Risk Management in Transport PPP Projects
In the Islamic Countries
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to be compensated by the government in accordance with the demand guarantees set in the
concession agreement.
Overall, the HKB bridge project is considered as satisfactory, due to the significant socioeconomic
and environmental benefit generated for the residents in Abidjan. Also, the project had and still
has a very positive signaling effect, not only because it shows that, after a decade of disorder,
public institutions were able to be trusted as a credible and stable partner by international
investors, but also because, despite the difficulties, the authorities did not question the right of
the private party to be compensated according to the contractual arrangements. On the other
side, the fiscal risks due to the demand guarantees were certainly overlooked in the project
preparation phase, and under this standpoint, the project is considered critical from the public
party standpoint.
Given its pioneering nature, the project has also contributed significantly to the development of
PPP initiatives in the transport sector, and several lessons were learned by the public institutions
leading to an improvement of the capabilities and practice in PPP management:
 The project made public authorities aware of the fiscal risks stemming from PPP
initiatives, and now, also with the support of multilateral institutions such as the IMF, more
appropriate procedures are in place for identifying and managing these risks (such as
PFRAM and the CNP-PPP risk management toolkit);
 Risks associated with demand guarantees are now well perceived, and different financing
structures are now being preferred in case direct user revenues do not provide a sufficient
guarantee to private parties to pay back their investment. For instance, part of the
construction cost in such cases can be borne directly by the public party, leaving to the PPP
private party only a share of investment that can be compensated by the revenue net of
operational, maintenance and reinvestment costs;
 Finally, in terms of project preparation, the government has since then improved
technical capabilities with regard of demand and revenue forecasting for transport
projects, thanks to the development of the Greater Abidjan Multimodal Transport Model,
now available to BNETD.
Sources: Author’s interviews, NORC (2018), Boston Consulting Group (2017), World Bank (2015).
Bonus/malus schemes and compensation measures
Bonus/malus schemes are allowed by the PPP legislation. Nevertheless, bonus schemes related
to performances above expectations are not common practice in Côte d’Ivoire. Instead, for
performances below expectations, clauses on the applicability of penalties are generally
included in the PPP contract.
Contract renegotiations
In accordance with the principle of the economic and financial balance of PPP schemes, contract
renegotiations during the execution phase are allowed in case of economic disruption or
imbalance. To this purpose, each PPP contract provides for the circumstances under which the