Risk Management in Transport PPP Projects
In the Islamic Countries
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of appraisal does not seem to be foreseen by law (WB, 2018). This type of appraisal should be
actually also performed in addition to the other type of viability analyses foreseen by law.
Further to respond to international best practices in the appraisal of PPP schemes, this public
sector comparator assessment is deemed to be specifically relevant to the Mozambican context.
Sound national and sector development plans are indeed not prepared where PPP initiatives are
identified and prioritized in the wider framework of the sector and nation investment projects.
PPP projects are furthermore usually developed on the basis of unsolicited proposals. In
addition to the adoption of specific tools/methods in the legislation or in the relevant guidelines
or appraisal models for the comparative assessment of the implementation of a project under
the PPP or other alternative procurement solutions, the timing and responsibility of such a
decision should be also appropriately defined. According to current legislation and procedure
whereas proposals for candidate PPP projects are scrutinized by the line Ministry and the
Ministry of Economy and Finance before the launch of the PPP procedure for the selection of the
potential contractor, no other entity provides authorization for the project be implemented as a
PPP before the procurement process is launched. The strategic decision whether to develop a
project as a PPP at the tendering stage is subject to the risk that the project is either implemented
or not, and if implemented this should be a PPP. Value-for-Money and public sector comparator
analysis should thus be preferably performed before the tendering stage.
Special arrangements for PPPs
As also reflected in the PPP legislation, PPP initiatives in Mozambique whilst offering an
opportunity to the private sector, are also expected to contribute not only to a more efficient and
effective use of the existing and new public infrastructure and management of the related
services, they are also expected to bring to the country know-how and skills, as well as wealth.
The law foresees that contractual arrangements shall foresee an adequate sharing of the
economic and financial risks and benefits between the private and public party. This could be
achieved by means of consideration of the following measures: reserving a share between 5%
to 20% of the SPV capital to the local stock market for acquisition by Mozambican citizens; the
possibility for local companies to participate in the SPV; the contribution of the project to the
generation of a positive foreign exchange effect on the Balance of Payments; the sharing of
extraordinary direct benefits, through the constitution of an SPV economic stabilization reserve;
the share with the public of annual extraordinary profits; the realization of social responsibility
programs or projects; the payment of a concession award fee, or contract signature bonus or
premium, the payment of concession fee, etc. In addition to the socio-economic benefits referred
to in the PPP law, it is also foreseen to include contractual clauses concerning the preservation
of the environment, as well as social responsibility and development programs directed to the
population affected by the project. PPP projects are finally expected to generate direct local
employment and transfer of know-how and skills to Mozambican workers also by means of
training initiatives. The relevance of the above targets associated to PPPs is remarked in the
legislation by the requirement to include the above elements in the permanent PPP monitoring
reporting by the competent Mozambican Authorities.
Whilst these provisions seem to be aimed at protecting the interest of the Mozambican society
in the development and implementation of projects that the Country could not independently