Now in the midst of a three-stage strategic plan to develop the transport sector and position the country as a regional hub for air and maritime traffic, Morocco has experienced remarkable growth in transit in recent years. Following a 10-year investment programme aimed at boosting basic infrastructure, Morocco now has one of the region’s more developed transport networks. Between 2003 and 2007, the government invested Dh58bn (€5.16bn) in road, airport, port and rail infrastructure upgrades. The second phase saw investment of Dh120bn (€10.67bn) between 2008 and 2012 to continue infrastructure building and introduce reforms to liberalise the sector and increase the competitiveness of transport operators. The challenge now is to boost interconnectivity, improve sector organisation, and further develop the logistics network in order to maximise the benefits of Morocco’s expanded infrastructure. The government has proposed a Dh60bn (€5.33bn) investment programme over 2010-30 for the construction of a nationwide logistics network, which stands to support economic growth in several sectors in the medium term.

RAIL: As the basic infrastructure investment programme reaches an advanced stage, the priority in the rail sector is to develop a new high-speed train (train à grande vitesse, TGV). Railways are set to receive Dh33bn (€2.93bn) in investment between 2010 and 2015 to develop existing lines as well as the TGV. Morocco’s National Office for Railways (Office National des Chemins de Fer, ONCF) reported it plans to invest Dh7.5bn (€666.75m) in the rail network in 2013; Dh4.5bn (€400.05m) of this will go to the construction of the TGV, and the remaining Dh3bn (€266.7m) will go toward refurbishing the existing network. Morocco aims to construct 1500 km of high-speed rail lines by 2035. The project was officially launched in September 2011. Construction is under way on the first segment of the line, which will stretch 200 km from Tangier to Kénitra, part of an Atlantic axis that will ultimately connect Tangier to Casablanca. The line is expected to reduce travel time between Casablanca and Tangier from five hours to just over two hours and boost passenger numbers on this line from 2m to 8m annually. This segment should help to contribute to the economic development of the maritime trade and industrial zone around Tangier-Tétouan and increase the flow of goods transported to and from the Tanger-Med port. In future stages, a second east-west “Maghreb” TGV axis is slated for construction between Rabat and Oujda, with the possibility of extending it to other countries in North Africa.

EXISTING LINES: Morocco’s existing railroads cover over 2200 km, connecting major production zones to the Mediterranean and Atlantic coasts via the ports of Tangier, Casablanca, Nador, Safi and Jorf Lasfar. The ONCF saw turnover of Dh4bn (€355.6m) in 2011, a 15.2% increase year-on-year (y-o-y), due to growth in both passenger and freight transport. Passenger numbers were 34m in 2011 after growing 10% y-o-y. The ONCF aims to boost passenger traffic to 50m by 2015. “In the competition with bus services, the railways are holding up well: in 2004, ONCF had 15m passenger, and now it has increased to 37m passengers,” said Mohamed Rabie Khlie, the CEO of ONCF.

When the TGV becomes operational, it will free up space on the country’s current railways for freight transport. Railways are a key medium for domestic freight traffic and are necessary to support growth in agriculture and agro-industry, energy, mining, cement and container transport. Expanding activities at the Tanger-Med port contributed to boost freight traffic by 3% y-o-y to reach 37m tonnes in 2011. The OCP Group is undergoing a Dh130bn (€11.56bn) investment programme to increase phosphate production and export levels by 2020, which should continue to provide a key source of traffic for the rail industry. Growth in the manufacturing industry should also expand rail traffic in the near-term; the first trains carrying cars from the Renault factory in Melloussa to the Tanger-Med port became operational in 2012, and the ONCF plans to increase the frequency to six trains per day by 2014. The ONCF aims to increase transportation to 50m tonnes of freight and 1m containers by rail by 2015, and handle 3m containers in its inland ports each year. ONCF executives have stated that while the rail authority has no plans to privatise, it does expect to lean heavily on public-private partnerships in the future in order to support its expansion plans and the growing costs of freight transport. The TGV project, in particular, benefits from significant outside participation.

While the state has committed to providing Dh5.8bn (€515.62m) of the total Dh20bn (€1.78bn) cost for the first TGV segment, high levels of funding have also been pledged by the French government and development agency, as well as development funds from several Gulf states, including Saudi Arabia, Kuwait and Abu Dhabi (see chart). French transport firm Alstom sold 14 trains to Morocco for a total cost of €400m, and a team of specialists from France’s Société Nationale des Chemins de Fer (SNCF) was commissioned to provide technical support for the project.

