment priorities for the period 1994-97. This study is expected to emphasize the need for a stepped-up program of track renewal, beginning in 1994. Continuation of the track doubling program eastward towards Fes should, therefore, be appropriately phased to take account of the need to clear the backlog of track renewal and rehabilitation requirements. The renewal program should be given priority following completion of the ongoing track doubling  -10- between Rabat and Kenitra (40 km) in 1993. As such, ONCF would be able to consolidate its fast-train services and begin to tackle the track renewal backlog prior to embarking on further modernization of the network. Port Sector 2.08 The emphasis in the port sector over the past decade has been on the development of new infrastructure. The sector suffered from poor coordination between medium term infrastructure needs and the immediate operational requirements of the ports. Although this lack of coordination started to improve somewhat in 1985 with the creation of ODEP, this improvement came too late to ensure the timely adaptation of existing facilities to meet rapid changes in cargo handling technology. 2.09 Current investments in new container handling facilities in the port of Casablanca are long overdue, the delay being attributable mainly to the inability of MPW and the port enterprise, ODEP, to reach a decision on the location and size of the container port and the phasing of its development. Similar problems have occurred with the development of bulk handling facilities. For instance, a coal berth completed at Jorf Lasfar in the mid 1980s has insufficient draft for 60,000-ton coal carriers. Similarly, despite cereal imports averaging 2 million tons annually over the last decade, only 50% of those imports are handled in bulk silos, the higher sea freight rates and handling charges resulting in substantial foreign exchange losses. These investment issues are currently being addressed as part of a Bank-supported Port Sector Project. This project also includes a provision to update an existing port master study with a special emphasis on linking medium term planning and operational analysis at each port in order to gauge the full potential of existing facilities before resorting to new investments. Airport Infrastructure 2.10 With the current downturn in air traffic, particularly tourist traffic to Morocco, part of the somewhat ambitious airport expansion program could be postponed. ONDA has planned a DH 1.2 billion program for the period 1991-94. Most of this has been allocated to completion of a major terminal extension at Casablanca airport, ongoing works at the new airport in Agadir, and improvements at Marrakech airport. However, the program also includes improvements at a large number of minor airports which should now be postponed. Emphasis should be given to ongoing improvements in navigation and control equipment and to the trainir.g program supported by bilateral financing from Canada and a number of other countries. Coordination of New Investments 2.11 Investments in infrastructure improvement will continue to be crucial to the process of upgrading efficiency and quality of service. However, these investments need to be evaluated by means of appropriate methodologies and strict economic criteria. 2.12 In the short-to-medium term, there are unlikely to be major problems in selecting options for alternative investments in the main transport corridors.  -11- For instance, ongoing investments in railway track doubling between Rabat and Kenitra (40 km) are justified on capacity grounds. Similarly, the existing road between Rabat and Kenitra is also operating well beyond capacity and a new expressway is now planned over this route. Beyond Kenitra, expressway development is planned northward tow&rds Larache and Tangiers, while rail infrastructure improvements will take place eastward towards Meknes and Fes, a corridor in which the railway has a natural advantage. This pattern of development is likely to provide the least cost solution to meet traffic demands in the medium term. For expressway development, the justification north of Kenitra is based on distance savings for long distance traffic. However, the traffic potential is low and a phased program of construction should be considered in order to optimize the investment. Moreover, each section should be justified on economic grounds and not in terms of the availability of financing from toll revenue generated on the existing expressway network. Similarly, the ONCF track doubling program needs to be phased to take account of the backlog of track renewal requirements and the results of the ongoing preinvestment studies. C. Enterprise Reform 2.13 Public enterprises in the transport sector in Morocco have suffered from a lack of transparency in their relationships with the Government and from a lack of autonomy in day-to-day operations. The reform and financial restructuring of these enterprises now form integral parts of the adjustment process, the new objectives being to reduce the public sector deficit and to support trade rationalization through the provision of demand-responsive services. This approach places the institutional setting and the relationship between enterprise and Government at the center of the reform process. It starts with an understanding of the purpose of the enterprise and what is expected of it, clarifies the roles and responsibilities of the Government and the enterprise, and then considers the appropriate regulatory and institutional framework. Clearly, this requires a comprehensive approach which goes beyond the operational and financial considerations of the enterprise alone. A program of public enterprise reform has been underway in Morocco since the mid-1980s and has been supported by the Bank through both adjustment lending and project lending. However, there have been mixed results in the implementation of this program. For instance, while there has been some success in the port and air transport sectors, a number of issues need to be resolved in the railway sector. Lack of Government commitment to the reform program has been the main problem. This lack of commitment is evident not only on the part of the MOF, but also on the part of some technical ministries concerned.  -12- Railways 2.14 Improved relationships with the Government are central to improvements in operational and financial performance. Although phosphate tariffs are adjusted annually for inflation, the base rate needs to be revised to provide for proper cost recovery. This is a major issue, given the importance of phosphates in operating revenue. Despite lack of support on tariff adjustments and compensation payments, the Government transferred to ONCF financing responsibilities previously vested in the Government and cut its contribution to the investment program from some DH 800 million (US$100 million) in 1987 to less than DH 200 million (US$25 million) annually during the 1988-92 Plan. During the same period, ONCF also embarked on several large modernization investments and held back on certain tariff increases because of competition from road transport. While the transfer of financing responsibilities to ONCF had been foreseen at the start of the 1988-92 Plan, this was to have been accompanied by compensation for social fare reductions and a revised rate for phosphate transport. In addition, the financial objectives set for ONCF, calling for total cost recovery in the medium term, proved to be over-optimistic. These financial objectives, together with the political power of the phosphate industry, proved to be key obstacles to negotiation of the phosphate transport tariff. Despite these difficulties, ONCF more than covered its operating expenses and was able to use the surplus to make a substantial contribution to its investments, the working ratio improving from 84 in 1989 to a level of 75 in 1991. However, ONCF is presently unable to bridge the current resource gap that followed limited government participation in railway investments, and in this situation its current lack of liquidity was inevitable. A clear definition of responsibilities between ONCF and the Government is therefore required in the form of an approved performance contract, which should be accompanied by a financial restructuring program that will take care of debts accumulated over the last four years. 2.15 A more realistic overall financial objective has now been proposed for ONCF, which would require the enterprise to cover the long term marginal cost of its services. The proposed system would involve setting tariffs at a level sufficient to cover long term recurrent costs: users would pay operating expenses in full, plus a provision for fixed asset renewal at replacement cost. The non- renewable portion of infrastructure investments (right-of-way, unpaved roads, bridges and tunnels) would be financed by the Government and recouped through general taxation. In return, ONCF would be required to continue to reduce costs, particularly for passenger traffic, and to demonstrate the economic viability of its investment program using an agreed methodology and applying well-defined criteria. Government participation would thus be established on an objective basis rather than on the current basis, which derives primarily from budgetary considerations. ONCF recently launched a preinvestment study of the main components of its proposed program over the four-year period 1994-97, which will subsequently be approved by the Government. ONCF is also undertaking an inventory and replacement-cost revaluation of its fixed assets, to be used as an objective basis for general tariff setting. A cost accounting study has recently been completed by independent auditors with a view to revising the phosphate tariff base rate. Compensation payments for social fare reductions would be paid by the Government and ONCF's arrears to the MOF would be cleared over a four-year period. In addition, coordination between ONT and ONCF is in need of improvement. These revised objectives would constitute the main components of  -13- a performance contract to be agreed between ONCF and the Government. This performance contract is ready to be finalized. Ports 2.16 In December 1984, the Government transferred all commercial port activities from the civil service to an autonomous enterprise, ODEP. However, the MPW retained overall responsibility for port administration, planning, construction, maintenance and dredging, as well as safety of port operations. ODEP is a financially autonomous enterprise engaged in commercial activity [A caract6re Industriel et commercial] which took over cargo handling from the former R6gie d'Acconage du Port de Casablanca (RAPC). Its responsibility encompasses a wide spectrum of port operations, especially cargo handling and maintenance. A Technical Committee for each port, chaired by the local port representative of the MPW, is consulted on all matters connected with port operations and maintenance. Both the local authorities and the users are represented on the Technical Committees. 2.17 So far, the new sector organization has substantially achieved its objectives. These are to raise port efficiency, reduce subsidies, and restore the financial viability of the sector. First, most performance indicators for port operations are markedly better than before 1985. Second, although the Government still finances dredging and breakwater maintenance, maintenance of port facilities has improved without increasing the financial burden on the budget. Current plans foresee that ODEP will be responsible in the future for the construction and maintenance of port infrastructure, except for breakwaters, dredging, and jetty maintenance, which will remain the responsibility of the Government. Formal transfer of publicly-owned assets to ODEP is planned in the near future. Finally, ODEP's financial situation is healthy, since the enterprise generates a surplus enabling it to finance its investments and to pay the Government a fee for the use of port infrastructure. 2.18 ODEP's present organization is satisfactory and no major changes are required. The main issues are essentially investment-related, particularly the need to increase capacity for unitized traffic in Casablanca and Tangiers, and to develop handling facilities for major bulk imports of coal and cereals. These investments will provide substantial support for the development of foreign trade through the reduction of distribution costs for major import and export commodities. A four-year investment program to facilitate these measures is being supported by a Bank-financed Port Sector Project. Institutional improvements also being addressed under the project relate to overall planning for the port sector, principles of tariff setting and adjustment procedures, financial and physical performance indicators, transfer of fixed assets to ODEP, level of user fees paid by ODEP, and clearance of arrears owed to the former RAPC. Responsibilities for cereal handling, currently handled by National Cereals Board (ONICL), also need to be clarified; ideally they should be integrated into ODEP's activities. These various items are covered in a draft performance contract to be agreed between the Government and ODEP. Other Enterprises 2.19 RAM has had performance contracts since 1982. Although under the  -14- supervision of MOT for technical matters, and MOF for financial matters, RAM operates essentially as a private concern. The Government owns 98% of RAM's shares, the remainder being privately owned. Overall, RAM is an efficient and profitable enterprise, with a 19% return on net fixed assets during 1987-90. RAM recently embarked on a major equipment replacement program involving the acquisition of 10 Boeing 737-400s and 737-500s. 2.20 ONT does not have a performance contract with the Government. It is a profitable organization posting satisfactory operating