VZCZCXYZ0000
RR RUEHWEB

DE RUEHCL #0113 1610915
ZNR UUUUU ZZH
R 100915Z JUN 09
FM AMCONSUL CASABLANCA
TO RUEHC/SECSTATE WASHDC 8421
RUEATRS/DEPT OF TREASURY WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEHMD/AMEMBASSY MADRID 3870
RUEHFR/AMEMBASSY PARIS 0709
RUCNMGH/MAGHREB COLLECTIVE

UNCLAS CASABLANCA 000113 
 
SIPDIS 
SENSITIVE 
 
STATE FOR NEA/MAG 
COMMERCE FOR NATHANIEL MASON 
DEPT FOR EEB/IFD/OIA 
 
E.O. 12958: N/A 
TAGS: EINV ETRD EFIN KIDE PGOV MO
SUBJECT: MOROCCO - 2009 REPORT ON INVESTMENT DISPUTES AND 
EXPROPRIATIONS CLAIMS 
 
REF: A. 2008 STATE 43784 
 ¶B. RABAT 334 
 
¶1. (SBU) The United States Government is aware of one (1) claim by 
United States persons that may be outstanding against the Government 
of Morocco (GOM). 
 
a. Claimant A 
b. 2009 
 
¶2. (SBU) Claimant A is a U.S. based, private real estate investment 
firm and is one of the largest American investors in Morocco.  The 
dispute in question arose when the GOM terminated an agreement with 
the company for the development of the Taghazout Station, a flagship 
project in the country's "Plan Azur" tourism strategy.  The project 
deal had been in place for two years prior, and the Moroccan 
Ministry of Tourism explained that repeated construction delays and 
the investor's inability to obtain USD 52 million in local bank 
financing brought about the April 8 decision to discontinue the 
contract. 
 
¶3. (SBU) The Ministry claims that the Government had extended many 
benefits to the company in order to expedite the construction 
process, including the land (which had been cleared of its previous 
occupants), perimeter upgrades, and electricity lines.  A ministry 
representative noted that in the face of the many difficulties 
presented he had agreed to scale back the project in a revised 
convention in December of 2008, allowing the claimant to build the 
hotels, golf courses, and residences on roughly half of the 
project's original 1,200 acres.  However, Claimant A executives 
highlighted that they had waited over a year for the Minister to 
study and amend the original agreement, contributing to the funding 
difficulties. Construction of the Taghazout station ceased at the 
beginning of February 2009 as a result of the lack of financing and 
has not resumed since.  The government complained that the company 
has not come forward with a solution, such as bridge equity 
financing or investment of its own equity. 
 
¶4. (SBU) In an April 9 response, the Claimant reviewed its efforts 
to secure local bank financing and requested a grace period from the 
ministry to permit the process to continue.  In addition, company 
officials have noted that it is open to taking on a local Moroccan 
partner to share in development.  To date, the company has invested 
USD 125 million into the project, but is now faced with the 
difficult fact that Moroccan banks do not want to talk about a USD 
52 million loan due to all the negative press about the project. 
Executives have stressed that the company cannot move forward 
without a local partner or bank financing. 
 
¶5. (SBU) The Ministry's non-confrontational approach and willingness 
to entertain alternative solutions are hopeful signs and we will 
continue to encourage an amicable settlement.  We conveyed the gist 
of the GOMs position to the company in an April 17 conference call, 
and it is mobilizing to determine what it can put together to get 
the project going again. 
 
¶6. (SBU) Information regarding this claim was last received April 
19, 2009. 
 
¶7. (SBU) Claimant A: Colony Capital. No Privacy Act Waiver signed. 
 
MILLARD