Oman should set up a central public-private partnership (PPP) authority to coordinate the tendering of PPP projects, according to Rajeev Singh, partner at the UKs EY, speaking at MEEDs Outlook Oman conference in late October.
The planned PPP authority will be created from an existing privatisation authority, EY recommended as part of a PPP framework preparation and advisory contract.
We are recommending a central dedicated PPP unit whose responsibility will cut across all sectors, said Singh. There are some reasonably good elements of the current privatisation framework, the privatisation board needs to be significantly enhanced and given a lot more authority and power. These can be modified, their scopes become much wider.
A draft PPP law is now in the concluding stages of review at the Ministry of Legal Affairs, while executive regulations are being prepared. EY is pushing for a capacity-building programme at the same time.
Institutions need to be resourced up, especially the central PPP authority, said Singh. Training is needed, not just for the PPP authority, but also sponsoring ministries that will play a key role, and the local private sector, lenders, anyone who is going to be a stakeholder.
Simultaneously, some pilot projects will be brought to market.
When putting out a new procurement system and framework that you are going to be fast-tracking a lot of projects through, you want to make sure it has been tested by the market because for sure it will require a bit of tweaking, said Singh. Pilot projects are a great way to test proof of concept. We are in an advanced stage of reviewing and identifying some that are possibly good candidates.
The pilot schemes could be in the housing, healthcare, education and transport industries.
The Medical City has already attracted investors: the Oman Investment Fund and UK/local Carillion Alawi. The team is now evaluating bids from transaction and legal advisers.
Other projects are at an earlier stage.
There are two hospitals that were supposed to be launched by the government, said Ali al-Sunaidy, Minister of Commerce & Industry, speaking at the same event. There is a school now, under review by the Ministry of Education, to move the management of the school totally to the private sector, and the government paying per student. In some schools now, we probably pay RO5,000-RO7,000 ($12,985-$18,179) per student. If you give it to a private company, they use the same curriculum, but I am sure the price will come down to maybe RO2,000-RO3,000.
Private power generation and water desalination schemes have been used as a model due to the success of the current framework, and are not expected to come under the new PPP law. However, there are still a few questions over whether other water and wastewater projects will be put under the utilities client, Oman Power & Water Procurement Company, or the new PPP authority.