Public Disclosure Authorized

Report No. 918a-MOR

Kingdomof Morocco: Appraisalof

the Bay of AgadirTourismProject
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January
21, 1976
Public Disclosure Authorized

Tourism ProjectsDepartment
Not for Public Use
Public Disclosure Authorized
Public Disclosure Authorized

Documentof theWorld Bank

Thisdocumenthasarestricteddistributionandmaybeusedby recipients
of theirofficialduties.Itscontentsmaynot
onlyin the performance
otherwisebedisclosedwithoutWorklBankauthorization.
 KINGDOM OF MOROCCO

BAY OF AGADIR TOURISM PROJECT

CURRENCY EQUIVALENTS

Currency Unit: Dirham (DH)

US$1.00 = Dg 3.80
US$.26 =:DH 1.00

WEIGHTS AND MEASURES EQUIVALENTS

1 millimeter (mm) = 0.04 inches (in)

1 meter (m) = 3.28 feet (ft) 2
1 square meter (m2) : 10.76 square feet (ft )
1 kilometer (km) = 0.62 miles (mi)
1 hectare (ha) = 2.47 actes

ABBREVIATIONS AND ACRONYMS

BCEOM Bureau Central d'Etudes pour les Equipements d'Outre Mer

CIH
E = Crédit Immobilier et Hôtelier
DUHE = Dé'lgation a l'Urbanisme, l'Habitat et l'Environnement
MUHTE = Ministère de l'Urbanisme, de l'Habitat, du Tourisme et de
1'Environnement
ONE = Office National de l'Electricité
ONEP = Office National de l'Eau Potable
ONMT = Office National Marocain du Tourisme
PTT = Ministère des Postes, Téléphone et Télégraphe
RAPC = Régie d'Acconnage du Port de Casablanca
SOMET = Sociéte Maroc-Etudes
SONABA = Société Nationale d'Amdnagement de la Baie d'Agadir
STB = Secteur Touristique et Balnéaire
TP = Ministère des Travaux Publics et des Communications
UAT = Unite d'Amé'nagementTouristique

FISCAL YEAR

January l to December 31
 FOR OFFICIALUSE ONLY

KINGDOMOF MOROCCO

BAY OF AGADIR TOURISMPROJECT

TABLE OF CONTENTS
Page No.

SUMMARY ............ -ii

I. INTRODUCTION .................................. 1

II. THE TOURISM SECTOR . . ..... .....

III. THE PROJECT....... . 4

A. Project Background. 4
B. Physical Planning and
Environmental Aspects le.......le... 5
C. Project Description. 7
D. Implementation . .. ............ 10
E. Cost Estimates ........... 13
F. Financing and Lending
Arrangements. 0.. ........- §-§. 14
G. Procurement ...... . 15
H. Disbursement . .16

IV. JUSTIFICATION ........... .......................

16

A. Superstructure Development ............. ... 16

B. The Market 18
................................
C. Financial Aspects ...... ...................
20
D. Economic Justification .................... 22

V. AGREEMENTS REACHED AND RECOMMENDATIONS ......... 24

ANNEXES

I. Statistical Appendix to the Sector

II. Project Description and Cost Estimates
III. Unité d'Aménagement Touristique (UAT)
IV. Regional Infrastructure
V. Société Nationale d'Aménagement de la Baie d'Agadir (SONABA)
VI. Market Justification
VII. Accommodation Facilities - Financial Analysis
VIII. Economic Justification of the UAT Investment

CHARTS
1. Schedule of Implementation, Expenditure and Disbursement
2. Initial Implementation Schedule

MAPS
IBRD 11657R
IBRD 11658

This report is based on the findings of an appraisal mission consisting of

Messrs. Bauer, Benbrahim, Brizzi, Christie, and Carrère and Fougère (consultants).
This document has a restricted distribution and may be used by recipients only in the performance
of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.
 KINGDOMOF MOROCCO

BAY OF AGADIR TOURISM PROJECT

SUMMARY

i. This report appraises a project to provide infrastructureand

common facilitiesfor a new tourism developmentin Agadir on the Atlantic
coast of Morocco. The infrastructurewould consist of streets,water supply
and sewerage systems, electricpower and telecommunications. The common
facilitieswould include shopping and recreationalcenters. These works
would support the developmentof 7,000 hotel beds and 2,600 housing units
that would be built by private investorsbetween 1979 and 1987. The project
would also include three componentsoutside the immediate resort area: the
constructionof the Ait Melloul bypass, the upgrading of tourism road CT 7002
and the replacementof the pumps for unloading fish in Agadir harbor. These
measures would enhance Agadir's tourism assets and alleviate some of the
city's problems caused by its rapid growth followin2 the 1960 eerthquake.

ii. Morocco's multifacetedattractionshave supported a rapid growth of

the tourism sector. Foreign visitorswho numbered 469,000 in 1968 attained
the 1,052,000mark in 1974. Growth of visitor trafficwould have been even
faster but for the shortageof improved land which constrainedhotel construc-
tion in Agadir and Marrakesh, the top-rankingareas of Morocco for investors
and tourists alike.

iii. The UNDP-financedstudies by consultantswhich served as a basis for

appraisal are well-conceived. They recommend an original concept for develop-
ment of the project area, which would mix 7,000 tourist beds with 2,600 housing
units. This approachwould balance the need for expansionof tourism activities
with that of alleviatingAgadir's acute shortageof housing. The incremental
investmentin infrastructurerequired for the housing component is justified as
providing an additionalbenefit from the tourism project at a marginal cost.
Further, the co-existencewithin the same urban context of foreign tourists and
local residents would avoid the creation of a tourist ghetto, generate greater
"?animation"in the resort, and give Agadir's residents access to entertainment
and sports facilities while providing them with opportunities for socially valuable
interchange with tourists.

iv. The project is estimated to cost about US$44 million, including

contingencies. The proposed loan of US$21 million would cover the foreign
exchange component of the project. The balance of the funds required to
finance the project and any cost overrunswould be provided by the Government.

v. Major civil works and equipmentwould be awarded under international

competitive bidding in accordance with Bank guidelines. A contract for tele-
communicationsequipment,however, for an estimated US$600,000 (or 1.47.of
the project cost) would be negotiated directly to ensure compatibilitywith
similar equipment in operation in Agadir. In evaluatinginternationalbids
for equipment contracts,domestic manufacturersof equipment and furniture
would be allowed a preferentialmargin of 15% of the CIF price of competing
imports or the prevailing level of customs duties, whichever is lower.
 - ii -

vi. The tourism works would be implementedby a Government-controlled

development corporation,the Société Nationale d'Aménagementde la Baie
d'Agadir (SONABA), in close cooperationwith specializedGovernmentagencies.
At the operational stage, SONABA would lease or sell the land and the common
resort facilitiesand turn over the income-producinginfrastructureto the
specializedagencies. Charges and leases would be adequate to ensure a
satisfactoryfinancial return on the overall investment. The regional com-
ponents would be implementedby the Ministry of Public Works.

vii. Since 1970 there has been a threefold increase in Agadir's accom-
modation capacity and a fivefold increase in bednights. Room occupancies
currently average 95%. Numerous investors have expressed interest in building
hotel and housing units in the project area. SONABA would earn a 9.2% discounted
financialrate of return on its operations. The economic rate of return is
estimatedat 17.4%. When fully operational in 1989, the project will employ
about 4,400 workers in hotels and other tourism facilities. Indirect employment
generated in construction,handicrafts,agricultureand other services is
likely to account for 7,200 additionaljobs. Net annual foreign exchange earnings are
estimated to amount to about US$37 million in 1989. The project would yield
a small net budgetary surplus to the Governmentof US$0.5 million in 1981
rising to US$5.9 million in 1989.

viii. The project is suitable for a Bank loan of US$21 million equivalent
to the Government for a term of 20 years including a grace period of 5 years.
 MOROCCO

BAY OF AGADIR TOURISM PROJECT

I. INTRODUCTION

1.01 In 1971 the Moroccan Government requested Bank assistance to finance

infrastructurefor the developmentof tourism in either Tangiers or Agadir.
Following consultationbetween the Moroccan authoritiesand the Bank, it was
decided to concentrate efforts on the Agadir area, where a lack of improved
land for hotels was constrainingthe development of tourism.

1.02 In July 1973, with the assistanceof a UNDP grant for which the
Bank was executing agency, the Government retained consultantsto identify
suitable areas for the first phase of tourism development around the Bay of
Agadir and to carry out the necessary feasibility studies. 1/ The project
proposal emerging from these studies was submitted to the Bank for consider-
ation in the spring of 1975. The pr9ject was appraised in June 1975 by a
mission consistingof Messrs. Bauer9 Benbrahim, Brizzi and Christie, assisted
by Messrs. Carrere and Fougère (consultants).

1,03 The Bank has financedhotel constructionin Morocco since 1970

through two lines of credit to Crédit Immobilier et H&telier (CIH). 2/ This
would be the first Bank loarnfor tourism infrastructurein Morocco.

II. THE TOURISM SECTOR

2.01 Situatedwithin easy reach by car from European tourist-generating

countries,Morocco's outstanding tourism resources include the attractive
beaches along its extensiveMediterraneanand Atlantic coasts; the archi-
tectural treasures in its Imperial cities of Fez, Rabat, Meknes and Marrakesh;
and the exotic atmosphereof its pre-Saharan oases, within view of the snow-
capped Atlas range. Notwithstandingthe Moroccan Government'sefforts in
recent years, this multifaceted tourism potential is still largely untapped.

2.02 The country'shotel capacity doubled from 20,500 beds in 1968 to

41,000 beds in 1974. About two-thirdsof this additional capacitywas built
by private investors,most of them Moroccan. The remainderwas built by the
Government either directly or through public agencies such as the National
Railway Company, Royal Air Maroc and subsidiariesof Government-ownedbanks.
Hotel financing is provided by CIH, a Government-controlledlending institution
which extends loans with a maximum maturity of 20 years, including a 5-year
grace period.

1/ The consultantswere the French firm Bureau Central d'Etudes pour les
Equipements d'Outre Mer (BCEOM) and their Moroccan associate, Société
Maroc-Etudes (SOMET).

2/ Loans 704-MOR and 848-MOR.

 -2-

2.03 Morocco's accommodations are concentrated in the Imperial cities

and Casablanca (43%), the Mediterranean coast (35%) and Agadir (12%)
(Annex 1, Table 1). They are generally of a high standard, with luxury
establishments accounting for more than 40% of the total. Foreigners manage
and operate about 30% of Moroccan hotels.

2.04 Occupancies vary greatly according to hotel locations. In major

cities like Casablanca and Rabat, where visitors are predominantly business-
motivated, annual bed occupancies average around 60%. Even higher levels are
attained in Agadir and Marrakesh, the country's southernmost tourism resorts.
Bed occupancies in Tangiers on the other hand follow the general seasonal
pattern of other exclusively beach-based Mediterranean tourism centers, i.e.,
averaging 30%-35% over the course of the year.

2.05 The 1973-77 Five-Year Plan calls for the construction of 55,000
beds, primarily in three- or four-star hotels, which are favored by broad,
middle-income segments of the international tourism market. Despite a recent
overhaul of the incentives system (para. 2.11), this target is unlikely to be
met. Between 1968 and 1972, 4,000 beds per year were added, but over the last
three years, additional beds averaged only 2,500 per year. The slower growth
of hotel capacity is attributable in part to a lack of investor confidence
following the 1970-72 political unrest, in part to the increased opportunities
for alternative investments offered by Moroccanization policies and in part to
the shortage of improved land for hotel construction in Agadir and Marrakesh,
the top-ranking areas of Morocco for investors and tourists alike.

2.06 Outpacing the growth of accommodation capacity, the number of foreign

visitors to Morocco (excluding cruise visitors) increased from 469,000 to
1,226,000 between 1968 and 1973, an annual rate of 21%. A 14% decline to
1,052,000 in 1974 reflected the impact of the energy crisis and economic
difficulties in Western European countries (Annex I, Table 2). Growth has
resumed in 1975; in the first quarter of this year, foreign visitor arrivals
were 25% greater than in the corresponding quarter of 1974.

2.07 In 1974 Western European countries accounted for one-half of visitor

arrivals in Morocco, with France (20%), the U.K. (10%) and Germany (8%) pre-
dominating. In the same year, U.S. and Canadian arrivals rose to 19% of the
total visitor market from a 14% share in 1968 (Annex I, Table 2). About two-
thirds of total visitors arrive in Morocco by car. However, due to new air
policies which encourage charter flights, the proportion of arrivals by air
is increasing (Annex I, Table 3).

2.08 With its varied tourism potential Morocco attracts a heterogeneous

clientele: this includes culturally-oriented visitors drawn to the Imperial
cities, climate-seekers attracted to the dry invigorating air of Agadir and
Marrakesh and beach-motivated tourists flocking to the country's Mediter-
ranean and Atlantic shores. In keeping with the diversity of its motivations,
tourist traffic to Morocco tends to be m.ore evenly distributed over the year
than does traffic to other Mediterranean countries. Summer arrivals in Morocco
in 1973 accounted for only 40% of the yearly total as compared for instance,
to 50% in Spain and 54% in Yugoslavia (Annex I, Table 4).
 - 3 -

2.09 A 1972 survey estimated the average daily expendituresof all

tourists to be about DH 65 (US$ 17.1), and that of tourists staying
in hotels at DH 88 (US$23,2). of total tourist expenditures, 36%
were absorbed by accommodations,12% by entertainment,7% by local trans-
portation and the remaining 45% by purchases of sundries. Gross foreign
exchange receipts from tourists more than doubled from 1968 to 1974 reaching
DH 1,025 million (about US$270 million), or 21% of the country's total foreign
exchange earnings from the export of goods and services. Until phosphate
prices were raised in 1973, tourism was Morocco's major export (Annex I, Table 5).
Net foreign exchange revenues from tourism are estimated at about 80% of gross
receipts. About 16,000 Moroccans are directly employed in the hotel industry;
one-half of these work in five- and four-star hotels. Jobs indirectly attri-
butable to the tourist sector are estimated at 60,000 in handicrafts and
20,000 in agriculture,the constructionindustry, transport and other services.

2.10 The tourism directorateof the Ministère de l'Urbanisme,de l'Habitat,

incentives
administerq the tourism investipsnt
du Tourisme et de l'Environnement(MITHTE)
system, the trainingof hotel personnel,'generalpromotion and the construction
of infrastructure.

2.11 The 1973 Investment Code provides the following incentives for hotel
investors:

(a) ten-year income tax exemptions; other forms of fiscal relief;

(b) interest-freeadvances of 15% of the investment (land cost

excluded) repayable over five years followinga five-year grace
period;

(c) interest rebates on CIH loans, effectively reducing CIH statutory

rate, at present 8.5%, to 4.5%.

Under this incentives system, the financing plan for a typicalMoroccan hotel
is 30% equity, 55% CIH loan and 15% Government advance. In addition the
Investment Code guaranteesto foreign investors repatriationof dividends,
profits and proceeds from liquidation.

2.12 The Bank has expressed concern on several occasions that the liberality
of incentivesmay lead to overinvestmentin hotels. Incentives are granted to
investors in hotel projects which are judged technically by MUHTE and financially
by CIH. The latter also calculates an ERR on all hotel investments; however,
because of the methodology employed and the limitations of data, these calculations
are not fully reliable. The recent mission which appraised the proposed third
loan to CIH conducted a special field survey aimed at establishing the methodological
and informationbases for improved economic appraisal techniques. Adoption of
these techniqueswould be a condition of the proposed loan to CIH as would the
Government'sundertaking to improve the collection and analysis of tourism
statistics. It is expected that these measures may lead to a rationalization
of Morocco's hotel incentives system and reduce the risk of benefits being
granted to marginally economic hotel projects.

2.13 MUHTE's ProfessionalTraining Division is in charge of organizing

and supervisinghotel training. Training for upper- and middle-echelon
personnel is basically adequate. High-level training is given at the Tangiers
 -4 -

Institute. Taken together the five middle-level schools located in Tangiers,

Rabat, Fez, Marrakesh and Agadir graduate about 200 middle-echeloncadres.
On the other hand, the obsolete training facilitiesat Ben Guerir, which have
a maximum annual output of 500, are inadequate to meet the increased need
for training of lower-levelhotel personnel. This situation should improve
with the implementationof the third Education Project, which, in addition to
the constructionof a new middle-levelschool in El Jadida with an annual
output of 55, would include the constructionof four new training centers in
Beni Mellal, Nador, Ouarzazate and Casablancawith a total annual output of
520 lower-levelhotel personnel.

2.14 MUHTE has entrusted tourism promotion to the Office NationalMarocain

du Tourisme (ONMT) whose budget allocation for this purpose was increased
from DH 5.2 million în 1968 to DH 9.9 million in 1974. 1/ ONMT's campaigns
are complementedby the publicity of Royal Air Maroc and individualhotels.
Although the increase in funds devoted to tourism promotion has not kept pace
with the rise *n tourism receipts (the promotion budget of ONMT represented
less than 0.9% of receipts from tourism in 1974 as compared to 1.2% in 1968),
Morocco may be consideredwell-promotedfor tourism,particularlyon the
European market.

2.15 MUHTE's budget for tourism infrastructure 2/ was traditionally er-trusted

to the Ministere des Travaux Publics et des Communications This arrange-
TTh).
ment permitted MUHTE to tap TP's qualified technical staff; however, it proved
administratively cumbersome and limited MUHTE's control over the use of its own
funds. In 1967 MUHTE undertook to implement tourism infrastructure through
Government-controlled tourism infrastructure development corporations (sociétés
d'aménagement) to be created ad hoc for individual projects. This decision was
well-advised; such corporations enjoying the flexible regulations of business
law are well-suited for the implementation of tourism schemes which often include
a complexity of works and commercial activities. Yet the first of these corpo-
rations, the Société Nationale d'Aménagementde la Baie de Tanger, has i±ot
achieved its objectives. Because of insufficientfunding and staffing, it has
left works uncompletedat Tangiers and investorsare not being attracted to the
area. When studies for Agadir began, the Government created a second socie;te
d'aménagement, the Société Nationale d'Aménagement de la Baie d'Agadir (SONABA).
With adequate financing assured and key personnel already appointed, SONABA
has good prospects for success.

III. THE PROJECT

A. Project Background

3.01 The project would be located in Agadir, administrative and economic

capital of southern Morocco. Situated on the Atlantic coast, a three-hour

1/ ONMT also supervises Morocco's tourism offices abroad and is in charge of

building Government hotels.

2/ The 1973-77 Plan budgeted DH 77 million for tourism infrastructure.

 - 5 -

flight from Paris, Agadir is one of the winter beach resorts closest to
Europe. The climate from Novembe to June is mild and dry; temperatures
range from 190C - 220C, and there are only three to five days of rain
monthly. An unusually wide sandy beach dominated to the north by a ruined
fortress on a barren hill stretches several miles along the Bay. Within a
two-hour drive from Agadir are picturesquemountain villages, pre-Saharan
oases with battlementedmud castles and the fertile valley of the Souss
River guarded by the walled city of Taroudant.

3.02 Agadir is accessible by four main roads (Map 1): coastal road
RP 8 connects the city to Casablanca, the recently completedRP 40 crosses
the Atlas Mountains to the northeast towards Marrakesh; RP 30 leads south
and RP 32 runs east through the Souss Valley. 1/ The internationalairport
located in the middle of the Agadir urban area has a 2,910-m long runway
fully equipped for night landing that can take most types of aircraft.
The existing airport will become an obstacle to the physical growth of
Agadir and the Moroccan authoritiesare planning to relocate it by 1985 to a
site 20 km east in the Souss Valley.

3.03 When planning the reconstructionof Agadir after the catastrophic

earthquakeof 1960, the authoriti.sdecided to base the economic development
of the region on agriculture,fishing and tourism. The Governmentdevelopment
plans were successful. The implementationof irrigation and agro-industrial
projects liasboosted agriculturalproduction in the Souss Valley. Today
Agadir is known as one of the most importantworld centers for sardine fishing
and processing. Tourism,which hardly existed before the earthquake,has
boomed; by 1974, 4,000 hotel beds had been built in Agadir, 3,500 of which were
on the Secteur Touristique et BalnéaireQSTB). a beach area between thp harbor and
the Oued Lahouar; in the same year visitor arrivals had attained the 120,000 mark.

3.04 The project area, known as the Unité d'AménagementTouristique (UAT),

is adjacent to the STB. It covers 260 ha of undeveloped hilly land straddling
the southern limits of Agadir's municipal boundary and facing an open expanse
of seashore. Lying close to the town and its infrastructure,the UAT is well-
defined by man-made and natural boundaries. To the north, the Oued Lahouar
divides the UAT from the STB, where golden dunes covered by eucalyptus trees
provide an impressivelandmark. To the south an unspoiled forest of over
1,000 ha is maintainedby the Ministry of Forests as a natural preserve; to
the east the principal road RP 32 links the UAT with the town and the neigh-
boring villages.

B. Physical Planning and EnvironmentalAspects

3.05 The original plans for the reconstructionof Agadir no longer meet
the needs of the rapidly growing population. Whereas those plans were designed
for a population of 50,000,Agadir'spresent population is estimated at 70,000
and that of Greater Agadir, which includes Agadir,and several towns in the
southeast,at more than 180,000. To cope with the area's population explosion,
the local authoritieshave begun preparing comprehensiveurban development
studies. These studies would recommend solutions for the diminishing supply of
urban land for housing which has resulted in the springing up of squatter

1/ Constructionof RP 40 was financed under the First Highway Project

(Loan 642-MOR and Credit 176-MOR). Upgrading of RP 30 south of Agadir
is being carried out under the Second Highway Project (Loan 955-MOR).
 -6 -

settlementsand in the uncoordinatedgrowth of villages around the town.

The studies would also provide e coherent framework for ongoing projects
such as the harbor extension,creationof ore-processingplants, the relocation
of the airport and the tourism development of the UAT. The project would in-
clude funds to complete the preparation of these urgently required studies
(para. 3,29).

3.06 Industrial and harbor activities create serious environmentalproblems.

Under the current method of unloading fish the harbor is polluted with debris
which is swept to nearby beaches by tides and currents. This problem would
be solved under the project by a new unloading method (para. 3.26). Fishmeal
plants generate foul odors which the wind carries from time to time to various
parts of the city including the hotel sites. The Governmenthas agreed to
identify suitable measures to abate air polluton and to enforce appropriate
regulations.

3.07 The proposed extension of the harbor would create new sea currents
which could eventually erode Agadir's beaches, This problem is being investi-
gated by the TP on a scale model of the Bay and the harbor. The Government's
undertaking to inform the Bank, at the time of expanding the harbor, of the
measures to be taken to protect the beach and to implement them as a part of
the harbor works, will be set forth in a supplementalletter.

3.08 Recent constructionin the STB has tended toward increasingly taller
buildings which jeopardizethe visual balance of the beachfront as a whole.
To remedy this situation, the preappraisalmission proposed the services of
an architect-plannerhired by the Bank Tourism Projects Department to revise
the STB's land-use plan and building regulations (schéma d'améenagement).The
consultant'swork has been completed to the satisfactionof the Bank and the
local authorities. A condition of loan effectivenessis the enactment of the
STB's revised schéma d'aménagement.

3.09 The UAT is designed to accommodate 7,000 tourist beds. The layout of
the project area is such that, with only small incremental costs, the necessary
infrastructureworks can be extended to service 2,600 housing units which are
also to be built within the site. Of the 7,000 tourist beds, 5,300 would be
chiefly in three-starhotels and 1,700 in housekeepingapartments, a combination
which would make Agadir attractive to broad segments of the internationaltourism
market.

3.10 The planning concept proposed for the UAT would be a drastic departure
from the development of the STB which to date has proceeded in a ribbon-fashion
along the beach and has been characterizedby segregationof hotels from other
types of activities. Hotels and housing in the UAT would be mixed and share
common facilities for shopping and entertainment. Hotels would be smaller
than those of the STB and would be clustered around common green spaces and
outdoor sports facilities.

3.11 The UAT and the STB would be linked by two roads to be built across
the Oued Lahouar and by an urban park on the south bank of the river. With
its sports and entertainmentfacilities, the park would also be a gathering
place for tourists. The location of the UAT would allow its developmentas
an independent and self-containedentity; at the same time it would provide
 - 7 -

the Agadir metropolitanarea with additional infrastructureand facilities.

SONABA and MUHTE are jointly refining the details of the UAT schéemad'amenagement.
A condition of loan effectivenessis the enactment of the UAT's schéma d'aménage-
ment with provisions satisfactoryto the Bank. The Governmentagreed to consult
with the Bank on any subsequentmodification thereto,

3.12 At present 92% of the UAT land is already in the public sector,
either national or local, the remaining 8% being in private hands. Of the
latter, only a small portion of a single private lot would be built upon; the
rest would be used as parkland or buffer zones, Legislation to declare the
UAT land of public interest is being prepared which will authorize the
necessary changes in previously designated land uses, the expropriationof
private lands and the transfer of public lands to SONABA. A condition of loan
effectivenessis that SONABA obtain interim authorizationfrom the present
landowners to start with the early stages of implementingthe project in
advance of the completionof all formalities for the transfer of land owner-
ship.

