US embassy cable - 05RABAT1693

UNCLAS SECTION 01 OF 02 RABAT 001693 
 
SIPDIS 
 
DEPT FOR NEA/MAG 
DEPT ALSO FOR EB 
STATE PASS USTR FOR DOUG BELL 
STATE PASS USAID FOR SARA BORODIN 
USDOC ITA/MAC/ANESA FOR DAVID ROTH 
USDOL FOR ILAB 
PARIS FOR ZEYA 
LONDON FOR GOLDRICH 
ROME FOR ROSE 
 
E.O. 12958: N/A 
TAGS: ECON, ELAB, EINV, EAIR, MO 
SUBJECT:  FROM THE MOUNTAINS TO THE SEA: MOROCCO'S PLAN AZUR 
 
REF: A) Rabat 1610 
 
1.  Summary:  The principal strategy for meeting the goal of 
Morocco's "Vision 2010" is the development of six beach 
resorts under the $5.2 billion Plan Azur.  Vision 2010 was 
an agreement established in 2001 between the Government of 
Morocco (GOM) and the private sector to focus on tourism as 
a vehicle for economic growth by attracting 10 million 
tourists per year by 2010 (Reftel).  Plan Azur combines 
cultural centers and beach resorts to give Morocco a 
competitive edge in the tourism industry.  The developments 
of these resorts are contracted out to international 
investors at low land prices and with tax incentives.  This 
cable is the second in a series of three cables on Morocco's 
tourism industry.  End Summary. 
 
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Plan Azur Beach Resorts 
----------------------- 
 
2.  Concessions for four of the six beach resorts of Plan 
Azur, each 500 to 700 hectares, have already been awarded, 
and construction is already underway.  The Mediterranean 
site of Saidia with a target number of 28,700 beds was sold 
to French company Fadesa in 2003; Mogador-Essaouira with 
8,700 beds to a Belgian and Dutch consortium Thomas & Piron, 
L'atelier, Colbert, and Orco in 2004; Mazagan-El Jadida with 
8,000 beds to South African group Kerzner International in 
2004; Lixus-Larache with 13,000 beds to a consortium 
including Thomas & Piron, L'atelier, and Orco in the same 
year.  The GOM is currently looking for contractors for the 
two remaining resorts in the south, Taghazout-Agadir with 
25,000 beds and Plage Blanche-Guelmim with 26,000 beds, 
which both require more infrastructure development than the 
others.  Plans for each of the resorts involve development 
of villas, apartments, golf courses, restaurants, shops, 
casinos and conference centers.  Each investor signed a 
contract committing to preserving nearby cultural sites 
including medinas, and to help neighboring communities 
benefit from the projects by using local resources such as 
artisans and construction companies. 
 
3.  According to the Ministry of Tourism, the GOM targeted 
international investors for the Plan Azur because of their 
expertise and access to resources.  All the resort 
concessions were secured at low prices:  Saidia for $1.10 
per square meter, Lixus-Larache for $0.86 per square meter, 
Mazagan-El Jadida for $1.67 per square meter, Mogador- 
Essaouira for $2.22 per square meter and Taghazout-Agadir is 
up for sale for $5.55 per square meter.  The Ministry of 
Finance was in charge of pricing the land.  In order to 
maintain ownership of some of the land, the GOM plans to 
lease the golf courses to investors.  The contractors are 
committed to finishing the projects in three phases so the 
GOM can monitor progress.  The first four resorts are 
scheduled to be finished by 2012. 
 
4.  As the first one sold, Saidia has made the most progress 
with $30 million worth of villas sold to Spanish, English, 
and Moroccan investors and two hotels to Spanish hotel 
management company Barcelo.  A total of $1.4 billion has 
been invested in Saidia so far with $345 million directed 
toward the creation of 28,000 new jobs, of which 8,000 are 
directly related to the project.  There are two nearby 
international airports at Oujda and Nador.  $530 million has 
been invested in Essaouira-Mogador, which is expected to 
create 28,500 direct and indirect jobs.  $600 million in 
Mazagan-El Jadida is expected to generate 12,000 jobs in the 
beginning and 30,000 by the end of the project, and $700 
million in Lixus-Larache is expected to generate 3,800 
direct jobs and 19,000 indirect jobs. 
 
5.  In an interview with Moroccan financial daily 
L'Economiste, Kerzner Group chairman Butch Kerzner expressed 
complete confidence in Vision 2010.  Kerzner Group, which 
developed Sun City in South Africa and Atlantis in the 
Bahamas, recently decided to increase the level of 
investment for the first phase of the project in Mazagan-El 
Jadida from $230 million to $280 million.  Kerzner has 
confidence in the GOM's efforts in Morocco's tourism 
industry, and notes that he was impressed by the pragmatism 
and progressive vision of the GOM's strategy.  He believes 
that the Plan Azur will be a success for Morocco. 
 
6.  Comment: Plan Azur is an ambitious project that involves 
a large amount of coordination between different GOM 
ministries and with the private sector.  Recently, the 
Minister of Tourism noted that the Vision 2010 goals of 
230,000 beds may not be achieved until 2012 because it would 
be unrealistic to expect investors to finish projects of 
these magnitudes by 2010.  Vision 2010 is largely dependent 
on the success of Plan Azur.  The first four resorts, 
however, are not scheduled to be completed until 2012. 
Although the strategy of combining culture and beach creates 
a unique tourist product, beach tourism is still highly 
competitive, and Morocco needs to avoid relying too much on 
the Plan Azur for achieving its tourism objective.  End 
Comment.