Risk Management in Transport PPP Projects
In the Islamic Countries
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 The PPP unit;
 The PPP Council.
For transport projects, the public contracting body is generally the Ministry of Transport, with
the exception of projects implemented in Aqaba, where ADC acts as the contracting authority.
The Figure overleaf taken from Jordan’s PPP guidelines illustrates the current allocation of tasks
between the private sector and the main institutional stakeholders.
Current institutional arrangements foresee that the Ministry of Transport (acting as public
contracting authority) identifies and selects potential PPP projects and prepares a PPP project
application. The PPP unit, which centralizes PPP expertise in a single government office, is in
charge of reviewing the application and submitting a recommendation for its approval or
rejection to the PPP Council, a body chaired by the Prime Minister and composed of selected
Ministers as well as the Governor of the Central Bank and the PPP unit Director. This body
supervises the overall PPP program and is responsible for PPP-related decisions, with the PPP
unit acting as the enforcement arm of the Council’s decisions. If the Council approves the PPP
project, the Ministry of Transport establishes a PPP Technical Committee, which supports the
Ministry in the subsequent phases. The Ministry, with the Technical Committee’s supervision,
thus carries out through a PPP transaction advisor a PPP feasibility study, which is then subject
to the revision of the PPP unit and the approval of the Council. The study includes parts on risk
identification and assessment and a preliminary foreseen risk allocation. The transport-specific
part of project preparation is under the responsibility of the Transport Ministry, while the
revision of the PPP unit focuses on PPP-related aspects and in particular on the project’s
bankability, sustainability and risk sharing. Once project preparation is completed, the Ministry
issues tendering documents for the identification of the private sector operator. After the
tender has been awarded, the private operator and the Ministry negotiate on an initial PPP
contract draft, which includes a provisional risk allocation. As for previous steps, the contract is
reviewed by the unit and approved by the Council. After this, its stipulation between the private
operator and the Ministry can take place. The two actors thus enter the contract management
phase, during which the Ministry is in charge of monitoring performance and risks, as well as
taking remedies to mitigate risks.