AVIATION: The state may also seek foreign and private sector partners to boost the air transport industry and complement public investment in the sector. The national flag carrier, Royal Air Maroc (RAM), went through a difficult financial period over 2009-11, as revenues were eroded by low tourism arrivals, higher fuel prices and growing competition, particularly from low-cost air carriers, which have increased their market presence since liberalisation in 2004. In September 2011 the state committed Dh1.6bn (€142.24m) to RAM to support a company-wide restructuring and reform process. The airline is on track to meet its goal of cutting expenditures by Dh1bn (€88.9m) in 2012 through a variety of measures. Indeed, 17 of the least profitable routes were cancelled in 2012, and new ones were added to destinations with the demand and potential to cement Morocco’s position as a regional air travel hub, such as Spain. The airline also reduced its workforce by 30% to 3900 in a bid to strengthen efficiency. These efforts are part of a broader overhaul of RAM, under which the state will invest an additional Dh1.2bn (€106.68m) between 2013 and 2014 to continue revamping its workforce, streamlining its operations and renewing planes in its fleet. To support RAM’s future growth programmes, the government is seeking a partnership in order to expand its presence in the region.

The number of airlines operating regular flights Morocco has expanded to 45 since signing an open skies agreement with the EU in 2006, which eliminated restrictions on the number and frequency of routes between Morocco and Europe. Low-cost operators, such as European carriers easyJet and Ryanair, were quick to move onto the market. According to RAM estimates, low-cost airlines increased the number of seats they offered from 550,000 in 2006 to 7.05m seats in 2010. This has tightened sector competition and is partially responsible for the closure of RAM’s low-cost subsidiary, Atlas Blue, in early 2011.

Commercial passenger traffic has risen steadily in the past decade to reach 7m in 2011. Nearly half of all traffic passed through the country’s primary airport, Casablanca’s Mohamed V, for a total of 7.29m passengers. The tourism centres of Marrakech and Agadir were next in line, with 3.43m and 1.52m passengers in 2011, respectively. Passenger numbers are expected to increase considerably to 24.4m by 2020, assuming a return to normal growth in the tourism industry. In order to prepare for future demand and increase Morocco’s attractiveness as a regional hub for air transport, the National Airports Office (Office National des Aéroports, ONDA) is overseeing a sector-wide investment programme to boost airport capacity. In 2013, ONDA plans to invest Dh2bn (€177.8m) in ongoing construction projects in Casablanca, Marrakech, Fes, Nador and Agadir (see analysis).

MARITIME: Morocco has one of the most developed maritime transport networks in North Africa, with 13 ports open to foreign trade, as well as 10 domestic fishing ports, and 6 tourism and leisure ports. Morocco’s ports are critically important to the economy; 95% of exported goods are transported via maritime routes, and the value of all exported goods and services in 2011 made up 35.6% of national GDP. Overall port traffic has expanded by an average of around 6% in volume each year over 2000-10, supported by economic growth and efforts to integrate with regional and global markets. Morocco’s ports saw a total of 96m tonnes of traffic in 2011, a 4.1% increase y-o-y. Import and export traffic accounted for 73.8m tonnes of the total, an increase of 2.4% from 2010, which was primarily led by import growth. Container traffic grew by 2.2% y-o-y to reach 3m twenty-foot equivalent units (TEUs), two-thirds of which were due to trans-shipment. The port of Tangier, Tanger-Med, handles all trans-shipment traffic. Tanger-Med processed 2m TEUs in trans-shipment in 2011, compared to 81,000 TEUs of import-export traffic. Casablanca, the next most active container port, handled 800,000 TEUs in 2011, followed by Agadir with roughly 200,000 TEUs in 2011. Casablanca dominates import-export activity with 31% of total traffic, followed by Jorf Lasfar with 24%, Mohammedia with 16%, Safi with 8% and Tanger-Med with 6%. The volume of exports dipped slightly at the end of 2012, due to the impact of the recession on European demand and reduced agricultural production in the 2011/12 season. Nonetheless, the country’s economic growth strategies, including ambitious plans to quadruple the value of agricultural exports, boost phosphate exports and expand manufacturing industries, should spur solid growth in port traffic.

PORT CAPACITY: The 2010 National Ports Strategy assumes an annual demand of 290m tonnes in 2030, triple the level seen in 2011. The biggest gains are anticipated in container traffic, phosphate exports, and hydrocarbons, as well as trans-shipment. In order to prepare for future demand, the Ministry of Equipment and Transport and the National Ports Agency (Agence Nationale des Ports, ANP) are engaged in an infrastructure maintenance and expansion programme, which proposes to invest Dh74bn (€6.59bn) in maritime infrastructure between 2010 and 2030. While an ambitious goal, an average of Dh3bn (€266.7m) has been invested annually in the ports sector in the last 10 years, according to ministry estimates.

