MOROCCO PROJECT COMPLETION REPORT - AfDB

AFRICAN DEVELOPMENT BANK

MOROCCO

PROJECT COMPLETION REPORT

SIXTH POTABLE WATER SUPPLY PROJECT

COUNTRY DEPARTMENT September 2003 NORTH REGION

TABLE OF CONTENTS

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2.1 2.2 2.3 2.4

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3.1 3.2 3.3 3.4 3.5 3.6

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4.1 4.2 4.3 4.4 4.5 4.6

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5.1 5.2

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7.1 7.2 7.3

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9.

9.1 9.2 9.3

Equivalents, Acronyms and Abbreviations Executive Summary Project Basic Data Project Matrix INTRODUCTION PROJECT OBJECTIVES AND FORMULATION Objectives Description Background Preparation, Appraisal, Negotiation and Approval PROJECT IMPLEMENTATION Entry into Force and Start-up Modifications Implementation Schedule Reports Award of Contracts Sources of Financing and Disbursement PROJECT PERFORMANCE Overall Evaluation Operating Performance Institutional Performance Financial Performance Economic Performance Performance of Consultants, Contractors, Suppliers and the Borrower SOCIAL AND ENVIRONMENTAL IMPACT Social Impact Environmental Impact PROJECT VIABILITY PERFORMANCE OF THE BANK, THE BORROWER AND OTHER DONORS Bank’s Performance Borrower’s Performance Other Donors OVERALL PERFORMANCE AND RATING CONCLUSIONS, LESSONS AND RECOMMENDATIONS Conclusions Lessons Recommendations

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This report was prepared by Messrs. B. MOHLINGER, Consulting Engineer, and B. NIANG, Consulting Financial Analyst, ONIN.2, following their mission to Morocco in January/February 2003. Mr. B. BEN SASSI, Water Engineer, ONIN.2 and Project Task Manager, participated in the mission start-up and finalization of the report. Further information on the report should be addressed to Mr. P.E. NJUGUNA, Ag. Division Manager, ONIN.2.

LIST OF ANNEXES

Annex TITLE Number of Pages

1 Description of Project Components 2

2 Comparative Table of Project Disbursement at Appraisal and Completion

1

3 Comparative Table of Project Cost 1

4 ONEP Financial Statements 1

5 Assumptions and Calculation of the Internal Financial Rate of Return (IFFR)

2

6 Assumptions and Calculations of the Economic Rate of Return (ERR)

2

7 Implementation Performance 1

8 Bank Performance 1

9 Overall Project Performance Evaluation 1

10 Matrix of Recommendations and Actions to Take 1

11 Data on Project Contracts 8

12 List of Documents Used for the Completion Report. 1

EQUIVALENTS, ACRONYMS AND ABBREVIATIONS

CURRENCY EQUIVALENTS

Currency Appraisal (4th Quarter 1993) Completion (June 2003) 1 Dirham (MAD) 1 Unit of Account (UA)

100 centimes

MAD 13.1067

100 centimes

MAD 14.4494

MEASURING UNITS

km Kilometer km2 Square kilometer ha Hectare m3 Cubic meter m3/s Cubic meter per second m3/h Cubic meter per hour l/s liter per second inh./ha inhabitants per hectare

LIST OF ABBREVIATIONS

ADB = African Development Bank DGH = General Directorate of Water ERR = Economic Rate of Return IBRD = International Bank for Reconstruction and Development (World Bank) IFRR = Internal Financial Rate of Return IGF = General Inspectorate of Finance LPEE = Public Test and Study Laboratory MAD = Moroccan Dirham ND = Nominal Diameter ONE = National Electricity Agency ONEP = National Potable Water Agency PWS = Potable Water Supply RADEEF = Fez Autonomous Water and Electricity Distribution Authority SAP = Structural Adjustment Program SDAU = Development and Urbanization Master Plan

Fiscal Year: 1 January – 31 December

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EXECUTIVE SUMMARY 1. The Sixth Potable Water Supply Project figures among the Bank’s operations in the development of Morocco’s potable water supply sector, helping to meet supply needs of nearly 2 million people. It comprises several sub-projects in Tangiers, Marrakech, Casablanca, Sidi Kacem, Ouarzazate, Benguerir, Assa, Khemisset and Tiflet, as well as sanitation studies and actions to improve water quality control. 2. The project was implemented over six years (March 1996 to June 2001), compared to the 4 years initially scheduled. Bids were invited soon after the loan approval. However, due to modifications, certain components were spread out beyond the original timetable. 3. The modifications concerned the substitution of the Debdou Center with the Assa Center, the substitution of the Bou Regreg Complex Network 2 rehabilitation with boosters on aqueducts within the same Complex, the cancellation of the Mharhar (Tangiers) Treatment Station rehabilitation and the abandoning of the Kariat Ba Mohamed intake works. 4. The Bou Regreg Complex Network 2 rehabilitation component was first delayed due to the postponement of the Network 1 rehabilitation (financed by another donor). Subsequently, the component was cancelled. The engineering studies with regard to the Mharhar (Tangiers) Treatment Station were retaken from the scratch; thereafter, that component was also cancelled. It should be noted that these cancellations came at a period when potable water tariffs were frozen and ONEP was more interested in cutting its capital costs in order to preserve its financial balance. ONEP requested the cancellation of the corresponding loan components, thanks to which the funding was reviewed downwards from UA 30 million to UA 24.5 million. Towards the end of the project after all expenditures were in, ONEP requested a second cancellation which reduced the loan to UA 20 million. 5. Other delays were also recorded, particularly in the wake of the collapse of a contracting firm in Ouarzazate and another in Benguerir. Negotiations with the Haouz Agricultural Development Agency over what volumes to pump delayed the connection of Marrakech PWS facilities. The Bou Regreg pumping station works schedule was extended due to difficulties in programming supply interruptions in Casablanca. Lastly, for the El Kansera water intake works, it took the General Directorate of Water three years to approve the construction plans and program the electricity switch-off before effecting the connection. 6. ONEP obtained concessional financing from the European Union for the Debdou PWS Center, but replaced that component with the Assa PWS. A similar situation arose with regard to the Demnate sanitation study, thus reducing the number of such studies from 10 to 9. 7. The total project cost on completion, excluding taxes, stands at UA 27.169 million (i.e. MAD 350.67 million) – 45.4% below the appraisal estimate. The Bank contributed UA 16.173 million to the cost and ONEP UA 10.996 million. 8. This cost is substantially below the appraisal estimate, and the abandoning of the two components mentioned above is neither the only nor the major reason for the gap since both rehabilitation operations were estimated at UA 9 million, i.e. 18% of the total project cost. The final cost of every component fell within the appraisal envelope. The gaps are attributable to overestimates in the engineering studies which served as the basis for preparing the project, as well as higher contingency provisions. 9. The ADB loan was granted to the National Potable Water Agency with Moroccan Government guarantee. ONEP began to reimburse the loan in October 1999.

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10. The internal financial rate of return (IFRR) stands at –0.8%, compared to 14.4% at appraisal; the economic rate of return is 0% instead of the 14.5% projected during the appraisal.

11. The project impact is rated as satisfactory. The objectives in terms of increasing the production capacity, extending the distribution networks and increasing the population served were reached. The non-rehabilitation of the Bou Regreg Treatment Station Network 2 and the Mharhar (Tangiers) Station had no negative impact on ONEP’s operations but only resulted in an increase in maintenance charges (replacement of the most dilapidated equipment which would not have been changed during the rehabilitation).

12. Project implementation started two years following approval, with the first set of bid invitations. The award of contracts took longer than scheduled partly due to the time the ADB put in giving its approval. The project recorded modifications, among which the substitution of the Debdou Center with the Assa Center in the wake of ONEP’s access to more concessional funding, the cancellation of a sanitation study (financing from another donor), and the cancellation of the rehabilitation of two treatment stations.

13. Immediately following works start-up, a series of technical problems emerged, all linked to the inadequate engineering studies on which basis the project was prepared. ONEP adequately managed these problems and found appropriate solutions to them. Notwithstanding the resulting delay in implementation, the financial impact was well controlled and modifications totalled 4.1% of the contract amount, compared to the 10% provision for technical contingencies at appraisal. The executing agency regularly sent project progress reports up to the departure of technical assistance. The Borrower’s completion report is yet to be finalized.

14 The project contributed to the executing agency’s institution building. ONEP was reorganized in pursuit of three strategic objectives: (i) generalization of potable water; (ii) sustainability and security of existing facilities; and (iii) active participation in the liquid sanitation field. Staffing improved in quality and quantity. The ongoing reorganization comprises an analytic accounting project aimed at transforming management control into a real guidance system to facilitate decision-making and improve management quality.

15 Annual tariff adjustments projected at appraisal were not made due to the sector’s characteristically high social sensitivity. However, efforts have been made to enable ONEP to gradually recover cost. Thus, between 1993 and 2000, the average weighted tariff increased by 11% overall. In April 2003, ONEP raised tariffs by 4.5%.

16 The limitation of arrears to 3 months of income from 1996 was imposed as a loan condition. Although recovery improved considerably compared to the 1992 situation, the objective set under this condition was not reached.

17 In terms of operation, negative gaps were recorded between output on completion and the appraisal estimates. These gaps are well reflected in the turnover return ratio (-4.9% compared to an appraisal estimate of 13.4%).

18 Even if ONEP’s financial structure remains balanced, it is less solid than expected, although more comfortable than at the start of the period when the liquidity ratio stood at 0.8, against a minimum norm of 1. Debt is more moderate that expected: a real ratio of 26.6% compared to an estimate of 33.1%. Debt remained stable throughout the period in view of the fact that it accounted for 26.3% in 1992. The debt service ratio which stood at 1.2 in 1992, was projected to increase gradually from year to year to reach 2.4 in 2000. In 2000, the actual debt service ratio was 1.45, far below the appraisal estimate but higher than the 1.3 set as a loan financial condition. 19 The internal financial rate of return on completion, calculated on the same assumptions as those during the appraisal, stands at –0.8%, compared to the appraisal figure of 14.4%. An economic rate of return of 14.5% was calculated during the appraisal for the project as a whole, against the background of its direct and quantifiable benefits. Calculated on completion, the same rate is zero.

