still provide this service directly, although there is a policy to gradually transfer sewer services to onee. the 2008 amendment to the municipal code allowed for the creation of municipal associations (groupement d'agglomérations urbaines). private concessions water and sewer services in the city of tangiers on the straits of gibraltar are run by the private company amendis, a subsidiary of veolia environnement of france several private multi-utility concessionaires provide drinking water, sewerage services and electricity in casablanca, rabat, tangiers, and tetouan. lydec, the concession holder in casablanca, is owned by suez environnement (51%), the moroccan insurance company rma watanya (15%) and the moroccan investment company fipar-holding (19.75%). in addition, 14.25% of the shares are traded on the casablanca stock exchange since 2005. amendis, a subsidiary of the french multi-national veolia environnement, is the concession holder in tangier and tetouan. in 2013, veolia sold its moroccan subsidiary veolia environnement maroc that holds the concession to the british private equity group actis capital for €370 million after requests for tariff increases had been denied by the authorities. the company had also been criticized for failing to reach its investment targets, in particular concerning access to the poor. uae-based averda is the current concession holder in rabat, having won a seven-year contract set to expire in 2022. a fourth concessionnaire provides bulk water to casablanca. municipal utilities: régies autonomes water supply and sanitation in the mediterranean city of nador was transferred to onep after the municipal utility radeen was unable to clean up the nador lagoon 12 specialized municipally owned public operators called régies autonomes provide water in 12 medium to large cities. the same operators also provide sanitation in 11 cities and electricity distribution services in 7 cities. the largest of the cities served by regies autonomes are agadir, fes, marrakech, meknes and oujda. regies also exist in chaouia, el jadida, kenitra, larache, safi, tadla and taza. many of these utilities are owned by several municipalities (régies intercommunales). the régie autonome de distribution de l'eau et de l'elecricité de nador (radeen) was taken over by onep in about 2007 as a result of the utility's failure to properly to clean up the highly polluted lagoon of nador. the national utility onee onee (office national de l'electricité et de l'eau potable) is an electric utility and a bulk water provider that produces 80 percent of the country's drinking water and sells much of it to the regies and the private concessionnaires. it also distributes water directly to customers in about 500 medium to small towns. onee has also taken over sanitation services in more than 65 of the towns where it distributes drinking water by 2009, and it is expected to take over sanitation services in a total of 191 towns by 2017. furthermore, onee provides water through standposts to one third of the rural population that has access to an improved source of water. onee («office national d'électricité et d'eau potable») was created through as alliance of the power company one and onep. direct service provision by municipalities: régies directes 40 municipalities in small towns serve 3 percent of urban customers with water (régies directes) through "non-professional and underfunded municipal departments". they also provide sewerage services in 280 towns (2003). associations the moroccan association for water supply and sanitation (association marocaine de l'eau potable et de l'assainissement - amepa) is a trade association created in 1997 to "address upcoming challenges and defend the sector's interests". it has organized a number of national and international seminars and congresses in morocco. it also participates in international conferences. in 2009 it had 120 members, including service providers, contractors, consulting firms and professional associations. fassi fihri, general director of onep, was the president of amepa as of november 2009. financial aspects tariffs and affordability morocco has a complicated system of water and sanitation tariffs and fees that consists of a large array of tariffs at different stages of the water cycle: water abstraction, sale in bulk, retail sales, as well as the collection, treatment and discharge of wastewater. urban tariffs are differentiated by locality, by the quantity consumed, and by the type of use (residential, public, commercial and industrial). urban tariff review mechanisms vary furthermore depending on whether the service provider is private or public, the process for the latter being more complicated and cumbersome than for the former. in general, the level of urban water tariffs is high compared to other countries in the middle east and north africa, making it hard to afford to the urban poor connected to the piped network. on the other hand, it is insufficient to allow for full cost recovery. 11% of all users, including a large share of poor users in both urban and rural areas, receive water for free from standpipes. abstraction fees. onee and the régies have to pay fees (redevances) for water abstraction and wastewater discharge to the basin agencies. these fees were introduced on the basis of the water law of 1995. their level is low, not allowing the basin agencies to cover its own administrative costs, not to speak of contributing to the financing of investments by service providers as foreseen by the law. since their introduction the level of the fees has not been adjusted, so that in inflation-adjusted terms the value of the already low fee has been further eroded. bulk water tariffs. onee charges tariffs for the supply of bulk water to the private operators and the régies. these tariffs are reviewed by the government together with the tariffs for the régies and onee's retail water and sewer tariffs. bulk water tariffs differ from one city to the other taking into account production costs. for example, bulk water tariffs for casabalanca, where the service provider is private, are twice as high as for the neighboring city settat. there is a 5% special tax on bulk water sales in order to finance the rural water supply program pager as well as another more important surtax to finance water supply in small towns. retail water tariffs. the same retail tariff structure applies to the entire country. water