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INDUSTRY AND MARKETS Skikda Industrial Accident Underscores Algeria's Need to Review its Safety and Environmental Policies The recent explosion that rocked the gas complex of Skikda generated an intense debate about the safety of industrial sites in Algeria, the most important of which is the industrial zone of Arzew in Algeria. The Arzew site was established as Algeria began to develop its petroleum sector and overall industrial base in the early 1960s. Arzew is a vast industrial complex located on an important Mediterranean shipping port in northwestern Algeria. This industrial hub is based on 2,500 hectares of land and employs 18,000 workers. The complex is home of three natural gas liquefaction (LNG) units called GL1/Z, GL2/Z, and GL4/Z, which produce 17.3 million, 17.5 million, and 2.4 millions cubic meters of LNG, respectively. In addition to these three units are two large facilities, GP1/Z and GP2/Z, which produce respectively 7.2 million and 2.5 million tons of liquefied petroleum gas (LPG). There is also a crude oil refinery with a capacity of handling 48,000 barrels of crude oil per day. The Arzew industrial site also incorporates petrochemical activities with the production of 2,000 tons per day of ammoniac-based fertilizers, a helium gas plant, a methanol complex, a synthetic resin plant producing 100,000 tons per year, an industrial gas plant, and a variety of peripheral infrastructure and industries. All of these industrial facilities represent undoubtedly strategic centers for the Algerian economy. But despite this dense industrial infrastructure developed since the country's independence, the country's industrial policy failed to translate this base into wealth creation and social development, at least to benefit the urban centers and villages surrounding the Arzew industrial zone. The needs to develop the industrial sector often came at the expense of balanced social and territorial growth. Indeed, in the case of Arzew, the industrial complex consumes 20% of the municipalities of Arzew, Bethioua, Mers El-Hadjadj and Ain El-Bya combined. These regions have lost valuable agricultural land to accommodate decades of an industrial policy that was considered the only way to grow the economy. As a consequence, in the region of Arzew, fast industrialization led to important and often negative mutations on the region's environment, farming activities, health, employment profile and tourism, directly affecting the lives of the 120,000 people living there. Furthermore, the Arzew complex is unique and different compared to the traditional form of industrial zone in that its strategic role in the national economy gives it virtually additional rights not seen elsewhere. For example, it is virtually impossible to draw boundaries and limits as both industrial facilities and urban centers overlap. Public areas are intertwined with factories in an environment that is making safety experts worry about the consequences of a potential industrial accident, as it recently happened in Skikda. Their worries are further compounded by the series of explosions recorded in 2003 due to the use of older equipment, and the pollution that comes from untreated chemical waste. Because of the old equipment used in Arzew, Algeria and its state-owned oil company Sonatrach spend $30 million each year in the maintenance bill. Another major source of risk is the use since 1965 within GL4/Z of an underground LNG storage reservoir, which is the only one in the world. The reservoir is gigantic and accounts for half of the LNG stored in GL4/Z. A recent report from safety firm CNTS reveals that the storage is showing signs of decay. Although undergoing an upgrade, a list of troubled spots in the reservoir has been drawn, which points to the need to take emergency actions or risk a potential accident. The situation is even more alarming given the proximity of the urban center and populated areas. The Arzew industrial pole comprises of a series of infrastructure and facilities that link all the region's plants and factories in an intricate web. Because of this complicated system, a accident that would occur on one end, would affect the rest of the system with potential damage to the industrial infrastructure and the civilian areas. Any disruption in one facility could lead to an instantaneous disruption in the whole industrial complex. Because Arzew is not a traditional industrial zone, officials are now confronted with the lack of a now much needed security perimeter. Safety experts are concern that an industrial accident could lead to the release of dangerous gases that would spread over a 6 kilometer radius. Some experts say gas emissions would affect the entire territories of the municipalities of Arzew, El Mahgoun, Ain El-Bya, Bethioua and the entire Sonatrach village. Experts also worry about the release of waste water into the sea. Some 34,000 cubic meters of waste water are released into the Mediterranean sea every day, with the most toxic ones coming from Bethioua and Ain El-Bya because they are not treated. An analysis from the Biology Institute of Oran found that the bay of Arzew boasts high levels of mercury, copper and zinc. Industrial gas releases are also sources of atmospheric pollution. The medical community in the area noticed an increase of cases of asthma and other respiratory illnesses. The outcome of the Skikda accident, with a large death toll and the interruption of business, and with losses estimated at hundreds of millions of dollars, Algerian officials must review their industrial safety plans to insure greater security and business continuity. ------------------------- Law and Industry
