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06RABAT276 2006-02-17 09:52:00 UNCLASSIFIED Embassy Rabat
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1. (U) Summary: Minister of Transportation and Public Works Karim
Ghellab gave Ambassador a tour d'horizon of the reforms Morocco is
making to its transportation sector, liberalizing its ports (septel),
signing an Open Skies agreement with the European Union, and
constructing a mammoth new transshipment port on the Mediterranean.
Ghellab, a young, reform-minded technocrat, described his job as
"building the country's infrastructure, creating the conditions for
competition, and ensuring that the private sector operates at an
appropriate standard." End Summary.

2. (U) In a Feb. 8 meeting with Ambassador, Minister Ghellab
described his work in opening Morocco's air transport sector to
competition, first with the United States and more recently with
Europe. Ghellab showed evident pride in the fact that Morocco had
recently become the first country outside continental Europe to
sign an Open Skies agreement with the European Union, even ahead
of the United States.

3. (U) Ghellab brushed aside concerns that exposure to competition
from European carriers will harm Royal Air Maroc (RAM), which he
described as "an independent, private company in which all the
shares are owned by the state." He said RAM had created its
low-cost affiliate Atlas Blue last year specifically in order to
face competition from European low-cost carriers once the Open
Skies pact was signed.

4. (U) Switching to the port sector, Ghellab said the main thrust
of the GOM's ongoing port reform is to create competition between
dock operators and bring down prices for shippers, importers and
exporters. Parliament passed reform legislation in July of last
year that will come into effect gradually during 2006 as the related
decrees of application are finalized.

5. (U) Ghellab spoke enthusiastically about the construction of the
Tangier-Mediterranean port, a giant transshipment port that will
rival Algeciras in size and eventually in volume. Tangier-Med will
allow shipment of goods directly from Morocco to the United States
and Asia; all such cargo now must pass through ports in Europe.
Asked if the new port will draw business away from the port of
Casablanca, currently Morocco's largest, Ghellab reiterated that
this is precisely the idea - to create competition and give private
shippers and importers an alternative. Ghellab said his ministry is
spending $800 million on land transportation infrastructure that
will link Tangier-Med by rail and highway to Rabat and Casablanca.

6. (U) Moving finally to maritime transportation, Ghellab said state
shipping company Comanav, already 50 percent private owned, will be
privatized completely by the end of 2006.

7. (U) Comment: Minister Ghellab, born in 1966, is a capable and
well-respected technocrat who is considered an up-and-coming member
of the political elite. He was educated in France but speaks fairly
good English. He comes across as a dyed in the wool reformer with a
modern view of the role of the government. His style, even office,
is hands-on and all business. Midway through the meeting Ghellab
grabbed pen and paper to draw diagrams of the new port, rail and
road projects, a dramatic change from the more laid back, older
generation ministers. In another departure from tradition, this was
a rare minister-level meeting with no staff present. We expect to
see more of Ghellab in the future, in increasingly responsible
positions. End Comment.