Risk Management in Transport PPP Projects
In the Islamic Countries
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The Greek example shows how a systematic PPP strategic framework can evolve over
time moving from a focus on major, mostly self-standing flagship projects to a wider multi-
sector strategy, where innovative financing (blended PPPs) is employed. The third box
concerns Thailand, to illustrate the development of an innovative strategic planning
approach (including differentiated pipelines of projects and a PPP Fast Track process) in an
emerging market.
Box 4 The Thailand PPP Strategic Plan23
The 2013 Private Investment in State Undertaking Act (“PISU Act”) reformed a law on private
participation in public investment originally emanated in 1992, introducing a systematic
approach to planning and implementing PPPs. The Act vested the responsibility for national
PPP policy with the State Enterprise Policy Office (“SEPO”) and established a PPP Committee
tasked with publishing in cooperation with SEPO a “PPP Strategic Plan” consistent with the
National Economic and Social Development Plan. The PISU Act is aimed at standardizing and
facilitating PPP procedures and improve the transparency and accountability of the decision
process.
The latest iteration of this procedure has led to the production of the Second PPP Strategic Plan
2017-2021. The plan identifies two groups of investments, one where private sector
involvement is required, the other where private sector participation is encouraged, but
the decision on procurement mode still open. Group 1 pipeline covers four transport sectors:
urban rail transit lines, toll roads in metropolitan areas, public logistics ports and the
development of high-speed rail lines. Group 2 has a much wider sectoral coverage, from
information technology and environment to social infrastructure, in addition to transport.
As part of the new procedures, a “PPP Fast Track” process was introduced in order to reduce
bottlenecks associated with the approval and development of high-priority infrastructure
projects. The process allows the PPP Committee to focus on strategically important projects with
the very ambitious aim to reduce the time lag from feasibility study to contract award from 25 to
9 months. As of 2017, 11 projects worth THB 934.2 billion (some USD 30.3 billion at current
exchange rates) were included in the PPP Fast Track project pipeline, three of which awarded to
support the extension of the Bangkok metropolitan mass transit system.
Finally, it is worth illustrating an often underrated risk dimension, namely the fiscal risk
linked to the fact that PPP contracts exposes public sector stakeholders to contingent
liabilities and/or future risks related to public sector obligations, particularly in cases where
the payment mechanism to remunerate the concessionaire is based on availability fees. While
an important part of risk management lies in the fine-tuning of the contracting phase, the
general approach to using PPPs as a way to acquire additional fiscal space through off-balance
sheet finance is of strategic relevance and should be taken into consideration in the
23 This Box is based on PWC (2018), ”Infrastructure Developments and Public-Private Partnerships in Thailand:
A 2018 Update.”