In their brief, Tradicran lawyers listed a series of complaints including fraud, embezzlement and non-payment of debts valued at tens of millions dollars. This affair is yet another indication that the wheat trading sector in Morocco is dominated by illegal operations and unethical practices. Based on the documents filed by Tradicran lawyers at the Brigade Economique et Financiere, or the special police brigade of Casa-Anfa, which focuses on financial crimes, the affair concerns the use of falsafied documents and the defrauding of millions of dollars. The affair began in 1997 when a group of mill operators were organized into a single corporate entity under the leadership of Ghali Sebti to establish the Cerelex company. Sebti was then the most powerful cereal broker in the country in that he also ran the miller association, in a country where wheat is a dominant part of the households daily meals. Cerelex core business has been the importation of wheat to benefit the
members of the corporation. The city of Casablanca was chosen to host
the headquarters of the company, partly because of the quality of its
seaport. With Cerelex, the Casablanca port soon became a magnet to crago
ships, turning the trade of wheat and other cereals as a very profitable
business for those involved. Almost everyone fared well. The Moroccan
importers turned to loans to finance their purchases, promising to pay
their debts, and the Swiss suppliers trusted the system abd believed they
would get paid because the 16 members of Cerelex were at that point well-known
within Morocco as trustworthy and worth doing business with. Furthermore,
one of the key partners in the corporation was Ghali Sebti, the former
head of the powerful association of mill companies. Sebti's presence created
a great deal of trust among suppliers given his influence, but instead
they fell into a trap that cost them large sums of money. Indeed Sebti
exhorted a lot power in the Moroccan cereal market in that he controlled
all aspects of the cereal channel both upstream and downstream. A partnership
agreement was signed between the two parties, with the primary element
of the contract would be that the Moroccan corporation will buy exclusively
from the Swiss trading firm. In exchange, the Moroccan mill owners will
get a commission once the merchandise is delivered and enough time to
pay their invoice. When the scandal related to the wheat association became national news, the main figure, Ghali Sebti, was nowhere to be found and appeared to have escaped, leaving behind him stacks of unpaid bills owed to a number of suppliers and service providers. That was in December of 2001, a date that marked the beginning of the trial of the millers association before a special court of justice. With the beginning of the trial of the wheat importers association, the members of the Cerelex board began to panic and decided to dissolve their company even as the key figure, Ghali Sebti, was missing. In suspension of payment, the remaining board members of Cerelex halted their company's activities and ordered a mass layoff. Meanwhile, Tradicran began to reach out to some of the leadership of Cerelex in an effort to recover its money, when it attempted to contact Hamdi Mustafa, the company's president and Kamal Ait Bouabid, its managing director. But the efforts failed leading to a worsening of the case and the inability of the two parties to solve their differences. This is because Cerelex management was also the target of a government probe in relations to the miller association. Without a counterpart at Cerelex, Tradicran quickly filed a complaint before the Casablanca commercial court, which ordered legal proceedings. Other tribunals in Morocco were also involved, including that of Casa-Anfa, which decided to involve the special economic police to investigate the case. As of today, the brigade continues its investigation, and interviewed a number of Cerelex directors. According to well-informed sources, the complaint centers around alleged fraudulent bankruptcy, also allegedly provoked by Cerelex officials. These officials are also said to be the primary holders of the debts contracted with Tradicran. According to the civil and criminal complaints filed in Moroccan courts, all of the main directors of Cerelex made purchases under their own names on behalf of Cerelex, which has been in suspension of payment since 2000. The quantities of wheat purchased by the directors were large and were marketed and distributed using their own names. Because of their involvement and scheme, the Moroccan wheat market was at a certain point flooded with unpaid Swiss wheat, which apparently benefited only a handful of individuals. It is a highly opaque and non-transparent industry that led to this large scale fraud. The sector of wheat import and distribution has been monopolistic, to say the least given the fact that Sebti and his partners loacked it. The debts related to this affair are said to have reached DH 109 million or some $10 