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Document of
The World Bank
FOR OFFICIAL USE ONLY
Report No. 11693-MOR
STAFF APPRAISAL REPORT
KINGDOM OF MOROCCO
LAND DEVELOPMENT PROJECT FOR LOW INCOME FAMILIES
MAY 21, 1993
Infrastructure Operations Division
Country Department IMiddle East and North Africa Regional Office
This document has a restricted distribution and may be used by recipients only in the performance oftheir official duties. Its contents may not otherwise be disclosed without Worid Bank authorization.
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CURRENCY EOUIVALENTS
Currency Unit = Dirham (DH)DH 1 = US$0.12
US$1 = DH 8.50
(As of January 1993)
FISCAL YEAR
January 1 - December 31
WEIGHTS AND MEASURES
Metric svstem British/US system
1 meter (m) 2 3.28 feet (ft)1 square meter (m2) = 10.76 sq. ft
GLOSSARY OF ABBREVIATIONS AND ACRONYMS
ANHI Agence Nationale de Lutte contre l'Habitat InsalubreB billionBMCE Banque Marocaine de Commerce ExtérieurBNDE Banque Nationale pour le Développement EconomiqueCB Central BankCDG Caisse de Dépôts et de GestionCIH Crédit Immobilier et HôtelierCNCA Caisse Nationale de Crédit AgricoleDG Directeur Général
EC European Community
EIA Environmental Impact AssessmentERAC Etablissement Régional d'Aménagement et de ConstructionERR Economic Rate of ReturnFNAET Fonds National d'Achat et d'Equipement des TerrainsFSDP Financial Sector Development ProjectGoM Governament of MoroccoHBM Habitation à Bon MarchéHSDL Housing Sector Development LetterICB International Competitive Bidding
ICC Interministerial Coordinating CommitteeLCB Local Competitive BiddingLDCC Land Development Coordinating CommitteeM millionMoF Ministry of FinanceMoH Ministry of HousingMoI Ministry of InteriorONE Office National de l'ElectricitéONEP Office National de l'Eau PotablePPD Planning and Programming DirectorateRED Régie Autonome de Distribution d'Eau et d'Electricité de RabatSAL Structural Adjustment LoanSGMB Société Générale Marocaine de BanquesSNEC Société Nationale d'Equipement et de ConstructionSOE Statement of ExpenditureTA Technical AssistanceToR Terms of ReferenceTVA Taxe sur la Valeur AjoutéeVIT Valeur Immobilière Totale
FOR OFFICIAL USE ONLY
KINGDOM OF MOROCCO
STAFF APPRAISAL REPORT
LAND DEVELOPMENT PROJECT FOR LOW-INCOME FAMILIES
Contents
LOAN AND PROJECT SUtMMARY . .. . . . . . . . . . . . . . . . . . . . . . i
I. INTRODUCTION .i.. . . . . . . . . . . . . . . . . . . . . . . . .
II. SECTOR BACKGROUND . . . . . . . . . . . . . . . . . . . . . . . . . 2
A. The Urban Sector ... . . . . . . .. 2
B. The Housing Sector ... . . . . . . .. 3
C. The Financial Sector ... . . . . . .. 6
D. Government's Strategy for the Housing Sector . .. . . . . . . 8
III. THE PROJECT ............................ . 10
A. Rationale for Bank Involvement ................ . 10
B. Lessons from Past Projects . . . . . . . . . . . . . . . . . . 1i
C. Project Concept and Description . . . . . . . . . . . . . . . . 12
D. Project Costs and Financing Arrangements . . . . . . . . . . . 17
E. Project Implementation and Coordination . . . . . . . . . . . . 20
F. Implementation Schedule . . . . . . . . . . . . . . . . . . . . 21
G. Procurement . . . . . . . . . . . . . . . . . . . . . . . . . . 21
H. Disbursement .. 23
I. Accounts and Audits . . . . . . . . . . . . . . . . . . . . . . 24
J. Supervision . . . . . . . . . . . . . . . . . . . . . . . . . . 24
K. Environmental and Resettlement Issues . . . . . . . . . . . . . 24
IV. ORGANIZATION AND MANAGEMENT . . . . . . . . . . . . . . . . . . . . 25
A. Société Nationale d'Equipement et de Construction (SNEC) . . . 25
B. Crédit Immobilier et Hôtelier (CIH) . . . . . . . . . . . . . . 28
C. Private Banks . . . . . . . . . . . . . . . . . . . . . . . . . 29
Y. PROJECT JUSTIFICATION AND RISKS . . . . . . . . . . . . . . . . . . 32
A. Project Benefits .. 32
B. Urban Poverty Impact . . . . . . . . . . . . . . . . . . . . . 33
C. Project Risks . . . . . . . . . . . . . . . . . . . . . . . . . 33
D. Cost Recovery . . . . . . . . . . . . . . . . . . . . . . . . . 33
VI. AGREEMENTS REACHED AND RECOMMENDATION . . . . . . . . . . . . . . . 34
This document has a restricted distribution and may be used by recipients only in the performance
of their officiai duties. Its contents may not otherwise be disclosed without World Bank authorization.
TABLES
2.1 Provision of Serviced Lots . . . . . . . . . . . . . .43.1 Estimated Number of Lots and Dwellings . . . . . . . . .133.2 Project Cost Estimates . . . . . . . . . . . . . . . . . . . . . . 183.3 Financing Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . 193.4 Procurement Arrangements . . . . . . . . . . . . . . . . . . . . . 224.1 CIH: Loans in Arrears of Principal and Interest . . . . . . . . . . 294.2 CIH: Compliance with IBRD Financial Covenants . . . . . . . . . . . 304.3 SGMB Key Financial Indicators . . . . . . . . . . . . . . . . . . . 304.4 Wafabank Key Financial Indicators . . . . . . . . . . . .31
ANNEXES
1. Housing Sector Development Letter ... . . . .... . . . . . . . 372. Bank Involvement in Urban Projects ... . . . ... . . . . . . . 493. Cost Estimates of Land Development Component . . . . . . . . . . . 524. Identified Sub-project - Cost Estimates . . . . . . . . . . . . . . 535. Conditions for Appraisal of Future Land Development Sub-projects 546. Number of Lots and Expected Housing Densities . . . . . . . . . . . 587. Land Use . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 598. Prices of Lots ... . . . . . . . . .... . . . . . . . . . . . 609. Relocation of Squatters and Technical Description . . . . . . . . . 6110. Terms of Reference for Housing Finance Study . . . . . . . . . . . 671l. Terms of Reference for Land Delivery Study . . . . . . . . . . . . 7412. Terms of Reference for Socio-Economic Impact Study . . . . . . . . 8513. Terms of Reference for Technical Assistance to SNEC . . . . . . . . 9214. Terms of Reference for Technical Assistance to CIH . . . . . . . . 9815. Expenditure Accounts by Financiers ............... . 10116. Implementation Schedule ... . . . . . . .... . . . . . . . . . 10217. Schedule of Contracta ... . . . . . . ..... . . . . . . . . . 10318. Estimated Schedule of Diabursement ... . . . .. . . . . . . . . 10519. Supervision Forecasts ... . . . . . . ..... . . . . . . . . . 10620. Resettlement Issues: Back-to-Office Report (January 11, 1993) . . 10721. SNEC - Organization ... . . . . . . . .... . . . . . . . . . . 11622. SNEC - Financial Statements ... . . . . . .... . . . . . . . . 11723. CIH - Organization ... . . . . . . . .... . . . . . . . . . . 12724. CIH - Financial Statements ... . . . . .... . . . . . . . . . 12825. SGMB - Financial Statements ... . . . . . .... . . . . . . . . 13226. Wafabank - Financial Statements ... . . . . .... . . . . . . . 13627. Cost Recovery Sources of Project Items . . . . . . . . . . . . . . 14028. Documents and Data Available in Project File . . . . . . . . . . . 141
MAP IBRD No. 24454
This report is based on the findings of an appraisal mission which visited Morocco in December 1992. Themission comprised Messrs. Henri Beenhakker (Task Manager), Maurice Gress (Procurement Adviser), Robert Wildeman(Principal Financial Economist), Mohammed Benouahi (Senior Financiat Analyst), Piet Nankman (Consultant, UrbanPlanning), Dan Aronson (Consultant, Sociotogist) and Michel Poputus (Consultant, Financiat Analyst). YoussefChoucair <Senior Urban Speciatist) and Kingsley Robotham (Senior Urban Specialist) were peer reviewers of theproject, which was prepared under the supervision of Amir Al-Khafaji, Division Chief, MN1IN; Harinder Kohli,Director, MN1DR and Caio Koch-Weser, Regional Vice-President, MNA.
KINGDOM OF MOROCCO
LAND DEVELOPMENT PROJECT FOR LOW-INCOME FAMILIES
LOAN AND PROJECT SUMMARY
Borrowers Government of Morocco (GoM), Crédit Immobilier et Hôtelier (CIH),
Société Générale Marocaine de Banques (SGMB), and Wafabank.
Beneficiaries : Société Nationale d'Equipement et de Construction (SNEC) and
private sector land and housing developers.
Amount : US$130 M equivalent in the aggregate.
Terms Repayable in 20 years, including 5 years of grace, at the
standard variable interest rate.
Onlendinq Terms : For CIH, SGMB and WafaBank: loans at market determined interest
rates amortized over 4 years for sub-projects constructed for
resale and 20 years for sub-projects constructed for rental or
investment purposes, and for self construction sub-projects. For
SNEC: a fixed interest rate of 12.5 percent (in line with the
market determined interest rate) with 10 years maturity,
including 5 years of grace.
Description The proposed project has four main objectives: (a) provide
serviced residential lots at affordable prices specifically
targeted to squatter and low-income families; (b) provide medium-
term f inancing to eligible private sector property developers for
construction of housing for low-income families; (c) foster the
participation of private sector banks in the housing finance
sector; and (d) improve the housing finance sub-sector, housing
subsidy policies and the land delivery process. Bank financed
components include: (a) the preparation of serviced lots by SNEC
(US$63.5 M equivalent); (b) sub-loans to private sector
developers exclusively for constructing serviced lots and houses
(about US$63.5 M); (c) studies for MoH to review the housing
finance sector, the level and distribution of land/housing
subsidies, the land delivery proceBs and market performance, and
socio-economic impacts of rehousing (US$2 M); and (d) technical
assistance (TA) to enhance the institutional capacity of SNEC
(US$0.5 M) and CIH (US$0.5 M). Cross subsidization will be
applied under the SNEC land development component in order to
sell lots for squatter and low-income families at below market
prices. Sub-loans to private sector developers will be arranged
through CIH, SGMB and Wafabank in accordance with specific
criteria.
Benefits and Risks : The land development component of the project is expected to
directly benefit about 2,800 squatter households and 9,150 low-
income households as owner-occupants of serviced lots. In
addition, private investment in these and other residential plots
to be made available under the project is expected to produce
another 35,220 low-income dwelling units for tenancy or sale.
The lines of credit to CIH, SGMB and Wafabank would benefit about
5,200 low-income families with serviced lots and about 2,300 low-
- ii -
income families with dwellings. The small sizes of lots intendedfor squatter and low-income families together with theestablishment of procedures for selecting beneficiaries reducethe risk that the pressure of increased demand resulting from ashortage of housing could lead to higher-income groups obtainingthese lots. The risk that sector reforms would be delayed isminimized under a Housing Sector Policy Letter which specifiesdates for completing studies and establishes action plans toimplement study recommendations.
Proiect Cost Summary, Financinq Plan. Estimated Disbursements andEconomic Rate of Return
USS millionLocal Foreign TotaL
PROJECT COST ESTIMATE
Land DevelopmentLand acquisition 38.06 - 38.06Civil Works 45.45 30.28 75.73Design Consuttancies 9.03 2.26 11.29Other Costs 27.53 4.85 32.38Subtotat
120.07 37.39 157.46Loans to Private Devetopers
Through CIH 52.67 35.11 87.78Through private sector banks 31.99 21.33 53.32Subtotat 84.66 56.44 141.10
Technical AssistanceTo SNEC
0.15 0.46 0.62To CIH 0.15 0.46 0.62Studies for MoN 0.46 2.00 2.46Subtotal 0.76 2.93 3.70
Total Baseline Cost 205.49 96.76 302.25Physicat Contingencies 6.32 3.03 9.35Price Contingencies 6.96 2.96 9.92Total Project Cost 218.77 102.75 321.52
FINANCING PLAN1 BRD
27.25 102.75 130.00SNEC 113.46 0.00 113.46CIH 21.94 0.00 21.94MoH 0.46 0.00 0.46Private Banks 13.33 0.00 13.33Sub-borrowers 42.33 0.00 42.33Total
218.77 102.75 321.52ESTIMATED DISBURSEMENTS CIBRD FY) 1994 1995 1996 1997 1998 1999 2000IBRD 2.25 18.99 44.11 32.75 21.73 9.17 1.00SNEC 4.11 16.67 24.77 31.99 24.96 9.96 1.00CIH 0.00 4.38 13.60 3.08 0.44 0.34 0.10MoH 0.14 0.20 0.10 0.02 0.00 0.00 0.00Private Banks 0.00 2.66 4.66 4.66 0.95 0.30 0.10
Economic Rate of Return About 35 percent.
Staff Appraisal Report 11693-MOR
MaD no : 24454
KINGDOM OF MOROCCO
LAND DEVELOPHENT PROJECT FOR LOW-INCOME FAMILIES
I. INTRODUCTION
1.01 High population growth rates and rural to urban migration have
given rise to a pervasive shortage of urban housing in Morocco.
Overcrowding, shared housing, and shanty towns are visible consequences of
the high urban growth rate. Since financial institutions other than the
Crédit Immobilier et Hôtelier (CIH) hardly participate in the f inancing of
affordable low-cost housing, the shortage has become particularly acute
for low-income families.
1.02 The proposed project has four main objectives: (a) provide
serviced residential lots at affordable prices specifically targeted to
squatter and low-income families; (b) provide medium-term financing to
eligible private sector property developers for construction of housing
for low-income families; (c) foster the participation of private sector
banks in the housing finance sector; and (d) improve the housing finance
sub-sector, housing subsidy policies and the land delivery process. The
project comprises four main components: (a) land development to be
implemented by Société Nationale d'Equipement et de Construction (SNEC);
(b) a line of credit to CIH and two private sector banks to provide loans
to private sector land or housing developers; (c) studies for MoH to
review the housing finance sector, the level and distribution of
land/housing subsidies and taxation, the land delivery process and market
performance, the collection of housing sector information, and the socio-
economic impacts of rehousing; and (d) technical assistance (TA) for SNEC
and CIH.
1.03 For the purposes of this project, low-income families have
been defined as families with a monthly income of less than DH 3,000
(US$353). With an average family size in this income group of 6.6, a
monthly family income of less than DH 3,000 is equivalent to less than DH
5,455 (US$642) per family member per year. While this criteria includes a
maximum annual income per family member about twice the 1991 urban poverty
threshold (DH 2,725 or US$316 per person per year), it is expected that
many of the members of families eligible to buy subsidized lots (in
particular squatter families), will have less. Low-income families make
up about 25 percent of Morocco's population and consist, on the average,
of two minimum wage earners (Salaire Minimum Interprofessionnal Garanti or
SMIG is about DH 1,400 or US$165 per month).
1.04 The Bank has a long-standing dialogue with the Ministry of
Housing (MoH), the implementing agency for two earlier lending operations
(Rabat Development Project and Second Urban Development Project)
supporting urban renewal and land development. CIH, is also well known to
the Bank. It has already received four loans for hotel and tourism
development, amounting to US$148.8 million (M), and two housing finance
loans amounting to US$137.5 M. Five of these loans are now fully
disbursed; the second housing finance loan is almost completed. The
private sector banks, Société Générale Marocaine de Banques (SGMB) and
- 2 -
Wafabank, are included in the ongoing Financial Sector Development Project(FSDP). SNEC on the other hand, is a relatively new organization, but itsstaff is experienced and generally well trained.
1.05 The Bank loan to the Government of Morocco (GoM) would beUS$66.0 M; US$64.0 M to be onlent to SNEC for land development and TA, andUS$2.0 M for studies for MoH. The loan to CIH would be in the amount ofUS$40 M; US$39.5 M to be onlent for land and housing development for low-income families and US$0.5 M for TA. A loan of US$12.0 M would be made toeach of the private sector banks.
II. SECTOR BACKGROUND
A. The Urban Sector
2.01 Demoaraohic Trends. As of early 1993, Morocco's populationwas about 27 million people of whom about 46 percent or 13.0 million livein urban areas. Largely as a result of rural immigration, the urbanpopulation is estimated to have grown at an average rate of 3.7 percentper annum during the last decade, while the overall population grew about2.6 percent. Despite Government efforts to improve living conditions inrural areas, high urban growth rates are expected to continue over thenext 10 years, and the urban population could reach 16 million or 49percent of total population by the end of the 90s. Like most countries inthe region, Morocco is encountering great difficulties in providing jobopportunities, shelter and basic services to an increasing number of youngurban dwellers and unskilled rural migrants. About one million people, or7.6 percent of the urban population, have monthly incomes below the 1991urban poverty threshold of US$316 (DH 2,725) . The inability of localgovernments to manage the rapid pace of growth has resulted in aproliferation of shanty towns, which are now a common feature of mostMoroccan cities. The improvement of urban housing on a nationwide basishas, therefore, become an urgent priority.
2.02 Urban Administration. Morocco is divided into 59 provinces orprefectures. These in turn are divided into rural and urban communes.Provinces are under the Ministry of Interior (MoI), and each one is headedby a Governor who represents the King. The Governor is responsible notonly for maintaining law and order, but also for supervising andcoordinating the activities of all central government agencies operatingwithin his jurisdiction, as well as local governments and electedauthorities. The provincial assembly contains representatives ofprofessional organizations and members elected by the communes, and isresponsible for defining, approving, and managing budgetary expenditures.
2.03 Communes are the basic local government units. They aregoverned by an elected council chaired by a President who is responsiblefor executing Council decisions as well as representing the localcommunity in all civil, administrative, and legal functions. Centralcontrol of the communes by MoI is carried out through a local executiveoff icial ("Pasha", or "Caid"), who represents the Governor and is
specifically charged with ensuring proper application of regulations. The
1976 Communal Charter ("Loi Organique des Collectivités Locales et des
Pinances Locales") gives the communes very broad powers in formulating
their economic and social development plan and the level and organization
of their public services.
2.04 Responsibility for meeting the needs of the growing urban
population is shared by central and local government institutions. Most
social services such as education, health, and social housing are financed
by the central government. Local provincial delegations of the various
ministries ensure the implementation and administration of central
governments policies at the local level. Local government is generally
responsible for providing adequate municipal services such as sewerage and
solid waste management. Water and power supply in major cities are
provided by local autonomous utilities ("régies"); in rural areas and
cities without régies the national utility agencies (ONEP and ONE) provide
water and power.
B. The Housinq Sector
2.05 Housinq Demand. Over the last decade, Morocco's private and
public housing production lagged behind the increase in urban population.
According to a 1989 census by MoH, 23 percent of the urban population
lives in squatter settlements, or shanty towns, and substandard housing
built without permit on unserviced land. In addition, the housing
densities are very high. The average number of persons per room in urban
dwellings is estimated at 2.1, with approximately 60 percent of all urban
households living in one- and two-room units. More than 10 percent of all
households live in shared housing.
2.06 The demand for housing comes from families who are temporarily
living in rental properties, in cohabitation, or migrating into urban
areas, and wanting to improve their housing conditions, particularly
squatter families. Approximately 40 percent of households are living in
rental properties; about 60 percent of rental units are in two-story
attached houses where owners informally rent the upper floors for
additional income. The Habous1 , insurance companies, social security
agencies, as well as numerous public enterprises and ministerial
departments, are the other main owners of rental housing.
2.07 Income level, consumption patterns, and home ownership status
also determine the various types of housing demand. Low-income households
prefer semi-detached houses. These are usually built with traditional
construction techniques on small lots varying from 75 to 120 m2. Middle-
and upper-income groups prefer to live in centrally located apartments or
in suburban single-family homes. The choice of a house by all income
groups is generally considered a permanent, once-in-a-lifetime decision.
l/ The "Habous" is a religious institution set up to administer the
operation and maintenance of mosques and other religious and social
facilities.
- 4 -
This leads to incremental construction processes in which a house isexpanded over time according to the changing needs and financial resourcesof the household.
2.08 Housina SupplY. The Governiment has a comprehensive socialhousing program which extends to most provinces and includes:
(a) annual development of about 42,000 serviced lots for squatLerand low- and middle-income households, including areas forcommercial facilities and public services;
(b) annual construction of about 10,000 low-cost partiallycompleted housing units for squatters; and
(c) slum upgrading by developing both infrastructure facilitiesand public services.
In general, the program consists of identified operations, defined bygeographical area, implementation agency and investment costs. MoH is themain force behind the program's conception and promotion. Theresponsibility for managing the construction and commercial process isdelegated to two national public developers, "Agence Nationale de LutteContre l'Habitat Insalubre" (ANHI) established in 1984 and SNEC,established in 1987, as well as seven regional public developers or"Etablissements Régionaux d'Aménagement et de Construction (ERACs)established in the mid-70s. The activities of these agencies are definedin formal agreements between MoH, the local authority and the agencyinvolved. This process is consistent with past Bank recommendations to(a) limit MoH's role to policy making and investment promotion and (b)encourage cooperation between MoH, developers, and the local authoritiesto solve social housing problems.
2.09 Housing construction is mainly (about 85 percent) done byprivate contractors and amounted to about 70 thousand houses per yearduring 1989-1992. About a quarter of this construction is producedinformally by the owners themselves, who often enlist the help ofrelatives, friends, and piece-workers. However, about 98 percent ofserviced lots is provided by the public sector. Table 2.1 presents theproduction of serviced lots by private and public developers.
Table 2.1 Provision of Serviced Lots(in Thouuands)
1989 1990 1991 1992
Public Sector 26 27 32 42Private Sector 2 1 1 1Total 28 28 33 43
Since the end of 1990, the Government has been putting more emphasis onthe provision of serviced lots rather than the other two components of itssocial housing program (para. 2.08) since its cost per person and durationof implementation are lower, while this type of provision allows the useof cross-subsidization (para. 3.11). The cost per person for theprovision of serviced lots is about half of the comparable figure for slumupgrading, while the average time of implementation of slum upgrading isabout twice that of the provision of serviced lots.
2.10 Although the number of squatter households declined from
204,100 or 12.8 percent of the total number of urban households in 1982 to
165,500 or 7.8 percent in 1989, the construction of housing for low-income
families remains insufficient. The production of this type of housing by
the private sector has been constrained by the lack of construction
finance, which forces developers either to put up equity contributions
varying from 30 percent to 50 percent of the total investment cost or to
resort to expensive bridge financing.
2.11 The combined housing production in the private and public
sectors is estimated at about DH 7 to DH 8 billion (B) (US$0.9-1.0 B)
annually, which represents about 4 percent of GDP. Moreover, this
production induces an additional annual investment of DH 1.7-2.0 B in
related urban infrastructure and about DH 1.0 B for furnishing and
equipping new dwellings. During the past five years the annual
contribution of the housing sector to Gross Fixed Capital Formation is
estimated at about 20 percent. This excludes the informal housing sector,
for which data are non-existent.
2.12 Housinq Finance. One of the main issues in the housing sector
is lack of housing finance; other issues pertain to subsidies, shortage of
urban land, housing regulations, and lack of data. Bank assistance would
finance studies to resolve these issues (para. 3.21). Although
insufficient access to medium and long-term financing is not limited to
the housing sector, it is particularly acute with regard to mortgage
lending. In urban areas, CIH is about the only organization making
mortgage loans.
2.13 Subsidies. Presently, the Government is assisting people with
an annual income of less than DH 36,000 (US$4,235) by providing loans with
a subsidized interest rate (para. 2.23) . The Government is interested in
examining the potential advantages of replacing subsidized interest rates
by up front grants since these grants: (a) may make it easier to target
the poor; (b) are more transparent than subsidized interest rates; (c) are
lesa likely to distort the financial market; and (d) are easier for the
Ministry of Finance (MoF) to budget. To avert the risk that the recipient
of these grants may use them for things other than buying a lot or
dwelling, a voucher system may be introduced. On a broader scale, the
level and distribution of land and housing subsidies needs to be examined.
2.14 Shortace of Urban Land. A scarcity of reasonably priced
urban land is making the production of affordable housing in Morocco
increasingly more difficult. The two main reasons for the high prices are
low property taxes on land, and cumbersome, urban regulations. Data
suggest that the low property taxes discourage private owners from selling
developable land. In major population centers, the urban regulatory
system (which falls under MoI) restrains urban perimeters and prevents the
urban use of land outside the perimeters. In addition, the procedures to
obtain an authorization to develop land within the urban perimeter are
complex and time consuming. This raises the price of land for which an
authorization has been obtained, by up to 25 percent. In some cases the
urban standards could be relaxed, particularly with regard to the
limitation on the number of floors a household is allowed to build. Ananalysis of the land delivery process and market performance is calledfor.
2.15 Housina Reculations. Many regulations associated with homebuilding (various licenses, permits and service charges) are cumbersomeand non-transparent. Builders and some buyers incur unnecessary indirectcosts as local governments are often slow in processing and approvingconstruction licenses and permits. The Casablanca Urban Agency is anexception, however, since it recently simplified and streamlined itshousing regulations and procedures. The Government intends to examinewhether the same can be achieved in other municipalities. Consultantsfinanced under the Second Housing Finance Project (para. 3.04) arecarrying out a diagnostic study of the housing construction procedures.Agreement has been reached with Government that the recommendationsarising f rom MoH's study and an action plan for their implementation, willbe presented to the Bank, for review by December 31, 1993.
2.16 Housinq Sector Information. A competitive market requiresthat participants have access to relevant, timely, and reliableinformation. At present, an insufficient amount of information iscollected by the Government, while no information is collected by theprivate sector. This lack of data constrains the further development ofMorocco's housing finance and production sectors. An analysis of the keyinformation needs of housing market participants is desirable.
C. The Financial Sector
2.17 Past Performance. During the first half of the 1980s (aperiod characterized by inflationary pressures and persistent and highfiscal and external deficits), Moroccan authorities maintained extensiveregulations over the financial system, including inter alia, tight creditceilings, administered interest rates and mandatory placements in Treasurybonds at below market rates. The net result of these restrictions wasreduced competition within the banking system, limited access by theprivate sector to credit, and significant constraints in market-basedresource allocation.
2.18 Recognizing the need for change, and concurrent with improvedmacroeconomic performance, the Government implemented a series off inancial sector reforms beginning in the second half of the eiahties. ByAugust 1990, the minimum capital and net equity requirements for banks wasincreased to DH 100 M and a more rigorous definition of equity wasestablished. These measures were followed-up in January 1991 with moredefinitive controls on monetary aggregates and bank refinancing with theCentral Bank (CB), including the elimination of credit ceilings; anincrease in the ceiling for reserve requirement ratios on sight depositswith the authority to extend the base to time deposits; restricted accessto rediscounting for medium term investment loans tbrough the eliminationof Banque Nationale pour le Développement Economique (BNDE) bonds from thetotal amount that can be rediscounted with CB; and the application of asingle seven-day interest rate on all advances at variable rates.
Moreover, deposit rates were freed, the use of variable interest rates was
encouraged, the system of foreign exchange risk coverage was improved,
banking supervision was strengthened by requiring annual independent
external audits in accordance with international standards, and directed
credit is gradually being phased out.
2.19 After the introduction of the reforms in early 1991 there was
an initial rapid expansion of credit (mostly short-term credit) followed
by lower credit growth than expected in 1992. With loan interest rates
now limited only by a ceiling set at 1 1/3 times the weighted average
interest rate on six and twelve-month bank deposits, there is competition
between banks for market shares (mostly short-term credit) which has been
a major objective of the reforms. Bank lending rates remain high and
currently reach values above 14 percent for short-term credits compared to
an inflation rate of about 6 percent for 1992. These current high real
rates are largely due to substantial, although slowly decreasing,
borrowing requirements by the Government, usually at below market rates.
2.20 In order to slow down further credit growth, CB has intervened
by limiting a bank's access to short-term funds to an aggregate volume of
DH 800 M with penalty interest rates for drawings exceeding this amount.
A second measure of reducing credit growth is related to loan
classification and provisioning--an average provision of 35 percent of
non-performing loans is expected to be adopted, which is one of the
central elements of the financial sector reform program.
2.21 Bank Involvement in the Financial Sector. In support of the
financial sector reform process, the Bank prepared a FSDP in June 1991.
This project is a hybrid consisting of a financial sector adjustment
component (US$125 M, Loan 3365-MOR to the GoM) and an investment component
(US$110 M, Loans 3366-73 MOR) to BNDE and eight participating commercial
banks. In parallel with the investment component, an IFC-led syndicated
loan for the equivalent of US$100 M provided additional financing to four
of the eight participating banks. It was agreed that under the adjustment
component, the loan would be disbursed in two tranches- -the f irst tranche
of US$75 M was released at effectiveness and has been fully disbursed.
2.22 The second tranche of US$50 M, originally expected for early
1992, is contingent upon the achievement of six conditions and
satisfactory progress in the overall financial sector reform program.
Specifically, the six conditions comprise: (a) satisfactory economic
performance; (b) presentation of a banking law to the Council of
Ministers; (c) adoption of regulatory measures reducing the f loor level of
obligatory rediscountable medium-term loans and housing loans to 2.5
percent of total bank deposits; (d) adoption of regulations requiring
banks to maintain a ratio of equity to risk-weighted assets of at least 8
percent; (e) adoption of regulations requiring banks to limit exposure to
any group of related beneficiaries to 15 percent of bank equity; and, (f)
adoption of regulatory measures reducing mandatory placements in Treasury
bonds from 32 percent to 25 percent of bank sight deposits (which bear
interest at about 4.25 percent or well below market) . Compliance with
these conditions is presently being reviewed by the Bank.
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2.23 Housinq Finance Sub-Sector. The housing finance sub-sector isdominated by CIH, a public sector specialized housing and tourism bankwhich has been in business since 1920. It is the main government conduitfor channelling finance to low-income families. In rural areas, CaisseNationale de Crédit Agricole (CNCA), Government owned, also providesmortgage loans. Private sector banks are generally not interested inmaking long-term mortgage loans; sometimes they provide medium-termmortgage financing to their affluent customers as an accommodation. Aspecial housing finance program ("Habitation à Bon Marché - HBM) aimed atlow-income families is administered on behalf of CIH by the "BanqueCentrale Populaire" (BCP; also Government-owned). Both the CIH and theCNCA provide subsidized loans to these families for the purchase of ahouse with a "Valeur Immobilière Totale" (VIT) of less than DH 300,000(US$35,300). The VIT consists of costs of raw land, land development,house construction and legal expenses. The subsidized interest rateamounts to about 10 percent, in comparison with a market determined rateof about 13 to 14 percent. CIH does not, however, offer preferentialfinancing terms to developers.
2.24 Compatibilitv of Proiect Design with Financial Sector Reforms.In line with the reforms agreed under the ongoing FSDP, each bankparticipating in the proposed project will have an onlending rate(applicable to private developers) based on market determined costs ofborrowing. The market determined interest rate is defined as the weightedaverage interest rate on six and twelve-months deposits (adjusted everysix months), plus an intermediation charge, subject to a ceiling of 1 1/3times this weighted average. Loans would be amortized over 4 years forsub-projects constructed for immediate resale and 20 years for sub-projects constructed for rental or investment purposes, and for selfconstruction sub-projects (para. 3.18). Currently, rates are about 13 to14 percent.
2.25 The participating banks will be the direct borrowers from theBank. To cover their foreign exchange risk under their loan from theBank, the Government has established a foreign exchange risk coverage fundto which the banks must contribute. This contribution is based on thefollowing formula:
(a) a front-end fee of 1 percent of the principal amount of eachloan and chargeable to the end-user; and
(b) the difference between the interest rate on the bank's foreignborrowing and the weighted average interest rate on six andtwelve months deposits.
This system is expected to be self-financing and ensure equalization ofthe cost of foreign resources and the cost of domestic capital to thebanking system.
D. Government's stratecrv for the Housinq Sector
2.26 The Government's policies with regard to the housing-sector
are evolving in line with other economic reform measures. During the
preparation of the project the Government has taken the following actions.
2.27 EncouraQinq Private Sector Develoiment. To encourage private
sector banks to make loans to private sector land and housing developers,
which heretofore has been primarily CIH's domain, the Government is
treating these banks and CIH on the same basis with regard to who is
assuming the foreign exchange risk rather than giving CIH a privileged
status. As a result, two private sector banks have shown interest in
participating in the proposed project; however, since they do not have
much experience in this field, they, as well as MoF, have suggested
starting on a pilot basis. To encourage private sector developers, it was
agreed that under the proposed project, onlending by CIH and the private
sector banks should only be to these developers. Under the f irst and
second housing finance projects onlending was primarily to parastatal
organizations and municipalities.
2.28 Imorovinq the Productivity of the Housinq Stock. Investments
in rental housing have declined in Morocco, due, in part, to difficulties
experienced by landlords in enforcing payment of rent and in terminating
leases and evicting tenants in the event of unauthorized subletting of the
leased premises. As a first step toward rectifying this situation, the
GoM has recently prepared draft legislation which is designed to provide
the courts with instruments to facilitate the recovery of rent and the
eviction of tenants for unauthorized subletting; this draft is awaiting
final approval by the Council of Ministers (presided by the King) before
being sent to Parliament for enactment.
2.29 Enhancinq the Coordination amona MoH. MoF, MoI. To improve
the coordination among the supply of serviced lots, housing,
infrastructure, and finance, the Government intends to establish an
Interministerial Coordinating Committee (ICC) with the Minister of Housing
as chairman and representatives from MoH, MoF, MoI as well as private
sector banks and developers. This Committee will also give guidance to
the consultants carrying out the studies for MoH (para. 3.21), take
necessary actions to implement the studies, recommendations, and follow
progress made by the housing sector using housing indicators such as the
annual production of housing units, reduction in the number of people in
slum areas, and the average period of time between the issuing of
construction permits and issuance of housing permits. For decisions not
affecting policies and strategies the Minister of Housing may delegate
ICC's chairmanship. The establishment of the ICC is a condition of
effectiveness of the Loan Agreement with GoM.
2.30 Tax Reform. To enhance the competition between public and
private sector developers, public developers are no longer exempted from
income taxes. In addition, CIH now has to pay value added tax (TVA) on
interest earned on long-term mortgage sub-loans for the
purchase/construction of dwellings with a VIT of more than DH 500,000
(US$58,800). CIH, as well as private sector banks are exempt from paying
the TVA for long-term loans for the purchase/construction of dwellings
with a VIT of less than DH 500,000.
2.31 Imorovina Souatter Resettlement. Although the Government has
a long experience with squatter resettlement, it has further improved its
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involvement by refining its resettlement policy and specific resettlementplans for each sub-project before re-housing takes place (Annex 1) . A1990 project completion report on an European Community (EC) financedproject in Morocco (similar to the land development component of theproposed project) estimates that the drop out rate of squatter families isonly about 10 percent. This rate is now expected to be lower through theimplementation of a nation wide computer based registration of rehousedsquatters which will prevent them from selling a subsidized lot andbecoming a squatter elsewhere. To verify this, the proposed projectincludes a study which, inter alia, will assess the drop out rate (para.3.21).
2.32 The above reforms are moving in the right direction; however,the functioning of the housing market and the finance sector needs to bestrengthened in the medium-term. A Housing Sector Development Letter(HSDL; Annex 1) received by the Bank from the Minister of Housing,outlines a program to further reduce constraints to the development of thesector through the following key actions:
(a) streamlining and making more transparent regulationspertaining to land development and construction of houses andbuildings, and analysis of transfer of property;
(b) assessing and revising as appropriate housing subsidy policyto ensure transparency, fiscal affordability, and socialsafety net targeting;
(c) rationalizing land development by opening up competitionbetween the national and regional parastatal land developers,and the private ones;
(d) assessing the housing finance sector to insure improved accessto mortgage loans;
(e) collecting pertinent housing sector information; and
(f) assessing socio-economic impacts of squatter resettlement, andif necessary, taking steps to ensure that squatters are notimpoverished as a result of their resettlement.
The HSDL establishes time frames for undertaking studies covering theabove issues and calls for the development of specific action programsprior to the mid-term review.
III. THE PROJECT
A. Rationale for Bank Involvement
3.01 Bank assistance strategy for Morocco has been designed to helpthe Government develop a comprehensive reform program, and to providefinancial resources to support such a program. In this connection, two
SALs focussed on key macroeconomic and sectoral policy issues, andinstitutional reform. Both the Government and the Bank, however, concur
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that increased priority needs to be given to reducing poverty and
promoting social development. This new emphasis flows from two
considerations: first, that the concern with economic stabilization did
not allow for sufficient attention to be paid to living conditions and
poverty; and second, that some social indicators and conditions are more
severe in Morocco than in countries with comparable income levels.
3.02 Tackling both the income and social aspects of poverty,
however, will be a long-term process. SAL-II began the process by
initiating actions to be continued throughout the 1990's, in three areas:
first, initial, broad reallocations of public spending toward activities
likely to have a strong impact on both income and social aspects of
poverty; second, provision of information and analysis on social
conditions; and third, support of the Government's formulation of a
poverty reduction strategy in the next five-year plan.
3.03 For thirty years or more in Morocco, the urban population
growth rate has exceeded the rate at which urban services have been
provided. The lack of serviced land to accommodate the rapidly expanding
urban population is particularly striking, and the net result has been the
establishment of squatter settlements surrounding urban areas. Thus,
there is a clear case for Bank assistance in the provision of land
development and upgrading projects. For reasons explained in para. 2.09
high priority was accorded by the Government to land development. Bank
assistance in this sector will also spur activity in the construction
industry, encourage participation of the private sector, contribute to
employment generation, and fill a resource gap.
B. Lessons from Past Proiects
3.04 Bank Involvement in the Housina Finance Sub-Sector. The Bank
has assisted Morocco with two housing finance projects. The f irst project
has been successfully completed, and the second one is almost completed
(97 percent disbursed) . The loans have contributed to CIH's effectiveness
as an universal bank while disbursements to CIH have been faster than
originally forecast. The proposed project has incorporated the lessons
learned from these initiatives. Specifically the project design
emphasizes: (a) increasing competition within the housing finance sector
by expanding the housing finance line of credit to private sector banks;
(b) improving access to credit by private sector developers and
contractors; (c) optimizing cost recovery through differential pricing
mechanisms; and, (d) finding more appropriate solutions to lending to low-
income families for the purchase of lots and houses. Annex 2 briefly
describes the earlier initiatives and highlights more fully the lessons
learned from them.
3.05 In addition to the two housing finance projects mentioned
above, the Bank has assisted Morocco with the financing of two urban
development projects, both of which have been completed. The principal
lessons learned from these projects relate to the need to overcome
impediments to project implementation such as shortages of adequately
trained personnel, poor decision making channels, over-regulated project
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executing mechanisms, and prohibitive procurement restrictions (Annex 2)The proposed project aims at avoiding these pitfalls by placing the landdevelopment component under SNEC, a semi-autonomous agency with highlyqualified persons which has been accorded recognition as a priorityinstitution with easy access to the top levels of government, and a broadlicense to set its own operational policies and procedures. In addition,emphasis will be placed on: (a) intervening on a scale designed to havemaximum positive impact on squatter and low-income families; and (b)enhancing community participation in squatter resettlement through theimplementation of recommendations arising from the squatter resettlementstudy of the first land development sub-project, in subsequent landdevelopment sub-projects (para. 3.22).
C. Proiect Concept and Description
3.06 Total project costs are estimated at about DH 2,569.15 M(US$321.52 M). Its main objectives (para. 1.02) are to be realized byfour main components:
(a) land develoiment consisting of the development of about 17,100serviced residential lots with a potential of privatedevelopment of about 50,800 dwelling units of which about 93percent would be occupied by low-income families (includingrehoused squatters) as owners or tenants;
(b) a line of credit to banks through CIH and two private sectorbanks to provide medium-term financing to eligible privatesector developers for the development of housing for low-income families (excluding squatters);
(c) studies for MoH to address the sector issues described inparas 2.12-2.16 and to carry out a socio-economic impactanalysis of squatter rehousing; and
(d) institutional develoament through training and TA to SNEC andCIH.
