Risk Management in Transport PPP Projects
In the Islamic Countries
164
In order to proceed with the implementation of the PPP, EPB had to seek authorization from the
State Participation Council on the proposed initiative and obtain approval from the Ministry of
Public Works and Transport who had to grant the concession agreement to the future SPV. The
concession agreement was provided to the SPV after signature of the JV agreement between EPB
and Portek. This was granted to the SPV company, denominated Bejaia Mediterranean Terminal –
BMT. BMT is a mixed public-private company of Algerian law, where EPB holds 51% of the equity
share, and Portek 49% of the equity share, the total equity amounting to USD 2.5 million. The total
cost of the initiative amounted to USD 21 million financed by the operation of the terminal (user
fees) and through the use of a soft loan contracted by Portek (Aoumad, 2017; UNECE, 2017).
Rehabilitation works started in 2004 and the container terminal became operational in 2006.
On the other hand, as part of its tasks CNED reviews and provides recommendations concerning
all the above elements i.e. economic, social, technical and financial feasibility. Guidelines are
also in use since 2008, including a major project preparation guideline (Guide de maturation des
grands projets d’infrastructure économique et sociale) and an ex-post assessment guideline
(Guide d’évaluation rétrospective des grands projets d’infrastructure). In 2013 an additional
guideline was also elaborated relating to the appropriate management of the preparation and
implementation of the major projects (Guide de management des grands projets
d'infrastructures économiques et sociales). The latter was requested to be implemented by the
Ministry of Finance on the basis of ex-post assessment reports elaborated by CNED on the
effectiveness and efficiency in the implementation of major infrastructure projects in Algeria,
demonstrating that delays and cost overruns of major projects in Algeria are mostly related to
the non satisfactory preparation and level of maturity of the projects before the procurement
phase.
The above listed set of analyses implemented for major project appraisal and for PPP projects
in Algeria is deemed adequate in general terms to manage the risks associated with the
development of PPP initiatives towards their implementation. On the other hand, whilst
mentioning the practical use of those tools, the existing literature also reports on the lack of
specific standard methodologies for the performance of any of the above set of assessments.
Furthermore none of those methodologies are prescribed to be undertaken by law (WB, 2018).
These are additional elements reflecting the lack of a PPP regulatory and institutional
framework in Algeria. The country is gradually introducing practices and measures favorable to
the development and implementation of PPP initiatives, however the legislative and
institutional setting are still primarily focused on public procurement and accordingly do not
include provisions related to the elaboration of relevant studies and analyses that represent
important mitigation measures for appropriate risk management of PPP initiatives. The
guidelines elaborated by CNED appear indeed related to major projects and are not specific to
PPP initiatives. Within this context there seems to be still low awareness and capacity among
the public sector about the implications and opportunity to adopt the PPP model (KDI, 2014;
CNED, 2015). Accordingly, studies already implemented in the past were proposing the
implementation of public sector sensibilization activities on the use of the PPP model, the
adoption of a national policy on PPP together with the identification of a PPP unit and the
selection and implementation of PPP pilot project initiatives. These were suggested to be put in