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PROJECT BASIC DATA

1. Loan Number : P-MA-EAZ-002 2. Borrower : National Potable Water Agency (Office National de l'Eau

Potable, ONEP) Guarantor : Government of the Kingdom of Morocco

3. Beneficiary : ONEP 4. Executing Agency : ONEP A LOAN

Appraisal Estimate Actual 1 Amount (in UA million) 30.00 16.17 2 Interest rate Variable Variable 3 Reimbursement period 20 years 20 years 4 Grace period 5 years 5 years 5 Date of loan negotiation 01/94 03/94 6 Date of loan approval N. S. 26/05/94 7 Date of loan signature N. S. 20/07/94 8 Date of entry into force N. S. 03/02/95 9 Date of first disbursement 25/06/96

10 Date of final disbursement 06/06/02 11 Start of implementation 10/94 12 End of implementation 12/94 06/2001 13 Date of first reimbursement

B. PROJECT DATA 1. Total cost (in UA million)

Appraisal Estimate Actual Gap Gap (%) For. Exc. 30.000 16.173 -13.822 -46.1% Loc. Cur. 19.800 10.996 -8.804 -44,5%

Total 49.800 27.169 -22.631 -45,4%

2. Financing Plan (in UA million)

Appraisal Estimate Actual Gap Sources

L.C. F.E. Total L.C. F.E. Total Value %

ADB 30.000 30.000 16.173 16.173 -13.827 -46.1% ONEP 19.800 19.800 10.335 0.661 10.996 -8.804 -44.5% Total 19.800 30.000 49.800 10.335 16.834 27.169 -22.631 -45.4%

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C – PERFORMANCE INDICATORS 1. Cost increase : -45.4% 2. Delay compared with the schedule : + 50% 3. Status of implementation : Completed 4. Industrial performance : satisfactory 5. Performance of the consulting engineer : satisfactory 6. Performance of contracting firms : satisfactory to unsatisfactory,

depending on the batch 7. Performance of the executing agency : satisfactory 8. Project return : satisfactory

Appraisal PCR Economic rate of return (%) 14.5% 0% Financial rate of return (%) 14.4%% -0.8%%

D. - MISSIONS

Period Number of Persons

Composition Staff Weeks

Appraisal 14/11-01/12/93 2 1 engineer 1 financial analyst

3*

Supervision 07/97 2 1 consulting engineer 1 financial analyst

2*

Supervision 22/11-03/12/99 1 1 engineer 0.5* Supervision 12/06-23/06/00 1 1 engineer 2 Supervision 07/12-22/12/00 2 1 water engineer

1 consulting financial analyst

1.5*

Supervision 25/06-06/07/01 1 1 engineer 0.5* Supervision 07/10-20/10/01 1 1 engineer 0.5* Completion 18/01-08/02/03 2 1 consulting engineer

1 consulting financial analyst

3*

Total 13 * Missions covering several projects.

E. DISBURSEMENTS 1. By Origin of Financing (in UA million)

Appraisal Estimate Actual Gap Gap (%) For. Exc. 30.000 16.173 -13.822 -46.1% ONEP 19.800 10.996 -8.804 -44.5% Total 49.800 27.169 -22.631 -45.4%

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2. ADB Disbursements

Appraisal Estimate Actual Percentage Total disbursed 30.000 16.173 53.9% Amount cancelled 10.000 33.3%

3. Disbursement Schedule

Years Sources of Financing 94 95 96 97 98 99 2000 2001 2002 Total

ADB 2.2 10.6 11.9 5.4 30.0ONEP 1.6 6.9 7.7 3.5 19.8Total 3.8 17.5 19.6 9.0 49.8

Appraisal Estimate

% 8% 35% 39% 18% ADB 3.416 6.287 1.576 2.767 0.878 0.002 1.247 16.174ONEP 3.283 6.019 0.544 1.391 0.549 0.373 0.340 12.499Total 6.699 12.306 2.120 4.158 1.427 0.375 1.587 28.673

Actual

% 23% 43% 7% 15% 5% 1% 6% F. CONTRACTING FIRMS Information on the contracts of contracting firms, suppliers and consulting engineers is given in Annex 11.

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PROJECT MATRIX Project Name : Morocco – Sixth Potable Water Supply Project Completion Date : 2001 Design Team : B. Mohlinger – B. Niang – B. Ben Sassi

Hierarchy of Objectives (HO) Objectively Verifiable Indicators (OVI) Means of Verification (MOV) Major Assumptions/Risks

Sector Objective At Appraisal Actual (Sector Objective vs. Overall Objective)

1 Improvement of water supply to the population

1.1 Access to potable water and consumption per capita: 80% connection service rate in 1999 in towns

1.1 In 2001, the connection service rate stood at 91% in towns

1.2 National statistics on water sale and consumption

Project Objective (Project Objective vs. Sector Objective):

1 Increase production and/or distribution to Benguerir, Ouarzazate, Debdou, Sidi Kacem

1.1 Production and distribution correspond to estimates per town (center)

1.1 The production capacity matches estimates; production and distribution are below estimates

1.1 ONEP statistics on production and sales

1 Consumption estimates are correct

The increase in water consumption was lower than predicted

2 Sustained resources

There has been no water resources problem

2 Secure water supply in Khemisset, Tiflet and Kariat Ba Mohamed

2.1 The number of hours of non-availability falls by half

2.1 The number of hours of non-availability fell by between 1 and 3 hours


3 The counterpart resources are available

Counterpart funds were available

3 Improve security in Tangiers and Marrakech

3.1 The number of hours of non-availability falls by half

3.1 The number of hours of non-availability fell by 80%


4 The planning contract is respected; the water tariff is regularly adjusted The planning contract was not fully respected; tariff increases were lower than projected (11% yearly instead of 12%)

4 Improve quality control 4.1 Infrastructure available in 20 additional laboratories

4.1 The number of laboratories

4.1 ONEP statistics

5 Prepare sanitation projects for 10 towns and secondary centers

5.1 Engineering dossiers 5.1 Engineering dossiers are available for 9 towns; dossiers for the 10th town were financed by another donor

5.1 Availability of the engineering dossiers

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Hierarchy of Objectives (HO) Objectively Verifiable Indicators (OVI) Means of Verification (MOV) Major Assumptions/Risks

Results (Results vs. Project Objective)

1 Production and distribution facilities at Tangiers, Marrakech, Berrechid, Ouarzazate, Debdou, Sidi Kacem

1.1 152 km of pipelines, 2 treatment stations rehabilitated, 5 pumping stations, 6 reservoirs with a total capacity of 8000m3, 50 km of electric lines

1.1 172 km of pipelines, 74 pumping stations, 6 reservoirs with a total capacity of 8000m3, 50 km of electricity lines; the Debdou Center was replaced with the Assa Center

1.1 Works reception minutes, project site visit

1 Quality of engineering studies

Engineering studies had certain weaknesses

2 Capacity of contracting firms

Most contracting firms had the required capacity

3 Capacity of the executing agency

The executing agency performed satisfactorily

2 New intake works in the El Kansera and Kariat Ba Mohamed dams

2.1 2 intake works 2.1 1 intake work at the El Kansera dam

The intake work at the Kariat Ba Mohamed dam was destroyed; another intake work was built with ONEP financing

2.1 Works reception minutes, project site visit

4 Quality of engineering studies

Engineering studies had certain weaknesses

1 Capacity of the contracting firms

Most contracting firms had the required capacity

2 Capacity of the executing agency

The executing agency had the required capacity

3 3 batches of laboratory equipment

3.1 Laboratory equipment installed and functional

3.1 Laboratory equipment installed and functional

3.1 Works reception minutes, laboratory visit

4 Sanitation studies for 10 towns and secondary centers

4.1 10 engineering dossiers and BD

4.1 9 engineering dossiers and 6 BD

4.1 Reports on the implementation of studies, engineering dossiers

Activities (Activities vs. Results)

1.1 Bid invitation, contract award, construction

1.2 Training

1.3 Supplies

1 Resources ADB loan : UA 30

million ONEP

contribution: MAD 259 million

Implementation unit Consulting engineer Contracting firms

1 Resources ADB loan: UA 30 million ONEP contribution:

MAD: 192 million

1.1 Bid analysis reports, contracts, progress reports, site visits

1 The implementation schedule is realistic

The implementation schedule was realistic

2 ONEP has the capacity to implement the project

ONEP had the capacity to implement the project

Note: During the project appraisal, the project matrix was not required. The matrix was prepared in 1996. Project implementation data are in italics.

1. INTRODUCTION 1.1 Since 1970 when it began operations in Morocco, the Bank has participated in financing 7 projects in the potable water and sanitation sector, with most of the country’s major towns benefiting. Total Bank financing for projects in the sector, including cancellations, amount to UA 162.65 million. These projects helped to improve the water supply and distribution system in 20 Moroccan towns. ADB Group projects have had an impact on 6 million inhabitants, i.e. nearly 40% of the urban population. 1.2 Each of the Bank’s first four projects concerned water supply to one town only; the three subsequent ones are composite projects comprising a series of sub-projects grouped together and funded through one or two loans. 1.3 This completion report was prepared on the basis of information available within the Bank or gathered from Moroccan government agencies during the project completion mission to Morocco from 18 January to 8 February 2003. The list of documents used in preparing the report is given in Annex 12. 2 PROJECT OBJECTIVES AND FORMULATION 2.1 Objectives 2.1.1 Within the framework of the water policy defined by the Moroccan Government, the project’s sector objective is to provide water in sufficient quantity and quality to urban dwellers and the country’s industry, as well as prepare the groundwork for putting sanitation systems in place. 2.1.2 The Sixth Potable Water Supply Project falls within the context of Bank Group operations in Morocco’s potable water sector. In particular, it aims at: (i) improving the institutional framework of agencies in charge of the sector; (ii) rehabilitating and extending ONEP facilities in the urban and rural area; (iii) improving potable water supply to nearly two million inhabitants; (iv) preparing the ground for putting in place appropriate sanitation systems in major secondary centers; and (v) improving water quality control by providing ONEP laboratories with the necessary equipment. 2.2 Description The project comprises a series of sub-projects: the rehabilitation of a treatment station and the construction of a raw water aqueduct in Tangiers, a backup supply for Marrakech, the construction of two raw water intake works, the rehabilitation of Network No. 2 at the Bou Regreg Complex which supplies Rabat and Casablanca, the extension of the Ouarzazate network, the extension of supply and distribution in Benguerir, Debdou and Sidi Kacem, sanitation studies for 10 towns, the supply of equipment for ONEP laboratories, and technical assistance for project implementation. Details on the sub-projects are given in Annex 1. 2.3 Background The ADB identified the project during supervision missions to other sector projects (Tangiers PWS, El Hachef Dam, Fifth PWS Project). Within the framework of its Fifth PWS Project, the World Bank had identified some of the sub-projects but did not include them in