million. According to sources, the directors of Cerelex have even used their company's capital for their own use, with a total amount estimated at DH 40 million. This has led to the bankruptcy of their firm. The directors of Cerelex are now accused of embezzlement of funds, which were transferred to foreign offshore bank accounts. Tradicran estimates that some $2.4 million were moved to foreign banks. Sources also name a company called Realtor Associates Limited, a Bahamas-based firm and eight other companies as having received money via another offshore company called Nuffton Properties Limited, headquartered in Tortola, British Virginia Island. The complaint filed in court also included the disappearance of another $2.4 million though 12 wheat purchase contracts. There are also a variety of other contracts that made the value of the overall scheme in the tens of millions of dollars. The victims in the scheme were primarily Tradicran and a number of Moroccan banks. But the troubles facing the millers and Cerelex do not originate only from Tradicran, as now the Moroccan customs service also joined the offensive against the millers. The customs service primary issue is the failure of the defendants to repatriate their hard currencies back to Morocco, as the law requires it. The ability of the defendants to move larges sums of dollars abroad almost without official monitoring is sign of a fast liberalization process that has failed to put in place all of the safeguards necessary to avoid similar situations. The liberalization of the sector brought important changes in the distribution and import of cereal products in Morocco. As part of the liberalization of the sector, free competition replaced the more controlled process whereby the official cereal authority ONICL chose intermediaries through the required call for competition for the purpose of importing cereal products during times of shortage or low inventory. But the new system was ill prepared to deal with all aspects of trading and loopholes were discovered in that not only benefited a few but also put tens of thousands of Moroccan farmers out of business as foreign cereal flooded the market. Domestic production of cereal suffered the most, as a result, particularly when the prices of cereal abroad began to decrease. This trend has harmed the entire chain of the cereal sector, from farmers and producers to their cooperatives and merchants. With growing volumes of foreign cereal entering Morocco, tens of thousands of tons of Moroccan cereal perished because they could not find buyers. The primary beneficiaries of this phenomenon now appear to be a handful of millers, many of whom are currently waiting for potential long-term jail sentences. These men sought to control an entire industry, from the importation, production, processing, sales and even re-exportation. And it is only today that the full extent and scale of their illegal schemes are becoming evident. It is only recently that Ghali Sebti surrendered voluntarily to authorities when he returned from a trip aboard. Before his arrest, he was sentenced 15 years in prison in absentia for his role in the association but was released on bail. The Tradicran affair adds more difficulties to the already troubled Sebti. Before Tradicran, the ministries of agriculture and justice have already lodged a series of damaging complaints against him and his associates as early as 1997. The government found that Sabti and associates embezzled funds that were normally to be used in the context of state subsidy to the industry and to consumers alike, as well as part of the annual compensation the state pays to millers to allow them to remain afloat and compete. Some millers who have learned of the activities of the association say the money was channeled to other business activities that were not subsidized by the government and to benefit the businesses owned by those currently in jail, such as funding business activities that generate higher added value. It is now increasingly evident that a great amount of the money earmarked by the government to subsidize millers has gone to private hands rather than to benefit the industry as a whole and consumers as well. May be this scandal will push the government establish more efficient law enforcement mechanisms ------------------------- Airlines The French airline carrier Corsair, a unit of TUI, began servicing this
week the Moroccan city of Fez from Paris, France. The airliner has set
up a twice weekly service between the two cities to accompany current
tourist demand for the destination and its future growth. TUI is a German
tour operator, considered the world's second largest travel group. The
company operates 92 aircraft of 360 seats, 280 hotels, and 3,700 branch
offices. Industry/Telecom Industrial firm SITEL or Société Industrielle Algérienne de Télécommunications, will produce the first "Made in Algeria" mobile phones starting in February 2004. The phone will be produced in partnership with Ericsson, using the Swedish company's technology. The manufacturing plant involved in this project is based in the western city of Tlemcen. Although he has not commented on pricing, the head of SITEL, Mr. Amine
Baghli, said similar phones are sold between AD 10,000 and AD 12,000 a