C. Project Description

3.13 The project would consist of infrastructureand common facilities

for the UAT, a regional infrastructurecomponent and studies.

(a) UAT Infrastructure

3.14 The UAT infrastructurewould include streets, street lighting, power,

sewerage, water supply and telecommunicationsworks. The proposed infrastructure
would be an extension of Agadir's existing infrastructuresystem.

3.15 The street component would include UAT's primary and secondary
streets, the connection of the UAT with RP 32 and two bridges across the
Oued Lahouar into the STB (para. 3.11). Pedestrian paths, street lights, park-
ing facilities,an esplanade for buses and taxis and a landscapedparking area
near the bridges would be other featuresof the street component.

3.16 The sewerage system for the UAT would be connected by a rising main
from a low point near the mouth of the Oued Lahouar with that of Agadir which
is run at present by the Municipality. The solution recommendedby the con-
sultants is that of a combined system (i.e., with one main collectingboth
domestic and rainwater). During final design a dual system will be studied.
The funds provided for this component would adequately finance either solution.

3.17 The UAT's water would come from the same system that supplies
Greater Agadir, which is run by the state-ownedOffice National de l'Eau
Potable (ONEP). Existing water resources,which have recently been expanded
by successfulunderground drilling in the Souss Valley and improvementof
ONEP's facilities,are sufficient to meet the region's growing needs up to
1982. Further exploration for undergroundwater in the Souss Valley is
expected to provide ONEP with resources adequate until 1990. The proposed
dam on the Oued Issen east of Agadir would be an additional source of supply
in the longer run. The UAT water distributionsystem would connect with a
400-mm main which ONEP recentlyinstalled up to the UAT boundary and which
is large enough to meet UAT water requirements.
 - 8 -

3.18 Agadir's electricalsystem is part of the national network which

is run by the state-ownedOffice National de l'Electricite(ONE). The power
componentof the project would include a 2-km overhead supply line from
ONE's main transformer,a substationand underground distributionlines.

3.19 Telephone and telex services in Morocco are provided by the

Ministere des Postes, Télephone et Télégraphe (PTT). Agadirt s 2,000-line
telephone exchange is being doubled to absorb the demand backlog and meet
expected requirements(excludingthose of the UAT). The project would provide
for an additional1,000 telephone lines designed specificallyfor the UAT,
and for the correspondingunderground telephone and telex cable connections.
The telex exchange is not yet saturated and, accordingly,will not be extended
under the project.

3.20 The infrastructurecomponent would also feature landscapingof the

major open spaces around the UAT near the hotel clusters and common facilities.
The RP 32 access, the south bank of the Oued Lahouar and beach parking would
be laid out as urban parks.

(b) UAT Common Facilities

3.21 The project would provide financing for a core of common facilities
for shopping,);
entertainmentand sports which would make the UAT attractive to
investors and visitors alike. One shopping area near the UAT entrance from
RP 32 and another near the hotel clusters would accommodate shops, offices,
a handicrafts center as well as entertainmentfacilities. The sports facil-
ities would be grouped in four landscapedareas near the hotels, a multi-
purpose recreationarea and a beach center. Buildings would also be provided
for the storage of municipal maintenance and garbage collection equipment.

3.22 The UAT infrastructureand common facilitiesinvestments are reviewed

in greater detail in Annex III.

Regional Infrastructure

3.23 The regional infrastructurecomponent would include the Ait Melloul

bypass, upgrading of the secondary road CT 7002 and replacementof the pumps
for unloading fish in Agadir harbor; its implementationwould enhance the
area's tourism potential and foster the urban developmentof Greater Agadir.

(a) Ait Melloul Bypass

3.24 Located 13 km southeast of Agadir at the outer edge of the Greater

Agadir urban area, the town of Ait Melloul (pop. 8,500) is a major crossroads:
heavy traffic originating in the southeast converges there before being channeled
on RP 32 through the urban sprawl to Agadir's harbor (Map 1). The proposed
bypass would be 8.4 km long with a new bridge over the Souss River and would
complete a belt road around Agadir.

(b) Upgrading the Secondary Road CT 7002

3.25 This road extends for 56 km and connects several villages in the
picturesque Imouzzer Valley (pop. about 20,000). One of the most attractive
sites in the region, the valley is already visited by several thousand tourists
 -9

annually and regular bus trips there are scheduled by tour operators. Although
entirely asphalted, the road is unsafe because of falling rocks, sharp curves
and the absence of guardrails. The project would provide a lump sum for
localized improvementsto increase road safety (toe walls, widening of danger-
ous bends) and for small tourist facilities (parkingareas, lookouts) as well
as funds for studies for the road link between the Imouzzer Valley and highway
RP 40.

(c) Replacementof the Fish Pumps

3.26 As stated above (para. 3.06), the harbor is polluted by effluent

from the primitivewater pumps used to unload fish for the fishmeal plants
of Agadir and Anza. The pumps discharge residual fish blood, heads and scales
which contaminatenearby beaches as they are swept out of the inner harbor by
the tides. The project provides for replacementof existingpumps by a pneumatic
unloading system which would limit pollution while increasing unloading capacity.
This system is also expected to reduce the fish odor to some extent.

3.27 The regional infrastructurecomponent is reviewed in greater detail

in Annex IV.

Project Administration,Technical Assistance and Studies

3.28 The project also provides funds for project administration,pro-

fessional services, technical assistance and three studies. Funds earmarked
for project administrationare relatively large since the Project Unit would
be in charge of drawing up the detailed land-use plans as well as of super-
vising the constructionof the streets, street lighting, sewerage and common
facilities.

3.29 The technicalassistance would enable the Agadir Délégationà

l'Urbanisme,l'Habitat et l'Environnement(DUHE) to complete its planning
studies (para. 3.05). The Government'sundertaking to submit the terms of
reference and a work plan for these studies for Bank approval by June 1976
and to complete them by January 1978 will be set forth in a supplemental
letter.

3.30 The first study included in the project would seek ways to preserve
architecturaland environmentalvalues, while improving housing conditions,
in the Agadir region, particularly in the Imouzzer Valley (para. 3.25). it
is expected to provide preservationguidelinesand regulationsapplicable to
other rural areas in Morocco, where traditional settlementsare threatened by
the opening of roads and inappropriateuse of modern constructionmaterials.
The project funds would meet the cost of about four man-years of the necessary
expatriateexpertise. The Government'sundertaking to submit the terms of
referenceof the study to the Bank for approval by July 1976 will be set
forth in a supplementalletter.

3.31 The second study would cover the technical, financial, economicand
organizationalaspects of the Greater Agadir sewerage system. The Government's
undertaking to submit for Bank approval, terms of reference for this study by
July 1976, will be set forth in a supplementalletter. The Government agreed
 - 10 -

to use its best efforts to dispose of Agadir's sewage in order to avoid sea
pollution. The objective of the third study would be to prepare a subsequent
tourism project in Morocco.

D. Implementation

(a) UAT Execution

3.32 SONABA would have primary responsibilityfor implementing the works

for UAT. It would own the land, conduct the detailed planning studies, super-
vise final engineeringwork and coordinate the implementationof all UAT com-
ponents. SONABA wQuld advertise requests for tenders, evaluate bids, enter
into contracts and supervise all work. SONABA would contract with ONEP, ONE
and PTT for the design and constructionof UAT's water, electric power and
telecommunicationscomponentsrespectively. In implementingthe sewerage
component, SONABA would work closely with the Municipality of Agadir which
runs the existing sewerage system and the Province of Agadir which is in
charge of the Greater Agadir Sewerage Study.

3.33 Until the UNDP study was completed (para. 1.02) SONABA operated
with a skeleton staff. It has subsequently establisheda Project Unit and
engaged a technical director and a chief urban planner. Should their positions
become vacant, SONABA has agreed to exchange views with the Bank on proposals
to fillthem. Similarly,SONABA would inform the Bank of any proposal to
replace the General Manager. In addition, SONABA agreed to review the critical
path network for the execution of all works every six months in consultation
with the Bank.

3.34 Coordinationbetween SONABA and other Governmentagencies would be

ensured by:

(i) SONABA's Board of Directors which includes representativesof all

ministries involved in project implementation;

(ii) an ad hoc interministerialcommissionon the Bay of Agadir tourism

development chaired by the Minister of Tourism and including re-
presentativesof various ministries and agencies;

(iii) a Comité Technique Local Consultatif chaired by the Governor of

Agadir and grouping SONABA's management and local representatives
of various agencies; and

(iv) interagency agreementsbetween SONABA on the one hand and ONEP,

ONE and PTT on the other, defining the agencies' respective
financialand technical responsibilitiesin the constructionof
the water, electricityand telecommunicationscomponents. A
condition of loan effectivenesswould be the signing of agreements,
satisfactoryto the Bank, between SONABA and all the agencies
concerned.
 - il -

(b) UAT Operations

3.35 SONABA would retain ownership of the unsold common facilities and
land. Its operational tasks would include-

(i) defining and applying policies for the lease and sale of hotel
and housing sites as well as for the lease or sale of its own
common facilities,

(ii) attracting investors;

(iii) cooperating with investors, their architects and the Municipality

in order to preserve the urban plan and the architectural concept
adopted for the UAT. During appraisal the Municipality gave SONABA
written assurances that it would grant building permits for the
UAT only after prior approval by SONABA's technical services;

(iv) operating common facilities until they are leased or sold; and

(v) co-sponsoring with prospective hotel operators a committee which

would be in charge of UAT's "animation." SONABA agreed to prepare
and discuss with the Bank within 4 years of loan signing a program
to stimulate social activities within the UAT and a schedule for
its implementation.

SONABA's personnel structure would be modified as required to ensure a smooth

transition from the implemention to the operational stage. SONABA's under-
taking to consult with the Bank on any changes in its organization is recorded
in the Agreed Minutes of Negotiation. The organization of SONABA is reviewed
in detail in Annex V.

3.36 Once implemented, the electricity, water and telecommunications

components would be transferred to ONE, ONEP and PTT respectively. These
agencies are well-equipped to operate and maintain such facilities. At
present a small portion of the UAT is situated outside Agadir's municipal
boundary. The Government has agreed to extend before January 1, 1980 (when
infrasturcture works are expected to be completed), Agadir's municipal juris-
diction to include the whole UAT. The Municipality will thus be in a position
to own, operate and maintain the streets, parking areas, bus esplanade, sewer-
age system and public parks in the UAT. It will also be made responsible
for handling solid waste disposal, street cleaning and fire fighting in the
UAT. Municipal services are well staffed and should perform these tasks
satisfactorily.

The Regional Components

3,37 The TP would be in charge of constructing the Ait Melloul bypass,

upgrading CT 7002 and undertaking the studies for the road linking Imouzzer to
RP 40. It would supervise the final engineering studies, advertise requests
for tenders, evaluate bids, enter into contracts and supervise implementation.
The TP has already carried out two earlier road projects with the Bank (Loan 642-MOR
 - 12 -

and Loan 955-MOR). The Régie d'Acconnage. du Port de Casablanca (RAPC) which is
responsible within the TP for loading and unloading ships in Moroccan harbors,
including Agadir, will supervise the installation of the new fish pumps and
operate them.

3.38 The following table lists the various agencies involved in the
financing,.construction, ownership, maintenance and operation of the project
components:

Table No. 1

Responsibility Ownership,
for Construction Maintenance,
Project Component Financing or Implementation Operation

1. UAT

Land SONABA

Roads, Parking,
Street Lighting,
Sewerage, Public Municipality
Parks SONABA SONABA of Agadir

Water Supply SONABA SONABA/ONEP ONEP

Electricity SONABA SONABA/ONE ONE

Telecommunications SONABA SONABA/PTT PTT

UAT CommonFacilities, 1/
Private Parks SONABA SONABA SONABA

2. Regional Components

Ait Melloul Bypass TP TP TP

Upgrading CT 7002 TP TP TP

Fish Pumps TP RAPC RAPC

3. Technical Assistance and Studies

Agadir Urban Study MUHTE DUHE

Preservation of
rural sites MUHTE DUHE

Greater Agadir Local Local

Sewerage Authorities Authorities

Second Tourism Project MUHTE MUHTE

I/ Until sold to private investors.

 - 13 -

E. Cost Estimates

3,39 The detailed cost estimates and the foreign exchange components of the
project are given in Annex II and are summarized in the table below:

Table No. 2

Project Cost by Category of Expenditure

Dirhams '000 US$'000

Code Component Local Foreign Total Local Foreign Total

0. UAT Land Acquisition 8,200 - 8,200 2,158 - 2,158

1. UAT Infrastructure 25,673 25,672 51,345 6,756 6,755 13,512

a. Civil works 1933i3 16,776 36,129 5,093 4,415 9,508

b. Equipment 3,252 7,955 11,207 856 2,093 2,949
c. Professional services 3,068 941 4,009 807 247 1,055

2. Common Facilities 8,874 10,382 19,256 2,335 2,732 5,066

a. Civil works 6,168 6,137 12,305 1,623 1,615 3,238

b. Equipment 2,056 3,978 6,034 541 1,047 1,587
c. Professional services 650 267 917 171 70 241

3. Regional Infrastructure 8,247 7,865 16,112 2,170 2,069 4,239

a, Civil works 7,204 6,596 13,800 1,896 1,736 3,632

b. Equipment 27 478 505 7 125 132
c. Professional services 1,016 791 1,807 267 208 475

4. Project Administration 4,492 1,877 6,369 1,182 494 1,676

5. Technical Assistance
& Studies 2,23 2,152 4,390 589 566 1,155

BASE LINE COST 57,724 47,948 105,672 15,190 12,616 27,806

Contingencies 2-9.757 31.836 61.593 7,830 8,378 16.208

Physical increases 3,867 4,354 8,221 1,017 1,146 2,163

Price increases 25,890 27,482 53,372 6,813 7,232 14,045

TOTAL PROJECT COST 87,481 792784 I67,265 23,020 20,994 44,014

(in rounded figures) (87,030) (80,000) (167,000) (23,000) (21,000) (44,000)

Note: DH-US$ do not exactly correspond in this table due to rounding.

 - 14 -

3.40 The base line cost of Table No. 2 is derived from BCEOM-SOMET cost
estimates (adjusted to account for price changes since December 1974) as
revised by the appraisal mission, Unit prices were checked with those in
the latest tenders by the various agencies. An average increase of 10%
has been allowed to cover physical contingenciesfor civil works and equip-
ment. This amount is reasonablesince most of the cost estimates are based
on advanced engineering data. Taking into account the recent evolution of
prices in Morocco and the likely impact of worldwide inflation on international
materials, labor and equipment costs, provision has been made for a 10.5% to
13.5% price increase per year for civil works and 10% to 12% for equipment,
resulting in a price contingencyof 50.3% of the base line cost. The overall
contingency provision amounts to 58.3% of base line costs and brings the total
project cost, excluding interest during construction,to US$44 million.

3.41 Most building materials needed for project implementationare pro-

duced locally whereas most of the equipmentwould have to be imported. The
foreign exchange component of the total project is estimated at 48% or US$21
million. The local currency component, US$23 million, includes taxes equiva-
lent to about 22% of total project costs.

F. Financing and Lending Arrangements

3.42 The proposed loan of US$21 million would cover the estimated foreign
exchange component of the project. The loan would include US$120,000 of retro-
active financing to cover the cost of the Project Unit's expatriate staff after
August 1, 1975, and the cost of the detailed planning and engineering studies
which are expected to be undertaken before loan signing.

3.43 The proposed loan would be made to the Moroccan Government. The
portion of the funds needed for the UAT infrastructure,common facilitiesand
project administrationwould be on-lent to SONABA on the same terms as the
Bank loan. The remainder of the UAT financingwould be provided by:

(i) an increase in SONABA's equity to DH 20 million;

(ii) a government loan of DH 34.6 million on the same terms and con-
ditions as the Bank loan; and

(iii) a subordinatedtreasury advance of DH 30.0 million_bearing_6%

interest. The interest on the advance would be subordinateto
interest and principal payments by SONABA of its senior debt (Government
loan and proceeds of Bank loan). Reimbursementof the advance's
principal would begin only after reimbursementof all the senior
debt.

The Government'sundertaking to pay in the equity and disburse the Treasury

advance before March 1978 will be set forth in a supplementalletter. Conditions
of loan effectivenessare the conclusionof a subsidiary loan agreement between
the Government and SONABA, the increase of SONABA's authorized capital to
DH 20 million and t:hesubscription of DH 4,9 million.
 - 15 -

3,44 The financing plan for the project is as follows:

Table No. 3

Govt. Proceeds
SONABA Loan to Treasury of IBRD Govt.
Equity SONABA Advance Loans Funds Total

(US$ million)

UAT investment 5.3 9.1 7.9 17.0 - 39.3

Regional components
and studies - - - 4.0 4.6 8.6

Total (including 5.3 9.1 7.9 21.0 4.6 47.9

interest during
constructiona/)

(DH million)

UAT investment 20.0 34.6 30.0 64.6 - 149.2

Regional components
and studies - - - 15.2 17.5 32.7

Total (including 20.0 34.6 30.0 79.8 17.5 181.9

interest during
constructiona/)

a/ Not included in Table No. 2 above

G. Procurement

3.45 Civil works contracts would be tendered under internationalcompetitive

bidding according to the Bank's guidelines. In order to permit smaller local
contractors to tender for work of a size within their capabilitiesand also to
attract foreign bidders, contracts for civil works would be tendered individually
and combined into bidding groups at the bidder's option. Equipmentwould be
procured after internationalcompetitive bidding in accordancewith Bank
guidelines except for purchases not exceeding US$70,000 equivalent for which pro-
curement will be in accordancewith normal local procedures for competitive
bidding, which are acceptable to the Bank, provided that such purchases do
not exceed an aggregate of US$500,000. A 15% preferencemargin, or the pre-
vailing customs duty, whichever is lower, would be extended to local manufactur-
ers in the evaluationof bids for equipment. Telecommunicationequipment
procured under the project would have to be compatiblewith that presently
-used in Agadir. It is therefore proposed that PTT negotiate the purchase with
manufacturersof this equipment. Prices so negotiatedwould be subject to
Bank approval. The amount involved would be US$600,000, or 1.4% of the total
cost of the project.
 - 16 -

H. Disbursement

3,46 The proposed loan of US$21 million would be disbursed to meet:

(i) 47% of total expendituresfor civil works;

(ii) 100% of the foreign cost of imported goods or of the ex-

factory cost of locally produced goods procured through
internationalcompetitive bidding and 60% of other locally
procured items;

(iii) 34% of the total expendituresfor professional services,

project administrationand technical assistance,.

IV. JUSTIFICATION

A. SuperstructureDevelopment

4.01 As stated above (para, 3.09) the project would provide improved
land for both hotel and housing developments,enabling a multipurposeuse of
the UAT (the<'lastundeveloped area convenientlylocated near Agadir). The
proposed "mixed" approach was suggested by the project sitets location in
the middle of the fast growing Greater Agadir area and by the fact that only
small incrementalinvestmentwas involved in providing also the infrastructure
required by the housing component. This approach would balance the need for
expansionof tourism activities,one of the region'smajor sources of income,
with that of alleviating the acute shortage of housing, the town's most
crucially felt problem. It relies on the concept that tourism and urban
activities far from being antithetic can be mutually beneficial. Coexistence
of hotels and housing units in the UAT will avoid creation of a tourism ghetto,
generate a lively atmosphereand give Agadir's residents access to entertain-
ment and sports facilitieswhile providing them with an opportunity for socially
valuable interchangewith tourists.

4.02 The accommodationbuildup of hotels in the UAT and in the remainder

of Agadir (mainly STB) would be as follows:

Table No. 4

Hotel Capacity in the UAT and in Agadir as a Whole

(numberof beds)

STB and Other

UAT Sites in Town Total Agadir

1975 4,000 4,000

1980 1,000 7,500 8,500
1985 6,000 9,500 15,500
1988 7,000 11,000 18,000
 - 17 -

Sponsoredby local investors, the UAT's hotels would mostly be small, three-
star establishmentscatering to mass tourism. In a sense, they would complement
the hotels in the STB which are large, multistory establishmentsin deluxe
categories.

4.03 Investorsr interest in Agadir is strong. The InvestmentDivision

of MUHTEhas on file requests from local and foreign investors for the con-
struction of 26,000 hotel beds. These projects are in various stages of
preparation. Since the UAT project has become known in the financial com-
munity, SONABA has received numerous requests for hotel sites in the UAT

4.04 Until recently land in the STB was sold at subsidizedprices. The
Governmenthas directed the Governor of Agadir - who is in charge of adminis-
tering the STB land - to ensure that henceforth STB land prices are allowed
to be determinedby market forces, as will be the case at the UAT.

4.05 The sale and lease of UAT land would be regulated by a cahier des
charges (conditionsof sale or leas3) which would reflect the main provisions
of UAT's schéma d'aménagement. Adoption by SONABA's Board of a cahier des
charges with provisionsagreeable to the Bank is a condition of loan effective-
ness. Since-the main purpose of the cahier des charges is to ensure that the
environment in which they invest will not be downgraded, it is expected that
investors would readily accept its provisions.

4.06 Hotel investors in Agadir should be able to rely on adequate supply

of trained hotel personnel. At present the Agadir hotel school trains only
middle-levelstaff; its output is expected to be sufficient for the needs of
the proposed hotel development in Agadir. The current system of training
lower-levelstaff on the job has not proven satisfactory,however, and
inadequateservice is among the visitors' chief complaints. With the expected
increase in capacity the need for trained personnel at the lower level will
become more acute and reach 200 per annum. This need will be partially ful-
filled by graduates of the proposed new schools (para. 2.13). To supplement
their output, the Moroccan Government has agreed to make more efficient
use of the existing facilitiesin Agadir and to train there some 100 lover-
level people per annum.

4.07 A promotion campaignwould be launched to advertise investment

opportunitiesin the UAT to national and internationalinvestors. Part of
this campaignwould consist of programs to assist investors in their negotiat-
ions with both local and national authorities (e.g., Municipality,MUHTE, CIH),
and to promote common activities (e.g., reservations,food supply) among small
hotel owners. SONABA agreed to prepare and discuss with the Bank within 2
years of loan signing, a timetable of steps to be taken to implement the
proposed promotion campaign.

4.08 Despite the UAT's attractivenessand SONABA's promotional efforts,

the risk remains that private hotel investmentmight not be forthcoming. To
guarantee completionof the project after the infrastructureinvestmenthas
 - 18 -

been made, the Moroccan Government would undertake to build, if the private
sector does not, sufficienthotel beds to attain acceptable rates of return
on infrastructureoutlays. It has been calculated that the constructionof
4,200 beds (60% of the scheduled total) would secure an economic rate of
return of 13%, which is consideredacceptable for Morocco. The Government
agreed to ensure that this minimum number of beds is in operation in 1988
provided the Government and the Bank agree that a potential market for these
beds exists. In the event of government involvement in hotel investment
and operation, these functionswould be performed by designated specialized
agencies and not by SONABA.

4.09 The UAT housing program, designed primarily for the middle- and
upper-incomesegments of Agadir's population,would accommodate 13,000
people or about 7% of the Agadir urban area's present population. Some 30%
of the units would be built and owned directly by prospective dwellers,
whereas the remainder would be built by investors who would then rent them
either to residents or tourists. By increasing the supply of developed land,
the implementationof the UAT Project is expected to alleviate the overall
shortage of developed land for housing in the area. The housing component
involvesno subsidies,direct or indirect, nor does it preempt water, elec-
tricity or sewerage capacity needed for lower income housing elsewhere in
the area. All in all, it representsan additional benefit from the project,
gained at a small incrementalcost.

B. The Market

4.10 Internationalarrivals in Agadir soared from 46,000 in 1970 to

119,000 in 1974, an average annual rate of increase of 20%. This compares
with a 15% rate of growth in traffic to the country as a whole. In 1974
over 90% of visitors to Agadir came by plane (versus 36% for all of Morocco),
80% on inclusive tours marketed by operators. The growth in traffic was
accompaniedby a rise in the average length of stay from three days in 1970
to 11 days in 1974.

4.11 In the initial stage of its development,Agadir was mainly an

elite destination for French winter tourists. Over the years, however, it
diversified its market geographically,also attracted less affluent visitors
and establisheditself as a year-round destination. The share of French
visitors decreased from 59% in 1970 to 41% in 1974, in favor of other Western
European visitors such as Germans and Swiss, who account presently for 14%
and 11% of the total market. With the rise in income in Morocco, domestic
tourism also expanded. Nationals mostly from Rabat and Casablancaarrive
for extendedweekends during spring and summer and presently account for 20%
of total arrivals and 8% of bednights. Traffic to Agadir is evenly distributed
throughout the year with slight drops in January, June and October.

