Risk Management in Transport PPP Projects
In the Islamic Countries
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Box 28 Operation of the Bejaia Mediterranean Terminal - BMT
In the JV agreement signed in 2003 between EPB and Portek, the two partners decided about the
respective responsibilities in terms of senior executives for the management of the company. The
general manager, the technical, operational and marketing directors were assigned to Portek. The
directors of human resources and finance are allocated to EPB. In addition, the board of Directors
was decided to be composed of three directors from EPB and two from Portek (Aoumad, 2017).
The results of the BMT PPP initiative are assumed to be overall positive. An assessment of the
performance of the concession has been conducted considering the period 2006-2016, namely
the first 10 years of concession with reference to transfer of know-how and competences,
efficiency and effectiveness of the PPP with reference to the rate of containerization, the traffic,
ship processing and job creation. The results prove that containerization rate increased from 6%
before the entry into operation of BMT to 23% in 2016 with a significant increase in productivity
and handling of cargo passed from 10 container to 25 container per hour, with a significant
reduction in the time of handling vessels at the port. Traffic increased from 75,966 TEU in 2006
to 267,338 TEU in 2016. Finally jobs passed from 209 in 2006 to 653 in 2016. The assessment
also compares the performance targets expected by the SPV at the end of the concession with the
ones effectively achieved proving that these were met ahead of schedule (Aoumad, 2017).
As of the transfer of know-how the assessment concludes that after the ten year period the PPP
initiative has been effective in transferring know-how to the management of EPB, introducing
new organizational, managerial and operational methods in EPB which are also based on the use
of ICT technologies related to cargo operations but also to simplification of administrative
operations, including single window solutions (Aoumad, 2017).
Bonus/malus schemes
According to current legislation on public procurement, penalties are applied as standard
practice to the procurement of works and services. More specifically if the investment is not
implemented according to the foreseen time-schedule or defects are identified in terms of scope
and technical specifications, and the responsibility is attributable to the private partner of the
SPV, the procuring authority has to notify the private party who has responsibility to remedy
the notified fault within a deadline also set in the notification. If the private party does not
remedy the notified fault financial penalties are applied and it may also be excluded from
participating in future public contracts. The public authority may also unilaterally terminate the
contract or impose a partial termination. Conversely, if the contract is terminated due to causes
attributable to the public sector, indemnifications may be provided to either party based on the
progresses of the contract and responsibility (WB, 2018). Bonuses are not foreseen to be applied
to public procurement by law in Algeria.
According to public procurement law in Algeria, a contract may be unilaterally terminated by
the procuring authority on the basis of general interest of the country, regardless the
performance of the private party (WB, 2018). This provision is deemed to represent an
additional potential barrier to the involvement of the private sector in Algeria (EIB, 2011).