Infrastructure: A Real Breakthrough
31 March 2009
Read by 4117 persons
Remember this number: 10.9 billion euros, or 128 billion dirhams. This is equivalent to a quarter of the GDP that will be invested in infrastructure between 2008 and 2012. Because of its scale, this plan is by far the largest territorial development operation ever launched in the Kingdom. Roads, highways, ports (TangerMed II), airports and railways, including the high-speed train (TGV), the list of gigantic projects that must be launched and, for some, completed by the end of the legislature, is impressive. The general economy of these projects can be summarized in one sentence: integrating Morocco into globalization.
Karim Ghellab, Minister of Equipment and the driving force behind this policy, rightly uses the term "breakthrough." It is true that, once completed, these works will physically change the face of the Kingdom.
Besides port infrastructure (TangerMed II is announced with an investment of nearly 18 billion dirhams), the emphasis is on the highway network, for which 30 billion dirhams will be invested by 2015 with the objective of doubling annual achievements. Also in pole position is the railway, whose TGV program is the major pillar. The Tanger-Casablanca line, whose work will begin in 2009, according to the predictions of the Equipment teams, will launch the ambitious high-speed line program of 1500 km by 2035. For the financial structuring, it remains for the ONCF to find a substitute for the financial windfall that OCP gave it in case the world's number one phosphate producer was unfaithful to it in freight, as seems to be emerging. In principle, nothing obliges OCP to continue overpaying for the transport of its production to ONCF. From this point of view, it will be necessary to monitor the inevitably political decisions that will be made on this issue in the coming weeks.
According to the forecasts of the Ministry of Equipment, as early as this year, the rail links connecting Taourirt to Nador and Tangier to TangerMed will be completed (the latter was inaugurated last April).
Economically, more communication and transport infrastructure means reduced transaction costs and improved competitiveness and attractiveness of the country to investors. And if, in parallel, the axes of the master plan for logistics platforms materialize, the resulting gains in logistics costs will be a formidable lever of competitiveness for businesses. This will also lead to a upheaval in mobility, whose effect on growth and employment is undeniable. According to experts, lowering the psychological threshold of the notion of distance is a factor that will necessarily impact the dynamics of the job market. This plus is not yet visible in Tangier where companies sometimes have to overbid to attract executives to the region.
For companies and service providers revolving around the construction industry, the boost to infrastructure provides visibility for at least ten years, or more. But this economic "security" is also a challenge for SMEs in the sector. To make the most of this favorable weather, they will have to overcome several levels at once in terms of organization, resources and agility. This is not a given.
Already today, few companies manage to meet project deadlines, due to overflowing order books and a lack of anticipation of the growth in workload. The real estate boom and tourism investment are also fueling demand. It is therefore the capacity to digest these programs that will determine the propensity of construction SMEs to "play in the first division" and to rise to the category of "champions." The National Federation of Building and Public Works (FNBTP) has fought for years to bring about a few large national operators in the sector.
International investment banks have not been mistaken. For them, the Maghreb and the Mena region in general are "new Eldorados" for cement groups. To carry out all these programs, it is true, tens, even hundreds of millions of tons of cement and derived products will be needed. It is not surprising that the Moroccan subsidiaries of global cement manufacturers are under pressure and are resizing their capacity by investing in new units. Even before these projects reach cruising speed, production units are struggling to keep up with demand to the point of resorting to a quota system. The response to the capacity to supply the market will also depend on the respect of the schedule and, indirectly, the control of the costs of these programs.
If communication infrastructures are the most spectacular, they are not exclusive. Alongside this locomotive, several major programs will contribute to reshaping the face of tomorrow's Morocco and serve as a support for its integration into globalization. The port of TangerMed barely commissioned and a second is announced (TangerMed II). The gigantic Bouregreg project and its ancillary infrastructure will give Rabat-Salé an additional dimension. Without this program, the Tramway project would not have seen the light of day so quickly, nor that of Casablanca, whose Council was forced to accelerate the pace without lifting the mortgage on financing.