results. It receives no government subsidies and enjoys no tax exemptions. As road freight transport organizer, using an approved vehicle fleet, it increased its performance as follows over the period 1986-90: Tonnage transported + 18.50% Ton-km + 20.00% Turnover + 38.60% Approved vehicle fleet + 13.80% Available capacity + 26.00% ONT also plays a role in international road freight transport, a relatively new activity for Morocco. Given the country's poor level of participation in international road traffic, ONT's action is essentially aimed at bringing in Moroccan carriers, through implementation of a medium-term program comprising several modules, ranging from sensitization to prospection for export and import freight opportunities, with assistance provided at the level of investment portfolio preparation. The results have been remarkable, the percentage of participation by Morocco increasing from 0.75% in 1988 to 10.50% in 1990. In the area of facilitation of international road transport operations, ONT is recognized by the Customs authorities and by the International Road Transport Union (IRU), guarantor association under the International Road Transport (TIR) Convention. Privatization 2.21 There is already substantial private sector involvement in the provision of transport services in Morocco. The road freight transport industry is entirely in private hands, being composed of several thousand private owner- operators with small trucks of up to and ir.cluding 8 tons GVW, about 1,300 operators belonging to private companies and private cooperatives with a fleet of about 2,850 larger trucks (average GVW 14.5 tons) which are required to operate under the supervision of ONT, and several hundred own-account operators with a total of some 5,000 large trucks (average GVW 22 tons), (para. 1.10 - 1.11). Interurban bus transport is also privately owned, with the exception of the approximately 10% of the market handled by the public enterprise, CTM. The SDNT, in process of completion, will examine how the efficiency and profitability of individual operators could be improved, in particular through the definition of criteria for access to the public transportation business. 2.22 In the maritime sector, some minor port operations are undertaken by private firms. These include pilotage, towage and stevedoring on board ships, which are essentially operations requiring limited investment and thus involving little risk. ODEP is also considering privatizing certain areas of its  -15- operations, such as leisure port development. However, ODEP's port operations are generally efficient in terms of berth throughput and there is no need at the present time to seek further private sector involvement. Moreover, it is unlikely that sufficient private sector interest could be generated in the large investments currently being undertaken by ODEP in container handling and in bulk terminal facilities. ONCF is also considering privatizing certain areas of its operations, particularly its chain of luxury hotels. The subcontracting of railway catering may also be considered. 2.23 In the highway sector, an attempt was made to seek private sector involvement in the development of a toll expressway concession. However, little interest was shown by the private sector in this proposal and the Government subsequently created a public enterprise to operate the existing Casablanca-Rabat expressway as a toll facility and to plan and implement the extension of this link northward beyond Rabat. The Government may consider privatizing the toll road concession by launching a competition for a management contract. 2.24 Finally, a large number of small private firms are involved in ancillary and support activities in the transport sector, particularly forwarding and shipping agents. These agents should be encouraged to develop appropriate logistical procedures to foster improvements in intermodal movements, particularly in connection with the export trade. D, Rationalization of the Transport System Road Freight 2.25 The road freight sector is facing three principal problems: (a) need to legalize the operations of trucks of up to and includ,ng 8 tons GVW (parc libre) in order to encourage investment; (b) lack of specific criteria for access to the transport market; and (c) heavy tax pressure on the road transport sector discouraging the purchase of new vehicles and resulting in an aging fleet. 2.26 In its initial conclusions, following its analysis of the options available for resolving the problems of road freight, the SNDT suggests the following measures for rationalizing the sector: (a) legalization of transport for hire by operators with trucks of up to and including 8 tons GVW; this would offer greater security and establish a more sound basis for operation of these vehicles; (b) rationalization of the sector through the establishment of specific criteria for access to the transport market and a review of the possibilities for eliminating tariff controls on transport for hire operations; reinforcement of ONT's commercial activities; concentration of resources on technical inspections (vehicle safety) and enforcement of the laws; improvements in the vocational training offered to operators, culminating in the award of a  -16- CertlfLcat d'aptltude professlonnelle (CAP); (c) promotion of vehicle fleet renewal and development of the sector through changes in the system of taxation by reducing taxes on the purchase of new vehicles and (.s far as possible) transferring them to operating expenses. Interurban Bus Services 2.27 The interurban bus sector is almost entirely operated by private companies. An exception is the high-quality, air-conditioned services operated by CTM on a small number of routes. Access to the interurban bus sector is regulated by the National Transport Commission. Each major town has an Inspecteur Voyageurs (IV) as the local Directorate of Overland Transport (DTT) representative. The IV is in charge of organization and supervision at the local bus station. Any private operator may apply for a transport permit, stating his proposed itinerary and frequency of service. Once authorized by the provincial committee, the service must be provided as stated in the permit, otherwise the permit may be canceled. 2.28 The present situation depends heavily on the judgment of each provincial committee. It has to make an assessment of the need for and viability of each route; it also has to balance profitable with non-profitable routes to ensure that all areas are served. 2.29 Bus fares are calculated on the basis of route distance, and a table of fare rates is reviewed regularly by a national committee. The SDNT indicates that current rates permit a modest profit on average routes, with the result that there is little renewal of the bus fleet. 2.30 Demand is highly seasonal, with maximum demand occurriag during the summer months. The quality of privately operated buses is generally satisfactory and they tend to be sufficiently maintained. In many rural areas, buses provide virtually the only means of inter-provincial travel, although there is some competition from taxis on a few routes. 