Risk Management in Transport PPP Projects
In the Islamic Countries
39
Table 9: Overview of elements of Phase 2) Pre-tendering decision process
Phase Elements included
Pre-tendering
decision
process
 Screening for PPP suitability: What does the choice between PPP or
traditional public procurement base upon? Is there evidence of the use of
public sector comparators to support the decision-making process to launch
PPP transport projects? What are the roles and responsibilities in the
process of preparation of the pre-tender studies (including the role of the
private sector in proposing initiatives)?
 Special arrangements for PPPs: What types of PPPs pre-tender studies
(such as willingness to pay surveys) are performed before the launch of the
PPP transport projects? How are they incorporated in the project design?
How are the scenario analyses incorporated into feasibility studies of PPP
projects? Which approaches are adopted to promote PPPs to the public
when implementing the PPP transport projects (e.g. public campaigns to
persuade/communicate with the citizens/residents regarding the need for
a PPP project, and/or realization of public inquiries and debates? What are
the criteria adopted to assess risks (e.g. their likelihood and possible impact
of their consequences)?
Source: Authors.
Screening for PPP suitability
The process leading to the implementation of a transport PPP opens with the identification of a
project addressing a well-defined public need, in line with the overall transport strategy and the
public investment planning system3. At this initial stage, the technical scope of the project is
defined and its socioeconomic desirability is preliminarily assessed (through economic tools
such as Cost-Benefit Analysis, which is widely considered as the most appropriate one for
transport projects4 ). To this end, it is crucial that the performance of proper studies (e.g. demand
analysis, financial analysis, economic analysis, sensitivity and risk analysis, environmental
impact assessment) is embedded in an institutional setting which enables using the results of
these studies in the decision-making process (COMCEC, 2019).
A sort of information checklist can be developed by the public entity to identify areas of
uncertainty and risk from this early stage. For instance, the following points should be included
in this screening procedure (APMG, 2016): i) land availability; ii) construction risks; iii)
technology requirements (particularly if new or untested); iv) site risks (e.g. due to hazardous
3 Identifying a priority investment project requires a sound public investment planning system, which involves
setting out transport infrastructure strategies, assessing project options to meet objectives, conducting
detailed feasibility and Cost-Benefit Analyses, and prioritising projects within an overall public investment
plan (The World Bank et al., 2017).
4 For an overview on the use of Cost-Benefit Analysis and other economic tools on transport projects in OIC
countries, see COMCEC (2019).