FOR OFFICIAL USE ONLY Report No: RES38127 INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT RESTRUCTURING PAPER ON A PROPOSED PROGRAM RESTRUCTURING OF MOROCCO URBAN TRANSPORT PROJECT (P4R) APPROVED ON DECEMBER 9, 2015 TO THE KINGDOM OF MOROCCO Transport Global Practice Middle East And North Africa Region Regional Vice President: Ferid Belhaj Country Director: Marie Francoise Marie-Nelly Regional Director: Paul Noumba Um Practice Manager: Olivier P. Le Ber Task Team Leader(s): Ziad Salim EL Nakat, Nabil Samir The World Bank Morocco Urban Transport Project (P4R) (P149653) ABBREVIATIONS AND ACRONYMS DLI Disbursement-Linked Indicator GRM Grievance Redress Mechanism IBRD International Bank for Reconstruction and Development IP Implementation Progress ISR Implementation Status and Results Report IVA Independent Verification Agency M&E Monitoring and Evaluation MAD Moroccan Dirham MTR Mid-Term Review OPRC Operations Procurement Review Committee PDO Project Development Objective PforR Program-for-Results PMU Program Management Unit PPC Priority Program of Corridors TA Technical Assistance USD United States dollar The World Bank Morocco Urban Transport Project (P4R) (P149653) DATA SHEET (Morocco Urban Transport Project (P4R) - P149653) BASIC DATA Project ID Financing Instrument IPF Component Program-for-Results Financing No Approval Date Current Closing Date 09-Dec-2015 30-Jun-2020 Organizations Borrower Responsible Agency Ministry of Interior - General Directorate for Local Kingdom of Morocco Government Program Development Objective(s) The Program Development Objective is to strengthen the capacity of urban transport institutions to plan, implement and monitor infrastructure and services, and to improve the level of service of urban transport in targeted corridors in the program area. OPS_TABLE_PDO_CURRENTPDO Summary Status of Financing Net Approval Effectiveness Closing Ln/Cr/TF Signing Date Commitment Disbursed Undisbursed Date Date Date IBRD-85600 09-Dec-2015 21-Dec-2015 15-Jan-2016 30-Jun-2020 200.00 163.50 36.50 Policy Waiver(s) Does the Program require any waivers of Bank policies applicable to Program-for-Results operations? No Page 1 of 15 The World Bank Morocco Urban Transport Project (P4R) (P149653) I. PROGRAM STATUS AND RATIONALE FOR RESTRUCTURING PROGRAM STATUS 1. Overall status. The Morocco Urban Transport Program PforR (“the Program”, the “Project” or “the PforR”) was approved in December 9th, 2015 for a total amount of USD 200 million from the International Bank for Reconstruction and Development (IBRD). The Program became effective in January 15th, 2016 and has since been under implementation. 2. Progress towards PDO and IP. As of June 3rd, 2019 (date of the latest ISR), progress towards achievement of the Program Development Objective (PDO) and overall Implementation Progress (IP) are both rated Moderately Satisfactory. The Project has disbursed 82 percent of the IBRD loan amount (USD 163.50 million out of USD 200 million) including advances. 3. Mid-Term Review. The Mid-Term Review (MTR) of the Project was carried out in April 2019. The Government confirmed that the PDO remains relevant to contribute to improve urban transport by enhancing the access of citizens to social services and economic opportunities and fostering urban economic development, through strengthened institutions and improved infrastructure and services. In order to ensure proper and swift finalization of the implementation of the Program and achieve its intended objectives and results, the following actions were recommended:  Extending the Program closing date to enable the achievement of the specific results measured by Disbursement-Linked Indicators (DLI) 6 and 7;  Strengthening the capacity of the Division of Urban Mobility and Transport of the Ministry of Interior as Program Management Unit (PMU) and other relevant actors of the Program (including participating municipalities), including through the mobilization of additional technical assistance, in terms of: o Technical aspects, including in terms of steering, monitoring and evaluation of the sector (particularly through the central M&E system for the sector) and operational expertise needed to support the implementation of the Priority Program of Corridors (PPC) supported by DLI#6 and DLI#7 of the PforR; o Fiduciary aspects (including financial reporting, monitoring and coordination and procurement as well as continuing to strengthen fiduciary grievance redress mechanisms - GRMs); o Social and environmental aspects (including continuing to strengthen relevant GRMs).  Harmonizing the procurement threshold for the Program with the most recent IBRD’s Operations Procurement Review Committee (OPRC) thresholds to enable the inclusion of additional eligible activities for Program financing.  Improving the coordination of the various stakeholders of the Program both at the central and local level, including to ensure a more direct and swifter flow of funds to subprojects.  