Risk Management in Transport PPP Projects
In the Islamic Countries
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government’s readiness to offer various incentives: “types of support vary according to the type
of project and may include capital and operational support, facilitation of licenses, controlling
tariffs, and any other services needed for the sustainability of the project”.
New developments are expected in the near future, among which the revision of the PPP law
and the transferring of the PPP unit under the Prime Ministry’s Office, indicating that the issue
ranks high on the political agenda.
As regards future projects, general support to PPPs will be granted and a new PPP in public
transport appears to be finally on the horizon. Since the approval of the Bus Rapid Transit (BRT)
Project in Amman47, the project to link Amman and Zarqa, the second largest city in Jordan, has
been reconsidered as well. For many years a light rail link between the two cities has been
discussed but never implemented. While this project is still under consideration, the new BRT
between Amman and Zarqa is closer and closer. As a matter of fact, in January 2019 the Ministry
of Public Works and Housing launched the tender for this second BRT project. While the
construction of the two projects is public, a PPP arrangement is foreseen for the supply, fund,
management, operation and maintenance of the buses to be used within Amman and between
Amman and Zarqa.
In the railway sector, discussions were initiated decades ago on a possible Aqaba-Amman line.
While the government would reportedly prefer to include passenger service as well in such
project, recent studies have suggested that bankabilitywould be granted only in case of a railway
line dedicated to cargo exclusively. Such a project would represent a major development
opportunity for Aqaba as a regional gateway, particularly at a time when geopolitical tensions
in the Strait of Hormuz may lead to increased traffic in the Red Sea. Combined with the currently
ongoing development of a logistic hub close to Amman (originally itself presented as a PPP as
part of an unsolicited proposal), a cargo railway line would highly increase the competitiveness
of Aqaba’s container terminal. At the same time, the project would contribute to shift cargo from
roads to rail, reducing the need for maintenance on Jordan’s North-South highway (currently in
poor state due to the high number of trucks driving on it) as well as increasing its safety and its
appeal for touristic purposes.
As reported by the Word Bank (2019), within the Pipeline of Projects identified by the
government of Jordan for 2019 there are three potential new PPP projects in the transport
sector for a total investment of about JD 242 (USD 341) million. These are the King Hussein
Bridge (short term priority), the Marka Airport (medium term priority), and the Amman
Development Corridor Phase 2 (short term priority).
Legal provisions
In the past, Jordan’s lack of a PPP-specific legislation had been highlighted in the literature as a
flaw in its regulatory framework (Mako, 2012). That gap has been filled by the 2014 PPP law
(drafted by the Executive Privatization Commission, a governmental authority established
47 The project is a joint effort by the the Greater Amman Municipality, the Transport Ministry, and the Ministry
of Public Works and Housing.