2.31 Control of service quality is a difficult issue, since there are demands for different service levels, including a minimum-price service. No compromise should be accepted where vehicle safety is concerned, and public service vehicle inspections should be held more frequently and their quality upgraded. Also, the IVs should be given authority to ban from service, on a daily basis, any vehicle which does not comply with minimum standards (e.g. safety, cleanliness, emissions). 2.32 To encourage improvements in service quality, premium fares should be permitted on routes served by more than one operator. Surcharges could be based on the availability of air conditioning and of facilities for watching TV or videos or listening to music, and on seat spacing. Interurban Taxi Services 2.33 The National Transport Study surveys indicate that nearly 20Q of  -17- interurban road journeys are made by taxi. The average load is five passengers and overloading occurs frequently. A large proportion of interurban taxi services are illegal (and uninsured), and are provided almost exclusively by diesel- powered vehicles receiving preferential tax treatment. Many of the vehicles are old and in unroadworthy condition. The combination of these factors enables interurban taxis to charge prices offering effective competition with bus fares, the latter being subject to regulation. However, in terms of energy consumption and safety, the market share of taxis seems undesirably high. 2.34 The Study recommends that tighter controls be introduced, including stiffer penalties for illegal operations. Registered interurban taxis should be regularly inspected and their approved seating capacity marked on the vehicle; all seats should be provided with seat belts and the use of these made mal.Iatory. International Transport Services 2.35 Moroccan shipping lines account for 20% of total traffic and 50,; of general cargo traffic. In addition to COMANAV and MARPHOCEAN, nine small private Moroccb firms and four major foreign lines operate shipping services. Although there is some degree of competition among the shipping services, rates are mainly governed by international conferences and access to the market is limited. A similar situation exists for air transport services, and both passenger and cargo rates to Europe are set at high levels. Demand for cargo s^rvices, particularly for high value perishable goods, far outstrips supply. As an extension of the recent UNDP Trade Facilitation Project, the Government has launched a Trade Logistics and Facilitation Study to analyze the costs of the logistic chains involved in the movement of key imports and exports and the related constraints. The study is being directed by the Ministry of Foreign Trade as part of the agreements for SAL II, which includes a trade development component. 2.36 The task concentrates primarily on the documentary and procedural obstructions to the easy movement of goods, using the same analytical and corrective techniques and inter-institutional cooperation approaches developed by the Trade Facilitation Project. However, work carried out so far has revealed a number of other substantive constraints on day-to-day trading operations. It has become clear, for instance, that one of the reasons why the trader has difficulty in managing intermodal transport procedures is that in Morocco this activity is little understood and poorly carried out. One of the problems of compliance with the more complex procedures - for example, documentary credits or temporary admission - is that the trader or his agent can have considerable difficulty in obtaining and circulating the necessary information. 2.37 The study also examines transport services and facilities currently available to Moroccan traders and their agents in terms of quality, costs and choice. The findings will be compared with corresponding resources available to typical international trading competitors. The main characteristics of modern transport systems will be described and factors of particular relevance to Moroccan international trade patterns will be identified. The role, contribution, and requirements of transport intermediaries - including freight forwarders, express carriers and container operators - will be described and assessed. Any constraints on freedom of choice in transport services will be identified and their effects on competitiveness evaluated. Recommendations will  -18 be made as to changes required in the management and operation of transport ent3rprises, including changes in the regulatory framework. 2.38 Transport and information services are key to the success ot international trading, particularly for those industries on which Morocco will need to rely for export expansion. For this reason, the study will prepare a comprehensive action plan which will address the main procedural, documentary, supervisory and physical constraints affecting key distribution chains. The study will also pull together, in a coherent framework, the recommendations on road transport rationalization provided by the SDNT and certain specific recommendations on the streamlining of customs inspection procedures, limitation of container movements, and introduction of simplified documents and MIS systems. E. Environment and Safety 2.39 Increasing attention is now being paid to the environmental and safety aspects of transport programs in Morocco. The ongoing Highway Sector Project provides support for an improved road safety program involving measures to strengthen the vehicle testing program. Technical assistance under this program will also propose standards for engine emission levels with a view to introducing controls to limit air pollution. At the same time, the Roads Directorate is establishing a database for monitoring accident black spots, which would also be used to establish priorities in correcting deficiencies in the main road network. 2.40 Design work for the new container termLnal in the port of Casablanca, prepared under the Port Sector project, includes specific provisions for minimizing environmental impact. The project is also helping the Government to limit the environmental impact of dredging operations in Moroccan ports. A systematic study is currently being undertaken with specific reference to the methodology used to analyze dredged material samples, the condition of the selected dredged material disposal sites, and the introduction of measures to limit pollution resulting from dredging operations. Studies are also planned to identify the additional investments required in Moroccan ports for dredging material removal and deballasting facilities. Support for such projects could be provided by the Global Environment Facility. The port project also provides for a radar control tower in the Straits of Gibraltar to assist shipping and ensure greater safety in this heavily trafficked area. This facility forms part of a system being established by the Ministry of Merchant Marine in collaboration with ODEP to limit the possibility of marine accidents and specifically the impact of oil spills. 