EXPANSION: Perhaps the most important project currently under way is the expansion of the Tanger-Med port, the country’s most direct line to Europe. Work on the extension, Tanger-Med II, was launched in 2009 and should help to cement the Strait of Gibraltar as the centre of Morocco’s maritime activity. Tanger-Med II will add a capacity of 5.2m TEUs, bringing the port’s total capacity to 8.2m TEUs. Tanger-Med II will serve as a motor for the economic development of the region, as industrial, logistical, and social resources are built around this trans-shipment and external trade hub.

The expansion of the Jorf Lasfar port, the primary point for phosphates exports, also stands to boost economic growth. The ANP plans to increase port capacity to 54m tonnes by 2030 in order to accommodate industrial growth. Tentative plans are also in discussion to construct a new terminal facility at nearby Safi, which would be dedicated to importing industrial materials for the national electricity provider and OCP, with a total capacity of some 16.6m tonnes projected by 2019.

Much of the domestic distribution is carried out by truck. The national logistics strategy aims to establish a number of container platforms nationwide, to increase storage space closer to consumer areas. Logistics zones will be established in key transport hubs, so as to favour the use of railways for inter-city distribution, easing congestion on roads and reducing travel costs. Five container logistics platforms on a total of 250 ha are scheduled for construction by 2015. These will be located in the consumer zones of Casablanca, Tangier, Marrakech, Fez-Meknès and Oujda.

PRIVATE SECTOR: While much of Morocco’s transport sector continues to be managed by public entities, particularly airports and railways, the private sector plays an important role in maritime transport. All ports excluding Tanger-Med are managed by the ANP, under the purview of the Ministry of Equipment and Transport. Tanger-Med is managed and developed by the Special Agency for Tanger-Med, a public-private partnership. Below this level, private companies have concessions to operate and develop much of the port system.

For example, the two terminals of Tanger-Med I are operated by Netherlands-based APM Terminals, a subsidiary of AP Moller Maersk, and the second by a consortium of companies including EUROGATE, Contship Italia, and shipping lines MSC, CMA-CGM and Comanav. The private entity Marsa Maroc, formerly the Office d’ Exploitation des Ports, is active in nine ports nationwide including Casablanca, Tanger-Med, Mohammedia and Jorf Lasfar, with an estimated 50% market share of total port traffic. Marsa Maroc has managed the bulk terminal at Tanger-Med I since 2010 and was awarded the operating concession for Tanger-Med terminal 4 (TC4) in 2009. TC4, which is still under construction, will be devoted to trans-shipment and import-export traffic, with an annual capacity of 2.25m TEUs. A consortium of both local and foreign contractors, including the French firm Bouygues, Bymaro, Saipem, Besix and Somagec, is leading construction of the terminal. The concession to build and operate the third container terminal (TC3) was awarded to Marsa Maroc in December 2012. The terminal (with a capacity of 600,000 TEUs) adds to Marsa Maroc’s duties as the operator of Casablanca’s East container terminal (700,000 TEUs).

The biggest transporters are shipping majors Maersk, MSC and CMA-CGM, which control some two-thirds of all shipping logistics. Yet, with a number of new projects, the maritime transport sector is not saturated and there is room for growth for smaller companies.

ROADS: The road network has seen improvements under the 2003-12 infrastructure programme. Some 1000 km of roads have been completed since 2004, bringing the network to 60,000 km. The national highway authority, Société Nationale des Autoroutes du Maroc (ADM), plans to add 400 km more by 2015. The national highway network currently stretches 1416 km, and ADM plans to extend this to 1800 km by 2015. “The basic road infrastructure is good, and there is no special need for improvements,” Oussama Loudghiri, the director-general of Société Nationale du Transport et de Logistique, told OBG. Morocco has two primary highway axes. An east-west axis links Rabat, Fez and Oujda, and a north-south axis links Casablanca, Marrakech and Agadir, with a connection to Tangier. By 2015 another segment is planned to extend the existing Casablanca-El Jadida link farther south to the port city of Safi. In the last 20 years, the Ministry of Equipment and Transport has invested Dh38bn (€3.38bn) for this.

