Morocco - Greater Casablanca Sewerage Project

Document of The World Bank FOR OFFICIAL USE ONLY /2 1g: Q k$ Report No. 6472a-MOR STAFF APPRAISAL REPORT KINGDOM OF MOROCCO GREATER CASABLANCA SEWERAGE PROJECT May 6, 1987 Regional Projects Department Europe, Middle East and North Africa Regional Office This document has a restricted distribution and may be used by recipients only in the performanct of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  CURRENCY EQUIVALENT (as of March 1987) Currency Unit - Moroccan Dirham (DH) - 100 centimes US$1.00 - DH8.40 DH1.00 - US$0.119 DH1,000,000 - US$119,048 MEASURES AND EQUIVALENTS 1 millimeter (mm) - 0.04 inches 1 meter (m) - 3.28 feet 1 kilometer (km) - 0.62 miles I square meter (m2) - 10.8 square feet 1 hectare (ha) - 2.47 acres 1 square kilometer (km2) - 0.386 square miles I liter (1) - 0.264 US gallons 1 cubic meter (m3) - 264 US gallons 1 cubic meter per second (m3/sec) - 35.3 cubic feet per second liters per capita per day (lcd) - 0.264 US gallons per capita per day liters per second (1/sec.) - 0.035 cubic feet per second PRINCIPAL ABBREVIATIONS AND ACRONYMS USED AH - Administration de l'Hyd:aulique CIRF - Inter-Regies' Training Center DRSC - Direction des Regies et Services Conc6des FEC - Fonds d'Equipement Communal ONEP - Office National de l'Eau Potable WHO - World Health Organization SMD - Societe Marocaine de Distribution REI - Regie des Exploitations Industrielles RAD - Regie Autonorne de Distribution d'Eau et d'Electricit6 de Casablan ca RADEEF - Regie Autonome de Distribution d'Eau et d'Electricite de Fes RADEEM - Regie Autonome de Distribution d'Eau et d'Electricite de Meknes RADEEMA - Regie Autonome de Distribution d'Eau et d'Electricite de Marrakech RAID - Regie Autonome Intercommunale de Distribution d'Eau et d'Electricite de la Province de Tanger RED - Regie Autonome Jntercommunale de Distribution d'Eau et d'Electri.cite de Rabat-Sale RAMSA - Regie Autonome Multiservices d'Agadir RADEEC -- Regie Autonome de Distribution d'Eau et d'Electricite de Chaouia RADEEN - R6gie fntercommiunale d'Eau ct d'Electricite de Nador SIRTI - Societe Inter--Regie de Traitement Informatique BOD -- Biochemical Oxygen Demand Measured During Five Days at 200C DWF - Dry Weather Flow FLSCAL YEAR January 1 - December 31  KINGDOM OF MOROCCO FOR OMCIAL USE ONLY GREATER CASABLANCA SEWERAGE PROJECT STAFF APPRAISAL REPORT Table of Contents Page No. LOAN AND PROJECT SUMMARY. .. ....... .. ..... i I. THE WATER SUPPLY AND SEWERAGE SECTOR ... .... . Country Backgroundc k g r o u nd.... .. . ... . 1 Water Resources ... . . . ........... .2 Sector Organization ........ . .. .... 2 Water Supply .............. .. ......... , , ..... 3 Sewerage ............... . . . , *.. ......0.. . . . . . 4 Government's Objectives for the Sewerage Sector 4 Bank's Involvement in the Sector. 5 Bank's Experience with Past L ending .. 6 Sectoral Strategy ........ 6 II. THE PROJECT AREA ...................................... 7 Location - Special Features .......................... . 7 Existing Water Sunply and Sewerage Systems . ............. 7 Population Served and Levels of Services . . . 9 Population Projections .. ................................ 10 Water Demand and Water Production Projections . . 10 Sewage and Pollution Loads . . ............................ 10 III. THE PROJECT .................................. 1 1 Genesis .................................. . 11 Project Scope and Objectives . . ................ 12 Technological Alternatives . . ......................... 13 Project Description . . ......................... 14 Status of Project Preparation .... 16 Cost Estimate ........................ . .. ...... 16 Project Investment Financing Plan and .... 18 Financing Arrangements Project Implementation ..... 19 The Regies - Sewerage Studies .......................... . 20 Procurement ..... 21 Disbursement ...... ... .... 23 Land Acquisition ..... 26 Monitoring System ..... 26 This report was prepared by Messrs Michel T.L. Pommier, Geoffrey Matthews, and Alexander Velderman (EMPWS). 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.  Table of Contents (coMtiued) Page No. IV. THE BORROWER AND THE IMPLEMENTING AGENCIES .............. 26 Present Organization ............ ............ . 