3.07 Land Develooment ComDonent. The purpose of this component(estimated cost US$157.5 M, Bank financing US$63.5 M) is to supplyserviced land for the development of low-income housing and relatedfacilities. Actual construction of the housing and other facilities wouldbe undertaken by the lot owners themselves and would not be financed underthe project. A sector loan approach has been adopted for this component,which would include about ten sub-projects. Three sub-projects (RiadEssalam, Yasmine 2 and M'Jaara), representing about twenty-three percentof the total cost of the component, have been appraised. Detailed costestimates are presented in Annex 3. Seven other sub-projects have beenidentified. Cf these, three (El Amal, Nahda and Al Hanaa) are in anadvanced stage of preparation. Preliminary coet estimates of theidentified sub-projects are presented in Annex 4. Agreement has beenreached with SNEC that only sub-projects which meet specified selectioncriteria and receive prior Bank approval will be eligible for financing
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under the Loan to GoM (see Annex 5) . These criteria include, among others
(para. 3.14), existence of a resettlement plan consistent with the
Government's resettlement policy (para. 2.31) and whose goal would be to
avoid the movement of squatters over a distance of more than 2 kilometers.
3.08 Table 3.1 shows that about 17,100 serviced lots would be
provided under the project. When completed, these lots would accommodate
about 50,800 dwelling units serving a population of 255,000 residents.
About 93 percent of the lots (i.e. all residential lots except the single-
family lots) would be occupied by rehoused squatters and low-income
families.
Table 3.1: Estimated Number of Lots and Dwellinas.
Target group LOTS DWELLINGS 1/Number Total Owner- Sale or
number occupied rental
Squatter rehousing 2,784 8,219 2,784 5,435
Low-income families 9,147 23,537 9,147 14,390
Subtotal 11,931 31,756 11,931 19,825
Mixed commercial/residential 2,945 8,882 2,945 5,937
Apartment buildings 1,503 9,464 0 9,464
Subtotal 4,448 18,346 2,945 15,401
Single-family housing 721 721 721 0
Total 17,100 50,823 15,597 35,226
1/ The estimated number of low-income dwellings (owner-occupied or
rental) is: 15,401 + 11,931 + 19,825 = 47,157 units.
3.09 In addition to residential lots, each sub-project would
include serviced sites for the construction of commercial facilities and
small-scale businesses. The sites would also be provided with basic
infrastructure such as roads, storm water drainage, water supply,
sewerage, electricity, street lighting and, in the larger towns, telephone
facilities. Off-site infrastructure including access roads and
connections to existing water, sewer and power mains would be provided
where necessary. In parallel with these activities, lots for community
facilities and parks will be provided.
3.10 In designing the topology mix for the residential lots, every
effort was made to create an environment that would avoid income
stratification. Lots for squatter rehousing and low-income families vary
in size from 64 to 120 m2 and permit two or three floors. Lots for
apartment buildings range in size from 125 to 265 m2 and allow for three
to five floors, generally with several apartments per floor. Mixed
residential-commercial lots, with an area of 100 to 180 m2 and up to three
floors, are located along the main streets, with shops, businesses and
workshops on the ground floor and apartments on the upper floors. Thus
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residential lots can accommodate from two to ten dwelling units in themulti-family townhouses or small apartment buildings typical of urbanhousing development in Morocco, allowing housing densities of up to 120dwellings per hectare. In addition, most sub-projects provide commercialor industrial lots, as well as small numbers of single-family lots with anaverage size of about 250 m2. Although design characteristics aregenerally satisfactory, they will be further evaluated in one of theproposed studies (para. 3.21). Technical data (number of lots, expectednumber of dwellings and housing densities) and land use of the appraisedsub-projects and of the identified sub-projects El Amal, Nahda and AlHanaa are presented in Annexes 6 and 7. By making lots for apartmentbuildings and part of mixed commercial-residential lots available toinvestors, the project supports the Government's efforts to encourageprivate sector provision of housing, thus increasing efficiency anddecreasing the burden on the national budget.
3.11 Pricina and Affordabilitv. Internal cross-subsidies throughdifferential pricing of lots is the major centerpiece of the proposedproject. Lots for squatters and low-income families would be sold atbelow market prices, cross-subsidized from the sale at higher prices ofother lots within the same sub-project. In aggregate, total revenues willequal total costs for each sub-project. It is estimated that about 25percent of average household income would be spent on shelter (which isnot unusual for low-income households) and that the least expensive lotwould be affordable to about 90 percent of the urban population. Annex 8presents the proposed sales prices per type of lot in six sub-projects.
3.12 Squatter and other low-income households do not rely on incomeand savings alone to put up the initial capital for the purchase of a lotand the construction of a house; sale of assets, pooled family resourcesand personal loans from relatives, friende or employers are otherresources commonly used. As each lot allows for the construction of morethan one dwelling, additional resources can be mobilized through theconstruction of rental apartments, or the sale of customary "air rights"("houa"), i.e. the right to build and own an apartment on one of thefloors, without sharing ownership of the lot. A post evaluation of arecent EC financed squatter relocation project found that two-thirds ofthe lots were built up within the first two years by the originalallottees.
3.13 Beneficiary Selection. A beneficiary of a lot intended forlow-income families must under Moroccan law meet the following criteria:
(a) minimum age of 21 years;
(b) head of household with at least one child under the age of 21years;
(c) monthly household income of less than DH 3,000 (US$353);
(d) the beneficiary should not own another lot or dwelling and canonly buy one subsidized lot; and
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(e) the beneficiary should use the lot for his/her own residence,
although he/she may rent part of that residence.
3.14 The above criteria are already applied by MoI's local
authorities in charge of beneficiary selection and their enforcement has
been satisfactory; normally squatters have no problem meeting the criteria
(criteria (a) and (b) do not apply to them). Agreement was reached with
SNEC that in order for a sub-project to be eligible for Bank financing, at
least 50 percent of the land should be marketable, of which at least 60
percent is to be sold to families meeting criteria (c), (d) and (e).
Squatters and low-income families who have been allocated a lot are
registered in order to prevent double allocation. All other lots are sold
to applicants, who, after being assessed, are selected by lottery if the
number of applicants exceeds the number of available lots. The lottery
system is equitable and takes into consideration a household's desire to
move with close relatives and friends. Payments for all lots are made by
the beneficiaries in three installments, the first (50 percent of the
price) at the time of lot allocation, the second (30 percent) and third
(20 percent) at the start, middle and completion of the works
respectively.
3.15 Scuatter Relocation. Two of the three appraised sub-projects
(Riad Esslam and Yasmine 2) involve relocation of squatters. The number
of families to be relocated, the number of lots to be provided, and a
technical description of these sub-projects are presented in Annex 9.
3.16 Land development plans for squatters are prepared at the city
level, and are based on nation-wide surveys of squatter settlements (the
last of which was completed in early 1992) and on site-specific surveys.
The plans are well prepared and embrace the following principles and
procedures: (a) no eviction without alternative accommodation in the form
of a serviced lot; (b) entitlement limited to those listed in the surveys;
(c) minimal social and economic disruption; (d) partial cost recovery from
the beneficiary; and (e) full ownership of the allocated lot. Lots for
squatters are provided within larger land development projects undertaken
by public developers. In most cases, development sites are selected
expressly to include or to be adjacent to existing squatter settlements,
so as to minimize disruption. The exception pertains to squatter
settlements located on hills endangered by land slides during the rain
season and settlements located near places of employment (e.g. factories)
which have been closed. Elected municipal councilors representing
squatters are the formal channel for community participation. In
addition, as the authorities are keen to avoid social disruption, informal
consultation normally takes place.
3.17 Loans to Private Sector Land and HousinQ DeveloDers. The main
objective of this component (estimated cost US$141.1 M, Bank financing US$
63.5 M) is to provide medium-term financing through CIH and two private
sector banks to private sector land and housing developers. For this
purpose a US$40 M (including US$0.5 M TA) loan would be made to CIH and
loans of US$12 M would be made to each of the private sector banks, SGMB
and Wafabank. The banks would make sub-loans available at market
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determined rates (para. 2.24) to finance development of residential lotsand lots for associated public and recreational facilities, andconstruction of basic infrastructure (such as roads, sewerage,electricity, telecommunication, and street lighting), and construction ofdwellings.
3.18 Banks in Morocco generally do not finance land acquisition.Furthermore, they require a priori clear title to the land as collateralfor a land development or construction loan. Individuals or otherentities who own a lot are by definition classified as a propertydeveloper, and would be eligible for a loan under the proposed project,assuming that other credit criteria are satisfied (para 3.19). In otherwords, loans for self construction are included in this component. Allloans will only be made to private sector developers.
3.19 To ensure a focus on low-income families while at the sametime providing a credit package acceptable to private sector developers,Bank funds will be on-lent for the development of serviced residentiallots of 120 m2 or less or for the construction of dwelling units with aVIT of DH 300,000 (US$35,300) or less. These criteria are based oncapacity to repay loans and prevailing costs of land and housingdevelopment.
3.20 Agreement has been reached with the participating banks that(a) they will maintain appropriate records of all sub-projects so thatthey can be reviewed on a sample basis by Bank supervision missions; and(b) sub-projects benefitting from sub-loans of more than US$1 M equivalentunder each participating bank will require prior review and approval bythe Bank to ascertain that all analyses have been properly performed. Itis expected that between 25 and 30 sub-projects per year will be reviewed.
3.21 Studies for MoH. As mentioned earlier, a diagnostic type ofstudy is being carried out in MoH on procedures affecting housingconstruction (para. 2.15) . This effort will be followed by detailedstudies (estimated cost US$2.5 M, Bank financing US$2.0 M) to examine:
(a) the housing finance sector;
(b) the level and distribution of land/housing subsidies andtaxation;
(c) the land delivery process and market performance;
(d) the collection of housing sector information; and
(e) the socio-economic impact (on males as well as females) ofrehousing.
The studies will require about 180 man-months of expertise; ICC will giveguidance to the consultants (para. 2.31). Annex 10 presents the Terms ofReference (ToR) for the study dealing with items (a) and (b), Annex il
- 17 -
gives the ToR for the study pertaining to items (c) and (d) and Annex 12
presents the ToR for the study dealing with (e).
3.22 As indicated in Annex 12, the study of the socio-economic
impact of rehousing consists of three phases, i.e. phase 1 consisting of
interviews with squatter families prior to their rehousing, phase 2
consisting of interviews with squatter families after their arrival on the
serviced lots, and phase 3 consisting of interviews with squatter families
about two years after their arrival. The study will encompass four sub-
projects of the land development component and will start with Yasmine 2.
Agreement has been reached with Government that (a) the recommendations
formulated after the above mentioned phases 1 and 2 for Yasmine 2, will be
discussed with the Bank and the agreed recommendations implemented in
subsequent sub-projects of the land development component; and (b) all
resettlement activities under this Project will be carried out on the
basis of the principles summarized in the HSDL (Annex 1).
3.23 Technical Assistance. TA will be provided to SNEC (estimated
cost US$0.6 M, Bank financing US$0.5 M) and CIH (estimated costs US$0.6 M,
Bank financing US$0.5 M) to improve their data processing and management
systems. The TA is estimated at about 85 man-months and will be primarily
directed towards enabling their data processing systems to generate
monitoring documents for each operation, and making the existing
accounting and budget systems compatible. In the case of SNEC, the TA
component also includes US$50,000 for the supply of computer hardware and
software, as well as a small amount for training, e.g., the launching of
a proecurement/disbursement seminar at the beginning of project
implementation. Annexes 13 and 14 present ToR for the TA for SNEC and
CIH, respectively.
D. Proiect Costs and Financinq ArranQements
3.24 Cost Estimates. The total cost of the project including taxes
and contingencies is estimated at about DH 2,569.15 M (US$321.52 M), of
which US$102.75 M or approximately 32 percent represents the foreign
exchange component. Taxes and duties are approximately DH 255.77 M
(US$30.09 M) or 9 percent of total project cost. Table 3.2 presents
local, foreign and total cost estimates by project component. The base
cost estimates are in July 1992 prices. Annex 15 presents taxes for each
project component together with the share of Bank, Governiment, CIH and
private sector banks' financing.
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Table 3.2: Proiect Cost Estimates
(DH Mittion) (US$ million)
2 %X Total
X Totalforeign Base Foreign BaseLocal Foreign Total Exchange Costs Local Foreign Total Exchange Costst. Investment CostsA. Land Devetopuent
1. Land Acquisition 323.51 - 323.51 - 13 38.06 - 38.06 - 132. Civit Works 386.33 257.38 643.71 40 35 45.45 30.28 75.73 40 353. Design Consultancies 76. 75 19.21 95.96 20 4 9.03 2.26 11.29 20 44. Other Costs 234.00 41.23 275.23 15 1 27.53 4.85 32.38 15 tSubtotat Land Devetopment 1020.59 317.82 1338.41 24 53 120.07 37.39 157.46 24 53B. Loans to private devetopers1. Throuah CIH 447.68 Z98.45 746.13 40 28 52.67 35.11 87.78 40 282. Through Private Sector Banks 271.93 181.29 453.22 40 18 31.99 21.33 53.32 40 18Subtotat Loens to private devetopers 719.61 479.74 1,199.35 40 46 84.66 56.44 141.10 40 46C. Technicat AssistanceTo SNEC 1.31 3.93 5.24 75 - 0.15 0.46 0.62 75 -To CIH 1.31 3.93 5.24 75 - 0.15 0.46 0.62 75 -Study for MoH 3.91 17.00 20.91 81 - 0.46 2.00 2.46 81Subtotat Technicai Assistance 6.53 24.86 31.39 79 1 0.76 2.93 3.70 79 1Total BASELINE COSTS 1,746.73 822.42 2,569.15 32 100 205.49 96.76 302.25 32 100
PhysicaL Contingencies 1/ 53.72 25.76 79.48 32 3 6.32 3.03 9.35 32 3Price Contingencies 59.16 25.16 84.32 30 5 6.96 2.96 9.92 30 3Total PROJECT COSTS 1,859.61 873.34 2,732.95 33 108 218.77 102.75 321.52 33 106
1/ Applied to consultants for studies and tand deveLopment component excluding costs of (and.
3..25 Estimated costs for civil works are based on engineering studies andare derived from prices for similar construction works. The costs of communallyand publicly owned land are based on prices negotiated between MoH and therelevant owners (Collectivités, municipalités, and Services des Domaines) . Thecost of privately owned land is based on estimates made by "Commissionsd'Evaluation" established by the Service des Domaines. Estimated costs forconstruction materials, equipment and vehicles are based on recent quotationsfrom suppliers and, where necessary, have been adjusted upward to includetransportation costs. It is expected that civil works costing about DH 17 M(US$2 M) and related to SNEC's operations would start before loan signing andwould be eligible for retroactive financing (para. 3.40).
3.26 The cost of professional services for final design and supervisionis estimated at prevailing rates in Morocco. Professional services related tothe studies and the TA include about 180 and 95 man-months of local and foreignconsultants, respectively.
3.27 A 10 percent physical contingency has been added to the costestimates for infrastructure works, equipment, and consultant services. Physicalcontingencies do not apply to costs of land; loans to CIH and the two privatebanks have been identified on the basis of total costs. Price contingencies arebased on: (a) annual, local inflation rates of 4.0, 4.4, 5.4, 5.7, 5.2 for FY93,FY94, FY95, FY96 and FY97, respectively, and 5.3 thereafter; (b) annual, foreigninflation rates of 3.8, 1.9, 2.7 and 3.4 percent for FY93, FY94, FY95 and FY96respectively, and 3.6 percent for the period FY97-FY2001.
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3.28 Proiect Financing, The implementation of the proposed project
would be f inanced by the Government (MoH), SNEC, CIH, the two private
sector banks, sub-borrowers (i.e. private sector developers borrowing from
CIH and the private sector banks), and the Bank (Table 3.3) . It would
involve four separate loans: one to GoM for US$66 M, one to CIH for US$40
M, and two loans to the private sector banks for US$12 M each. GoM will
use the loan proceeds to finance the preparation of serviced lots by SNEC,
the MoH studies and SNEC's TA. CIH and the private sector banks will use
the proceeds to finance the development/construction of lots/housing for
low-income families; a small portion of the loan to CIH (US$0.5 M) will
also be used for TA. All loans will be made on standard Bank terms and
conditions for Morocco: 20 years, maturity, including 5 years of grace,
and a variable interest rate.
Table 3.3: Financinq Plan
(US$ million)_____________________
Local Foreign Total
IBRD 27.25 102.75 130.00
SNEC 113.44 0.00 113.46
CIH 21.94 0.00 21.94
MoH 0.46 0.00 0.46
Private Banks 13.33 0.00 13.33
Sub-borrowers 42.33 0.00 42.33
Total 218.77 102.75 321.52
3.29 The disbursement percentage of expenditures for civil works
(para. 3.38) is based on the assumption that for each SNEC sub-project,
the Bank financed portion will not exceed the lowest of two thresholds:
(a) 75 percent of total costs excluding costs of land, financing and
taxes; and (b) total costs multiplied by the ratio total area of lots
designated for squatter and low-income families, over total area of all
lots to be sold. The first threshold normally applies to Bank financed
projects in Morocco; the second one is introduced so that Bank funds will
be used for the financing of lots intended for squatter and low-income
families. About 30 percent of the identified sub-projects is expected to
belong to the second category. Aareement has been reached with CIH, SGMB,
and Wafabank that they will: (a) on-lend the proceeds of their Bank loans
to private sector land/housing developers at market determined interest
rates; and (b) credit repayments to a special account to be used again for
housing for low-income families during the implementation period of the
project. In addition, agreement has been reached with the Government that
it will on-lend part of the proceeds of the Bank loan to SNEC at a fixed
rate of 12.5 percent (in line with the market determined interest rate)
and a maturity of 10 years, including 5 years of grace and that it would
bear the foreign exchange risk. GoM plans to use the repayments of SNEC's
loan for further land development activities for squatter and low-income
families.
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E. Proiect Imiplementation and Coordination
3.30 The arrangements for project implementation and coordinationare the result of experience gained from previous Bank financed projectsin Morocco (Annex 2). Specifically, MoH would be responsible for theimplementation of its studies, SNEC for the implementation of its TAcomponent, CIH, SGMB and Wafabank for loans to private sectordevelopers/contractors, and CIH for the implementation of its TAcomponent. SNEC would also be responsible for the implementation of theland development component, including: (a) all procurement anddisbursement requirements; (b) implementation of appropriate constructionstandards and selection criteria; (c) marketing of residential andcommercial/industrial sites; (d) transferring, at cost, the land forcommunity facilities to the relevant ministerial departments; and (e)transferring responsibility for maintenance and operation of theinfrastructure networks to the municipalities. SNEC may engage ERAC staffas consultants to do such technical work as engineering and quantitysurveys. SNEC would create a project management cell, staffed by at leasta construction management specialist and an accountant, to coordinate andsupervise the implementation of the land development component, to ensurethat procurement is in accordance with the Bank's requirements, to processdisbursement applications and to prepare semi-annual progress reports.Agreement has been reached with Government that it will carry out theprogram outlined in the HSDL, update the program during the month ofSeptember of each year, as agreed with the Bank on the basis of acceptableindicators, and undertake a mid-term review of progress on carrying outthis program before December 31, 1996. Cross conditionality among thefour proposed loans is not required since successful implementation of theloans to the three banks does not depend on SNEC's activities or the HSDLstudies.
3.31 In order to ensure effective coordination among the agenciesinvolved in the implementation of the land development component, a LandDevelopment Coordinating Committee (LDCC) chaired by MoH's Director ofPlanning and Programming and comprising representatives of the MoI, SNEC,water and electricity distributors (Régie des Eaux et Electricité, RED),and the technical services of the cities and communes would beestablished2. The LDCC would ensure that the organizational arrangementsfor the execution of sub-projects are satisfactory, and that appropriatebudgetary allocations are planned according to schedule. The LDCC wouldconstitute the principal local counterpart for Bank supervision missions.There would also be a coordinating committee at the local level in eachcity. This committee would include representatives of each Governmentagency and the municipal departments involved in the implementation ofsub-projects. It would be chaired by the Governor.
2/ The post evaluation report mentioned in para. 2.31 indicatedthat such a coordinating committee was instrumental in thesmooth implementation of a similar project.
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F. Implementation Schedule
3.32 The project implementation schedule (Annex 16) shows a
completion date of June 30, 1999. The estimated implementation time is
based on time necessary for the preparation of final designs and tender
documents, delivery times for materials and equipment, and time required
to implement the MoH studies and SNEC's and CIH's TA. The closing date
for each loan would be June 30, 2000, to permit the disbursement of the
remaining loan proceeds for eligible expenditures incurred under then-
existing contracts. SNEC, CIH, SGMB and Wafabank will each: (a) provide
the Bank with semi-annual progress reports to monitor project
implementation (commencing in or about March, 1994); and (b) prepare and
submit to the Bank within six months following the closing date of the
loan, a project completion report reviewing the planned objectives of the
project, including costs and benefits derived, and the performance and
contribution of all parties associated with the project.
G. Procurement
3.33 Loan to GoM. Contracts for works would amount to DH 815 M
(US$95 M). During project preparation the Bank reviewed the tender
procedures and contract grouping with the relevant implementing agencies.
Construction works are relatively small, labor intensive and with the
exception of those in the Casablanca and Mohamadia areas, dispersed in
remote locations and, therefore, are difficult to package for
International Competitive Bidding (ICB). The total number of contracts
will be about 97 with amounts varying from DH 0.2 M (US$0.02 M) to DH 30
M (US$3.5 M). Contracts above US$5 M equivalent would be awarded in
accordance with the Bank's ICB procedures. The remainder, with an average
value of US$1.0 M, would be awarded on the basis of local competitive
bidding according to procedures acceptable to the Bank. Foreign
contractors would be allowed to bid whenever interested.
3.34 Public utilities are responsible for the construction of all
water, telecommunication and power supply facilities, and municipalities
for roads and sewerage with the exception of Casablanca where the Regie of
Casablanca is responsible for sewerage. However, for this specific
project, the following arrangements have been made:
(a) The construction of roads and sewers will be entirely SNEC's
responsibility. SNEC will employ consultants for the studies
and supervision of the works. SNEC will also undertake the
bidding procedures, including bid evaluation and contract
awards. The costs of feasibility studies and execution of
works will be eligible for Bank financing.
(b) The Regie of Casablanca and other public utility companies, as
well as Office National de l'Electricité (ONE) and Office
National de l'Eau Potable (ONEP), will remain responsible for
carrying out the feasibility studies and supervision of the
works covering mainly water supply and electricity, as they
are most suited and experienced to undertake such activities,
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and are efficient utilities. Such services will be eligiblefor Bank f inancing. The terms of reference for this work wereagreed during Negotiations. Each of these agencies wili,however, not be entitled to participate in the bids for theexecution of the works.
(c) With regard to the works in (b) above, SNEC will advertise forbidding, receive and evaluate the bids, and sign the contractwith the selected contractor. Such contracts will be eligiblefor Bank financing.
3.35 Equipment for upgrading the SNEC's efficiency at a value ofabout US$50,000 per contract comprising data processing equipment andrelated small supplies will be awarded under local shopping procedures.Prior review by the Bank of relevant bidding documents for works,including advertising procedures, bid evaluation reports, pre-qualification documents and bidders' selection reports would be carriedout for all contracts worth US$300,000 and above. Other contracts wouldbe subject to ex-post review after their execution and prior to submissionto the Bank of the firat application for withdrawal of funds. Table 3.4presents a summary of the type of procurement which could apply to goode,works and services; Annex 17 gives the schedule of contracts.
Table 3.4: Procurement Arrangements (US$ million)
Procurement Method
International LocalCompetitive ComfpetitiveBidding Bidding Other N.B.F 2/ Total
A. Land Acquisition - - - 38.06 38.06B. Civil Works 7.50 81.90 89.40(4.88) (50.06) (54.94)C. Equipment and Materiats
0.25(0.22)
D. ConsultanciesDesign Consultancies
13.10 13.10(8.34) (8.34)
Technicat Assistance 1.23 1.23
(1.00) (1.00)Studies for Ministry of Housing 2.46 2.46
(2.00) (2.00)E. Financing Costs - - - 10.31 10.31F. Other Costs
- - - 25.61 25.61G. Sub-Loans
141.10 141.10
(63.50) (63.50)Total 7.50 81.90 157.89 73.98 321.52
(4.88) (50.06) (74.84) - (130.00)1/ Figures in parentheses are the amounts financed by the Bank2/ NBF: not Bank-financed
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3.36 Loans to Private Sector Land and Housinc DeveloDers. The
lines of credit to CIH, SGMB and Wafabank will finance works, equipment,
and professional services for land and housing development. Work
contracts are emall, widely disbursed with an average value of US$0.5 M
and are not suitable for packaging. Hence, none of these contracts is
suitable for ICB. Private sector developers execute construction works
either themselves or through small contractors. In financing their sub-
projects, CIH, SGMB and Wafabank will make sure that these conform to
appropriate cost and technical standards.
3.37 MoH Studies and TA. Contracts for the MoH studies (para.
3.21) and the TA (para. 3.23) will be awarded according to the Bank's
Guidelines for the Use of Consultants. It is expected that the
consultants will be about 65 percent foreign and 35 percent local.
H. Disbursement
3.38 The disbursement schedule of the loan to the GoM (Annex 18,
Part A), which is in line with the Bank profile, is based on a realistic
estimate of the time required to implement the land development component,
since this requires more time than the implementation of studies of MoH
and TA for SNEC. Disbursements of the Bank loans would be made on the
following basis:
(a) 65 percent of expenditures for civil works;
(b) for equipment and materials 100 percent of foreign
expenditures, 100 percent of local expenditures (ex-factory
cost), and 75 percent of local expenditures for other items
locally procured;
(c) 100 percent of consultant services and TA; and
(d) 90 percent of subloans to private sector developers by CIH,
SGMB and Wafabank.
Disbursemente for contracts for works and goods valued below US$250,000
would be disbursed against statements of expenditures (SOEs). The
supporting documents would be held by the Borrower for review by Bank
supervision missions and auditors. All other disbursements would be fully
documented including contracts for consultant services for Part A.
3.39 To facilitate the timely implementation of Part A of the
project, the Borrower would establish a special account at a commercial
bank on terms and conditions acceptable to the Bank. The authorized
allocation will be US$ 3.0 M (DH 25.5 M) covering the Bank's share of 3-4
months of estimated expenditures. The special account would be
replenished at least every four months or whenever one-third of the amount
deposited has been withdrawn, whichever occurs earlier. Monthly bank
statements detailing the transactions in the special account which have
been reconciled by the Borrower would accompany all replenishment
applications.
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3.40 The disbursement schedule of the lines of credit to CIH, SGMBand Wafabank (Annex 18, Part B) is based on a conservative assessment ofthe sub-project pipelines eligible for Bank financing and the disbursementrate observed under the first and second Housing Finance projects (para.3.04). Disbursements would be made against SOEs submitted by theborrowers, who will list the sales value of lots and houses.Disbursements for building material loans would be made against certifiedSOEs. The borrowers will retain all documentation to support SOEs anddisbursement requests and will keep a record of all expenditures forreview by their auditors and Bank supervision missions. Disbursements ofUS$2.0 M for SNEC, US$4.0 M for CIH, US$1.2 M for SGMB and US$1.2 M forWafabank are eligible for retroactive financing for sub-projects alreadyappraised by the banks.
I. Accounts and Audits
3.41 Agreement has been reached with SNEC, CIH, SGMB and Wafabankthat each of them will furnish the Bank with separate, annual project andorganization accounts audited by independent, external auditors acceptableto the Bank and including auditor's separate opinion on the expenditureswhich were claimed under SOEs, within six months after the end of eachfiscal year. GOM will also furnish audited accounts to the Bank within 6months after the end of each fiscal year.
J. Supervision
3.42 Two supervision missions per year during the approximate sixyears of implementation would suffice to supervise all activities. Themissions would be staffed by an economist, a financial analyst, amunicipal engineer/urban planner, and a sociologist (Annex 19), and lastabout two and half weeks (including half a week at headquarters). At anaverage cost of US$2,100 per staff week and an average cost of US$8,000for travel and lodging per staff member, and taking into account that 2projects would be supervised on average during each mission, the totalcost for supervision (48 staff member missions) would be about US$510,000.
K. Environmental and Resettlement Issues
3.43 The proposed project has been reviewed and placed inenvironmental screening category B, consistent with the provisions ofOperational Directive 4.01, Annex E, "Envirornental Assessment". Theproposed project will not be subject to the preparation of anenvironmental assessment, although a socio-economic survey of resettlementis to be carried out as part of the project (para. 3.22). As noted inAnnex 5, no sub-project will be financed by the Bank unless (a) adequateand regular collection and environmentally acceptable disposal of solidwastes are provided in relocation sites in order to prevent any healthhazards for the communities concerned, and (b) a detailed resettlementplan acceptable to the Bank has been prepared for the sub-project.Designs for water supply and sewerage networks in all land developmentsub-projects have been
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checked to ensure that the levels of service correspond to acceptable Bank
standards. An overall positive environmental impact will be realized by
improving living conditions of low-income families.
3.44 A resettlement expert, who joined the appraisal mission, has
reviewed in detail the Government's resettlement policy and plans for
resettlement sub-projects (Annex 20) and approved the Government
resettlement proposal for the first two sub-projects. He concluded that
even though a few modalities of the Bank's OD on Involuntary Resettlement
are not specifically reflected (limited squatters, participation in
resettlement planning, lack of socio-economic survey), its overall goal is
largely met by Moroccan housing practice. The Government's program is
designed to improve the conditions of the squatters. In order to ensure
that the OD's objectives are met, the project includes a socio-economic
study whose primary objective is to ensure that squatters are not
impoverished as a result of their resettlement (para. 3.22). Finally, it
is of interest to note that the expert concluded that "the Bank would
have many lessons to draw, for worldwide application, from involvement in
Morocco' s programs".
IV. ORGANIZATION AND MANAGEMENT
4.01 SNEC rather than ANHI or one of the ERACs was chosen as an
implementing agency since: (a) ANHI is receiving sufficient assistance
from the US Government; (b) SNEC has more experience in housing for low-
income families than the ERACs; and (c) some of the ERACs are financially
inviable and have managerial weaknesses. All private banks in Morocco
have been given a chance to participate in the proposed project.
Initially, four banks expressed interest, but two have withdrawn on the
basis of their inability to meet the costs of supervision, create a new
department, train new staff, and introduce new risk management guidelines
and provisions. Although only a small number of banks are participating,
it is a first step toward competition among banks as developers can now
choose between three banks for financing, instead of having no choice but
to go to CIH. The Housing Finance Study (Annex 10) included in the
project will provide the information on the housing market and finances
necessary to prepare a thorough housing finance policy and strategy
leading to full and competitive private sector participation in the
housing sector in Morocco.
A. Société Nationale d'Eauipement et de Construction (SNEC)
4.02 SNEC was established in 1987 as a publicly owned corporation
to take over the program of "Fonds National d'Achat et d'Equipement des
Terrains (FNAET)" f rom MoH accounts. The ownership structure of SNEC
comprises the MoH, MoF, and MoI, as well as CIH, Caisse de Dépôts et de
Gestion (CDG), CNCA, ANHI, and four ERACs.
4.03 The Minister of Housing appoints a Director General (DG) who
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is in turn responsible for SNEC's day-to-day activities. Operating witha current staff of about 50 people (to be increased to 70 by 1993 and,ultimately, to about 100 when operating at full capacity), SNEC is dividedinto three main line departments: Technical, Commercial andAdministrative. About 30 people work in the Technical Department, 4 inthe Commercial Department, 6 in Administration, 4 in Regional offices,while the remaining 6 work in various line functions. SNEC's majoractivities revolve around 7 task managers, each with specificresponsibilities for identifying, preparing and supervising theconstruction of land development sub-projects in various regions aroundthe country (Annex 21 presents an organization chart). To enable SNEC tocarry out its programmed activities an increase in SNEC's staff to 70 isa condition of effectiveness of the GoM loan.
4.04 SNEC is well managed; managers and senior staff are generallywell trained and suitably qualified for the job. To enhance itsadministrative and operational capability, SNEC has recently installed anintegrated Management Information System which will be improved byconsultants hired under the project. To further improve its institutionalcapability, additional training in technical and financial management willalso be provided under the project.
4.05 Land Develooment Ooerations. During its first two years ofoperation (1987-89), SNEC acted almost entirely as Receiver/Manager forformer FNAET activities (an ongoing process but now less time consuming).This work entailed, inter alia: (a) an assessment of projects completed todate; (b) a determination and verification of all outstanding liabilitiesowing to either the contractors or the purchasers; and (c) completion ofconstruction activities for several of the sites. For these services SNECreceives a commission of 7 percent on all transactions that it processeson behalf of FNAET. This commission is more or less consistent withcomparable fees charged by the private sector. More recently, SNEC hasbranched out into land and housing development, not only for its ownaccount but also for those of the central and local governments.
4.06 SNEC builds on the basis of pre-sold lots, and generallyrequires a 50 percent down payment at the time the offer to purchase issigned, plus an additional 30 percent during the construction period andthe remaining 20 percent when the title is transferred. At the time ofappraisal, SNEC had about five projects under construction for its ownaccount, although none of them are as yet completed. While its trackrecord as a land developer therefore, is still relatively untested, carehas been taken to minimize the risks associated with a new institutionthrough the TA financed under the project.
4.07 Financial Performance. SNEC's summary income statements,balance sheets, and sources and applications of funds for the years FY1990-2001 are shown in Annex 22. FY 1991 was the first year that SNECused an independent auditor of international standard. Independentauditors acceptable to the Bank will be appointed on an annual basis.
4.08 SNEC's sole source of income since its inception in 1987 hasbeen the commissions it earns from its Receiver/Manager duties when ittook over FNAET. The completion of works under its Receiver/Managerundertaking and the investment costs associated with its own construction
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activities are funded through Government transfers which have averaged
about DH 13 M per month. These transfers have totaled DH 230 M (US$27 M)
as of December 31, 1991, while purchasers down payments comprised DH 26.3
M (US$3.1 M) and trade accounts payable totalled DH 23 M (US$2.7 M).
Similarly, work in progress (on its own account) totalled DH 210 M
(US$24.7 M). As at December 31, 1991, cash in bank was DH 59 M (US$6.9
M).
4.09 Preliminary financial data indicate that net operating profit
for 1993 will be DH 1.2 M (US$0.14 M), a figure which is projected to
gradually increase to DH 18.1 M (US$2.1 M) by the end of 1996. Agreement
has been reached that SNEC will submit to the Bank by June 30 of each
year, updated financial projections (income statements, balance sheets,
sources and applications of funds).
4.10 While SNEC is very liquid at this time, it operates from a
very small capital base; total paid in capital is only DH 100,000
(US$11,800). In order to enhance SNEC's credit-worthiness and financial
viability, the Government considers SNEC' s conventional FNAET advances (DH
230 M) as an interest free long-term loan which will not be repaid before
the year 2000. AQreement has been reached with SNEC and Government that
it will increase the amount of SNEC's paid in capital by DH 20 M through
annual increases of DH 4 M starting in 1994 and ending in 1998. The
annual increases will be taken from the FNAET purchasers advances.
Finally, agreement has been reached that SNEC will maintain:
(a) construction fees of not less than 7 percent of all
construction expenditures;
(b) a sales margin for lots and houses of not less than 3 percent
of the cost of producing the lots and houses;
(c) a ratio of expenses to net gross profit of not more than 80
percent for FY93, not more than 70 percent for FY94, not more
than 60 percent for FY95, and not more than 50 percent for
each fiscal year thereafter;
(d) a ratio of salaries to net gross profit of not more than 50
percent for FY93, FY94, and FY95, not more than 40 percent for
FY96, and not more than 30 percent for each fiscal year
thereafter;
(e) an income ratio of not less than 10 percent of net gross
profit;
(f) a return on capital of not less than 1 percent in FY93, not
less than 2 percent in FY94, not less than 3 percent in FY95
and not less than 4 percent in each fiscal year thereafter;
and
prepare projections of these financial targets before June 30 of each
fiscal year and if necessary take corrective actions to achieve them.
A definition of these ratios, is contained in Annex 22.
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B. Crédit Immobilier et Hôtelier (CIH)
4.11 With an operating style similar to that of a private sectorenterprise, CIH is efficient and well managed. Although GoM owned, CIH isfinancially and managerially independent of GoM intervention and operateslike a private financial institution. In view of its independence, GoMwill provide a guarantee of repayment of the Bank's loan to CIH but noperformance guarantee. Recently, CIH entered into a major expansionprogram and, during the last five years, has more than doubled its branchnetwork; increasing the number of branches from 18 in 1987 to 46 in 1992.Similarly, CIH staff increased from 550 to 1120 during the same period.While CIH mobilizes its deposits and savings through its branch network,a central department located at its head office in Casablanca sets theoperational policies. (Annex 23 presents an organizational chart).
4.12 Lendinct ODerations. In terms of aggregate lending volume, CIHis large. As shown in the financial projections of Annex 24, loansreceivable totalled DH 15,479 M (US$1,821 M) at the end of 1991 and areexpected to increase to DH 24,970 M (US$2,938 M) by the end of 1996.Housing loans (both to housing developers and individuals) are by farCIH's largest single lending activity, accounting for about 75 percent ofits total lending volume, while about 15 percent is earmarked for thetourism sector, and the remaining 10 percent for other activities. Theproposed Bank loan of US$40 M would represent about 2.5 percent of CIH'saggregate loan disbursements during the same period.
4.13 CIH's policy statement and lending criteria are clearlydefined and its portfolio supervision is rigorous. Developers (both hoteland housing), for example, are required to submit proposals detailing thetechnical, legal, financial and commercial aspects of their proposedprojects, all of which are appraised by a competent in-house team of CIHspecialists. Physical inspection of the project sites is made on aregular basis. Individual loan applicants are similarly scrutinized andcollateral guarantees (including assignment of wages) are obtained whereappropriate.
4.14 Loan Portfolio Management. As shown by Table 4.1, CIH'saggregate loan arrears (principal and interest) are within acceptableparameters, even though they increased from 3.9 percent of its portfolioin 1989 to 5.6 percent by the end of 1991. It is noteworthy that morethan two-thirds of the 1991 arrears arose from loans made to the tourismsector, an economic activity which was particularly hard-hit by recentinternational events. Housing arrears, on the other hand, are verymoderate--only about 1.1 percent of the total housing loan portfolio is inarrears. Moreover, as an added protection, CIH has increased itsprovision for bad debts to 78 percent of its total arrears.
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Table 4.1: CIH: Loans in Arrears of Principal and interest
As at December 31
1987 1988 1989 1990 1991
Total Portfolio Arrears:
Housing 59.1 73.8 91.0 91.0 91.0
Hotel and Tourism 192.7 218.0 201.0 266.0 438.0
Commercial 42.2 49.0 48.0 93.0 109.0
Total Arrears 299.0 340.8 340.0 450.0 638.0
As a % of Total Loans 5.1% 4.8% 3.99 4.3% 5.6%
Housing Loans Arrears:
As t of Total Arrears 19.8% 21.7% 26.7% 20.0% 14.0%
As % of Housing Loans 1.8% 1.9% 1.6% 1.2% 1.1%
Provision for Arrears:
in DH Millions 157.0 196.2 215.0 327.0 458.0
As % of Arrears 52.5% 57.6% 63.2% 72.6% 77.8%
4.15 Financial Performance. CIH has been, and continues to be,
profitable. As shown in the financial projections of Annex 24, net
operating profit (before reserve allocations) increased from DH 130 M
(US$15 M) in 1989 to DH 167 M (US$20 M) in 1990. Preliminary financial
data indicate that net operating profit for 1991 was DH 185 M (US$22 M),
a figure which will gradually increase to DH 503 M <US$59 M) by the end of
1996. In line with its recent expansion program, CIH has almost doubled
its asset base during the last three years, increasing from US$1.16 B in
July of 1989 to US$2.02 B by the end of 1991.
4.16 As shown in Table 4.2, CIH is in compliance with Bank
financial covenants on an earlier loan (3121-MOR) . Acareement has been
reached that the covenants for the proposed loan will be those as shown in
Table 4.2 (i.e. an extension of the covenants for the existing Second
Housing Finance Project), including the appointment of independent
external auditors acceptable to the Bank.
C. Private Banks
4.17 SGMB is the 5th largest private commercial bank in Morocco
with 51 percent of its capital owned by Moroccan investors. The remaining
49 percent of the capital is held by foreign banks, the largest portion of
which by Société Générale-France (36 percent).
4.18 At the end of 1991 SGMB had a staff of 1,374 of which 411 are
in its headquarters in Casablanca. SGMB's management is highly competent
and is regularly assisted by Société Générale-France in the design as well
as the implementation of it's operations. SGMB has two subsidiaries, one
for industrial investments and the other for leasing activities. Its
network, at the end of 1991 was about 90 branches; housing finance
activity has heretofore been mainly targeted to upper-middle and high-
income clients. Operations regarding housing finance activity are dealt
with at the department and branch levels.