A Plethora of Markets (in millions of euros)
• Highways: 2818
• 630 km of expressways: 182
• Mediterranean Ring Road: 218
• Rural Roads (1,500 to 2,000 km per year): 727
• Road Maintenance: 727
• TGV: 1,818
• Stations and rail network: 1,909
• TangerMed II: 1,636
• Maintenance and other port projects: 300
• Airports: 527
Published June 28, 2008
Posted August 22, 2008
L’Economiste
Karim Ghellab, Minister of Equipment and the driving force behind this policy, rightly uses the term "breakthrough." It is true that, once completed, these works will physically change the face of the Kingdom.
Besides port infrastructure (TangerMed II is announced with an investment of nearly 18 billion dirhams), the emphasis is on the highway network, for which 30 billion dirhams will be invested by 2015 with the objective of doubling annual achievements. Also in pole position is the railway, whose TGV program is the major pillar. The Tanger-Casablanca line, whose work will begin in 2009, according to the predictions of the Equipment teams, will launch the ambitious high-speed line program of 1500 km by 2035. For the financial structuring, it remains for the ONCF to find a substitute for the financial windfall that OCP gave it in case the world's number one phosphate producer was unfaithful to it in freight, as seems to be emerging. In principle, nothing obliges OCP to continue overpaying for the transport of its production to ONCF. From this point of view, it will be necessary to monitor the inevitably political decisions that will be made on this issue in the coming weeks.
According to the forecasts of the Ministry of Equipment, as early as this year, the rail links connecting Taourirt to Nador and Tangier to TangerMed will be completed (the latter was inaugurated last April).
Economically, more communication and transport infrastructure means reduced transaction costs and improved competitiveness and attractiveness of the country to investors. And if, in parallel, the axes of the master plan for logistics platforms materialize, the resulting gains in logistics costs will be a formidable lever of competitiveness for businesses. This will also lead to a upheaval in mobility, whose effect on growth and employment is undeniable. According to experts, lowering the psychological threshold of the notion of distance is a factor that will necessarily impact the dynamics of the job market. This plus is not yet visible in Tangier where companies sometimes have to overbid to attract executives to the region.
For companies and service providers revolving around the construction industry, the boost to infrastructure provides visibility for at least ten years, or more. But this economic "security" is also a challenge for SMEs in the sector. To make the most of this favorable weather, they will have to overcome several levels at once in terms of organization, resources and agility. This is not a given.
Already today, few companies manage to meet project deadlines, due to overflowing order books and a lack of anticipation of the growth in workload. The real estate boom and tourism investment are also fueling demand. It is therefore the capacity to digest these programs that will determine the propensity of construction SMEs to "play in the first division" and to rise to the category of "champions." The National Federation of Building and Public Works (FNBTP) has fought for years to bring about a few large national operators in the sector.
International investment banks have not been mistaken. For them, the Maghreb and the Mena region in general are "new Eldorados" for cement groups. To carry out all these programs, it is true, tens, even hundreds of millions of tons of cement and derived products will be needed. It is not surprising that the Moroccan subsidiaries of global cement manufacturers are under pressure and are resizing their capacity by investing in new units. Even before these projects reach cruising speed, production units are struggling to keep up with demand to the point of resorting to a quota system. The response to the capacity to supply the market will also depend on the respect of the schedule and, indirectly, the control of the costs of these programs.
If communication infrastructures are the most spectacular, they are not exclusive. Alongside this locomotive, several major programs will contribute to reshaping the face of tomorrow's Morocco and serve as a support for its integration into globalization. The port of TangerMed barely commissioned and a second is announced (TangerMed II). The gigantic Bouregreg project and its ancillary infrastructure will give Rabat-Salé an additional dimension. Without this program, the Tramway project would not have seen the light of day so quickly, nor that of Casablanca, whose Council was forced to accelerate the pace without lifting the mortgage on financing.
A Plethora of Markets (in millions of euros)
• Highways: 2818
• 630 km of expressways: 182
• Mediterranean Ring Road: 218
• Rural Roads (1,500 to 2,000 km per year): 727
• Road Maintenance: 727
• TGV: 1,818
• Stations and rail network: 1,909
• TangerMed II: 1,636
• Maintenance and other port projects: 300
• Airports: 527
Published June 28, 2008
Posted August 22, 2008
L’Economiste
