Meeting with members of the Economic and Financial Committee of the French Chamber of Commerce and Industry in Morocco : 12/11/2009

Meeting with members of the Economic and Financial Committee of the French Chamber of Commerce and Industry in Morocco

The new prospects of privatization and public-private partnerships were the concern of the meeting of Mr. Abdelaziz TALBI, Director of Public Enterprises and Privatization with members of the Economic and Financial Committee of the French Chamber of Commerce and Industry in Morocco (FCCIM), held November 11th , 2009 in Casablanca in the presence of officials of the DEPP.

In his opening speech, the chairman of the Economic and Financial Committee of FCCIM and the former Minister of Finance, Mr. M`hamed SAGOU, expressed the interest given to the progress of public commercial sector and to the issue addressed at this meeting.

In his presentation, Mr. TALBI highlighted the new dynamism in the public commercial sector, boosted by the positive fallout of liberalization policies and sectoral restructuring carried out at different rates (telecommunications, transport, ports activities, energy, phosphates) and the development of Public Private Partnerships` operations (PPP).

He also emphasized the exponential increase of investments of EPs, which recorded an average annual growth rate of 27.3% over the 2005-2008 period, supported by the receipts of privatization allocated to the General State Budget and the Hassan II Fund for Economic and Social Development. "We move from one record to next record on public investment," he stated.Investment forecasts for the year 2010 are of 111 billion dirham on a total allocated budget of 506 billion dirham scheduled for 2008-2012 period.

He then highlighted the various achievements as regards PPP and delegated management, particularly in the areas of water and electricity distribution and sanitation, urban transport, electricity generation, irrigation water, management, port activities, housing and agriculture.

Regarding prospects for the divestiture of state holdings, Mr. TALBI specified that there is a significant potential, estimated at 50 billion DH through, either the total or partial transfer of the firms on the list of privatized companies , or the divestiture of minority holdings to private and / or public investors.

As the terms of surrender, Mr. Talbi pointed out that they will be defined on the basis of recommendations of consulting firms, the quality of candidates and market opportunities. "It is not because there is a potential that we will exploit it fully and immediately. Future operations will be conducted with realism and pragmatism, "he stated

Mr. TALBI recalled that the aim of privatization is not to raise the state coffers revenues, but to introduce competitive mechanisms, to sustain companies and restructure economy and thereby streamline the state shares.

The following discussion focused mainly on the profound changes in the public sector, the promotion of solar energy in Morocco, the pre-project analysis and investment decision-making as well as their funding.

Regarding solar energy promotion, it was reported that Morocco has a solar plan which aims to install 2,000 MW by the year 2020 with an investment of 70 billion dirhams in the context of PPP. As for the solar electricity produced by households connected to the network, a pilot project called "Chourouk" is being launched by ONE since the redeployment of such project to a larger scale are still relatively expensive. Concerning manufacturers, the amendment of the law governing the ONE gave the opportunity for private operators to self-produce electricity with a threshold power output of 50 MW.

In addition, Mr. TALBI stressed that the use of entities dedicated to specific projects (Tangier Mediterranean Special Agency, the Bouregreg Valley Development Agency) proved to be highly efficient because of a reduced manpower and an optimal organization, a renewed governance and ownership shareholding involving synergy between different actors: the State, local authorities, public institutions and private operators.

With regard to investment decisions, Mr. TALBI stressed that they are consistently supported by studies in order to decide on their feasibility and economic viability. In addition, these decisions are reviewed at the level of strategic committees and legislative bodies of the company before being adopted.

As for the issue related to funding, the Director of the DEPP stressed that self-financing constitutes nearly 70% of the amount of public sector investment dealer. Public Companies have also recourse to external funding. In this context, Mr. TALBI stressed that the success of a project, beyond the interests of its funding, is dependent on a deliberate policy, an innovative institutional arrangements, modern governance and quality management and human resources. "The concern of funding should not outweigh the quality and originality of the project itself," he added.

After the meeting, the President of the Economic and Financial Committee of the FCCIM, Mr. M`hamed SAGO, welcomed the new dynamics experienced by the Public Enterprises sector and held to welcome the new approach adopted by the State to support the various economic sectors and conclude the public investment projects. Mr. SAGO had also hoped to devote a special issue of the publication of the FCCIM to progress in the public commercial sector.