and sewer tariffs in morocco follow an increasing-block tariff structure, under which the tariff per cubic meter rises as consumption increases. the residential tariff has four blocks, the lowest applying to consumption of less than 6 m³ per month and the highest to consumption above 40 m³ per month. however, the level of retail tariffs varies from one locality to another. standpipe services, which are common for the urban poor, are typically free. utilities send bills to local governments. in a few cases, standpipe management has been entrusted to a gardien/gérant, who operates the faucet and charges users. according to a world bank report, free standpipe services are pro-poor. but they are also increasingly unsustainable for operators, both in terms of wasted water (up to 40 percent) and in terms of lack of revenues. operators are in favor of promoting individual connections in order to strengthen their revenue base. water and sewer retails tariffs were increased in 2006 throughout the country by reducing the size of the first block of the increasing-block tariff from 8 to 6 cubic meters per month and by increasing the fixed portion of the bill. the volumetric tariff for each tariff block remained unchanged. these modifications were equivalent to an 11% (check) tariff increase. after the increase the average water tariff varied between dirham 3.20 per m3 (us$0.29) in meknes and dirham 7.18 per m3 (us$0.66) in casablanca. the sewer tariff varied between dirham 0.59 per m3 (us$0.05) in oujda and dirham 1.64 per m3 (us$0.15) in marrakech. in 2002 it was decided that the sewer tariff in small towns served by onep should become uniform for all towns, using an increasing-block structure. the average onep sewer tariff was dirham 1.50 per m3 in 2009. although a decision has been taken in 2004 to increase the sewer tariff to dirham 2.00 per m3. however, the application of this decision has been delayed and until 2009 only sewer tariffs were only increased in one town. nevertheless, an increase to dirham 2.20 per m3 has been envisaged for 2009. connection fees. in urban areas one-time connection fees for water and sewer connections are paid to the respective service provider. the level of the fees is determined based on a formula that takes into account the length of the water and sewer network in the city, as well as the length of the facade of each property (for water connection fees charged by onep, called taxe riveraine) or the area of the property (for all connection fees charged by the régies and private operators, as well as for sewer connection fees charged by onep, all together called participation au premier etablissement or ppe). these fees do not include the costs of actually establishing the connection from the service line in the street, which the beneficiary has to pay himself separately. as in other countries, it also does not cover the costs of plumbing installations inside the property. connection fees to the water and sewer network are a major source of funding for service providers. at the same time their high level constitutes an obstacle to expand the network, despite a policy to allow poor customers to pay part of the connection fee in installments that are added to the monthly water bill over a period of up to 7 years (branchements sociaux). these difficulties are illustrated by the example of casablanca where an initial annual target of 10,000 social connections had been set, but only 1,250 were implemented every year until 2006. the national human development initiative waives connection fees for selected poor urban neighborhoods average connection fees ranged from an equivalent of us$220 to 500 for water and us$880 to 1,650 for sewerage in 2004. however, according to another source, in 2008 the connection fee for sewerage charged by onep was only 1,600 dirham (about us$145). affordability. data from the national household living standards survey 1998/99 assessed total expenditures for water supply at mad 84.8/person/year in urban areas and 147.4 mad/person/year in rural areas, or 1.8 and 2.9 percent of average total per capita expenditure. cost recovery cost recovery in the sector remains a challenge. onee is nominally financially autonomous through its tariff revenues, but it receives investment subsidies of dirham 150 million per year for rural water supply and half its sanitation investments are financed by the government budget and municipalities. the regies have to rely to a large extent on connection fees for their revenues. investment the investments in the water and sanitation sector increased substantially between 2003 and 2005. in urban water distribution it increased from dirham 0.9bn to 1.5bn, in rural water supply from dirham 0.5bn to 0.8bn, in water production from 0.3bn to 0.6bn, and in sanitation from dirham 1.1bn to 2.8bn. overall investments doubled from dirham 2.8bn (us$337m) to 5.7bn (us$687m). per capita investment in water supply and sanitation thus stood at us$21 per capita and year, a relatively high level compared to other middle-income countries. financing investments are financed from tariff revenues, various subsidies and transfers (grants and soft loans) by external partners. however, there are also substantial cross-subsidies. for example, bulk water tariffs charged by onee to the private concessionnaires and the régies are higher than production costs. the surplus is used to cross-subsidize onee's activities in rural water supply and in sanitation, where tariffs do not cover costs. furthermore, according to a world bank study of 2008, there is a cross-subsidy of about dirham 1bn from electricity users who are charged distribution tariffs that are above costs. this allows the concessionnaires and the régies to generate the revenue necessary to pay for the inflated tariffs for bulk water, which in turn allows onee to cross-subsidize rural water supply and sanitation at an amount that is also about dirham 1bn. external cooperation external cooperation plays a major role in the moroccan water and sanitation sector. external partners provide investment finance and technical assistance. beginning in 2002 the african development bank, the european union and subsequently the world bank also provided budget support linked to the fulfillment of certain policy conditions. the major external partners in the sector are, in addition to the three named above, france, germany and japan. other external partners