27 RAD - Organization and Management ....................... 27 The Regies - Organization and Management ................ 28 Personnel and Training ......................... ..... *... 29 Accounting Systems. . .................. ........... ..... .. . 30 Billing and Collection .................................. 30 Audit and Insurance ...................................... 31 V. FINANCIAL ANALYSIS .. ........... .................... 32 Past Results and Present Situation ...................... 32 Financing Policies and Objectives ........................ 33 Financing Plan of RAD's Sewerage Investment Program ..... 34 Future Financial Performance of RAD ..................... 35 VI. JUSTIFICATION ........... ................ 36 Project Benefits . . .................... 36 Environmental Impact... . ............ 37 Least Cost Solution .... ................... 37 Beneficiaries .................... . .................. 38 Poverty Impact and Affordability . . . 38 Adequacy of Revenues .................................... 39 Risks and Safeguards . ................................... 39 VII. AGREEMENTS REACHED AND RECOMMENDATIONS ............ 39 ANNEXES Annex 1 - Statistical Data on Water Supply and Sewerage in the Project Area Annex 2 - Population .n Project Area Annex 3 - Projected Average Water Demand and Total Sewage Flow Annex 4 - Works Implementation Schedule Annex 5 - Summary of Project Cost Annex 6 - Annual Project Investment Annex 7 - Project Implementation Schedule Annex 8 - Monitoring Criteria Annex 9 - RAD's Sewerage Organizational Structure Annex 10 - RAD's Financial Statements Annex 11 - Financial Assumptions Annex 12 - Selected Documents in Project Files MAPS I Location of Project Areas IBRD No. 19884R II Casablanca Project Area IBRD No. 19885  - i - KINGDOM OF MOROCCO GREATER CASABLANCA SEWERAGE PROJECT LOAN AND PROJECT SUMMARY Borrower: Kingdom of Morocco. Loan Amount: US$60 million equivalent. Terms: Twenty years, including six years of grace, at the standard variable interest rate. US$49.5 million and US$10.5 million would be onlent to RAD and eight Regies, respectively, under the same terms and conditions. RAD and the Regies would assume the foreign exchange risk and the variable interest risk. Beneficiaries: The Regie of Agadir (RAMSA), Casablanca (RAD), Fes (RADEEF), Marrakech (RADEEMA), Meknes (RADEEM), Nador (RADEEN), Rabat (RED), Settat (RADEEC), Tangier (RAID). Project Description: The project is the first major operation in the sewerage sector in Morocco. The project will introduce institutional improvements, cost recovery and long term policy reforms that will strengthen the overall development of the sector. The project will: (a) improve health and enhance the environment in Greater Casablanca; (b) rehabilitate the existing sewer networks; (c) keep abreast of the domestic and industrial demands for sewerage services; (d) identify the least cost alternative to treat and dispose of sewage in the Greater Casablanca area and eight major urban areas; (e) provide for effective operation and maintenance of existing facilities and improve the quality of design and construction; and (f) promote nationwide the creation and development of appropriate institutional, financial and technical structures to manage sewerage services. The proposed project includes: (i) rehabilitation of existing sewerage systems; (ii) extensions to the main sewers; (iii) construction of sewers for unserviced areas; (iv) provision of operation and maintenance equipment; (v) provision for technical assistance and training; (vi) studies to assess alternatives for the treatment and disposal of sewage in the Greater Casablanca area; and (vii) preparation of sewerage master plans, feasibility studies, detailed design and bidding documents for eight major cities, i.e. Agadir, Fes, Marrakech, Meknes, Nador, Rabat, Settat and Tangier. The project will directly benefit about 6.2 million people by the year 1995. The risks associated with the project are those arising from the establishment of a new sewerage authority. Provisions for training and technical assistance and adoption of financial policies aimed at making sewerage authorities financially viable will assist in minimizing project risks.  - ii - Estimated Project Cost: Component Local Foreign Total