Risk Management in Transport PPP Projects
In the Islamic Countries
150
between productive sites and logistics nodes. Albeit reasonable under the socio-economic
standpoint for the country, including in the scope and assessment of the PPPs additional
elements such as the contribution of a project to the generation of local employment or training
of the local management or involvement of local companies may add risks to the PPP that are
not related to the main purpose of the project. These considerations were also included in the
2012 World Bank Implementation Completion and Results Report No: ICR2154 of the
Companhia dos Caminhos de Ferro da Beira (Beira Railway Company), reporting on the issues
that caused the termination of the Beira Railway Company PPP. This report also recommended
to avoid CFM being involved as a shareholder in the PPPs in the future, which is also suggested
in other PPP assessment studies (USAID 2010; Fischer & Nhabinde, 2012). In accordance with
the number of projects in which CFM is involved, improvements in the management of the risks
associated with PPPs in the transport sector in Mozambique will significantly depend on the
solutions of the conflicts of interest potentially associated with the role of this entity. Further
recommendations on the improvement risk management processes are reported in the
following sections which generally apply to the sector as a whole.
Policy recommendations
On the basis of the above-identified issues the following set of policy recommendations is
proposed:
 Political measures: PPP projects should primarily result from the elaboration of national
integrated development plans or transport master plans in order to make sure these are
integrated in the wider socio-economic development vision and strategy of the
government. Their identification should be framed in the wider context of the investments
required for the development of the transport system and their selection should be based
on the capacity of these projects to perform positively and possibly better than other
investments in terms of cost-effectiveness and cost-efficiency analysis. This is required to
ensure that the projects may effectively be attractive to the private sector and investors
market, also mitigating the risk of contingent and long term liabilities for the stage budget.
 Institutional and organizational measures: due consideration should be given to the
establishment of a PPP unit with the purpose of promoting, appraising and granting
authorizations for PPPs development and implementation. Aimed at maximizing
coherence between the PPP initiatives and the national and sector development plans, the
unit could be set up within or under control of the Ministry of Economy and Finance and it
could be linked to the Office of Presidency or Prime Minister. Adequate staff and resources
should be secured to this unit to hire technical experts for specific advisory services. PPP
units may be also set up within the organization of the main line Ministries involved in the
planning, development, implementation and monitoring of PPP projects in the transport
sector as well as within the established Regulatory Authorities. Regulatory Authorities
should be effectively put in the operational condition of exercising their duties concerning
the control and supervision of the PPP contracts.
 Technical measures: Independent consultants and engineers should be recruited for due
diligence and auditing procedures of feasibility studies as well as technical design