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Risk Management in Transport PPP Projects

In the Islamic Countries

4

Conceptual framework

Risk governance

dimensions

Investment

phases

Risk

Identification

Risk Assessment

Risk Allocation/

Sharing

Risk Monitoring

Risk Treatment/

Remedies

1.

Strategy and policy

Political support and strategies

Legal provisions

Institutional arrangements

Investment attraction

+++

++

++

+

+

2.

Pre-tendering decision process

Screening for PPP suitability

Special arrangements for PPPs

+++

+++

+

3.

Procurement and contracting

Procurement strategies

PPP contractual arrangements

Performance metrics

Remuneration

+++

++

++

4.

Construction and asset delivery

Management of risks during design phase

Management of risks during construction

+++

+++

5.

Operation

Management of risks during operation

Bonus/malus schemes

Contract renegotiation

+++

+++

6.

End of contract

Contract return

Follow up

+

+

+

+

+

Source: Authors.

Building upon existing international literature an ad-hoc classification of risks has been also

developed, which is presented in the Table below. It is based firstly on a macro-distinction

between context-related and project-related risks, and secondly on further risk categories,

under which actual risks have been listed, aiming to provide a practical overview of the threats

characterizing transport PPPs, i.e. the reasons why a proper risk management is indispensable.