Risk Management in Transport PPP Projects
In the Islamic Countries
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Terminals in 2004 (part of the A.P. Moller-Maersk group). In 2006, following a successful 2-year
period during which congestion issues had been solved thanks to a new management and
significant investments, ADC and APM entered a joint venture (Cebotari and Dennis, 2008).
Both PPPs are generally referred to as BOT arrangements (Build-Operate-Transfer). Importantly,
however, the two infrastructures already existed before the PPP (as such, they are considered
brownfield projects) and in both cases financing was part of the private sector’s responsibilities
as well. For these reasons, in the case of ACT the acronym “REFOT” is used as well (Rehabilitate-
Equip-Finance-Operate-Transfer). The latter can be considered more precise, if it is made clear
that the ACT project did not merely involve a minor rehabilitation of existing assets, but also
extensive works leading to structural changes.
In addition to these two flagship projects, both widely regarded as success stories, several other
transport PPPs of a smaller size have been implemented in Aqaba Special Economic Zone.
Box 30 Transport PPP projects in Aqaba Special Economic Zone
Aqaba is a Special Economic Zone inaugurated in 2001 and governed by the Aqaba Special
Economic Zone Authority (ASEZA). Benefitting from low taxation, numerous investments have
been implemented in the city in the last two decades, among which many through PPP schemes.
PPPs in Aqaba have been launched by Aqaba Development Corporation (ADC), ASEZA’s
development arm, which acts as contracting authority. In addition to the already mentioned ACT
project, other PPPs stemmed from the division of the Port into separate terminals, for which
separate concessions were implemented through BOT or REFOT arrangements (e.g. Phosphate
Terminal and Industrial Port). PPPs were implemented for Marine Services and for a Logistics
Village in addition to an Air Cargo terminal as well. All contracts were based on a model
concession but modified according to the specific requirements (Koppies, 2012). Except for ACT,
the other PPPs are not well known outside Aqaba’s institutional and business environment,
despite representing significant experiences. It is hard to find mention of these PPPs in
documents or databases by Jordanian national authorities or international organizations. Part of
the reasons behind this lack of awareness may lie in Aqaba’s special status, communication issues
with national authorities and ADC’s reliance on internal capacity and private consultants, rather
than international organizations.
From a risk management perspective, PPP projects in Aqaba are especially interesting in light
of the peculiar nature of ADC, i.e. the contracting authority. In fact, while being government-
owned (50% by ASEZA, 50% by the national government through the Ministry of Finance), ADC
qualifies as a private sector company. As such, ADC is not part of the Jordan’s public sector and
its specific mandate is to unlock Aqaba's economic potential by mobilizing private investment
(either on a stand-alone basis or through PPPs).