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Table: 4.2 CIH: Comxliance with IBRD Financial CovenantsAs at December 31
- Actual - ---------- Projected ----------
1990 ~21991 1992 1993 1994 1995 1996Interest Rate Spread
Covenanted not < than 2.2'< 2.2% 2.2% 2.2% 2.2% 2.2% 2.2%Actual/Forecast 2.2% 2.5% 2.9% 3 3. 3.3% 3.4% 3.5%
Operation Expenses as a% of Total Assets:
Covenanted not > than 1.3* 1.3* 1.3% 1.3* 1.3% 1.3% 1.3%Actual/Forecast 1.0% 1.0* 1.0* 1.0% 1.1% 1.1% 1.2%
Current Assets to Sight Deposits:Covenanted > than 1:5 1:5 1:5 1:5 1:5 1:5 1:5Actual/Forecast 1:4 1:4 1:3 1:3 1:3 1:3 1:3Equity to Total Assets:Covenanted not > than 1:18 1:18 1:18 1:18 1:18 1:18 1:18Actual/Forecast 1:14 1:15 1:15 1:15 1:15 1:12 1:12
4.19 SGCM total assets amount to DH 10.1 B (of which DH 2.3 B areloans) as of December 31, 1992 compared to DH 5.7 B (of which loans wereDH 5.4 B) at the same date in 1987. Although SGMB has the lowest share oflending to the public sector of all the private commercial banks, itslending is diversified among many activities in the private sector.
4.20 Annex 25 shows SGMB's financial statements for the 1987-1992period and forecasts for years 1993 to 1996. Key financial indicators arepresented in Table 4.3.
Table43: SGMB kev financial indicators(DH billion)
1987 1988 1989 1990 1991 1992
Total Assets 5.7 5.7 6.9 7.7 9.2 10.1Equity 0.3 0.3 0.4 0.7 0.8 0.9Equity to Total Assets % 5.0 0.5 6.0 9.0 9.0 9.0Total Loans 2.3 2.6 3.3 3.3 4.6 5.4
of which Medium & LT 0.4 0.6 0.6 0.9 1.1 1.4Doubtful 0.1 0.1 0.2 0.1 0.3 0.2Provision 0.1 0.1 0.1 0.1 0.2 0.2
Net Profit to Equity % 24.0 21.0 21.0 15.0 14.0 14.0
4.21 SGMB's profitability is fully satisfactory. The 1992 netincome is DH 130.0 M representing about 14 percent of total equity.Capital adequacy has improved substantially since 1990, as capitalincreased from DH 130.0 M to DH 520.0 M in 1991. As is the case for othercommercial banks, SGMB lacks long term financing.
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4.22 Wafabank is the 4th largest private commercial bank with the
majority shareholding (about 50 percent) held by the Kettani group which
represents the second largest industrial and financial group in Morocco.
Suez-Paris Bank is Wafabank's foreign partner holding about 18 percent of
its shares.
4.23 Wafabank has a competent management staff and is an efficient
organization with several subsidiaries operating in different financial
sectors varying from insurance to leasing activities, as well as "Wafa
Immobilier" specializing in housing finance. As of December 31, 1991,
Wafabank had a staff of about 1,500 and a network of about 100 branches
with foreign representations in France, Algeria, Germany, Belgium, United
Arab Emirates and the Netherlands to attract savings from Moroccans
working abroad.
4.24 Between 1987 and 1992 Wafabank's activity has expanded
rapidly. Total assets have increased from DH 6.8 B (of which loans were
DH 2.6 B) in 1987 to DH 13.5 B (of which loans are DH 6.6 B) in 1992. The
financing of exports, a major source of growth in the Moroccan economy,
has been the main reason for Wafabank's rapid lending and commercial
development in recent years. Wafabank's strategy is to concentrate its
lending and other commercial activities in large enterprises. Wafabank is
also getting into housing finance (para. 4.23) so far mainly for upper-
middle to high-income clients.
4.25 Wafabank's financial statements for the last six years 1987-
1992, together with the forecasts for 1993 to 1996 are shown in Annex 26.
Key financial indicators are presented in Table 4.4.
Table 4.4: Wafabank Key Financial Indicators(DH billion)
1987 1988 1989 1990 1991 1992
Total Assets 6.8 7.9 8.3 9.9 12.2 13.5
Equity 0.4 0.4 0.5 0.6 0.7 1.1
Equity to Total Assets t 6.0 0.5 6.0 6.0 0.6 8.0
Total Loans 2.6 2.9 3.3 3.9 5.9 6.6
of which Medium & LT 0.4 0.5 0.7 0.8 1.0 1.5
Doubtful 0.2 0.2 0.1 0.2 0.3 0.4
Provision 0.2 0.2 0.1 0.1 0.2 0.2
Net Profit to Equity % 21.0 19.0 16.0 16.0 16.0 13.0
4.26 As can be seen in Table 4.4, Wafabank is a profitable
institution. Its net profits have increased steadily from DH 73 M in 1987
to DH 134 M in 1992. Wafabank has also increased its level of internal
resources by more than tripling its capital in 1992. The only weakness in
its financial structure is lack of long-term financing as this is
difficult to obtain in Morocco.
4.27 The financial viability of SGMB and Wafabank is sound. During
the last two years, CB has issued strict regulations for the financial
sector and introduced new requirements to strengthen banks' (including
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CIH) capital structures and make them exercise more discipline in managingtheir operations.
4.28 Both SGMB and Wafabank have little experience in dealing withfinancing low-income families that usually benefit from governmentprograms. However, the two banks are now interested in extending theirservices to low-income families on a pilot basis.
4.29 SGMB's and Wafabank's low-income clientele have access to thesame subsidized loans as CIH's low-income clientele does. Under existingprudential regulations both banks are required to (a) maintain a ratio ofequity to risk-weighted assets equal to or greater than 8 percent; and (b)limit their exposure to any group of clients to 7 percent of equity.Agreement was reached that the banks will continue to carry out theiroperations in accordance with these regulations.
V. PROJECT JUSTIFICATION AND RISKS
A. Proiect Benefits
5.01 Direct economic benefits would mostly materialize in the formof increased land values in beneficiary areas. An analysis of landdevelopment sub-projects similar to the ones included in the proposedproject and carried out in Rabat, Khouribga, and Fes shows that during thefirst year after completion of such a sub-project, land values increasedby 10 to 25 percent and thereafter by 5 to 10 percent annually.
5.02 The quantification of benefits through imputed incrementalbenefits ignores other important, but difficult to quantify benefits,e.g., the avoidance of productivity losses in the local labor force due tothe social and educational impoverishment of the youth in squatter areas.In addition, housing conditions in shanty towns present serious healthhazards because of the lack of proper sanitation facilities and watersupply. Finally it is expected that consistent with similar landdevelopment sub-projects there will be a significant contribution toemployment generation among the poor through increased activity in theconstruction industry, handicraft industry, and local commerce.
5.03 The following costs were included to compute the economic rateof return (ERR) of land development sub-projects: (a) land and sitedevelopment, including site preparation and on-site infrastructure; (b)the share of off-site infrastructure allocatable to the sites; (c)physical contingencies; and (d) administration and supervision. Theeconomic analysis was done on the basis of domestic market prices and aproject life of 10 years. Assuming that land values would increase by 10percent during the first year after project completion and 5 percentthereafter, the ERRs of a sample of 7 sub-projects were computed; theyrange from 29 to 48 percent. Assuming only one percentage increases inland values (10 percent during the first year after project completion),which is rather conservative, results in a range of ERRs from 15 to 40percent.
- 33 -
5.04 The lines of credit to CIH, SGMB and Wafabank for loans to
private sector land and housing developers is for the provision of
serviced lots and houses for low-income families. The ERRs computed for
a sample of 10 houses financed with such loans under the Second Housing
Finance Loan range from 15 to 20 percent. It is expected that the ERRs of
housing sub-projects to be financed under the proposed loan will be in the
same range. Assuming that about half of the above mentioned lines of
credit would be used for the construction of houses and the other half for
the development of serviced lots, results in an overall ERR of the
proposed project of 27 percent under the conservative assumption of
increased land values (para. 5.03) and an ERR of 36 percent under the more
optimistic assumption of increased land values. Both of these values are
well above the prevailing opportunity cost of capital in Morocco (10
percent).
B. Urban Povertv Imoact
5.05 The proposed project is primarily designed to meet the shelter
needs of squatter and low-income families. The land development component
is expected to directly benefit about 2,800 squatter households who will
be resettled and 9,150 low-income households as owner-occupants of
serviced lots. In addition, private investment in these and other
residential lots to be made available under this component is expected to
produce another 35,220 low-income dwelling units for tenancy or sale.
Assuming that about half of the above mentioned lines of credit would be
used for the construction of houses results in about 5,200 low-income
families receiving serviced lots and 2,300 low-income families receiving
a dwelling.
C. Proiect Risks
5.06 There is often a danger that the pressures of increased demand
resulting from a shortage of housing could lead to higher-income groups
obtaining the serviced lots targeted for the low-income population and
squatters. Under the proposed project this risk has been reduced by the
implementation of strict procedures for selecting beneficiaries.
Moreover, the small sizes of lots intended for low-income families reduce
the attractiveness ta higher-income groups, while enhancing affordability
to the poor.
5.07 A second risk is related to the financial viability of SNEC.
The profitability of its operations may be limited due to rising costs of
land. This risk would be minimized through effective project supervision
to ensure compliance with the financial covenants described in Chapter IV.
A third risk pertains to possible delays in the implementation of sector
reforms. The HSDL, signed by the Minister of Housing, minimizes this risk
by giving specific dates for implementing the recommendations of the
studies to be undertaken in the proposed project.
D. Cost Recovery
5.08 Replicability is a major overall objective of the proposed
project. In order to achieve full cost recovery while at the same time
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ensuring that the proposed facilities are affordable to the greatestnumber of families (particularly squatter and low-income households),layouts of infrastructure and lot sizes proposed by the Government havebeen revised and reduced during Bank preparation missions. The costs ofthe proposed project would be directly recovered through charges paid bythe individual beneficiaries. Annex 27 presents cost recovery sources foreach item of the proposed project.
VI. AGREEMENTS REACHED AND RECOMMENDATION
6.01 Conditions of loan effectiveness of the loan to GoM are:
(a) establishment of an ICC to enhance the coordination among MoH,MoF and MoI (para. 2.29); and
(b) an increase in SNEC's staff to 70 (para. 4.03);
6.02 In addition to the standard agreements reached duringnegotiations, agreement has been reached with:
(a) Goverrnent that the recommendations arising from the MoH study onthe process of development of the housing sector and an action planfor their implementation, will be presented to the Bank for reviewby December 31, 1993 (para. 2.15);
(b) SNEC on the selection criteria to be applied to the identified sub-projects (paras. 3.07 and 3.14);
(c) CIH, SGMB and Wafabank that (i) they will maintain appropriaterecords of all sub-projects so that they can be reviewed on asample basis by Bank supervision missions; and (ii) sub-projectsbenefitting from construction subloans of more than US$1 Mequivalent under each participating bank will require prior reviewand approval by the Bank to ascertain that all analyses have beenproperly performed (para. 3.20);
(d) Government that (i) the recommendations formulated after completionof the first two phases of the Yasmine 2 socio-economic impactstudy, be discussed with the Bank and the agreed recommendations beimplemented in subsequent sub-projects of the land developmentcomponent; and (ii) all resettlement activities under this Projectwill be carried out on the basis of the principles summarized inthe HSDL (Annex 1; para. 3.22);
(e) CIH, SGMB, and Wafabank that they will (i) on-lend the proceeds oftheir Bank loans to private sector land/housing developers atmarket determined interest rates; (ii) credit repayments to aspecial account to be used again for housing for low-incomefamilies during the implementation period of the project (para.3.29);
(f) Government that it will on-lend part of the proceeds of the Bank
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loan to SNEC at a f ixed rate of 12.5% (in line with the market
determined interest rate) and a maturity of 10 years, including 5
years of grace and that it would bear the foreign exchange risk
(para. 3.29).
(g) Government that it will carry out the program outlined in HSDL,
update the program each year, as agreed with the Bank on the basis
of acceptable indicators, and undertake a mid-term review of
progress with carrying out this program (para. 3.30);
(h) SNEC that it will submit to the Bank by June 30 of each year,
updated financial projections (income statements, balance sheets,
sources and applications of funds); (para. 4.09);
(i) Government that it will increase the amount of SNEC's paid in
capital by DH 20 M through annual increases of DH 4 M starting in
1994 and ending in 1998 (para. 4.10)
(j) SNEC that it will maintain:
(i) construction fees of not less than 7 percent of all
construction expenditures;
(ii) a sales margin for lots and houses of not less than 3
percent of the cost of producing the lots and houses;
(iii) a ratio of expenses to net gross profit of not more than
80 percent for FY93, not more than 70 percent for FY94,
not more than 60 percent for FY95, and not more than 50
percent for each fiscal year thereafter;
(iv) a ratio of salaries to net gross profit of not more than
50 percent for FY93, FY94, and FY95, not more than 40
percent for FY96, and not more than 30 percent for each
fiscal year thereafter;
(v) an income ratio of not lese than 10 percent of net gross
profit;
(vi) a return on capital of not less than 1 percent in FY93,
not less than 2 percent in FY94, less than 3 percent in
FY95 and not less than 4 percent in each fiscal year
thereafter; and
prepare projections of these financial targets before June 30 of
each fiscal year and if necessary take corrective actions to
achieve them (para. 4.10).
(k) CIH that the financial covenants of the Second Housing Finance
Project will also apply to the proposed loan (para. 4.16); and
(1) SGMB and Wafabank that each of them will conduct its operations in
accordance with prudential regulations issued by GON which include:
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(i) maintaining a ratio of equity to risk-weighted assetsequal to or greater than 8 percent; and
(ii) limiting SGMB and Wafabank's exposure to any group ofclients to 7 percent of equity (para. 4.29).
6.04 Given the above agreements, the project is suitable for aBank loan of US$66 M to GoM, and loans of US$40 M to CIH, US$12 M toSGMB and US$12 M to Wafabank, with the guarantee of GoM with terms of 20years, including five-year grace periods.
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Page 1 of 3
KINGDOM OF MOROCCO
STAFF APPRAISAL REPORT
LAND DEVELOPMENT PROJECT FOR LOW-INCOME FAMILIES
Housinq Sector DeveloDment Letter
Nr. Lewis T. Preston, President
International Bank for Reconstruction and Development
1818 H Street, N.W.
Washington, D.C. 20433
USA
Dear Mr. Preston:
Re: Land Development Project for
Low-Income Families
We would like to thank you for your organization'e assistance in
defining the actions to be taken by the Moroccan Goverrnent to improve our
housing sector.
From the social point of view, the principal adjustments as defined by
the Ministry of Housing, that need to be made in order to improve the sector are
the following :
- reabsorption of squatter areas;
- provision of infrastructure in inadequately serviced
neighborhoods;- rehabilitation of old infrastructure and buildings in medinas;
- provision of serviced lots in rural areas;
- encouragement of private sector developers.
The Ministry of Housing has thus taken a number of steps to satisfy the
demand for housing, particularly on the part of people living in squatter areas
and inadequately serviced neighborhoods. Our experience shows that, given
limited available f inancial resources, the provision of sites and services is the
best way of helping low-income families. This method, which encourages the
participation of private capital, enables the Goverrment to assist the largest
number of poor people with the restricted budget.
In addition, internal cross-subsidies through differential pricing of
lots is the major center piece of the land development program. In fact, there
are three categories of people to whom serviced lots are sold: squatters, to whom
lots are sold below cost, people with an average income to whom lots are sold at
prices equal to or higher than the cost, and people with an above average income
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Page 2 of 3
to whom lots are sold at prices well above the cost. In the aggregate, we tryto match total revenues to total costs for each sub-project; however, this ie notalways possible, in which case the Government subsidizes the difference.
Our efforts have resulted in a significant reduction of squatterpopulation; in 1982 this population represented 13 percent of the urbanpopulation, while in 1992 this percentage amounted to 6.8 percent. The 1992survey of squatter areas revealed that 160,000 households are still living assquatters. The program presently under implementation targets 95,000 of thesehouseholds while potential solutions are being identified and studied for theremaining 65,000.
A number of major actions have already been undertaken with regard tothe financial sector (which will serve as the basis for improvements in housingfinance), the productivity of the housing stock, and the coordination oforganizations involved in the housing sector. These actions are brieflydescribed below.
The financial sector
During the 1980's and the beginning of the 1990's the Governmentintroduced reforms pertaining to the following items in the financial sector:
- a more rigorous definition of equity requirements for banks;- liberalization of the banking system;- deregulation of the credit system; and- strengthening of banking supervision (independent external
audits).
In addition, to encourage private banks to make loans to private land and housingdevelopers, the Government has made possible for these banks to participate inthe Government's foreign exchange risk scheme.
Productivity of the Housing Stock
To improve relations between landlords and tenants, two draft laws wereapproved by the "Conseil du Gouvernement" in July 1992. These are expected toimprove the productivity of the existing housing stock.
Strengthening Coordination among the Concerned Parties.
A technical committee with representatives from the concerned partieswill be established to assist the consultants *who will be carrying out studiesfor the Ministry of Housing and to implement the studies' recommendations.Although the Ministry of Housing has extensive experience in housing squatters,it is necessary to launch the atudies described in Attachment 2 to this letter.The studies deal with housing strategies and, where necessary, will reformulatehousing policy. They will also provide indicators by which progresa in thehousing sector will be measured. The studies are:
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ANNEX 1
Page 3 of 3
1. Land Delivery
The ultimate objective of this study is to collect statistical data of
the housing sector in order to rationalize the preparation of lots.
2.Housing Finance
This study vill explore the possibilities for improving and expanding
housing finance. The improvement of access to mortgage loans and an evaluation
of the housing subsidy policy are the principal components of the study.
3.Impact of Squatter Resettlement
This study vill analyze the socio-economic impact of squatter
resettlement and the targeting of the beneficiary population.
In viev of the importance of the studies, we propose to examine vith
the Bank the utudiea' recommendations as well as their objectives and
implementation plans as described in Attachment 2. The timing indicated in these
plane vill enable us to define concrete action plans vell before a mid-term
review of the proposed project.
Sincerely yours,
Abderrahmane Boufettas.
Minister of Housing,The Kingdom of Morocco.
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ATTACHMENT 1Page 1 of 2
SYNTHESIS OF THE BASIC PRINCIPLESFOR LAUNCHING SLUM DWELLERS' RESETTLEMENT
IN THE KINGDOM OF MOROCCO
This paper describes the principles and procedures followed by theGovernment in the resettlement of slum dwellers. In case of emergencies suchas landslides and storms, these procedures may be adopted to local conditions.
I. IDENTIFICATION
A. Slum Dwellers
The identification of slum dwellers is obtained by a survey ofzribas and households occupying slum areas (illegal owners or slum dwellers).This census is taken by local authorities with the help of the communesinvolved and technical assistance from the Ministry of Housing (MoH).
B. Lang
Land is identified and developed by MoH's delegations incollaboration with local authorities of the Ministry of Interior and electedrepresentatives of the concerned communities. The resettlement is based onthe principles of an operation whose objectives are to enhance the integrationof various social segments and to satisfy the minimal conditions for anhomogenous urban unit. The operation, which is carried out in accordance withurban regulations in effect, takes place near former alum areas, providedphysical constraints, such as potentially dangerous land alides, do not exist.
C. A Resettlement Proiect
Such a project comprises a variety of lots (low-cost housing,individual houses, multiple-occupancy buildings, businesses, resettlementhousing, and public facilities). Cross-subsidization through differentialpricing of lots enables the sale of lots to former slum dwellers below cost.The financial feasibility of this system is based on the principle ofmaximizing cross-subsidization on a project-by-project basis in order tominimize state's subsidies.
II. LOT ASSIGNMENT
Lots are assigned to heads of householda included in the above-mentioned survey with no discrimination with regard to social statue, age orsex. The assignment usually consiste of one lot to each surveyed householdand sometimes two householda per lot.
A. Price and Payment bv Slum Dwellers
The price of lots for slum dwellers depends upon the financialpackage of each project, but usually the lots are sold at a price well below
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ATTACHNENT 1Page 2 of 2
the actual cost (the difference is covered by the above-mentioned cross-
subsidies or, where needed, by State subsidies).
Payment for lots by slum dwellers is done in a minimum of three
successive installments. The delivery of the lots, accompanied with housing
plans and a building permit, takes place when the total payment has been made.
Delivery of lots takes place simultaneously with the moving of
usable building materials from the squatter areas to the new site, and clean-
up of the former site.
The resettlement policy is based on the principles of self-
construction adapted to the slum dwellers' financial capacity over time.
B. Technical follow-uD
With the help of architects and engineers who monitor the
technical aspects, technical assistance for self-construction is provided by
the project operator. At the end of construction, local authorities remit
occupancy permits to the beneficiaries.
The sale of a lot by the intended beneficiary is strictly
forbidden before his/her occupancy. However, beneficiary households are
authorized to unite with non-slum dwellers to construct dwellings together
when the former intend to occupy one floor and the latter another floor of the
dwelling.
The land title is delivered to the initial beneficiary of the lot
(or co-jointly if a lot is assigned to two beneficiaries) only after the
resettlement operation has been completed.
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Attachment 2Page 1 of 7
ESTABLISHMENT 0F A FUTURE STRATEGY
This attachment gives the objectives and implementation plans of thesix components of the studies mentioned in the Appraisal Report.
1. Reculations affect the type, timing, location and the cost of newserviced lots and housing for both the private and public sectors. The emphasisvill be to reform the physical regulations which distort the incentivea tosuppliers and buyers.
1.1 Obiectives:
(a) to facilitate production of housing;
(b) to facilitate competitive input markets (land, finance,construction); and
(c) to encourage efficient use of existing serviced land and housing.1.2 Implementation Plan:
(a) MoH will undertake a review of the urban residential regulatoryframework to assess each major housing-related regulation in termsof:
(i) the intended purpose of the regulation;(ii) the value and the costs and benefits of each regulation; and(iii) the distribution of benefits and costa.
This review will commence in January 1994 and vill be completed inJanuary, 1995.
(b) A program to reform housing regulations vill be established in July1995 and vill seek to:
Ci) reduce the cost of regulation;(ii) increase flexibility by moving to performance regulationsrather than physical regulations; and(iii) rationalize incentives created by the various rogulations.
(c) The priority areas for regulatory reform are:
(i> liberalization of direct controls on the allocation of nevserviced lots and housing;(ii) increased competition in the construction and landdevelopment industries and encouragement of a diversifiedsupply; and(iii) greater reliance on indirect regulation such as taxation toimprove sector efficiency.
- 43 -
Attachment 2Page 2 of 7
2. The Land SuDolv Svstem is the most critical constraint on the
housing market and likely the leading cause of high prices of serviced lots
and houses. The strategy for policy development is to increase the reliance
on market forces in identifying and allocating land for residential
development.
2.1 Obiectives.
(a) to create a responsive Supply of land for residential use which
implies a "market" for undeveloped and developed new residential
land: a "market" requires:
(i) competition among developers (private and public); and
(ii) competition among land sellers.
(b) to open urban perimeters of major cities to increase the effective
supply of land for potential urban use;
(c) to reduce, over time, the ratio between the price of residential
and rural land at the periphery of cities; and
Id) to increase the spatial efficiency of major cities through the use
of market land price differentials reflecting locational
advantages.
2.2 ImDlementation Plan:
(a) A review will be undertaken of the legal and regulatory framework
which governs the conversion of raw land into residential plots
and which determines the floor space which could be built on it;
the review would include:
(i> the quantification of the main legal and regulatory
parameters governing land supply;
(ii) locational analysis of the supply of land in major cities;
(iii) a projection of the area of land for which conversion permit
will be granted for the next 10 years for the major cities
of the country; and
(iv) an estimate of the effect of the new land supply on
densities and land prices.
This review will commence in January 1994 and will be completed in
January 1995.
(b) A program of reform for land regulation will be established in
July 1995 and will aim at:
(i) increasing the amount of residential land and floor space
put on the market in urban areas;
(ii) increasing competition among land owners and public and
private developers; and
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Attachment 2Page 3 of 7
(iii) decentralizing and streamlining the decision-making processconcerning land conversion and site planning.
(c) The priority for specific reforms will include the creation of newregulatory tools concerning land development, in particular:
(i) introduction of a new zoning statue for "potential"residential land which would become a pool of land withinwhich re-zoning would be automatic once infrastructure hasbeen provided;
(ii) assessment of constraints on the formation of existingassociations such as cooperatives and the possible promotionof new forma of associations which vould, amongst others,facilitate the purchase of land needed to developresidential areas; and
(iii) redefinition of administrative role for land planning givingmore responsibilities to local authorities.
3. Pertinent housina sector information, such as Government policies andintentions, housing production, and housing finance, is all central to privatesector calculations. At present, there exist important gaps in the informationcollected and published about Morocco's housing market either by the Governmentor private firms. Specifically, there is a lack of information at the locallevel, which is the one most useful for the private sector.
3.1 Obiectives:
(a) to assess the housing information needs on the part of privatemarket participants;
(b) to develop a method which will provide access to more reliable,consistent and timely information on which private marketparticipants can base their decisions,; and
(c) to induce the private sector to produce information about thehousing market on a self-financing basis.
3.2 Implementation Plan:
(a) A review of available information about the housing market,including determination of where this information is deficient orredundant, will be carried out. Key issues to be addressed are:
(i) What types of information is currently being collected andpublished about Morocco'e housing market?
(ii) How accurate, timely and consistent is the informationcurrently available about market conditions? How can it beimproved?
(iii) What gape or overlapB of information about the housingmarket exist?
(iv) How is the existing information currently being used, and
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Attachment 2Page 4 of 7
how will additional information likely be used, and by whom?
(v) Who is currently collecting and publishing the existing
information? What are the respective roles of the
Government, industry groups, trade organizations, financial
institutions private firms and others in this process?
Regarding future information to be collected and
disseminated, how could this burden be shared by the private
sector?(vi) Is information available at a desegregated level and by
geographic location? If so, what types of information, who
collects it, and how often is it disseminated?
This review will commence in January 1994 and will be completed in July
1995.
(b) By October 1, 1994 MoH will develop an outline of the issues
involved, and will organize a meeting of all the parties (e.g.,
bankers, developers, and Government agencies) to analyze the
outline, and set an agenda for further analysis with the following
objectives:
(i) to determine the information needs of private sector
decision makers, which has a value that the users are
willing to pay for and a cost that makes it worthy to
produce;(ii) to establish the extent to which this information should
be
collected by private information companies, associations of
entrepreneurs, and/or the Government;
(iii) to set common definitions and guidelines so as to make the
information produced by different parties or in different
regions comparable; and
(iv) to integrate a data bank available to all parties, with
present information that is accurate and timely by April 1,
1995.
(c) The priority areas for the collection of pertinent housing
information are:
(i) the establishment of priorities for collecting and
publishing information;
(ii) the method of collecting data,
(iii) survey design and data collecting procedures;
(iv) data processing and analysis;
(v) institutional arrangements for creating and using
information; and
(vi) cost of alternative approaches.
4. The Housinq Finance Sector is dominated by Credit Immobilier et
Hôtelier (CIH), a public sector specialized housing bank which has been in the
business since 1968. The Government'e strategy is to encourage private sector
banks to participate in the housing finance sector, in particular mortgage loans.
- 46 -
Attachment__Page 5 of 7
4.1 Obiectives:
(a) to make access to medium- and long-term financing easier availablein the housing Bector;
(b) to establish a diversity of f inancial credit and savings instrumentswhich could be used by banks wishing to operate in the housingsector; and
(c) to determine the role of the sector's future banking institutions.
4.2 Imolementation Plan:
(a) A review of the legal structure, business strategy, and sectorcredit policies will be undertaken and include:
(i) mobilization of resources;(ii) financial management of the sector;(iii) inventory of formal and informal housing practices;(iv) credit delivery and the role of CIH;(v) financial management of social housing programs;(vi) the relationships between CIH and the other banks;(vii) comparison of the principal housing finance systems;(viii) macroeconomic management of savings achemes;(ix) establishment and management of banks;(x) analysis of double index loans in the Moroccan context;(xi) possible establishment of double index loans;(xii) macroeconomic risks and management of liquidity problems;(xiii) formation and internal management by banks;(xiv) development of an analytic framework;(xv) implementation of the supply and disposition account; and(xvi) evaluation of the macro constraints in financing the housing
sector.
This review will commence in January 1994 and will be completed in January1995.
(b) If desirable, a program for reform of the legal structure and sectorcredit policies would be established by July 1, 1995 and would aimat:
Ci) increasing competition among private and public sectorbanks;
(ii) streamlining of making access to medium- and long-termcredit available to individuale, land developers, andhousing contractors; and
(iii) redefinition of the Government's and CIH's role in thehousing finance sector.
(c) The priority areas for the reform are:
- 47 -
Attachment 2Page 6 of 7
(i) CIH's long-term financial plan;
(ii) budgetary constraints to financing social housing programs;
(iii) impact of social housing policy choices on the housing
sector's financial system; and
(iv) methods for mobilizing financial resources.
5. Housinq Subsidy Policv is the vehicle through which assistance to
low-income families is provided. Its effectiveness is critical to those
households disadvantaged by the high and rising prices of serviced lots and
houses.
5.1 Obiectives:
(a) to assist low-income families to improve their housing;
(b) to restrict subsidies to the lower half of the income distribution;
and
(c) to increase the economic efficiency (EE) of subsidy programs (The EE
can be evaluated as the ratio of the recipients' evaluation of the
benefits they receive compared to their market value).
5.2 Im,lementation Plan:
(a) A review of the direct and indirect housing subsidies will be
undertaken with a view to:
(i) identify the target income range of beneficiaries;
(ii) measure each subsidy from three distinct points of view;
-for Government (as a financial and economic cost)
-for suppliers (public and private)
-for beneficiaries (families);
(iii) measure the economic efficiency of each subsidy; and
(iv) possibly replace subsidized interest rates by up-front
grants.
This review will commence in January 1994 and will be completed in
January 1995.
(b) Based on the above review and if found desirable, a plan to reform
subsidies and/or to replace subsidized interest rates by up-front
grants would be established by July 1, 1995.
(c) The priority areas for assistance to low-income families in the form
of subsidies or up-front grants are:
(i) fiscal affordability and ease of budgeting by MoF;
(ii) enhanced targeting of beneficiaries; and
(iii) improved transparency.
6. The droD out rate in sauatter resettlement is believed to be low
- 48 -
Attachment 2Page 7 of 7
(lessthan 10 percent); however, the Government intends to re-assess this rate and toanalyze the socio-economic impact of rehousing squatter families.
6.1 Obiectives:
(a) to assess the drop out rate in resettlement of squatter families;and
(b) to analyze the socio-economic impact of rehousing.
6.2 Imilementation Plan:
(a) A survey of squatter families will be undertaken in four of the landdevelopment sub-projects and will start with the Yasmine 2 sub-project in January 1994. In principle, the surveys vill consist ofthe following three phases:
(i) interviews with the squatter fanilies prior to theirrehousing;
(ii) interviews with the squatter families shortly afterrehousing; and
(iii) interviews with the squatter families about two years afterrehousing.
The first phase of the Yasmine 2 sub-project will commence inJanuary 1994 and the three phases of the surveys in all four sub-projecta will be completed by July 1, 1996.
(b) If based on the above first two phases of the Yasmine 2 sub-project,it is found to be desirable, the Government's resettlement policyand specific resettlement plans will be modified, and therecommendations based on these two phases will be applied to thesubsequent land development sub-projects of the proposed project.The resettlement policy and specific resettlement plans will befinalized by September 1, 1996.
(c) The priority of assessing the drop out rate in squatter resettlementwould be:
(i) the impact of rehousing;(ii) the underlining reasons for the drop out; and(iii) measures to further reduce the drop out rate.
- 49 -
ANIEt 2Page 1 of 3
KINGDOM OF MOROCCO
STAFF APPRAISAL REPORT
LAND DBVELOPMENT PROJECT FOR LOW-INCOME FAMILIES
Bank Involvement in Urban Prolecte
1. The FirBt Housing Finance Project (Loan 2245-MOR), approved in March
1983 and completed in December 1988, was a pilot operation inasmuch as it vas the
first time the Bank had supported urban development through a line of credit
granted to a f inancial institution. The US$59 million line of credit to CIH
supported low- and moderate-cost housing construction through loans to private
and public developers, subsequently converted into mortgage loans to homeowners.
Technical assistance funds, in the amount of US$1.9 million, assisted CIH in: (a)
developing low-cost housing appraisal and advisory capabilities; (b) organizing
training programs for staff; (c) managing new products, including savings deposit
schemes; and (d) setting up a management information system, including the
development of a computerized network both at headquarters and in the regional
agencies.
2. The project was successful; it helped transform CIH into a universal
bank, sustaining the pace at which low- and moderate-cost housing construction
loans were granted while the Government was rapidly reducing its support. The
following lessons were learned:
(a) The process by which developer loans were transferred to the
beneficiaries, as soon as down payments were made, reduced
developerse financial burden. Developers could then paso on those
savings to beneficiaries in the f orm of relatively lower final
selling prices.
(b) To maintain a satisfactory loan disbursement rate, the Bank muet
allow the Borrower to apply more flexible technical and other
eligibility criteria to the refinancing of projects, especially when
the project is a pilot scheme.
3. The Rabat Urban Development Project (Loan 1528-MOR), approved in
February 1978 and completed in March 1982, vas designed to improve living
conditions of the city's urban poor. Loan proceeds, in the amount of US$18
million, financed an employment generation program, the upgrading of slum
infrastructure and social services in three squatter areas vith a total
population of about 60,000, and related technical assistance.
4. The Second Urban Development Project (Loan 1944-MOR), approved in
January 1981 and completed in July 1988, supported the Government's efforts to
provide shelter, basic services, and employment to low-income urban families in
Meknes and Kenitra. Loan proceeds, in the amount of US$36 million, f inanced the
upgrading of squatter settlements, provision of affordable serviced residential
lots, credit for self-help housing improvement, construction of community
- 50 -
ANNEX 2Page 2 of 3
facilities, development of serviced land for business activities, provision offacilities, equipment and technical assistance to improve municipal services, andstudies for the preparation of new urban projects.
5. Findings of the FY91 OED Audit of the two urban developmentoperations were as follows:
(a) The projects' physical achievements were significant, benefittingappreciable proportions of the populations of Rabat, Meknes, andKenitra. In addition, except in Kenitra, they contributed to asubstantial decrease in the share of the total population living insquatter settlements.
(b) Most beneficiaries were low-income, although some higher incomehouseholds demonstrated their interest to live on the improvedsites.
(c) The projects' contributions to the physician environments of theirrespective cities are of particular interest. Beneficiaryhouseholds interviewed by the Audit mission confirmed that projectinvestments brought improvements to their neighborhoods and upgradedtheir living conditions.
(d) The projects' expected policy impact was given high profile duringappraisal. The Audit's review of recent Government policystatements and actions suggests, however, that actual changes vereless substantive than desired by the Bank since the eradication ofsquatter areas is still firmly on the agenda.
(e) There was a "divorce" between management of the projects' physicaland financial aspects. One of its main victims was cost recovery,which was regarded by project managers as just one more problem tobe dealt with and one that did not adversely affect short-runphysical implementation. As a result, insufficient attention wasgiven to the necessary institutional and administrative arrangementsfor cost recovery.
(f) Although there is presently much emphasis on municipal developmentin Bank urban lending, this was not the case when these projectswere undertaken. While a special municipal services component wasincluded in Urban II, both projects were essentially conceived asoperations to be conducted by central government agencies. As aresult, the role of the municipalities was limited.
(g) Project implementation did not generate a cash return to theMoroccan Government, which has thus had to subsidize the operations,while local tax efforts have been insufficient to ensure that themunicipalities have the resources necessary for proper maintenanceof the upgraded areas. As a result, maintenance services arelacking, especially with respect to streets, drains, and solid waste
- 51 -
ANNX2Page 3 of 3
disposal. The aforementioned emphasis on municipal development in
expected to improve this situation.
6. Under Loan 3122-MOR, a line of credit to CIH (USS 77.5 million) has
helped mobilize resources and channel them to low- and moderate-cost housing
development. The line of credit will contribute to broader Government efforts
to improve CIH's ability to compete effectively with commercial banks. Nearly
the entire loan amount, or US77.8 million, has been disbursed, as withdrawals
have been made at twice the pace projected at appraisal. The last remaining
project items are two studies to be carried out for the ministries of Housing and
Interior.
-52 -_a= -1
,ligOm o? dOROCCO
SlCPiF? APPRAISAL1 flRPO2lT
IMMD DEVELEIEqT PROE2CT F'OR UL-:tqacOM PEYILIES
,Coat Hutanuatel cf Land'Develooexent Co192onent <19r9i2 eia.. DE mIllioM>
APPRAISED SUB-PROJECTS TOTAL TOTAL GRAND TOTALNamo of sub-project Rlad Essalam Yasmine 2 M'Jaara APPPWASED IDENTIFIED LANDLocation Mohammedla Khourlbga JorlElMelha SUB-PROJECTS SUB-PROJECTS DEVELOPMENT1 LAND ACQUISITION 45.3e 12.12 0.36 e3.s4 260.07 323.512 CIVIL WORKS il 62.95 29.38 30.60 112.91 830.80 843.71Sow.rag. 15.84 e.8s 3.15 25.85Roade 15.60 8.58 16.s7 41.15Water uupply 5.58 4.85 4.28 14.71Power & urset llghtlng 9.92 7.61 5.62 23.16Telephone <civil works only) 5.28 0.90 0.00 6.18Othe, 0.72 0.56 0.58 1.86
3 DESIGN CONSULTANCIES 6.00 4.41 3.98 13.39 82.67 96.06Topographi surwvey 0.21 0.04 0.08 0.335dl tsding 0.11 0.00 0.05 0.10Tite proparation 0.36 0.25 0.31 0.91Marketing 0.31 0.47 0.50 1.29Site Iayouts 0.39 0.51 0.20 1.15Engineering dehign 0.39 0.55 0.30 1.29PeIne & "oine 3.24 2.00 2.07 7.91Supervion 0.00 0.00 0.30 0.30
4 OTHER COSTO 26.43 14.84 10.40 51.72 223.s1 27513Land taxes 0.84 0.67 0.00 1.51Land de.vlopment permit 1.57 0.65 1.88 4.10Share of of-Me worke 3.44 0.00 1.17 4.01SNEC te 10.10 s.0o 4.21 19.37Flnancing coot 10.48 8.48 3.19 22.14
ô TOTAL BASE COST 129.73 00.74 51.39 241.80 1.096.65 1,338.41O CONTINGENCIES 10.78 9.12 9.50 32.93 219.00 254.43Appralsd Idontifled
Phyulcal 0.100 0.100 7.39 4.02 4.18 15.59 74.13 80.72Price 0.116 0.182 9.30 5.10 5.32 19.81 144.90 164.717 TOTAL PROJECTCOST 140.51 69.85 60.89 277.20 1,316.5U 1,62.848 TAXES 9.34 5.12 6.21 19.00 77.12 91.78VAT clvil worka (14%) 0.92 3.61 3.90 14.43 60.21 84.64VAT eervices (19%) 2.41 1.51 1.31 5.23 20.01 32.14
1. Thi amounts under 2, 3 and 4 Include valu added tax (VAT) equal to 14% on civil works nd 19% on srvicec.
- 53 -
KiNODox Or IM=CC A
STAF APPRUAXJL REPORT
liD DEVELopM1T PROJECT FOR LOI. P AXMLIES
IdSntified Sub-oroiectu - Cost iutimateu (1992 orices. D! MilliOn)
Name of mub-project El Amul Nahda N Hana. Fath Bakaz ZouaghaBfl iboulay TOTAL
Location An Aouda Ouazzane El Kolaa Oujda Marrakech Fos M ocelim A Alch
1 Land acquluition 4.47 7.82 10.60 51.68 24.32 48.40 33.44 72.92 259.07
2 CMI worke 11 13.49 14.40 40.52 101.09 47.67 04.80 05.41 153.51 .110
3 Design consultanclem 2.79 2.49 9.98 14.80 0.41 13.87 9.22 22.90 82.57
4 Otier coo t 7.75 6.44 13.20 43.69 20.51 40.88 28.2 71.U 231.51
5 TOTAL BASECOST 28.60 30.15 80.32 211.21 98.81 19#.01 130.27 321.27 1.090.56
O Contlngencles 6.63 6.01 17.44 42.48 19.81 30.82 27.37 10.54 219.00
7 TOTAL PROJECT COST 35.03 30.10 97.78 253.69 118.03 237.83 163.04 372.84 1,315.65
a Taxes 2.74 2.51 7.53 8.34 10.79 11.53 77.12
1 The aanount under 2.3 and 4 Include value addd tax (VAT) equai to 14% for civil wores and 19% for ul.a
- 54 -
ANNEX 5Page 1 of 4
KINGDOM OF MOROCCO
STAFF APPRAISAL REPORT
LAND DBVELOPMENT PROJECT FOR LOW-INCOME FAMILIES
CONDITIONS FOR APPRAISAL OF FUTURE LAND DEVELOPMENT SUB-PROJECTS
1. Land development sub-projects submitted to the Bank for appraisalafter effectiveness of the loan shall comply with the following conditions:
(a) the sub-project shall be situated on land owned by SNEC and titledunder its name; in cases where land acquisition is in progress, thefinal price of the land shall have been fixed by the land evaluationcommittee ("commission d'expertise") or shall have been agreed uponwith the landowners;
(b) in caoes where a sub-project has been initiated by an ERAC, SNECshall be solely responsible for its development ("maître d'ouvrage")and shall be the owner or acquisitor of the land;
(c) at least 50 percent of the total area of the sub-project shall bemarketable; at least 60 percent of the marketable area shall be usedfor squatter and low-income families;
(d) the financial balance of the sub-project shall be positive;
(e) complete documentation shall be provided, following the guidelineshereafter;
(f) resettlement of squatters will not involve a move of more than 2kilometers from their present location, unless this is done forreasons of bringing them closer to places of potential employment orpresent location is dangerous in view of land slides; theseexceptions are subject to Bank approval;
(g) the Bank financed portion will not exceed the lowest of twothresholds: (i) 75 percent of total costs excluding costs of land,financing and taxes; and (ii) total costs multiplied by the ratiototal area of lots designated for squatter and low-income families,over total area of all lots to be sold;
(h) adequate and regular collection and disposal of solid wastes areprovided in relocation sites in order to prevent any health hazardsfor the communities concerned; and
(i) items spelled out in the Government's resettlement policy (Annex 1).