Mobilizing additional financial resources for the sector at the national and regional level. 4. Subprogram 1 - Strengthening of the sector’s institutions (USD 104.5 million). This Subprogram covers DLI#1, DLI#3, DLI#4, and DLI#5. The disbursement rate of this Subprogram is on track to reach 100 percent by the original closing date of the Project (with additional efforts for DLI#5). 5. DLI #1 - Strengthened M&E system for the urban transport sector (USD 24.5 million). Based on the verified achievement of results1, two disbursements for a total of USD 9.5 million in 2016 and 2018 have been carried out for this DLI. An additional disbursement for results2 of USD 10 million has been carried out in August 2019 following the satisfactory conclusion of the verification mission of the Independent Verification Agency (IVA) of the Program. The disbursement rate of this DLI that is progressing satisfactorily is on track to reach 100 percent by the original closing date of the Project. 1 A strengthened central computer-based M&E system for the sector has been designed, installed, tested and implemented in 3 cities. 2 The strengthened M&E system for the sector has been reviewed and implemented in 3 additional cities. Page 2 of 15 The World Bank Morocco Urban Transport Project (P4R) (P149653) 6. DLI #3 - Number of operational associations of urban agglomerations (USD 25 million). Based on the verified achievement of results (in Greater Agadir and Greater Casablanca), two disbursements for a total of USD 16.67 million have been carried out in 2016 and 2017 for this DLI. An additional disbursement for results (in Greater Rabat) of USD 8.33 million has been carried out in August 2019, as confirmed by the above-mentioned verification mission. The disbursement rate of this DLI, that is progressing satisfactorily, has already reached 100 percent, close to one year before the original closing date of the Project. 7. DLI#4 - Number of urban mobility master plans prepared using a structured process and a participatory approach (USD 30 million). Two disbursements for achieved results (in Agadir, Oujda and El Jadida) for a total of USD 22.5 million have been carried out in 2016 and 2017 for this DLI. An additional disbursement for results (in Fès) of USD 7.5 million has been carried out in August 2019, as confirmed by the above-mentioned verification mission. The disbursement rate of this DLI, that is progressing satisfactorily, has already reached 100 percent, close to one year before the original closing date of the Project. 8. DLI#5 - Number of operational municipally-owned urban transport enterprises (25 million). While no disbursement has been carried out yet for this DLI, progress has been achieved in the operationalization of such entities in several cities, notably Agadir, Marrakesh, Fès, and Khouribga, which should be confirmed by the next verification mission to be carried out by the IVA. The disbursement rate of this DLI, that is progressing moderately satisfactorily, is on track to reach 100 percent before the original closing date of the Project with additional efforts from the relevant counterparts. 9. Subprogram 2 - Strengthening of the sector’s sustainable financing mechanism (USD 35 million). This Subprogram covers DLI#2. The disbursement rate of this Subprogram is on track to reach 100 percent by the original closing date of the Project. 10. DLI #2 - Strengthened Urban Transport Fund (35 million). Two disbursements for achieved results3 for a total of USD 25 million have been carried out in 2017 and 2018 for this DLI. An additional disbursement for results4 of USD 5 million has been carried out in August 2019, as confirmed by the above-mentioned verification mission. The disbursement rate of this DLI, that is progressing satisfactorily, is on track to reach 100 percent before the original closing date of the Project. 11. Subprogram 3 - Development of urban transport corridors to improve access of citizens to economic opportunities and social services (USD 60 million). This Subprogram covers DLI#6 and DLI#7. The disbursement rate of this Subprogram is anticipated to reach 100 percent with the proposed extension of original closing date of the Project and the adjustment of its procurement thresholds. 12. DLI#6 - Percentage of Priority Program of Corridors completed and open to traffic (USD 30 million). A disbursement for achieved results (7.5 kilometers of bus lanes in Marrakesh) for a total of USD 8.5 million has been carried out in 2018 for this DLI. This indicator, while progressing more slowly than originally anticipated in its first half given the pilot nature of the works, is now showing tangible progress in several cities, particularly Rabat (with the support of the Rapid Results Initiative coordinated by the MNCO1 CMU) and Marrakesh, as mentioned in the latest ISR. DLI#6 disbursement rate is anticipated to reach 100 percent with the proposed extension of original closing date of the Project and the proposed adjustment of its procurement thresholds. 