Hugues de La Forge

1
Methods for comparing PPPs and other procurement
approaches The Moroccan experience
May 2008

• Hugues de La Forge
• Gide Loyrette Nouel Naciri Associé

2
PPPs AND OTHER NOTIONS

• Moroccan investors and public parties have been
  practicing concessions for many years now with
  major projects suchs as Jorf Lasfar Power Plant
  Concession or water supply and maintenance
  contracts such as in Casablanca or Rabat and more
  recently in Tanger or Tetouan
• Public procurement rules (recently modified by
  Decree of February 5th, 2007) do not offer a
  satisfactory basis for setting up PPPs as they do
  not allow a contractor to take part or whole of
  the risk of the goods and service operated either
  in terms of availability or traffic or even
  affordability
• There was a clear need for a specific framework
  to be implemented by the Moroccan legislator

3
OVERVIEW OF LAW 54-05 - GENERAL

• Law 54-05 dated february 14th 2006 called Loi
  sur la Gestion Déléguée proposes a legal device
  allowing either public entities (établissements
  publics) or local authorities to conclude
  partnerships for the performance of a public
  service or the construction and/or operation of
  public works associated to its performance
• Moroccan State is not concerned by this Law
• Tracks followed by the Law are more ambitious but
  not oriented in a PFI scheme such as Ordonnance
  dated June 14th, 2004 achieved in France

4
OVERVIEW OF LAW 54-05 - GENERAL

• Indeed, the Law may be applied to almost any
  form of partnerships (concessions or affermage
  or régie intéressée) it being understood that
  remuneration of the private party should derive
  from users contribution and/or operations
  profit in order to ensure contract economic
  equilibrium
• This does not expressly allows (nor forbids) any
  form of remuneration through the grantor where in
  the absence of final buyer the goods and services
  need to be remunerated by the public party
• Legal framework implemented by Law 54-05 is
  definitely concession orientated.

5
OVERVIEW OF LAW 54-05 MAIN PROVISIONS

• A set of imperative provisions will have to be
  incorporated in the project contract such as a
  limited duration of the contract, regime of
  financial streams, terms and conditions to ensure
  follow-up and control of the délégation,
  penalties, a non contentious procedure before
  going to any Courts and a description of events
  giving rise to termination
• Non compulsory provisions can be summarized as
  follows periodic review of the service,
  recourse to arbitration and securities on
  reversionary assets.

6
COMPARING PPPs IN MOROCCO?

• The bill of Law 54-05 originally provided for a
  compulsory pre-feasibility study (as per
  Ordonnance dated June 14th, 2004 in France) to be
  completed before a public service be executed
  trough a délégation de service public
• This study had to assess from a legal, economical
  and financial perspectives the potential outcomes
  of the Project and in particular the amount of
  expected investments, risks transfer and
  allocation
• Draft law also suggested to establish an
  appraisal and financial projections without
  providing fore more clarifications

7
COMPARING PPPs IN MOROCCO?

• For local authorities, decision to launch a
  project delegation was subject to obtaining first
  the prior approval of Commission Consultative de
  Gestion Déléguée des Services Publics Locaux
• None of these provisions are maintained in the
  current Law
• Note that Decree date February, 5th 2007 ruling
  Procurement Rules Laws invites the public entity
  before setting up any call for tenders or
  negotiation to define as clearly as possible the
  needs and specifications for the concerned
  project as well as an appraisal of costs of the
  project.

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Contact(s) Hugues.delaforge_at_gide.com

Naciri Associés En collaboration avec Gide
Loyrette Nouel 63, bd Moulay Youssef 2000
Casablanca Tel [phone] Tel
212 (0) 22 27 30 16 E-mail gln.casablanca_at_gide.c
om www.gide.com