Road map: Planning for longer, better routes and connections

The Moroccan transport sector has made some great strides in recent years, as attested by investments in the maritime and road segment. While major events such as the 2008-09 financial crisis, the ensuing Eurozone debt crisis and recent regional political instability have impacted passenger and cargo flows to and from the kingdom, investment plans in general have kept pace. As such, projects across the spectrum of the transport sector are ongoing and set for delivery over the next year and a half, in line with the government’s medium-term infrastructure development plans.

ROADS: Morocco’s road development plans are laid out under an overarching road map, known as the National Motorway Reinforcement Scheme (Schema d’ Armature Autoroutier National, SAAN). The plan includes projects at the national, regional and rural levels designed to accommodate expected increases in traffic linked to urban and industrial development.

A key player is Autoroutes du Maroc – the agency responsible for the development, maintenance and exploitation of the country’s highways – which oversees a total of 1800 km of existing and planned roads. It typically operates under a 50-year concession that is commercialised through toll payments. According to the agency’s 2012 figures, the latest available, traffic on Moroccan roads rose by 4.78% compared to 2011. The busiest connections include the Berrechid-Agadir link, accounting for about 22.6% of total traffic volumes; followed by Casablanca-Rabat, at about 20%; while the links from Rabat to Fez and from Kenitra to Tangiers East accounted for a little over 14% each.

The first phase of SAAN was finalised in 2012 and oversaw the completion of some 1000 km of new roads, bringing the entire national road network to 60,000 km. Particular attention was given to the country’s two main axes: east to west linking Rabat with Fez and Oujda, and north to south linking Tangiers and Tétouan to Marrakech, El Jadida and Agadir via Casablanca.

GREATER LINKS: The road map’s next phase extends until 2025. Key projects currently under construction include the 172-km link between Berrechid and Beni Mellal, branching off the Casablanca-Marrakech highway. At the time of writing, the project was set to make its planned completion date by the end of 2015, with most of the work remaining on the 75-km stretch between Berrechid and Khouribga. Another project concerns the extension of the main north-south artery from El Jadida to Safi. At an estimated Dh4.8bn (€426.2m), works started in early 2013 and are on track for delivery by early 2015. With expansion of the Safi port under way, its connection by means of a highway is of particular importance to the country’s long-term logistics plans, running along the coast parallel to the Casablanca-Marrakech link.

Other highway projects scheduled for the short to medium term include connections between Casablanca and Berrechid, Guercif and Nador, Fez and Tangiers and a coastal road that connects Safi to the southern cities of Agadir, Tiznot and Guelmin. In the longer term, the Ministry of Equipment, Transport and Logistics is working on plans for another connection between Rabat and Casablanca, as well as direct links from Marrakech to Tangiers via Fez.

RURAL: In addition to highways, the kingdom has also made substantial efforts to improve road connections in rural areas. Under the National Rural Roads Programme (Programme National des Routes Rurales, PNRR), more than 25,000 km of roads were developed between 1997 and 2012, when the first two phases of the plan were completed. The third phase is now under way and will run until 2016. Current objectives call for a total of 8000 km of roads, while another 12,000 km will be added under the plan’s fourth phase, which is set for completion by 2021.

PNRR’s funding is typically divided between local communities, state coffers and international development agencies. As such, the latter financed up to 60% of the pre-2012 works through allocation to the Road Financing Fund (Caisse pour le Financement Routier, CFR) and the Directorate of Roads, both accountable to the Ministry of Equipment, Transport and Logistics. In March 2014, the European Investment Bank reconfirmed its support by allocating a €150m credit line for modernisation and renovation of the national network.

ROAD SAFEFTY: Although the quality of the road network has much improved in recent years, the number of lethal traffic accidents rose from 125 in 2009 to 172 in 2012. In an effort to curb this trend the government has launched a nation-wide training campaign aimed at professional drivers. In addition, it is incentivising bus and truck owners to dispose of old vehicles. Between 2014 and 2016 a total of Dh520m (€46.2m) was set aside as compensation for the acquisition of used trucks and buses that are not in line with safety standards. In this way, the government aims to renew the national fleet of vehicles meant for public use, some 70% of which is older than 10 years. By the end of the term, the government aims to have replaced at least 30% of the total. Another budget line has been created to support transport firms willing to comply with international management and control standards. Beneficiaries will have access to a maximum of Dh200,000 (€17,760) to provide the required training.