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the project per se. The search for financing for the unfunded components being a loan condition, the Government had proposed that the ADB finance those components. Subsequently, other sub-projects were incorporated into the project. 2.4 Preparation, Appraisal, Negotiation and Approval 2.4.1 The borrower handled all the preparation, with the assistance of engineering consulting firms. The Bank did not conduct any project preparation mission. 2.4.2 An engineer and a financial analyst from the Bank appraised the project during the second half of November 1993. The project was approved on 26 May 1994. The conditions principally concerned ONEP’s financial balance and the project’s environmental impact. The project started up on 16 August 1995 with the publication of the first set of bid invitations in Development Business. 3 PROJECT IMPLEMENTATION 3.1 Entry into Force and Start-up 3.1.1 The loan agreement was signed on 20 July 1994 and became effective on 3 February 1995, i.e. eight months following the project approval and six and a half months following the signing of the loan agreement. 3.1.2 The loan was subject to two conditions to be fulfilled precedent to the first disbursement, and four other conditions. The conditions precedent to disbursement concerned the appointment of a project coordinator and the presentation of proof of the State’s settlement of its arrears amounting to MAD 54 million as at end 1992. These conditions were fulfilled in January 1995 when a Bank mission was handed the necessary documents (therefore within the six-month timeframe). 3.2 Modifications 3.2.1 In 1995, ONEP obtained EU financing for the Debdou PWS; in 1996, the Agency requested that the Debdou Center be replaced with the Assa Center. The request was approved during the third quarter of 1997 and bids were invited immediately thereafter. 3.2.2 Another project modification concerned the cancellation of the Bou Regreg Treatment Network 2 rehabilitation (Rabat). The rehabilitation of Treatment Network 1 (World Bank financing) had fallen behind on schedule. Owing to operational constraints, it was not possible to implement the two rehabilitation programs simultaneously. Initially, ONEP intended to delay the ADB project component. In the end, it requested that the component be withdrawn from the project and replaced with the rehabilitation of pumping stations on the two aqueducts which link the Bou Regreg complex to Casablanca. The Bank gave its agreement thereon and on the Assa Center at the same time. A similar situation arose in connection with the rehabilitation of the Mharhar Station (Tangiers) where, following the retake of the engineering studies, it was decided that the sub-component be withdrawn from the project. Another reason for canceling the two components is that ONEP did not consider them of critical importance and sought to limit its investments in order to maintain the Agency’s financial balance at a period when tariffs were frozen.

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3.2.3 For the Kariat Ba Mohamed intake structures, works under construction at the time were swept away during the flooding of the Sebou river (the flooding also modified the layout of the river bed). ONEP decided to abandon that project component, and turned its attention towards finding another solution for the intake structure. Initially, ONEP commenced a new hydraulic study of the riverbed. Subsequently, however, the Agency opted to move the intake structure to a site where the riverbed was stable enough. The cost of the works destroyed amounted to UA 0.23 million. The Bank did not participate in financing the new intake structure (the cost of which was modest). 3.3 Implementation Schedule 3.3.1 During the project appraisal in 1994, the estimated schedule was four years, including 7 months for the contract award procedures and 3 months for account closeout operations. No timeframe was given for the loan’s entry into force. 3.3.2 The project was implemented over six years (up to November 2001). The additional implementation period is due to the replacement of the Debdou Center with the Assa Center, technical problems, difficulties with the two contracting firms and delays in approving contracts. The period between November 2001 and the final disbursements were used for accounting procedures. It should be noted that payments remain outstanding for a small number of contracts. 3.3.3 Almost all the sub-projects encountered technical problems that could have been avoided had the engineering dossiers been better prepared. The problems with the two contracting firms were foreseeable; the Bank shares responsibility for delays in approving the contracts. 3.4 Reports The reports that the Borrower should have sent are those mentioned in the general conditions. The project progress reports were sent regularly to the Bank up to the departure of technical assistance in June 2001. Although these reports contained all data required under the Bank’s format, they gave no information about payments made by ONEP. Concerning audit reports, ONEP acted as it did for the three preceding projects by sending audit reports on its operations. When the Bank requested that it be sent specific reports on the project, ONEP engaged the services of an external auditor to prepare the reports in the required format. 3.5 Award of Contracts Bank procedures for the procurement of goods and works, and its guidelines for the use of consultants were adhered to. No contract was the subject of claims by contracting firms or bidding consulting firms. The executing agencies consistently applied the bid analysis criteria, and none of the contracts awarded was contested. There were no changes in the bidding procedures; the breakdown between local and international competitive bidding was respected. An average of nine months separated bid publication and contract award.

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3.6 Sources of Financing and Disbursement 3.6.1 The loan agreement provided for the following sources of financing: the Bank to the tune of UA 30 million (60.3% of the total project cost) for the foreign exchange cost, and ONEP for financing the UA 19.8 million local currency cost. The table below shows the breakdown of the estimated and actual financing:

Comparative Table Between Project Sources of Financing at Appraisal and on Completion

In UA Million

Appraisal Estimate Actual Gap Sources

Local

Currency For. Exc.

Total Local Currency

For. Exc.

Total Value %

ADB 30.000 30.000 16.173 16.173 -13.827 -46.1% ONEP 19.800 19.800 10.335 0.661 10.996 -8.804 -44.5% Total 19.800 30.000 49.800 10.335 16.834 27.169 -22.631 -45.4% 3.6.2 The actual breakdown does not differ significantly from the appraisal estimates, and logically so since the types of works remained unchanged. However, it is worth noting that ONEP funded part of the project’s foreign exchange cost. This is attributable to the fact that some contracts were still running as at loan completion, as a result of which ONEP had to settle the contract balances. Some contracts also recorded cost overruns (not covered by amendments) the financing of which the Bank did not participate. 3.6.3 With regard to disbursements, it took several months to pay contractors with the loan resources. This was partly attributable to the period separating the preparation of the itemized account and the forwarding of disbursement requests to the Bank. The Bank generally took a few weeks to process such requests, even though some cases took far longer (up to eight months). 3.6.4 During the implementation phase and with a view to preparing its completion report, ONEP had difficulties in monitoring Bank disbursements. The disbursement slips were at times sent to the Ministry of Finance and not to ONEP; when disbursements differed from amounts requested, the Bank either did not offer explanations or did so late. One year following the closure of disbursements, it was still impossible to explain a gap of nearly UA 15 000 between disbursement requests and actual disbursements. 3.6.5 Concerning payments by ONEP, a comparison of the itemized account dates and the payment value dates indicates that the average timeframe for payments was nearly 5 months. However, a few payments were made after one year (some as much as two years). 3.6.6 For its share of the financing plan, ONEP did not keep separate accounts. The Bank has not been communicated the exact amount of ONEP’s participation in the project. It is expected that the amount will be indicated in the Borrower’s completion report being prepared.

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3.6.7 The comparative schedule of disbursements by source of financing at appraisal and completion is presented in Annex 2. The table shows that disbursements, initially scheduled to span four (4) years (1994 to 1997), actually took seven (7) years (1996 to 2002). The cumulative disbursements on ADB financing amount to UA 16.19 million or 61.9% of the initial loan amount. The UA 3.826 million balance has still not been cancelled. 4 PROJECT PERFORMANCE 4.1 Overall Evaluation 4.1.1 The loan was subject to four “other conditions”: (i) forward regularly to the ADB ONEP’s management indicators, including indicators contained in program contracts and agreements between ONEP and the authorities (régies); (ii) limit arrears to 3 months of turnover from 1996, provide a minimum 30% investment self-financing and limit debt servicing to 1.3; (iii) take steps to implement the conclusions of the sanitation studies; (iv) before 30 June 1995, show evidence of agreements signed with the authorities (régies) with regard to the arrears payment schedules for a period not exceeding 3 years with effect from 1994. 4.1.2 The key management indicators were given in the quarterly project progress reports and in ONEP’s annual document on management indicators. ONEP signed agreements with the authorities (régies) in connection with the payment timeframes, depending on their financial capacity. Generally, the agreements were respected. Thanks to them, the current payment period stands at 5 months. ONEP’s self-financing ratio is 55%, and the servicing ratio 1.5. The sanitation studies have been completed and the implementation of the related works has been scheduled under ONEP’s work program for the 2003-2007 period. The agreements with the authorities (régies) concerning the timeframe for the payment of the latter’s arrears were forwarded to the Bank in January 1995. 4.2 Operating Performance 4.2.1 The infrastructure set up under the project matched the appraisal characteristics. The initial installations become operational in 1997 and all are running satisfactorily. 4.2.2 During the appraisal, the project was expected to provide an additional annual production of 31 791 000 m3 of water in 2001. Based on ONEP’s calculations, sales attributable to the project production stood at 15 634 000 m3 in 2001. Since the volume sold in 2001 represented nearly 51.30% of the production, the additional production from the project for that year may be estimated at 30 475 633 m3, i.e. 1 315 367 m3 or 4.1% less that the appraisal estimates. Since the project is still at the ascending phase, such an operating result at this stage is satisfactory. 4.3 Institutional Performance Organization and Management 4.3.1 Within the framework of Government’s new orientations, ONEP’s general management initiated a process to reorganize the Agency, with three strategic objectives in view: (i) the generalization of potable water; (ii) the sustainability and security of existing infrastructure; and (iii) the active participation in the field of liquid sanitation. In order to

