Risk Management in Transport PPP Projects
In the Islamic Countries
58
concessions in Chile); thus standardized “best practice” is difficult to identify, except in
generic terms and it may be easier to spell out “what to avoid” than identifying best
practice likely to succeed in specific circumstances.
To sum up, this chapter is aimed at identifying basic indications, complementing those
presented in the conceptual framework, to facilitate the preparation of a tailored “support
package” likely to enable effective risk governance in line with institutional and project
characteristics, to be developed and illustrated through the case studies in this chapter, leading
to policy recommendations in Chapter 6.
4.2. Global trends and risk mitigating practices
This section discusses trends and issues of general relevance, providing some practical
illustrations by phase according to the project implementation life-cycle outlined in the
conceptual framework.
4.2.1. Global trends
The challenge of infrastructure needs10
According to recent estimates of the McKinsey Global Institute (MGI) global infrastructure needs
for the 19 years spanning the period 2017-2035 are of the order of magnitude of USD 69 trillion,
or about 4.1% of world GDP. This translates into some USD 3.7 trillion a year of investment in
economic infrastructure, of which USD 1.1 trillion in transport (mostly in the road and rail
sectors). Some of this requirement – which according to MGI could increase by USD 1 trillion a
year if the additional needs of the Sustainable Development Goals objectives are included – could
partly be addressed through better management of infrastructure investment. The scope for
improvement is estimated byMGI at about 38%of investment, driven by better project selection
and management and better use of existing infrastructure assets. The orders of magnitude
presented by the MGI are in line with those presented in other recent studies 11. Thus, there is
broad agreement that better ways to involve the private sector in the provision of
infrastructure services and assets , including through PPP models, can help channeling
additional financial resources and achieving efficiency gains in project delivery.
According to the same sources, the infrastructure deficit in OIC Member Countries is particularly
acute.
Learning from the Great Recession
Recent global trends show how the PPP market in both mature and emerging economies is still
affected by the aftermath of the great recession started in 2008. An event like a widespread
10 McKinsey (2017), “Bridging Infrastructure Gaps. Has the World made progress?”, McKinsey Global Institute.
See also COMCEC Coordination Office (2019) “Infrastructure Financing through Islamic Finance in the Islamic
Countries”, Ankara.
11 For instance World Bank (2017), “Mobilizing Islamic Finance for Infrastructure Public-Private Partnerships”,
Washington, and Bhattacharya A., Meltzer J.P., Oppenheim J., Qureshi Z., Stern N. (2016) “Delivering on
Sustainable Infrastructure for Better Development and Better Climate”, Washington, Brookings Institution.