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Morocco: Highway Sector Project (Loan 3168-MOR)

The Morocco Highway Sector Project, supported by Loan 3 168-MOR for US$79.0 million equivalent, was approved in FY90. The loan was closed in FY96, one and a half year behind schedule, and a balance of US$0.8 million was canceled. The Implementation Completion Report (ICR) was prepared by the Middle East and North Africa Regional Office. The borrower's report is included as an Appendix.

This project was the first Bank-supported operation to introduce a sectoral approach to the development of the highway system and road transport. The project's objectives were: (i) to help government maintain existing roads and to help optimize the use of funds among, various road maintenance activities; (ii) to improve efficiency in the road transport market, and (iii) to improve efficiency in the road construction industry. To achieve these objectives, the project comprised two components: (i) funding for a three-year slice of the public road investment and maintenance program, focusing on road rehabilitation, periodic maintenance, bridge reconstruction and workshops; equipment for road maintenance, traffic counting, workshops and road safety, (ii) technical assistance and studies in support of objectives related to the road transport market and the construction industry.

The physical objectives were attained. Civil works achieved, and in some cases exceeded, the targets. There were, however, substantial delays relative to the original schedule, due to slow disbursements and to inadequate counterpart funding, during early project implementation. As a result of the investment in maintenance the quality of the roads improved: nationally, the percentage of roads in good condition increased from 20 percent prior to the project to 44 percent when last measured in 1994. The equipment purchased helped improve traffic counting and the operation of the road maintenance workshops. An automotive test center built under the project is being used to monitor the work of private motor vehicle test centers. The economic rate of return for individual components ranges from over 12 percent for the road works to over 24 percent for the rehabilitation of bridges. These returns are satisfactory but lower than those estimated at appraisal, mainly because of cost overruns in the civil works.

The institutional objectives were not fully achieved. The majority of the studies and technical assistance were done as originally envisaged. However, in general, their recommendations are only slowly being- implemented- this is particularly so with proposed reforms in the road transport market. A study of rural roads prepared an investment program. but failed to make recommendations on ways to improve the organization of road services and to meet the transport needs of rural municipalities. The ICR notes that the macroeconomic crisis and large-e budget cuts in the 1980s severely affected the construction industry and precluded introducing reforms required for increasing its efficiency.

OED rates the project outcome as satisfactory, institutional development as modest, sustainability as likely and Bank performance as satisfactory. These ratings are in line with those in the ICR.

The main lessons from this project are: (a) for project-financed policy studies to be of practical value, they should be accompanied by a sustained dialogue with key government agencies, and (b) a macroeconomic crisis during project implementation is likely to make it more difficult to implement sectoral reforms, and attention should be paid during such process to the reforms more likely to be affected by the crisis.

The ICR is of satisfactory quality, however, it does not contain a plan for the future operation of
the project.

No audit is planned.

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