Damenut cf lhe World Bank

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1 Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Damenut cf lhe World Bank FOR OFFICIAL USE ONLY REPORT AND RECOMMENDATION OF THE PRESIDENT OF THE Report No. P-4478-MOR INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT TO TUE EXECUTIVE DIRECTORS ON A PROPOSED LOAN IN AN AMOUNT EQUIVALENT TO US t125 MILLION TO THE OFFICE NATIONAL DES POSTES ET TELECOMMUNICATIONS WITH THE GUARANTEE OF THE KINGDOM OF MOROCCO FOR A FIRST TELECOMMUNICATIONS PROJECT March 5, 1987 This document has a restricted distribution and may bc used by recipiens only in the performance of Lheir officiai duties. Its contents may not otherwise bc disclosed without Worid Bank authorization-

2 CURREUICY EQUWALENTS As of January 22, 1987 Currency Unit Moroccan Dirham (DH) $1.00 = DR 9.00 DH 1.00 $0.111 DH 1,000,000 = $111,100 FISCAL YEAR Covernment and ONPT: January 1 - December 31 ABBREVIALTIONS A&ND ACRONYMS CCP CEN DEL DT ICB INPT ITU: LCB LIB MATELCA Comptes Chèques Postaux (postal checking accounts). Caisse d'epargne Nationale (national savings bank). Direct exchange line or connected telephone line. Directorate of Telecommunications (Direction des Télécommunications, ONPT)- International Competitive Bidding (as per Bank guidelines). Institut National des Postes et Téléconmmunications (Rabat). International Telecommuinication Union (Geneva). Local Competitive Bidding. Limited International Bidding. Société Marocaine de Télécommunications par Cables Sous-Marins- MPT : Ministry of Posts and Telecommunications (Ministère des Postes et Télécommunications, Rabat). ONPT P & T RTM SNT UNDP Office National des Postes et Télécommunications du Maroc. Posts and Telecommunications. Government Organization for Sound and Television Broadcasting (Radiodiffusion et Télévision Marocaine). National Telecommunications Enterprise (Société Nationale des Télécommunications, Rabat). LUnited Nations Development Program.

3 FOR OFFICIAL USE ONLY MOROCCO OFFICE NATIONAL DES POSTES ET TELECOMbMINICATIONS (ONPT) FIRST TELECOMMUMCATIONS PROJECT Lan and Project Summary Borrower: Guarantor: Amount: Terms: Office National des Postes et Télécommunications du Maroc. ONPT (National Posts and Telecommunications Office). Kingdom of Morocco US $125 million equivalent. 20 years, including 5 years of grace, at standard variable interest rate. ONPT will bear the foreign exchange risk and will pay a 1% guarantee fee to the Government. Descripion The project is an integral but self-contained part of ONPT's investment progran and vill be implemented during It aims at expansion, improvement and modernization of the telecommunications network. Major emphasis is placed on institutional development as the principal means cf strengthening implementation capacity. The project comprises: (a) installation of exchange capacity of about 290,000 lines, together vith the associated external plant and transmission equipment which includes replacement of worn out switching equipment (34,000 lines) and rehabilitation of obsolete line distribution newtworks; (b) automation of networks for about subscribers in distant rural districts, and provision of service to 89 isolated areas; (c) improvement and expansion of specialized services (telex, data systems, mobile land and maritime radio-comîunications); (d) strengthening of ONPT's subscriber line connection, maintenance and service quality monitoring capacity; (e) improvement of cormon service facilities; and (f) training and technical assistance. Projeet Benefits and Risks The project vill benefit all sectors of the Moroccan economy. An adequate telecommunications infrastructure is a prerequisite to achieving Government's objectives of overall economic growth and balanced regional development, and allows more efficient utilization of transportation, including energy conservation. The project will also serve as a catalyst ta mobilize and transfer resources to Government. The project faces no unusual riska. Project implementation vould be adversely affected if the anticipated organizational and management improvements are not fully attained or are delayed. This risk is contained by the technical assistance component and by the monitoring and review procedures included in the project. This document has a restuicted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise b. discloscd without World Bank authorization.

