Risk Management in Transport PPP Projects
In the Islamic Countries
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Box 20 Monitoring project performance in Mozambique
In the State Account Audit report for the year 2017 the Supreme Audit Institution claims about
inconsistencies in the PPPs monitoring reporting data provided by the concessionaires
compared to the ones included in the State Account Report. As part of the state account auditing
exercise, the Supreme Audit Institution visited several PPP concessionaires including the Maputo
and Beira Port, Maputo Railway Corridor, Nacala Integrated Logistics Corridor, Pemba Port and
Logistics Terminal, National Road N.º 4 – TRAC and Zambesi Highways toll roads. Data were
requested which are part of the monitoring process according to the PPP legislation and contract.
This information was compared with the one included in the General State Account of 2017.
Differences emerged which relate to the main concession risk/benefit sharing parameters,
including concession fixed and variable fees, taxes, number of national and international
employees. The need for the Supreme Audit Institution to perform such an exercise reveals issues
relating to the accurate monitoring of the PPPs. The information is likely collected and produced
by the contractors, and deficiencies may likely affect the operate of the Ministries. The role of the
Regulatory Authorities in setting up a consistent database of PPPs appears strategically relevant
to solve incoherencies between the monitoring data (Supreme Audit Institution, 2018).
As commented in previous sections above the legal provisions are accurate in setting the
legislative and procedural background for an appropriate follow up process. However, as also
reported by the Mozambican Authorities, the procedures prescribed by law are not, or in any
case not entirely in place, which does not allow the proper ex-ante and ex-post evaluation of the
PPPs and the management of the risks associated with their delivery. Furthermore according to
the law, there seem to be no provision on the opportunity to make the performance evaluation
and monitoring of the PPPs publicly available. The opportunity to improve transparency all
along the PPP management system as well as at the individual project level is recommended by
several studies which should also concern the publicity of the contractual provisions as well as
the outcome of the monitoring of the PPPs (Fischer & Nhabinde, 2012).
Remuneration
In general terms PPPs in Mozambique are conceived as initiatives to improve the economic and
financial management of assets. Accordingly they shall be designed to be self-sustainable and
maximize cost-effectiveness and/or cost-efficiency of project construction and operation. As a
standard practice the PPP contracts implemented in Mozambique foresee the direct collection
of tolls or users’ fees from the end users of passengers’ and/or freight services. The law also
allows for the possibility to provide compensations or subsidies by the public sector to
remunerate the PPP contracts. On the other hand concession taxes and fixed as well as variable
fees are also foreseen to be paid by the contractors according to the risk/benefit sharing
principle set in the PPP law and its implementing regulation.