RABAT- Morocco plans the non-renewal of contracts with private utilities as it prepares to launch state-owned alternatives in each of its 12 regions to take care of sewage management as well as water and electricity distribution, the interior ministry said.

The new companies, dubbed regional multiservice companies (SRM), will be launched as part of reforms to improve the performance of public companies and give regions more powers, the interior ministry told Reuters in an email confirming news relayed by local news outlets. 

The new state utilities will first be launched in four regions starting in January 2022, before they are generalised across the country, the interior ministry said.

This means contracts will not be renewed with local subsidiaries of French utilities Veolia and Suez, which manage water and electricity in Morocco’s key cities.

Contracts with Suez subsidiary Lydec, a Casablanca-listed company, and with Veolia-owned Redal and Amendis expire in 2027 and 2026, respectively.

Lydec said in a statement it took note of the decision to create SRM and looks forward to establishing a new partnership with authorities beyond 2027.

A new law will be enacted to lay the legal basis for this reform.

(Reporting by Ahmed Eljechtimi; Editing by Steve Orlofsky) ((ahmed.eljechtimi@thomsonreuters.com;))