4.12 A field survey conducted by the mission shows that while there was
a threefold increase in hotel capacity since 1970 there was a fivefold increase
in bednights. As a result of growing pressure of demand on supply, bed and
room occupancy rates doubled, reaching 75% and 95% respectively,in the first
eight months of 1975.
 - 19 -

Table No. 5
a/
Accommodationand Demand Buildup in Agadir
(1970-1975)
b/
1970 1971 1972 1973 1974 (1975)

Beds 740 1,540 2,242 2,684 2,806 (2,928)

Bednights 165,972 256,488 443,646 597,447 690,813 (531,779)
Bed occupar!cy 38% 46% 54% 66% 67% (75%)
Room occupancy 47% 57% 68% 76% 84% (95%)

a/ Data pertain to the major hotels. The remaining capacity includes small
hotels (less than 40 beds) that enjoy even higher occupancies since they
cater more extensively to local clientele.
b/ First eight months.

The high yearly rates of utilization of hotel capacity point to sizeable

volumes of frustrateddemand - foreign and domestic alike. Tht is confirmed
1 ' or to satisfy
by the high rate of hotel refusals to book individual tourists
tour operators' requests for block space. 2/

4.13 With substantial expansion of accommodationcapacity, hotel occu-

pancies in Agadir are expected to decline from the current congested levels
to more normal levels. A drop in room occupancy rates from 95% to 75%
(correspondingto a drop in bed occupancy from 75% to 60%) would still ensure
that Agadir's accommodationsearn adequate financial returns (para. 4.20).
At these target occupancy levels, hotels to be built in Agadir under the
schedule detailed in paragraph 4.02 would require 3.9 million bednights
annually by 1988. Since realized demand is estimated to be one million bed-
nights in 1975, and current frustratedor turnawaydemand is estimated to
amount to another 200,000 bednights (20% of realized),"new" demand to be
attracted to Agadir in the period consideredwould total 2.7 million bednights.
This implies an annual growth rate of about 9.5%, which appels reasonable
in the conteit of: (i) past development trends, i e., 14.57%' annual growth
rate for Morocco in the period 1968-1974,and 37%/47for Agadir between 1970
and 1974; (ii) projections contained in a study of the Mediterraneantourism
market recently completed by consultants5iwhich predict annual growth rates
of foreign tourism to the Mediterranean region, to the Maghreb countries and
to Morocco of 5%, 13% and 10.5% respectively,over the next decade; and (iii)
likely expansion of domestic visitor flows to Agadir, parallel with this

1/ During the peak months of the 1974/75 winter season and in August 1975,
numerous Agadir-bound tourists had to be diverted to Taroudant, 100 km
from Agadir.
2/ Tour operators who have tried without success to include Agadir in their
marketing programs include Touropa, American Express,Meditours and
Neckermann.
3/ Arrivals of foreign tourists.
4/ Bednights.
5/ Financed by 10 Bank-associatedDFC's in Mediterraneancountries,with
the Bank as executing agency.
 - 20 -

destination'sexpected shift towards a broader category-mixof accommodations

and with rising personal incomes of Moroccan nationals. The market for the
UAT accommodationis reviewed in more detail in Annex VI.

4.14 The current population of the Agadir metropolitanarea is estimated

at 180,000. By 1984 it is expected to increaseby 230,000 inhabitants,creat-
ing a need for 45,000 additional housing units (not counting those needed by fam-
ilies presently living in overcrowded and substandard dwellings). The
requirementof middle- and upper-incomehousing is estimated at 20% of overall
housing demand. The housing program supported by the project, which is directed
to satisfy less than one-third of this demand, should find a ready market,
especiallysince the UAT housing units would have particular appeal for
employeesof the UAT hotels and common facilities.

C. Financial Aspects

4.15 SONABA's financial policies would be:

(a) to recover its investmentcosts, including those for the water/

sewerageand power utilities that would be transferredat no
cost to ONE and ONEP;

(b) to earn a satisfactoryrate of return on these investments;

(c) to maintain adequate debt service coverage; and

(d) to establish prices which would ensure attainment of these

objectives and still be acceptable to investors; these prices
would include sale prices of improved land and properties,
ground and property rentals,and service charges for the use
of common facilitiesto be calculatedon a per hotel room basis.
SONABA agreed on these financial objectives. This will lead to land prices
that are in line with prevailingmarket prices.
4.16 The achievementof these objectives appears feasible. Pro forma
financial projections reflectinga set of market-basedassumptionsi/as to

1/ The main assumptionsare: average sale price for land, DH 97 (US$25.5)

per square meter; annual ground rent, DH 800 (US$210)per room; property
leases, DH 15-20 (US$4-US$5)per square meter per month; markup on pro-
perty sales 50%, annual service charge of DH 1,000 (US$263) per room. The
following table compares projected land prices on the UAT, calculated to
cover all investmentcosts and to earn a satisfactoryreturn to SONABA
with existing prices in the city of Agadir (where land is developed and
sold by the local authoritiesand where Çovernment has kept land prices
low in order to foster the city's reconstruction)and elsewhere in the
metropolitanarea (where land is developed by private investors).

Type of Construction UAT City of Agadir MetropolitanArea

DH/m
Hotels 70 13 -
Low density 120 20-30 40-100
Middle density 150 40-50 100-200
High density 170 80 100-300
 - 21 -

timing of land and property sales and leases, level of land and property
prices and rentals, and of service charges show that SONABA would earn a
9.2% discounted financial rate of return on its operation and a rate of
return of 10% on net assets by the sixth year of operation. The pro-
jections also show that the debt service ratio would be 1.4 over the first
five years and would increase thereafter to 1.8 in current terms. Depending
on the ratio of land sales to land leases SONABA might accumulate excess cash.
It would have then to decide what use to make of these funds. SONABA has
already agreed to prepay the proceeds of the Bank loan to the extent that
in any one year the ratio of land sold in the UAT to the total land intended
for sale or rent exceeds the ratio of repayments by SONABA of the Bank loan
relent to it to the total amount of such loan. Such prepaymentswould be about
50% of the Bank loan to SONABA over the period 1983-89 if land were sold at
the pace assumed during appraisal. SONABA's financial situation is reviewed
in detail in Annex V.

4.17 SONABA agreed:

(a) to prepare a statement of its proposed financialpolicies accept-

able to the Bank, within a year of loan signing. The policy
statementwould detail the financial objectives set forth in
paragraph 4.15 and include the methodology for calculationall
sale prices and rents and procedures for their implementation;

(b) to establishwithin a year of loan signing a system of commercial

accounts to be maintained by an accounting department suitably
staffed;

(c) to have the accounts audited annually by independentauditors

acceptable to the Bank;

(d) to submit audited financialaccounts to the Bank within four

months after the close of each fiscal year; and

(e) in order to safeguard its financial position, not to incur

until 1986 any debt without the Bank's prior approval, other
than that incurred to finance the present project.

4.18 ONE, ONEP and PTT would charge the UAT users their standard rates
for commercialand domestic consumers. Existing power and water rates in
Morocco are now being reviewed under covenants to the First Power Project
(Loan 936-MOR) and the CasablancaWater Supply Project (Loan 850-MOR). These
studies are expected to recommend a revised national tariff structure that
will ensure charges equal to the economic cost of the service provided. The
sewerage rates would be examined under the proposed study of the Greater
Agadir sewerage system (para, 3.31) in order to recommend tariffs that will
cover the full economic cost of service.

4.19 RAPC would operate the new fish pumps and would be expected to
charge users (fishmealplants and boat owners) tariffs coveringoperating
and maintenance expenses as well as depreciationand financial charges.
 - 22 -

Projected rates ensuring a 10% return on the total investmentwould be

DH 6,0 (US$1.6)per ton of unloaded fish as compared to present costs of
DH 5.3 (US$1.4)per ton, This extra cost would not affect the competitive-
ness of Agadirt s fishmeal plants since it would be compensated by savings
resulting from a reduction in fish wasted that would be made possible by
the adoption of the new unloading method. The Government'sundertakin2 to
cause RAPC to discuss with the Bank the proposed tariff structure for the use
of the pumps is recorded in the Agreed Minutes of Negotiation.

4.20 Bed occupancy for individualhotels and housekeeping apartments

has been projected at 50% in the first year of operation rising to 60% in the
third year. Given the buildup of accommodationfacilities from 1,000 beds
in the first year of project operation to 7,000 by the seventh year, the
composite occupancy curve would thus rise slowly from 50% in the first year
to 60% in the ninth year of operation. Average daily guest èxpenditures
have been projected at DH 63 (US$16.6) in hotels. These assumptions result
in a gross operating profit (30% of total sales) adequate to cover financial
charges. The hotels would have an overall internal rate of return of 9.5%.
Housekeeping apartmentswould enjoy a GOP of 60% of sales and the rate of
return on acco=modationinvestmentincluding apartments would equal 11.6%.
The financial analysis of hotels and apartments is detailed in Annex VII.

D. Economic Justification

4.21 For the purpose of the economic analysis the project is split into
two componentswhich are justified separately: the UAT-related works and
the Ait Melloul bypass. Since the work on CT 7002 and the replacement of
the fish pumps will chiefly benefit tourism, they are justifiedwithin the
UAT investment.

Economic Justificationof the UAT Works

4.22 The gross benefits of the project to the economy would be the
expendituresof tourists attracted to the UAT's hotels and housekeeping
apartments. Average daily expenditure per visitor has been estimated at
DH 104.5 (US$27.50),broken down as follows: food and accommodation61%,
shopping 24%, sports and entertainment10% and miscellaneous5%. The only
benefits from the proposed housing program which have been included are
the yields from the sale of land. Benefits accruing to Royal Air Maroc
from the transport of UAT visitors have not been taken into account in
rates of return computations. Also excluded are the benefits resulting
from developing the UAT within a carefully planned framework ensuring the
balanced growth of tourism and urban activities and allowing the efficient
use of land and infrastructure. In view of Agadir's relatively even demand
over the year, large overhang of frustrateddemand and favorablemarket
projects, most of the UAT's expenditurewill be incremental. The non-
incremental expenditurehas been estimated to be a quarter of the UAT's
total net benefits.
 - 23 -

4.23 The capital costs associatedwith the project amount to DH 314.9

million (US$82.9million) of which the UAT's infrastructure,CT 7002 and
the fish pumps represent 21%, the hotels, the housekeepingapartments and
common facilities77% and the tourism facilitiesoutside the UAT (e.g.,
taxis, shops) 2%. The use of UAT land has been valued at the revenues
foregone in agriculture. Operating expenses of hotels, apartments, and
common facilitieshave been estimated on the basis of the actual experience
of similar £acilities in Agadir.

4.24 With an estimated economic life of the project of 30 years, the

economic rate of return on the investmentin the UAT tourism development
(i.e., all project investmentapart from the Ait Melloul bypass) would be
17.4%. The sensitivity of the rate of return to changes in key variables
is shown in Table 6.

Table No. 6

Sensitivity Tests

SensitivityTesting Resultant Rate of Return

/0
Best estimate 17.4
Investment cost +20% 14.6
Benefits a/ +25% 21.1
+10% 18.9
-10% 15.8
Two-year delay in opening hotels 13.4
5% shadow pricing of foreign exchange 18.0

a/ Changes in benefits reflect variations in occupancy rates, average daily

expendituresand operating costs.

4.25 The proposed project is expected to increase net foreign exchange

receipts by about DH 8.7 million (US$42.3million) per year in 1981 and
by DH 140 million (US$37 million) in 1989 and annually afterwards. Net
annual budgetary receipts from taxes levied on tourism activities in the
UAT would rise from DH 2.1 million (US$ 0.5 million) in 1981 to DH 22.4
million (US$5.9 million) in 1989. Taking into account the net budgetary
receipts and the net operating income of SONABA, the internal rate of
return to the Governmenton its investment in the UAT is 20.5%. Direct
employmentin hotels and tourism facilities to be built in the UAT would
amount to 4,400 jobs. Indirect employment generated in construction,
handicrafts,agriculture and other services is likely to account for 7,200
additional jobs.
 - 24 -

4,26 The following table indicates the distributionof benefits

directly generated by the UAT developmente

Table No. 7

Share of Investments Share of Benefits (1989)

SONABA operations 20 9
Hotel and apartment operations 70 37
Other tourism facilitiesa/ 10 30
Total 100 76

a/ Includes common facilitiesin resort area plus other facilitiesoutside

such as handicrafts shops, taxis, buses, etc,

The remaining share of the benefits is associatedwith taxes. The economic

rate of return on the overall project reflects comparativelylow returns on
the infrastructureand hotel investmentsand high returns from other-than-
hotel operatihohs,requiringminimal investments,and taxes, The economic
justificationof the UAT works is analyzed in detail in Annex VIII.

Economic Justificationof the Ait Melloul.Bypass

4,27 Since the level of tourism-relatedtraffic on the Ait Melloul

bypass would be quite small as compared with commercialand other traffic,
the bypass evaluationhas been carried out on the basis of benefits accruing
to road users in terms of vehicle operating costs and time savings. Assuming
a 20-year economic life for the bypass, the internal rate of return on the
investmentwould be 27.7%. The sensitivity of the rate of return to vari-
ations in investmentcosts and benefits is given below:

Assumption Resulting Rate of Return

Investment cost +15% 23.0

Benefits +25% 32.4
-25% 22.4

V. REACHEDAND RECOMMENDATIONS
AGREEMENTS

5.01 During negotiations the Government agreed:

(a) to take suitable measures to abate air pollùition(para. 3.06),

to protect the beach (para. 3.07), and to reduce sea pollution
(para. 3.31);

(b) to consult with the Bank on any subsequentmodificationof the

UAT's schéma d'am'énagement(para. 3.11);
 - 25 -

(c) to carry out, on the basis of terms of reference to be agreed

with the Bank, studies for the planning of Agadir (para. 3.29),
for the preservation of rural sites (para. 3.30) and for the
Greater Agadir sewage system (para. 3.31);

(d) to extend before January 1, 1980, Agadir's municipal jurisdiction

to include the whole UAT (para. 3.36);

(e) to pay an additional equity and provide a treasury advance to

SONABA and to finance any cost overrun (para. 3.43);

(f) to organize a training program using the existing hotel school

for an annual output of 100 lower-level personnel (para. 4.06);

(g) to ensure that a minimum of 4,200 beds is in operation in 1988,

provided the Government and the Bank agree that a patential
market for these beds exists (para. 4.08).

5.02 During negotiations SONABA agreed:

(a) to consult with the Bank on any proposed changes in key personnel
(para. 3.33);

(b) to review the critical path network every six months in consul-
tation with the Bank (para. 3.33);

(c) to discuss with the Bank within two years of loan signing a time-
table for the investment promotion campaign (para. 4.07) and
within four years of loan signing a program to stimulate social
activities within the UAT (para. 3.35);

(d) to prepay the proceeds of the Bank loan to the extent that
in any one year the ratio of land sold in the UAT to the total
land intended for sale or rent exceeds the ratio of repayments
by SONABA of the Bank loan relent to it to the total amount of
such loan;

(e) to prepare within one year of loan signing a statement of its

proposed financial policies acceptable to the Bank (para. 4.17),
consonant to its agreed financial objectives (para. 4.15);

(f) to establish a system of commercial accounts to be maintained by

an accounting department adequately staffed and to submit
accounts audited annually by independent auditors acceptable
to the Bank (para. 4.17);

(k) not to incur before 1986 any additional debt without the Bank's
prior approval (para. 4.17).
 - 26 -

5,03 Conditions of loan effectivenessare,

(a) the enactmentof the STB's schéma d'amenagement (para. 3.08);

(b) the enactment of the UAT's schéma d'amenagementwith provisions

satisfactory to the Bank (para. 3.11);

(c) that all steps have been taken to permit SONABA to begin carry-
ing out the project works on the UAT (para. 3.12);

(d) the signing of interagencyagreements (para. 3.34);

(e) the conclusion of a subsidiary loan agreement between the

Government and SONABA (para. 3.42);

(f) the increase of SONABA's authorized capital to DH 20 million

and the paying in of DH 4.9 million (para. 3.42);

(g) the adoption by SONABA's Board of a cahier des charges with

provisions agreeable to the Bank (para. 4.05).

5.04 Subject to the conditionsof effectivenessdescribed above, the

project is suitable for a Bank loan of US$21 million to the Kingdom of
Morocco. An appropriate term for the loan is 20 years including 5 years'
grace.
 ANNEX I

MOROCCO

BAY OF AGADIR TOURISM PROJECT

StatisticalAppendix to the Sector

Index

Table 1 AccommodationCapacity 12-31-74

Table 2 Evolution of InternationalArrivals (1968-1974)

Table 3 Arrivals by Means of Entry (1968-1974)

Table 4 Seasonalityof Arrivals (1972-1974)

Table 5 Main Commodity Exports (1968-1974)

 MOROCCO

B3Y OF AGADIR TOURISMPROJACT

AÂcoiuodation Capacity 12-31-74

3-Star
5,-3!ar% 4-Star h V^o tlonVillaes 1-Star otal
No0. S B o N.o d Beds No. ofa . or of!edg Io. of No. of oof Bds ge
Province Hotels B*d5 in Province Hotels Beds in Province Hotels Beds in Province HotOle Beds in ProDin9c Motels Beds in Provinoe Hotà» f in Province

Agadir 3 838 16.4 6 1,716 33.6 l1 1,702 33.3 12 549 10.7 10 298 5,8 44 5,103 12.5
Ai Hoceima 3 546 29.3 1 1,200 64.3 4 120 6.4 8 1,866 4.6
Boni Mellal 1 105 28.3 1 162 43,7 2 48 12.9 1 56 15.1 5 371 0.9
Casablanca 3 1,192 22.1 il 1,573 29.1 15 1,460 27.0 12 823 15.2 6 353 6.6 47 5,1401 13.2
El Jadida 1 65 24.3 1 60 22.5 5 142 53.2 7 267 0.6
Fez 3 1,106 44.9 3 383 15.5 3 - 347 14.1 8 378 15.3 5 250 10,2 22 2,464 6.o
Kenitra 1 144 27.3 3 185 35.1 3 198 37.6 7 527 1.3
Khourigba 2 107 100.0 2 107 0.3
KsarEs Souk 2 255 74.8 1 53 15.5 1 33 9.7 4 341 0.8.
Marrakech 3 1,415 30.4 4 764 16.4 12 1,827 39.2 9 467 10.0 5 187 4.0 33 4,660 I1.4
Meknes 1 260 11.4 1 22 1.0 8 1,094 47.9 8 679 29.7 5 230 10.0 23 2,285 5.6
Nador 1 192 100.0 1 192 0.5
Ouarzazate 5 856 66.5 2 400 31.0 1 32 2.5 8 1,288 3.2
Oujda 2 157 59.0 3 109 41.0 5 266 o.6
Rabat 2 868 31.6 4 546 19.9 8 665 24.2 7 425 15.5 4 245 8.8 25 2,749 6.7
Safi 1 140 43.5 1 68 21.1 1 40 12.4 1 74 23.0 4 322 0.8
Tangier 5 1,602 22.6 10 2,628 37.1 il 1,445 20.4 9 794 11.2 10 606 8.6 45 7,075 17.4
Tar 1 80 53.3 2 70 46.7 3 150 0.4
Tetouan - - 3 352 6.6 10 4,510 85.1 2 205 3.9 7 231 4.4 22 5,298 13.0

Total 20 7,281 17.9 59 10,287 25.4 90 15,355 37.6 75 4,698 11.5 71 3,111 7.6 315 40,732 100.0

o! Tourism
Source: Ministry im

August1975
 fOROCCO

BAYOF ÂQADIR TOURISM PROJECT

Evolution of International Arrivals (1968-1974)

National:,ty 1968 1969 1970 1971 1972 Number

French 119,131 148,986 173,795 188,173 ( 210,626 265,989 216,422 20.57

us 56,411 94,125 117,796 136,744 195,680 185,983 173,217 16.46

Spanioh 36,869 36,229 41,877 42,766 76,104 175,793 70,184 6.67

British 64,445 79,721 84,396 80,886 107,643 134,651 107,839 10.25

Algerian 28,396 46,151 60,232 66,613 91,510 105,373 147,956 14.06

German 34,724 38,551 55,405 70,703 75,144 90,440 82,157 7.80

Belgian 16,812 21,190 21,585 21,775 25,6o7 36,837 24,149 2.29

Dutch 16,143 23,227 25,449 24,481 29,100 36,173 33,360 3.17

Scandinavian 26,444 31,599 29,909 20,741 32,416 32,747 29,392 2.79

Canadian 9,306 15,198 17,083 20,712 28,848 31,251 26,539 2.52

Italian 14,141 17,597 18,554 17,916 25,o68 25,507 26,954 2.56

Swiss 10,911 15,431 9,792 12,690 19,484 24,533 21,256 2.02

Other 35,659 38,584 45,119 53,051 71,381 80,317 92,593 8.80

Total 469,492 606,589 700,992 757,256 987,611 1,225,594 1,052,018 1oeD.o

Cruisers 106,880 95,361 105,511 91,376 131,183 147,165 133,364

Grand Total 576,372 701,950 806,503 848,632 1,118,794 1,376,759 1,185,382

17 OfficiaI include Moroccan visitors

statistics from abroad. These have been deleted froin this table.

Source: Ministry of Tourism

August 1975
 MNEN I
Table 3

MOROCCO

BAY OF AGADIRTOURISMPROJECT

Arrivals by Means of Entry I968-1974)

(Percentages)

1968 1969 1970 1971 1972 1973 1974

Air 34.12 34.64 31.14 37.06 33.16 32.39 35.61

Sea 41.35 36.98 39.89 32.26 33.67 28.59 33.39

Land 24.53 28.38 28.97 30.68 33.17 39.02 31.00

Total 100.00 100.00 100.00 100.00 100l00 100.00 100.00

Source: Ministry of Tourism

August 1975
 ANNEXI
Table 4

MOROCCO

BAY OF AGADIRTOURISMPROJECT

Seasonality of Arrivals (1972-1974)

(Percentages)

1972 1973 1974

January 4.87 4.65 4.38

February 4.72 4.00 4.31

March 7.59 5.52 6.23

April 7.92 7.76 7.23

May 6.78 7.03 6.20

June 7.08 8.70 6.71

July 13e94 15.87 14.66

August 16.22 17.57 18.10

September 10.49 11.99 10.19

October 7.96 6.17 7.64

November 6.10 4.42 5.87

December 6.33 6.32 8.48

Total 100.00 100.00 100.00

Source: Ministry of Tourism

August 1975
 ANNEX I
Table 5

MOROCCO

BAY OF AGADIRTOURISMPROJECT

Main Commodity Exports (1968-1974)

(DH millions)

1968 1969 1970 1971 1972 1973 1974

Phosphate 544 551 572 588 673 788 4,o75

Citrusfruit 420 389 357 389 429 494 388
Tomatoes 144 146 180 163 179 230 183

Legumesand pulses 94 94 132 89 138 181 158

Cannedfish 130 124 127 148 134 190 244
Canned fruit
and vegetables 51 65 56 88 113 132 165
Vlive oil 7 91 16 21 111 101 147

Tourism 450 614 682 760 893 1,005 1,025

7ource: Office des Changes

August1975
 ANNEX 1I
Page 1

MOROCCO

BAY OF AGADIR TOURISM PROJECT

Project Description and Cost Estimates

The project consists of the following elements to be executed by the agencies

indicated:

1. SONABA

(a) provision of infrastructurefacilities for the UAT area including:

(i) a street system within the UAT, an access road to RP 32 and

a bridge and a ford across the Oued Lahouar;

(ii) a water distributionsystem linked with ONEP's existing network;

(14J) a power distributionsystem linked with ONE's existing network

through a 2-km overhead line;

(iv) a sewerage network linked with Agadir's existing system;

(v) a telecommunicationssystem including a 1,000-line extension

of Agadir's telephone exchange;

(vi) landscaping of the major open spaces (e.g., RP 32 access,

south bank of the Oued Lahouar and beach parking).

(b) provision of common facilitiesfor the UAT incllidi-ngs

(i) two shopping areas consisting of shops, offices, restaurants,

bars, a cinema, an open-air theater, a hammam and a handicrafts
center;

(ii) sports facilitiesconsisting of tennis courts, swimming pools;

a multipurposerecreation area and a beach center.

(c) provision of technical and financial advisers during the construction

period.

2. Ministry of Public Works

(a) constructionof a bypass road about 8 km long to the east of Ait

Melloul, including a new bridge over the Souss River;

(b) localized improvementsto CT 7002 between Agadir and Imouzzer Ida

ou Tanane and study of the road between Imouzzer Ida ou Tanane and
RP 40;

(c) replacement of the fish pumps in Agadir harbor.

 ANNEX II
Page 2

3. Ministry of Urban Development, Housing, Tourism and Environment

(a) technical assistance for a study of the preservation of rural

sites in Immouzer Valley;

(b) technical assistance for the completion of Agadir's physical

planning studies;

(c) technical assistance for the preparation of a Second Tourism Project.

