Proceedings of the 14th Meeting of the
Transport and Communications Working Group
19
dominating the market may reduce the long-term efficiency in the provision of transport
services.
 The capacity of the existing units should be strengthened as appropriate.
Policy Recommendation III (Technical measures): Support the use of appropriate
technical tools, analyses, and competences
Rationale:
 Pre-feasibility and feasibility studies should be preferably prepared by the public sector
following the identification of the PPP initiatives as part of national and sector-specific
transport plans. In-depth analysis should be performed at this stage by the public party also
using dedicated software and models. This is crucial to avoid public acceptance risks which
ultimately lead to financial sustainability risks.
 The practice of the recourse to demand and/or revenue guarantees by the public sector to
implicitly cover possible imbalances between the demand and revenue thresholds required
to turn projects bankable and mitigate financial sustainability risks, may be substituted by
alternative remuneration/regulatory schemes such as the Least Present Value of Revenues
(LPVR) approach, share-in-profit/Joint Venture approach or shared implementation
responsibility.
 At the tendering phase, projects should be preferably at an advanced stage of maturity to
avoid risks related to changes in the project scope which can lead to contract renegotiation
risks.
 Independent consultants and engineers should be recruited for due diligence and auditing
procedures of feasibility studies as well as technical design documentation, project
implementation, and operation monitoring procedures.
 To mitigate fiscal risks, the authorities responsible for the state budget should estimate and
monitor the impact on the state budget of PPPs related contingent liabilities and fiscal risks.
This should be done on a project-by-project basis as well as with reference to the system of
active PPPs. Reports on all direct fiscal commitments and contingent liabilities should be
elaborated on a periodic basis (at least annually), also depending on the number of PPPs.
Policy Recommendation IV (Legislativemeasures): Improve the legal framework adopting
a PPP tailored legislation
Rationale:
 Also depending on the number of PPP initiatives implemented or foreseen to be implemented
in a country, consideration should be given to the adoption of a PPP dedicated regulatory
framework. Tailored to PPPs this would address more appropriately the specificities related
to this type of procurement method, also providing a standard set of provisions potentially
mitigating risks of contractual disputes and renegotiations. Attention should be also given to
the inclusion in the new or existing PPP legislation of provisions concerning transparency in
the procurement of PPP initiatives, limiting as far as possible the use of the unsolicited
proposal and direct negotiation procurement methods.