Risk Management in Transport PPP Projects
In the Islamic Countries
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The long-lasting experience of the country in entering PPP contracts and the pivotal role of UKAS
counterbalance the quite vague legislative and procedural framework. Neither a general PPP
law nor specific legislation to manage different PPP models exist. The existing PPP guidelines
are very generic and no sector-specific guidelines and tools exist. As a result, there is not a
formalized and well-defined system to carry out the necessary assessments to establish the need
for a PPP project and its viability.
Policy recommendations
On the basis of the above conclusions, the following policy recommendations can be formulated:
 Political measures: a broad evidence-based debate should take place at political level to
provide an assessment of the strategic approach adopted by the country so far, identify the
main challenges ahead and contribute to choices on the way forward, with a specific focus
on risk management practices. The debate should involve representatives from different
political positions and external experts in a consulting capacity.
 Institutional and organizational measures: to set up PPP department at the ministry of
Transport in order to empower officers at the ministry level to evaluate the viability of PPP
proposal before submitting it to UKAS and to closely monitor the operation phases of PPP
project.
 Technical measures: to minimize the risks of conflict of interest between the public and
private parties directly involved in the contract negotiation phase (especially for
unsolicited proposals), the recruitment of independent consultants should be considered
for due diligence and auditing procedures of technical design documentation, project
implementation and operation monitoring procedures.
 Legislative measures: possible changes in the existing legislation should be considered
to better regulate different PPP models in view of improving transparency in the
procurement (e.g. regulate unsolicited proposals) and monitoring of the implementation
and delivery of the PPPs.
 Procedural measures: for the appropriate management of PPP risks towards the
successful implementation of transport investments, risk management guidelines and
checklists should be considered for adoption. Further to the identification of the main risks
applicable to the PPPs over the course of the different stages of project life-cycle, those
guidelines should deal with risk evaluation (e.g. explaining the role of sensitivity analysis,
scenario analysis, risk quantification) and mitigation measures.
 Statistics and surveys: UKAS should continue to maintain the database in which it tracks
records of all PPPs projects in all sectors. Periodical publication of summary data on the
performance of the PPP contract could be considered in order to increase the level of
institutional transparency. Also, due consideration should be given to the possibility of
collection and publication of information and data on the management of contingent
liabilities and fiscal risks. Willingness-to pay surveys should be promoted by the Ministry
of transport before promoting large transport PPP project.