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provide the Agency with adequate capacity for attaining its objectives, the reorganization focused on the following issues: (i) decentralization of the organizational structure so as to provide greater support to the regions; (ii) a new geographical distribution to better take into consideration the location of resources; (iii) refocusing of missions to clarify the roles and responsibilities of each directorate; (iv) pooling of functions around three focal points: strategic, operational and support; and (v) modernization, especially of management in the area of marketing, human resources, supplies and planning. The two strategic thrusts concerning the generalization of access to potable water and sanitation were assigned to directorates allocated with enhanced resources. Staff and Training 4.3.2 During the appraisal, ONEP had a total of 5 205 staff (10% management, 30% supervisors and 60% field staff). As at end 2001, ONEP had 6 505 staff, of which 13.2% management, 28% supervisors and 58.8% field staff. Overall, the staff strength increased by 24.9% - normal for a firm such as ONEP which holds virtual monopoly in an expanding sector. It should be noted that the increase in the number of staff is accompanied by improved quality (the supervision rate increased from 10% at end 1990 to 13.2% at end 2000). Training 4.3.3 The human resources quality has also improved, thanks to the continuous training dispensed to staff at the ONEP training center. Indeed, ONEP this year celebrated the 25th anniversary of the Water Techniques Training Center (Centre de Formation aux Techniques de l'Eau, CFTE) which is the Agency’s facility for staff training and improvement. The CFTE dispenses technical, administrative and behavioral training in the fields of potable water and sanitation. The Center is an integral part of ONEP’s Bou Regreg (Rabat) Complex. It has managers and experienced trainers in the potable water and sanitation fields. The training facilities are well equipped. On yearly average, the CFTE organizes 450 training sessions, representing 21 000 training days, for 4 000 trainees. In addition, it provides training yearly for 500 to 600 participants from Moroccan water sector agencies (authorities [régies], distribution companies, etc.). Thanks to international assistance, ONEP also trains managers from African and Middle Eastern Countries. 4.3.4 ONEP’s continuous training provides the Agency with qualified staff to effectively and efficiently manage equipment procured under the project, improve work productivity and reduce staff expenditure. It facilitates staff retraining and deployment (towards sanitation, for instance). Furthermore, it enables the Agency to externalize certain functions by training staff to perform such activities and subsequently assisting them to set up their own business and work as ONEP’s service providers. Hence, for subscriber connection, search for water leakages, station management, etc. young ONEP employees were selected, trained and assisted to set themselves up in business with an advance, a took kit and an order list for 2 to 3 years. This method brought a considerable reduction (four-fold) in the connection period. In addition, it enabled these young businessmen to create jobs. Accounting and Accounts Auditing 4.3.5 ONEP keeps commercial accounting in line with the Moroccan accounting plan. Its accounting is computerized, thanks to which the financial statements (balance sheets, general operating accounts, income and loss statements) are available within the timeframe

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prescribed by the law. Its financial statements are subject to internal and external auditing prior to presentation to the Board of Directors. Hence, ONEP’s general accounting is efficiently organized and reliable. ONEP also keeps analytical accounting which provides it with specific and comprehensive information on the structure of the production cost per profit center. The ongoing reorganization comprises an analytical accounting project aimed at turning management control into a real regulating system in order to facilitate decision-making and improve management quality. To that end, provision has been made to dissociate general accounting from analytical accounting, as well as introduce forecast analytic accounting. The project, which comprised a number of actions to implement in phases, was scheduled for completion by the end of 2000. It should be mentioned that ONEP does not keep separate accounts for projects financed by the Bank and, it would seem, other donors. As a result, it is difficult to gather information on the disbursement schedule in foreign exchange and local currency. Yet, within the project monitoring framework, the appraisal report clearly stated that the project accounting records were to be made available at each supervision. Thanks to ONEP’s organization, its accounting technical and human resources, a reliable accounting system for the Agency’s projects would be easily put in place as part of the new accounting organization under study. Billing 4.3.6 One of the loan conditions required the implementation of the program contract signed on 12 January between ONEP and the State, covering the 1993-1995 period. In particular, the contract provided for a 12% increase in the production tariff in 1993, 1994 and 1995. These annual tariff adjustments were not made due to the sector’s high social sensitivity. However, efforts have been made to enable ONEP to gradually recover costs. Hence from 1993 to 2000, the average weighted tariff increased by 11%. The 2000-2004 program contract also provided for an 8% production tariff increase from 1 January of each contract year. However, these provisions were not implemented. In April 2003, ONEP was authorized to effect a 4.5% tariff increase. Credit and Arrears Recovery 4.3.7 One of the loan conditions required that ONEP limit arrears to 3 months of turnover with effect from 1996. Recovery improved significantly compared to the 1992 situation when arrears stood at 12 months of turnover. As at August 2002, total credit amounted to MAD 992.3 million (6 months of turnover), of which MAD 350.7 million (2 months of turnover) is due according to agreements signed with the customers. It should be noted that 74% of the credit outstanding as at 22 August 2002 was owed by three former authorities (RAD, RDE and RAID) and inherited by the Casablanca, Tetouan and Tangiers urban communities following the lease by the three cities of the potable water distribution and liquid sanitation to private operators. The Casablanca Urban Community inherited a debt of MAD 566 million, of which MAD 408 million (72%) was recovered, leaving an outstanding balance of MAD 158 million. The Tangiers and Tetouan Urban Communities owe MAD 98.5 million and MAD 1.7 million, respectively (13.5 and 0.2 billing months, in that order). Contacts continue with the DRSC to recover outstanding debt. Furthermore, in order to improve recovery and enjoy a more comfortable cashflow situation, the ONEP Board of Directors in December 2001 decided to gradually reduce the backlog to 3 months for all authorities (régies). Discussions are underway with the DRSC with a view to concretizing that decision.

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4.3.8 In connection with local governments and public departments, the recovery rate increased from 50% in 1992 to an average of 98% over the 1992-2001 period in the case of public departments, and from 40% to 93% for local governments, thanks to the introduction of a stamp payment system. The Government in 1999 set up committees to monitor the stamp payment system to ensure the sustainability of the system. These committees are presided by ONEP and comprise the representatives of the Ministry of Finance, the Ministry of the Interior and the distributing agencies. 4.4 Financial Performance Operations Analysis 4.4.1 During the appraisal, a projected operating account was prepared for the 1992 to 2000 period. The table in Annex 4 compares the estimates with ONEP’s operating performance in 2000 for the major operating parameters. The comparison concerns 2000 because it is important to make a global assessment of the project impact vis-à-vis the appraisal estimates. The table provides the following key information: (i) turnover is 47.4% below estimates, mainly attributable to the fact that the projections were based on an annual 12% tariff increase. However, over the period, the average weighted tariff increased by 11% only; (ii) the performance on completion is 149% below the projected result at appraisal (a net operating deficit of MAD 87.208 million); (iii) the negative gaps between the status on completion and the appraisal estimates are clearly reflected in the turnover ratio (-4.9% compared to an estimate of 13.4%). Balance Sheet Analysis 4.4.2 The table in Annex 4 compares key sections of ONEP’s projected balance sheets with their actual status in 2000. Over the period, the total balance sheet increased by 20.4% above the appraisal estimates. It is worth noting the sharp increase in the current assets, the actual amount of which was 38% above projections, as well as the 155.6% increase in the short-term debt compared to the appraisal estimates. Indeed, over the 1992-2000 period, the increase in ONEP applications, including fixed assets, was financed by short-term resources. Thus, short-term debt rose by 155.6% above projections whereas short and medium-term debt was 13.6% below estimates, resulting in a real liquidity ratio of 1.19, against a forecast of 2.2. Although ONEP’s financial structure remains balanced, it is less solid than expected. Even so, it is far more comfortable than at the start of the period when the liquidity ratio was 0.8 against a minimum norm of 1. For its part, debt was more moderate than projected: a real ratio of 26.6% compared with estimates of 33.1%. Debt remained stable over the period since it stood at 26.3% in 1992. At 1.2 in 1992, the debt service ratio was expected to increase gradually from year to year to reach 2.4 in 2000. In 2000, the actual debt service ratio stood at 1.45, far from the appraisal target but close to the 1.5 norm. Financial Rate of Return 4.4.3 An internal financial rate of return was calculated at appraisal. The calculation assumptions as well as the results on completion are given in Annex 3. The internal financial rate of return based on the same assumptions as those used during the appraisal is –0.8% compared to 14.4% at appraisal. This wide gap confirms the disparity between the appraisal projections and actual performance as analyzed in the preceding paragraphs. Thus, the project’s financial performance is unsatisfactory. Three sensitivity tests were conducted at

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appraisal: (i) a 10% increase in cost, in which case the IFRR would be zero; (ii) a 10% fall in income, with the IFRR also zero; and (iii) the third sensitivity test would simultaneously combine the two, still with an IFRR of zero. In addition to these three sensitivity tests, a fourth test closer to ONEP’s operating trend was conducted on completion. It consisted in increasing the operating expenditure by 5% and increasing the income by 3%, giving an IFRR of 4.2%. Hence, the project’s financial return is sensitive to gradual increase in tariff and control over the Agency’s expenditure. Financial Conditions and Clauses 4.4.4 During the appraisal, two issues were raised in connection with the financial aspects: (i) limit arrears to 3 months of turnover from 1996, provide a minimum 30% investment self-financing and keep debt servicing to a minimum 1.3; (ii) before 30 June 1995, show proof of singing agreements with the authorities (régies) scheduling the latter’s arrears payment over a period not exceeding 3 years with effect from 1994. Concerning the first condition, the provision to limit outstanding arrears to 3 months of turnover with effect from 1996 was not respected, even though efforts were made and are being pursued. From 1996, the investment self-financing rate was largely above 30%, ranging from 86.7% in 1996 to 70.1% in 2000 to stand at 61.7% in 1997. The debt service coverage rate rose from 0.9% in 1995 to 2.6% in 1996, ending at 2.4% in 2000. The lowest rate recorded for the period was in 1997 (1.9). Hence, provisions for the first financial condition on investment self-financing and debt servicing were largely fulfilled. The second condition requiring that the arrears of the authorities (régies) be limited to 3 months of turnover was not completely fulfilled as mentioned earlier. In any case, these two conditions were relevant since they were intended to encourage ONEP’s application of prudent and rigorous financial management with a view to improving the Agency’s return and consolidating its viability. 4.5 Economic Performance 4.5.1 During the appraisal, the project was expected to generate the following socio-economic benefits: (i) contribute to reducing water-borne diseases and infant mortality which remain relatively high in Morocco; (ii) assist urban and rural women to save two to three hours daily - used in fetching often unsafe water from stand pipes or wells in the rural area; (iii) help in the direct or indirect creation of new employment at ONEP, within the authorities (régies) and in various beneficiary regions; (iv) stimulate related and sub-contracting activities, as well as participate in increasing State fiscal receipts. Therefore, by increasing water production, the project contributed to improving the population’s living standard, especially that of women and children, and Morocco’s public health. Moreover, through the investments made, the project generated value added for ONEP, its customers and suppliers. However, studies and surveys were not conducted to quantify these benefits. 4.5.2 An economic rate of return of 14.5% was calculated for the project, based on the direct and quantifiable benefits. Calculated on completion using the same assumptions, the result is zero. Hence, the project’s economic performance is unsatisfactory. Three sensitivity tests were conducted during the appraisal: (i) a 10% increase in cost, in which case the ERR would be zero; (ii) a 10% fall in receipts, with the ERR equally zero; (iii) the third sensitivity test consisted in combining both assumptions; the ERR would also be zero in that case. In addition to these three sensitivity tests, a fourth one closer to ONEP’s operating trend was conducted on completion. It consisted in increasing the operating charges by 5%, thus giving an ERR of 5%. Hence, the project’s economic viability is sensitive to gradual tariff adjustment and control over the Agency’s operating expenditure.