4. Local Authorities

technical assistance for the study of the Greater Agadir sewerage system.
 ANNEX II
Page 3

StatisticalAppendix

1. General Cost Estimates

Table 1 Breakdown of Project Cost by Components

Table 2 Breakdown of Project Cost by Componentsand by Years
Table 3 ContingenciesAllowances
Table 4 Schedule of Expendituresby Project Components - Quarterly

2. Detailed Cost Estimates

(a) UAT Infrastructure

Table 6 Streets and Parking; Street Lighting

Table 7 Sewerage; Water Supply
Table 8 Power Supply; Telecommunications
Table 9 Landscaping

(b) Common Facilities

Table 10 Shopping Centers

Table Il Sports and Beach Facilities;Maintenance Facilities

(c) Regional Infrastructure

Table 12 Ait Melloul Bypass; Upgrading CT 7002

Table 13 Replacement of Fish Pumps

(d) Project Administration

Table 14

(e) Technical Assistance and Studies

Table 14
 TABLE 1

MOROCCO : BAY OF AGADIR TOURISM PROJECT

Breakdown of Project Cost by Components

(DH '000)

Foreign
Civil Physical Price Professional Total Cost _ Exchange Component
Code Component Works Eauipment Increase. Increase Services DH '000 US$ '000 DH '000 US$ '000

1. UAT Infrastructure 36,129 11.207 4.918 28,878 4,009 85.141 22.404 42.793 11.260

1 Streets and parking 18,494 - 1,849 10,870 1,155 32,368 8,518 15,630 4,113
2. Street lighting 324 2,290 261 1,601 130 4,606 1,212 2,590 681
3 Sewerage 5,497 548 605 3,469 302 10,421 2,742 5,398 1,421
4 Water supply 2,236 117 235 1,525 471 4,584 1,206 2,275 598
5 Power supply 3,023 5,279 830 5,350 .1,660 16,142 4,248 8,404 2,211
6 Telecommunications 1,003 2,705 556 2,430 - 6,694 1,761 4,925 1,296
7 Landscaping 5,552 268 582 3,633 291 10,326 2,717 3,571 940

2. Common Facilities 12,305 6.034 1.833 14.084 917 35.173 9.255 19.019 5.005

1 Shopping centers 9,113 3,762 1,287 9,701 644 24,507 6,449 12,854 3,383
2 Sports & beach facilities 2,766 1,636 440 3,386 220 8,448 2,223 4,690 1,234
3 Maintehance facilities 426 636 106 997 53 2,218 583 1,475 388

3. Regional Infrastructure 13.800 505 1.470 7.476 1.807 25,058 6.594 12,232 3,218

1 Ait Melloul bypass 10,160 - 1,016 5,306 1,188 17,670 4,650 8,210 2,160
2 Upgrading of CT 7002 3,300 50 335 1,764 552 6,001 1,579 3,037 799
3 Replacement of fish pumps 340 455 119 406 67 1,387 365 985 259

4. Proiect Administration - - - 1.168 6.369 7,537 1.983 2,157 568

5. Technical Assistance
and Studies - - - 626 4.390 5.016 1.320 2,443 643

TOTAL PROJECT COST 62,234 17.746 ,221 52,232 17,492 157,925 41,556 78,644 20,694 >
-~~~~~~~~~~~~~~~~~~~~~~Q e

JS H

August 1975
 TABLE 2

MOROCCO BAY OF AGADIR TOURISMPROJECT

Breakdown of Project Cost by Cosmonents and by Yeare

(DR '000)
YEAR I YEAR 2 YEAR 3 YEAR 4 YEAR 5

Foreign Foreign Foreign Foreign Foreign

Foreign
Exchange Total Exchange Total Exchange Total Exchange Total Exchange Total Exchange
Total
Cost Component Cost Component Cost Component Cost Component Cost Component
Code Component Cost Component

1.831 534 13,481 6,588 31,473 15.774 25.871 13_311 12,485 6,586
1. UAT Infirastructuft 85,141 42,793

854 256 5,813 2,702 12,295 6,054 9,008 4,458 4,398 2,160
1 Streets and parking 32,368 15,630
103 31 508 265 1,464 842 1,572 902 959 550
2 Street lighting 4,606 2,590
233 70 1,853 893 4,007 2,131 3,501 1,884 827 420
3 Sewerage 10,421 5,398
90 13 949 450 1,722 877 1,403 723 420 212
4 Water supply 4,584 2,275
319 48 3,095 1,673 6,377 3,478 4,407 2,297 1,944 908
5 Power supply 16,142 8,404
- - 550 351 1,581 1,014 2,327 1,795 2,236 1,765
6 Telecommunications 6,694 4,925
3,571 232 116 713 254 4,027 1,378 3,653 1,252 1,701 671
7 Landscaping 10,326

- - 743 216 5.136 2,574 13,321 7.228 15,973 9.001

2. Common Facilities 35.173 19,019

- 553 159 4,167 2,061 9,406 5,052 10,381 5,582

1 Shopping canters 24,507 12,854
- 190 57 869 483 3,512 1,972 3,877 2,178
2 Sports & beach facilities 8,448 4,690 -
1,241
1,475 - _- - 100 30 403 204 1,715
3 Maintenance facilities 2,218

6007.907 2 .8Oh il1 5.528 6.863 3.203 - -

3. Regional Infrastructure 25L058 12,232 1.138

17,670 8,210 660 299 4,263 1,980 6,778 3,171 5,969 2,760
1 Ait Melloul bypass
6,001 3,037 430 278 1,136 553 3,541 1,763 894 443
2 Upgrading of CT 7002 -
1,387 985 48 30 508 361 831 594 - - -
3 Replacement of ftsh pumps

1,427 687 1,633 539 1.588 453 1,394 230 1,495 248
4. Project Administration 7,537 2,157

5. Technical Assistance
799 2,344 1.201 725 331 375 112 - -
and Studies 5 016 2.443 1,572

5,968 2,627 24,108 11,438 50.072 24.660 47.824 24 084 29.953 15.835
TOTAL PROJECT COST 157,925 78,644

(US$1 '000)

481 140 3,549 1,733 8,282 4.151 6.807 3.501 3.285 1.73S
1. UAT Infrastructure 22404 11,260

225 67 1,530 711 3,236 1,593 2,370 1,173 1,157 56Y

1 Streets and parking 8,518 4,113 145
681 27 8 134 70 385 221 414 237 252
- 2 Street lighting 1,212
2,742 1,421 61 18 488 235 1,054 561 921 496 218 111
3 Sewerage
23 3 250 118 453 231 369 190 111 56
4 Water supply 1,206 598
84 13 814 440 1,678 915 1,160 604 512 239
5 Power supply 4,248 2,211
- - 145 92 416 267 612 472 588 465
6 Telecommunications 1,761 1,296
61 31 188 67 1,060 363 961 329 447 150
7 Landscaping 2,717 940

_ - 195 57 1,352 677 3.505 1 902 4.203 2.369

2. Common Facilictes 9,255 5.005

- - 145 42 1,097 542 2,475 1,330 2,732 1,469

1 Shopping centers 6,449 3,383
- 50 15 229 127 924 519 1,020 573
2 Sports & beach facilities 2,223 1,234 -
53 451 327
583 388 - - - - 26 8 106
3 Maintenance facilities

6,594 3.218 300 160 1.555 762 2, 933 1 l842

1sh,
3. Regional Infrastructure
783
2,160 174 79 1,122 521 1, 834 1,571 726
1 Ait Melloul bypass 4,650
799 113 73 299 146 932 464 235 116
2 Upgrading of CT 7002 1,579
259 13 8 134 95 218 156 - - -
3 Replacement of fish pumps 365

181 430 142 418 119 367 61 393 65 f g

4. Proiect Administration 1v983 568 375

5. Technical Assistance
643 414 210 617 316 191 87 98 30 -
and Studies 1 320

1,570 691 6,346- 3,010 13,176 6,488 12,583 633 7.881 4,163
TOTAL PROJECT COST 41,556 20,694

Auguat 1975
 TABLF 3

MOROCCO: BAY OF AGADIR TOURISMPROJECT

Contingencies Allawances

(US$ '000)

Civil Works Equipment Professional Services Total Cost

Local Foreign Total Local Foreign Total Local Foreign Total Local Foreign total

Total Project Cost

Excluding Contingencies (a) 8,612 7,766 16,378 1,404 3,264 4,668 3,016 1,585 4,602 13,032 12,616 25,648.
Percentage of Total 53'/, 47% 100% 30% 70% 100% 65% 35% 100% 51% 49% 100%

Contingencies
a) Physical Increase
Percentage of (a) 10% 10% 10% 10% 11% 11% 8% 9% 8%
Amount 872 783 1,655 146 362 508 - - - 1,017 1,146 2,163

b) Price Increase
Percentage of (a) 59% 58% 58% 59% 63% 62% 30% 22% 28% 52% - 55% 54%
Amount 5,066 4,519 9,585 824 2,055 2,879 923 358 1,281 6,813 6,932 13,745

c) Total Cost
Percentage of (a) 69% 68% 68% 69% 74% 72% 30% 22% 28% 60% 64% 62%
Amount 5,938 5,302 11,240 970 2,417 3,387 923 358 1,281 7,830 8,078 15,908
Percentage of Total 53% 47% 100% 29% 71% 100% 72% 28% 100% 49% 51% 100%

Total Cost Including

Contingeacies 14,550 13,068 27,618 2,374 5,681 8,055 3,939 1,943 5,883 20,862 20,694 41,556
Percentage of Total 53% 47% 100% 29% 71% 100% 67% 33% 100% 50% 50% 100%

4/ Professional Services include Project Administration, Technical Assistance and Studies Components.

August 1975
 TABLE4

TOURISMPROJECT
: AY 0F AGADIIR
MOROCCO

Sched,ale .f Ex enditure. by Pro)ect Comaponeota -Q..rterlv

(US$ '000)

Code rroje!otSeto Q 1j 2 Q Q4QQ 9 6 Qf 7i Q~ 9j Q 10 Il 12 013 <114 <115 0 16 017 Q 18 019 Q20 rTOT

1. LAÂT3.1,frastn,ctsre 100 127 127 127 400 750 1,050 1,349 1,682 2,000 2,300 2,300 2,100 1.800 1.550 1.357 1,100 900 700 585 22,404
Total YTear 1 - - 481 - - - - - - - - - - - - - -
3,549- -- -- - - -
Toctal Nea IlI -
- 8.282 - - - - - -
Total Y ear HIi- - - -
Total-Ye.r IV - - - - - - - - - - -- 6,807 - - -

T.t.]-Year V - - - - - -- --- - - 3 85 -
Total-(ceeltve 4.1 - - 4 030 1-2.312 19.119 22,404

2. ~ù~ Facilities - 45 50 50 50 200 280 370 502 650

-
800
-
950
-
1.105
-
1,103
-
1,100
-
1,000
-
1.000
-
9.255
-
Total-'Yearî - - - - - -
195 - - - -- - -- -
Total Year Il- - - - -
- 1.352 - - - - - - - -
Total -Year 111 - - - - - -
Total1 Year IV- - - - - - - - - - 3,505 --- -

Total-Year V - - - - - - - - - -- 4.203 -

Total1 (aoccaalative) - - - - - 195- 1,547 - 5,052 - - 9,255 -

3.1 Ai MLloo Byas36 46 46 46 217 217 344 344 420 420 471. 472 396 395 390 390 - - - - 4,650
Total Year I - - - 174 - - - 1,122 - - - - - - - - - - - -

- --- - - -
Total-Year Il
Total Year 1I -- - - 1,783 - - - - - -

Total -Year IV - - - - - - - - - - 1,571 - --

- - - --- - - - - - - - - -
Total Year V
Total -(acc.-zlative> - - - 174 - - - 1,296 - - - 3,079465

3.2 Upgradingof CT 7002 23 30 30 30 50 50 99 100 233 233 233 233 135 100 - - - 1.579
Total -Year I - 113 - - - - - - -
Total-Year Il - 299 - -

Total-YearII - - - - - 732 - - - - - - - -

Total-Year IV - - - - -- - - 215 - - -

- - - - - - - - - - - -
Total-Year V - --
Total -(accusslative) - - 113 - - - 412 - - 1,344 - î,7T - -

3.3 Replaceientof Fish PuIpsO - - 5 8 27 27 40 40 55 55 54 54 -- - -365

13 - - - - - - - - - - - - - -
T.t.1-Yearî - -
134 - - - - - - - - - -
T.tal-Year II- - - - -
- 218 - - - - - - - -
Total-Yearlî - - - - -
- - - - - - - -- - -
T.tal-Ye- IV - - - - -
--- - - - - -- -- -
Total Year V - -
Total -(accoeolat ive) - 13 - - - 147 - - 365 - - - --

104 -
104 10 1-9 92 92 98 98 98 98 1
4 Tota9l94 94 94 10 107 107 10
4 TPret1 Yearto 93 94 94 374 10 10 10 10 10 10 0 10 91 92 92 92 98 9 98 98 1,8
-- - - - - -- -
Total Year Il -~ - - - - -430 -
- 418 - - - - - - -
Tot.1 YearlI - - - - -
Tot.1-Yeart IV - - - - - - 367 - - -
- - -- - - __193 -
Total Yeari V
Total css,uative)
.... T75 - - - 805 - -1,223 - - - 1,590 - 1.983 -

5. TecoclAsitne&
Itudies 57 57 150 150 150 150 158 159 48 48 48 47 24 24 25 25 - - - - 1.320
Tot.1-Ye.r 1 - - - 414 - - - - - - - - - - - - -
617 -- - - - - - - - -
Tot.1-Ye.r IIl - -
- 191 - - - - - - - -
Tot.1-YearlI - - - - -
Total Y- IorV - - - - - - - - - - - - -- 98 - - - -

Tot.1lY-Te V
Total (acconalative) - - - -41î4 - - - 1.031 - 1,2322 - - 1.320 - - - -

TOTAL PROJECT COlT 309 354 452 455 996 1,351 1,848 2,151 2,742 3,140 3,580 3,714 3,396 3,211 3.007 2,969 2,301 2,098 2,798 1,684 41,556
Tota1-Yearcl - - - 1,570 - - - - - - - - - - - - - - -
6,346 -- - - - - - -- -
Tot.1-Ye.r Il -
Total -Ye.r III - - - --- 13.176 - - - - - - - -

Tot.1-Year IV - - - - - - - - - - -- 12.583 - -- -

Total-Ye.r V - - - - - - 7 881 -

Total -(...ooulative) - - - 1,570 - -7,916 - 21,091 33,675 - - - 4t

Aug..t 1975 41
 ANNEXII
Page 8

TABLE 5

MOROCCO : BAY OF AGADIR TOURISI PROJECT

Forecast of IBRD Disbursement

(US$ '000)

Disbursements
ImplementationQuarter Quarterly % Cumulative _ Quarterly %

First Year Qi - - 21,000 100.0

Q2 134 0.6 134 0.6 20,866 99.4
Q3 151 0.7 285 1.3 20,715 98.6
Q4 201 1.0 486 2.3 20,514 97.7

Second Year Q5 205 1.0 691 3.3 20,309 96.7

Q6 464 2.2 1,155 5.5 19,845 74.5
Q7 638 3.1 1,793 8.6 19,207 91.5
Q8 880 4.2 2,673 12.8 18,327 87.3

Third Year Q9 1,028 4.9 3,699 17.7 17,299 82.4

Q10 1,347 6.4 5,046 24.1 15,952 76.0
Qîl 1,547 7.4 6,595 31.5 14,405 68.6
Q12 1,764 8.4 8,359 39.9 12,641 60.2

Fourth .Year Q13 1,831 8.7 10,190 48.6 10,810 51.5

Q14 1,704 8.1 11,894 56.7 9.106 43.4
Q15 1,612 7.7 13,506 64.4 7,494 35.7
Q16 1,516 7.2 15,022 71.6 5,978 28.5

Fifth Year Q17 1,503 7.1 16,525 78.7 4,475 21.3

Q18 1,219 5.8 17,744 84.5 3,256 15.5
Q19 1,110 5.3 18,854 89.8 2,146 10.2
Q20 950 4.5 19,804 94.3 1,196 5.7

Sixth Year Q21 1,196 5.7 21,000 100.0 - -

TOTAL 21,000 100.0

August 1975
 TABLE 6

MOROCCO Z3AYOF AGADIR TOURISM PROJECT

Cost Estimates UAT Infrastructure

(DH'OOO) Exchange Rate: US$1 - DlR 3.80

A. TOTAL COST FOREIGN EXCHANGECOMPONENT YEAR I YEAR 2 YEAR 3 YEAR 4 YEAR 5

Foreign Foreign Foreign Foreign Foreign

civil Equip- Civil Equip- Total Exchange Total Exchange Total Exchange Total Exchange Total Exchange
Works ment Total Works ment Total Cost Component Cost Component Coaen t CDonent Cost Component Cost Compon.nt

1. Streets and tarking

1.1 Primary streets 5717 - 5717 2858 - 2858 - - 1715 857 2287 1143 1715 858 -
1.2 Secondary streets 7386 - 7386 3694 - 3694 - - 730 369 2954 1478 2216 1109 1478 73S
1.3 Parking areas 3041 - 3041 1520 - 1520 - - 304 153 1216 608 912 455 609 304
1 4 Pedestrian paths 911 _ 911 365 - 365 - - 91 36 365 146 273 110 182 73
1.5 RP 32 access 719 - 719 359 - 359 - - 288 144 431 215 - -
1.6 Oued Lahouar bridges 720 - 720 324 - 324 - - 288 130 432 194 _- -

Subtotal 18494 - 18494 9120 - 9120 - - 3424 1689 7685 3784 5116 2532 2269 1115

Physical increase 1849 - 1849 911 - 911 - - 342 169 768 378 512 253 227 111
Price increase 10317 - 10317 5087 - 5087 - - 1193 588 3842 1892 3380 1673 1902 934

Contingencies subtotal 12166 - 12166 5998 - 5998 - - 1535 757 4610 2270 3892 1926 2129 1045

Soil *tudies - - 268 - - 80 134 40 134 40 - - - - -

Design & Supervision - - 1440 - - 432 720 216 720 216

Prof. Serv. subtotal - - 1708 - - 512 854 256 854 256

TOTAL COST (DH'000) 30660 - 32368 15118 - 15630 854 256 5813 2702 12295 6054 9008 4458 4398 2160

TOTAL COST (US$'000) 8068 - 8518 3978 - 4113 225 67 1530 711 3236 1593 2370 1173 1157 569

2. Street Lighting

2.1 Underground cables 142 1264 1406 56 759 815 - - 281 163 562 325 422 245 141 82
2.2 Str-t lighting ecuipment 182 1026 1208 73 616 689 - - - 362 207 484 275 362 207

Subtotal 324 2290 2614 129 1375 1504 - - 231 163 924 532 906 520 503 289

Physical increase 32 229 261 13 137 150 - - 28 16 92 53 91 52 50 29

Price increase 187 1337 1524 75 799 874 - - 95 55 448 257 575 330 406 232

Contingencies subtotal 219 1566 1785 88 936 1024 - - 123 71 540 310 666 382 456 261

Design & Supervision - - 207 - t2

6 103 31 104 31 - - - - _ e

TOTAL COST (DHI'000) 543 3856 4606 217 2311 2590 103 31 508 265 1464 842 1572 902 959 550

TOTAL COST (US$'000) 143 1315 1212 57 608 681 27 8 134 70 385 221 414 237 252 145

Auguet 1975
 TAbLE 7

MOROCCO BAY OF AGADIR TOURISM PROJECT

Cost Estimates: UAT Infrastructure

(DH' 000)
Exchange Rate: US$ I = DH 3.80

A. TOTAL COST FOREIGN EXCHANGECOMPONENT YEAR I YEAR 2 YLAR 3 YEA 4 YEAR 5

Foreign Foreign Foreign Foreign Foreign

Civil Equip- Civil Equip- Total Exchange Total Exchange Total Exchange Total Exchange Total Exchange
Works ment Total Works ment Total Cost ComPonent Cost Component- Coset Component Cost Component Coat Component

3. Sewerage

3.1 Primary network 2954 60 3014 1478 49 1527 - - 904 457 1205 612 905 458 - -
3.2 Secondary network 2099 41 2140 1050 33 1083 - - 214 108 857 433 642 325 427 217
3.3 Pumping stations 241 443 684 120 354 474 - - - - 342 237 342 237 - -
3.4 Rising mains 203 4 207 101 3 104 - - - 103 52 104 52

Subtotal 5497 548 6045 2749 439 3188 - - 1118 565 2507 1334 1993 1072 427 217

Physical increase 550 55 605 275 44 319 - - 112 57 251 133 199 107 43 22
Price increase 3003 301 3304 1510 241 1751 - - 389 201 1249 664 1309 705 357 181

Contingencies subtotal 3553 356 3909 1785 285 2070 - - 501 258 1500 797 1508 812 400 203

Design & Supervision - - 467 - - 140 233 70 234 70 - - - - -

TOTAL COST (DN'000) 9050 904 10421 4534 724 5398 233 70 1853 893 4007 2131 3501 1884 827 420

TOTAL COST (USs'000o 2382 238 2742 1193 191 1421 61 18 488 235 1054 561 921 496 218 111

4. Water Supply

4.1 Primary network 1341 70 1411 737 55 792 - - 423 238 565 316 423 238 - -
4.2 Secondary network 895 47 942 492 37 529 - - 94 53 376 211 283 159 189 106

Subtotal 2236 117 2353 1229 92 1321 - - 517 291 941 527 706 397 189 106

Physical increase 223 12 235 123 9 132 - - 52 29 94 S3 70 40 19 10

Price increase 1211 60 1271 663 50 713 - - 180 101 469 263 465 261 157 88

Contingencies subtotal 1434 72 1506 786 59 845 - - 232 130 563 316 535 301 176 98

Design & Supervision - - 725 - - 109 90 13 200 29 218 34 162 25 55 8

TOTAL COST (DH1'000) 3670 189 4584 2015 151 2275 90 13 949 450 1722 877 1403 723 420 212

TOTAL COST ('JS$'000) 966 50 1206 530 40 598 23 3 250 118 453 231 369 190 111 56

August 1975
 TABLE 8

MOROCCO: AY OF AGADIR TOURISM PROJECT

Cost Estimates UAT Infrastructure

(DH'OOO)
Exchange Rate: US$ 1 = DH 3.80

TOTAL COST FOREIGN EXCHANGECOMPONENT YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5

A.

