Investment in infrastructure three pillars of city resilience

KEY REQUIREMENTS / IMPLEMENTATION FACTORS

Clear land use and town-planning regulations and rigid construction norms (for setting baseline conditions).

Local government’s capacity in planning and implementation (to be able to fulfill infrastructure obligations).

Rigid public outreach approach to explain what standard building/land use regulations are traded for.

Negotiated Exaction: Lessons Learned
INVESTMENT IN INFRASTRUCTURE
OPPORTUNITIES
CHALLENGES

• Straightforward two-way transaction
• Minimal fiscal impact
• Minimum framework regulatory arrangements needed. Transaction can be fully structured with ad hoc deal terms

• As long as exactions are negotiated on case by case, entry barriers to development projects are less predictable
• Regulatory exemptions traded for development permits may fail to generate enough public good outside of a project itself. Infrastructure upgrades and related development with “eased regulations” shall generate wider public benefit and justify diversion from standard regulations
• In view of the above, objection from the public to exaction-driven private development is common

Negotiated Exaction: Sample Project
INVESTMENT IN INFRASTRUCTURE
Project Description
The project equips the city of Casablanca with a 9-km long collector to drain and canalize floodwater of Oued Bouskoura river and discharge directly into the ocean.
The collector will reduce exposure of large parts of Greater Casablanca to flooding and will increase the city’s flood protection to a 20-year level.
$90 million, 95% complete as of March 2017. Funding sources include PPP to include government (40%) and municipal funds (30%), National Fund to Combat Natural Disasters, and private funds
Value Capture Component
A fraction of the project was financed with contributions from private companies owning and developing real estate in the flood-affected areas of Oued Bouskoura basin.
Such contributions included $8 million from the Morocco’s largest private company, OCP Group (phosphate producer), which develops industrial facilities and a leisure center in the Bouskoura basin.