- 55 -
ANNEX5Page 2 of 4
Guidelines for the Presentation of Sub-oroiects
2. The appraisal file shall assemble all documents required for the full
understanding and complete evaluation of the proposed land development projects.
This includes among others:
(a) a concise presentation note, justifying the project and containing
or summarizing the documentation listed below, full details of which
may be attached in an annex;
(b) one or several mape showing: the location of the project in relation
to the city: the limits of the built-up areas; the exact boundaries
of the project site; existing and proposed land use of the
surrounding areas, including other land development projects
proposed or in progress; relief and natural drainage; the main
existing infrastructure networks (roads, railways, sewers, water and
power mains) as well as the proposed connections of the project site
to these networks; squatter settlements to be relocated in the
project, with their names; and any other information relevant to the
design of the projects;
(d) a description and map of the project site including: a topographic
survey with levels and contour lines; exact area; soil
characteristics; existing occupation (such as squatter settlements,
farms, high tension lines), etc.;
(e) the status of land acquisition including: a map and a table ehowing
the limite, cadastral numbers, areas and ownership of the plots to
be acquired; the present status of land acquisition with a time
table for its completion; actual and/or estimated cost per square
meter;
(f) extracts of the legal master plans and special development plans
relevant to the project site, with a legend and a surnmary of the
applicable regulations; variances requested, if any; status of the
application for a land development permit;
(g) a site layout plan showing the exact boundaries of the land (to be)
acquired, the boundaries of the public rights of way and of the
public open spaces, as well as the boundaries of all individual
lots;
(h) a land use table similar to annex 7 of the SAR;
(i) a lot pricing table color-referenced to the site layout plan (g) and
showing for each group of lots: the number of lots, type, area per
lot, number of floore permitted and the proposed price per square
meter (see 1, below) as well as totale for each group of lots;
- 56 -
ANNEX 5Page 3 of 4
<j) preliminary engineering designs for roads, storm water drainage,vater supply, sewers, power supply, street lighting, telephone,etc., including for each type of works: a plan map of the networkwith dimensions, capacities and cross-sections; details ofconnections to existing networke and off-site works; a bill ofquantities with unit prices; a technical note detailing standards,levels of service and calculations as well as an analysis ofalternatives and justification of the alternatives selected1;preliminary cost estimates;
(in case sewers do not connect to existing mains, details of theoutfall should be provided and measures proposed to avoidenvironmental hazards, together with a coat estimate of the workerequired)
(k) a time schedule for execution of the works including: execution inphases, if any, and cost estimates per phase; a list of civil workeand consultancy contracts to be tendered together with theirestimated cost and estimated dates for bid invitation, award, startand completion of works (see SAR, annex 13);
(1) a financial and commercial analysis including: an analysis of thelocal demand for serviced lots; justification of the proposed pricesand comparison with market prices; affordability analysis forsquatter relocation and low-income lots; marketing plan showing thenumber of lots to be sold annually; cashflow analysis showing yearexpenditures, revenues and financing requirements; internal rate ofreturn; and
(m) a squatter relocation plan detailing: the location and names of thesquatter settlements to be relocated (ref. b and c above); a copy ofthe official list of squatter compounds and households (zribas) ineach of the settlements; the number and type of relocation lots tobe provided (ref. g,h and i above); arrangements to be made for thesharing lots, if any; a time schedule for attribution, delivery andoccupation of the lots.
3. Educational, health and social services will be provided in each sub-project according to the following standards.
;/ In this context, it in recommended to consider the experience of theTunisia Urban Development Projecti III and IV where alternative civilworks deuigns allowed for a decrease in the number of resettledpopulation.
- 57 -
Page 4 of 4
CATEGORY STANDARDS
l______________________ Ratio/hab m2/hab Surface
1. Primary school 1/8,500 0.59 5,000 m2
2. Junior high school 1/15,000 0.80 12,000 m2
3. Senior high school 1/50,000 0.30 15,000 m2
4. Training center 1/25,000 0.40 10,000 m2
5. Trade school 1/25,000 0.48 12,000 m2
6. Health center 1/15,000 0.07 1,000 m2
7. Clinique 1/45,000 0.04 2,000 m2
8. Hospital 1/150,000 0.17 25,000 m2
9. Youth center 1/65,000 0.05 3,000 m2
10. Nursery 1/100,000 0.04 3,000 m2
11. Library 1/50,000 0.06 3,000 m2
12. Sport fields 1/45,000 0.22 10,000 m2
13. Mosque 1/15,000 0.07 1,000 m2
14. Closed market 1/100,000 0.04 4,000 m2
15. Post office 1/45,000 0.02 1,000 m2
16. Police station 1/45,000 0.02 1,000 m2
KINGDON OF IMROCCO
STAFF APpRAISAL REpoR
LAND DEVELOPl4ENT pROJECT Pog LOW-INCOME FAMI-LIES
Number of Lot. and Exp,ected Housincr Denaitiels
TYPE 0F 440U81d oTLCNST2 3 ~ ~ ~~~~~~~~~~~~~~~~~~~~~4 TENSTYAL
SQUATTER AEI4OUSI04 LOW-14COMI HOUSINO REIIOENTIUUCOMMIERCIAL APARTUEW«BUILOMS0 LOW-I4COUE HOUSINO il SMUGLK-PAMILY MIRO AU. moulIN
Lot Lti FS.O,i4- LMi L10 Do..l- Lot Lot 0.91- Loi Loi D.<.- Loi D.If- Lt0 0.W.I Loi L.iO.o-104Lo 44. 31 Bo. o1 Lo. oIe Fl, 9nl *.- Loi .1z. FS. &Wo s,. Loi. .0. FS. 9bo. o. Loi &ffl o.- L04* b.*. Loio kg.
SUB-FfiOJECT iu~~~~~h v 092 vo w ha o i.2 haoc l oeM2 ru i u o o2 v lu hago2mho r go hu vo 12 l o v .
APP4¶A*SS0OB-RJEI. RéId I.o. 3.3 272 120 3 097 1.3 112 120 3 403 1 ¶ 00 lell $ 474
1.1 70 Ise 3 33 0.3 Il7 140 2 141.1 es Ise 3 452
0440000 4.4 342 120 1312 1.3 112 120 403 3.4 212 199 on2 Il 44 2.897 - - - 9.01 041 2.497 112
Y-.V..02 2.0 202 70 à 944 2.0 230 124 3 0133.0 19I Ise 4 1.102
0.2 ¶0 ¶53 £ 740.41 2-0 20 70 944 4.0 431 i w 2.122 0.0 7113 2.041 1.A 34 294A11 0.37 749 2.004 120
3. MjoMI 7.1 114 102.7 a 1.427 0.1056 33 140 1 90 O3.0 144 134 2 3101.4 92 103 3 422
0.~~~~~~~~~~~l ~~~~~~7.1 404 103 1.427 4.0 271 140 973 1¶1 OU90 2.300 1.1 44 244.41 12.21 1.011 2.344 79
IDEI4TWIE OUS-PRbOJECTO4. VA"I 12 lu2 94 2 364 1.4 171 ai 2 332 915 10 Se 2 100
3.1 201 10 3 0r72a0t.440 1.2 192 94 294 3.9 447 É4 1.220 415 10 Se 100 9.0 eni l'en 0.7 32233.0 034 721 1.721 ¶22
1. NoO4 1.1 ¶10 70 2 MO0 2.7 240 102 3 791 27 220 120 2 142 0.4 OU4 1,437 0.3 Il 272.72 4.711 447 1.446 I
I.UIAdO. 9.2 021 100 2 1.942 2.9 202 110 2 153 2.3 91 24 0 1,120 14~2 1 .35é 3.133 3.4 144 230 17.79 1.402 3.6147 70
<To."oo..g 1..0¶ 46 ou4 go 2.4= 24.2 2.414 ft 3.M8 13.3 1.011 131 3,000 9.2 511 140 3.240 14.3 4,937 14,013 7.2 214 2117A1 91.30 5.200 11,092 1
7-Il. OUM1(.44. 14.17 l'en4 10 1,37 1594 7.493.3 Se 17.948 2541 19113.1 131 g.ffl 1i74 90.44 1bo 4.214 133.47 12.442 35,.W 12.1 402 597.10 141.11 12,1164 31.741 I
OPAMJOTOTAL 24.93 2.74 90 9.210 100.17 9.147 Se 22.037 34.7 2.949 131 0.0111 03.97 l.903 110 0.444 l07.9i 17.379 40.100 ¶9.3 71 3417 207.47 10.100 9I,. 10
0444 91909.4 19,44-0,y.4444 bh.w f W0*4 199049090044010 . 4
0. .Ip F 14 .4 9 0
V94
B00.,om 4191.
CINGDOF 0DOROCO
STAFF APPRAISAL REPORT
LND DELOPMW PROJECT FOR W- INCOME PAIILIES
Land Uoe
TOTAL i 4 OTHER4 CIAAL ORUAT1ON TOTALTYPE OF LOT1 2 J 4 O w r* AOT C WAE rE
~~~~~~~~~o-oSURhIdo8 IApuR _imeft Tol b_- On. Teri oanuiil c.auh UIUETA. OPEN IIPAC£ SITEIB_s'oouU F041 4WOWWId bidhgi .Low4 hay bt (1W 0-0
ka * h l ha ha ha l h a lb ha lb ha ha l ha ha la
ppfd E_ M a?-A 102 1 a4 UJ - - O.t UT - - ol 8 0.8 2.0 * 07 10.4 43J 1. s 3o4Iri" ~4. 4'; 1.03 .43. 14.0 - 3 10 1. 3. L L?4381.4 US U
Y_hes Le - - -. 2 Le 7.0 31.8 A 7 a4 1a te *A 7t 1 J.7 1a4 ao 0YMR"t 7.0 144 16J $là 304~~~~~~~~~8.
W rham - _ 7.1 30.i 4.0 12 - - 11.1 37.0 1.1 aT 12.2 407 - - 7.7ul
WfU_d _-W M i elb- 12 3 0 L . 4 4 0.1 0.8 o.o 4.0 7.0 4 0 7.0 « .4 14.0
N éda 1.1 7.t 2.7 1t7.0 2 .7 112 - - .4 43.1 11 22 3.7 48 02 1. 0.7 4.4 7.0 1.2 7.8 48. 14.8
M ,I H m n - e 0.2 1 a.7 2 .1 8. 2 .2 4 . 8 l 4 2 a u 7 J 1 7 J 3 0 1 .a 2 . 8 U 7 . 3 0 4 i. 7 5 . 4AI .m _ _ &_ . __ - - -
DMTOTM. 3.0 M ^2 *1J u.s M M 0.8 84.3 30- -. 8-4-7 Mà 7 &4 L# 1.O si 74.1 47.8 a" M2 1à", _ au .lai _ _ é_ »._ _& _ __ __ _ - _ _
KfDML OF l<>ROCC
STAFP APPRAISJL REPORT
LAZID DEVELIOPEURIT PROJCT FOR LON- INCOeI FAMIES
Pricsu et Lotu 1/
APPRAISED SUS-PROJECTS IDENTIFIED SUB-PROJECTS TOTAUAVERAGE
NAME. NAME NAME. NAME. NAME- NAME.Riad Essalam Yasmine 2 M'Jaara El Amal Nahda AI Hanaa TOTAL
LOCATiON: LOCATION: LOCATION: LOCATION: LOCATION: LOCATION:Mohammedia Khourlbga Jorf El Meiha Ain Aouda Ouezzane El Kelaa
Proect area (ha) 24.0 21.0 30.0 14.6 14.9 46.5 151.0Marketable area (ha) 9.5 7.7 12.2 6.4 6.9 19.1 61.8Total project cost (Dh million) 155.33 74.65 65.88 40.05 40.78 111.15 487.84Average costsqm (Dh/sqm) 1,635 969 540 626 591 582 789LOT TYPE PROPOSED PRICES (Dh,sqm) AVERAGE
Squatter lots 550-650 ------ ------ 450 250 220 380
Low-income lOtS 1,900-2,300 ------ 400-500 550-650 600 500 850
Mixed resdentlaUcommerclal lots 2.850 - 700-800 900 750 850 1.220Apartment building lots ------ 850-1,050 ------ ------ --- 900 925
Single-lamlIy lots ------ 1,000 600 800 600-700 600 730Commercial and Industrial lots 2.350 1,100-1.300 ------ 1,400 850 600 1,280____.____ fo - ____._____ ___________e_ ___ __ __ __ no____...____ ------------- ___a____e__. ______to__._ __n__._._e t_m__ -
1/ Lanci for community faclilaes has not been taken Into account berause paymernt oRten Io nogllgibbe
KIUrGDa OF HDROCCO
STApF APJPRISAJ RE}PORT
LAIND DVELOPMIE pROJECT FOR LOW-INCOMR FAM1ILES
Relocation of S=uatters and Technical Descriotion
RELOCATION OF SOUA'TTERS
SQUATTER RELOCATiON LOTS SQUATTERS TO BE RELOCATED
Nr of Average PotenffaiLots size nr. of Zrilbas 11 House- Persons
SUB-PROJECT (sqm) dwelllngs holds
APPRAISED SUB-PROJECTSRiad ESSlam 342 128 1,312 1,056 1,310 7,258 1
Yasmine 2 282 70 846 295 303 1,784 C
M'Jaara (no rehousing) - -
IDENTIFIED SUB-PROJECTS 2/El Amal 182 64 364 337 364 703
Nahda 150 70 300 150 150 300
AI Hanaa (no rehousing) - - -
TOTAL 956 332 2,822 1,838 2,127 10,045
il A zriba is a lot ina squatter se»Uement with one or more shacks occupled by a single
extended famlly or several unretated househoidas.
21 Squatter relocatlon ln other Identlfied sub-projects: not yet determined.
- 62 -
ANNEX 9Page 2 of 6
TECHNICAL DESCRIPTION
Land ACouisition
Land for the projects is acquired by the SNEC from public or privateowners. Prices for public land are fixed by valuation committees and are beingraised steadily to approach market prices. Private land is acquired mainlythrough negotiation, sometimes under the principle of eminent domain with ownersand possible occupants being duly compensated either way. Supportiveintervention by the Governors and the local authorities, who are eager to seethese projects carried out because of their social objective, is a key elementin speeding up land acquisition. As rule, project preparation goes ahead beforeland acquisition is completed, but it is not started unless there is reasonablecertainty that the land can be fully acquired. Public developers are allowed,by law, to start the development of sites that are in the process of beingacquired.
Town Planning Standards
Town planning standards (i.e. housing densities, zoning, number ofbuilding levels, rights-of-way for roads, reservations for open space andcommunity facilities) are laid down in the general regulations, in the masterplans and in the special area development plans, that are strictly followed bythe local authorities and therefore leave limited room for negotiation. As aresult, in most new housing developments, less than 50 percent of the sites isactually marketable. For the design of future land development projecte to befinanced under the loan, a rule of at least 50 percent of marketable land hasbeen agreed upon with the SNEC. The relatively high housing densities of up to120 dwellings per hectare, typical of urban housing development in Morocco,justify this rule.
Infrastructure Standards and Levels of Service
All vehicular streets are surfaced with twin coats of asphalt andprovided with curbs and sealed or paved sidewalks. Squatter relocation lotsgenerally will have pedestrian access only, with access to vehicular roads at nomore than 50m. Except in the Casablanca-Mohammedia agglomeration, storm waterdrainage and sewerage are combined. Ail building lots are provided withindividual sewer, water and power connections up to the lot boundary, but waterand electricity meters will be requested and paid separately by the occupants.Street lighting is provided in all projects. In the larger cities, the developeris held by law to execute at his cost the civil works required for theinstallation of a telephone network.
Design standards for water supply and electricity networks are setby the utility companies and make allowance for higher than planned populationdensities. The municipalities are responsible for sewers, except in Casablanca-Mohammedia, where they are managed by the local utility company. Standards aregenerally not negotiable. Water is supplied from existing water mains and thenetworks are designed to provide an average of 80 lpcd. Power supply lines areunderground, except in some squatter relocation areas. Sewer pipes are laid
- 63 -
ANNBX 9Page 3 of 6
beneath the surface so that there is no risk of unsanitary open drains or
clogging with solid waste, and connected to the nearest existing collector or
outfall.
Off-site civil works include connecting roads, sewer and water mains
as well as a share in the construction of a bridge. These works would be
financed under the loan insofar SNEC is the executing agency.
Arrangements with utilitv comoanies
Under the normal arrangements for land development projects, off-site
and on-site works for water and power supply (and sewers in Casablanca-
Mohammedia) are designed and executed by the national or local utility companies
(ONEP, ONE, RAD)>. The company bills the developer for either the actual cost of
the works, or a lumpsum amount determined by a formula based on population
density, adding in both cases a 20 percent design and supervision fee ("peines
et soins"). The corresponding amounts represent a considerable proportion of the
total cost of a land development project. However, under the current
arrangements would not be eligible for financing by the Bank. Therefore, a
diiferent arrangement has been agreed upon for the present project whereby the
utility company would be in charge of design and supervision, and its 20 percent
fee would be reimbursible from the loan, while the works would be executed by
SNEC. However, the additional amounts that some local utility companies charge
as a contribution to overall infrastructure investment cost ("taxe" or
"participation au premier établissement") would not be eligible for financing
under the loan.
Housinq Develooment
The development of housing and of commercial, industrial and
community facilities is to be undertaken by the purchasers of the lots and is not
part of the project. Though housing developers are not prevented from applying
for the loans that will be made available through the CIH and three private banks
as part of the loan, these loans are not specifically targeted to the land
development sub-projects also financed under the loan.
The mix of residential lots and the permissible types of housing are
defined in the special area development plans prepared by the municipalities.
Annexes 6 and 7 present details on land use, number and type of building lots,
estimated number of dwellings units and housing densities for several projects.
In practice, all residential lots except the single-family lots will be built up
in the manner typical of urban housing development in Morocco; full occupation
of the lot up to the boundaries, except for a small courtyard of 5-15 m2 in back;
two to five floors, depending on the size of the lot and the local regulations;
a continuous street front with commercial ground floors where permitted.
In order to optimize the return on their investment, owners tend to
divide the available floor space into as many separate apartments as possible.
Consequently, the net floor area per apartment rarely exceeds a0 m2 and is often
much smaller. Owners generally occupy one of the apartments, and the others are
let, sold or used by relatives. Thus, with three dwellings per lot on average,
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ANNEX 9Page 4 of 6
the 15,100 serviced lots made available under the loan will enable the privatesector to produce almost 40,200 new low-cost housing units. These units answerhousing demand f rom the target group whose incomes are below Dh 3,000 per month.
This system of housing development is efficient in terms of land use,since it allows housing densities varying from 80 to 120 dvellings per hectare,with an average of 107 dw/ha.
Squatter relocation and low-income lots will be sold to beneficiariesmeeting the agreed selection criteria (see SAR, para 3.13). The prices of theselots will be set at affordable levels, made possible by differential pricing andinternal cross-subsidies. The other lots will be sold freely.
Future maintenance of DeveloPed Sites
Current procedures for the transfer of developed housing sites andinfrastructure networks to municipalities and utility companies are satisfactoryand will be applied. Delivery of a land development permit by the municipalitymeans that the local authorities in principle accept ownership of the site andresponsibility for maintenance of roads and sewers and for solid wastecollection. They effectively take on this responsibility upon completion of thesite, when ownership is formally transferred. The infrastructure works aretransferred in similar ways to the utility companies, that have designed thenetworks and supervised their construction to ensure that they conform with thespecifications.
DESCRIPTIONS OF APPRAISED SUB-PROJECTS
Proiect RIAD ESSALAN
Location Mohammedia, Morocco's main port and industrial center, whichis part of the Casablanca agglomeration.
SiteI The project is situated on an almost flat 46 ha site at theedge of the urbanized area, among other housing developmentsites in progress and along the main railway line. Sewer andwater mains exist nearby.
_Pesent un Part of an adjacent squatter settlement extends into theproject site, which otherwise is unoccupied.
Land acauisition Forty percent of the site has already been acquired by SNEC atthe rate of Dh 123 per m2. Acquisition of the remainingpoition is underway and the owners have agreed on a price ofDh 160 per m2.
Description The project would be executed in three phases. Civil vorks inphase 1, which includes reuidential and amall-scale industrylots, are scheduled to start in early 1993. Only phases 2 and3, with an area of 24 ha, would therefore be financed under
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ANNEX 9
Page 5 of 6
the loan. Phase 2 includes mainly low-income housing lots
that are to be marketed among Moroccan workers in Europe, and
would be implemented first. Phase 2 is mainly for the
relocation of surrounding squatter settlements and would be
undertaken last.
Scouçatters About 1300 families from a large adjacent settlement and from
several smaller settlements scattered in the surrounding area
would be relocated within the project, on 342 multi-family
lots.
Proiect YASMINE 2
Location Khouribga, a medium-sized town about 100 km South-east of
Casablanca.
site A flat 25 ha site in an urban extension zone with several
housing projects in progress. Sewer and water mains are
available nearby.
Present use No present use or occupation.
Land acauisition Ninety-five percent of the 25 ha site has been acquired by
SNEC at an average price of Dh 45 per mi2.
DescriDtion The project is executed in two phases. Phase 1 of about 4 ha,
including mè..inly relocation lots for squatters, is in progress
and would therefore not be financed under the loan. Phase 2
of about 21 ha, to be financed under the loan, includes lots
for low-income apartment buildings and a small number of
single-family lots.
Sauatters Relocation of squatters is part of SNEC's project, but not
financed under the loan.
Proiect NoJAR
Location Jorf El Melha, a market town of about 10,000 inhabitants in a
developing agricultural region near Sidi Kacem, in the North.
Site A slightly sloping site of 53 ha adjacent to the town, along
the main road. Other housing sites are being developed
nearby.
Present use The site is unoccupied.
Land acauisition In progress, at an estimated cost of Dh 21 per m2. As the
entire site is in public ownership, no delays are anticipated.
- 66 -
ANNEX 9Page 6 of 6
Descrivtion The first phase of the project is already being implementedand theref ore would not be f inanced under the loan. Phases 2,3 and 4, to be financed under the loan, would be started in1994, 1995 and 1996, respectively. The project includesmainly low-income housing lots and a small number of single-family lots.
Off-site works The site would be connected to the sewerage system includingtreatment facilities that are being prepared for the town asa whole.
Squatters There are no squatter settlements in Jorf El Melha, and nosquatter relocation is envisaged.
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ANNEX 10Page 1 of 7
KINGDOM OF MOROCCO
STAFF APPRAISAL REPORT
LAND DEVELOPMENT PROJECT FOR LOW-INCOME FAMILIES
Terms of Reference for Housinq Finance Studv
A INTRODUCTION
1 Backcround
The Government of the Kingdom of Morocco has agreed with the World
Bank on a loan to support a series of measures through the Ministry of Housing
(MoH) to review and strengthen the housing finance sector for private ownership
and rental properties and to rehabilitate the existing system of urban property
taxation.
1.1 To assess the merits of the idea, both the Government and the World
Bank require a more detailed definition of what would be involved. The
objective of this assignment, therefore, is to prepare a detailed proposal for
(i) measures to improve the system of housing finance; and, (ii) a nationwide
property tax rehabilitation program to improve the financial capacity of the
housing sector. These proposals would then guide the implementation of the
programs themselves. This consultancy has been divided into three phases,
notably:
Phase 1: Diagnostics:Housing FinanceProperty Tax
Phase II: Outline of Strategy:
Housing FinanceProperty Tax
Phase III. Program Design:Housing FinanceProperty Tax
1.2 In order to ensure effective coordination among the agencies involved
in the preparation of this etudy, an Interministerial Coordinating Committee
chaired by the Minister of Housing and comprising representatives of the
ministries of Finance and Interior and private developers and banks shall be
responsible for this consultancy, and shall provide policy guidance to the
consultants at critical stages in the development of their work and to resolve
the problems and issues identified by the consultante during the development of
their work. Implicit in this consuitancy is an orientation to the development
of practical programs.
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ANNEX 1 0Page 2 of 7
B SCOPE OF WORK
2 Phase I: Diacinostics - Housina Finance
2.1 The Government plans to institute a series of long-term housing goalsfor the housing finance sector, notably (i) greater transparency in subsidies tobeneficiaries; (ii) better targeting of subsidies to specific social programs;(iii) the possible implementation of a financial program specifically gearedtowards slum upgrading; (iv) greater concentration of the limited Governmentresources on low-income families; and, (v) a more precise elaboration of theGovernment's long-term financial commitments (whether direct or indirect) to thehousing finance sector. These reforms are intended to play a central role in theimprovements to the sector.
2.2 Presently, the main conduit for housing finance in Morocco is theCrédit Immobilier et Hôtelier - CIH (Housing and Hotel Finance Bank), a_pecialized financial body approved by the Moroccan Government, whose functionsare to provide construction finance, housing finance, land development finance,and finance for the construction of commercial or industrial premises, includingtourism and related facilities. In addition to its credit activities, CIH alsois authorized (1986 Finance Law) to accept public savings deposits. It isgenerally accepted that CIH is the technical leader for financing theconstruction-housing sector. Its mandate, in theory, is to identify, develop anddisseminate in the economy, new types of loans and new tools for mobilizingresources.
2.3 In addressing the question of a housinq finance deliverv mechanisms,the consultants' diagnostics should include a review of the legal structure ofCIl and the regulations concerning the participation of other banks in thehousing finance sector. The review should identify whether: (i) CIH in itspresent form is really the best vehicle for housing finance; (ii) it is necessaryto have a specialized housing bank distinct from the banking sector as whole;(iii) the CIH should remain a separate financial institution or whether it mightbe converted to a fund (similar to a secondary mortgage market) managed by theCentral Bank or some other institution; (iv) ÇjI, if converted to a fund, wouldbe available on a competitive basis to any financial institution; (v) there wouldbe real competition between truly independent institutions; (vi) there would bemerit in converting CIH's regional networke into independent institutionsoperating in different markets and whether it would result in competition andopportunities for innovation.
2.4 The consultants' review should also determine whether =II (i) has thepotential to encourage the best sector financinc oractices through its methodsof evaluation and the types of loans it grants; and (ii) should continue to havea critical role to play in standardizing financing procedures and practices inthe construction-housing sector, especially for loans dealing with land,infrastructure, housing development, access to home ownership, and the purchaseand sale of existing houses.
2.5 Resource mobilization and asset and liability manaaement are crucialissuee in the housing finance sector in Morocco. The basic challenge in resource
- 69 -
ANNEX 10Page 3 of 7
mobilization concerns the diversification of resources between sight deposits,
time deposits, contractual savings schemes, medium- to long-term borrowings, and
the potential sources of capital increases for the lending institutions, while
the basic challenge in asset and liability management concerns liquidity,
interest rates, credit risks, and arrears management etc. The consultants'
review, therefore, should encompass the financial concepts of resource
mobilization and asset and liability management that are currently being applied
in Morocco.
2.6 The subsidy imolications of social housinq are not fully documented.
In completing their diagnostics, therefore, the consultants should identify (i)
wether preferential or subsidized loans should be offered for home buying and not
for other forms of assistance; (ii) whether the economic and social benefits of
the "social financing" of access to home ownership are higher than costs; (iii)
which income groups should benefit from such assistance; (iv) the possible
substitution of up-front grants for subsidized interest loans; (v) whether a
variety of housing typologies should be considered; (vi) the financing sources
of current forms of assistance; (vii) the cost of this assistance and who bears
it; (viii) the most serious economic and financial distortions arising f rom such
assistance; and (ix) the system that ultimately should be chosen. Experience
elsewhere in the world indicates that providing up front grants is superior to
subsidized interest rates; provided this is confirmed for Morocco, the study
should include recommendations for how to implement a system for up front grants.
2.7 The current situation with regard to formal and informal housinq
assistance is not well documented. Questions arise as to the sources of
assistance, the characteristics of these types of assistance, their annual volume
and current amounts outstanding (local government, state enterprises, social
funds, etc.). Other questions arise as to the income of households receiving
assistance and the financial characteristics of the forms of assistance granted.
The consultants should identify whether (i) the financing of social housing for
ownership should be separated from that of ongoing social programs; (ii) social
housing programs should come under the responsibility of an institution such as
the CIH or a legally distinct fund managed by the Ministry of Housing (MoH). The
consultants' diagnostics, therefore, should include an inventory of all formal
informal housing assistance practices.
3 Phase I: Diaanostics - Propertv Taxation
3.1 The consultants shall review the existing system of property taxation
in the capital city and in a limited number of other smaller cities.
This review will encompass the entire sequence of steps involved in the
administration of property tax, including (i) the system for ensuring that all
properties are included on the tax rolls; (ii) method of valuation and rate
setting; and, (iii) billing and collection. On the basis of the forgoing, the
consultants shall identify Ci) where revenue losses are occurring; (ii) what
proportion of properties are missing f rom the rolls; (iii) whether valuations are
accurate; (iv) nominal tax rates and exemption policies; (v) procedural problems;
(vi) characteristics of the prevailing system of tenure and inherent land
speculation; and (vii) characteristics of the policy setting environment.
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ANNRX 10Page 4 of 7
4 Phase II: Outline of Stratecv - Housinq Finance
4.1 In outlining a proposed housing finance strategy for Morocco, theconsultants program should include a comoarison of other relevant housinci financesystems. This comparison should highlight the available choices of institutionsand financial instruments, as well as the potential for their integration intothe Moroccan financial system. To the extent possible, the consultants programshould take into account the methods for mobilizing financial resources beingstudied or implemented in the transition economies of Eastern Europe. Particularattention should be paid to an analysis of the risks of instability in suchsystems, especially when other high return financial instruments appear on themarket.
4.2 The consultants' strategy should also encompass the various housincif inance options that may be applicable to the Moroccan market. A pro formaanalysis of the integration of these products in the f inancial management of theCIH and other Banks should be carried out. The consultants' strategy should alsooutline the various recommendations for the principal types of investment inhousing (public sector and its different components - SNEC. ANHI, EPACs, etc. --private commercial sector, and the individual contracting sector) and shouldinclude projections on production costs and the volume of business, as well asanticipated financial requirements for each type of investment.
4.3 It is clear that there should be a fundamental change in the notionof granting housing loans at below market interest rates. It is not possible toincrease the level of development of banking services in the sector in a way thatwould be compatible with the sector's financing needs as long as financialreturns on loans are insufficient to provide remuneration for savers at adequatereal rates. Immediate transition to long-term floating or variable rate loansis a very likely necessity in Morocco. In defining the housing financestrategy, therefore, the consultants should pay special attention to thepotential of non-conventional lending instruments such as double index loans(f irst introduced in Mexico and now in a number of other countries) and up-frontgrants.
4.4 The housing finance strategy proposed by the consultants should alsoencompass the develooment of a housinc finance model showing the variousassumptions included in the analysis, the different types of risk for the lenderand the borrower, a comparison with existing loans, and a discussion of the bestoperational methods for the choosing the level of interest rates, the termn of theloan, and the definition and use of various indexes. The consultants' strategyshould also include a discussion of (i) the liquidity problems that banks mightencounter in an extremely unfavorable macro-economic business cycle; (ii)refinancing requirements and a possible source of such refinancing using severalscenarios based on the aize of a loan portfolio; and (iii) possible refinancingsources and their impact on the economy should be included.
4.5 The consultants' strategy should also provide an analysis -- even arelatively simplified one -- of the financial flows in the housinca sector. Thisanalysis would like be two-dimensional: Ci) annual volumes of housingproduction, including related infrastructure, for the last f ive years broken down
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ANNEX 10Page 5 of 7
between all the major housing producers in the sector; and, (ii) the sources of
finance for these investments. In creating this analytical and management tool,
the procedure for developing supply and disposition accounts will be equally
important as the final product to the rapid improvement of the quality of
decisions in the sector.
4.6 The housing finance strategy should include an evaluation of the
impact of social housing policy choices on the sector's financial system and the
competition between demands for financing plans. Evaluation of loan options
(interest rates, etc.) and the impact of "social" policy choices on the "non-
social" segments of the sector are to be considered.
5 Phase II: Outline of Strateav - Property Taxation
5.1 Based upon the consultants review of the existing system, a strategy
for property tax rehabilitation shall be outlined describing the major phases of
the work and the institutional arrangements for implementing them. In outlining
the property tax rehabilitation strategy, the consultants shall be cognizant of
two primary concerns:
5.0.1 costs-extremely low administrative costs will be required if
the system is to be replicable. The proposal, therefore,
should be judicious in its recommendation for technical
assistance; and
5.0.2 sustainability-the proposal should aim at producing a
sustainable system and, therefore, will identify the means by
which lasting institutional, procedure and staffing
achievements would be achieved.
6 Phase III: Program Design Housing Finance and Property Taxation
6.1 The consultants shall prepare a detailed proposal for each of the
programs comprising (i) a list of specific steps to be undertaken in implementing
the program; (ii) an identification of complementary Covernment actions that are
considered critical to the success of the program; (iii) an estimate of the cost
of implementing each phase of the program; (iv) an estimate of the staffing
implications of the proposed strategy; (v) an estimate of the long-term recurrent
costs of operating the programs; and, (vi) a set of job descriptions for key
managerial and professional positions.
C. CONCLUSION
7.1 In conclusion, the objectives of the study are:
(a) to make access to medium and long term financing easier
available in the housing sector;
(b) to establish a diversity of financial credit and savings
instruments which could be used by banks wishing to operate in
the housing sector;
- 72 -
ANNEX 10Page 6 of 7
(c) to determine the role of the secotr's future bankinginstitutions;
(d) to assist low-income families to improve their housing;
(e) to restrict subsidies to the lower half of the incomedistribution; and
(f) to increase the economic efficiency (EE) of subsidy programs(The EE can be evaluated as the ratio of the recipients'evaluation of the benefits they receive compared to theirmarket value).
7.2 It is envisaged that the study would comprise two main components (Iand II):
I. (a) A review of the legal structure, business strategy, and sectorcredit policies will be undertaken and include:
(i) mobilization of resources;(ii) financial management of the sector;(iii) inventory of formal and informal housing practices;(iv) credit delivery and the role of CIH;(v) financial management of social housing programs;(vi) the relationships between CIH and the other banks;(vii) comparison of the principal housing finance systems;(viii) macroeconomic management of savings schemes;(ix) establishment and management of banks;(x) analysis of double index loans in the Moroccan
context;(xi) possible establishment of double index loans;(xii) macroeconomic risks and management of liquidity
problems;(xiii) formation and internal management by banks;(xiv) development of an analytic framework;(xv) implementation of the supply and disposition account; and(xvi) evaluation of the macro constraints in financing thehousing sector.
This review will commence in January 1994 and will be completed inJanuary 1, 1995.
(b) If desirable, a program for reform of the legal structure and sectorcredit policies would be established by July 1, 1995 and would aimat:
(i) increasing competition among private and public sectorbanks;(il) streamlining of making access to medium- and long-termcredit available to individuals, land developers, andhousing contractors; and
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ANL 1 0
Page 7 of 7
(iii) redefinition of the Government'e and CIH's role in the
housing finance sector.
(c) The priority areas for the reform are:
<i) CIH's long-term financial plan;
<ii) budgetary constraints to f inancing social housing programs;
(iii) impact of social housing policy choices on the housing
sector's financial system; and
(iv) methods for mobilizing financial resources.
II. (a) A review of the direct and indirect housing subsidies vill be
undertaken with a view to:
(i) identify the target income range of beneficiaries;
(ii) measure each subsidy from three distinct points of view;
-for Government (as a financial and economic coat)
-for suppliers (public and private)
-for beneficiaries (families);
(iii) measure the economic efficiency of each subsidy; and
(iv) possibly replace subsidized interest rates by up-front
grants.
This review will commence in January 1994 and will be completed in
January, 1995.
(b) Based on the above review and if found desirable, a plan to reform
subsidies and/or to replace subsidized interest rates by up-front
grants vould be established by July, 1995.
(c) The priority areas for assistance to low-income families in the form
of subsidies or up-front grants are:
(i) fiscal affordability and ease of budgeting by NoF;
(ii) enhanced targeting of beneficiaries; and
(iii) improved transparency.
D. REPORTS
8 The consultants shall be expected to prepare a report after each
phase and a final report after completion of all phases. The duration of each
of the three phases is estimated at one, seven, and two months, respectively.
Bach report shall be submitted to both the MoH and the World Bank for review and
comment.
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ANNEX 11Page 1 of 11
KINGDOM OF MOROCCO
STAFF APPRAISAL REPORT
LAND DEVELOPMENT PROJECT FOR LOW-INCOME FAMILIES
Terms of Reference for Land Delivery Studv
BACKGROUND
1. The Government of Morocco (GoM) has agreed with the World Bank on theLand Delivery Study as well as another study, the Housing Finance Study, whichboth aim at improving the performance of the housing sector, which is not keepingup with the demand created by high rates of urban growth. This particularlyaffects the lower-income groups who, because of the short supply and high costof affordable regulated housing, have no choice but squatter settlements andillegal subdivisions. Two studies recently carried out have dealt with theconstruction sector and a diagnostic of the housing sector1. They havesignalled several problem areas that require further study. The present studywill deal with (i) institutional constraints and bottlenecks in the areas of landadministration, land use controls and infrastructure development, and (ii)instruments to improve market transparency and responsiveness and to facilitateprivate sector entry into the market.
2. The Ministry of Housing (MoH) shall be the agency responsible forcontracting and supervising the consultants. Overall guidance shall be providedby an Interministerial Coordinating Committee composed of representatives of thethree Ministries concerned (Housing, Finance and Interior), of the housingfinance institutions and of the private housing sector.
IMPLEMENTATION OF THE STUDY
3. Contract terms, work programs and outputs shall be negotiated betweenthe MoH and the consultants. The proposed study requires coordination among theministries of Housing, Finance and Interior; the aforementioned interministerialCoordinating Committee will facilitate this coordination. For the sake ofcontinuity and to avoid duplication, the consultants shall take intoconsideration the two above-mentioned studies and, if necessary, other recentstudies, comment on the findings, and integrate them into their own work. Thestudy requires at least one expert in each of the following fields: landmanagement/registration (with significant international exposure to situationssimilar to the Moroccan one); urban planning; civil engineering; institutionallaw and institutional development.
LAND MANAGEMENT
4. Backaround. The land administration system suffers from deficienciesas: the parallel existence of a modern and a traditional system; the existenceof several types of land ownership, each with its own rules; the absence of acomplete cadastral coverage; the fragmentation of responsibility for landmanagement among several agencies; the delays and costs caused by cumbersomeregulations and procedures for conversions and transactions; problems in theappli-.-tion f i -?rnd ex-propriation procedure which result in significant
- 75 -
ANNEX 1 1
Page 2 of 11
delays. These deficiencies have several inhibiting effects on land and housing
development:
(a) the lack of land information is a constraint on efficient management
of urban land, on long-term land use planning and on the development
of an open land market;
(b) complex and costly titling procedures are a burden on developers and
resulting delays are a source of insecurity for their clients;
(c) the lack of registered title, frequent among the lower-income groups,
limits access to formal housing credit; ind
(d) the excessive dispersal of land ownership is an obstacle to a
coherent planning of housing programs.