13. DLI#7 - Percentage of corridors in the Priority Program of Corridors supported under the Program that meet their objective in reduction of urban transport journey time (USD 30 million). While no disbursement has been carried out yet for this DLI, the progress achieved in the gradual implementation of bus lanes in various cities (as measured by DLI#6) should result, once completed, in journey time savings for users (as measured by this DLI) once new operators start operations or existing bus contracts have been amended when necessary. The disbursement rate of this DLI is anticipated to reach 100 percent with the proposed extension of original closing date of the Project. 3 The Urban Transport Fund have started to assume its intended functions after institutional and financial arrangements have defined and adopted. 4 The Urban Transport Fund has continued to assume its intended functions. Page 3 of 15 The World Bank Morocco Urban Transport Project (P4R) (P149653) 14. Fiduciary and legal aspects. As per the latest ISR date, the rating for Fiduciary Systems and Environmental and Social Systems is Satisfactory. The up-to-date audit reports received for the Project were deemed mostly satisfactory. RATIONALE FOR RESTRUCTURING 15. Official request. An official letter from the Borrower dated July 4th, 2019 requesting the restructuring of the Project has been received by the World Bank on July 8th, 2019. 16. Rationale. The proposed restructuring builds upon the recommendations of the MTR of the Program. The extension of closing date would allow for the completion of the achievement of the intended results of DLI#6 and DLI#7, enabling the Program to reach a 100 percent disbursement rate. As mentioned above, DLI#6 is now showing tangible progress through the progressive implementation of bus lanes in various cities in several cities, particularly Rabat (with the support of the Rapid Results Initiative coordinated by the MNC01 CMU) and Marrakesh. This progress measured by DLI#6 should result, once completed, in journey time savings for users in similar progress in DLI#7 (given their causal link) once new operators start operations or existing bus contracts have been amended when necessary. The proposed change in procurement thresholds would enable the inclusion of additional eligible activities for Program financing, particularly for DLI#6 and DLI#7. 17. In order to sustain this progress and ensure the finalization of the Program during the proposed additional implementation period, the following actions, recommended by the client in the context of the MTR have already started to be implemented by the Borrower with the support of the World Bank and other development partners and will continue to do so, including in the context of the Rapid Results Initiative:  Provision of regular capacity activities to the various actors of the Program (including participating municipalities) in technical, fiduciary and social and environmental matters;  Mobilization of the required international expertise to support the implementation at the local level of bus lanes as pilot initiatives;  Thorough follow-up with the Program stakeholders, through frequent missions, meetings, video-conferences and workshops, of the activities linked to DLI#6 and DLI#7 to improve coordination, communication and accountability, including to ensure a more direct and swifter flow of funds to subprojects. The most critical activities in this regard include the finalization, operationalization or improvement of bus lanes and the renewal, extension or amendment of bus concessions in Greater Rabat, Casablanca and Marrakesh. Page 4 of 15 The World Bank Morocco Urban Transport Project (P4R) (P149653) II. DESCRIPTION OF PROPOSED CHANGES 18. Change in Loan Closing Date. The Program team proposes to extend the Program closing date by 12 months from June 30th, 2020 to June 30th, 2021. 19. Change in Implementation Schedule and Disbursement Estimates. The team proposes to modify the Implementation Schedule and Disbursement Estimates of the Project in line with the proposed change in Loan Closing Date. 20. Other Changes. At the request of the Borrower, in order to facilitate the achievement of DLI#6 and DLI#7, and in line with more recently approved PforRs in Morocco, the team proposes expanding the procurement threshold of the Program to include, as eligible expenditures, contracts whose costs are or are expected to be (i) above the current procurement thresholds mentioned in the original Loan Agreement and (ii) below the current OPRC thresholds given the risk (Substantial) of the Project. The revised thresholds per contract proposed are USD 75 million for works, USD 50 million for goods, information technology and non-consulting services, and USD 20 million for consultants (firms)5. No particular adverse impact on fiduciary systems and risks is expected from the proposed change. The contracts that are proposed to be covered retroactively (above the current threshold and below the revised ORPC threshold) were procured competitively as per Government procurement regulations. This proposed change would apply starting January 1st, 2019 and would entail an amendment to the Loan Agreement to modify Section II.B of Schedule 2 on Excluded Activities. 