unit, while hinting that his product will be more competitive. Infrastructure/Relations Algerian transport officials reported that the French government would be willing to contribute to the financing of the construction of the subway metro system in the capital Algiers. The information was later confirmed by the French transport minister Gilles de Robien, who announced that France would provide financing and engineering work, in particular in the area of electrification and power supply and in the acquisition of heavy equipment. According to the plan, the first section of the subway is expected to be delivered and operational in 2007. This first section is being built by the Algerian construction firm Cosider and a German contractor. It is to note that French companies appear to be siding with the Algerian
government in an effort to ask the French authorities to convert part
of Algeria's debt into investments. The support for this initiative comes
from the powerful French corporate association, Mouvement des Entreprises
de France or MEDEF, which will apparently lobby the French government
so as to consolidate its position in Algeria. Construction Turkish companies have been hired to build 5,000 housing units in Morocco. The construction of the houses will be funded by the state and will also involve Moroccan contractors. The two countries agreed to collaborate on the construction of 100,000 houses and other lodging facilities that would be partly used to accommodate the growth of the tourism sector. Turkish companies are targeting the Moroccan construction market as the
two countries a free-trade zone. Among the projects being considered by
the Turks is a 1,500-kilometer highway to be completed by 2010. The Italian automaker FIAT slashed its activities in Morocco after it halted its involvement in the assembly business there. But FIAT is not yet willing to completely withdraw from Morocco and plans to continue selling cars that it will import instead. FIAT's venture in Morocco has been critical in launching an auto assembly industry in the North African country. In 1994, when the state-owned Somaca assembly company was about to go bankrupt, Morocco imported nearly 100,000 vehicles per year from Europ, with just about 10% representing new vehicles and the remaining were used cars. The cost of acquiring a vehicle was prohibited by extremely high custom taxes, and the establishment of an auto assembly business appeared to be the main idea industrial policy makers had in an effort to protect the domestic market and develop a local industry. With the launch of an assembly business, legislators also liberalized the import of new automobiles while tightening the rules for the import of used cars. With an assembly business and simplified import procedures came the development of a denser distribution channel and better-structured sales organizations. FIAT was chosen as the driver of the assembly business in Morocco in a contract that linked it to the government, which was slated to expire in 2003. When the agreement expired in December 2003, it was not renewed because
of a number of reasons that affected the outcome of the negotiations between
the state of Morocco and FIAT. The biggest such obstacles was FIAT's own
financial troubles. Indeed, FIAT was in no way able to support any activity
in Morocco precisely because it has no money. Although FIAT was among
the most successful automakers a decade ago, it now has a spiraling debt
estimated at $6 billion. As the Moroccan government eliminated FIAT's exclusivity on assembly by allowing Renault's involvement, FIAT decided not to renew its contract. The Moroccan decision to allow others to assemble cars was considered by many Italian executives as a "transgression to the spirit of the 1995/1996 agreements." What's Next for FIAT? The future of FIAT as a global company remains uncertain. It can be saved by GM or the Italian government or it can simply disappear. Despite the uncertain future, FIAT officials in Morocco say they intend to continue to do business there. Some 86,000 FIAT cars are currently in circulation in Morocco, a number they say should be further boosted. But the trends and events in the Moroccan market are not encouraging. Already a number of distributors in Casablanca, Tangier and Beni Mellal have decided to discontinue their relationship with FIAT and sales are expected to further slide in 2004. Although aware that sales will decline in 2004, FIAT executives are convinced their company will be profitable in Morocco. But they are also aware a restructuring of their organization, albeit painful, is necessary . FIAT Maroc intends to import three models, the Uno, Palio and Siena,
all of which will originate from Brazil, where FIAT has a manufacturing
plant producing 350,000 vehicles a year. Other models to be marketed in
Morocco will include the Panda, Idea, and redesigned Punto Stilo, models
produced in Italy proper. In terms of pricing, Moroccan buyers should expect a 10% increase in
the base price before taxes. Those interested in leasing will not see