MARITIME: In 2013 domestic maritime traffic flows were down by 1.8% on the previous year, reaching 75.47m tonnes. The decline in imports – which account for 62% of overall trade – is largely due to macroeconomic challenges linked to the delayed implementation of the national budget and a growing budget deficit that adversely affected spending. Indeed, the import categories of cereal (volumes of which fell by 31%), coal (-7%) and hydrocarbons (-4.6%) experienced the most sizeable drops. On the upside, and similar to its performance in 2012, exports grew by some 2%, reaching 28.65m tonnes by the end of 2013. Growth was predominantly led by containerised cargo and is testament to the country’s expansion of its export base as well as its container terminal capacity.

All of the kingdom’s various ports, with the exception of Tanger-Med in the north, are managed by the National Ports Agency (Agence Nationale des Ports, ANP), which operates as a public commercial firm under the auspices of the Ministry of Equipment, Transport and Logistics. In 2013 its ports accounted for 90% of all traffic, down from 93% in 2012 – a testament to the growth seen at Tanger-Med.

The ports of Casablanca, Jorf Lasfar and Mohammedia accounted for three-quarters of the year’s activity, with the remainder divided between the smaller ports of Agadir, Safi, Nador and Laâyoune.

Guided by the National Port Strategy, which maps traffic flows and consequent infrastructure needs until 2030, a total of Dh1.8bn (€159.8m) has been allocated for investment in 2014, while more than Dh6bn (€532.8m) will go towards ANP’s port development until 2018. Besides transformation of current growth poles, such as Safi and Nador, into specialised energy hubs with a regional mandate, funding is destined for upgrading of Casablanca’s container terminal and construction of an entirely new facility close to the Atlantic coastal city of Kenitra, north of Rabat (see analysis).

Overcoming previous issues, the port of Tanger-Med witnessed a 39% year-on-year (y-o-y) growth in 2013, with total cargo reaching 34.9m tonnes. According to figures from the Tanger-Med Port Authority, which oversees operations, containerised traffic grew by 40%, while inflows and outflows of vehicles registered an annual rise of 81%. This is due in part to output from the new Renault-Nissan factory, which opened in Tangiers in 2012. Of the 181,500 vehicles handled by the port in 2013, nearly 94,000 came from the factory.

RAIL: Much of the rise in domestic cargo transportation, generated by expanding port capacity and large-scale industrialisation of the country’s north, hinges on connection with its hinterland by rail. In addition, Morocco’s national railway firm, Office National des Chemins de Fer (ONCF), projects passenger numbers will grow from 36m in 2012 to 133m by 2030. As such, ONCF is overseeing a substantial investment plan that will have allocated a total of Dh33bn (€2.9bn) by 2015, of which Dh8bn (€710.4m) is slated for allocation in 2014.

Key items are the construction of a high-speed link from Tangiers to Casablanca and an upgrade of the existing network. At 2200 km Morocco’s railway system is one of the most extensive in Africa; however, nearly half is not electrified and more than 1400 km operate on single tracks. Meanwhile, a near doubling of passenger numbers over the past decade has resulted in network congestion, limiting cargo traffic to night-time. As a result, the plan calls for the construction of a new line, dedicated solely to cargo, between Casablanca and Kenitra, where traffic is busiest.

At the top of the list of priorities is the construction of the high-speed link between Tangiers and Kenitra, passing by Rabat and extending to Casablanca on a regular-speed double line. The 200-km-long connection will be the fastest on the continent, surpassing South Africa’s Gautrain, and reduce rail transport times on Morocco’s north-west significantly. Travel time on the Tangiers-Casablanca leg will fall from five hours to two hours and 10 minutes, while the Tangiers-Rabat link will be halved to one hour and 30 minutes, at an average speed of 320 km per hour.

COSTS: The project’s total anticipated cost of Dh20bn (€1.78bn) is being financed by a combination of public funds (Dh5.8bn, €515m), foreign loans (Dh13.4bn, €1.2bn) and donations from foreign partners (Dh840m, €74.6m) like Saudi Arabia, the UAE and Kuwait. ONCF has said that the line will be operational by end-2015 and expects more than 6m passengers to use the service during its first year. However, delays in civil works, due to both capacity issues with contractors and administrative challenges related to land expropriation, may have an impact on the completion date (see analysis).

ONCF has also announced interest in eventual extension of the project to Agadir, as well as a second line linking Casablanca on the Atlantic coast to Oujda in the country’s north-east, to form a nationwide high- speed rail network of 1500 km. The feasibility and timeline of such plans have yet to be confirmed.

UPGRADES: Aside from the high-speed link, ONCF is overseeing execution of several projects shortlisted in its 2010-15 investment programme. The plans – at a combined value of Dh12.8bn (€1.1bn) – call for capacity increases on various sections of the national rail network, as well as improvements in the quality of service delivery. A key component accounting for nearly half of total funding is the upgrade of the Kenitra-Marrakech link, a vital artery connecting Rabat and Casablanca to tourist areas further to the south that will feed directly into the high-speed line serving Tangiers.