S. Land administration assessment. The consultants shall make an
assessment of the land administration systems (both traditional and modern) and
of their incidence on the supply of urban land and housing. This will include
among others:
(a) a review of the institutions and other actors (such as notaries,
surveyors, and real estate agents);
(b) a review of relevant legislation, regulations, procedures and
practices;
(c) an identification of critical shortcominge and bottlenecke that have
a direct impact on the supply of new urban land, and on the urban
land market; and
(d) an analysis of the methods of resolving litigious cases and their
impact on the supply of urban lots.
6. A stratecv for reform. The consultants, otarting from the findings
of the foregoing assesament, shall develop the broad outline of a long-term
etrategy for reform, if necesoary. The strategy ehould define the precise
objectives of the reforms, explore the basic options, present a preliminary
estimate the cost of the technology, staff, training and other resources
required, and propose a plan for implementation in phases.
7. In designing the etrategy, the consultants shall review recent
experiences in land administration reform conducted in countries faced with
similar problems2. These experiences tend to demonstrate that land registration
systeme of Buropean-colonial origin, as in Morocco, were not deeigned to deal
with massive urban growth, and, therefore, cannot be extended to cover the whole
country as such. Innovative approaches are necessary, euch as:
(a) progressive convergence of the modern and the traditional land tenure
systems, in view of their ultimate integration into a unified system;
(b) in the medium term, the creation of a simplified register and
cadastre for cuetomary law land holdings and transactions;
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ANNEX 11Page 3 of il
(c) simplification and streamlining of the legislation, regulations andprocedures governing land registration in order to make it moreaccessible and less costly;
(d) a revision of the roles and responsibilities of the institutionsinvolved;
(e) decentralization of parts of the process to the local level;
(f) delegation of tasks to private sector professionals such as notariesand surveyors in the system to be developed;
(g) public information campaigns; publication of laws, rules, regulationsand procedures in common language; creation of incentives toencourage voluntary registration;
(h) integration of the legal and fiscal cadastres; and
(i) making land information available to the urban planning authorities,land developers and the public, in order to develop a moretransparent land market.
8. Upon completion of the above strategy for reforms, a short-termstrategy plan shall be prepared in detail by the consultants for implementationduring the course of the project. It shall include a set of measures and actionsconsistent with the overall strategy and be effective in:
(a) removing bottlenecks and constraints in the supply of new land forlow-income housing by public or private developers and individualbuilders, as well as removing bottlenecks and constraints in theregularization, especially those resulting in illegal subdivisions,and more particularly:
(b) accelerating and facilitating titling procedures, especially in newland and housing development schemes undertaken by public or privatedevelopers;
(c) providing documentation to facilitate access to formal housing creditfor low-income families; and
(d) opening up the land market.
9. The proposed actions and measures will be designed in such a way thatthey can become effective during the mid-term review of the proposed project.Therefore, new legislation should be avoided where possible and preference givento interpretive or exemptive regulations, ministerial circulars or officialguidelines. Such proposals will be prepared by the consultants, who will alsolay out a detailed plan for implementation of the proposals.
LAND USE REGULATIONS
10. Introduction. Land use controls impose several constraints on thesupply and on the cost of land for lower-income housing and help to explain whyan estimated 20 to 30 percent of the urban population have no access to the
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Page 4 of 11
formal housing market and are living in squatter settlements and illegal
subdivisions:
(a) the increasing shortage of urban land zoned for residential
development suggests that master plans (SDAU) and special development
plans (plans d'aménagement), with the strict urbanization and zoning
limits they impose, are not responding to market demand;
(b) generous site planning standards generally allow no more than 45 to
50 percent of a development site to be sold;
(c) reservations for public and community facilities are overly generous;
in addition, payment for these plots is seldom forthcoming, though
they are generally priced at below-market rates; and
(c) rigid enforcement of land use regulations and standards by the local
authorities, with little or no room for negotiation; the approval
process for land development and building permits can be cumbersome
and slow;
11. Land use requlations and the supi,ly of residential land. In order to
assess the responsiveness of the urban planning system to market demand, the
consultants shall assess the area of land zoned for low-cost housing that is
being made available in the larger cities, and compare it with their estimate of
the demand. The market information system (see paragraph 21) shall be used for
this purpose.
12. Site Dlannina standards. First, the consultant shall document current
practices by computing average percentages for the main land use categories in
a representative sample of recent land/housing development projects by public and
private developers. These figures could be compared with those for other low-
income housing areas, such as illegal subdivisions and traditional neighborhoods.
Where possible, the origin of the site planning standards shall be indicated
(e.g. master plan, special development plan, designers, local authority, Ministry
of Education standards for school sites, etc).
13. Next, the consultants will comment on the current standards and
demonstrate their effect on land use efficiency, housing densities, prices and
affordability, through a series of simulations using alternative standards and
lay-outs (e.g. reduction of street widths, parking areas and vehicular access;
additional floors and reduced ceiling heights; variations in lot dimensions and
in block layouts; reduced reservations for institutional and community
facilities, etc.)3.
14. Finally, the consultants will during the mid-term review of the
project, propose a set of guidelines and revised standards for the design of low-
income housing sites, based upon the findings of the foregoing analyses. The
steps required for their implementation should be specified, e.g. whether new
legislation is required, whether the guidelines can be made effective through
interpretive or exempting regulations and circulars, or whether a mere change of
established practice will suffice. The proposale should be presented and argued
in a concise, self-contained discussion paper fit for wider distribution.
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ANNEX 1 1Page 5 of li
15. The aDoroval orocees. The consultants will review the administrativeprocess for approval of planning and building permits, especially whereindividual builders are concerned, and recommend streamlining and simplificationwhere appropriate.
INFRASTRUCTURE DEVELOPMENT AND LAND SERVICING
16. Introduction. A variety of entities are responsible for thedevelopment of primary, secondary and tertiary infrastructure networks in urbanareas. Roads and sewers are the responsibility of the local authorities, butgenerally built by the developers themselves, under the former's supervision.Power and water supply are the domain of monopolistic utility companies, whichare either national or municipal, depending on the size of the city. With someexceptions, the companies themselves carry out all off-site and on-site works andcharge the coet to the developer, in different ways. The main constraints interms of residential land development are: (i) the absence of adequate mechanismafor financing the development of primary and secondary infrastructure, whichlimite the areas of land that can opened up for urban development, and (ii) thehigh coet of land servicing due to:
(a) high engineering standards used by the local authorities and theutility companies;
(b) the various contributions for the financing of primary and secondaryinfrastructure imposed on land developers by the municipalities andby the local utility companies;
(c) the design and supervision fees charged by the utility companies; and
(d) the absence of competition in the implementation of infrastructurerelated to water and electricity supply which results in delays, theabsence of transparency in invoices, and insufficient coordinationamong implementing agencies.
17. The consultants' task is to review the present system of provision ofprimary and secondary urban infrastructure, including:
(a) an assessment of the financing and cost sharing mechanisms;
(b) an evaluation of the effects of the system on limiting the supply ofland for new urban and housing development; the market informationsystem (see paragraph 21) should be used for this purpose;
(c) recommendations to improve access to serviced land for low-incomegroups;
(d) recommendations to simplify implementation procedures and theratification of urban documents giving more responsibility to localauthorities; and
(e) an analysis of the possible introduction of a new zoning statue for"potential" residential land which would become a pool of land withinwhich re-zoning would be automatic once infrastructure has beenprovided.
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18. In addition, the consultants shall review current engineering
standards for site-level infrastructure (roads, drainage, water supply, sewerage,
power supply, telecommunications) and evaluate their impact on the cost of
developed land. Next, a set of revised engineering standards for low-income
housing sites shall be developed, introducing the principle of performance
standards instead of the current physical standards. A summary of the proposals
shall be presented by the time of the mid-term review, in a separate discussion
paper, together with the guidelines for site design already mentioned.
19. Sector performance indicators. The MoH intende to monitor a limited
number of indicators to measure the progress and performance of its housing
policy. The following indicators have been selected:
(a) the ratio of vacant to occupied residentially zoned land, to measure
the effects of regulatory reforms aimed at increasing the supply of
serviced land;
(b) the ratio of median house price to median household expenditure, as
an indicator of the effects of government action to make land and
housing markets more efficient;
(c) the ratio of production cost to market value of new housing units,
measuring the efficiency of the housing industry and the decline in
housing shortages;
(d) an indicator identifying the target groups in terms of their annual
expenditures, and the maximum amount of subsidies to be provided; and
(e) indicator measuring the annual reduction in numerous squatters
dwellings, the annual provision of infrastructure in adequately
serviced neighborhoods and the annual provision of serviced lots in
dwelling area.
The consultants shall assist the MoH in setting up a system for
monitoring these indicators; this system should form part of the market
information system described above. In addition, the consultants shall make
recommendations for other indicators to measure progress in the housing sector,
if found to be desirable.
LAND AND HOUSING MARRETS
20. The land and housing markets are still largely dominated by the public
sector, and lack transparency and responsiveness to demand. At the same time,
the private sector is expanding its operations, and has expressed the need for
better market information. However, it remains at a competitive disadvantage
compared to public operators, in terms of access to land, infrastructure and
finance. This part of the study will develop an instrument that is apt to
improve the transparency and responsiveness of the markets, and to facilitate the
entry of the private sector.
21. Since the Governient wishes to encourage the private sector to
participate more in land development and in the construction of houses for low-
income families, the consultants shall study, amongat others, the following
points:
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ANNGX 1 1Page 7 of 11
(a) the possibility of limiting Government intervention to those caseswhere the private sector shows no interest to participate;
(b) recommendations for organizations jointly owned by the private andpublic sectors;
(c) constraints on the formation of existing associations like thecooperatives and the possible promotion of new forms of associationswhich would, amonget others, facilitate the purchase of land neededto develop residential areas; and
<d) potential measures to ensure an equilibrium between supply and demandfor land for residential usage.
22. Market information svstem4. The objective is to develop a system forthe collection and diffusion of market information, to assist the publicauthorities in decision making in urban policy and land use planning, anddevelopers in improving their marketing and investment decisions. The systemcould be operated either by a public or private agency or jointly and vould beself-financing, through contributions by the member-users. The information, tobe collected for homogeneous zones in a city, and covering one or several cities,could include the following type of information:
(a) land use data (urbanized area, residential area, number of housingunits of different types, commercial and industrial area,institutional area, serviced and unserviced vacant land) and changesover time;
(b) demographic data (population, number of households, populationdensities) and changes over time;
(c) information on the prices of serviced and unserviced land zoned fordifferent uses; and
(d) information on land development projects in progress (area, prices bytype of plot, profile of buyers).
Once it is entered in a computerized data base, this informationshould be made available on demand to the member-users and could also be used toanalyze market trends, monitor the effect of urban policies or support investmentdecisions. The further development of a system already functioning in the"Agence Urbaine" of Casablanca could serve as a point of departure.
23. The consultants shall make a detailed proposal for the installationof such a market information system. This will include:
(a) evaluation of the system in operation in Casablanca;
(b) identification of us'rs;
(c) types of information to be included;
(d) domiciliation of the system, management and operation, method offinancing;
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Page 8 of 11
(e) cost estimate of initial set-up and operation;
(f) a phased plan for implementation; and
(g) development of an initial version of the system, which shall be
functioning by the time of the mid-term review of the project and
shall be used by the consultants to conduct the assessments mentioned
in paragraphs 11 and 17.
CONCLUSION
24. In conclusion, the objectives of the studV are:
(a) to facilitate production of housing;
(b) to facilitate competitive input markets (land, finance,
construction);
(c) to encourage efficient use of existing serviced land and
housing;
(d) to create a responsive supply of land for residential use which
implies a "market" for undeveloped and developed new residential
land: a "market" requires:
(i) competition among developers (private and public); and
(ii) competition among land sellers.
(e) to open urban perimeters of major cities to increase the effective
supply of land for potential urban use;
(f) to reduce, over time, the ratio between the price of residential and
rural land at the periphery of cities;
(g) to increase the spatial efficiency of major cities through the use
of market land price differentials reflecting locational
advantages;
(h) to assess the housing information needs on the part of private market
participants;
(i> to develop a method which will provide access to more reliable,
consistent and timely information on which private market
participants can base their decisions; and
(j) to induce the private sector to produce information about the housing
market on a self-financing basis.
25. It is envisaged that the etudy would comprise the following three main
components:
I. (a) A review of the urban residential regulatory framework will be
undertaken for NoH to assena each major housing-related regulation in
terme of:
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ANNEX 11Page 9 of il
(i) the intended purpose of the regulation;(ii) the value and the co6t6 and benefits of each regulation; and(iii) the distribution of benefits and costs.
This review will commence in January 1994 and will be completed inJanuary 1995.
(b) A program to reform housing regulations will be established by July 1,1995 and will seek to:
(i) reduce the cost of regulation;(ii) increase flexibility by moving to performance regulationsrather than physical regulations; and(iii) rationalize incentives created by the various regulations.
(c) The priority areas for regulatory reform are:
(i) liberalization of direct controls on the allocation of newserviced lots and housing;(ii) increased competition in the construction and land developmentindustries and encouragement of a diversified supply; and(iii) greater reliance on indirect regulation such as taxation toimprove sector efficiency.
tI. (a) A review will be undertaken of the legal and regulatory frameworkwhich governs the conversion of raw land into residential plots andwhich determines the floor space which could be built on it; thereview would include:
(i) the quantification of the main legal and regulatory parametersgoverning land supply;(ii) locational analysis of the supply of land in major cities;(iii) a projection of the area of land for which conversion permitwill be granted for the next 10 years for the major cities ofthe country; and(iv) an estimate of the effect of the new land supply on densitiesand land prices.
This review will commence in January 1994 and will be completed inJanuary 1995.
(b) A program of reform for land regulation will be established by July 1,1995 and vill aim at:
(i) increasing the amount of residential land and floor space puton the market in urban areas;(ii) increasing competition among land owners and public and privatedevelopers; and(iii) decentralizing and streamlining the decision-making processconcerning land conversion and site planning.
(c) The priority for specific reforms will include the creation of newregulatory tools concerning land development, in particular:
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ANNEX 11
Page 10 of il
(i) introduction of a new zoning status for "potential" residential
land which would become a pool of land within which re-zoning
would be automatic once infrastructure has been provided;
(ii) assessment of constraints on the formation of existing
associations such as cooperatives and the possible promotion of
new forms of associations which would, amongst others,
facilitate the purchase of land needed to develop residential
areas; and
(iii) redefinition of administrative role for land planning giving
more responsibilities to local authorities.
III. (a) A review of available information about the housing market, including
determination of where this information is deficient or redundant,
will be carried out. Key issues to be addressed are:
(i) What types of information is currently being collected and
published about Moroccols housing market?
(ii) How accurate, timely and consistent is the information
currently available about market conditions? How can it be
improved?(iii) What gaps or overlaps of information about
the housing market
exist?(iv) How is the existing information currently being used,
and how
will additional information likely be used, and by whom?
(v) Who is currently collecting and publishing the existing
information? What are the respective roles of the Government,
industry groups, trade organizations, financial institutions,
private firms and others in this process? Regarding future
information to be collected and disseminated, how could this
burden be shared by the private sector?
(vi) Is information available at a desegregated level and by
geographic location? If so, what types of information, who
collects it, and how often is it disseminated?
This review will commence in January 1994 and will be completed in July
1995.
(b) By October 1, 1994 MoH will develop an outline of the issues involved,
and will organize a meeting of all the parties (e.g., bankers,
developers, and Government agencies) to analyze the outline, and set
an agenda for further analysis with the following objectives:
(i) to determine the information needs of private sector decision
makers, which has a value that the usera are willing to pay for
and a cost that makes it worthy to produce;
(ii) to establish the extent to which this information should be
collected by private information companies, associations of
entrepreneurs, and/or the Government;
(iii) to set common definitions and guidelines so as to make the
information produced by different parties or in different
regions comparable; and
(iv) to integrate a data bank available to all parties, with present
information that in accurate and timely by March 1, 1995.
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ANNEX 1 1Page il of il
(c) The priority areas for the collection of pertinent housing informationare:
(i) the establishment of priorities for collecting and publishinginformation;(ii) the method of collecting data,(iii) survey design and data collecting procedures;(iv) data processing and analysis;(v) institutional arrangements for creating and using information;
and(vi) cost of alternative approaches.
REPORTS
26. The consultants muet establish the following reports:
(a) the methodological report of the study, two months after itsbeginning;
<b) the provisional report, ten months after the beginning of thestudy; and
(c) the final report, twelve months after the beginning of thestudy.
Each report must be submitted to the Ministry of Housing and to theBank for examination and observations.
REFERENCES
1. Etude du Secteur de la Construction, by Groupement d'Etudes INAU/CERAU-TUM,for CIH, December 1992;Rapport sur les Structures de l'Anpareil de Production de Logements auMaroc, by Groupement TEAM Maroc/TRAM International, for Ministry ofHousing, draft report, November 1992.
2. See among other sources: Catherine Farvacque and Patrick McAuslan:Reforminq Urban Land Policies and Institutions in Developinq Countries,Urban Management Program Policy Paper, The World Bank, Washington D.C.,1992. This publication provides an overview of recent experience inseveral countries, a discussion of the problems encountered, and a reviewof the most promising approaches to land management reform.
3. See:A. and M-A.Bertaud and J.O.Wright: Efficiency in Land Use and InfrastructureDesign: An Anilication of the Bertaud Nodel, Discussion Paper, Report INU17, The World Bank, Urban Development Division, Washington DC, 1988;Règlements d'Urbanisme et Plans de Subdivisions et leur Impact sur lesCoûts de Viabilisation du Terrain: Uttilisation du Modéle PADCO-Bertaud oourune Meilleure Conception des Plans de Lotissement en Tunisie, préparé parMarie-Agnes Bertaud pour la Banque Mondiale, Février 1990
4. For a detailed description of a market information system, see: David E.Dowall: The Land Market Asseesment: A New Tool for Urban Management, TheWorld Bank/UNCHS/UNDP, Washington DC, 1991.
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ANNEX 12Page 1 of 7
KINGDOM OF MOROCCO
STAFF APPRAISAL REPORT
LAND DEVELOPMENT PROJECT FOR LOW INCOME FAMILIES
Terms of Reference for Socio-Ecomomic Impact Studv
1. The Morocco Land Development Project will contribute to the rehousing
of bidonville dwellers in mixed-type residential subdivisions being developed by
S.N.E.C. across Morocco. This program is part of a national program being
implemented by the Ministry of Housing (MoH) to relocate over time about 160,000
slum dwellers identified during a 1992 national survey of slum dwellers. The
first of these subprojects will begin in 1993, and the next ones will involve
components of rehousing to begin in late 1994 or thereafter.
2. Although rehousing practice is well-developed in Morocco, the social
and micro-economic factors in the rehousing process, and the impacts of rehousing
on those affected and on society at large are not at all well understood. Little
research has been conducted that follows bidonville dwellers before, during and
after their resettlement into new self-help housing. There are three general
types of "outcomes" in the rehousing process:
(a) Some bidonville dwellers buy their subsidized lots and build their
houses as their finances permit, even building a second story and
earning substantial income from renting it out.
(b) Others, unable to amass the resources to build by themselves, get
housed by entering into an agreement of "association" with an
outsider who builds the dwelling to house both families in exchange
for co-ownership of the property.
(c) Still others resell their rights and are never rehoused on the plot
of land offered to them.
What factors determine which outcome there will be is not known, nor have the
proportions of people in each category been calculated carefully. The
possibility is that the poorest people do not get rehoused, despite the
intentions of the government and the project.
3. It is intended that the study proposed here monitor, describe, and
analyze these processes and impacts. A primary goal of the study will be to make
interim and final recommendations to MoH, the Ministry of Interior, and the
Goverrment as a whole, on ways to reduce the distressed ceding or re-sale of new
property righte, in order to maximize the proportion of bidonville dwellers who
accede to the full potential value of the rehousing entitlement they are given.
Studv Obiectives
4. The purpose of the study is to assess the social and micro-economic
processes and impacts of the rehousing of bidonville dwellers in key subprojects
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ANN 12Page 2 of 7
of the Land Development Project for Low-Income Families. The follovingfundamental questions must be answered:
(a) Are people'8 incomes (net of housing co8ts) at least as high afterrehousing as they were before?
(b) Taking account of all costs and benefits, how much better or vorseare the standards of living of resettlers (both female and male) thanthey were before?
(c) What happens to the people who cannot mobilize the resources to payfor and/or develop their lot?
(d) In the rehousing process, how do people resolve grievances that mayarise in the allotment or valorization process?
(e) What changes to family and social life occur as a result ofrehousing?
(f) How can a process of consultation with bidonville dvellers bedeveloped which will improve the resettlement process?
5. Issues to be analyzed bear directly on the relation of rehousing topoverty reduction, the successful targeting of housing subsidies, and theconsequences of rehousing on vider questions of differentiation and change inMoroccan society. On the basis of the analysis of these issues, recommendationswill be advanced to improve rehousing outcomes for resettlers, and especially toensure that rehousing does not create or deepen impoverishment for any alumdwellers subject to the process. Three subprojects of the Land DevelopmentProject for Low-Income Families, selected because they represent widely varyingconditions across the country, vill be studied in detail, after a pre-study inthe first of the subprojects.
The Studv
6. The following paragraphe are meant to include a wide range of topiceand issues the analysis of which would illuminate understanding of the wholesocial and micro-economic practice of the rehousing of bidonville dwellers. Theactual research formats and instruments may be adapted to the particularities ofeach research site but will provide the basic understandings noted above inparagraphs 2, 4, and 5.
7. Five general domains of information will be gathered, having to dowith (A) baseline socioeconomic information on the bidonvilles to be rehoused,(B) socio-spatial information useful for urban planning, (C) the social proceasof rehousing, (D) the micro-economics of rehousing, and (E) the social and micro-economic impacts of rehousing. Without limiting the possible issues to beresearched, these domains include the folloving topics:
A. Baseline information:
(i) Describe general social and physical conditions in thebidonvilles: housing types, population, physical
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Page 3 of 7
conditions, site and situation characteristics,
neighborhood patterns, institutional infrastructure, off-
site institutional usage.
(ii) Describe social differentiation (by origin, class position,
income, professional category, sex, etc.) in the
bidonville; discuss formal and informal patterns of
influence and leadership; indicate patterns of tenure of
"baraques", dwellings and land, with rents and/or
usufructuary agreements, if any. As part of survey in
A(iii) below, show the distribution (acroas socio-economic
groups among the resettlers) of costs for all shelter-
related services (water, sanitation, energy, maintenance,
etc.). Compare bidonville housing costs to those in other
low-cost housing areas nearby. Identify assets to be lost
in the rehousing process (including land, buildings or
building materials, and commercial assets), indicating a
method for costing those assets.
(iii) For a significant sample of families, survey for family
size, educational levels, work places; discuss formal and
informal revenue sources and income of all family members;
describe magnitudes and locations (urban, rural, etc.) of
assets; show economic and kinship links to rural or urban
areas; trace residential and work careers and mode of
access to current bidonville residence; survey significant
sources of personal and social support for job finding, in
illness, in access to urban services, and as neighbors.
Analyze gender and age-specific roles in domestic economy.
Discuss the meaning of bidonville residence compared to
other forms of housing.
B. Urban planning inouts:
(i) Describe space use and spatial relations in the
bidonvilles; explain locational factors in bidonville
internai economy; discuss socio-spatial linkages to
external economy, including transport use, consumption of
urban services.
(ii) Describe and analyze solidarities in laneways and zribas;
analyze family size and space use.
C. Social orocess of rehousinc:
(i) Monitor the allocation of building lots, noting action by
individuals and/or groups in anticipation of or in reaction
to the attribution. Discuss sources of foreknowledge,
informal communication, and grievance airing. Indicate
roles, if any, of notables, influentials, elected leaders,
and local authorities in solving perceived personal or
general problems of allocation. From this and other
consultation during the research process, define methods of
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ANNEX 12Page 4 of 7
consultation for future resettlement actions that willimprove communication, allow the input of resettlers' ideasinto the planning process, and make the rehousing activitymore effective.
(ii) For the sample families, trace the sources and timing ofpayments. Indicate differences in the granting ofdocuments or of people's understanding of the legal processinvolved.
(iii) Show how people plan for construction, including decisionsabout subcontractors, labor recruitment, and themobilization of materials. Discuss the planning of themove itself, including the recovery of used buildingmaterials and/or the moving of the existing "baraque".
(iv) Discuss the settling-in process. Note the pacing andphasing of construction, including utility hook-ups.Discuss the modalities of integration into new publicservices (schools, transport, etc.). Show how peopleestablish new networks of neighborhood and businessrelationships. Discuss the completion of the house.Record and analyze the stress of transition for differentfamily members.
D. Micro-economics of rehousing:
(i) For the sample families, discuss the mobilization ofresources for lot purchase and construction (includingextended family and interpersonal and institutional loansources, and or finding an associate); list all cash andother costs involved; indicate how cash-flow is managedduring construction, including the stresses put on otherconsumption.
(ii) Monitor the relocation of formal and informal enterprisesfrom bidonville to rehousing area. Indicate the costs andbenefits of lost or added trade.
(iii) Discuss employment generation, including construction work,in the new housing area. Analyze changes in employment forthe sampled families. Summarize net changes in employmentstructures and income levels.
(iv) Analyze total costs, including recurrent costs, of the newhousing, including utilities, transport, etc. Calculateany rental income from new premises. Determine the marketvalue of the new housing at 12 months and 24 months afterthe start of construction. Analyze opportunity costs ofthis investment in relation to leavinq resources where theywere before the rehousing possibility arose. Compare totalcosts of housing before and after resettlement. Discuas
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Page 5 of 7
questions of whether resettlers can permanently sustain the
costs of the new housing situation they have built.
E. Socio-economic imDacts of rehousina:
<i) For the sampled families, assess the impacts of the
acquisition of new housing on kinship and friendship
linkages, including pressures from the mobilization of
funds and changes in status. Discuss the consequences of
selling rural assets on both urban incomes and rural
property rights within the wider family. Discuss changes
in household structure and roles from the bidonville to the
rehousing area. Assess aggregate changes in social
differentiation, leadership patterns, and life styles
(including health and nutrition, if possible) in the new
housing zones after rehousing.
(ii) Account for (and explain why) those bidonville dwellers who
are allotted purchase rights sell before completion of
construction (the "taux de glissage"). Recommend ways to
diminish this rate.
(iii) Discuss the variety of f orms of "associateship," including
special forms in the case of multiple-family allotment of
sites. Illustrate the legal relationships that are
produced. Determine the consequences, both social and
economic, of taking an "associate" in order to build.
(iv) Analyze the process of taking formal institutional credit,
including any problems that arise once the repayment period
has begun, and suggest ways, if any, that this procese can
be improved.
(v) Discuss the legal rights acquired by new householders,
including the formalization of title. Analyze resales
after construction, including the implications for market
value of any variations in tenure rights.
8. Methodoloav. The researcher will use a combination of methods to
generate the data for the overall study. General data on the bidonville
dwellers going to each new subdivision will be gathered in a broad survey.
Descriptive data on bidonville and rehousing area spatial patterns, neighborhood
interactions, and institutional use will be constructed on the basis of brief
periods of participant observation. A sample of families will be followed
before, during, and after resettlement, to gather the material for items A (iii),
C (ii), (iii), and (iv), D (i) and (iv), and E (i), (iv), and (v). Those
bidonville dwellers to be followed for questions of commerce [Items B(i) and
D(ii)], and those to be followed for questions of allotment-selling [E(ii)],
associateship [E(iii)], and institutional credit [E(iv)], will have to be
identified through separate methods that pinpoint such activities.
9. Level of Effort. Bach of the three phases of the study will engage
a senior researcher for a period of three months spread over the entire period
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ANNMEX 12Page 6 of 7
of the study. Working with the senior researcher will be a team of field staff,involving three full-time assistants for six months each, or eighteen person-months of junior researchers' effort on each study. The preparatory study ofYasmine 2 will involve the senior researcher for three months and three fieldassistants for one month each.
10. Products and Phasinq.
A. The Rehousing in Yasmine 2 in Khouribga will be used as the pre-test, or preliminary phase, of this study. As lots have alreadybeen allocated there, and the move may be begun before the studycan begin, all those parts of the study which can be accomplishedwill be, even if some of the data is gathered retrospectively.Assuming that the people have moved onto the site before thestudy begins, interim results based on phases 1 and 2 will beproduced within six months of the beginning of the study, anddiscussed at a government workshop, to which representation fromthe World Bank will be invited. No rehousing is to begin at anysubsequent site until these interim results of the Yasmine 2study can be incorporated into the planning: as the rehousinglots for the next subproject after Yasmine 2 will not be readyfor release to squatters until at least early 1995 (and perhapslater), this interval will give plenty of time for the fullresults of the (truncated) first and second phases of the Yasmine2 study to be produced and integrated into further planning (seepara D below for third phase planning).
B. The full study will be carried out for three of the subprojectsof the Land Development Project for Low-Income Families. RiadEssalam will be the first of these. The two others will bechosen to vary the characteristics of the resettlers and therehousing situations: one will be chosen from among those withrehousing lots to be released in 1997, and one from those to beready in 1998. Because the bidonvilles to be relocated to eachsub-project will be identified before Bank approval of thesubproject, the study can begin as soon as Bank approval has beengiven.
C. The methodology for all subprojects will be uniform, but must beadapted to the size and number of bidonvilles in each subproject.Without compromising the need to insure that the studies arerelevant to particular circumstances, the aim is to havecomparable results across subprojects.
D. Each subproject will have data generated from the bidonvillestudies and during the first 12 months after lota are releasedfor rehousing construction to begin. A further follow-up willbe done 24 months from time the first transfers to the new lotstake place. Results of each of these three phases (baseline,transfer/construction, follow-up) will be produced in interimdocuments, and key items that bear on project implementation willbe presented in workshops of Government. A final synthesis
- 91 -
ANNEX 12Page 7 of 7
document will be prepared for each subproject. Copies of all
documents will be forwarded to the World Bank.
B. A final report of the atudy will be produced by the researchers
for review by the Government and the Bank by June 1999. At the
same time, MoH will separately report to the Bank how it has
integrated the findings of this *tudy into further rehousing
policy and practice.
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ANNBX 13Page 1 of 6
KINGDOM OF MOROCCO
STAFF APPRAISAL REPORT
LAND DEVELOPMENT PROJECT FOR LOW-INCOME FAMILIES
Terms of Reference for Technical Assistance to SNEC
1 - INTRODUCTION
1.1 The Government of the Kingdom of Morocco has agreed with the WorldBank on a loan to support a series of measures to strengthen the institutionalcapacity of Societe Nationale d'Equipement et de Construction (SNEC). SNEC shallbe the agency responsible for this consultancy and shall provide policy guidanceto the consultants at critical stages in the development of their work and toresolve the problems and issues identified by the consultants during thedevelopment of their work.
1.2 This consultancy has been divided into three parts, notably:
i the expansion and integration of an existing data processing system;ii establishment of a financial monitoring system; andiii provision of training.
1.3 In providing consultancy services, consideration will be given tojoint ventures comprising specialists in such different fields as dataprocessing, real estate development operations, analytical accounting techniquesand management control systems. In all cases, staff training modules shall beincluded as part of the consultants' output. All reports shall be in French.
2 - BACKGROUND
2.1 SNEC was established in 1987 as a publicly-owned corporation to takeover the program of "Fonds National d'Achat et d'Equipement des Terrains (FNAE)from Ministry of Housing (MoH) accounts. The ownership structure of SNECcomprises the MoH, the Ministry of Finance (MoF), and the Ministry of Interior(MoI), as well as Credit Immobilier et Hotelier (CIH), Caisse de Dépôts et deGestion (CDG), Caisse Nationale de Credit Agricole (CNCA), Agence Nationale deLutte contre l'Habitat Insalubre (ANHI), and four Establissements Regionaux d'Aménagement et de Construction (ERACs). The MoH appoints a Director General (DG)who is in turn responsible for SNEC's day-to-day activities.
2.2 Operating with a current staff of about 50 people (to be increasedto about 70 by 1993 and, ultimately, to about 100 when operating at fullcapacity), SNEC is divided into three main line departments: Technical,Commercial and Administrative. About 30 people work in the Technical Department,4 in the Commercial Department, 6 in Administration, 4 in Regional offices, while
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ANNB 1 3Page 2 of 6
the remaining 6 work in various line functions. SNEC's major activities revolve
around 7 task managers, each with specific responsibilities for identifying,
preparing and supervising the construction of land development projects in
various regions around the country.
2.3 During its first two years of operation (1987-89), SNEC concentrated
almost entirely as Receiver/Manager for former FNAET activities (an on-going
process but now less time consuming). More recently, SNEC has branched out into
land and housing development, not only for its own account but also for those of
the central and local governments.
2.4 SNEC builds on the basis of pre-sold lots, and generally requires a
30 percent down payment at the time the offer to purchase is signed, plus an
additional 40 percent during the three year construction period and the remaining
30 percent when the title is transferred. At the present time, SNEC has about
five projecte under construction for its own account, although none of them are
as yet completed. At its present level of activity, SNEC is well managed.
Managers and senior staff are generally well trained and suitably qualified. To
enhance its administrative and operational capability, SNEC has recently
installed an integrated Management Information System (MIS) which will be
improved and expanded by the consultants appointed under this consultancy.
2.6 The existing data processing hardware (compriuing a mini computer and
20 micro computers) appears to be adequate in terme of central capacity and in
terme of peripheral capacity to manage both ite current operations and operations
under preparation. However, the software installed (some real estate and market
data as well as commercial data), is not yet integrated with the accounting and
financial management of the enterprize--these functionB are presently done on a
manual basis.
4 - SCOPH 0F WORK
4.1 The preparation of this study will occur in three phases as detailed
below. The third phase, which involves the installation of the new systems,
shall be subject to the specific written instructions of SNEC. Implicit in the
objectives for each of the three phases is an orientation to oractical problem
solving.
Phase I: Diacnostice
Task 1: Review and Update of Existing Situation.
Task 2: Planning and Feasibility.
Phase II: Oerations and Systeme Develoyment
Task 3: Integration of Data Processing System
Task 4: Development of Financial Monitoring System
Task 5: Development of Training Modules
- 94 -
ANNEX 13Page 3 of 6
Phase III: Implementation and Evaluation
Task 6: Implementation and Evaluation
4.2 The starting date for Phase I is expected to be immediately afterSNEC and the consultants have reached agreement on these Terms of Reference. Itis expected that the study would be completed within 4 months. Implementationand evaluation is expected to take an additional 4 months.
Phase I; Diaqnostice
Task 1: Review and UVdate of Existinq Situation.
4.3 This analysis shall include but not be limited to an update by theconsultants of all available data.
Task 2: Planning and FeasibilitM
4.4 The consultants shall prepare a diagnostic survey of the selectedactivities. At the end of this task, the consultants shall prepare a DiagnosticReport containing analysis and discussion of the probleme that need to beaddressed during the subsequent phases of this consultancy. The DiagnosticReport should be presented and discussed with SNEC management as well as with theWorld Bank. It is important that a mutual understanding be reached at this stageon the key probleme confronting the efficient operations of SNEC
Phase Il: ODerations and Systems Develooment
Task 3: Intecration of Data Processinq Svstem
4.5 The objectives of this task:
(i) to carry out a rapid analysis of existing hardware in order todetermine whether it is sufficient and in line with SNECI'sfuture requirements;
(ii) to integrate all the operations required by SNEC activities,and specifically to ensure the incorporation of generalaccounting into the data base and correlation with analyticalaccounting so that each operation can be monitored againstbudgetary forecaste; and
(iii) to implement automatic generation of all operational andfinancial data including, inter alia, balance sheets,operating accounts, cash forecaste, ratios, etc.
4.6 The consultants' output shall comprise:
(i) a detailed description of hardware requirements;
- 95 -
ANNEX 1 3Page 4 of 6
(ii) an analysis and description of the new data processing
functions, as well as their integration into the company as a
whole (organization charts, description of tasks and
procedures, description and distribution of documents
including management regulations and audits).
(iii) adaptation and automatic generation of performance charts;
(iv) adaptation of data base extensions;
(v) integration of accounting charts (general, analytical and
budgetary); and
(vi) provision of general, analytical and budget accounting
software.
4.7 This standard accounting software, created in UNIX-INFORMIX, will be
integrated into SJIE's management data system and shall be designed to perform
the following functions:
(i ) incorporation of the chart of accounts;(ii) incorporation of the analytical chart of accounts (items,
sections, authorizations, budgets);(iii) incorporation of accounting vouchers and entries;
(iv) fiscal year flows;(v ) automatic carry-over of balance sheets f rom one fiscal year to
the next;(vi) the possibility of working on several periods and fiscal years
(vii) updating in real time of accounts, monthly statements and
income statements, budgets, sections;(viii) publication of all accounting and other documents relating to
the new applications; and(ix) assistance with the implementation of the new applications and
associated training.
Task 4: Development of Financial Monitoring Svstem
4.8 The objectives of this task are:
Ci) to assist SNEC and data processing consultants to set up a
system of computerized management auditing;
(ii) to establish a system for monitoring SNBC'8 financial
activities and a monthly and annual activity and financialmanagement report;
(iii) to improve the present system of financial forecasts for the
entire company; update forecaste and monitor their break-even
point;
- 96 -
ANNEX 13Page 5 of 6
(iv) to assist project managers and accounting and finance staffprepare a financial package and monitor SN C operations, andensure that the financial criteria for each operation coincidewith those required for the company as a whole;
(v) to assist the Director General in the selection of an internalmanagement auditor and train such a person;
(vi) to help the SNEC specify and formalize its organizationalsystem; and
(vii) to provide financial management training to the company'smanagerial staff.
4.9 The consultants' output shall comprise:
(i) analysis of the weak points requiring improvement; a reportshould be produced highlighting these points and suggestingsolutions;
(ii) introduction of the recommendations issued, establishingprocedures; at this level, the consultants should provide theimpetus required to implement recommendations;
(iii) monitoring of the introduction and operation of therecommendations selected;
(iv) formalization of the system(s) established between twomissions to SNEC; this will take concrete form by thepreparation of a report describing the procedures introducedor to be introduced by JEC staff during the absence of theconsultants; and
(vii) training of managerial staff in financial management.
Task 5: Develooment of Training Modules
4.10 The consultants' output shall comprise:
(i) Business Data Processinq The training modules will bedesigned to improve the general skills of the company'smanagerial staff with regard to the operation and managementcapacity of S8'e computerized management system. Theprincipal requirement is the introduction to inter-relatedSGBD and Informix SQL
(ii) Financial Management Two types of modules should beconsidered: (a) a technical training module for SNECengineers and managerial staff to allow them to familiarize
-97 -
Page 6 of 6
themselves with f inancial management and general techniques of
analytical and budgetary accounting, to learn the f inancial
specificity of the operations they manage, and to communicate
effectively with the company's accounting and finance staff;
(b) a module targeting accounting and finance staff which
would comprise refresher courses in financial management,
general, analytical and budgetary accounting, and the tax
status of real estate activities. The goal would be to make
staff aware not only of the detailed functioning of each
operation developed, but also how these operations are
integrated into the company's global management process, so
that the indicators and financial balances of the company's
operations are respected.
(iii) Work OrQanization and Management The objective of this module
is to improve the effectivenesa of the monitoring of
operations entrusted to or launched by the SNÉC and to
strengthen the company's organization in general. It will
comprise courses in methods for monitoring and planning
operations specific to SNEa's activities, methods for managing
work f lows, for improving procedures, communication techniques
and any useful technique for improving the efficiency and the
availability of each employee.
Phase III: Implementation
Task 6: Imolementation and Evaluation:
4.11 The consultants shall develop the detailed designe for the requisite
software development, and shall assist SE personnel in the installation of the
revised systems and procedures. A post implementation review shall be undertaken
to ensure that the revised systems meet the intended goal.
4.12 Since the integration of the data processing system (Tank 3) is the
most urgent task, its implementation and evaluation of results should take place
as soon as possible (before the results of Task 4 are available).
- 98 -
ANNEX 14Page 1 of 3
KINGDOM OF MOROCCO
STAFF APPRAISAL REPORT
LAND DEVELOPMENT PROJECT FOR LOW-INCOME FAMILIES
Terme of Reference for Technical Assistance to CIH
I - CONTEXT
The _érdit Immobilier et Hâtelier - CIH (Housing and Hotel Finance Bank)is a specialized financial body, approved by the Moroccan Government,whose functions are to provide construction finance, housing finance, landdevelopment finance, and finance for the the construction of commercial orindustrial premises, including tourism or related facilities. In additionto its credit activities, CIH is authorized (1986 Finance Law) to acceptpublic savinge deposits.