4 - ii. Estimated C ' $ Million Equivalent - Bank Local- a Foreign Total Financing Switching equipment Telex and data transmission Local networks & outside plant Long distance transmission Rural automation Buildings Training and data processing equipment Consultancy services Miscellaneous Total Base Cost Contingencies Physical Price TOTAL PROJECT COST là2e-" U4.i _ Finaneing Pla: -$ million equivalent Local Foreign Total IBRD ONPT Other financing-' TOTAL 359. R 2 _4_5 Estimated Disbursements: $ Million equivalent- Bank FY Annual Cumulative Economie Rate of Retunr: 26% Staff ApDraisl Report: Report No MCR, dated March 3, 1987 a/ Includes $129.2 million in customs duties and taxes. bj Other fina.icing to be obtained through price and terms bidding ($115.4 million) and through tied procurement arrangements ($74.5 million).

5 INTERNATIONAL BA.NK FOR RECONSTRUCTION AN!D DEVELOPMENT REPORT AND RECOMMENDATION OF THE PRESIDENT OF THE IBRD TO THE EXECUTWVE DIRECTORS ON A PROPOSED LOAN ni AN AMOUNT EQUALFENT TO US$125 MILLION TO THE KINGDOM OF MOROCCO FOR A FIRST TELECOMMUNICATIONS PROJECT 1. I submit the folloving report and recommendation on a proposed loan to the Office National des Postes et Télécommunications (ONPT), with the guarantee of the Kingdom of Morocco for the equivalent of UJS$125.0 million, to help finance a first telecoimnunications project. The loan would have a term of 20 years, including 5 years of grace, at the standard variable rate. ONPT would bear the interest and exchange risks on the Bank loan and will pay a 1% guarantee fee to the Government. PART I - TIE ECONOMY"1 2. An economic report, entitled "LMorocco: Priorities for Public Sector Investment ( )" (No MOR), vas issued on June 15, Another economic report entitled "Morocco: Industrial Incentives and Export Promotion" (No MOR) was distributed to the Board on January 11, An economic mission on financial intermediation vas in Morocco in September 1983 and its report (No MOR) vas issued on December 12, The folloving section reflects the findings of an economic updating mission that vent to Morocco in July 1984 to prepare a paper, entitled "Morocco: Medium-term Adjustment Policies and Prospects", for presentation to a meeting of the Consultative Group for Morocco in Paris on January 9-11, Data and mnalysis have been updated to reflect the recent mission reviewing progress on policy adjustment loans, analyzing Public Resource Mobilization (report in preparation), and analyzing medium-term prospects for a forthcoming CEM. Country data are given in Annex I. Intr odu1t;ion 3. During nearly two decades after Independence in 1956, Morocco followed relatively conservative economie policies. Cautious external borrowings supplemented a weak savings effort to permit only a slow rise in investment, so that the economy grew only at about 4 percent per annum. Primary products - principally phosphates - accounted for 90 percent of merchandise exports. During the mid-1970s, after a sudden increase in phosphate prices, Morocco launched an ambitious public investment program which boosted GDP growth to 7.5 percent annually during the period The phosphate boom, however, began subsiding as early as mid Meanwhile, the petroleum import bill, which had quadrupled in 1974, continued to place Il Part I is an updated version of that presented in in the Second Vocational Training Project (Report No. P-4424-MOR of December 15, 1986). A nev CEM is expected to be circulated shortly, in preparation for the Consultative Group on Morocco scheduled to be held in early March 1987.

Document of The World Bank

Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Document of The World Bank FOR OFFICIAL USE ONLY IMPLEMENTATION COMPLETION REPORT KINGDOM