Thomas White Global Investing
Morocco
Morocco Stamp
February 12, 2010
A Postcard from Africa
Morocco: New High-Speed Train Project Draws Mixed Reactions

Morocco high-speed trains

Morocco’s high-speed rail project is part of an understanding signed between King Mohammed VI and French President Nicholas Sarkozy.

Morocco is often known as the land of spices and scents, an extraordinary, bewildering mix of exoticism that has attracted travelers and traders for centuries. Yet, few would know that the country is one of the world’s fastest growing economies, expanding at a rate of 5.8% in the fourth quarter of 2009 even as many other countries collapsed under the strain of a recession. Morocco is young, brash, and confident, as evidenced by fresh plans for a massive $2.47 billion investment towards a high-speed train link between Tangier and the economic capital of Casablanca.

The new link is part of the government’s ambitious plans to upgrade its entire railway infrastructure at a cost of $4.04 billion. Work on the high-speed train project will begin in June this year, with the train link expected to become fully operational in December 2015. Partially funded by the state to the tune of $588 million, the project also receives funding from King Hassan II’s Fund for Economic and Social Development as well as loans and donations from France and other European countries.

What’s special about this train line? When functional, the train can cut travel times between the main cities of Casablanca and Tangier from five hours to just two. Right now, around two million people use the rail to travel between these two cities. The government expects that number to rise to around eight million passengers by 2016 and the tourism potential is clearly massive. France has long been the leader in building an efficient high-speed rail network or TGV (Train à Grande Vitesse) as it is known in French. The French connection is strong in Morocco with the National Railways Office believed to have signed an agreement with French railway operator, SNCF. Alstom and Bombardier are also whispered to be in the running. The project sounds promising, and the prospect of a high-speed rail between Casablanca and Tangier is tantalizing for tourists, traders and businessmen alike.

But, there are skeptics. The Fadaa al-Boughaz, Tangier’s leading national daily, criticized the project as a ‘luxury’ the country’s poor can ill afford. It argued that the huge funds set aside for the project would be better utilized for Morocco’s education or health sectors. It was a view echoed by Lahcen Daoudi, a leader in the Party of Justice and Development, who told Magharabia that the lower classes would feel ‘marginalized’ and questioned the benefits of such a train for the poor.

The government defends its pet project though, stating that the plan was given the go-ahead only after an extensive study on the socio-economic impact of the train. It believes that Morocco needs the modernization, the safety offered by the TGV, and the boost to the property market. It is already planning to ramp up its public works spending by 20% this year in order to beat the economic slowdown, despite the threat of a budget deficit. And there are additional high-speed trains in the offing – a new track between Tangier and Kenitra, and another between Marrakech to Casablanca, which will shrink journey time from over three hours to just an hour.

Clearly, these are exciting times for Morocco. One of Africa’s most stable economies is showing the way, and the world is waking up to the fact that Morocco is more than spice and mint tea – it is a country that one day may have a rail network to rival France.

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