Morocco plans port expansion with eye to recovery

By Zakia Abdennebi

TANGIER, Morocco, June 17 (Reuters) - Morocco is pressing ahead with a 9.25 billion dirham ($1.14 billion) port expansion near Tangier to ensure it is well placed to benefit from a future recovery in world trade, government ministers said.

The extension to Tanger-Med would make it the biggest port in the Mediterranean and enable the north African country to capture a bigger slice of container traffic through the Strait of Gibraltar that links the Mediterranean to the Atlantic.

It would also help combat widespread poverty in Morocco's neglected northwest and offer an economic alternative to the hashish trade, which still looms large over the region despite repeated eradication attempts.

The government is building a series of business parks near the existing Tanger Med port, offering tax breaks and a platform to re-export manufactured goods exempt from customs duties.

France's second-biggest carmaker, Renault , said on Monday it would go ahead with plans to build a factory near Tanger-Med to produce low-cost vehicles, despite the global economic downturn.

"Many investors have decided to suspend investment decisions," Moroccan Finance and Economy Minister Salaheddine Mezouar told reporters in Tangier. "Morocco has decided to pursue its ambition of strategic positioning because every crisis has an end."

Moroccan firm Marsa Maroc won a concession to operate the new port, named Tanger Med 2, for 30 years. It plans to invest 320 million euros and eventually guarantee traffic of 2 million containers per year.

The port will be built by a consortium of Belgium's Besix, France's Bouygues , its Moroccan unit Bymaro, Morocco's Somagec and Italy's Saitem, Moroccan officials said.

The first construction phase will last 51 months and cost 7.25 billion dirhams, with work due to begin in the first quarter of 2010. The second phase would take 24 months but launch will depend on market conditions.

The project would take the port complex's overall capacity to 8 million containers per year, said Moroccan Equipment and Transport Minister Karim Ghellab.

"It will be the biggest port in the Mediterranean ..., a door to Europe and to international markets, be they European, Asian or American," he said. (Reporting by Zakia Abdennebi; Writing by Tom Pfeiffer; Editing by Richard Chang)