Improving Transport Project Appraisals
In the Islamic Countries
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Special considerations can apply for infrastructural investments considered strategic because
of their contribution to the country’s “passive defence” (i.e. contributing to the defence against
a military attack, or minimising its effects), or because of their proximity to the borders. In
similar cases (all belonging to the category of government-based projects, and not under
MRUD’s control), the requirement to conduct a project appraisal is not considered binding.
Timing
For PPP projects, the following appraisal procedure and timings apply. Pre-Feasibility studies
(phase 0) are prepared by the MRUD when project alternatives are still to be selected, and there
is a need to decide which one is the best option. Based on the selected project option, a tender is
usually launched for selecting the most suitable investors55.
Once a project alternative as well as an investor have been selected, a Memorandum of
Understanding (MoU) is signed between the investor and the MRUD or its affiliated
organisations and companies. Within some months (at least six) from the MoU signature, the
investor has the responsibility to carry out a feasibility study (phase 1) in order to gain more
insights on technical, financial and economic aspects. If the results of the studies demonstrate
the feasibility of the investment from various standpoints (financial, economic, technical) the
investment is accepted by the MRUD or its affiliated organisations/companies and all the costs
sustained by the investor to prepare the studies are reimbursed. Then, the project must receive
the permit by the government in order to proceed. Once the permit is obtained, the Project
Company56 is established and the investor has to carry out a detailed design (phase 2).
The described appraisal procedure is also valid for government-based projects funded directly
by the government annual budget. However, for those projects the three phases are carried out
by the MRUD or its representatives.
Figure 5.2: Project studies in the case of BOT projects
Source: CSIL.
55 If there is no proposal, direct negotiation with selected investors is used.
56 A company which is established to finance and implement the civil construction plan or project (as joint venture or
transfer) in accordance with the contents of the PPP Act.
PRE-FEASIBILITY STUDY
• Economic feasibility
• Technical feasibility
• Traffic study
• Operational feasibility
0
FEASIBILITY STUDY
• Geometric design
• Hydraulic & hydrologystudy
• Geology study
• Traffic study
• Benefit-cost analysis
• Economic study
• Environmental study
• Schedule feasibility
1
DETAILED DESIGN
• Pavementstudy
• Safety study
• Preparationof executiveplans
• Tender documents
2