Risk Management in Transport PPP Projects
In the Islamic Countries
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4. ANALYSIS OF GLOBAL TRENDS AND BEST PRACTICES OF RISK MANAGEMENT OF
PPP S
4.1. Introduction
As presented in the previous chapter, risk management is one of the central topics in the
extensive literature on transportation PPPs. As already mentioned, the many aspects of risk
management are covered in professional and academic literature, handbooks, guidelines and
various on-line tools designed to assist stakeholders in preparing, structuring and executing
PPPs9 .
Ultimately, practical risk management strategies tend to be project- and context-specific and
standardization is difficult. The reasons can be briefly recapitulated as follows:
 Although it is well-known that the PPP approach changes the risk profile of investment
projects compared to traditional public procurement, it may be difficult to separate risk
management strategies applicable to transport projects in general and those specifically
associated to the PPP delivery mode;
 The nature of PPP risks is dynamic and varies over the investment implementation cycle
and over time, with several risk dimensions and multiple stakeholders facing those risks,
often with diverging objectives and conflicting interests;
 The dynamic nature of risk management decisions also means that decisions by a
stakeholder to retain, reduce or transfer certain risks in one phase of the implementation
cycle will affect risk exposures and risk management options in successive phases, e.g.
more in-depth (and expensive) soil condition analysis by the public contracting authority
in the pre-tender phase is likely to reduce the private party’s design and construction risk
in successive phases, and the way this risk is priced and managed;
 The technical and economic features of transportation investment are also subject to
considerable variation, so the patterns of technical, market and financial risk for e.g. an
airport, a port terminal, a road concession etc. can be quite dissimilar;
 Risk management provisions can be very specific and deeply embedded in contract
documentation, spelling out triggering conditions which may or may not become
applicable depending on events and may be difficult to observe for external parties;
 Empirical support for evidence-based risk management decisions is fragmented, often
based on a large number of sector- and country-specific studies (e.g. on toll road
9 In this respect, two valuable resources are the APMG PPP Guide (APMG, 2016, available at
and the World Bank’s PPP Legal Resource Center
. Advisory support, albeit with a focus on the EU
PPP market, can be found a Recent comprehensive guidelines can be found in
Version 3 of the PPP Reference Guide published in 2017 by the World Bank Group in cooperation with other
partner institutions (The World Bank et al., 2017).