2.41 Finally, the Government is showing renewed interest in the railway modernization program, particularly the upgrading of rail services in the main rail corridor between Casablanca and Fes. This corridor is operating at full capacity in terms of existing rail services and the ongoing modernization program is justified in that its purpose is to avoid potential diversion of traffic to road transport The upgrading program has major environmental and safety advantages over road transport alternatives. These include lower energy use per unit of traffic, reducing air pollution levels, smaller right-of-way losses, lower noise levels, reduced congestion effects, and lower accident rates. Although difficult to quantify, these benefits need -o be evaluated and taken  -19- into account in the assessment of investment programs in the main transport corridors.  ANMX 1 Page 1 of 4 MOROCCO TRANSPORT POLICY MATRIX Issues/Proble. Area Prerent Situation Actions to be taken 1. !nvestment Rationalization and Stratecv a) Road Rehabilitation and Following 1989 Road User Charges Study, Maintain expenditures on roads in real Maintenance allocations to road program increased to about terms with emphasis on rehabilitation and DH 1.3 billion annually, including DH 400 maintenance. Additional funding should be million from recently created Road Furd which provided to progressively upgrade and covers routine and part of periodic maintenance. maintain the classified rural road network comprising some 6000 km of paved roads of less than 4 m width and 28,000 km of unpaved roads. Studies launched on rural roads network (narrow Ongoing studies will establish scope of paved roads and unpaved roads). rural road program for the period 1994-97 including 10,000 km of unclassified rural Level of rood user charges is adequate but roads for which Roads Directorate of MPW structure could be simptified. should provide assistance in program preparation and execution. b) Expressway Construction Following unsuccessful attempt to create private Extension of network northward from Kenitra Program to(l road concession, a Public Enterprise has towards Larache (and eventually Tangiers) been established for the construction and will not conflict within planned railway operation of an exprescjay network based on toll modernization in Rabat-Fes corridor. revenue financing. Toll revenue from existing Justification north of Kenitra is based CAsablanca-Rabat expressway will be used to msinly on distance savings for long Inance extension of network initially from distance traffic. However, traffic Raoat to Kenitra (40 km). potential is low and phased construction should be considered to optimize Master Plan Study launched for motorway network. investment. c) Railway Infrastructure Following reduction of capital subsidies in 1987 ONCF to continue slow down pace of and lack of action on compensatory tariff investments in modernization and to give adjustment,. particularly for phosphates, ONCF wrhasis during 1994-97 to clearing backlog has reduced essential investments in track in track renewal. Continued investment in renewal and rehabilitation to about 40 km/year track doubling program beyond Kenitra will compared to normal rate of 70 km/year. ONCF now depend on outcome of ongoing pre-investment reducing allocations to modernization program studies for 1994-97 period (see d) below). withfn restructuring program context. Railway investment program to remain at a.:out DH 1 billion annually in real terms. Preinvestment studies launched for 1994-97 period. d) Road/Rail Competition In main Casablanca-Rabat-Kenitra corridor, ExFrrsswayconstructionshouldbe justified capacity investments in both road and rail oneconomic grounds and not on availability infrastructure are justified by existing traffic of f iancing from toll revenue. Phased volumes. Track doubling from Rabat to Kenitra cons!;iction should be considered north of (40 km) is ongoing and there are plans to Kenicr. construct a 4-tlane expressway over the same route during 1994-97. Beyond Kenitra, ONCF track doubling program should be expressway development will be towards Larache phased to take account of track and Tangiers, while rail infrastructure renewal/rehabilitation backlog and results investment will be towards Meknes and Fes. This of ongoing pre-investment studies. pattern of development is expected to provide least cost solution to meet traffic demands. e) Port Facilities Past decade was characterized by a period of Ensure im-roved coordination between poor coordination between port infrastructure investments in infrastructure and equipment planning and actual operational needs. in port sector while meeting environmental Situation has improved since creation of ODEP in concerns. 1985. In order to foster export growth anm reduce import costs, port investment program Updating of port master plan study with during period 1991-93 addressed essential needs special emphasis on linking medium-term for continued development of facilities for planning and operational analysis at each container and ro-ro traffic and for bulk inports port in order to gauge the full potential  ANNX I Page 2 of 4 Issues/Problem Aer Present Situation Actions to be taken of coal. OWEP is responsible for the of existing facilities before resorting to infrastructure for such facilities. Investments new investments. by MPW Ports Directorate in basic port infrastructure is being reduced to minimum programs of rehabilitation for breakwaters/jetties and maintenance dredging. Annual Investments of about OH 150 million. Cereals handling currently handled by ONICL Investments in grain silos should be given which comes under Ministry of Agriculture. Onty high priority by Government. Institutional 50% of 1.5-2 million tons of cereal imports issues concerning operation and cost handled in silos at Casablanca and Safi which recovery on grain silos should be are inaccessible to 60,000-ton bulk cereal addressed. carriers. This results in high foreign exchange expenditures on sea freight rates and handling costs. 