Foreign Foreign Foreign Foreign Foreign

Civil Equip- Civil Equip- Total Exchange Total Exchange Total Exchange Total Exchange Total Exehange
Works ment Total Works ment Total Cost Component Cost Component Cost Component Cost Component Cost Component

5. Power Supply

5.1 Trunk supply 25 144 169 il 87 98 - 68 39 101 59

5.2 Substation 317 586 903 158 468 626 - - 361 250 542 376 - -
5.3 MV transmission lines 234 349 583 93 209 302 - - 175 90 233 122 175 90
840 1551 2391 419 1240 1659 - - 718 498 955 663 718 498
5.4 Transformers
lines 1607 2649 4256 643 1590 2233 - - 425 223 1703 893 1277 670 851 447
5.5 LV distribution

3023 5279 8302 1324 3594 4918 - - 1747 1100 3534 2113 2170 1258 851 447
Subtotal

302 528 830 132 360 492 - - 175 110 353 211 217 126 85 45
Physical increase
1616 2842 4458 702 1909 2611 - - 598 377 1742 1042 1413 821 705 371
Price increase

subtotal 1918 3370 5288 834 2269 3103 - - 773 487 2095 1253 1630 947 790 416
Contingencies

- - 2552 - - 383 319 48 575 86 748 112 607 92 303 45

Design & Supervision

4941 8649 16142 2158 5863 8404 319 48 3095 1673 6377 3478 4407 2297 1944 908
TOTAL COST (DH000)

1300 2276 4248 568 1543 2211 84 13 814 440 1678 915 1160 604 512 239
TOTAL COST (US$'000)

6. Telecommunications

6.1 Trunk supply 203 304 507 81 244 325 - 203 130 304 195 - -
lines 640 970 1610 256 776 1032 - - 162 103 644 413 482 310 322 206
6.2 Distribution
exchange extensions 160 1431 1591 64 1288 1352 - - - 675 796 677
6.3 Telephone

1003 2705 3708 401 2308 2709 - - 365 233 948 608 1277 985 1118 883
Subtotal

inerease 150 406 556 60 346 406 - - 55 35 142 91 191 148 168 132
Physical
Price inerease 64' 1782 2430 268 1542 1810 - - 130 83 491 315 859 662 950 750

798 2138 2986 328 1888 2216 - - 185 118 633 406 1050 810 1118 882
Contingencies subtotal

- - - - - - - - - - - - -
Design & Supervision -

4893 6694 729 4196 4925 - - 550 351 1581 1014 2327 1795 2236 1765
TOTAL COST (DH'OOO) 1801

1287 1761 192 1104 1296 - - 145 92 416 267 612 472 588 465
TOTAL COST (US$'000) 474

August 1975
 TABLE 9

MOROCCO: BAY OF AGADIR TOURISM PROJECT

Cost Estimates : UAT Infrastructure

(DHO000)

Exchange Rate: US$ I = DH 3.80

A. TOTAL COST FOREIGN RECHAIGE COMPONEMT YE&R 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5

Foreign Foreign Foreign Foreign Foreign

Civil Equip- Civil Equip- Total Exchange Total Exchange Total Exchange Total Exchange Total Exchange
Works ment Total Works ment Total Cost Component Cost Component Cost Component Cost Component Cost Component

7. Landscaping

7.1 Internal armas nd gardens 2795 177 2972 839 97 936 _ _ 297 94 1189 374 892 280 594 188
7.2 External arsas and gardens 850 35 885 255 19 274 - - 89 28 354 110 265 82 177 54
7.3 Oued Lahouar arma 549 22 571 164 12 176 - - - - 285 87 286 89 - -
7.4 RP 32 belvedere 568 23 591 171 13 184 - - - - 295 92 296 92
7.5 Beach parking area 256 il 267 128 6 134 - - - - 133 67 134 67 - -
7.6 Site preparation for build-
ing construction 534 - 534 267 - 267 - - 53 27 214 107 160 80 107 53

Subtotal 5552 268 5820 1324 147 1971 - - 439 149 2470 837 2033 690 878 295

Physical incresse 555 27 582 182 15 197 - - 44 15 247 84 203 69 88 29

Price increamse 33 153 3460 1083 88 1171 - - 152 51 1233 418 1340 455 735 247

Contingencies subtotal 3862 180 4042 1265 103 1368 - - 196 66 1480 502 1543 524 823 276

Design & Supervision - - 464 - - 232 232 116 78 39 77 39 77 38 - -

TOTAL COST (DH'O00) 9414 448 10326 3089 250 3571 232 116 713 254 4027 1378 3653 1252 1701 571

TOTAL COST (S$V000) 2477 118 2717 813 66 940 61 31 188 67 1060 363 961 329 447 150

August 1975
 TABLE 10

MOROCCO: bAY OF AGADIR TOURISM PROJECT

Cost Estimates : Co-nmon Facilities

Exchange Rate: US$1 - DU 3.80

TOTAL COST FOREIGN EXCBANGECOMPONfENT YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5

B.
Foreign Foreign Foreign Foreign Foreign
Civil Equip- Civil Equip- Total Exchange Total Exchange Total Exchange Total Exchange Total Exchange
ment Total Works ment Total Cost Comaonent Cost Comoonent Cost Component Cost Component Cost Componmit
Works

1, Shoppinsg Centers

1.1 Services and office

617 260 877 - - - - 332 171 666 353 667 353
buildings 1233 432 1665
8219 3041 1282 4323 - - - - 1644 865 3287 1729 3288 1729
1.2 Shopping facilities 6082 2137
1.3 Restaurant & entertain-
444 285 729 - - - - 273 146 545 291 545 292
ment facilities 888 475 1363
112 102 214 - - - - - - 191 106 192 108
1.4 Pandicrafts center 224 159 383
660 173 200 373 - - - - - - 330 186 330 187
1.5 Cinema 347 313
58 86 144 - - - - - - 79 72 80 72
1.6 open-air theater 117 42 159
426 111 122 233 - - - - _ _ 213 116 213 117
1.7 Hammam 222 204

12875 4556 2337 6893 - - - - 2249 1182 5311 2853 5315 2858
Subtotal 9113 3762

455 234 689 - - - - 225 118 531 285 531 286

Physical increase 911 376 1287
3274 1680 4954 - - - - 1140 602 3564 1914 4535 2438
Price increase 6694 2545 9239

10526 3729 1914 5643 - - - - 1365 720 4095 2199 5066 2724
Contingencies subtotal 7605 2921

318 - 553 159 553 159 - - - -

Design & Supervision - - 1106 - - -

4251 12854 - - 553 159 4167 2061 9406 5052 10381 5582
TOTAL COST (DR'OOO) 16718 6683 24507 8285

2180 1119 3383 - - 145 42 1097 542 2475 1330 2732 1469
TOTAL COST (US$'000) 4399 1759 6449

August 1975
 TABLE 1l

MOROCCO: BAY OF AGADIR TOURISMPROJECT

Cost Estimates: 'Common Facilities

(DH' 000)
Exchange Rate: US$ 1 DH 3.80

B. TOTAL COST FOREIGN EKCHANGECOMPONENT YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5

Foreign Foreign Foreign Foreign Foreign

Civil Equip- Civil Equip- Total Exchange Total Exchange Total Exchange Total Exchange Total Exchange
Works ment Total Works ment Total Cost Component Cost Component Cost Component Cost Component Cost Component

2. Sports & Beach Facilities

2.1 Tennis courts 218 38 256 109 23 132 - - - 52 26 102 53, 102 53
2.2 Swimming pools 934 927 1861 466 742 1208 - - - - 373 241 744 483 744 484
2.3 omnisport areas 72 13 85 22 8 30 - - - - - - 42 15 43 15
2.4 Stable and riding school 608 260 868 304 142 446 - - - - - - 434 223 434 223
2.5 Beach facilities 934 398 1332 466 218 684 - - - - 666 342 666 342

Subtotal 2766 1636 4402 1367 1133 2500 - - - - 425 267 1988 1116 1989 1117

Physical incresse 277 163 440 137 113 250 - - - - 42 26 199 112 199 112
Price increase 2101 1124 3225 998 829 .s26 - - - - 211 133 1325 744 1689 949

Contingencies subtotal 2378 1287 3665 1135 942 2076 - - - - 253 159 1524 856 1888 1061

Design & Supervision - - 381 - - 114 - - 190 57 191 57 - - - -

TOTAL COST (DH'OOO) 5144 2923 8448 2501 2075 4690 - - 190 57 869 483 3512 1972 3877 2178

TOTAL COST (US$'000) 1354 769 2223 658 546 1234 - - 50 15 229 127 924 519 1020 573

3. Maintenance Facilities

3.1 Garbage collection build- 213 297 510 107 237 344 - - - - 107 54 403 290
ings and equipment
3.2 Street & garden maintenance, 213 339 552 107 271 378 - - - _ 107 54 445 324
buildings and equipment ____

Subtotal 426 636 1062 214 508 722 - - - - - - 214 108 848 614

Physical increase 43 63 106 21 51 72 - - - - - - 21 il 85 61

Price increase 381 569 950 193 458 651 - - - _ 168 85 782 566

Contingencies subtotal 424 632 1056 214 509 723 - - - _ 189 96 867 627

Design & Supervision - - 100 - - 30 - - - - 100 30 - - - -

TOTAL COST (DH'OOO) 850 1268 2218 428 1017 1475 - _ _ _ 100 30 403 204 1715 1241

TOTAL COST (US$'000) 224 334 583 113 268 388 - - - - 26 8 106 53 451 327

August 1975
 TABLE 12

MOROCCO BAY OF AGADIR TOURISMPROJECT

Cent Estimates Regional infrastructure

(DH'DOO) Exchange Ratez US$1 - DR 3.80

TOTAL COST FOREIGN EXCUANCECOMPONENT YEAR 1 YEAR 2 YTEA73 YEAR 4 YEAR S

Foreign Foreign Foreign Foreign Foreign

Civil Equip- Civil Equip- Total Exchange Total Exchange Total Exchange Total Exchange Total Exchange
Works oent Total Works ment Total Cost Component Cost Component Coat Component Cost Component Cost Component

1. Ait Melloul Byvass

1.1 Excavation and fll 862 - 862 431 - 431 - _ 431 215 431 216 - -
1.2 Road Construction 3898 - 3898 1949 - 1949 - - 1169 585 1560 779 1169 5e5
1.3 Oued SOURs Bridge 5400 - 5400 24 - 2 - _ l080 486 21£Q 92 21fiQ 92-

Subtotel 10160 - 10160 4810 - 4810 _ - 2680 1286 4151 1967 3329 1557 _ _

Physîcal increase 1016 - 1016 481 - 481 - 268 128 415 197 333 156
Price increase 5186 - 5186 2449 - 2449 - - 930 446 2066 979 2190 1024

Contingencies subtotal 6202 - 6202 2930 - 2930 - _ 1198 574 2481 1176 2523 1180

Studieis ad soil tests - _ 148 - - 118 148 118 - - - - - - _ _

Design - - 804 - - 281 512 181 292 100 - - - - -
Supervision - 356 - - 71 - - 93 20 146 28 117 23 - _

Professional services
subtotal - - 1308 - - 470 660 299 385 120 146 28 117 23 -

TOTAL COST (DH'OOO) 16362 - 17670 7740 - B210 660 299 4263 1980 6778 3171 5969 2760 - -

TOTAL COST (US$'000) 4306 _ 4650 2037 - 2160 174 79 1122 521 1783 834 1571 726 _

2. Upgrading of CT 7002
2.1 Road safety improvements 3000 - 3000 1500 - 1500 - - 500 250 2000 1000 500 250
2.2 Parking facilities 200 - 200 100 - 100 - - 100 50 100 50 - -
2.3 Landscaping and signals 50 150 50 40 90 - - 75 45 75 45 - - -

Subtotal 3300 50 3350 1650 40 1690 - - 675 345 2175 1095 500 250 - -

Physical increase 330 5 335 165 4 169 - - 67 34 218 110 50 25 - -

Price increase 1621 25 1646 810 20 830 - - 234 120 1083 545 329 165 - -

Contingencies subtotal 1951 30 1981 975 24 999 - - 301 154 1301 655 379 190 - -

7tudies _ 285 _ _ 228 285 228 - - - _ _ _

Des:?gn - - 285 - 100 145 50 140 50 - - -
Supervision - - 100 _ _ 20 - - 20 4 65 13 15 3
Profes sional services
subttotal s 670 - 348 430 278 160 54 65 13 15 3 - -

TOTAL CO8T (DIlOOO) 5251 80 6001 2625 64 3037 430 278 1136 553 3541 1763 894 443 _ _
TOTAL COST (US$1000) 1382 21 1579 6908 17 799 113 73 299 146 932 464 235 116 _ - .

August 1975
 TABLE 13

MOROCCO: BAY OF AGADIR TOURISM PROJECT

Cost Estimates: Regional Infrastructure

(DI'000) Exchange Rate: US$1 = DH 3.80

C. TOTAL COST FOREIGN EXCHANGECOMPONENT YEAR I YEAR 2 YEAR 3 YEAZ 4 YEAR 5

Foeign Foreign Foreign Foreign Foreign

Civil Equip- Civil Equip- Total Exchange Tdtal Exchange Total Exchange Total Exchange Total Exchange
Works ment Total Works ment Total Cost Component Cost Component Cost Component Cost Coiponent Cost Couponsut

3. Replacement po Fish Puaaps

3.1 Fish unloading pumps - 370 370 - 370 370 - - 148 148 222 222 -
3.2 Installation of tbe
pumps 340 85 425 136 68 204 - - 170 82 255 122 -

Subtotal 340 455 795 136 438 574 - - 318 230 477 344 - -

Physical increase 51 68 119 20 66 86 - - 48 34 71 52 - - - -

Price increase 151 202 353 60 193 253 - 113 80 240 173 - - - -

Contingencies subtotal 202 270 472 80 259 339 - - 161 114 311 225 - - - -

Design & Supervision - - 120 - - 72 48 30 29 17 43 25 - - - -

TOTAL COST (DH'OOO) 542 725 1387 216 697 985 48 30 508 361 831 594 - - -

TOTAL COST (US$'000) 143 191 365 57 183 259 13 8 134 95 218 156 - - -

August 1975
 TABLE 14

MOROCCO: BAY OF AGADIR TOURISM PROJECT

Cost Estimates: Pro1ect Administration

Exchange Rate: US$I 3.80

(DH'000)

FOREIGN
EXCHANGE YEAR 5
YEAR I YEAR 2 YEAR 3 YEAR 4
D. TOTAL COST COMPONENT

Foreign Foreign Foreign Foreign Foreign

Total Exchange Total Exchange Total Exchange Total Exchange
Total Exchange
Cost Component Cost Component Cost Component Cost Component
Cost Component

Prolect Administration

1175 412 1047 306 795 104 795 104

Personnel 4894 1517 1082 591
1. Technical - 123 - 123 - 123 -
615 - 123 - 123
2. Administrative Personnel 52 - 52 -
260 - 52 - 52 - 52 -
3. Secretaries & Chauffeurs 72 120 72
360 120 72 120 72 120 72 120
4. Office & Transportation 600

1470 484 1342 378 1090 176 1090 176

6369 1877 1377 663
Subtotal
163 55 246 75 304 54 405 72
1168 280 50 24
Price increase
687 1633 539 1588 453 1394 230 1495 248
TOTAL COST (DH'000) 7537 2157 1427

181 930 142 418 119 367 61 393 65

TOTAL COST (US$'000) 1983 568 375

Cost Estimates : Technical Assistance & Studies

E.

Tachnical Assistance &

Studies

760 456 152 92 304 182 304 182

1. Second Tourism Project
1900 950 950 475 950 475 - -
2. Agadir Severage System - - -
760 456 250 150 510 306
3. Agadir Urban Development
4. Environment and Architectural 275 82 275 82
970 290 145 44 275 82
Preservation Unit
1497 761 2039 1045 579 264 275 82
Subtotal 4390 2152

156 146 67 100 30 - -

626 291 75 38 305
Price increase
2344 1201 725 331 375 112 - - as
5016 2443 1572 799
TOTAL COST (DH0'O0)
617 316 191 87 98 30 - _
1320 643 414 210
TOTAL COST (US$'000)
 ANNEX IIT
Page 1

MOROCCO

BAY OF AGADIR TOURISM PROJECT

Unité d'AménagementTouristique (UAT)

A. Land-Use Plan and Zoning Regulations

1. The UAT land-use plan indicates three main areas for development:

- a central area of 119 ha for buildings

- a belt area of 90 ha for gardens, sports and beach facilities

- an area of 32.8 ha at the southeasternextremity of the UAT'for

further expansion of housing.

The central area, designed on a 1:2,000 scale, consists of:

- 16.75 ha for hotels

- 50.25 ha for housing

- 3.90 ha for commercial buildings

- 11.80 ha for social, administrativeand cultural buildings

- 36.30 ha for streets, parking areas, gardens and sports facilities.

The main objective of the land-use plan is to create a concentrateddevelopment

that resembles the physical appearanceof traditionalMoroccan towns. Building
densities range from 350 to 125 beds per ha 1/ in the housing zones and 550
to 380 hotel beds in the tourism zones. The maximum building height is two
floors (8 m) for housing and four floors (15 m) for hotels. Map 2 at the end
of the report shows the main streets and locates common facilities.
The zoning regulations for tourism accommodationand housing are summarized
in the table below:

1/ Net area without public streets, gardens, etc.

 ANNEX III
Page 2
a/
Density Max. Build. Floor Area
Zones No.of ha No. of Beds Beds/ha Height (m) Ratio %
Tourism Accommodation
Upper-class
hotels 2.60 1,000 380 15.0 50-60

Medium class
hotels 10.50 4,000- 380 10.5 60-70

Lower-class
hotels 0.55 300 550 8.0 60-70

housekeeping 3.10 1,700 550 10.5 50-60

apartments
Total 16.75 7,000

Housing

High density 14.85 5,200 350 8.0 75-85

Medium density 25.00 6,500 260 8.0 65-75

Low density 10.40 1,300 125 4.5 35-45

Total 50.25 13,000

a/ Beds per ha of land without public streets.

Areas are set aside for commercial buildings such as shops, banks, travel
agencies, restaurants, cafes, cinemas and a handicrafts center. Other areas
are planned for social and administrative use including three schools, a health
center, a municipal government building, a post office and a police station.
The land-use plan is in the process of being finalized as a "schèma d'aménagement."
Its enactment with provisions satisfactory to the Bank is a condition of loan
effectiveness. Since this land-use plan determines only the location of the
primary streets and the general land use of the urban sectors, SONABA will have to
complete detailed plans before final design of the secondary infrastructure.
The schedule for the preparation Qf detailed land-use plans and the final
engineering of primary infrastructure is illustrated in the initial implementation
schedule (Chart 2).

B. Infrastructure

2. The infrastructure requirements have been studied in conjunction with

the land-use plan. The primary networks have been defined on the basis of
preliminary engineering studies; the secondary on the basis of standardized
requirements (e.g., the number of square meters of parking area per inhabitant
or tourist). Costs have been estimated within plus or minus 10%. Annex II
(Tables 6 to 9) includes detailed cost estimates based on the BCEOM-SOMET
preliminary engineering study adjusted to account for price changes since
December 1974.

3. SONABA would implement directly the streets and street lighting, sewerage
and landscaping work. SONABA would employ consultants for final design and
 Iu.tEXil!
Page 3

and preparation of requests for tender; it would prequalify firms, advertise

bids, select contractorsand supervise the work (the cost of supervision is
thus includedunder project administrationand not professionalservices).
The water, power and telecommunicationswork would be coordinatedby
SONABA and implementedby ONE. ONEP and PTT, which would charge SONABA for
final engineeringand supervision. A condition of loan effectivenesswould
be the signature of agreementsbetween SONABA, ONE, ONEP and PTT. Tllese
agreementswould specify inter alia that all procurement under the project
be carried out in accordancewIth Bank guidelines.

Streets and Parking Areas

4. Access to the UAT will be provided by a diamond crossroad on RP 32

and two connectionsover the Oued Lahouar to the limits of the STB (by a
bridge and a ford). The Municipality of Agadir will complete these connections
within the STB to feed into the existing street system there. The UAT's
primary street network consists of about 12 km delimiting the different urban
sectors. The streets range in width f.-n-"i 12 m with two separate lanes to
7.5 m depending on their location ard projected traffic flow. The secondary
network consists of 22 km of streets; 15.5 km are 5 m wide and the rest 3-rm
wide. All streets will have sidewalks on both sides. Pedestrianpaths 2 km
long through green areas will connect the main service centers. The parking
facilities,8 ha in area, provide space for 4,000 vehicles, 2,600 of which
are expected to belong to the resident population (one car per family). The
project also provides a large plaza for buses.

5. Since SONABA would supervise the implementationof this component the

cost of professionalservices is limited to final design and is equal to 5%
of the base line cost plus price contingenciesfor street design and 8% for
bridge design. The foreign exchange component represents:

- 50% of the total cost of streetaandparking areas

- 40% of pedestrianpaths

- 45% of bridges

- 30% of professionalservices.
Street Lighting

6. Street lighting will be provided by underground cables originating

from a power substationat the UAT limits. Poles 12 m and 9 m high will
be used to light the primary network, and a simpler system for the secondary
network. Professionalservices for street lighting, as for streets, are
limited to final design and account for 5% of the base line cost plus price
increase. The foreign exchange component is estimated to make up 40% of civil
works and 60% of equipment.

Sewerage

7. The consultantsproposed a combined sewerage system that will collect

domestic sewage and stormwaterat a low point near the mouth of the Oued Lahouar.
The sewage will be pumped back by a rising mainito a collector bordering RP 32,
while rainwaterwill be discharged into the sea. The capacity of the pumping
station and the rising main to the RP 32 collector is adequate to handle the
 ANNEX III
Page 4

UAT sewage. If sewage from STB is collected by that system, additionalwork

would be required. The UAT seweragenetwork will follow the street system and
use concrete sewers produced locally. The project studied by BCEOM-SOMET
has been expanded to include a supplementarypumping station and main from
the beach facilitiesto the UAT main collector.

8. Foreign exchange is estimated to be 50% and 80% respectivelyof the

total cost of civil works and equipment. Professionalservices are limited
to final design since supervision is budgeted to project administration. Final
design amounts to 5% of the base line cost plus price increase. Since a dual
system appears to be technicallypreferable, the solution proposed by the
consultantswill be reconsideredduring final design. The funds provided for
the project would adequately finance either solution.

Water Supply

9. The total water consumptionof the UAT is estimated at 1.7 million

cubic meters per year with a maximum demand of 115 1/sec. A 400 mm pipe, recently
installed by ONEP just to the limits of the UAT, will meet the water needs of
the UAT. A loop along RP 32 to the water station of Ben Sergao will be con-
structed later by ONEP as part of the general expansion of its facilities in
Agadir. This loop will protect the UAT against any interruptionof the water
supply and provide additional capacity. The UAT water supply network follows
the road system and will be constructed in asbestos cement pipes produced
locally.

10. The consultants'cost estimates for the primary network have been
revised on the basis of new estimates by the ONEP office in Agadir. The
estimates for the secondary network have been adjusted only to account for
price increases since December 1974. The foreign exchange component makes
up 55% of the total cost of civil works and 80% of equipment. Estimates for
professionalservices amount to 20% of the base line cost plus price contin-
gencies, the fee usually charged by ONEP.

Landscaping

11. Landscapingand gardens are essential to create an attractiveand

homogeneous atmosphere. Landscaping is planned for both internal green spaces
and the areas surrounding the UAT. The project includes civil works and
equipment for gardens such as irrigationand lighting. The average foreign
exchange component makes up 30% of civil works and 55% of equipment. Design
and supervisionwill be mainly by foreign consultants and represent 5% and 3%
respectivelyof the base line cost plus price increase.

Power Supply

12. The estimated need for power amounts to 16,000 kW (13,000 kW for
hotel developmentand 3,000 kW for housing). Power will be provided by a trunk
line about 2 km long connecting the UAT with the nearest HV line. An HV/MV
substationwill be built near the UAT. The distribution system will be
based on a primary undergroundMV network connecting 30 transformers. The
transformerswill feed independent LV undergroundnetworks distributing
power along the secondary street network. The cost estimates,revised by the
technical services of ONE in Casblanca, indicate that the foreign exchange
 ANNEX lik
Page 5

component of civil works is 43% and of equipment 60%. Most of the equipment
is produced locally with imported materials. Professional services include
ONE's fee equal to 20% of the cost of construction (base line cost plus price
contingencies).

Telecommunications

13. Telecommunicationsin the UAT are estimated to require 400 telephone

lines and 30 telex lines. The UAT would be connected with the existing
telephone exchange (2,000 lines) which is in the process of being doubled
and would be additionallyexpanded by 1,000 lines financed under the project.
The connectionand the internal lines will both be underground. The cost
estimates for the connection line were prepared by the PTT technical services
which also revised the consultants'estimate for the internal lines. Part
of the equipment is produced locally with imported material. The foreign
exchange component of civil works is estimated to be 40% and of equipment 60%.
To ensure compatibilitywith the existing network the communicationsequipment
would be procured after only limited competition. PTT would not charge for the
professionalservices it would provide.

C. Common Facilities

14. The project would provide a core of facilities for shopping, enter-
tainmentand sports to make the UAT attractive to investors and visitors alike and
to ensure architecturalhomogeneity of the common areas. Detailed cost estimates
are included in Annex II (Tables 10 and 11). SONABA will entrust the final
design of these superstructurefacilities to consulting architects. SONABA's
staff will be in charge of project implementation.

Shopping Centers

15. The project includes two clusters of shopping and service facilities,
one at the UAT center and the other near the main group of hotels.

List of Facilities and Floor Space

Service and office buildings 2

UAT center 1,200 m
Hotel area 500 m2

Shopping facilities 2
UAT center 7,400 m 2
Hotel area 1,000 m

Restaurants,bars and
entertainmentfacilities 2
UAT center 800 m2
Hotel area 480 m

Cinema 500 seats

Open-air theater 200 seats

Hammam 400 m2

Handicrafts center 375 m2

 ANNEXIII

The cost estimates include site preparation and are based on the present
cost per square meter for similar construction in Morocco. The cost of
constructing two paved squares with arcades, fountains and architectural
decoration is included in the cost estimates of the service and office
buildings and the shopping facilities. The cost estimates of the cinema,
the open-air theater, the hammam and the handicrafts center include
furniture and professional equipment Y (e.g., motion picture projector).
The foreign exchange component is estimated at 50% of the total cost of
civil works, 60% of building equipment and 70% of furniture and professional
equipment.

Sports and Beach Facilities

16. The facilities financed under the project would include:

- 6 tennis courts
- 4 swimming pools
- 1 multipurpose area including a soccer field
- 1 riding school including a stable, a riding area and a clubhouse
- beach facilities including an enormous swimming pool, a clubhouse,
cabanas and a sailing school.

Tennis courts and swimming pools will be grouped in two or three enclosed
sports centers2 equipped with sanitary facilities. The stable and annexes will
have a 1,000 m covered area, the riding club a 300 m2 floor space and the
riding area a 7,500 m2 corral. T§e clubhouse annexed to the beach facilities
would cover 1,000 m2 with a 200 m restaurant and a 200 m2 nightclub. The
cost estimates are based on the present cost for similar construction. The
foreign exchange component is estimated to make up 50% of the total cost of
civil works and 55% of equipment. 2/

Maintenance Facilities

17. The maintenance facilities include:

- buildings and equipment for garbage collection

- buildings and equipment for road and garden maintenance.

Equipment, including trucks and trailers, amounts to 60% of the total cost.
The foreign exchange component is estimated et 50% of the cost of
civil works and 80% of equipment.

1/ The amounts allocated for this equipment are:

Cinema DH 120,000
Open-air theater DH 30,000
Hammam DH 80,000
Handicrafts center DH 60,000
2/ Except for the multipurpose sports area where the foreign exchange component
amounts to 30% of the civil works and for the swimming pools where it amounts to
80% of equipment.
 ANNEX IV
Page 1

MOROCCO

BAY OF AGADIR TOU1,ISMPROJECT

Regional Infrastructure

A. Ait Melloul Bypass

Scope of the Project

1. All vehicular traffic flowing into the urban area of Agadir from
the southeast passes first through the town of Ait Melloul, where three main
regional roads converge. This traffic,which includes many trucks from the
agriculturaland mining areas of the Souss Valley, has no direct route to
the Agadir beltway serving the harbor, the industrial zone and the eastern
neighborhoodsof the city. The proposed bypass would complete that belt road
streets of Ait Melloul
thus diverting traffic from the crowded ot-ommercial
and from RP 32, the central road of Agadir which borders both the STB and
the UAT.

