Risk Management in Transport PPP Projects
In the Islamic Countries
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as well as investor-state arbitration as Mozambique in 1998 adopted the 1958 New York
Convention on the Recognition and Enforcement of Foreign Arbitral Awards.
5.3.7. End of contract
Contract return
According to PPP legislation at the end of the concession period the infrastructure shall be
returned to the procuring authority in optimal conditions under both the infrastructural and
functional stand points. Concession periods may vary according to the financial performance of
the project. However maximum duration is set by law to 30 years for greenfield projects and 20
years for brownfield initiatives related to rehabilitation projects. The duration of lease or
management contracts relating to existing infrastructure involving no or limited works shall not
exceed 10 years. Greenfield projects may be extended for a maximum period of 10 years. The
contract return process shall start 3 years before the expiry of the concession period, which is a
reasonable time span to allow the parties making all the necessary due diligences and
procedures, including the launch of a new tendering process for the eventual transfer of the
concession to a subsequent contract.
Actually no PPP contract in Mozambique has reached the end of the concession period. The
Maputo Port Terminal and Beira Port concessions have been actually extended before the expiry
of the concession period. In both cases extensions seems to be motivated by
adjustments/expansions of the investment programs at the basis of the concession41, specified
that on the basis of publicly available information it is not possible to understand the reason
why these concessions were not retendered, specified that they had been granted on the basis
of the legislation in place before the current PPP law was published in 2011.
Follow up
The PPP legislation in place explicitly defines principles, procedures and responsibilities for the
appropriate monitoring and assessment of PPPs and makes reference to guidelines/models for
the appraisal and follow up of PPPs. This shall be done with reference to individual projects as
well as to the system of PPPs as a whole within the specific sector or national economy. Yet the
institutional setting presents weaknesses in terms of structure and capacity to perform in line
with the requirements set in the legislation. The setup of PPP units within the line Ministries and
of a dedicated PPP unit would be generally appropriate to support the monitoring process of the
PPPs, and specifically useful for the ex-post assessment of the PPPs. A central PPP database
could be developed and used to identify success stories as well as systemically analyze the
performance of the PPPs with reference to internal and external factors thus making effectively
possible the management of the risks associated to their delivery.
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