Improving Transport Project Appraisals
In the Islamic Countries
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6.9 Conclusions and recommendations
Conclusions
Project appraisal is firmly embedded in the transport sector in Jordan. Although there is no law
stipulating that project appraisal is to be carried out for all projects, the PPP Law describes the
technical requirements that must be presented for any PPP project, which include the financial
feasibility of the project, the updated Sustainability Report, and the cost-benefit analysis.
Two types of projects can be distinguished, requiring matching appraisal approaches. On the
one hand, there are development projects, funded by the Government of Jordan, requiring
economic evaluation, focused on optimal social welfare. On the other hand, there are PPP
projects, using financial evaluation to derive at maximum benefit for the private stakeholders.
Recently, the transport sector strategy (LTNTS) has been developed, resulting in a multi-modal
implementation pipeline of transport projects, based on the feasibility analysis of different
scenarios of implementation, evaluated and prioritised through a multi-criteria analysis (MCA),
including cost-benefit analysis (CBA). The strategy provides an excellent basis for developing
the transport sector in Jordan, by selecting an optimal scenario with clear priorities at project
and policy level, for implementation in the formof an action plan. The action plan present a clear
way forward for developing the sector by the Government of Jordan, in close collaboration with
its development partners. As such, individual projects that are included in the action plan
already have a strong foundation. In order to be implemented. Appraisal of the individual project
is still to be done, but is supported by the analysis from the LTNTS.
The LTNTS is a powerful strategy as it is based on national priorities and presents an integrated
approach, which is reflected in the multimodal approach, the integration between transport and
land-use, the focus on reducing transport externalities (environment, safety, congestion), and
the link to trade and international corridor development.
For the appraisal of transport projects, it is common to organise a combination of a Steering
Committee, with decision-making authority, and a Technical Committee, responsible for
managing the appraisal process and advising the Steering Committee. The Technical Committee
will include relevant ministries and authorities involved. The private sector is mobilised to carry
out preparatory work, for example by implementing demand studies and doing feasibility
studies.
A special role is designed for the PPP Unit, who by law is responsible for managing the process
of assessing the financial feasibility of the project, based on cost-benefit analysis.
Jordan has established an excellent collaboration with a wide variety of development partners
and IFIs, providing a solid funding basis. The collaboration with these partners underline the
importance of project appraisal, as this is often a pre-condition for collaboration.