The project is divided into two sections: the Kenitra-Casablanca link is ONCF’s busiest, accounting for nearly 50% of annual cargo volumes, excluding phosphates, and 70% of passenger numbers. The second leg links Casablanca to Marrakech via Settat. In addition to its value to the tourism industry, strong economic growth and a resulting rise in demand in both cities have put pressure on the service’s capacity levels. As part of the project, existing infrastructure will be upgraded, while an additional line will be added to sections of the single-line Settat-Marrakech connection. According to ONCF, this will reduce travel time between Casablanca and Marrakech by about 37 minutes and allow for greater service frequency. A new, third rail is being installed on 148 km between Casablanca and Kenitra and will be solely dedicated to cargo.

INTER-LINKS: In addition, ONCF is focused on consolidating its connectivity with other modes of transportation, particularly with Morocco’s ports, which offer the company a strategic opportunity to grow and diversify its cargo revenues. While phosphates account for almost half of freight revenue at present, the firm’s ambitions are to get it on par with container and passenger traffic. As such, it is stepping up its development of dry ports. Following the success of its Casablanca facility, offering clients a single-window clearance system close to the city industrial zone of Ain Sbaa and the city port, the model will be emulated in the cities of Marrakech, Jorf Lasfar, Fez and Nador. By end-2015, ONCF projects that these facilities will process 300,000 containers annually, supported by construction of multimodal logistic platforms scheduled for the same cities.

On the passenger side, efforts are being made to address some of the numerous service concerns that have dented ONCF’s reputation in recent years, including operating delays and limited seating capacity on trains. One example of this is the introduction of automated ticket booths at some train stations, and online ticket sales are scheduled to be in place before the end of 2014. These efforts seem to be bearing fruit as well; the ONCF claims that its approval ratings have increased from 63% to 80% over the past five years.

Infrastructure and operating improvements have resulted in steady growth in both passenger and cargo numbers – welcome news for ONCF, which up until a few years ago was faced with substantial financial challenges. In 2009, influenced by the financial crisis and the ensuing decline in the traffic of phosphates and derived products, the company’s operating result was Dh229m (€20.33m), as compared to Dh730m (€64.8m) the year before. Things have improved four years on and the firm posted an operating result of Dh341.2m (€30.30m) for the first half of 2013, up 16.4% on the same period the year before. Turnover for the full year grew by 3.5%, reaching Dh5bn (€444m).

AIR: Air passenger numbers in 2013 increased by 9.21% y-o-y to reach 16.5m passengers. This marked a significant turnaround following two years of marginal performance caused by falling tourism numbers as a result of regional political instability and economic woes in the eurozone. Based on December 2013 figures, air connections with Europe account for close to three-quarters of total traffic, followed by domestic flights (9.8%), Africa (6.7%), the Middle East (5.1%) and North America (1.6%). Activity at Casablanca’s Mohamed V Airport, which accounts for nearly half of all traffic, grew by 5.2%, while Marrakech, a key tourist hub and the country’s second-busiest airport, witnessed a rise of 13.5%.

Similar to other segments of Morocco’s transport sector, infrastructure is being ramped up in a bid to support, or in some cases catch up with, traffic growth. At the top of the priorities of the National Office of Airports (Office National des Aéroports, ONDA), the state-owned agency in charge of airport management, is the refurbishment and extension of Mohamed V’s Terminal I. The airport’s current capacity of 7m passengers is insufficient to handle the large and growing number of passengers. For example, in 2013 there were a total of 7.56m passengers passing through the facility. Several other challenges will also need to be addressed at the airport, such as the current design of traffic flows, the absence of an automated baggage processing system and issues related to user amenities.

SETBACKS: The project has faced some significant challenges in recent years. After a start was made on an initial master plan in early 2009, activities were suspended following the revelation of a number of technical shortcomings with regards to passenger traffic flows inside the terminal. The miscalculations were such that ONDA ordered a new study that was awarded to Spanish engineering firm INECO in 2011. Since then, an agreement has been reached on an alternative plan that eyes a capacity of 21m passengers and a separation of domestic, international and transit traffic as well as arriving and departing passengers. In addition, an increase in public spaces will create more and better waiting areas. The new facility will also have more commercial outlets in line with ONDA’s ambition to raise non-aviation revenues. The delays have prompted some criticism from airlines. Royal Air Maroc (RAM), the national carrier, has frequently voiced concerns about the condition of the airport, especially the baggage management and the lack of space at gates.

Other airports undergoing construction include Marrakech, Fez, Tétouan, Zagora and Beni Mellal. ONDA is looking to ramp up capacity with the expansion and modernisation of existing platforms. The agency is also looking to refurbish secondary airports in the towns of Bouarfa, Taza, Ifrane, Tan Tan and Tata.

