Moroccan Law on Public-Private Partnerships (PPPs) for Infrastructure

Morocco has undergone a significant legislative transformation to modernize its infrastructure and stimulate economic growth. Central to this strategy is the development of Public-Private Partnerships (PPPs). These arrangements allow the Moroccan state and local authorities to leverage the expertise and financing of the private sector to deliver essential public services and large-scale infrastructure projects.

The legal framework governing these partnerships is designed to ensure transparency, competition, and efficiency. Whether it involves transport, energy, or social infrastructure like healthcare, the Moroccan approach to PPPs is built on a rigorous selection process and a clear division of risks between the public and private partners.

The Legal Framework and Scope of PPPs

The primary legal basis for these partnerships is Law No. 86-12, as amended and supplemented by Law No. 46-18, which sets the general principles for PPP contracts. Additionally, specific decrees, such as those relating to local authorities (Jemaâtes), extend these mechanisms to regional and local levels.

According to Moroccan law, a PPP project must respond to a pre-defined need identified by the "Public Person" (the state, a local authority, or a public institution). Before a project can proceed as a PPP, it must undergo a mandatory "Preliminary Evaluation" (Évaluation Préalable). As per Article 2 of the relevant law, this evaluation must include:

• A comparative analysis against other forms of project delivery (such as traditional public procurement).
• An assessment of the project's complexity and total cost over the duration of the contract.
• A clear plan for risk sharing between the public and private sectors.
• An analysis of the expected performance levels and sustainability of the service.

This ensures that the PPP model is only chosen when it provides real value for money and superior service quality compared to standard public works contracts.

Rules of Participation and Eligibility

Moroccan law is strict regarding who can participate in the bidding process for PPPs. This is to ensure that only financially stable and ethically sound entities manage public infrastructure. According to Article 11 of the Decree concerning local authority PPPs, certain entities are strictly prohibited from participating, including:

• Persons or companies in a state of judicial liquidation.
• Persons in a state of judicial restructuring, unless they possess a specific authorization from a competent judicial authority to continue their activities.
• Entities that have been temporarily or permanently excluded from public bidding under Article 19 of the decree.
• Bidders who represent more than one candidate within the same competitive procedure.

A key requirement for the successful bidder (the "Adjudicataire") is the creation of a "Project Company." Under Article 10, the winner must form a company subject to Moroccan law, whose sole purpose is the execution of the specific PPP project. This ensures that the project's assets and liabilities are ring-fenced and governed by the Moroccan legal system.

Competition and Market Integrity

PPP contracts in Morocco are subject to the principles of free competition and price transparency. Law No. 104-12 on the Freedom of Prices and Competition applies to all natural or legal persons involved in the Moroccan market.

Article 1 of this law clarifies that its provisions apply to public legal entities when they act as economic operators rather than exercising administrative authority. This means that when the state enters the marketplace via a PPP, it must respect the rules of fair competition. This prevents monopolies and ensures that the selection of the private partner is based on merit, technical capability, and financial efficiency.

In specialized sectors like healthcare, Article 32 of the Law on the Practice of Medicine allows for PPPs to fill gaps in medical services. These partnerships are governed by specific conventions between the administration and private sector representatives, always remaining subject to the broader legislative framework for PPPs.

Financial Reporting and International Investment

Given that many infrastructure projects involve international investors and large-scale capital movements, Moroccan law integrates strict reporting requirements. Law No. 19.06 requires statistical declarations for all commercial and financial operations between residents and non-residents. This is vital for maintaining Morocco's balance of payments and monitoring the overall external financial position of the Kingdom.

For international investors, Morocco provides several guarantees. Investment disputes can often be settled through international mechanisms, such as those provided by the Arab Investment Guarantee Corporation or the International Centre for Settlement of Investment Disputes (ICSID), as referenced in Dahir No. 1.84 regarding mining investments. These protections make the Moroccan PPP market attractive for global infrastructure firms.

Conclusion and Key Takeaways

The Moroccan legal framework for Public-Private Partnerships is a sophisticated system that balances the need for private sector efficiency with the protection of the public interest. By requiring rigorous preliminary evaluations and the establishment of dedicated Moroccan project companies, the law ensures that infrastructure projects are sustainable and legally sound.

Key Takeaways:

• Mandatory Evaluation: Every PPP project must be justified by an evaluation showing it is more beneficial than traditional public procurement.
• Local Incorporation: The winner of a PPP contract must incorporate a specific company under Moroccan law dedicated solely to the project.
• Strict Eligibility: Companies in financial distress or those previously excluded for misconduct are barred from participation.
• Transparency: All PPPs are subject to Moroccan competition laws to ensure fair market practices.

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