Moroccan railway company to invest $520 million ahead of privatization
Morocco’s national railroad company, Office National des Chemins de Fer (ONCF), intends to borrow six billion Moroccan Dirhams ($520 million) early next year. The government is expected to guarantee this loan, which will be used to finance ambitious modernization plans, including renovating passengers stations, purchasing electric locomotives and carrying out railway extension projects. Most of the funds, however, will be pumped into retirement funds for employee compensation. Retirement fund deficits are considered the core obstacle to ONCF’s privatization program, reported Al-Hayat.
The state-owned ONCF will be restructured into a joint-stock public limited company, dubbed Societe Marocaine des Chemins de Fer, which will operate under the supervision of the Moroccan government. "As a public body, we don't have a lot of options when we need money. By becoming a public limited company...we'll be able to ask Moroccan or foreign institutions for funds… diversify our financing resources and pave the way for a possible privatization," ONCF Director General Karim Ghellab told Liberation daily. The privatization would not take place before ONCF's development plan ends in 2005.
In the 1990's the ONCF faced financial hardships, with Dh6.5 billion in debts and a four billion Dh deficit, leading to an 18 percent drop in the number of passengers by and 10 percent drop in merchandise transport. In a bid to overcome the crisis, the state pumped Dh700 million in funds and moved to raise the tariffs on phosphates transport by 26 percent.
As part of an ONCF campaign to improve its services and expand its network ahead of the planned liberalization, the company is investing Dh1.14 billion ($99 million) in upgrading a backbone link between the cities of Sidi Kacem and Meknes in the north. Work on the 54-kilometer long line is to be completed before the end of 2002, the official MAP news agency reported.
The project is hoped to relieve pressure on the Casablanca-Fes axis, which accounts for 70 percent of the country's railway traffic. ONCF will also purchase a new double-decker rolling stock that will increase line’s capacity from 250 to 400 passengers per train and shorten the service from 4.5 hours to 3.25 hours, beginning in 2004.
The company expects to transport some 12.9 million passengers and 27 million tons of freight in 2001. In 2000, the ONCF transported over 13 million passengers, 7.82 million tons of goods and 19.1 million tons of phosphates, earning the company over $170 million in revenues, according to official figures. Traveler’s traffic represents approximately 25 percent of ONCF’s receipts, while the carriage of phosphates represent 50 percent of receipts. The remaining 25 percent is earned by the transport of various goods.
Created in 1963, the ONCF is a public corporation, operating under the technical supervision of Morocco's Ministry for Transport and the Merchant Marine and under the financial supervision of the Ministry for Economy and Finance. The country’s railroad network is laid out as a corridor linking Marrakech to Oujda with branches serving Tangiers, Safi, Oued Zem, Al-Jadida and Benguerir. However, the current network does not reach the larger southern part of Morocco.
ONCF employs 14,000 people and operates more than 1,900 kilometers of track, of which 20 percent are double way rails, and 100 train stations. Its rolling stock includes 117 main-line locomotives, 95 shunting locomotives, 14 train sets with three electric power cars, 414 passenger coaches and 7,381 freight wagons. — (menareport.com)
© 2001 Mena Report (www.menareport.com)