Proceedings of the 14th Meeting of the
Transport and Communications Working Group
40
country and the existing institutional setting concerning foreign investment promotion and
public procurement, PPP units may also be set up that could be involved at least in PPP policy
definition and implementation, identification, planning, promotion and appraisal of PPPs.
Furthermore, additional PPP units/departments may also be formed, as appropriate, within the
Ministries involved in the planning, development, implementation, and monitoring of transport
PPP projects as well as within the established Regulatory Authorities. Adequate regulations and
institutional settings would also be considered to ensure an optimal level of competition in the
market as the presence of a small number of operators dominating in the market may reduce in
the long-term efficiency in the provision of transport services, by taking into consideration
national priorities and sector specificities
Policy Recommendation III: Supporting the use of appropriate technical tools, analyses,
etc., and development of strong database and competences for minimizing risks during
the implementation of the PPP projects
Rationale:
Pre-feasibility and feasibility studies would be preferably prepared by the public sector
following the identification of the PPP initiatives as part of national and sector-specific transport
plans. The in-depth analysis shall be performed at this stage by the public side by using
dedicated software and models. This is crucial to avoid public acceptance risks which ultimately
lead to financial sustainability risks. Least Present Value of Revenues (LPVR) approach, share-
in-profit/Joint Venture approach or shared implementation responsibility are some of the tools
to mitigate financial sustainability risks.
Independent consultants or engineers may be utilized for due diligence and auditing procedures
of feasibility studies as well as technically well-designed documentation, project
implementation, and monitoring. Furthermore, in order to mitigate fiscal risks, the authorities
in charge of the state budget need to estimate andmonitor the impact of PPPs related contingent
liabilities and fiscal risks on the budget. This can be done on a project-by-project basis and the
reports on all direct fiscal commitments and contingent liabilities would be elaborated on a
periodic basis depending on the number of PPPs.
Policy Recommendation IV: Developing/Improving risk management guidelines and
checklists for the betterment of the implementation of the PPP projects
Rationale:
Risk management guidelines and checklists should be considered for adoption, were not already
in place for the overall improvement of risk management practices with reference to all types of
risks. These should be country if not transport/mode-specific in order to reflect peculiarities in
the policy, institutional and regulatory settings. Guidelines should preferably be tailored to PPP
initiatives and not generally applicable to infrastructure investments as PPPs are more complex