Morocco - Telecommunications Sector Restructuring Project

Document of The World Bank FOR OFFICIAL USE ONLY Al -39f6 57- "O Report No. 10714-MOR t i.) .:1 107 1 4 -M( Mr-( .Ty- ( iJP I Ti t.1e': TV'f,F(CUNMMIll r~ I(iT I (l ) ?p .-E,fTKP FA 'E2T Au thor I;.' LAP PU ArLAI.N E> t .::. :: 847 ln f .l: :1-1 , I:er,t.. .: MN119 1 l STAFF APPRAISAL REPORT MOROCCO TELECOMMUNICATIONS SECTOR RESTRUCTURING PROJECT DECEMBER 16, 1992 Industry and Energy Division Country Department I Middle East and North Africa Region This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  CURRENCY AND EOUIVALENTS Currency Unit - Moroccan Dirham (DH) US$1.00 = DH 8.80 (end-February, 1992) DH 1.00 = US$ 0.11 WEIGHTS AND MEASURES Metric Svstem US Svstem 1 meter (m) 3.2808 Feet (ft) 1 kilometer (km) 0.6214 mile (mi) 1 square kilometer (km2) = 0.3861 square mile (mi2) 1 metric ton (m ton) 0.9842 long ton (lg ton) 1 kilogram (kg) 2.2046 pounds (lbs) ABBREVIATIONS AND ACRONYMS DEL - Direct Exchange (main) Line DFI - Direct Foreign Investment EC - European Co.munity EIB - Europear. Investment Bank INPT - Institut National des Postes et T6l6communications ISDN - Integrated Services Digital Network MPT - Ministry of Post and Telecommunications ONPT - Office National des Postes et T6l6communications (National Post and Telecommunications Authority) PERL - Public Enterprise Rehabilitation Loan VAT - Value-added tax MOROCCO - FISCAL YEAR January 1 - December 31  FOR OFFICIAL USE ONLY MOROCCO TELWCOMMUNICATIONS SECTOR RESTRUCTURING PROJECT Loan and Prolect Summary Borrower: National Post and Telecommunications Authority (ONPT). Guarantor: Kingdom of Morocco. amount: 100US1 million equivalent. Terms: 20 yeare, including 5 years grace period, at the Bank's standard variable interest rate. Proieet Obiective. and Deucrintion: The project, the second operation in Morocco's telecommunications sector, supports: (i) the prepar&tion of the necessary groundwork to permit liberalization of the sector's activities, including the enhancement of the sector's institutional capacity; and (ii) the further expansion of the telecommunications network. It would include, first, technical assistance, training and studies designed to strengthen Government's institutional capabilities in respect of its regulatory function; and, second, a time slice (1992-94) of ONPT'S multi-year investmeat program initiated in 1987 with the support of the Bank. Physical components of the project include, inter alia, (i) about 497,000 new switching lines and related local networks and subscriber connections; (ii) microwave and optical fiber transmission routes; (iii) equipment to expand existing international switching gateways; (iv) trunk dialling of about 780 rural communities; and (v} a national radio frequency ccntrol center. Proioct Benefits and risks: General benefits to the Moroccan economy include: (i) removal of constraints to foreign investment and private sector development, particu_arly in export-oriented and communications-intensive activities, at a time when Morocco is developing its ties with the EEC; (ii) possibility of decentralizing the country's economic infrastructure; and (iii) improvements in the functioning of existing and emerging markets. The project will also enhance the country's socio- political development through the provision of better access to healtn, education and government services to rural areas, and by strengthening cultural and political integration. In addition, the project will also serve to enhance the sector's fiscal transfers to the Government. The main risks affecting the project are, on the one hand, possible slippage in the formulation and implementation of sector reform, and on the other, project delays due to possible over-stretching of ONPT's project implementation capacity. Both risks would be mitigated 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.  - it - by government commitment to a time bound action plan for reform and the set up of spacific project implementation arrangements, and by the inclusion in the project of an extensive technical assistance component. Estimated Costs -------(US$ million)--------- Local a) Foreian Total Switching b) 151.8 161.5 313.3 Long diet. transmission 154.2 180.7 334.9 Local networks 124.4 106.7 231.1 Pural telecoms 32.5 45.8 78.3 TA, training & studies - 15.2 15.2 Data processing 8.5 12.0 20.5 Miscellanecue c) 68.3 - 68.3 XPT (T.A. and control center) - 3.1 3.1 Base cost ('91 prices) 539.8 525.0 1,064.8 Physical conting. 18.7 18.5 37.2 Price conting. 65.5 36.1 101.6 TOTAL COST 624.0 579.6 1,203.6 -) includes indirect foreign cost (USS 54.4 million) and VAT/custom duties (USS383.5 million) b) includes date transmission C) includes Land, buildings, and vehicles  - Lii - Financina Plan Local Foreign Total ----------(USS million)