Risk Management in Transport PPP Projects
In the Islamic Countries
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QAIA passengers by year (expected vs actual)
5.5.6. Operation
Management of risks during operation
According to the PPP guidelines, Key Performance Indicators to be checked during operation
include among others: volume; technical quality of the service; customer satisfaction; project-
specific measures.
Due to Jordan’s location and to crises in the wider region, a risk factor during operation for
transport projects in the country is represented by geopolitical developments. In particular, the
closure of the Jordanian-Syrian border affects the figures of incoming cargo. For a PPP project
like the Aqaba Logistics Village, this translates into a reduced demand, which in turn affects
decisions on whether to make infrastructural investments. For other PPP projects in Aqaba,
frequent strikes have represented a considerable risk factor as well, in particular for the ACT
project and Aqaba Ports Management Co.
According to ADC, clear KPIs for the operation phase are established for each PPP project and
ADC follows up on them.
Bonus/malus schemes
Bonus/malus schemes are not foreseen in the QAIA PPP project.
In Aqaba, ASEZA and ADC do not foresee bonus schemes related to performances above
expectations. For performances below expectations instead, clauses on the application of
penalties are provided in the PPP contract, but so far they have never been applied: firstly, the
performance of private partners so far has so far been in compliance with KPIs and has overall
greatly satisfied ADC; secondly, ADC management prefers to engage with the private operators
directly, trying to accommodate their needs in an informal way, if necessary. As such, no
penalties were ever forced by ADC upon a private partner.