any major increase, which is expected to be minimal. U.S.Export-Import Bank Loan for Power Project in Eastern Algeria The U.S. Ex-Im Bank, an independent federal agency that guarantees U.S. exports worldwide, approved a $192 million loan for Shariket Kahraba Skikda (SKS) for the construction of an 825-megawatt power plant in the Algerian eastern city of Skikda. The North American company involved in this project is the Redmond, Washington-based subsidiary of the Canadian SNC Lavalin, which will supply construction expertise and services and will export General Electric gas-fired turbines as part of this project. SKS is a joint venture company established by Algeria's state-owned petroleum company Sonatrach and utility firm Sonelgaz. The lender is Societe Generale of New York, N.Y., which received a 12-year guarantee from Ex-Im Bank. The U.S. Ex-Im Bank has more than $840 million in exposure in Algeria. Morocco - SMBs Morocco's small and medium-sized businesses (SMBs) apparently have a plethora of funding sources to finance their modernization and upgrades, but not enough SMBs tap into those funds because not too many companies are even aware of their existence. Indeed there are various funds, including Fortex, Renovotel, Foman, Man, the certification fund and many others. With DH 100 million, Fortex provides financing to companies operating in the textiles and garment industries. The money is used to support company-structuring efforts in preparation for the launch of the Morocco-EU free trade zone. Renovotel, for its part, targets existing hotel infrastructures through a state-bank co financing program valued at DH 200 million. The third biggest fund is called Foman. It is used to support companies through local consulting and helps co-finance investment on equipment in partnership with private and public banks. Man is another fund that SMBs can use to improve their industrial competitiveness
in face of rising competition from foreign companies. Beverage Market In early April 2003, the executives at the Moroccan unit projected 2003 revenue of Dh 120 to 150 million. But instead Mathlouti revealed that the company would announce losses of up to DH 10 million, including a credit of 350,000 euros loaned by the parent company, allegations that have been refuted by the Moroccan partner. A legal action is likely to be taken by Mecca-Cola against its Moroccan business partners, who are accused of embezzlement and mismanagement. The 350,000-euro loan granted early on represented 110,000 euros in cash and the remaining in form of merchandise with some 40 containers carrying the beverage. Mecca-Cola alleges that it has not been paid by its Moroccan affiliate. To recall, Mecca-Cola is a brand registered in France. It was created by Mathlouti, a French national of Tunisian origin. Makhlouti's product was first launched in November 2002 in France and in some other European markets. The launch was an overnight success and attracted a great deal of media attention, including coverage from French newspaper Le Monde and American cable news network CNN. Driven by his religious fervor and his anti-western and anti-Israeli convictions, the trained lawyer Mathlouti first attempted to do business with the Iranian Zam-Zam Cola, seeking to open a franchise in France. In an interview given to Le Monde newspaper on February 4, 2003, Mathlouti says "all I wanted was to be the representative of that brand and make it more popular." But Mathlouti never heard from the owners of Zam-Zam, in spite of various attempts to reach them. Convinced that his Zam-Zam efforts were not productive, he decided to go it alone. He established a soda's chemical composition, set up a website and protected the brand name. With his own funds of about $22,000, he set up the Mecca-Cola Beverages Company. In spite of difficulties to find producing partners, his brand eventually took off with three million bottles of one-and-a-half liter sold in a few month period and with projections of up to 300 million bottles by December 2003. The success of Mecca-Cola in Europe astonished analysts and observers. None of them expected the brand to reach such success in less than a year activity. From Europe, Mecca-Cola decided to expand to markets where it expected
to find a more open and more politically attentive consumer base. Airlines (AFP) - Private Tunisian airline Nouvelair will from next month offer scheduled flights between the Mediterranean coastal city of Monastir, 160 kilometers (100 miles) south of Tunis, and London, an official at the carrier said Thursday. An Airbus A320 will ply the route once a week, on Sundays, for Nouvelair, which up until now operated charter flights between Tunisia and Britain. The scheduled flights will be introduced to meet increased demand from British holidaymakers, who visit Monastir year-round, said the airline. Tunisia has two private airlines -- Nouvelair and Carthago Airlines --
in addition to national carrier, Tunisair, which has a fleet of 30 aircraft
and carries 3.5 million air travellers annually. Industry Moroccan furniture maker Rochbond is to set up two production facilities during the course of 2004. The first industrial unit will produce materials to be used specifically in furniture and for upholstery purposes, while the second will be a mattress production unit. These two units will be integrated into the company's current production campus with a planned investment of DH 60 million. Richbond was established in 1964 and now has a dense distribution and
retail network, including stores in France, Belgium, the Netherlands,
Switzerland and Canada. The company expansion accompanied the growth of
the immigrant community in Europe, who originate from the Maghreb region.