Upon completion, total airport capacity will increase from 23.5m today to 51m by 2030, which should be sufficient to support ONDA’s projections of traffic growth in coming decades. The agency forecasts total passenger traffic will reach 18m by 2015, 36m by 2020 and 26m by 2025.

COMPETITION: Partly responsible for the recent uptick in passenger numbers is the expanding footprint of lowcost carriers (LCCs). In recent years, companies like Ryanair, Vueling, easyJet and Jetairfly have increased short- to medium-haul services, in particular to and from Europe. In 2012 Ryanair opened connections to Lille, Nantes, Nimes and Saint-Etienne and added various European destinations to its service from Marrakech. Vueling started six new routes in 2013 between Marrakech and Casablanca and Barcelona, Bilbao and Paris.

Although RAM remains the largest carrier, accounting for around 50% of all traffic, the list of the list largest airlines in the country is dominated by LCCs, led by Ryanair, which holds a share of 12%, up from 9% in 2012. Meanwhile, EasyJet and Jetairfly, the number three and four in the market, both lost half a percentage point over the year, reaching 6.8% and 6.1%. Further down, Vueling has seen notable growth, with its market share rising from 0.4% in 2012 to 2% in 2013.

Severe price pressures from LCCs, a drop in tourism arrivals and higher fuel prices have collectively had a negative impact on RAM’s performance since 2009. Sizeable losses led to the introduction of a recovery programme in 2009, which saw a financial injection by the government – the carrier’s major shareholder – of Dh1.7bn (€151m) in 2011, similar to overall losses that year. The firm’s aim of cutting costs by Dh1bn (€88.8m) by end-2012 led to the cancellation of 17 of its least profitable connections. In addition, the airline downsized its fleet to 44 planes, laid off one-third of its workforce, and outsourced activities such as services and human resource management.

The measures led to a significant recovery in the company’s performance in 2012, which, at an operating profit of Dh718m (€63.8m), was its best result since 1990. Another injection of Dh1.2bn (€106.5m) is intended to revamp the workforce, streamline operations and renew the aging fleet. By mid-2013, the company announced plans to acquire between 20 and 30 new-generation planes, including 15 medium-haul and five long-haul jets by 2020. “If we want to develop and protect our market share, we must think of buying new planes,” Driss Benhima, the company’s CEO, told local media in a recent briefing.

Going forward, the company has refocused its attention on medium- and long-haul connections where LCCs have a limited footprint. Through partnerships with international carriers, RAM intends to capitalise on Casablanca’s strategic positioning as a hub for flights to Africa. In line with this, it is increasing its connectivity with the continent itself.

In June 2014 the Casablanca-N’Djamena line will open as RAM’s 30th destination on the continent. “RAM is by definition African and it is our ambition to be perceived as the first African airline,” Benhima declared. In the longer run, the company projects it will be the third-biggest airline on the continent by 2020 and will operate a fleet of some 100 planes by 2025. In mid-2013 Abdelaziz Rebbah, the minister of transport, told local media that, “We restructured the firm to help it accommodate the tourism development strategy focused on Latin America, Asia, Russia and Africa.” Morocco aims to triple its tourism receipts and double tourist arrivals to 20m per year by 2020. For this, the company is considering strategic partnerships with major airlines in Asia or the Gulf region.

CARGO: Despite a drop in volumes from 60,800 tonnes in 2006 to 55,000 tonnes in 2010, the country expects the development of industrial and logistics zones across the country to fuel growing demand for air cargo. RAM anticipates annual average growth levels of around 5% per year. ONDA is currently overseeing a Dh860m (€76.4m) long-term investment plan to develop and expand freight terminals in key centres such as Rabat, Casablanca, Agadir and Tangiers. As for Casablanca, a new cargo facility is being built to replace the existing structure, owned and operated by RAM, which dates from 1962. The new facility will be built on a surface area of 30,000 sq metres, compared to 11,500 sq metres today, and will be able to handle an annual capacity of 150,000 tonnes of cargo.

OUTLOOK: The Moroccan government is in the driver’s seat of a nationwide effort to extend and overhaul the transport network. Over the next five years substantial public funding is set to go towards revamping and expanding road, rail, maritime and air traffic infrastructure. This will consolidate Morocco’s position as a regional transit hub for both cargo and passenger traffic, while also responding to growing demand from the domestic market, where passengers are increasing in number, as well as demanding better service quality. While the role of the private sector remains limited in the design, financing and management of transportation networks, it can expect interlinked systems able to process goods, services and people in time and comfort that top standards elsewhere on the continent.

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The Report: Morocco 2014

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