The development of CIH activities, both in individual loan amounts and inthe volume of cases handled, has necessitated major investments in dataprocessing equipment with a view to managing the client credit situation.For credits extending over 10-15 years, or even 20 years in the case oflow-cost housing loans, there is also a desire to increase theproductivity of existing staff.
In this context, CIH wishes to engage consultants to provide services,including the purchase of a certain amount of software with a view toacquiring new and/or expanded capabilities, or to replace certain existingfunctions by others which would be more productive, taking into accountthe new possibilities offered by developments in data processingtechnology.
II - DEFINITION OF PRODUCT FUNCTIONS
The software producte CIH intends the consultants to purchase and installin 1993 can be divided into four groupa, notably:
- system producte;
- producte to assist in the manipulation of data by end users;
- operations automation producte; and
- developmental products.
2.1 - Systems oroducts
The eystem in question is the operations system used by the local network.The latest version of this system should be acquired and installed for two
- 99 -
ANNEX 14
Page 2 of 3
major reasons:- effective June 1, 1993, technical support for the version
presently used by CIH will be discontinued by the supplier
(IBM); this results in significant risk to CIH, since most of
its activities are fully automatated; and
- the new version -- called VSA/ESA -- offers several new
functions which will greatly assist the two data processing
teams, i.e. the operations team and the development team.
2.2 - Products to assist in data handlinq bv end users
The majority of CIH central data processing applications are based on a
data base management system for inter-related data (CA-ATACOM) installed
in 1986. This type of system facilitates access by fairly experienced
users to computer-managed inputs. Over the last two years, the supplier
has enhanced and standardized this user interface, thus making it more
user-friendly.
This standardization -- called SZL-QUERY -- will allow micro-computer
access to all data available on the central computers. Immediate
applications of this system include the monitoring of loan recovery
prosesses and the consultation of loan files by internal auditors; etc.
2.3 - ODerations automation oroducts
These products permit the automation of various operating tasks, the
sequencing of these different tasks, as well as the interpretation of the
different error prompts which are carried out automatically in order to
avoid, where possible, the risk of human error.
This automation is needed because of both the rapid increase in volume and
increase in the complexity of word processing at CIH over the last five
years.
2.4 - DeveloDmental oroducts
These products would contribute to improving the productivity of the data
processing development teams so as to be able to meet CIH's data
processing development requirements within a reasonable period of time.
III - THE PURCHASING PROCESS AND CONDITIONS
The process and conditions of the purchase and the installation of the
various products listed in the previous paragraph are specific to each of
the products:
Certain products can be purchased f rom only one supplier, when
thore is a proprietary system or a module linked to a product
already used by the CH This is the case for:
- 100 -
ANNEX 14Page 3 of 3
* operations systems* data handling toole* developmental tools.
Other producte mostly for operations automation, may have tabe provided jointly by several suppliers.
3.1 - Svstem Droducts
System products can be acquired only from IBM since this is a proprietarysystem for the management of the centrally-located computers and willinclude the purchase of a one-time utilization license, at an estimatedcost of about DH 3,400,000; and the training of three staff members (inFrench) costing a total of DH 120,000 including seminar and travel costs.
3.2 - Products desicned to assist in data handlinq
Data handling products vill likely be acquired from Computer Associatessince they will be used in association with the data base managementsystem purchased from this company, and will include the purchase of aone-time utilization license, at an estimated cost of about DH 712,000,and on-site training of the technical team and the user training team atan estimated cost of about DH 90,000.
3.3 - Ooerations automation oroduct
Operations automation products will likely be acquired from severalsuppliers and will include the purchase of a one-time utilization licenseat an estimated cost of DH 580,000; and the installation and trainingassistance at an estimated cost of DH 24,000.
3.4 - Developmental tools
Development tools are consolidated with the CA-DATCOM data base systemwhich will be purchased at an estimated cost of DH 703,000.
IV - CONCLUSIONS
The total cost of this consultancy, including products which CI intendsto install, amounts to about DH 5,500,000.
Since the amount devoted to this type of purchase in the framework of theWorld Bank loan amounts to about DH 4,000,000, certain products may bepartially financed by the vendor.
KINODOM OF uOaDOco
STffF APPPAISAL IOPORT
LANM DEVELaOPME<Y PTJEC FOR LOW-i.NUE FAUNE9
E*ondhure Moaua by Fhnuid (ffl mEon)
wud mk Cet MML Privai Solr Banku Sub-bonnow.r SAEC Tala Fraign Lced Dulle.
Aino Aounlt Anrmt Amnt Y A nt AnouOt Y Aut Y E.hang. (E Taxs) 6 Ta.
1. hitnO.nt CeaiA Lwna DOibpymnt ~ppr Sub-Pro)e.w.
1. Ld AcquWIdon - - - - - 7.61 100.0 7.61 3.0 - 7.61 -
2 C" Woks 10.25 86.0 - - - - - - 56.63 36.( 16.41 5.0 6.26 7.32 2.21
2. Deitgn C _m*t4We 1.52 *1.0 - - - - - - - 0.30 19.0 1.U 1.0 0.37 .l16 0.30
4. OthCt -- - - - - - - - - 5.76 100.0 6.76 2.0 1.01 4.98 0.79
subio"L ndDk"bprnnt(odeofl ièd Sub-,qi.oa) 11.50 40.0 - - - _ _ _ _ _ 20.17 e0.0 31.97 11.0 7.66 20.94 3.36
B. Lord D nvpl i ntW Sd ub
1. L nd Acquls----on 29.96 100.0 29.96 9.0 - 32.67 _ I
2.C ok 43.18 "6.0 - - - - 30.69 36.0 74.07 23.0 20.16 37.41 6.16
3. DesignCo.wu *$ 6.62 81.0 - - - - - - - - 3.21 .0 11.73 4.0 2.30 7.5 1.11 O
4. O(a Ct - - - - - - - - - - 29.00 100.0 29.00 9.0 4.27 23.06 1.76
Subtoa Lnd Dvlopnwntp dcientid Subqq-Profcl 61.70 40.0 - - - - - - - - 93.06 60.0 144.76 46.0 35.72 101.01 8.03
SubtotolaLard D.v.lopmni 63.60 39.0 - - 113.22 61.0 176.72 66.0 43.38 121.96 11.39
C. Loar %o pditiai debkipen1.ThuoughCUt 39.60 46.0 21.04 26.0 - - - - 26.33 30.0 - - 87.78 27.0 36.11 42.13 10.63
2. Tlwough PrIval. Seclai wOk 24.00 46.0 - - - - 13.33 26.0 16.00 30.0 - - 63.32 17.0 21.33 24.63 7.46
Sublet Losns tu petal. dcvelÉp^er 63.60 46.0 21.94 16.0 - - 13.33 9.0 4Z33 30.0 - - 141.10 44.0 6644 64.68 18.00
1. To SNEC \ 0.80 *1.0 - - - - - - - - 0.12 19.0 0.62 0.0 0.40 0.04 0.12
2. To CnI 0.60 1.0 - - - - - - - - 0.12 19.0 0.62 0.0 0.46 0.04 0.12
3. Swdy toi Mioi 2.00 51.0 - - 0.46 19.0 - - - - 2.46 1.0 2.00 - 0.48
Subta TochaIal alsla 3.00 81.0 - - 0.48 9.6 - - - - 0.24 9.6 370 1.0 2.93 0.07 0.70
Totl Dibramnt 130.00 42.0 21.94 7.6 0.46 0.1 13.33 4.7 42.33 16.0 113.46 30.0 321.62 100.0 1OZ76 1U,.66 30.09
.1
- 102 -
ANS=16
KINGDOM OP MDROCCO
STAFF APPRAISAL REPORT
LAND DBVBLOPMBNT PROJECT FOR LOW- INCOMH FAMILIES
Imilementation Schedule
IBRD Financiat Years
COMPONENT 1994. 1995 1996 1997 1998 1999 20WO
Land Development
Appraised sub-proJects
1 Riad Essatma xxxxxxxxxxxxxxxxxxxxxxxxxxxxxx2 Yasmine Z xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
3 ' Jaara xxxxxxxxxxxxxxxxxxxxxx>xxxxxxxxxxx
Identified sub-projects
4 El Amal xxxxxxxx x^xxxxaxxxx
5 Nahda xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
6 AI Manaa xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
7 Fath xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
8 Bakaz XXXXXXXIXXXJXX xxxxxxx_xMx9 Zouagha Sas xxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
10 Iboulay xxxxxxxxxxxxxxxxxxxxxxxxxxxxx.
I1 Aakhar xxxxxxxxxxxxxxxxxxxxxxxxxxxxx
Loans to Private Developers
Through CIH xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxjxxxxxx
Through Private Banks XXXXXXXXxxXXXXXXXXXXXXxxxxxxXXxxaMXXXX.
Technicat Assistance
To SNEC xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxX
To CIH xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx UStudios for MOH xxxxxxxxxxxxxxxxxxxxxxxxxxx
…-- - - - - - - - - - - - - - -- - - - - - - - - - - - - - - -- - - - - - - - - - - - - - -
Equipment and materiats XXXXXXXX…-----
- 103 -
RINGOm4 OP MOROCCO
STAFF APPRAISAL REPORT
LAN DEVnLOC P PROJECr FOR LOW-INCOME F.AMILES
Schedule of Contracte (DM million) I/
PROJECT COMPONENT CIVIL WORKS CONSULTANCIES EOUIPM. & MAT. TYPE ESTIM
TYPE OF CONTRACT Nt. of Amount Nr. of Amount Nr. of Amount OF TENDER
con- con- con- PROCU- AWARD
tracts tracts tracts REMENT DATE
LAND DEVELOPMENTAPPRAISED SUB-PROJECTS 23 138.58 23 16.44
Rlad Essalarn - Subtotai 6 64.99 7 6.14
Roads & sewerage 1 11.58 LCB 8/93
1 27.02 LCB 94
Water supply 1 6.85 LCB 94
Electricity 1 12.18 LCB 94
Telephone 1 6.48 LC8 95
Other 1 0.88 LCB 95
Topogr. surveys 1 0.26 Other 94
Slte layouts 1 0.48 Other 94
Engin.des+sup. 1 0.48 Other 94
Peines et soins RAD 1 3.98 Other -
Other 3 0.95 Other 94
Yasrnine 2 - Subtotal 5 36.04 8 5.41
Roads & sewerage 1 18.95 LCB 95
Water supply 1 5.95 LC8
Electrlcity 1 9.34 LCB
Tolephone 1 1.10 LCB
Other 1 0.69 LCB 96
Topogr. suivsy 1 0.05 Other 94
Site layouts 1 0.63 Other 94
Engin.des+sup. 1 0.68 Other 94
Peines & soins ONE 1 1.95 Other 95
Peines & soins RAD 1 1.24 Other 95
Other 3 0.87 Other 95
M'Jaara - Subtotal 12 37.55 8 4.89
Roads&sewerage 1 11.11 LCB 94
1 5.35 LCB 95
1 8.22 LCB 96
Water supply 1 2.37 LCB 94
1 1.14 LCB 95
1 1.76 LCB 96
Electrlcity 1 3.12 LCB 94
1 1.50 LCB 96
1 2.27 LCB 96
Other 1 0.32 LCB 94
1 0.16 LCB e5
1 0.23 LCB 96
Topogr. suNvey 1 0.10 Other 94
Site layouts 1 0.32 Other 94
Engin.des+sup. 1 0.88 Other 94
Peines & soins ONEP 1 1.44 Other 94
Peines & soins ONE 1 1.88 Other 94
Other 3 0.27 Other 94
IDENMlFIED SU8-PROJECTS (ESTIM.) 71 646.47 71 101.96 94-97
GRAND TOTAL LANO DEVELOPMENT 97 785.06 97 118.40
- 104 -
àmuz_mPage 2 ci 2
__ --- -- -------------------------- _____ ________ -------- ------- _ -------- ------ ---- ---------- ---------PROJECT CÇ?MPONENT CML WORKS CONSULTANCIES EOUIPM. & MAT. TYPE TENDERTYPE OF CONTRACT Nr. of Amount Nr. of Amount Nr. of Amount OF AWARD
con- con- con- PROCU-tracts tracte tracts REMENT
TECHNICAL ASSISTANCE - TOTAL 4 9.97To SNEC 3 4.73 ICB 94To CIH 1 5.24 ICB 94
STUDIES FOR MOH 3 21.08 Othr 94
EQUIPMENT & MATEFIIALS (SNEC) 1 8.50 ICB 94
GRAND TOTAL 97 785.06 104 149.5 1 8.50
i/ Estimated costa Include taxes and contIngencles.
- 105 -
ANNEX 18
KINGDOM OF MOROCCO
STAFF APPRAISAL REPORT
LAND DEVELOPMENT PROJECT FOR LOW-INCOME FAMILIES
Estimated Schedule of Disbursement (US$ million)
Part A: Part B:Land Development, Loans to Private Developers and TA to CIH
TA to SNEC,studies for MOH
IBRD Through CIH Through Private Banks
Fiscal Sem-Year ester By Semester Cumulative By Semester Cumulative By Semester Cumulative
1994 2 1.11 1.11 0.42 0.42 0.72 0.72
1995 1 3.34 4.45 3.22 3.64 1.68 2.40
2 3.91 8.35 4.44 8.08 2.40 4.80
1996 1 5.66 14.02 11.95 20.03 2.40 7.20
2 6.18 20.20 11.92 31.95 6.00 13.20
1997 1 9.13 29.33 3.98 35.93 6.00 19.20
2 9.25 38.58 2.00 37.93 2.40 21.60
1998 1 10.00 48.59 0.42 38.35 1.20 22.80
2 9.20 57.79 0.42 38.77 0.48 23.28
1999 1 5.55 63.34 0.82 39.58 0.48 23.76
2 1.86 65.20 0.32 39.90 0.14 23.90
2000 1 0.80 66.00 0.10 40.00 0.10 24.00
2 0.00 66.00 0.00 40.00 0.00 24.00
TOTAL 66.00 40.00 24.00_____ -------- ----- ----- ----- ----- -- - -- - - --- --- --- ------------____ ___ ___ ___ ___ ___ ___ ___
- 106 -
ANNBX 19
KINGDOM OF MOROCCO
STAFF APPRAISAL REPORT
LAND DEVELOPMENT PROJECT FOR LOW-ICOME FAMILIES
Su»,ervision Forecasts
CALENDAR YEAR STAFF SPECIALITY STAFF WEBKS STAFFMISSION
1993 Economist 2.5 (1)Fin. Analyst 2.5 (1)Municipal Eng./Urban Planner 2.5 (1)Sociologist 2.5 (1)
1994 Economist 5 (2)Fin. Analyst 5 (2)Municipal Eng./Urban Planner 5 (2)Sociologist 5 (2)
1995 Economist 5 (2)Fin. Analyst 5 (2)Municipal Eng./Urban Planner 5 (2)Sociologist 5 (2)
1996 Economist 5 (2)Fin. Analyst 5 (2)Municipal Eng./Urban Planner 5 (2)Sociologist 5 (2)
1997 Economist 5 (2)Fin. Analyst 5 (2)Municipal Eng./Urban Planner 5 (2)Sociologist 5 (2)
1998 Economist 5 (2)Fin. Analyst 5 (2)Municipal Eng./Urban Planner 5 (2)Sociologist 5 (2)
1999 Economist 2.5 (1)Fin. Analyst 2.5 (1)Municipal Eng./Urban Planner 2.5 (1)Sociologist 2.5 (1)
120 (48)
107 -
ANNBX 20
Page 1 of 9
KINGDOM OF MOROCCO
STAFF APPRAISAL REPORT
LAND DEVELOPMENT PROJECT FOR LOW-INCOME FAMILIES
Resettlement Issues: Back-to-Office Report (Januarv 11. 1993)
1. In accordance with my Terms of Reference dated November 25, 1992, I visited
Morocco from December 4-18, 1992. With other members of the Mission, and with
the cooperation and assistance of SNEC and many government officials, I was able
to visit two of the sub-project sites of the proposed project, seven sites of
other rehousing projects for (now ex-) bidonville dvellers, and several
bidonvilles in Mohammedia, Rabat, Khouribga, and Fez. This report responds to
the Terms of Reference and recapitulates central points of the presentation given
in the Division on January 5. It is divided into five sections, on (a) the
question of how involuntary the resettlement actually is in this project, and
what the justification of resettlement is, (b) policies and procedures for
resettlement/ relocation, (c) the specific plans for resettlement in the first
three sub-project sites, (d) legal issues involved in rehousing, and (e) a socio-
economic impact monitoring program for the proposed project directed at improving
social planning and targeting of the poorest beneficiaries of future subprojects
and projects.
A. Involuntary Resettlement?
2. The elimination of shantytowns (bidonvilles) has been a goal and a program
of the Moroccan government since the 1940's. Hundreds of housing operations have
permitted the reduction of bidonville populations from 12.8t of urban households
in 1982 to 7.8 percent in 1989. In 1992 there vere 44,200 less families in
bidonvilles than a decade earlier, even while the total urban population vas
expanding dramatically. The following table demonstrates the falling numbers of
bidonville dvellers:
ECONOMIC nWSEHOLDS IN BIDONVILLES IN KDROCCO
REGION1982 Census 1989 Census 1992 Census
NORD-OUEST 59 200 57 571 55 017
CENTRE-NORD 19 100 6 291 5 741
CENTRE-SUD 18 500 5 944 6 198
ORIBNTAL 8 000 951 1 142
TENSIFT 16 500 20 493 14 051
CENTRE 75 300 63 760 63 451
SUD 7 500 10 481 14 263
TOTAL 204 100 165 491 159 863
Sources: 1982 and 1989: "A propos du recensement des bidonviltes de 1989," by A.Benbetaid and M. Hachtouki, Almaoull 2, Nov. 1991, pp. 3-6.
1992: D.P.P., Ministère de L'Habitat.
- 108 -
Page 2 of 9
3. Many different modes of intervention have been employed to upgradebidonville housing or to replace it altogether. In recent years the favoredmethod has been to offer bidonville dwellers the rights to purchase a serviced,substantially subsidized lot of land. Self-help construction then permits thebeneficiary of the lot to "valorize" the land. The value of the asset receivedand thus valorized is so hiQh. both in cultural and in economic terms. that thereare virtuallv no cases in which the riQht to a lot is refused in favor of stavinain the shantytown. Nonetheless, the move to new housing is involuntary in thesense that the bidonville dweller has no right to stay where he is: the remainsof the bidonville are demolished once people move to their new site. The Bank'sOD on Involuntary Resettlement is thus applicable to the proposed project, evenif the incentive to move is so high that the offer is not refused.
4. The fundamental justification for bidonville elimination is social,oriented to the beneficiaries, not to the land they are occupying. The land onwhich they live, sometimes legally and sometimes not, may be valuable (a formerlyperiurban hamlet now surrounded by the city) or not at all (a disused quarry onunstable land). There may or may not be speculative gains to be made byalternative uses for the old site. Nonetheless, government authorities winbeneficiary consent to removal and rehousing by offering to them a piece ofproperty that brings with it: (a) homeovnership, a powerful indicator of statuein the society; (b) secure tenure, enabling (and proven by) substantialinvestment on the site; (c) improved physical quality of life, given theimmediate connection to sanitary lines and the right to connect to water andelectricity supplies; and (d) high cash value, at least twice and perhaps fivetimes the money invested in buying and building on the property. Of course,there is also a benefit to state security in thus satisfying some of the pooresturban dwellers' personal aspirations. But bidonville dwellers know and acceptthe national purposes and the procesa by which they will be rehoused. The factthat people nobilize what for them are large sums of money (averaging in casstudy in Salé over $ 7000), vith only occasional resort to institutional credit,and ccuplete their construction vithin a year or two of lot acquisition, inadequate indication that the general program in vell-justified.
B. Policies and Procedures for Resettlement
5. Until now, Morocco has had no official, written policy on the eliminationof bidonvilles, nor an official policy on involuntary resettlement. Instead,four decades of practice have given rise to the ideas, institutional mandates,and procedures that condition and structure rehousing operations. In responseto the Bank's request, the Ministère de l'Habitat and SNEC vrote a "Notesynthètique sur les principes de base pour le lancement des opérations derecasement de bidonvilles dans le Royaume du Maroc" (Annex 1), which summarizesthe practice of the authorities in operations of the sort proposed for thisproject. It is recommended that the Bank reauire confirmation orior toneqotiations that this note constitutes Ministry policy. It is furtherrecommended that the documentation submitted for the Bank's aooroval of eachsubvroiect include a confirmation that the rehousinq will be carried out inaccordance with this note.
- 109 -
ANNEX 20Page 3 of 9
6. The Moroccan practice in rehousing operations meets the central thrust of
the Bank's OD on involuntary resettlement. The goal of the OD ij that people
who must move to new locations wind up with living standards and incomes that are
higher than, or at least as good as, those they had before. It is also required
that they not suffer serious losses during the transition. In the proposed
project, the short distances people will move (generally one kilometer or lese)
mean that off-site income sources should not be affected, while many (but not
all) informal sector, on-site activities can continue in the new locations.
Living standards clearly rise for all those affected: The transitional period,
actually making the move, requires further discussion (see next paragraph).
7. The costs of the move to the new location (other than the lot subsidy) are
virtually all borne by the bidonville dwellers themeelves. SNEC (and other
developers) prepares and sells building lots in tracts of land it acquires. In
the proposed project, planning for most of those tracts includes a segment of
space for rehousing bidonville dwellers on lots between 64 and 120 square meters
in area. It is not SNEC or the Ministère de l'Habitat, but rather the Ministry
of the Interior acting through the local authorities under the leadership of the
provincial governor that decides which bidonvilles will be resettled in the
"rehousing" section of the new subdivision. The right to purchase a lot is
assigned by lottery to each household head in the selected bidonvilles. The
beneficiary must pay the subsidized cost of the lot (currently from DH 12,000 to
15,000), the costs of construction and hook-up to municipal services, the coste
of moving, and various legal and other fees. Except in a few privately-argued
cases of extraordinary sunk investments, no compensation is paid by the state for
any reason. The Bank OD suggests that the state should indemnify the losses of
any property rights in the bidonville location, the opportunity cost of self-help
construction labor, and for building materials, lost commerce, or moving. But
for Moroccan authorities, all these elements of cost are subsumed in the subsidy
built into the cost of their new building lot. Beneficiaries agree that the
subsidy substantially outweighs the costs, "voting" by their actions of
valorization of their new property to accept the state's implicit cost/benefit
proposals. Thus, even thouah some modalities of the OD are not reflected. the
overall goal seeme laraelv to be met bv Moroccan rehousinc oractice.
B. The crucial question, then, is how bidonville dwellers, who apparently live
in such poverty, solve the "cash-flow" problem of having to f ind the funde to buy
and build on the lot they are offered. Evidence is scant, except that visually
one sees that all but a few lots in the rehousing schemes are built up within a
short time. An EEC post-facto study of a large rehousing effort in Salé showed
that people found the means to buy and build primarily through personal and
family resources, as the following table shows:
- 110 -
ANNEX 20Page 4 of 9
SOURCES OF FUNDS FOR LOT PURCHASE AND CONSTRDCTIONFrom: EEC/MOH Study of Self-Help Rehousing Scheme
Hay Arrahma, Salé(percentages)
Funding Source | Lot Purchase Construction
Personal Savings 37.8 30.3
Sale of assets 22.8 22.3
Family assistance 6.5 12.2
Personal Credit 26.6 27.2
Credit (Place of Work) 0.9 0.8
Bank Credit 1.4 3.4
Other sources 4.3 3.6
| TOTAL CASES | 413 | 492
9. For unknown reasons, the table does not reveal one major source ofconstruction funds for those too poor to build on their own account. AllMoroccan authorities agree that finding an "associate" is one major solution forthe poorest. Such an "associate" is a non-bidonvillois with the financial meansto construct the building. A contract with an associate grants coproperty rightsto the lot and building, with the associate owning the apartment on one (usuallythe upper) f loor and undivided rights to the soil, the roof top terrace, and othercnommon areas. The obligation of the associate is to build the apartment on one(usually the ground) floor for the bidonville person who has obtained the lot.In a housing market in which non-bidonville dwellers can f ind only a tiny numberof serviced lots, at very high prices, potential "associates" are eagerlyavailable to find those bidonville dwellers who need to forego what amounts tohalf the potential value of the asset in order to realize the other half and toget rehoused.
10. In these two ways, mobilizing resources personally or contracting anassociate, all but a small percentage of bidonville dwellers are said to manageto take advantage of their offer of a lot. Ways to discover the reasons for andpossibly reduce the small proportion who decide or are forced to sell off theirallotment altogether (the "Blippage rate, n or taux de glissement), are discussedin Section E below.
C. Resettlement in Specific Sub-Projects
11. The mission was able to appraise and recommend for Bank financing theresettlement plans for two of the sub-projects of the proposed project, namelyRiad Essalam in Mohammedia, and Yasmine 2 in Khouribga. A summary sheet on theresettlement and a location map for each of these two project8 are available in
- 111 -
ANNEX 20Page 5 of 9
the Project File. As well, for a third sub-project, El Amal in Ain Aouda, an
incomplete summary sheet (and map) is available in the Project File.
12. RIAD BSSALAM. The subdivision covers 46 hectares in the northeastern zone
of Mohammedia. It is composed of some 64 old lots bought from private
landowners, and acquisition has not involved any involuntary displacement. The
rehousing operation will involve the gathering up of people from il separate
bidonvilles in the city, who will be rehoused on 15 hectares of the project.
Some 1198 zriba (compounds) that include 1486 householde and a total of 8233
individuals (an average of 5.5 persons per household) are to be rehoused. Half
of the entire total is the bidonville of Bradaa (called in the census Bradaa I
and Bradaa II), which is located partly on and mostly abutting the newly
aggregated subdivision. The subdivision plan indicates that there are 342 lots
for rehousing, which means that local authorities have planned to allot one
rehousing lot for each 4.35 households. This multiple-family allotment is said
to be more or less normal in the region of metropolitan Casablanca, and is
accomplished by granting 120 square-meter lots which can be built up both
vertically and horizontally (i.e, two families per floor). The serviced lots
will be ready for delivery (and thus for construction to begin) by early 1997.
13. YASMINE 2. This subproject will develop 784 housing and business lots on
28 hectares of land purchased f rom 57 private owners. (Note: The proposed Bank
project will not finance the rehousing area of the subdivision ("Phase II],
because the infrastructure for this zone is already under construction. The OD,
however, requires that resettlement be addressed in all projects in which Bank
finance is involved in anv components.) The overall subdivision will "re-absorb"
seven small bidonvilles and will complete the rehousing to be done in the 4th
arrondissment of the young industrial city of Khouribga. (It is planned that
all the bidonville dwellers in the city will be rehoused within about 4 years
from now.) Some 300 households, most living within a kilometer of the new site,
will be allocated 282 lots on 5 hectares. Each of the rehousing lots is 70
square meters. They have already been allocated, and being sold to the
bidonville dwellers for 10,000 DH plus 3,500 DH as an additional cost (attributed
to the cost of water and electricity services), or overall, just under 200 DH/m'.
According to Ministry technicians on site, this is about a quarter of the cost
of such a lot on the private market. So far, more than 90 percent of the
beneficiaries have paid the first installment of their cost. Lots will be ready
for construction by mid-1993.
14. EL AM^L. This total sub-project site, in the southern town of AMn Aouda,
is 14.06 hectares, of which 1.16 hectares will provide 182 lots for the rehousing
of bidonville dwellers. Because funds for this subproject had yet to be
identified, local authorities have not yet decided which of the 16 bidonvilles
censused in the city will be rehoused at El Amal. There are 1491 zriba in the
bidonvilles of Ain Aouda, with 1608 households and a total of 7415 people in
them. The lots themselves will not be ready for delivery until early 1995. It
has been aQreed to reauire the identification of the bidonvilles to be moved to
El Amal before negotiations as one element of the aDiroval of this sub-oroiect.
15. The detailed resettlement plans called for by OD 4.30 include requirements
for the timely provision of public facilities (schools, religious buildings,
- 112 -
ANNEX 20Page 6 of 9
etc.), utilities, transportation, and the like. This project is an urban landdevelopment and housing project: basic to the project are the technical plansfor all these features, which will serve both rehoused shanty dwellers and thelots being sold publicly. The Bank's urban planner has overseen the review ofall these features, and so the resettlement expert did not further inquire intothese matters except to confirm that the schools, mosques, transport lines andother attributes of the planning routinely have been realized successfully inother and ongoing housing projects.
16. It is recommended for future subprojects and agreed in the Bank thatapproval of the bidonville rehousing element be reviewed for approval on thebasis of submission of the following:
(a) certification that the rehousing component is to be carried out inconformity with the principles of the "Note de Synthêse" (see para. 5above);
(b) the urban planning documentation showing adequate provision ofschools and other public facilities;
(c) the summary and location plan in the format presented here, showingexactly which bidonvilles will be rehoused, certifying that the distanceto the rehousing site is within approximately one kilometer, and statingthe additional information shown for these first subprojects (as shown forRiad Essalam and Jasmine 2 in the Project File).
D. Legal Issues Underlying the Rehousing of Bidonville Dvellers
17. The elimination of bidonvilles proceeds under the general authorities ofthe Ministry of Housing and the Ministry of the Interior. One legal domain, theMoroccan laws on expropriation for public utility, has turned out not to be ofconcern, since there are no cases reported (by scholars consulted as well as theauthorities themselves) in which bidonville dwellers have had to submit toeviction after being offered a subsidized building lot in projects like the onehere being proposed. Three other legal matters that bear upon the social aspectsof resettlement are the nature of land tenure in the bidonvilles with any relatedquestions of compensation; the nature of tenure in the new subdivisions; and thelegal implications of the contract of "associateship" for the purposes ofbuilding construction.
18. Land tenure and cocpensation in the bidonvilles. There is no general dataon the legal status of Morocco's bidonvilles. Most are said to be establishedon disused land owned by the state or religious institutions. Some are onprivate land, where informal or formal rent may be charged by a landowner.Others may be old hamlets and villages established on ancestral lands, where somesmall proportion of the bidonville dwellers have inherited tenure rights. Nomatter the form of tenure, though, bidonville dwellers in Morocco have notchallenged the state's program to rehouse them, nor have those with more securerights attempted to gain greater compensation than their non-indigenous neighborsfor the additional losses incurred. Whatever the additional value of abidonville holding may be if one's ancestors lived on the land, people seem to
- 113 -
ANNEX 20
Page 7 of 9
disregard the marginal difference between themselves and other beneficiaries
of
subsidized lots in order to obtain what is a larger lot, with full
services
available, in the new subdivisions.
19. Tenure in the new subdivisions. Ownership of and title to property
have
different meanings and are acquired at different rates. The first document that
lot purchasers receive from SNEC -- whether they are bidonville dwellers
on
subsidized lots or any other purchaser of a lot in a SNEC subdivisions
-- is a
purchase and sales agreement. A copy of one example of such an agreement (for
Khouribga) is available in the Project File, along with a rough translation.
In
principle there is a second document actually conveying each property
from SNEC
to its purchaser: it should be signed either after payment is complete, or once
SNEC itself has registered its title to the property. The mission asked for an
example of such a document, but it was not produced. In principle, it was said,
such a clocument contains any restrictions that may be placed on the property,
including, in the case of the subsidized lots, a time restriction on re-sale
to
discourage speculation. Title is quite a distinct matter: title
registration/recording is a slow and cumbersome process, somewhat
more rapid if
the land is private and the title is already registered, but taking
years and
years if f ormal title is f irst being established, above all if the land
has been
the property of the state or of a religious trust. The note of July 22, 1992,
on the "Legislative Framework Governing Land Acquisition and Resettlement
in
Morocco, n by N. DeWitt, LEGMN, describes this process in useful detail.
20. Purchasers of non-subsidized lots can re-sell them at any time, and
sooner
or later all purchasers from SNEC will be able to re-sell their property.
It is
not clear what document such a subsequent purchaser would demand to see to
prove
that he or she vas buying from a bona fide owner. The problem created by the
uncertainty over the documentation provided by SNEC (and other developers)
is
well-stated by DeWitt in the note referred to above:
the transfer of ... land upgraded by public developers to individual
owners ... has been effected in a very informal way, with inadequate
documentation f rom the government needed to evidence ownership and
without
registration of the property; subsequent efforts to register such
property.. .have been hindered by the initial incomplete transfer
of title
from the government (or public developer) to the private owner.
Because little clarification on this matter was received during the last
mission,
it has been acreed to reauire at negotiation that SNEC and/or the
government
demonstrate the leaal basis and timinQ of and the format for final
transfer of
clear ownershio of prolertv from itself to its clients. and to certify
that such
ownershio will be transferred to all Durchasers of lots. subsidized
or not.
develored under Bank f inancino. (One way to do so would be for SNEC
to show the
type of documentation that it has received from the private owners
from whom it
has bought the land, and to verify that its clients will receive documentation
of the same nature.)
21. The legal statue of "associations" between bidonville-dvellers and others
for the valorization of subsidized lots. For a bidonville dweller to take on
an
Rassociate" who will build housing on the subsidized lot, the legal relationship
- 114 -
ANNEX 20Page 8 of 9
between the two should be clear. A contract is signed and legalized (notarized,in U.S. terms), by which the lot owner cedes rights of part ownership to theassociate in return for which the house is built for both parties by theassociate. The one such contract seen by the mission stated the date by whichconstruction should be f inished, the quality of the apartment to be built for thelot-owner, and the features of the building (roof terrace, stairwells, halls andentrance) that would be owned commonly. What was not clear in this case waswhether the ownership of the land remained separate, in the hands of the (soon-to-be-ex-) bidonville dweller. It is easy to imagine that in urban areas theland will become much more valuable than the building after the passage of sometime. The mission consulted briefly with two notaries in Rabat, who agreed thatthe applicable law was the Dahir on co-ownership of apartments of 16 November1948, as amended, a copy of which is available in the Project File. Article 5clarifies the matter: when different stories of a building or differentapartments belong to different owners, in default of clauses to the contrary intheir agreements, they are presumed to be co-owners of the soil. It is not knownhow often trouble cases may have arisen over these matters, but it was stated tothe Mission by some bidonville dwellers that their uncertainty about the legalaspects of associateship made them reluctant to entertain the idea.
B. Resolving Open Questions: The Study of Socio-Economic Impacts
22. Moroccan bidonville rehousing schemes are a long-running success story.They have moved scores of thousands of families to serviced, relatively spaciousquarters that have high resale values. This consultant is convinced that thegoal of the Bank's OD is met, and that the Bank would have many lessons to draw,for worldwide application, from involvement in Morocco's programs.
23. Nevertheless, knowledge of what actually transpires in the social andmicro-economic process of rehousing is almost totally lacking. Except foroccasional surveys of internationally-financed projects, there has been noregular gathering of data on any of the following topics:
Baseline information: Social conditions in the bidonvilles; socialdifferentiation in bidonvilles; formal and informal revenue sources of allfamily members; assets; economic and kinship links to rural or other urbanareas; support networks; residential careers; bidonville residence asleverage for housing; patterns of influence and leadership; the culturalsignificance of housing.
Urban plannin inDuts: Spatial relations in the bidonvilles; solidaritiesin lanes and zribas; use of urban facilities; locational factors inbidonville economy; family size and space use.
Social process of rehousing: Waiting for lot allocation; informalneighborhood consultations and airing of grievances; payments and legalpapers; planning the move; moving the barraque and building materials;finding building materials and subcontractors/laborers; beginningresidence; establishing new networks; phasing the construction; decisionson utility hookups; completing the house; integration into new publicservices (achools, transport, etc.); handling the stresses of transition.
- 115 -
ANNEX 20Page 9 of 9
Micro-economics of rehousin : The economics of bidonvilles versus other
low-cost housing; mobilizing resources for rehousing (including extended
family and interpersonal and institutional loan sources, and or f inding an
associate); relocating enterprises; managing cash-flow during
construction); "hidden" costs; judging value and "affordability";
recurrent costs of housing before and after rehousing (utilities,
transport, maintenance, supplies, etc.); total costs.
Socio-economic imoacts of rehousina: Impacts of financial pressures on
kinship and friendship linkages; consequences of selling rural assets;
accounting for the "taux de glissage" (reasons for re-sale before or
during construction); the generation of construction work; the relation of
title registration to asset value; problems with institutional credit
sources; the "bottom line"; new relationships in the new subdivisions; new
patterns of urban facility utilization.
24. It would not be important to know any of the foregoing were we sure that
all the bidonville dwellers were happily rehoused homeowners within a few months
of the acquisition of their lots. But we know there is a visible and an
invisible rate of resale of lot rights soon after acquisition, and we can
confidently predict that there are serious stresses that ramify through extended
families as the strains on cash flow to complete construction make themselves
felt. It is important to know whether specific interventions at critical points
(hastening title, controlling contractors, supervising "associateships," for
example), or a program of sharply targeted additional subsidies for the poorest,
would solve some problems before they force larger issues to emerge.
25. Therefore the final recommendation, agreed to by the Ministère de l'Habitat
during the mission, is that a lona-term study of socio-economic Drocesses and
impacts of the Dresent oroiect will be undertaken. The study, to be supervised
by the Ministry and carried out by independent consultants, will be oriented to
guidance both for the project and for housing programs in general, as soon as
outputs are ready for integration into future rehousing work. Terms of reference
of this study are given in Annex 12.
- 1 16 - NE21
o il
- 117 -
XII'GpOP op NOROCCO
STAFF APPR SL REPORT
AD DEVEXPM8 LO PROJ;:r FOR LOW-INCOE PAf2LIEE AWI1 22
SlrC - Finangial Statements Pago 1,f l0
Financia. Righlightu (DE milliOns)
As at December 31. Actuzl* **vv * *******- Foreea t
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 Total
Finenclol Ilghtights (000'r):
Cash in Bank 30.0 58.9 54.8 36.4 9.7 14.3 48.3 97.1 113.0 85.3 45.6 70.8 I/A
Work ln Progresa 98.1 210.1 271.8 323.3 440.6 611.8 745.3 795.0 783.1 793.3 M.3 1,042.1 I/A
Total Asseta 136.8 280.9 339.0 372.9 464.3 640.5 807.8 906.1 910.0 892.3 851.9 1,125.0 M/A
FRUET-Purchxssro Advance 0.9 26.3 ".6 74.8 10S.1 135.3 155.5 175.6 195.8 215.9 236.0 256.1 U/A
FNAET-Genral Advanceo 130.0 230.0 230.0 230.0 230.0 230.0 230.0 230.0 230.0 230.0 Z30.0 230.0 VA
Capital & Retained Earninua 0.0 1.4 (2.2) (1.0) 7.5 19.7 35.2 55.3 77.5 98.8 117.1 130.0 I/A
Revenue:Land & Nouaing Sales 0.0 0.0 4.3 101.7 148.0 171.2 271.2 406.9 494.4 541.8 553.4 262.2 2,955.1
Other 7.0 12.5 5.2 4.9 5.5 6.0 5.1 6.1 6.1 5.9 2.9 2.9 50.5
Expenso:Coat of Sates 0.0 0.0 0.0 89.2 127.1 144.8 238.0 366.8 450.2 491.9 504.3 221.2 2,633.6
AcÊlnistrative ExpéNets 7.1 11.1 13.1 15.5 18.9 19.2 19.8 20.2 20.9 21.5 22.4 23.1 194.6
Met Incoa After Taxas (0.1) 1.4 (3.6) 1.2 4.6 8.2 11.4 16.1 18.2 21.3 18.3 12.9 108.7
Production Indices:
Nu xr of Lot Starts 1,000 1,600 1,500 3,000 4,300 4,500 4,500 4,500 4,000 4,700 4,000 4,000 41,600
Nu*er of Lot Sala 0 0 0 1,000 1,600 1,500 2,600 4,000 5,000 5,500 5,500 2,200 28,900
Nurber Lots ln Progresa 1,000 2,600 4,100 6,100 8,800 11,800 13,700 14,200 13,200 12,400 10,900 12,700 12,70
Nlumber of Houro Starts 68 46 146 152 200 200 200 250 250 300 300 300 2,412
Nuwer of Nouro Sses O O 0 68 46 146 152 200 200 200 250 250 1,512
Nuwber Houses ln Progres« 68 114 260 344 498 552 600 650 700 800 850 900 900
Construction Disburs_ntx 122.8 17Z.6 115.4 190.5 294.2 365.7 401.4 446.2 468.2 522.0 504.3 509.9 3,817.8
IBRO Covenantsd Indice:
Construction Fes 0.02 0.02 7.02 7.02 7.02 7.02 7.0% 7.02 7.0X 7.0m 7.0X 7.0% 7.0Z
Satles argin 0.02 0.0m 3.02 3.0% 3.0% 3.02 3.0X 3.02 3.0 3.02 3.02 3.02 3.0X
Expons Ratio 101.1X 89.22 138.3X 88.72 71.6X 59.32 51.8X 43.72 41.5X 38.5X 43.12 52.7X 52.32
Sataries Ratio 53.82 35.5X 69.6X 48.02 40.42 32.9X 28.62 23.72 22.32 20.1X 22.12 26.2X 27.9Z
Met Incom Ratio -1.12 10.8X -70.4X 1.5X 3.7X 7.02 9.8X 13.7X 15.5X 18.12 16.0Z 7.7X 10.12
Return on Capital -0.12 0.6X *1.6X 0.5 2.02 3.32 4.32 5.72 5.92 6.5% 5.3% 3.6X 3.82
Pald In Capital (D# l) 0.1 0.1 0.1 0.1 4.0 8.0 12.0 16.0 20.0 20.0 20.0 20.0 20.0
Def inition:
TotaL Revonus: the ua 0f atl house sales, lot satls, construction & management tes, lnteret 4 other Incae.
coat of Satls: the direct cout of contructing a house or serviced lot, inclusive of land L plstion, nfrustructure
costx, house construction coats, dcsign & sipervialon, taxas S duties, fin nce coats S construction fes.
