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Morocco: Paths to progress

By Oxford Business Group Optimism in Morocco’s business environment, seen in recent World Bank plaudits for its measures to protect investors, is likely to be further boosted by a series of major transport infrastructure projects that are under way. Speaking at a World Economic Forum conference held in Marrakech in October, Karim Ghellab, equipment and transport …


By Oxford Business Group

Optimism in Morocco’s business environment, seen in recent World Bank plaudits for its measures to protect investors, is likely to be further boosted by a series of major transport infrastructure projects that are under way.

Speaking at a World Economic Forum conference held in Marrakech in October, Karim Ghellab, equipment and transport minister, noted that the country has earmarked €11 billion for transport improvements between 2008 and 2012.

“In the last ten years, Morocco has quadrupled its investments in transport infrastructure,” Ghellab was quoted as saying by Moroccan News Agency, MAP. “Morocco is capitalizing on infrastructure because improving infrastructure is likely to contribute to both economic and human development,” he said.

In-keeping with the government’s plans to attract more Foreign Direct Investment (FDI), the minister mentioned the launch of several infrastructure projects such as a Tangier-Med port complex and motorway network. Another area seen as key to modernization is the upgrade of rail links.

A Casablanca-Tangier high-speed rail line commenced construction in June. It is expected to be completed in 2014 and begin commercial use a year after. The Dh20 billion (€1.82 billion) project, which is being handled by French rail company SNCF, will eventually be extended to Marrakech.

Tracks have already been laid for a 19-km, 31-station tram network between Rabat and Sale which will cross the Bou Regreg River, and drivers are now being trained to begin work by the end of this year. The network, expected to cost Dh4 billion (€365 million) will be able to carry some 180,000 people per day. It will connect major public facilities such as rail stations, hospitals and universities to the main residential areas.

The government is also developing a tram system for Casablanca that, when completed, is expected to reach 76 kilometers in length. Turkish construction firm Yapi Merkezi won the first major construction contract for this project in mid-August. The company will be building the platforms and laying track for a 30-kilometers stretch of the network between Sidi Moumen and Hay Mohammad. Tender rounds for two other sections of the network will be launched soon.

France’s Systra, an international consulting firm that specializes in rail and urban transport projects, is heavily involved in the project, with the French government providing Dh6.8 billion (€620.2 million) in preferential loan funding and the balance made up of Dh5.5 billion (€501.6 million) in other loans, Dh1.9 billion (€173.3 million) in grants, Dh4.8 billion (€437.8 million) from the Moroccan government budget, and Dh1 billion (€91.2 million) from the Hasan I Fund for Economic and Social Development. Work is expected to be completed in 2014, with operational testing and use to begin in 2015.

As for conventional rail, the country already has a track in place from its main northern line to the port of Nador and there are plans to extend this network to Agadir on the Atlantic coast and perhaps Laayoune in Western Sahara.

Rail is not the only form of transport that is being upgraded and expanded.

A new terminal is under way at Marrakech Menara International Airport that will double its capacity and a €56 million upgrade of the Fez Saiss Airport is also in the works. Both projects are being financed by loans from the African Development Bank.

As the country continues to expand its transportation networks, not only to more traditional areas such as Europe but also to the rest of Africa and the Gulf, investors will find it easier to do business in Morocco. A recent World Bank report commended the country for strengthening protection of investors, also highlighting significant progress in simplifying business procedures, which holds promise for future investors, particularly in the growing transport sector.

The World Bank’s “Doing Business 2011” report lauded Morocco’s efforts to attract and protect investors, citing the recent decision to reduce minimum capital requirements from Dh30,000 (€2736) to Dh1000 (€91).

This has contributed to a 40 percent increase in the number of established firms and Morocco is now considering abolishing the requirement altogether.

 

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