Project Description

2. The technical aspects of the bypass constructionas well as the

investment requirementsand the economic justificationhave been considered
in a prefeasibilitystudy by the consultant consortium BCEOM-SOMET.

3. The project would provide for the constructionof 8 km of a 7 m-wide

road and a 400 m-long bridge of reinforced concrete across the Souss River.
The road would have hard shoulders 3 m wide and its design speed would
permit 80 km/hour. Between the junctions with RP 36 and RP 30 the road would be
bordered by two bicycle paths each with a 1.5 m width. The total cost of
the bypass, including professionalservices and contingencies,amounts to
US$4,650,000. The foreign exchange componentwould be US$2,160,000,equal
to 46% of the total cost. The details of cost estimates are given in Annex Il,
Table 12.
4. Physical contingenciesrepresent 10% of the base line cost. Price
contingenciesrepresent 46% of the base line cost plus physical contingencies
and are estimated on the basis of an 11-12% annual price increase. Construction
of the bypass is scheduled for completion four years after loan signing.
The first year would be spent completing the studies and final design. The
project would be supervisedby the Agadir Public Works.

Justification

5. Since the level of tourism-relatedtraffic on the Ait Melloul bypass

would be quite small compared to commercialand other traffic, the economic
justificationfor the project has been carried out on the basis of benefits
accruing to all road users in terms of reduced vehicle operating costs and
time savings. The consultantsprojected use of the bypass on the basis of
traffic counts (Tables 1 and 2). Vehicle operating costs (Table 3), the value
of time and the maintenance costs were determined on the basis of BCEOM's
"Etude du Secteur des Transports" updated to 1975. Assuming a 20-year economie
 ANNEX IV
Page 2

life for the bypass, the internal rate of return would be 27.7%. The sensitivity
of the rate of return to variations in investment cost and benefits is given
below:

Sensitivity Test Resulting Rate of Return

Investment cost overrun (15%) 23.0

Benefit increase (25%) 32.4
Benefit decrease (25%) 22.4

B. Upgrading of CT 7002

Scope of the Project

6. The Imouzzer Valley, one of the most scenic attractions in the vicinity of
Agadir, cuts through the rugged mountains along the north coast of the province
for nearly 30 km. Palm groves and picturesque villages with traditional mud
architecture dot the valley. Several thousand tourists visit here annually,
many on regularly scheduled bus tours.

7. Although entirely asphalted the road to Imouzzer is unsafe because

of falling rocks, sharp curves and the absence of guardrails. The project
would-upgrade the road to meet the needs of additional tourist traffic and
facilitate communications for the 20,000 inhabitants. Since this road could
easily be connected with the Souss Valley and RP 40 from Marrakesh, thus
completing the road circuit from Agadir, the project would also provide funds
to study a proposal for such a link.

Project Description

8. CT 7002 is 52.7 km long and has a 4-5 m platform and a 3 m asphalted

carriage. A recent prefeasibility study by the consultant consortium BCEOM-
SOMET for upgrading the road indicated a required investment of US$3 million,
price contingencies excluded. Since much of the work is not needed immediately,
the mission proposed to limit the project to what is strictly necessary
for road security and tourism. As a first step toward complete upgrading
of the road the project would provide drainage and earthwork, retaining walls,
widening of the most dangerous bends, stop areas to permit bus crossings, as well
as outlooks at the main panoramic spots, parking areas and leveled land for
tourism facilities (restaurants,bars).

9. The investments required by the road are given in Annex II, Table 12.
They amount to some US$1,600,000 including professional services and contingencies.
The foreign exchange component would be US$800,000, equal to 50% of the total
cost. Professional services would include US$75,000 for preliminary studies, 1/
US$75,000 for detailed engineering and US$38,000 for supervision. Final design
and supervision would be mainly by local consultants. The price contingencies
represent 44% of the hase line cost plus physical contingencies and have heen
calculated at an annual rate of increase of 11-12%. Implementation would take
four years from loan signing, the first of which would be needed for further
studies to finalize the project. The Agadir TP would implement the project.
Since this investment would mostly benefit tourism in Agadir, it is justified
jointly with the UAT.

1/ Including feasibility of the tourism circuit road linking Imouzzer with RP 40.
 ANNEX IV
Page J

C. Replacement of Fisl:Pumps

10. With an average annual catch of 100,000 tons, Agadir is one of the most
important harbors for sardine fishing in the world. The fish is now unloaded by
eight pumps which send water into a ship's hold until a ratio of one ton of
fish to three cubic meters of water is reached; the mixture is then pumped to
the wharf where a coarse mesh sereens out the fish. The water containing
blood, heads, scales, etc. is returned to the harbor and swept out by tides
to the nearby beaches. Several alternative solutions for limiting pollution
have been identified such as:

- treatment of the effluent from existing pumps

- replacement of the pumps with a pneumatic "dry" unloading system or

some other method.

11. The results of recent studies carried out by the Ministry of Public
Works and by the appraisal mission 1/ recommend the replacement of the existing
pumps which are near the end of their useful life. The mission compared several
dry unloading systems (capacity, machinery cost, operating cost) and indicated
the Norwegian Myreus pumps as the most suitable equipment. The project cost
estimates (Annex II, Table 13) are based on this equipment because of its
high performance in relation to capital and operating costs. The purchase price
of six pumps would be some US$160,000. The installation cost would be US$190,000
including all local taxes. The foreign exchange component amounts to 100%
of the equipment and 48% of the installation costs. Design and supervision
are 15% of the base line cost plus physical increase. Although the Myreus
pumps have been assumed as a reference for the cost estimates, this does not
exclude normal bidding procedures for procurement, with detailed analysis of
different offers. The project would be executed by the Régie d'Acconnage du
Port de Casablanca (RAPC), the agency within the Ministry of Public Works in
charge of loading and unloading ships in all Moroccan harbors. Bank financing
would be channeled to the Ministry of Public Works which would also Drovide
the counterpart financing.

12. The pumps would be owned and operated by RAPC which would charge
fishmeal plants and boat owners for unloading the fish. RAPC is expected
to charge rates adequately covering operating costs, depreciation and
financial charges. This would amount to about US$1.6 per ton (in 1975
prices), assuming a 10% return to RAPC on its investment. At present the
cost of unloading fish is about US$1.4 per ton. It is not expected that RAPC
would encounter difficulties charging an adequate rate since the recommended
system would avoid the losses in the fish catch which occur with the present
system. 2/ The Government's undertaking to cause RAPC to discuss with the Bank
the proposed tariff structure for the use of the pumps is recorded in the
Agreed Minutes of Negotiations.

jj The appraisal mission was joined by Mr. Fougère of the consulting firm CANPLAN,
a specialist in unloading fish.
2/ Estimated to 17% of the catch in an FAO study.
 TABLE1

MDROCCO

BAY OF AGADIRTOURISMPROJECT

Regional Infrastructure

(Ait Melloul Bypass)

Traffic Previsions on the Existing Ait Melloul Road System

(ADT)
Stopping at Transit Traffic to Total
Coming Agad~ir t RP~ho nTraensihir TTrfric
From Ait Melloul Harbor/Âna
RP 30 1ol 31DU Rdi 3 620 1,800.

540 320 280 110 330 1,040

1975 RS 509
560 410 920 80 780 2.190
RP 32

1,710 1,040 2,020 240 1,730 5,030

Total

960 720 1,290 280 920 3,210

RP 30
830 410 430 140 500 1,480
1980 RS 509

860 610 1 110 1.180 3.250

RP 32

2,650 1,740 3,070 530 2,600 7,940

Total

1,460 940 1,930 360 1,390 4,620

RP 30
1,270 540 650 170 780 2,140
1985 RS 509
880 1.990 160 1.800 4¨830
RP 32

4,060 2,360 4,570 690 3,970 11,590

Total
 TABLE 2

MOROCCO

BAY OF AGADIRTOURISMPROJECT

Regional Infrastructure

(Ait Melloul Bypass)

Traffic Previsions on Ait Melloul Bypass

(ADT)

Coming Transit Traffic to

From HarborjAnza Agadir City TOTAL

RP 30 190 440 20 650

1975 RS 509 210 190 80 480

RP 32 L2 780 80 1,170

Total 710 1,410 180 2,300

RP 30 460 720 130 1,310

1980 RS 509 280 300 100 680

RP 32 490 1,150 110 1,750

Total 1,230 2,170 340 3,740

RP 30 650 1,160 180 1,990

1985 RS 509 390 490 130 1,010
RP 32 740 1,790 160 2,690

Total 1,780 3,440 470 5,690

 ANNEXIV
Page 6

TABLE 3

MOROCCO

BAY OF AGADIRTOURISMPROJECT

Regional Infrastructure

(Ait Melloul Bypass)

aJ
Vehicle Operating Costs by Type of Vehicle and Type of Road
(DH/1000 Ian)
bJ
Type of Road
A B C
Type of vehicle Flat road Hilly Road Mountainous Road

Cars 295 297 331

Trucks A (1.5 - 5 t ) 660 665 688

Trucks B (5 - 12 t ) 868 1015 2215
Trailer trucks ( > 12 t ) 1331 1504 2830

3 Costs are exclusive of taxes and tine value

/ A= slope . 2%, 25% of bends.with R - 400 m.

B = slope 2-4%, 45% of bends with R = 250 m.

c = slope > 4%, 75%of benidswith R = 100 m.

 ANNEX V
Page 1

MOROCCO

BAY OF AGADIR TOURISM PROJECT

Société Nationale d'Aménagement de la

Baie d'Agadir (SONABA)

A. Background

1. SONABA was founded July 6, 1973, with the objective of implementing

tourism development in the Bay of Agadir 1/. The Moroccan state owns 51% of
SONABA's shares. The other shares belong to the Office National Marocain du
Tourisme (19.4%), Crédit Immobilier et Hôtelier (10%), Caisse de Depot et
Gestion (9.5%), Banque Nationale de Développement Economique (9%), Diaffa (0.5%),
Maroc Tourist (0.5%) and Société Nationale d'Aménagement de la Baie de Tanger
(0.1%). SONABA's Board of Directors is chaired by the Minister of Tourism and
includes four other Government officials (the Governor of Agadir, Vice Chairman;
the Secretary General of the Ministry of Public Works; a representative of the
Ministry of Urban Development and one from the Ministry of Tourism) and rep-
resentatives of each shareholder. SONABA is headed by a Director General
who has received full powers from the Minister of Tourism. SONABA has agreed
to inform the Bank of any change of personnel in the position of Director
Gegera1,

9. To coordinate the activities of SONABA and other concerned Government

agencies, two committees have been established at national and local levels
(Chart 1). The InterministerialCommission to supervise the development of
the Bay of Agadir was set up on December 5, 1973, by a letter from the Prime
Minister to the Minister of Tourism. Its membership includes representatives
of the:

- Ministry of Urban Development, Housing, Tourism and Environment

- Ministry of the Interior
- Ministry of Finance
- Ministry of Public Works
- Secretary of State for Planning
- Secretary of State for Economic Affairs

The local committee (Comité Technique Local Consultatif) was created in February
1975 and is chaired by the Governor. It includes:

- SONABA's Director General

- representatives of the Municipality
- representatives of the local agencies (TP, DUHE, ONE, ONEP).

B. Organization for Operation

3. During the project preparatory studies SONABA operated with a skeleton

staff. Since then it has organized three divisions: a Project Unit, a Commer-
cial and Financial Division and a Legal and Administrative Division (Chart 1).

1/ SONABA is a commercial enterprise, subject to corporate law. As such it can

enter into contracts without going through the procedures used in the Admin-
istration. This will ensure the flexibility needed for timely completion of the
project.
 ANNEX V
Page 2

4. The Project Unit is headed by SONABA's Technical Director 1/, an

engineer with experiencein similar infrastructureprojects. He is
responsible for:

- planning and coordinatingall project works

- selecting consultants
- supervising final studies
- preparing tender documents
- advertising requests for tender
- evaluating bids
- procuring equipment and necessary goods
- preparing and updating a critical path network for all project works
- preparing requests for disbursements
- preparing progress reports.

The Project Unit itself will supervise the work on streets, street lighting,
sewerage, pedestrianwalks, landscaping and common-facilities. It will
coordinate constructionof the electricity,water and telecommunicationsnet-
works with ONE, ONEP and PTT respectively. Planning and architecturalwork would
be coordinatedby the chief planner 1/ who supervised these aspects of the
UNDP studies. The detailed planning studies will be carried out by SONABA's
own architecturalstaff. This staff will work with investors, their architects
and the Municipalityof Agadir in order to preserve the urban plan and the
architecturalconcept adopted for the UAT. During appraisal the Municipality
gave SONABA written assurances that it would grant building permits for the
UAT only after prior approval by SONABA's technical staff.

5. SONABA's second key unit is the Commercial and Financial Division.

The commercial staff will be responsiblefor the campaign to promote the
sale or lease of hotel and housing sites as well as SONABA's superstructure
property. It would also assist investors in hotels and housing in their nego-
tiations with the local and national administrations(e.g., CIH, Municipality)
and promote common activities (e.g., reservations,food supply) among small
hotel operators. The commercial staff would also sponsor jointly with the
hotel owners a Comité de Station to be in charge of the UAT's ".animation."
It is expected that the Municipalityand hoteliers outside the UAT would partici-
pate. SONABA has agreed to prepare and discuss with the Bank (i) within two
years of loan signing a timetable of all steps to be taken to implement the
proposed investmentpromotion.campaign, and (ii) within four years of loan
signing a program for "animating" the UAT and a schedule of its implementation.
The finance staff would be in charge of accounting and financial management
(para. 13). It would, in particular, define and keep up-to-date policies for
the lease or sale of hotel and housing sites as well as SONABA's superstructure
facilities in accordancewith guidelines agreeable to the Bank (para. 12).

6. In addition to these major units, SONABA would have a Legal and Admin-
istrative Division. The legal staff will draft the contracts for the design
and constructionof the electricity,water and telecommunicationsnetworks
with ONE, ONEP and PTT respectively. It would also draft the conditions
(cahier des charges) for the sale/lease of UAT land and be in charge of preparing

1/ SONABA agreed to consult with the Bank on any change of personnel for
this position.
 ANNEX V
Page 3

and supervising sale and loan contr-cts. Conditions of loan effectiveness

are the conclusion of contracts between SONABA and ONE, ONEP and PTT with
provisions satisfactory to the Bank. The administrative staff would be in
charge of personnel and equipment management.

7. SONABA agreed to consult with the Bank on any change in its organ-
ization.

C. Financial Projections for SONABA

8. Pro forma statements of income and expense, funds flow and balance
sheets for SONABA's operations are presented in Tables 1-3. These projections
include the UAT infrastructure, the SONABA superstructure and project admin-
istration and are based on the following financial plan (1981 prices):

DH Million US$ Million

Requirements

Land 8.2 2.1

Construction 120.1 31.7
Project administration 7.5 2.0
Interest during construction 13.4 3.5
Total 149.2 39.3

Sources of Initial Funds

Equity 20.0 5.3

Government loan 34.6 9.1
Treasury advance 30.0 7.9
IBRD 64.6 17.0
Total 149.2 39.3

It has been assumed that about 14% of the investment would be financed by an
increase in SONABAts equity from DH 100,000 to DH 20 million. The Bank loan and
the Government loan have been assumed to be for 20 years, including 5 of grace,
at 8.5% interest. The Treasury advance would carry interest of 6% and be amor-
tized once the senior debt has been reimbursed. Interest on the advance would be
subordinate to interest and principal payments by SONABA of its senior debt.
Interest during construction on all three loans has been capitalized and is financed
pro rata by the respective loans. 1/

9. It has been assumed that a prepayment clause would be applied if (a) the
ratio of land sold exceeds the IBRD loan amortization ratio after the second year
of operation, and (b) a debt service coverage ratio, 2/ of 1.1 minimum is main-
tained. Portions of the IBRD and Government loans are prepaid from the third
year of operation. Debt service ratios are presented before application of the
prepayment clause.

1/ In 1983 SONABA will have accunulated sizable cash if land is sold at a pace equal
to or faster than assumed during appraisal. In the projections, it has been
assumed that SONABA would use this cash to reimburse the Treasury advance in 12
equal annual payments.
2/ Defined as net current assets at year end plus estimated cash flow in the
following year divided by estimated debt service in that year.
 ANNEX V
Page 4

10. SONABA will derive revenue from several sources: the sale of
improved land, the leasing of hotel sites, the sale and leasing of commercial
properties and a service charge for the use of common sports facilities.
Estimated revenues are given in the financial assumptions attached. All
rents and sale prices have been based on the recovery of all investment in im-
provements plus a reasonable rate of return. It has been assumed that 50% of
the total sites, shopping centers and other SONABA superstructure would be
leased rather than sold. This assumption and the timing of land and property
sales will have considerable bearing on SONABA's financial position. Although
subject to unknown factors, these projections provide reasonable estimates
of market conditions prevailing at the time of appraisal.

11. The financial projections indicate that SONABA would achieve a rate of
return of 10% of net fixed assets dropping to 4% after all land sales are
completed. SONABA may pay dividends up to a-.maximumof 6% of its capital
in any one year out of net profits. The projections indicate that dividend
payments could be made. SONABA's DCF financial rate of return is 9.2%.

D. Financial Covenants

12. SONABA's success will depend on its ability to control its revenue
through pricing policies which realistically reflect market conditiotls.
Assurances were received that SONABA would:

(a) prepare a pricing policy acceptable to the Bank. This policy

statement would list objectives and give the methodology for
calculating all sale prices and rents and would become part of
SONABA's cahier des charges;

(b) not incur any debt without the Bank's approval until 1986,
other than that incurred to finance the present project.

E. Audit

13. SONABA would be required to establish, with the assistance of consultants

acceptable to the Bank, a system of commercial accounts to be maintained by
an accounting department suitably staffed. Accounts would be audited annually
by independent auditors acceptable to the Bank. Audited financial statements
would be submitted to the Bank within four months after the close of each
fiscal year. In addition, since the Government is a major shareholder in
SONABA, the accounts would also be audited by the Ministry of Finance.
 Table 1

NOROCCO: BAY OF AGADIRTOURISMPROJECT

SONABA: Projected Income Statements for Year Ending December 31
(DH millions)

Project Year 1976/79 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989
Revenue(1975prices)
Land sales - 12.3 12.3 9.4 9.4 9.4 9.4 9.4 9.2 _ -
Land leases - 0.2 0.4 0.6 0.8 1.1 1.1 1.1 1.1 1.1 1.1
Propertysales - - - 1.4 1.4 1.4 1.4 1.4 1.4 1.4 1.2
Propertyleases - 1.3 1.9 2.2 2.5 2.8 3.2 3.2 3.2 3.2 3.2
Servicecharges - 0-4 0.8 1.1 1.5 2.0 2.5 3.0 3.5 3.5 3.5
Total revenue - 14.2 15.4 14.7 15.6 16.7 17.6 18.1 18.4 9.2 9.0
Adjiustedto 1980 level (1.45of - 20.6 22.4 21.3 22.7 24.2 25.6 26.3 27.0 13.4 13.1
1975 prices)

Cost of Sales
Iandand Improvements - 2.2 2.2 2.1 2.1 2.1 2.1 2.1 2.0 - -
Property - 1.4 1.4 1.4 1.4 1.4 1.4 1.4 1.2
Total cost of sales - 22 22 3.5 3.5 3.5 -Y.7 3.5 3.4 1. 2
OperatingCosts
Administration - 1.0 1.1 1.1 1.1 1.2 1.3 1.3 1.2 1.1 1.0
Maintenance - 1.5 1.5 1.5 1.5 1.5 1.5 1.4 1.3 1.2 1.1
Promotion - 0.2 0.2 0.2 0.2 0.2 0.1 0.1 0.1 0.1 0.1
Total operatingcosts _ 2.7 Z 77 2.9 2 =2f
. 2'!2
2.2
Gross OperatingProfit (GOP) - 15.7 17.4 15.0 16.4 17.8 19.2 20.0 21.0 9.6 9.7
AdJustedfor inflation (7% p.a. - 15.7 18.6 17.2 20.1 23.3 26.9 28.0 29.0 13.4 13.5
for 5 yrs)
Depreciationand amortization - 6.o 5.8 5.7 5.3 5.1 5.0 4.8 4.7 4.4 4.4
Profit before interest - 9.7 12.8 11.5 14.8 18.2 21.9 23.2 24.3 9.0 9.1
Interest
IBRD/Government - 8.5 8.2 7.9 6.5 5.0 4.8 4.0 3.2 2.4 1.7
Treasuryadvance - 1.8 1.8 1.8 1.7 1.5 1.4 1.2 1.1 0.9 0.8
- 10.3 10.0 9.7 2 -. 2 52 -3 3.3 2.7
Profit before tax - (0.6) 2.8 1.8 6.6 11.7 15.7 18.0 20.0 5.7 6.4
Incometax - _ 1.0 0.6 2.3 4.1 5.5 6.3 7.0 2.0 2.2
Netprofit - -) -T 1.2 TT *. 10.2 11.7 13.0 37
Ratio ot net profit to net fixed assets % - _ 2 1 3 4 10 13 16 4 4
Debt Service
Cash generated - 15.7 17.6 16.6 17.8 19.2 21.4 21.7 22.0 11.4 11.3
Debt service(seniordebt) - 8.5 1U.8 11.8 10.7 8.4 7.6 7.1 5.9 4.9 4.0
Debt service(incl. treasuryadvance) - 10.3 13.6 13.6 14.9 12.4 11.5 10.8 9.5 8.3 7.3
Debt servicecoverage (seniordebt) - 1.8 1.4 1.4 1.7 2.3 2.8 3.1 3.7 2.3 2.8
Debt servicecoverage(inel.treasury - 1.5 1.2 1.2 1.2 1.5 1.9 2.0 2.3 1.4 1.5
advance)

January
1976 OJQ
X >
 Table 2

M_ROCCO: BAY 0F AGADIR TOURISMPROJECT

SONABA: Projected Balance Sheets
(DH millions)

Year 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 198 9

Assets
Current assets 7.8 15.0 19.3 13.9 17.9 25.0 31.8 40.2 32.7 30.7
Work in Progress 1.8 16.0 52.6 91.9
Land (Net) 8.2 8.2 8.2 8.2 7.9 7.6 7.4 7.2 7.1 7.0 6.9 6.8 6.8 6.8
Land Improvements - utility contribution 74.8 72.9 71.0 69.1 67.2 65.2 63.2 61.2 60.2 49.2
Depre.i.ation 3.0 5.9 8.7 11.4 14.0 16.5 18.9 21.2 23.4 25.5
Net 71. Z7-R5
67 2 3 7.7 53.2 4.77 7
4.I3 0OÔ jS6-.8 33.7
Properties for sale 10.9 10.9 9.5 8.1 6.7 5.3 3.9 3.1 3.1 3.1.
Depreciation 0.4 0.8 1.0 1.1 1.3 1.4 1.4 1.5 1.6 .7
Net 10.5 10.1
02. 8.5 7.0 *B:3; 3.9 1.6 1 5 1.4
Fixed Assets 32.9 32.9 32.9 32.9 32.9 32.9 32.9 32.9 32.9 32.9
Depreciation 1.4 2.8 4.2 5.6 7.0 8.4 9.8 11.2 12.6 14.0
Net 31.5 30.1 27.3 2. 24.5 23.1 21.7 20.3 IB:3i
Pre-opening expenses 2.5 5.7 11.2 16.6 21.1 21.1 21.1 21.1 21.1 21.1 21.1 21.1 21.1 21.1
Amortization 1.1 2.2 3.3 4.4 5.5 6.6 7.7 8.8 9.9 I1.0
Net 20.0 18.9 17. 16.7 S313 5 3. 123 11.2 10.1
Total Assets 12 27-y 7-2*0 7 ir9. 1Zi7 1 129.8 125.1 123.6 122.0 122.6 109.3 101.6

Liabilities and Capital

Current liabilities
Income tax 1.0 o.6 2.3 4.`. 5.5 6.3 7.0 2.0 2.2
Dividends 1.6 1.1 1.6 1.6 1.6 1.6 1.6 1.6 1.6
Maturing debt 3.6 3.9 6.7 '.9 5.3 5.6 5.2 5.0 4.8 5.2
Prepayment - - 12.4 6.6 6.2 6.9 6.3 5.4 5.7 -
Totalcurrentliabilities 3. 6.5 20.8 16.4 17.2 19.6 19.94 19.0 14.1 9.0
Long-termDebt,Net
IBRD 1.0 5.4 24.3 46.9 62.7 60.1 49.3 42.8 36.9 30.5 24.6 19.5 14.3 12.5
Government 0.4 1.2 6.7 19.7 33.7 32.4 26.6 23.1 20.0 16.4 13.3 10.5 7.7 6.8
T: 6.6 91.0 92- 75.9 65.9 6-.9 46.9 37.9 30.0 22.0 19.3
Treasuryadvance,net 6.1 8.3 20.9 30.0 30.0 30.0 27.5 25.0 22.5 20.0 17.5 15.0 12.5 10.0
Capital
Equity 5.0 15.0 20.1 20.1 20.1 20.1 20.1 20.1 20.1 20.1 20.1 20.1 20.1 20.1
Retainedearnings (0.6) (0.5) (0-5) 2.0 7.6 15.7 25.2 36.5 38.6 41.2
19.5 i9.619.6 22.1 27.-7 35.8 WE735 3W
6. 387 61.3
Legalreserves - 0.1 0.2 0.4 0.8 1.3 1.9 2.0 2.0 2.0
Total shareholders equity and
liabilities 12.5 29.9 72.O 167 179.7 1E2E7 1Z-O 2
129 125.1 123 122.0 122 109.3 1-.1
Net current assets -4 .2 5 (1-5) ( 0.7 5 .4 12.L 21.2 10.6 21.7

Net fixedassets 141.7 133.6 124.7 115.9 107.2 98.6 90.2 82.4 76.6 70.9

plus Treasuryadvance
SeniorDebt/equity 65/35 65/35 60/40 56/44 50/50 42/48 34/66 26/74 20/80 18/82

January1976
 Table 3

MOROCCO: BAY OF AGADIR TOURISM PROJECT

SONABA: Projected Sources and eplication of FUnds
(DH millions)

Project Year 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989
Sources of Funds
SONABAequity 5.0 10.0 5.1
IBRD loan 1.0 4.4 18.9 22.6 16.9
Goverrnent loan 0.4 0.8 5.5 12.9 16.0
Treasury advance 6.1 2.2 12.6 1
Net profit before tax (0.6) 2.8 1.8 6.6 11.7 15.7 18.0 20.0 5.7 6.4
Depreciation asL' i. . ,ion. 6.o 5.8 5.7 5.3 5.1 5.0 4.8 4.7 4.4 4.4
Decrease in assets 2.2 2.2 3.5 3.5 3.5 3.5 3.5 3-4 1.4 1.2
Total sources 12W05- 17.14 i0 10 20o3 2. ;i II
12 12.0
Application of FUnds
Land 8.2
Capital expenditure 1. 8 14.2 36.6 39.1 28.14
?reopening expenses 1.4 1.6 1.7 1.4 1.5
Financial charges 1.1 1.6 3.8 4.1 3.0
12=5 r7--.- ZDE- M-75 32.9
Repaynent of LT Debt
IBRD 2.3 2.5 2.7 2.2 1.8 2.0 1.8 1.6 1.5
Government 1.3 1.4 1.5 1.2 1.0 1.1 0.9 Q.9 Q.8-
Subtotal 3 3.9 I.2 3.41 2.7
2.3 2.5
Prepaynent
IBRD - - 8.1 4.4 4.0 4.5 4.1 3.5 3.7
Government - - h43 2.2 2.2 2.4 2.2 1.9 2.0
Taxes - 1.0 o.6 2.3 4.1 5.5 6.3 7.0 2.2
Dividendsa _ 1.6 1.1 1.6 1.6 1.6 1.6 1.6 1.6
Treasury advance - - 2.5 2.5 2.5 2.5 2.5 2.5 2.5
Change in cash 23
7.6 L. J. L5.) 3.9 .o 627 8.2 ffl$) L(.3)
12. S;Î::iÉ 2.1
1-40.5 10.8 1l1o 15,4 20.3 2122i 23 -i 11.5 12.0

January 1976

-Ic
 ANNEX V
Page 8

Assumptions for Financial Projections

1. Land for the constructionof hotels, villas and apartments is

sold at an average of DH 97.4 per square meter and ranges from DH 70 for
hotel sites to DH 170 for high-densityapartment construction. The pro-
jections assume that 80% of this land would be sold.