Met Groas Profit: total reve té los coat of alos.
Total Expenss :tt salaries, uwol, coats otf aInistration. and other expenéeo Includtng depreciation.
Met Incoao: net grocs profit lesa total expeno.
con tructSon fes: the ratio of the *nage_nt fees to co ott sales before corstruction fe.
Slas Kargin: the ratio of thé cot eotsalés to the *allino pric of a house or lot.
Expenso Ratio. the ratio of total expenséo to net groa profit.
Sarles Ratio: the ratio of total salarias waues end retlted benefits to net grosa profit.
MNt inco_ Ratio: the ratio of net lincore to net grosa profit.
Return on Capital: the ratio of net incore to the su% of FIAET gnertrl adv., pald ln capital and retalnsd *arning.
- 118 -
Kingdoa of Norocco tM 22Land Devotopunt Project for Low Incoa FltiUe
Pag 2 of 10Societe Nationale d'Eqipmmnt et de Construtctlon (SIEC)Balance Sheet (DO NiLtion)
Au At Decamber 31
" Actut -* Foreceat…1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001Aba.ts t . . -Current Assets:
Cash in Bank 30.0 58.9 54.8 36.4 9.7 14.3 48.3 97.1 113.0 85.3 65.6 70.1Accounts Recelvabte 1.2 2.1 2.1 2.1 2.1 2.1 2.1 2.1 2.1 2.1 2.1 2.1Investments 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0Workin Progress 98.1 210.1 271.8 323.3 440.6 611.8 745.3 795.0 783.1 793.3 773.3 1,042.1
97.1 271.1 328.7 361.8 452.4 628.2 795.7 894.2 898.3 s88.7 841.1 1,115.0. . .. .. . . . . . . . . ... .. . . .. . . .. . . .. . . .. . . .. . ... .. . .
Other Assets:Lowg-ter Louis 0.8 1.7 1.8 1.9 1.9 2.0 2.1 2.2 2.3 2.3 2.3 2.3Fixed Assets:Start-up Costa 2.9 2.9 2.9 2.9 2.9 2.9 2.9 2.9 2.9 2.9 2.9 2.9Vehicles and Equipnmnt 3.6 4.7 5.2 5.9 6.9 7.9 8.4 8.9 9.4 9.9 9.9 9.9MIS Syste. 3.0 4.0 5.0 6.0 6.7 6.9 7.2 7.4 7.7 7.9 8.2 8.4Acuculated Depreclation (1.8) (3.4> (4.4) <5.4) <6.4) (7.4) (8.4) (9.4) (10.4) (11.4) > 12.4) (13.4>
.. .. .. .. ....... ....... ...... .... . .. .. ..... .. . . .. ....... ...Met Ffxed Assets 7.6 8.1 8.6 9.3 10.0 10.2 10.0 9.7 9.5 9.2 8.5 7.7
. .. . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . ........ .. . .Total Assets 136.8 280.9 339.0 372.9 464.3 640.5 807.8 906.1 910.0 892.3 851.9 1,125.0
Liabilities and Equlty
Current Liablitias:Accounts Payable 6.7 23.2 28.2 33.2 38.2 43.2 48.2 53.2 58.2 63.2 68.2 73.2Purchasers, Advances 0.0 0.0 18.5 (12.7> <9.5) 57.9 106.4 84.2 20.0 (42.5) <92.9) 166.0
.. . . .. .. ..... ...... ....... ... .... ....... .... .. .. .... .... ... ..... .. .. ..... .....Total Current LfabiLlttle 6.7 23.2 46.7 20.5 28.7 101.1 154.6 137.4 78.2 20.7 (24.7) 239.2... . ... . .. ... . .. ... ... . ...... ....... ....... ........ ... .... . .. .... . ...... ...... .. .. ..Long-Ter- Liabi liti«:
FNAET-Gmnwr&L Advanea 130.0 230.0 230.0 230.0 230.0 230.0 230.0 230.0 230.0 230.0 230.0 230.0FNAET-Purchisera Advances 0.9 26.3 44.6 74.8 105.1 135.3 155.5 175.6 195.8 215.9 236.0 256.1IBRD Loan 0.0 0.0 0.0 18.6 63.1 129.4 212.6 307.8 328.6 326.9 293.5 239.8Dooestfc Loans 0.0 0.0 20.0 30.0 30.0 25.0 20.0 0.0 0.0 0.0 0.0 30.0Equity:Paid in Capital 0.1 0.1 0.1 0.1 4.0 8.0 12.0 16.0 20.0 20.0 20.0 20.0Retained Earninge (0.1) 1.3 (2.3) 01.1) 3.5 11.7 23.2 39.3 57.5 78.8 97.1 110.0~~~~ ....... ..-. .... .... ..... ..... ..... ...... ...... ... . .... ..... ....
0.0 1.4 <2.2) (1.0) 7.5 19.7 35.2 55.3 77.5 98.8 117.1 130.0
Total Liabilities and Equity 136.8 280.9 339.1 372.9 46.3 640.5 807.8 906.1 910.0 892.3 851.9 1,1 5.0- - _ - - _ - _- _ -
- 119 -
Kingdcu of Moracco ANNEX 22
Land Oeveîopment ProJ.ct for Low Incare Fusilles Page 3 of 10
Societe Nationale d'Equ1p.mnt et de Construction (SNEC)
Statenent of Revenres and Expenses (DR MilLions)
For the Ybar Endfng Doceaw r 31
-"-- Actuel * * Foracast-
1990 1991 1992 1993 1994. 1995 1996 19'97 1998 1999 2000 2001 Total
Revenue:Land Satles -SNEC 0.0 0.0 0.0 74.5 119.1 111.7 111.7 111.7 111.7 111.7 111.7 163.8 1,027.4
iiousing Sales -SNEC 0.0 0.0 0.0 17.4 11.8 37.4 39.0 51.3 51.3 51.3 64.1 64.1 387.6
Land Sates - IBRD 0.0 0.0 0.0 0.0 0.0 0.0 94.5 214.8 300.7 343.7 343.7 0.0 1,297.5
Construction Fats 0.0 0.0 4.3 9.8 17.1 22.1 26.0 29.1 30.7 35.1 33.9 3.4.3 242.6
0.0 0.0 4.3 101.7 148.0 171.2 271.2 406.9 494.4 541.8 553.4 262.2 2,955.1
Cost of SaLes:
L.and -SNEC 0.0 0.0 0.0 72.3 115.7 108.4 108.4 108.4 108.4 108.4 108.4 159.0 997.5
llousing -SNEC 0.0 0.0 0.0 16.9 11.4 36.3 37.8 49.8 49.8 49.8 62.2 62.2 376.3
Larid - BRD 0.0 0.0 0.0 0.0 0.0 0.0 91.8 208.6 292.0 333.7 333.7 0.0 1,259.7
0.0 0.0 0.0 89.2 127.1 144.8 238.0 366.8 450.2 491.9 504.3 221.2 2,633.6
Gros. Profit 0.0 0.0 4.3 12.5 20.9 26.5 33.1 40.2 44.2 49.9 49.0 40.9 321.6
Manmagement Fees-FNAET et et 1.9 3.7 3.8 3.5 3.5 3.5 2.1 2.1 2.1 1.4 1.4 1.4 24.7
Management Fees-Other 3.7 7.0 1.0 1.0 1.5 2.0 2.5 3.0 3.0 3.0 0.0 0.0 17.0
Interest Incare 1.1 1.5 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Other Incom, 0.3 0.4 0.4 0.5 0.5 0.5 0.5 1.0 1.0 1.5 1.5 1.5 8.9
Met Grous Profit 7.0 12.5 9.5 17.5 26.4 32.4 38.2 46.2 50.3 55.8 51.9 43.8 372.1
Expenses:Salaries and Vegags 3.8 4.4 6.6 8.4 10.7 10.7 10.9 10.9 11.2 1l.2 11.5 11.5 103.6
Ackninistrative Expenses 1.1 1.3 1.5 1.8 2.4 2.5 2.7 2.9 3.1 3.4 3.8 4.1 28.2
Management Expense 0.6 0.8 0.9 1.2 1.7 1.7 1.8 2.0 2.1 2.3 2.5 2.8 19.1
Other Expenses 0.6 3.1 3.1 3.1 3.2 3.3 3.3 3.4 3.5 3.5 3.6 3.7 33.7
Provision for Depreciation 1.0 1.6 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 10.0
Start-u.p Expenses 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Capitalized Expenses 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Total Expenses 7.1 11.1 13.1 15.5 18.9 19.2 19.8 20.2 20.9 21.5 22.4 23.1 194.6
Net Incorn Befor. Taxes (0.1> 1.4 <3.6) 2.0 7.5 13.2 18.4 26.0 29.4 34.3 29.5 20.7 177.5
Inca.. Taxas 0.0 0.0 0.0 0.8 2.8 5.0 7.0 9.9 11.2 13.0 11.2 7.9 68.8
Net Income <0.1> 1.4 (3.6) 1.2 4.6 8.2 11.4 16.1 18.2 21.3 18.3 12.9 108.7
suu eu uuem ~ nuuaw mamuu .=u= u=u3. wmuu~ mm mn---Mm~
- 120 -
Kir4cbn of Morocco AMY ZLand Develop nt Project for Lou Incom_ Fe.il tes Page 4 of 10Societe Nationale d'Equip-mn t et de Construction <SNEC)
Statecent of Source ed Appilcationl of Funda (ON NiLlios)For the Year Endind Decewnnbr 31
*** Actuel ** F Foreceat…
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 Total._ . ..... _ _..__. ....... ....... __ ... __.... __._..._... _ ....... ._._.__.... ....... _....... ....... __..._._____._._____Source of Furds:SNEC Met Incon <0.1) 1.4 (3.6) 1.2 4.6 8.2 11.4 16.1 18.2 21.3 18.3 12.9 t10.7Depreciotion 1.0 1.6 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 10.0Accounts Recefvable 1.3 (0.9) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0Investsants 10.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0Accounts Peyable 5.0 16.5 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 50.0FNAET-CGenral Advmnces 91.0 100.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 a.o 0.0 0.0Purchasers' Advances:
Lard SaLes - SNEC 0.0 0.0 15.5 37.1 65.2 85.2 97.6 105.5 121.6 169.1 231.9 301.2 1,2Z9.8Housing Sales - SNEC 0.0 0.0 3.0 8.9 19.1 29.2 38.0 45.2 51.8 60.3 69.5 79.1 404.2IBRO Project 0.0 0.0 0.0 14.7 49.8 102.1 158.1 204.9 226.0 214.8 167.7 106.5 1,244.6FNAET 33.2 78.2 72.0 80.0 80.0 80.0 50.0 50.0 50.0 40.0 40.0 40.0 582.0Work In Prog Tranafrd. To:Cost of Sale.-SNEC Lsnd 0.0 0.0 0.0 72.3 115.7 108.4 108.4 108.4 108.4 108.4 108.4 159.0 997.5Cost of Snles-SNEC Nouslnq 0.0 0.0 0.0 16.9 11.4 36.3 37.8 49.8 49.8 49.8 62.2 62.2 376.3Cost of SaLs-IBRD Project 0.0 0.0 0.0 0.0 0.0 0.0 91.8 208.6 292.0 333.7 333.7 0.0 1,259.7IBRD Loana 0.0 0.0 0.0 18.6 44.5 66.3 83.3 95.2 85.8 63.4 31.6 11.3 499.8Domestic Losn 0.0 0.0 20.0 30.0 30.0 25.0 20.0 0.0 0.0 0.0 0.0 30.0 155.0Capital Incresse 0.0 0.0 0.0 0.0 3.9 4.0 4.0 4.0 4.0 0.0 0.0 0.0 19.9.... . .... _._._ . .... . .... _._...... ._.__.._._. __._...... .. _.._._ _.___..... ....... ... ... __ ._ ....... __.__.____.____.Totat Sources 140.6 196.7 112.9 285.7 430.2 550.8 706.4 893.7 1,013.6 14066.7 1,069.3 808.2 6,937.5._._....__._ .... __... _.__...... ___._. _...._ ____._____ ..... __ ..... .. . . _._.._. ........ ....... _.._.. ....... ........ _Uses of Funds:
Loans Recelvable 0.8 0.9 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.0 0.0 0.6Start.up Coite 0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0Vehicles nd Equlpcent 1.5 1.1 0.5 0.7 1.0 1.0 0.5 0.5 0.5 0.5 0.0 0.0 5.2MIS Syste. 2.5 1.0 1.0 1.0 0.7 0.3 0.3 0.3 0.3 0.3 0.3 0.3 4.5Construction Dlsburseants:SNEC-L"nd Developont 96.0 119.8 51.8 71.9 93.6 101.0 106.6 112.7 152.S 263.0 319.9 370.2 1.643.3SNEC-Housrin Developmnt 0.0 0.0 9.9 19.9 33.8 40.4 45.9 53.2 60.2 72.3 81.2 90.0 506.9IBRO Project 0.0 0.0 0.0 48.9 117.0 174.5 219.1 250.5 225.7 166.7 83.2 29.7 1,315.3FMAET et at 26.8 52.8 53.7 49.8 49.8 49.8 29.9 29.9 29.9 19.9 19.9 19.9 352.2Purchasers Adv. Trawsfrd To:SNEC Land Salés 0.0 0.0 0.0 74.5 119.1 111.7 111.7 111.7 1t1.? 111.7 111.7 163.8 1,027.4SNEC Housing Sates 0.0 0.0 0.0 17.4 11.8 37.4 39.0 51.3 51.3 51.3 64.1 64.1 387.6IBRD Project Lsnd Sale. 0.0 0.0 0.0 0.0 0.0 0.0 94.5 214.8 300.7 343.7 343.7 0.0 1,297.5Paynsnt FNAET Cen. Adv. 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0Payaent FNAET Purch. Adv.
Payent IBRD Lons 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 65.0 65.0 65.0 65.0 260.0Payment Dometic Loaen 0.0 0.0 0.0 20.0 30.0 30.0 25.0 20.0 0.0 0.0 0.0 0.0 125.0._ ._.... .__ ....... .... ... ... _._.__.. . __.___.____. _.... ._._..... ....... ...... ....... _. ._.__..... ....... ._ ...... ...... _.__.TotaL Uses 127.7 175.6 117.0 304.1 456.9 546.2 672.4 844.8 997.7 1,094.5 1,089.0 803.0 6,925.6.__.. .______..... ....... ... .. ..... __.___. ...... ...... _ _ __. .. _.. .. .. .__ .. __.. .. .. ._ _._..__. ._..__.._Incr. (Decr.) Cash In B*nk 13.8 21.1 (4.1) (18.4) (26.7) 4.6 34.0 4J.9 15.9 (27.7> (19.7) 5.1 11.9_uuuu u8 auaua uauua uuu U *98 * _UUU _ o8U UU _UUmm"
- 121 -
Klngdo. of Morocco AiNEX 22
Land Devetopenrt Project for Low Income Fusiles Puge 5 of 10
Sociate NationAle d'Eq41pement et de Conetruction (SIEC)
Sehod4el of Forecasting As.swptfone
For the Year Endind Daecs bar 31
**- Actuel *-" Fo<ecast-
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 Totat
Management Fees:
Other Comissions tX) 7.00% 7.00% 7.00% 7.00% 7.00% 7.00 7.00X 7.00 7.002 7.002 7.002 7.00X 7.00%
Other Traneactions (DN M):
Office of Phosphate 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Royal Air Moroc 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Mumicipalities 52.6 99.7 14.3 14.3 21.4 28.5 35.7 42.9 42.9 42.9 42.9 42.9 328.5
52.6 99.7 14.3 14.3 21.4 28.5 35.7 42.9 42.9 42.9 42.9 42.9 328.5
....... ......... ....... .......... ....... ........ ............. ....... ... ... .. ... ..... ........ . ...... ....... ...... .......... .... ......
Bank Deposit Rate tX) 4.90% 3.982 8.00% 9.00% 9.00% 9.00X 8.50% 8.502 5.002 8.002 8.00% 8.002 8.40X
Other Incneo (Dh M) 0.3 0.4 0.4 0.5 0.5 0.5 0.5 1.0 1.0 1.5 1.5 1.5 8.9
Expanses CX Increase)
Sataries and Wages:
Statutory Incrasees 0.00% 10.00% 2.50% 0.002 2.50% O.OOX 2.50% 0.002 2.50s 0.00% 2.50% 0.002 1.25%
Incresse In Nurber 63.472 7.822 46.45X 26.902 25.00X O.OO 0.002 0.002 0.002 0.002 0.00% 0.002 9.84%
_. _.... ......... ....... .......... ....... .......... ....... .......... .... ... _.... ...... __.___ ...... _. . ...... ....... ............ ..
63.47r 17.82 48.952 26.902 27.502 0.0.0 2.50s 0.002 2.50X 0.00% 2.50% 0.002 16.01X
........ . ......... .. ...... ....... . ....... .......... .... .... .... ..... .. ........ ....... .......... ....... .......... . -
Aâmlnistrative Expereas 3.702 17.59X 17.002 20.00% 33.00% 7.002 7.002 7. OX 7.00% 10.002 10.002 10.00X 12.80s
Mangemnt Expmnses -4.762 26.662 25.002 25.00% 40.00% 5.00o 5.002 7.002 7.002 10.002 10.00% 10.00% 14.402
Other Expenes 118.502 422.03X 0.002 2.00X 2.00% 2.002 2.002 2.00% 2.00% 2.002 2.00% 2.00% 1.802
Depreciation (OH M) 1.0 1.6 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 10.0
Tex Rate tX> 0.00 0.00% 38.00% 38.00x 38.00% 38.00X 38.002 38.00% 38.00x 38.00% 38.002 38.00% 38.00%
Changes in Assets:
Accouzts Rac. (Dm M) <1.3) 0.9 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Inve.tments (Dm M) (10.0) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Loana Rocelvabla (DH M) 0.8 0.9 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.0 0.0 0.6
Start-up Costs (DM M) 0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Vehicles and Equip (DM M) 1.5 1.1 0.5 0.7 1.0 1.0 0.5 0.5 0.5 0.5 0.0 0.0 5.2
Mnft Infor. Sys. (DN M) 2.5 1.0 1.0 1.0 0.7 0.3 0.3 0.3 0.3 0.3 0.3 0.3 4.5
Changes In Liabilities:
Accou,te Payable <DN M) 5.0 16.5 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 50.0
Advnces from Covernr_nt:
Nei Advanees <DO M) 91.0 100.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Repa yents (DN M) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Repaya_nt IMiD Loan (DU M) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 65.0 65.0 65.0 65.0 260.0
Doestie Loana:
New Oomstic Loane (DO M) 0.0 0.0 20.0 30.0 30.0 25.0 20.0 0.0 0.0 0.0 0.0 30.0 155.0
Repaym. Dœ. Loawe (DM M) 0.0 0.0 0.0 20.0 30.0 30.0 25.0 20.0 20.0 0.0 0.0 0.0 145.0
CapitaL Increase 0.0 0.0 0.0 3.9 4.0 4.0 4.0 4.0 0.0 0.0 0.0 0.0 19.9
- 122 -
Kingdom of Morocco AIINEX 22Land Development Project for Low Income Families Page 6 of 10Societe Nationale d'Equipement et de Construction (SNEC)
Schedule of Forecasting Assutptions - SNEC Land ProductionFor the Year Ending Decenrber 31
*** Actua *** ***** Forect 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 Total
-- - - -- - - -- - - -- - - -- - - -- - - -- - - --- -- ------- ------- ------- ------ __--__ __ -_-___(A) In-put Assunptions:1. Land-Price Conting. N/A N/A 0.02 4.0S 6.0X 6.0X 6.02 6.02 6.02 6.02 6.02 6.0X »/A2. lnfrast-Price Continr. N/A N/A 0.0X 4.02 4.4X 5.4X 5.7X 5.7X 5.32 5.32 5.3S 5.3X %/A3. Infrast-Physical Conting. N/A H/A 0.0X 0.02 0.02 0.0X 0.02 0.02 0.02 0.02 0.0X 0.02 NIA4. No. of Lots Started 1,000 1,600 1,500 1,500 1,500 1,500 1,500 1,500 2,200 4,000 4,000 4,000 25,8005. Average Lot Size (M2s) 125.0 125.0 125.0 125.0 125.0 125.0 125.0 125.0 125.0 125.0 125.0 125.0 125.06. Coverage Ratio 35.0% 35.02 40.02 40.0X 40.02 40.02 40.02 40.02 40.02 40.02 40.02 40.0 NI/A7. Cross Land Cost/MZ (DH) 63.0 63.0 63.0 65.5 69.5 73.6 78.0 82.7 87.7 92.9 98.5 104.4 815.98. Infrastruct. Cost/M2 (DO) 240.0 240.0 240.0 249.6 260.6 274.7 290.3 306.9 323.1 340.2 358.3 377.3 3,020.99. Paynent-La,d Coast Year 1 100.0X Year 2 0.02 Year 3 0.02 Year 4 0.o0 Year 5 0.02 100.0210. Payment-Infrast Costs Year 1 25.02 Year 2 35.02 Year 3 35.0 YTear 4 5.02 Year 5 0.02 100.0211. Design & Supervision 4.02 4.02 4.02 4.02 4.02 4.02 4.02 4.02 4.0X 4.02 4.02 4.02 NIA12. Taxes ard Duties 4.02 4.02 4.02 4.02 4.02 4.02 4.02 4.02 4.02 4.02 4.02 4.02 M/A13. Firancing Costs 7.02 7.02 7.02 7.02 7.02 7.02 7.02 7.02 7.02 7.02 7.02 7.0 NI/A14. Construction Fees 7.02 7.02 7.02 7.02 7.02 7.02 7.02 7.02 7.02 7.02 7.02 7.02 M/A15. No. of Lots Sold 0 0 0 1,000 1,600 1,500 1,500 1,500 1,500 1,500 1,500 2,200 13,S0016. Sales Margin 0.02 0.02 3.02 3.02 3.02 3.02 3.02 3.02 3.02 3.02 3.02 3.02 3.0217. Purchasers Advances Year 1 30.02 Year 2 30.02 Year 3 30.02 Year 4 10.0S Year 5 0.02 1W.02
B. Output Resutts:1. Cross Lard Req'd (000u12) 357.1 571.4 468.8 468.8 468.8 468.8 468.8 468.8 687.5 1,250.0 1,250.0 1,250.0 7,250.02. Cross Land Cost (OH M1) 22.5 36.0 29.5 30.7 32.6 34.5 36.6 38.8 60.3 116.2 123.1 130.5 632.83. Infrastruct. Cost (DH It) 30.0 48.0 45.0 46.8 48.9 51.5 54.4 57.5 88.9 170.1 179.1 188.6 930.94. Met Land & Infrastruc./N2 420.0 420.0 397.5 413.4 434.2 458.7 485.4 513.7 542.3 572.6 604.6 638.3 484.95. Design & Other Fees/N2 53.8 39.2 58.8 73.3 89.2 95.6 100.9 106.7 102.5 100.7 117.0 131.7 93.46. Average SetLing Price/142 N/A N/A 470.0 501.3 539.1 570.9 603.9 639.0 664.2 693.5 743.2 793.1 595.67. Average Cost per Lot (<H) 59,220 57,400 57,038 60,841 65,422 69,290 73,292 77,549 80,604 84,162 90,194 96,252 72,2838. Average Setlfng Price/Lot N/A N/A 58,749 62,666 67,385 71,368 75,491 79,875 83,023 86,687 92,900 99,140 74,4529. Sales Revenue <DH M) N/A N/A 0.0 74.5 119.1 111.7 111.7 111.7 111.7 111.7 111.7 163.8 1,027.410. Cost Lot Sales (DH It) N/A N/A 0.0 72.3 115.7 108.4 108.4 108.4 108.4 108.4 108.4 159.0 997.511. Lots in Prog End of Year 1,000 2,600 4,100 4,600 4,500 4,500 4,500 4,500 5,200 7,7D0 10,200 12,000 12,000Disbursement Schedule (PH N):
12. Land Cost 40.0 30.0 29.5 30.7 32.6 34.5 36.6 38.8 60.3 116.2 123.1 130.5 632.813. Infrastructure Cost 56.0 82.0 11.3 27.5 44.3 48.6 51.1 53.9 64.0 96.5 138.3 173.8 709.214. Design & Supervision 0.0 0.0 1.8 1.9 2.0 2.1 2.2 2.3 3.6 6.8 7.2 7.5 37.215. Taxes and Duties 0.0 0.0 3.0 3.1 3.3 3.4 3.6 3.9 6.0 11.5 12.1 12.8 62.516. Financing Costs 0.0 0.0 2.9 4.1 5.4 5.8 6.1 6.5 8.7 14.9 18.3 21.3 93.917. SNEC Construction Fee 6.7 7.8 3.4 4.7 6.1 6.6 7.0 7.4 10.0 17.2 20.9 24.2 107.5._._.... ....... ....... ...... ....... ._... ... ._... ... ___.__._____. __..._ ....... ..... .. __ .... ... .. ___..... ....... .__Total Dlsbursemnts 102.7 119.8 51.8 71.9 93.6 101.0 106.6 112.7 152.5 263.0 319.9 370.2 1,643.3Less:
18. Purchasers' Adv. tDH It) 0.0 0.0 15.5 37.1 65.2 85.2 97.6 105.5 121.6 169.1 231.9 301.2 1,229.8._........ ........ ... ... _._ ......... .. .. __... ... .__.. . __ ....... .. ___ . .... ...... .. .... ... ....... _, ....... .. ... ... _19. Financ. Surptus (Deficit) N/A H/A (36.3) (34.8) (28.4) (15.9) (9.0) (7.2) (30.8) (93.9) <88.0) (69.0) (413.4)-...... saa ---... .*-a . .. * . . ... .5.. . ..m.. . u.... . - * *-
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Kingdo of Norocco AWNEX 22
Land Dovolopmnt ProJact for Low Incoa Failti. Page 7 of 10
Socicto Nattonale d'Equip.omnt et de Coantruction (SNEC)
Schcdute of Forecasting Assumptions - SNEC NouuIng Production
For the Yc r Endîng D connbr 31
*** Actu *** ********Forecuat-
1990 1991 1992 1993 1994 1995 1996 1997 1°W 1999 2000 2001 Totat
(A) Ass.wptlon Varlabtî :
1. Land-PrIc. Conting. N/A N/A 0.02 4.0* 6.0X 6.02 6.02 6.02 6.02 6.02 6.02 6.0X M/A
2. Infrast-Prica Continu. N/A N/A 0O. 4.02 4.4X 5.42 5.72 5.72 5.32 5.32 5.32 5.32 m/A
3. Infrast-Physlcat Conting. N/A N/A 0.02 0.02 O.O 0.02 0.02 0.02 0.02 O.O 0.02 0.02 M/A
4. No. of Houses Storted 6a U 146 152 200 200 200 250 250 300 300 300 2,412
5. Average Nouse Size (M2) N/A N/A 100 100 100 100 100 100 100 100 100 100 1,000
6. Average No. of Houes/Ha N/A N/A 100 100 100 100 100 100 100 100 100 100 1,000
7. Gross Land Cost/M2 (DHM) /A N/A 80ô0 83.2 88.2 93.5 99.1 105.0 111.3 118.0 125.1 132.6 1,036.1
8. Infrastruct. Cost/UZ (DH) N/A M/A 70.0 72.8 76.0 80.1 84.7 89.5 94.2 99.2 104.5 110.0 881.1
9. ousing Costs/M2 (Dl) NIA N/A 1,500 1,560 1,629 1,717 1,814 1,918 2.020 2,127 2,239 2,358 18t880.7
10. Payc nt-Land Costs Yoar 1 100.02 Yser 2 0.02 Yoar 3 0.02 O Yar 4 0.02 YTsr 5 0.02 100.0W
11. Paymant-infrast Coste Year 1 25.02 Year 2 35.02 YTsr 3 35.02 Yosr 4 5.02 YTsr 5 0.02 100.0W
12. Payumnt-Hoiung Costa Yser 1 25.0 Year 2 35.02 YTr 3 35.0 Ysar 4 5.02 YTar 5 0.02 100.O
13. Deslgn & Supervision N/A N/A 4.02 4.02 4.02 4.02 4.02 4.02 4.02 4.02 4.02 4.02 N/A
14. Taxes nd Duties N/A N/A 4.02 4.02 4.02 4.02 4.02 4.02 4.02 4.02 4.02 4.02 N/A
15. Finrncing Colts N/A N/A 7.02 7.02 7.02 7.02 7.02 7.02 7.02 7.02 7.02 7.02 N/A
16. Constructlon Fees 7.02 7.02 7.02 7.02 7.02 7.02 7.02 7.02 7.OX 7.02 7.02 7.02 N/A
17. t. ofHoumes Sold O O 0 68 46 146 152 200 200 200 250 250 1,512
18. Sales Nargin 0.02 O.X 3.02 3.02 3.02 3.02 3.02 3.02 3.0X 3.02 3.02 3.02 3.02
19. R colpt Purch. Advencas Yoar 1 30.02 YTsr 2 30.02 YTr 3 30.0X YTsr 4 10.02 Year 5 0.0 100.0X
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Kingda of Morocco AMEX 22
Land Devetopent Project for Low Incone Fsil fae Page 8 of 10Societe Nationale d'Equip.Unt et de Construction (SNEC)
Schedute of Forecasting AssuiptIons - SbEC Nousing ProductionFor the Ye.r Ending Decumber 31
*** Actu l *** Forecst -1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 Total
(B) Output Results:1. Gross Land R.q'd (OOOse2) N/A N/A 14.6 15.2 20.0 20.0 20.0 25.0 25.0 30.0 30.0 30.0 229.82. Houses in Ccnstr.(OOOsM2) 1/A U/A 14.6 15.2 20.0 20.0 20.0 25.0 25.0 30.0 30.0 30.0 229.83. Gross Land Cost (DU N) U/A M/A 1.2 1.3 1.8 1.9 2.0 2.6 2.8 3.5 3.8 4.0 24.74. Infrastruct. Cost tDH M) I/A N/A 1.0 1.1 1.5 1.6 1.7 2.2 2.4 3.0 3.1 3.3 21.05. Housing Costa (Du 1) N/A M/A 21.90 23.71 32.57 34.33 36.29 47.95 50.49 63.80 67.18 70.74 448.96. Net Land & infrastruc./12 N/A N/A 150.0 156.0 164.2 173.6 183.8 194.5 205.6 217.3 229.6 242.6 198.87. Nousing Constructio<VM2 N/A U/A 1,500.0 1,560.0 1,628.6 1,716.6 1,814.4 1,917.9 2,019.5 2,126.5 2,239.2 2,357.9 1,953.7B. Design & Other Fees/M2 N/A N/A 202.9 287.5 341.5 390.1 432.3 419.6 462.9 471.6 518.0 564.4 432.19. Aver Selling Price/N2 N/A N/A 1,908.4 2,063.6 2,198.4 2,348.7 2,503.4 2,607.9 2,768.6 2.899.9 3,076.4 3,259.9 2,563.5
10. Average Mouss Coat (DM M) I/A l/A 185,286 200,345 213,434 228,029 243,04U 253,198 264,799 281,539 298,683 316,494 248,88611. Aver Selling Price/House N/A N/A 190,844 206,355 219,837 234,870 250,339 260,794 276,863 289,985 307,643 325,989 256,35212. Sales Revenue (DH 1) I/A I/A 0.0 17.4 11.8 37.4 39.0 51.3 51.3 51.3 64.1 64.1 387.613. Cost of Sales (DU 11) H/A U/A 0.0 16.9 11.4 36.3 37.8 49.8 49.8 49.8 62.2 62.2 376.314. Houses ln Prog End of Yea 68 114 260 344 498 552 600 650 700 800 850 900 900
Disburseuent Schedule (DM li):15. Laid Cost 0.0 0.0 1.2 1.3 1.8 1.9 2.0 2.6 2.8 3.5 3.8 4.0 24.716. Infrastructure Cost 0.0 0.0 0.3 0.6 1.1 1.4 1.6 1.8 2.0 2.4 2.8 3.1 17.117. Housing Cost 0.0 0.0 5.5 13.6 24.1 29.4 33.7 38.3 43.8 52.2 59.2 66.0 365.818. Deslgn & Supervfs1on 0.0 0.0 0.9 1.0 1.4 1.4 1.5 2.0 2.1 2.7 2.8 3.0 18.819. Taxes aid Duties 0.0 0.0 0.9 1.0 1.4 1.4 1.5 2.0 2.1 2.7 2.8 3.0 18.820. Financing Coasts 0.0 0.0 0.5 1.1 1.9 2.3 2.6 3.0 3.4 4.1 4.6 5.1 28.521. SUEC Construction Fees 0.0 0.0 0.6 1.3 2.2 2.6 3.0 3.5 3.9 4.7 5.3 5.9 33.2
. . . . .. . . .. . . .. . . .. . . .. . . .. . . .. . . .. . . .. . . ...... ....... _.__.__.__.__.
Total Disbursements 0.0 0.0 9.9 19.9 33.8 40.4 45.9 53.2 60.2 72.3 81.2 90.0 506.9Less:
22. Purchasers Adv. (DM 1) 0.0 0.0 3.0 8.9 19.1 29.2 38.0 45.2 51.8 60.3 69.5 79.1 404.2. . .. .. .. . ....... _._.... . .... . .... . .... . .... ............. . ... ... . ... __.........__. _____._
Financing Surplus (Deficit) 0.0 0.0 (6.9) (10.9) (14.8) (11.2) (7.9) (8.0) (8.4) (12.0) (11.8) (10.9) (102.8)-saS sa s- m5s ss a- a Osan smmsa. a a
- 125 -
Kir4dba otf orocco AMEX 22
Land DeYelopzent Project for Low Incoe Fmiltes Page 9 of 10
Societe Nationale d'Equlp mnt et de Construction lSHEC)
Sch1cdute of Forecasting Assuwptions - IBRD Financed Project
For the Year Endin Decewmber 31
*** Actual ** ***t*****************à* Forecat *--..
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 Total
(A) ln-Put Assumption:
1. Land-Price Conting. N/A N/A 0.02 0.02 0.02 0.02 0.02 0.02 0.02 O.OX 0.0 0.0 M/A
2. Infrast-Price Conting. N/A H/A 0.02 4.02 4.42 5.4X 5 5.7 5.7X 5.32 5.3X 5.32 5.32 %/A
3. lnfrast-Physicel Conting. N/A N/A 0.02 10.02 10.02 10.02 10.02 10.0 10.02 10.02 10.02 10.02 H/A
4. No. of Lots Started O O O 1,500 2,800 3,000 3,000 3,000 1,800 700 0 0 15,800
5. Average Lot Size tM2s) 0.0 0.0 125.0 125.0 125.0 125.0 125.0 125.0 125.0 125.0 125.0 125.0 125.0
6. Coverage Ratio 0.02 0.02 47.02 47.02 47.0X 47.02 47.02 47.02 47.02 47.02 47.02 47.0X N/A
7. Gross Land Cost/H2 (ON) 0.0 0.0 63.0 63.0 63.0 63.0 63.0 63.0 63.0 63.0 63.0 63.0 630.0
B. Infrastruct. Cost/N2 (DH) 0.0 0.0 240.0 273.6 313.0 361.2 417.9 483.5 557.5 642.8 741.1 854.5 4,S85.2
9. Yr of Payment-Land Coat Year 1 100.0 Year 2 0.02 YTar 3 0.02 Year 4 o0.02 Yer 5 0.02 100.0X
10. Yr of Payrent-Infraatr Coat Year 1 25.02 Year 2 35.02 Year 3 35.0X Year 4 5.02 Tear 5 0.02 100.0O
11. Design & Supervision 0.02 0.02 4.02 4.02 4.02 4.02 4.02 4.02 4.02 4.02 4.02 4.02 H/A
12. Taxes wnd Dutles 0.02 0.02 4.02 4.02 4.02 4.02 4.02 4.02 4.02 4.02 4.02 4.02 N/A
13. Financing Costs 0.02 0.02 7.0X 7.02 7.02 7.02 7.02 7.0X 7.02 7.02 7.02 7.02 H/A
14. Construction Fees 0.02 0.02 7.02 7.02 7.02 7.02 7.02 7.0X 7.02 7.02 7.02 7.02 H/A
15. lo. of Lots Sold O O O O O O 1,100 2,500 3,500 4,000 4,000 0 15,100
16. Sales Margin 0.02 0.02 3.02 3.02 3.02 3.02 3.02 3.02 3.02 3.02 3.02 3.02 3.02
17. Purchasers Advance YTear 1 30.02 Year 2 30.02 Yo r 3 30.02 Tsar 4 10.02 YTr 5 0.02 100.0l
18. IBRO Disbursement 2 0.02 38.02 38.02 38.0X 38.02 38.0X 38.02 38.02 38.02 38.02 M/A
B. Output Results:
1. Gross Land Rsq'd (OOOrJ2) 0.0 0.0 0.0 398.9 744.7 797.9 797.9 797.9 478.7 186.2 0.0 0.0 4,202.1
2. Gross Land Cost (DN M) 0.0 0.0 0.0 25.1 46.9 50.3 50.3 50.3 30.2 11.7 0.0 0.0 264.7
3. Infrastruct. Cost (DR M) 0.0 0.0 0.0 51.3 109.5 135.5 156.7 181.3 125.4 56.2 0.0 0.0 816.0
4. Met Land 4 Infrastruct./N 0.0 0.0 0.0 407.6 447.0 495.2 552.0 617.6 691.5 776.8 0.0 0.0 547.2
5. Design & Other Fe5/N2 0.0 0.0 0.0 58.5 70.7 90.9 110.2 125.7 173.6 294.2 0.0 0.0 120.2
6. Aver Solling Prica/N2 0.0 0.0 0.0 480.1 533.3 603.7 682.0 765.6 891.1 1,103.2 0.0 0.0 687.4
7. Aver Cort per Lot (DR) O O 0 58,267 64,721 73,270 82,768 92,907 108,147 133,885 0 0 83,426
8. Aver SeLling Price/Lot 0.0 0.0 0 60,015 66,662 75,468 85,251 95,694 111,391 137,902 0 0 65,928
9. Sates Revenue (Oh N) 0.0 0.0 0.0 0.0 0.0 0.0 94.5 214.8 300.7 343.7 343.7 0.0 1,297.5
10. Cost of Sales (OH M) 0.0 0.0 0.0 0.0 0.0 0.0 91.8 208.6 292.0 333.7 333.7 0.0 1,259.7
11. Lots In Prog End of Year 0.0 0.0 0 1,500 4,300 7,300 9,200 9,700 8,000 4,700 700 700 700
Oirbursument Schedute (ON N>:
12. Land Cost 0.0 0.0 0.0 25.1 46.9 50.3 50.3 50.3 30.2 11.7 0.0 0.0 264.7
13. Infrastructure Cost 0.0 0.0 0.0 12.8 45.3 90.2 127.5 153.1 156.4 129.3 72.7 26.0 813.2
14. Design & Supervision 0.0 0.0 0.0 2.1 4.4 5.4 6.3 7.3 5.0 2.2 0.0 0.0 32.6
15. Taxes and Duties 0.0 0.0 0.0 3.1 6.3 7.4 8.3 9.3 6.2 2.7 0.0 0.0 43.2
16. Flnancing Costs 0.0 0.0 0.0 2.7 6.5 9.8 12.4 14.2 13.1 9.9 5.1 1.8 75.5
17. SMEC Construction Fos. 0.0 0.0 0.0 3.2 7.7 11.4 14.3 16.4 14.8 10.9 5.4 1.9 t6.0
._.. .. _. _. .. ...... ... _.... ....... ....... ...... ....... ....... ..... .. ._._..... .. ..... ....... _.......