2. Public EnterPrise (PE) Lack of transparency in relationships between Reform Govermnent and public enterprises and of autonomy in day-to-day operations. Need to Improve cost recovery, accountability, Launch comprehensive railway restructuring demand-oriented marketing functions, and study to convert ONCF into a commercially operational efficiency through negotiation and oriented enterprise. approval of performance contracts between PEs and Government. a) Railway Restructuring The Government transferred to ONCF financing Clear definition of responsibilities responsibilities for infrastructure in 1987 and between ONCF and Government Is required in cut the capital subsidy from DH 800 million to form of an agreed performance contract OH 200 million during the 1988-92 plan. This accompanied by financial restructuring to transfer was to have been accompanied by general take care of debts accumulated over past tariff increases, compensation for social fare four years. Mediuman term objective is reductions and revised rates for phosphate recovery of long-run marginal costs. transport. However, lack of Government support Measures to include: on tariff maTters resulted in substant:al resource gap for ONCF and current illiquidity. - general tariff increases - phosphate base tariff adjustment of about 60% - compensation payments for social traffic - reduced investment program agreed through 1994. Despite tariff and revenue issues, ONCF Performance contract to be revised in late generates surplus funds over its operating costs 1994 based on results of preinvestment which make a large contribution to investments, studies for 1994-97 period and the working ratio being about 80 in 1990. restructuring study. ONCF to continue to improve efficiency of its operations, particularly for passenger traffic, by improving load factors and reducing unit costs to maintain its market share. b) Port Operations Performance indicators for port operations Institutional improvements including improved considerably with creation of ODEP in relationship between ODEP and Government 1985. Efficiency has been increased, subsidies are addressed in a performance contract. reduced, and financial viability restored. ODEP Measures to be covered include: i) improved will now be responsible for construction and overall planning, ii) principles of tariff maintenance of new infrastructure, except for setting and procedures for adjustment, iii) breakwaters/jetties which will remain the financial and physical performance targets, responsibility of Government, along with iv) level of user fees, and v) arrears owed maintenance dredging. 00EP pays a fee to to former port agency (RAPC) Goverrment. Poor coordination in port planning during 1980s Investment in new container terminal at has resulted in urgent need to expand facilities Casablanca began in 1991 with completion for unitized traffic at Casablanca and Tangiers scheduled for 1994. and to modify recently completed infrastructure for bulk coal handling. Need to complete plans and implement investments for i) new coal handling facility at Jorf Lasfar related to proposed  ANNEX 1 Page 3 of 4 Issues/Problem Area Present Situation Actions to be taken ONE power plant and ii) ro-ro facilities in Tangiers. 3. ationalization of the Transport System The road freight transport sector faces three In its initial conclusions, following its principal problems; analysis of the options available for resolving these problems, the SNDT suggests the following measures for rationalizing the sector: Need to legalize the operations of trucks of Legalization of transport for hire by less than 8 tons GVW (parc libre) in order to operators with trucks of less than 8 tons encourage investment. GVW; this would offer greater security and establish a more sound basis for operation of these vehicles. Lack of specific criteria for access to the Rationalization of the sector through the transport market. estabLishment of specific criteria for access to the transport market and a review of the possibilities for eliminating tariff controls on transport for hire operations; reinforcement of ONT's commercial activities; concentration of resources on technical inspections (vehicle safety) and enforcement of the laws; improvements in the vocational training offered to operators, culminating in the award of a Certificat d'aotitude professionnelle (CAP). Heavy tax pressure on the road transport sector Promotion of vehicle fleet renewal and resulting in an aging fleet. development of the sector through changes in the system of taxation, reducing excise taxes on new vehicles and (as far as possible) transferring the burden of those taxes to operating expenses. 4. Trade Logistics and Facilitation Inefficiency in customs clearance and Streamline customs procedures by Limiting documentation related to foreign trade flows movement of containers to customs area to results in long transit times for unitized those selected for inspection. cargo, particularly for import traffic. Although port dwell times for import containers Introduce systematic sampling procedures have recently been reduced from 22 to 18 days, based on recommendations of UNDP Project. further improvements are required. Currently all containers are moved to custons area regardless of whether or not tney are to be inspected. The UNDP Trade Facilitation Project focuses on Introduce simplified customs documents. simplified trade documents, measures to reduce dwell times, and standard documents for data interchange. Intermodal interface facilities are weak. Establish interface between customs and Improved multi-modal options, particularly for port MIS systems. high value unitized cargo, offer valuable flexibility for improved operation of traffic. As an extension of UNDP Project, Goverrmnent has Prepare detailed action plan for trade launched a trade logistics study to analyze logistics based on results of study. In costs of logistic chains involved in movement of line with proposed deregulation of road several key import and export goods and related transport operations, action to be taken to constraints. Study directed by Ministry of develop ONT's role as a forwarding agent Foreign Trade. providing door-to-door services and ensuring intermodal coordination.  ANNEX I Page 4 of 4 Issues/Problem Area Present Situation Actions to be taken 5. Environment and Safety a) Port operations Maintenance dredging currently performed without Systematic studies of dredging activities particular reference to impact on marine Life, to be undertaken, with specific reference However, maJor projects now include specific to: provisions for minimizing environmental impact. - methodology for testing and analyzing dredging material sanpLes - status of selected sites for disposal of dredging materials - measures to limit pollution caused by dredging No specific procedures for removal of wastes Identify additional investments required in from ships. Moroccan ports for waste removal and deballasting. Water quality in ports affected by urban and Identify measures and investments required industrial waste water. Plans for coastal to Limit negative inpact of waste water. treatment plant in Casablanca area. Implement coastal interceptor sewer. b) Road Transport Current vehicle inspection procedures are not New guidelines to be defined and inproved entirely satisfactory. inspection program to be implemented with specific reference to: - vehicle safety - engine emission levels c) Rail Transport Rail transport has important environmental and Environmental and safety advantages of rail safety advantages: alternatives to