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4.6 Performance of Consultants, Contractors, Suppliers and the Borrower 4.6.1 The consultant charged with providing technical assistance during the project implementation phase performed satisfactorily. Project monitoring was adequate; the technical assistance consultant prepared full quarterly progress reports and delivered them on time. Spot missions by experts were well programmed and their contributions relevant. 4.6.2 The consulting engineer in charge of sanitation studies and the Bou Regreg aqueduct rehabilitation study also performed satisfactorily. 4.6.3 Ninety-five per cent (95%) of the contracting firms performed satisfactorily, except for batches concerning the Upper Ouarzazate network and the Benguerir civil engineering works. In the case of the Upper Ouarzazate network, the contractor never commenced the works and the contract was terminated at the contractor’s fault. With regard to the Benguerir civil engineering works, the contractor encountered management difficulties which caused delays in completing the component. 4.6.4 Suppliers of laboratory equipment performed satisfactorily in 90% of cases. Four suppliers were unable to deliver all or some of their order and their contracts were terminated at their fault. 4.6.5 The borrower’s performance in terms of the technical and administrative management of contracts should be judged in the light of decisions taken during project implementation and management. 4.6.6 Despite problems with the engineering studies (weaknesses in connection with the Assa, Benguerir, Marrakech, Tangiers, Sidi Kacem and the Kariat Ba Mohamed intake structure sub-projects), the project was satisfactorily implemented. The technical and administrative departments responsible for the project execution identified the problems on time and proposed appropriate solutions. Even with the difficulties encountered, the cost overruns were reasonable (the amendments stand at 4.1% of the contract amount, compared with the 10% provision for physical contingencies in the appraisal report). 4.6.7 Relations with the consultant and the contractors were generally good. The only issue that arose concerned the occasional late payments due to relatively lengthy administrative procedures. 4.6.8 In the light of the foregoing, the executing agency performed satisfactorily overall in connection with contract management and relations with consultants. 5 SOCIAL AND ENVIRONMENTAL IMPACT 5.1 Social Impact The project’s social impact is linked to the extension of potable water supply in Ouarzazate, Sidi Kacem, Benguerir and Assa towns to areas hitherto not served. The construction of new distribution networks helped to improve service to the population by generalizing private connections or, in some cases, reducing the distance between the home and the standpipe. This has contributed to improving women’s lot by reducing the number of households that have to use the standpipe, or where such households use the standpipe,

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reducing the water chore by bringing the standpipe closer. In addition, the project has contributed to poverty reduction by allowing for the extension of water supply to the poorest who, generally, are the last to be connected to the network. Households now connected or with access to new standpipes no longer need to buy from water sellers who generally demand prices higher than ONEP’s tariffs. 5.2 Environmental Impact 5.2.1 The project was not assigned an environmental classification because that was not requirement at the time of appraisal. An environmental impact assessment was conducted under the World Bank’s fifth potable water supply project, but the two facilities proposed were not put in place. 5.2.2 The main project impact concerns the increase in the volume of wastewater – a threat to the environment if not collected and treated prior to release. All the towns concerned are equipped with a sewerage network, but none has a treatment station. The appraisal report stated that the problem would be solved within the framework of implementation of the sanitation master plans then ongoing or scheduled for implementation in the short term. However, on project completion, the infrastructure promised had still not been put up. Furthermore, the loan came with a condition regarding the implementation of the recommendations of the sanitation studies provided for within the project framework. ONEP has included the implementation of the recommendations of studies conducted in its 2003-2007 program contract. 5.2.3 The impact of the Marrakech water supply backup was more significant that initially expected. Water supply from a second source (the Lalla Takerkoust dam) requires a reduction in the volume available for irrigation schemes downstream. ONEP held discussions with the Haouz Regional Agricultural Development Agency (ORMVAH), which manages the irrigation facilities, with a view to compensating the volume pumped. The solution envisaged is to extend the Rocade Canal (which supplies ONEP’s facilities at Marrakech) by 7 km in order to irrigate the schemes currently serviced by the dam. That solution would help improve water resources management by ORMVA and ONEP. Within the framework of the solution under negotiation, ONEP could use the backup facilities to extend water supply in Marrakech, thus enhancing the value of these facilities. Lastly, this sub-project will have a positive impact on the environment since it will permit better water resources management by ORMVA (the irrigation schemes) and ONEP. 5.2.4 The El Kansera dam intake works replaces a diversion from the agricultural water intake facility, allowing for a choice of which tranche water should be pumped from. Its commissioning will have a positive impact on the quality of raw water arriving at the treatment station, allowing for the reduction of reagent dosage and the production of sludge resulting from the treatment. It will have no negative impact whatsoever on the environment. The destruction of the Kariat Ba Mohamed intake works is due to inadequate engineering study on the intake structure. 5.2.5 Other components with an environmental impact include the Sidi Kacem, Benguerir and Assa PWS, all supplied from boreholes. The boreholes were drilled by the General Water Directorate which analyzed their sustainability and impact of pumping on the water tables concerned. The analyses concluded that the impact that pumping has on other water users was negligible.

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5.2.6 The project’s other negative impact concerned the inconveniences that the population would suffer during the works implementation phase due to noise, dust, slow traffic and reduced visibility. These impacts were attenuated, thanks to precautions taken on work sites (wetting of landfill and the fact that trenches remained only long enough to permit the laying of aqueducts and testing). 5.2.7 The laboratory equipment contributed significantly to optimizing the water treatment and quality control process. 6 PROJECT VIABILITY The viability of the project largely depends on the technical and management capacity of the operating agency, and its ability to mobilize the necessary financial resources. ONEP has the required technical capacity and operates other similar facilities. It is the main cog of the institutional and operational structure charged long ago with supplying urban and rural dwellers with potable water. It has the human and technical resources, as well as the experience necessary to adequately manage and maintain the project facilities. Given the social nature of potable water, ONEP is not free to charge production prices to recover cost and balance its accounts, if not generate profit. However, its vital role guarantees the sustainability of its operations, thanks to State assistance especially for the Agency’s capital resources mobilization and infrastructure maintenance needs. Moreover, the State has shown greater willingness to adopt a billing policy that takes more account of the financial balance requirements of ONEP and other sector operators. 7 PERFORMANCE OF THE BANK, THE BORROWER AND OTHER

DONORS 7.1 The Bank’s Performance 7.1.1 Although the Bank did not conduct any specific identification mission, the project was among the country’s priorities and conformed with the Bank’s policy both in terms of loans to the country and the ADB sector policy. 7.1.2 The Bank did not conduct a preparation mission on the project. Greater Bank involvement in preparing the project would have helped avoid problems encountered with the project engineering studies. 7.1.3 The Bank’s appraisal of the project was adequate and the loan conditions were appropriate and relevant. 7.1.4 The Bank did not conduct a project start up mission; the first supervision mission was undertaken in July 1997, i.e. three years after the loan approval. From 1999, supervision missions became more regular, averaging one every eight months. For contract award, although the Bank’s procedures were followed, the Bank took fairly long to process dossiers at the project’s initial phase. 7.1.5 There were problems in connection with project disbursement monitoring due to contract registration. Since some contractors had several contracts with the project, there were crossed allocations. Disbursement extracts were not sent to the borrower and the executing agency as regularly as necessary. When the disbursement amounts did not

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correspond to the amounts requested, the Bank at times offered no explanation. As a result, the borrower had problems completing or correcting payment requests. However, most of these issues were resolved towards the end of the implementation phase. 7.1.6 Therefore, the Bank performed satisfactorily with a rating of 2.5 out of 4 (see Annex 9); nonetheless, there is room for improvement. 7.2 The Borrower’s Performance 7.2.1 The National Potable Water Agency (Office National de l'Eau Potable, ONEP) is the borrower, the executing agency and the project beneficiary, all combined; the Ministry of Economy and Finance is the project guarantor. 7.2.2 Following the loan approval by the Bank, the borrower took two months to sign the loan and six months to fulfill the conditions for effectiveness – both satisfactory. For the general condition concerning submission to the Bank of project account audit reports, ONEP first sent the Agency’s account audit reports as it had done for the three preceding projects. Following the Bank’s request that it submit audit reports specific to the project, ONEP complied. Quarterly progress reports were sent regularly to the Bank until the departure of the project technical assistance. Thereafter, ONEP no longer sent the reports. The technical assistance also prepared a draft completion report but without the latest project data. ONEP planned to finalize the project completion report before the end of summer 2003. 7.2.3 Problems encountered during the implementation of several components are attributable to the inadequate engineering dossiers during the project preparation phase. Apart from the Kariat Ba Mohamed intake works, ONEP acted speedily to remedy the situation, with little financial impact. The cancellation of the Bou Regreg and Tangiers treatment station rehabilitation works had no negative impact on the Agency’s operations. Thus, their withdrawal from the project appeared to be justified. 7.2.4 In terms of disbursement management, payments from funds from the ADB loan and ONEP’s local currency commitments were not managed by the same accounting entity. The external financing unit managed disbursement requests from the loan; the accounting department managed disbursements from ONEP financing. Although that raised no functional problems, since ONEP payments were not made from a specific budget, there was inadequate visibility over project payments. The fact that ONEP did not keep separate account of its payments raised problems over the determination of the project cost. 7.2.5 Following the departure of the technical assistance, ONEP no longer prepared project quarterly reports. Before departing, the technical assistance prepared a project completion report which ONEP was to finalize. That is yet to be done. 7.2.6 The facilities put up under the project are running smoothly; their status of maintenance is excellent. 7.2.7 From the foregoing, it may be concluded that apart from the project preparation and a few problems encountered during the implementation phase, ONEP performed satisfactorily and scores a rating of 2.6 over 4 (see Annex 8).

