PPPs expected to take off in UAE

31 August 2020
With the political will to use the public-private partnership model and the bureaucratic infrastructure in place, the outlook for PPPs is positive in the UAE

Outside the power and water sectors, the outlook for public-private partnerships (PPPs) in the UAE remains haunted by the failure of the Mafraq-Ghuweifat highway PPP scheme in 2011. Almost a decade later, however, the outlook appears more positive for PPPs in 2020.

In February, Abu Dhabi Investment Office (Adio) revealed plans to procure infrastructure schemes worth $2.72bn under the PPP model as part of the Ghadan 21 accelerator programme.

An award quickly followed: in March, Abu Dhabi awarded a 12-year PPP contract to replace the emirate’s streetlights to Abu Dhabi-based Tatweer for Traffic Assets & Systems Operation & Management.

Another positive sign for the future came in April, when the emirate’s Executive Council formed a committee that will oversee the development and operation of infrastructure, including PPP projects.

With the political will to use the PPP model and the bureaucratic infrastructure in place, Abu Dhabi is now widely expected to proceed with more PPPs in the future.

Dubai's Roads & Transport Authority is understood to be considering the PPP route for extensions to Dubai Metro’s Red and Green lines 

Dubai PPPs

There is also the political will to use PPPs in Dubai. In 2019, the emirate’s Department of Finance allocated $272m-worth of PPP projects in order to attract private sector investments, raise government service quality and reduce the burden on the budget.

The move has given renewed gusto to PPPs outside of the power and water sectors, which have struggled to make headway since Dubai’s PPP law was enacted in 2015.

Plans for a sports stadium as well as a cardiac centre stalled before they ever really got going, while the biggest blow came in 2018 when construction work on Dubai’s first PPP scheme outside the power and water sectors halted following the collapse of one of the project partners.

Another PPP scheme that made slow progress was a real estate development in Deira above a metro station planned by the Roads & Transport Authority (RTA). After selecting a successful bidder in 2018, the RTA has revisited its plans and in January this year it reissued tender documents for the development, which it has renamed Union 71.

If the RTA can make PPP work this time, then more transport projects will follow. It is understood to be considering the PPP route for extensions to Dubai Metro’s Red and Green lines.

This month's UAE market report includes:

> GovernmentAbu Dhabi deals in domestic and diplomatic stimulus
> EconomyUAE economic activity heads for tepid recovery
> BankingUAE banks seek path through Covid crisis
> UpstreamAdnoc presses ahead with onshore projects
PetchemsAbu Dhabi bolsters regional petrochemicals market
> ConstructionA very different crisis for UAE construction
> Power & waterUAE utilities sector progresses amid crisis
> Real estateProfits decline at Dubai real estate companies
> City planningPandemic refocuses urban design priorities
> DatabankUAE economic activity turns the corner


> Algeria: PPP framework fails to modernise
> Bahrain: Manama ramps up its PPP plans
> Egypt: Mixed results for Egyptian PPPs
> Iraq: Crises and protests curb Iraq PPPs
> Jordan: Construction sector eyes PPP opportunities
> Kuwait: Corner turned on water and power schemes
> Lebanon: PPPs offer route to recovery
> Morocco: Rabat reforms legislation to spur PPPs
> Oman: Muscat risks PPP confidence loss
> Saudi Arabia: Riyadh refocuses PPP plans
> Tunisia: PPP plans draw broad support
> UAE: PPPs expected to take off in UAE
> Other GCC: Gulf state bolsters legislation to drive PPPs

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