5For reference, the original thresholds per contract are USD 50 million for works, USD 30 million for goods, USD 20 million for non- consulting services and 15 million for consultants’ services. Page 5 of 15 The World Bank Morocco Urban Transport Project (P4R) (P149653) III. SUMMARY OF CHANGES Changed Not Changed Change in Loan Closing Date(s) ✔ Change in Disbursement Estimates ✔ Change in Implementation Schedule ✔ Other Change(s) ✔ Change in Implementing Agency ✔ Change in Program's Development Objectives ✔ Change in Program Scope ✔ Change in Results Framework ✔ Change in Cancellations Proposed ✔ Reallocation between and/or Change in DLI ✔ Change in Disbursements Arrangements ✔ Change in Systematic Operations Risk-Rating Tool ✔ (SORT) Change in Safeguard Policies Triggered ✔ Change in Legal Covenants ✔ Change in Institutional Arrangements ✔ IV. DETAILED CHANGE(S) OPS_DETAILEDCHANGES_LOANCLOSING_TABLE LOAN CLOSING DATE(S) Original Revised Proposed Proposed Deadline Ln/Cr/TF Status Closing Date Closing(s) Date Closing Date for Withdrawal Applications IBRD-85600 Effective 30-Jun-2020 30-Jun-2021 30-Oct-2021 Page 6 of 15 The World Bank Morocco Urban Transport Project (P4R) (P149653) OPS_DETAILEDCHANGES_DISBURSEMENT_TABLE DISBURSEMENT ESTIMATES Year Current Proposed 0000 0.00 0.00 2016 28,755,000.00 78,340,000.00 2017 51,247,499.99 25,830,000.00 2018 41,872,500.00 28,500,000.00 2019 0.00 30,830,000.00 2020 0.00 35,000,000.00 2021 0.00 1,500,000.00 2022 0.00 0.00 OPS_DETAILEDCHANGES_EA_TABLE . Page 7 of 15 The World Bank Morocco Urban Transport Project (P4R) (P149653) ANNEX 1: RESULTS FRAMEWORK . . Results framework Program Development Objectives(s) The Program Development Objective is to strengthen the capacity of urban transport institutions to plan, implement and monitor infrastructure and services, and to improve the level of service of urban transport in targeted corridors in the program area. Program Development Objective Indicators by Objectives/ Outcomes RESULT_FRAME_TBL_PDO Indicator Name DLI Baseline End Target Number of cities of more than 100,000 inhabitants that improved their institutional score Number of cities (with more than 100,000 inhabitants) that improved their urban transport institutional assessment score by 0.00 15.00 at least 10 percent (Number) Percentage of corridors supported by the Program that meet their objectives in terms of time saved Percentage of corridors in the Priority Program of Corridors supported under the Program that meet their objectives in 0.00 90.00 reduction of urban transport journey time (Percentage) PDO Table SPACE Page 8 of 15 The World Bank Morocco Urban Transport Project (P4R) (P149653) Intermediate Results Indicators by Result Areas RESULT_FRAME_TBL_IO Indicator Name DLI Baseline End Target Strengthened central capacity to plan and monitor urban transport Current M&E system is paper-based and limited in scope Revised M&E system has been implemented in at least 9 Strengthened M&E system for the urban transport sector (Text) and depth cities The Urban Transport Fund institutional and financial The Urban Transport Fund has continued to assume its Strengthened Urban Transport Fund (Text) arrangements are in place intended functions Strengthened local capacity to plan, implement and monitor urban transport Number of operational associations of urban agglomerations 0.00 3.00 (Number) Number of urban mobility master plans prepared using a 3.00 7.00 structured process and a participatory approach (Number) Number of operational municipality-owned urban transport 2.00 4.00 enterprises (Number) Improved level of service of urban transport on targeted corridors Percentage of Priority Program of Corridors completed and open 0.00 30.00 to traffic (Percentage) Percentage of corridors supported by Program that meet their 0.00 90.00 time saving objectives (Percentage) Direct Program beneficiaries (as a percentage of targets) 0.00 90.00 (Percentage) of which female (Percentage) 0.00 50.00 IO Table SPACE Page 9 of 15 The World Bank Morocco Urban Transport Project (P4R) (P149653) Disbursement Linked Indicators Matrix DLI IN00731228 ACTION DLI 1 Strenghtened M&E system for the urban transport sector Type of DLI Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount Process No Text 24.50 18.37 Period Value Allocated Amount (USD) Formula Current M&E system is paper-based and limited in Baseline scope and depth Prior Results 4.50 Implementation 20.00 DLI