Information Regarding Public-Private Partnerships In The UAE

The term Public-Private Partnership refers to a legal arrangement between a government body and a business in the private sector for the purpose of sharing possibilities and risks in the execution of commercial projects that involve public services. There are a few top corporate law firms in Dubai that can best advise you on the different scenarios you’ll  go through when entering a PPP.

Generally, how much each stakeholder contributes and how much responsibility they have depends on the project that is being established. One of the many commercial lawyers in Dubai can be taken on to help draft a partnership agreement that works best for both parties.

Public-Private Partnerships May Take The Form Of:

• Build-Own-Operate-Transfer(BOOT) agreements

• Leasing arrangements

• Management arrangements

• Concession agreements

• Service agreements

• Build-Operate-Transfer (BOT) agreements

• Build-Own-Operate(BOO) agreements, among others.

The majority of PPPs are long-term, risk-based partnerships with the goal of building infrastructure in the country by utilizing the private sector’s resources, know-how and efficiency.

By implementing strategic development initiatives and forming these private partnerships, the government of the United Arab Emirates hopes to greatly benefit society’s members, the state, the private sector, and the country’s economy.

Laws Governing The Public-Private Partnership In The UAE:

A high-level framework of procedures and policies for working with the private sector is laid out in Cabinet Decision No. 2/2017, which was released by the UAE government.

Prior to considering a PPP, a number of variables must be taken into account in accordance with Paragraph 2.8 of the PPP Cabinet Decision. These include:

• The lack of financial resources or experience on the part of federal entities to carry out the services and projects
• The private partner’s ability to carry out services or projects more rapidly than the government
• The opportunity for creativity and innovation
• The absence of regulatory or legal barriers to the participation of the private sector
• The ability to measure and price the partnership’s outputs.

The Dubai Law No. 22 of 2015 on the establishment of Public-Private Partnership in the Emirate of Dubai has also been published in Dubai. This law aims to set up public-private partnerships and give the government the tools it needs to achieve its strategic plans successfully. 

The regulation of PPP in Abu Dhabi is also covered by Abu Dhabi Administrative Decision No. 179 of 2020 and Abu Dhabi Law No. 2 of 2019.

Establishing PPP In The UAE:

Cabinet Decision lays out the broad principles for establishing PPP, but it also notes that these principles are merely indicative and federal entities must review them and adopt or use any other procedures or practices that may have recently been used in any stage of the project.

In accordance with Chapter 7 of the PPP Cabinet Decision, there are a number of ways to grant a project for public procurement, including:

1. Open method: An open process is available to all interested providers. This also goes by the name–public tender.
2. Selective method: Except for suppliers who are qualified, no one else is allowed to submit bids. This is also known as–closed tender.
3. Limited method: Only invited suppliers can place their bids. This is otherwise referred to as–limited practice.
4. Competitive dialogue: A conversation is opened up with the eligible bidders. The project’s technical objectives and contract form are reviewed, and the bidding criteria document is created as a result of this debate. After the bidding documents are released, a conversation may be held to resolve any problems with the contract or other matters that call for changing the project specifications before bids are submitted.

The PPP Cabinet Decision continues to explain that the awarding method of competitive dialogue is thought to be the most suitable method for choosing a private sector partner due to the complexity of the PPP contract, especially in infrastructure projects that make up a significant portion of the total PPPs carried out by the UAE government.

It is worth emphasizing that the procedures mentioned above are not the only ones and that there are a number of alternative techniques like restricted procedure and negotiated procedure that might be used to choose a partner from the private sector.

Nevertheless, as was already said, Dubai and Abu Dhabi have their own PPP-specific laws in place, and these laws may be more significant for these two Emirates. Thus, consult with highly qualified law firms in Dubai and set up a meeting to have one of the best commercial lawyers Dubai has to offer to run you through which law applies depending on the Emirate. 

Summing up–The UAE Government and the Emirates have issued these regulations to ensure that the private sector participates effectively and positively supports the government’s efforts in fostering growth. Partnerships with the private sector have been shown to increase efficiency, effectiveness, and performance, improve service quality, protect the interests of the general public, and stimulate the economy. These regulations provide clear guidelines on how such collaboration can enhance their performance.