2. Ground rent has been calculated at DH 400 per bed per year, for
20% of-bed capacity.

3. Rents for commercialproperties are based on rates of DH 15-20

per square meter per month.

4. Propertiesfor sale have been priced at a markup of 50% of cost.

5. Sale prices have been calculated in 1975 prices, inflated to 1980

prices by a factor of 1.45 (para. 3.32). Gross operating profits have
been inflated at 7% per annum for 5 years to give cash flow in current prices.

6. Annual service charges for common facilitieshave been calculatedat

an average of DH 500 per bed for the 7,000 hotel and apartment beds to be
constructedwithin the project area. Charges are based on the recovery of
capital costs and operating expenses of the sports and beach facilitiesplus
maintenance of common areas not under municipal jurisdiction.

7. Administrativecosts have been estimated at 5% of sales. Maintenance

has been estimated at 2% of capital costs of facilitiesbelonging to SONABA.
Promotionalexpenses have been calculated at DH 100,OOO for ten years.

8. Depreciationhas been estimated at an overall average rate of 4%.

9. The utility contribution,representing SONABA's investment in infra-

structure,has been capitalizedand amortized over a 25-year period with the
exception of the portion applicable to land and properties sold which has
been written off at the time of sale. Project administrationand interest
during constructionhave been capitalizedand written off over 20 years.
 BAY OF AGADIR TOURISM PROJECT
ORGANIZATION OF SONABA

Shareholders

Board of Directors

Interministerial CMiister of therBsmr

CommissionCommission ....... ~(Ministerof Tourism)
C...hairman
of the Board I
(Minister of Tourism).f

Comité Technique 1
Local Consultatif ......... Director General
(Governorof Agadir>I

Project Legaland Commercialand

t Unit\ | Administration i Financial

t-1t

World Bank-15168(R)
C
 ANNEX VI
Page 1

MOROCCO

BAY OF AGADIR TOURISM PROJECT

Market Justification

1. Tourism assets in Morocco include the Mediterraneancoastal region

of Tangiers to the north, the beaches stretching the entire length of the
country on the Atlantic coast to the west, the Imperial cities of Fez, Rabat,
Meknes and Marrakesh in the interior and the varied cultural sites of the
south. These assets, easily accessible,have long been popular with motorized
travelers. Recently Morocco's attractions,particularlyAgadir and Marrakesh,
have been opened up for visitors arriving by air. Agadir offers great scenic
beauty, climatic conditionsfavorable for year-round beach tourism and a con-
venient center for varied excursions to the entire Souss region of southern
Morocco. Agadir's combination of tourism assets is unique in Morocco and a
rarity in the wider Mediterraneancontext.

AccommodationDevelopment

2. The number of beds of internationalstandards in Agadir will reach

about 4,000 by the end of 1975. Another 4,000 beds are scheduled for completion in
the existing tourism sector (STB) within the next five years. Beyond that, an
additional 3,000 beds are forecast by 1988 (Table 1). This would complete
the accommodationscheduled for the-STB according to its revised schèma
d'aménagement, The UAT project would provide approximately7,000 additional beds
during the period 1980-86. The following table summarizes the projected buildup
of hotel capacity in the UAT and in Agadir overall.

Hotel Capacity in Agadir (Number of Beds)

UAT STB and Other Sites in Agadir Total Agadir

1975 4,000 a/ 4,000.

1980 1,000 7,500 8,500
1981 2,000 8,000 b/ 10,000
1982 3,000 8,500 11,500
1983 4,000 9,000 13,000
1984 5,000 9,500 14,500
1985 6,000 10,000 16,000
1986 7,000 10,500 17,500
1987 7,000 11,000 18,000
1988 7,000 11,000 18,000

a/ Capacity including a 480-bed hotel scheduled to open in November 1975.

b/ 4,000 beds under construction.

Market Characteristics

3. Agadir's assets began to be tapped on a significant scale only at the

turn of the last decade when the number of beds of internationalstandards rp.qhed
1,200 and foreign arrivals numbered 46,000. The ensuing expansion of capacity
to 3,400 beds in 1974 was followedby an increase in traffic to 119,000 visitors,
 ANNEX `VI
Page 2

an annual rate of growth of 28%. Commensurate with its unique assets, the
share of traffic to Morocco secured by Agadir almost doubled from 6% in 1970
to 11% in 1974 (Table 2). The growth in foreign tourist traffic to Agadir
during this period was accompanied by a rise in average length of stay from
three to eleven days. Consequently bed occupancy levels in Agadir rose from
37% in 1970 to 67% in 1974, reaching 75% during the first eight months of 1975 (Table 3).

4. The high occupancies enjoyed by Agadir's hotels have led to high rates of
refusals and overbooking. During the peak months of the 1974/75 winter season and in
August of this year for instance, tourists were sent as far away as Taroudant
(100 km from Agadir) for lack of space. More fortunate visitors were accommo-
dated over night in hotels still under construction and given meals in the hotels
where their stay was originally intended.

5. Arrivals are well spread out over the year making Agadir a year-round
destination. Ninety percent of all foreign visitors arrive by air (compared to 36%
for the country overall). Most are on inclusive tours marketed by European
operators, with about half arriving on c :rtered flights and the rest on block
space contracted from scheduled carri -s. In 1974 about 85% of the visitors
came from Western and northern Europe with France (42%), West Germany (13%) and
Switzerland (11%) the major generating countries. The rate of repeat visitors
among tourists is high, a noteworthy characteristic for a new destination. Over
the last five years Agadir has diversified its clientele; the share of French
has decreased by over 50% in favor of growth in traffic of Swiss, British and
Benelux nationals (Table 4). Domestic traffic accounts for 20% of total arrivals
and 8% of total bednights.

Market Prospects

6. Although Agadir is Morocco s only winter beach destination, its growth

prospects are linked to those of the country as a whole. As its capacity is
expanded and internal access improved with the completed road from Marrakesh,
Agadir will benefit increasingly from the tourism assets of the rest of the
country.

7. Future growth of traffic to Agadir will therefore depend on Morocco's

overall growth as well as on its competitiveness with comparable destinations
in neighboring countries and in West Africa and the Canaries. North Africa is
a major competitor in summer but not in winter, with the possible exception of
Djerba, Tunisia, which enjoys pleasant .%eather in winter but ?s not as warm as
Agadir. West Africa (particularly Senegal and the Ivory Coast) is not a likely
competitor because of the price disadvantage. The Canaries offer the greatest year-round
competition to Agadir. Both offer pleasant, safe beaches and truly summer-like
weather, but Agadir is additionally favored with varied cultural and scenic
attractions close by including Marrakesh, Goulimine and the entire Souss region.
However, despite a closer proximity to the main European market, Agadir appears
at a slight price disadvantage vis-a-vis the Canaries (Table 5). Only 10% of its
present capacity is of lower category compared to 30% for the Canaries and
therefore the price of an inclusive tour to Agadir is on average, slightly
higher. It will be possible to market the accommodation proposed for the UAT
at prices that will compare favorably with those of the Canaries, and enable
Agadir to tap the middle- and lower-income segments of the market.
 ANNEX VI
Page 3

Market Projections

8. No substantialchange is expected in the factors affecting inter-

national and domestic demand for Agadir. It is assumed that visitor traffic
to Agadir will grow in line with the planned developmentof the resort's
accommodationcapacity.

9. Assuming that the average length of stay of foreign visitors remains

the same at Il days and assuming that internal tourism's share will increase
to 15% of total bednights in Agadir as incomes in Morocco continue to rise,
the number of foreign visitors projected on the basis of an expected occu-
pancy rate of 60% would reach 305,000 in 1988. This implies an average
annual growth in foreign visitor traffic to Agadir of 7.5% in the 1975-88
period which is both reasonableand conservativein light of the following
considerations:

(a) Foreign visitor arrivals in Agadir have increased by 28% annually

in recent years. If there had been sufficient capacity, particularly
in the lower category, a much higher growth rate in traffic might
have been expected.

(b) The uniquenessof Agadir's assets in Morocco and the growing

popularity of beach-basedwinter tourism warrant further increase
in Agadir's share of traffic to Morocco. On the assumption that
the demand for Moroccan travel will double by 1988 from its 1973
figure of 1.2 million, the projected foreign arrivals in Agadir
would represent 13% of total Moroccan arrivals. If arrivals in
Morocco triple by 1990 1/ (equivalentto a 7% rate of growth,
considerablylower than the growth rate of 19% observed between
1968 and 1973), the foreign arrivals in Agadir projected above
would represent only about 8% of all arrivals in Morocco, signifi-
cantly lower than the 11% in 1974.

(c) Agadir's market includes a significantproportion of upper-income

visitors which makes it less vulnerable than other destinations
to a possible reduction in the real growth of disposable income in
Western Europe. This is consistentwith past experience that
tourist demand is highly income elastic and with the absence of
disruptionsin tourism to Agadir during the 1974 economic difficul-
ties. 2/ Agadir also stands to benefit from the expansionof the
market segment vacationing twice a year.

(d) As traditionaldestinationsin Europe become increasinglycrowded

and those south of the Mediterraneancontinue to enjoy a price
advantage, vacation traffic to Morocco gnd thus Agadir should
expand more vigorously.

1/ A recent study of Mediterraneantourism by the Battelle Institute forecast

3.6 million arrivals in Morocco by 1985.
2/ In 1974 traffic to Morocco as a whole decreased 14% while traffic to Agadir
increasedby 2%.
 ANNEX VI
Page 4

Marketing

10. The marketing strategy proposed for the UAT developmentwill be

aimed at attracting both the upper- and middle-income family markets. The
UAT would be marketed by tour operators and the vehicle will be the package
vacation lasting either one or two weeks. Suggested packages for the UAT
include seven-day and fifteen-dayvacations to be marketed through wholesale
and retail travel outlets. A typical eight-day, seven-night package on a
half-board basis (i.e., room, breakfast and one meal) would cost US$160
(1975 prices) excluding air fare and personal expenses. This is competitive
with comparablepackages to the Mediterraneanand the Canaries and the US$27.50
average daily expenditure (1975 prices) also compares favorably with
expendituresrecorded in competing destinations (e.g., US$27.40 in Tunisia
and US$24.80 in Spain in 1974).
 Table 1

MOROCCO

BAY OF AGADIR TOURISMPROJECTS

Evolution of ARadir's Capacity by Categoro of Accommodation

Under construction
l973 c/azmed or
l9/ c/v1975
b7
19/ cr 1972
a/ / c! / .7

3 1,227 30.2 - - -
24.3 2 747 24.3 2 747 21.1
5-Star 2 747 29.9 2 747
38.1 4 1,380 39.2 4 1,380 33.9 4 1,874 46.8
760 30.4 3 1,170 38.1 3 1,170
4-Star 2
5 795 19.5 - _ _
4 697 22.7 5 795 22.6
3-Star 4 635 25.5 4 6971' 22.7
9.9 8 416t/ 10.2 8 2,035 50.8
6.7 5 206 6.7 7 348
2
-Star 4 102 4.1 5 206
7.2 9 253 6.2 1 97 2.4
8.2 9 253 8.2 9 253
i-star 9 253 10.1 9 253

29 4,071 100 13 4,oo6 100

23 3,073 100 27 3,523 1oe
Total 21 2,497 100 23 3,073 100

'd

a/ Number of hotels
> c
b/ Number of beds
H
c/ % of total
d/ Includes a 480-bed hotel scheduled to open in November 1975
e! Extension of an existing hotel
1975.
/ Includes a 68-bed apartment scheduled ta open in December

Source: Délégation Régionale au Tourisme

 ANNIX VI
Page 6

Table 2

MOROCCO

BAY 0F AGADIR TOURISMPRBJECT

International Arrivals at A-adir

ARadir
Agadir Index Morocco Index Morocco

1970 46,331 100 700,992 100 6.6

1971 65,022 140 757,256 108 8.6

1972 85,217 184 987,611 141 8.6

1973 116,461 251 1,225,784 175 9.5

1974 119,054 257 1,052,000 150 11.3

Source: Délégation Régionale au Tourisme

 BAY CF TOul1ISM 8100T
AGADIR

8U013UP oF AB00800dAT1ON A8 BSM0CUP0 OCYD AbADIR /

Jrn=ury 1970 - Ag..et 1975

_p57o 1971 1972 1973 1971 1715

B.d ,eaito R.d,i.ht8 N.d oe,hW.efhv RMdCaso sl a bednlhteh Bd Bma

,bd c t BeddigOt, bd Beoup.o.,T
Bed cwa0itî %edaiîhAs M.d oB.d
0w0it,, ~ r *ah& BrdL.aAk
ooo _bd baaah. .M oez
J.,u.ry 170 5,811 39.9 1,540 22,604 h7. 2,1h. 31,117 b6.9 2,308 b8,128 67.3 2,718 .2,77$ 50.8 2,928 57,197 63.0

6br,r y 470 6,277 47.7 0.81O 22,689 52.6 2,2Mn 32,168 55.. 2,718 51,719 60.0 2.718 13,189 57.1 2.928 65,398 79.8

86v 170 6,743 46.3 1.5LO 25,162 52.7 2,20. 43.800 6..2 2,716 58,140 69.0 2,718 60,599 71.9 2,928 74,492 82.1

4rl1 830 11,258 17.2 1,.5O 30.150 65.3 2,20. 79,302 59.h 2,710 51,831 63.6 2,718 70,817 86.8 2,928 62,837 71.s

Y m870 10,512 1.2.2 1.5.0 21,01 ....

O 2,201 55,222 81,0 2,718 53987 64LI 2,718 h7,glh s0.9 2,928 64,982 71.6

830 6,528 25.b 1,651 11,730 25.4 2,201 28,2hO .2.7 2,710 58,266 71.5 2,718 39,431 48.4 2,928 51,155 58.2

hiy 830 9,229 35.9 1,660 20,Q4. J2.9 2,20C 43,707 6..0 2,717 52,997 62.9 2,718 68,628 81.1 2,928 72,669 80o0

A.8ut 830 12.099 47.0 1.5,0 27,373 77.3 2,308 ù.,225 69.8 2,708 68,208 81.0 2,928 86,690 95.5 2,928 83.869 94.5

B.pteée r 830 6,918 27.9 1,510 22,794 19.3 2,309 30,035 50.6 2,718 50,776 62.3 209p8 73,669 83.9 - -

8,t5,e 830 7,9W6 31.1 1,510 13.728 28.8 2,507 71,35. hl.8 2,718 46,276 54.9 2,928 5b.245 61.8 - -

N?ob- , 830 8,070 32.1 1,510 16,985 36.8 2,308 32,603 17.1 2,718 31,037 38.1 2,928 48.256 S-.9 - _ _

13.,8.r 830 10,379 10.3 0,5ho 21,837 15.7 2,70e 39,012 65.6 2,718 26,102 31.0 2,928 52.293 65.3 - -

Te.1 3U-r - 102,350 37.8 256,183 1..6 - .3,676 5,.2 - 597,447 65.8 - 690,813 67.4 - 531,779 74.7

S/ Fr81% O .ai t D
02
,ap.aoy.
 Table h

MOROCCO

BAY oF AGADIRTfURISM PROJECTS

Distribution of International Arrivals at Agadir 1969-1973

Growth

0rigin N 1970--- 1971 No 1972 X 1273 1274 Index

France 27,501 59.36 36,196 55.67 39,973 46.91 46,234 39.64 50,013 42.00 182
Germany 4,161 8.98 8,599 13.22 10,455 12.27 15,693 13.45 15,344 12.88 369
US - Canada 3,118 6.73 5,054 7.77 5,195 8.44 8,414 7.22 7,588 6,38 243
Benelux 2,440 5.27 3,714 5.71 4,743 5.57 7,939 6.81 6,914 5.82 283
Great Britain 2,075 4.48 2,929 4.51 5,373 6.30 9,976 8.55 8,193 6.88 395
Switzerland 1,800 3.88 3,o46 4.69 S,765 10.28 I2,793 10.97 12,665 10.64 704
Italy 1,694 3.66 2,071 3.19 3,054 3.58 3,948 3.38 4,157 3.4? 245
Scandinavia 1,042 2.25 715 1.10 1,273 1.49 3,431 2.94 6,127 5.15 588
Others 2,500 5.39 2,088 4.14 4,396 5.16 7,023 7.04 80 6.76 32
Total 46,331 100.00 65,022 100.00 85,217 100.00 116,461100.00 119,054 100.00 257

Sources DélégationRégionale au Tourisme.

 ANNEX VI
Table 5 Page 9

MOROCCO

BAY OF AGADIRTOURISMPROJECT-
Comparison of PackagTurPie (171.

(Indexes)

From: Paris Stuttgart Copenhagen Brusselles

A B C A B C A B C A B C

Agadir 100 100 100 100 100 100 100 100 100 100 100 100

Balearij Islands 56 57 56 39 51 29 54 62 74 46 41 48
Canaries 85 52 99 63 64 63 83 50 119 78 39 95
Madeira 132 123 116 88 82 92 96 79 115 84 59 94
Djerba 92 93 92 73 106 44 62 81 55
Rhodes 97 102 91 65 50 81

Malta 85 65 72 59 58 33 68
Cyprus 137 - 83 88 81
Algeria 82 88 79 62 82 44

Senegal 141 138 224

IvoryCoast 137

The Gambia 142 103 183

Thailand 186 248 134

Ceylon 214 90 169 136 204

Kenya 182 97 256

1/ Valid for all 5candinavia

A Price for a one-week package
B Price for additional week
C Difference between A and B, a measure of transport cost

Sources: Jet Tours, Air Tour, Escapade, Horizon 74, Trans 2t6, Trans Tours,
Vacances Aériennes, Vingresor, Transair, Trans Europe, Neckermann.
 MOROCCO

BAY OF AGADIR TOURISM PROJECT

AccommodationFacilities
Financial Analysis

A. Introduction

1. The proposed development and phasing of the accommodationcapacity,

along with a composite occupancy curve and pro forma statement of income and
expense are given in Table 1. It has been assumed that accommodationswill
be opened at a rate of 1,000 beds per year over a seven-yearperiod starting
in 1979-80. Hotels are expected to be chiefly three-starcategory and about
25% of bed capacity will be located in housekeepingapartments. Hotels in
Agadir presently are predominantlyforr- and five-star and the accommodation
capacity proposed under the project TiLL provide a more balanced product line
for Agadir and permit the developme.~tof the high volume market forecast for
the area.

2. the projectionshave been based on the following estimates and

assumptionswhich take into account the actual experience of hotels in Agadir
and other relevant areas in Morocco.

B, Hotels

3. There is no marked seasonalityin Agadir and fairly high annual

hotel occupancy can be expected. For individualhotels, bed occupancieswere
forecast at 50% in the first year rising to 60% in the third year of operation.
The resulting overall bed occupancy curve rises from 50% in the first year
of operation to 60% over a 9-10-year period. Most of the clientele is expected
to be group and/or charter (80%) and room occupancieswill be only marginally
higher than bed occupancies.

4. Statementsof income and expense in 1975 prices were prepared

following the U.S. Uniform System of Accounts for Hotels. Rates based on
the year-roundrates currently being obtained in Agadir for rooms and meals
were calculatedassuming all guests would stay on a half-board plan
(on a per person basis for bed, breakfast and one other meal). Allowances
were made for a modest number of meals served in addition to the half-beard and
beverage, gift shop and other sales (telephone,laundry)were calculated on a
per guestnightbasis. The resultant average guestnight expenditure in hotels
is as follows:

DH US$

Room 25 6.58
Meals 24 6.32
Drinks 12 3.16
Other 2 0.54

Total 63 16.58
 ANNEX VII
Page 2

It has been assumed that shops in hotels would be rented (1 square meter per
guestroom) at a rate of DH 10 per square meter per month.

5. Costs of sales were estimated as ratios to departmental sales. A

ratio of 32% was used for food and 30% for beverage sales. The number of
employees per room average 0.86 in existing hotels. Based on this ratio
and applicable wage rates in Morocco, payroll amounts to 19% of total sales,
including allowances for housing, meals and transport. The category of "other
direct expenses" includes cleaning supplies, replacement of linen, china and
glassware and agency commissions. The undistributed expense categories were
calculated using ratios based on experience in the area. The provisions of
the existing incentives package have been applied. Service charges and
ground rent (Annex V) have been calculated at DH 500 and DH 400 respectively
per bed per year. Based on these assumptions, the hotels reach a steady gross
operating profit of 31% (adjusted GOP after service charge and ground rent
of 26%).

6. The overall financial internal rate of return for the hotels

taken together is 9.9%, assuming that the hotels are managed by the owning
company. If they were managed by management companies, the rate of return would
be about 6% after deduction of management fees, These results are in constant
1975 prices and do not include capital gains or the effect of inflation.

7. The DCF rate of return-on the project is considered reasonable and

the accounting ratios show that the hotel can serve its debt comfortably and
pay dividends of over 10%.

C. Housekeep ng Apartments

8. It has been assumed that 1,750 of the total 7,000 beds would be in housekeep-
ing apartments. Occupancy in the apartments has been projected on the
same basis as for hotels, -that is, an average bed occupancy of 50% rising to
60% by the tenth year of the project's operations.

9. Apartments are assumed to generate revenue from -ent,

and minor amounts from shop sales. The average ni2htlv rental
for apartments has been assumed to be DH 25. Operating costs have been based on
consultants' estimates for labor, supplies and operating overhead such as heat,
light and power. Service charges have been calculated at DH 500 per bed
(Annex V). Based on these assumptions, the apartments reach a gross operating
profit of 64% (after service charges, 52%).