STRATEGIC CHOICES: Work continues on the Dh6.2bn (€551.18m) Mediterranean Bypass, a strategic road axis that should improve access to areas along Morocco’s Mediterranean coast. The highway traces an east-west coastal route from the port city of Tangier to Saï- dia in the east, and will ultimately reduce travel time between the two cities from 11 to seven hours. The project budget between 2008 and 2012 was Dh2.4bn (€213.36m). The priority in the coming years is to improve rural road networks, conducted through the National Rural Routes Programme (Programme National des Routes Rurales, PNRR). The first phase of the PNRR, covering 1995-2005, invested Dh750m (€66.68m) to construct or redevelop 11,000 km of rural roads and increase the percentage of the population with access to the road network to 54%. The Ministry of Equipment and Transport estimates phase one of the programme reduced merchandise transport costs from Dh300 (€26.67) to Dh150 (€13.34) per tonne per 10 km, which strengthened rural agricultural operations.

The second phase of the PNRR aims to connect 80% of the rural population to the road network by building or improving 15,000 km of rural roads, at a pace of 2000 km per year. The total project investment was set at Dh10bn (€889m), with support from several international financial institutions, including the World Bank, the African Development Bank, the French Development Agency, the European Investment Bank, and the Arab Fund for Economic and Social Development.

Road safety has long been a problem in Morocco, and the introduction of the new Highway Code in 2010 had positive initial effects following its application, despite some criticism from those who found it too restrictive. However, while the number of accidents and fatalities on the roads dipped in 2011, they rose again in 2012. According to the ministry, this spike is due in part to decreased caution exercised by drivers as road conditions improve. Enforcing the Highway Code will require more manpower. The ministry has set aside Dh2bn (€177.8m) for the second half of 2012 and 2013 to increase road surveillance and engage non-governmental organisations in road safety awareness work.

URBAN TRANSPORT: The urban transport systems in Rabat and Casablanca also received major upgrades in 2012, with the installation of a modern tramway network in both cities. Rabat’s tramway was launched in May 2011 with two lines, one 11.5 km and the other 8 km, with a total of 32 stations. Construction of the Rabat-Salé line was managed by the French transport firm Colas Rail and its Moroccan subsidiary, GTR. Construction is nearing completion on the Casablanca tramway, a single 30-km line with 48 stations, cutting an east-west path from Hay Hassani to Sidi Moumen. Initial rolling stock had been installed and tests were being completed on the line as of November 2012. The tram is expected to open to the public in early 2013, according to the timeline from Casa Transports, the urban transport authority responsible for the project. Urban road congestion has slowed circulation – particularly in Casablanca, where an estimated 800 buses and 1500 registered taxis circulate each day. The new public transport systems stand to relieve some of this tension and reduce accidents. However, buses remain a safe option. “While buses have proven to be among the safest means of transport (only 2% of all road accidents concern buses), the public media impact of an accident is bigger,” said Ezzoubeir Errhaimini, the president director-general of the CTM Group.

LOGISTICS & INTER-MODAL TRANSPORT: Now that major advances have been made in rail, maritime, air and road infrastructure, the government’s main priority is to strengthen the national logistics network in order to be able to capitalise on these structural improvements. The government worked with private sector representatives to develop a National Strategy for the Development of Logistics Competitiveness in 2010, which aims to completely overhaul the fragmented logistics network by 2030. By mobilising Dh60bn (€5.33bn) in public and private sector investment, the plan aims to establish 70 logistics platforms, grouped into 18 discrete integrated zones. Each platform will focus on one of several activities: distribution and logistics sub-contracting, cereals, agricultural and agro-industrial products, construction materials and container platforms.

In order to respond to a growing demand for logistics, the ONCF has launched a building programme to establish multi-modal container terminals near key industrial zones nationwide, incorporating logistical services as well as Customs and administrative processes. The first multi-modal container terminal was inaugurated in 2008 in the Casablanca industrial zone of Aîn Sbâa, located 6 km from the port. The multimodal zone covers 43 ha, including an 8-ha dry port linked to the national railway network, with a stockage capacity of 3000 TEUs and annual processing capacity of 150,000 TEUs. ONCF has projects to build another five container terminals in Marrakech, Jorf Lasfar, Zenata, Fez and Nador. The ONCF has an agreement with the road transport agency Carré to ensure multi-modal transport in areas not covered by the rail system.

OUTLOOK: The development of the logistics network is expected to be a rising tide for the transport sector, increasing efficiency and boosting revenues in maritime, air, road and rail transport. The recently completed 10-year investment programme has positioned Morocco to benefit from a modern and extensive transport sector, which should support economic growth in the coming years. Private-sector firms are playing greater roles, particularly with respect to maritime and rail transport. More reforms should also help to boost modernisation.