Risk Management in Transport PPP Projects
In the Islamic Countries
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 The performance targets assigned to the operator, if any;
 The terms of the contract modification;
 The terms and consequences of sharing and transferring risks between the parties;
 The guarantees and insurance policies in charge of the contractor;
 The terms under which the contracting authority monitor and control that the investments
were made in accordance with the requirements of the contract;
 The designation of the body or bodies in charge of monitoring the performance of the
contract and if necessary, its economic and financial regulation;
 The definition of force majeure, unpredictability, unforeseen technical consequences and
their consequences, including financial consequences;
 The sanctions and penalties for breach of contractual obligations;
 The terms and consequences of the termination, anticipated or not, of the contract;
 The conditions of continuity of service in the event of operator failure, particularly when
termination is pronounced;
 The terms of the contracting authority's control of a sale of the contract and the evolution
of the operator's shareholding;
 The rules governing the management of the project's assets, the costs and financial flows
it generates, their distribution between the parties to the contract and their allocation to
the implementation of the project;
 The applicable law and dispute prevention and settlement procedures and the conditions
under which arbitration or other alternative dispute resolution methods may be used, if
necessary.
Performance metrics
PPPs have a defining feature in their focus on outputs (i.e. service delivery) rather than inputs
(e.g. technical requirements). In this respect, the PPP decree requires that, in addition to the
contractual obligations, a PPP agreement contract specifies the performance targets assigned to
the operator, if any. The definition of such performance objectives is mandatory in all the PPPs
falling in the category of partnership agreements, in which the remuneration of the contractor
is based on fees paid by the contracting authority.
However, no specific provisions are included in the legislation concerning the definition of such
performance targets, which is therefore let to the decision of the contracting authority and the
outcomes of the negation phase.
The legislation prescribes that the contracting authority - supported by the CNP-PPP - shall
monitor and audit the private operator’s execution of his contractual obligations. Provisions
on the financial, technical, and administrative supervision of the project, as well as the
requirements for the report relating to monitoring activities need to be specified in the
contractual agreement.