Infrastructure Financing through Islamic
Finance in the Islamic Countries
35
integrated infrastructure plan and cost-benefit analysis. Other than analysing the fiscal and
budgetary implications in terms of assessment of PPP relative to public procurement, projects
would also be analysed to assess the socioeconomic and environmental impacts, financial
viability, risk management, and market assessment. After assessing the projects, the relevant
authority (e.g. Ministry of Finance or central budgetary) approves the suitable projects in the
preparation stage.
Once the projects are identified, in the second stage procurement is implemented. The
prerequisites of the procurement stage include a PPP evaluation committee that meets certain
specific criteria and clear procurement procedures. The bids are solicited with the publication
of a PPP procurement notice whereby the tender documents are sought. The tender
documents would include the PPP procurement process and criteria used for prequalification
and short-listing. The proposals would include the financial models that are evaluated
according to the evaluation criteria identified in the tender notice. Subsequently, the award
notice is published and notified to all the bidders.
The final stage of PPP procurement is the management of the contract for the selected projects
that would require a PPP contract monitoring and evaluation management system. The system
would track progress, completion, and contract implementation after the completion of the
PPP project. Issues that will be considered in contract management would include any changes
in the structure of the SPV, any modifications or renegotiations, and dealing with issues such as
changes in laws, refinancing, subcontracting, dispute resolution, and contract termination.
Chart 2.5 shows the averages of procurement regimes of OIC member countries and countries
belonging to different income groupings. The procurement stage has the highest score for all
country groupings, followed by contract management, except for high income countries where
the preparation stage secures the second highest score. While the procurement status of OIC
countries is better than that of low income countries, the stages have lower scores compared
to all other income groups, including lower-middle income countries. The results indicate that
the overall procurement regime in OIC countries is not well developed.
Chart 2.5: Procurement Regimes for PPPs of Different Country Groupings
Source: World Bank (2018f)
0
10
20
30
40
50
60
70
80
High income Upper-middle
income
Lower-middle
income
Low income OIC Members
(40)
63
49
45
39
43
77
64
58
54 55 58 57
52
47
51
Index (1-100 Highest)
Preparation Procurement Contract management