PPPs expected to take off in UAE
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
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.