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7.3 Other Donors The only other donor operation concerned World Bank participation in preparing components for Bou Regreg Network 2, Tangiers and Marrakech components, and those of the two intake works. The four components encountered engineering design problem. Nonetheless, the Bank should still have conducted an in-depth assessment of the technical feasibility of projects proposed to it for financing. 8 OVERALL PERFORMANCE AND RATING All works outlined during the project appraisal were not executed, among which the rehabilitation of the Bou Regreg Network 2 Complex, the rehabilitation of the Tangiers treatment station, the Debdou PWS and the Kariat Ba Mohamed intake works. The Debdou PWS was replaced with the Assa PWS; the non-rehabilitation of the treatment stations had no significant impact on ONEP’s operations. The Kariat Ba Mohamed intake was built on another site with ONEP’s resources. All infrastructure set up under the project are operational. Their technical performance corresponds with the appraisal projections. The overall evaluation based on the Bank’s criteria may be considered satisfactory, with a rating of 3 out of 4 (see Annex 10). 9 CONCLUSIONS, LESSONS AND RECOMMENDATIONS 9.1 Conclusions 9.1.1 The Sixth Potable Water Supply Project was completed four (4) years behind schedule; the implementation phase took two years longer than planned. The delay is attributable to: (i) the loan effectiveness procedure; (ii) delays in the procurement procedures; (iii) the inadequate engineering studies used in preparing the project; and (iv) the replacement of one project component with another. Most of the works and facilities planned were implemented and commissioned; the facilities have the intended technical characteristics.

9.1.2 The sanitation studies allowed for preparation of ONEP operations in the towns studied, a part of which was included in the Agency’s development program for the 2003-2007 period. 9.1.3 At the financial level, the project cost on completion is well below the appraisal estimates. These differences are attributable to the cancellation of two components, on the one hand, and cost overestimate in the project preparation studies, on the other hand. Subsequently, the executing agency adequately controlled the project cost. Disbursements were sometimes late, often due to their belated dispatch by the Bank. 9.1.4 The only major project impact on the environment concerns the increase in the quantity of wastewater generated by the extended water production and distribution. The social impact is considered positive. 9.2 Lessons Lessons that can be drawn from the project mostly pertain to project preparation, supervision, regular communication of disbursement data, keeping of project accounts and application of environmental impact accommodating measures. Thus:

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i) The executing agency had used the services of a series of consulting firms to prepare the project. The cost estimates and technical provisions were flawed. These problems would have been less had ONEP’s engineering department undertaken an in-depth review of the feasibility studies;

ii) The Bank did not adequately review the engineering studies on which the

project preparation was based; their flaws were not detected during the project preparation;

iii) During project start-up and the most important stage of the implementation

phase, the Bank’s missions were insufficient; missions only became regular towards the end of the project (average one mission every eight months);

iv) The borrower and the executing agency did not forward the disbursement slips

as often as required (at times they were forwarded to the guarantor only); whenever there was divergence between the amount requested and that disbursed, the necessary explanations were at times not given;

v) ONEP did not keep separate account of its participation in project financing.

9.3 Recommendations To the Bank:

- The Bank should pay more attention to project preparation in general, and to reviewing studies underpinning such preparation, in particular;

- The Bank should conduct regular project supervision missions in order to

prevent problems, instead of intervening when problems had already developed;

- The Bank should ensure that disbursement data are sent regularly to borrowers and executing agencies.

To the Government:

- The Government should implement the recommendations of the sanitation master plan studies on towns concerned by the project;

- The Government should take make the necessary provision to ensure that

ONEP’s tariff scale enables it to recoup its costs. In that regard, the tariff consolidation schedules planned under the State/ONEP program contracts should be respected.

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To ONEP:

- ONEP should strengthen the department in charge of project preparation, especially with regard to preparing and monitoring engineering studies;

- ONEP should keep separate accounts of projects financed by the Bank which

contain all necessary information on ONEP’s disbursement schedules;

- ONEP should continue to render operational its internal post-evaluation department;

- ONEP should conclude all contracts signed under the project.

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Description of Project Components

A. Rehabilitation of Bou Regreg’s Station S2

The S2 station has a capacity of 1.6 m3/s and its rehabilitation will involve the repairing of the sedimentation tank covering and filters, the replacement of defective electromechanical equipment, the replacement of the hydraulic valve control system with a pneumatic system, and the rehabilitation of electrical installations.

B. Construction of Two Intake Works

The first intake facility will be built in the El Kansera dam where the agricultural intake structure at the bottom of the dam is used, as a result of which it is impossible to select the water tranche to be pumped. The intake structure will service the Khemisset and Tiflet PWS facilities. The second intake facility is a streamline intake in the Sebou River and is meant to supply Kariat Ba Mohamed with potable water.

C. Strengthening of Production in Marrakech

The infrastructure planned for include a water system with a nominal flow equal to that of a 1.4 m3/s treatment station. It comprises a pumping station, a force main and an 18.5 km gravity line of 1 000 mm, as well as reservoirs and ancillary works.

D. Rehabilitation and Strengthening of Production in Tangiers

This component comprises: (i) the rehabilitation of the Mharhar treatment station; and (ii) the construction of a water transmission line linking the El Hachef dam to the El Hachef treatment station. The Mharhar treatment station has a capacity for 0.8 m3/s and its rehabilitation will involve the repairing of the sedimentation tank covering and filters, the replacement of defective electromechanical equipment, the replacement of the hydraulic valve control system with a pneumatic system, and the rehabilitation of electrical installations. The water transmission line linking the El Hachef dam to the El Hachef treatment station consists in laying a 1 400 mm pipeline along 7.4 km.

E. Extension of Production and Distribution Facilities in Benguerir

This component comprises the refurbishment of two pumping stations, the laying of a 400 mm force main along 25 km, the construction of a 2 000 m3 reservoir and the extension and strengthening of the distribution network by laying 15 km of pipeline.

F. Extension of Production and Distribution Facilities in Debdou

This component comprises a borehole, the laying of a 200 mm pipeline along 21 km, the construction of a 500 m3 reservoir, the installation of an electricity line along 21 km and the extension/rehabilitation of the water distribution network.

Annex 1 Page 2 of 2

G. Extension of Distribution Facilities in Ouarzazate

This component comprises the laying of 400 mm to 600 mm primary pipelines for the town and 11 km of 60 mm to 400 mm diameter for the semi-urban zone.

H. Extension of Production and Storage Facilities in Sidi Kacem

This component comprises the refurbishment of three existing boreholes, the rehabilitation of the existing pumping station, the laying of a new 19.5 km 400 mm pipeline and the construction of two 3000 m3 reservoirs.

I. Laboratory Equipment for ONEP

The laboratory equipment is meant to expand the analysis possibilities of the central laboratory, equip eight provincial laboratories and replace outdated equipment in 36 provincial laboratories or treatment stations. The equipment will be procured in two or three phases.

J. Sanitation Studies in Ten Centers

The sanitation studies comprise the preparation of master plans, detailed sketches and bidding documents for each of the centers. The centers will be pooled into three geographic groups (North, East and South).

K. Works Monitoring and Supervision

This component concerns technical assistance by two experts, geotechnical and material tests by a specialized laboratory, the services of a control agency (for the ten-year guarantee) as well as logistical support for works supervision.

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KINGDOM OF MOROCCO


Comparative Table of Project Disbursements at Appraisal and Completion In UA Million

Years Sources of Financing

94 95 96 97 98 99 2000 2001 2002 TotalADB 2.2 10.6 11.9 5.4 30.0ONEP 1.6 6.9 7.7 3.5 19.8Total 3.8 17.5 19.6 9.0 49.8

Appraisal Estimate

% 8% 35% 39% 18% ADB 3.416 6.287 1.576 2.767 0.878 0.002 1.247 16.174ONEP 3.283 6.019 0.544 1.391 0.549 0.373 0.340 12.499Total 6.699 12.306 2.120 4.158 1.427 0.375 1.587 28.673

Actual

% 23% 43% 7% 15% 5% 1% 6%

Annexe 3 Page 1 de 1

KINGDOM OF MOROCCO SIXTH POTABLE WATER SUPPLY PROJECT

COMPARATIVE TABLE OF PROJECT COST

(in UA Million)

Appraisal Estimate Cost on Completion Gap Components

Local Currency

For. Exch. Total Local Currency

For. Exch. Total Value %

Bou Regreg 2.3 4.4 6.7 0.3 0.6 1.0 -5.7 -86%Intake works 0.2 0.3 0.5 0.3 0.2 0.5 0.0 -5%Marrakech 3.7 5.1 8.8 5.0 3.6 8.6 -0.2 -2%Tangiers 2.6 3.1 5.8 2.9 2.3 5.2 -0.6 -10%Benguerir 2.6 3.6 6.2 1.1 0.8 1.9 -4.3 -69%Debdou 0.8 1.2 2.0 Assa (replaces Debdou) 0.8 0.4 1.2 -0.8 -40%Ouarzazate 0.9 1.2 2.1 0.8 0.8 1.7 -0.4 -20%Sidi Kacem 1.9 1.9 3.8 2.8 2.0 4.7 0.9 25%Laboratory equipment 0 1.5 1.5 0.9 0.0 0.9 -0.6 -37%Sanitation studies 0.2 1.3 1.5 0.5 0.1 0.6 -0.9 -58%Technical assistance 0.5 1.4 2 0.7 0.1 0.8 -1.2 -61% Grand total 15.8 25.1 40.9 16.2 11.0 27.2 -13.7 -34%

Note: technical contingencies and price escalation are not included in this table.

Annex 4 Page 1 of 1

KINGDOM OF MOROCCO


ONEP Comparative Table of Operating Estimates and Actual Performance in 2000

(in MAD Thousand)

CHAPTER 1992 Performance

2000 Projections

2000 Performance

Gap between Projection and Actual

Performance over the Period

Gap in %

Receipts 959004 3371311 1772169 -1599142 -47.4%Total expenditure 1029880 2919017 1859377 -1059640 -0.36%Staff expenses 203833 436934 445676 8742 2.0%Net result -70876 452294 -87208 -539502 -119.3%Result/receipt -7,4% 13,4% -4,9%

ONEP Comparative Table of ONEP’s Projected and Actual 2000 Balance Sheet

(in MAD Thousand)

CHAPTER 1992 Performance

2000 Projections

2000 Performance

Gap between Projection and

Actual Performance

over the Period

Gap in %

Fixed assets 6086320 10233474 11872352 1638878 16.0%Liquid assets 1252902 2480241 3437118 956877 38.6%Total assets 7339222 12713715 15309470 2595755 20.4%Equity 4258932 7749851 9121204 1371353 17.7%M & L term debt 1519181 3839503 3314344 -525159 -13.6%Short term debt 1561109 1124361 2873922 1749561 155.6%Total liabilities 7339222 12713715 15309470 2595755 20.4%Liquidity ratio 0.8 2.2 1.2 Debt ratio 26.3% 33.1% 26.6%

Annex 5 Page 1 of 2


Assumptions and Calculation of the Internal Financial Rate of Return i) The rate was calculated at appraisal for the 1994 to 2022 period, corresponding to the estimated life of investments. For reasons of consistency, the completion rate was calculated for the same period (1994-2022). ii) For the net annual cash flow calculation (1994-2022), actual figures were retained for the investments (actual Bank and Government disbursements), and for the gross figures reconstituted by the mission and ONEP yearly for each project beneficiary production center, with a production quota allocated to the project. The quotas per center are indicated below:

Center Name Production Quota Allocated to the Project -Tangiers 10% -Sidi Kacem 60% -Ouarzazate 30% -Bou Regreg 0% -Khemisset/Kari.B.Moh 0% -Benguerir 50% -Debdou (Assa) 80% -Marrakech 20%

iii) In view of the stability of the project’s additional production, the low tariff increases absorbed overall by rising cost, the assumption retained projected constant cash flow for the 2002-2025 period, in line with the appraisal estimates. iv) Taking into account the lifespan of project investments, provision was made to undertake new investment representing 10% of the initial investment amount for the partial rehabilitation and upgrading of facilities.

