Morocco has a long tradition of PPP projects, in particular in the form of delegating public service and the respective legal framework. Despite the absence of a specific PPP government policy, Morocco is developing PPP in many different fields and is adopting institutional changes while moving ahead in the development of PPP by trying to draw lessons from international experience and the expertise of the Directorate of Public Enterprises and Privatisation [Direction des Enterprises Publiques et de la Privatization] (DEPP) and the Directorate of Public Utilities and Concessions [Direction des Régies et des Services concédés] (DRSC).
The Law No 54-05 “Concerning contracts for the delegated management of public services or infrastructure as concluded by municipal authorities or public enterprises” (“Concession Law”) was enacted in 2006. It is based on Morocco’s past experience with similar projects. The scope of the Law is however expressly restricted to local communities and their associations, as well as to public enterprises.
The Law No 86-12 concerning partnership contracts for the PFI types of PPP based totally or partially on availability payments was passed in December 2014 (the “PPP Law”) to complete the range of PPP instruments. It is in operation, except at the municipal level, where the Concession Law remains applicable. This PPP Law should further contribute to the development of Non-Concession PPP in Morocco, as it notably sets forth a new principle of risk-sharing between the public partner and the selected candidate (in example - the private partner).
The PPP Law expressly integrates in its scope any legal person governed by public law, including the state.
The PPP Law is more advanced with respect to new requirements such as preparation and project selection as well as security arrangements.
The PPP Law is notably oriented to availability payments so that the scope of PPP models available is quite large. The only restriction to this wide scope is that user-fee based models fall within the scope of application of the Concession Law, which does not apply to government projects (i.e. without use fees), and that, conversely, the partnership contracts (PPP contracts) are not available for municipalities.
Especially concerning availability payments, the PPP Law provides that the candidate may be remunerated by the public entity, but also provides an alternative payment method through which the candidate will be remunerated by any third party or by profits generated by the activity being carried out. For the purposes of clear information, this is one of the most important differences from the French model, which provides for a government availability payment method only. Moreover, the selected candidate shall be subject to a performance obligation.
No red flag issues were identified.