be evaluated and considered in assessment of railway modernization tow energy use per passenger-km or ton-km programs. and therefore low air pollution levels - smaller right-of-way than for equivalent road infrastructure - lower noise levels - reduced congestion effects in urban areas. - low accident rates  ANNEX 2 Page 1 of 4 THE TRANSPORT SYSTEM A. Passenaer Traffic 1. Total annual passenger-km increased at an average of about 4.8% per year between 1977 and 1988, from 12.8 to 21.4 billion (Table 1). In 1988, 92% of interurban passengers traveled by road, nearly 8% by rail, and less than 1% by air (Table 2). The average distance traveled by air (170 km) was similar to that for rail passenger travel (181 km), both being greater than the average trip length by road (138 km). Only about 6% of road and rail journeys and 13% of journeys by air were made for purposes of work, the majority being for a variety of personal reasons (Table 3). B. Freight Traffic Foreian Trade 2. Between 1983 and 1988, export tonnage increased by an average of 4.2% per year and import tonnage by an average of 6.6% per year (Table 4). Export and import tonnages reached some 35.9 million tons and 14.7 million tons, respectively, in 1988. 3. Although total general cargo port traffic increased by about 6.4% per year between 1983 and 1988, unitizable freight grew much more rapidly for imports - by 8.8% per year - but dropped by 5.5% per year for exports (excluding fruit and vegetables) (Table 5). Domestic Freiaht 4. Between 1976 and 1988, the domestic freight market nearly doubled in terms of tons transported, increasing from 33.9 million tons to 61.3 million tons per year (Table 6). Average haul lengths decreased over the same period, from 211 to 175 km, and consequently total ton-km grew less rapidly than total tons transported. In 1988, 23.5 million tons of phosphates were transported - 38% of total domestic freight tonnage. Some 45% of total tonnage was carried by road, 54% by rail, and about 2% by coastal shipping. Excluding phosphate traffic, about three quarters was carried by road and about one quarter by rail, coastal shipping accounting for about 2%. Average haul lengths by road and rail were similar - 166 km and 172 km respectively. C. Road Subsector The Network 5. The classified road network comprises some 58,500 km, of which half is paved (Table 7). The primary network includes 9,400 km of paved and 1,500 km of unpaved roads; the secondary network includes 6,250 km of paved and 2,400 of unpaved roads; and the tertiary network includes 12,850 km of paved and 26,100 of unpaved roads. 6. Only 6% of the network consists of roads more than 7m wide (i.e.,  ANNEX 2 Page 2 of 4 more than 2 traffic lanes); the majority of the network (61% of route length) comprises roads of 4-6m width (Table 8). Only about 1,500 km of the road network carried more than 3,000 vpd in 1988, but accounted for 34% of total vehicle-km (Table 9). Vehicle Fleet 7. Between 1980 and 1986, the registered vehicle fleet grew at an average rate of 4.0% per year to reach approximately 556,000 motor vehicles, comprising 377,600 passenger cars (68% of the fleet) and 178,400 trucks and buses (Table 10). Road PassenQer Traffic 8. Between 1977 and 1982, road traffic increased at 6.2% per year on average, but then declined slightly between 1982 and 1985, from 21.2 million to 20.4 million vehicle-km per day (Table 11). Over the period 1977-1988, private road transport increased from 3,800 million to 5,486 million vehicle-km per year, but its market share dropped from 32% in 1977 to just under 29% in 1988; the market share of interurban buses also declined, falling from 57.5% in 1977 to 52.1% in 1988. Over the same period, the market share of illegal taxis tripled, from 3.2 to 6.6%, and that of large interurban taxis increased from 7.3 to 11.5% (Table 12). Road Freioht Traffic 9. The structure and development of the interurban road freight market are shown in Table 13. Between 1976 and 1988, the market nearly tripled in terms of tons transported (from 13 million to 34 million tons per year) and increased by about 50% in terms of ton-km (from 3,244 million to 4,742 million ton-km). The market share of the ONT Parc public declined slightly in terms of ton-km, and that of the Parc libre (vehicles up to and including 8 tons GVW) increased slightly; the share of own-account operators remained stable. 10. The size of the oarc public under the auspices of ONT increased steadily between 1979 and 1988, from 2,116 to 2,609 vehicles (Table 14). The average carrying capacity of the vehicles also increased, from 13.7 tons in 1979 to 15.9 tons in 1988. The tonnage handled by ONT increased by nearly 40% over the decade 1978-88, while ton-km increased by 36% (Table 15). Road Accidents 11. The number of reported road accidents declined over the first part of the decade 1977-87, but has been on the rise from 1980 to the present day (Table 16). In 1987, there were 27,154 reported road accidents, resulting in 36,902 injuries and 2,269 fatalities. Although the number of fatal accidents decreased from 2,659 in 1977 to 2,269 in 1987, the fatality rate remains relatively high by international standards (Table 17), even though the overall accident rate was comparable to that of the USA in 1985 (Table 18). WA..1le utly about one quarter of road accidents in Morocco occur outside urban areas, these account for around two thirds of fatalities and about 40% of injuries (Table 19).  ANNEX 2 Page 3 of 4 D. Rail Subsector Rolling Stock 12. ONCF has a total of 244 locomotives, of which 108 are electric and 136 diesel powered (Table 20). The average locomotive age is 17 years; about three quarters of the locom,tives are more than 10 years old. Line capacity characteristics are shown in Table 21. Railway Passenoer Traffic 13. In 1989, ONCF transported 11.8 million passengers, but passenger volumes have stagnated over the past four years, mainly because of capacity constraints. However, rail passenger traffic measured in passenger-km has continued to increase at about 2.5% per year since 1987, although this is significantly less than the 12% average annual rate achieved during the period 1980-87, with some 48% of passengers traveling in 2nd class, 49% in class E, and 3% in 1st class (Table 22). Raiiway Freiaht Traffic 14. Total rail freight traffic measured in ton-km increased by 5% between 1980 and 1988, reaching 5.7 million ton-km (Table 23). However, traffic declined in 1989 to 4.5 billion ton-km, owing mainly to a sharp downturn in phosphate traffic, which fell from 23 million tons (4.1 billion ton-km) to 16.5 million tons (2.9 billion ton-km). Phosphate markets were reestablished in 1990 and rail freight traffic has now returned to 1988 levels. 