The company employs 1,200 workers. Telecommunications Mobilis, a wholly-owned subsidiary of the Algerian state-owned telecommunications company Algerie Telecom, will issue its first batch of 60,000 pre-paid GSM lines in February and March 2004, with 40,000 to be distributed each month thereafter. Beginning July 2004, the operator of the Mobilis network plans to sell 200,000 lines, before adding one million customers in early 2005. According to Mustapha Achaibou, the Mobilis CEO, his company is preparing to accommodate two million subscribers in 2005. To help boost its business nationwide, Mobilis partnered with two major distributors, the Algerian postal service Algerie Poste, with the use of its 1,500 branches, and the private company Algerie KA. The SIM card will be sold at AD 5,800, all taxes included, which will come with 25 minutes of communication time to be used within 45 days of purchase. Subsequently, subscribers will have between 30 to 45 days to use the additional minutes they acquire for a spending of AD 1,000 and AD 2,000, respectively. Customers will have an additional 70 days to roll over their unused minutes. However, additional features will be charged as they are used, including checking voice mail at AD 6, checking the status of phone and minute usage at AD 6, and sending an SMS message also at AD 6. National calls are charged AD 20 per minute, all taxes included. Mobilis, which witnessed delays in receiving its GSM network infrastucture,
says it will employ 1,000 workers in the short term, as competition becomes
fiercer in the Algerian mobile phone market. Construction The Moroccan hotel and real estate group Risma raised DH 201.5 million during the last week of this year to fund its growth. The money raised will be reimbursed with shares and not with cash. The effort focused on institutional investors and was not open to individuals. The bulk of the money came from insurance companies, which provided half of the money. The Risma bond was priced at a fixed DH 135 and the company pledged it intends to list in the stock market in 2006. The French hotel firm Accor, which is Risma's largest shareholder with a 45% stake, contributed with DH 40 million, followed by Investment funds OPCVM with DH 34.8 million, and banks with DH 26 million. The money raised will be used to finance the company's growth in the
next two years. The company said it needs DH 510 million to successful
implement its growth plan, including the completion of the construction
of the Casa City Center, which will require DH 330 million. The company
plans to build a 300-room Ibis Hotel and a 250-room Novotel Hotel in a
major complex that would also include offices, a commercial center, and
parking. Work on this infrastructure will begin in February 2004 and is
scheduled to open two years later. Telecom The number of subscribers to the Algerian GSM mobile network operated by the Egyptian Orascom has reached 1.2 million at the end of the year 2003. The company has made a major push to raise its subscriber base, which was only 1 million in mid-September 2003, according to the company. Because there is virtually no competition, Orascom controls 88% share of the Algerian GSM market. Orascom has recently made a second installment toward the payment of the license to the Algerian government. The price of the license is $737 million. Infrastructure/Construction (AFP) - French engineering giant Bouygues has begun work to shore up
the Hassan II grand mosque in the Moroccan port city of Casablanca, which
threatens to fall down, L'Economiste daily reported Monday. The mosque is the biggest in the world after the one in the Muslim holy city of Mecca in Saudi Arabia. "The work will consist of reinforcing beams in the part of the Hassan II mosque that is exposed to the sea and has undergone a few structural changes," the city's urban planning department was quoted by L'Economiste as saying. The newspaper, which is close to the north African country's business leaders, said that the French construction firm and Moroccan insurance companies had been quarrelling over who should pay for expensive repairs. "By using expert assessments and counter-assessments, each kept passing the buck to the other," L'Economiste said. The work is expected to take three months. The threat to the mosque, which took six years to build, was first reported in 2000. Two years later, the city council dismissed "alarmist" press stories, stating that the only section of the building at risk was "part of the esplanade overhanging the sea". Signs of damage were "typical of all constructions subject to the physical and chemical aggression of the maritime environment and are the object of