IN00731229 ACTION DLI 2 Strengthened Urban Transport Fund Type of DLI Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount Process No Text 35.00 28.57 Period Value Allocated Amount (USD) Formula The Urban Transport Fund’s institutional and Baseline financial arrangements are under preparation. Prior Results 10.00 Implementation 25.00 Page 10 of 15 The World Bank Morocco Urban Transport Project (P4R) (P149653) DLI IN00731230 ACTION DLI 3 Number of operational associations of urban aglomerations Type of DLI Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount Intermediate Outcome No Number 25.00 66.68 Period Value Allocated Amount (USD) Formula Baseline 0.00 Prior Results 0.00 8.34 Implementation 16.66 DLI IN00731231 ACTION DLI 4 Number of urban mobility masterplans prepared using a structured process and participatory approach Type of DLI Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount Output Yes Number 30.00 75.00 Period Value Allocated Amount (USD) Formula Baseline 3.00 Prior Results 0.00 15.00 Implementation 15.00 Page 11 of 15 The World Bank Morocco Urban Transport Project (P4R) (P149653) DLI IN00731232 ACTION DLI 5 Number of operational municipally-owned urban transport enterprises Type of DLI Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount Outcome No Number 25.00 50.00 Period Value Allocated Amount (USD) Formula Baseline 2.00 Prior Results 0.00 0.00 Implementation 25.00 DLI IN00731233 ACTION DLI 6 Percentage of Priority Program of Corridors completed and open to traffic Type of DLI Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount Outcome No Percentage 30.00 0.00 Period Value Allocated Amount (USD) Formula Baseline 0.00 Prior Results 0.00 0.00 Implementation 30.00 Page 12 of 15 The World Bank Morocco Urban Transport Project (P4R) (P149653) DLI IN00731234 ACTION Percentage of corridors in the Priority Program of Corridors supported under the Program that meet their objective in DLI 7 reduction of urban transport journey time Type of DLI Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount Outcome No Percentage 30.00 0.00 Period Value Allocated Amount (USD) Formula Baseline 0.00 Prior Results 0.00 0.00 Implementation 30.00 Page 13 of 15 The World Bank Morocco Urban Transport Project (P4R) (P149653) ANNEX 2: PROGRAM ACTION PLAN . . PAP_NOT_CHANGE_TBL Action Description Source DLI# Responsibility Timing Completion Measurement Identification, assessment, and recommendation, based on a structured analysis, of sustainable financial resources for the Urban Transport Fund in particular and the urban transport sector in general Client Due Date 31-Dec-2019 Development and dissemination of a The client is working on preparing methodological and finalizing it within the guide on urban framework of the technical mobility master assistance from "mobilize your plans for cities Technical Client Due Date 31-Dec-2018 city" Design and delivery of a capacity building program for municipalities in (i) project management applied to urban transport and (ii) preparation and management of urban transport concession and delegated services contracts Client Due Date 31-Dec-2017 Designation of focal points in participating cities to ensure monitoring and supervision of environmental and social aspects of the Program Client Due Date 31-Dec-2016 Preparation and dissemination of Client Due Date 31-Dec-2016 Page 14 of 15 The World Bank Morocco Urban Transport Project (P4R) (P149653) municipal technical guide for environmental and social management Select cities benefitted from TA Establishment, from the WB to improve their strengthening or systems. Meanwhile, most cities formalization of a are now improving their GRM social and processes to adhere to 2017 environmental decree which aligns the city level GRM by the Environmental and Social GRM with the well established participating cities Systems Client Due Date 31-Dec-2017 national level GRM. Design and delivery of capacity building activities in municipal environmental and social management Client Due Date 31-Dec-2017 Design and delivery of a fiduciary capacity building action plan for municipalities Client Due Date 31-Mar-2017 The roles and functions intended Operationalization for this committee have been of the central transferred to a well established Committee for national committee ("commission regional and Nationale de la Commande municipal Publique") which now deals with procurement national as well as regional and monitoring Fiduciary Systems Client Due Date 31-Dec-2016 local procurement monitoring. Select cities benefitted from TA Establishment, from the WB to improve their strengthening or systems. Meanwhile, most cities formalization of a are now improving their GRM municipal processes to adhere to 2017 fiduciary GRM decree which aligns the city level (including for GRM with the well established procurement) Fiduciary Systems Client Due Date 31-Dec-2017 national level GRM. . Page 15 of 15