What is PPP?
Public Private Partnership (PPP) is a contractual relationship between one or more government entities and one or more organisations of the private sector. Each party plays a certain role, integrated in one developmental framework. There are many forms of partnerships with the private sector which depend on the level of contribution and responsibilities each party has. The forms include:
- service contracts
- management contracts
- leasing contracts
- concession contracts
- build, operate, transfer (BOT)
- build, own, operate, transfer(BOOT)
- build, own, operate (BOO)
Why adopt the ‘PPP’ model?
The PPP model would serve the UAE’s goals and agenda in implementing a sustainable, competitive-economy based on knowledge, expertise and diversity. It would serve the public interest from the integration of efforts, fund, expertise and technologies of both the government entities and the private partners. In addition, it is an ideal option to render efficient commodities and services at a lower cost and to make use of the private sector’s capabilities and efficiency.
Other benefits include:
- attracting national, regional and foreign investments
- cost saving on projects’ operation and maintenance through competitive bidding and innovative technologies offered by private tenderers
- motivating the private sector to innovate
- promoting economic growth by creating more job opportunities in the country
- reducing government spending and funding and/or sharing economic risks with the private sector
The legal framework
UAE Cabinet resolution
In 2017, the UAE Cabinet issued resolution (1/1) on the procedures manual for partnership between federal entities and private sector. The manual intends to diversify the mechanisms for developing the strategic infrastructure projects and improve the quality of services. It also provides a general framework for project lifecycle of partnerships with private sectors. The manual is available on the website of Ministry of Finance.
Dubai regulatory framework of Public Private Partnerships
Government of Dubai enacted Law No. 22 of 2015 which sets up the regulatory framework of Public Private Partnerships in the emirate of Dubai. The law aims at encouraging the private sector to participate in the development of projects and increase investments in different fields. According to the law, a partnership project may be proposed by a government entity or by the private sector.
It also specifies certain terms for partnerships between the public and private sectors. They are:
- feasibility of the project economically, financially, technologically and socially
- allocation of sufficient funds in the budget of the government entity to cover the expenses of the project, if any.
The law stipulates conditions for approving the projects. These conditions involve, among other things, funding and methods of partnerships. The term of the partnership contract may not exceed thirty years from the date of execution. For more details, read the guide Public Private Partnerships in Dubai issued by Department of Finance - Government of Dubai.
Tendering for contracts
To ensure transparency, fair competition and achieving the public interest, private sector partners must participate in a public tender process in most project cases, except where the project is solely created by such company. At the federal level, Ministry of Finance sets out rules and procedures for projects’ tendering process with the private sector. Meanwhile at the local government levels, Department of Finance in each emirate handles tendering process. Read more on the page ‘Government tendering and awarding’.
PPPs in the education sector
The UAE Government entities partner with the private sector in rendering education services. According to a study by Department of Economic Development in Abu Dhabi, management services contract is one of the important aspects of Public Private Partnership in the area of educational services in the emirate of Abu Dhabi, in addition to professional services’ contract which involves the service of curriculum design.
According to the Abu Dhabi Government portal, since 2006, the Department of Education and Knowledge started to assign the educational and administrative supervision of several kindergartens and primary schools to private educational contractors on 3-year term contracts.
The partnership aims to benefit from the experience of the private sector in improving the quality of education output in the public education sector in Abu Dhabi.
PPPs in Infrastructure projects
The UAE is committed to lower its carbon footprint and is getting prepared to generate at least 27 per cent of total power generation from low carbon technologies by 2021. To achieve this target, the UAE mobilised the private sector expertise and international capital in long-term partnerships between the public and private sectors.
Existing and anticipated (PPP) infrastructure projects include:
- three utility scale renewable based on photovoltaic solar technology
- Abu Dhabi’s Masdar solar and wind projects across a range of different geographies
- Dubai’s Roads and Transport Authority projects including the Union Square development
- the upcoming Route 2020 project, expected to extend Dubai Metro from Jebel Ali to the Expo 2020 site
Sourced from: UAE’s PPPs unlock private capital for renewable energy – Gulf News
PPPs in waste management projects
The Sharjah-based private company Bee’ah offers waste management services, waste recycling and environmental solutions to different government departments throughout the country. Masdar, Abu Dhabi’s renewable energy company, partnered with Bee’ah to develop a cutting-edge waste-to-energy plant in Sharjah. The project will help Sharjah reach its zero waste-to-landfill target by 2020; thus, diverting as much as 300,000 tonnes of solid waste from landfill each year.
Services based on the PPP model
There are many private partners in the UAE, which work in association with the public sector to render many services which are listed below.
Private sector services under ADWEA
Abu Dhabi Distribution Company
ADDC is a leading water and electricity distribution and Supply Company and one of the companies of the Abu Dhabi Water and Electricity Authority group which operates under the Regulation & Supervision Bureau (RSB).
Typing service centres approved by the residency department
General Directorate of Residency and Foreigners Affairs in Dubai (GDRFA) introduced the UAE vision system, which facilitates public to apply for all kind of visa and residency related transactions via typing service centres approved by the residency department.
Postal and mail services
Zajel is one of the established courier companies in the UAE and a subsidiary of Emaratech Technology Capital. Several government departments in Dubai such as RTA and Dubai Courts use Zajel services for mail deliveries.
Government Procurement services
Dubai eSUPPLY platform
eSupply is the official Procurement Portal for Dubai Government and it is a joint cooperation between Dubai Smart Government and partners from the private sector which are Tejari and BravoSolution. Read more about eSupply on the page ‘Government tendering and awarding’.
Updated on 22 Jun 2022