The local development company “Casa Patrimoine”, responsible for preserving the cultural heritage of Casablanca, is in the process of being dissolved after an evaluation deemed negative of its effectiveness. The wali of Casablanca, Mohamed Mhidia, initiated this process, citing the ineffectiveness of the investments made. The City Council at its October session will vote on the move, while other SDLs could also be merged as part of a broader reorganization.
The wali of Casablanca, Mohamed Mhidia, launched the process of dissolving the Local Development Company (SDL) “Casa Patrimoine”. This decision was taken during a general meeting chaired by Mhidia, after an in-depth assessment of the role, financial situation and cost of this entity. It was concluded that the SDL was no longer relevant. The dissolution proposal will be submitted to the City Council, which is expected to decide at its next session in October.
Casa Patrimoine’s mission was to preserve and promote the cultural, tangible and intangible heritage of Casablanca. However, it failed to carry out several important projects, financed through partnerships with local authority councils, the Ministry of the Interior and the Ministry of Culture. Among the projects in question are the rehabilitation of the historic center of the city, the restoration of historic passages such as Botbol, El Glaoui, Sumica and Tazi, as well as the rehabilitation of the facades of Boulevard Mohammed V. These initiatives, for the most part suspended, resulted in expenses of several million dirhams, without bringing significant benefits to urban development or improving the image of the city.
According to media sources, Casa Patrimoine will be the first of the SDLs to be dissolved, mainly due to the ineffectiveness of the investments made. Other SDLs could also be affected by mergers as part of a strategy to optimize resources and operations.
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SDL governance issues
After the liquidation of Casa Patrimoine, the elected officials of the City Council will have to designate an entity to take over its functions. It is likely that SDL Casa Aménagement will take over, with the primary mission of continuing the commitments established by Casa Patrimoine within the framework of the agreements signed with the various stakeholders.
Indeed, the Court of Auditors, in its 2022-2023 report, highlighted the dysfunctions of the SDL, affecting their governance, their results and the achievement of objectives.
At the institutional level, ten SDLs are encountering structural problems which are hampering either their start-up or the continuity of their activity. This has led to partial or complete shutdowns, sometimes over periods of 4 to 30 years. This situation has generated significant financial losses, as well as a drop in capital, requiring, in certain cases, additional financial contributions in the absence of preventive or corrective solutions such as the dissolution of companies in difficulty. To date, only one SDL has been dissolved among the ten in difficulty, while five others are in a fragile financial situation, requiring an emergency plan.
In terms of profitability, SDLs are struggling to generate satisfactory results: only 5% of them have reached or are on the verge of reaching an acceptable rate of profitability. These companies also suffer from a lack of commercial and financial autonomy, as well as the fragmentation of their market share, exacerbated by competition.
Concerning the objectives set, although public authorities have injected 5 billion dirhams into the capital of SDLs, accompanied by an additional annual mobilization of 562 million dirhams, these companies have neither achieved the planned objectives nor provided added value expected.
However, projects experience significant delays, sometimes up to seven years, often accompanied by rising costs and the persistence of structural problems, particularly in terms of land mobilization and management of public space, such as This is demonstrated by the cases of SDLs managing wholesale markets or parking.
Towards a necessary reform
On the institutional and financial level, more than 90% of SDLs were put in place without adequate prior studies, whether legal, technical, financial or economic. This has led to gaps in their statutes, which do not sufficiently integrate the specificities of public services or the rights of stakeholders. In addition, the financial package of these SDLs is often unbalanced, with a lack of sources of public financing. Seven SDLs were created with capital well in excess of their actual needs, while some had to use their capital to cover losses due to the cessation of their activities. Their dependence on public funds, due to lack of free access to the market, also prevents sufficient financial and commercial autonomy.
In addition, signed agreements often lack essential details, particularly on objectives, project costs and results control mechanisms. They also do not include performance indicators, nor clauses on risk management, disputes, or the regime of acquired assets. This lack of rigor compromises the effectiveness and profitability of SDLs.
The Court of Auditors recommended that the Ministry of the Interior encourage local authorities to quickly take measures in favor of LDCs in difficulty, either by adopting safeguard or recovery plans, or by considering their liquidation. It also recommends strengthening the financial autonomy and profitability of SDLs, in accordance with the principles of public service management, while ensuring better rationalization of expenses. Furthermore, the Court recommends carefully evaluating options for creating SDLs using comparative financial and economic studies, and ensuring that their implementation is tailored to long-term needs.
Some agreements grant overly broad powers to SDLs, entrusting them with incompatible missions, such as setting contract amounts or carrying out controls. This hampers the rationalization of expenses and the efficiency of management. Finally, in terms of governance, local authorities do not fully fulfill their supervisory role, and their representatives within the SDLs do not rigorously monitor the progress of projects. The absence of regular reports prevents continuous evaluation of results and difficulties encountered.
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