Annex 5 Page 2 of 2

IRR CALCULATION TABLE OF THE ADB PROJECT VI

Basic Assumption: Constant Cost and Receipt

In MAD million

Year Investment

Cost Total

Receipts Operating

Expenditure Cash Flow 1994 0.0 1995 0.0 1996 97.30 -97.3 1997 160.61 5.7 6.4 -161.4 1998 27.17 29.9 25.1 -22.3 1999 48.89 31.7 22.0 -39.2 2000 19.40 36.1 23.4 -6.7 2001 13.79 38.8 22.6 2.5 2002 14.23 38.8 22.6 2.0 2003 38.8 22.6 16.3 2004 38.8 22.6 16.3 2005 38.8 22.6 16.3 2006 38.8 22.6 16.3 2007 38.8 22.6 16.3 2008 38.8 22.6 16.3 2009 38.8 22.6 16.3 2010 38.8 22.6 16.3 2011 38.8 22.6 16.3 2012 38.8 22.6 16.3 2013 38.8 22.6 16.3 2014 38.8 22.6 16.3 2015 38.8 22.6 16.3 2016 38.8 22.6 16.3 2017 38.11 38.8 22.6 -21.8 2018 38.8 22.6 16.3 2019 38.8 22.6 16.3 2020 38.8 22.6 16.3 2021 38.8 22.6 16.3 2022 38.8 22.6 16.3 Internal rate of return

Basic assumption IRR Cost increase 0% Increase in receipts 0%

Sensitivity Analysis: Rate 1 – Increase in the operating cost 10% 2 – Declining receipts 10% 3 – Both 1 and 2 combined 4 – Increase in cost 5% 4.2%

Increase in receipts 3%

Annex 6 Page 1 of 2


Assumptions Underlying the Calculation of the Economic Rate of Return

1.1 Investment Cost

The investment cost equals the actual cost. The financial cost were corrected, as during appraisal, by the following conversion factors:

Local currency investment 0.9 Foreign exchange investment 1

1.2 Operating and Maintenance Cost This chapter represents the cumulative expenditure that ONEP has to bear. 1.3 Project Benefits

The receipts are estimated on the basis of additional sales generated by the project. The same applies to the calculation of the internal financial rate of return. Given the stability of the project’s additional production, the virtual absorption of tariff increases by rising cost, the assumption retained projected constant cash flow for the 2002-2025 period, in line with the appraisal estimates. Taking into account the lifespan of project investments, provision has been made to undertake new investment representing 10% of the initial investment amount for the partial rehabilitation and upgrading of facilities.

Annex 6 Page 2 of 2


Basic Assumption: Constant Cost and Receipts In MAD Million

Year Local

Investment ADB

InvestmentTotal

Receipts Operating Expenses Cash Flow

1994 0.0 1995 0.0 1996 38.88 53.82 -92.7 1997 74.02 78.36 5.7 6.4 -153.1 1998 18.04 7.12 29.9 25.1 -20.4 1999 27.09 18.12 31.7 22.0 -35.5 2000 10.68 7.53 36.1 23.4 -5.5 2001 8.04 4.85 38.8 22.6 3.3 2002 8.83 4.41 38.8 22.6 3.0 2003 38.8 22.6 16.2 2004 38.8 22.6 16.2 2005 38.8 22.6 16.2 2006 38.8 22.6 16.2 2007 38.8 22.6 16.2 2008 38.8 22.6 16.2 2009 38.8 22.6 16.2 2010 38.8 22.6 16.2 2011 38.8 22.6 16.2 2012 38.8 22.6 16.2 2013 38.8 22.6 16.2 2014 38.8 22.6 16.2 2015 38.8 22.6 16.2 2016 38.8 22.6 16.2 2017 18.61 17.42 38.8 22.6 -19.8 2018 38.8 22.6 16.2 2019 38.8 22.6 16.2 2020 38.8 22.6 16.2 2021 38.8 22.6 16.2 2022 38.8 38.8

Basic Assumption ERR

Cost increase 0% Increase in receipts 0%

Sensitivity Analysis: Rate ERR

1 – Increase in the operating cost 10% 2 – Declining receipts 10%

3 – Both 1 and 2 Combined 4 – Increase in cost 5%

Increase in receipts 3% 5.0%

Annex 7 Page 1 of 1


IMPLEMENTATION PERFORMANCE

Indicators Rating (1 to 4)

Comments

1. Respect of the implementation schedule 1 Deadline overrun by more than nine months.

2. Respect of costs 2 Good cost control for components implemented despite project preparation problems.

3. Respect of lending conditions 2 Conditions relating to tariff adjustments and reduction of arrears were only partly met.

4. Adequate monitoring and quarterly progress reports

2 Excellent progress reports; no longer sent after the departure of technical assistance.

5. Satisfactory operation (where necessary)

4 Satisfactory operation and excellent maintenance of facilities.

TOTAL 11 Overall evaluation of the implementation performance

2.2 Satisfactory

Annexe 8 Page 1 de 1


BANK’S PERFORMANCE

Indicators Rating

(1 to 4) Comments

1. At identification 4 The project was one of the country’s priorities and fell in line with the Bank’s policy

2. At project preparation 1 The Bank did not conduct preparation missions; it took little action and few measures prior to the appraisal

3. At appraisal 3 The project was adequately appraised and the loan conditions relevant

4. At supervision 2 The number of missions was inadequate; the processing of documents at times took too long. Disbursement information was sometimes inadequate

TOTAL 10 Overall rating of Bank performance

2.5 Satisfactory

Annex 9 Page 1 of 1


OVERALL PERFORMANCE

N° Indicators Rating

(1 to 4) Comments

1 Relevance and attainment of objectives i) Macro-economic policy 3 The macro-economic framework reform programs attained their

objectives. ii) Sector policy 3.5 The Government initiated a global sector policy. iii) Equipment component (including production) 4 The equipment had the technical characteristics outlined during the

appraisal; production almost reached projections for 2000 even though the project facilities have not yet reached full operating capacity.

iv) Financial component 2.5 The expected operating results have not yet been obtained. The net results posted a deficit throughout the period, except in 1996. ONEP’s financial structure is barely balanced. However, objectives regarding the debt, new investment self-financing and debt service coverage ratios were reached from 1996 to 2000.

Poverty reduction, social aspects, women in development

3.5 The project’s socio-economic benefits are positive and obvious with regard to improving the living standard of women/children, and public health.

vi) Environment 2.5 The project’s positive impacts were attained, but actions to mitigate the negative impacts were not implemented.

vii) Private sector promotion 3.5 Increase in water production enhanced private sector activity. ONEP’s reorganization led it to outsource some of its operations to small private businesses, which it helped to establish and sustain.

vii) Others (specify) N.A. 2 Institution Building The institutional framework has evolved favorably (satisfactorily). i) Institutional framework (including

restructuring) 3.5 ONEP’s organization in its capacity as the executing agency is suitable

to the project and evolved positively towards an enhanced capacity. ii) Integrated financial and management system,

including the auditing system 3.5 The financial management systems are based on clear and reliable

procedures, and an efficient IT. These systems will improve further with the ongoing ONEP reorganization. The project accounts were regularly audited. The accounts are well kept but should be improved to allow for the availability in real time of all necessary project information, especially on local currency disbursements.

iii) Technology transfer 3.5 Training on the use of equipment procured under the project rendered the staff skilled and efficient.

iv) Qualified staff (including rotation), training and counterpart personnel

3.5 Various departments are equipped and provided with skilled staff. Staff training and skills improvement reached an optimal level.

3 Sustainability Environmental policy. i) Borrower’s continued commitment 3.5 Potable water supply is an absolute and constant priority for Morocco. ii) Policy environment 2 The environmental policy is in place but its application is late. iii) Institutional framework 3.5 The executing agency has an institutional framework with adequate

capacity that is constantly being improved. iv) Technical viability and staffing 3.5 The staffing is right. Staff skills improvement is provided and the

technical equipment in place adequate. v) Financial viability and cost recovery

mechanism 2 Income growth is low due to the quasi-stagnation in the quantities sold,

and tariffs do not cover costs. Since the expenditure increases normally with inflation, financial viability is not possible on the sole basis of the operating results.

vi) Economic viability 3.5 The project’s economic viability is guaranteed. vii) Environmental viability 2 The environmental viability depends on investments that will be made

in the sanitation sub-sector, especially for the construction of treatment plants.

viii) Operation and maintenance continuity (availability of funds to cover recurrent expenditure, foreign exchange, spare parts, maintenance workshop)

2 The operating agency has financial resources to sustain the works and facilities. However, its cash flow situation is tight and exposes it to heavy and costly short-term debt.

4 Economic rate of return 3 TOTAL 62.5 Overall performance evaluation 3.1 Highly satisfactory

Annex 10 Page 1 of 1


MATRIX OF RECOMMENDATIONS AND ACTIONS TO TAKE

N°

Designation Recommendations and Actions

1 Institutional Aspects 1.1 Government

Regularly increase tariffs to enable ONEP to maintain its financial balance. Implement the recommendations of the sanitation master plan studies for towns concerned by the project.

1.2 ONEP

Strengthen its departments in charge of project preparation. Continue to render the department in charge of project evaluation operational.

2 Technical Aspects 2.1 ONEP

Pay more attention to project preparation. Attach greater importance to project completion reports.