10. The overall financial internal rate of return for the apartments
is 15.9%, assuming that they are managed by the owners. Thic rate
may be misleading since direct management is unlikely. However, since it was
not known whether the apartments would operate as resort condominia, cooperatives
or under some other form of management, the results have been shown assuming
direct management.

D. Overall Results

11. The rate of return on the hotels and apartments is sensitive to

investment cost, occupancy and operating costs. The rates of return resulting
 ANNEX VII
Page 3

from variations in the basic assumptions are shown in the table below:

Rates of Return
Hotels Apartments Overali

Best estimates 9.9 15.9 10.9

a/
Gross operating profit

(a) +25% 13.3 19.8 14.4

(b) -25% 6.0 11.5 6.9
(c) Investment cost +10% 8.5 14.4 9.6

a/ Reflecting changes in occupancy, tariffs and operating costs.

E. Single Hotel

12. Income statement and cash flow for a three-star hotel are shown in
Table 2 with assumptions listed on the following page. Assuming that the
project benefits from the existing incentives package, internai rates of return
on the project are as follows:

Overall Return Returns to Equity

Direct Management

Best estimate 10.1 21.4

Benefits + 25% 13.2 27.1
Benefits - 25% 6.6 15.4
Investment cost + 10% 8.9 19.3

Management Contract--

Best estimate 6.5 10.9

Benefits + 25% 9.0 14.4
Benefits - 25% 3.4 7.0
Investment + 10% 5.4 9.6

It is likely that hotels will have management contracts and consequently the
right-hand column is the more relevant.
 Table 1

MOROCCO: PROJECT
BAY OF AGADIR TOURISI',

Summary Statement of Hotel Tncome and Expense

(constant 1975 Dirhams'000's)

Project Year 5 6 7 8 9 10 il 12 13

Accommodation (beds)

750 1,500 2,250 3,000 3,750 4,500 5,250 5,250 5,250

Hotels
250 500 750 1,000 1,250 1,500 1,750 1,750 1,750
Apartments
1,000 2,000 3,000 4,000 5,000 6,000 7,000 7,000 7,000
Total

52 55 56 57 57 58 59 60
Composite bed occupancy (%) 50
Guestnights (000's)

137.0 286.9 451.2 615.5 779.7 943.9 1,083.2 1,135.3 1,149.7

-lotels
45.5 95.7 150.4 205.1 259.9 314.7 369.4 378.8 383.3
Apartmenits
Total 182.5 382.6 601.6 810.6 1,039.6 1,260.6 1,452.6 1,514.1 1,533.0

INCOME STATEMENT

Sales

4,563 9,565 15,040 20,514 25,995 31,465 36,315 37,854 38,324

Rooms
4,932 10,330 16,242 22,158 28,069 33,979 38,995 40,870 41,381
Food and beverage
365 765 1,204 1,641 2,078 2,511 2,905 3,075
Other
9,860 20,660 32,486 44,313 56,142 67,955 78,215 81,752 82,780
Total sales

Departmental expenses:

1,728 3,618 5,691 7,764 9,832 11,885 13,669 14,320 14,497

Cost of sales
Payroll and related expenses 2,192 4,397 6,614 8,831 11,048 13,266 15,485 15,506 15,523
925 1,936 3,046 4,155 5,264 6,372 7,321 7,661 7,760
Other direct expenses
4,845 9,951 15,351 20,750 26,144 31,523 36,475 37,487 37,780
Total departmental expenses

Departmental profit 5,015 10,709 17,135 23,563 29,998 36,432 41,740 44,265 45,000
Undistributed expenses:

370 774 1,218 1,661 2,105 2,548 2,949 3,067 3,104

Administrative and general
408 408 608 831 1,053 1,274 1,475 1,534 1,553
Advertising and promotion
385 770 1,154 1,539 1,924 2,309 2,693 2,693 2,693
Heat, light and power
633 1,265 1,99 2,530 3,163 3.795 4.428 4,428
Repairs and maintenance
1,796 3,217 4,977 6,561 8,245 9,926 11,545 11,722 11,778
Total ondistributed expenses

House profit (loss) 3,219 7,492 12,158 17,002 21,753 26,506 30,195 32,543 33,222
Store rentals 45 90 135 180 225 270 315 315 315
Cross operating profit (loss) 3,264 7,582 12,293 17,182 21,978 26,776 30,510 32,858 33,537 b

Sround rent 150 300 450 600 750 900 1,050 1,050 1,050 OS z
Service charge 500 1 000 1,500 3,000 2,500 3,000 3,500 3,500 3 500
Adjusted gross operating profit 2,614 6,282 10,343 13,582 18,728 22,876 25,960 28,308 28,987 c

August 1975
 Table 2
MOROCCO: bAY OF AGADIRTOURISMPROJECT

Typical 100-Room. 3-Star Hotel

Projected Income Statement and Cash Flow

(constant 1975 Dirhams 000's)

Year 1 2 3 4 5 6 7 8 9 10 il 12

Bed occupancy (7,) 50 55 60 60 60 60 60 60 60 60 60 60

Guestnights (000) 36.5 40.2 43.8 43.8 43.8 43.8 43.8 43.8 43.8 43.8 43.8 43.8
Modified American Plan 40 40 40 40 40 40 40 40 40 40 40 40
(DH per person)

INCOME STATEMENT

Revenue:

Rooms 912 1,005 1,095 1,095 1,095 1,095 1,095 1,095 1,095 1,095 1,095 1,095
Food 876 965 1,051 1,051 1,051 1,051 1,051 1,051 1,051 1,051 1,051 1,051
Beverage 438 482 526 526 526 526 526 526 526 526 526 526
Other 75 80 88 88 88 88 88 88 88 88 88 88
Total 2,301 2,532 2.760 2,760 2,760 2,760 2,760 2,760 2,760 2,760 2,760 2,760

Coat of sales:

Food 280 309 336 336 336 336 336 336 336 336 336 336
Beverage 131 145 158 158 158 158 158 158 158 158 158 158
Other 36 40 44 44 44 44 44 44 44 44 44 44
Total 447 494 538 538 538 538 538 538 538 538 538 538

Direct expenses:

Payroll and related expenses 552 552 552 552 552 552 552 552 552 552 552 552
Other direct expenses 230 253 276 276 276 276 276 276 276 276 276 276
Total 782 805 828 828 828 828 828 828 828 828 828 828

Undistributed expenses:

Administrative and general 92 101 110 110 110 110 110 110 110 110 110 110
Advertising and promotion 55 55 55 55 55 55 55 55 55 55 55 55
Heat, light and power 77 80 83 83 83 83 83 83 83 83 83 83
Repairs and maintenance 118 128 138 138 138 138 138 138 138 138 138 138
Total 342 364 386 386 386 386 386 386 386 386 386 386

Sales and local taxes 115 127 138 138 138 138 138 138 138 138 138 138
Profit before fees and rent 615 742 870 870 870 870 870 870 870 870 870 870
Service charges 28 28 28 28 28 28 28 28 28 28 28 28

Gross Operating Profit (GOP): 587 714 842 842 842 842 842 842 842 842 842 842

Interest 149 141 133 124 115 106 97 87 77 66 54 48

Depreciation and amortization 300 300 300 300 300 300 300 300 300 300 300 300
Income tax - - - - - - - - - - 195 198

Net profit 38 273 409 418 427 436 445 455 445 476 293 296

CASHFLOW

Cash generation 587 714 84e 842 842 842 842 842 842 842 678 678
Less: Replacements reserve 90 90 90 90 90 90 90 90 90 90 90 90
Grant repayment - - - - - 180 180 180 180 180 - -
Gross cash flow 497 624 752 752 752 572 572 572 572 572 588 588
Debt service 318 318 318 318 318 318 318 318 318 318 205 205
Net cash flow 179 306 434 434 434 254 254 254 254 254 383 383

RATIOS

GOP/Total revenues (%) 26 28 31 31 31 31 31 31 31 31 31 31

NP/Total revenues (7) 1 10 14 15 15 16 16 16 16 17 il il
NP/IIitial equity (7) 27, 157. 2370 237% 24" 24°. 25% 25% 25% 267. 167 16%
Debt service coverage 1.6 2.0 2.4 2.4 2.4 1.8 1.8 1.8 1.8 1.8 2.9 2.9

November 1975
 ANNEX VII
Page 6

InvestmentAssumptions for A Typical Hotel

Number of rooms 100

Classification 3-star
Investmentcost per room DH 60,000

Composed of:
Land 5%
Construction 35%
Heavy equipment 25%
Light equipment 15%
Fees 10%
Incorporationfees 5%
Working capital 5%
100%

Financial plan

30% equity
15% state advance (payablein 10 years with 5 of grace)
55% CIH loans 40% at 4.5% interest over 20 years with 3 of grace
15% at 4.5% interest over 10 years, no grace period

Depreciation: 5% of investment per year

Replacements: equal to 30% of initial project cost over project's life

 ANNEX VIII
Page 1

MOROCCO

BAY OF AGADIR TOURISM PROJECT

Economic Justification of the UAT Investment

A. Rate of Return Computation

1. Although the proposed tourism component will provide infrastructure

in the UAT, it is part of a development program which includes hotels and
apartments. Hence its economic evaluation has been made in this larger
context.

2. The gross benefits to the economy resulting from the project would
come from the expenditures of tourists attracted to the UAT's hotels and housekeeping
apartments. The implementation of the UAT is expected to affect the revenues
of competing accommodation in Agadir and elsewhere in Morocco in two ways.
Firstly, a share of UAT visitors, particularly during the slow months (January,
June and October-November), could have been accommodated in existing hotels hence
a portion of the UAT visitor traffic is not incremental. Secondly, the extension
of capacity in the UAT could induce lower hotel rates in all of Agadir's
accommodations. In view of the favorable market prospects for Agadir and the
large overhang of frustrated demand, the UAT's effect on prices would be
limited. The quantification of these two effects is difficult for lack of
significant data. As a proxy measure, a quarter of the UAT's net benefits has
not been counted as incremental.

3. Some of the services would be paid for directly by the tourists while
others would be compensated for only indirectly. Accordingly, the costs and
revenues must be carefully analyzed so as to avoid double counting.

4. The expenditures of visitors to the UAT have been estimated on the

basis of tourist expenditures at similar facilities in.Morocco and competing
destinations. Visitors to the hotels, representing about three-quarters of
the number of visitors to the project area, would spend US$28 per guestnight.
Visitors to the apartments would spend US$26 per.guestnight. The breakdown
of average daily visitor expenditures according to the facilities used is
summarized in the table below.

Breakdown of Expenditures of Visitors to the UAT

Apartments Hotels Total Composite

DH US$ DH US$ DH US$

Accommodation, food and

beverage 58 15.20 66 17.30 64 16.90
Shopping 25 6.60 25 6.60 25 6.60
Sports and entertainment 10 2.70 10 2.70 10 2.70
Local transportation and
other 5 1.30 5 1.30 5 1.30

Total 98 25.80 106 27.90 104 27.50

 ANNEX VIII
Page 2

5. On this basis the composite daily expenditureper visitor has been

estimated at about DH 104 (US$27.50)which includes food and accommodation
at hotels and apartments,DH 52 (US$13.60);additional expenses for food and
beverage, DH 12 (US$3.30);miscellaneoussales, DH 5 (US$1.30);shopping,
DH 25 (US$6.60);sports and entertainment,DH 10 (US$2.70). Hotel revenues
assume an average bed occupancy rate on the whole UAT rising from 50% in 1980
to 60% in 1990. The only benefits from the proposed housing program which
have been included are the yields from the sale of land.

6. Although a portion of the net revenues accruing to the Moroccan

airline from tourist traffic would be attributableto the project, it has
not been taken into account in calculatingrates of return. Aiso excluded
are the benefits resulting from developing the UAT in a planned and coordinated
fashion, ensuring maximum attractivenessto the tourists, integrationof
tourism in other urban activities, efficient use of infrastructureand the
best use of land.

,CostAssumptions

7. The relevant costs are the capital and operating costs of the infra-
structure provided under the proposed project and of the hotel and related
superstructurefacilities to be built in the project areas, plus the estimated
capital and operating costs of producing the goods and services consumed by
the visitors outside the project area.

8. Investment costs cover the capital cost of constructing the tourism-

related works in the UAT, upgrading CT 7002, replacing the fish pumps and
constructinghotels and other superstructurefacilities. Accommodationinvestment
costs are assumed to average DH 30,000 (US$7,900)per bed for hotels and
DH 70,000 (US$18,400)for housekeepingapartments.

9. Economic costs of superstructureoperations are derived from the

projected financial accounts of hotels, restaurants and other facilitieswhich
in turn are based on actual accounts of similar establishmentsin Agadir.
Since SONABA is expected to recover the investmentin utilities through land
sales and leases, the related investment costs do not appear in the utilities
rate base. The utilities incrementalgross operating profit generated by
servicing the UAT accommodationhas been assumed to cover the
maintenance and replacementexpenses on thè UAT's utilities works. The
operating and maintence costs of nonrevenue-earninginfrastructureitems
(such as streets, street lighting and landscaring)as well as the operating
costs of solid waste disposal and other municipal serviceswould be paid
for by the Municipality. Since the municipal taxes to be levied on the-UAT
adequately cover these costs, they have been neglected. Incre-
mental revenues from the airport landing fees have been assumed to cover
the incrementalcosts incurred. The share of Morocco's generic tourism
promotion attributableto the project, estimated at DH 1.9 million per annum
from 1982 on, has been included in the rate of return computations. The
training costs, estimated at DH 416,0OO per annum from 1983 on, have also
been taken into account. Investment costs, operating costs and gross revenues
are all calculated in 1974 prices.
 ANNEX VIII
Page 3

Gross Operating Profits

10. The gross operating profits projected for the main categories of
visitor expenditures are shown below for the year 1988, when all the hotels and
operations will be activated.

Average Daily Gross Operating

Visitor Expenditures Profit
DH DH %
Accommodation, food and
beverage 64 18.69 29
Shopping 25 9.44 38
Sports and entertainment 10 4.03 40
Miscellaneous items 5 1.92 38

Total 104 34.08 34

Efficiency Price Consideration

11. Project amounts were further examined to determine the efficiency

prices of land, foreign exchange and labor. The use of the UAT land has been
valued at the benefits foregone in agriculture. At present, the official exchange
rate reflects adequately the value of the Moroccan currency. This situation
may, however, change over the life of the project. Accordingly the rate of return
calculations ignored shadow pricing for foreign exchange except for illustrative
purposes (para. 13). For people in the Souss Valley alternative employment oppor-
tunities are provided by emigration to northern Europe. Thus it has not been
found appropriate to shadow price labor.

Internal Rate of Return

12. Each project facility and piece of equipment will have a different
economic life, but taken as a whole, the project is estimated to have an
economic life of about 30 years. The modest provision for some replacement
expenditures during this period is considered to be offset by the life of the
main assets beyond 30 years. The cost benefit streams are detailed in Table 1.
With the above assumptions, the internal economic rate of return on the project
would be 17.4%. The sensitivity of the rate of return to alternative assumptions
regarding costs and benefits is shown below.

13. The rate of return would be sensitive to changes in investment costs,

gross operating profits, i/ the timing of hotel development and the assumed
shadow rates for wages and foreign exchange. The rates of return resulting from
alternative assumptions for each of these variables are shown in the table below.

Resulting Rate of Return %

Best estimate 17.4
Investment costs + 20% 14.6
Gross operating profits:
(a) + 10% 21.1
(b) + 25% 18.9
(c) - 10% 15.8
Two years' delay in opening of hotels 13.4
5% shadow pricing of foreign exchange 18.0

1/ Changes in GOP projections reflect potential variation in occupancy rates,

average daily expenditures and operating costs.
 ANNEX VIII
Page 4

B. Balance of Payments Effect

14. The proposed project is expected to increase gross foreign exchange

earnings by about DH 19 million (US$5.0million) in 1981 when the first hotels
open and by about DH 160 million (US$42.1million) per year from 1989 on,
when all planned accommodationshave become fully operational. This compares
with DH 1,025 million (US$270million) gross foreign exchange receipts earned
by Morocco from tourism in 1974. Foreign exchange revenues accruing to Royal
Air Maroc from internationalair travel have been excluded from the estimated
gross foreign exchange earnings.

15. Foreign exchange outflows resulting from the project would include
the import component (about 13%) of operating costs, debt service on the foreign
share of CIH loans, fees to foreign management firms and debt service on the
IBRD loan. The total outflow of foreign exchange is estimated to amount to
DH 10.3 million (US$2.7 million) in 1981 rising to DH 20.1 million (US$5.3
million) in 1989. (This calculation does not take into account the incremental
imports likely to ensue from increased wages for labor employed on the project.)
The net foreign exchange earnings generated by the project would amount to
about DH 8.7 million (US$2.3 million) in 1981 and about DH 140 million (US$36.8
million) in 1989 and annually thereafter.

C. Employment Effects

16. Assuming a ratio of 0.37 employees per bed, the accommodationin the
UAT tourism area would generate 2,600 new jobs by 1989. Additional jobs created
in the restaurants, shops, tour agencies, entertainment and recreational
facilities would amount to about 1,800. Indirect employment generated in con-
struction, handicrafts, agriculture and other services is likely to account for
7,200 additional jobs.

D. Budgetary Position of the Government

17. The current expenditures budgeted to the project would include the
cost of Government services for vocational training and the share of the Govern-
ment's tourism promotion attributable to the UAT tourism development. These
expenditures would increase from DH 1.3 million (US$0.4 million) in 1981 to
DH 2.3 million (US$0.6 million) by 1989. Budgetary receipts deriving from the
project would comprise taxes collected on room, beverage, food and other sales
and income taxes on salaries and profits. Taxes on tourist expenditures would
increase from DH 2.6 million (US$0.7 million) in 1981 to DH 20.1 million
(US$5.3 million) by 1989. Income tax returns will increase from DH 0.8 million
(US$0.2million) in 1981 to DH 4.6 million (US$1.2million) in 1989 and
DH 17.1 million (US$4.5 million) in 1994. In 1981 the project would have a
small net budgetary surplus of DH 2.1 million (US$0.5 million) rising to
DH 22.4 million (US$5.9million) in 1989 and DH 34.9 million (US$9.2million)
in 1994. Taking into account the net budgetary receipts and the net operating
income of SONABA, the internal rate of return to Government on the investment
in the UAT is 20.5%.
 Table 1

M9ROCCO

fkY O? AGADIR OURIS P6ROJECTS

Coat/ennefit Strasas (DH 0001

In constant 1975 prices

1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987

1. L.d-h/ 820 820 810 820 820 820 820 820 820 820 820 820
2. UT InveStcamt
Istrastraccare
Streeta Bcd parking 683 3,696 6,762 4,502 1,997
Streertlighttng 82 330 813 798 442- -----
Secerage 186 1,171 2,206 1.754 376-4
Watnr sapply 72 615 1,002 750 210
Foyer - 1,998 3,708 2,395 991 - - - - - - -
Teleccertcmnlcstians 255 336 872 1,174 1,029
Lsrd.c.ping 186 449 21236 1,851 773
Tata) 1,464 8,595 17,599 12,224 5,818 - - - - - - -
CanetonFacilities
A-enity ceres - 442 2,422 4,673 4,676 - - - - - - -
Sparts snd beach ftcilitce6 - 152 526 1,750 1,750
Oth-r ca-60n facilities- _- 80 188 746 _ _ _ _ _ _
Total - 594 3,028 6,611 7,174 _ - _ _ _
3. OuCsîde Investdentsc/ - - - 3,840 3,040 --

4. Inveantent in Aecpeemdatiîesd/ - - 13,437 26,875 26,875 26,875 26,875 26,875 26,875 13,437
5. I-assntent in Reaianal W-rks
Fieh panpa 38 316 473 - - - - - - -
CT 7002 197 676 1.966 452 - _ _ _ - -
Total 235 992 2,439 452 - - - - - - - -

6. R04rrI.oLets
TraîclcgV - - - 416 584 584 584 416 416 416 416 416
Generic paenatia-f/ 272 680 680 680 1,520 1,900 1,900 3,900 1,900 1,900
SONARAAsepcrtatingepec.e. - - - - 1,400 1,420 1,400 1,400 1,500 1,500 1,500 1,300
Ttala Caste 2,519 11,001 37,595 52,118 46,391 30,359 31,199 31,411 31,511 18,073 4,636 4,436
Il.-&etî

a«, Gr7r (helsîs aed aparcteants) - - - - 3,264 7,582 12,293 17,182 21,978 26,776 30,510 32,858
2. Taxsi/ 2,070 4,162 6,048 8,655 11,032 13,339 15,344 15,993
3. C0P otsideh/ - - - - 2,782 3,833 9,j72 12.358 15,850 19,219 22,146 23,084
4. E nest it ran laies fe L.nd ard
Cormon taaii4t±ca - - - - 940 1,880 2,960 4,040 5,120 6,200 7,280 8,360
5. Revenue tract
ft C an Facilita leRes- _ - _ 1.300 1.900 2.200 2 500 2 800 2IlM I2JO2 3.200
T.tali Be-fit. - 10,356 21,357 32,673 44,735 56,780 68,734 78,480 83,495

Aditstcd Be-afitriî _ _ - 7,767 16,018 24,505 33,551 42,585 51,550 58,860 62,621

a/ Irveermtnt caste are gi-en net ef taes.

b/ Land Inian rrtflcts rever.ese tregene in ceriaelîaral ce
c/ icaccîcent cec-t atside the UAT Inclades additiînel l1eee r in tearia ftacilitiîes (eKg., tceia, lace., retterante, hop-). The am..nt bas bece linitnd ta DR 6.08 illlian
rince therc le an over-upply ef -aah f-cilitie in AK dir.
d/ AcacRteadatla.. caste arc .. sues d at DH 60,000 pet hbtel roon and DH 70,000 pet apartent.
e/ Trtnînlg calera ce-t ftr 100 percera par year in 1981 aad 1982 nd fat 75 peaple in 1979 and after 1982,
E/ Gesnric promction ce.t amctnts ta 0.5% f receipts.

Berefita
S/ Te- enet af th.-e deraivd trac ddesettc taurîse ialade -lec tac (4%/), beverare tax, patente, handicrafta as weli a- ahler tares in and ataide the UAT.
h/i la esc,i-ated et 39% af -ctsîde erpenditares.
i Adjijastrd fEr nonincrepentai benetite satircated at 25% cf t.t.l (cc para. 2). Ttala increment-l benefit c-ntian. ta incr .. e.nttil 1997 ahib le the end of the tac
enerceatiop period fer cl hbtela. The.e will reach Dh 69.7 milliac in 1997 darirg thb 'typical" yesr jr 1997.

Decerber 1975
 MOROCCO: BAY OFAGADIR TOURISMPROJECT
SCHEDULEOF IMPLEMENTATION,EXPENDITUREAND DISBURSEMENT

YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 YEAR 6

CODE PROJECT COMPONENT _-- _- …_ _ -_
Qi Q2 Q3 Q4 Q5 Q6 07 Q8 09 010 1i1 012 Q13 014 015 C116 017 1 8 Q19 Q20 Q21 022 023 Q24

A. UAT INFRASTRUCTURE
1. Streets&Parking ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~Detects
Liabilit y Periodj
Primary Network . .....
Secondary Network ..................
2. Street Lighting
Primary Network ..................
Secondary Network . ..................
3. Sewerage
Primary Network ..................
Secondary Network . ..................
4. VVaterSupply
Primary Network
Secondary Network ..................
5. Power Supply
Trunk Supply and Substation ..................
Transmission Lines_ _
Distribution Lines ..................
6. Telecommunications
Trunk Supply
Distribution Lines ..................
Telephone Exchange Extension_ ..................
7. Landscaping
B. COMMON FACILITIES
1. Shopping Centers
Commercial Buildings ..... .... ......
Handicrafts Center ..... .... ....
Cinema and Open-Air Theater ...... .....
Hammam ............
2. Sports and Beach Facilities
Tennis Courts and Swimming Pools ..........
Multipurpose Area ..........
Stable and Riding School ..................
Beach Facilities ..........
3. Maintenance Facilities ......... .....
C. REGIONAL INFRASTRUCTURE
1. Ait Melloul Bypass
2. Upgrading of CT7002
3. Replacement of Fish Pumps
D. PROJECT ADMINISTRATION _ _ _ -
E. TECHNICAL ASSISTANCE AND STUDIES
1. Second Tourism Project _ -
2. Agadir SewerageSystem
3. Agadir Urban Development - - -
4. Env. and Arch. Preservation Unit _ _ _ _ _ _

LOAN AGREEMENT SIGNING DATE

EXPENDITURES RATE- 1570 6346 13176 12583 7881

( in 1000 US$ equivalent) 3.8% 15.2% 31.7% 30.3% 19.0%
DISBURSEMENT RATE 486 2187 5686 6663 4782 896
( in 1000 US$ equivalent) 2.3% 10.6% 27.5% 32.2% 23.1% 4.3%

1/ Excluding Land Acquisition

July 1975 World Bank - 15166(R)

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NOVEMBER 1976
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AUGUST1975
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Contourlines, 5 meter intervais f - I/nt `
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