Risk Management in Transport PPP Projects
In the Islamic Countries
199
 Part of the mandate of the PPP unit is to buildcapacity in the sector, however no evidence
of such activities has been found for stakeholders of transport PPP projects. Both Ministry
of Transport and ADC strongly rely on private consultants for all activities related to risk
management;
 The introduction of an assessment focused on fiscal aspects (impact of Fiscal Commitment
Contingent Liabilities) before the tendering phase represents a positive development
which will be probably put forward by the PPP Amendment Law. The novelty seems
especially appropriate in view of demand guarantees which public transport PPPs entail.
Nevertheless, there is no evidence of analyses to verify the impact that a bundle of
PPPs can have on the state budget. PPPs are still seen primarily as a way to deliver assets
without imposing burdens on state resources.
Policy recommendations
Building upon the conclusive remarks, the following recommendations are suggested.
 Political measures: In order to minimize risk perception of private investors, it is
essential for Jordan tomaintain its political support for PPP schemes and continue to prove
a trustworthy partner for the private sector. In this respect, Jordan’s excellent
collaboration with various IFIs should be preserved. In order to explore the attraction of
new funds for transport PPPs, the involvement of Islamic finance in this type of projects
could be subject to close scrutiny.
 Institutional and organizational measures: The reform of the PPP unit with its move to
the Prime Minister’s Office can be an opportunity for reflection on the maturity of Jordan’s
approach to PPPs. To this end, an international event with academics, stakeholders and
experts could be arranged, as a way to promote the new unit as well. The upcoming reform
should, however, capitalize the experience gained so far by the PPP unit and the various
contracting authorities.
 Technical measures: The expansion of the PPP model into public transport sector as well
as rail sectors calls for a rigorous and transparent way for calculating demand/revenues
guarantee. This calculation and the impact of fiscal commitment contingent liabilities are
typically done on a project-by-project basis. However, it could be useful to produce an
annual report which describes how the government assesses the exposure to PPPs and
reports on all direct fiscal commitments and contingent liabilities.
 Legislative measures: Possible amendments to the PPP law in the close future should
strike the right balance between alignment to good practices identified by international
organizations and involvement of stakeholders in the preparation and discussion of the
amendments.
 Procedural measures: Procedures set out in the guidelines represent a good basis for risk
management practices, but their implementation needs to be ensured. An effort should be
made in this direction starting with increasing the knowledge of the procedures by all
involved staff and with monitoring that the procedures are duly followed.