TotaL Diabursuents 0.0 0.0 0.0 48.9 117.0 174.5 219.1 250.5 225.7 166.7 83.2 29.7 1,315.3
16. Lesa Purchasersa Adv. (DO 0.0 0.0 0.0 14.7 49.8 102.1 158.1 204.9 226.0 214.8 167.7 106.5 1,244.6
17. Lots IMRD Lonn 0.0 0.0 0.0 18.6 44.5 66.3 83.3 9f.2 85.8 63.4 31.6 11.3 499.8__.__,,... ,... ........ . ,...... .. ..... ....... _.......... .__...... ...... ., .......... ....... ........ ....... ...............
Financing Surplus (Deficit) 0.0 0.0 0.0 (15.7) (22.8> (6.1> 22.2 49.6 86.1 111.4 116.2 88.0 429.1
_ uu*_mu *_a a- " m _ u . _ mwu _ _*
- 126 -
Kingd oa f Morocco *AoNEX 22Land DeveotPuent Project for Low~ Incarn FamiLle, Page 10 of 10Societe Nationat. d'Equipesunt et de Construction (SNEC)ScheduLe of Forecasting Aaseuntiou - FNAET et et Lar Pro<*action
For the Ysar Endlng Decuaiber 31
'** Actuel *ue a***eeee*eeeee***e Foreceat 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 200 TotaL
(A) Input Variables:1. Land-Pr!ce Conting.2. Infrast-Price Conting. N/A N/A 0.0% 4.02 4.42 5.4X 5.72 5.72 5.32 5.3% 5.32 5.3X 4.6X3. lnfrast-Physicat Contlng. N/A N/A 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.0%3. No. of Lots Started N/A N/A N/A N/A M/A N/A N/A M/A N/A N/A N/A N/A O4. Average Lot Size <142s) N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A M/A 0.05. Coverage Ratio N/A Nd/A N/A N/A N/A N/A N/A N/A N/A Nt/A N/A Nd/A 0.0%6. Gross Lanid Cost/>42 (DH) N/A N/A N/A N/A N/A N/A N/A N/A N/A M/A N/A N/A 0.07. lnfrastruct. Cost/N2 (ON) N/A N/A N/A N/A N/A N/A N/A %/A N/A M/A N/A %/A 0.0S. Yr of Pay,sent-Laa Coat Ysar I N/A Year 2 N/A Tsar 3 N/A Year 4 M/A YsarS N /A 0.0%9. Yr of Payment-Infraestr Cost Ysar i N/A Year 2 N/A Year 3 N/A YTear 4 Ml/A Ysar 5 N/A 0.0210. Design &Supervision 4.02 4.02 4.02 4.0% 4.02 4.02 4.0% 4.02 4.02 4.02 4.02 4.02 4.0211. Taxes an uties 4.02 4.02 4.02 4.02 4.02 4.02 4.02 4.02 4.02 4.02 4.0% 4.0% 4.0212. Ftnancing Costs 7.002 7.002 7.002 7.002 7.002 7.002 7.002 7.002 7.002 7.002 7.002 7.002 7.00213. Construction Fees 7.02 7.02 7.02 7.02 7.02 7.02 7.02 7.02 7.02 7.02 7.02 7.02 7.0214. No. of Lots SoLd M/A N/A N/A N/A N/A N/A M/A N/A M/A M/A N/A N/A O15. Sales Margin M/A M/A N/A N/A N/A N/A M/A N/A N/A N/A N/A N/A 0.0216. Purchasers Advsncee Year I 30.02 Tsar 2 30.02 Ysar 3 30.02 Tsar 4 10.02 Tsar 5 0.02 100.02
S. Output Results:1. Gross Land Req'd (000sN2) M/A M/A N/A N/A %/A N/A N/A N/A N/A M/A N/A 11/A 0.02. Gross Ln Coast (ONI N) N/A N/A M/A M/A M/A N/A N/A N/A N/A N/A N/A N/A 0.03. Infrastruct. Cost (DH 14) N/A %/A M/A N/A N/A N/A N/A M/A N/A M/A N/A N/A 0.04. Net Lard & Infrastruct./N N/A M/A N/A N/A NI/A N/A M/A N/A M/A N/A N/A M/A 0.05. Design £ Other Fe.s/14 N/A N/A N/A M/A N/A N/A M/A N/A N/A N/A M/A N/A6. Average SeLLing Prlce/M2 N/A N/A N/A N/A M/A N/A N/A N/A N/A M/A N/A N/A 0.07. Aver Cost per Lot <DH) N/A N/A NIA N/A N/A M/A N/A N/A N/A M/A N/A M/A O8. Aver Setting Prfce/M2 M/A %/A M/A M/A N/A N/A N/A N/A M/A N/A M/A N/A 0.09. Sates Revenue (DU 14) N/A M/A M/A N/A N/A M/A %/A NIA M/A M/A N/A N/A O10. Cost of SaLes (DH M) N/A N/A N/A N/A N/A N/A M/A N/A M/A N/A N/A M/A 0.011. Lots in Prog End of Year M/A N/A N/A N/A N/A M/A N/A N/A N/A N/A M/A MIA N/A
Dîsbursement Schedute (DU M):12. Land Coat 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.013. Infrastructure Cost 26.8 52.8 50.2 4".5 46.5 46.5 27.9 27.9 27.9 18.6 18.6 18.6 329.214. Desîgni & Supervision 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.015. Taxes andl Dutias 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.016. Firwlncing Costs 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.017. Construction Fees 0.0 0.0 3.5 3.3 3.3 3.3 2.0 2.0 2.0 1.3 1.3 1.3 23.0
TotaL Disburséments 26.8 52.8 53.7 49.8 49.8 49.8 29.9 29.9 29.9 19.9 19.9 19.9 352.2
18. Purchasers' Advances (DM 0.0 0.0 72. 0 80.0 80.0 80.0 50.0 50.0 50.0 40.0 40.0 40.0 582.0
meu.n..mse usmu. ~ .e.uu mese m.sSu mse ne .muea ...es musa ms
- 127 -
KIN5;DOM OF MOROCCO
STAFF APPRAISAL REPORT
LAM D IM=OEl;T PROJECT FOR LOW-INCOMH P»ILIIES
Cll- OrQanization
n " e GESTION ,Nfl.T-? D-
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A ~ ~~ l 5 FO>ATION
- 128 -
KINGDOM OF MOROCCO
STAFF APPRAISAL REPORTAnwx 24LAND DBEVLOPNHENT PROJECT FOR LOW-INCOME FAMILIES Page 1 of 4
CIH - Financial StatementsBalance Sheet (DH 000s)As at December 31
1990 1991 1992 1993 1994 1995 1996ASSETS --------- --------- ---------- --------- ---------- ---------- ----------
Current Assets:Cash in Banks 72,890 177,798 120,595 95,754 103,598 100,949 105,713Short-Tera Investments 103,500 62,100 20,700 0 o O OCurrent Maturities:
eHousing Loans 719,093 936,847 1,885,727 2,440,824 2,922,633 3,636,785 4,109,662Caumercial & Other Loans 1,560,501 2,548,443 2,015,808 2,196,107 2,382,012 2,882,285 3,391,939Arrears-All Loans 1,417,515 1,867,445 1,958,222 2.195,592 2,331,265 2,598,716 2,860,807Lest Provisions-Atl Loans (181,116) (459,164) (672,717) <896,947)(1,132,389)(1,379,603)(1,632,877)
3,692,383 5,133,469 5,328,335 6,031,330 6,607,119 7,839,132 8,835,2"Loans Receivable-Trade 9,859,331 10,562,087 12,435,306 13,399,445 14,650,852 15,574,399 16,235,529Loans Recelvable-Government 29,465 24,194 21,032 17,554 13,940 9,319 4,931Equity Investments 142,343 134,642 134,642 134,642 134,642 134,642 134,642Deferred Charges-Net 168,030 190,438 198,996 210,266 223,729 237,827 249,804Less Accumulated Amortization (61,622) (80,660) <85,116) (90,492) (96,611) (103,590) (109,823)Buildings and Equipment-Net 190,193 262,966 297,404 307,959 367,960 427,958 487,958Less Accumulated Depreciation (46,345) (62,537) (70,501) (73,003) (87,226) (101,449) (115,672)
Total Assets 13,973,778 16,164,599 18,260,098 19,937,701 21,814,405 24,018,238 25,722,613
LIABILITIES & CAPITALCurrent Liablitites:Current Maturities:Doeestic Sorrowings 1,231,409 1,010,778 1,378,015 1,465,832 1,670,458 1,915,157 2,474,722International Sorrowings 188,674 244,239 322,634 299,513 299,939 299,819 297,433
Accounts Payable 1,451,509 2,514,786 1,793,010 1,889,757 1,983,958 2,082,866 2,394,441.. .. . . .. . . ... . . ..... .. . . . . ... . . . .. . . . . . .... . .
2,871,592 3,769,803 3,493,659 3,655,102 3,954,355 4,297,842 5,166,596Customer De"sits:Sight Deposits 866,265 1,254,459 1,704,459 2,159,459 2,614,459 3,134,459 3,654,459Tern Deposits 255,741 425,702 580,702 830,702 1,080,702 1,365,702 1,650,702
Long-Teru LiabIlities:Donestic Borrowings 6,530,354 7,207,547 8,887,669 9,221,837 9,351,379 9,336,222 8,861,500International Uorrowings 2,416,427 2,413,080 2,400,290 2,750,777 3,350,838 3,851,019 4,153,585
.......... ~~ . . . . . .. . . . . . . . . .. .. . . .. .......... ... . . .
12,940,379 15,070,591 17,066,779 18,617,877 20,351,733 21,985,24 23,486,842
Capital & Retained Earnings:Paid-in Capital 585,000 685,000 785,000 785,000 785,000 885,000 985,000Subscribed Capital 200,000 100,000 o O 0 300,000 200,000Reserves 171,347 202,297 229,828 261,749 285,267 311,785 352,662Retained Earnfngs 77,052 106,711 178,491 273,075 392,405 536,209 698,109
1,033,399 1,094,008 1,193,319 1,319,824 1,462,672 2,032,994 2,235,771... ... ....... ................. ............. .......... ................ .. ........... ................... ..........
Total Liabilities & Capital 13,973,778 16,164,599 18,260,098 19,937,701 21,814,405 24,018,238 25,722,613.......... uuuuuumuam.. .......... ...... UUuU... UUUUUUUU UUUUUUUUU UUUU............... . . -.--....... .......
- 129 -
Kingdom of Morocco Annex 24
Credit Immobilier et Notelier (CIH) Page 2 of 4
Statement of Revenue end Expenses (DH OOOs)
As at December 31
1990 1991 1992 1993 1994 1995 1996
Revenues:
Interest Charges 1,492,665 1,825,603 2,128,194 2,466,451 2,741,704 3,012,542 3,271,411
Commissions 27,015 29,791 33,433 27,508 29,729 33,779 33,677
Financial Services 18,938 6,928 13,105 10,620 10,000 10,000 10,000
Miscettaneous Services 4,242 4,018 4,420 4,862 5,348 5,883 6,471
..---- ------- ------- ------ ---------- ----------...... ---------- . .....
1,542,860 1,866,340 2,179,152 2,509,441 2,786,781 3,062,204 3,321,559
Expenses:
Salaries and Wages 101,215 121,919 132,454 152,322 175,170 201,446 231,663
Eqptoyee Taxes & Benefits 19,007 14,826 23,369 26,874 30,905 35,541 40,873
Travet 2,016 2,034 2,000 2,300 2,645 3,042 3,498
Administration 11,811 17,149 14,005 16,106 18,522 21,300 24,495
Financing Costs 1,120,207 1,329,802 1,467,760 1,690,005 1,871,544 2,045,635 2,194,092
Provision for Loan Losses 95,313 159,611 213,553 224,230 235,442 247,214 253,274
Provision for Depreciation 26,144 35,276 40,567 46,653 53,650 61,698 70,953
1,375,713 1,680,617 1,893,708 2,158,490 2,387,878 2,615,876 2,818,848
Net Income Before Taxes 167,147 185,723 285,444 350,951 398,903 446,328 502,711
Taxes 74,320 69,464 121,828 149,786 170,252 190,492 214,556
Dividends and Directors Fees 53,520 64,728 75,520 86,520 86,520 86,520 97,520
Net Income 39,307 51,531 88,096 114,645 142,131 169,316 190,635
Less Reserve Allocations:
Statutory Reserves 4,377 5,524 7,753 9,532 10,834 12,122 13,654
Construction Reserves 5,280 5,770 8,563 10,529 11,967 13,390 15,081
Transferred to Retained Earnings 29,650 40,237 71,780 94,584 119,330 143,804 161,900
2-g======== =w=à =t-wst--5- -u=SXsts--
- 130 -
Kingdom of Morocco Annex 24Credit Immobilier et Hotelier (CIH) Page 3 of 4Statement of Source and Application of Funds (DH 000s)
As at December 31
1990 1991 1992 1993 1994 1995 1996
SOURCE OF FUNDS:
Net Income N/A 51,531 88,096 114,645 142,131 169,316 190,635Add Non Cash Charges:
Provision for Loan Losses N/A 159,611 213,553 224,230 235,442 247,214 253,274Provision for Depreciation N/A 35,276 40,567 46,653 53,650 61,698 70,953
Cash Profit N/A 246,418 342,216 385,528 431,223 478,228 514,862Loan Recovery Adjustment N/A 118,437Sale of Short Term Investments N/A 41,400 41,400 20,700 0 O 0Repayment of Loans From Governrment N/A 5,271 3,162 3,478 3,614 4,621 4,388Sale of Equity Investments N/A 7,701 0 0 0 0 0Sight Deposits N/A 388,194 450,000 455,000 455,000 520,000 520,000Term Deposits N/A 169,961 155,000 250,000 250,000 285,000 285,000Accounts Payable N/A 1,063,277 (721,776) 96,747 94,201 98,908 311,575Increase in Subscribed Capital N/A 0 0 0 0 400,000 0Paid-in in Capital N/A 100,000 100,000 0 0 100,000 100,000
N/A 2,140,659 370,002 1,211,453 1,234,038 1,886,757 1,735,825D*omestic Borrowings:
Current Maturities N/A (220,631) 367,237 87,817 204,626 244,699 559,565Long-Term N/A 677,193 1,680,122 334,168 129,542 t15,157) (474,722)International Borrowings:
Current Maturities N/A 55,565 78,395 (23,121) 426 (120) (2,386)Long-Term N/A (3,347) (12,790) 350,487 600,061 500,181 302,566
N/A 2,649,439 2,482,966 1,960,804 2,168,693 2,616,360 2,120,848
USE OF FUNDS:
Loan Disbursements-Net RepaymentsCurrent Maturities:
Nousing Loans N/A 217,754 948,880 555,097 481,809 714,152 472,877Commercial & Other Loans N/A 987,942 (532,635) 180,299 185,905 500,273 509,654Arrears-Ali Loans N/A 449,930 90,777 237,370 135,673 267,451 262,091Net Increase Loans Receivable N/A 702,756 1,873,219 964,139 1,251,407 923,547 661,130
N/A 2,358,382 2,380,241 1,936,905 2,054,794 2,405,423 1,905,752Deferred Charges N/A 22,408 8,558 11,270 13,463 14,098 11,977Buildings and Equipment N/A 72,773 34,438 10,555 60,001 59,998 60,000Reduction in Subscribed Capital N/A 100,000 100,000 100,000 100,000Loan Loss Adjustment N/A (9,032) 16,932 26,915 32,591 39,490 38,355
N/A 2,544,531 2,540,169 1,985,645 2,160,849 2,619,009 2,116,084
Increase (Decrease) in Cash N/A 104,908 (57,203) (24,841) 7,844 (2,649) 4,764
- 131 -
Kingdom of Morocco Annex 24
Credit Immobilier et Hotelier (CIH) Page 4 of 4
Monitoring Indices
As at December 31
1990 1991 1992 1993 1994 1995 1996
As a X of Interest Revenue:
Salaries and Wages 1/ 7.92X 7.44% 7.24X 7.23X 7.49X 7.84% 8.31X
Administration Costs 2/ 0.77X 0.92% 0.64X 0.64X 0.66X 0.70% 0.74X
Financing Costs 3/ 72.61% 71.25% 67.35X 67.35X 67.16X 66.80X 66.06%
Depreciation and Amortization 4/ 7.872 10.44% 11.66% 10.79X 10.37X 10.09X 9.76X
Interest Rate Differential:
Average on Lending Rate 5/ 13.60% 13.91% 13.99X 14.332 14.42X 14.322 14.27X
Average Cost of Capital 6/ 10.42% 10.43% 10.32X 9.99X 10.08X 9.91X 9.66X
3.18% 3.48% 3.672 4.34X 4.35X 4.41X 4.61X
Interest Spread 7/
Covenanted as not less than 2.20X 2.20% 2.20% 2.202 2.202 2.20% 2.20X
Forecast 2.202 2.502 2.892 3.122 3.262 3.36X 3.51X
Operating Expenses as a
X of Total Assets 8/
Covenanted as not more than 1.30% 1.30% 1.302 1.30X 1.30X 1.30X 1.30X
Forecast 0.96% 1.03X 1.00O 1.03X 1.092 1.14X 1.212
Current Assets to Sight Deposits 9/
Covenanted as not more than 1: 5.0 5.0 5.0 5.0 5.0 5.0 5.0
Forecast at 1: 4.3 4.1 3.1 2.8 2.5 2.5 2.4
Equity to Total Assets Ratio 10/:
Covenanted as not more than 1: 18.0 18.0 18.0 18.0 18.0 18.0 18.0
Forecast at 1: 13.5 14.8 15.3 15.1 14.9 11.8 11.5
Definitions:1/ Salaries, Wages, Employee Taxes & Benefits divided by TotaL Revenues.
2/ Travel and Administration Costs divided by Total Revenues.
3/ Financing costs divided by Total Revenues.
4/ Depreciation and Amortization divided by Total Revenues.
5/ Interest Income divided by Housing, Commercial and Other Loans of current previous year.
6/ Interest Expense divided by average Total Liabilities and Capital of current and previous year.
7/ The sun of Interest Charges, Conmissions and Financial Services minus Financial Expenses divided by
average Total Assets of current and previous year.
8/ The sun of Salaries & Wages, Taxes & Benefits, Travel & Administration divided by average
Total Assets of current and previous year.
9/ Current Assets divided by Sight Deposits
10/ The sun of alt Assets divided by the sum of Paid-in and Subscribed Capital, Reserves and Retained
Earnings.
- 132 -
KINGDON OF MOROCCO
Page l of 4STAFF APPRAISAL REPORT
LMD DEVELOPMKNT PROJECT FOR LOW_-ICOMB FAMILIES
SGMB - Financial Statements
Balance Sheet (DH Millions)As at December 31 udffl U_nudld
1007 100 iSSO 1000 1001 t0AS8ETS
NO FMO ASSETSCash end Depoel ai Centfral Sa 444.0 240.3 460.3 47.0 *70.S 4807Gonrnmtent and GoS.nm.-8ced 0u,I 1,1062 1.430.1 1,04e0 1,0.1 1,418.8 1.743.3
LOW RK ASSETSDepoohaI h M ooan Buko 162.1 50.2 44.0 6.3 0.0 07F haiW hnndnl Aboad 1.0 0S S.6 3.S 16S. 17.28p.caIald Fln. huUktUtne 0.0 0.0 0.0 0.0 0.0 0.0Recshebkbe 1.338.5 1.020.8 1'o00.0 1,3759 1,574.8 1.7043
NOC4AL FMIK ASSETSShui-Tm nLoas 1,U801 2,006.9 2,020.9 2,4ffl4 3,48L 4,0461Modlum ad Lon-T.m Lowe 4064 5062 049.8 U9.4 1,117.8 1,353.0
HMH FWK AS8ETSDoubtful Acount 125.5 140.1 16.0 116.0 29Z6 241.0L.u ProuW bO (64.) (0.t5) (70.5) (40.8) <120.7) (187)Ihteret t*od bb 0.0 0.0 0.0 0.0 0.0 0.0
OTME ASSETSProp.fly, Plane and Equlpn.nt 1 5&7 104.2 100.9 234.0 2 4.6 8.1tlai-up C'mie 1.4 a9 2.1 3.2 6.8 10.1
EOUTY INVE»TUENTO 64.5 73.2 1087 157.7 s20.0 3762
TOTAL ASSTS 5,00a4 6,te0.2 8s430 7.074.e0 8.,2.7 10,136.0
uALmES
DEPO8TraDOmmnd 1,79Z9 1,9t00 2,297.8 2.W.0 2,0.11 8.106Tlm 800.1 910.8 1.064.1 1,112.3 1,427.1 1,104.1Sdngo 001.2 808.4 t00. 779.0 070.4 0017.0OthU 447.2 172.7 100.0 2060 224.3 2 a
P ED FUNSDuo to B t 2080 73 S 140.7 300.8 71.1 1.208
dlsooun"d Io en Central an&m 4109 449.0 6961 644.1 410.4 414.8Due to Cntral Banku 0.9 0.3 0.0 0.0 0.0 0.0M.dlum nd Lone-Term Sonowflg 0.0 0.0 0.0 0.0 0.0 0.0
OTHER LULTIESBM Payabl 045 0 99.5 1,071.0 1.191.4 1,604.1 1,601.0hAcruât (301.0 249.1 23t.8 90.0 201.2 327.1
TOTAL ULIADTIES 536.0 5.317.0 0,474.2 7.007.7 8,420.7 9,221.t
Pald- Caphtal 70.0 130.0 130.0 130.0 820.0 620.0Capl and P.e 100.0 212.5 201.6 278.0 185.8 200RPhatsnd Eavinge 0.0 0.1 0.1 260.1 112.7 127.7
TOTAL CAPITAL ACCOUNTO 2.0 342.0 411.7 0t$L 7u.0 914.2
TOTAL IILflE8 AND CAPTAL ACCOUNTS 5.003.4 8,800.2 iU69 7,074.0 9,200.7 10.130.0
CONTINGENT LUU*à&ff 3,48Z7 4,041.6 4.3&00 6,037.3 4,50.0 2,3D9.0
- 133 -
ANNC 2 5Page 2 of 4
Incmne Statenent (DH Millions)As at December 31
-------- -------- Audited -------- -------- Unaudite1987 1988 1989 1990 1991 1992
Interest Income 357.7 395.1 430.4 497.1 680.0 795.0
Interest Expense -159.4 -176.2 -201.4 -234.1 -325.0 -376.0
Fee Income 109.5 132.2 148.0 180.1 118.0 128.0NET OPER. INCOME 307.8 351.1 377.0 443.1 473.0 547.0
StaMfing 100.4 107.2 115.9 129.5 148.0 165.0
Administrative Expenses 48.8 54.3 57.9 59.8 70.0 83.0Deprociation 12.9 19.5 19.9 20.8 26.0 33.0
NET OPER EXPENSES 162.1 181.0 193.7 210.1 244.0 281.0
NEr OPER. PROFIT 145.7 170.1 183.3 233.0 229.0 266.0
Other Incomet-Expensés -0.7 -15.2 -6.1 -13.6 17.0 22.0Leus lan Loss Expenses -18.1 -28.5 -27.1 -39.7 -49.0 -60.0
Revaluated Assoe -0.1 0.1 0.8 0.2 0.0 0.0
NET INCOME BEF. TAX 126.8 126.5 150.9 179.9 197.0 228.0
Taxes 62.1 55.4 65.5 83.1 85.0 98.0NETINCOMEAFT.TAX 64.7 71.1 85.4 96.8 112.0 130.0
DMdends 9.6 16.5 16.5 13.1 19.3Transfer to Reserves 55.0 54.7 69.1 67.2 92.6Transfer to Ret. Earnings 0.1 0.1 0.1 16.7 0.2
'Awaiting shareholdersdocIsion
- 134 -
ANS 2 5Page 3 of 4
Projected Balance Sheet (DM Millions)Ae at December 31
1993 1994 1995 1996ASSETS ----------- --------- - - - - - - - - - -__________
NO RISK ASSETSCash and Depoitt at Centrai Bank 535.4 588.9 647.8 712.6Government and Government-Backed Sccurltlea 1,917.6 2,109.4 2,320.3 2552.4
LOW RISK ASSETSDeposits wlth Moroccan Banka 7.4 8.1 8&9 9.8FinancWl Intgmediarles Abroad 18.9 20.8 22.9 25.2Speclalized Fin. InstitutIons 0.0 0.0 0.0 0.0Recelvables 1,940.7 2.134.8 2,348.3 2.583.1
NORMAL RISIK ASSETSShort-Term Loans 4,449.6 4,894.6 5.384.0 5,922.4Medium and Long-Term Loans 1,487.2 1,635.9 1,799.5 1,979.5
HIGH RISK ASSETSDoubtful Accounts 272.8 300.1 330.1 363.1Less Provwsons (208.7) (229.5) (2525) (277.7)Interest Recelvable 0.0 0.0 0.0 0.0
OTHER ASSETSProperty, Plant and Equlpment 304.8 335.3 -368.8 405.7Start-up Costs 11.1 12.2 13.4 14.8
EOUIrY INVESTMENTS 412.7 454.0 499.4 549.3
TOTAL ASSETS 11,149.6 12,264.6 13,491.0 14.840.1
LIABILMES
DEPOSITSDemand 3,450a6 3,795.6 4.175.2 4,592.7Tlme 1,215.1 1,336.6 1.470.2 1,617.2Savlngs 1.064.7 1,171.2 1,288.3 1,417.1Other 311.9 343.0 377.3 415.1
PURCHASED FUNDSDue to Banks 1,414.1 1,555.5 1,711.0 1,882.1Rediscounted to the Central Banks 676.0 743.5 817.9 899.7Due to Central Banks 0.0 0.0 0.0 0.0Medium and Long-Term Borrowinga 0.0 0.0 0.0 0.0
OTHER LIBILMESBlils Payable 1,652.0 1,817.2 1,998.9 2,198.8Accruais 359.8 395.8 435.4 478.9
TOTAL LIABILJTIES 10,144.0 11,158.4 12,274.2 13,501.6
Pald-In Capital 572.0 629.2 692.1 761.3Capital and Raserves 293.2 322.5 354.7 390.2Retained Earnings 140.5 154.5 170.0 187.0
TOTAL CAPITAL ACCOUNTS 1.005.6 1,106.2 1,216.8 1.338.5
TOTAL UBLITIES AND CAPITAL ACCOUNTS 11,149.6 12,264.6 13,491.0 14,840.1
CONTINGENT LUABILrTES 5,839.9 6,423.9 7,066.3 7,772.9
- 135 -
ANNsX 25Page 4 of 4
Projected Incane Statement (DH Millions)As at December 31
1993 1994 1995 1996
Interest Income 874.5 962.0 1058.1 1164.0Interest Expense -413.6 -455.0 -500.5 -550.5Fee Income 140.8 154.9 170.4 187.4
NET OPER INCOME 601.7 661.9 728.1 800.9
Statfng 181.5 199.7 219.6 241.6Administrative Expenses 91.3 100.4 110.5 121.5Depreclation 36.3 39.9 43.9 48.3
NET OPER EXPENS 309.1 340.0 374.0 411.4
NET OPER. PROFIT 292.6 321.9 354.0 389.5
Other Incornu/-Exponsf 24.2 26.6 29.3 32.2Less loan Lons Expenses -66.0 -72.6 -79.9 -87.8Revaluated Assets 0.0 0.0 0.0 0.0
NET INCOME BEF. T 250.8 275.9 303.5 333.8Taxes 107.8 118.6 130.4 143.5
NETINCOMEAFT.T 143.0 157.3 173.0 190.3DMvldends 21.2 23.4 25.7 28.3TranstertoRcsenrs 101.9 112.0 123.3 135.6Transfer to Rot Earnings 0.2 0.2 0.3 0.3
- 136 -
ANWB 26Page l of 4
KINGDON OF MDROCCO
STAFF APPRAISAL REPORT
LAND DVEFLOPXBNT PROJET FOR LOW-INCONM FAMILIES
Wafabank - Financial Statements
Balance Sheet (DH Nillions)As at Decomber 31
Audbd1007 1008 lSW 100 1001 tW2
ASSETS
NO Fm ASOTCash Md Dspos0 a C.ela ont 411. 002 481.4 761.3 1»2&0 70112Govmamm t MW B.oufd _ 111.40IL8 27002 &874.3 3.7 2110. 3.18.a0
LOWWRK AOTODspos Wb Moofifl amite 17.7 14.2 aZ s U2 4.0 87
F l hllnbsemdlulsAbma 111&6 .4 00.S 77J 9&1 ouSp4oa»d Fm . 0.0 0.0 0.0 0.0 0.0 0.0&bW l f l07 1.230. t,O 1.3128 18 1.,o0.NO0KiAL FM AOTS
abor1-mTsL 2s43 2.4210 2,00te 318 4.080 811j.MedIum Md Long-T«M Lo1 3.7 480 0Mo 760. 1,001. 1,47ILa
mmH mm AmEDeubthl A tMMU 1002 1107 04.1 211.W 30&0 4Le". Pgoqei (11s") (14.8> 0.> (11m1) (1M7> un8>hbt R obI 0.0 0.0 0.0 0.0 0.0 0.8
OTM AsamPmpsf1. 7kMAIMd Uqkits 20Z0 2«8L0 2one0 37 &38 »70.SW# °up Com 1.0 0.0 0.0 0.0 0.0 0.0
WVByrivEBm tUS 81.8 101.1 118. 207.0 120a 307.1
lTMAL >Agyf 3100111.0 787.8U 01003 0."08. 12.28.7 18A.47.
WOIODemend t471.7 2.J t 7 7. 3,8012 4.4aJ 4,104Tb" 1,1&O 1,"80 1.1440. 2l0. 2,711.1 2.83a.hige 90. 80. 070. m4u 1.007 1.000Ohier 1l 018.7 1o 007 U&4 40"
PUDCA FUNDue Io a 40 a"4 20 20.8 461.1 084.Aedoountsd Io t CnvI uit. 4048 4.0 6040 427.7 aie0 0.0Du Io snw lsi IL 3.0 08 1 1.8 14.1 16J 71.4Medium and LonpT.rm nnoowgs . 0.0 0.0 0.0 0.0 0.0 0.8
SM Pwablh 418. $70i 774.3 001.4 12.0u 1470.3P.cnJs 40.4 480 430 371.7 0.4 42L4TOTAL. UAB1T1E8 &471.9 7,08 7.704. 02..3 11,480.6 12,411.2
Pd" C&RW M.1 U0.1 100U 100.8 100 42.Ca$aI Md Ps.svs 27ILé 044.8 4M0. 420.7 881 40Rstahid Enlmhn 14 1.4 1.4 102.0 12&. 1387TOTAL CAPTAL ACOU 8 I4.1 4a30 ao.o 04. 74.2 1.000.7
TOTAL UUTIE AND CAPITAL ACOCOUTS ,»2 7M70.8 *,no. %um 13Z223.7 13,471.0
OONTINT L WIA DT8 3,444.0 3 00 1,160.7 *,214.0 9.13Z. 10.=1
- 137 -
ABMX 26Page 2 of 4
Incane Statement (DH Millions)As at December 321
-------- -------- Audlted ------ -------- Unaudite1987 1988 1969 1990 1991 1992
Interest Income 456.0 474.9 511.3 581.2 794.1 948.0
Interest Expense -218.9 -253.1 -272.3 -313.8 -414.6 -508.1
Feo Income 130.8 169.4 183.1 205.5 191.7 185.0
NET OPER INCOME 367.9 391.2 422.1 472.9 571.2 624.9
Statfnng 109.9 119.9 130.6 146.7 164.5 167.7
Administrative Expenses 53.5 67.9 74.7 88.0 119.1 135.5
Depreclation 19.9 27.9 32.8 36.9 37.6 43.6
NET OPER EXPENSES 183.3 215.7 238.1 271.6 321.2 346.8
NEr OPER. PROFIT 184.6 175.5 184.0 201.3 250.0 278.1
Other Incomer-Expenses -1.8 -23.6 -8.4 -13.5- 1.1 -3.3
Less loan Loss Expenses -42.0 -13.6 -23.7 -42.7 -42.7 -58.7
Revaluated Assets 0.5 1.0 0.0 25.3 0.6 1.3
NET INCOME BEF. TAX 141.3 139.3 151.9 170.4 209.0 217.4
Taxes 68.1 59.3 65.3 69.8 87.1 83.3
NErINCOMEAFr.TAX 73.2 8Q0 86.6 100.6 121.9 134.1
DdeMnds 12.0 12.0 15.1 13.1 17.2 -
Transfer to Reserves 61.2 68.1 71.4 67.2 104.6 0
Transfer to Rat. Eanlngs 1.4 0.0 1.4 21.7 1.5 *
*Awalting shareholderu'declslon
- 138 -
AENNX 2 6Page 3 of 4
Projected Balance Sheet (DH Millions)As at December 31
109 190 100 100ASSE'O
NO 3SK AMUETSCuam and Deposll at CeIntrl Bnk 771.3 U03 1.0 tGovwnnmt and Bymmmt-Bak.d SOurleb 3,4e7.2 J,91.0 4.1ffl 4014.
LM RSK ASUEISDapouls WIt Moroh Baike 4.1 4.6 4. b.4FfranoW Sb.mudlhbi Abroad 9&2 104.7 111.1 1.0apodallzd FkL. kh*tI0oe 0.0 0.0 0.0 0.0ReI&abbu 2,134.8 2.348.0 2,5120 tU41.1
NORtUIL RISK AETSShore-T.rm Loum 3.083 0.231.0 0,"60 7,80.0UMdkam and Lonq-T«m Loft" 1,1021.2 tj7ua. 1,001.0 2,1b7.8
IHM RISK ASSETS
Doubdul Aount 40&1 611.0 0027 810.0Leu PrTvkimo 07.2Z 0.) 0S 11.2) Int.ngl .eIvable 0.0 0.0 0.0 9.
OTHER ASSETOProp.y, Plut wd Equlp.mt 428.0 4.2 102 J7.Siu-up Ceox 0.0 0.0 0.0 0.0
EOUTTY W4VEMTUENTr 4288 488.4 0112 1001U
TOTAL A9ETC 14,011. 10.301.0 17.31.1 10,724.2
UAIUAEM
rEPOgT8
D.m.nd 6,310.7 0484 0,4. f7,1Tlmo f21.9 3.00.6 3.8m7 4.3W.0Sn"rqee 1,100.9 1,211.0 1.1t0 1,401.Othor 448.7 3167 300 817
PUWCNAD FUN
Due to Bute 720.4 7tlL4 071.7 00.P.discounl.d to Ibo Cenral Bank 030 004.2 770 SU0.0Duoio Contal *atk 07.3 001 10.7 110.2M.dlum and Long-Torm Borrowhpge 0.0 0.0 0.0 0.0
OTHER LIBUJTIESBl Payable 1,1 t,7.7 1,907.0 2.104A=uuie 4ti.7 001.3 700.4 U0.0
TOTAL l.ABULITIES 13.023 1S,017.J 10,810.3 18,171.2
Pald-4n Capital 48t.1 b14.0 3 02aoCap4tal and Flénoova 848.5 004.4 t4.2 731.3FunaJad Evanigo 140.3 1tU2 100.0 1".7
TOTAL CAPfTAL ACCOUNTS 1.1m0.0 12034 1,411.0 1,830
TOTAL LILMTIE8AND CAPITAL ACCOUNTS 14.19.1 1J,301.0 17,001.1 10.724.2
CONTINGENT LIAILTIE£ 11,27.3 12,406.0 13,0480 10,010.1
- 139 -
ANM 2 6Page 4 of 4
Projected Income Statement (DH Milliocn)
Au at December 31
1993 1994 1996 1996
Interest ncome 1042.8 1147.1 1261.8 13880
Interest Expense -558.9 -614.8 -6763 -743.9
Fee Income 203.5 223.9 246.2 270.9
NET OPER. INCOME 687.4 756.1 831.7 914.9
Stafflng 184.5 202.9 223.2 245.5
Administrattve Expenses 149.1 164.0 180.4 198.4
Depreciation 48.0 52.8 sao 63.8
NET OPER. EXPENS 381.5 419.6 461.6 507.7
NET OPER. PROFiT 305.9 336.5 370.2 407.2
Other Incornet-Expensrs -3.6 -4.0 -4.4 -4.8
Less ioan Loss Expenses -64.6 -71.0 -7M1 -85.9
Revaluated Asets 1.4 1.6 1.7 1.9
NET INCOME BEF. T 239.1 263.1 289.4 318.3
Taxes 91.6 100.8 110.9 122.0
NET INCOME AFT. T 147.5 162.3 1785 196.3
DMçdends 18.9 20.8 22.9 25.2
Transferto Rserves 115.1 126.6 139.2 153.1
Transfer to Ret. Earnings 1.7 1.8 2.0 2.2
- 140 -
ANB 2 7
KINGDOM OF MOROCCO
STAPF APPRAISAL REPORT
LAND DEVELOPgIBNT PROJBCT FOR LOw-INCOMt FANILIES
Cont Recoverv Sources of Project Items
COST ITEM RBCOVERY SOURCE
1. Land Plot charges
2. Cadastral surveys and site preparation
3. On-site infrastructure:- Roada- Severage- Water supply w- Blectricity
N
- Street lighting
4. Off-site Infrastructure:- Roads Not directly recovered- Severage and drainage N
5. Building materials loans Loan repayments
6. House construction
7. Design and supervision and projectadministration Plot charges
8. Study and technical assistance Not directly recorered
- 141 -
ANNEX 28
KINGDOM OF MOROCCO
STAFF APPRAISAL REPORT
LAND DEVELOPMENT PROJECT FOR LOW-INCOME FAMILIES
Documents and Data Available in Proiect File
1. Etude du Secteur de la Construction, Groupement d'Etudes INAU/CERAU-TUM.
CIH, December 1992;
2. Rapport sur les Structures de l'ADpareil de Production de Logements au
Maroc, Groupement TEAM Maroc/TEAM International, Ministry of Housing,
draft report, November 1992.
3. Guide Pratiaue de Fiscalité Marocaine, la Société Nouvelle des
Imprimeries Réunies "SONIR", 34 Rue Mohamed Smiha, Casablanca, Maroc.
Dépot légal No. 40/1990.
4. Etude de la Politique Foncière du Maroc, PADCO, INC., 1834 Jefferson
Place, NW, Washington, DC 20036, Juillet 1987.
5. Loi formant le statut général des cooPératives et les Missions del'Office du Développement de Coopération, Dahir N. 1-83-2236 du 5
octobre 1984.
6. Code de Procédure Civile, François-Paul Blanc et Rabha Zeidguy,
Sochepresss - Université, 1992.
7. L'Habitat en chiffres. 1989, Société Nationale d'Equipement et de
Construction, C.A.O. Services, Rabat. Dépot légal: 83/91.
8. L'Habitat en chiffres. 1990, Société Nationale d'Equipement et de
Construction, C.A.O. Services, Rabat. Dépot légal: 41/92.
9. L'Habitat en chiffres, 1991, Société Nationale d'Equipement et de
Construction, C.A.O. Services, Rabat. Dépot légal: 19/93.
Ton-eg '- Mediterrorieon Seor
MOROCCOIlA
LAND DEVELOPMENT 91PROJ ECT
KB<d, And ORTH tOCEANdl'=^n°>/R>ezn < 2ne-» jF t CENTRAL
SO» bman UTH KoNT= ORIENTAL
Jod a5 J d d. t T ES T. \
-320 ~~A T L A N T I C / iSeuhnr =ur_
32' C~~~tENSITRAent Gumm<Encil
% t4- des Mgouno | _ ~~~~~~~~~~~~~~~~~~~~MAJOR ROADS
/i! > t 5% t-~~~~~~~~~~~~~~ SECONDARY ROADS
OCEANAlh LOCAL ROADS
1y The Wodd ®onis sterff I r Tur=udonnt~\ S O U T H z=gO,.z > PoO PROVINCE CAPITALS
of ,eod.,, ond os for the / ! NATIONAL CAPITAL
G,`roaup.ITh idefroo,hoio,i u° Ot/ {2 TOWNS AND CITIESond oh. boaodOo., shoorn / m 32
pool of Tl.PhdWufifon&r Grcu,/ oTrn Toi0 _v t ppoITO ELEVATION ABOVE 1000 METERS
rn oedyr"- on*or~oo.yDD o/ o Y - .,ECONOMIC REGION BOUNDARIES
.och hoondo,..,s * INTERNATIONAL BOUNDARIES- I92 / _ _ (NTERNATIONAL BOUNDARY
.//duelmimRO ûSKJLOoETERS
2r~ ~ ~~~~~~~~~~~~~Amn .f PRVIC CAPiTALS
_= | th. o 4 28r
.1 -d H~ NATONAL CAPITA