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Hashemite Kingdom of Jordan – Ministry of Water and Irrigation

Agence Française de Développement – French Agency for Development

Marseille Center for Mediterranean Integration

Assessing the full cost and value of water in Morocco – AFD/SCP study results Dominique Rojat

Environment and Development of the Mediterranean


- Water Demand Management -

Assessing full cost and value of water for: - Prioritizing water supply options - Discussing water allocation

Presentation from an AFD-SCP study conducted in Morocco, Sept. 2007


Study Area

Water Resource Management Issues in the Tensift Basin (Marrakech region)

Agence Franç Française de Dé Développement - AFD

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The Tensift Basin Water resources and infrastructure

Al Massira

O. Lakhdar

Hassan 1er

Sidi Driss

Moulay Youssef O. Tessaout O. Zat

O. Rdat

Lalla Takerkoust O. Ourika Taskourt

Wirgane

O. N’Fis

Agence Franç Française de Dé Développement - AFD

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Water scarcity and future needs  Haouz Groundwater Table heavily overexploited (150%, -2m/year)  Dams: “off the limits”  Reduced capacity due to siltation (Lalla Takerkoust: only 30% of nominal capacity)  New investments hampered by increasing marginal costs  Rocade transfer Canal (from the neighboring Oum er Rbia basin):  Actual flow (125Mm3) less than half ‘Paper’ resource planning (350Mm3)  Domestic water uses now 60Mm3 vs. 40Mm3 planned (to the detriment of irrigation)  Recently: extra allocation of 20Mm3 for golf greens  Irrigation = adjustment variable:  got only 36% of the 310Mm3 ‘paper’ allocation over 1993-2005  In bad years, uses only 50% of water available

 Trend: OK for five years owing to Wirgane dam and Wastewater Reuse  More 100 to 600Mm3 needed by 2020 if tourism is to meet planned development  => What are the options? Agence Franç Française de Dé Développement - AFD

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Cost assessment of different water supply solutions (1) Comparaison des solutions d'approvisionnement en eau sur la

Comparison of water supply options based on tentative evaluation of the full cost of water des différentes composantes du coût total (DH/m3) (DH/m3base – 10 DH = 1 Euro) 16 14 12 Externalities Externalités

10

Coûts d'opportunité Opportunity costs

8

Fonctionnem ent O&M

6

Inves tis s em ent Investment

4 2

Agence Franç Française de Dé Développement - AFD

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Cost assessment of different water supply solutions (2)  Even operating and maintenance costs were not always assessed or estimated for lack of data  Only in a few cases was it possible to estimate opportunity costs and externalities  Still, ranking of water supply solutions based on cost/m3 is highly sensitive to those costs  The most costly solutions are found to be: transfer from Massira and desalination  The most cost-effective solutions are the WDM ones, i.e. water savings on existing infrastructure and networks  The cost-effectiveness of the WW Re-use solution is dependent on accounting for the informal sector opportunity costs i.e. farmers making illegal use of used water for irrigation Agence Franç Française de Dé Développement - AFD

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Water supply solutions matched with funding sources  Findings to be weighted considering funding sources associated to different solutions:  Dams to be State-funded  Transfer from Massira will be at ONEP’s expense as far as treated water is concerned  Irrigation water saving investments are subsidized at a 80% rate  Domestic water saving costs may not be fully born by users due to limits set to tariffs  WW Re-use and desalination offer PPP opportunities

 => shifting from full cost to public expenditure requirement may be appropriate from a public decision-making perspective  Other/new options still to be explored/developed: groundwater recharge, use of flooding water, conservation agriculture, law enforcement on water pumping, incentives to water saving, taxes on tourism activities, river/groundwater contracts, ITQs? Agence Franç Française de Dé Développement - AFD

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Assessing Value of Water in different uses Average value added by m3: agriculture vs. tourism Agriculture (Central Haouz irrigated areas): 1,1 to 9,4 DH/m3 - Private sector achieves a far better value for water -

Occupation du sol des périmètres alimentés par l'ORMVAH

Céréales (blé dur, blé tendre, orge) Oliviers Arboriculture

Tourism : 40 to 50 EUR/m3

Abricotiers Agrumes Divers

=> Ratio of 1 to 100

Fourrages

Cultures maraîchères

Agence Franç Française de Dé Développement - AFD

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Water valuation and allocation choices Interest and limits of the VA/m3 approach  Average VA (reflects current situation) instead of marginal VA (appropriate criterion for allocation choice) was used for comparison  Tourism and (esp. smallholder) agriculture issues are not homogenous in nature-comparison is imbalanced, “unfair” from a social viewpoint  Reverse thinking: what does the VA/m3 indicator not say?  Agriculture: indirect values (livestock rearing, processing of agricultural products…), groundwater recharge, drainage, social value (employment), environmental amenities with impact on tourism  Tourism: price rise => loss in purchasing power for local consumers, GHG emissions Agence Franç Française de Dé Développement - AFD

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Thank you for your attention

Agence Franç Française de Dé Développement - AFD

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