15. In 1987, rail freight, excluding phosphates, comprised mineral products (34%), chemical products and fertilizers (19%), agricultural products (13%), food products (8%), petroleum products (8%), and miscellaneous goods (18%) (Table 24). E. Civil Aviation Subsector 16. There are 10 airports open to international traffic in Morocco, six of which can accommodate Boeing 747s (Table 25). Three airports - Casablanca, Agadir and Marrakech - handle about 80% of total airport passenger traffic (Tables 26 and 27); Casablanca Airport (Mohammed V) is the busiest, followed by Agadir and Marrakech. 17. Until recently, there were two carriers, Royal Air Maroc (RAM) and Royal Air Inter (RAI) but the latter was absorbed into RAM in 1989. RAM currently handles some 2 million passengers annually, just over 10% of this total representing domestic traffic. Passenger traffic accounts for over 80% of revenues and load factors average about 60%. F. Maritime Subsector 18. The eleven national ports have a total of 147 berths, the largest port being Casablanca, with 48 berths (Table 28). More than 16,500 ship  ANNEX 2 Page 4 of 4 movements were recorded in 1988, of which 6,220 were at Casablanca and 4,885 at Tangiers (Table 29). Casablanca had the highest berth occupancy rate in 1988 (Table 30). Total tonnage handled in 1988 was 38.4 million tons, comprising mineral products (18.0 million tons - 47%), liquid bulk (10.6 million tons - 28%), general cargo (5.6 million tons - 14%), dry bulk (2.3 million tons; 6%) and cereals (1.9 million tons - 5%) (Table 31).  Table-1 MOROCC TRANSPORT SECTOR STRATEGY PAPER Million Passenaer-Km by modg, 1977 and 1988 Mode Fleet/Operator 1977 1988 l ~~~ ~ ~~~ ~ ~~~No. ()No.(% Road All modes 11,876 92.9 19,115 89.0 Rail ONCF 813 6.3 2,092 10.0 Air RAM/RAI 100 0.8 212 1.0 Total _ 12,789 100.0 21,419 100.0 Source SDNT, Mission 3, Table 3.5, page 30  Table-2 MQROCCO TRANSPORT SECTOR STRATEGY PAPER Passenaer Market Shares and AveraQe Trip Lenaths. 1988 Market Share by Mode Mode Passengers PKM Avg. Journey (Million) (Million) Length (km) Road 138.4 92.1 19,115.5 89.7 138 Rail 11.6 7.7 2,092.5 10.0 181 Air 0.4 0.3 68.1 0.3 170 Total 150.4 100.0 21,276.1 100.0 142 Source: SDNT, Mission 3, Table 3.22, page 46  Table-2 MOROCCO TRANSPORT SECTOR STRATEGY PAPER PassenQer Market Shares and Averaaes Trip Lenoths. 1988 Market Share by Mode Mode Passengers * PKM Avg. Journey (Million) (Million) Length (km) Road 138.4 92.1 19,115.5 89.7 138 Rail 11.6 7.7 2,092.5 10.0 181 Air 0.4 0.3 68.1 0.3 170 Total 150.4 100.0 21,276.1 100.0 142 Source: SDNT, Mission 3, Table 3.22, page 46  Table -3 MOROCCO TRANSPORT SECTOR STRATEGY PAPER Passencer Journey Purposes. by Mode Journey Purpose (%) Mode Miscellaneous Leisure Work Tourism Total Rail 25 56 6 13 100 Road 32 52 6 10 100 Air 8 24 13 55 100 Source: SDNT, Mission 3, Table 3.23, page 47  Table-4 MOROCCO TRANSPORT SECTOR STRATEGY PAPER Growth of Foreign Trade: 1983 - 1988 ('000 Tons) Year Annual Average Growth Rate (_) l 1983 1985 1987 1988 1983-87 1983-88 IMPORTS OIL PRODUCTS 4,379 5,233 5,049 5,197 3.6 3.5 COAL 244 451 1,059 1,051 44.3 33.9 SULPHUR 1,349 1,469 2,093 2,925 1.6 16.7 CEREALS 1,858 2,042 2,065 1,515 2.7 -4.0 OTHER BULK 698 788 829 906 4.4 5.4 GENERAL CARGO 2,084 2,437 2,617 3,063 5.9 8.0 SUB-TOTAL 10,612 12,420 13,712 14,657 6.6 6.6 EXPORTS PHOSPHATES 13,976 14,790 13,060 14,260 -1.7 0.4 OTHER BULK 3,125 3,415 3,609 5,240 3.7 10.9 GENERAL CARGO 1,455 1,351 1,454 1,754 0.0 3.8 SUB-TOTAL 18,556 19,556 18,123 21,254 -0.6 2.8 TOTAL 29,168 31,976 31,835 35,911 2.2 4.2 Source: World Bank Report No. 7983-MOR (Table 4.1).  Table-5 MOROCCO TRANSPORT SECTOR STRATEGY PAPER Growth of General Cargo Port Traffic 1983-1988 ('000 Tons) Year Annual Average l ~~~~~~~~~~~~~~Growth Rate (%) 1983 1985 1987 1988 1983-87 1983-88 IMPORTS NON-UNITIZABLE 1,024 1,142 1,180 1,450 3.6 7.2 UNITIZABLE 1,060 1,295 1,437 1,631 7.9 8.8 SUB-TOTAL 2,084 2,437 2,617 3,063 5.6 7.8 EXPORTS FRUIT & VEG. 662 717 762 1,116 3.6 11.0 NON-UNITIZABLE 63 61 81 90 6.5 7.3 UNITIZABLE 730 573 611 548 -4.4 -5.5 SUB-TOTAL 1,455 1,351 1,454 1,754 0.0 3.8 TOTAL 3,539 3,788 4,071 4,817 3.6 6.4 Source: World Bank Report NO. 7983-MOR (Table 4.2).  Table-6 MQROCCO TRANSPORT SECTOR STRATEGY PAPER Freiqrht Traffic By Mode, 1976 and 1988 (Tons and Tkm in Millions) 1976 1988 Mode Fleet/Operator Tons (P) Tons (W) incl. excl. incl. excl. Phos Phos Phos Phos Road Public/Private 13.0 38 27.7 27.7 45 73 Rail ONCF 20.0 59 33.0 9.5 54 25 Air RAM/RAI - - 0.0 0.0 - Coastal Miscellaneous 0.7 3 0.6 0.6 1 2 TOTAL 33.9 100 61.3 37.6 100 100 1976 1988 (Tkm) |() (Tkm) |(%) (Tkm) |(e) incl. Phos excl. Phos Road Public/Private 3,244.6 47 4,603.9 43 4,603.9 69 Rail ONCF 3,143.2 46 5,705.9 53 1,610.6 24 Air RAM/RAI - - 2.0 - 2.0 Coastal Miscellaneous 517.1 7 414.5 4 414.5 7 TOTAL 6,904.9 100 10,726.3 100 6,631.0 100 Source: SDNT, Mission 3, Table 3.39 page 27  Table-7 MOROCCO TRANSPORT SECTOR STRATEGY PAPER Classified Road Network 1988 (km) PAVED UNPAVED TOTAL PRIMARY 9,400 1,500 10,900 SECONDARY 6,250 2,400 8,650 TERTIARY 12,850 26,100 38,950 TOTAL 28,500 30,000 58,500 Source: World Bank Report No. 7983-MOR, Table 2.1.  Table-8 MOROCCO TRANSPORT SECTOR STRATEGY PAPER Length of Road Network (Km) By Pavement Width Classification under 4 m 4 to 6 m 6 to 7 m over 7 m Primary and Secondary 1,133 10,056 2,676 1,459 Tertiary 4,857 6,499 288 62 TOTAL 5,990 16,555 2,964 1,521 in * 22 61 11 6 Source: World Bank (Report No. 7983-MOR, Table 2.2).  Table-9 MOROCCO TRANSPORT SECTOR STRATEGY PAPER Distribution of Road Network By Traffic Volume. 1988 Traffic volumo Average daily Network (Vpd) traffic (Vpd)_ %- v.kcm Length Primary Second/ (km) (t) Tert. (W) Less than 750 250 20,900 20 80 24 750 to 1,500 1,100 4,103 60 40 21 1,500 to 3,000 2,250 2,000 75 25 21 more than de 4,800 1,500 90 10 34 3,000 ___ Source: World Bank (Report No. 7983-MOR, Table 2.5).  Table-10 MOROCCO TRANSPORT SECTOR STRATEGY PAPER National Vehicle Fleet, 1980 and 1986 Vehicle type 1980 1986 Annual Average Growth ___________ Rate (%) Passenger cars 301,000 377,600 3.9 Trucks and buses 139,500 178,400 4.2 TOTAL 440,500 556,000 4.0 Source: World Bank (Report No. 7983-MOR, Table 2.3).  Table-li MOROCCO TRANSPORT SECTOR STRATEGY PAPER Daily Road Traffic Volumes 1976 - 1985 (Million Vehicle-Km per Day) 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 13.7 15.5 17.1 18.4 18.7 19.6 21.2 20.6 20.0 20.4 Source: World Bank (Report No. 7983-MOR, Table 2.4).  Table- 12 MOROCCO TRANSPORT SECTOR STRATEQY PAPER Road Passenger Transoort By Mode. 1977 and 1988 Mode Millions VKM per Year v Change Market Share 1977 to 1988 1977 1988 1977 1988 Private Vehicle 3,800 5,486 44 32.0 28.7 Bus/Coach 6,826 9,968 46 57.5 52.1 Illegal Taxi and 380 1,252 230 3.2 6.6 other private Big Taxi 870 2,205 153 7.3 11.5 Others na 204 na na 1.1 TOTAL 11,876 19,115 61 100.0 100.0 Note: na= not applicable Source: SDNT, Mission 3, Table 3.15, page 41'  Table-13 MOROCCO TRANSPORT SECTOR STRATEGY PAPER Road Freight Transport By Administrative Categorv. 1976 and 1988 Category Year 1976 1988 Million % Million Tons Tons Public-ONT (For Hire) 3.0 23.1 15.0 44.1 Private (Own Account) 4.7 36.1 8.9 26.2 Private S 8 Tons 5.3 40.8 10.1 29.7