Abu Dhabi issues new public-private partnership regulations to boost investment

Governments in the Gulf region are increasingly turning to the PPP model to diversify their economies

ABU DHABI, UNITED ARAB EMIRATES - - -  13 February 2017 --- Gray skies spread a blanket over the Abu Dhabi skyline on Monday, February 13, 2017, but did not put a damper on the spirit of people and birds that flocked to the breakwater. (  DELORES JOHNSON / The National  )  
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Abu Dhabi issued new public-private partnership (PPP) procurement regulations to boost collaboration between the private and public sector entities and attract more investment into the emirate.

The latest regulations provide clarity to the private sector investors during the procurement phase of a PPP project, the Abu Dhabi Investment Office (Adio), said in a statement on Thursday.

“The robust PPP procurement framework is consistent with international best practice to support greater private sector investment in the procurement and delivery of public sector infrastructure assets and services across Abu Dhabi,” Adio said.

The regulations follow the Abu Dhabi government’s announcement earlier this year to issue tenders worth Dh10 billion under the PPP model in infrastructure partnership projects including education, transport and municipal works. The initiative was launched as part of Dh50bn Ghadan 21 accelerators programme to boost Abu Dhabi’s economy.

“Efficient and effective collaboration between the public and private sectors is at the heart of Abu Dhabi’s long-term economic strategy,” Tariq Bin Hendi, director general of Adio, said. “Adio’s role is to encourage the deployment of private sector expertise, efficiencies and innovation in the emirate’s major infrastructure projects. We welcome investors seeking to partner with the government to bring ambitious projects to life here.”

In addition to the new regulations, Adio has also published a guidebook with details on the processes and procedures for the development, procurement and management of partnership projects in Abu Dhabi “to support the public and private sector entities in delivering projects in a transparent, timely and efficient manner”.

“Formalising our PPP procurement framework is a significant milestone for Adio and allows us, with confidence, to focus on accelerating the issuing of tenders and the delivery of major projects,” Mohamed Al Dhaheri, head of Adio’s infrastructure partnerships, said. “Our role is to facilitate long-term and sustainable partnerships between the public and private sectors, with the aim of providing investment opportunities for the private sector, delivering improved public sector infrastructure and services to Abu Dhabi’s residents, and creating employment opportunities.”

Public-private partnerships are a method that allows a consortium of bidders to design, build, finance and operate an infrastructure asset over long periods of up to 20-30 years. The projects are backed by private financiers, who receive a regular income stream from the asset during the period.

Governments in the Gulf region are increasingly turning to the PPP model to diversify their economies.

Many of them are developing legal frameworks to regulate PPP projects, which are expected to improve transparency and attract investment.

Earlier this month, the UAE's minister of Industry and Advanced Technology called for a public-private partnership approach to boost the country's industrial development amid a push to empower national industries and improve their competitiveness.

In his first meeting with members of the Industrial Co-ordination Council, Dr Sultan Al Jaber emphasised his plans to work with the council and the private sector to boost in-country value creation by supporting small and medium-sized businesses and creating sustainable jobs.

“A key enabler for success will be an active engagement with both the public and private sectors to ensure regulatory and legislative frameworks are optimal, relevant and adapt to the realities of today, and are flexible enough to provide the right platform for the change and growth our leadership envisages in the decades ahead,” Dr Al Jaber said.

Abu Dhabi is also providing more opportunities to private sector companies to develop land owned by government agencies by reforming Musataha agreements.

The newly-structured Musataha agreements will allow for stronger partnerships between the public and private sectors, and aim to encourage investors to commit with confidence to long-term business opportunities in the emirate, according to a statement from Adio in June.