2.3 The Bank

Attach greater importance to project preparation. Conduct regular project supervision missions. Regularly communicate disbursement data to borrowers and executing agencies.

3 Financial Aspects 3.1 Government Regularly increase water tariffs to ensure sector balance.

3.2 ONEP

Keep separate accounting of its participation in donor-funded projects.

3.3 The Bank

Improve records on loan disbursements.

4 Environmental Impact 4.1 Government Strive to make up for the delay accumulated in the

sanitation sub-sector, especially for towns in the interior.

4.2 ONEP Seek financing for implementation of projects emanating from the sanitation studies.


KINGDOM OF MOROCCO


CONTRACT DATA BOU REGREG Booster Station Name Cegelec Maroc (Morocco) Responsibility Rehabilitation of booster stations Contract amount MAD 11 260 106 Amendment Amount Change in name of contracting firm Study Name Hydroprojecto – SCET Maroc (Portugal - Morocco) Responsibility Aqueduct rehabilitation study Contract amount MAD 2 266 810.57 INTAKE STRUCTURE El Kansera Intake Works Name AIC Métallurgie (Morocco) Responsibility El Kansera intake works Contract amount MAD 2 720 658.00 Amendment Amount MAD 649 918.50 Kariat Ba Mohamed Intake Works Name ETPE (Morocco) Responsibility Intake works on the Sebou River Contract amount MAD 4 784 148.00 MARRAKECH Batch A Aqueducts Name SOGEA – OMCE (Morocco - Morocco) Responsibility Aqueducts Contract amount MAD 74 948 463.05 Amendment Amount MAD 1 324 304.25 Batch B Civil Engineering Name Les coffrages modernes (Morocco) Responsibility Civil engineering for the pumping station and reservoirs Contract amount MAD 12 135 535.00


Batch C Equipment Name SEHI (Morocco) Responsibility Pumping station infrastructure Contract amount MAD 8 352 326.00 Amendment amount MAD 818 613.00 Batch D Electricity Supply Name ONE (Morocco) Responsibility Electric lines and accessories Contract amount MAD 346 777.33 TANGIERS Batch B1 Aqueducts Name SNCE (Morocco) Responsibility Supply lines Contract amount MAD 48 654 073.82 Amendment amount MAD 1 963 975.84 BENGUERIR Batch A Equipment Name Les Equipements industriels (Morocco) Responsibility Pumping station equipment Contract amount MAD 4 500 240.41 Batch B Aqueduct Name ENATRAM (Morocco) Responsibility Aqueduct Contract amount MAD 10 672 766.28 AMENDMENT AMOUNT MAD 1 910 728.71 Batch C Civil Engineering Name ITDR - Ares (Morocco - Morocco) Responsibility Reservoirs and pumping station civil engineering Contract amount MAD 1 970 442.50 Batch D Distribution Lines Name Ibnou Zahir - CAPEP (Morocco) Responsibility Distribution lines Contract amount MAD 5 678 612.00 AMENDMENT AMOUNT MAD 1 124 500.00


ASSA Batch A Aqueducts Name SOTRADEMA (Morocco) Responsibility Supply and distribution lines Contract amount MAD 4 894 154.00 Amendment Amount MAD 859 344.03 Batch B Civil Engineering Name Les Coffrages modernes (Morocco) Responsibility Civil engineering of pumping station and reservoirs Contract amount MAD 2 969 625.00 Batch C Treatment Plant Name Zinelec - Zinco (Morocco - Morocco) Responsibility De-ironing, demagnatization station Contract amount MAD 8 720 112.98 Batch F Electricity Line Name ENEDIS (Morocco) Responsibility Construction of electricity lines Contract amount MAD 405 228.00 OUARZAZATE Batch A Distribution Lines Name ICAR - Haliness (Italie - Morocco) Responsibility Distribution lines, upper network Contract amount MAD 11 601 645 Contract terminated Batch A Distribution Lines Name Ibnou Zahir - Capep (Morocco) Responsibility Distribution lines, upper network Contract amount MAD 11 600 598.28 AMENDMENT AMOUNT MAD 1 038 000.00 Batch B Distribution Lines Name ENATRAM (Morocco) Responsibility Distribution lines, lower network Contract amount 8 227 300.95 SIDI KACEM Batch A Aqueduct Name SAHEG (Morocco) Responsibility Supply lines Contract amount 31 501 413.48


Batch B Civil Engineering Name Ghenjaoui (Morocco) Responsibility Civil engineering on reservoirs and the pumping station Contract amount MAD 1 620 936.00 Amendment Amount MAD 273 804.74 Batch C Equipment Name PROTEC (Morocco) Responsibility Pumping station equipment Contract amount MAD 5 347 624.70 Amendment Amount MAD 127 300.00 Batch D Civil Engineering and Aqueducts Name Les Coffrages modernes (Morocco) Responsibility Aqueducts Contract amount MAD 5 468 315.20 Avenant MAD 775 200.00 LABORATORY EQUIPMENT Batch Name Omnium S.T. (Morocco) Responsibility A zetameter Contract amount MAD 229 000.00 Contract terminated Batch Name Hydrosystems (Morocco) Responsibility Water flow measurement and sampling equipment Contract amount MAD 820 000.00 Batch Name Chimilabo (Morocco) Responsibility pH-meters, conductimeters, distillers, double boilers and

heating plates Contract amount MAD 851 500.00 Batch Name Louis Guillaud (Morocco) Responsibility Turbidimeters and flocculators Contract amount MAD 841 144.00 Batch Name MBI (Morocco) Responsibility Boilers Contract amount MAD 114 600.00 Contract terminated


Batch Name Sartoma (Morocco) Responsibility Scales Contract amount MAD 149 940.00 Batch Name Boyer (Morocco) Responsibility Spectrophotometers and microscopes Contract amount MAD 851 500.00 Batch Name ESIM (Morocco) Responsibility Growth chamber Contract amount MAD 475 900.00 Batch Name Florence (Morocco) Responsibility Microscopes, heating plates, stirrers and double boilers Contract amount MAD 99 775.00 Batch Name Assistec (Morocco) Responsibility Boilers Contract amount MAD 276 000.00 Batch Name Louis Guillaud (Morocco) Responsibility pH-meters and oxygen meters Contract amount MAD 254 600.00 Batch Name Sartoma (Morocco) Responsibility Microtox and equipment for microbiological analysis

Filtration membranes Contract amount MAD 727 865.00 Name SEDEL (Morocco) Responsibility Microdigest Contract amount MAD 295 000.00 Batch Name Boyer (Morocco) Responsibility IR spectrophotometer and visible spectrophotometers Contract amount MAD 578 710.00


Batch Name SOBOVAT (Morocco) Responsibility Halogene component sensor Contract amount MAD 593 500.00 Batch Name Analysis (Morocco) Responsibility Scales Contract amount MAD 140 500.00 Batch Name Chimilabo (Morocco) Responsibility Distillers, turbidimeters, conductimeters, laboratory freezer,

culture mixer and distributor. Contract amount MAD 1 208 500.00 Batch Name Sygeo (Morocco) Responsibility Flowmeter and sampler Contract amount MAD 478 800.00 Batch Name Assistec (Morocco) Responsibility Steamers Contract amount MAD 215 000.00 Batch Name SEDEL (Morocco) Responsibility Atomic absorption spectrometers, particle meter and

chromatograph Contract amount MAD 2 643 000.00 Name Thermo Optec (Morocco) Responsibility IR and visible UV Spectrophotometers Contract amount MAD 745 542.50 Batch Name Hemolab (Morocco) Responsibility Temperature unit Contract amount MAD 172 500.00 Batch Name Sygeo (Morocco) Responsibility Flowmeters and samplers Contract amount MAD 535 328.00


Batch Name Assistec (Morocco) Responsibility Distillers and demineralizers Contract amount MAD 437 744.00 Batch Name Chimilabo (Morocco) Responsibility pH-meters and conductimeters Contract amount MAD 201 580.00 Batch Name Diverlabo (Morocco) Responsibility Heating plates, stirrers and double boilers Contract amount MAD 118 960.00 Batch Name Boyer (Morocco) Responsibility Scales Contract amount MAD 130 475.00 Batch Name Chimilabo (Morocco) Responsibility Filtration and colony meters Contract amount MAD 125 067.10 Batch Name LIN (Morocco) Responsibility Nitrogen generator Contract amount MAD 84 952.00 Batch Name SCOMEDICA (Morocco) Responsibility Steamers Contract amount MAD 137 600.00 Batch Name Diverlabo (Morocco) Responsibility Laboratory and portable turbidimeters Contract amount MAD 223 550.00


SANITATION STUDIES Batch 1, North Name NEDECO (Netherlands) Responsibility Ouezzane and Oued Amlil sanitation study Contract amount NLG 224 247.50 Plus MAD 1 896 010.00 Batch 2, East Name Iskane (Morocco) Responsibility Debdou, El Aioune, Midelt and Missour sanitation study Contract amount MAD 5 047 714.84 Lot 3, South Name COBA (Portugal) Responsibility El Kelaa des Sraghna, Imi n'Tanout and Taroudant sanitation

study Contract amount MAD 4 026 564.77 Plus ECU 170 879.18 TECHNICAL ASSISTANCE Batch TA Technical Assistance Name Louis Berger (France - Morocco) Responsibility Technical assistance Contract amount MAD 2 984 149.00 Plus FRF 3 692 260.00 Amendment N° 1 MAD 2 790 417.60 Amendment N° 2 Change of the closing date


KINGDOM OF MOROCCO


List of Documents Used for the PCR 1 Appraisal report of the sixth ADB potable water supply project, January 1994. 2 The provisionary completion reports on the fifth and sixth potable water supply

projects. 3 ONEP Organization Chart. 4 A table showing ONEP’s staff breakdown. 5 The water distribution profit and loss statements from 1992 to 2001. 6 The program contract between the State and ONEP for the 2000 to 2004 period. 7 Yearly status of outstanding payments, 1992 to 2001. 8 Status of ONEP payments for various project implementation contracts (partial). 9 Statement of final itemized accounts prepared for the project contracts. 10 The last quarterly progress reports for the two projects. 11 Allocation of laboratory equipment procured under the project. 12 Descriptive briefs on the quality of water in towns concerned by the projects. 13 A table showing the trend of water sales tariff. 14 Project audit reports for 1999 and 2000. 15 A brochure on ONEP’s water quality control.

MOROCCO PROJECT COMPLETION REPORT - AfDB

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