Risk Management in Transport PPP Projects
In the Islamic Countries
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Political support and strategies
After the Privatization Law of the year 2000, Jordan has resorted to PPPs as a way to address
major infrastructural needs and deliver assets without causing excessive burdens on the
national budget. In addition, PPP schemes have been chosen in order to ensure top quality in the
management of transport and logistics services. It is mainly on the basis of these two arguments
that high-level political support to transport PPPs is granted in Jordan.
In the two main transport PPPs, i.e. QAIA and ACT, the need for an intervention was apparent
and PPP was seen as a method to ensure a new beginning for two infrastructures which are
critical for Jordan’s competitiveness as a whole. Due to their nature, the two projects also had a
significant influence over Jordan’s trade with other countries, foreign relations and international
image. In this sense, the two PPPs offered the chance to align the country with recommendations
from international organizations and IFIs as well as to enhance Jordan’s profile as a modern
economy on the global stage, open to foreign investments.
Box 31 Political support for the Aqaba Container Terminal PPP project
The ACT PPP project enjoyed strong support from King Abdullah II, driven by the vision to
develop Aqaba into a major business hub. In addition, reform-minded political actors and
technocrats in national government, ASEZA and ADC were able to push the project forward
despite initial opposition from Parliament and port workers (Cebotari and Dennis, 2008).
While the King has been supportive of increasing the role of the private sector in the delivery
and management of transport assets, the Parliament has proved to be less willing to back PPPs,
sometimes voicing concerns over the supposed submission of crucial national infrastructures to
private and foreign interests. Overall, however, the Jordanian political establishment has
repeatedly backed PPPs as key for infrastructure development and legal provisions as well as
institutional arrangements have been gradually transformed over the years to align with
political willingness to set up an adequate framework for the implementation of PPPs. Major
achievements have consisted in the 2014 PPP law and in the subsequent setup of a PPP unit
within the Ministry of Finance. In addition, support for PPPs is consistently included in official
strategic documents.
The 2014 Long Term National Transport Strategy and Action Plan, for instance, highlights
the need to identify additional sources for funding of the transport sector, also involving the
private sector through PPPs. In particular, the document identifies the use of PPP financing as
highly relevant for two areas: i) public transport; ii) freight and logistics (Ministry of Transport,
2014).
The country’s PPP program, released as a policy paper by the PPP unit, outlines Jordan’s
approach to PPPs. In particular, it highlights the government’s “strong commitment to
enhancing the role of the private sector in national economy” and its support for “the use of best
practices in managing contractual, credit, and market-related risks”. In addition, it sets out the