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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