Risk Management in Transport PPP Projects
In the Islamic Countries
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3.2.1. Strategy and policy
A favorable political and institutional context and a solid legal framework are among the
enabling conditions for implementing transport PPPs.
Elaborating on the approach of Flor (2018), who identifies institutional pillars behind the
success of PPPs1, the first phase of the conceptual framework focuses on: political support and
strategies; legal provisions; institutional arrangements. As a fourth point, investment attraction
should be additionally addressed. For each of the four points, the following Table sets out
relevant questions that guided the analysis throughout the report.
Table 7: Overview of elements of Phase 1) Strategy and policy
Phase Elements included
Strategy and
policy
 Political support and strategies: What is the degree of political support for
infrastructure privatization in general and transport PPP projects in terms of national
plans, programs, sectoral strategies, economic policy papers, etc.?
 Legal provisions: What are the pros and cons of the legal framework regarding risk
management of transport PPP projects? Which specific regulations are needed to
make private sector participation possible and effective?
 Institutional arrangements: Which administration units/agencies are tasked with
risk identification and assessment in transport PPPs? What are their main activities
to address risks and uncertainties regarding transport PPPs?
 Investment attraction: What are the main drivers and barriers for the attraction of
public investment and to receive the support of multilateral and national banks? What
is the degree of foreign participation in PPP transport projects? What is the
contribution of Islamic finance in transport PPPs?
Source: Authors.
Political support and strategies
Consistent, strong and high-level political support for a PPP project or a set of PPP initiatives
is essential for their successful implementation. This consideration applies particularly to
largescale PPPs and projects representing a first attempt at developing and implementing PPPs
in a country or sector, but it holds true for PPPs in general. Flor (2018) highlights political will
among the institutional pillars needed to increase the probability of PPP success. As the
provision of infrastructures and services through PPP schemes represents a significant
innovation compared to more traditional public procurement options, PPP initiatives need
political support from high levels of government, also considering that private firms may bear
more risk in a PPP than under a traditional public procurement contract. In the same vein, in a
1 It may be noted that what represents success for PPPs remains a debated point. PPP contracts pursue different
goals that are not always aligned among themselves. PPPs may thus be evaluated by using a narrow
perspective, focusing on its performance against contractual targets, or rather by applying a wider approach
that integrates broader benefits and gains for society. There is however no prevailing framework guiding
evaluation studies, as their design is mostly influenced by their specific purpose (Carbonaro et al., 2017).