appropriate and permanent maintenance", the city council said. Also in 2002, L'Opinion said that 500 houses in the 18 poorest parts of town were at risk, where many families lived in a single room. Three people were killed and 15 injured when a building collapsed in the medina -- the fortified old town -- on November 7, 2002. The weekly Maroc Hebdo then said that a report on the risk to the mosque was said to have gone to the royal palace and to have recommended repairs worth 400 million dirhams (40 million euros / dollars). The cost of building the sumptuous mosque during the reign of King Mohammed VI's late father has never been disclosed, but it can accommodate some 25,000 people in its prayer hall and is also a major tourist attraction. It was in part paid for by a national subscription scheme which led to
a lot of criticism in the impoverished North African country. CDG Group Purchases Land from Defunct Sogeta and Sodea Morocco's CDG Group has acquired various sections of land previously owned by the defunct state-framing enterprises Sogeta and Sodea. The group acquired a total of 1,300 hectares of land for an investment worth DH 760 million. The land areas, which are located in Tangiers, Rabat, Casablanca and
Marrakech, will be used for various real estate development projects such
as the 60 hectares of land in Ain Aouda near Casablanca for the construction
of a housing complex. Information Technology/Telecom The year 2004 could be a banner year for the Internet in Morocco. The ministry of industry, commerce and telecommunications, which is the department in charge of the sector, selected 2004 to launch a nationwide marketing campaign aimed at boosting the use of Internet technologies. Although the details remain sketchy, Moroccan consumers and business will enjoy lower Internet access prices right from the beginning of the new year. Indeed, the telecom regulatory agency ANRT already authorized telecom firm Maroc Telecom to lower its tariffs and eliminate subscription fees effective January 1st. The new connection fee is now set to DH 12 per or about US$1.2. According to telecom minister Rachid Talbi Alami, this program is part of the government's strategic objective to liberalize the sector, in an effort spearheaded by the ministry. The minister argued that Morocco could be a major center for the Internet in Africa because it has "bandwidth capacity of 500 megabits per second." For this upcoming marketing effort, the primary targets are the country's households. Residential customers with Internet accounts represent less than 5% of the one million Internet subscribers in Morocco. This represents an insignificant market today because Internet access remains prohibited by high prices and lack of higher PC penetration. This rather sluggish market is what prompted ANRT and Maroc Telecom to scrap the subscription fee and announce a 40% reduction of the hourly access, now reduced to DH 12, all taxes included. This would bring the minute rate to DH 0.166 before tax. The tax taken by the government accounts for 17% of the DH 12. In addition, Maroc Telecom is revising its relationships with the 130
Internet service providers (ISPs) licensed to operate across the country.
Maroc Telecom will pay back ISPs 28% of the revenue they generate on behalf
of Maroc Telecom. ISPs will also benefit from deeper discounts for packages
they sell that include flat rates and unlimited evening and weekend usage.
The price points for these specific packages will be reduced by 41%. For
the period that are part of a monthly fee, unused minutes could now be
transferred to the following month. Similarly, ISPs will also receive price-based incentives with the cost of the 34 megabits/second IP transit reduced to DH 330,000 per month, down from DH 450,000. The all-inclusive package, which includes a desktop computer and Internet access currently priced at DH 3,750 will be lowered to DH 2,500 at the end of 2004. With these efforts, the government is hoping to double or even triple the number of residential subscribers. Some, at the telecom ministriesare even more bullish, talking about a target of three million subscribers by the end of 2004, a target that will be difficult to achieve without some wage increase. And while consumers are likely to be the winners in 2004, the prolific cybercafes are expected to loose ground. There are an estimated 2,500 cybercafes in Morocco, a number likely to decrease in the foreseeable future, as residential Internet access is more generalized and more affordable. This is despite the fact the hourly access in cybercafes is DH 10, or DH 2 below the new residential prices. |
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