Risk Management in Transport PPP Projects
In the Islamic Countries
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According to current practice, the content of the feasibility studies to seek authorization from
the President to implement a project under the PPP model includes the followingmain chapters:
 Description of the project scope and its strategic and functional merit in the framework of
the national policies and infrastructure development plans;
 Project investment costs (construction and maintenance);
 Demand and market analysis;
 Multicriteria analysis based on the provinces competitiveness index;
 Economic appraisal based on Cost-Benefit Analysis;
 Financial appraisal including public sector comparator assessment comparing the PPP
option versus conventional public procurement and estimating the burden of the project
on public budget;
 Sensitivity tests and risk analysis.
As part of the sensitivity tests performed within the scope of feasibility studies, impacts and
effects of the variation of the following elements are usually assessed: inflation and currency
exchange rates, toll rate variations, demand, contract duration for the construction and/or
operation phases, application of different discount rates, land acquisition costs, construction
and operation & maintenance costs. A quantitative Monte-Carlo risk analysis is also usually
undertaken on the same project variables. On the other hand, the Turkish Authorities consulted
as part of this study report that at present a standard set of risks for use at the feasibility stage
or contract preparation is not defined by law or regulating procedures/guidelines.
In general terms, the practices that are currently in place in Turkey for the implementation of
PPP projects include the most relevant elements required to assess the viability of a project
to be implemented as a PPP including a public sector comparator analysis and an assessment of
the impact of a project on the state budget. Furthermore, sensitivity and risk analysis are also
performed. Feasibility studies and contractual documentation are prepared by the line Ministry
through the relevant competent directorates, which are reviewed before PPP contracts are
signed by the Ministry of Treasury and Finance, in the event of debts assumption commitment.
Project design and environmental impact assessment as well as additional tender
documentation, including a draft of the PPP contract are prepared by the concerned competent
directorates of the Ministry of Transport and Infrastructure, that are also managing directly the
tender procedures.
Special arrangements for PPPs
As already commented above, Treasury’s and Institutions’ credit enhancement tools may
provide an increased bankability of PPPs and thus make PPPs more attractive to investors.
Considering that Turkey has intensified the use of the PPP model in the past decade, namely
after the 2008 credit crunch, a number of measures to attract foreign investors and facilitate
credit collection for PPPs was implemented. Commitments and guarantees offered by the public