Risk Management in Transport PPP Projects
In the Islamic Countries
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 “Unknown unknowns” are always there and the web of contracts typical of PPP operations
are inevitably incomplete;
 In all project implementation phases, analysis should be supported by a map of the
relevant ecosystem components (e.g. stakeholders, their capabilities and relationships);
 In general, from a public sector perspective a robust negotiating platform needs to be
combined with early detection/early warning systems in all phases of the project cycle.
Phase 1: Policy/Strategic Framework
The policy environment and strategic framework phase may well constitute the most critical
step in the construction of a resilient risk management and control system. Analysis and
decision-making in this phase are likely to affect risk exposure and risk governance
throughout the PPP investment cycle. This is likely to affect not only individual projects but the
whole portfolio of investments in the transport sector. The decision to use PPPs in the transport
sector has a strategic nature, thus it needs to be coordinated with sector policy to identify at an
early stage priority areas for PPPs as part of the domestic policy and investment strategy.
Background considerations should focus on the relationship between the transport sector (and
its components) and the economic growth and competitiveness of the domestic economy. In this
context, the relationship between transport plans (generally by sector, e.g. port master plans
and the like) and suitability of PPP approach should be studied in view of fundamental
opportunities and constraints for the wider economy, including budgetary constraints, the need
for technical assistance, the wish to nurture a local contractor sector, the need to attract inward
investment, and so on. It is important in this phase to clarify links between transport sector
features and priorities and PPP opportunities, linking opportunities to the projects and/or
project types – for instance some need to be seen in a network context, others as standalone,
some require cross-border cooperation. Ultimately this should bring to the fore the nature of
the “PPP concept” more desirable for the development of the host country.
In this phase the opportunity to reinforce/establish a governance structure for PPPs should be
carefully considered, paying particular attention to its organizational form and its position
within the governmental structure. Thus, as already mentioned in the conceptual framework a
key issue is the relevance and role of any PPP units, established or to be established, as well as
the role of line Ministries vs Ministries of Economy/Finance/Treasury.
According to APMG (2016) a good policy framework should assist the public authority and
the private party along each step of PPP development, contributing to a good structuring of
the project and to its delivery in line with expectations. A PPP framework may achieve this goal
by setting out procedures and clear roles for various institutions, and by establishing effective
public financial management and oversight. Further, the framework should articulate its
objectives in line with the overall goals of the government and provide a solid basis for
subsequent evaluation.