Water privatization in Morocco goes back to the times of the French Protectorate when most water supply systems were run under a private concession. After independence the private utility was nationalized, but in the mid-1990s the Moroccan government privatized water and sewer services again, alongside with electricity distribution. The privatization process began with the award of the Casablanca concession to Lyonnaise des Eaux (now SUEZ) in 1997, followed by the award of a concession for the capital Rabat to Veolia Environnement in 1998 and the award of another concession for Tangiers and Tetouan also to Veolia. In 2009 private companies provided water and sanitation services to 38% of the urban population of the country.

Contents 1 History 2 Investment 3 Outcomes 4 Tariffs 5 References

[edit] History

Since the municipal public utility Régie Autonome Intercommunale de Distribution d'Eau et d'Electricité de Casablanca (RAD) had a poor service record the government decided in the mid 1990s to bring in a private company to manage the city's water, sewerage and power networks. The lengthy negotitations process for the contract, which was originally conceived "after the direct intervention of King Hassan", was accompanied by intense criticism from the press, businessmen such as the Confédération Générale des Entreprises du Maroc, and city councillors. ^[1] Finally a consortium called Lydec, led by Lyonnaise des Eaux (now SUEZ), was awarded the 30-year concession without a competitive tender. Lyonnaise des Eaux thus returned to a city where it had already provided services for almost half a century. The original consortium included Lyonnaise des Eaux (35%), Elyo (24%), Agbar (5%), EdF (18%) and Endesa (Spain) (18%). The contract was signed on April 28, 1997, between Jérôme Monod, CEO of Lyonnaise des Eaux, and Abdelmoughit Slimani, President of the Council of Grater Casablanca (Communauté Urbaine de Casablanca), under the auspices of then interior Minister Driss Basri.^[2]

In 2008 the concession contract was renegotiated to provide a better balance between the two partners, limiting the rate of return of the concessionnaire from 14.6% to 11.7% and requiring him to increase his investments by Dirham 1bn. Also, automatic tariff increases will now be limited to specific situations such as increases in bulk water or electricity tariffs.^[3]

The Casablanca concession paved the way for subsequent concessions in Rabat, Tangiers and Tetouan. While the Rabat concession was awarded directly to Vivendi in 1998, the concessions in Tangiers and Tetouan coering 23 municipalities with 1.1 million inhabitants were awarded in January 2002 after competitive bidding to Amendis, a subsidiary of Vivendi. Amendis is the brand name used by the Société des eaux et d'électricité du Nord (SEEN), a consortium led by the Vivendi group and that also includes Hydro-Québec International and Moroccan shareholders.^[2]

[edit] Investment

Lydec's 30-year investment plan totals 30 billion Moroccan Dirham. According to one source 21 billion of this sum will come from connection fees paid by new customers into a fund, 8.2 billion would come from Bank loans and internal cash generation, and 0.8 billion would be in the form of equity to be raised by the subsidiary running the concession.^[1] According to another source the concessionnaire will not provide any significant equity, nor will it borrow significant debt. Instead it will generate 87.8% of its contribution of 6.3 billion Dirham by using its technical and commercial know-how to mobilize funding from its customers. The remainder would be mobilized through connection fees.^[2] According to Lydec, the company invested 7.7 billion Dirham between 1997 and 2008, of which the company financed 4.4 billion. 33% of the investment was for sanitation, 23% for water supply, 34% for electricity and 10% were investments that benefited all three sectors. A substantial share of the investments in sanitation were dedicated to storm water management.^[4]

[edit] Outcomes

According to Lydec, surveys show that more than 90% of its customers have noticed improvements: shorter waiting time at customer centers, simplified procedures, quicker repairs, more reliable billing and less inundations. In particular, Lydec built the Western collector, a 4.7 km underground stormwater drain with a capacity of 40 m3/s. Also, the company says that it saved 25 million cubic meters of drinking water in 2002 compared to the situation before the concession.^[5]

According to Amendis, during the first five years of its concession in Tangiers and Tetouan it expanded the wastewater collection and treatment system in the two cities and provided 40,000 subsidized water and wastewater connections.^[6]

[edit] Tariffs

Between 1997 and 2001 the average water tariff in Casablanca increased by 35% and the average sewerage tariff by 34%. However, the electricity tariff decreased by 6%. During public management by RAD water tariffs had increased by 60% between 1990 and 1995. However, this increase had to a large extent been due to an increase in bulk water tariffs charged by ONEP to RAD.^[7]

[edit] References

1. ^ ^{a b} Middle East Economic Digest:"No smooth course for private water", 7 March 1997, p.2-3
2. ^ ^{a b c} Claude de Miras and Xavier Godard:Les firmes concessionnaires de service public au Maroc:eau potable, assainissement et transport collectifs, in:Méditerrannée, No. 106 (2006), p. 114-117
3. ^ Lavieéco:Tarifs de l’eau et de l’électricité : Lydec fait des concessions, March 21, 2008
4. ^ Lydec:Investissements, accessed on October 10, 2009
5. ^ Lydec:Carte de visite, accessed on October 10, 2009
6. ^ Veolia Water:Tangier and Tetouan - Morocco. Water, wastewater and electricity services, accessed on October 10, 2009
7. ^ Dominique Lorrain:Multiutilité à Casablanca, CEMS, CNRS/EHESS, Juin 2002, p. 14-15